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Annual
Report and
Risk Index
Accounts
Risk management
Enterprise Risk Management Framework
196
approach
Princ
ipal r
isks
201
Risk pro\ufb01le
Credit Risk
207
Basis of preparation
207
Credit Risk overview
207
Impairment model
207
Staging of \ufb01nanc
ial
instruments
207
IFRS 9 ECL princ
iples and approaches
207
Summary of Credit Risk performance
207
Maximum exposure to Credit Risk
209
Analysis of \ufb01nanc
ial
instruments by stage
210
Credit quality analysis
212
\u2022
Credit quality by client segment
212
\u2022
Credit quality by key geography
217
Movement in gross exposures and credit impa
irment for loans and advances, debt secur
it
ies,
undrawn commitments and \ufb01nanc
ial guarantees
219
Analysis of stage 2 balances
225
Credit impa
irment charge
226
Problem credit management and provis
ion
ing
226
\u2022
Forborne and other modif
ied loans by cl
ient segment
226
\u2022
Forborne and other modif
ied loans by key geography
226
Credit Risk mit
igat
ion
227
\u2022 Collateral
227
\u2022
Collateral held on loans and advances
227
\u2022
Collateral \u2013 Corporate and Investment Banking
227
\u2022
Collateral \u2013 Wealth and Retail Banking
228
\u2022
Mortgage loan-to-value ratios by geography
228
\u2022
Collateral and other credit enhancements possessed or called upon
229
\u2022
Other Credit Risk mit
igat
ion
229
Other portfolio analysis
229
\u2022
Maturity analysis of loans and advances by client segment
229
\u2022
Credit quality by industry
230
\u2022
Industry and Retail Products analysis of loans and advances by key geography
231
\u2022
High carbon sectors
232
\u2022
Commercial real estate
234
\u2022
Debt securit
ies and other el
ig
ible b
ills
235
IFRS 9 ECL methodology
236
Traded Risk
247
Market Risk movements
247
Counterparty Credit Risk
249
Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion
249
Liqu
id
ity and Funding Risk
250
Liqu
id
ity and Funding Risk metrics
250
Liqu
id
ity analysis of the Group\u2019s balance sheet
252
Interest Rate Risk in the Banking Book
254
Operational and Technology Risk
255
Operational and Technology Risk pro\ufb01le
255
Other princ
ipal r
isks
255
Climate Risk
256
Managing the \ufb01nanc
ial and non-\ufb01nancial r
isks from climate change
257
Assessing the resil
ience of our strategy us
ing scenario analysis
265
\n \n
Annual
Report and
Risk Index
Accounts
Capital
Capital summary
270
\u2022 Capital ratio
270
\u2022 Capital base
271
Movement in total capital
272
Risk-weighted asset
272
Leverage ratio
274
\n
The following parts of the Risk review and Capital review form part of these \ufb01nanc
ial statements and are aud
ited by the
\n
external auditors:
\n
a) Risk review:
Disclosures marked as \u2018audited\u2019 from the start of Credit risk section (page 207) to the end of other princ
ipal r
isks
\n
in the same section (page 255); and
\n
b) Capital review:
Tables marked as \u2018audited\u2019 from the start of \u2018Capital base\u2019 to the end of \u2018Movement in total capital\u2019, excluding
\n
\u2018Total risk-weighted assets\u2019 (pages 271 and 272).
Enterprise Risk Management Framework
\n
Risk management is at the heart of banking, it is what we do. Managing risk effectively is how
\n
we drive commerce and prosperity for our clients and our communit
ies, and
it is how we grow
\n
sustainably and pro\ufb01tably as an organisat
ion.
\n
Effective risk management is essential in deliver
ing cons
istent
\n
and sustainable performance for all our stakeholders and is
\n
a central part of the \ufb01nancial and operat
ional management
\n
of the Group. The Group adds value to clients and the
\n
communit
ies
in which they operate by balancing risk and
\n
reward to generate returns for shareholders.
\n
The Enterprise Risk Management Framework (ERMF)
\n
enables the Group to manage enterprise-wide risks, with the
\n
objective of max
im
is
ing risk-adjusted returns while remain
ing
\n
with
in our R
isk Appetite (RA). The ERMF is complemented by
\n
frameworks, polic
ies and standards wh
ich are mainly aligned
\n
to the Princ
ipal R
isk Types (PRTs), and is embedded across the
\n
Group, includ
ing
its branches and subsid
iar
ies.
\n
1
\n
It is reviewed
\n
and approved by the Board annually, with the latest version
\n
being effective from August 2024.
\n
Risk culture
\n
Risk culture encompasses our general awareness, attitudes,
\n
and behaviours towards risk, as well as how risk is managed
\n
at enterprise level.
\n
A healthy risk culture is one in which everyone takes personal
\n
responsib
il
ity to ident
ify and assess, openly d
iscuss, and
\n
take prompt action to address exist
ing and emerg
ing risks.
\n
We expect our control functions to provide oversight and
\n
challenge constructively, collaboratively, and in a timely
\n
manner on the risks owned by the \ufb01rst line of defence.
\n
This effort is re\ufb02ected in our valued behaviours and
\n
underpinned by our Code of Conduct and Ethics.
\n
Further details on our Code of Conduct and Ethics can be
\n
found on
page 95
.
\n
The risks we face constantly evolve, and we must always
\n
look for ways to manage them as effectively as possible.
\n
While unfavourable outcomes will occur from time to time,
\n
a healthy risk culture means that we react quickly and
\n
transparently. We can then take the opportunity to learn from
\n
our experience and improve our framework and processes.
\n
Strategic risk management
\n
The Group\u2019s approach to strategic risk management includes
\n
the following:
\n
\u2022
Risk ident
i\ufb01cation:
impact analyses of risks that arise from
\n
the Group\u2019s growth plans, strategic in
it
iat
ives, and bus
iness
\n
model vulnerabil
it
ies are reviewed. This assesses how
\n
exist
ing r
isks have evolved in terms of relative importance
\n
and whether new risks have emerged.
\n
\u2022
Risk Appetite:
impact analysis is performed to assess if
\n
strategic in
it
iat
ives can be ach
ieved with
in RA and h
ighl
ight
\n
areas where addit
ional RA should be cons
idered.
\n
\u2022
Stress testing:
ident
i\ufb01ed r
isks are used to develop scenarios
\n
for enterprise stress tests.
\n
Roles and responsib
il
it
ies
\n
Senior Managers Regime
\n
2
\n
Roles and responsib
il
it
ies under the ERMF are al
igned to
\n
the objectives of the Sen
ior Managers Regime. The Group
\n
Chief Risk Of\ufb01cer (GCRO) is responsible for the overall
\n
development and maintenance of the Group\u2019s ERMF and for
\n
ident
ify
ing material risks which the Group may be exposed to.
\n
The GCRO delegates effective implementat
ion of the R
isk
\n
Type Frameworks (RTF) to Risk Framework Owners (RFO),
\n
who provide second line of defence oversight for their
\n
respective PRTs.
\n
The Risk function
\n
The Risk function provides oversight and challenge on the
\n
Group\u2019s risk management, ensuring that business is conducted
\n
in line with regulatory expectations. The GCRO directly
\n
manages the Risk function, which is independent from the
\n
orig
inat
ion, trading, and sales functions of the businesses.
\n
The Risk function is responsible for:
\n
\u2022
proposing the RA for approval by the Board
\n
\u2022
mainta
in
ing the ERMF, ensuring that it remains relevant
\n
and appropriate to the Group\u2019s business activ
it
ies, and
\n
is effectively communicated and implemented across
\n
the Group
\n
\u2022
ensuring that risks are properly assessed, risk and return
\n
decis
ions are transparent and r
isks are controlled in
\n
accordance with the Group\u2019s standards and RA
\n
\u2022
overseeing and challenging the management of PRTs under
\n
the ERMF
\n
\u2022
independence of the Risk function by ensuring that the
\n
necessary balance in making risk and return decis
ions
is not
\n
compromised by short-term pressures to generate revenues.
\n
The Risk function supports the Group\u2019s strategy by build
ing
\n
a sustainable ERMF that places regulatory and compliance
\n
standards, together with culture of appropriate conduct, at
\n
the forefront of the Group\u2019s agenda.
\n
Our Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
\n
function,
\n
3
\n
works alongside the Risk function with
in the ERMF
\n
to deliver a unif
ied second l
ine of defence. Compliance Risk
\n
and Financ
ial Cr
ime Risk, as PRTs, fall under the scope of the
\n
CFCR\u2019s responsib
il
it
ies.
\n
Three lines of defence model
\n
The Group applies a three lines of defence model to its
\n
day-to-day activ
it
ies for effective risk management,
\n
and to reinforce a strong governance and control
\n
environment. Typically:
\n
\u2022
Businesses and functions engaged in or supporting revenue
\n
generating activ
it
ies that own and manage risks constitute
\n
the \ufb01rst line of defence.
\n
1
The Group\u2019s ERMF and system of internal control applies only to wholly controlled subsid
iar
ies of the Group, and not to associates, jo
int ventures or structured
\n
entit
ies of the Group.
\n
2
Senior managers refer to ind
iv
iduals designated as senior management functions under the FCA and PRA Senior Managers Regime.
\n
3
From 1 January 2025, our Conduct, Financ
ial Cr
ime and Compliance (CFCC) function was renamed as Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR).
\u2022
Control functions, independent of the \ufb01rst line of defence,
\n
that provide oversight and challenge of risk management
\n
activ
it
ies act as the second line of defence.
\n
\u2022
Internal Audit acts as the third line of defence, provid
ing
\n
independent assurance on the effectiveness of controls
\n
supporting the activ
it
ies of the \ufb01rst and second lines
\n
of defence.
\n
Each PRT has an RTF which outlines the areas of governance
\n
and risk management and is the formal mechanism through
\n
which authorit
ies are delegated. R
isk management plans,
\n
processes, activ
it
ies, and resource allocations are consistent
\n
with the three lines of defence model prescribed by the ERMF.
\n
Risk ident
i\ufb01cation and assessment
\n
Identif
icat
ion and assessment of potentially adverse risk
\n
events is an essential \ufb01rst step in managing the risks of any
\n
business or activ
ity. To ensure cons
istency we use PRTs to
\n
classify our risk exposures. However, we also recognise the
\n
need to mainta
in a hol
ist
ic perspect
ive since:
\n
\u2022
a single transaction or activ
ity may g
ive rise to multiple
\n
types of risk exposure
\n
\u2022
risk concentrations may arise from multiple exposures that
\n
are closely correlated
\n
\u2022
a given risk exposure may change its form from one risk
\n
type to another.
\n
There are also sources of risk that arise beyond our own
\n
operations, such as the Group\u2019s dependency on suppliers for
\n
the provis
ion of serv
ices and technology.
\n
As the Group remains accountable for risks aris
ing from the
\n
actions of such third parties, failure to adequately monitor
\n
and manage these relationsh
ips could mater
ially impact the
\n
Group\u2019s abil
ity to operate.
\n
The Group mainta
ins a taxonomy of r
isks inherent to the
\n
strategy and business model, as well as a risk inventory which
\n
captures ident
i\ufb01ed r
isks, includ
ing the Top
ical and Emerging
\n
Risks (TERs) to which the Group is or might be exposed to.
\n
Multiple ident
i\ufb01cation and assessment techn
iques are
\n
used to ensure breadth and depth of understanding of the
\n
internal and external risk environment, as well as potential
\n
opportunit
ies. A r
isk assessment of the corporate plan is
\n
undertaken annually, supplemented by risk assessments of
\n
new in
it
iat
ives. R
isk ident
i\ufb01cation \ufb01ndings
inform the related
\n
risk oversight process, and most importantly RA and controls
\n
setting, scenario selection and design, and model re\ufb01nement
\n
and development.
\n
The GCRO and the Group Risk Committee (GRC) regularly
\n
review reports on the risk pro\ufb01le for the PRTs, adherence to
\n
Group RA, stress test results and the Group risk inventory
\n
includ
ing TERs.
\n
Risk Appetite and pro\ufb01le
\n
The Group recognises the following constraints which
\n
determine the risks that we are will
ing to take
in pursuit of our
\n
strategy and the development of a sustainable business:
\n
\u2022
Risk capacity is the maximum level of risk the Group can
\n
assume, given its current capabil
it
ies and resources, before
\n
breaching constraints determined by capital and liqu
id
ity
\n
requirements or the internal operational environment, or
\n
otherwise fail
ing to meet the expectat
ions of regulator and
\n
law enforcement agencies.
\n
\u2022
RA is de\ufb01ned by the Group and approved by the Board.
\n
It is the boundary for the risk that the Group is will
ing to
\n
undertake to achieve its strategic object
ives and corporate
\n
plan. We set RA to enable us to grow sustainably while
\n
managing our risks, giv
ing con\ufb01dence to our stakeholders.
\n
The Group RA is supplemented by risk control tools such as
\n
granular level lim
its, pol
ic
ies, and standards to ma
inta
in the
\n
Group\u2019s risk pro\ufb01le with
in approved RA.
\n
The Board is responsible for approving the RA Statements,
\n
which are underpinned by a set of \ufb01nanc
ial and operat
ional
\n
control parameters known as RA metrics and their associated
\n
thresholds. These set boundaries for the aggregate risk
\n
exposures that can be taken across the Group.
\n
The Group RA is reviewed bi-annually to ensure that it is \ufb01t for
\n
purpose and aligned with strategy, with focus given to new or
\n
emerging risks.
\n
Risk Appetite Statement
\n
The Group\u2019s objective
is to not compromise adherence with its
\n
RA in order to pursue revenue growth or higher returns.
\n
See the table on page 198 for the set of RA Statements.
\n
Stress testing
\n
The objective of stress test
ing is to support the Group in
\n
assessing that it:
\n
\u2022
does not have exposure to excessive risk concentrations
\n
that could produce unacceptably high losses under severe
\n
but plausible scenarios
\n
\u2022
has suf\ufb01cient \ufb01nancial resources to w
ithstand severe but
\n
plausible scenarios
\n
\u2022
has the \ufb01nancial \ufb02ex
ib
il
ity to respond to extreme but
\n
plausible scenarios
\n
\u2022
understands key business model risks and considers what
\n
kind of event might crystallise those risks \u2013 even if extreme
\n
and with a low likel
ihood of occurr
ing
\n
\u2022
ident
i\ufb01es, as requ
ired, actions to mit
igate the l
ikel
ihood or
\n
impact of those events
\n
\u2022
has set RA metrics at appropriate levels.
\n
Enterprise stress tests incorporate capital and liqu
id
ity
\n
adequacy stress tests, includ
ing recovery and resolut
ion,
\n
as well as reverse stress tests.
\n
Stress tests are performed at the Group, country, business,
\n
and portfolio level under a wide range of risks and at varying
\n
degrees of severity. Unless specif
ically set by the regulator,
\n
scenario design is a bespoke process that aims to explore risks
\n
that can adversely impact the Group.
\n
The Board delegates approval of the Bank of England (BoE)
\n
stress test submiss
ions to the Board R
isk Committee (BRC),
\n
which reviews the recommendations from the GRC. Based on
\n
the stress test results, the Group Chief Financ
ial Of\ufb01cer (GCFO)
\n
and GCRO can recommend strategic actions to the Board to
\n
ensure that the Group\u2019s strategy remains with
in RA.
\n
In addit
ion, analys
is is run at the PRT level to assess specif
ic
\n
risks and concentrations that the Group may be exposed to.
\n
These include qualitat
ive assessments such as stress
ing of
\n
credit sectors or portfolios, and quantitat
ive assessments
\n
such as potential losses from severe but plausible market risk
\n
scenarios or internal stressed liqu
id
ity metrics.
Stress testing plays a crit
ical role
in assessing the potential impact on portfolio values of extreme but plausible scenarios,
\n
leading to potential losses typically much larger than those predicted by the Value at Risk (VaR) model. The Group uses
\n
histor
ical and forward-look
ing scenarios. A common set of scenarios is used across all legal entit
ies complemented
in some
\n
cases with entity-specif
ic scenar
ios. RA for market risk stress losses is set at the Group as well as legal entity level.
\n
Non-\ufb01nancial r
isk types are also stressed to assess the necessary capital requirements under the Operational and
\n
Technology RTF.
\n
The Group has also undertaken a number of Climate Risk stress tests, both those mandated by regulators as well as
\n
management scenarios.
\n
Princ
ipal R
isk Types
\n
PRTs are those risks that are inherent in our strategy and business model and have been formally de\ufb01ned in the Group\u2019s ERMF.
\n
These risks are managed through dist
inct RTFs wh
ich are approved by the GCRO.
\n
The PRTs and associated RA Statements are reviewed annually. The table below shows the Group\u2019s current PRTs, their de\ufb01n
it
ion
\n
and RA Statement.
\n\n \n
Princ
ipal R
isk Types
De\ufb01nit
ion
Risk Appetite Statement
Credit Risk
Potential for loss due to failure of a counterparty to
The Group manages its credit exposures following
meet its agreed obligat
ions to pay the Group.
the princ
iple of d
ivers
i\ufb01cation across products,
geographies, client segments and industry sectors.
Traded Risk
Potential for loss resulting from activ
it
ies undertaken
The Group should control its \ufb01nanc
ial markets
by the Group in \ufb01nanc
ial markets.
activ
it
ies to ensure that market and counterparty
credit risk losses do not cause material damage to
the Group\u2019s franchise.
Treasury Risk
Potential for insuff
ic
ient capital, liqu
id
ity, or funding
The Group should mainta
in suf\ufb01cient cap
ital, liqu
id
ity
to support our operations, the risk of reductions in
and funding to support its operations, and an interest
earnings or value from movements in interest rates
rate pro\ufb01le ensuring that the reductions in earnings
impact
ing bank
ing book items and the potential for
or value from movements in interest rates impact
ing
losses from a shortfall in the Group\u2019s pension plans.
banking book items does not cause material damage
to the Group\u2019s franchise. In addit
ion, the Group should
ensure its pension plans are adequately funded.
Operational and
Potential for loss resulting from inadequate or failed
The Group aims to control operational and
Technology Risk
internal processes, technology events, human error,
technology risks to ensure that operational losses
or from the impact of external events (includ
ing
(\ufb01nancial or reputat
ional), includ
ing any related to the
legal risks).
conduct of business matters, do not cause material
damage to the Group\u2019s franchise.
Information and Cyber
Risk to the Group\u2019s assets, operations, and
The Group aims to mit
igate and control ICS r
isks
Security (ICS) Risk
ind
iv
iduals due to the potential for unauthorised
to ensure that inc
idents do not cause the Bank
access, use, disclosure, disrupt
ion, mod
if
icat
ion,
material harm, business disrupt
ion, \ufb01nancial loss
or destruction of informat
ion assets and/or
or reputational damage \u2013 recognis
ing that wh
ile
informat
ion systems.
inc
idents are unwanted, they cannot be ent
irely
avoided.
Financ
ial Cr
ime Risk
4
Potential for legal or regulatory penalties, material
The Group has no appetite for breaches of laws and
\ufb01nancial loss or reputat
ional damage resulting
regulations related to Financ
ial Cr
ime, recognis
ing
from the failure to comply with applicable laws
that while inc
idents are unwanted, they cannot be
and regulations relating to internat
ional sanct
ions,
entirely avoided.
anti-money laundering and anti-bribery and
corruption, and fraud.
Compliance Risk
Potential for penalties or loss to the Group or for
The Group has no appetite for breaches of laws and
an adverse impact to our clients, stakeholders
regulations related to regulatory non-compliance;
or to the integr
ity of the markets we operate
in
recognis
ing that wh
ile inc
idents are unwanted, they
through a failure on our part to comply with laws,
cannot be entirely avoided.
or regulations.
Environmental, Social
Potential or actual adverse impact on the
The Group aims to measure and manage \ufb01nanc
ial
and Governance
environment and/or society, the Group\u2019s \ufb01nanc
ial
and non-\ufb01nancial r
isks aris
ing from cl
imate change,
and Reputational
performance, operations, or the Group\u2019s name,
reduce emiss
ions
in line with our net zero strategy
(ESGR) Risk
brand or standing, aris
ing from env
ironmental,
and protect the Group from material reputational
social or governance factors, or as a result of the
damage by upholding responsible conduct and
Group\u2019s actual or perceived actions or inact
ions.
striv
ing to do no s
ign
i\ufb01cant env
ironmental and
social harm.
Model Risk
Potential loss that may occur because of decis
ions
The Group has no appetite for material adverse
or the risk of misest
imat
ion that could be princ
ipally
impl
icat
ions aris
ing from m
isuse of models or errors
based on the output of models, due to errors in
in the development or implementat
ion of models;
the development, implementat
ion, or use of
while accepting some model uncertainty.
such models.
\n
4
Fraud forms part of the Financ
ial Cr
ime RA Statement but, in line with market practice, does not apply a zero-tolerance approach.
\n
As of November 2024, the Climate Risk RA Statement was integrated into the ESGR PRT.
ERMF effectiveness reviews
\n
The GCRO is responsible for annually af\ufb01rm
ing the
\n
effectiveness of the ERMF to the BRC via an effectiveness
\n
review. This review is based on the princ
iple of ev
idence-
\n
based self-assessments for all the RTFs and relevant polic
ies.
\n
A top-down review and challenge of the results is conducted
\n
by the GCRO with all RFOs and an opin
ion on the
internal
\n
control environment is provided by Internal Audit.
\n
The ERMF effectiveness review measures year-on-year
\n
progress. The key outcomes of the 2024 review are:
\n
\u2022
Continued focus on embedding the ERMF across the
\n
organisat
ion.
\n
\u2022
Financ
ial r
isks continue to be effectively managed, and the
\n
Group is making good progress in embedding non-\ufb01nanc
ial
\n
risk management.
\n
\u2022
Self-assessments performed in branches and banking
\n
subsid
iar
ies re\ufb02ect the embeddedness of the ERMF.
\n
Country and cluster risk committees continue to play an
\n
active role in overseeing and managing risks across our
\n
footprint markets.
\n
Ongoing effectiveness reviews allow for a structured
\n
approach to ident
ify
improvement opportunit
ies and bu
ild
\n
plans to address them.
\n
In 2025, the Group aims to further strengthen its risk
\n
management practices by improv
ing the management of
\n
non-\ufb01nancial r
isks with
in
its businesses, functions and across
\n
our footprint. As the regulatory environment continuously
\n
changes, the Group constantly monitors regulatory
\n
developments and take proactive actions for compliance.
\n
Executive and Board risk oversight
\n
Overview
\n
The corporate governance and committee structure helps
\n
the Group to conduct our business. The Board has ultimate
\n
responsib
il
ity for risk management and approves the ERMF
\n
based on the recommendation of the BRC, which also
\n
recommends the Group RA Statement for all PRTs and other
\n
risks. In addit
ion to the BRC and Aud
it Committee, the Culture
\n
and Sustainab
il
ity Committee oversees the Group\u2019s culture
\n
and key sustainab
il
ity prior
it
ies.
\n
See
page 113
for the Board and committee governance structure.
\n
Group Risk Committee
\n
The GRC, which derives its authority from the GCRO, is responsible for ensuring the effective management of risk throughout
\n
the Group in support of the Group\u2019s strategy. The GCRO chairs the GRC, whose members are drawn from the Group
\n
Management Team. The GRC oversees the effective implementat
ion of the ERMF for the Group,
includ
ing the delegat
ion
\n
of any part of its authorit
ies to appropr
iate ind
iv
iduals or sub-committees.
\n\n \n
Group Risk Committee
sub-committees
Chair
Roles and responsib
il
it
ies
Group Non-Financ
ial R
isk
Global Head, Operational,
Governs the in-scope non-\ufb01nanc
ial r
isks throughout the Group in support
Committee (GNFRC)
Technology and Cyber Risk
of the ERMF and the Group\u2019s strategy.
Group Financ
ial Cr
ime Risk
Group Head, CFCR
Ensures that the Financ
ial Cr
ime Risk pro\ufb01le (excluding Fraud Risk and
Committee (GFCRC)
Secondary Reputational Risk aris
ing from F
inanc
ial Cr
ime Risk) is
managed with
in RA and pol
ic
ies.
Group Responsib
il
ity and
GCRO
Ensures the effective management of Reputational and Sustainab
il
ity
Reputational Risk Committee
Risk across the Group. This includes provid
ing overs
ight of matters aris
ing
(GRRRC)
from clients, products, transactions and strategic coverage-related
decis
ions and matters escalated by the respect
ive RFOs.
International Financ
ial
Co-chaired by the Global
Ensures the effective management of expected credit loss (ECL)
Reporting Standards (IFRS) 9
Head Enterprise Risk
computations, as well as stage allocation of \ufb01nanc
ial assets for quarterly
Impairment Committee (IIC)
Management (ERM) and
\ufb01nancial report
ing.
Group Head, Central Finance
Model Risk Committee
Global Head, ERM
To support the Group strategy by ensuring the effective measurement
(MRC)
and management of Model Risk in line with internal polic
ies and
model RA.
Investment Committee
Global Head of Stressed
Ensures the optim
ised w
ind-down of the Group\u2019s non-core direct
Assets Risk
investment activ
it
ies in equit
ies, quas
i-equit
ies (exclud
ing mezzanine),
funds and other alternative investments (excluding debt/debt-like
instruments).
SC Ventures (SCV) Risk
CRO, SCV who receives
Oversees the effective management of risk throughout SCV and the
Committee
authority directly from the
portfolio of controlled entit
ies operat
ing under SCV.
GCRO
Climate Risk Management
Global Head, ERM
Oversees the effective implementat
ion of the Group\u2019s Cl
imate Risk
Committee (CRMC)
workplan, includ
ing relevant regulatory requ
irements. This includes
embedding Climate Risk and net zero oversight across Group businesses,
as part of the Group\u2019s commitment to manage Climate Risk related
\ufb01nancial and non-\ufb01nancial r
isks.
Regulatory Interpretation
Co-chaired by the Global
Provides oversight of material regulatory interpretat
ions for the Cap
ital
Committee (RIC)
Head ERM and Group Head,
Requirements Regulation (as amended by UK legislat
ion), the Prudent
ial
Central Finance
Regulatory Authority (PRA) rulebook and other relevant regulations
impact
ing Group regulatory cap
ital calculations and reporting. The
areas and risk types in scope are credit risk, traded risk, operational risk,
large exposures, leverage ratio and securit
isat
ion.
\n \n
Group Risk Committee
sub-committees
Chair
Roles and responsib
il
it
ies
Dig
ital Assets R
isk
CRO, SC Ventures & Global
Oversees effective risk management of the Dig
ital Assets (DA) R
isk
Committee (DRC)
Head, Dig
ital Asset R
isk
pro\ufb01le of the Group. This includes provid
ing overs
ight and subject matter
expertise of DA Risk matters across the PRTs.
Corporate & Investment
Co-Heads CRO CIB and CRO,
Ensures the effective management of \ufb01nanc
ial r
isk throughout CIB in
Banking Financ
ial R
isk
ASEAN & South Asia
support of the Group\u2019s strategy.
Committee (CIBFRC)
Wealth & Retail Banking
Chief Risk Of\ufb01cer, WRB &
Ensures the effective management of risk throughout WRB in support
Risk Committee (WRBRC)
GCNA
of the Group\u2019s strategy.
HK & GCNA Risk Committee
CRO, Hong Kong & GCNA
These committees ensure the effective management of risk in the
(HK&GCNA RC)
clusters in support of the Group\u2019s strategy.
SG & ASEAN Risk Committee
CRO, Singapore & ASEAN
(SG&ASEAN RC)
Standard Chartered Bank
CRO, India & South Asia
(SCB) India Country Risk
Committee (CRC & CNFRC)
UK & Europe Risk Committee
CRO & Chief Credit Of\ufb01cer,
(UK & ERC)
Europe
Americas Risk Committee
CRO, Americas
(ARC)
Middle East and Pakistan
CRO & Regional CCO AME
Risk Committee (MEPRC)
Africa Risk Committee
CRO & Regional CCO AME
\n
Group Asset and Liab
il
ity Committee
\n
The Group Asset and Liab
il
ity Committee (GALCO) is chaired
\n
by the GCFO. Its members are drawn princ
ipally from the
\n
Management Team. GALCO is responsible for determin
ing
\n
the Group\u2019s balance sheet strategy and ensuring that, in
\n
executing the Group\u2019s strategy, the Group operates with
in
\n
RA and regulatory requirements relating to capital, loss-
\n
absorbing capacity, liqu
id
ity, leverage, Interest Rate Risk in the
\n
Banking Book (IRRBB), Banking Book Basis Risk and Structural
\n
Foreign Exchange Risk. It also monitors the structural impact
\n
of decis
ions around susta
inable \ufb01nance, net zero and climate
\n
risk. GALCO is also responsible for ensuring that internal and
\n
external recovery planning requirements are met.
Princ
ipal r
isks
\n
We manage and control our PRTs through
\n
dist
inct RTFs, pol
ic
ies and RA.
\n
See
page 198
for the Group\u2019s current PRT de\ufb01nit
ions and
\n
Risk Appetite Statements.
\n
Changes impact
ing PRTs
in 2024
\n
In May 2024, to further align with our risk strategy and
\n
promote consistency and ef\ufb01c
iency, the Operat
ional and
\n
Technology Risk and Information and Cyber Security Risk
\n
teams were unif
ied under the Operat
ional, Technology and
\n
Cyber Risk (OTCR) function. The PRT disclosures and RA
\n
Statements for ICS Risk and Operational and Technology
\n
Risk remain separate.
\n
Following Tracey McDermott\u2019s retirement as Group Head,
\n
Conduct, Financ
ial Cr
ime and Compliance at the end of
\n
2024, David Howes has been appointed as Group Head,
\n
Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
\n
from 1 January 2025 and will assume Senior Manager
\n
responsib
il
it
ies for F
inanc
ial Cr
ime,
includ
ing the Group Ent
ity
\n
Senior Manager Function, Compliance Oversight Function
\n
(SMF16) and Money Laundering Reporting Of\ufb01cer (MLRO)
\n
role (SMF 17).
\n
Credit Risk
\n
Mit
igat
ion
\n
Segment-specif
ic pol
ic
ies are
in place for Corporate &
\n
Investment Banking (CIB) and Wealth & Retail Banking
\n
(WRB) which set the princ
iples that must be followed for the
\n
end-to-end credit process covering in
it
iat
ion, assessment,
\n
documentation, approval, monitor
ing and governance.
\n
The Group also sets out standards for the elig
ib
il
ity,
\n
enforceabil
ity, and effect
iveness of mit
igat
ion arrangements.
\n
Potential losses are mit
igated us
ing a range of tools, such
\n
as collateral, netting agreements, credit insurance, credit
\n
derivat
ives and guarantees.
\n
Risk mit
igants are carefully assessed for the
ir market value,
\n
legal enforceabil
ity, correlat
ion, and counterparty risk of the
\n
protection provider. Collateral is valued prior to drawdown
\n
and regularly thereafter as required, to re\ufb02ect current market
\n
condit
ions, the probab
il
ity of recovery and the per
iod of time
\n
to realise the collateral in the event of liqu
idat
ion. The Group
\n
also seeks to divers
ify
its collateral holdings across asset
\n
classes and markets.
\n
Where guarantees, credit insurance, standby letters of
\n
credit or credit derivat
ives are used as Cred
it Risk mit
igat
ion,
\n
the creditworth
iness of the protect
ion provider is assessed
\n
and monitored using the same credit process applied to
\n
the obligor.
\n
Monitor
ing
\n
The Group regularly monitors credit exposures, portfolio
\n
performance, external trends and emerging risks that
\n
may impact risk management outcomes. Internal risk
\n
management reports that are presented to risk committees
\n
contain informat
ion on key pol
it
ical and econom
ic trends
\n
across major portfolios and countries, portfolio delinquency
\n
and loan impa
irment performance.
\n
In CIB, clients and portfolios are subject to addit
ional rev
iew
\n
when they display signs of actual or potential weakness; for
\n
example, where there is a decline in the client\u2019s posit
ion w
ith
in
\n
their industry, \ufb01nanc
ial deter
iorat
ion, a breach of covenants,
\n
or non-performance of an obligat
ion w
ith
in the st
ipulated
\n
period. Such accounts are subject to a dedicated process
\n
overseen by the Credit Issues Committee in the relevant
\n
countries where client account strategies and credit grades
\n
are re-evaluated. In addit
ion, remed
ial actions can be
\n
undertaken, such as placing accounts on early alert for
\n
exposure reduction, security enhancement or exit
ing the
\n
account. Credit-impa
ired accounts are managed by the
\n
Group\u2019s special
ist recovery un
it, Stressed Asset Group (SAG),
\n
which is independent of the Client Coverage/Relationsh
ip
\n
Managers. The Stressed Asset Risk (SAR) Group is the second
\n
line risk unit.
\n
On an annual basis, senior members from the CIB business
\n
and Risk partic
ipate
in a more extensive portfolio review
\n
(known as the \u2018industry portfolio review\u2019) for certain industry
\n
groups. In addit
ion to a rev
iew of the portfolio informat
ion,
\n
this industry portfolio review incorporates industry outlook,
\n
key elements of the business strategy, RA, credit pro\ufb01le and
\n
emerging and horizon risks. A summary of these industry
\n
portfolio reviews is also shared with the CIB Financ
ial R
isk
\n
Committee.
\n
For WRB, exposures and collateral monitor
ing are performed
\n
at the counterparty and/or portfolio level across different
\n
client segments to ensure transactions and portfolio
\n
exposures remain with
in RA. Portfol
io delinquency trends are
\n
also monitored. Accounts that are past due (or perceived as
\n
high risk but not yet past due) are subject to collections or
\n
recovery processes managed by a special
ist
independent
\n
function. In some countries, aspects of collections and
\n
recovery activ
it
ies are outsourced. For discret
ionary lend
ing
\n
portfolios, sim
ilar processes to those of CIB are followed.
\n
Any material in-country developments that may impact
\n
sovereign ratings are monitored closely by Country Risk with
in
\n
the ERM function. The Country Risk Early Warning system, a
\n
triage-based risk ident
i\ufb01cation system, categor
ises countries
\n
based on a forward-looking view of possible downgrades and
\n
the potential incremental risk-weighted assets (RWA) impact.
\n
In addit
ion, an
independent Credit Risk review team with
in the
\n
ERM function performs assessments of the Credit Risk pro\ufb01les
\n
at various portfolio levels. They focus on selected countries
\n
and segments through deep dives, comparative analysis,
\n
and review and challenge of the basis of credit approvals.
\n
The review aims to ensure that the evolving Credit Risk pro\ufb01les
\n
of CIB and WRB are well managed with
in RA and pol
ic
ies.
\n
Results of the reviews are reported to the GRC and BRC.
\n
Credit rating and measurement
\n
All credit proposals are subject to a robust credit risk
\n
assessment. It includes a comprehensive evaluation of the
\n
client\u2019s credit quality, includ
ing w
ill
ingness, ab
il
ity, and
\n
capacity to repay. The primary lending considerat
ion for
\n
counterparties is based on their credit quality and operating
\n
cash \ufb02ows, while for ind
iv
idual borrowers it is based on
\n
personal income or wealth. The risk assessment gives due
\n
considerat
ion to the cl
ient\u2019s liqu
id
ity and leverage posit
ion.
\n
Where applicable, the assessment includes a detailed
\n
analysis of the Credit Risk mit
igat
ion arrangements to
\n
determine the level of reliance on such arrangements as the
\n
secondary source of repayment in the event of a sign
i\ufb01cant
\n
deteriorat
ion
in a client\u2019s credit quality leading to default.
\n
Client income, net worth, and the liqu
id
ity of asset by class
\n
are considered for overall risk assessment for wealth lending.
\n
Wealth lending credit lim
its are subject to the ava
ilab
il
ity of
\n
qualif
ied collateral.
A standard alphanumeric Credit Risk grade system is used for
\n
CIB, whereby credit grades 1 to 12 are assigned to performing
\n
customers, and credit grades 13 and 14 are assigned to
\n
non-performing or defaulted customers.
\n
WRB internal ratings-based portfolios use applicat
ion and
\n
behavioural credit scores that are calibrated to generate a
\n
probabil
ity of default. The R
isk Decis
ion Framework uses a
\n
credit rating system to de\ufb01ne the portfolio/new booking
\n
segmentation, shape and decis
ion cr
iter
ia for the unsecured
\n
consumer business segment.
\n
Advanced Internal Ratings-Based (AIRB) models cover the
\n
majority of our exposures and are used
in assessing risks at a
\n
customer and portfolio level, setting strategy, and optim
is
ing
\n
our risk-return decis
ions. The Model R
isk Committee (MRC)
\n
approves material internal ratings-based risk measurement
\n
models. Prior to review and approval, all internal ratings-
\n
based models are validated by an independent model
\n
validat
ion team. Rev
iews are also triggered if the
\n
performance of a model deteriorates materially against
\n
predetermined thresholds, measured through the ongoing
\n
model performance monitor
ing process.
\n
We adopt the AIRB approach under the Basel regulatory
\n
framework to calculate Credit Risk capital requirements for
\n
the majority of our exposures. The Group has also establ
ished
\n
a global programme to assess capital requirements necessary
\n
to be implemented to meet the latest revised Basel III
\n
regulation (referred to as Basel 3.1 or Basel IV).
\n
Credit Concentration Risk
\n
Credit Concentration Risk for CIB is managed through
\n
concentration lim
its cover
ing large exposure lim
it to a s
ingle
\n
counterparty or a group of connected counterparties (based
\n
on control and economic dependence criter
ia), or at portfol
io
\n
level for multiple exposures that are closely correlated.
\n
Portfolio RA metrics are set, where appropriate, by industry,
\n
products, tenor, collateralisat
ion level, top cl
ients, and
\n
exposure to holding companies.
\n
For concentrations that are material at a Group level,
\n
breaches and potential breaches are monitored by the
\n
respective governance committees and reported to the
\n
GRC and BRC.
\n
Credit impa
irment
\n
For CIB, in line with the regulatory guidel
ines, Stage 3 expected
\n
credit loss (ECL) is considered when an obligor is more than
\n
90 days past due on any amount payable to the Group, or
\n
the obligor has symptoms of unlikel
iness to pay
its credit
\n
obligat
ions
in full as they fall due. These credit-impa
ired
\n
accounts are managed by SAG.
\n
In WRB, loans to ind
iv
iduals and small businesses are
\n
considered credit-impa
ired as soon as any payment of
\n
interest or princ
ipal
is 90 days overdue or they meet other
\n
objective ev
idence of impa
irment, such as bankruptcy, debt
\n
restructuring, fraud, or death, with unlikely continuat
ion of
\n
contractual payments. Financ
ial assets are wr
itten off, in the
\n
amount that is determined to be irrecoverable, when they
\n
meet condit
ions set such that emp
ir
ical ev
idence suggests
\n
the client is unlikely to meet their contractual obligat
ions,
\n
or a loss of princ
ipal
is reasonably expected.
\n
Estimat
ing the amount and t
im
ing of future recover
ies
\n
involves sign
i\ufb01cant judgement and cons
iders the assessment
\n
of matters such as future economic condit
ions and the value
\n
of collateral, for which there may not be a readily accessible
\n
market. The total amount of the Group\u2019s impa
irment
\n
provis
ion
is inherently uncertain, being sensit
ive to changes
in
\n
economic and credit condit
ions across the markets
in which
\n
the Group operates.
\n
Further details on sensit
iv
ity analysis of ECL under IFRS 9 can be
\n
found in the \u2018Risk pro\ufb01le\u2019 section on
pages 236 to 246
.
\n
Underwrit
ing
\n
The underwrit
ing of secur
it
ies and loans
is in scope of the
\n
CIB\u00a0RA. Addit
ional l
im
its approved by the GCRO are set on
\n
sectoral concentration and maximum holding period.
\n
The Underwrit
ing Comm
ittee, under the authority of the
\n
GCRO, approves ind
iv
idual proposals to underwrite new
\n
security issues and loans for our clients. In July 2024, oversight
\n
of the Underwrit
ing Comm
ittee was transferred from Traded
\n
Risk to CIB Credit Risk.
\n
Traded Risk
\n
Mit
igat
ion
\n
Traded Risk lim
its are de\ufb01ned at a level wh
ich aims to ensure
\n
that the Group remains with
in RA. The Traded R
isk Policy
\n
sets the princ
iples that must be followed for the end-to-end
\n
traded risk management process includ
ing l
im
it sett
ing, risk
\n
capture and measurement, lim
it mon
itor
ing and escalat
ion,
\n
risk mit
igat
ion and stress testing. Polic
ies are rev
iewed and
\n
approved by the Global Head, Traded Risk Management
\n
period
ically to ensure the
ir ongoing effectiveness.
\n
Market Risk measurement
\n
The Group uses a VaR model to measure the risk of losses
\n
aris
ing from future potent
ial adverse movements in market
\n
rates, prices, and volatil
it
ies. VaR is a quantitat
ive measure
\n
of market risk that applies recent histor
ical market cond
it
ions
\n
to estimate the potential future loss in market value that
\n
will not be exceeded in a set time period at a set statist
ical
\n
con\ufb01dence level.
\n
VaR provides a consistent measure that can be applied across
\n
trading businesses and products over time and can be set
\n
against actual daily trading pro\ufb01t and loss outcomes.
\n
For day-to-day risk management, VaR is calculated as at the
\n
close of business, generally at UK time for expected market
\n
movements over one business day and to a con\ufb01dence level
\n
of 97.5 per cent. Intra-day risk levels may vary from those
\n
reported at the end of the day.
\n
The Group applies two VaR methodologies:
\n
\u2022
Histor
ical s
imulat
ion: th
is involves the revaluation of all
\n
exist
ing pos
it
ions to re\ufb02ect the effect of h
istor
ically
\n
observed changes in Market Risk factors on the valuation of
\n
the current portfolio. This approach is applied for general
\n
Market Risk factors and the major
ity of spec
if
ic (cred
it
\n
spread) risk factors. The enhanced Volatil
ity Scal
ing VaR
\n
(VSV) model went live in January 2025, where risk factors\u2019
\n
returns are scaled to re\ufb02ect histor
ical volat
il
ity. The VSV
\n
model is more responsive to volatil
ity changes observed
in
\n
the market.
\n
\u2022
Monte Carlo simulat
ion: th
is methodology is sim
ilar to
\n
histor
ical s
imulat
ion but w
ith considerably more input risk
\n
factor observations. These are generated by random
\n
sampling techniques, but the results retain the essential
\n
variab
il
ity and correlations of histor
ically observed r
isk
\n
factor changes. This approach is applied for capturing
\n
the id
iosyncrat
ic credit spread risk factors.
\n
As an input to regulatory capital, trading book VaR is
\n
calculated for expected movements over 10 business days
\n
and to a con\ufb01dence level of 99 per cent. Some types of
\n
market risk are not captured in the regulatory VaR measure
\n
and these risks not in VaR are subject to capital add-ons.
\n
An analysis of VaR results in 2024 is available in the \u2018Risk pro\ufb01le\u2019
\n
section
(pages 247 to 249)
.
Counterparty Credit Risk measurement
\n
A Potential Future Exposure (PFE) model is used to measure
\n
the credit exposure aris
ing from the pos
it
ive mark-to-market
\n
of traded products. The PFE model provides a quantitat
ive
\n
estimate of future potential movements in market rates,
\n
prices, and volatil
it
ies at a certain con\ufb01dence level over
\n
different time horizons based on the tenor of the transactions.
\n
The Group applies two PFE methodologies: simulat
ion
\n
based, which is predominantly used, and an add-on based
\n
PFE methodology.
\n
Monitor
ing
\n
Traded Risk Management monitors the overall portfolio risk
\n
and ensures that it is with
in spec
if
ied l
im
its and therefore RA.
\n
Lim
its are typ
ically reviewed twice a year.
\n
All material Traded Risks are monitored daily against
\n
approved lim
its. Traded R
isk lim
its apply at all t
imes unless
\n
separate intra-day lim
its have been set.
\n
Treasury Risk
\n
Mit
igat
ion
\n
The Group develops polic
ies to address mater
ial Treasury
\n
Risks and aims to mainta
in
its risk pro\ufb01le with
in RA. In order
\n
to do this, metrics are set against Capital Risk, Liqu
id
ity and
\n
Funding Risk and IRRBB. Where appropriate, RA metrics are
\n
cascaded down to clusters and countries in the form of lim
its
\n
and management action triggers.
\n
Capital Risk
\n
In order to manage Capital Risk, strategic business and capital
\n
plans (Corporate Plan) are drawn up covering a \ufb01ve-year
\n
horizon and are approved by the Board annually. The plan
\n
ensures that adequate levels of capital, includ
ing loss-
\n
absorbing capacity, and an ef\ufb01c
ient m
ix of the different
\n
components of capital are mainta
ined to support our strategy
\n
and business plans.
\n
Treasury is responsible for the ongoing assessment of the
\n
demand for capital and the updating of the Group\u2019s
\n
capital plan.
\n
RA metrics includ
ing cap
ital, leverage, min
imum requ
irement
\n
for own funds and elig
ible l
iab
il
ity (MREL) and double
\n
leverage are assessed with
in the Corporate Plan to ensure
\n
that the strategy can be achieved with
in r
isk tolerances.
\n
Structural Foreign Exchange (FX) Risk
\n
The Group\u2019s structural FX posit
ion results from the Group\u2019s
\n
non-US dollar investment in the share capital and reserves of
\n
subsid
iar
ies and branches. The FX translation gains or losses
\n
are recorded in the Group\u2019s translation reserves with a direct
\n
impact on the Group\u2019s Common Equity Tier 1 ratio.
\n
The Group contracts hedges to manage its structural FX
\n
posit
ion
in accordance with the RA, and as a result the
\n
Group has taken net investment hedges to partially cover
\n
its exposure to certain non-US dollar currencies to mit
igate
\n
the FX impact of such posit
ions on
its capital ratios.
\n
Our structural foreign exchange exposures can be found
\n
on
page 249
.
\n
Liqu
id
ity and Funding Risk
\n
At Group, cluster and country level we implement various
\n
business-as-usual and stress risk metrics to monitor and
\n
manage Liqu
id
ity and Funding risk. This ensures that the
\n
Group mainta
ins an adequate and well-d
ivers
i\ufb01ed l
iqu
id
ity
\n
buffer, as well as a stable funding base, to meet its liqu
id
ity
\n
and funding regulatory requirements.
\n
The risk management approach and RA are assessed
\n
annually through the Internal Liqu
id
ity Adequacy Assessment
\n
Process. A funding plan is also developed for ef\ufb01c
ient l
iqu
id
ity
\n
projections to ensure that the Group
is adequately funded
\n
in the required currencies, to meet its obligat
ions and cl
ient
\n
funding needs. The funding plan is part of the overall
\n
Corporate Plan process align
ing to the cap
ital requirements.
\n
Further detail on Liqu
id
ity and Funding Risk can be found
\n
on
pages 250 to 253
.
\n
Interest Rate Risk in the Banking Book
\n
This risk arises from differences in the repric
ing pro\ufb01le,
interest
\n
rate basis, and optional
ity of bank
ing book assets, liab
il
it
ies
\n
and off-balance sheet items. IRRBB represents an economic
\n
and commercial risk to the Group and its capital adequacy.
\n
The Group monitors IRRBB against the RA.
\n
Further detail on IRRBB can be found on
page 254
.
\n
Pension Risk
\n
Pension Risk is the potential for loss due to having to meet an
\n
actuarially assessed shortfall in the Group\u2019s pension plans.
\n
Pension Risk arises from the Group\u2019s contractual or other
\n
liab
il
it
ies w
ith respect to its occupational pension plans or
\n
other long-term bene\ufb01t obligat
ion. For a funded plan,
it
\n
represents the risk that addit
ional contr
ibut
ions w
ill need to
\n
be made because of a future funding shortfall. For unfunded
\n
obligat
ions,
it represents the risk that the cost of meeting
\n
future bene\ufb01t payments is greater than currently antic
ipated.
\n
The Pension Risk is monitored against the RA and reported
\n
to the GRC. The RA metric is calculated as the total capital
\n
requirement (includ
ing both P
illar 1 and Pillar 2A capital) in
\n
respect of Pension Risk, expressed as a number of basis points
\n
of RWA.
\n
Recovery and resolution planning
\n
In line with PRA requirements, the Group mainta
ins a Recovery
\n
Plan, which is a live document to be used by management in
\n
the event of stress in order to restore the Group to a stable
\n
and sustainable posit
ion. The Recovery Plan
includes a set of
\n
recovery ind
icators, an escalat
ion framework, and a set of
\n
management actions capable of being implemented during
\n
a stress. A Recovery Plan is also mainta
ined w
ith
in each major
\n
entity, and all Recovery Plans are subject to period
ic \ufb01re-
\n
drill testing.
\n
As the UK resolution authority, the BoE set a single point of
\n
entry bail-in at the ultimate holding company level (Standard
\n
Chartered PLC) as the preferred resolution strategy for the
\n
Group. In support of this strategy, the Group has a set of
\n
capabil
it
ies, arrangements, and resources in place to
\n
mainta
in, test and
improve resolution capabil
it
ies, and
\n
continue to meet the required resolvabil
ity outcomes on an
\n
ongoing basis.
\n
Following the BoE\u2019s \ufb01rst resolvabil
ity assessment and publ
ic
\n
disclosure for major UK \ufb01rms in 2022, the Group submitted its
\n
Resolvabil
ity Self-Assessment Report to the BoE and PRA, and
\n
subsequently published its resolvabil
ity publ
ic disclosure in
\n
August 2024 as part of the second Resolvabil
ity Assessment
\n
Framework cycle.
Monitor
ing
\n
On a day-to-day basis, Treasury Risk is managed by Treasury,
\n
Finance and country CEOs. The Group regularly reports and
\n
monitors Treasury Risk inherent in its business activ
it
ies and
\n
those that arise from internal and external events.
\n
Internal risk management reports covering the balance
\n
sheet and the capital and liqu
id
ity posit
ion are presented
\n
to the relevant country Asset and Liab
il
ity Committee.
\n
The reports contain key informat
ion on balance sheet trends,
\n
exposures against RA and supporting risk measures which
\n
enable members to make informed decis
ions around the
\n
overall management of the balance sheet. In addit
ion, an
\n
independent Treasury CRO with
in ERM rev
iews the prudency
\n
and effectiveness of Treasury Risk management.
\n
Pension Risk is managed by the Head of Pensions and Reward
\n
Analytics, and monitored by the Global Head, ERM on a
\n
period
ic bas
is.
\n
Operational and
\n
Technology Risk
\n
Mit
igat
ion
\n
The Operational and Technology RTF sets out the Group\u2019s
\n
overall approach to the management of Operational and
\n
Technology Risk in line with the Group\u2019s Operational and
\n
Technology RA. This is supported by the Risk and Control
\n
Self-Assessment (RCSA), which provides a systematic
\n
approach for ident
i\ufb01cation and assessment of operat
ional
\n
risks, includ
ing des
ign and operation of mit
igat
ing
\n
controls (applicable to all risks as per the Non-Financ
ial
\n
Risk Taxonomy).
\n
The RCSA is used to determine the design and operating
\n
effectiveness of each process, and requires:
\n
\u2022
the recording of end-to-end processes which deliver our
\n
key client journey and business outcomes
\n
\u2022
the ident
i\ufb01cation of r
isks to support the achievement of
\n
client and business outcomes
\n
\u2022
the assessment of inherent risk on the impact to client and
\n
business outcomes, and likel
ihood of occurrence
\n
\u2022
the design and monitor
ing of key controls to effect
ively
\n
and ef\ufb01ciently m
it
igate pr
ior
it
ised risks with
in acceptable
\n
levels and
\n
\u2022
the assessment of residual risk and timely treatment of
\n
elevated risks.
\n
Elevated Residual Risks require treatment plans to address
\n
the underlying causes and reduce the risks to with
in the RA.
\n
Monitor
ing
\n
To deliver services to clients and to partic
ipate
in the \ufb01nanc
ial
\n
services sector, the Group runs processes which are exposed
\n
to Operational and Technology risks. The Group prior
it
ises
\n
and manages risks which are sign
i\ufb01cant to our cl
ients and
\n
to the \ufb01nancial serv
ices sectors. The control ind
icators are
\n
regularly monitored to determine the Group\u2019s exposure to
\n
residual risk.
\n
The residual risk assessments and reporting of events form
\n
the Group\u2019s Operational and Technology Risk pro\ufb01le.
\n
The completeness of the Operational and Technology Risk
\n
pro\ufb01le ensures appropriate prior
it
isat
ion and t
imel
iness of
\n
risk decis
ions,
includ
ing r
isk acceptances with treatment
\n
plans for risks that exceed acceptable thresholds.
\n
The BRC is informed on adherence to Operational and
\n
Technology RA through metrics reported for selected risks.
\n
These metrics are monitored, and escalation thresholds are
\n
devised based on the material
ity and s
ign
i\ufb01cance of the
\n
risk. These Operational and Technology RA metrics are
\n
consolidated on a regular basis and reported at the relevant
\n
Group committees, provid
ing sen
ior management with the
\n
relevant informat
ion to
inform their risk decis
ions.
\n
Information and Cyber
\n
Security (ICS) Risk
\n
Mit
igat
ion
\n
ICS Risk is managed through the ICS RTF, compris
ing a r
isk
\n
assessment methodology and supporting policy, standards,
\n
and methodologies. The ICS Policy and standards are
\n
aligned to industry best practice models includ
ing the
\n
National Institute of Standards and Technology Cyber
\n
Security Framework and ISO 27001. We undertake an
\n
annual ICS Effectiveness Review to evaluate ICS Risk
\n
management practices in alignment with the ERMF.
\n
Monitor
ing
\n
The Group Chief Information Security Of\ufb01cer (CISO) function
\n
monitors the evolving threat landscape covering cyber
\n
threats, attack vectors and threat actors that could target the
\n
Group. This includes performing a threat-led risk assessment
\n
to ident
ify key threats,
in-scope applicat
ions and key controls
\n
required to ensure the Group remains with
in RA.
\n
The ICS Risk pro\ufb01les of all businesses, functions and countries
\n
are consolidated to present a holist
ic Group-level ICS R
isk
\n
pro\ufb01le for ongoing monitor
ing. Mandatory ICS learn
ing,
\n
phish
ing exerc
ises and role-specif
ic tra
in
ing support
\n
colleagues to monitor and manage this risk.
\n
During these reviews, the status of each risk is assessed
\n
against the Group\u2019s controls to ident
ify any changes to
\n
impact and likel
ihood, wh
ich affects the overall risk rating.
\n
The Group stress tests its cyber posture through extensive
\n
control testing and by executing offensive security testing
\n
exercises, includ
ing vulnerab
il
ity test
ing, code reviews,
\n
penetration tests and Red Team attack simulat
ion test
ing.
\n
This testing approach constantly stress tests the Group\u2019s
\n
defence and approach to cyber security. These show a wider
\n
picture of the Group\u2019s risk pro\ufb01le, leading to better vis
ib
il
ity on
\n
potential \u2018in \ufb02ight\u2019 risks. The Group also tracks remediat
ion of
\n
security matters ident
i\ufb01ed by external rev
iews, such as the
\n
BoE CBEST Threat Intelligence-Led Assessment and the
\n
Hong Kong Monetary Authority\u2019s (HKMA) Intelligence-led
\n
Cyber Attack Simulat
ion Test
ing (iCAST).
\n
The CISO and OTCR functions monitor the ICS Risk pro\ufb01le and
\n
ensure that breaches of RA are escalated to the appropriate
\n
governance committee or authority levels for remediat
ion
\n
and tracking.
Financ
ial Cr
ime Risk
\n
Roles and responsib
il
it
ies
\n
The Group Head, CFCR is the Group\u2019s Compliance and
\n
Money-Laundering Reporting Of\ufb01cer and performs the
\n
Financ
ial Conduct Author
ity (FCA) controlled function
\n
and senior management function in accordance with
\n
requirements set out by the FCA, includ
ing those set out
\n
in their handbook on systems and controls.
\n
Mit
igat
ion
\n
The CFCR function is responsible for the establishment and
\n
maintenance of polic
ies, standards, and overs
ight of \ufb01rst line
\n
of defence controls to ensure continued compliance with
\n
\ufb01nancial cr
ime laws and regulations, and the mit
igat
ion
\n
of Financ
ial Cr
ime Risk. In this, the requirements of the
\n
Operational and Technology RTF are followed to ensure
\n
a consistent approach to the management of processes
\n
and controls.
\n
Financ
ial Cr
ime Risk management is built on a risk-based
\n
approach, meaning the risk management plans, processes,
\n
activ
it
ies, and resource allocations are determined according
\n
to the level of risk.
\n
Risk mit
igat
ion takes place through the process of
\n
ident
i\ufb01cation of new and amended regulat
ions and the
\n
implementat
ion of necessary process and control changes
\n
to address these.
\n
Monitor
ing
\n
The Group monitors enterprise-wide \ufb01nanc
ial cr
ime risks
\n
through the Financ
ial Cr
ime Risk Assessment. This is
\n
undertaken annually to assess the inherent \ufb01nanc
ial cr
ime
\n
risk exposures and the associated processes and controls by
\n
which these exposures are mit
igated.
\n
Financ
ial Cr
ime Risk controls are governed in line with the
\n
Operational and Technology RTF. The Group has a monitor
ing
\n
and reporting process in place for Financ
ial Cr
ime Risk, which
\n
includes escalation and reporting to the CFCR and relevant
\n
risk committees.
\n
While not a formal governance committee, the CFCR
\n
Oversight Group provides oversight of CFCR risks includ
ing
\n
the effective implementat
ion of the F
inanc
ial Cr
ime RTF.
\n
It also provides oversight, challenge and direct
ion to CFCR
\n
policy owners on material changes and posit
ions taken
in
\n
CFCR-owned polic
ies,
includ
ing
issues relating to regulatory
\n
interpretat
ion and Group\u2019s CFCR RA. The Regulatory
\n
Change Oversight Forum provides vis
ib
il
ity and overs
ight
\n
of material and/or complex large-scale regulatory change
\n
emanating from \ufb01nanc
ial serv
ices regulators impact
ing
\n
non-\ufb01nancial r
isks.
\n
Further details on how we manage \ufb01nanc
ial cr
ime can be
\n
found on
page 96
.
\n
Compliance Risk
\n
Roles and responsib
il
it
ies
\n
All activ
it
ies that the Group engages in must comply with the
\n
relevant country/local specif
ic and extraterr
itor
ial regulat
ions.
\n
Compliance Risk includes the risks associated with a failure
\n
to comply with all regulations that are applicable to the
\n
Group regardless of the issu
ing regulatory author
ity. Where
\n
Compliance Risk arises, or could arise, from failure to manage
\n
another PRT, the oversight and management processes for
\n
that specif
ic PRT must be followed, to ensure that effect
ive
\n
oversight and challenge of the \ufb01rst line of defence can be
\n
provided by the appropriate second line of defence function.
\n
Areas of regulation can be broadly div
ided
into two dist
inct
\n
categories: those issued by \ufb01nanc
ial serv
ice regulatory
\n
authorit
ies and those
issued by non-\ufb01nanc
ial serv
ice
\n
regulators. The Group is exposed to both categories of
\n
regulation, and roles and responsib
il
it
ies d
iffer depending
\n
on the category. For regulations issued by \ufb01nanc
ial serv
ices
\n
regulatory authorit
ies and other regulators that may
issue
\n
regulations pertain
ing to Compl
iance Risk, CFCR ident
i\ufb01es
\n
new and amended regulations as and when issued and
\n
communicates the relevant regulatory obligat
ions to the
\n
country RFO delegate. The areas where CFCR does not act
\n
in a second line of defence capacity are specif
ied
in the
\n
respective RTF with appropriate ownership.
\n
Each of the assigned second line of defence functions have
\n
responsib
il
it
ies,
includ
ing mon
itor
ing relevant regulatory
\n
developments from non-\ufb01nancial serv
ices regulators at
\n
both Group and country levels, policy development,
\n
implementat
ion, and val
idat
ion as well as overs
ight and
\n
challenge of \ufb01rst line of defence processes and controls.
\n
Mit
igat
ion
\n
The CFCR function is responsible for the establishment and
\n
maintenance of polic
ies, standards, and overs
ight of the \ufb01rst
\n
line of defence controls to ensure compliance with laws and
\n
regulations, and the mit
igat
ion of Compliance Risk. In this,
\n
the requirements of the Operational and Technology RTF are
\n
followed to ensure a consistent approach to the management
\n
of processes and controls.
\n
Monitor
ing
\n
The monitor
ing of controls des
igned to mit
igate the r
isk of
\n
regulatory non-compliance in processes is governed in line
\n
with the Operational and Technology RTF. Compliance Risk
\n
reporting includes escalation and reporting to the CFCR and
\n
relevant risk committees.
\n
While not a formal governance committee, the CFCR
\n
Oversight Group provides oversight of CFCR, risks includ
ing
\n
the effective implementat
ion of the Compl
iance RTF, and
\n
oversight, challenge and direct
ion to CFCR pol
icy owners on
\n
material changes and posit
ions taken
in CFCR-owned polic
ies,
\n
includ
ing
issues relating to regulatory interpretat
ion and the
\n
Group\u2019s CFCR RA. The Regulatory Change Oversight Forum
\n
provides vis
ib
il
ity and overs
ight of material and/or complex
\n
large-scale regulatory change emanating from \ufb01nanc
ial
\n
services regulators impact
ing non-\ufb01nancial r
isks.
Environmental, Social
\n
and Governance and
\n
Reputational (ESGR)
\n
Risk
\n
Mit
igat
ion
\n
The ESGR RTF provides the overall risk management
\n
approach for Environmental, Social and Governance (ESG)
\n
and Reputational risks.
\n
The ESG Risk policy outlines the Group\u2019s commitment to
\n
integrat
ing ESG cons
iderat
ions
into its business, operations,
\n
and decis
ion-mak
ing process. The policy sets out the
\n
requirements for ident
ify
ing, assessing, and managing
\n
ESG risks, includ
ing Cl
imate Risk.
\n
The Reputational Risk policy sets out the princ
ipal sources
\n
of reputational risk driven by negative shifts in stakeholder
\n
perceptions, as well as the responsib
il
it
ies for manag
ing
\n
Reputational Risk aris
ing out of cl
ient onboarding and due
\n
dil
igence, from transact
ions, product design and product
\n
features, or strategic coverages such as exposure to sensit
ive
\n
industr
ies, markets, or
investments. Whenever potential
\n
for stakeholder concerns is ident
i\ufb01ed,
issues are subject to
\n
review and decis
ion by both the \ufb01rst and second l
ines of
\n
defence. The Reputational Risk policy also sets out the key
\n
considerat
ions for m
it
igat
ing greenwashing risk that can
\n
arise during product and/or deal lifecycle, sustainab
il
ity
\n
reporting and disclosures, and external campaigns related
\n
to sustainab
il
ity themes.
\n
Monitor
ing
\n
Exposure to reputational risks aris
ing from transact
ions,
\n
clients, products and strategic coverage is monitored
\n
through established triggers to prompt the appropriate
\n
risk-based considerat
ions and assessment by the \ufb01rst l
ine
\n
of defence and escalations to the second line of defence.
\n
Risk acceptance decis
ions and themat
ic trends are also
\n
reviewed on a period
ic bas
is.
\n
Exposure to ESG Risks is monitored through triggers
\n
embedded with
in the \ufb01rst l
ine of defence processes. The
\n
environmental and social risks are considered for clients and
\n
transactions via Environmental and Social Risk Assessments
\n
and/or Climate Risk Assessments (CRAs). Vendors that are
\n
presenting as high risk are assessed for modern slavery risk.
\n
Based on responses provided by the supplier at onboarding,
\n
those that meet the high-risk category-country combinat
ions
\n
are subjected to further risk assessment.
\n
Exposure to Climate Risk is monitored in conjunct
ion w
ith
\n
other PRTs. We have embedded qualitat
ive and quant
itat
ive
\n
climate considerat
ions
into the Group\u2019s Credit Underwrit
ing
\n
Princ
iples for O
il and Gas, Min
ing, Sh
ipp
ing, Commerc
ial Real
\n
Estate and Project Finance portfolio. We have expanded
\n
coverage of Climate and Credit Risk considerat
ions to phys
ical
\n
collateral, as they serve as key risk mit
igants, espec
ially in
\n
default events. We assess physical risk concentrations for our
\n
WRB portfolio on a quarterly basis and assess the physical
\n
risk vulnerabil
it
ies of our sites period
ically and when new s
ites
\n
are onboarded.
\n
Our Net Zero Climate Risk Working Forum meets quarterly
\n
to discuss account plans for high climate risk and net zero
\n
divergent clients. Stress testing and scenario analysis are
\n
used to assess the impact of ESGR-related risks. The impact
\n
on capital requirements has been included in the PLC Group
\n
Internal Capital Adequacy Assessment Process. Management
\n
informat
ion
is reviewed at a quarterly frequency and any
\n
breaches in RA are reported to the GRC and BRC.
\n
Model Risk
\n
Mit
igat
ion
\n
The Model Risk Policy and Standards de\ufb01ne requirements
\n
for model development, validat
ion,
implementat
ion and use,
\n
includ
ing regular model performance mon
itor
ing and, where
\n
required, model risk mit
igants.
\n
Model de\ufb01cienc
ies ident
i\ufb01ed through the development or
\n
validat
ion process, or model performance
issues ident
i\ufb01ed
\n
through ongoing monitor
ing, are m
it
igated through
\n
respective model risk mit
igants. M
it
igants
include model
\n
overlays as either post-model adjustments (PMAs) or
\n
management adjustments, model restrict
ions and potent
ially
\n
a model recalibrat
ion or redevelopment, all of wh
ich undergo
\n
independent review, challenge, and approval. PMAs are used
\n
to address observed de\ufb01cienc
ies caused from with
in the
\n
model, by adjusting the model output e
ither directly or
\n
ind
irectly (e.g. adjusting parameters). Where a PMA
is applied
\n
as a mit
igant for a model used
in Pillar 1 or Pillar 2 calculations
\n
or models with material impact on \ufb01nanc
ial account
ing
\n
disclosures (e.g. IFRS 9), the independent review must be
\n
performed by Group Model Validat
ion (GMV) w
ith sign-off
\n
from the Model Approver prior to implementat
ion.
\n
Management adjustments are used to address issues by
\n
applying management decis
ions w
ithout adjust
ing a d
irect
\n
modelling component.
\n
As with all PRTs, operational controls are used to govern all
\n
Model Risk-related processes, with regular risk assessments
\n
performed to assess appropriateness and effectiveness of
\n
those controls, in line with the Operational and Technology
\n
RTF, with remediat
ion plans
implemented where necessary.
\n
Group Model Risk Policy and Standards also de\ufb01ne
\n
requirements for determin
ist
ic quantitat
ive methods
\n
(DQMs) that are used as part of an end-to-end modelled
\n
process. DQMs are sim
ilar
in nature to a model, however the
\n
processing component is either purely determin
ist
ic or has an
\n
element of expert judgement. Unlike a model, there is no use
\n
of statist
ical, econom
ic \ufb01nanc
ial or mathemat
ical theories.
\n
The regulatory framework around Model Risk is continuously
\n
evolving, the PRA\u2019s Supervisory Statement 1/23 (SS1/23) is
\n
an example. The Group proactively monitors regulatory
\n
changes to take the required actions timely for compliance.
\n
Regarding SS1/23, the Group is currently deliver
ing to a
\n
roadmap to compliance, which commenced in 2024 and
\n
will continue over the next two years.
\n
Monitor
ing
\n
The Group monitors Model Risk via a set of RA metrics.
\n
Adherence to Model RA and any threshold breaches are
\n
reported to the BRC, GRC and MRC. These metrics and
\n
thresholds are reviewed twice per year to ensure that
\n
threshold calibrat
ion rema
ins appropriate, and the themes
\n
adequately cover the current risks.
\n
Models undergo regular performance monitor
ing based on
\n
their level of perceived Model Risk, with monitor
ing results
\n
presented, and breaches escalated to the Model Sponsor,
\n
Model Owner, GMV and respective MRC or Indiv
idual
\n
Delegated Model Approvers.
\n
Model Risk management produces Model Risk reports
\n
covering the model landscape, which include performance
\n
metrics, ident
i\ufb01ed model
issues and remediat
ion plans.
\n
These are presented for discuss
ion at the Model R
isk
\n
governance committees on a regular basis.
Risk pro\ufb01le
Credit Risk (audited)
Basis of preparation
Unless otherwise stated, the balance sheet and income
statement informat
ion presented w
ith
in th
is section is based
on the Group\u2019s management view. This is princ
ipally the
location from which a client relationsh
ip
is managed, which
may differ from where it is \ufb01nanc
ially booked and may be
shared between businesses and/or regions. This view re\ufb02ects
how the client segments and regions are managed internally.
Loans and advances to customers and banks held at
amortised cost in this \u2018Risk pro\ufb01le\u2019 section include reverse
repurchase agreement balances held at amortised cost,
per Note 16 Reverse repurchase and repurchase agreements
includ
ing other s
im
ilar secured lend
ing and borrowing.
Credit Risk overview
Credit Risk is the potential for loss due to the failure of a
counterparty to meet its contractual obligat
ions to pay the
Group. Credit exposures arise from both the banking and
trading books.
Impairment model
IFRS 9 mandates an impa
irment model that requ
ires the
recognit
ion of expected cred
it losses (ECL) on all \ufb01nanc
ial
debt instruments held at amortised cost, Fair Value through
Other Comprehensive Income (FVOCI), undrawn loan
commitments and \ufb01nanc
ial guarantees.
Staging of \ufb01nanc
ial
instruments
Financ
ial
instruments that are not already credit-impa
ired
are orig
inated
into stage 1 and a 12-month ECL provis
ion
is recognised.
Instruments will remain in stage 1 until they are repaid, unless
they experience sign
i\ufb01cant cred
it deteriorat
ion (stage 2) or
they become credit-impa
ired (stage 3).
Instruments will transfer to stage 2 and a lifet
ime ECL
provis
ion
is recognised when there has been a sign
i\ufb01cant
change in the Credit Risk compared to what was expected
at orig
inat
ion.
The framework used to determine a Sign
i\ufb01cant Increase
in
Credit Risk (SICR) is set out below.
\n \n
Stage 1
Stage 2
Stage 3
\u2022 12-month ECL
\u2022
Lifet
ime expected cred
it loss
\u2022 Credit-impa
ired
\u2022 Performing
\u2022
Performing but has exhib
ited SICR
\u2022 Non-performing
IFRS 9 ECL princ
iples and approaches
The main methodology princ
iples and approach adopted by the Group are set out
in the following table.
\n \n
Title
Supplementary Information
Page
Approach for determin
ing ECL
\u2022
IFRS 9 ECL methodology
236
\u2022
Applicat
ion of l
ifet
ime ECL
236
Key assumptions and judgements in determin
ing ECL
\u2022
Incorporation of forward-looking informat
ion
238
\u2022
Forecast of key macroeconomic variables underlying the
238
ECL calculation and the impact of non-linear
ity
\u2022
Impact of multiple economic scenarios
241
\u2022
Judgemental adjustments and management overlays
241
\u2022
Sensit
iv
ity of ECL calculation to macroeconomic variables
242
Sign
i\ufb01cant
increase in Credit risk (SICR)
\u2022
Quantitat
ive and qual
itat
ive cr
iter
ia
244
Assessment of credit-impa
ired \ufb01nancial assets
\u2022
Wealth and Retail Banking (WRB) clients
245
\u2022
Corporate and Investment Banking (CIB) and Private
245
Banking clients
\u2022 Write-offs
245
Transfers between stages
\u2022
Movement in gross exposures and credit impa
irment
219
Modif
ied \ufb01nancial assets
\u2022
Forborne and other modif
ied loans
226
Governance of PMAs and applicat
ion of expert cred
it
\u2022
IFRS 9 Impairment Committee
246
judgement in respect of ECL
Summary of Credit Risk performance
Maximum exposure
The Group\u2019s on-balance sheet maximum exposure to Credit
Risk increased by $25 bill
ion to $823 b
ill
ion (31 December 2023:
$798 bill
ion). Cash and balances at Central banks decreased
by $6.5 bill
ion to $63 b
ill
ion (31 December 2023: $70 b
ill
ion) due
to reduced placements. Loans to banks held at amortised
cost decreased by $1.4 bill
ion to $44 b
ill
ion (31 December 2023:
$45 bill
ion). Fa
ir value through pro\ufb01t and loss increased by
$27.8 bill
ion to $172 b
ill
ion (31 December 2023: $144 b
ill
ion),
largely due to increases in debt securit
ies and reverse repos,
but this was partially offset by a $16.7 bill
ion reduct
ion in
debt securit
ies not held at fa
ir value through pro\ufb01t and loss.
Loans and advances to customers decreased by $5.9 bill
ion to
$281\u00a0bill
ion (31 December 2023: $287 b
ill
ion), due to a reduct
ion
in mortgages in Korea, Singapore and Hong Kong, given
continued headwinds, includ
ing fore
ign currency movements.
Loans and advances to customers in the CIB segment
\n
increased by $7.6 bill
ion, ma
inly due to the execution of
\n
pipel
ine deals
in Global Banking, but this was offset by a
\n
$7.4\u00a0bill
ion decrease
in Central and other items. Derivat
ive
\n
\ufb01nancial
instruments increased by $31 bill
ion to $81 b
ill
ion
\n
(31\u00a0December 2023: $50 bill
ion). Off-balance sheet
instruments
\n
increased by $16 bill
ion to $273 b
ill
ion (31\u00a0December 2023:
\n
$257\u00a0bill
ion), due to an
increase in \ufb01nanc
ial guarantees and
\n
other equivalents, which was driven by new\u00a0business.
\n
Further details can be found in the \u2018Maximum exposure to Credit Risk\u2019
\n
section on
page 209
; \u2018Credit quality by client segment\u2019 section on
\n
page\u00a0212
.
\n
Loans and advances
\n
94 per cent (31 December 2023: 94 per cent) of the Group\u2019s
\n
gross loans and advances to customers remain in stage 1 at
\n
$269 bill
ion (31 December 2023: $274 b
ill
ion), re\ufb02ect
ing our
\n
continued focus on high-quality orig
inat
ion. For WRB, stage 1
\n
balances decreased by $6.5 bill
ion to $117 b
ill
ion (31 December
\n
2023: $123 bill
ion), of wh
ich $5.9 bill
ion was ma
inly due to a
\n
reduction in the mortgage portfolios in Korea, Singapore and
\n
Hong Kong, mainly driven by slower booking momentum and
\n
higher attrit
ion as a result of
intense interest rate competit
ion.
\n
For CIB, stage 1 balances increased by $8\u00a0bill
ion to $129 b
ill
ion
\n
(31 December 2023: $121 bill
ion) ma
inly driven by the Energy,
\n
Financ
ing, Insurance and Transport sectors. For Central and
\n
other items, stage 1 balances decreased by 6.3 bill
ion to
\n
$22 bill
ion (31 December 2023: $28\u00a0b
ill
ion) due to a reduct
ion
\n
in exposures to the Government sector, across a number of
\n
our markets.
\n
Stage 2 loans and advances to customers decreased by
\n
$0.6\u00a0bill
ion to $11 b
ill
ion (31 December 2023: $11 b
ill
ion). For
\n
WRB, stage 2 balances decreased by $0.4 bill
ion to $1.9 b
ill
ion
\n
(31 December 2023: $2.3 bill
ion), due to decrease
in the
\n
mortgage portfolio. For Central and other items, higher risk
\n
exposures decreased by $0.9 bill
ion to $0.1 b
ill
ion (31 December
\n
2023: $1 bill
ion), was due to the matur
ity of short-term loan
\n
exposures that were replaced with debt securit
ies
in Pakistan.
\n
Stage 3 loans and advances decreased by $1 bill
ion to
\n
$6.2\u00a0bill
ion (31 December 2023: $7.2 b
ill
ion) due to debt sales,
\n
repayments, write-offs and upgrades to Stage 2 loans in CIB.
\n
WRB stage 3 balances remained broadly stable at $1.6 bill
ion
\n
(31 December 2023: $1.5 bill
ion). For Central and other
items,
\n
stage 3 balances decreased by $0.1 bill
ion to $0.1 b
ill
ion
\n
(31 December 2023: $0.2 bill
ion).
\n
Further details can be found in the \u2018Analysis of \ufb01nanc
ial
instruments by
\n
stage\u2019 section on
page 210
; \u2018Credit quality by client segment\u2019 section
\n
on
page 212
; \u2018Credit quality by industry\u2019 section on
page 230
.
\n
Analysis of Stage 2
\n
The key SICR driver which caused exposures to be classif
ied
\n
as stage 2 remains an increase in probabil
ity of default (PD).
\n
The proportion of CIB exposures in stage 2 decreased due to
\n
a reduction in clients placed on non-purely precautionary
\n
early alert that have not breached PD thresholds. In WRB, the
\n
exposures in stage 2 loans with more than 30 days past due
\n
remained stable at $0.3 bill
ion (31 December 2023: $0.3 b
ill
ion).
\n
In Central and other items, the $0.5 bill
ion decrease
in CG12
\n
balances to $1.5\u00a0bill
ion (31 December 2023: $2 b
ill
ion) was
\n
due to the maturity of short-term loan exposures that were
\n
replaced with debt securit
ies
in Pakistan. \u2018Others\u2019 category
\n
includes exposures where orig
inat
ion data is incomplete and
\n
the exposures are allocated into stage 2.
\n
Further details can be found in the \u2018Credit quality by client segment\u2019
\n
section in
page
212
; \u2018Analysis of stage 2 balances\u2019 section on
page 225.
\n
Credit impa
irment charges
\n
The Group\u2019s ongoing credit impa
irment was a net charge of
\n
$547 mill
ion (31 December 2023: $508 m
ill
ion).
\n
WRB contributed a net charge of $644 mill
ion (31 December
\n
2023: $354 mill
ion), dr
iven by a higher interest rate
\n
environment impact
ing repayments on cred
it cards and
\n
personal loans and to a few non-repeating ECL releases
\n
recorded in 2023. The increase in impa
irments was also due
\n
to the maturity and portfolio growth of dig
ital partnersh
ips
\n
in China and Indonesia, as well as a $21 mill
ion overlay
\n
aris
ing from the settlement fa
ilure of two e-commerce
\n
platforms in Korea.
\n
CIB contributed a net release of $106 mill
ion (31 December
\n
2023: $123 mill
ion charge) due to a number of stage 3 releases
\n
and repayments.
\n
Further details can be found in the \u2018Financ
ial rev
iew\u2018 section on
page 51
;
\n
\u2018Credit impa
irment charge\u2019 sect
ion on
page 226
.
\n
Commercial Real Estate (CRE)
\n
The Group provides loans to CRE counterparties of which
\n
$8.8\u00a0bill
ion
is to counterparties in the CIB segment where the
\n
source of repayment is substantially derived from rental or
\n
sale of real estate and is secured by real estate collateral.
\n
The remain
ing CRE loans compr
ise working capital loans to
\n
real estate corporates, loans with non-property collateral,
\n
unsecured loans and loans to real estate entit
ies of d
ivers
i\ufb01ed
\n
conglomerates. The average LTV ratio of the performing book
\n
CRE portfolio has increased to 54 per cent (31 December 2023:
\n
52 per cent). The proportion of loans with an LTV greater than
\n
80 per cent has increased to 4 per cent (31 December 2023:
\n
3 per cent).
\n
China CRE
\n
Total exposure to China CRE decreased by $0.6 bill
ion to
\n
$2\u00a0bill
ion (31 December 2023: $2.6 b
ill
ion) ma
inly from exposure
\n
reductions. The proportion of credit impa
ired exposures
\n
increased to 70 per cent (31 December 2023: 58 per cent)
\n
due to repayments with
in the non-cred
it impa
ired portfol
io.
\n
The overall provis
ion coverage
increased to 87 per cent
\n
(31\u00a0December 2023: 72 per cent), re\ufb02ecting increased provis
ion
\n
charges during the year. The proportion of the loan book
\n
rated as Higher Risk increased to 3 per cent (31 December
\n
2023: 0.3 per cent) primar
ily due to downgrades dur
ing
\n
the year.
\n
The Group continues to hold a judgemental management
\n
overlay, which decreased by $71 mill
ion to $70 m
ill
ion
\n
(31\u00a0December 2023: $141 mill
ion), re\ufb02ect
ing repayments
\n
and util
isat
ions during the year.
\n
The Group is further ind
irectly exposed to Ch
ina CRE through
\n
its associate investment in China Bohai Bank.
\n
Further details can be found in the \u2018China commercial real estate\u2019 section
\n
on
page 234
; \u2018Judgemental adjustments\u2019 section on
page 241
.
\n
High carbon sectors
\n
With the Group\u2019s expansion in the asset-backed lending
\n
business, the total on-and-off balance sheet exposure for
\n
the Aviat
ion sector
increased to $2.6 bill
ion (31 December
\n
2023: $1.9 bill
ion), wh
ile the Shipp
ing sector decreased to
\n
$4.6 bill
ion (31 December 2023: $5 b
ill
ion). The Group\u2019s pos
it
ion
\n
statements mandates that for newer vessels and aircraft,
\n
only carbon ef\ufb01cient ones can be \ufb01nanced.
\n
While exposures to the Oil and Gas sector increased to
\n
$21\u00a0bill
ion (31 December 2023: $20 b
ill
ion) due to
increased
\n
funding towards more emiss
ions-ef\ufb01cient counterpart
ies,
\n
exposures to the Power sector increased to $11 bill
ion
\n
(31\u00a0December 2023: $9 bill
ion) due to
increased lending to
\n
renewables and ef\ufb01cient gas generat
ion counterparties.
\n
Further details on net zero targets and progress in managing transit
ion
\n
risk of the high carbon sectors can be found in the \u2018Sustainab
il
ity review\u2019
\n
section on
page 57
; \u2018High carbon sectors\u2019 section on
page 232
.
Maximum exposure to Credit Risk (audited)
\n
The table below presents the Group\u2019s maximum exposure to Credit Risk for its on-balance sheet and off-balance sheet \ufb01nanc
ial
\n
instruments as at 31 December 2024, before and after taking into account any collateral held or other Credit Risk mit
igat
ion.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Credit risk management
Credit risk management
Master
Master
Maximum
netting
Net
Maximum
netting
Net
exposure
Collateral
8
agreements
Exposure
exposure
Collateral
8
agreements
Exposure
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
On-balance sheet
Cash and balances at central banks
63,447
\u2013
\u2013
63,447
69,905
\u2013
\u2013
69,905
Loans and advances to banks
1
43,593
2,946
40,647
44,977
1,738
43,239
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
7
2,946
2,946
\u2013
\u2013
1,738
1,738
\u2013
\u2013
Loans and advances to customers
1
281,032
119,047
\u2013
161,985
286,975
118,492
168,483
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending\u2077
9,660
9,660
\u2013
\u2013
13,996
13,996
\u2013
\u2013
Investment securit
ies \u2013 Debt secur
it
ies
and other elig
ible b
ills
2
143,562
143,562
160,263
\u2013
\u2013
160,263
Fair value through pro\ufb01t or loss
3, 7
172,031
86,195
\u2013
85,836
144,276
81,847
\u2013
62,429
Loans and advances to banks
2,213
\u2013
\u2013
2,213
2,265
\u2013
\u2013
2,265
Loans and advances to customers
7,084
\u2013
\u2013
7,084
7,212
\u2013
\u2013
7,212
Reverse repurchase agreements and
other sim
ilar lend
ing
7
86,195
86,195
\u2013
\u2013
81,847
81,847
\u2013
\u2013
Investment securit
ies \u2013 Debt secur
it
ies
and other elig
ible b
ills
2
76,539
\u2013
\u2013
76,539
52,952
\u2013
\u2013
52,952
Derivat
ive \ufb01nancial
instruments
4, 7
81,472
15,005
60,280
6,187
50,434
8,440
39,293
2,701
Accrued income
2,776
\u2013
\u2013
2,776
2,673
\u2013
\u2013
2,673
Assets held for sale
9
889
\u2013
\u2013
889
701
\u2013
\u2013
701
Other assets
5
34,585
\u2013
\u2013
34,585
38,140
\u2013
\u2013
38,140
Total balance sheet
823,387
223,193
60,280
539,914
798,344
210,517
39,293
548,534
Off-balance sheet
6
Undrawn Commitments
182,529
2,489
\u2013
180,040
182,390
2,940
\u2013
179,450
Financ
ial Guarantees and
other equivalents
90,632
1,807
\u2013
88,825
74,414
2,590
\u2013
71,824
Total off-balance sheet
273,161
4,296
\u2013
268,865
256,804
5,530
\u2013
251,274
Total
1,096,548
227,489
60,280
808,779
1,055,148
216,047
39,293
799,808
\n
1
Amounts are net of ECL provis
ions. An analys
is of credit quality is set out in the credit quality analysis section (page 212). Further details of collateral held by
\n
client segment and stage are set out in the collateral analysis section (page 227). The Group also has credit mit
igat
ion through Credit Linked Notes as set out
\n
on page 229
\n
2
Excludes equity and other investments of $994 mill
ion (31 December 2023: $992 m
ill
ion). Further deta
ils are set out in Note 13 \ufb01nanc
ial
instruments
\n
3
Excludes equity and other investments of $5,486 mill
ion (31 December 2023: $2,940 m
ill
ion). Further deta
ils are set out in Note 13 \ufb01nanc
ial
instruments
\n
4
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the
\n
sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions
\n
5
Other assets include Hong Kong certif
icates of
indebtedness, cash collateral, and acceptances, in addit
ion to unsettled trades and other \ufb01nancial assets
\n
6
Excludes ECL provis
ions of $255 m
ill
ion (31 December 2023: $227 m
ill
ion) wh
ich are reported under Provis
ions for l
iab
il
it
ies and charges
\n
7
Collateral capped at maximum exposure (over-collateralised)
\n
8
Adjusted for over-collateralisat
ion, wh
ich has been determined with reference to the drawn and undrawn component as this best re\ufb02ects the effect on the
\n
amount aris
ing from expected cred
it losses
\n
9
The amount is after ECL. provis
ions. Further deta
ils are set out in Note 21 Assets held for sale and associated liab
il
it
ies
Analysis of \ufb01nanc
ial
instruments by stage (audited)
\n
The table below presents the gross and credit impa
irment balances by stage for the Group\u2019s amort
ised cost and FVOCI
\n
\ufb01nancial
instruments as at 31 December 2024.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and
balances at
central banks
62,597
\u2013
62,597
432
(4)
428
426
(4)
422
63,455
(8)
63,447
Loans and
advances
to banks
(amortised cost)
43,208
(10)
43,198
318
(1)
317
83
(5)
78
43,609
(16)
43,593
Loans and
advances to
customers
(amortised cost)
269,102
(483) 268,619
10,631
(473)
10,158
6,203
(3,948)
2,255
285,936
(4,904) 281,032
Debt securit
ies
and other
elig
ible b
ills
5
141,862
(23)
1,614
(4)
103
(2)
143,579
(29)
Amortised cost
54,637
(15)
54,622
475
(2)
473
42
\u2013
42
55,154
(17)
55,137
FVOCI
2
87,225
(8)
1,139
(2)
61
(2)
88,425
(12)
\u2013
Accrued income
(amortised cost)
4
2,776
2,776
\u2013
\u2013
2,776
\u2013
2,776
Assets held
for sale
4
840
(7)
833
38
\u2013
38
58
(45)
13
936
(52)
884
Other assets
34,585
\u2013
34,585
\u2013
\u2013
\u2013
3
(3)
\u2013
34,588
(3)
34,585
Undrawn
commitments
3
178,516
(50)
4,006
(52)
7
(1)
182,529
(103)
Financ
ial
guarantees,
trade credits
and irrevocable
letter of credits
3
87,991
(16)
2,038
(7)
603
(129)
90,632
(152)
Total
821,477
(589)
19,077
(541)
7,486
(4,137)
848,040
(5,267)
\n
1
Gross carrying amount for off-balance sheet refers to notional values
\n
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
\n
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a \ufb01nanc
ial l
iab
il
ity and therefore there is no \u201cnet carrying amount\u201d.
\n
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
\n
be separately ident
i\ufb01ed. Otherw
ise they will be reported against the drawn component
\n
4 Stage 1 ECL is not material
\n
5
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $N
il mill
ion (31 December 2023:
\n
$14 mill
ion)
\n \n
2023
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and
balances at
central banks
69,313
\u2013
69,313
207
(7)
200
404
(12)
392
69,924
(19)
69,905
Loans and
advances
to banks
(amortised cost)
44,384
(8)
44,376
540
(10)
530
77
(6)
71
45,001
(24)
44,977
Loans and
advances to
customers
(amortised cost)
273,692
(430) 273,262
11,225
(420)
10,805
7,228
(4,320)
2,908
292,145
(5,170) 286,975
Debt securit
ies
and other
ible b
elig
ills
5
158,314
(26)
1,860
(34)
164
(61)
160,338
(121)
Amortised cost
56,787
(16)
56,771
103
(2)
101
120
(57)
63
57,010
(75)
56,935
FVOCI
2
101,527
(10)
1,757
(32)
44
(4)
103,328
(46)
Accrued income
(amortised cost)
4
2,673
2,673
\u2013
\u2013
2,673
\u2013
2,673
Assets held
for sale
4
661
(33)
628
76
(4)
72
1
\u2013
1
738
(37)
701
Other assets
38,139
\u2013
38,139
\u2013
\u2013
\u2013
4
(3)
1
38,143
(3)
38,140
Undrawn
commitments
3
176,654
(52)
5,733
(39)
3
\u2013
182,390
(91)
Financ
ial
guarantees,
trade credits
and irrevocable
letter of credits
3
70,832
(10)
2,910
(14)
672
(112)
74,414
(136)
Total
834,662
(559)
22,551
(528)
8,553
(4,514)
865,766
(5,601)
\n
1
Gross carrying amount for off-balance sheet refers to notional values
\n
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
\n
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a \ufb01nanc
ial l
iab
il
ity and therefore there is no \u201cnet carrying amount\u201d.
\n
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
\n
be separately ident
i\ufb01ed. Otherw
ise they will be reported against the drawn component
\n
4 Stage 1 ECL is not material
\n
5
Stage 3 gross includes $80 mill
ion or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $14 m
ill
ion
Credit quality analysis (audited)
\n
Credit quality by client segment
\n
For CIB, exposures are analysed by credit grade (CG), which plays a central role in the quality assessment and monitor
ing of r
isk.
\n
All loans are assigned a CG, which is reviewed period
ically and amended
in light of changes in the borrower\u2019s circumstances or
\n
behaviour. CGs 1 to 12 are assigned to stage 1 and stage 2 (performing) clients or accounts, while CGs 13 and 14 are assigned to
\n
stage 3 (credit-impa
ired) cl
ients. Consumer and Business Banking portfolios are analysed by days past due and Private Banking
\n
by the type of collateral held.
\n
Mapping of credit quality
\n
The Group uses the following internal risk mapping to determine the credit quality for loans.
\n\n \n
Corporate & Investment Banking
Private Banking
1
Wealth & Retail Banking
4
Credit quality
Internal grade
S&P external ratings
Regulatory
Internal grade
descript
ion
mapping
equivalent
PD range (%)
Internal ratings
mapping
Strong
1A to 5B
AAA/AA+ to
0 to 0.425
Class I and Class IV
Current loans (no past
BBB-/BB+
2
dues nor impa
ired)
Satisfactory
6A to 11C
BB to CCC+
3
0.426 to 15.75
Class II and Class III
Loans past due till
29 days
Higher risk
Grade 12
CCC+ to C
15.751 to 99.999
Stressed Assets Group
Past due loans
(SAG) Managed
30 days and over till
90 days
\n
1
For Private Banking, classes of risk represent the type of collateral held. Class I represents facil
it
ies with liqu
id collateral, such as cash and marketable secur
it
ies.
\n
Class II represents unsecured/partially secured facil
it
ies and those with ill
iqu
id collateral, such as equity in private enterprises. Class III represents facil
it
ies with
\n
resident
ial or commerc
ial real estate collateral. Class IV covers margin trading facil
it
ies
\n
2
Banks\u2019 rating: AAA/AA+ to BB+/BB. Sovereigns\u2019 rating: AAA to BB+
\n
3
Banks\u2019 rating: BB to \u201cCCC+ to C\u201d. Sovereigns\u2019 rating: BB+/BB to B-/CCC+
\n
4
Wealth & Retail Banking excludes Private Banking. Medium enterprise clients with
in Bus
iness Banking are managed using the same internal credit grades as CIB
\n
The table below sets out the gross loans and advances held at amortised cost, ECL provis
ions and expected cred
it loss
\n
coverage by business segment and stage. ECL coverage represents the ECL reported for each segment and stage as a
\n
proportion of the gross loan balance for each segment and stage.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
Loans and advances by client segment (audited)
\n\n \n
2024
Customers
Corporate &
Wealth &
Investment
Retail
Central &
Customer
Undrawn
Financ
ial
Banks
Banking
Banking
Ventures
other items
Total
commitments
Guarantees
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
43,208
128,746
117,015
1,383
21,958
269,102
178,516
87,991
\u2013 Strong
31,239
90,725
111,706
1,367
21,540
225,338
162,574
56,070
\u2013 Satisfactory
11,969
38,021
5,309
16
418
43,764
15,942
31,921
Stage 2
318
8,643
1,905
48
35
10,631
4,006
2,038
\u2013 Strong
8
1,229
1,413
31
\u2013
2,673
994
471
\u2013 Satisfactory
125
6,665
155
6
\u2013
6,826
2,862
1,403
\u2013 Higher risk
185
749
337
11
35
1,132
150
164
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
55
155
6
\u2013
216
\u2013
\u2013
\u2013 More than 30 days past due
2
7
337
11
\u2013
355
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
83
4,476
1,617
12
98
6,203
7
603
Gross balance\u00b9
43,609
141,865
120,537
1,443
22,091
285,936
182,529
90,632
Stage 1
(10)
(80)
(383)
(20)
\u2013
(483)
(50)
(16)
\u2013 Strong
(7)
(28)
(325)
(18)
\u2013
(371)
(33)
(7)
\u2013 Satisfactory
(3)
(52)
(58)
(2)
\u2013
(112)
(17)
(9)
Stage 2
(1)
(303)
(147)
(23)
\u2013
(473)
(52)
(7)
\u2013 Strong
\u2013
(41)
(70)
(14)
\u2013
(125)
(10)
\u2013
\u2013 Satisfactory
(1)
(218)
(32)
(3)
\u2013
(253)
(32)
(4)
\u2013 Higher risk
\u2013
(44)
(45)
(6)
\u2013
(95)
(10)
(3)
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
(1)
(32)
(3)
\u2013
(36)
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
\u2013
(45)
(6)
\u2013
(51)
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
(5)
(3,178)
(759)
(11)
\u2013
(3,948)
(1)
(129)
Total credit impa
irment
(16)
(3,561)
(1,289)
(54)
\u2013
(4,904)
(103)
(152)
Net carrying value
43,593
138,304
119,248
1,389
22,091
281,032
Stage 1
0.0%
0.1%
0.3%
1.4%
0.0%
0.2%
0.0%
0.0%
\u2013 Strong
0.0%
0.0%
0.3%
1.3%
0.0%
0.2%
0.0%
0.0%
\u2013 Satisfactory
0.0%
0.1%
1.1%
12.5%
0.0%
0.3%
0.1%
0.0%
Stage 2
0.3%
3.6%
7.7%
47.9%
0.0%
4.4%
1.3%
0.3%
\u2013 Strong
0.0%
3.3%
5.0%
45.2%
0.0%
4.7%
1.0%
0.0%
\u2013 Satisfactory
0.8%
3.3%
20.6%
50.0%
0.0%
3.7%
1.1%
0.3%
\u2013 Higher risk
0.0%
5.9%
13.4%
54.5%
0.0%
8.4%
6.7%
1.8%
Of which (stage 2):
\u2013 Less than 30 days past due
0.0%
1.8%
20.6%
50.0%
0.0%
16.7%
0.0%
0.0%
\u2013 More than 30 days past due
0.0%
0.0%
13.4%
54.5%
0.0%
14.4%
0.0%
0.0%
Stage 3, credit-impa
ired
\ufb01nancial assets (S3)
6.0%
71.0%
46.9%
91.7%
0.0%
63.6%
14.3%
21.4%
\u2013 Stage 3 Collateral
1
297
584
\u2013
\u2013
881
\u2013
46
\u2013 Stage 3 Cover ratio
(after collateral)
7.2%
77.6%
83.1%
91.7%
0.0%
77.8%
14.3%
29.0%
Cover ratio
0.0%
2.5%
1.1%
3.7%
0.0%
1.7%
0.1%
0.2%
Fair value through pro\ufb01t or loss
Performing
36,967
58,506
6
\u2013
\u2013
58,512
\u2013
\u2013
\u2013 Strong
30,799
38,084
3
\u2013
\u2013
38,087
\u2013
\u2013
\u2013 Satisfactory
6,158
20,314
3
\u2013
\u2013
20,317
\u2013
\u2013
\u2013 Higher risk
10
108
\u2013
\u2013
\u2013
108
\u2013
\u2013
Defaulted (CG13-14)
\u2013
13
\u2013
\u2013
\u2013
13
\u2013
\u2013
Gross balance (FVTPL)
2
36,967
58,519
6
\u2013
\u2013
58,525
\u2013
\u2013
Net carrying value (incl FVTPL)
80,560
196,823
119,254
1,389
22,091
339,557
\u2013
\u2013
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $9,660 mill
ion under Customers and of $2,946 m
ill
ion under
\n
Banks, held at amortised cost
\n
2
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $51,441 mill
ion under Customers and of $34,754 m
ill
ion under
\n
Banks, held at fair value through pro\ufb01t or loss
\n \n
2023
Customers
Corporate &
Wealth &
Investment
Retail
Central &
Customer
Undrawn
Financ
ial
Banks
Banking
Banking
Ventures
other items
Total
commitments
Guarantees
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
44,384
120,886
123,486
1,015
28,305
273,692
176,654
70,832
\u2013 Strong
35,284
84,248
118,193
1,000
27,967
231,408
162,643
47,885
\u2013 Satisfactory
9,100
36,638
5,293
15
338
42,284
14,011
22,947
Stage 2
540
7,902
2,304
54
965
11,225
5,733
2,910
\u2013 Strong
55
1,145
1,761
34
\u2013
2,940
1,090
830
\u2013 Satisfactory
212
5,840
206
7
\u2013
6,053
4,169
1,823
\u2013 Higher risk
273
917
337
13
965
2,232
474
257
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
78
206
7
\u2013
291
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
10
337
13
\u2013
360
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
77
5,508
1,484
12
224
7,228
3
672
Gross balance\u00b9
45,001
134,296
127,274
1,081
29,494
292,145
182,390
74,414
Stage 1
(8)
(101)
(314)
(15)
\u2013
(430)
(52)
(10)
\u2013 Strong
(3)
(34)
(234)
(14)
\u2013
(282)
(31)
(2)
\u2013 Satisfactory
(5)
(67)
(80)
(1)
\u2013
(148)
(21)
(8)
Stage 2
(10)
(257)
(141)
(21)
(1)
(420)
(39)
(14)
\u2013 Strong
(1)
(18)
(65)
(14)
\u2013
(97)
(5)
\u2013
\u2013 Satisfactory
(2)
(179)
(22)
(3)
\u2013
(204)
(23)
(7)
\u2013 Higher risk
(7)
(60)
(54)
(4)
(1)
(119)
(11)
(7)
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
(2)
(22)
(3)
\u2013
(27)
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
(1)
(54)
(4)
\u2013
(59)
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
(6)
(3,533)
(760)
(12)
(15)
(4,320)
\u2013
(112)
Total credit impa
irment
(24)
(3,891)
(1,215)
(48)
(16)
(5,170)
(91)
(136)
Net carrying value
44,977
130,405
126,059
1,033
29,478
286,975
\u2013
\u2013
Stage 1
0.0%
0.1%
0.3%
1.5%
0.0%
0.2%
0.0%
0.0%
\u2013 Strong
0.0%
0.0%
0.2%
1.4%
0.0%
0.1%
0.0%
0.0%
\u2013 Satisfactory
0.1%
0.2%
1.5%
6.7%
0.0%
0.4%
0.1%
0.0%
Stage 2
1.9%
3.3%
6.1%
38.9%
0.1%
3.7%
0.7%
0.5%
\u2013 Strong
1.8%
1.6%
3.7%
41.2%
0.0%
3.3%
0.5%
0.0%
\u2013 Satisfactory
0.9%
3.1%
10.7%
42.9%
0.0%
3.4%
0.6%
0.4%
\u2013 Higher risk
2.6%
6.5%
16.0%
30.8%
0.1%
5.3%
2.3%
2.7%
Of which (stage 2):
\u2013 Less than 30 days past due
0.0%
2.6%
10.7%
42.9%
0.0%
9.3%
0.0%
0.0%
\u2013 More than 30 days past due
0.0%
10.0%
16.0%
30.8%
0.0%
16.4%
0.0%
0.0%
Stage 3, credit-impa
ired
\ufb01nancial assets (S3)
7.8%
64.1%
51.2%
100.0%
6.7%
59.8%
0.0%
16.7%
\u2013 Stage 3 Collateral
2
621
554
\u2013
\u2013
1,175
\u2013
34
\u2013 Stage 3 Cover ratio
(after collateral)
10.4%
75.4%
88.5%
100.0%
6.7%
76.0%
0.0%
21.7%
Cover ratio
0.1%
2.9%
1.0%
4.4%
0.1%
1.8%
0.0%
0.2%
Fair value through pro\ufb01t or loss
Performing
32,813
58,465
13
\u2013
\u2013
58,478
\u2013
\u2013
\u2013 Strong
28,402
38,014
13
\u2013
\u2013
38,027
\u2013
\u2013
\u2013 Satisfactory
4,411
20,388
\u2013
\u2013
\u2013
20,388
\u2013
\u2013
\u2013 Higher risk
\u2013
63
\u2013
\u2013
\u2013
63
\u2013
\u2013
Defaulted (CG13-14)
\u2013
33
\u2013
\u2013
\u2013
33
\u2013
\u2013
Gross balance (FVTPL)
2
32,813
58,498
13
\u2013
\u2013
58,511
\u2013
\u2013
Net carrying value (incl FVTPL)
77,790
188,903
126,072
1,033
29,478
345,486
\u2013
\u2013
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $13,996 mill
ion under Customers and of $1,738 m
ill
ion under
\n
Banks, held at amortised cost
\n
2. Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $51,299 mill
ion under Customers and of $30,548 m
ill
ion under
\n
Banks, held at fair value through pro\ufb01t or loss
Loans and advances by client segment credit quality analysis
\n\n \n
2024
Corporate & Investment Banking and Central & other items
Gross
Credit impa
irment
Regulatory 1 year
S&P external ratings
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Credit grade
PD range (%)
equivalent
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
112,265
1,229
\u2013
113,494
(28)
(41)
\u2013
(69)
1A-2B
0 \u2013 0.045
A+ and above
32,160
31
\u2013
32,191
(2)
\u2013
\u2013
(2)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
40,712
524
\u2013
41,236
(8)
(33)
\u2013
(41)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
39,393
674
\u2013
40,067
(18)
(8)
\u2013
(26)
Satisfactory
38,439
6,665
\u2013
45,104
(52)
(218)
\u2013
(270)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
24,928
2,677
\u2013
27,605
(21)
(24)
\u2013
(45)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
9,514
2,618
\u2013
12,132
(20)
(169)
\u2013
(189)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
3,997
1,370
\u2013
5,367
(11)
(25)
\u2013
(36)
Higher risk
\u2013
784
\u2013
784
\u2013
(44)
\u2013
(44)
12
15.751 \u2013 99.999
CCC/C
\u2013
784
\u2013
784
\u2013
(44)
\u2013
(44)
Credit-
impa
ired
\u2013
\u2013
4,574
4,574
\u2013
\u2013
(3,178)
(3,178)
13-14
100
Defaulted
\u2013
\u2013
4,574
4,574
\u2013
\u2013
(3,178)
(3,178)
Total
150,704
8,678
4,574
163,956
(80)
(303)
(3,178)
(3,561)
2023
Strong
112,215
1,145
\u2013
113,360
(34)
(18)
\u2013
(52)
1A-2B
0 \u2013 0.045
A+ and above
37,936
81
\u2013
38,017
\u2013
\u2013
\u2013
\u2013
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
32,004
558
\u2013
32,562
(3)
\u2013
\u2013
(3)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
42,275
506
\u2013
42,781
(31)
(18)
\u2013
(49)
Satisfactory
36,976
5,840
\u2013
42,816
(67)
(179)
\u2013
(246)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
24,598
1,873
\u2013
26,471
(38)
(77)
\u2013
(115)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
8,232
2,273
\u2013
10,505
(13)
(90)
\u2013
(103)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
4,146
1,694
\u2013
5,840
(16)
(12)
\u2013
(28)
Higher risk
\u2013
1,882
\u2013
1,882
\u2013
(61)
\u2013
(61)
12
15.751 \u2013 99.999
CCC/C
\u2013
1,882
\u2013
1,882
\u2013
(61)
\u2013
(61)
Credit-
impa
ired
\u2013
\u2013
5,732
5,732
\u2013
\u2013
(3,548)
(3,548)
13-14
100
Defaulted
\u2013
\u2013
5,732
5,732
\u2013
\u2013
(3,548)
(3,548)
Total
149,191
8,867
5,732
163,790
(101)
(258)
(3,548)
(3,907)
Undrawn commitment and \ufb01nanc
ial guarantees \u2013 by cl
ient segment credit quality
\n\n \n
2024
Corporate & Investment Banking and Central & other items
Notional
Credit impa
irment
Regulatory 1 year
S&P external ratings
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Credit grade
PD range (%)
equivalent
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
140,733
1,265
\u2013
141,998
(22)
(6)
\u2013
(29)
1A-2B
0 \u2013 0.045
A+ and above
29,623
280
\u2013
29,903
(1)
\u2013
\u2013
(1)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
53,568
492
\u2013
54,060
(4)
\u2013
\u2013
(4)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
57,542
493
\u2013
58,035
(17)
(6)
\u2013
(23)
Satisfactory
46,394
4,200
\u2013
50,594
(23)
(33)
\u2013
(56)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
2,544
1,065
\u2013
3,609
(4)
(6)
\u2013
(10)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
30,438
1,162
\u2013
31,600
(11)
(16)
\u2013
(27)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
13,412
1,973
\u2013
15,385
(8)
(11)
\u2013
(19)
Higher risk
\u2013
286
\u2013
286
\u2013
(11)
\u2013
(11)
12
15.751 \u2013 99.999
CCC+/C
\u2013
286
\u2013
286
\u2013
(11)
\u2013
(11)
Credit-
impa
ired
\u2013
\u2013
593
593
\u2013
\u2013
(129)
(129)
13-14
100
Defaulted
\u2013
\u2013
593
593
\u2013
\u2013
(129)
(129)
Total
187,127
5,751
593
193,471
(45)
(50)
(129)
(224)
2023
Strong
129,331
1,649
\u2013
130,980
(19)
(3)
\u2013
(22)
1A-2B
0 \u2013 0.045
A+ and above
27,882
179
\u2013
28,061
(1)
\u2013
\u2013
(1)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
52,061
557
\u2013
52,618
(3)
(1)
\u2013
(4)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
49,388
913
\u2013
50,301
(15)
(2)
\u2013
(17)
Satisfactory
35,405
5,921
\u2013
41,326
(23)
(28)
\u2013
(51)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
2,581
1,065
\u2013
3,646
(2)
(6)
\u2013
(8)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
25,089
3,028
\u2013
28,117
(14)
(9)
\u2013
(23)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
7,735
1,828
\u2013
9,563
(7)
(13)
\u2013
(20)
Higher risk
\u2013
697
\u2013
697
\u2013
(15)
\u2013
(15)
12
15.751 \u2013 99.999
CCC+/C
\u2013
697
\u2013
697
\u2013
(15)
\u2013
(15)
Credit-
impa
ired
\u2013
\u2013
663
663
\u2013
\u2013
(112)
(112)
13-14
100
Defaulted
\u2013
\u2013
663
663
\u2013
\u2013
(112)
(112)
Total
164,736
8,267
663
173,666
(42)
(46)
(112)
(200)
Loans and advances by client segment credit quality analysis by key geography
\n\n \n
Corporate & Investment Banking and Central & other items
2024
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
32,552
12,079
44,631
230
1,539
64
1,833
1,272
1,272
(8)
(8)
(16)
(33)
(107)
(9)
(149)
(1,157)
(1,157)
(2.8)%
Corporate Lending
14,429
6,180
20,609
225
1,329
64
1,618
1,260
1,260
(5)
(4)
(9)
(33)
(102)
(9)
(144)
(1,157)
(1,157)
(5.6)%
Non Corporate
Lending
1
4,567
2,730
7,297
4
206
\u2013
210
12
12
(1)
(3)
(4)
\u2013
(5)
\u2013
(5)
\u2013
\u2013
(0.1)%
Banks
13,556
3,169
16,725
1
4
\u2013
5
\u2013
\u2013
(2)
(1)
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Singapore
31,129
7,769
38,898
500
955
35
1,490
407
407
\u2013
(8)
(8)
(4)
(14)
\u2013
(18)
(196)
(196)
(0.5)%
Corporate Lending
7,333
4,003
11,336
469
594
35
1,098
335
335
\u2013
(6)
(6)
(4)
(14)
\u2013
(18)
(195)
(195)
(1.7)%
Non Corporate
Lending
1
19,348
567
19,915
29
358
\u2013
387
\u2013
\u2013
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
4,448
3,199
7,647
2
3
\u2013
5
72
72
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
UK
11,029
3,939
14,968
48
479
3
530
316
316
(10)
(4)
(14)
\u2013
(27)
(6)
(33)
(258)
(258)
(1.9)%
Corporate Lending
325
871
1,196
47
479
1
527
258
258
(9)
(3)
(12)
\u2013
(27)
(6)
(33)
(237)
(237) (14.2)%
Non Corporate
Lending
1
8,690
982
9,672
1
\u2013
\u2013
1
57
57
(1)
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(21)
(21)
(0.2)%
Banks
2,014
2,086
4,100
\u2013
\u2013
2
2
1
1
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
US
16,244
4,456
20,700
92
433
33
558
31
31
(4)
(1)
(5)
(1)
(1)
\u2013
(2)
(3)
(3)
(0.0)%
Corporate Lending
5,426
2,761
8,187
77
322
\u2013
399
28
28
(3)
(1)
(4)
(1)
(1)
\u2013
(2)
\u2013
\u2013
(0.1)%
Non Corporate
Lending
1
9,688
123
9,811
15
79
\u2013
94
3
3
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(3)
(3)
(0.0)%
Banks
1,130
1,572
2,702
\u2013
32
33
65
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
China
10,380
2,794
13,174
49
133
14
196
171
171
(3)
(1)
(4)
\u2013
\u2013
\u2013
\u2013
(86)
(86)
(0.7)%
Corporate Lending
4,933
2,193
7,126
49
133
14
196
168
168
(1)
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(83)
(83)
(1.1)%
Non Corporate
Lending
1
3,241
363
3,604
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
2,206
238
2,444
\u2013
\u2013
\u2013
\u2013
3
3
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(3)
(3)
(0.2)%
Others
42,171
19,370
61,541
318
3,251
819
4,389
2,460
2,460
(10)
(33)
(43)
(3)
(70)
(29)
(102)
(1,483) (1,483)
(2.4)%
Corporate Lending
24,835
14,075
38,910
291
2,048
516
2,855
2,221
2,221
(6)
(26)
(32)
(3)
(38)
(28)
(69)
(1,333)
(1,333)
(3.3)%
Non Corporate
Lending
1
9,451
3,590
13,041
22
1,117
153
1,292
232
232
\u2013
(6)
(6)
\u2013
(31)
(1)
(32)
(149)
(149)
(1.3)%
Banks
7,885
1,705
9,590
5
86
150
241
7
7
(4)
(1)
(5)
\u2013
(1)
\u2013
(1)
(1)
(1)
(0.1)%
Total
143,505
50,407
193,912
1,237
6,790
968
8,996
4,657
4,657
(35)
(55)
(90)
(41)
(219)
(44)
(304)
(3,183)
(3,183)
(1.7)%
\n\n \n
Corporate & Investment Banking and Central & other items
2
2023
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
36,776
10,151
46,927
167
937
30
1,134
1,284
1,284
(7)
(23)
(30)
(4)
(118)
(3)
(125)
(1,025)
(1,025)
(2.4)%
Corporate Lending
14,401
6,289
20,690
165
855
30
1,050
1,219
1,219
(5)
(20)
(25)
(3)
(118)
(3)
(124)
(1,024)
(1,024)
(5.1)%
Non Corporate
Lending
1
6,323
2,458
8,781
1
81
\u2013
82
65
65
(1)
(2)
(3)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
Banks
16,052
1,404
17,456
1
1
\u2013
2
\u2013
\u2013
(1)
(1)
(2)
(1)
\u2013
\u2013
(1)
\u2013
\u2013
(0.0)%
Singapore
34,526
6,046
40,572
361
509
36
906
285
285
(4)
(4)
(8)
(11)
(14)
(4)
(29)
(75)
(75)
(0.3)%
Corporate Lending
5,766
2,334
8,100
304
504
36
844
221
221
(4)
(3)
(7)
(11)
(13)
(4)
(28)
(74)
(74)
(1.2)%
Non Corporate
Lending
1
23,033
510
23,543
57
2
\u2013
59
\u2013
\u2013
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
5,727
3,202
8,929
\u2013
3
\u2013
3
64
64
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
(1)
(1)
(0.0)%
UK
8,364
4,171
12,535
56
785
83
924
257
257
(5)
(5)
(10)
\u2013
(14)
(7)
(21)
(209)
(209)
(1.7)%
Corporate Lending
5,407
1,559
6,966
52
539
71
662
250
250
(4)
(5)
(9)
\u2013
(13)
(7)
(20)
(202)
(202)
(2.9)%
Non Corporate
Lending
1
558
1,244
1,802
\u2013
160
\u2013
160
3
3
(1)
\u2013
(1)
\u2013
(1)
\u2013
(1)
(3)
(3)
(0.3)%
Banks
2,399
1,368
3,767
4
86
12
102
4
4
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.1)%
US
14,550
4,742
19,292
219
176
19
414
5
5
(2)
(2)
(4)
\u2013
\u2013
\u2013
\u2013
(5)
(5)
(0.0)%
Corporate Lending
7,487
2,765
10,252
146
130
\u2013
276
1
1
(1)
(2)
(3)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
Non Corporate
Lending
1
6,181
425
6,606
25
4
\u2013
29
4
4
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.1)%
Banks
882
1,552
2,434
48
42
19
109
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
China
9,737
2,733
12,470
31
298
8
337
262
262
(3)
(4)
(7)
\u2013
\u2013
\u2013
\u2013
(125)
(125)
(1.0)%
Corporate Lending
4,723
2,179
6,902
31
297
8
336
259
259
(2)
(1)
(3)
\u2013
\u2013
\u2013
\u2013
(125)
(125)
(1.7)%
Non Corporate
Lending
1
3,254
318
3,572
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
1,760
236
1,996
\u2013
1
\u2013
1
3
3
\u2013
(3)
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.2)%
Others
43,547
18,233
61,780
366
3,347
1,979
5,692
3,716
3,716
(16)
(34)
(50)
(4)
(35)
(54)
(93)
(2,115)
(2,115)
(3.2)%
Corporate Lending
16,189
15,034
31,223
345
2,322
678
3,345
3,335
3,335
(8)
(27)
(35)
(3)
(28)
(46)
(77)
(2,012)
(2,012)
(5.6)%
Non Corporate
Lending
1
18,894
1,861
20,755
19
946
1,059
2,024
375
375
(6)
(6)
(12)
(1)
(6)
(1)
(8)
(102)
(102)
(0.5)%
Banks
8,464
1,338
9,802
2
79
242
323
6
6
(2)
(1)
(3)
\u2013
(1)
(7)
(8)
(1)
(1)
(0.1)%
Total
147,500
46,076
193,576
1,200
6,052
2,155
9,407
5,809
5,809
(37)
(72)
(109)
(19)
(181)
(68)
(268)
(3,554)
(3,554)
(1.9)%
\n
1
Include \ufb01nancing,
insurance and non-banking corporations and governments
\n
2
Amounts have been re-presented from a regional basis (Asia; Africa & Middle East; and Europe & Americas) to key geographies covering the major
ity of the
\n
reported balances
\n \n
Wealth & Retail Banking and Ventures
2024
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
41,906
320
42,226
288
47
40
375
228
228
(59)
(14)
(73)
(33)
(20)
(4)
(57)
(69)
(69)
(0.5)%
Mortgages
31,080
265
31,345
55
14
24
93
75
75
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
(0.0)%
Credit cards
4,210
19
4,229
93
30
1
124
14
14
(36)
(11)
(47)
(27)
(19)
(1)
(47)
(14)
(14)
(2.5)%
Others
6,616
36
6,652
140
3
15
158
139
139
(23)
(3)
(26)
(6)
(1)
(3)
(10)
(48)
(48)
(1.2)%
Singapore
26,755
52
26,807
441
39
34
514
312
312
(29)
(26)
(55)
(6)
(6)
(6)
(18)
(265)
(265)
(1.2)%
Mortgages
13,531
12
13,543
160
32
15
207
9
9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.0)%
Credit cards
2,248
25
2,273
14
5
16
35
16
16
(9)
(26)
(35)
(5)
(5)
(4)
(14)
(19)
(19)
(2.9)%
Others
10,976
15
10,991
267
2
3
272
287
287
(20)
\u2013
(20)
(1)
(1)
(2)
(4)
(242)
(242)
(2.3)%
Korea
18,062
220
18,282
378
9
22
409
112
112
(22)
(1)
(23)
(28)
(4)
(1)
(33)
(33)
(33)
(0.5)%
Mortgages
13,198
171
13,369
250
8
17
275
62
62
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2)
(2)
(0.0)%
Credit cards
36
1
37
1
\u2013
\u2013
1
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2.6)%
Others
4,828
48
4,876
127
1
5
133
50
50
(21)
(1)
(22)
(28)
(4)
(1)
(33)
(31)
(31)
(1.7)%
Rest of World
26,085
4,998
31,083
338
76
241
655
977
977
(239)
(13)
(252)
(39)
(5)
(18)
(62)
(403)
(403)
(2.2)%
Mortgages
15,079
2,007
17,086
136
43
141
320
459
459
(4)
(2)
(6)
\u2013
\u2013
(1)
(1)
(124)
(124)
(0.7)%
Credit cards
1,148
351
1,499
29
12
19
60
40
40
(33)
(1)
(34)
(21)
\u2013
(1)
(22)
(27)
(27)
(5.2)%
Others
9,858
2,640
12,498
173
21
81
275
478
478
(202)
(10)
(212)
(18)
(5)
(16)
(39)
(252)
(252)
(3.8)%
Total
112,808
5,590
118,398
1,445
171
337
1,953
1,629
1,629
(349)
(54)
(403)
(106)
(35)
(29)
(170)
(770)
(770)
(1.1)%
\n\n \n
Wealth & Retail Banking and Ventures
1
2023
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
42,930
242
43,172
514
74
51
639
174
174
(24)
(34)
(58)
(28)
(13)
(12)
(53)
(49)
(49)
(0.4)%
Mortgages
32,376
152
32,528
282
53
13
348
63
63
\u2013
\u2013
\u2013
(1)
\u2013
\u2013
(1)
(1)
(1)
(0.0)%
Credit cards
4,045
44
4,089
80
17
24
121
18
18
(9)
(33)
(42)
(19)
(12)
(8)
(39)
(18)
(18)
(2.3)%
Others
6,509
46
6,555
152
4
14
170
93
93
(15)
(1)
(16)
(8)
(1)
(4)
(13)
(30)
(30)
(0.9)%
Singapore
26,644
68
26,712
379
41
34
454
282
282
(15)
(18)
(33)
(2)
(5)
(4)
(11)
(247)
(247)
(1.1)%
Mortgages
14,993
16
15,009
230
34
11
275
13
13
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.0)%
Credit cards
1,916
25
1,941
11
5
16
32
10
10
(7)
(17)
(24)
\u2013
(5)
(3)
(8)
(16)
(16)
(2.4)%
Others
9,735
27
9,762
138
2
7
147
259
259
(8)
(1)
(9)
(2)
\u2013
(1)
(3)
(227)
(227)
(2.4)%
Korea
22,966
211
23,177
462
20
9
491
93
93
(40)
\u2013
(40)
(18)
\u2013
\u2013
(18)
(19)
(19)
(0.3)%
Mortgages
16,535
164
16,699
364
18
8
390
69
69
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Credit cards
113
2
115
3
\u2013
\u2013
3
\u2013
\u2013
(4)
\u2013
(4)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(3.4)%
Others
6,318
45
6,363
95
2
1
98
24
24
(36)
\u2013
(36)
(18)
\u2013
\u2013
(18)
(19)
(19)
(1.1)%
Rest of World
26,653
4,787
31,440
440
79
256
775
947
947
(169)
(29)
(198)
(31)
(7)
(42)
(80)
(457)
(457)
(2.2)%
Mortgages
14,678
2,297
16,975
156
48
134
338
375
375
(5)
(2)
(7)
(2)
\u2013
(1)
(3)
(118)
(118)
(0.7)%
Credit cards
1,419
68
1,487
73
1
15
89
40
40
(26)
(9)
(35)
(7)
\u2013
(10)
(17)
(16)
(16)
(4.2)%
Others
10,556
2,422
12,978
211
29
107
347
532
532
(138)
(18)
(156)
(22)
(7)
(31)
(60)
(323)
(323)
(3.9)%
Total
119,193
5,308
124,501
1,795
213
350
2,358
1,496
1,496
(248)
(81)
(329)
(79)
(25)
(58)
(162)
(772)
(772)
(1.0)%
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
Undrawn commitment and \ufb01nanc
ial guarantees \u2013 by cl
ient segment credit quality
\n\n \n
Wealth & Retail Banking and Ventures
2024
Notional
ECL
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
70,595
100
\u2013
70,695
(15)
(3)
\u2013
(18)
Satisfactory
850
11
\u2013
861
(5)
(1)
\u2013
(6)
Higher risk
\u2013
21
\u2013
21
\u2013
(3)
\u2013
(3)
Impaired
\u2013
\u2013
8
8
\u2013
\u2013
\u2013
\u2013
Total
71,445
132
8
71,585
(20)
(7)
\u2013
(27)
\n\n \n
2023
Notional
ECL
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
73,819
160
\u2013
73,980
(15)
(3)
\u2013
(18)
Satisfactory
889
18
\u2013
907
(5)
(1)
\u2013
(6)
Higher risk
\u2013
33
\u2013
33
\u2013
(3)
\u2013
(3)
Impaired
\u2013
\u2013
3
3
\u2013
\u2013
\u2013
\u2013
Total
74,708
211
3
74,922
(20)
(7)
\u2013
(27)
Movement in gross exposures and credit impa
irment for
\n
loans and advances, debt securit
ies, undrawn comm
itments
\n
and \ufb01nancial guarantees (aud
ited)
\n
The tables overleaf set out the movement in gross exposures
\n
and credit impa
irment by stage
in respect of amortised cost
\n
loans to banks and customers, undrawn commitments,
\n
\ufb01nancial guarantees and debt secur
it
ies class
if
ied at
\n
amortised cost and FVOCI. The tables are presented for the
\n
Group and separately for CIB and WRB (which also includes a
\n
separate presentation for secured and unsecured exposures).
\n
Methodology
\n
The movement lines with
in the tables are an aggregat
ion of
\n
monthly movements over the year and will therefore re\ufb02ect
\n
the accumulation of multiple trades during the year. The credit
\n
impa
irment charge
in the income statement comprises the
\n
amounts with
in the boxes
in the table below, less recoveries
\n
of amounts previously written off. Discount unwind is reported
\n
in net interest income and related to stage 3 \ufb01nanc
ial
\n
instruments only.
\n
The approach for determin
ing the key l
ine items in the tables
\n
is set out below.
\n
\u2022
Transfers
\u2013 transfers between stages are deemed to
\n
occur at the beginn
ing of a month based on pr
ior month
\n
closing balances.
\n
\u2022
Net remeasurement from stage changes
\u2013 the
\n
remeasurement of credit impa
irment prov
is
ions ar
is
ing
\n
from a change in stage is reported with
in the stage that the
\n
assets are transferred to. For example, assets transferred
\n
into stage 2 are remeasured from a 12-month to a lifet
ime
\n
ECL, with the effect of remeasurement reported in stage 2.
\n
For stage 3, this represents the in
it
ial remeasurement from
\n
specif
ic prov
is
ions recogn
ised on ind
iv
idual assets
\n
transferred into stage 3 in the year.
\n
\u2022
Net changes in exposures
\u2013 new business written less
\n
repayments in the year. With
in stage 1, new bus
iness written
\n
will attract up to 12 months of ECL charges. Repayments of
\n
non-amortis
ing loans (pr
imar
ily w
ith
in CIB) w
ill have low
\n
amounts of ECL provis
ions attr
ibuted to them, due to the
\n
release of provis
ions over the term to matur
ity. In stages 2
\n
and 3, the net change in exposures re\ufb02ect repayments
\n
although stage 2 may include new facil
it
ies where clients
\n
are on non-purely precautionary early alert, are CG 12, or
\n
when non-investment grade debt securit
ies are acqu
ired.
\n
\u2022
Changes in risk parameters
\u2013 for stages 1 and 2, this re\ufb02ects
\n
changes in the probabil
ity of default (PD), loss g
iven default
\n
(LGD) and exposure at default (EAD) of assets during the
\n
year, which includes the impact of releasing provis
ions over
\n
the term to maturity. It also includes the effect of changes
\n
in forecasts of macroeconomic variables during the year.
\n
In stage 3, this line represents addit
ional spec
if
ic prov
is
ions
\n
recognised on exposures held with
in stage 3.
\n
\u2022
Interest due but not paid
\u2013 change in contractual
\n
amount of interest due in stage 3 \ufb01nanc
ial
instruments
\n
but not paid, being the net of accruals, repayments and
\n
write-offs, together with the corresponding change in
\n
credit impa
irment.
\n
Changes to ECL models, which incorporate changes to
\n
model approaches and methodologies, are not reported as
\n
a separate line item as these have an impact over a number
\n
of lines and stages.
\n
Movements during the year
\n
Stage 1 gross exposures decreased by $3.2 bill
ion to $721 b
ill
ion
\n
(31 December 2023: $724 bill
ion). CIB exposure
increased by
\n
$30\u00a0bill
ion to $367 b
ill
ion (31 December 2023: $337 b
ill
ion),
\n
due to an increase in exposures in \ufb01nanc
ial guarantees
in
\n
the Energy, Financ
ing, Insurance and Transport sectors.
\n
WRB decreased by $11.4 bill
ion to $180 b
ill
ion (31 December
\n
2023: $191 bill
ion), largely dr
iven by fewer mortgages in Korea,
\n
Singapore and Hong Kong, as well as off-balance sheet
\n
commitments. Debt securit
ies decreased by $16.5 b
ill
ion,
\n
largely in the Central and other items segment which had
\n
also seen a $6.3 bill
ion reduct
ion in loan balances.
\n
Total stage 1 provis
ions
increased by $56 mill
ion to $582 m
ill
ion
\n
(31 December 2023: $526 mill
ion). CIB prov
is
ions decreased
\n
by $18\u00a0mill
ion to $133 m
ill
ion (31 December 2023: $151 m
ill
ion),
\n
due to a release in the China CRE overlay which was driven
\n
by repayments and portfolio movements. This was partly
\n
offset by new overlays of $27 mill
ion, pr
imar
ily
in Bangladesh.
\n
WRB provis
ions
increased by $67 mill
ion to $392 m
ill
ion
\n
(31 December 2023: $325 mill
ion), due to del
inquenc
ies
in
\n
the personal loans and unsecured lending portfolio.
\n
Stage 2 gross exposures decreased by $4 bill
ion to $19 b
ill
ion
\n
(31 December 2023: $22 bill
ion), pr
imar
ily dr
iven by a net
\n
reduction in CIB exposures from off-balance sheet
\n
instruments. WRB exposures decreased by $0.4 bill
ion to
\n
$2 bill
ion (31 December 2023: $2.5 b
ill
ion), ma
inly due to the
\n
mortgage portfolio.
\n
Stage 2 provis
ions
increased by $20 mill
ion to $537 m
ill
ion
\n
(31 December 2023: $517 mill
ion). CIB prov
is
ions
increased by
\n
$44\u00a0mill
ion to $362 m
ill
ion (31 December 2023: $318 m
ill
ion),
\n
due to $76 mill
ion new overlays, largely
in Hong Kong, and
\n
portfolio movements. This was offset by China CRE overlay
\n
releases, which were driven by repayments. WRB provis
ions
\n
increased by $11\u00a0mill
ion to $151 m
ill
ion (31 December 2023:
\n
$140 mill
ion) ma
inly driven by the overlay in Korea due
\n
to the settlement failure of two e-commerce platforms.
\n
Debt securit
ies pr
imar
ily held
in the Central and other items
\n
segment decreased by $31 mill
ion, due to sovere
ign upgrades.
\n
The impact of model and methodology updates in 2024
\n
reduced modelled provis
ions by $15 m
ill
ion across stages 1, 2
\n
and 3 in\u00a0WRB.
\n
Stage 3 gross exposures for CIB decreased by $1.1 bill
ion to
\n
$5.2 bill
ion (31 December 2023: $6.3 b
ill
ion) due to repayments
\n
and write-offs. CIB provis
ions decreased by $0.3 b
ill
ion to
\n
$3.3 bill
ion (31 December 2023: $3.7 b
ill
ion), due to releases
\n
from repayments and write-offs. WRB stage 3 loans
\n
remained broadly stable at $1.6 bill
ion (31 December 2023:
\n
$1.5 bill
ion) and prov
is
ions also rema
ined stable at $0.8 bill
ion
\n
(31 December 2023: $0.8 bill
ion). The amount of stage 3
\n
exposures written off during the year that remain subject
\n
to enforcement activ
ity
is $1.2 bill
ion (31 December 2023:
\n
$1 bill
ion).
All segments (audited)
\n\n \n
Stage 1
Stage 2
Stage 3\u2075
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
3
ment
Net
balance
3
ment
Net
balance
3
ment
Net
balance
3
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
720,112
(645)
719,467
27,479
(618)
26,861
8,841
(4,724)
4,117
756,432
(5,987)
750,445
Transfers to stage 1
19,594
(661)
18,933
(19,583)
661
(18,922)
(11)
\u2013
(11)
\u2013
\u2013
\u2013
Transfers to stage 2
(42,628)
174
(42,454)
42,793
(182)
42,611
(165)
8
(157)
\u2013
\u2013
\u2013
Transfers to stage 3
(96)
6
(90)
(2,329)
326
(2,003)
2,425
(332)
2,093
\u2013
\u2013
\u2013
Net change in
exposures
23,717
(185)
23,532
(22,727)
22
(22,705)
(1,708)
624
(1,084)
(718)
461
(257)
Net remeasurement
from stage changes
\u2013
52
52
\u2013
(199)
(199)
\u2013
(163)
(163)
\u2013
(310)
(310)
Changes in risk
parameters
\u2013
202
202
\u2013
(32)
(32)
\u2013
(1,100)
(1,100)
\u2013
(930)
(930)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1,027)
1,027
\u2013
(1,027)
1,027
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(83)
83
\u2013
(83)
83
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
180
180
\u2013
180
180
Exchange translation
differences and
other movements\u00b9
3,177
531
3,708
(3,365)
(495)
(3,860)
(128)
(102)
(230)
(316)
(66)
(382)
As at 31 December
2023\u00b2
723,876
(526) 723,350
22,268
(517)
21,751
8,144
(4,499)
3,645
754,288
(5,542) 748,746
Income statement
ECL (charge)/release
69
(209)
(639)
(779)
Recoveries of
amounts previously
written off
\u2013
\u2013
271
271
Total credit
impa
irment
(charge)/release
69
(209)
(368)
(508)
As at 1 January 2024
723,876
(526) 723,350
22,268
(517)
21,751
8,144
(4,499)
3,645
754,288
(5,542) 748,746
Transfers to stage 1
16,433
(543)
15,890
(16,423)
543
(15,880)
(10)
\u2013
(10)
\u2013
\u2013
\u2013
Transfers to stage 2
(33,301)
128
(33,173)
33,770
(153)
33,617
(469)
25
(444)
\u2013
\u2013
\u2013
Transfers to stage 3
(1,631)
63
(1,568)
(146)
168
22
1,777
(231)
1,546
\u2013
\u2013
\u2013
Net change in
exposures
29,928
(173)
29,755
(18,435)
80
(18,355)
(1,383)
622
(761)
10,110
529
10,639
Net remeasurement
from stage changes
\u2013
61
61
\u2013
(185)
(185)
\u2013
(203)
(203)
\u2013
(327)
(327)
Changes in risk
parameters
\u2013
84
84
\u2013
(242)
(242)
\u2013
(873)
(873)
\u2013
(1,031)
(1,031)
Derecognised
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1,260)
1,260
\u2013
(1,260)
1,260
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
53
(53)
\u2013
53
(53)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
135
135
\u2013
135
135
Exchange translation
differences and
other movements\u00b9
(14,626)
324
(14,302)
(2,427)
(231)
(2,658)
147
(268)
(121)
(16,906)
(175)
(17,081)
As at 31 December
2024\u00b2
720,679
(582)720,097
18,607
(537)
18,070
6,999
(4,085)
2,914
746,285
(5,204) 741,081
Income statement
ECL (charge)/release\u2076
(28)
(347)
(454)
(829)
Recoveries of
amounts previously
written off
\u2013
\u2013
279
279
Total credit
impa
irment
(charge)/release
4
(28)
(347)
(175)
(550)
\n
1
Includes fair value adjustments and amortisat
ion on debt secur
it
ies
\n
2
Excludes Cash and balances at central banks, Accrued income, Assets held for sale and Other assets gross balances of $101,755 mill
ion (31 December 2023:
\n
$111,478\u00a0mill
ion) and Total cred
it impa
irment of $63 m
ill
ion (31 December 2023: $59 m
ill
ion)
\n
3
The gross balance includes the notional amount of off balance sheet instruments
\n
4 Reported basis
\n
5
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $N
il mill
ion (31 December 2023:
\n
$14 mill
ion)
\n
6
Does not include release relating to Other assets of $3 mill
ion (31 December 2023: N
il)
Corporate & Investment Banking (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
315,437
(194)
315,243
20,148
(411)
19,737
6,994
(3,822)
3,172
342,579
(4,427)
338,152
Transfers to stage 1
14,948
(347)
14,601
(14,948)
347
(14,601)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Transfers to stage 2
(34,133)
80
(34,053)
34,175
(88)
34,087
(42)
8
(34)
\u2013
\u2013
\u2013
Transfers to stage 3
(17)
\u2013
(17)
(1,270)
141
(1,129)
1,287
(141)
1,146
\u2013
\u2013
\u2013
Net change in
exposures
41,314
(73)
41,241
(20,084)
89
(19,995)
(1,335)
623
(712)
19,895
639
20,534
Net remeasurement
from stage changes
\u2013
15
15
\u2013
(45)
(45)
\u2013
(82)
(82)
\u2013
(112)
(112)
Changes in risk
parameters
\u2013
60
60
\u2013
(68)
(68)
\u2013
(668)
(668)
\u2013
(676)
(676)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(340)
340
\u2013
(340)
340
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(120)
120
\u2013
(120)
120
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
155
155
\u2013
155
155
Exchange translation
differences and
other movements
(360)
308
(52)
(1,148)
(283)
(1,431)
(188)
(184)
(372)
(1,696)
(159)
(1,855)
As at 31 December
2023
337,189
(151) 337,038
16,873
(318)
16,555
6,256
(3,651)
2,605
360,318
(4,120)
356,198
Income statement
ECL (charge)/release
2
(24)
(127)
(149)
Recoveries of
amounts previously
written off
\u2013
\u2013
31
31
Total credit
impa
irment
(charge)/release
2
(24)
(96)
(118)
As at 1 January 2024
337,189
(151) 337,038
16,873
(318)
16,555
6,256
(3,651)
2,605
360,318
(4,120) 356,198
Transfers to stage 1
10,390
(245)
10,145
(10,390)
245
(10,145)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Transfers to stage 2
(25,698)
47
(25,651)
25,810
(58)
25,752
(112)
11
(101)
\u2013
\u2013
\u2013
Transfers to stage 3
(186)
(4)
(190)
(186)
22
(164)
372
(18)
354
\u2013
\u2013
\u2013
Net change in
exposures
50,866
(50)
50,816
(16,508)
88
(16,420)
(1,063)
607
(456)
33,295
645
33,940
Net remeasurement
from stage changes
\u2013
16
16
(4)
(36)
(40)
\u2013
(100)
(100)
(4)
(120)
(124)
Changes in risk
parameters
\u2013
29
29
\u2013
(129)
(129)
\u2013
(336)
(336)
\u2013
(436)
(436)
Derecognised
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(321)
321
\u2013
(321)
321
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
25
(25)
\u2013
25
(25)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
104
104
\u2013
104
104
Exchange translation
differences and
other movements
(5,455)
225
(5,230)
(726)
(176)
(902)
13
(225)
(212)
(6,168)
(176)
(6,344)
As at 31 December
2024
367,106
(133) 366,973
14,869
(362)
14,507
5,170
(3,312)
1,858
387,145
(3,807) 383,338
Income statement
ECL (charge)/release
(5)
(77)
171
89
Recoveries of
amounts previously
written off
\u2013
\u2013
26
26
Total credit
impa
irment
(charge)/release
(5)
(77)
197
115
\n
1
The gross balance includes the notional amount of off balance sheet instruments
Wealth & Retail Banking (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
193,239
(413)
192,826
1,821
(118)
1,703
1,454
(776)
678
196,514
(1,307) 195,207
Transfers to stage 1
4,265
(246)
4,019
(4,254)
246
(4,008)
(11)
\u2013
(11)
\u2013
\u2013
\u2013
Transfers to stage 2
(7,544)
73
(7,471)
7,667
(73)
7,594
(123)
\u2013
(123)
\u2013
\u2013
\u2013
Transfers to stage 3
(64)
1
(63)
(1,049)
187
(862)
1,113
(188)
925
\u2013
\u2013
\u2013
Net change in
exposures
1,965
(78)
1,887
(1,713)
14
(1,699)
(395)
\u2013
(395)
(143)
(64)
(207)
Net remeasurement
from stage changes
\u2013
31
31
\u2013
(137)
(137)
\u2013
(38)
(38)
\u2013
(144)
(144)
Changes in risk
parameters
\u2013
110
110
\u2013
(69)
(69)
\u2013
(426)
(426)
\u2013
(385)
(385)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(649)
649
\u2013
(649)
649
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
37
(37)
\u2013
37
(37)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
24
24
\u2013
24
24
Exchange translation
differences and other
movements
(862)
197
(665)
\u2013
(190)
(190)
59
33
92
(803)
40
(763)
As at 31 December
2023
190,999
(325)
190,674
2,472
(140)
2,332
1,485
(759)
726
194,956
(1,224)
193,732
Income statement
ECL (charge)/release
63
(192)
(464)
(593)
Recoveries of
amounts previously
written off
\u2013
\u2013
239
239
Total credit
impa
irment
(charge)/release
63
(192)
(225)
(354)
As at 1 January 2024
190,999
(325) 190,674
2,472
(140)
2,332
1,485
(759)
726
194,956
(1,224) 193,732
Transfers to stage 1
5,126
(288)
4,838
(5,116)
288
(4,828)
(10)
\u2013
(10)
\u2013
\u2013
\u2013
Transfers to stage 2
(7,393)
80
(7,313)
7,525
(80)
7,445
(132)
\u2013
(132)
\u2013
\u2013
\u2013
Transfers to stage 3
(98)
1
(97)
(1,254)
211
(1,043)
1,352
(212)
1,140
\u2013
\u2013
\u2013
Net change in
exposures
(3,926)
(89)
(4,015)
(1,505)
21
(1,484)
(431)
\u2013
(431)
(5,862)
(68)
(5,930)
Net remeasurement
from stage changes
\u2013
29
29
\u2013
(144)
(144)
\u2013
(44)
(44)
\u2013
(159)
(159)
Changes in risk
parameters
\u2013
19
19
\u2013
(152)
(152)
\u2013
(537)
(537)
\u2013
(670)
(670)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(808)
808
\u2013
(808)
808
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
28
(28)
\u2013
28
(28)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
30
30
\u2013
30
30
Exchange translation
differences and
other movements
(5,128)
181
(4,947)
(92)
(155)
(247)
139
(16)
123
(5,081)
10
(5,071)
As at 31 December
2024
179,580
(392)
179,188
2,030
(151)
1,879
1,623
(758)
865
183,233
(1,301)
181,932
Income statement
ECL (charge)/release
(41)
(275)
(581)
(897)
Recoveries of
amounts previously
written off
\u2013
\u2013
253
253
Total credit
impa
irment
(charge)/release
(41)
(275)
(328)
(644)
\n
1
The gross balance includes the notional amount of off-balance sheet instruments
Wealth & Retail Banking \u2013 Secured (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
135,362
(60) 135,302
1,413
(17)
1,396
1,028
(552)
476
137,803
(629)
137,174
Transfers to stage 1
3,311
(20)
3,291
(3,302)
20
(3,282)
(9)
\u2013
(9)
\u2013
\u2013
\u2013
Transfers to stage 2
(5,340)
11
(5,329)
5,436
(9)
5,427
(96)
(2)
(98)
\u2013
\u2013
\u2013
Transfers to stage 3
(28)
1
(27)
(463)
1
(462)
491
(2)
489
\u2013
\u2013
\u2013
Net change in
exposures
(3,138)
(16)
(3,154)
(1,250)
3
(1,247)
(216)
\u2013
(216)
(4,604)
(13)
(4,617)
Net remeasurement
from stage changes
\u2013
4
4
\u2013
(16)
(16)
\u2013
(3)
(3)
\u2013
(15)
(15)
Changes in risk
parameters
\u2013
22
22
\u2013
24
24
\u2013
(110)
(110)
\u2013
(64)
(64)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(109)
109
\u2013
(109)
109
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(3)
3
\u2013
(3)
3
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
12
12
\u2013
12
12
Exchange translation
differences and
other movements
(369)
25
(344)
(7)
(22)
(29)
(24)
20
(4)
(400)
23
(377)
As at 31 December
2023
129,798
(33)
129,765
1,827
(16)
1,811
1,062
(525)
537
132,687
(574)
132,113
Income statement
ECL (charge)/release
10
11
(113)
(92)
Recoveries of
amounts previously
written off
\u2013
\u2013
68
68
Total credit
impa
irment
(charge)/release
10
11
(45)
(24)
As at 1 January 2024
129,798
(33) 129,765
1,827
(16)
1,811
1,062
(525)
537
132,687
(574)
132,113
Transfers to stage 1
3,839
(23)
3,816
(3,836)
23
(3,813)
(3)
\u2013
(3)
\u2013
\u2013
\u2013
Transfers to stage 2
(4,952)
13
(4,939)
5,054
(13)
5,041
(102)
\u2013
(102)
\u2013
\u2013
\u2013
Transfers to stage 3
(43)
\u2013
(43)
(566)
19
(547)
609
(19)
590
\u2013
\u2013
\u2013
Net change in
exposures
2,570
(11)
2,559
(917)
8
(909)
(268)
\u2013
(268)
1,385
(3)
1,382
Net remeasurement
from stage changes
\u2013
6
6
\u2013
(15)
(15)
\u2013
(7)
(7)
\u2013
(16)
(16)
Changes in risk
parameters
\u2013
(6)
(6)
\u2013
(6)
(6)
\u2013
(129)
(129)
\u2013
(141)
(141)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(114)
114
\u2013
(114)
114
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
53
(53)
\u2013
53
(53)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
16
16
\u2013
16
16
Exchange translation
differences and
other movements
(4,496)
6
(4,490)
(57)
(31)
(88)
(33)
47
14
(4,586)
22
(4,564)
As at 31 December
2024
126,716
(48) 126,668
1,505
(31)
1,474
1,204
(556)
648
129,425
(635) 128,790
Income statement
ECL (charge)/release
(11)
(13)
(136)
(160)
Recoveries of
amounts previously
written off
\u2013
\u2013
80
80
Total credit
impa
irment
(charge)/release
(11)
(13)
(56)
(80)
\n
1
The gross balance includes the notional amount of off balance sheet instruments
Wealth & Retail Banking \u2013 Unsecured (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Retail Banking
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
57,877
(353)
57,524
408
(101)
307
426
(224)
202
58,711
(678)
58,033
Transfers to stage 1
954
(226)
728
(952)
226
(726)
(2)
\u2013
(2)
\u2013
\u2013
\u2013
Transfers to stage 2
(2,204)
62
(2,142)
2,231
(64)
2,167
(27)
2
(25)
\u2013
\u2013
\u2013
Transfers to stage 3
(36)
\u2013
(36)
(586)
186
(400)
622
(186)
436
\u2013
\u2013
\u2013
Net change in
exposures
5,103
(62)
5,041
(463)
11
(452)
(179)
\u2013
(179)
4,461
(51)
4,410
Net remeasurement
from stage changes
\u2013
27
27
\u2013
(121)
(121)
\u2013
(35)
(35)
\u2013
(129)
(129)
Changes in risk
parameters
\u2013
88
88
\u2013
(93)
(93)
\u2013
(316)
(316)
\u2013
(321)
(321)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(540)
540
\u2013
(540)
540
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
40
(40)
\u2013
40
(40)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
12
12
\u2013
12
12
Exchange
translation
differences and
other movements
(493)
172
(321)
7
(168)
(161)
83
13
96
(403)
17
(386)
As at 31 December
2023
61,201
(292)
60,909
645
(124)
521
423
(234)
189
62,269
(650)
61,619
Income statement
ECL (charge)/release
53
(203)
(351)
(501)
Recoveries of
amounts previously
written off
\u2013
\u2013
171
171
Total credit
impa
irment
(charge)/release
53
(203)
(180)
(330)
As at 1 January
2024
61,201
(292)
60,909
645
(124)
521
423
(234)
189
62,269
(650)
61,619
Transfers to stage 1
1,287
(265)
1,022
(1,280)
265
(1,015)
(7)
\u2013
(7)
\u2013
\u2013
\u2013
Transfers to stage 2
(2,441)
67
(2,374)
2,471
(67)
2,404
(30)
\u2013
(30)
\u2013
\u2013
\u2013
Transfers to stage 3
(55)
1
(54)
(688)
192
(496)
743
(193)
550
\u2013
\u2013
\u2013
Net change in
exposures
(6,496)
(78)
(6,574)
(588)
13
(575)
(163)
\u2013
(163)
(7,247)
(65)
(7,312)
Net remeasurement
from stage changes
\u2013
23
23
\u2013
(129)
(129)
\u2013
(37)
(37)
\u2013
(143)
(143)
Changes in risk
parameters
\u2013
25
25
\u2013
(146)
(146)
\u2013
(408)
(408)
\u2013
(529)
(529)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(694)
694
\u2013
(694)
694
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
25
\u2013
(25)
25
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
14
14
\u2013
14
14
Exchange
translation
differences and
other movements
(632)
175
(457)
(35)
(124)
(159)
172
(63)
109
(495)
(12)
(507)
As at 31 December
2024
52,864
(344)
52,520
525
(120)
405
419
(202)
217
53,808
(666)
53,142
Income statement
ECL (charge)/release
(30)
(262)
(445)
(737)
Recoveries of
amounts previously
written off
\u2013
\u2013
172
172
Total credit
impa
irment
(charge)/release
(30)
(262)
(273)
(565)
\n
1
The gross balance includes the notional amount of off balance sheet instruments
Analysis of stage 2 balances
\n
The table below analyses total stage 2 gross on-and off-balance sheet exposures and associated expected credit provis
ions
\n
by the key SICR driver that caused the exposures to be classif
ied as stage 2 as at 31 December 2024 and 31 December 2023 for
\n
each segment.
\n
Where multiple drivers apply, the exposure is allocated based on the table order. For example, a loan may have breached
\n
the PD thresholds and could also be on non-purely precautionary early alert; in this instance, the exposure is reported under
\n
\u2018Increase in PD\u2019.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Corporate &
Wealth &
Investment Banking
Retail Banking
Ventures
Central & other items
1
Total
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
Increase in PD
8,465
112
1.3%
1,366
104
7.6%
48
20
31.3%
154
\u2013
0.0%
10,033
236
2.4%
Non-purely
precautionary early alert
3,473
44
1.3%
30
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
3,503
44
1.3%
Higher risk (CG12)
686
24
3.5%
18
\u2013
0.0%
\u2013
\u2013
0.0%
1,488
1
0.4%
2,192
25
1.1%
Top up/Sell down
(Private Banking)
\u2013
\u2013
0.0%
254
1
0.4%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
254
1
0.4%
Others
2,245
25
1.1%
150
5
3.3%
\u2013
\u2013
0.0%
482
\u2013
0.0%
2,877
30
1.0%
30 days past due
\u2013
\u2013
0.0%
212
19
9.0%
6
4
66.7%
\u2013
\u2013
0.0%
218
23
10.6%
Management overlay
\u2013
157
0.0%
\u2013
22
0.0%
\u2013
3
0.0%
\u2013
\u2013
0.0%
\u2013
182
0.0%
Total stage 2
14,869
362
2.4%
2,030
151
7.4%
54
27
40.7%
2,124
1
0.3%
19,077
541
2.8%
2023
Increase in PD
8,262
75
0.9%
1,962
109
5.6%
96
23
24.0%
599
13
2.2%
10,919
220
2.0%
Non-purely
precautionary early alert
5,136
26
0.5%
37
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
5,173
26
0.5%
Higher risk (CG12)
1,008
56
5.6%
26
1
3.8%
\u2013
\u2013
0.0%
2,020
17
0.8%
3,054
74
2.4%
Top up/Sell down
(Private Banking)
\u2013
\u2013
0.0%
148
2
1.4%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
148
2
1.7%
Others
2,467
37
1.5%
151
16
10.6%
\u2013
\u2013
0.0%
489
\u2013
0.0%
3,107
53
1.7%
30 days past due
\u2013
\u2013
0.0%
148
12
8.1%
2
\u2013
0.0%
\u2013
\u2013
0.0%
150
12
7.7%
Management overlay
\u2013
124
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
17
0.0%
\u2013
141
0.0%
Total stage 2
16,873
318
1.9%
2,472
140
5.7%
98
23
23.5%
3,108
47
1.5%
22,551
528
2.3%
\n
1
Includes Gross and ECL for Cash and balances at central banks and Assets held for sale
Credit impa
irment charge (aud
ited)
\n
The table below analyses credit impa
irment charges or releases of the ongo
ing business portfolio and restructuring business
\n
portfolio for the year ended 31 December 2024.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Stage 1 & 2
Stage 3
Total
Stage 1 & 2
Stage 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Ongoing business portfolio
Corporate & Investment Banking
81
(187)
(106)
11
112
123
Wealth & Retail Banking
317
327
644
129
225
354
Ventures
10
64
74
42
43
85
Central & other items
(37)
(18)
(55)
(44)
10
(34)
Credit impa
irment charge/(release)
371
186
557
138
390
528
Restructuring business portfolio
Others
1
(11)
(10)
1
(21)
(20)
Credit impa
irment charge/(release)
1
(11)
(10)
1
(21)
(20)
Total credit impa
irment
charge/(release)
372
175
547
139
369
508
\n
Problem credit management and provis
ion
ing (audited)
\n
Forborne and other modif
ied loans by cl
ient segment
\n
A forborne loan arises when a concession has been made to the contractual terms of a loan in response to a customer\u2019s
\n
\ufb01nancial d
iff
icult
ies.
\n
Net forborne loans decreased by $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to repayments in CIB
\n
non-performing forborne loans. Net non-performing forborne loans decreased by $235 mill
ion to $732 m
ill
ion (31 December
\n
2023: $967 mill
ion), wh
ich was partly offset by a $17 mill
ion
increase in CIB performing forborne loans.
\n\n \n
2024
2023
Corporate &
Corporate &
Investment
Wealth &
Investment
Wealth &
Banking
Retail Banking
Total
Banking
Retail Banking
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Gross stage 1 and 2 forborne loans
17
36
53
\u2013
40
40
Modif
icat
ion of terms and condit
ions
1
17
36
53
\u2013
40
40
Impairment provis
ions
\u2013
(1)
(1)
\u2013
(2)
(2)
Modif
icat
ion of terms and condit
ions
1
\u2013
(1)
(1)
\u2013
(2)
(2)
Net stage 1 and 2 forborne loans
17
35
52
\u2013
38
38
Collateral
\u2013
27
27
\u2013
31
31
Gross stage 3 forborne loans
2,065
258
2,323
2,340
274
2,614
Modif
icat
ion of terms and condit
ions
1
1,824
258
2,082
2,113
274
2,387
Re\ufb01nancing
2
241
\u2013
241
227
\u2013
227
Impairment provis
ions
(1,481)
(110)
(1,591)
(1,529)
(118)
(1,647)
Modif
icat
ion of terms and condit
ions
1
(1,242)
(110)
(1,352)
(1,337)
(118)
(1,454)
Re\ufb01nancing
2
(239)
\u2013
(239)
(192)
\u2013
(192)
Net stage 3 forborne loans
584
148
732
811
156
967
Collateral
172
55
227
341
49
390
Net carrying value of forborne loans
601
183
784
811
194
1,005
\n
1
Modif
icat
ion of terms is any contractual change apart from re\ufb01nanc
ing, as a result of cred
it stress of the counterparty, i.e. interest reductions, loan
\n
covenant waivers
\n
2
Re\ufb01nancing
is a new contract to a borrower in credit stress, such that they are re\ufb01nanced and can pay other debt contracts that they were unable to honour
\n
Forborne and other modif
ied loans by key geography
\n
Net forborne loans decreased by $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to non-performing
\n
forborne loans.
\n\n \n
2024
2023
3
Hong
Singa-
Hong
Singa-
Kong
Korea
China
pore
UK
US
Other
Total
Kong
Korea
China
pore
UK
US
Other
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Performing
forborne loans
2
8
\u2013
3
\u2013
\u2013
39
52
\u2013
6
\u2013
3
\u2013
\u2013
29
38
Stage 3
forborne loans
118
18
77
25
78
1
415
732
104
22
114
37
46
1
643
967
Net forborne loans
120
26
77
28
78
1
454
784
104
28
114
40
46
1
672
1,005
\n
3
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances)
Credit Risk mit
igat
ion
\n
Potential credit losses from any given account, customer or portfolio are mit
igated us
ing a range of tools such as collateral,
\n
netting arrangements, credit insurance and credit derivat
ives, tak
ing into account expected volatil
ity and guarantees.
\n
The reliance that can be placed on these mit
igants
is carefully assessed in light of issues such as legal certainty and
\n
enforceabil
ity, market valuat
ion correlation and counterparty risk of the guarantor.
\n
Collateral (audited)
\n
A secured loan is one where the borrower pledges an asset as collateral of which the Group is able to take possession in the
\n
event that the borrower defaults.
\n
The collateral values in the table below (which covers loans and advances to banks and customers, excluding those held at fair
\n
value through pro\ufb01t or loss) are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of
\n
over-collateralisat
ion. The extent of over-collateral
isat
ion has been determ
ined with reference to both the drawn and undrawn
\n
components of exposure as this best re\ufb02ects the effect of collateral and other credit enhancements on the amounts aris
ing
\n
from ECL. The value of collateral re\ufb02ects management\u2019s best estimate and is backtested against our prior experience.
\n
Collateral held on loans and advances
\n
The table below details collateral held against exposures, separately disclos
ing stage 2 and stage 3 exposure and
\n
corresponding collateral.
\n\n \n
2024
Net amount outstanding
Collateral
Net exposure
Credit-
Credit-
Credit-
Stage 2
impa
ired
Stage 2
impa
ired
Stage 2
impa
ired
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
Total
assets
assets (S3)
Total
2
assets
assets (S3)
Total
assets
assets (S3)
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment Banking
1
181,897
8,657
1,376
36,750
3,052
298
145,147
5,605
1,078
Wealth & Retail Banking
119,248
1,758
858
85,163
891
584
34,085
867
274
Ventures
1,389
25
1
\u2013
\u2013
\u2013
1,389
25
1
Central & other items
22,091
35
98
80
35
\u2013
22,011
\u2013
98
Total
324,625
10,475
2,333
121,993
3,978
882
202,632
6,497
1,451
2023
Corporate &
Investment Banking
1
175,382
8,175
2,046
36,458
2,972
623
138,924
5,203
1,423
Wealth & Retail Banking
126,059
2,163
724
86,827
1,136
554
39,232
1,027
170
Ventures
1,033
33
\u2013
\u2013
\u2013
\u2013
1,033
33
\u2013
Central & other items
29,478
964
209
2,475
964
\u2013
27,003
\u2013
209
Total
331,952
11,335
2,979
125,760
5,072
1,177
206,192
6,263
1,802
\n
1
Includes loans and advances to banks
\n
2
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
\n
Collateral \u2013 Corporate & Investment Banking (audited)
\n
Our underwrit
ing standards encourage tak
ing specif
ic charges on assets and we cons
istently seek high-quality, investment-
\n
grade collateral.
\n
Collateral taken for longer-term and sub-investment grade corporate loans increased to 49 per cent (31 December 2023:
\n
41 per cent).
\n
The unadjusted market value of collateral across all asset types, in respect of CIB, without adjust
ing for over collateral
isat
ion,
\n
increased to $383 bill
ion (31 December 2023: $290 b
ill
ion) predom
inantly due to an increase in reverse repos.
\n
88 per cent (31 December 2023: 83 per cent) of tangible collateral excluding reverse repurchase agreements and \ufb01nanc
ial
\n
guarantees held comprises physical assets with the remainder held in cash. Overall collateral remained broadly stable at
\n
$37 bill
ion (31 December 2023: $36 b
ill
ion).
\n
Non-tangible collateral, such as guarantees and standby letters of credit, is also held against corporate exposures, although the
\n
\ufb01nancial effect of th
is type of collateral is less sign
i\ufb01cant
in terms of recoveries. However, this is considered when determin
ing
\n
the loss given default and other credit-related factors. Collateral is also held against off-balance sheet exposures, includ
ing
\n
undrawn commitments and trade-related instruments.
Corporate & Investment Banking
\n\n \n
2024
2023
Amortised cost
$mill
ion
$mill
ion
Maximum exposure
181,897
175,382
Property
8,504
9,339
Plant, machinery and other stock
935
933
Cash
1,973
2,985
Reverse repos
12,568
13,826
AA- to AA+
938
1,036
A- to A+
8,324
10,606
BBB- to BBB+
1,437
855
Lower than BBB-
95
169
Unrated
1,774
1,160
Financ
ial guarantees and
insurance
7,075
5,057
Commodit
ies
33
5
Ships and aircraft
5,662
4,313
Total value of collateral
1
36,750
36,458
Net exposure
145,147
138,924
\n
1
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
\n
Collateral \u2013 Wealth & Retail Banking (audited)
\n
In WRB, fully secured products remain stable at 85 per cent of the total portfolio (31 December 2023: 85 per cent).
\n
The following table presents an analysis of loans to ind
iv
iduals by product \u2013 split between fully secured, partially secured
\n
and unsecured.
\n\n \n
2024
2023
Fully
Partially
Fully
Partially
secured\u00b9
secured\u00b9
Unsecured
Total2
secured\u00b9
secured\u00b9
Unsecured
Total\u00b2
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Maximum exposure
101,264
536
17,448
119,248
106,914
505
18,640
126,059
Loans to ind
iv
iduals
Mortgages
76,696
\u2013
\u2013
76,696
82,943
\u2013
\u2013
82,943
CCPL
463
\u2013
16,343
16,806
375
\u2013
17,395
17,770
Auto
160
\u2013
\u2013
160
312
\u2013
\u2013
312
Secured wealth products
21,928
\u2013
\u2013
21,928
20,303
\u2013
\u2013
20,303
Other
2,017
536
1,105
3,658
2,981
505
1,245
4,731
Total collateral
2
85,163
86,827
Net exposure
3
34,085
39,232
Percentage of total loans
85%
0%
15%
85%
0%
15%
\n
1
Secured loans are fully secured if the fair value of the collateral is equal to or greater than the loan at the time of orig
inat
ion. All other secured loans are considered
\n
to be partly secure
\n
2
Collateral values are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of over-collateralisat
ion
\n
3 Amounts net of ECL
\n
Mortgage loan-to-value ratios by geography (audited)
\n
Loan-to-value (LTV) ratios measure the ratio of the current mortgage outstanding to the current fair value of the properties on
\n
which they are secured.
\n
For the majority of mortgage loans, the value of property held as secur
ity sign
i\ufb01cantly exceeds the pr
inc
ipal outstand
ing of the
\n
loan. The average LTV of the overall mortgage portfolio increased to 48.9 per cent (31 December 2023: 47.1 per cent) driven by
\n
a decrease in property prices and regulatory relaxations in a few key markets, includ
ing Hong Kong and Korea. Hong Kong,
\n
which represents 34.3 per cent of WRB mortgage portfolio, has an average LTV of 58.6 per cent (31 December 2023: 55.7 per
\n
cent). The increase in Hong Kong resident
ial mortgage LTV was due to a decrease
in property prices. However, 29 per cent of
\n
the Hong Kong mortgage exposure is backed by credit insurance and, specif
ically, 95 per cent of mortgage exposure w
ith LTV
\n
greater than 80 per cent is backed by credit insurance.
\n
Our other key markets continued to have low portfolio average LTVs (Korea and Singapore at 42.1 per cent and 42.5 per cent
\n
respectively). Korea average LTV increased by 1.7 per cent ( 31 December 2023: 40.4 per cent) was mainly due to government
\n
relaxations whereby highly regulated areas have eased up to accommodate customers with higher LTV.
An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.
\n\n \n
2024
2023
1
Hong
Hong
Kong
Singapore
Korea
Other
Total
Kong
Singapore
Korea
Other
Total
%
%
%
%
%
%
%
%
%
%
Amortised cost
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Less than 50 per cent
40.9
52.7
64.1
50.2
51.3
44.9
50.9
69.5
51.0
54.9
50 per cent to 59 per cent
17.6
21.8
13.2
15.4
16.5
19.5
24.7
11.0
16.7
17.1
60 per cent to 69 per cent
12.7
15.6
13.5
17.0
14.3
9.7
15.2
9.7
16.3
11.9
70 per cent to 79 per cent
5.5
9.6
8.3
12.7
8.5
4.3
8.7
8.9
11.6
7.9
80 per cent to 89 per cent
5.1
0.1
0.8
4.1
2.9
7.3
0.5
0.6
3.6
3.3
90 per cent to 99 per cent
8.2
0.0
0.1
0.5
3.0
7.4
\u2013
0.1
0.4
2.5
100 per cent and greater
10.1
0.1
0.1
0.2
3.5
7.0
\u2013
0.1
0.4
2.4
Average portfolio loan-to-value
58.6
42.5
42.1
48.0
48.9
55.7
43.4
40.4
47.8
47.1
Loans to ind
iv
iduals \u2013
mortgages ($mill
ion)
31,506
13,756
13,703
17,731
76,696
32,935
15,292
17,157
17,559
82,943
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
Collateral and other credit enhancements possessed or called upon (audited)
\n
The Group obtains assets by taking possession of collateral or calling upon other credit enhancements (such as guarantees).
\n
Repossessed properties are sold in an orderly fashion. Where the proceeds are in excess of the outstanding loan balance, the
\n
excess is returned to the borrower.
\n
Certain equity securit
ies acqu
ired may be held by the Group for investment purposes and are classif
ied as fa
ir value through
\n
pro\ufb01t or loss, and the related loan written off. The carrying value of collateral possessed and held by the Group is $23.7 mill
ion
\n
(31 December 2023: $16.5 mill
ion).
\n\n \n
2024
2023
$mill
ion
$mill
ion
Property, plant and equipment
6.1
10.5
Guarantees
4.7
6.0
Other
12.9
\u2013
Total
23.7
16.5
\n
Other Credit Risk mit
igat
ion (audited)
\n
Other forms of Credit Risk mit
igat
ion are set out below.
\n
Credit default swaps
\n
The Group has entered into credit default swaps for portfolio management purposes, referencing loan assets with a notional
\n
value of $3.5 bill
ion (31 December 2023: $3.5 b
ill
ion). These cred
it default swaps are accounted for as \ufb01nanc
ial guarantees as per
\n
IFRS 9 as they will only reimburse the holder for an incurred loss on an underlying debt instrument. The Group continues to hold
\n
the underlying assets referenced in the credit default swaps and it continues to be exposed to related Credit Risk and Foreign
\n
Exchange Rate Risk on these assets.
\n
Credit linked notes
\n
The Group has issued credit linked notes for portfolio management purposes, referencing loan assets with a notional value of
\n
$18.6 bill
ion (31 December 2023: $22.5 b
ill
ion). The Group cont
inues to hold the underlying assets for which the credit linked notes
\n
provide mit
igat
ion. The credit linked notes of $2.0 bill
ion (31 December 2023: $2.1 b
ill
ion) are recogn
ised as a \ufb01nanc
ial l
iab
il
ity at
\n
amortised cost on the balance sheet and are adjusted, where appropriate, for reductions in expected future cash \ufb02ows with a
\n
corresponding credit impa
irment
in the income
statement.
\n
Derivat
ive \ufb01nancial
instruments
\n
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the
\n
counterparty through netting the sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions.
\n
These are also set out under the \u2018Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion\u2019 section (page 249).
\n
Off-balance sheet exposures
\n
For certain types of exposures, such as letters of credit and guarantees, the Group obtains collateral such as cash depending
\n
on internal Credit Risk assessments, as well as in the case of letters of credit holding legal title to the underlying assets should
\n
a default take place.
\n
Other portfolio analysis
\n
This section provides maturity analysis by credit quality by industry and industry and retail products analysis by key geography.
\n
Maturity analysis of loans and advances by client segment
\n
Loans and advances to the CIB segment remain predominantly short-term, with $91 bill
ion (31 December 2023: $91 b
ill
ion)
\n
maturing in less than one year. 91 per cent (31 December 2023: 98 per cent) of loans to banks mature in less than one year,
\n
as net exposures decreased to $44 bill
ion (31 December 2023: $45 b
ill
ion). Shorter matur
it
ies g
ive us the \ufb02exib
il
ity to respond
\n
promptly to events and rebalance or reduce our exposure to clients or sectors that are facing increased pressure or uncertainty.
\n
The WRB short-term book of one year or less, is stable at 27 per cent (31 December 2023: 26 per cent). The WRB long-term book
\n
of over \ufb01ve years also remained stable at 62 per cent (31 December 2023: 63 per cent).
\n \n
2024
2023
One year
One to
Over
One year
One to
Over
or less
\ufb01ve years
\ufb01ve years
Total
or less
\ufb01ve years
\ufb01ve years
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate & Investment Banking
91,065
33,130
17,670
141,865
90,728
30,746
12,822
134,296
Wealth & Retail Banking
32,252
13,194
75,091
120,537
33,397
13,711
80,166
127,274
Ventures
1,001
442
\u2013
1,443
747
334
\u2013
1,081
Central & other items
22,085
2
4
22,091
29,448
43
3
29,494
Gross loans and advances to customers
146,403
46,768
92,765
285,936
154,320
44,834
92,991
292,145
Impairment provis
ions
(4,369)
(409)
(126)
(4,904)
(4,872)
(185)
(113)
(5,170)
Net loans and advances to customers
142,034
46,359
92,639
281,032
149,448
44,649
92,878
286,975
Net loans and advances to banks
39,591
3,699
303
43,593
43,955
1,021
1
44,977
\n
Credit quality by industry
\n
Loans and advances
\n
This section provides an analysis of the Group\u2019s amortised cost portfolio by industry on a gross, total credit impa
irment and
\n
net basis.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
ment
amount
balance
ment
amount
balance
ment
amount
balance
ment
amount
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
12,147
(9)
12,138
468
(57)
411
870
(559)
311
13,485
(625)
12,860
Manufacturing
19,942
(12)
19,930
840
(16)
824
418
(305)
113
21,200
(333)
20,867
Financ
ing,
insurance and
non-banking
34,452
(16)
34,436
1,238
(6)
1,232
154
(142)
12
35,844
(164)
35,680
Transport, telecom
and util
it
ies
16,099
(11)
16,088
2,309
(32)
2,277
330
(85)
245
18,738
(128)
18,610
Food and
household
products
8,425
(8)
8,417
267
(8)
259
251
(198)
53
8,943
(214)
8,729
Commercial
real estate
12,135
(10)
12,125
1,714
(126)
1,588
1,485
(1,265)
220
15,334
(1,401)
13,933
Min
ing and
quarrying
5,542
(3)
5,539
287
(12)
275
124
(57)
67
5,953
(72)
5,881
Consumer
durables
5,988
(6)
5,982
218
(26)
192
292
(259)
33
6,498
(291)
6,207
Construction
1,925
(2)
1,923
528
(5)
523
171
(160)
11
2,624
(167)
2,457
Trading
companies &
distr
ibutors
589
\u2013
589
24
(1)
23
88
(48)
40
701
(49)
652
Government
28,870
\u2013
28,870
441
(12)
429
205
(18)
187
29,516
(30)
29,486
Other
4,590
(3)
4,587
344
(2)
342
186
(82)
104
5,120
(87)
5,033
Total
150,704
(80) 150,624
8,678
(303)
8,375
4,574
(3,178)
1,396
163,956
(3,561) 160,395
Retail Products:
Mortgage
75,340
(8)
75,332
896
(2)
894
606
(136)
470
76,842
(146)
76,696
Credit Cards
8,037
(121)
7,916
222
(80)
142
71
(60)
11
8,330
(261)
8,069
Personal Loan
and other
unsecured lending
10,021
(228)
9,793
238
(53)
185
279
(131)
148
10,538
(412)
10,126
Auto
159
\u2013
159
1
\u2013
1
\u2013
\u2013
\u2013
160
\u2013
160
Secured wealth
products
21,404
(37)
21,367
402
(6)
396
518
(353)
165
22,324
(396)
21,928
Other
3,437
(9)
3,428
194
(29)
165
155
(90)
65
3,786
(128)
3,658
Total
118,398
(403)
117,995
1,953
(170)
1,783
1,629
(770)
859
121,980
(1,343) 120,637
Net carrying value
(customers)\u00b9
269,102
(483) 268,619
10,631
(473)
10,158
6,203
(3,948)
2,255
285,936
(4,904) 281,032
Net carrying
value (Banks)
1
43,208
(10)
43,198
318
(1)
317
83
(5)
78
43,609
(16)
43,593
\n
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $9,660 mill
ion for customers and $2,946 m
ill
ion for Banks.
\n \n
2023
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
ment
amount
balance
ment
amount
balance
ment
amount
balance
ment
amount
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
9,397
(8)
9,389
672
(22)
650
949
(535)
414
11,018
(565)
10,453
Manufacturing
21,239
(8)
21,231
708
(16)
692
656
(436)
220
22,603
(460)
22,143
Financ
ing,
insurance and
non-banking
31,633
(13)
31,620
571
(1)
570
80
(77)
3
32,284
(91)
32,193
Transport,
telecom and
util
it
ies
14,710
(8)
14,702
1,722
(36)
1,686
481
(178)
303
16,913
(222)
16,691
Food and
household
products
7,668
(15)
7,653
323
(7)
316
355
(262)
93
8,346
(284)
8,062
Commercial
real estate
12,261
(30)
12,231
1,848
(129)
1,719
1,712
(1,191)
521
15,821
(1,350)
14,471
Min
ing and
quarrying
5,995
(4)
5,991
220
(10)
210
151
(84)
67
6,366
(98)
6,268
Consumer
durables
5,815
(3)
5,812
300
(21)
279
329
(298)
31
6,444
(322)
6,122
Construction
2,230
(2)
2,228
502
(8)
494
358
(326)
32
3,090
(336)
2,754
Trading
companies &
distr
ibutors
581
\u2013
581
57
\u2013
57
107
(58)
49
745
(58)
687
Government
33,400
(6)
33,394
1,783
(5)
1,778
367
(33)
334
35,550
(44)
35,506
Other
4,262
(4)
4,258
161
(3)
158
187
(70)
117
4,610
(77)
4,533
Total
149,191
(101) 149,090
8,867
(258)
8,609
5,732
(3,548)
2,184
163,790
(3,907)
159,883
Retail Products:
Mortgage
81,210
(8)
81,202
1,350
(5)
1,345
519
(123)
396
83,079
(136)
82,943
Credit Cards
7,633
(104)
7,529
244
(65)
179
69
(50)
19
7,946
(219)
7,727
Personal Loan
and other
unsecured lending
10,867
(188)
10,679
324
(77)
247
315
(165)
150
11,506
(430)
11,076
Auto
310
\u2013
310
1
\u2013
1
1
\u2013
1
312
\u2013
312
Secured wealth
products
19,923
(22)
19,901
278
(10)
268
474
(340)
134
20,675
(372)
20,303
Other
4,558
(7)
4,551
161
(5)
156
118
(94)
24
4,837
(106)
4,731
Total
124,501
(329)
124,172
2,358
(162)
2,196
1,496
(772)
724
128,355
(1,263)
127,092
Net carrying value
(customers)\u00b9
273,692
(430) 273,262
11,225
(420)
10,805
7,228
(4,320)
2,908
292,145
(5,170) 286,975
Net carrying
value (Banks)
1
44,384
(8)
44,376
540
(10)
530
77
(6)
71
45,001
(24)
44,977
\n
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $13,996 mill
ion for customers and $1,738 m
ill
ion for Banks.
\n
Industry and Retail Products analysis of loans and advances by key geography
\n
This section provides an analysis of the Group\u2019s amortised cost loan portfolio, net of provis
ions, by
industry and geography.
\n
The Manufacturing sector group is spread across a diverse range of industr
ies,
includ
ing automob
iles and components, capital
\n
goods, pharmaceuticals, biotech and life sciences, technology hardware and equipment, chemicals, paper products and
\n
packaging, with lending spread over 3,251 clients.
Corporate & Investment Banking
\n\n \n
2024
2023
1
Hong
Singa-
Hong
Singa-
Kong
China
pore
UK
US
Other
Total
Kong
China
pore
UK
US
Other
Total
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
2,200
59
1,552
1,744
1,750
5,551
12,856
3,118
42
1,162
1,341
3,638
1,130
10,431
Manufacturing
4,077
4,200
1,463
389
2,307
8,431
20,867
3,570
4,309
1,666
694
2,921
8,982
22,142
Financ
ing,
insurance
and non-banking
3,674
3,486
1,893
4,005
9,900 12,696
35,654
3,700
3,570
1,708
1,724
6,627
14,864
32,193
Transport, telecom
and util
it
ies
5,131
662
3,106
1,084
936
7,685
18,604
4,634
429
2,499
1,030
630
7,470
16,692
Food and household
products
1,038
428
1,414
962
685
4,202
8,729
541
519
911
816
664
4,611
8,062
Commercial
Real estate
4,512
334
1,404
1,039
1,650
4,994
13,933
3,895
588
1,125
1,436
1,236
6,192
14,472
Min
ing and Quarry
ing
608
606
847
1,426
224
2,170
5,881
1,028
735
427
1,729
279
2,071
6,269
Consumer durables
2,780
293
466
84
537
2,046
6,206
3,030
244
180
177
483
2,008
6,122
Construction
318
156
372
96
247
1,268
2,457
176
163
319
137
389
1,569
2,753
Trading Companies &
Distr
ibutors
95
103
106
31
40
277
652
119
75
121
31
20
321
687
Government
2,576
117
219
169
4
4,352
7,437
1,445
1
547
236
6
3,814
6,049
Other
1,419
563
786
377
233
1,650
5,028
1,676
265
646
257
264
1,425
4,533
Net Loans and
advances to
Customers
28,428
11,007
13,628
11,406
18,513 55,322 138,304
26,932
10,940
11,311
9,608
17,157 54,457 130,405
Net Loans and
advances to Banks
16,727
2,443
7,721
4,103
2,766
9,833
43,593
17,457
1,996
8,994
3,868
2,544
10,119
44,978
\n
Wealth & Retail Banking
\n\n \n
2024
2023
1
Hong
Hong
Kong
Korea
Singapore
Other
Total
Kong
Korea
Singapore
Other
Total
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Retail Products:
Mortgages
31,506
13,703
13,756
17,731
76,696
32,935
17,157
15,292
17,559
82,943
Credit Cards
3,447
38
1,679
1,517
6,681
3,325
114
1,705
1,549
6,693
Personal Loans and other
unsecured lending
1,057
2,796
301
5,972
10,126
950
3,230
220
6,676
11,076
Auto
\u2013
\u2013
122
38
160
\u2013
\u2013
240
72
312
Secured wealth products
5,229
24
10,793
5,882
21,928
5,164
33
9,388
5,718
20,303
Other Retail
579
2,153
72
853
3,657
644
3,149
82
856
4,731
Net Loans and advances
to Customers
41,818
18,714
26,723
31,993
119,248
43,018
23,683
26,927
32,430
126,058
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
High carbon sectors
\n
Sectors are ident
i\ufb01ed and grouped as per the Internat
ional Standard Industrial Classif
icat
ion (ISIC) system and exposure
\n
numbers have been updated to include all in-scope ISIC codes used for target setting among the high carbon sectors.
\n
The maximum exposures shown in the table include loans and advances to customers at amortised cost, Fair Value through
\n
pro\ufb01t or loss, and committed facil
it
ies available as per IFRS 9 \u2013 Financ
ial Instruments
in $mill
ion.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
Maximum exposure
\n\n \n
2024
Maximum
on Balance
Sheet
Net On
Undrawn
Financ
ial
Net Off
Total On &
Exposure
Balance
Commitments
Guarantees
Balance
Off Balance
(net of credit
Sheet
(net of credit
(net of credit
Sheet
Sheet Net
impa
irment)
Collateral
Exposure
impa
irment)
impa
irment)
Exposure
Exposure
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Automotive manufacturers
3,881
69
3,812
3,331
605
3,936
7,748
Aviat
ion
1,829
960
869
842
928
1,770
2,639
Steel
1,526
316
1,210
816
325
1,141
2,351
Coal Min
ing
25
\u2013
25
\u2013
\u2013
\u2013
25
Alumin
ium
1,341
32
1,309
354
53
407
1,716
Cement
709
55
654
637
267
904
1,558
Shipp
ing
7,038
5,037
2,001
2,176
397
2,573
4,574
Commercial Real Estate
7,635
3,400
4,235
2,758
684
3,442
7,677
Oil & Gas
7,421
988
6,433
7,928
7,079
15,007
21,440
Power
6,341
1,500
4,841
4,538
1,124
5,662
10,503
Total\u00b9
37,746
12,357
25,389
23,380
11,462
34,842
60,231
Total Corporate & Investment Banking2
196,823
32,152
164,671
118,106
81,132
199,238
363,909
Total Group\u00b3
420,117
121,993
298,124
193,115
90,602
283,717
581,841
2023
Industry:
Automotive manufacturers
3,564
65
3,499
3,791
538
4,329
7,828
Aviat
ion
1,330
974
356
944
615
1,559
1,915
Steel
1,596
193
1,403
601
358
959
2,362
Coal Min
ing
29
9
20
51
99
150
170
Alumin
ium
526
9
517
338
188
526
1,043
Cement
671
47
624
769
259
1,028
1,652
Shipp
ing
5,964
3,557
2,407
2,261
291
2,552
4,959
Commercial Real Estate
7,498
3,383
4,115
1,587
112
1,699
5,814
Oil & Gas
6,278
894
5,384
7,845
6,944
14,789
20,173
Power
5,411
1,231
4,180
3,982
732
4,714
8,894
Total
1
32,867
10,362
22,505
22,169
10,136
32,305
54,810
Total Corporate & Investment Banking2
188,903
32,744
156,159
104,437
63,183
167,620
323,779
Total Group\u00b3
423,276
125,760
297,516
182,299
74,278
256,577
554,093
\n
1
Maximum on balance sheet exposure includes FVTPL amount of High Carbon sector is $749 mill
ion (31 December 2023: $125 m
ill
ion)
\n
2
Includes on balance sheet FVTPL amount of $58,519 mill
ion (31 December 2023: $58,498 m
ill
ion) for Corporate & Investment Bank
ing loans to customers
\n
3
Total Group includes net loans and advances to banks and net loans and advances to customers held at amortised cost of $43,593 mill
ion (31 December 2023:
\n
$44,977 mill
ion) and $281,032 m
ill
ion (31 December 2023: $286,975 m
ill
ion) respect
ively and loans to banks and loans and advances to customers held at FVTPL
\n
of $36,967 mill
ion (31 December 2023: $32,813 m
ill
ion) and $58, 525
mill
ion (31 December 2023: $58,511 m
ill
ion) respect
ively. Refer to credit quality table
\n
Maturity and ECL for high-carbon sectors
\n\n \n
2024
2023
Loans and
Maturity Buckets
1
Loans and
Maturity Buckets
1
advances
advances
(Drawn
Less than
More than
More than
Expected
(Drawn
Less than
More than
More than
Expected
funding)
1 year
1 to 5 years
5 years
Credit Loss
funding)
1 year
1 to 5 years
5 years
Credit Loss
Sector
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Automotive Manufacturers
3,883
3,458
369
56
2
3,566
3,106
460
\u2013
2
Aviat
ion
1,833
231
404
1,198
4
1,339
149
145
1,045
9
Cement
724
356
368
\u2013
15
719
512
189
18
48
Coal Min
ing
38
25
13
\u2013
13
42
9
33
\u2013
13
Steel
1,598
941
133
524
72
1,649
1,258
185
206
53
Alumin
ium
1,352
1,089
177
86
11
537
442
63
32
11
Oil & Gas
7,580
2,601
2,407
2,572
159
6,444
2,980
1,576
1,888
166
Power
6,401
1,700
1,404
3,297
60
5,516
1,933
1,533
2,050
105
Shipp
ing
7,053
1,035
2,450
3,568
15
5,971
1,051
2,568
2,352
7
Commercial Real Estate
7,773
3,880
3,680
213
138
7,664
3,722
3,935
7
166
Total balance
1
38,235
15,316
11,405
11,514
489
33,447
15,162
10,687
7,598
580
\n
1
Gross of credit impa
irment
Sectors of interest
\n
Commercial Real Estate
\n\n \n
2024
Maximum on
Balance Sheet
Undrawn
Financ
ial
Exposure (net
Net On
Commitments
Guarantees
Net Off
Total On & Off
of credit
Balance Sheet
(net of credit
(net of credit
Balance Sheet
Balance Sheet
impa
irment)
1
Collateral
Exposure
impa
irment)
impa
irment)
Exposure
Net Exposure
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Commercial Real Estate
14,037
5,947
8,090
4,932
670
5,602
13,692
2023
Commercial Real Estate
14,533
6,363
8,170
4,658
311
4,969
13,139
\n
1
Includes net loans and advances of $13,933 mill
ion (31 December 2023: $14,471 m
ill
ion) as deta
iled in the table below
\n
Analysis of credit quality of loans and advances of Commercial Real Estate
\n\n \n
2024
2023
Gross
Gross
Amortised costs
$mill
ion
$mill
ion
Strong
7,222
7,326
Satisfactory
6,515
6,751
Higher risk
112
32
Credit impa
ired (stage 3)
1,485
1,712
Total Gross Balance
15,334
15,821
Strong
(83)
(20)
Satisfactory
(44)
(139)
Higher risk
(9)
\u2013
Credit impa
ired (stage 3)
(1,265)
(1,191)
Total Credit Impairment
(1,401)
(1,350)
Total Net of Credit Impairment
13,933
14,471
Strong
1.1%
0.3%
Satisfactory
0.7%
2.1%
Higher risk
8.0%
0.0%
Credit impa
ired (stage 3)
85.1%
69.6%
Cover Ratio
9.1%
8.5%
\n
An analysis of the net CRE loans and advances by key geography, is set out on page 232.
\n
China commercial real estate
\n
The table below represents the on and off-balance sheet items that are exposed to China CRE by credit quality.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Rest of
Rest of
China
Hong Kong
Group
1
Total
China
Hong Kong
Group
1
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Loans to customers
324
1,598
\u2013
1,922
584
1,821
39
2,444
Off balance sheet
1
40
\u2013
41
42
82
\u2013
124
Total as at 31 December
325
1,638
\u2013
1,963
626
1,903
39
2,568
Loans to customers \u2013 By Credit quality
Gross
Strong
\u2013
12
\u2013
12
33
\u2013
\u2013
33
Satisfactory
172
338
\u2013
510
339
619
39
997
Higher risk
12
42
\u2013
54
8
\u2013
\u2013
8
Credit impa
ired (stage 3)
140
1,206
\u2013
1,346
204
1,202
\u2013
1,406
Total as at 31 December
324
1,598
\u2013
1,922
584
1,821
39
2,444
Loans to customers \u2013 ECL
Strong
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Satisfactory
(2)
(73)
\u2013
(75)
(3)
(134)
(12)
(149)
Higher risk
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
Credit impa
ired (stage 3)
(63)
(1,111)
\u2013
(1,174)
(70)
(941)
\u2013
(1,011)
Total as at 31 December
(65)
(1,185)
\u2013
(1,250)
(73)
(1,075)
(12)
(1,160)
\n
1
Rest of Group mainly includes Singapore
Debt securit
ies and other el
ig
ible b
ills (audited)
\n
This section provides further detail on gross debt securit
ies and treasury b
ills.
\n
The credit quality descript
ions
in the table below align to those used for CIB and Central and other items, as described on
\n
page 212. Debt securit
ies held that have a short-term external rat
ing are reported against the long-term rating of the issuer.
\n
For securit
ies that are unrated, the Group appl
ies an internal credit rating, as described under the \u2018Credit rating and
\n
measurement\u2019 section on page 201.
\n
Total gross debt securit
ies and other el
ig
ible b
ills decreased by $16.8 bill
ion to $144 b
ill
ion (31 December 2023: $160 b
ill
ion) due
\n
to maturity of exposures, primar
ily
in stage 1.
\n
Stage 1 gross balance decreased by $16.5 bill
ion to $142 b
ill
ion (31 December 2023: $158 b
ill
ion), ma
inly due to the maturity of
\n
exposures in Hong Kong.
\n
Stage 2 gross balance decreased by $0.2 bill
ion to $1.6 b
ill
ion (31 December 2023: $1.9 b
ill
ion).
\n
Stage 3 gross balance was broadly stable at $0.1 bill
ion (31 December 2023: $0.2 b
ill
ion).
\n\n \n
2024
2023
Gross
ECL
Net
2
Gross
ECL
Net
2
Amortised cost and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
141,862
(23)
141,839
158,314
(26)
158,288
\u2013 Strong
138,353
(19)
138,334
155,568
(23)
155,545
\u2013 Satisfactory
3,509
(4)
3,505
2,746
(3)
2,743
Stage 2
1,614
(4)
1,610
1,860
(34)
1,826
\u2013 Strong
562
\u2013
562
917
(3)
914
\u2013 Satisfactory
31
\u2013
31
50
(1)
49
\u2013 High Risk
1,021
(4)
1,017
893
(30)
863
Stage 3
103
(2)
101
164
(61)
103
Gross balance\u00b9
143,579
(29)
143,550
160,338
(121)
160,217
\n
1
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith Nil impa
irment (31 December 2023: $14 m
ill
ion)
\n
2
FVOCI instruments are not presented net of ECL on the balance sheet. While the presentation is on a net basis for the table, the total net on-balance sheet
\n
amount is $143,562 mill
ion (31\u00a0December 2023: $160,263 m
ill
ion). Refer to the Analys
is of \ufb01nanc
ial
instrument by stage table
IFRS 9 ECL methodology (audited)
\n
Approach for determin
ing ECL
\n
Credit loss terminology
\n\n \n
Component
De\ufb01nit
ion
Probabil
ity of default (PD)
The probabil
ity that a counterparty w
ill default, over the next 12 months from the reporting
date (stage 1) or over the lifet
ime of the product (stage 2),
incorporating the impact of forward
looking economic assumptions that have an effect on Credit Risk, such as unemployment rates
and GDP forecasts. The PD estimates will \ufb02uctuate in line with the economic cycle. The lifet
ime
(or term structure) PDs are based on statist
ical models, cal
ibrated using histor
ical data and
adjusted to incorporate forward-looking economic assumptions.
Loss given default (LGD)
The loss that is expected to arise on default, incorporating the impact of forward-looking
economic assumptions where relevant, which represents the difference between the
contractual cash\ufb02ows due and those that the bank expects to receive. The Group estimates
LGD based on the history of recovery rates and considers the recovery of any collateral that is
integral to the \ufb01nanc
ial asset, tak
ing into account forward-looking economic assumptions
where relevant.
Exposure at default (EAD)
The expected balance sheet exposure at the time of default, taking into account expected
changes over the lifet
ime of the exposure. Th
is incorporates the impact of drawdowns of
facil
it
ies with lim
its, repayments of pr
inc
ipal and
interest, and amortisat
ion.
\n
To determine the ECL, these components are multipl
ied
\n
together: PD for the reference period (up to 12 months or
\n
lifet
ime) x LGD x EAD and d
iscounted to the balance sheet
\n
date using the effective interest rate as the discount rate.
\n
IFRS 9 ECL models have been developed for the CIB businesses
\n
on a global basis, in line with their respective portfolios.
\n
However, for some of the key countries, country-specif
ic
\n
models have also been developed.
\n
The calibrat
ion of forward-look
ing informat
ion
is assessed
\n
at a country or region level to take into account local
\n
macroeconomic condit
ions.
\n
Retail ECL models are country and product specif
ic, g
iven the
\n
local nature of the WRB business.
\n
For less material retail portfolios, the Group has adopted less
\n
sophist
icated approaches based on h
istor
ical roll rates or
\n
loss rates:
\n
\u2022
For medium-sized retail portfolios, a roll rate model is
\n
applied, which uses a matrix that gives the average loan
\n
migrat
ion rate between del
inquency states from period
\n
to period. A matrix multipl
icat
ion is then performed to
\n
generate the \ufb01nal PDs by delinquency bucket over different
\n
time horizons.
\n
\u2022
For smaller retail portfolios, a loss rate approach is applied.
\n
These use an adjusted gross charge-off rate, developed
\n
using monthly write-off and recoveries over the preceding
\n
12 months and total outstanding balances.
\n
\u2022
While the loss rate approaches do not incorporate
\n
forward looking informat
ion, to the extent that there are
\n
sign
i\ufb01cant changes
in the macroeconomic forecasts an
\n
assessment will be completed on whether an adjustment
\n
to the modelled output is required.
\n
For a lim
ited number of exposures, proxy parameters or
\n
approaches are used where the data is not available to
\n
calculate the orig
inat
ion PDs for the purpose of applying the
\n
SICR criter
ia; or for some reta
il portfolios where a full history
\n
of LGD data is not available, estimates based on the loss
\n
experience from sim
ilar portfol
ios are used. The use of proxies
\n
is monitored and will reduce over time.
\n
The following processes are in place to assess the ongoing
\n
performance of the models:
\n
\u2022
Quarterly model monitor
ing that uses recent data to
\n
compare the differences between model predict
ions and
\n
actual outcomes against approved thresholds.
\n
\u2022
Annual independent validat
ion
is performed by Group
\n
Model Validat
ion (GMV); Depth of GMV\u2019s val
idat
ion var
ies
\n
depending on the model material
ity. Mater
ial models
\n
would go through a full annual re-validat
ion process, wh
ile
\n
a less intens
ive val
idat
ion process w
ill be performed on
\n
non-material models.
\n
Applicat
ion of l
ifet
ime ECL
\n
ECL is estimated based on the period over which the Group
\n
is exposed to Credit Risk. For the major
ity of exposures th
is
\n
equates to the maximum contractual period. For retail credit
\n
cards and corporate overdraft facil
it
ies, however, the Group
\n
does not typically enforce the contractual period, which can
\n
be as short as one day. As a result, the period over which the
\n
Group is exposed to Credit Risk for these instruments re\ufb02ects
\n
their behavioural life, which incorporates expectations of
\n
customer behaviour and the extent to which Credit Risk
\n
management actions curtail the period of that exposure.
\n
The average behavioural life for retail credit cards is between
\n
3 and 6 years across our footprint markets.
\n
The behavioural life for corporate overdraft facil
it
ies was
\n
re-estimated from 24 months to 36 months. The impact of this
\n
change was not material.
Composit
ion of cred
it impa
irment prov
is
ions (aud
ited)
\n
The table below summarises the key components of the Group\u2019s credit impa
irment prov
is
ion balances at 31 December 2024 and
\n
31 December 2023.
\n\n \n
2024
2023
Corporate &
Wealth &
Corporate &
Wealth &
Investment
Retail
Central &
Investment
Retail
Central &
Banking
Banking
Ventures
other items
Total
Banking
Banking
Ventures
other items
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
4
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
4
$mill
ion
Modelled ECL
provis
ions
(base forecast)
337
613
61
37
1,048
372
553
48
98
1,071
Impact of multiple
economic scenarios
1
24
19
\u2013
\u2013
43
20
18
\u2013
6
44
Modelled ECL
provis
ions before
management
judgements
361
632
61
37
1,091
392
571
48
104
1,115
Includes: Model
performance post
model adjustments
\u2013
14
\u2013
\u2013
14
(3)
(28)
\u2013
\u2013
(31)
Judgemental post
model adjustments
2
\u2013
(23)
\u2013
\u2013
(23)
\u2013
2
\u2013
\u2013
2
Management
overlays
3
\u2013 China commercial
real estate
70
\u2013
\u2013
\u2013
70
141
\u2013
\u2013
\u2013
141
\u2013 Other
109
27
7
\u2013
143
\u2013
5
\u2013
17
22
Total modelled
provis
ions
540
636
68
37
1,281
533
578
48
121
1,280
Of which:
Stage 1
133
392
30
34
589
151
325
15
68
559
Stage 2
362
151
27
1
541
318
140
21
49
528
Stage 3
45
93
11
2
151
64
113
12
4
193
Stage 3 non-modelled
provis
ions
3,267
665
\u2013
54
3,986
3,587
646
\u2013
88
4,321
Total credit
impa
irment prov
is
ions
3,807
1,301
68
91
5,267
4,120
1,224
48
209
5,601
\n
1
Includes upwards judgemental post-model adjustment of $28 mill
ion (31 December 2023: n
il)
\n
2
Excludes $28 mill
ion upwards judgemental post-model adjustment wh
ich is included in \u2018Impact of multiple economic scenarios\u2019
\n
3
$32 mill
ion (31 December 2023: $22 m
ill
ion)
is in stage 1, $181 mill
ion (31 December 2023: $141 m
ill
ion)
in stage 2 and $nil mill
ion (31 December 2023: n
il) in stage 3
\n
4
Includes ECL on cash and balances at central banks, accrued income, assets held for sale and other assets
\n
Model performance post model adjustments (PMAs)
\n
As part of model monitor
ing and
independent validat
ion processes, where a model\u2019s performance breaches the approved
\n
monitor
ing thresholds or val
idat
ion standards, an assessment
is performed to determine whether a model performance PMA
\n
is required to temporarily remediate the model issue. The process for the determinat
ion of PMAs
is set out in the \u2018Governance
\n
of PMAs and applicat
ion of expert cred
it judgement in respect of ECL\u2019 section on page 246.
\n
As at 31 December 2024, model performance PMAs have been applied for \ufb01ve models out of the total of 110 models.
\n
In aggregate, these PMAs increase the Group\u2019s impa
irment prov
is
ions by $14 m
ill
ion (1 per cent of modelled prov
is
ions)
\n
compared with a $31 mill
ion decrease at 31 December 2023. The reduct
ion was primar
ily due to the
implementat
ion of
\n
new models, thereby removing the need for PMAs on the old models.
\n
In addit
ion to these model performance PMAs, separate judgemental post model and management adjustments have also
\n
been applied as set out on page 241.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Model performance PMAs
Corporate & Investment Banking
\u2013
(3)
Wealth & Retail Banking
14
(28)
Total model performance PMAs
14
(31)
Key assumptions and judgements in determin
ing ECL
\n
Incorporation of forward-looking informat
ion
\n
The evolving economic environment is a key determinant
\n
of the abil
ity of a bank\u2019s cl
ients to meet their obligat
ions as
\n
they fall due. It is a fundamental princ
iple of IFRS 9 that the
\n
provis
ions banks hold aga
inst potential future Credit Risk
\n
losses should depend, not just on the health of the economy
\n
today, but should also take into account potential changes
\n
to the economic environment. For example, if a bank were to
\n
antic
ipate a sharp slowdown
in the world economy over the
\n
coming year, it should hold more provis
ions today to absorb
\n
the credit losses likely to occur in the near future.
\n
To capture the effect of changes to the economic
\n
environment, the PDs and LGDs used to calculate ECL
\n
incorporate forward-looking informat
ion
in the form of
\n
forecasts of the values of economic variables and asset
\n
prices that are likely to have an effect on the repayment
\n
abil
ity of the Group\u2019s cl
ients.
\n
The \u2018base forecast\u2019 of the economic variables and asset prices
\n
is based on management\u2019s view of the \ufb01ve-year outlook,
\n
supported by projections from the Group\u2019s
in-house research
\n
team and outputs from a third-party model that project
\n
specif
ic econom
ic variables and asset prices. The research
\n
team takes consensus views into considerat
ion, and sen
ior
\n
management review project
ions for some core country
\n
variables against consensus when forming their view of the
\n
outlook. For the period beyond \ufb01ve years, management
\n
util
ises the
in-house research view and third-party model
\n
outputs, which allow for a reversion to long-term growth rates
\n
or norms. All projections are updated on a quarterly bas
is.
\n
Forecast of key macroeconomic variables underlying the ECL
\n
calculation and the impact on non-linear
ity
\n
In the Base Forecast \u2013 management\u2019s view of the most likely
\n
outcome \u2013 the pace of growth of the world economy is
\n
expected to remain broadly unchanged from 2024 at
\n
around 3 per cent in 2025. This compares to the average of
\n
3.7 per cent growth for the 10 years prior to COVID-19
\n
(between 2010 and 2019). Support from easing \ufb01nanc
ial
\n
condit
ions and expans
ionary \ufb01scal policy may be partly offset
\n
by protection
ist trade pol
ic
ies and st
ill-high interest rates in
\n
the US and elsewhere. The US economy is set to moderate
\n
in 2025, after a resil
ient 2024 performance desp
ite elevated
\n
interest rates. The euro area continues to struggle with major
\n
European economies includ
ing Germany and France who r
isk
\n
slipp
ing
into recession. Asia is relatively healthy, although
\n
growth at the regional level is set to moderate slightly in
\n
2025 as both China and India slow down. The Middle-East is
\n
expected also to remain a bright spot for global growth, with
\n
the region\u2019s non-oil growth exceeding overall global growth.
\n
The uncertainty around the economic outlook remains
\n
elevated. In particular, the change in US Presidency is
\n
expected to lead to sign
i\ufb01cant changes
in US polic
ies,
\n
includ
ing new and h
igher tariffs on key US trading partners.
\n
On the geopolit
ical front, tens
ions remain elevated over the
\n
con\ufb02ict in Ukraine and the situat
ion
in the Middle-East.
\n
While the quarterly Base Forecasts inform the Group\u2019s
\n
strategic plan, one key requirement of IFRS 9 is that the
\n
assessment of provis
ions should cons
ider multiple future
\n
economic environments. For example, the global economy
\n
may grow more quickly or more slowly than the Base Forecast,
\n
and these variat
ions would have d
ifferent impl
icat
ions for the
\n
provis
ions that the Group should hold today. As the negat
ive
\n
impact of an economic downturn on credit losses tends to
\n
be greater than the posit
ive
impact of an economic upturn,
\n
if the Group sets provis
ions only on the ECL under the Base
\n
Forecast it might mainta
in a level of prov
is
ions that does
\n
not appropriately capture the range of potential outcomes.
\n
To address the inherent uncertainty in economic forecast,
\n
and the property of skewness (or non-linear
ity), IFRS 9 requ
ires
\n
reported ECL to be a probabil
ity-we
ighted ECL, calculated
\n
over a range of possible outcomes.
\n
To assess the range of possible outcomes the Group simulates
\n
a set of 50 scenarios around the Base Forecast, calculates
\n
the ECL under each of them and assigns an equal weight of
\n
2 per cent to each scenario outcome. These scenarios are
\n
generated by a Monte Carlo simulat
ion, wh
ich addresses the
\n
challenges of crafting many realist
ic alternat
ive scenarios in
\n
the many countries in which the Group operates by means of
\n
a model, which produces these alternative scenarios while
\n
consider
ing the degree of h
istor
ical uncerta
inty (or volatil
ity)
\n
observed from Q1 1990 to Q3 2023 around economic
\n
outcomes, the trends in each macroeconomic variable
\n
modelled and the correlation in the unexplained movements
\n
around these trends. This naturally means that each of the
\n
50 scenarios do not have a specif
ic narrat
ive, although
\n
collectively they explore a range of hypothetical alternative
\n
outcomes for the global economy, includ
ing scenar
ios that
\n
turn out better than expected and scenarios that amplify
\n
antic
ipated stresses.
\n
The GDP graphs below illustrate the shape of the Base
\n
Forecast for key footprint markets in relation to prior periods\u2019
\n
actuals. The long-term growth rates are based on the pace
\n
of economic expansion expected for 2030. The tables below
\n
provide a summary of the Group\u2019s Base Forecast for these
\n
markets. The peak/trough amounts show the highest and
\n
lowest points with
in the Base Forecast.
\n
China\u2019s GDP growth is expected to ease slightly to 4.5 per cent
\n
in 2025 from 4.8 per cent in 2024. This re\ufb02ects persistent
\n
weakness in the property sector, though it is expected to
\n
moderate external headwinds and low consumer con\ufb01dence.
\n
Growth in India is also expected to ease with GDP expanding
\n
by 6.5 per cent from 6.9 per cent in 2024 as the impact from
\n
recent one-off factors such as construction activ
ity and
\n
electric
ity demand (am
id below normal rains) fade. GDP
\n
growth for Singapore is expected to slow to 2.4 per cent in
\n
2025 from 3.5 per cent last year. An uncertain global trade
\n
outlook will weigh on sentiment in trade-reliant economies.
\n
Recent economic activ
ity may have also been partly dr
iven
\n
by front-loading of orders of electronics ahead of potentially
\n
negative trade polic
ies
in 2025. Sim
ilarly, the uncerta
in
\n
external environment and likely trade protection
ist measures
\n
will lim
it the ups
ide to growth for both South Korea and Hong
\n
Kong which are expected to grow by 2.0 per cent and 2.9 per
\n
cent respectively in 2025.
China GDP
YoY%
Hong Kong GDP
YoY%
Korea GDP
YoY%
20
10
8
Actual
Forecast
Actual
Forecast
Actual
Forecast
8
7
16
6
6
5
4
12
4
2
3
8
Long-term growth
0
2
-2
Long-term growth
4
1
Long-term growth
-4
0
0
-6
-1
-8
-2
-4
-10
-3
-8
-12
-4
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Singapore GDP
YoY%
India GDP
YoY%
20
30
Actual
Actual
Forecast
Forecast
15
20
10
10
5
Long-term growth
0
Long-term growth
0
-10
-5
-20
-10
-15
-30
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
\n \n
2024 year-end forecasts
China
Hong Kong
3-month
3-month
GDP growth
Unemployment
interest rates
House prices
5
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY %)
(YoY %)
%
%
(YoY %)
Base forecast
1
2024
4.8
3.6
2.0
(3.7)
2.6
3.0
4.4
(11.1)
2025
4.5
3.5
1.7
(5.3)
2.9
3.1
2.5
1.8
2026
4.3
3.3
1.6
(3.2)
2.5
3.2
2.2
6.5
2027
4.1
3.2
1.6
(0.9)
2.1
3.2
2.4
4.8
2028
3.9
3.2
1.8
0.9
1.9
3.2
2.4
3.4
5-year average
2
4.1
3.3
1.7
(1.3)
2.2
3.1
2.4
3.8
Quarterly peak
5.3
3.5
1.9
2.3
3.5
3.2
2.9
6.8
Quarterly trough
3.2
3.1
1.6
(5.6)
1.5
3.0
2.1
(2.6)
Monte Carlo
Low
3
(1.0)
2.8
0.6
(10.1)
(1.8)
1.8
0.3
(13.1)
High
4
9.3
3.7
3.0
7.8
5.8
5.1
5.3
22.2
\n \n
2024 year-end forecasts
Singapore
Korea
3-month
3-month
GDP growth
Unemployment
6
interest rates
House prices
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY %)
Base forecast
1
2024
3.5
2.9
3.6
4.3
2.5
2.8
3.6
(0.4)
2025
2.4
2.7
1.9
0.4
2.0
2.8
3.0
4.3
2026
2.1
2.7
1.9
2.2
2.2
2.8
2.9
3.4
2027
2.2
2.7
2.0
3.0
2.1
2.8
2.9
2.4
2028
2.4
2.7
2.0
3.1
1.9
2.8
2.9
2.1
5-year average
2
2.3
2.7
2.0
2.4
2.0
2.8
2.9
2.8
Quarterly peak
3.4
2.8
2.4
3.2
2.2
2.9
3.2
4.8
Quarterly trough
0.6
2.7
1.6
(0.4)
1.5
2.8
2.9
1.9
Monte Carlo
Low
3
(2.7)
2.0
0.3
(10.5)
(1.3)
2.2
0.8
(4.3)
High
4
7.0
3.6
3.9
17.5
5.2
3.5
5.7
9.8
240
Standard Chartered
\u2013 Annual Report 2024
\n
Risk review
Risk pro\ufb01le
\n\n \n
2024 year-end forecasts
India
3-month
GDP growth
Unemployment
7
interest rates
House prices
Brent Crude
(YoY%)
%
%
(YoY%)
$ pb
Base forecast
1
2024
6.9
NA
6.4
6.3
78.3
2025
6.5
NA
6.1
6.5
77.1
2026
6.5
NA
6.0
6.4
76.4
2027
6.6
NA
6.0
6.4
77.3
2028
6.6
NA
6.0
6.3
75.3
5-year average
2
6.6
NA
6.0
6.4
76.2
Quarterly peak
7.1
NA
6.2
7.3
77.8
Quarterly trough
5.9
NA
6.0
6.0
74.8
Monte Carlo
Low
3
3.2
NA
1.9
(0.1)
44.5
High
4
10.0
NA
10.3
12.6
107.8
\n\n \n
2023 year-end forecasts
China
Hong Kong
3-month
3-month
GDP growth
Unemployment
interest rates
House prices
5
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY%)
5-year average
2
4.3
4.0
2.1
4.6
2.5
3.4
3.4
2.8
Quarterly peak
5.7
4.1
2.5
7.2
3.8
3.4
5.0
4.6
Quarterly trough
3.8
3.8
1.7
1.5
1.5
3.4
2.3
(1.1)
Monte Carlo
Low
3
0.6
3.3
0.8
(1.5)
(3.8)
1.4
0.3
(19.3)
High
4
7.7
4.4
3.8
12.0
8.2
6.4
8.3
25.5
\n\n \n
2023 year-end forecasts
Singapore
Korea
3-month
3-month
GDP growth
Unemployment
6
interest rates
House prices
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY%)
5-year average
2
2.9
2.8
2.9
2.2
2.3
3.1
3.1
3.3
Quarterly peak
3.8
2.9
4.1
3.9
2.6
3.5
3.7
5.3
Quarterly trough
1.9
2.8
2.3
(0.7)
2.0
3.0
3.1
(0.3)
Monte Carlo
Low
3
(2.4)
1.7
0.6
(16.2)
(2.3)
1.4
0.7
(6.1)
High
4
8.5
3.8
5.9
19.2
7.0
5.8
6.3
12.5
\n\n \n
2023 year-end forecasts
India
3-month
GDP growth
Unemployment
interest rates
House prices
Brent crude
(YoY%)
%
%
(YoY%)
$ pb
5-year average
2
6.2
NA
6.2
6.1
88.2
Quarterly peak
9.1
NA
6.3
6.5
93.8
Quarterly trough
4.4
NA
5.8
4.7
82.8
Monte Carlo
Low
3
2.1
NA
2.7
(0.5)
46.0
High
4
10.5
NA
9.9
13.8
137.8
\n
1
Data presented are those used in the calculation of ECL and presented as average growth for the year. These may differ slightly to forecasts presented elsewhere
\n
in the Annual Report as they are \ufb01nal
ised before the per
iod end
\n
2
5 year averages covering 20 quarters from Q1 2025 to Q4 2029 for the 2024 annual report. They cover Q1 2024 to Q4 2028 for the numbers reported for the 2023
\n
annual report
\n
3
Represents the 10th percentile in the range of economic scenarios used to determine non-linear
ity
\n
4
Represents the 90th percentile in the range of economic scenarios used to determine non-linear
ity
\n
5
A judgemental management adjustment is held in respect of the China commercial real estate sector, as discussed on page 241
\n
6
Singapore unemployment rate covers the resident unemployment rate, which refers to cit
izens and permanent res
idents
\n
7
India unemployment is not available due to insuff
ic
ient data
Impact of multiple economic scenarios
\n
The \ufb01nal probabil
ity we
ighted ECL reported by the Group is a simple average of the ECL for each of the 50 scenarios simulated
\n
using a Monte Carlo model. The Monte Carlo approach has the advantage that it generates many alternative scenarios that
\n
cover our global footprint. The range of scenarios is restricted through the use of ceil
ings and \ufb02oors appl
ied to the underlying
\n
macroeconomic variables. The current set of ceil
ings and \ufb02oors generated a relat
ively narrow range of forecasts at 31
\n
December 2024 and will be redeveloped in the \ufb01rst quarter of 2025.
\n
Prior to this, a $28 mill
ion non-l
inear
ity PMA has been appl
ied, $13 mill
ion for CIB and $15 m
ill
ion for WRB. The total amount of
\n
non-linear
ity has been est
imated by assign
ing probab
il
ity we
ights of 68 per cent, 22 per cent and 10 per cent respectively to
\n
the Base Forecast, \u2018Higher for Longer Commodit
ies and Rates\u2019, and \u2018Global Trade and Geopol
it
ical Tens
ions\u2019 scenarios which
\n
are presented on page 243 and comparing this to the unweighted Base Forecast ECL. The non-linear
ity PMA represents the
\n
difference between the probabil
ity we
ighted ECL calculated using the three scenarios and the probabil
ity we
ighted ECL
\n
calculated by the Monte Carlo model.
\n
The total amount of non-linear
ity
includ
ing the PMA
is $43 mill
ion (31 December 2023: $44 m
ill
ion). The CIB portfol
io accounted
\n
for $24 mill
ion (31 December 2023: $20 m
ill
ion) of the calculated non-l
inear
ity, w
ith the remain
ing $19 m
ill
ion (31 December 2023:
\n
$18 mill
ion) attr
ibutable to WRB portfolios.
\n
The impact of multiple economic scenarios on total modelled ECL is set out in the table below, together with the management
\n
overlay and other judgemental adjustments.
\n\n \n
Management
overlays
Multiple
and other
economic
judgemental
Total
Base forecast
scenarios
1
adjustments
modelled ECL
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Total modelled expected credit loss at 31 December 2024
1,048
43
190
1,281
Total modelled expected credit loss at 31 December 2023
1,071
44
165
1,280
\n
1
Includes an upwards judgemental PMA of $28 mill
ion (31 December 2023: n
il)
\n
2
Total modelled ECL comprises stage 1 and stage 2 balances of $1,130 mill
ion (31 December 2023: $1,105 m
ill
ion) and $151 m
ill
ion (31 December 2023: $193 m
ill
ion) of
\n
modelled ECL on stage 3 loans
\n
The average ECL under multiple scenarios is 4 per cent (31 December 2023: 4 per cent) higher than the ECL calculated using
\n
only the most likely scenario (the Base Forecast). Portfolios that are more sensit
ive to non-l
inear
ity
include those with greater
\n
leverage and/or a longer tenor, such as Project and Shipp
ing F
inance portfolios. Other portfolios display min
imal non-l
inear
ity
\n
owing to lim
ited respons
iveness to macroeconomic impacts for structural reasons, such as sign
i\ufb01cant collateral
isat
ion as w
ith
\n
the WRB mortgage portfolios.
\n
Judgemental adjustments
\n
As at 31 December 2024, the Group held judgemental adjustments for ECL as set out in the table below. All of the judgemental
\n
adjustments have been determined after taking account of the model performance PMAs reported on page 237. They are
\n
reassessed quarterly and are reviewed and approved by the IFRS 9 Impairment Committee (IIC) and will be released when no
\n
longer relevant.
\n\n \n
Corporate &
Wealth & Retail Banking
Investment
Credit
Central &
Banking
Mortgages
Cards
Other
Total
Ventures
other
Total
31 December 2024
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Judgemental post model adjustments
13
\u2013
9
(17)
(8)
\u2013
\u2013
5
Judgemental management overlays:
\u2013 China CRE
70
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
70
\u2013 Other
109
\u2013
5
22
27
7
\u2013
143
Total judgemental adjustments
192
\u2013
14
5
19
7
\u2013
218
Judgemental adjustments by stage:
Stage 1
27
\u2013
10
(11)
(1)
4
-
30
Stage 2
165
\u2013
5
25
30
3
\u2013
198
Stage 3
\u2013
\u2013
(1)
(9)
(10)
\u2013
\u2013
(10)
31 December 2023
Judgemental post model adjustments
\u2013
\u2013
1
1
2
\u2013
\u2013
2
Judgemental management overlays:
\u2013 China CRE
141
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
141
\u2013 Other
\u2013
1
2
2
5
\u2013
17
22
Total judgemental adjustments
141
1
3
3
7
\u2013
17
165
Judgemental adjustments by stage:
Stage 1
17
1
3
6
10
\u2013
\u2013
27
Stage 2
124
\u2013
\u2013
(3)
(3)
\u2013
17
138
Stage 3
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Judgemental PMAs
\n
As at 31 December 2024, judgemental PMAs to increase ECL
\n
by a net $5 mill
ion (31 December 2023: $2 m
ill
ion
increase)
\n
have been applied. $28 mill
ion (31 December 2023: n
il) of
\n
the increase in ECL related to multiple economic scenarios,
\n
$13 mill
ion
in CIB and $15 mill
ion
in WRB (see \u2018Impact of
\n
multiple economic scenarios\u2019 section). This was partly offset
\n
by a reduction of ECL of $23 mill
ion for certa
in WRB models,
\n
primar
ily to adjust for temporary factors
impact
ing modelled
\n
outputs. These will be released when these factors normalise.
\n
Judgemental management overlays
\n
China CRE
\n
The real estate market in China has been in a downturn since
\n
late 2021, as evidenced by continued decline in sales, and
\n
investments in the sector. Liqu
id
ity issues experienced by
\n
Chinese property developers continued into 2023, with more
\n
developers defaulting on their obligat
ions both offshore and
\n
onshore. During 2023, authorit
ies on the ma
inland introduced
\n
a slew of polic
ies to help rev
ive the sector and restore buying
\n
sentiments. Relaxed monetary policy and \ufb01scal stimulus
\n
packages continued in 2024, which had assisted in arresting
\n
the drop in new home sales and stabil
is
ing new home sales in
\n
late 2024 to an extent in some cit
ies, but home pr
ices remain
\n
muted overall. Continued policy relaxations, includ
ing those
\n
related to house purchase restrict
ions, complet
ion support for
\n
elig
ible projects from onshore \ufb01nancial
inst
itut
ions, relaxation
\n
in mortgage rates, and further support for affordable housing,
\n
are key for reversing the continued decline in sales and
\n
investments and ensuring continued stabil
isat
ion in 2025.
\n
The Group\u2019s loans and advances to China CRE clients was
\n
$1.9 bill
ion at 31 December 2024 (31 December 2023: $2.4
\n
bill
ion). He
ightened risk management continues to be carried
\n
out, with a focus on managing upcoming maturit
ies through
\n
re\ufb01nancing and/or repayment. No new \ufb01nancing transact
ions
\n
were entered into, and total repayments amounted to around
\n
$500 mill
ion dur
ing 2024. Clients with exposure maturing
\n
with
in the next 12 months have been placed on purely
\n
precautionary or non-purely precautionary early alert, where
\n
appropriate, for closer monitor
ing. G
iven the evolving nature
\n
of the risks in the China CRE sector, a management overlay of
\n
$70 mill
ion (31 December 2023: $141 m
ill
ion) has been taken by
\n
estimat
ing the
impact of further deteriorat
ion to exposures
in
\n
this sector. The decrease from 31 December 2023 was primar
ily
\n
driven by repayments and util
isat
ion due to movement to
\n
stage 3.
\n
Other
\n
In CIB, addit
ional overlays of $109 m
ill
ion (31 December 2023:
\n
nil) have been taken, $58 mill
ion of wh
ich is in Hong Kong,
\n
with the remainder relating to Bangladesh and an immater
ial
\n
amount for climate risks. The overlay in Hong Kong re\ufb02ects
\n
subdued economic activ
ity and
increas
ing commerc
ial
\n
property vacancy rates, which contributes to an uncertain
\n
outlook that are not yet fully re\ufb02ected in the credit grades
\n
and modelled ECL. The risk of further impa
irment rema
ins as
\n
a result of subdued economic activ
ity
in the property sector
\n
and the related liqu
id
ity constraints faced by counterparties
\n
as a result. The overlay in Bangladesh re\ufb02ects the polit
ical
\n
situat
ion that has contr
ibuted to an increas
ing level of
\n
uncertainty in the macroeconomic outlook. The overlays for
\n
Hong Kong and Bangladesh have been determined by
\n
estimat
ing the
impact of a deteriorat
ion to certa
in exposures
\n
in these countries.
\n
In WRB, overlays of $27 mill
ion
includes $21 mill
ion
in Korea
\n
to cover the risks relating to the failure of two e-commerce
\n
payment platforms in 2024, increased bankruptcy trends
\n
in certain markets and an immater
ial adjustment for
\n
climate risks.
\n
Further details on the adjustment for Climate Risk are set out
\n
in Note 1 of the \u2018Notes to the \ufb01nanc
ial statements\u2019 sect
ion.
\n
Overlays held at 31 December 2023 of $5 mill
ion
in WRB to
\n
capture macroeconomic environment challenges caused by
\n
sovereign defaults or heightened sovereign risk, and $17 mill
ion
\n
applied in Central and other items due to a temporary market
\n
dislocat
ion
in the Africa and Middle East region which were
\n
fully released during 2024.
\n
Stage 3 assets
\n
Credit-impa
ired assets managed by Stressed Asset Group
\n
(SAG) incorporate forward-looking economic assumptions
\n
in respect of the recovery outcomes ident
i\ufb01ed and are
\n
assigned ind
iv
idual probabil
ity we
ight
ings per IFRS 9.
\n
These assumptions are not based on a Monte Carlo
\n
simulat
ion but are
informed by the Base Forecast.
\n
Sensit
iv
ity of ECL calculation to macroeconomic variables
\n
The ECL calculation relies on multiple variables and is
\n
inherently non-linear and portfolio-dependent, which impl
ies
\n
that no single analysis can fully demonstrate the sensit
iv
ity
\n
of the ECL to changes in the macroeconomic variables.
\n
The Group has conducted a series of analyses with the aim of
\n
ident
ify
ing the macroeconomic variables which might have
\n
the greatest impact on the overall ECL. These encompassed
\n
single variable and multi-variable exercises, using simple up/
\n
down variat
ion and extracts from actual calculat
ion data,
\n
as well as bespoke scenario design assessments.
\n
The primary conclusion of these exercises is that no ind
iv
idual
\n
macroeconomic variable is materially in\ufb02uent
ial. The Group
\n
believes this is plausible as the number of variables used
\n
in the ECL calculation is large. This does not mean that
\n
macroeconomic variables are unin\ufb02uent
ial; rather, that the
\n
Group believes that considerat
ion of macroeconom
ics should
\n
involve whole scenarios, as this aligns with the multi-variable
\n
nature of the calculation.
\n
The Group faces downside risks in the operating
\n
environment related to the uncertaint
ies surround
ing the
\n
macroeconomic outlook. To explore this, a sensit
iv
ity analysis
\n
of ECL was undertaken to explore the effect of slower
\n
economic recoveries across the Group\u2019s footprint markets.
\n
Two downside scenarios were considered in particular to
\n
explore the current uncertaint
ies over commod
ity prices.
\n
The \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario is
\n
characterised by an escalating trade war between the US
\n
and China and other economies. The \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io explores the impact from
\n
stick
ier than expected
in\ufb02at
ion due to pers
istent shipp
ing
\n
disrupt
ions and r
ise in energy prices amid fears of an
\n
escalation of the Middle East con\ufb02ict.
\n \n
Global Trade and
Higher for longer:
Baseline
Geopolit
ical Tens
ions
Commodit
ies and Rates
Five year
Five year
Five year
average
Peak/Trough
average
Peak/Trough
average
Peak/Trough
China GDP
4.1
5.3/3.2
0.8
3.8/(2.6)
3.5
4.3/1.8
China unemployment
3.3
3.5/3.1
4.9
5.5/3.8
4.3
5.2/3.1
China property prices
(1.3)
2.3/(5.6)
(5.1)
11.1 /(47.6)
(1.4)
8.6/(24.5)
Hong Kong GDP
2.2
3.5/1.5
(1.0)
1.6/(8.0)
1.4
2.2/(0.1)
Hong Kong unemployment
3.1
3.2/3.0
6.2
7.2/3.7
4.7
6.3/3.2
Hong Kong property prices
3.8
6.8/(2.6)
(0.1)
30.9/(34.8)
2.8
8.9/(3.5)
US GDP
2.0
2.6/1.1
0.3
2.2/(3.2)
1.1
2.5/(2.1)
Singapore GDP
2.3
3.4/0.6
0.0
3.1/(5.9)
1.6
2.8/(2.3)
India GDP
6.6
7.1/5.9
4.7
6.7/0.8
6.1
7.4/4.3
Crude oil
76.2
77.8/74.8
59.1
86. 2/46.2
84.9
113.4/74.8
\n
Period covered from Q1 2025 to Q4 2029
\n\n \n
Base (GDP, YoY%)
Global Trade and Geopolit
ical Tens
ions
Difference from Base
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
China
4.5
4.3
4.1
3.9
3.8
2.1
(2.0)
(1.0)
1.4
3.5
(2.4)
(6.3)
(5.1)
(2.6)
(0.3)
Hong Kong
2.9
2.5
2.1
1.9
1.6
(6.3)
(1.4)
0.1
0.9
1.4
(9.1)
(3.9)
(2.0)
(1.0)
(0.2)
US
1.4
2.2
2.4
2.1
2.0
(0.9)
(2.2)
0.8
1.8
2.2
(2.3)
(4.4)
(1.6)
(0.3)
0.1
Singapore
2.4
2.1
2.2
2.4
2.5
(2.9)
(3.5)
1.0
2.8
2.6
(5.3)
(5.6)
(1.2)
0.4
0.1
India
6.8
6.3
6.7
6.5
6.5
4.6
1.8
5.3
5.8
6.1
(2.2)
(4.4)
(1.4)
(0.8)
(0.4)
\n
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025.
\n\n \n
Base (GDP, YoY%)
Higher for longer: Commodit
ies and Rates
Difference from Base
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
China
4.5
4.3
4.1
3.9
3.8
2.5
3.3
4.1
3.9
3.8
(2.0)
(1.0)
0.0
0.0
(0.0)
Hong Kong
2.9
2.5
2.1
1.9
1.6
0.3
1.1
2.1
1.9
1.6
(2.6)
(1.4)
(0.0)
(0.0)
0.0
US
1.4
2.2
2.4
2.1
2.0
(1.4)
0.5
2.4
2.1
2.0
(2.8)
(1.7)
(0.0)
0.0
0.0
Singapore
2.4
2.1
2.2
2.4
2.5
(0.2)
0.9
2.2
2.4
2.5
(2.6)
(1.2)
(0.0)
(0.0)
0.0
India
6.8
6.3
6.7
6.5
6.5
4.9
5.8
6.7
6.5
6.5
(1.9)
(0.5)
(0.0)
0.0
0.0
\n
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025
\n
The total modelled stage 1 and 2 ECL provis
ions (
includ
ing
\n
both on and off-balance sheet instruments) would be
\n
approximately $84 mill
ion h
igher under the \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io, and $258 mill
ion h
igher
\n
under the \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario
\n
than the baseline ECL provis
ions (wh
ich excluded the impact
\n
of multiple economic scenarios and management overlays
\n
which may already capture some of the risks in these
\n
scenarios). Stage 2 exposures as a proportion of stage 1 and 2
\n
exposures would increase from 2.7 per cent in the base case
\n
to 2.8 per cent and 3.5 per cent respectively under the \u2018Higher
\n
for Longer Commodit
ies and Rates\u2019, and \u2018Global Trade and
\n
Geopolit
ical Tens
ions\u2019 scenarios. This includes the impact of
\n
exposures transferring to stage 2 from stage 1 but does not
\n
consider an increase in stage 3 defaults.
\n
Under both scenarios, the major
ity of the
increase in ECL in
\n
CIB came from the main corporate CRE and Project Finance
\n
portfolios. For the main corporate portfolios, ECL would
\n
increase by $18 mill
ion and $47 m
ill
ion for \u2018H
igher for Longer
\n
Commodit
ies and Rates\u2019, and \u2018Global Trade and Geopol
it
ical
\n
Tensions\u2019 scenarios respectively and the proportion of stage 2
\n
exposures would increase from 4.1 per cent in the base case to
\n
4.3 per cent and 6.1 per cent respectively.
\n
For the WRB portfolios, most of the increase in ECL came from
\n
the unsecured retail portfolios, particularly Korea Personal
\n
Loans and the credit card portfolios in Hong Kong and
\n
Singapore, although Private Banking was also impacted in
\n
the \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario. Under
\n
the \u2018Higher for Longer Commodit
ies and Rates\u2019, and \u2018Global
\n
Trade and Geopolit
ical Tens
ions\u2019 scenarios, Credit card ECL
\n
would increase by $18 mill
ion and $32 m
ill
ion respect
ively,
\n
largely in the Singapore and Hong Kong portfolios and the
\n
proportion of stage 2 credit card exposures would increase
\n
from 1.8 per cent in the base case to 2.3 per cent and
\n
2.9 per cent for each scenario respectively, with the Singapore
\n
portfolio most impacted. Mortgages ECL would increase by
\n
$2 mill
ion and $19 m
ill
ion for each scenar
io respectively,
\n
with portfolios in Korea impacted in the \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io, and Malaysia in the \u2018Global
\n
Trade and Geopolit
ical Tens
ions\u2019 scenario, and the proportion
\n
of stage 2 mortgages would increase from 1.0 per cent in the
\n
base case to 1.4 per cent and 1.3 per cent respectively.
\n
There was no material change in modelled stage 3 provis
ions
\n
as these primar
ily relate to unsecured WRB exposures
\n
for which the LGD is not sensit
ive to changes
in the
\n
macroeconomic forecasts. There is also no material change
\n
for non-modelled stage 3 exposures as these are more
\n
sensit
ive to cl
ient specif
ic factors than to alternat
ive
\n
macroeconomic scenarios.
\n
The actual outcome of any scenario may be materially
\n
different due to, among other factors, the effect of
\n
management actions to mit
igate potent
ial increases in
\n
risk and changes in the underlying portfolio.
\n \n
Higher for
Longer
Global Trade
Gross as
ECL as
Commodit
ies
and Geopolit
ical
reported
1
reported
2
ECL Base case
and Rates
Tensions
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1 modelled
Corporate & Investment Banking
367,106
106
95
113
125
Wealth & Retail Banking
179,580
397
387
406
428
Ventures
1,391
27
27
27
27
Central & Other items
172,602
22
22
23
25
Total stage 1 excluding management judgements
720,679
552
531
569
605
Stage 2 modelled
Corporate & Investment Banking
14,869
198
185
206
315
Wealth & Retail Banking
2,030
116
107
132
161
Ventures
48
24
24
24
24
Central & Other items
1,660
1
1
1
1
Total stage 2 excluding management judgements
18,607
339
317
363
501
Total Stage 1 & 2 modelled
Corporate & Investment Banking
381,975
304
280
319
440
Wealth & Retail Banking
181,610
513
494
538
589
Ventures
1,439
51
51
51
51
Central & Other items
174,262
23
23
24
26
Total excluding management judgements
739,286
891
848
932
1,106
Stage 3 exposures excluding other assets
6,999
4,095
Other \ufb01nancial assets
3
101,755
63
ECL from management judgements
218
Total \ufb01nancial assets reported at 31 December 2024
848,040
5,267
\n
1
Gross balances includes both on- and off- balance sheet instruments; allocation between stage 1 and 2 will differ by scenario
\n
2
Includes ECL for both on- and off-balance sheet instruments
\n
3
Includes cash and balances at central banks, Accrued income, Other \ufb01nanc
ial assets; and Assets held for sale
\n
Sign
i\ufb01cant
increase in Credit Risk (SICR)
\n
Quantitat
ive cr
iter
ia
\n
SICR is assessed by comparing the risk of default at the
\n
reporting date to the risk of default at orig
inat
ion. Whether a
\n
change in the risk of default is sign
i\ufb01cant or not
is assessed
\n
using quantitat
ive and qual
itat
ive cr
iter
ia. These cr
iter
ia
\n
have been separately de\ufb01ned for each business and where
\n
meaningful are consistently applied across business lines.
\n
Assets are considered to have experienced SICR if they have
\n
breached both relative and absolute thresholds for the
\n
change in the average annualised IFRS 9 lifet
ime probab
il
ity
\n
of default (IFRS 9 PD) over the residual term of the exposure.
\n
The absolute measure of increase in credit risk is used to
\n
capture instances where the IFRS 9 PDs on exposures are
\n
relatively low at in
it
ial recognit
ion as these may
increase by
\n
several multiples without representing a sign
i\ufb01cant
increase
\n
in credit risk. Where IFRS 9 PDs are relatively high at in
it
ial
\n
recognit
ion, a relat
ive measure is more appropriate in
\n
assessing whether there is a sign
i\ufb01cant
increase in credit risk,
\n
as the IFRS 9 PDs increase more quickly.
\n
The SICR thresholds have been calibrated based on the
\n
following princ
iples:
\n
\u2022
Stabil
ity \u2013 The thresholds are set to ach
ieve a stable stage 2
\n
population at a portfolio level, trying to min
im
ise the
\n
number of accounts moving back and forth between
\n
stage 1 and stage 2 in a short period of time
\n
\u2022
Accuracy \u2013 The thresholds are set such that there is a
\n
materially higher propensity for stage 2 exposures to
\n
eventually default than is the case for stage 1 exposures
\n
\u2022
Dependency from backstops \u2013 The thresholds are stringent
\n
enough such that a high proportion of accounts transfer to
\n
stage 2 due to movements in forward-looking IFRS 9 PDs
\n
rather than relying on backward-looking backstops such
\n
as arrears
\n
\u2022
Relationsh
ip w
ith business and product risk pro\ufb01les \u2013 the
\n
thresholds re\ufb02ect the relative risk differences between
\n
different products, and are aligned to business processes
\n
For CIB clients the quantitat
ive thresholds are a relat
ive
\n
100 per cent increase in IFRS 9 PD and an absolute change
\n
in IFRS 9 PD of between 50 and 100 bps for investment
\n
grade and sub-investment grade assets. For debt securit
ies
\n
orig
inated before 1 January 2018, the bank
is util
is
ing the
\n
low Credit Risk simpl
i\ufb01ed approach, where debt secur
it
ies
\n
with an internal credit rating mapped to an investment
\n
grade equivalent are allocated to stage 1 and all other debt
\n
securit
ies are allocated to stage 2.
\n
For WRB (excluding Private Banking) clients, portfolio specif
ic
\n
quantitat
ive thresholds are appl
ied to Credit Card portfolios in
\n
Hong Kong, Singapore, Malaysia and UAE and Personal Loan
\n
portfolios in Taiwan (with a revis
ion to the thresholds appl
ied
\n
in 2024). During 2024 portfolio specif
ic quant
itat
ive thresholds
\n
are also now being applied to Hong Kong Personal Loans and
\n
Business Clients Mortgage portfolio in India. The impact of
\n
the threshold changes in 2024 was not material. For Credit
\n
Card portfolios, the thresholds include relative and absolute
\n
increases in IFRS 9 PD with average lifet
ime IFRS 9 PD cut-offs
\n
for those exposures that are with
in a range of customer
\n
util
isat
ion lim
it. For Personal Loans portfol
ios, the thresholds
\n
include relative and absolute increases in IFRS 9 PD cut-offs for
\n
those exposures that are over six months old in the portfolio,
\n
have certain months left in the loan tenor and have certain
\n
behaviour scores. For Business Clients Mortgage, the threshold
\n
includes relative and absolute increases in IFRS 9 PD cut-offs
\n
for those exposures that were in high arrear grade bucket at
\n
least once in the last 12 months.
The range of thresholds applied are:
\n\n \n
Relative IFRS 9
Absolute IFRS 9
Customer
Average
PD increase
PD increase
util
isat
ion
Remain
ing tenor
IFRS 9 PD
Portfolio
(%)
(%)
(%)
(months)
(lifet
ime)
Credit cards \u2013 Current
50\u2013150%
3.4% \u2013 9.3%
15% \u2013 90%
\u2013
4.51% \u2013 11.6%
Credit cards \u2013 1-29 days past due
100% \u2013 210%
3.5% \u2013 6.1%
25% \u2013 67%
\u2013
1.5% \u2013 18.5%
Personal loans \u2013 Current
100% \u2013 250%
1.0%
\u2013
>60
\u2013
Personal loan \u2013 1-29 days past due
200% \u2013 300%
1.5%
\u2013
>12
\u2013
Business Client Mortgages \u2013 Current
100%
4.4%
\u2013
\u2013
\u2013
Business Client Mortgages \u2013 1-29 days past due
100%
7.0%
\u2013
\u2013
\u2013
\n
For all other material WRB portfolios (excluding Private
\n
Banking) for which a statist
ical model has been bu
ilt, the
\n
quantitat
ive SICR thresholds appl
ied are a relative threshold
\n
of 100 per cent increase in IFRS 9 PD and an absolute change
\n
in IFRS 9 PD of between 100 and 350 bps depending on the
\n
product. Certain countries have a higher absolute threshold
\n
re\ufb02ecting the lower default rate with
in the
ir personal loan
\n
portfolios compared with the Group\u2019s other personal loan
\n
portfolios. The orig
inal l
ifet
ime IFRS 9 PD term structure
is
\n
determined based on the orig
inal appl
icat
ion score or r
isk
\n
segment of the client.
\n
For all Private Banking classes, in line with risk management
\n
practice, an increase in credit risk is deemed to have occurred
\n
where margin
ing or loan-to-value covenants have been
\n
breached. For Class I assets (lending against divers
i\ufb01ed
\n
liqu
id collateral),
if these margin
ing requ
irements have not
\n
been met with
in 30 days of a tr
igger, a sign
i\ufb01cant
increase in
\n
credit risk is assumed to have occurred. For Class I and Class III
\n
assets (real-estate lending), a sign
i\ufb01cant
increase in credit
\n
risk is assumed to have occurred where the bank is unable
\n
to \u2018sell down\u2019 the applicable assets to meet revised collateral
\n
requirements with
in \ufb01ve days of a tr
igger. Class II assets are
\n
typically unsecured or partially secured, or secured against
\n
ill
iqu
id collateral such as shares in private companies.
\n
Sign
i\ufb01cant cred
it deteriorat
ion of these assets
is deemed
\n
to have occurred when any early alert trigger has
\n
been breached.
\n
Qualitat
ive cr
iter
ia
\n
Qualitat
ive factors that
ind
icate that there has been a
\n
sign
i\ufb01cant
increase in credit risk include processes linked to
\n
current risk management, such as placing loans on non-purely
\n
precautionary early alert or being assigned a CG12 rating.
\n
An account is placed on non-purely precautionary early alert
\n
if it exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion or attent
ion by
\n
management. Weaknesses in such a borrower\u2019s account, if
\n
left uncorrected, could result in deteriorat
ion of repayment
\n
prospects and the likel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry,
\n
concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and
\n
overdue balances, among other factors.
\n
All client assets that have been assigned a CG12 rating,
\n
equivalent to \u2018Higher risk\u2019, are deemed to have experienced
\n
a sign
i\ufb01cant
increase in credit risk. Accounts rated CG12 are
\n
primar
ily managed by relat
ionsh
ip managers
in the CIB unit
\n
with support from SAG for certain accounts. All CIB clients are
\n
placed in CG12 when they are 30 DPD unless they are granted
\n
a waiver through a strict governance process.
\n
In WRB, SICR is also assessed for where specif
ic r
isk elevation
\n
events have occurred in a market that are not yet re\ufb02ected
\n
in modelled outcomes or in other metrics. This is applied
\n
collectively either to impacted specif
ic products/customer
\n
cohorts or across the overall consumer banking portfolio in
\n
the affected market.
\n
Backstop
\n
Across all portfolios, accounts that are 30 or more days past
\n
due (DPD) on contractual payments of princ
ipal and/or
\n
interest that have not been captured by the criter
ia above are
\n
considered to have experienced a sign
i\ufb01cant
increase in credit
\n
risk. For less material portfolios, which are modelled based on
\n
a roll-rate or loss-rate approach, SICR is primar
ily assessed
\n
through the 30 DPD trigger.
\n
Expert credit judgement may be applied in assessing SICR to
\n
the extent that certain risks may not have been captured by
\n
the models or through the above criter
ia. Such
instances are
\n
expected to be rare, for example due to events and material
\n
uncertaint
ies ar
is
ing close to the report
ing date.
\n
Assessment of credit-impa
ired \ufb01nancial assets
\n
WRB clients
\n
The core components in determin
ing cred
it-impa
ired ECL
\n
provis
ions are the value of gross charge-off and recover
ies.
\n
Gross charge-off and/or loss provis
ions are recogn
ised when
\n
it is established that the account is unlikely to pay through
\n
the normal process. Recovery of unsecured debt post credit
\n
impa
irment
is recognised based on actual cash collected,
\n
either directly from clients or through the sale of defaulted
\n
loans to third-party inst
itut
ions. Release of credit impa
irment
\n
provis
ions for secured loans
is recognised if the loan
\n
outstanding is paid in full (release of full provis
ion), or the
\n
provis
ion
is higher than the loan outstanding (release of the
\n
excess provis
ion).
\n
CIB and Private Banking clients
\n
Credit-impa
ired accounts are managed by the Group\u2019s
\n
special
ist recovery un
it, Stressed Asset Group (SAG), which is
\n
independent of the Client Coverage/Relationsh
ip Managers.
\n
Where a portion of exposure is considered not recoverable,
\n
a stage 3 credit impa
irment prov
is
ion
is raised. This stage 3
\n
provis
ion
is the difference between the loan-carrying amount
\n
and the probabil
ity-we
ighted present value of estimated
\n
future cash \ufb02ows, re\ufb02ecting a range of scenarios (typically
\n
the \u2018upside\u2019, \u2018downside\u2019 and \u2018likely\u2019 recovery outcomes).
\n
Where the exposure is secured by collateral, the values used
\n
will incorporate the impact of forward-looking economic
\n
informat
ion on the value recoverable collateral and t
ime
\n
to realise the same.
\n
The ind
iv
idual circumstances of each client are considered
\n
when SAG estimates future cash\ufb02ows and the tim
ing of future
\n
recoveries which involves sign
i\ufb01cant judgement. All ava
ilable
\n
sources, such as cash\ufb02ow aris
ing from operat
ions, selling
\n
assets or subsid
iar
ies, realis
ing collateral or payments under
\n
guarantees, are considered. In any decis
ion relat
ing to the
\n
rais
ing of prov
is
ions, the Group attempts to balance
\n
economic condit
ions, local knowledge and exper
ience, and
\n
the results of independent asset reviews. The ind
iv
idual
\n
impa
irment prov
is
ions (v
iz. those not directly from a model)
\n
are approved by Stressed Assets Risk (SAR) who are in the
\n
Second Line of Defence.
\n
Write-offs
\n
Where it is considered that there is no realist
ic prospect
\n
of recovering a portion of an exposure against which an
\n
impa
irment prov
is
ion has been ra
ised, that amount will
\n
be written off.
Governance of PMAs and applicat
ion of expert cred
it
\n
judgement in respect of ECL
\n
The Group\u2019s Credit Policy and Standards framework details
\n
the requirements for continuous monitor
ing to
ident
ify any
\n
changes in credit quality and resultant ratings, as well as
\n
ensuring a consistent approach to monitor
ing, manag
ing
\n
and mit
igat
ing credit risks. The framework aligns with the
\n
governance of ECL estimat
ion through the early recogn
it
ion
\n
of sign
i\ufb01cant deter
iorat
ions
in ratings which drive stage 2
\n
and 3 ECL.
\n
The models used in determin
ing ECL are rev
iewed and
\n
approved by the Group Credit Model Assessment Committee
\n
(CMAC) or Delegate Model Approver (DMA), which is
\n
appointed by the Model Risk Committee. CMAC has the
\n
responsib
il
ity to assess and approve the use of models and to
\n
review all IFRS 9 interpretat
ions related to models. CMAC also
\n
provides oversight on operational matters related to model
\n
development, performance monitor
ing and model val
idat
ion
\n
activ
it
ies, includ
ing standards and regulatory matters.
\n
Prior to submiss
ion to CMAC for approval, the models are
\n
validated by GMV, a function which is independent of
\n
the business and the model developers. GMV\u2019s analysis
\n
comprises review of model documentation, model design
\n
and methodology, data validat
ion, rev
iew of the model
\n
development and calibrat
ion process, out-of-sample
\n
performance testing, and assessment of compliance
\n
review against IFRS 9 rules and internal standards.
\n
Model performance PMAs
\n
The process of PMA ident
i\ufb01cation, calculat
ion and approval
\n
are prescribed in the Credit Risk IFRS 9 ECL Model Family
\n
Standards, which are approved by the Global Head, Model
\n
Risk Management. PMA calculations are reviewed by GMV
\n
and submitted to CMAC for approval and will be removed
\n
when the estimates return to being with
in the mon
itor
ing
\n
thresholds or validat
ion standards. The level of PMAs and
\n
remediat
ion plans are regularly tracked at CMAC.
\n
Judgemental adjustments
\n
These comprise judgemental PMAs and judgemental
\n
management overlays, and account for events that are
\n
not captured in the Base Case Forecast or the resulting ECL
\n
calculated by the models. Judgemental adjustments must
\n
be approved by the IIC having considered the nature of the
\n
event, why the risk is not captured in the model, and the basis
\n
on which the quantum of the overlay has been calculated.
\n
Judgemental adjustments are subject to quarterly review and
\n
re-approval by the IIC, and will be released when the risks are
\n
no longer relevant.
\n
The IFRS 9 Impairment Committee:
\n
\u2022
oversees the appropriateness of all Business Model
\n
Assessment and Solely Payments of Princ
ipal and Interest
\n
(SPPI) tests
\n
\u2022
reviews and approves ECL for \ufb01nanc
ial assets class
if
ied as
\n
stages 1, 2 and 3 for each \ufb01nancial report
ing period
\n
\u2022
reviews and approves stage allocation rules and thresholds
\n
\u2022
approves material adjustments in relation to ECL for fair
\n
value through other comprehensive income (FVOCI) and
\n
amortised cost \ufb01nanc
ial assets
\n
\u2022
reviews, challenges and approves base macroeconomic
\n
forecasts and the multiple macroeconomic scenarios
\n
approach that are util
ised
in the forward-looking
\n
ECL calculations
\n
The IIC consists of senior representatives from Risk and
\n
Finance. It meets at least twice every quarter \u2013 once before
\n
the models are run to approve key inputs into the calculation,
\n
and once after the models are run to approve the ECL
\n
provis
ions and any judgemental management overlays
\n
that may be necessary.
\n
The IIC is supported by an Expert Panel which also reviews
\n
and challenges the base case projections and mult
iple
\n
macroeconomic scenarios. The Expert Panel consists of
\n
members of Enterprise Risk Management (which includes the
\n
Scenario Design team), Finance, Group Economic Research
\n
and country representatives of major jur
isd
ict
ions.
Traded Risk
\n
Market Risk (audited)
\n
Market Risk is the potential for fair value loss due to adverse
\n
moves in \ufb01nanc
ial markets. The Group\u2019s exposure to Market
\n
Risk arises predominantly from the following sources:
\n
\u2022 Trading book:
\n
\u2013 The Group provides clients with access to markets,
\n
facil
itat
ion of which entails the Group taking moderate
\n
Market Risk posit
ions. All trad
ing teams support client
\n
activ
ity. There are no propr
ietary trading teams. Hence,
\n
income earned from Market Risk-related activ
it
ies is
\n
primar
ily dr
iven by the volume of client activ
ity.
\n
\u2022 Non-trading book:
\n
\u2013 Treasury is required to hold a liqu
id assets buffer, much of
\n
which is held in high-quality marketable debt securit
ies
\n
\u2013 The Group underwrites and sells down loans, and
\n
invests in select investment grade debt securit
ies w
ith
\n
no trading intent
\n
\u2013 The Group has capital invested and related income
\n
streams denominated in currencies other than US dollars.
\n
To the extent that these income streams are not hedged,
\n
the Group is subject to Structural Foreign Exchange Risk
\n
which is re\ufb02ected in reserves.
\n
A summary of our current polic
ies and pract
ices regarding
\n
Market Risk management is provided in the \u2018Princ
ipal R
isks\u2019
\n
section (page 202).
\n
The primary categories of Market Risk for the Group are:
\n
\u2022
Interest Rate Risk: aris
ing from changes
in yield curves and
\n
impl
ied volat
il
it
ies
\n
\u2022
Foreign Exchange Risk: aris
ing from changes
in currency
\n
exchange rates and impl
ied volat
il
it
ies
\n
\u2022
Commodity Risk: aris
ing from changes
in commodity prices
\n
and impl
ied volat
il
it
ies
\n
\u2022
Credit Spread Risk: aris
ing from changes
in the price of
\n
debt instruments and credit-linked derivat
ives and dr
iven
\n
by factors other than the level of risk-free interest rates
\n
\u2022
Equity Risk: aris
ing from changes
in the prices of equit
ies
\n
and impl
ied volat
il
it
ies
\n
Market Risk movements (audited)
\n
Value at Risk (VaR) allows the Group to manage Market Risk
\n
across the trading book and most of the fair valued non-
\n
trading books.
\n
The average level of total trading and non-trading VaR
\n
in 2024 was $41.8 mill
ion, 22 per cent lower than 2023
\n
($53.3 mill
ion). The year end level of total trad
ing and non-
\n
trading VaR in 2024 was $43.3 mill
ion, 3 per cent lower than
\n
2023 ($44.5 mill
ion), due to a reduct
ion in market volatil
ity.
\n
For the trading book, the average level of VaR in 2024 was
\n
$21.1 mill
ion, 2 per cent lower than
in 2023 ($21.5 mill
ion).
\n
Trading activ
it
ies have remained relatively unchanged,
\n
and client driven.
\n
Daily Value at Risk (VaR at 97.5%, one day) (audited)
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Trading
1
and non-trading
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
32.8
43.9
18.6
38.8
39.5
54.1
23.2
30.5
Credit Spread Risk
20.4
31.3
12.8
16.6
33.8
48.0
25.0
31.7
Foreign Exchange Risk
9.2
15.0
5.0
7.4
7.0
12.2
4.2
7.4
Commodity Risk
5.3
10.0
2.9
4.6
5.8
9.7
3.7
4.3
Equity Risk
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(26.3)
NA
NA
(24.1)
(32.9)
NA
NA
(29.4)
Total
41.8
53.1
29.4
43.3
53.3
65.5
44.2
44.5
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Trading\u00b9
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
12.7
22.0
7.0
12.0
13.1
20.4
7.7
11.6
Credit Spread Risk
6.6
9.6
4.8
5.4
9.4
12.4
7.4
9.4
Foreign Exchange Risk
9.2
15.0
5.0
7.4
7.0
12.2
4.2
7.4
Commodity Risk
4.8
10.0
2.4
4.3
5.8
9.7
3.7
4.4
Equity Risk
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Divers
i\ufb01cation effect
3
(12.2)
NA
NA
(8.3)
(13.8)
NA
NA
(11.5)
Total
21.1
33.1
13.0
20.8
21.5
30.6
14.7
21.3
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Non-trading
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
28.0
35.5
17.4
32.5
34.2
43.6
19.7
23.9
Credit Spread Risk
17.2
24.8
10.0
15.7
28.3
40.1
21.5
24.4
Foreign Exchange Risk
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Commodity Risk
1.3
1.8
0.6
0.8
0.1
0.5
0.3
0.5
Equity Risk
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(12.7)
NA
NA
(10.2)
(18.7)
NA
NA
(13.2)
Total
34.2
44.3
28.6
38.8
44.0
53.4
32.0
35.6
The following table sets out how trading and non-trading VaR is distr
ibuted across the Group\u2019s bus
inesses:
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Trading
1
and non-trading
2
41.8
53.1
29.4
43.3
53.3
65.5
44.2
44.5
Trading
1
Macro Trading
4
17.0
29.9
10.0
17.1
13.8
20.2
9.2
15.4
Global Credit
6.8
11.1
4.3
5.8
12.8
18.2
8.5
10.1
XVA
3.3
4.4
2.4
2.4
4.8
7.0
3.4
4.5
Divers
i\ufb01cation effect
3
(6.0)
NA
NA
(4.5)
(9.9)
NA
NA
(8.7)
Total
21.1
33.1
13.0
20.8
21.5
30.6
14.7
21.3
Non-trading
2
Treasury
32.9
40.8
26.9
38.6
43.4
50.2
31.1
34.9
Global Credit
5.0
13.4
2.4
8.8
3.9
13.6
2.0
4.0
Listed Private Equity
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(4.1)
NA
NA
(8.6)
(3.4)
NA
NA
(3.3)
Total
34.2
43.3
28.6
38.8
44.0
53.4
32.0
35.6
\n
1
The trading book for Market Risk is de\ufb01ned in accordance with the UK onshored Capital Requirements Regulation Part 3 Title I Chapter 3, which restricts the
\n
posit
ions perm
itted in the trading book
\n
2
The non-trading book VaR does not include the loan underwrit
ing bus
iness
\n
3
The total VaR is non-addit
ive across r
isk types due to divers
i\ufb01cation effects, wh
ich is measured as the difference between the sum of the VaR by ind
iv
idual risk
\n
type or business and the combined total VaR. As the maximum and min
imum occur on d
ifferent days for different risk types or businesses, it is not meaningful
\n
to calculate a portfolio divers
i\ufb01cation bene\ufb01t for these measures
\n
4 Macro Trading comprises the Rates, FX and Commodit
ies bus
inesses
\n
Risks not in VaR
\n
In 2024, the main market risks not re\ufb02ected in VaR were:
\n
\u2022
basis risks for which the histor
ical market pr
ice data is lim
ited and
is therefore proxied, giv
ing r
ise to potential proxy basis risk
\n
that is not captured in VaR
\n
\u2022
potential depeg risk from currencies currently pegged or managed, where the histor
ical one-year VaR observat
ion period
\n
may not re\ufb02ect the possib
il
ity of a change in the currency regime or a sudden depegging
\n
\u2022
potential understatement of VaR when abrupt increases in market volatil
ity are not adequately captured by the VaR model.
\n
Addit
ional cap
ital is set aside to cover such \u2018risks not in VaR\u2019.
\n
Backtesting
\n
In 2024, there were no regulatory backtesting negative exceptions at Group level (in 2023 there were \ufb01ve).
\n
An enhancement to the VaR model will be implemented from January 2025 to increase the model\u2019s responsiveness to abrupt
\n
upturns in market volatil
ity.
\n
The graph below illustrates the performance of the VaR model used in capital calculations. It compares the 99 percentile pro\ufb01t
\n
and loss con\ufb01dence level given by the VaR model with the hypothetical pro\ufb01t and loss of each day given the actual market
\n
movement ignor
ing any
intra-day trading activ
ity.
\n
-60
\n
-40
\n
-20
\n
0
\n
20
\n
40
\n
60
\n
80
\n
2024 Backtesting chart
\n
Internal model approach regulatory trading book at Group level
\n
Hypothetical pro\ufb01t and loss (P&L) versus VaR (99 per cent, one day)
\n
Hypothetical P&L
Posit
ive VaR at 99%
Negative VaR at 99%
Negative exceptions
\n
Jan 2024
Feb 2024
Mar 2024
Apr 2024
May 2024
Jun 2024
Jul 2024
Aug 2024
Sep 2024
Oct 2024
Nov 2024
Dec 2024
\n
Posit
ive except
ions
\n
Trading loss days
\n\n \n
2024
2023
Number of loss days reported for Markets trading book total product income
1
12
16
\n
1
Includes credit valuation adjustment (CVA) and funding valuation adjustment (FVA), and excludes Treasury business (non-trading), period
ic valuat
ion changes
\n
for Capital Markets, expected loss provis
ions, overn
ight indexed swap (OIS) discount
ing and account
ing adjustments such as debit valuation adjustments
Average daily income earned from Market Risk-related activ
it
ies\u00b9 (audited)
\n
Trading: The average level of total trading daily income in 2024 was $13.3 mill
ion, 10.8 per cent h
igher than 2023 ($12 mill
ion).
\n
The increase is largely attributable higher client demand for derivat
ive products across Greater Ch
ina and North Asia coupled
\n
with larger holdings of government and corporate bonds in antic
ipat
ion of increased demand by clients.
\n
Non-trading: The average level of total non-trading daily income in 2024 was $2.7 mill
ion, attr
ibutable to translation gains on
\n
the revaluation of FX posit
ions
in Egypt, and FX revaluation gains across currencies in the Markets Credit Trading business.
\n \n \n
2024
2023
Trading
$mill
ion
$mill
ion
Interest Rate Risk
5.2
4.5
Credit Spread Risk
1.7
1.2
Foreign Exchange Risk
5.6
5.5
Commodity Risk
0.8
0.8
Equity Risk
\u2013
\u2013
Total
13.3
12.0
Non-trading
$mill
ion
$mill
ion
Interest Rate Risk
0.6
(0.1)
Credit Spread Risk
2.1
(0.7)
Equity Risk
\u2013
0.1
Total
2.7
(0.7)
\n
1
Re\ufb02ects total product income which is the sum of client income and own account income. Includes elements of trading income, interest income and non funded
\n
income which are generated from Market Risk-related activ
it
ies. Rates, XVA and Treasury income are included under Interest Rate Risk while Credit Trading
\n
income is included under Credit Spread Risk
\n
Structural foreign exchange exposures
\n
The table below sets out the princ
ipal structural fore
ign exchange exposures (net of investment hedges) of the Group.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Hong Kong dollar
4,232
4,662
Renminb
i
3,593
3,523
Indian rupee
3,480
3,309
Singapore dollar
3,306
2,415
Malaysian ringg
it
1,539
1,540
Korean won
1,363
2,114
Bangladeshi taka
1,113
1,007
Euro
1,112
1,125
Taiwanese dollar
1,087
1,222
UAE dirham
807
709
Thai baht
763
782
Pakistan
i rupee
392
306
Indonesian rupiah
230
293
Other
3,407
3,206
26,424
26,213
\n
As at 31 December 2024, the Group had taken net investment hedges using derivat
ive \ufb01nancial
instruments to partly cover
\n
its exposure to the Hong Kong dollar of $5,359 mill
ion (31 December 2023: $5,603 m
ill
ion), Korean won of $3,048 m
ill
ion
\n
(31 December 2023: $2,884 mill
ion), Ind
ian rupee of $1,784 mill
ion (31 December 2023: $1,809 m
ill
ion), Renm
inb
i of $1,640 m
ill
ion
\n
(31 December 2023: $1,516 mill
ion), UAE d
irham of $1,470 mill
ion (31 December 2023: $1,470 m
ill
ion), Ta
iwanese dollar of
\n
$1,092 mill
ion (31 December 2023: $1,025 m
ill
ion), S
ingapore dollar of $0 mill
ion (2023: $1,047 m
ill
ion) and South Afr
ican rand
\n
of $0 mill
ion (31 December 2023:$64 m
ill
ion). An analys
is has been performed on these exposures to assess the impact of a
\n
1 per cent fall in the US dollar exchange rates, adjusted to incorporate the impacts of correlations of these currencies to the
\n
US dollar. The impact on the posit
ions above would be an
increase of $262 mill
ion (31 December 2023: $260 m
ill
ion). Changes
in
\n
the valuation of these posit
ions are taken to reserves. For analys
is of the Group\u2019s capital posit
ion and requ
irements, refer to the
\n
\u2018Capital review\u2019 section (page 270).
\n
Counterparty Credit Risk
\n
Counterparty Credit Risk is the potential for loss in the event of the default of a derivat
ive counterparty, after tak
ing into
\n
account the value of elig
ible collaterals and r
isk mit
igat
ion techniques. The Group\u2019s counterparty credit exposures are included
\n
in the Credit Risk section.
\n
Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion
\n
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the
\n
counterparty through netting the sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions.
\n
In addit
ion, the Group enters
into credit support annexes (CSAs) with counterparties where collateral is deemed a necessary
\n
or desirable mit
igant to the exposure. Cash collateral
includes collateral called under a variat
ion marg
in process from
\n
counterparties if total uncollateralised mark-to-market exposure exceeds the threshold and min
imum transfer amount
\n
specif
ied
in the CSA. With certain counterparties, the CSA is reciprocal and requires us to post collateral if the overall mark-to-
\n
market values of posit
ions are
in the counterparty\u2019s favour and exceed an agreed threshold.
Liqu
id
ity and Funding Risk
\n
Liqu
id
ity and Funding Risk is the risk that the Group may not
\n
have suf\ufb01cient stable or d
iverse sources of funding to meet its
\n
obligat
ions as they fall due.
\n
The Group\u2019s Liqu
id
ity and Funding Risk framework requires
\n
each country to ensure that it operates with
in prede\ufb01ned
\n
liqu
id
ity lim
its and rema
ins in compliance with Group
\n
liqu
id
ity polic
ies and pract
ices, as well as local regulatory
\n
requirements.
\n
The Group achieves this through a combinat
ion of sett
ing
\n
Risk Appetite and associated lim
its, pol
icy formation, risk
\n
measurement and monitor
ing, prudent
ial and internal stress
\n
testing, governance and review.
\n
Throughout 2024, the Group retained a robust liqu
id
ity
\n
posit
ion across key metr
ics. The Group continues to focus
\n
on improv
ing the qual
ity and divers
i\ufb01cation of
its funding
\n
mix and remains committed to supporting its clients.
\n
Primary sources of funding (audited)
\n
The Group\u2019s funding strategy is largely driven by its policy to
\n
mainta
in adequate l
iqu
id
ity at all times, in all geographic
\n
locations and for all currencies. This is done to ensure the
\n
Group can meet all of its obligat
ions as they fall due.
\n
The Group\u2019s funding pro\ufb01le is therefore well divers
i\ufb01ed
\n
across different sources, maturit
ies and currenc
ies.
\n
The Group\u2018s assets are funded predominantly by customer
\n
deposits, supplemented with wholesale funding, which is
\n
divers
i\ufb01ed by type and matur
ity.
\n
The Group mainta
ins access to wholesale fund
ing markets
\n
in all major \ufb01nanc
ial centres
in which it operates. This seeks
\n
to ensure that the Group has market intell
igence, ma
inta
ins
\n
stable funding lines and can obtain optimal pric
ing when
\n
performing cash\ufb02ow management activ
it
ies.
\n
In 2024, the Group issued approximately $9.1 bill
ion worth of
\n
securit
ies from
its holding company, Standard Chartered PLC
\n
(2023 $8.1 bill
ion of sen
ior debt securit
ies). The
issuances
\n
included $1.6 bill
ion of Add
it
ional T
ier 1 securit
ies and
\n
$7.5\u00a0bill
ion of sen
ior debt securit
ies across mult
iple currencies.
\n
Over this same period, there were Addit
ional T
ier 1 calls of
\n
$0.6\u00a0bill
ion, T
ier 2 redemptions (calls & maturit
ies) of around
\n
$1.6 bill
ion and sen
ior calls of $6.3 bill
ion. In the next 12 months,
\n
approximately $7.8 bill
ion of the Group\u2019s Add
it
ional T
ier 1,
\n
senior and subordinated debt securit
ies are e
ither falling
\n
due for repayment contractually or callable by the Group.
\n
Group\u2019s composit
ion of l
iab
il
it
ies and equ
ity
31 December 2024
\n
4.2
9.7
9.2
\n
Derivat
ive \ufb01nancial
\n
instruments
\n
Deposits by banks
\n
Debt securit
ies
in issue
\n
Customer accounts
\n
Other liab
il
it
ies
\n
Equity
\n
Subordinated liab
il
it
ies
\n
and other borrowed funds
\n
61.6
8.1
\n
1.2
\n
6.0
\n
100%
\n
Liqu
id
ity and Funding Risk metrics
\n
The Group continually monitors key liqu
id
ity metrics, both on
\n
a country basis and consolidated across the Group.
\n
The following liqu
id
ity and funding Board Risk Appetite
\n
metrics de\ufb01ne the maximum amount and type of risk that the
\n
Group is will
ing to assume
in pursuit of its strategy: liqu
id
ity
\n
coverage ratio (LCR), liqu
id
ity stress survival horizons, recovery
\n
capacity and net stable funding ratio (NSFR). In addit
ion to
\n
the Board Risk Appetite, there are further lim
its that apply at
\n
Group and country level such as external wholesale borrowing
\n
(WBE) and cross currency lim
its.
\n
Liqu
id
ity coverage ratio (LCR)
\n
The LCR is a regulatory requirement set to ensure the Group
\n
has suf\ufb01cient unencumbered h
igh-quality liqu
id assets
\n
to meet its liqu
id
ity needs in a 30-calendar-day liqu
id
ity
\n
stress scenario.
\n
The Group monitors and reports its liqu
id
ity posit
ions under
\n
the Liqu
id
ity Coverage Ratio per PRA rulebook and has
\n
mainta
ined
its LCR above the prudential requirement.
\n
The Group mainta
ined robust l
iqu
id
ity ratios throughout 2024.
\n
At the reporting date, the Group LCR was 138 per cent
\n
(31 December 2023: 145 per cent), with a surplus to both
\n
Board-approved Risk Appetite and regulatory requirements.
\n
Adequate liqu
id
ity was held across our footprint to meet all
\n
local prudential LCR requirements where applicable.
\n
The Liqu
id
ity buffer reported is after deductions made to
\n
re\ufb02ect the impact of lim
itat
ions in the transferabil
ity of ent
ity
\n
liqu
id
ity around the Group. This resulted in an adjustment of
\n
$35 bill
ion to LCR HQLA as at 31 December 2024.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Liqu
id
ity buffer
170,306
185,643
Total net cash out\ufb02ows
123,226
128,111
Liqu
id
ity coverage ratio
138%
145%
Stressed coverage
\n
The Group intends to mainta
in a prudent and susta
inable
\n
funding and liqu
id
ity posit
ion,
in all countries and currencies,
\n
such that it can withstand a severe but plausible liqu
id
ity
\n
stress.
\n
Our approach to managing liqu
id
ity and funding is re\ufb02ected
\n
in the Board-level Risk Appetite Statement which includes
\n
the following:
\n
\u201cThe Group should have suf\ufb01cient stable and d
iverse sources
\n
of funding to meet its contractual and contingent obligat
ions
\n
as they fall due.\u201d
\n
The Group\u2019s internal liqu
id
ity adequacy assessment process
\n
(\u2018ILAAP\u2019) stress testing framework covers the following
\n
stress scenarios:
\n
\u2022
Standard Chartered-specif
ic \u2013 Captures the l
iqu
id
ity
\n
impact from an id
iosyncrat
ic event affecting Standard
\n
Chartered only with the rest of the market assumed to be
\n
operating normally.
\n
\u2022
Market wide \u2013 Captures the liqu
id
ity impact from a
\n
market-wide cris
is affect
ing all partic
ipants
in a country,
\n
region or globally.
\n
\u2022
Combined \u2013 Assumes both Standard Chartered-specif
ic
\n
and Market-wide events affect the Group simultaneously
\n
and hence is the most severe scenario.
\n
All scenarios include, but are not lim
ited to, modelled out\ufb02ows
\n
for retail and wholesale funding, off-balance sheet funding
\n
risk, cross-currency funding risk, intraday risk, franchise risk
\n
and risks associated with a deteriorat
ion of a \ufb01rm\u2019s cred
it
\n
rating. Concentration risk approach captures single name
\n
and industry concentration.
\n
ILAAP stress testing results show that, as at 31 December 2024,
\n
Group and all countries were able to survive for a period of
\n
time with posit
ive surpluses as de\ufb01ned under each scenar
io.
\n
The results take into account currency convertib
il
ity and
\n
portabil
ity constra
ints while calculating the liqu
id
ity surplus
\n
at Group level.
\n
Standard Chartered Bank\u2019s credit ratings as at 31 December
\n
2024 were A+ with stable outlook (Fitch), A+ with stable
\n
outlook (S&P) and A1 with posit
ive outlook (Moody\u2019s). As of
\n
31\u00a0December 2024, the estimated contractual out\ufb02ow of a
\n
three-notch long-term ratings downgrade is $1.0 bill
ion.
\n
External wholesale borrowing
\n
A risk trigger is set to prevent excessive reliance on wholesale
\n
borrowing. With
in the de\ufb01nit
ion of wholesale borrowing,
\n
triggers are applied to all branches and operating subsid
iar
ies
\n
in the Group.
\n
Advances-to-deposits ratio
\n
This is de\ufb01ned as the ratio of total loans and advances to
\n
customers relative to total customer deposits. An advances-
\n
to-deposits ratio below 100 per cent demonstrates that
\n
customer deposits exceed customer loans as a result of the
\n
emphasis placed on generating a high level of funding from
\n
customers.
\n
The Group\u2019s advances-to-deposits ratio has remained stable
\n
in 2024 at 53.3 per cent. Deposits from customers as at
\n
31\u00a0December 2024 are $486,261 mill
ion (31 December 2023:
\n
$486,666 mill
ion).
\n\n \n
2024
2023
$mill
ion
$mill
ion
Total loans and advances to customers
1,2
259,269
259,481
Total customer accounts
3
486,261
486,666
Advances-to-deposits ratio
53.3%
53.3%
\n
1
Excludes reverse repurchase agreement and other sim
ilar secured lend
ing of $9,660 mill
ion and
includes loans and advances to customers held at fair value
\n
through pro\ufb01t and loss of $7,084 mill
ion
\n
2
Loans and advances to customers for the purpose of the advances-to-deposits ratio excludes $19,187 mill
ion of approved balances held w
ith central banks,
\n
con\ufb01rmed as repayable at the point of stress (31 December 2023: $20,710 mill
ion)
\n
3
Includes customer accounts held at fair value through pro\ufb01t or loss of $21,772 mill
ion (31 December 2023: $17,248 m
ill
ion)
\n
Net stable funding ratio (NSFR)
\n
The NSFR is a PRA regulatory requirement that stipulates
\n
inst
itut
ions to mainta
in a stable fund
ing pro\ufb01le in relation to
\n
an assumed duration of their assets and off-balance sheet
\n
activ
it
ies over a one-year horizon. It is the ratio between the
\n
amount of available stable funding (ASF) and the amount
\n
of required stable funding (RSF). ASF factors are applied to
\n
balance sheet liab
il
it
ies and cap
ital, based on their perceived
\n
stabil
ity and the amount of stable fund
ing they provide.
\n
Likew
ise, RSF factors are appl
ied to assets and off-balance
\n
sheet exposures according to the amount of stable funding
\n
they require. The regulatory requirements for NSFR are to
\n
mainta
in a rat
io of at least 100 per cent. The average ratio
\n
for the past four quarters is 135 per cent.
\n
Liqu
id
ity pool
\n
The liqu
id
ity value of the Group\u2019s LCR elig
ible l
iqu
id
ity pool at the reporting date was $170 bill
ion. The \ufb01gures
in the table below
\n
account for haircuts, currency convertib
il
ity and portabil
ity constra
ints per PRA rules for transfer restrict
ions (amount
ing to
\n
$35 bill
ion as at 31 December 2024), and therefore are not d
irectly comparable with the consolidated balance sheet. A liqu
id
ity
\n
pool is held to offset stress out\ufb02ows as de\ufb01ned in the LCR per PRA rulebook.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Level 1 securit
ies
Cash and balances at central banks
76,094
81,675
Central banks, governments /public sector entit
ies
74,182
71,768
Multilateral development banks and internat
ional organ
isat
ions
14,386
16,917
Other
343
1,291
Total Level 1 securit
ies
165,005
171,651
Level 2 A securit
ies
4,367
13,268
Level 2 B securit
ies
934
724
Total LCR elig
ible assets
170,306
185,643
Liqu
id
ity analysis of the Group\u2019s balance sheet (audited)
\n
Contractual maturity of assets and liab
il
it
ies
\n
The following table presents assets and liab
il
it
ies by matur
ity groupings based on the remain
ing per
iod to the contractual
\n
maturity date as at the balance sheet date on a discounted basis. Contractual maturit
ies do not necessar
ily re\ufb02ect actual
\n
repayments or cash\ufb02ows.
\n
With
in the tables below, cash and balances w
ith central banks, interbank placements and investment securit
ies that are
\n
fair valued through other comprehensive income are used by the Group princ
ipally for l
iqu
id
ity management purposes.
\n
As at the reporting date, assets remain predominantly short-dated, with 59 per cent maturing in less than one year.
\n\n \n
2024
Between
Between
Between
Between
Between
Between
More than
one month
three
six months
nine months
one year
two years
\ufb01ve years
One month
and three
months and
and nine
and one
and two
and \ufb01ve
and
or less
months
six months
months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks
55,646
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
7,801
63,447
Derivat
ive \ufb01nancial
instruments
22,939
15,556
12,217
7,265
4,328
7,067
7,448
4,652
81,472
Loans and advances
to banks
1,2
22,381
21,722
10,588
6,771
4,986
8,407
3,715
1,990
80,560
Loans and advances
to customers
1,2
65,688
58,765
25,739
15,479
16,192
31,240
31,766
94,688
339,557
Investment securit
ies
1
13,016
25,886
21,546
14,789
14,688
32,815
41,423
62,418
226,581
Other assets
1
12,601
32,130
1,333
381
931
71
64
10,560
58,071
Total assets
192,271
154,059
71,423
44,685
41,125
79,600
84,416
182,109
849,688
Liab
il
it
ies
Deposits by banks
1,3
24,293
2,345
1,621
848
571
4,342
1,939
3
35,962
Customer accounts
1,4
379,926
37,502
25,863
10,152
10,123
9,695
47,367
2,635
523,263
Derivat
ive \ufb01nancial
instruments
21,680
17,115
11,773
7,018
4,353
6,660
8,144
5,321
82,064
Senior debt
5
609
1,755
4,074
2,132
932
7,926
18,784
17,886
54,098
Other debt securit
ies
in issue
1
2,734
2,663
6,550
4,535
5,015
851
1,206
688
24,242
Other liab
il
it
ies
12,173
43,574
3,020
1,441
155
4,494
682
2,854
68,393
Subordinated liab
il
it
ies and
other borrowed funds
\u2013
64
23
180
13
359
1,978
7,765
10,382
Total liab
il
it
ies
441,415
105,018
52,924
26,306
21,162
34,327
80,100
37,152
798,404
Net liqu
id
ity gap
(249,144)
49,041
18,499
18,379
19,963
45,273
4,316
144,957
51,284
\n\n \n
2023
Assets
Cash and balances at
central banks
63,752
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6,153
69,905
Derivat
ive \ufb01nancial
instruments
12,269
10,632
6,910
3,611
2,921
4,650
6,038
3,403
50,434
Loans and advances
to banks
1,2
28,814
23,384
10,086
4,929
5,504
1,583
2,392
1,098
77,790
Loans and advances
to customers
1,2
86,695
55,009
25,492
15,392
14,537
25,987
26,545
95,829
345,486
Investment securit
ies
1
12,187
28,999
17,131
18,993
20,590
24,244
44,835
50,168
217,147
Other assets
1
17,611
31,729
1,286
409
587
67
93
10,300
62,082
Total assets
221,328
149,753
60,905
43,334
44,139
56,531
79,903
166,951
822,844
Liab
il
it
ies
Deposits by banks
1,3
26,745
1,909
1,398
503
778
1,326
2,848
2
35,509
Customer accounts
1,4
384,444
47,723
28,288
13,647
11,806
7,787
38,578
2,349
534,622
Derivat
ive \ufb01nancial
instruments
13,111
12,472
6,655
4,001
3,433
5,142
6,932
4,315
56,061
Senior debt
5
130
1,111
1,537
1,389
624
11,507
20,127
14,443
50,868
Other debt securit
ies
in issue
1
3,123
5,822
6,109
3,235
3,037
492
482
195
22,495
Other liab
il
it
ies
14,929
26,447
1,695
544
883
1,830
1,809
12,763
60,900
Subordinated liab
il
it
ies and
other borrowed funds
980
68
19
172
453
312
1,936
8,096
12,036
Total liab
il
it
ies
443,462
95,552
45,701
23,491
21,014
28,396
72,712
42,163
772,491
Net liqu
id
ity gap
(222,134)
54,201
15,204
19,843
23,125
28,135
7,191
124,788
50,353
\n
1
Loans and advances, investment securit
ies, depos
its by banks, customer accounts and debt securit
ies
in issue include \ufb01nanc
ial
instruments held at fair value
\n
through pro\ufb01t or loss, see Note 13 Financ
ial
instruments
\n
2
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing of $98.8 bill
ion (31 December 2023: $97.6 b
ill
ion)
\n
3
Deposits by banks include repurchase agreements and other sim
ilar secured borrow
ing of $8.7 bill
ion (31 December 2023: $5.6 b
ill
ion)
\n
4
Customer accounts include repurchase agreements and other sim
ilar secured borrow
ing of $37.0 bill
ion (31 December 2023: $48.0 b
ill
ion)
\n
5
Senior debt maturity pro\ufb01les are based upon contractual maturity, which may be later than call options over the debt held by the Group
Behavioural maturity of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The cash\ufb02ows presented in the previous section re\ufb02ect the
\n
cash\ufb02ows that will be contractually payable over the residual
\n
maturity of the instruments. However, contractual maturit
ies
\n
do not necessarily re\ufb02ect the tim
ing of actual repayments or
\n
cash\ufb02ow. In practice, certain assets and liab
il
it
ies behave
\n
differently from their contractual terms, especially for short-
\n
term customer accounts, credit card balances and overdrafts,
\n
which extend to a longer period than their contractual
\n
maturity. On the other hand, mortgage balances tend to
\n
have a shorter repayment period than their contractual
\n
maturity date. Expected customer behaviour is assessed
\n
and managed on a country basis using qualitat
ive and
\n
quantitat
ive techn
iques, includ
ing analys
is of observed
\n
customer behaviour over time.
\n
Maturity of \ufb01nanc
ial l
iab
il
it
ies on an und
iscounted basis
\n
(audited)
\n
The following table analyses the contractual cash\ufb02ows
\n
payable for the Group\u2019s \ufb01nancial l
iab
il
it
ies by rema
in
ing
\n
contractual maturit
ies on an und
iscounted basis. The \ufb01nanc
ial
\n
liab
il
ity balances in the table below will not agree with the
\n
balances reported in the consolidated balance sheet as
\n
the table incorporates all contractual cash\ufb02ows, on an
\n
undiscounted basis, relating to both princ
ipal and
interest
\n
payments. Derivat
ives not treated as hedg
ing derivat
ives
\n
are included in the \u2018On demand\u2019 time bucket and not by
\n
contractual maturity.
\n
With
in the \u2018More than \ufb01ve years and undated\u2019 matur
ity band
\n
are undated \ufb01nancial l
iab
il
it
ies, the majority of wh
ich relate
\n
to subordinated debt, on which interest payments are not
\n
included as this informat
ion would not be mean
ingful, given
\n
the instruments are undated. Interest payments on these
\n
instruments are included with
in the relevant matur
it
ies up to
\n
\ufb01ve years.
\n\n \n
2024
Between
Between
Between
Between
Between
More than
one month
three
Between six
nine months
one year
two years
\ufb01ve years
One month
and three
months and
months and
and one
and two
and \ufb01ve
and
or less
months
six months
nine months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deposits by banks
24,303
2,360
1,660
862
589
4,347
1,939
4
36,064
Customer accounts
380,377
37,790
26,277
10,384
10,438
9,937
47,642
3,396
526,241
Derivat
ive \ufb01nancial
instruments\u00b9
80,055
13
12
10
3
216
592
1,163
82,064
Debt securit
ies
in issue
3,622
4,551
11,007
7,056
6,319
10,261
23,184
21,337
87,337
Subordinated liab
il
it
ies and
other borrowed funds
19
134
46
206
14
392
2,345
13,800
16,956
Other liab
il
it
ies
10,421
44,933
2,894
1,408
152
4,433
682
4,802
69,725
Total liab
il
it
ies
498,797
89,781
41,896
19,926
17,515
29,586
76,384
44,502
818,387
2023
Deposits by banks
26,759
1,921
1,417
513
790
1,328
2,848
4
35,580
Customer accounts
385,361
48,140
28,763
14,049
12,190
8,118
39,000
3,036
538,657
Derivat
ive \ufb01nancial
instruments\u00b9
53,054
517
46
44
103
202
887
1,208
56,061
Debt securit
ies
in issue
3,507
6,995
8,015
5,070
4,002
13,663
23,413
16,396
81,061
Subordinated liab
il
it
ies and
other borrowed funds
1,043
134
46
208
570
395
2,389
14,367
19,152
Other liab
il
it
ies
12,200
26,291
1,560
515
884
1,832
1,810
11,513
56,605
Total liab
il
it
ies
481,924
83,998
39,847
20,399
18,539
25,538
70,347
46,524
787,116
\n
1
Derivat
ives are on a d
iscounted basis
Interest Rate Risk in the Banking Book
\n
The following table provides the estimated impact to a
\n
hypothetical base case project
ion of the Group\u2019s earn
ings
\n
under the following scenarios:
\n
\u2022
A 50 basis point parallel interest rate shock (up and down)
\n
to the current market-impl
ied path of rates, across all
\n
yield curves
\n
\u2022
A 100 basis point parallel interest rate shock (up and down)
\n
to the current market-impl
ied path of rates, across all
\n
yield curves
\n
These interest rate shock scenarios assume all other economic
\n
variables remain constant. The sensit
iv
it
ies shown represent
\n
the estimated change to a hypothetical base case projected
\n
net interest income (NII), plus the change in interest rate
\n
impl
ied
income and expense from FX swaps used to manage
\n
banking book currency posit
ions, under the d
ifferent interest
\n
rate shock scenarios.
\n
The base case projected NII is based on the current market-
\n
impl
ied path of rates and forward rate expectat
ions. The NII
\n
sensit
iv
it
ies below stress th
is base case by a further 50 or
\n
100bps. Actual observed interest rate changes will likely
\n
differ from market expectation. Accordingly, the shocked NII
\n
sensit
iv
ity does not represent a forecast of the Group\u2019s net
\n
interest income.
\n
The interest rate sensit
iv
it
ies are
ind
icat
ive stress tests and
\n
based on simpl
i\ufb01ed scenar
ios, estimat
ing the aggregate
\n
impact of an unantic
ipated,
instantaneous parallel shock
\n
across all yield curves over a one-year horizon, includ
ing the
\n
time taken to implement changes to pric
ing before becom
ing
\n
effective. The assessment assumes that the size and mix of
\n
the balance sheet remain constant and that there are no
\n
specif
ic management act
ions in response to the change in
\n
rates. No assumptions are made in relation to the impact on
\n
credit spreads in a changing rate environment.
\n
Sign
i\ufb01cant modell
ing and behavioural assumptions are made
\n
regarding scenario simpl
i\ufb01cation, market compet
it
ion,
\n
pass-through rates, asset and liab
il
ity re-pric
ing tenors, and
\n
price \ufb02ooring. In particular, the assumption that interest rates
\n
of all currencies and maturit
ies sh
ift by the same amount
\n
concurrently, and that no actions are taken to mit
igate the
\n
impacts aris
ing from th
is are considered unlikely. Reported
\n
sensit
iv
it
ies w
ill vary over time due to a number of factors
\n
includ
ing changes
in balance sheet composit
ion, market
\n
condit
ions, customer behav
iour and risk management
\n
strategy. Therefore, while the NII sensit
iv
it
ies are a relevant
\n
measure of the Group\u2019s interest rate exposure, they should
\n
not be considered an income or pro\ufb01t forecast.
\n\n \n
2024
Estimated one-year impact
Other
to earnings from a parallel
currency
shift in yield curves at the
USD bloc
HKD bloc
SGD bloc
KRW bloc
CNY bloc
INR bloc
EUR bloc
bloc\u00b9
Total
beginn
ing of the per
iod of:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
+ 50 basis points
20
30
10
20
20
30
10
70
210
- 50 basis points
(40)
(30)
(20)
(20)
(30)
(30)
(20)
(80)
(270)
+ 100 basis points
30
60
20
30
30
40
30
150
390
- 100 basis points
(90)
(50)
(40)
(50)
(50)
(40)
(40)
(190)
(550)
\n\n \n
2023
Estimated one-year impact
to earnings from a parallel
Other
shift in yield curves at the
USD bloc
HKD bloc
SGD bloc
KRW bloc
CNY bloc
INR bloc
EUR bloc
currency
Total
beginn
ing of the per
iod of:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
bloc\u00b9
$mill
ion
+ 50 basis points
90
10
50
10
30
20
30
110
350
- 50 basis points
(150)
(30)
(50)
(20)
(40)
(30)
(30)
(120)
(470)
+ 100 basis points
180
10
100
20
60
40
50
230
690
- 100 basis points
(280)
(40)
(100)
(40)
(80)
(60)
(60)
(230)
(890)
\n
1
The largest exposures with
in the Other currency bloc are GBP,JPY, MYR, TWD
\n
As at 31 December 2024, the Group estimates the one-year
\n
impact of an instantaneous, parallel increase across all
\n
yield curves of 50 basis points to increase projected NII by
\n
$210\u00a0mill
ion. The equ
ivalent impact from a parallel decrease
\n
of 50 basis points would result in a reduction in projected NII
\n
of $270 mill
ion. The Group est
imates the one-year impact of
\n
an instantaneous, parallel increase across all yield curves of
\n
100\u00a0basis points to increase projected NII by $390 mill
ion.
\n
The equivalent impact from a parallel decrease of
\n
100 basis points would result in a reduction in projected
\n
NII of $550 mill
ion.
\n
The bene\ufb01t from ris
ing
interest rates is primar
ily from
\n
reinvest
ing at h
igher yields and from assets re-pric
ing faster
\n
and to a greater extent than deposits. NII sensit
iv
ity in falling
\n
rate scenarios has decreased versus 31 December 2023, due to
\n
an increase in programmatic hedging as well as actions taken
\n
in discret
ionary portfol
ios to increase asset duration.
\n
Over the course of 2024 the notional of interest rate swaps
\n
and HTC-accounted bond portfolios used to reduce NII
\n
sensit
iv
ity through the cycle increased from $47 bill
ion to
\n
$64\u00a0bill
ion. As at December 2024, the portfol
ios had a
\n
weighted average maturity of 3.0 years, which re\ufb02ects the
\n
behavioural
ised l
ives of the rate-insens
it
ive deposit and
\n
equity balances that they hedge, and a yield of 3.5 per cent.
Operational and Technology Risk
Operational and Technology Risk pro\ufb01le
The implementat
ion of standard
ised non-\ufb01nanc
ial r
isk,
control and causal taxonomies is enabling improved risk
aggregation and reporting, and has provided opportunit
ies
for simpl
ify
ing the process for risk ident
i\ufb01cation and
assessment in the Group.
Operational and Technology Risk is elevated in areas such
as Change Mismanagement Risk and Third-Party Risk
Management, which are subject to ongoing control
enhancement programmes. Other key areas of focus are
Systems Health/Technology risk, Operational Resil
ience
and Regulatory Compliance. To address these areas, the
Group has focused on improv
ing the susta
inable operating
environment and has in
it
iated several programmes to
enhance the control environment. The Group continues to
monitor and manage Operational and Technology risks
associated with the external environment such as geopolit
ical
factors, the increas
ing r
isk of cyber-attacks and inappropr
iate
use of Artif
ic
ial Intelligence. This enables the Group to keep
pace with the new business developments, while ensuring
that its risk and control frameworks evolve accordingly.
The Group continues to strengthen its risk management
to understand the full spectrum of risks in the operating
environment, enhance its defences and improve resil
ience.
Operational and Technology risk events and losses
Operational losses are one ind
icator of the effect
iveness and
robustness of our non-\ufb01nancial r
isk and control environment.
The Group\u2019s pro\ufb01le of operational loss events in 2024 and
2023 is summarised in the table below, which shows the
distr
ibut
ion of gross operational losses by Basel business
line. There has been a sharp increase in Corporate Items
in 2024 due to a single large event pertain
ing to F
inance
Accounting Adjustment.
% Loss
Distr
ibut
ion of Operational losses by Basel business line
2024
2023\u00b9
Agency Services
0.0%
3.9%
Asset Management
0.0%
0.2%
Commercial Banking
1.4%
8.0%
Corporate Finance
0.1%
7.2%
Corporate Items
72.5%
34.3%
Payment and Settlements
7.6%
16.6%
Retail Banking
17.0%
21.3%
Retail Brokerage
0.0%
0.0%
Trading and Sales
1.4%
8.6%
1
Losses in 2023 have been restated to include incremental events recognised in 2024
The Group\u2019s pro\ufb01le of operational loss events in 2024 and 2023 is also summarised by Basel event type in the table below.
It shows the distr
ibut
ion of gross operational losses by Basel event type.
% Loss
Distr
ibut
ion of Operational losses by Basel event type
2024
2023\u00b9
Business disrupt
ion and system fa
ilures
1.8%
4.7%
Clients products and business practices
14.1%
2.9%
Damage to physical assets
0.0%
0.0%
Employment practices and workplace safety
0.1%
0.6%
Execution delivery and process management
81.5%
77.3%
External fraud
2.4%
14.4%
Internal fraud
0.1%
0.2%
1
Losses in 2023 have been restated to include incremental events recognised in 2024
Other princ
ipal r
isks
The losses aris
ing from operat
ional failures for other princ
ipal and
integrated risks are reported as operational losses.
Operational losses do not include operational risk-related credit impa
irments. Capital review
The Capital review provides an analysis of the Group\u2019s capital and leverage posit
ion,
and requirements.
Capital summary
The Group\u2019s capital, leverage and min
imum requ
irements for own funds and elig
ible l
iab
il
it
ies (MREL) pos
it
ion
is managed
with
in the Board-approved r
isk appetite. The Group is well capital
ised w
ith low leverage and high levels of loss-absorbing
capacity.
2024
2023
CET1 capital
14.2%
14.1%
Tier 1 capital
16.9%
16.3%
Total capital
21.5%
21.2%
Leverage ratio
4.8%
4.7%
MREL ratio
34.2%
33.3%
Risk-weighted assets (RWA) $mill
ion
247,065
244,151
The Group\u2018s capital, leverage and MREL posit
ions were all
above current requirements and Board-approved risk
appetite. For further detail see the Capital section in the
Standard Chartered PLC Pillar 3 Disclosures for FY 2024.
The Group\u2019s CET1 capital increased 19 basis points to
14.2 per cent of RWA since FY2023. Pro\ufb01ts, movements in
FVOCI, FX translation reserves and decrease in regulatory
deductions were partly offset by RWA growth and
distr
ibut
ions (includ
ing ord
inary share buybacks of
$2.5 bill
ion dur
ing the year).
The PRA updated the Group\u2019s Pillar 2A requirement during
Q4 2024. As at 31 December 2024 the Group\u2019s Pillar 2A was
3.7 per cent of RWA, of which at least 2.1 per cent must be
held in CET1 capital. The Group\u2019s min
imum CET1 cap
ital
requirement was 10.5 per cent at 31 December 2024.
The Group CET1 capital ratio at 31 December 2024 re\ufb02ects
the share buybacks of $2.5 bill
ion announced dur
ing the year.
The CET1 capital ratio also includes an accrual for the FY 2024
div
idend. The Board has recommended a \ufb01nal d
iv
idend for
FY 2024 of $679 mill
ion or 28 cents per share result
ing in a full
year 2024 div
idend of 37 cents per share, a 37 per cent
increase on the 2023 div
idend. In add
it
ion, the Board has
announced a further share buyback of $1.5 bill
ion, the
impact
of this will reduce the Group\u2019s CET1 capital by around 61 basis
points in the \ufb01rst quarter of 2025.
The Group expects to manage CET1 capital dynamically
with
in our 13-14 per cent target range,
in support of our aim
of deliver
ing future susta
inable shareholder distr
ibut
ions.
The Group\u2019s MREL leverage requirement as at 31 December
2024 was 27.6 per cent of RWA. This is composed of a
min
imum requ
irement of 23.7 per cent of RWA and the Group\u2019s
combined buffer (compris
ing the cap
ital conservation buffer,
the G-SII buffer and the countercyclical buffer). The Group\u2019s
MREL ratio was 34.2 per cent of RWA and 9.7 per cent of
leverage exposure at 31 December 2024.
During 2024, the Group successfully raised $9.1 bill
ion of MREL
elig
ible secur
it
ies from
its holding company, Standard
Chartered PLC. Issuance include $1.6 bill
ion of Add
it
ional T
ier 1
and $7.5 bill
ion of callable sen
ior debt.
The Group raised an addit
ional $1.0 b
ill
ion of Add
it
ional T
ier 1
and $2.5 bill
ion
in senior securit
ies post the balance sheet
date, i.e. not included in the FY 2024 MREL posit
ion.
The Group is a G-SII, with a 1.0 per cent G-SII CET1 capital
buffer. The Standard Chartered PLC G-SII disclosure is
published at: sc.com/en/investors/\ufb01nanc
ial-results.
Capital base
\n
1
\n
(audited)
\n\n \n
2024
2023
$mill
ion
$mill
ion
CET1 capital instruments and reserves
Capital instruments and the related share premium accounts
5,201
5,321
Of which: share premium accounts
3,989
3,989
Retained earnings
24,950
24,930
Accumulated other comprehensive income (and other reserves)
8,724
9,171
Non-controlling interests (amount allowed in consolidated CET1)
235
217
Independently audited year-end pro\ufb01ts
4,072
3,542
Foreseeable div
idends
(923)
(768)
CET1 capital before regulatory adjustments
42,259
42,413
CET1 regulatory adjustments
Addit
ional value adjustments (prudent
ial valuation adjustments)
(624)
(730)
Intangible assets (net of related tax liab
il
ity)
(5,696)
(6,128)
Deferred tax assets that rely on future pro\ufb01tabil
ity (excludes those aris
ing from temporary d
ifferences)
(31)
(41)
Fair value reserves related to net losses on cash \ufb02ow hedges
(4)
(91)
Deduction of amounts resulting from the calculation of excess expected loss
(702)
(754)
Net gains on liab
il
it
ies at fa
ir value resulting from changes in own credit risk
278
(100)
De\ufb01ned-bene\ufb01t pension fund assets
(149)
(95)
Fair value gains aris
ing from the
inst
itut
ion\u2019s own credit risk related to derivat
ive l
iab
il
it
ies
(97)
(116)
Exposure amounts which could qualify for risk weight
ing of 1250%
(44)
(44)
Total regulatory adjustments to CET1
(7,069)
(8,099)
CET1 capital
35,190
34,314
Addit
ional T
ier 1 capital (AT1) instruments
6,502
5,512
AT1 regulatory adjustments
(20)
(20)
Tier 1 capital
41,672
39,806
Tier 2 capital instruments
11,449
11,965
Tier 2 regulatory adjustments
(30)
(30)
Tier 2 capital
11,419
11,935
Total capital
53,091
51,741
Total risk-weighted assets (unaudited)
247,065
244,151
\n
1
Capital base is prepared on the regulatory scope of consolidat
ion
Movement in total capital (audited)
\n\n \n
2024
2023
$mill
ion
$mill
ion
CET1 at 1 January
34,314
34,157
Ordinary shares issued in the period and share premium
\u2013
\u2013
Share buyback
(2,500)
(2,000)
Pro\ufb01t for the period
4,072
3,542
Foreseeable div
idends deducted from CET1
(923)
(768)
Difference between div
idends pa
id and foreseeable div
idends
(469)
(372)
Movement in goodwill and other intang
ible assets
432
(326)
Foreign currency translation differences
(525)
(477)
Non-controlling interests
18
28
Movement in elig
ible other comprehens
ive income
636
464
Deferred tax assets that rely on future pro\ufb01tabil
ity
10
35
Decrease/(increase) in excess expected loss
52
(70)
Addit
ional value adjustments (prudent
ial valuation adjustment)
106
124
IFRS 9 transit
ional
impact on regulatory reserves includ
ing day one
2
(106)
Exposure amounts which could qualify for risk weight
ing
\u2013
59
Fair value gains aris
ing from the
inst
itut
ion\u2019s own Credit Risk related to derivat
ive l
iab
il
it
ies
19
(26)
Others
(54)
50
CET1 at 31 December
35,190
34,314
AT1 at 1 January
5,492
6,484
Net issuances (redemptions)
1,015
(1,000)
Foreign currency translation difference and others
(25)
8
AT1 at 31 December
6,482
5,492
Tier 2 capital at 1 January
11,935
12,510
Regulatory amortisat
ion
1,189
1,416
Net issuances (redemptions)
(1,517)
(2,160)
Foreign currency translation difference
(191)
146
Tier 2 inel
ig
ible minor
ity
interest
(3)
19
Others
6
4
Tier 2 capital at 31 December
11,419
11,935
Total capital at 31 December
53,091
51,741
\n
The main movements in capital in the period were:
\n
\u2022
CET1 capital increased by $0.9 bill
ion as reta
ined pro\ufb01ts of $4.1 bill
ion, movement
in FVOCI of $0.6 bill
ion and a reduct
ion in
\n
regulatory deductions and other movements of $0.6 bill
ion were partly offset by share buybacks of $2.5 b
ill
ion, d
istr
ibut
ions
\n
paid and foreseeable of $1.4 bill
ion, fore
ign currency translation impact of $0.5\u00a0bill
ion.
\n
\u2022
AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.0 bill
ion of 7.88 per cent secur
it
ies and $0.6 b
ill
ion of
\n
5.30\u00a0per\u00a0cent securit
ies partly offset by the redempt
ion of $0.6 bill
ion of 5.38 per cent secur
it
ies.
\n
\u2022
Tier 2 capital decreased by $0.5 bill
ion due to the redempt
ion of $1.6 bill
ion of T
ier 2 during the year partly offset by the
\n
reversal of regulatory amortisat
ion and fore
ign currency translation impact.
\n
Risk-weighted assets by business
\n\n \n
2024
Credit risk
Operational risk
Market risk
Total risk
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate & Investment Banking
112,100
19,987
24,781
156,868
Wealth & Retail Banking
41,002
9,523
\u2013
50,525
Ventures
2,243
142
21
2,406
Central & Other items
33,958
(173)
3,481
37,266
Total risk-weighted assets
189,303
29,479
28,283
247,065
2023
Corporate & Investment Banking
102,675
18,083
21,221
141,979
Wealth & Retail Banking
42,559
8,783
\u2013
51,342
Ventures
1,885
35
3
1,923
Central & Other items
44,304
960
3,643
48,907
Total risk-weighted assets
191,423
27,861
24,867
244,151
\n \n
Credit risk
Corporate &
Wealth &
Investment
Retail
Central &
Operational
Banking
Banking
Ventures
Other items
Total
risk
Market risk
Total risk
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January 2023
110,103
42,091
1,350
43,311
196,855
27,177
20,679
244,711
Assets growth & mix
(4,424)
728
535
1,183
(1,978)
\u2013
\u2013
(1,978)
Asset quality
(391)
390
\u2013
2,684
2,683
\u2013
\u2013
2,683
Risk-weighted assets ef\ufb01c
ienc
ies
\u2013
\u2013
\u2013
(688)
(688)
\u2013
\u2013
(688)
Model Updates
(597)
(151)
\u2013
(151)
(899)
\u2013
500
(399)
Methodology and policy changes
\u2013
(196)
\u2013
\u2013
(196)
\u2013
(800)
(996)
Acquis
it
ions and disposals
(1,630)
\u2013
\u2013
\u2013
(1,630)
\u2013
\u2013
(1,630)
Foreign currency translation
(386)
(303)
\u2013
(2,035)
(2,724)
\u2013
\u2013
(2,724)
Other, Including non-credit
risk movements
\u2013
\u2013
\u2013
\u2013
\u2013
684
4,488
5,172
At 31 December 2023
102,675
42,559
1,885
44,304
191,423
27,861
24,867
244,151
Assets growth & mix
11,412
341
358
(5,803)
6,308
\u2013
\u2013
6,308
Asset quality
(1,349)
112
\u2013
(1,935)
(3,172)
\u2013
\u2013
(3,172)
Risk-weighted assets ef\ufb01c
ienc
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Model Updates
1,620
(1)
\u2013
\u2013
1,619
\u2013
(400)
1,219
Methodology and policy changes
38
39
\u2013
\u2013
77
\u2013
(1,300)
(1,223)
Acquis
it
ions and disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign currency translation
(2,296)
(1,207)
\u2013
(1,374)
(4,877)
\u2013
\u2013
(4,877)
Other, Including non-credit
risk movements
\u2013
(841)
\u2013
(1,234)
(2,075)
1,618
5,116
4,659
At 31 December 2024
112,100
41,002
2,243
33,958
189,303
29,479
28,283
247,065
\n
Movements in risk-weighted assets
\n
RWA increased by $2.9 bill
ion, or 1.2 per cent from 31 December
\n
2023 to $247.1 bill
ion. Th
is was mainly due to decrease in
\n
Credit Risk RWA of $2.1 bill
ion, an
increase in Market Risk RWA
\n
of $3.4\u00a0bill
ion and Operat
ional Risk RWA of $1.6 bill
ion.
\n
Corporate & Investment Banking
\n
Credit Risk RWA increased by $9.4 bill
ion, or 9.2 per cent from
\n
31\u00a0December 2023 to $112.1 bill
ion ma
inly due to:
\n
\u2022
$11.4 bill
ion
increase from changes in asset growth & mix,
\n
of which:
\n
\u2013 $9.0 bill
ion
increase from asset growth
\n
\u2013 $3.1 bill
ion
increase from derivat
ives
\n
\u2013 $0.8 bill
ion decrease from opt
im
isat
ion actions
\n
\u2022
$1.6 bill
ion
increase from industry-wide regulatory changes
\n
to align IRB model performance from adjustment to
\n
commercial real estate counterparties
\n
\u2022
$2.3 bill
ion decrease from fore
ign currency translation
\n
\u2022
$1.3 bill
ion decrease ma
inly due to an improvement in asset
\n
quality re\ufb02ecting client upgrades
\n
Wealth & Retail Banking
\n
Credit Risk RWA decreased by $1.6 bill
ion, or 3.7 per cent from
\n
31 December 2023 to $41.0 bill
ion ma
inly due to:
\n
\u2022
$1.2 bill
ion decrease from fore
ign currency translation
\n
\u2022
$0.8 bill
ion decrease from reclass
if
icat
ion of credit cards
\n
in Asia
\n
\u2022
$0.3 bill
ion
increase from changes in asset growth & mix
\n
\u2022
$0.1 bill
ion
increase mainly due to deteriorat
ion
in asset
\n
quality mainly in Asia
\n
Ventures
\n
Ventures is comprised of Mox Bank Lim
ited, Trust Bank
\n
and SC Ventures. Credit Risk RWA increased by $0.4 bill
ion,
\n
or 19 per cent from 31 December 2023 to $2.2 bill
ion from
\n
asset balance growth, mainly from SC Ventures.
\n
Central & Other items
\n
Central & Other items RWA mainly relate to the Treasury
\n
Market\u2019s liqu
id
ity portfolio, equity investments and current &
\n
deferred tax assets.
\n
Credit Risk RWA decreased by $10.3 bill
ion, or 23.4 per cent
\n
from 31 December 2023 to $34.0 bill
ion ma
inly due to:
\n
\u2022
$5.8 bill
ion decrease from changes
in asset growth & mix
\n
primar
ily from opt
im
isat
ion activ
it
ies
\n
\u2022
$1.9 bill
ion decrease due to
improvement in asset quality
\n
mainly from sovereign upgrades in Asia and Africa
\n
\u2022
$1.4 bill
ion decrease from fore
ign currency translation
\n
\u2022
$1.2 bill
ion decrease due to report
ing enhancements
\n
Market Risk
\n
Total Market Risk RWA increased by $3.4 bill
ion, or
\n
13.7 per cent from 31 December 2023 to $28.3 bill
ion
\n
primar
ily dr
iven by:
\n
\u2022
$1.7 bill
ion
increase in Standardised Approach (SA) Specif
ic
\n
Interest Rate Risk RWA mainly due to increases in the
\n
Trading Book government bond portfolio
\n
\u2022
$2.7 bill
ion
increase in Internal Models Approach (IMA)
\n
RWA from increases in VaR and Stressed VaR RWA due
\n
mainly to increased interest rate exposures, offset by a
\n
reduction of addons for Risks not in VaR
\n
\u2022
$1.3 bill
ion
in the \ufb01rst quarter decrease due to a reduction
\n
in the IMA RWA multipl
ier result
ing from fewer back-
\n
testing exceptions
\n
Operational Risk
\n
\u2022
Operational Risk RWA increased by $1.6 bill
ion, or
\n
5.8 per cent from 31 December 2023 to $29.5 bill
ion, ma
inly
\n
due to a marginal increase in average income as measured
\n
over a rolling three-year time horizon for certain products.
Leverage ratio
The Group\u2019s leverage ratio, which excludes qualify
ing cla
ims on central banks, was 4.8 per cent at FY2024, which was above the
current min
imum requ
irement of 3.7 per cent. The leverage ratio was 10 basis points higher than FY2023. Leverage exposure
increased by $21.2 bill
ion from decrease
in claims on central banks of $15.5 bill
ion, an
increase in Derivat
ives of $15.9 b
ill
ion,
securit
ies \ufb01nancing transact
ions of $1.2 bill
ion, decrease
in asset amounts deducted in determin
ing T
ier 1 capital (Leverage)
of $0.6 bill
ion, partly offset by decrease
in Off-balance sheet items of $5.0 bill
ion, Other Assets of $4.7 b
ill
ion, and secur
it
ies
\ufb01nancing transact
ion add-on of $2.4 bill
ion. T
ier 1 capital increased by $1.9 bill
ion as CET1 cap
ital increased by $0.9 bill
ion
and AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.6 bill
ion partly offset by the redempt
ion of $0.6 bill
ion
AT1 securit
ies.
Leverage ratio
31.12.24
31.12.23
$mill
ion
$mill
ion
Tier 1 capital (end point)
41,672
39,806
Derivat
ive \ufb01nancial
instruments
81,472
50,434
Derivat
ive cash collateral
11,046
10,337
Securit
ies \ufb01nancing transact
ions (SFTs)
98,801
97,581
Loans and advances and other assets
658,369
664,492
Total on-balance sheet assets
849,688
822,844
Regulatory consolidat
ion adjustments
1
(76,197)
(92,709)
Derivat
ives adjustments
Derivat
ives nett
ing
(63,934)
(39,031)
Adjustments to cash collateral
(10,169)
(9,833)
Net written credit protection
2,075
1,359
Potential future exposure on derivat
ives
51,323
42,184
Total derivat
ives adjustments
(20,705)
(5,321)
Counterparty risk leverage exposure measure for SFTs
4,198
6,639
Off-balance sheet items
118,607
123,572
Regulatory deductions from Tier 1 capital
(7,247)
(7,883)
Total exposure measure excluding claims on central banks
868,344
847,142
Leverage ratio excluding claims on central banks (%)
4.8%
4.7%
Average leverage exposure measure excluding claims on central banks
894,296
853,968
Average leverage ratio excluding claims on central banks (%)
4.7%
4.6%
Countercyclical leverage ratio buffer
0.1%
0.1%
G-SII addit
ional leverage rat
io buffer
0.4%
0.4%
1
Includes adjustment for qualify
ing central bank cla
ims and unsettled regular way trades", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00481": { "value": "Risk review and Capital review
Annual
Report and
Risk Index
Accounts
Risk management
Enterprise Risk Management Framework
196
approach
Princ
ipal r
isks
201
Risk pro\ufb01le
Credit Risk
207
Basis of preparation
207
Credit Risk overview
207
Impairment model
207
Staging of \ufb01nanc
ial
instruments
207
IFRS 9 ECL princ
iples and approaches
207
Summary of Credit Risk performance
207
Maximum exposure to Credit Risk
209
Analysis of \ufb01nanc
ial
instruments by stage
210
Credit quality analysis
212
\u2022
Credit quality by client segment
212
\u2022
Credit quality by key geography
217
Movement in gross exposures and credit impa
irment for loans and advances, debt secur
it
ies,
undrawn commitments and \ufb01nanc
ial guarantees
219
Analysis of stage 2 balances
225
Credit impa
irment charge
226
Problem credit management and provis
ion
ing
226
\u2022
Forborne and other modif
ied loans by cl
ient segment
226
\u2022
Forborne and other modif
ied loans by key geography
226
Credit Risk mit
igat
ion
227
\u2022 Collateral
227
\u2022
Collateral held on loans and advances
227
\u2022
Collateral \u2013 Corporate and Investment Banking
227
\u2022
Collateral \u2013 Wealth and Retail Banking
228
\u2022
Mortgage loan-to-value ratios by geography
228
\u2022
Collateral and other credit enhancements possessed or called upon
229
\u2022
Other Credit Risk mit
igat
ion
229
Other portfolio analysis
229
\u2022
Maturity analysis of loans and advances by client segment
229
\u2022
Credit quality by industry
230
\u2022
Industry and Retail Products analysis of loans and advances by key geography
231
\u2022
High carbon sectors
232
\u2022
Commercial real estate
234
\u2022
Debt securit
ies and other el
ig
ible b
ills
235
IFRS 9 ECL methodology
236
Traded Risk
247
Market Risk movements
247
Counterparty Credit Risk
249
Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion
249
Liqu
id
ity and Funding Risk
250
Liqu
id
ity and Funding Risk metrics
250
Liqu
id
ity analysis of the Group\u2019s balance sheet
252
Interest Rate Risk in the Banking Book
254
Operational and Technology Risk
255
Operational and Technology Risk pro\ufb01le
255
Other princ
ipal r
isks
255
Climate Risk
256
Managing the \ufb01nanc
ial and non-\ufb01nancial r
isks from climate change
257
Assessing the resil
ience of our strategy us
ing scenario analysis
265
\n\n\n \n
Annual
Report and
Risk Index
Accounts
Capital
Capital summary
270
\u2022 Capital ratio
270
\u2022 Capital base
271
Movement in total capital
272
Risk-weighted asset
272
Leverage ratio
274
\n
The following parts of the Risk review and Capital review form part of these \ufb01nanc
ial statements and are aud
ited by the
\n
external auditors:
\n
a) Risk review:
Disclosures marked as \u2018audited\u2019 from the start of Credit risk section (page 207) to the end of other princ
ipal r
isks
\n
in the same section (page 255); and
\n
b) Capital review:
Tables marked as \u2018audited\u2019 from the start of \u2018Capital base\u2019 to the end of \u2018Movement in total capital\u2019, excluding
\n
\u2018Total risk-weighted assets\u2019 (pages 271 and 272).
\n\n
Enterprise Risk Management Framework
\n
Risk management is at the heart of banking, it is what we do. Managing risk effectively is how
\n
we drive commerce and prosperity for our clients and our communit
ies, and
it is how we grow
\n
sustainably and pro\ufb01tably as an organisat
ion.
\n
Effective risk management is essential in deliver
ing cons
istent
\n
and sustainable performance for all our stakeholders and is
\n
a central part of the \ufb01nancial and operat
ional management
\n
of the Group. The Group adds value to clients and the
\n
communit
ies
in which they operate by balancing risk and
\n
reward to generate returns for shareholders.
\n
The Enterprise Risk Management Framework (ERMF)
\n
enables the Group to manage enterprise-wide risks, with the
\n
objective of max
im
is
ing risk-adjusted returns while remain
ing
\n
with
in our R
isk Appetite (RA). The ERMF is complemented by
\n
frameworks, polic
ies and standards wh
ich are mainly aligned
\n
to the Princ
ipal R
isk Types (PRTs), and is embedded across the
\n
Group, includ
ing
its branches and subsid
iar
ies.
\n
1
\n
It is reviewed
\n
and approved by the Board annually, with the latest version
\n
being effective from August 2024.
\n
Risk culture
\n
Risk culture encompasses our general awareness, attitudes,
\n
and behaviours towards risk, as well as how risk is managed
\n
at enterprise level.
\n
A healthy risk culture is one in which everyone takes personal
\n
responsib
il
ity to ident
ify and assess, openly d
iscuss, and
\n
take prompt action to address exist
ing and emerg
ing risks.
\n
We expect our control functions to provide oversight and
\n
challenge constructively, collaboratively, and in a timely
\n
manner on the risks owned by the \ufb01rst line of defence.
\n
This effort is re\ufb02ected in our valued behaviours and
\n
underpinned by our Code of Conduct and Ethics.
\n
Further details on our Code of Conduct and Ethics can be
\n
found on
page 95
.
\n
The risks we face constantly evolve, and we must always
\n
look for ways to manage them as effectively as possible.
\n
While unfavourable outcomes will occur from time to time,
\n
a healthy risk culture means that we react quickly and
\n
transparently. We can then take the opportunity to learn from
\n
our experience and improve our framework and processes.
\n
Strategic risk management
\n
The Group\u2019s approach to strategic risk management includes
\n
the following:
\n
\u2022
Risk ident
i\ufb01cation:
impact analyses of risks that arise from
\n
the Group\u2019s growth plans, strategic in
it
iat
ives, and bus
iness
\n
model vulnerabil
it
ies are reviewed. This assesses how
\n
exist
ing r
isks have evolved in terms of relative importance
\n
and whether new risks have emerged.
\n
\u2022
Risk Appetite:
impact analysis is performed to assess if
\n
strategic in
it
iat
ives can be ach
ieved with
in RA and h
ighl
ight
\n
areas where addit
ional RA should be cons
idered.
\n
\u2022
Stress testing:
ident
i\ufb01ed r
isks are used to develop scenarios
\n
for enterprise stress tests.
\n
Roles and responsib
il
it
ies
\n
Senior Managers Regime
\n
2
\n
Roles and responsib
il
it
ies under the ERMF are al
igned to
\n
the objectives of the Sen
ior Managers Regime. The Group
\n
Chief Risk Of\ufb01cer (GCRO) is responsible for the overall
\n
development and maintenance of the Group\u2019s ERMF and for
\n
ident
ify
ing material risks which the Group may be exposed to.
\n
The GCRO delegates effective implementat
ion of the R
isk
\n
Type Frameworks (RTF) to Risk Framework Owners (RFO),
\n
who provide second line of defence oversight for their
\n
respective PRTs.
\n
The Risk function
\n
The Risk function provides oversight and challenge on the
\n
Group\u2019s risk management, ensuring that business is conducted
\n
in line with regulatory expectations. The GCRO directly
\n
manages the Risk function, which is independent from the
\n
orig
inat
ion, trading, and sales functions of the businesses.
\n
The Risk function is responsible for:
\n
\u2022
proposing the RA for approval by the Board
\n
\u2022
mainta
in
ing the ERMF, ensuring that it remains relevant
\n
and appropriate to the Group\u2019s business activ
it
ies, and
\n
is effectively communicated and implemented across
\n
the Group
\n
\u2022
ensuring that risks are properly assessed, risk and return
\n
decis
ions are transparent and r
isks are controlled in
\n
accordance with the Group\u2019s standards and RA
\n
\u2022
overseeing and challenging the management of PRTs under
\n
the ERMF
\n
\u2022
independence of the Risk function by ensuring that the
\n
necessary balance in making risk and return decis
ions
is not
\n
compromised by short-term pressures to generate revenues.
\n
The Risk function supports the Group\u2019s strategy by build
ing
\n
a sustainable ERMF that places regulatory and compliance
\n
standards, together with culture of appropriate conduct, at
\n
the forefront of the Group\u2019s agenda.
\n
Our Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
\n
function,
\n
3
\n
works alongside the Risk function with
in the ERMF
\n
to deliver a unif
ied second l
ine of defence. Compliance Risk
\n
and Financ
ial Cr
ime Risk, as PRTs, fall under the scope of the
\n
CFCR\u2019s responsib
il
it
ies.
\n
Three lines of defence model
\n
The Group applies a three lines of defence model to its
\n
day-to-day activ
it
ies for effective risk management,
\n
and to reinforce a strong governance and control
\n
environment. Typically:
\n
\u2022
Businesses and functions engaged in or supporting revenue
\n
generating activ
it
ies that own and manage risks constitute
\n
the \ufb01rst line of defence.
\n
1
The Group\u2019s ERMF and system of internal control applies only to wholly controlled subsid
iar
ies of the Group, and not to associates, jo
int ventures or structured
\n
entit
ies of the Group.
\n
2
Senior managers refer to ind
iv
iduals designated as senior management functions under the FCA and PRA Senior Managers Regime.
\n
3
From 1 January 2025, our Conduct, Financ
ial Cr
ime and Compliance (CFCC) function was renamed as Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR).
\n\n
\u2022
Control functions, independent of the \ufb01rst line of defence,
\n
that provide oversight and challenge of risk management
\n
activ
it
ies act as the second line of defence.
\n
\u2022
Internal Audit acts as the third line of defence, provid
ing
\n
independent assurance on the effectiveness of controls
\n
supporting the activ
it
ies of the \ufb01rst and second lines
\n
of defence.
\n
Each PRT has an RTF which outlines the areas of governance
\n
and risk management and is the formal mechanism through
\n
which authorit
ies are delegated. R
isk management plans,
\n
processes, activ
it
ies, and resource allocations are consistent
\n
with the three lines of defence model prescribed by the ERMF.
\n
Risk ident
i\ufb01cation and assessment
\n
Identif
icat
ion and assessment of potentially adverse risk
\n
events is an essential \ufb01rst step in managing the risks of any
\n
business or activ
ity. To ensure cons
istency we use PRTs to
\n
classify our risk exposures. However, we also recognise the
\n
need to mainta
in a hol
ist
ic perspect
ive since:
\n
\u2022
a single transaction or activ
ity may g
ive rise to multiple
\n
types of risk exposure
\n
\u2022
risk concentrations may arise from multiple exposures that
\n
are closely correlated
\n
\u2022
a given risk exposure may change its form from one risk
\n
type to another.
\n
There are also sources of risk that arise beyond our own
\n
operations, such as the Group\u2019s dependency on suppliers for
\n
the provis
ion of serv
ices and technology.
\n
As the Group remains accountable for risks aris
ing from the
\n
actions of such third parties, failure to adequately monitor
\n
and manage these relationsh
ips could mater
ially impact the
\n
Group\u2019s abil
ity to operate.
\n
The Group mainta
ins a taxonomy of r
isks inherent to the
\n
strategy and business model, as well as a risk inventory which
\n
captures ident
i\ufb01ed r
isks, includ
ing the Top
ical and Emerging
\n
Risks (TERs) to which the Group is or might be exposed to.
\n
Multiple ident
i\ufb01cation and assessment techn
iques are
\n
used to ensure breadth and depth of understanding of the
\n
internal and external risk environment, as well as potential
\n
opportunit
ies. A r
isk assessment of the corporate plan is
\n
undertaken annually, supplemented by risk assessments of
\n
new in
it
iat
ives. R
isk ident
i\ufb01cation \ufb01ndings
inform the related
\n
risk oversight process, and most importantly RA and controls
\n
setting, scenario selection and design, and model re\ufb01nement
\n
and development.
\n
The GCRO and the Group Risk Committee (GRC) regularly
\n
review reports on the risk pro\ufb01le for the PRTs, adherence to
\n
Group RA, stress test results and the Group risk inventory
\n
includ
ing TERs.
\n
Risk Appetite and pro\ufb01le
\n
The Group recognises the following constraints which
\n
determine the risks that we are will
ing to take
in pursuit of our
\n
strategy and the development of a sustainable business:
\n
\u2022
Risk capacity is the maximum level of risk the Group can
\n
assume, given its current capabil
it
ies and resources, before
\n
breaching constraints determined by capital and liqu
id
ity
\n
requirements or the internal operational environment, or
\n
otherwise fail
ing to meet the expectat
ions of regulator and
\n
law enforcement agencies.
\n
\u2022
RA is de\ufb01ned by the Group and approved by the Board.
\n
It is the boundary for the risk that the Group is will
ing to
\n
undertake to achieve its strategic object
ives and corporate
\n
plan. We set RA to enable us to grow sustainably while
\n
managing our risks, giv
ing con\ufb01dence to our stakeholders.
\n
The Group RA is supplemented by risk control tools such as
\n
granular level lim
its, pol
ic
ies, and standards to ma
inta
in the
\n
Group\u2019s risk pro\ufb01le with
in approved RA.
\n
The Board is responsible for approving the RA Statements,
\n
which are underpinned by a set of \ufb01nanc
ial and operat
ional
\n
control parameters known as RA metrics and their associated
\n
thresholds. These set boundaries for the aggregate risk
\n
exposures that can be taken across the Group.
\n
The Group RA is reviewed bi-annually to ensure that it is \ufb01t for
\n
purpose and aligned with strategy, with focus given to new or
\n
emerging risks.
\n
Risk Appetite Statement
\n
The Group\u2019s objective
is to not compromise adherence with its
\n
RA in order to pursue revenue growth or higher returns.
\n
See the table on page 198 for the set of RA Statements.
\n
Stress testing
\n
The objective of stress test
ing is to support the Group in
\n
assessing that it:
\n
\u2022
does not have exposure to excessive risk concentrations
\n
that could produce unacceptably high losses under severe
\n
but plausible scenarios
\n
\u2022
has suf\ufb01cient \ufb01nancial resources to w
ithstand severe but
\n
plausible scenarios
\n
\u2022
has the \ufb01nancial \ufb02ex
ib
il
ity to respond to extreme but
\n
plausible scenarios
\n
\u2022
understands key business model risks and considers what
\n
kind of event might crystallise those risks \u2013 even if extreme
\n
and with a low likel
ihood of occurr
ing
\n
\u2022
ident
i\ufb01es, as requ
ired, actions to mit
igate the l
ikel
ihood or
\n
impact of those events
\n
\u2022
has set RA metrics at appropriate levels.
\n
Enterprise stress tests incorporate capital and liqu
id
ity
\n
adequacy stress tests, includ
ing recovery and resolut
ion,
\n
as well as reverse stress tests.
\n
Stress tests are performed at the Group, country, business,
\n
and portfolio level under a wide range of risks and at varying
\n
degrees of severity. Unless specif
ically set by the regulator,
\n
scenario design is a bespoke process that aims to explore risks
\n
that can adversely impact the Group.
\n
The Board delegates approval of the Bank of England (BoE)
\n
stress test submiss
ions to the Board R
isk Committee (BRC),
\n
which reviews the recommendations from the GRC. Based on
\n
the stress test results, the Group Chief Financ
ial Of\ufb01cer (GCFO)
\n
and GCRO can recommend strategic actions to the Board to
\n
ensure that the Group\u2019s strategy remains with
in RA.
\n
In addit
ion, analys
is is run at the PRT level to assess specif
ic
\n
risks and concentrations that the Group may be exposed to.
\n
These include qualitat
ive assessments such as stress
ing of
\n
credit sectors or portfolios, and quantitat
ive assessments
\n
such as potential losses from severe but plausible market risk
\n
scenarios or internal stressed liqu
id
ity metrics.
\n\n
Stress testing plays a crit
ical role
in assessing the potential impact on portfolio values of extreme but plausible scenarios,
\n
leading to potential losses typically much larger than those predicted by the Value at Risk (VaR) model. The Group uses
\n
histor
ical and forward-look
ing scenarios. A common set of scenarios is used across all legal entit
ies complemented
in some
\n
cases with entity-specif
ic scenar
ios. RA for market risk stress losses is set at the Group as well as legal entity level.
\n
Non-\ufb01nancial r
isk types are also stressed to assess the necessary capital requirements under the Operational and
\n
Technology RTF.
\n
The Group has also undertaken a number of Climate Risk stress tests, both those mandated by regulators as well as
\n
management scenarios.
\n
Princ
ipal R
isk Types
\n
PRTs are those risks that are inherent in our strategy and business model and have been formally de\ufb01ned in the Group\u2019s ERMF.
\n
These risks are managed through dist
inct RTFs wh
ich are approved by the GCRO.
\n
The PRTs and associated RA Statements are reviewed annually. The table below shows the Group\u2019s current PRTs, their de\ufb01n
it
ion
\n
and RA Statement.
\n\n \n
Princ
ipal R
isk Types
De\ufb01nit
ion
Risk Appetite Statement
Credit Risk
Potential for loss due to failure of a counterparty to
The Group manages its credit exposures following
meet its agreed obligat
ions to pay the Group.
the princ
iple of d
ivers
i\ufb01cation across products,
geographies, client segments and industry sectors.
Traded Risk
Potential for loss resulting from activ
it
ies undertaken
The Group should control its \ufb01nanc
ial markets
by the Group in \ufb01nanc
ial markets.
activ
it
ies to ensure that market and counterparty
credit risk losses do not cause material damage to
the Group\u2019s franchise.
Treasury Risk
Potential for insuff
ic
ient capital, liqu
id
ity, or funding
The Group should mainta
in suf\ufb01cient cap
ital, liqu
id
ity
to support our operations, the risk of reductions in
and funding to support its operations, and an interest
earnings or value from movements in interest rates
rate pro\ufb01le ensuring that the reductions in earnings
impact
ing bank
ing book items and the potential for
or value from movements in interest rates impact
ing
losses from a shortfall in the Group\u2019s pension plans.
banking book items does not cause material damage
to the Group\u2019s franchise. In addit
ion, the Group should
ensure its pension plans are adequately funded.
Operational and
Potential for loss resulting from inadequate or failed
The Group aims to control operational and
Technology Risk
internal processes, technology events, human error,
technology risks to ensure that operational losses
or from the impact of external events (includ
ing
(\ufb01nancial or reputat
ional), includ
ing any related to the
legal risks).
conduct of business matters, do not cause material
damage to the Group\u2019s franchise.
Information and Cyber
Risk to the Group\u2019s assets, operations, and
The Group aims to mit
igate and control ICS r
isks
Security (ICS) Risk
ind
iv
iduals due to the potential for unauthorised
to ensure that inc
idents do not cause the Bank
access, use, disclosure, disrupt
ion, mod
if
icat
ion,
material harm, business disrupt
ion, \ufb01nancial loss
or destruction of informat
ion assets and/or
or reputational damage \u2013 recognis
ing that wh
ile
informat
ion systems.
inc
idents are unwanted, they cannot be ent
irely
avoided.
Financ
ial Cr
ime Risk
4
Potential for legal or regulatory penalties, material
The Group has no appetite for breaches of laws and
\ufb01nancial loss or reputat
ional damage resulting
regulations related to Financ
ial Cr
ime, recognis
ing
from the failure to comply with applicable laws
that while inc
idents are unwanted, they cannot be
and regulations relating to internat
ional sanct
ions,
entirely avoided.
anti-money laundering and anti-bribery and
corruption, and fraud.
Compliance Risk
Potential for penalties or loss to the Group or for
The Group has no appetite for breaches of laws and
an adverse impact to our clients, stakeholders
regulations related to regulatory non-compliance;
or to the integr
ity of the markets we operate
in
recognis
ing that wh
ile inc
idents are unwanted, they
through a failure on our part to comply with laws,
cannot be entirely avoided.
or regulations.
Environmental, Social
Potential or actual adverse impact on the
The Group aims to measure and manage \ufb01nanc
ial
and Governance
environment and/or society, the Group\u2019s \ufb01nanc
ial
and non-\ufb01nancial r
isks aris
ing from cl
imate change,
and Reputational
performance, operations, or the Group\u2019s name,
reduce emiss
ions
in line with our net zero strategy
(ESGR) Risk
brand or standing, aris
ing from env
ironmental,
and protect the Group from material reputational
social or governance factors, or as a result of the
damage by upholding responsible conduct and
Group\u2019s actual or perceived actions or inact
ions.
striv
ing to do no s
ign
i\ufb01cant env
ironmental and
social harm.
Model Risk
Potential loss that may occur because of decis
ions
The Group has no appetite for material adverse
or the risk of misest
imat
ion that could be princ
ipally
impl
icat
ions aris
ing from m
isuse of models or errors
based on the output of models, due to errors in
in the development or implementat
ion of models;
the development, implementat
ion, or use of
while accepting some model uncertainty.
such models.
\n
4
Fraud forms part of the Financ
ial Cr
ime RA Statement but, in line with market practice, does not apply a zero-tolerance approach.
\n
As of November 2024, the Climate Risk RA Statement was integrated into the ESGR PRT.
\n\n
ERMF effectiveness reviews
\n
The GCRO is responsible for annually af\ufb01rm
ing the
\n
effectiveness of the ERMF to the BRC via an effectiveness
\n
review. This review is based on the princ
iple of ev
idence-
\n
based self-assessments for all the RTFs and relevant polic
ies.
\n
A top-down review and challenge of the results is conducted
\n
by the GCRO with all RFOs and an opin
ion on the
internal
\n
control environment is provided by Internal Audit.
\n
The ERMF effectiveness review measures year-on-year
\n
progress. The key outcomes of the 2024 review are:
\n
\u2022
Continued focus on embedding the ERMF across the
\n
organisat
ion.
\n
\u2022
Financ
ial r
isks continue to be effectively managed, and the
\n
Group is making good progress in embedding non-\ufb01nanc
ial
\n
risk management.
\n
\u2022
Self-assessments performed in branches and banking
\n
subsid
iar
ies re\ufb02ect the embeddedness of the ERMF.
\n
Country and cluster risk committees continue to play an
\n
active role in overseeing and managing risks across our
\n
footprint markets.
\n
Ongoing effectiveness reviews allow for a structured
\n
approach to ident
ify
improvement opportunit
ies and bu
ild
\n
plans to address them.
\n
In 2025, the Group aims to further strengthen its risk
\n
management practices by improv
ing the management of
\n
non-\ufb01nancial r
isks with
in
its businesses, functions and across
\n
our footprint. As the regulatory environment continuously
\n
changes, the Group constantly monitors regulatory
\n
developments and take proactive actions for compliance.
\n
Executive and Board risk oversight
\n
Overview
\n
The corporate governance and committee structure helps
\n
the Group to conduct our business. The Board has ultimate
\n
responsib
il
ity for risk management and approves the ERMF
\n
based on the recommendation of the BRC, which also
\n
recommends the Group RA Statement for all PRTs and other
\n
risks. In addit
ion to the BRC and Aud
it Committee, the Culture
\n
and Sustainab
il
ity Committee oversees the Group\u2019s culture
\n
and key sustainab
il
ity prior
it
ies.
\n
See
page 113
for the Board and committee governance structure.
\n
Group Risk Committee
\n
The GRC, which derives its authority from the GCRO, is responsible for ensuring the effective management of risk throughout
\n
the Group in support of the Group\u2019s strategy. The GCRO chairs the GRC, whose members are drawn from the Group
\n
Management Team. The GRC oversees the effective implementat
ion of the ERMF for the Group,
includ
ing the delegat
ion
\n
of any part of its authorit
ies to appropr
iate ind
iv
iduals or sub-committees.
\n\n \n
Group Risk Committee
sub-committees
Chair
Roles and responsib
il
it
ies
Group Non-Financ
ial R
isk
Global Head, Operational,
Governs the in-scope non-\ufb01nanc
ial r
isks throughout the Group in support
Committee (GNFRC)
Technology and Cyber Risk
of the ERMF and the Group\u2019s strategy.
Group Financ
ial Cr
ime Risk
Group Head, CFCR
Ensures that the Financ
ial Cr
ime Risk pro\ufb01le (excluding Fraud Risk and
Committee (GFCRC)
Secondary Reputational Risk aris
ing from F
inanc
ial Cr
ime Risk) is
managed with
in RA and pol
ic
ies.
Group Responsib
il
ity and
GCRO
Ensures the effective management of Reputational and Sustainab
il
ity
Reputational Risk Committee
Risk across the Group. This includes provid
ing overs
ight of matters aris
ing
(GRRRC)
from clients, products, transactions and strategic coverage-related
decis
ions and matters escalated by the respect
ive RFOs.
International Financ
ial
Co-chaired by the Global
Ensures the effective management of expected credit loss (ECL)
Reporting Standards (IFRS) 9
Head Enterprise Risk
computations, as well as stage allocation of \ufb01nanc
ial assets for quarterly
Impairment Committee (IIC)
Management (ERM) and
\ufb01nancial report
ing.
Group Head, Central Finance
Model Risk Committee
Global Head, ERM
To support the Group strategy by ensuring the effective measurement
(MRC)
and management of Model Risk in line with internal polic
ies and
model RA.
Investment Committee
Global Head of Stressed
Ensures the optim
ised w
ind-down of the Group\u2019s non-core direct
Assets Risk
investment activ
it
ies in equit
ies, quas
i-equit
ies (exclud
ing mezzanine),
funds and other alternative investments (excluding debt/debt-like
instruments).
SC Ventures (SCV) Risk
CRO, SCV who receives
Oversees the effective management of risk throughout SCV and the
Committee
authority directly from the
portfolio of controlled entit
ies operat
ing under SCV.
GCRO
Climate Risk Management
Global Head, ERM
Oversees the effective implementat
ion of the Group\u2019s Cl
imate Risk
Committee (CRMC)
workplan, includ
ing relevant regulatory requ
irements. This includes
embedding Climate Risk and net zero oversight across Group businesses,
as part of the Group\u2019s commitment to manage Climate Risk related
\ufb01nancial and non-\ufb01nancial r
isks.
Regulatory Interpretation
Co-chaired by the Global
Provides oversight of material regulatory interpretat
ions for the Cap
ital
Committee (RIC)
Head ERM and Group Head,
Requirements Regulation (as amended by UK legislat
ion), the Prudent
ial
Central Finance
Regulatory Authority (PRA) rulebook and other relevant regulations
impact
ing Group regulatory cap
ital calculations and reporting. The
areas and risk types in scope are credit risk, traded risk, operational risk,
large exposures, leverage ratio and securit
isat
ion.
\n\n\n \n
Group Risk Committee
sub-committees
Chair
Roles and responsib
il
it
ies
Dig
ital Assets R
isk
CRO, SC Ventures & Global
Oversees effective risk management of the Dig
ital Assets (DA) R
isk
Committee (DRC)
Head, Dig
ital Asset R
isk
pro\ufb01le of the Group. This includes provid
ing overs
ight and subject matter
expertise of DA Risk matters across the PRTs.
Corporate & Investment
Co-Heads CRO CIB and CRO,
Ensures the effective management of \ufb01nanc
ial r
isk throughout CIB in
Banking Financ
ial R
isk
ASEAN & South Asia
support of the Group\u2019s strategy.
Committee (CIBFRC)
Wealth & Retail Banking
Chief Risk Of\ufb01cer, WRB &
Ensures the effective management of risk throughout WRB in support
Risk Committee (WRBRC)
GCNA
of the Group\u2019s strategy.
HK & GCNA Risk Committee
CRO, Hong Kong & GCNA
These committees ensure the effective management of risk in the
(HK&GCNA RC)
clusters in support of the Group\u2019s strategy.
SG & ASEAN Risk Committee
CRO, Singapore & ASEAN
(SG&ASEAN RC)
Standard Chartered Bank
CRO, India & South Asia
(SCB) India Country Risk
Committee (CRC & CNFRC)
UK & Europe Risk Committee
CRO & Chief Credit Of\ufb01cer,
(UK & ERC)
Europe
Americas Risk Committee
CRO, Americas
(ARC)
Middle East and Pakistan
CRO & Regional CCO AME
Risk Committee (MEPRC)
Africa Risk Committee
CRO & Regional CCO AME
\n
Group Asset and Liab
il
ity Committee
\n
The Group Asset and Liab
il
ity Committee (GALCO) is chaired
\n
by the GCFO. Its members are drawn princ
ipally from the
\n
Management Team. GALCO is responsible for determin
ing
\n
the Group\u2019s balance sheet strategy and ensuring that, in
\n
executing the Group\u2019s strategy, the Group operates with
in
\n
RA and regulatory requirements relating to capital, loss-
\n
absorbing capacity, liqu
id
ity, leverage, Interest Rate Risk in the
\n
Banking Book (IRRBB), Banking Book Basis Risk and Structural
\n
Foreign Exchange Risk. It also monitors the structural impact
\n
of decis
ions around susta
inable \ufb01nance, net zero and climate
\n
risk. GALCO is also responsible for ensuring that internal and
\n
external recovery planning requirements are met.
\n\n
Princ
ipal r
isks
\n
We manage and control our PRTs through
\n
dist
inct RTFs, pol
ic
ies and RA.
\n
See
page 198
for the Group\u2019s current PRT de\ufb01nit
ions and
\n
Risk Appetite Statements.
\n
Changes impact
ing PRTs
in 2024
\n
In May 2024, to further align with our risk strategy and
\n
promote consistency and ef\ufb01c
iency, the Operat
ional and
\n
Technology Risk and Information and Cyber Security Risk
\n
teams were unif
ied under the Operat
ional, Technology and
\n
Cyber Risk (OTCR) function. The PRT disclosures and RA
\n
Statements for ICS Risk and Operational and Technology
\n
Risk remain separate.
\n
Following Tracey McDermott\u2019s retirement as Group Head,
\n
Conduct, Financ
ial Cr
ime and Compliance at the end of
\n
2024, David Howes has been appointed as Group Head,
\n
Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
\n
from 1 January 2025 and will assume Senior Manager
\n
responsib
il
it
ies for F
inanc
ial Cr
ime,
includ
ing the Group Ent
ity
\n
Senior Manager Function, Compliance Oversight Function
\n
(SMF16) and Money Laundering Reporting Of\ufb01cer (MLRO)
\n
role (SMF 17).
\n
Credit Risk
\n
Mit
igat
ion
\n
Segment-specif
ic pol
ic
ies are
in place for Corporate &
\n
Investment Banking (CIB) and Wealth & Retail Banking
\n
(WRB) which set the princ
iples that must be followed for the
\n
end-to-end credit process covering in
it
iat
ion, assessment,
\n
documentation, approval, monitor
ing and governance.
\n
The Group also sets out standards for the elig
ib
il
ity,
\n
enforceabil
ity, and effect
iveness of mit
igat
ion arrangements.
\n
Potential losses are mit
igated us
ing a range of tools, such
\n
as collateral, netting agreements, credit insurance, credit
\n
derivat
ives and guarantees.
\n
Risk mit
igants are carefully assessed for the
ir market value,
\n
legal enforceabil
ity, correlat
ion, and counterparty risk of the
\n
protection provider. Collateral is valued prior to drawdown
\n
and regularly thereafter as required, to re\ufb02ect current market
\n
condit
ions, the probab
il
ity of recovery and the per
iod of time
\n
to realise the collateral in the event of liqu
idat
ion. The Group
\n
also seeks to divers
ify
its collateral holdings across asset
\n
classes and markets.
\n
Where guarantees, credit insurance, standby letters of
\n
credit or credit derivat
ives are used as Cred
it Risk mit
igat
ion,
\n
the creditworth
iness of the protect
ion provider is assessed
\n
and monitored using the same credit process applied to
\n
the obligor.
\n
Monitor
ing
\n
The Group regularly monitors credit exposures, portfolio
\n
performance, external trends and emerging risks that
\n
may impact risk management outcomes. Internal risk
\n
management reports that are presented to risk committees
\n
contain informat
ion on key pol
it
ical and econom
ic trends
\n
across major portfolios and countries, portfolio delinquency
\n
and loan impa
irment performance.
\n
In CIB, clients and portfolios are subject to addit
ional rev
iew
\n
when they display signs of actual or potential weakness; for
\n
example, where there is a decline in the client\u2019s posit
ion w
ith
in
\n
their industry, \ufb01nanc
ial deter
iorat
ion, a breach of covenants,
\n
or non-performance of an obligat
ion w
ith
in the st
ipulated
\n
period. Such accounts are subject to a dedicated process
\n
overseen by the Credit Issues Committee in the relevant
\n
countries where client account strategies and credit grades
\n
are re-evaluated. In addit
ion, remed
ial actions can be
\n
undertaken, such as placing accounts on early alert for
\n
exposure reduction, security enhancement or exit
ing the
\n
account. Credit-impa
ired accounts are managed by the
\n
Group\u2019s special
ist recovery un
it, Stressed Asset Group (SAG),
\n
which is independent of the Client Coverage/Relationsh
ip
\n
Managers. The Stressed Asset Risk (SAR) Group is the second
\n
line risk unit.
\n
On an annual basis, senior members from the CIB business
\n
and Risk partic
ipate
in a more extensive portfolio review
\n
(known as the \u2018industry portfolio review\u2019) for certain industry
\n
groups. In addit
ion to a rev
iew of the portfolio informat
ion,
\n
this industry portfolio review incorporates industry outlook,
\n
key elements of the business strategy, RA, credit pro\ufb01le and
\n
emerging and horizon risks. A summary of these industry
\n
portfolio reviews is also shared with the CIB Financ
ial R
isk
\n
Committee.
\n
For WRB, exposures and collateral monitor
ing are performed
\n
at the counterparty and/or portfolio level across different
\n
client segments to ensure transactions and portfolio
\n
exposures remain with
in RA. Portfol
io delinquency trends are
\n
also monitored. Accounts that are past due (or perceived as
\n
high risk but not yet past due) are subject to collections or
\n
recovery processes managed by a special
ist
independent
\n
function. In some countries, aspects of collections and
\n
recovery activ
it
ies are outsourced. For discret
ionary lend
ing
\n
portfolios, sim
ilar processes to those of CIB are followed.
\n
Any material in-country developments that may impact
\n
sovereign ratings are monitored closely by Country Risk with
in
\n
the ERM function. The Country Risk Early Warning system, a
\n
triage-based risk ident
i\ufb01cation system, categor
ises countries
\n
based on a forward-looking view of possible downgrades and
\n
the potential incremental risk-weighted assets (RWA) impact.
\n
In addit
ion, an
independent Credit Risk review team with
in the
\n
ERM function performs assessments of the Credit Risk pro\ufb01les
\n
at various portfolio levels. They focus on selected countries
\n
and segments through deep dives, comparative analysis,
\n
and review and challenge of the basis of credit approvals.
\n
The review aims to ensure that the evolving Credit Risk pro\ufb01les
\n
of CIB and WRB are well managed with
in RA and pol
ic
ies.
\n
Results of the reviews are reported to the GRC and BRC.
\n
Credit rating and measurement
\n
All credit proposals are subject to a robust credit risk
\n
assessment. It includes a comprehensive evaluation of the
\n
client\u2019s credit quality, includ
ing w
ill
ingness, ab
il
ity, and
\n
capacity to repay. The primary lending considerat
ion for
\n
counterparties is based on their credit quality and operating
\n
cash \ufb02ows, while for ind
iv
idual borrowers it is based on
\n
personal income or wealth. The risk assessment gives due
\n
considerat
ion to the cl
ient\u2019s liqu
id
ity and leverage posit
ion.
\n
Where applicable, the assessment includes a detailed
\n
analysis of the Credit Risk mit
igat
ion arrangements to
\n
determine the level of reliance on such arrangements as the
\n
secondary source of repayment in the event of a sign
i\ufb01cant
\n
deteriorat
ion
in a client\u2019s credit quality leading to default.
\n
Client income, net worth, and the liqu
id
ity of asset by class
\n
are considered for overall risk assessment for wealth lending.
\n
Wealth lending credit lim
its are subject to the ava
ilab
il
ity of
\n
qualif
ied collateral.
\n\n
A standard alphanumeric Credit Risk grade system is used for
\n
CIB, whereby credit grades 1 to 12 are assigned to performing
\n
customers, and credit grades 13 and 14 are assigned to
\n
non-performing or defaulted customers.
\n
WRB internal ratings-based portfolios use applicat
ion and
\n
behavioural credit scores that are calibrated to generate a
\n
probabil
ity of default. The R
isk Decis
ion Framework uses a
\n
credit rating system to de\ufb01ne the portfolio/new booking
\n
segmentation, shape and decis
ion cr
iter
ia for the unsecured
\n
consumer business segment.
\n
Advanced Internal Ratings-Based (AIRB) models cover the
\n
majority of our exposures and are used
in assessing risks at a
\n
customer and portfolio level, setting strategy, and optim
is
ing
\n
our risk-return decis
ions. The Model R
isk Committee (MRC)
\n
approves material internal ratings-based risk measurement
\n
models. Prior to review and approval, all internal ratings-
\n
based models are validated by an independent model
\n
validat
ion team. Rev
iews are also triggered if the
\n
performance of a model deteriorates materially against
\n
predetermined thresholds, measured through the ongoing
\n
model performance monitor
ing process.
\n
We adopt the AIRB approach under the Basel regulatory
\n
framework to calculate Credit Risk capital requirements for
\n
the majority of our exposures. The Group has also establ
ished
\n
a global programme to assess capital requirements necessary
\n
to be implemented to meet the latest revised Basel III
\n
regulation (referred to as Basel 3.1 or Basel IV).
\n
Credit Concentration Risk
\n
Credit Concentration Risk for CIB is managed through
\n
concentration lim
its cover
ing large exposure lim
it to a s
ingle
\n
counterparty or a group of connected counterparties (based
\n
on control and economic dependence criter
ia), or at portfol
io
\n
level for multiple exposures that are closely correlated.
\n
Portfolio RA metrics are set, where appropriate, by industry,
\n
products, tenor, collateralisat
ion level, top cl
ients, and
\n
exposure to holding companies.
\n
For concentrations that are material at a Group level,
\n
breaches and potential breaches are monitored by the
\n
respective governance committees and reported to the
\n
GRC and BRC.
\n
Credit impa
irment
\n
For CIB, in line with the regulatory guidel
ines, Stage 3 expected
\n
credit loss (ECL) is considered when an obligor is more than
\n
90 days past due on any amount payable to the Group, or
\n
the obligor has symptoms of unlikel
iness to pay
its credit
\n
obligat
ions
in full as they fall due. These credit-impa
ired
\n
accounts are managed by SAG.
\n
In WRB, loans to ind
iv
iduals and small businesses are
\n
considered credit-impa
ired as soon as any payment of
\n
interest or princ
ipal
is 90 days overdue or they meet other
\n
objective ev
idence of impa
irment, such as bankruptcy, debt
\n
restructuring, fraud, or death, with unlikely continuat
ion of
\n
contractual payments. Financ
ial assets are wr
itten off, in the
\n
amount that is determined to be irrecoverable, when they
\n
meet condit
ions set such that emp
ir
ical ev
idence suggests
\n
the client is unlikely to meet their contractual obligat
ions,
\n
or a loss of princ
ipal
is reasonably expected.
\n
Estimat
ing the amount and t
im
ing of future recover
ies
\n
involves sign
i\ufb01cant judgement and cons
iders the assessment
\n
of matters such as future economic condit
ions and the value
\n
of collateral, for which there may not be a readily accessible
\n
market. The total amount of the Group\u2019s impa
irment
\n
provis
ion
is inherently uncertain, being sensit
ive to changes
in
\n
economic and credit condit
ions across the markets
in which
\n
the Group operates.
\n
Further details on sensit
iv
ity analysis of ECL under IFRS 9 can be
\n
found in the \u2018Risk pro\ufb01le\u2019 section on
pages 236 to 246
.
\n
Underwrit
ing
\n
The underwrit
ing of secur
it
ies and loans
is in scope of the
\n
CIB\u00a0RA. Addit
ional l
im
its approved by the GCRO are set on
\n
sectoral concentration and maximum holding period.
\n
The Underwrit
ing Comm
ittee, under the authority of the
\n
GCRO, approves ind
iv
idual proposals to underwrite new
\n
security issues and loans for our clients. In July 2024, oversight
\n
of the Underwrit
ing Comm
ittee was transferred from Traded
\n
Risk to CIB Credit Risk.
\n
Traded Risk
\n
Mit
igat
ion
\n
Traded Risk lim
its are de\ufb01ned at a level wh
ich aims to ensure
\n
that the Group remains with
in RA. The Traded R
isk Policy
\n
sets the princ
iples that must be followed for the end-to-end
\n
traded risk management process includ
ing l
im
it sett
ing, risk
\n
capture and measurement, lim
it mon
itor
ing and escalat
ion,
\n
risk mit
igat
ion and stress testing. Polic
ies are rev
iewed and
\n
approved by the Global Head, Traded Risk Management
\n
period
ically to ensure the
ir ongoing effectiveness.
\n
Market Risk measurement
\n
The Group uses a VaR model to measure the risk of losses
\n
aris
ing from future potent
ial adverse movements in market
\n
rates, prices, and volatil
it
ies. VaR is a quantitat
ive measure
\n
of market risk that applies recent histor
ical market cond
it
ions
\n
to estimate the potential future loss in market value that
\n
will not be exceeded in a set time period at a set statist
ical
\n
con\ufb01dence level.
\n
VaR provides a consistent measure that can be applied across
\n
trading businesses and products over time and can be set
\n
against actual daily trading pro\ufb01t and loss outcomes.
\n
For day-to-day risk management, VaR is calculated as at the
\n
close of business, generally at UK time for expected market
\n
movements over one business day and to a con\ufb01dence level
\n
of 97.5 per cent. Intra-day risk levels may vary from those
\n
reported at the end of the day.
\n
The Group applies two VaR methodologies:
\n
\u2022
Histor
ical s
imulat
ion: th
is involves the revaluation of all
\n
exist
ing pos
it
ions to re\ufb02ect the effect of h
istor
ically
\n
observed changes in Market Risk factors on the valuation of
\n
the current portfolio. This approach is applied for general
\n
Market Risk factors and the major
ity of spec
if
ic (cred
it
\n
spread) risk factors. The enhanced Volatil
ity Scal
ing VaR
\n
(VSV) model went live in January 2025, where risk factors\u2019
\n
returns are scaled to re\ufb02ect histor
ical volat
il
ity. The VSV
\n
model is more responsive to volatil
ity changes observed
in
\n
the market.
\n
\u2022
Monte Carlo simulat
ion: th
is methodology is sim
ilar to
\n
histor
ical s
imulat
ion but w
ith considerably more input risk
\n
factor observations. These are generated by random
\n
sampling techniques, but the results retain the essential
\n
variab
il
ity and correlations of histor
ically observed r
isk
\n
factor changes. This approach is applied for capturing
\n
the id
iosyncrat
ic credit spread risk factors.
\n
As an input to regulatory capital, trading book VaR is
\n
calculated for expected movements over 10 business days
\n
and to a con\ufb01dence level of 99 per cent. Some types of
\n
market risk are not captured in the regulatory VaR measure
\n
and these risks not in VaR are subject to capital add-ons.
\n
An analysis of VaR results in 2024 is available in the \u2018Risk pro\ufb01le\u2019
\n
section
(pages 247 to 249)
.
\n\n
Counterparty Credit Risk measurement
\n
A Potential Future Exposure (PFE) model is used to measure
\n
the credit exposure aris
ing from the pos
it
ive mark-to-market
\n
of traded products. The PFE model provides a quantitat
ive
\n
estimate of future potential movements in market rates,
\n
prices, and volatil
it
ies at a certain con\ufb01dence level over
\n
different time horizons based on the tenor of the transactions.
\n
The Group applies two PFE methodologies: simulat
ion
\n
based, which is predominantly used, and an add-on based
\n
PFE methodology.
\n
Monitor
ing
\n
Traded Risk Management monitors the overall portfolio risk
\n
and ensures that it is with
in spec
if
ied l
im
its and therefore RA.
\n
Lim
its are typ
ically reviewed twice a year.
\n
All material Traded Risks are monitored daily against
\n
approved lim
its. Traded R
isk lim
its apply at all t
imes unless
\n
separate intra-day lim
its have been set.
\n
Treasury Risk
\n
Mit
igat
ion
\n
The Group develops polic
ies to address mater
ial Treasury
\n
Risks and aims to mainta
in
its risk pro\ufb01le with
in RA. In order
\n
to do this, metrics are set against Capital Risk, Liqu
id
ity and
\n
Funding Risk and IRRBB. Where appropriate, RA metrics are
\n
cascaded down to clusters and countries in the form of lim
its
\n
and management action triggers.
\n
Capital Risk
\n
In order to manage Capital Risk, strategic business and capital
\n
plans (Corporate Plan) are drawn up covering a \ufb01ve-year
\n
horizon and are approved by the Board annually. The plan
\n
ensures that adequate levels of capital, includ
ing loss-
\n
absorbing capacity, and an ef\ufb01c
ient m
ix of the different
\n
components of capital are mainta
ined to support our strategy
\n
and business plans.
\n
Treasury is responsible for the ongoing assessment of the
\n
demand for capital and the updating of the Group\u2019s
\n
capital plan.
\n
RA metrics includ
ing cap
ital, leverage, min
imum requ
irement
\n
for own funds and elig
ible l
iab
il
ity (MREL) and double
\n
leverage are assessed with
in the Corporate Plan to ensure
\n
that the strategy can be achieved with
in r
isk tolerances.
\n
Structural Foreign Exchange (FX) Risk
\n
The Group\u2019s structural FX posit
ion results from the Group\u2019s
\n
non-US dollar investment in the share capital and reserves of
\n
subsid
iar
ies and branches. The FX translation gains or losses
\n
are recorded in the Group\u2019s translation reserves with a direct
\n
impact on the Group\u2019s Common Equity Tier 1 ratio.
\n
The Group contracts hedges to manage its structural FX
\n
posit
ion
in accordance with the RA, and as a result the
\n
Group has taken net investment hedges to partially cover
\n
its exposure to certain non-US dollar currencies to mit
igate
\n
the FX impact of such posit
ions on
its capital ratios.
\n
Our structural foreign exchange exposures can be found
\n
on
page 249
.
\n
Liqu
id
ity and Funding Risk
\n
At Group, cluster and country level we implement various
\n
business-as-usual and stress risk metrics to monitor and
\n
manage Liqu
id
ity and Funding risk. This ensures that the
\n
Group mainta
ins an adequate and well-d
ivers
i\ufb01ed l
iqu
id
ity
\n
buffer, as well as a stable funding base, to meet its liqu
id
ity
\n
and funding regulatory requirements.
\n
The risk management approach and RA are assessed
\n
annually through the Internal Liqu
id
ity Adequacy Assessment
\n
Process. A funding plan is also developed for ef\ufb01c
ient l
iqu
id
ity
\n
projections to ensure that the Group
is adequately funded
\n
in the required currencies, to meet its obligat
ions and cl
ient
\n
funding needs. The funding plan is part of the overall
\n
Corporate Plan process align
ing to the cap
ital requirements.
\n
Further detail on Liqu
id
ity and Funding Risk can be found
\n
on
pages 250 to 253
.
\n
Interest Rate Risk in the Banking Book
\n
This risk arises from differences in the repric
ing pro\ufb01le,
interest
\n
rate basis, and optional
ity of bank
ing book assets, liab
il
it
ies
\n
and off-balance sheet items. IRRBB represents an economic
\n
and commercial risk to the Group and its capital adequacy.
\n
The Group monitors IRRBB against the RA.
\n
Further detail on IRRBB can be found on
page 254
.
\n
Pension Risk
\n
Pension Risk is the potential for loss due to having to meet an
\n
actuarially assessed shortfall in the Group\u2019s pension plans.
\n
Pension Risk arises from the Group\u2019s contractual or other
\n
liab
il
it
ies w
ith respect to its occupational pension plans or
\n
other long-term bene\ufb01t obligat
ion. For a funded plan,
it
\n
represents the risk that addit
ional contr
ibut
ions w
ill need to
\n
be made because of a future funding shortfall. For unfunded
\n
obligat
ions,
it represents the risk that the cost of meeting
\n
future bene\ufb01t payments is greater than currently antic
ipated.
\n
The Pension Risk is monitored against the RA and reported
\n
to the GRC. The RA metric is calculated as the total capital
\n
requirement (includ
ing both P
illar 1 and Pillar 2A capital) in
\n
respect of Pension Risk, expressed as a number of basis points
\n
of RWA.
\n
Recovery and resolution planning
\n
In line with PRA requirements, the Group mainta
ins a Recovery
\n
Plan, which is a live document to be used by management in
\n
the event of stress in order to restore the Group to a stable
\n
and sustainable posit
ion. The Recovery Plan
includes a set of
\n
recovery ind
icators, an escalat
ion framework, and a set of
\n
management actions capable of being implemented during
\n
a stress. A Recovery Plan is also mainta
ined w
ith
in each major
\n
entity, and all Recovery Plans are subject to period
ic \ufb01re-
\n
drill testing.
\n
As the UK resolution authority, the BoE set a single point of
\n
entry bail-in at the ultimate holding company level (Standard
\n
Chartered PLC) as the preferred resolution strategy for the
\n
Group. In support of this strategy, the Group has a set of
\n
capabil
it
ies, arrangements, and resources in place to
\n
mainta
in, test and
improve resolution capabil
it
ies, and
\n
continue to meet the required resolvabil
ity outcomes on an
\n
ongoing basis.
\n
Following the BoE\u2019s \ufb01rst resolvabil
ity assessment and publ
ic
\n
disclosure for major UK \ufb01rms in 2022, the Group submitted its
\n
Resolvabil
ity Self-Assessment Report to the BoE and PRA, and
\n
subsequently published its resolvabil
ity publ
ic disclosure in
\n
August 2024 as part of the second Resolvabil
ity Assessment
\n
Framework cycle.
\n\n
Monitor
ing
\n
On a day-to-day basis, Treasury Risk is managed by Treasury,
\n
Finance and country CEOs. The Group regularly reports and
\n
monitors Treasury Risk inherent in its business activ
it
ies and
\n
those that arise from internal and external events.
\n
Internal risk management reports covering the balance
\n
sheet and the capital and liqu
id
ity posit
ion are presented
\n
to the relevant country Asset and Liab
il
ity Committee.
\n
The reports contain key informat
ion on balance sheet trends,
\n
exposures against RA and supporting risk measures which
\n
enable members to make informed decis
ions around the
\n
overall management of the balance sheet. In addit
ion, an
\n
independent Treasury CRO with
in ERM rev
iews the prudency
\n
and effectiveness of Treasury Risk management.
\n
Pension Risk is managed by the Head of Pensions and Reward
\n
Analytics, and monitored by the Global Head, ERM on a
\n
period
ic bas
is.
\n
Operational and
\n
Technology Risk
\n
Mit
igat
ion
\n
The Operational and Technology RTF sets out the Group\u2019s
\n
overall approach to the management of Operational and
\n
Technology Risk in line with the Group\u2019s Operational and
\n
Technology RA. This is supported by the Risk and Control
\n
Self-Assessment (RCSA), which provides a systematic
\n
approach for ident
i\ufb01cation and assessment of operat
ional
\n
risks, includ
ing des
ign and operation of mit
igat
ing
\n
controls (applicable to all risks as per the Non-Financ
ial
\n
Risk Taxonomy).
\n
The RCSA is used to determine the design and operating
\n
effectiveness of each process, and requires:
\n
\u2022
the recording of end-to-end processes which deliver our
\n
key client journey and business outcomes
\n
\u2022
the ident
i\ufb01cation of r
isks to support the achievement of
\n
client and business outcomes
\n
\u2022
the assessment of inherent risk on the impact to client and
\n
business outcomes, and likel
ihood of occurrence
\n
\u2022
the design and monitor
ing of key controls to effect
ively
\n
and ef\ufb01ciently m
it
igate pr
ior
it
ised risks with
in acceptable
\n
levels and
\n
\u2022
the assessment of residual risk and timely treatment of
\n
elevated risks.
\n
Elevated Residual Risks require treatment plans to address
\n
the underlying causes and reduce the risks to with
in the RA.
\n
Monitor
ing
\n
To deliver services to clients and to partic
ipate
in the \ufb01nanc
ial
\n
services sector, the Group runs processes which are exposed
\n
to Operational and Technology risks. The Group prior
it
ises
\n
and manages risks which are sign
i\ufb01cant to our cl
ients and
\n
to the \ufb01nancial serv
ices sectors. The control ind
icators are
\n
regularly monitored to determine the Group\u2019s exposure to
\n
residual risk.
\n
The residual risk assessments and reporting of events form
\n
the Group\u2019s Operational and Technology Risk pro\ufb01le.
\n
The completeness of the Operational and Technology Risk
\n
pro\ufb01le ensures appropriate prior
it
isat
ion and t
imel
iness of
\n
risk decis
ions,
includ
ing r
isk acceptances with treatment
\n
plans for risks that exceed acceptable thresholds.
\n
The BRC is informed on adherence to Operational and
\n
Technology RA through metrics reported for selected risks.
\n
These metrics are monitored, and escalation thresholds are
\n
devised based on the material
ity and s
ign
i\ufb01cance of the
\n
risk. These Operational and Technology RA metrics are
\n
consolidated on a regular basis and reported at the relevant
\n
Group committees, provid
ing sen
ior management with the
\n
relevant informat
ion to
inform their risk decis
ions.
\n
Information and Cyber
\n
Security (ICS) Risk
\n
Mit
igat
ion
\n
ICS Risk is managed through the ICS RTF, compris
ing a r
isk
\n
assessment methodology and supporting policy, standards,
\n
and methodologies. The ICS Policy and standards are
\n
aligned to industry best practice models includ
ing the
\n
National Institute of Standards and Technology Cyber
\n
Security Framework and ISO 27001. We undertake an
\n
annual ICS Effectiveness Review to evaluate ICS Risk
\n
management practices in alignment with the ERMF.
\n
Monitor
ing
\n
The Group Chief Information Security Of\ufb01cer (CISO) function
\n
monitors the evolving threat landscape covering cyber
\n
threats, attack vectors and threat actors that could target the
\n
Group. This includes performing a threat-led risk assessment
\n
to ident
ify key threats,
in-scope applicat
ions and key controls
\n
required to ensure the Group remains with
in RA.
\n
The ICS Risk pro\ufb01les of all businesses, functions and countries
\n
are consolidated to present a holist
ic Group-level ICS R
isk
\n
pro\ufb01le for ongoing monitor
ing. Mandatory ICS learn
ing,
\n
phish
ing exerc
ises and role-specif
ic tra
in
ing support
\n
colleagues to monitor and manage this risk.
\n
During these reviews, the status of each risk is assessed
\n
against the Group\u2019s controls to ident
ify any changes to
\n
impact and likel
ihood, wh
ich affects the overall risk rating.
\n
The Group stress tests its cyber posture through extensive
\n
control testing and by executing offensive security testing
\n
exercises, includ
ing vulnerab
il
ity test
ing, code reviews,
\n
penetration tests and Red Team attack simulat
ion test
ing.
\n
This testing approach constantly stress tests the Group\u2019s
\n
defence and approach to cyber security. These show a wider
\n
picture of the Group\u2019s risk pro\ufb01le, leading to better vis
ib
il
ity on
\n
potential \u2018in \ufb02ight\u2019 risks. The Group also tracks remediat
ion of
\n
security matters ident
i\ufb01ed by external rev
iews, such as the
\n
BoE CBEST Threat Intelligence-Led Assessment and the
\n
Hong Kong Monetary Authority\u2019s (HKMA) Intelligence-led
\n
Cyber Attack Simulat
ion Test
ing (iCAST).
\n
The CISO and OTCR functions monitor the ICS Risk pro\ufb01le and
\n
ensure that breaches of RA are escalated to the appropriate
\n
governance committee or authority levels for remediat
ion
\n
and tracking.
\n\n
Financ
ial Cr
ime Risk
\n
Roles and responsib
il
it
ies
\n
The Group Head, CFCR is the Group\u2019s Compliance and
\n
Money-Laundering Reporting Of\ufb01cer and performs the
\n
Financ
ial Conduct Author
ity (FCA) controlled function
\n
and senior management function in accordance with
\n
requirements set out by the FCA, includ
ing those set out
\n
in their handbook on systems and controls.
\n
Mit
igat
ion
\n
The CFCR function is responsible for the establishment and
\n
maintenance of polic
ies, standards, and overs
ight of \ufb01rst line
\n
of defence controls to ensure continued compliance with
\n
\ufb01nancial cr
ime laws and regulations, and the mit
igat
ion
\n
of Financ
ial Cr
ime Risk. In this, the requirements of the
\n
Operational and Technology RTF are followed to ensure
\n
a consistent approach to the management of processes
\n
and controls.
\n
Financ
ial Cr
ime Risk management is built on a risk-based
\n
approach, meaning the risk management plans, processes,
\n
activ
it
ies, and resource allocations are determined according
\n
to the level of risk.
\n
Risk mit
igat
ion takes place through the process of
\n
ident
i\ufb01cation of new and amended regulat
ions and the
\n
implementat
ion of necessary process and control changes
\n
to address these.
\n
Monitor
ing
\n
The Group monitors enterprise-wide \ufb01nanc
ial cr
ime risks
\n
through the Financ
ial Cr
ime Risk Assessment. This is
\n
undertaken annually to assess the inherent \ufb01nanc
ial cr
ime
\n
risk exposures and the associated processes and controls by
\n
which these exposures are mit
igated.
\n
Financ
ial Cr
ime Risk controls are governed in line with the
\n
Operational and Technology RTF. The Group has a monitor
ing
\n
and reporting process in place for Financ
ial Cr
ime Risk, which
\n
includes escalation and reporting to the CFCR and relevant
\n
risk committees.
\n
While not a formal governance committee, the CFCR
\n
Oversight Group provides oversight of CFCR risks includ
ing
\n
the effective implementat
ion of the F
inanc
ial Cr
ime RTF.
\n
It also provides oversight, challenge and direct
ion to CFCR
\n
policy owners on material changes and posit
ions taken
in
\n
CFCR-owned polic
ies,
includ
ing
issues relating to regulatory
\n
interpretat
ion and Group\u2019s CFCR RA. The Regulatory
\n
Change Oversight Forum provides vis
ib
il
ity and overs
ight
\n
of material and/or complex large-scale regulatory change
\n
emanating from \ufb01nanc
ial serv
ices regulators impact
ing
\n
non-\ufb01nancial r
isks.
\n
Further details on how we manage \ufb01nanc
ial cr
ime can be
\n
found on
page 96
.
\n
Compliance Risk
\n
Roles and responsib
il
it
ies
\n
All activ
it
ies that the Group engages in must comply with the
\n
relevant country/local specif
ic and extraterr
itor
ial regulat
ions.
\n
Compliance Risk includes the risks associated with a failure
\n
to comply with all regulations that are applicable to the
\n
Group regardless of the issu
ing regulatory author
ity. Where
\n
Compliance Risk arises, or could arise, from failure to manage
\n
another PRT, the oversight and management processes for
\n
that specif
ic PRT must be followed, to ensure that effect
ive
\n
oversight and challenge of the \ufb01rst line of defence can be
\n
provided by the appropriate second line of defence function.
\n
Areas of regulation can be broadly div
ided
into two dist
inct
\n
categories: those issued by \ufb01nanc
ial serv
ice regulatory
\n
authorit
ies and those
issued by non-\ufb01nanc
ial serv
ice
\n
regulators. The Group is exposed to both categories of
\n
regulation, and roles and responsib
il
it
ies d
iffer depending
\n
on the category. For regulations issued by \ufb01nanc
ial serv
ices
\n
regulatory authorit
ies and other regulators that may
issue
\n
regulations pertain
ing to Compl
iance Risk, CFCR ident
i\ufb01es
\n
new and amended regulations as and when issued and
\n
communicates the relevant regulatory obligat
ions to the
\n
country RFO delegate. The areas where CFCR does not act
\n
in a second line of defence capacity are specif
ied
in the
\n
respective RTF with appropriate ownership.
\n
Each of the assigned second line of defence functions have
\n
responsib
il
it
ies,
includ
ing mon
itor
ing relevant regulatory
\n
developments from non-\ufb01nancial serv
ices regulators at
\n
both Group and country levels, policy development,
\n
implementat
ion, and val
idat
ion as well as overs
ight and
\n
challenge of \ufb01rst line of defence processes and controls.
\n
Mit
igat
ion
\n
The CFCR function is responsible for the establishment and
\n
maintenance of polic
ies, standards, and overs
ight of the \ufb01rst
\n
line of defence controls to ensure compliance with laws and
\n
regulations, and the mit
igat
ion of Compliance Risk. In this,
\n
the requirements of the Operational and Technology RTF are
\n
followed to ensure a consistent approach to the management
\n
of processes and controls.
\n
Monitor
ing
\n
The monitor
ing of controls des
igned to mit
igate the r
isk of
\n
regulatory non-compliance in processes is governed in line
\n
with the Operational and Technology RTF. Compliance Risk
\n
reporting includes escalation and reporting to the CFCR and
\n
relevant risk committees.
\n
While not a formal governance committee, the CFCR
\n
Oversight Group provides oversight of CFCR, risks includ
ing
\n
the effective implementat
ion of the Compl
iance RTF, and
\n
oversight, challenge and direct
ion to CFCR pol
icy owners on
\n
material changes and posit
ions taken
in CFCR-owned polic
ies,
\n
includ
ing
issues relating to regulatory interpretat
ion and the
\n
Group\u2019s CFCR RA. The Regulatory Change Oversight Forum
\n
provides vis
ib
il
ity and overs
ight of material and/or complex
\n
large-scale regulatory change emanating from \ufb01nanc
ial
\n
services regulators impact
ing non-\ufb01nancial r
isks.
\n\n
Environmental, Social
\n
and Governance and
\n
Reputational (ESGR)
\n
Risk
\n
Mit
igat
ion
\n
The ESGR RTF provides the overall risk management
\n
approach for Environmental, Social and Governance (ESG)
\n
and Reputational risks.
\n
The ESG Risk policy outlines the Group\u2019s commitment to
\n
integrat
ing ESG cons
iderat
ions
into its business, operations,
\n
and decis
ion-mak
ing process. The policy sets out the
\n
requirements for ident
ify
ing, assessing, and managing
\n
ESG risks, includ
ing Cl
imate Risk.
\n
The Reputational Risk policy sets out the princ
ipal sources
\n
of reputational risk driven by negative shifts in stakeholder
\n
perceptions, as well as the responsib
il
it
ies for manag
ing
\n
Reputational Risk aris
ing out of cl
ient onboarding and due
\n
dil
igence, from transact
ions, product design and product
\n
features, or strategic coverages such as exposure to sensit
ive
\n
industr
ies, markets, or
investments. Whenever potential
\n
for stakeholder concerns is ident
i\ufb01ed,
issues are subject to
\n
review and decis
ion by both the \ufb01rst and second l
ines of
\n
defence. The Reputational Risk policy also sets out the key
\n
considerat
ions for m
it
igat
ing greenwashing risk that can
\n
arise during product and/or deal lifecycle, sustainab
il
ity
\n
reporting and disclosures, and external campaigns related
\n
to sustainab
il
ity themes.
\n
Monitor
ing
\n
Exposure to reputational risks aris
ing from transact
ions,
\n
clients, products and strategic coverage is monitored
\n
through established triggers to prompt the appropriate
\n
risk-based considerat
ions and assessment by the \ufb01rst l
ine
\n
of defence and escalations to the second line of defence.
\n
Risk acceptance decis
ions and themat
ic trends are also
\n
reviewed on a period
ic bas
is.
\n
Exposure to ESG Risks is monitored through triggers
\n
embedded with
in the \ufb01rst l
ine of defence processes. The
\n
environmental and social risks are considered for clients and
\n
transactions via Environmental and Social Risk Assessments
\n
and/or Climate Risk Assessments (CRAs). Vendors that are
\n
presenting as high risk are assessed for modern slavery risk.
\n
Based on responses provided by the supplier at onboarding,
\n
those that meet the high-risk category-country combinat
ions
\n
are subjected to further risk assessment.
\n
Exposure to Climate Risk is monitored in conjunct
ion w
ith
\n
other PRTs. We have embedded qualitat
ive and quant
itat
ive
\n
climate considerat
ions
into the Group\u2019s Credit Underwrit
ing
\n
Princ
iples for O
il and Gas, Min
ing, Sh
ipp
ing, Commerc
ial Real
\n
Estate and Project Finance portfolio. We have expanded
\n
coverage of Climate and Credit Risk considerat
ions to phys
ical
\n
collateral, as they serve as key risk mit
igants, espec
ially in
\n
default events. We assess physical risk concentrations for our
\n
WRB portfolio on a quarterly basis and assess the physical
\n
risk vulnerabil
it
ies of our sites period
ically and when new s
ites
\n
are onboarded.
\n
Our Net Zero Climate Risk Working Forum meets quarterly
\n
to discuss account plans for high climate risk and net zero
\n
divergent clients. Stress testing and scenario analysis are
\n
used to assess the impact of ESGR-related risks. The impact
\n
on capital requirements has been included in the PLC Group
\n
Internal Capital Adequacy Assessment Process. Management
\n
informat
ion
is reviewed at a quarterly frequency and any
\n
breaches in RA are reported to the GRC and BRC.
\n
Model Risk
\n
Mit
igat
ion
\n
The Model Risk Policy and Standards de\ufb01ne requirements
\n
for model development, validat
ion,
implementat
ion and use,
\n
includ
ing regular model performance mon
itor
ing and, where
\n
required, model risk mit
igants.
\n
Model de\ufb01cienc
ies ident
i\ufb01ed through the development or
\n
validat
ion process, or model performance
issues ident
i\ufb01ed
\n
through ongoing monitor
ing, are m
it
igated through
\n
respective model risk mit
igants. M
it
igants
include model
\n
overlays as either post-model adjustments (PMAs) or
\n
management adjustments, model restrict
ions and potent
ially
\n
a model recalibrat
ion or redevelopment, all of wh
ich undergo
\n
independent review, challenge, and approval. PMAs are used
\n
to address observed de\ufb01cienc
ies caused from with
in the
\n
model, by adjusting the model output e
ither directly or
\n
ind
irectly (e.g. adjusting parameters). Where a PMA
is applied
\n
as a mit
igant for a model used
in Pillar 1 or Pillar 2 calculations
\n
or models with material impact on \ufb01nanc
ial account
ing
\n
disclosures (e.g. IFRS 9), the independent review must be
\n
performed by Group Model Validat
ion (GMV) w
ith sign-off
\n
from the Model Approver prior to implementat
ion.
\n
Management adjustments are used to address issues by
\n
applying management decis
ions w
ithout adjust
ing a d
irect
\n
modelling component.
\n
As with all PRTs, operational controls are used to govern all
\n
Model Risk-related processes, with regular risk assessments
\n
performed to assess appropriateness and effectiveness of
\n
those controls, in line with the Operational and Technology
\n
RTF, with remediat
ion plans
implemented where necessary.
\n
Group Model Risk Policy and Standards also de\ufb01ne
\n
requirements for determin
ist
ic quantitat
ive methods
\n
(DQMs) that are used as part of an end-to-end modelled
\n
process. DQMs are sim
ilar
in nature to a model, however the
\n
processing component is either purely determin
ist
ic or has an
\n
element of expert judgement. Unlike a model, there is no use
\n
of statist
ical, econom
ic \ufb01nanc
ial or mathemat
ical theories.
\n
The regulatory framework around Model Risk is continuously
\n
evolving, the PRA\u2019s Supervisory Statement 1/23 (SS1/23) is
\n
an example. The Group proactively monitors regulatory
\n
changes to take the required actions timely for compliance.
\n
Regarding SS1/23, the Group is currently deliver
ing to a
\n
roadmap to compliance, which commenced in 2024 and
\n
will continue over the next two years.
\n
Monitor
ing
\n
The Group monitors Model Risk via a set of RA metrics.
\n
Adherence to Model RA and any threshold breaches are
\n
reported to the BRC, GRC and MRC. These metrics and
\n
thresholds are reviewed twice per year to ensure that
\n
threshold calibrat
ion rema
ins appropriate, and the themes
\n
adequately cover the current risks.
\n
Models undergo regular performance monitor
ing based on
\n
their level of perceived Model Risk, with monitor
ing results
\n
presented, and breaches escalated to the Model Sponsor,
\n
Model Owner, GMV and respective MRC or Indiv
idual
\n
Delegated Model Approvers.
\n
Model Risk management produces Model Risk reports
\n
covering the model landscape, which include performance
\n
metrics, ident
i\ufb01ed model
issues and remediat
ion plans.
\n
These are presented for discuss
ion at the Model R
isk
\n
governance committees on a regular basis.
Risk pro\ufb01le
Credit Risk (audited)
Basis of preparation
Unless otherwise stated, the balance sheet and income
statement informat
ion presented w
ith
in th
is section is based
on the Group\u2019s management view. This is princ
ipally the
location from which a client relationsh
ip
is managed, which
may differ from where it is \ufb01nanc
ially booked and may be
shared between businesses and/or regions. This view re\ufb02ects
how the client segments and regions are managed internally.
Loans and advances to customers and banks held at
amortised cost in this \u2018Risk pro\ufb01le\u2019 section include reverse
repurchase agreement balances held at amortised cost,
per Note 16 Reverse repurchase and repurchase agreements
includ
ing other s
im
ilar secured lend
ing and borrowing.
Credit Risk overview
Credit Risk is the potential for loss due to the failure of a
counterparty to meet its contractual obligat
ions to pay the
Group. Credit exposures arise from both the banking and
trading books.
Impairment model
IFRS 9 mandates an impa
irment model that requ
ires the
recognit
ion of expected cred
it losses (ECL) on all \ufb01nanc
ial
debt instruments held at amortised cost, Fair Value through
Other Comprehensive Income (FVOCI), undrawn loan
commitments and \ufb01nanc
ial guarantees.
Staging of \ufb01nanc
ial
instruments
Financ
ial
instruments that are not already credit-impa
ired
are orig
inated
into stage 1 and a 12-month ECL provis
ion
is recognised.
Instruments will remain in stage 1 until they are repaid, unless
they experience sign
i\ufb01cant cred
it deteriorat
ion (stage 2) or
they become credit-impa
ired (stage 3).
Instruments will transfer to stage 2 and a lifet
ime ECL
provis
ion
is recognised when there has been a sign
i\ufb01cant
change in the Credit Risk compared to what was expected
at orig
inat
ion.
The framework used to determine a Sign
i\ufb01cant Increase
in
Credit Risk (SICR) is set out below.
\n \n
Stage 1
Stage 2
Stage 3
\u2022 12-month ECL
\u2022
Lifet
ime expected cred
it loss
\u2022 Credit-impa
ired
\u2022 Performing
\u2022
Performing but has exhib
ited SICR
\u2022 Non-performing
IFRS 9 ECL princ
iples and approaches
The main methodology princ
iples and approach adopted by the Group are set out
in the following table.
\n \n
Title
Supplementary Information
Page
Approach for determin
ing ECL
\u2022
IFRS 9 ECL methodology
236
\u2022
Applicat
ion of l
ifet
ime ECL
236
Key assumptions and judgements in determin
ing ECL
\u2022
Incorporation of forward-looking informat
ion
238
\u2022
Forecast of key macroeconomic variables underlying the
238
ECL calculation and the impact of non-linear
ity
\u2022
Impact of multiple economic scenarios
241
\u2022
Judgemental adjustments and management overlays
241
\u2022
Sensit
iv
ity of ECL calculation to macroeconomic variables
242
Sign
i\ufb01cant
increase in Credit risk (SICR)
\u2022
Quantitat
ive and qual
itat
ive cr
iter
ia
244
Assessment of credit-impa
ired \ufb01nancial assets
\u2022
Wealth and Retail Banking (WRB) clients
245
\u2022
Corporate and Investment Banking (CIB) and Private
245
Banking clients
\u2022 Write-offs
245
Transfers between stages
\u2022
Movement in gross exposures and credit impa
irment
219
Modif
ied \ufb01nancial assets
\u2022
Forborne and other modif
ied loans
226
Governance of PMAs and applicat
ion of expert cred
it
\u2022
IFRS 9 Impairment Committee
246
judgement in respect of ECL
Summary of Credit Risk performance
Maximum exposure
The Group\u2019s on-balance sheet maximum exposure to Credit
Risk increased by $25 bill
ion to $823 b
ill
ion (31 December 2023:
$798 bill
ion). Cash and balances at Central banks decreased
by $6.5 bill
ion to $63 b
ill
ion (31 December 2023: $70 b
ill
ion) due
to reduced placements. Loans to banks held at amortised
cost decreased by $1.4 bill
ion to $44 b
ill
ion (31 December 2023:
$45 bill
ion). Fa
ir value through pro\ufb01t and loss increased by
$27.8 bill
ion to $172 b
ill
ion (31 December 2023: $144 b
ill
ion),
largely due to increases in debt securit
ies and reverse repos,
but this was partially offset by a $16.7 bill
ion reduct
ion in
debt securit
ies not held at fa
ir value through pro\ufb01t and loss.
Loans and advances to customers decreased by $5.9 bill
ion to
$281\u00a0bill
ion (31 December 2023: $287 b
ill
ion), due to a reduct
ion
in mortgages in Korea, Singapore and Hong Kong, given
continued headwinds, includ
ing fore
ign currency movements.
\n\n
Loans and advances to customers in the CIB segment
\n
increased by $7.6 bill
ion, ma
inly due to the execution of
\n
pipel
ine deals
in Global Banking, but this was offset by a
\n
$7.4\u00a0bill
ion decrease
in Central and other items. Derivat
ive
\n
\ufb01nancial
instruments increased by $31 bill
ion to $81 b
ill
ion
\n
(31\u00a0December 2023: $50 bill
ion). Off-balance sheet
instruments
\n
increased by $16 bill
ion to $273 b
ill
ion (31\u00a0December 2023:
\n
$257\u00a0bill
ion), due to an
increase in \ufb01nanc
ial guarantees and
\n
other equivalents, which was driven by new\u00a0business.
\n
Further details can be found in the \u2018Maximum exposure to Credit Risk\u2019
\n
section on
page 209
; \u2018Credit quality by client segment\u2019 section on
\n
page\u00a0212
.
\n
Loans and advances
\n
94 per cent (31 December 2023: 94 per cent) of the Group\u2019s
\n
gross loans and advances to customers remain in stage 1 at
\n
$269 bill
ion (31 December 2023: $274 b
ill
ion), re\ufb02ect
ing our
\n
continued focus on high-quality orig
inat
ion. For WRB, stage 1
\n
balances decreased by $6.5 bill
ion to $117 b
ill
ion (31 December
\n
2023: $123 bill
ion), of wh
ich $5.9 bill
ion was ma
inly due to a
\n
reduction in the mortgage portfolios in Korea, Singapore and
\n
Hong Kong, mainly driven by slower booking momentum and
\n
higher attrit
ion as a result of
intense interest rate competit
ion.
\n
For CIB, stage 1 balances increased by $8\u00a0bill
ion to $129 b
ill
ion
\n
(31 December 2023: $121 bill
ion) ma
inly driven by the Energy,
\n
Financ
ing, Insurance and Transport sectors. For Central and
\n
other items, stage 1 balances decreased by 6.3 bill
ion to
\n
$22 bill
ion (31 December 2023: $28\u00a0b
ill
ion) due to a reduct
ion
\n
in exposures to the Government sector, across a number of
\n
our markets.
\n
Stage 2 loans and advances to customers decreased by
\n
$0.6\u00a0bill
ion to $11 b
ill
ion (31 December 2023: $11 b
ill
ion). For
\n
WRB, stage 2 balances decreased by $0.4 bill
ion to $1.9 b
ill
ion
\n
(31 December 2023: $2.3 bill
ion), due to decrease
in the
\n
mortgage portfolio. For Central and other items, higher risk
\n
exposures decreased by $0.9 bill
ion to $0.1 b
ill
ion (31 December
\n
2023: $1 bill
ion), was due to the matur
ity of short-term loan
\n
exposures that were replaced with debt securit
ies
in Pakistan.
\n
Stage 3 loans and advances decreased by $1 bill
ion to
\n
$6.2\u00a0bill
ion (31 December 2023: $7.2 b
ill
ion) due to debt sales,
\n
repayments, write-offs and upgrades to Stage 2 loans in CIB.
\n
WRB stage 3 balances remained broadly stable at $1.6 bill
ion
\n
(31 December 2023: $1.5 bill
ion). For Central and other
items,
\n
stage 3 balances decreased by $0.1 bill
ion to $0.1 b
ill
ion
\n
(31 December 2023: $0.2 bill
ion).
\n
Further details can be found in the \u2018Analysis of \ufb01nanc
ial
instruments by
\n
stage\u2019 section on
page 210
; \u2018Credit quality by client segment\u2019 section
\n
on
page 212
; \u2018Credit quality by industry\u2019 section on
page 230
.
\n
Analysis of Stage 2
\n
The key SICR driver which caused exposures to be classif
ied
\n
as stage 2 remains an increase in probabil
ity of default (PD).
\n
The proportion of CIB exposures in stage 2 decreased due to
\n
a reduction in clients placed on non-purely precautionary
\n
early alert that have not breached PD thresholds. In WRB, the
\n
exposures in stage 2 loans with more than 30 days past due
\n
remained stable at $0.3 bill
ion (31 December 2023: $0.3 b
ill
ion).
\n
In Central and other items, the $0.5 bill
ion decrease
in CG12
\n
balances to $1.5\u00a0bill
ion (31 December 2023: $2 b
ill
ion) was
\n
due to the maturity of short-term loan exposures that were
\n
replaced with debt securit
ies
in Pakistan. \u2018Others\u2019 category
\n
includes exposures where orig
inat
ion data is incomplete and
\n
the exposures are allocated into stage 2.
\n
Further details can be found in the \u2018Credit quality by client segment\u2019
\n
section in
page
212
; \u2018Analysis of stage 2 balances\u2019 section on
page 225.
\n
Credit impa
irment charges
\n
The Group\u2019s ongoing credit impa
irment was a net charge of
\n
$547 mill
ion (31 December 2023: $508 m
ill
ion).
\n
WRB contributed a net charge of $644 mill
ion (31 December
\n
2023: $354 mill
ion), dr
iven by a higher interest rate
\n
environment impact
ing repayments on cred
it cards and
\n
personal loans and to a few non-repeating ECL releases
\n
recorded in 2023. The increase in impa
irments was also due
\n
to the maturity and portfolio growth of dig
ital partnersh
ips
\n
in China and Indonesia, as well as a $21 mill
ion overlay
\n
aris
ing from the settlement fa
ilure of two e-commerce
\n
platforms in Korea.
\n
CIB contributed a net release of $106 mill
ion (31 December
\n
2023: $123 mill
ion charge) due to a number of stage 3 releases
\n
and repayments.
\n
Further details can be found in the \u2018Financ
ial rev
iew\u2018 section on
page 51
;
\n
\u2018Credit impa
irment charge\u2019 sect
ion on
page 226
.
\n
Commercial Real Estate (CRE)
\n
The Group provides loans to CRE counterparties of which
\n
$8.8\u00a0bill
ion
is to counterparties in the CIB segment where the
\n
source of repayment is substantially derived from rental or
\n
sale of real estate and is secured by real estate collateral.
\n
The remain
ing CRE loans compr
ise working capital loans to
\n
real estate corporates, loans with non-property collateral,
\n
unsecured loans and loans to real estate entit
ies of d
ivers
i\ufb01ed
\n
conglomerates. The average LTV ratio of the performing book
\n
CRE portfolio has increased to 54 per cent (31 December 2023:
\n
52 per cent). The proportion of loans with an LTV greater than
\n
80 per cent has increased to 4 per cent (31 December 2023:
\n
3 per cent).
\n
China CRE
\n
Total exposure to China CRE decreased by $0.6 bill
ion to
\n
$2\u00a0bill
ion (31 December 2023: $2.6 b
ill
ion) ma
inly from exposure
\n
reductions. The proportion of credit impa
ired exposures
\n
increased to 70 per cent (31 December 2023: 58 per cent)
\n
due to repayments with
in the non-cred
it impa
ired portfol
io.
\n
The overall provis
ion coverage
increased to 87 per cent
\n
(31\u00a0December 2023: 72 per cent), re\ufb02ecting increased provis
ion
\n
charges during the year. The proportion of the loan book
\n
rated as Higher Risk increased to 3 per cent (31 December
\n
2023: 0.3 per cent) primar
ily due to downgrades dur
ing
\n
the year.
\n
The Group continues to hold a judgemental management
\n
overlay, which decreased by $71 mill
ion to $70 m
ill
ion
\n
(31\u00a0December 2023: $141 mill
ion), re\ufb02ect
ing repayments
\n
and util
isat
ions during the year.
\n
The Group is further ind
irectly exposed to Ch
ina CRE through
\n
its associate investment in China Bohai Bank.
\n
Further details can be found in the \u2018China commercial real estate\u2019 section
\n
on
page 234
; \u2018Judgemental adjustments\u2019 section on
page 241
.
\n
High carbon sectors
\n
With the Group\u2019s expansion in the asset-backed lending
\n
business, the total on-and-off balance sheet exposure for
\n
the Aviat
ion sector
increased to $2.6 bill
ion (31 December
\n
2023: $1.9 bill
ion), wh
ile the Shipp
ing sector decreased to
\n
$4.6 bill
ion (31 December 2023: $5 b
ill
ion). The Group\u2019s pos
it
ion
\n
statements mandates that for newer vessels and aircraft,
\n
only carbon ef\ufb01cient ones can be \ufb01nanced.
\n
While exposures to the Oil and Gas sector increased to
\n
$21\u00a0bill
ion (31 December 2023: $20 b
ill
ion) due to
increased
\n
funding towards more emiss
ions-ef\ufb01cient counterpart
ies,
\n
exposures to the Power sector increased to $11 bill
ion
\n
(31\u00a0December 2023: $9 bill
ion) due to
increased lending to
\n
renewables and ef\ufb01cient gas generat
ion counterparties.
\n
Further details on net zero targets and progress in managing transit
ion
\n
risk of the high carbon sectors can be found in the \u2018Sustainab
il
ity review\u2019
\n
section on
page 57
; \u2018High carbon sectors\u2019 section on
page 232
.
\n\n
Maximum exposure to Credit Risk (audited)
\n
The table below presents the Group\u2019s maximum exposure to Credit Risk for its on-balance sheet and off-balance sheet \ufb01nanc
ial
\n
instruments as at 31 December 2024, before and after taking into account any collateral held or other Credit Risk mit
igat
ion.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Credit risk management
Credit risk management
Master
Master
Maximum
netting
Net
Maximum
netting
Net
exposure
Collateral
8
agreements
Exposure
exposure
Collateral
8
agreements
Exposure
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
On-balance sheet
Cash and balances at central banks
63,447
\u2013
\u2013
63,447
69,905
\u2013
\u2013
69,905
Loans and advances to banks
1
43,593
2,946
40,647
44,977
1,738
43,239
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
7
2,946
2,946
\u2013
\u2013
1,738
1,738
\u2013
\u2013
Loans and advances to customers
1
281,032
119,047
\u2013
161,985
286,975
118,492
168,483
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending\u2077
9,660
9,660
\u2013
\u2013
13,996
13,996
\u2013
\u2013
Investment securit
ies \u2013 Debt secur
it
ies
and other elig
ible b
ills
2
143,562
143,562
160,263
\u2013
\u2013
160,263
Fair value through pro\ufb01t or loss
3, 7
172,031
86,195
\u2013
85,836
144,276
81,847
\u2013
62,429
Loans and advances to banks
2,213
\u2013
\u2013
2,213
2,265
\u2013
\u2013
2,265
Loans and advances to customers
7,084
\u2013
\u2013
7,084
7,212
\u2013
\u2013
7,212
Reverse repurchase agreements and
other sim
ilar lend
ing
7
86,195
86,195
\u2013
\u2013
81,847
81,847
\u2013
\u2013
Investment securit
ies \u2013 Debt secur
it
ies
and other elig
ible b
ills
2
76,539
\u2013
\u2013
76,539
52,952
\u2013
\u2013
52,952
Derivat
ive \ufb01nancial
instruments
4, 7
81,472
15,005
60,280
6,187
50,434
8,440
39,293
2,701
Accrued income
2,776
\u2013
\u2013
2,776
2,673
\u2013
\u2013
2,673
Assets held for sale
9
889
\u2013
\u2013
889
701
\u2013
\u2013
701
Other assets
5
34,585
\u2013
\u2013
34,585
38,140
\u2013
\u2013
38,140
Total balance sheet
823,387
223,193
60,280
539,914
798,344
210,517
39,293
548,534
Off-balance sheet
6
Undrawn Commitments
182,529
2,489
\u2013
180,040
182,390
2,940
\u2013
179,450
Financ
ial Guarantees and
other equivalents
90,632
1,807
\u2013
88,825
74,414
2,590
\u2013
71,824
Total off-balance sheet
273,161
4,296
\u2013
268,865
256,804
5,530
\u2013
251,274
Total
1,096,548
227,489
60,280
808,779
1,055,148
216,047
39,293
799,808
\n
1
Amounts are net of ECL provis
ions. An analys
is of credit quality is set out in the credit quality analysis section (page 212). Further details of collateral held by
\n
client segment and stage are set out in the collateral analysis section (page 227). The Group also has credit mit
igat
ion through Credit Linked Notes as set out
\n
on page 229
\n
2
Excludes equity and other investments of $994 mill
ion (31 December 2023: $992 m
ill
ion). Further deta
ils are set out in Note 13 \ufb01nanc
ial
instruments
\n
3
Excludes equity and other investments of $5,486 mill
ion (31 December 2023: $2,940 m
ill
ion). Further deta
ils are set out in Note 13 \ufb01nanc
ial
instruments
\n
4
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the
\n
sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions
\n
5
Other assets include Hong Kong certif
icates of
indebtedness, cash collateral, and acceptances, in addit
ion to unsettled trades and other \ufb01nancial assets
\n
6
Excludes ECL provis
ions of $255 m
ill
ion (31 December 2023: $227 m
ill
ion) wh
ich are reported under Provis
ions for l
iab
il
it
ies and charges
\n
7
Collateral capped at maximum exposure (over-collateralised)
\n
8
Adjusted for over-collateralisat
ion, wh
ich has been determined with reference to the drawn and undrawn component as this best re\ufb02ects the effect on the
\n
amount aris
ing from expected cred
it losses
\n
9
The amount is after ECL. provis
ions. Further deta
ils are set out in Note 21 Assets held for sale and associated liab
il
it
ies
\n\n
Analysis of \ufb01nanc
ial
instruments by stage (audited)
\n
The table below presents the gross and credit impa
irment balances by stage for the Group\u2019s amort
ised cost and FVOCI
\n
\ufb01nancial
instruments as at 31 December 2024.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and
balances at
central banks
62,597
\u2013
62,597
432
(4)
428
426
(4)
422
63,455
(8)
63,447
Loans and
advances
to banks
(amortised cost)
43,208
(10)
43,198
318
(1)
317
83
(5)
78
43,609
(16)
43,593
Loans and
advances to
customers
(amortised cost)
269,102
(483) 268,619
10,631
(473)
10,158
6,203
(3,948)
2,255
285,936
(4,904) 281,032
Debt securit
ies
and other
elig
ible b
ills
5
141,862
(23)
1,614
(4)
103
(2)
143,579
(29)
Amortised cost
54,637
(15)
54,622
475
(2)
473
42
\u2013
42
55,154
(17)
55,137
FVOCI
2
87,225
(8)
1,139
(2)
61
(2)
88,425
(12)
\u2013
Accrued income
(amortised cost)
4
2,776
2,776
\u2013
\u2013
2,776
\u2013
2,776
Assets held
for sale
4
840
(7)
833
38
\u2013
38
58
(45)
13
936
(52)
884
Other assets
34,585
\u2013
34,585
\u2013
\u2013
\u2013
3
(3)
\u2013
34,588
(3)
34,585
Undrawn
commitments
3
178,516
(50)
4,006
(52)
7
(1)
182,529
(103)
Financ
ial
guarantees,
trade credits
and irrevocable
letter of credits
3
87,991
(16)
2,038
(7)
603
(129)
90,632
(152)
Total
821,477
(589)
19,077
(541)
7,486
(4,137)
848,040
(5,267)
\n
1
Gross carrying amount for off-balance sheet refers to notional values
\n
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
\n
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a \ufb01nanc
ial l
iab
il
ity and therefore there is no \u201cnet carrying amount\u201d.
\n
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
\n
be separately ident
i\ufb01ed. Otherw
ise they will be reported against the drawn component
\n
4 Stage 1 ECL is not material
\n
5
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $N
il mill
ion (31 December 2023:
\n
$14 mill
ion)
\n\n\n \n
2023
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and
balances at
central banks
69,313
\u2013
69,313
207
(7)
200
404
(12)
392
69,924
(19)
69,905
Loans and
advances
to banks
(amortised cost)
44,384
(8)
44,376
540
(10)
530
77
(6)
71
45,001
(24)
44,977
Loans and
advances to
customers
(amortised cost)
273,692
(430) 273,262
11,225
(420)
10,805
7,228
(4,320)
2,908
292,145
(5,170) 286,975
Debt securit
ies
and other
ible b
elig
ills
5
158,314
(26)
1,860
(34)
164
(61)
160,338
(121)
Amortised cost
56,787
(16)
56,771
103
(2)
101
120
(57)
63
57,010
(75)
56,935
FVOCI
2
101,527
(10)
1,757
(32)
44
(4)
103,328
(46)
Accrued income
(amortised cost)
4
2,673
2,673
\u2013
\u2013
2,673
\u2013
2,673
Assets held
for sale
4
661
(33)
628
76
(4)
72
1
\u2013
1
738
(37)
701
Other assets
38,139
\u2013
38,139
\u2013
\u2013
\u2013
4
(3)
1
38,143
(3)
38,140
Undrawn
commitments
3
176,654
(52)
5,733
(39)
3
\u2013
182,390
(91)
Financ
ial
guarantees,
trade credits
and irrevocable
letter of credits
3
70,832
(10)
2,910
(14)
672
(112)
74,414
(136)
Total
834,662
(559)
22,551
(528)
8,553
(4,514)
865,766
(5,601)
\n
1
Gross carrying amount for off-balance sheet refers to notional values
\n
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
\n
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a \ufb01nanc
ial l
iab
il
ity and therefore there is no \u201cnet carrying amount\u201d.
\n
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
\n
be separately ident
i\ufb01ed. Otherw
ise they will be reported against the drawn component
\n
4 Stage 1 ECL is not material
\n
5
Stage 3 gross includes $80 mill
ion or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $14 m
ill
ion
\n\n
Credit quality analysis (audited)
\n
Credit quality by client segment
\n
For CIB, exposures are analysed by credit grade (CG), which plays a central role in the quality assessment and monitor
ing of r
isk.
\n
All loans are assigned a CG, which is reviewed period
ically and amended
in light of changes in the borrower\u2019s circumstances or
\n
behaviour. CGs 1 to 12 are assigned to stage 1 and stage 2 (performing) clients or accounts, while CGs 13 and 14 are assigned to
\n
stage 3 (credit-impa
ired) cl
ients. Consumer and Business Banking portfolios are analysed by days past due and Private Banking
\n
by the type of collateral held.
\n
Mapping of credit quality
\n
The Group uses the following internal risk mapping to determine the credit quality for loans.
\n\n \n
Corporate & Investment Banking
Private Banking
1
Wealth & Retail Banking
4
Credit quality
Internal grade
S&P external ratings
Regulatory
Internal grade
descript
ion
mapping
equivalent
PD range (%)
Internal ratings
mapping
Strong
1A to 5B
AAA/AA+ to
0 to 0.425
Class I and Class IV
Current loans (no past
BBB-/BB+
2
dues nor impa
ired)
Satisfactory
6A to 11C
BB to CCC+
3
0.426 to 15.75
Class II and Class III
Loans past due till
29 days
Higher risk
Grade 12
CCC+ to C
15.751 to 99.999
Stressed Assets Group
Past due loans
(SAG) Managed
30 days and over till
90 days
\n
1
For Private Banking, classes of risk represent the type of collateral held. Class I represents facil
it
ies with liqu
id collateral, such as cash and marketable secur
it
ies.
\n
Class II represents unsecured/partially secured facil
it
ies and those with ill
iqu
id collateral, such as equity in private enterprises. Class III represents facil
it
ies with
\n
resident
ial or commerc
ial real estate collateral. Class IV covers margin trading facil
it
ies
\n
2
Banks\u2019 rating: AAA/AA+ to BB+/BB. Sovereigns\u2019 rating: AAA to BB+
\n
3
Banks\u2019 rating: BB to \u201cCCC+ to C\u201d. Sovereigns\u2019 rating: BB+/BB to B-/CCC+
\n
4
Wealth & Retail Banking excludes Private Banking. Medium enterprise clients with
in Bus
iness Banking are managed using the same internal credit grades as CIB
\n
The table below sets out the gross loans and advances held at amortised cost, ECL provis
ions and expected cred
it loss
\n
coverage by business segment and stage. ECL coverage represents the ECL reported for each segment and stage as a
\n
proportion of the gross loan balance for each segment and stage.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n
Loans and advances by client segment (audited)
\n\n \n
2024
Customers
Corporate &
Wealth &
Investment
Retail
Central &
Customer
Undrawn
Financ
ial
Banks
Banking
Banking
Ventures
other items
Total
commitments
Guarantees
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
43,208
128,746
117,015
1,383
21,958
269,102
178,516
87,991
\u2013 Strong
31,239
90,725
111,706
1,367
21,540
225,338
162,574
56,070
\u2013 Satisfactory
11,969
38,021
5,309
16
418
43,764
15,942
31,921
Stage 2
318
8,643
1,905
48
35
10,631
4,006
2,038
\u2013 Strong
8
1,229
1,413
31
\u2013
2,673
994
471
\u2013 Satisfactory
125
6,665
155
6
\u2013
6,826
2,862
1,403
\u2013 Higher risk
185
749
337
11
35
1,132
150
164
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
55
155
6
\u2013
216
\u2013
\u2013
\u2013 More than 30 days past due
2
7
337
11
\u2013
355
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
83
4,476
1,617
12
98
6,203
7
603
Gross balance\u00b9
43,609
141,865
120,537
1,443
22,091
285,936
182,529
90,632
Stage 1
(10)
(80)
(383)
(20)
\u2013
(483)
(50)
(16)
\u2013 Strong
(7)
(28)
(325)
(18)
\u2013
(371)
(33)
(7)
\u2013 Satisfactory
(3)
(52)
(58)
(2)
\u2013
(112)
(17)
(9)
Stage 2
(1)
(303)
(147)
(23)
\u2013
(473)
(52)
(7)
\u2013 Strong
\u2013
(41)
(70)
(14)
\u2013
(125)
(10)
\u2013
\u2013 Satisfactory
(1)
(218)
(32)
(3)
\u2013
(253)
(32)
(4)
\u2013 Higher risk
\u2013
(44)
(45)
(6)
\u2013
(95)
(10)
(3)
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
(1)
(32)
(3)
\u2013
(36)
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
\u2013
(45)
(6)
\u2013
(51)
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
(5)
(3,178)
(759)
(11)
\u2013
(3,948)
(1)
(129)
Total credit impa
irment
(16)
(3,561)
(1,289)
(54)
\u2013
(4,904)
(103)
(152)
Net carrying value
43,593
138,304
119,248
1,389
22,091
281,032
Stage 1
0.0%
0.1%
0.3%
1.4%
0.0%
0.2%
0.0%
0.0%
\u2013 Strong
0.0%
0.0%
0.3%
1.3%
0.0%
0.2%
0.0%
0.0%
\u2013 Satisfactory
0.0%
0.1%
1.1%
12.5%
0.0%
0.3%
0.1%
0.0%
Stage 2
0.3%
3.6%
7.7%
47.9%
0.0%
4.4%
1.3%
0.3%
\u2013 Strong
0.0%
3.3%
5.0%
45.2%
0.0%
4.7%
1.0%
0.0%
\u2013 Satisfactory
0.8%
3.3%
20.6%
50.0%
0.0%
3.7%
1.1%
0.3%
\u2013 Higher risk
0.0%
5.9%
13.4%
54.5%
0.0%
8.4%
6.7%
1.8%
Of which (stage 2):
\u2013 Less than 30 days past due
0.0%
1.8%
20.6%
50.0%
0.0%
16.7%
0.0%
0.0%
\u2013 More than 30 days past due
0.0%
0.0%
13.4%
54.5%
0.0%
14.4%
0.0%
0.0%
Stage 3, credit-impa
ired
\ufb01nancial assets (S3)
6.0%
71.0%
46.9%
91.7%
0.0%
63.6%
14.3%
21.4%
\u2013 Stage 3 Collateral
1
297
584
\u2013
\u2013
881
\u2013
46
\u2013 Stage 3 Cover ratio
(after collateral)
7.2%
77.6%
83.1%
91.7%
0.0%
77.8%
14.3%
29.0%
Cover ratio
0.0%
2.5%
1.1%
3.7%
0.0%
1.7%
0.1%
0.2%
Fair value through pro\ufb01t or loss
Performing
36,967
58,506
6
\u2013
\u2013
58,512
\u2013
\u2013
\u2013 Strong
30,799
38,084
3
\u2013
\u2013
38,087
\u2013
\u2013
\u2013 Satisfactory
6,158
20,314
3
\u2013
\u2013
20,317
\u2013
\u2013
\u2013 Higher risk
10
108
\u2013
\u2013
\u2013
108
\u2013
\u2013
Defaulted (CG13-14)
\u2013
13
\u2013
\u2013
\u2013
13
\u2013
\u2013
Gross balance (FVTPL)
2
36,967
58,519
6
\u2013
\u2013
58,525
\u2013
\u2013
Net carrying value (incl FVTPL)
80,560
196,823
119,254
1,389
22,091
339,557
\u2013
\u2013
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $9,660 mill
ion under Customers and of $2,946 m
ill
ion under
\n
Banks, held at amortised cost
\n
2
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $51,441 mill
ion under Customers and of $34,754 m
ill
ion under
\n
Banks, held at fair value through pro\ufb01t or loss
\n\n\n \n
2023
Customers
Corporate &
Wealth &
Investment
Retail
Central &
Customer
Undrawn
Financ
ial
Banks
Banking
Banking
Ventures
other items
Total
commitments
Guarantees
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
44,384
120,886
123,486
1,015
28,305
273,692
176,654
70,832
\u2013 Strong
35,284
84,248
118,193
1,000
27,967
231,408
162,643
47,885
\u2013 Satisfactory
9,100
36,638
5,293
15
338
42,284
14,011
22,947
Stage 2
540
7,902
2,304
54
965
11,225
5,733
2,910
\u2013 Strong
55
1,145
1,761
34
\u2013
2,940
1,090
830
\u2013 Satisfactory
212
5,840
206
7
\u2013
6,053
4,169
1,823
\u2013 Higher risk
273
917
337
13
965
2,232
474
257
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
78
206
7
\u2013
291
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
10
337
13
\u2013
360
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
77
5,508
1,484
12
224
7,228
3
672
Gross balance\u00b9
45,001
134,296
127,274
1,081
29,494
292,145
182,390
74,414
Stage 1
(8)
(101)
(314)
(15)
\u2013
(430)
(52)
(10)
\u2013 Strong
(3)
(34)
(234)
(14)
\u2013
(282)
(31)
(2)
\u2013 Satisfactory
(5)
(67)
(80)
(1)
\u2013
(148)
(21)
(8)
Stage 2
(10)
(257)
(141)
(21)
(1)
(420)
(39)
(14)
\u2013 Strong
(1)
(18)
(65)
(14)
\u2013
(97)
(5)
\u2013
\u2013 Satisfactory
(2)
(179)
(22)
(3)
\u2013
(204)
(23)
(7)
\u2013 Higher risk
(7)
(60)
(54)
(4)
(1)
(119)
(11)
(7)
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
(2)
(22)
(3)
\u2013
(27)
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
(1)
(54)
(4)
\u2013
(59)
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
(6)
(3,533)
(760)
(12)
(15)
(4,320)
\u2013
(112)
Total credit impa
irment
(24)
(3,891)
(1,215)
(48)
(16)
(5,170)
(91)
(136)
Net carrying value
44,977
130,405
126,059
1,033
29,478
286,975
\u2013
\u2013
Stage 1
0.0%
0.1%
0.3%
1.5%
0.0%
0.2%
0.0%
0.0%
\u2013 Strong
0.0%
0.0%
0.2%
1.4%
0.0%
0.1%
0.0%
0.0%
\u2013 Satisfactory
0.1%
0.2%
1.5%
6.7%
0.0%
0.4%
0.1%
0.0%
Stage 2
1.9%
3.3%
6.1%
38.9%
0.1%
3.7%
0.7%
0.5%
\u2013 Strong
1.8%
1.6%
3.7%
41.2%
0.0%
3.3%
0.5%
0.0%
\u2013 Satisfactory
0.9%
3.1%
10.7%
42.9%
0.0%
3.4%
0.6%
0.4%
\u2013 Higher risk
2.6%
6.5%
16.0%
30.8%
0.1%
5.3%
2.3%
2.7%
Of which (stage 2):
\u2013 Less than 30 days past due
0.0%
2.6%
10.7%
42.9%
0.0%
9.3%
0.0%
0.0%
\u2013 More than 30 days past due
0.0%
10.0%
16.0%
30.8%
0.0%
16.4%
0.0%
0.0%
Stage 3, credit-impa
ired
\ufb01nancial assets (S3)
7.8%
64.1%
51.2%
100.0%
6.7%
59.8%
0.0%
16.7%
\u2013 Stage 3 Collateral
2
621
554
\u2013
\u2013
1,175
\u2013
34
\u2013 Stage 3 Cover ratio
(after collateral)
10.4%
75.4%
88.5%
100.0%
6.7%
76.0%
0.0%
21.7%
Cover ratio
0.1%
2.9%
1.0%
4.4%
0.1%
1.8%
0.0%
0.2%
Fair value through pro\ufb01t or loss
Performing
32,813
58,465
13
\u2013
\u2013
58,478
\u2013
\u2013
\u2013 Strong
28,402
38,014
13
\u2013
\u2013
38,027
\u2013
\u2013
\u2013 Satisfactory
4,411
20,388
\u2013
\u2013
\u2013
20,388
\u2013
\u2013
\u2013 Higher risk
\u2013
63
\u2013
\u2013
\u2013
63
\u2013
\u2013
Defaulted (CG13-14)
\u2013
33
\u2013
\u2013
\u2013
33
\u2013
\u2013
Gross balance (FVTPL)
2
32,813
58,498
13
\u2013
\u2013
58,511
\u2013
\u2013
Net carrying value (incl FVTPL)
77,790
188,903
126,072
1,033
29,478
345,486
\u2013
\u2013
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $13,996 mill
ion under Customers and of $1,738 m
ill
ion under
\n
Banks, held at amortised cost
\n
2. Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $51,299 mill
ion under Customers and of $30,548 m
ill
ion under
\n
Banks, held at fair value through pro\ufb01t or loss
\n\n
Loans and advances by client segment credit quality analysis
\n\n \n
2024
Corporate & Investment Banking and Central & other items
Gross
Credit impa
irment
Regulatory 1 year
S&P external ratings
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Credit grade
PD range (%)
equivalent
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
112,265
1,229
\u2013
113,494
(28)
(41)
\u2013
(69)
1A-2B
0 \u2013 0.045
A+ and above
32,160
31
\u2013
32,191
(2)
\u2013
\u2013
(2)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
40,712
524
\u2013
41,236
(8)
(33)
\u2013
(41)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
39,393
674
\u2013
40,067
(18)
(8)
\u2013
(26)
Satisfactory
38,439
6,665
\u2013
45,104
(52)
(218)
\u2013
(270)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
24,928
2,677
\u2013
27,605
(21)
(24)
\u2013
(45)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
9,514
2,618
\u2013
12,132
(20)
(169)
\u2013
(189)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
3,997
1,370
\u2013
5,367
(11)
(25)
\u2013
(36)
Higher risk
\u2013
784
\u2013
784
\u2013
(44)
\u2013
(44)
12
15.751 \u2013 99.999
CCC/C
\u2013
784
\u2013
784
\u2013
(44)
\u2013
(44)
Credit-
impa
ired
\u2013
\u2013
4,574
4,574
\u2013
\u2013
(3,178)
(3,178)
13-14
100
Defaulted
\u2013
\u2013
4,574
4,574
\u2013
\u2013
(3,178)
(3,178)
Total
150,704
8,678
4,574
163,956
(80)
(303)
(3,178)
(3,561)
2023
Strong
112,215
1,145
\u2013
113,360
(34)
(18)
\u2013
(52)
1A-2B
0 \u2013 0.045
A+ and above
37,936
81
\u2013
38,017
\u2013
\u2013
\u2013
\u2013
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
32,004
558
\u2013
32,562
(3)
\u2013
\u2013
(3)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
42,275
506
\u2013
42,781
(31)
(18)
\u2013
(49)
Satisfactory
36,976
5,840
\u2013
42,816
(67)
(179)
\u2013
(246)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
24,598
1,873
\u2013
26,471
(38)
(77)
\u2013
(115)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
8,232
2,273
\u2013
10,505
(13)
(90)
\u2013
(103)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
4,146
1,694
\u2013
5,840
(16)
(12)
\u2013
(28)
Higher risk
\u2013
1,882
\u2013
1,882
\u2013
(61)
\u2013
(61)
12
15.751 \u2013 99.999
CCC/C
\u2013
1,882
\u2013
1,882
\u2013
(61)
\u2013
(61)
Credit-
impa
ired
\u2013
\u2013
5,732
5,732
\u2013
\u2013
(3,548)
(3,548)
13-14
100
Defaulted
\u2013
\u2013
5,732
5,732
\u2013
\u2013
(3,548)
(3,548)
Total
149,191
8,867
5,732
163,790
(101)
(258)
(3,548)
(3,907)
\n\n
Undrawn commitment and \ufb01nanc
ial guarantees \u2013 by cl
ient segment credit quality
\n\n \n
2024
Corporate & Investment Banking and Central & other items
Notional
Credit impa
irment
Regulatory 1 year
S&P external ratings
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Credit grade
PD range (%)
equivalent
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
140,733
1,265
\u2013
141,998
(22)
(6)
\u2013
(29)
1A-2B
0 \u2013 0.045
A+ and above
29,623
280
\u2013
29,903
(1)
\u2013
\u2013
(1)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
53,568
492
\u2013
54,060
(4)
\u2013
\u2013
(4)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
57,542
493
\u2013
58,035
(17)
(6)
\u2013
(23)
Satisfactory
46,394
4,200
\u2013
50,594
(23)
(33)
\u2013
(56)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
2,544
1,065
\u2013
3,609
(4)
(6)
\u2013
(10)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
30,438
1,162
\u2013
31,600
(11)
(16)
\u2013
(27)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
13,412
1,973
\u2013
15,385
(8)
(11)
\u2013
(19)
Higher risk
\u2013
286
\u2013
286
\u2013
(11)
\u2013
(11)
12
15.751 \u2013 99.999
CCC+/C
\u2013
286
\u2013
286
\u2013
(11)
\u2013
(11)
Credit-
impa
ired
\u2013
\u2013
593
593
\u2013
\u2013
(129)
(129)
13-14
100
Defaulted
\u2013
\u2013
593
593
\u2013
\u2013
(129)
(129)
Total
187,127
5,751
593
193,471
(45)
(50)
(129)
(224)
2023
Strong
129,331
1,649
\u2013
130,980
(19)
(3)
\u2013
(22)
1A-2B
0 \u2013 0.045
A+ and above
27,882
179
\u2013
28,061
(1)
\u2013
\u2013
(1)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
52,061
557
\u2013
52,618
(3)
(1)
\u2013
(4)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
49,388
913
\u2013
50,301
(15)
(2)
\u2013
(17)
Satisfactory
35,405
5,921
\u2013
41,326
(23)
(28)
\u2013
(51)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
2,581
1,065
\u2013
3,646
(2)
(6)
\u2013
(8)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
25,089
3,028
\u2013
28,117
(14)
(9)
\u2013
(23)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
7,735
1,828
\u2013
9,563
(7)
(13)
\u2013
(20)
Higher risk
\u2013
697
\u2013
697
\u2013
(15)
\u2013
(15)
12
15.751 \u2013 99.999
CCC+/C
\u2013
697
\u2013
697
\u2013
(15)
\u2013
(15)
Credit-
impa
ired
\u2013
\u2013
663
663
\u2013
\u2013
(112)
(112)
13-14
100
Defaulted
\u2013
\u2013
663
663
\u2013
\u2013
(112)
(112)
Total
164,736
8,267
663
173,666
(42)
(46)
(112)
(200)
\n\n
Loans and advances by client segment credit quality analysis by key geography
\n\n \n
Corporate & Investment Banking and Central & other items
2024
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
32,552
12,079
44,631
230
1,539
64
1,833
1,272
1,272
(8)
(8)
(16)
(33)
(107)
(9)
(149)
(1,157)
(1,157)
(2.8)%
Corporate Lending
14,429
6,180
20,609
225
1,329
64
1,618
1,260
1,260
(5)
(4)
(9)
(33)
(102)
(9)
(144)
(1,157)
(1,157)
(5.6)%
Non Corporate
Lending
1
4,567
2,730
7,297
4
206
\u2013
210
12
12
(1)
(3)
(4)
\u2013
(5)
\u2013
(5)
\u2013
\u2013
(0.1)%
Banks
13,556
3,169
16,725
1
4
\u2013
5
\u2013
\u2013
(2)
(1)
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Singapore
31,129
7,769
38,898
500
955
35
1,490
407
407
\u2013
(8)
(8)
(4)
(14)
\u2013
(18)
(196)
(196)
(0.5)%
Corporate Lending
7,333
4,003
11,336
469
594
35
1,098
335
335
\u2013
(6)
(6)
(4)
(14)
\u2013
(18)
(195)
(195)
(1.7)%
Non Corporate
Lending
1
19,348
567
19,915
29
358
\u2013
387
\u2013
\u2013
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
4,448
3,199
7,647
2
3
\u2013
5
72
72
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
UK
11,029
3,939
14,968
48
479
3
530
316
316
(10)
(4)
(14)
\u2013
(27)
(6)
(33)
(258)
(258)
(1.9)%
Corporate Lending
325
871
1,196
47
479
1
527
258
258
(9)
(3)
(12)
\u2013
(27)
(6)
(33)
(237)
(237) (14.2)%
Non Corporate
Lending
1
8,690
982
9,672
1
\u2013
\u2013
1
57
57
(1)
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(21)
(21)
(0.2)%
Banks
2,014
2,086
4,100
\u2013
\u2013
2
2
1
1
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
US
16,244
4,456
20,700
92
433
33
558
31
31
(4)
(1)
(5)
(1)
(1)
\u2013
(2)
(3)
(3)
(0.0)%
Corporate Lending
5,426
2,761
8,187
77
322
\u2013
399
28
28
(3)
(1)
(4)
(1)
(1)
\u2013
(2)
\u2013
\u2013
(0.1)%
Non Corporate
Lending
1
9,688
123
9,811
15
79
\u2013
94
3
3
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(3)
(3)
(0.0)%
Banks
1,130
1,572
2,702
\u2013
32
33
65
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
China
10,380
2,794
13,174
49
133
14
196
171
171
(3)
(1)
(4)
\u2013
\u2013
\u2013
\u2013
(86)
(86)
(0.7)%
Corporate Lending
4,933
2,193
7,126
49
133
14
196
168
168
(1)
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(83)
(83)
(1.1)%
Non Corporate
Lending
1
3,241
363
3,604
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
2,206
238
2,444
\u2013
\u2013
\u2013
\u2013
3
3
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(3)
(3)
(0.2)%
Others
42,171
19,370
61,541
318
3,251
819
4,389
2,460
2,460
(10)
(33)
(43)
(3)
(70)
(29)
(102)
(1,483) (1,483)
(2.4)%
Corporate Lending
24,835
14,075
38,910
291
2,048
516
2,855
2,221
2,221
(6)
(26)
(32)
(3)
(38)
(28)
(69)
(1,333)
(1,333)
(3.3)%
Non Corporate
Lending
1
9,451
3,590
13,041
22
1,117
153
1,292
232
232
\u2013
(6)
(6)
\u2013
(31)
(1)
(32)
(149)
(149)
(1.3)%
Banks
7,885
1,705
9,590
5
86
150
241
7
7
(4)
(1)
(5)
\u2013
(1)
\u2013
(1)
(1)
(1)
(0.1)%
Total
143,505
50,407
193,912
1,237
6,790
968
8,996
4,657
4,657
(35)
(55)
(90)
(41)
(219)
(44)
(304)
(3,183)
(3,183)
(1.7)%
\n\n \n
Corporate & Investment Banking and Central & other items
2
2023
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
36,776
10,151
46,927
167
937
30
1,134
1,284
1,284
(7)
(23)
(30)
(4)
(118)
(3)
(125)
(1,025)
(1,025)
(2.4)%
Corporate Lending
14,401
6,289
20,690
165
855
30
1,050
1,219
1,219
(5)
(20)
(25)
(3)
(118)
(3)
(124)
(1,024)
(1,024)
(5.1)%
Non Corporate
Lending
1
6,323
2,458
8,781
1
81
\u2013
82
65
65
(1)
(2)
(3)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
Banks
16,052
1,404
17,456
1
1
\u2013
2
\u2013
\u2013
(1)
(1)
(2)
(1)
\u2013
\u2013
(1)
\u2013
\u2013
(0.0)%
Singapore
34,526
6,046
40,572
361
509
36
906
285
285
(4)
(4)
(8)
(11)
(14)
(4)
(29)
(75)
(75)
(0.3)%
Corporate Lending
5,766
2,334
8,100
304
504
36
844
221
221
(4)
(3)
(7)
(11)
(13)
(4)
(28)
(74)
(74)
(1.2)%
Non Corporate
Lending
1
23,033
510
23,543
57
2
\u2013
59
\u2013
\u2013
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
5,727
3,202
8,929
\u2013
3
\u2013
3
64
64
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
(1)
(1)
(0.0)%
UK
8,364
4,171
12,535
56
785
83
924
257
257
(5)
(5)
(10)
\u2013
(14)
(7)
(21)
(209)
(209)
(1.7)%
Corporate Lending
5,407
1,559
6,966
52
539
71
662
250
250
(4)
(5)
(9)
\u2013
(13)
(7)
(20)
(202)
(202)
(2.9)%
Non Corporate
Lending
1
558
1,244
1,802
\u2013
160
\u2013
160
3
3
(1)
\u2013
(1)
\u2013
(1)
\u2013
(1)
(3)
(3)
(0.3)%
Banks
2,399
1,368
3,767
4
86
12
102
4
4
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.1)%
US
14,550
4,742
19,292
219
176
19
414
5
5
(2)
(2)
(4)
\u2013
\u2013
\u2013
\u2013
(5)
(5)
(0.0)%
Corporate Lending
7,487
2,765
10,252
146
130
\u2013
276
1
1
(1)
(2)
(3)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
Non Corporate
Lending
1
6,181
425
6,606
25
4
\u2013
29
4
4
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.1)%
Banks
882
1,552
2,434
48
42
19
109
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
China
9,737
2,733
12,470
31
298
8
337
262
262
(3)
(4)
(7)
\u2013
\u2013
\u2013
\u2013
(125)
(125)
(1.0)%
Corporate Lending
4,723
2,179
6,902
31
297
8
336
259
259
(2)
(1)
(3)
\u2013
\u2013
\u2013
\u2013
(125)
(125)
(1.7)%
Non Corporate
Lending
1
3,254
318
3,572
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
1,760
236
1,996
\u2013
1
\u2013
1
3
3
\u2013
(3)
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.2)%
Others
43,547
18,233
61,780
366
3,347
1,979
5,692
3,716
3,716
(16)
(34)
(50)
(4)
(35)
(54)
(93)
(2,115)
(2,115)
(3.2)%
Corporate Lending
16,189
15,034
31,223
345
2,322
678
3,345
3,335
3,335
(8)
(27)
(35)
(3)
(28)
(46)
(77)
(2,012)
(2,012)
(5.6)%
Non Corporate
Lending
1
18,894
1,861
20,755
19
946
1,059
2,024
375
375
(6)
(6)
(12)
(1)
(6)
(1)
(8)
(102)
(102)
(0.5)%
Banks
8,464
1,338
9,802
2
79
242
323
6
6
(2)
(1)
(3)
\u2013
(1)
(7)
(8)
(1)
(1)
(0.1)%
Total
147,500
46,076
193,576
1,200
6,052
2,155
9,407
5,809
5,809
(37)
(72)
(109)
(19)
(181)
(68)
(268)
(3,554)
(3,554)
(1.9)%
\n
1
Include \ufb01nancing,
insurance and non-banking corporations and governments
\n
2
Amounts have been re-presented from a regional basis (Asia; Africa & Middle East; and Europe & Americas) to key geographies covering the major
ity of the
\n
reported balances
\n\n\n \n
Wealth & Retail Banking and Ventures
2024
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
41,906
320
42,226
288
47
40
375
228
228
(59)
(14)
(73)
(33)
(20)
(4)
(57)
(69)
(69)
(0.5)%
Mortgages
31,080
265
31,345
55
14
24
93
75
75
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
(0.0)%
Credit cards
4,210
19
4,229
93
30
1
124
14
14
(36)
(11)
(47)
(27)
(19)
(1)
(47)
(14)
(14)
(2.5)%
Others
6,616
36
6,652
140
3
15
158
139
139
(23)
(3)
(26)
(6)
(1)
(3)
(10)
(48)
(48)
(1.2)%
Singapore
26,755
52
26,807
441
39
34
514
312
312
(29)
(26)
(55)
(6)
(6)
(6)
(18)
(265)
(265)
(1.2)%
Mortgages
13,531
12
13,543
160
32
15
207
9
9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.0)%
Credit cards
2,248
25
2,273
14
5
16
35
16
16
(9)
(26)
(35)
(5)
(5)
(4)
(14)
(19)
(19)
(2.9)%
Others
10,976
15
10,991
267
2
3
272
287
287
(20)
\u2013
(20)
(1)
(1)
(2)
(4)
(242)
(242)
(2.3)%
Korea
18,062
220
18,282
378
9
22
409
112
112
(22)
(1)
(23)
(28)
(4)
(1)
(33)
(33)
(33)
(0.5)%
Mortgages
13,198
171
13,369
250
8
17
275
62
62
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2)
(2)
(0.0)%
Credit cards
36
1
37
1
\u2013
\u2013
1
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2.6)%
Others
4,828
48
4,876
127
1
5
133
50
50
(21)
(1)
(22)
(28)
(4)
(1)
(33)
(31)
(31)
(1.7)%
Rest of World
26,085
4,998
31,083
338
76
241
655
977
977
(239)
(13)
(252)
(39)
(5)
(18)
(62)
(403)
(403)
(2.2)%
Mortgages
15,079
2,007
17,086
136
43
141
320
459
459
(4)
(2)
(6)
\u2013
\u2013
(1)
(1)
(124)
(124)
(0.7)%
Credit cards
1,148
351
1,499
29
12
19
60
40
40
(33)
(1)
(34)
(21)
\u2013
(1)
(22)
(27)
(27)
(5.2)%
Others
9,858
2,640
12,498
173
21
81
275
478
478
(202)
(10)
(212)
(18)
(5)
(16)
(39)
(252)
(252)
(3.8)%
Total
112,808
5,590
118,398
1,445
171
337
1,953
1,629
1,629
(349)
(54)
(403)
(106)
(35)
(29)
(170)
(770)
(770)
(1.1)%
\n\n \n
Wealth & Retail Banking and Ventures
1
2023
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
42,930
242
43,172
514
74
51
639
174
174
(24)
(34)
(58)
(28)
(13)
(12)
(53)
(49)
(49)
(0.4)%
Mortgages
32,376
152
32,528
282
53
13
348
63
63
\u2013
\u2013
\u2013
(1)
\u2013
\u2013
(1)
(1)
(1)
(0.0)%
Credit cards
4,045
44
4,089
80
17
24
121
18
18
(9)
(33)
(42)
(19)
(12)
(8)
(39)
(18)
(18)
(2.3)%
Others
6,509
46
6,555
152
4
14
170
93
93
(15)
(1)
(16)
(8)
(1)
(4)
(13)
(30)
(30)
(0.9)%
Singapore
26,644
68
26,712
379
41
34
454
282
282
(15)
(18)
(33)
(2)
(5)
(4)
(11)
(247)
(247)
(1.1)%
Mortgages
14,993
16
15,009
230
34
11
275
13
13
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.0)%
Credit cards
1,916
25
1,941
11
5
16
32
10
10
(7)
(17)
(24)
\u2013
(5)
(3)
(8)
(16)
(16)
(2.4)%
Others
9,735
27
9,762
138
2
7
147
259
259
(8)
(1)
(9)
(2)
\u2013
(1)
(3)
(227)
(227)
(2.4)%
Korea
22,966
211
23,177
462
20
9
491
93
93
(40)
\u2013
(40)
(18)
\u2013
\u2013
(18)
(19)
(19)
(0.3)%
Mortgages
16,535
164
16,699
364
18
8
390
69
69
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Credit cards
113
2
115
3
\u2013
\u2013
3
\u2013
\u2013
(4)
\u2013
(4)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(3.4)%
Others
6,318
45
6,363
95
2
1
98
24
24
(36)
\u2013
(36)
(18)
\u2013
\u2013
(18)
(19)
(19)
(1.1)%
Rest of World
26,653
4,787
31,440
440
79
256
775
947
947
(169)
(29)
(198)
(31)
(7)
(42)
(80)
(457)
(457)
(2.2)%
Mortgages
14,678
2,297
16,975
156
48
134
338
375
375
(5)
(2)
(7)
(2)
\u2013
(1)
(3)
(118)
(118)
(0.7)%
Credit cards
1,419
68
1,487
73
1
15
89
40
40
(26)
(9)
(35)
(7)
\u2013
(10)
(17)
(16)
(16)
(4.2)%
Others
10,556
2,422
12,978
211
29
107
347
532
532
(138)
(18)
(156)
(22)
(7)
(31)
(60)
(323)
(323)
(3.9)%
Total
119,193
5,308
124,501
1,795
213
350
2,358
1,496
1,496
(248)
(81)
(329)
(79)
(25)
(58)
(162)
(772)
(772)
(1.0)%
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
Undrawn commitment and \ufb01nanc
ial guarantees \u2013 by cl
ient segment credit quality
\n\n \n
Wealth & Retail Banking and Ventures
2024
Notional
ECL
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
70,595
100
\u2013
70,695
(15)
(3)
\u2013
(18)
Satisfactory
850
11
\u2013
861
(5)
(1)
\u2013
(6)
Higher risk
\u2013
21
\u2013
21
\u2013
(3)
\u2013
(3)
Impaired
\u2013
\u2013
8
8
\u2013
\u2013
\u2013
\u2013
Total
71,445
132
8
71,585
(20)
(7)
\u2013
(27)
\n\n \n
2023
Notional
ECL
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
73,819
160
\u2013
73,980
(15)
(3)
\u2013
(18)
Satisfactory
889
18
\u2013
907
(5)
(1)
\u2013
(6)
Higher risk
\u2013
33
\u2013
33
\u2013
(3)
\u2013
(3)
Impaired
\u2013
\u2013
3
3
\u2013
\u2013
\u2013
\u2013
Total
74,708
211
3
74,922
(20)
(7)
\u2013
(27)
\n\n
Movement in gross exposures and credit impa
irment for
\n
loans and advances, debt securit
ies, undrawn comm
itments
\n
and \ufb01nancial guarantees (aud
ited)
\n
The tables overleaf set out the movement in gross exposures
\n
and credit impa
irment by stage
in respect of amortised cost
\n
loans to banks and customers, undrawn commitments,
\n
\ufb01nancial guarantees and debt secur
it
ies class
if
ied at
\n
amortised cost and FVOCI. The tables are presented for the
\n
Group and separately for CIB and WRB (which also includes a
\n
separate presentation for secured and unsecured exposures).
\n
Methodology
\n
The movement lines with
in the tables are an aggregat
ion of
\n
monthly movements over the year and will therefore re\ufb02ect
\n
the accumulation of multiple trades during the year. The credit
\n
impa
irment charge
in the income statement comprises the
\n
amounts with
in the boxes
in the table below, less recoveries
\n
of amounts previously written off. Discount unwind is reported
\n
in net interest income and related to stage 3 \ufb01nanc
ial
\n
instruments only.
\n
The approach for determin
ing the key l
ine items in the tables
\n
is set out below.
\n
\u2022
Transfers
\u2013 transfers between stages are deemed to
\n
occur at the beginn
ing of a month based on pr
ior month
\n
closing balances.
\n
\u2022
Net remeasurement from stage changes
\u2013 the
\n
remeasurement of credit impa
irment prov
is
ions ar
is
ing
\n
from a change in stage is reported with
in the stage that the
\n
assets are transferred to. For example, assets transferred
\n
into stage 2 are remeasured from a 12-month to a lifet
ime
\n
ECL, with the effect of remeasurement reported in stage 2.
\n
For stage 3, this represents the in
it
ial remeasurement from
\n
specif
ic prov
is
ions recogn
ised on ind
iv
idual assets
\n
transferred into stage 3 in the year.
\n
\u2022
Net changes in exposures
\u2013 new business written less
\n
repayments in the year. With
in stage 1, new bus
iness written
\n
will attract up to 12 months of ECL charges. Repayments of
\n
non-amortis
ing loans (pr
imar
ily w
ith
in CIB) w
ill have low
\n
amounts of ECL provis
ions attr
ibuted to them, due to the
\n
release of provis
ions over the term to matur
ity. In stages 2
\n
and 3, the net change in exposures re\ufb02ect repayments
\n
although stage 2 may include new facil
it
ies where clients
\n
are on non-purely precautionary early alert, are CG 12, or
\n
when non-investment grade debt securit
ies are acqu
ired.
\n
\u2022
Changes in risk parameters
\u2013 for stages 1 and 2, this re\ufb02ects
\n
changes in the probabil
ity of default (PD), loss g
iven default
\n
(LGD) and exposure at default (EAD) of assets during the
\n
year, which includes the impact of releasing provis
ions over
\n
the term to maturity. It also includes the effect of changes
\n
in forecasts of macroeconomic variables during the year.
\n
In stage 3, this line represents addit
ional spec
if
ic prov
is
ions
\n
recognised on exposures held with
in stage 3.
\n
\u2022
Interest due but not paid
\u2013 change in contractual
\n
amount of interest due in stage 3 \ufb01nanc
ial
instruments
\n
but not paid, being the net of accruals, repayments and
\n
write-offs, together with the corresponding change in
\n
credit impa
irment.
\n
Changes to ECL models, which incorporate changes to
\n
model approaches and methodologies, are not reported as
\n
a separate line item as these have an impact over a number
\n
of lines and stages.
\n
Movements during the year
\n
Stage 1 gross exposures decreased by $3.2 bill
ion to $721 b
ill
ion
\n
(31 December 2023: $724 bill
ion). CIB exposure
increased by
\n
$30\u00a0bill
ion to $367 b
ill
ion (31 December 2023: $337 b
ill
ion),
\n
due to an increase in exposures in \ufb01nanc
ial guarantees
in
\n
the Energy, Financ
ing, Insurance and Transport sectors.
\n
WRB decreased by $11.4 bill
ion to $180 b
ill
ion (31 December
\n
2023: $191 bill
ion), largely dr
iven by fewer mortgages in Korea,
\n
Singapore and Hong Kong, as well as off-balance sheet
\n
commitments. Debt securit
ies decreased by $16.5 b
ill
ion,
\n
largely in the Central and other items segment which had
\n
also seen a $6.3 bill
ion reduct
ion in loan balances.
\n
Total stage 1 provis
ions
increased by $56 mill
ion to $582 m
ill
ion
\n
(31 December 2023: $526 mill
ion). CIB prov
is
ions decreased
\n
by $18\u00a0mill
ion to $133 m
ill
ion (31 December 2023: $151 m
ill
ion),
\n
due to a release in the China CRE overlay which was driven
\n
by repayments and portfolio movements. This was partly
\n
offset by new overlays of $27 mill
ion, pr
imar
ily
in Bangladesh.
\n
WRB provis
ions
increased by $67 mill
ion to $392 m
ill
ion
\n
(31 December 2023: $325 mill
ion), due to del
inquenc
ies
in
\n
the personal loans and unsecured lending portfolio.
\n
Stage 2 gross exposures decreased by $4 bill
ion to $19 b
ill
ion
\n
(31 December 2023: $22 bill
ion), pr
imar
ily dr
iven by a net
\n
reduction in CIB exposures from off-balance sheet
\n
instruments. WRB exposures decreased by $0.4 bill
ion to
\n
$2 bill
ion (31 December 2023: $2.5 b
ill
ion), ma
inly due to the
\n
mortgage portfolio.
\n
Stage 2 provis
ions
increased by $20 mill
ion to $537 m
ill
ion
\n
(31 December 2023: $517 mill
ion). CIB prov
is
ions
increased by
\n
$44\u00a0mill
ion to $362 m
ill
ion (31 December 2023: $318 m
ill
ion),
\n
due to $76 mill
ion new overlays, largely
in Hong Kong, and
\n
portfolio movements. This was offset by China CRE overlay
\n
releases, which were driven by repayments. WRB provis
ions
\n
increased by $11\u00a0mill
ion to $151 m
ill
ion (31 December 2023:
\n
$140 mill
ion) ma
inly driven by the overlay in Korea due
\n
to the settlement failure of two e-commerce platforms.
\n
Debt securit
ies pr
imar
ily held
in the Central and other items
\n
segment decreased by $31 mill
ion, due to sovere
ign upgrades.
\n
The impact of model and methodology updates in 2024
\n
reduced modelled provis
ions by $15 m
ill
ion across stages 1, 2
\n
and 3 in\u00a0WRB.
\n
Stage 3 gross exposures for CIB decreased by $1.1 bill
ion to
\n
$5.2 bill
ion (31 December 2023: $6.3 b
ill
ion) due to repayments
\n
and write-offs. CIB provis
ions decreased by $0.3 b
ill
ion to
\n
$3.3 bill
ion (31 December 2023: $3.7 b
ill
ion), due to releases
\n
from repayments and write-offs. WRB stage 3 loans
\n
remained broadly stable at $1.6 bill
ion (31 December 2023:
\n
$1.5 bill
ion) and prov
is
ions also rema
ined stable at $0.8 bill
ion
\n
(31 December 2023: $0.8 bill
ion). The amount of stage 3
\n
exposures written off during the year that remain subject
\n
to enforcement activ
ity
is $1.2 bill
ion (31 December 2023:
\n
$1 bill
ion).
\n\n
All segments (audited)
\n\n \n
Stage 1
Stage 2
Stage 3\u2075
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
3
ment
Net
balance
3
ment
Net
balance
3
ment
Net
balance
3
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
720,112
(645)
719,467
27,479
(618)
26,861
8,841
(4,724)
4,117
756,432
(5,987)
750,445
Transfers to stage 1
19,594
(661)
18,933
(19,583)
661
(18,922)
(11)
\u2013
(11)
\u2013
\u2013
\u2013
Transfers to stage 2
(42,628)
174
(42,454)
42,793
(182)
42,611
(165)
8
(157)
\u2013
\u2013
\u2013
Transfers to stage 3
(96)
6
(90)
(2,329)
326
(2,003)
2,425
(332)
2,093
\u2013
\u2013
\u2013
Net change in
exposures
23,717
(185)
23,532
(22,727)
22
(22,705)
(1,708)
624
(1,084)
(718)
461
(257)
Net remeasurement
from stage changes
\u2013
52
52
\u2013
(199)
(199)
\u2013
(163)
(163)
\u2013
(310)
(310)
Changes in risk
parameters
\u2013
202
202
\u2013
(32)
(32)
\u2013
(1,100)
(1,100)
\u2013
(930)
(930)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1,027)
1,027
\u2013
(1,027)
1,027
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(83)
83
\u2013
(83)
83
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
180
180
\u2013
180
180
Exchange translation
differences and
other movements\u00b9
3,177
531
3,708
(3,365)
(495)
(3,860)
(128)
(102)
(230)
(316)
(66)
(382)
As at 31 December
2023\u00b2
723,876
(526) 723,350
22,268
(517)
21,751
8,144
(4,499)
3,645
754,288
(5,542) 748,746
Income statement
ECL (charge)/release
69
(209)
(639)
(779)
Recoveries of
amounts previously
written off
\u2013
\u2013
271
271
Total credit
impa
irment
(charge)/release
69
(209)
(368)
(508)
As at 1 January 2024
723,876
(526) 723,350
22,268
(517)
21,751
8,144
(4,499)
3,645
754,288
(5,542) 748,746
Transfers to stage 1
16,433
(543)
15,890
(16,423)
543
(15,880)
(10)
\u2013
(10)
\u2013
\u2013
\u2013
Transfers to stage 2
(33,301)
128
(33,173)
33,770
(153)
33,617
(469)
25
(444)
\u2013
\u2013
\u2013
Transfers to stage 3
(1,631)
63
(1,568)
(146)
168
22
1,777
(231)
1,546
\u2013
\u2013
\u2013
Net change in
exposures
29,928
(173)
29,755
(18,435)
80
(18,355)
(1,383)
622
(761)
10,110
529
10,639
Net remeasurement
from stage changes
\u2013
61
61
\u2013
(185)
(185)
\u2013
(203)
(203)
\u2013
(327)
(327)
Changes in risk
parameters
\u2013
84
84
\u2013
(242)
(242)
\u2013
(873)
(873)
\u2013
(1,031)
(1,031)
Derecognised
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1,260)
1,260
\u2013
(1,260)
1,260
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
53
(53)
\u2013
53
(53)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
135
135
\u2013
135
135
Exchange translation
differences and
other movements\u00b9
(14,626)
324
(14,302)
(2,427)
(231)
(2,658)
147
(268)
(121)
(16,906)
(175)
(17,081)
As at 31 December
2024\u00b2
720,679
(582)720,097
18,607
(537)
18,070
6,999
(4,085)
2,914
746,285
(5,204) 741,081
Income statement
ECL (charge)/release\u2076
(28)
(347)
(454)
(829)
Recoveries of
amounts previously
written off
\u2013
\u2013
279
279
Total credit
impa
irment
(charge)/release
4
(28)
(347)
(175)
(550)
\n
1
Includes fair value adjustments and amortisat
ion on debt secur
it
ies
\n
2
Excludes Cash and balances at central banks, Accrued income, Assets held for sale and Other assets gross balances of $101,755 mill
ion (31 December 2023:
\n
$111,478\u00a0mill
ion) and Total cred
it impa
irment of $63 m
ill
ion (31 December 2023: $59 m
ill
ion)
\n
3
The gross balance includes the notional amount of off balance sheet instruments
\n
4 Reported basis
\n
5
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $N
il mill
ion (31 December 2023:
\n
$14 mill
ion)
\n
6
Does not include release relating to Other assets of $3 mill
ion (31 December 2023: N
il)
\n\n
Corporate & Investment Banking (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
315,437
(194)
315,243
20,148
(411)
19,737
6,994
(3,822)
3,172
342,579
(4,427)
338,152
Transfers to stage 1
14,948
(347)
14,601
(14,948)
347
(14,601)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Transfers to stage 2
(34,133)
80
(34,053)
34,175
(88)
34,087
(42)
8
(34)
\u2013
\u2013
\u2013
Transfers to stage 3
(17)
\u2013
(17)
(1,270)
141
(1,129)
1,287
(141)
1,146
\u2013
\u2013
\u2013
Net change in
exposures
41,314
(73)
41,241
(20,084)
89
(19,995)
(1,335)
623
(712)
19,895
639
20,534
Net remeasurement
from stage changes
\u2013
15
15
\u2013
(45)
(45)
\u2013
(82)
(82)
\u2013
(112)
(112)
Changes in risk
parameters
\u2013
60
60
\u2013
(68)
(68)
\u2013
(668)
(668)
\u2013
(676)
(676)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(340)
340
\u2013
(340)
340
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(120)
120
\u2013
(120)
120
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
155
155
\u2013
155
155
Exchange translation
differences and
other movements
(360)
308
(52)
(1,148)
(283)
(1,431)
(188)
(184)
(372)
(1,696)
(159)
(1,855)
As at 31 December
2023
337,189
(151) 337,038
16,873
(318)
16,555
6,256
(3,651)
2,605
360,318
(4,120)
356,198
Income statement
ECL (charge)/release
2
(24)
(127)
(149)
Recoveries of
amounts previously
written off
\u2013
\u2013
31
31
Total credit
impa
irment
(charge)/release
2
(24)
(96)
(118)
As at 1 January 2024
337,189
(151) 337,038
16,873
(318)
16,555
6,256
(3,651)
2,605
360,318
(4,120) 356,198
Transfers to stage 1
10,390
(245)
10,145
(10,390)
245
(10,145)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Transfers to stage 2
(25,698)
47
(25,651)
25,810
(58)
25,752
(112)
11
(101)
\u2013
\u2013
\u2013
Transfers to stage 3
(186)
(4)
(190)
(186)
22
(164)
372
(18)
354
\u2013
\u2013
\u2013
Net change in
exposures
50,866
(50)
50,816
(16,508)
88
(16,420)
(1,063)
607
(456)
33,295
645
33,940
Net remeasurement
from stage changes
\u2013
16
16
(4)
(36)
(40)
\u2013
(100)
(100)
(4)
(120)
(124)
Changes in risk
parameters
\u2013
29
29
\u2013
(129)
(129)
\u2013
(336)
(336)
\u2013
(436)
(436)
Derecognised
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(321)
321
\u2013
(321)
321
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
25
(25)
\u2013
25
(25)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
104
104
\u2013
104
104
Exchange translation
differences and
other movements
(5,455)
225
(5,230)
(726)
(176)
(902)
13
(225)
(212)
(6,168)
(176)
(6,344)
As at 31 December
2024
367,106
(133) 366,973
14,869
(362)
14,507
5,170
(3,312)
1,858
387,145
(3,807) 383,338
Income statement
ECL (charge)/release
(5)
(77)
171
89
Recoveries of
amounts previously
written off
\u2013
\u2013
26
26
Total credit
impa
irment
(charge)/release
(5)
(77)
197
115
\n
1
The gross balance includes the notional amount of off balance sheet instruments
\n\n
Wealth & Retail Banking (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
193,239
(413)
192,826
1,821
(118)
1,703
1,454
(776)
678
196,514
(1,307) 195,207
Transfers to stage 1
4,265
(246)
4,019
(4,254)
246
(4,008)
(11)
\u2013
(11)
\u2013
\u2013
\u2013
Transfers to stage 2
(7,544)
73
(7,471)
7,667
(73)
7,594
(123)
\u2013
(123)
\u2013
\u2013
\u2013
Transfers to stage 3
(64)
1
(63)
(1,049)
187
(862)
1,113
(188)
925
\u2013
\u2013
\u2013
Net change in
exposures
1,965
(78)
1,887
(1,713)
14
(1,699)
(395)
\u2013
(395)
(143)
(64)
(207)
Net remeasurement
from stage changes
\u2013
31
31
\u2013
(137)
(137)
\u2013
(38)
(38)
\u2013
(144)
(144)
Changes in risk
parameters
\u2013
110
110
\u2013
(69)
(69)
\u2013
(426)
(426)
\u2013
(385)
(385)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(649)
649
\u2013
(649)
649
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
37
(37)
\u2013
37
(37)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
24
24
\u2013
24
24
Exchange translation
differences and other
movements
(862)
197
(665)
\u2013
(190)
(190)
59
33
92
(803)
40
(763)
As at 31 December
2023
190,999
(325)
190,674
2,472
(140)
2,332
1,485
(759)
726
194,956
(1,224)
193,732
Income statement
ECL (charge)/release
63
(192)
(464)
(593)
Recoveries of
amounts previously
written off
\u2013
\u2013
239
239
Total credit
impa
irment
(charge)/release
63
(192)
(225)
(354)
As at 1 January 2024
190,999
(325) 190,674
2,472
(140)
2,332
1,485
(759)
726
194,956
(1,224) 193,732
Transfers to stage 1
5,126
(288)
4,838
(5,116)
288
(4,828)
(10)
\u2013
(10)
\u2013
\u2013
\u2013
Transfers to stage 2
(7,393)
80
(7,313)
7,525
(80)
7,445
(132)
\u2013
(132)
\u2013
\u2013
\u2013
Transfers to stage 3
(98)
1
(97)
(1,254)
211
(1,043)
1,352
(212)
1,140
\u2013
\u2013
\u2013
Net change in
exposures
(3,926)
(89)
(4,015)
(1,505)
21
(1,484)
(431)
\u2013
(431)
(5,862)
(68)
(5,930)
Net remeasurement
from stage changes
\u2013
29
29
\u2013
(144)
(144)
\u2013
(44)
(44)
\u2013
(159)
(159)
Changes in risk
parameters
\u2013
19
19
\u2013
(152)
(152)
\u2013
(537)
(537)
\u2013
(670)
(670)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(808)
808
\u2013
(808)
808
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
28
(28)
\u2013
28
(28)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
30
30
\u2013
30
30
Exchange translation
differences and
other movements
(5,128)
181
(4,947)
(92)
(155)
(247)
139
(16)
123
(5,081)
10
(5,071)
As at 31 December
2024
179,580
(392)
179,188
2,030
(151)
1,879
1,623
(758)
865
183,233
(1,301)
181,932
Income statement
ECL (charge)/release
(41)
(275)
(581)
(897)
Recoveries of
amounts previously
written off
\u2013
\u2013
253
253
Total credit
impa
irment
(charge)/release
(41)
(275)
(328)
(644)
\n
1
The gross balance includes the notional amount of off-balance sheet instruments
\n\n
Wealth & Retail Banking \u2013 Secured (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
135,362
(60) 135,302
1,413
(17)
1,396
1,028
(552)
476
137,803
(629)
137,174
Transfers to stage 1
3,311
(20)
3,291
(3,302)
20
(3,282)
(9)
\u2013
(9)
\u2013
\u2013
\u2013
Transfers to stage 2
(5,340)
11
(5,329)
5,436
(9)
5,427
(96)
(2)
(98)
\u2013
\u2013
\u2013
Transfers to stage 3
(28)
1
(27)
(463)
1
(462)
491
(2)
489
\u2013
\u2013
\u2013
Net change in
exposures
(3,138)
(16)
(3,154)
(1,250)
3
(1,247)
(216)
\u2013
(216)
(4,604)
(13)
(4,617)
Net remeasurement
from stage changes
\u2013
4
4
\u2013
(16)
(16)
\u2013
(3)
(3)
\u2013
(15)
(15)
Changes in risk
parameters
\u2013
22
22
\u2013
24
24
\u2013
(110)
(110)
\u2013
(64)
(64)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(109)
109
\u2013
(109)
109
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(3)
3
\u2013
(3)
3
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
12
12
\u2013
12
12
Exchange translation
differences and
other movements
(369)
25
(344)
(7)
(22)
(29)
(24)
20
(4)
(400)
23
(377)
As at 31 December
2023
129,798
(33)
129,765
1,827
(16)
1,811
1,062
(525)
537
132,687
(574)
132,113
Income statement
ECL (charge)/release
10
11
(113)
(92)
Recoveries of
amounts previously
written off
\u2013
\u2013
68
68
Total credit
impa
irment
(charge)/release
10
11
(45)
(24)
As at 1 January 2024
129,798
(33) 129,765
1,827
(16)
1,811
1,062
(525)
537
132,687
(574)
132,113
Transfers to stage 1
3,839
(23)
3,816
(3,836)
23
(3,813)
(3)
\u2013
(3)
\u2013
\u2013
\u2013
Transfers to stage 2
(4,952)
13
(4,939)
5,054
(13)
5,041
(102)
\u2013
(102)
\u2013
\u2013
\u2013
Transfers to stage 3
(43)
\u2013
(43)
(566)
19
(547)
609
(19)
590
\u2013
\u2013
\u2013
Net change in
exposures
2,570
(11)
2,559
(917)
8
(909)
(268)
\u2013
(268)
1,385
(3)
1,382
Net remeasurement
from stage changes
\u2013
6
6
\u2013
(15)
(15)
\u2013
(7)
(7)
\u2013
(16)
(16)
Changes in risk
parameters
\u2013
(6)
(6)
\u2013
(6)
(6)
\u2013
(129)
(129)
\u2013
(141)
(141)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(114)
114
\u2013
(114)
114
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
53
(53)
\u2013
53
(53)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
16
16
\u2013
16
16
Exchange translation
differences and
other movements
(4,496)
6
(4,490)
(57)
(31)
(88)
(33)
47
14
(4,586)
22
(4,564)
As at 31 December
2024
126,716
(48) 126,668
1,505
(31)
1,474
1,204
(556)
648
129,425
(635) 128,790
Income statement
ECL (charge)/release
(11)
(13)
(136)
(160)
Recoveries of
amounts previously
written off
\u2013
\u2013
80
80
Total credit
impa
irment
(charge)/release
(11)
(13)
(56)
(80)
\n
1
The gross balance includes the notional amount of off balance sheet instruments
\n\n
Wealth & Retail Banking \u2013 Unsecured (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Retail Banking
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
57,877
(353)
57,524
408
(101)
307
426
(224)
202
58,711
(678)
58,033
Transfers to stage 1
954
(226)
728
(952)
226
(726)
(2)
\u2013
(2)
\u2013
\u2013
\u2013
Transfers to stage 2
(2,204)
62
(2,142)
2,231
(64)
2,167
(27)
2
(25)
\u2013
\u2013
\u2013
Transfers to stage 3
(36)
\u2013
(36)
(586)
186
(400)
622
(186)
436
\u2013
\u2013
\u2013
Net change in
exposures
5,103
(62)
5,041
(463)
11
(452)
(179)
\u2013
(179)
4,461
(51)
4,410
Net remeasurement
from stage changes
\u2013
27
27
\u2013
(121)
(121)
\u2013
(35)
(35)
\u2013
(129)
(129)
Changes in risk
parameters
\u2013
88
88
\u2013
(93)
(93)
\u2013
(316)
(316)
\u2013
(321)
(321)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(540)
540
\u2013
(540)
540
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
40
(40)
\u2013
40
(40)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
12
12
\u2013
12
12
Exchange
translation
differences and
other movements
(493)
172
(321)
7
(168)
(161)
83
13
96
(403)
17
(386)
As at 31 December
2023
61,201
(292)
60,909
645
(124)
521
423
(234)
189
62,269
(650)
61,619
Income statement
ECL (charge)/release
53
(203)
(351)
(501)
Recoveries of
amounts previously
written off
\u2013
\u2013
171
171
Total credit
impa
irment
(charge)/release
53
(203)
(180)
(330)
As at 1 January
2024
61,201
(292)
60,909
645
(124)
521
423
(234)
189
62,269
(650)
61,619
Transfers to stage 1
1,287
(265)
1,022
(1,280)
265
(1,015)
(7)
\u2013
(7)
\u2013
\u2013
\u2013
Transfers to stage 2
(2,441)
67
(2,374)
2,471
(67)
2,404
(30)
\u2013
(30)
\u2013
\u2013
\u2013
Transfers to stage 3
(55)
1
(54)
(688)
192
(496)
743
(193)
550
\u2013
\u2013
\u2013
Net change in
exposures
(6,496)
(78)
(6,574)
(588)
13
(575)
(163)
\u2013
(163)
(7,247)
(65)
(7,312)
Net remeasurement
from stage changes
\u2013
23
23
\u2013
(129)
(129)
\u2013
(37)
(37)
\u2013
(143)
(143)
Changes in risk
parameters
\u2013
25
25
\u2013
(146)
(146)
\u2013
(408)
(408)
\u2013
(529)
(529)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(694)
694
\u2013
(694)
694
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
25
\u2013
(25)
25
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
14
14
\u2013
14
14
Exchange
translation
differences and
other movements
(632)
175
(457)
(35)
(124)
(159)
172
(63)
109
(495)
(12)
(507)
As at 31 December
2024
52,864
(344)
52,520
525
(120)
405
419
(202)
217
53,808
(666)
53,142
Income statement
ECL (charge)/release
(30)
(262)
(445)
(737)
Recoveries of
amounts previously
written off
\u2013
\u2013
172
172
Total credit
impa
irment
(charge)/release
(30)
(262)
(273)
(565)
\n
1
The gross balance includes the notional amount of off balance sheet instruments
\n\n
Analysis of stage 2 balances
\n
The table below analyses total stage 2 gross on-and off-balance sheet exposures and associated expected credit provis
ions
\n
by the key SICR driver that caused the exposures to be classif
ied as stage 2 as at 31 December 2024 and 31 December 2023 for
\n
each segment.
\n
Where multiple drivers apply, the exposure is allocated based on the table order. For example, a loan may have breached
\n
the PD thresholds and could also be on non-purely precautionary early alert; in this instance, the exposure is reported under
\n
\u2018Increase in PD\u2019.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Corporate &
Wealth &
Investment Banking
Retail Banking
Ventures
Central & other items
1
Total
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
Increase in PD
8,465
112
1.3%
1,366
104
7.6%
48
20
31.3%
154
\u2013
0.0%
10,033
236
2.4%
Non-purely
precautionary early alert
3,473
44
1.3%
30
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
3,503
44
1.3%
Higher risk (CG12)
686
24
3.5%
18
\u2013
0.0%
\u2013
\u2013
0.0%
1,488
1
0.4%
2,192
25
1.1%
Top up/Sell down
(Private Banking)
\u2013
\u2013
0.0%
254
1
0.4%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
254
1
0.4%
Others
2,245
25
1.1%
150
5
3.3%
\u2013
\u2013
0.0%
482
\u2013
0.0%
2,877
30
1.0%
30 days past due
\u2013
\u2013
0.0%
212
19
9.0%
6
4
66.7%
\u2013
\u2013
0.0%
218
23
10.6%
Management overlay
\u2013
157
0.0%
\u2013
22
0.0%
\u2013
3
0.0%
\u2013
\u2013
0.0%
\u2013
182
0.0%
Total stage 2
14,869
362
2.4%
2,030
151
7.4%
54
27
40.7%
2,124
1
0.3%
19,077
541
2.8%
2023
Increase in PD
8,262
75
0.9%
1,962
109
5.6%
96
23
24.0%
599
13
2.2%
10,919
220
2.0%
Non-purely
precautionary early alert
5,136
26
0.5%
37
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
5,173
26
0.5%
Higher risk (CG12)
1,008
56
5.6%
26
1
3.8%
\u2013
\u2013
0.0%
2,020
17
0.8%
3,054
74
2.4%
Top up/Sell down
(Private Banking)
\u2013
\u2013
0.0%
148
2
1.4%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
148
2
1.7%
Others
2,467
37
1.5%
151
16
10.6%
\u2013
\u2013
0.0%
489
\u2013
0.0%
3,107
53
1.7%
30 days past due
\u2013
\u2013
0.0%
148
12
8.1%
2
\u2013
0.0%
\u2013
\u2013
0.0%
150
12
7.7%
Management overlay
\u2013
124
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
17
0.0%
\u2013
141
0.0%
Total stage 2
16,873
318
1.9%
2,472
140
5.7%
98
23
23.5%
3,108
47
1.5%
22,551
528
2.3%
\n
1
Includes Gross and ECL for Cash and balances at central banks and Assets held for sale
\n\n
Credit impa
irment charge (aud
ited)
\n
The table below analyses credit impa
irment charges or releases of the ongo
ing business portfolio and restructuring business
\n
portfolio for the year ended 31 December 2024.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Stage 1 & 2
Stage 3
Total
Stage 1 & 2
Stage 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Ongoing business portfolio
Corporate & Investment Banking
81
(187)
(106)
11
112
123
Wealth & Retail Banking
317
327
644
129
225
354
Ventures
10
64
74
42
43
85
Central & other items
(37)
(18)
(55)
(44)
10
(34)
Credit impa
irment charge/(release)
371
186
557
138
390
528
Restructuring business portfolio
Others
1
(11)
(10)
1
(21)
(20)
Credit impa
irment charge/(release)
1
(11)
(10)
1
(21)
(20)
Total credit impa
irment
charge/(release)
372
175
547
139
369
508
\n
Problem credit management and provis
ion
ing (audited)
\n
Forborne and other modif
ied loans by cl
ient segment
\n
A forborne loan arises when a concession has been made to the contractual terms of a loan in response to a customer\u2019s
\n
\ufb01nancial d
iff
icult
ies.
\n
Net forborne loans decreased by $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to repayments in CIB
\n
non-performing forborne loans. Net non-performing forborne loans decreased by $235 mill
ion to $732 m
ill
ion (31 December
\n
2023: $967 mill
ion), wh
ich was partly offset by a $17 mill
ion
increase in CIB performing forborne loans.
\n\n \n
2024
2023
Corporate &
Corporate &
Investment
Wealth &
Investment
Wealth &
Banking
Retail Banking
Total
Banking
Retail Banking
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Gross stage 1 and 2 forborne loans
17
36
53
\u2013
40
40
Modif
icat
ion of terms and condit
ions
1
17
36
53
\u2013
40
40
Impairment provis
ions
\u2013
(1)
(1)
\u2013
(2)
(2)
Modif
icat
ion of terms and condit
ions
1
\u2013
(1)
(1)
\u2013
(2)
(2)
Net stage 1 and 2 forborne loans
17
35
52
\u2013
38
38
Collateral
\u2013
27
27
\u2013
31
31
Gross stage 3 forborne loans
2,065
258
2,323
2,340
274
2,614
Modif
icat
ion of terms and condit
ions
1
1,824
258
2,082
2,113
274
2,387
Re\ufb01nancing
2
241
\u2013
241
227
\u2013
227
Impairment provis
ions
(1,481)
(110)
(1,591)
(1,529)
(118)
(1,647)
Modif
icat
ion of terms and condit
ions
1
(1,242)
(110)
(1,352)
(1,337)
(118)
(1,454)
Re\ufb01nancing
2
(239)
\u2013
(239)
(192)
\u2013
(192)
Net stage 3 forborne loans
584
148
732
811
156
967
Collateral
172
55
227
341
49
390
Net carrying value of forborne loans
601
183
784
811
194
1,005
\n
1
Modif
icat
ion of terms is any contractual change apart from re\ufb01nanc
ing, as a result of cred
it stress of the counterparty, i.e. interest reductions, loan
\n
covenant waivers
\n
2
Re\ufb01nancing
is a new contract to a borrower in credit stress, such that they are re\ufb01nanced and can pay other debt contracts that they were unable to honour
\n
Forborne and other modif
ied loans by key geography
\n
Net forborne loans decreased by $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to non-performing
\n
forborne loans.
\n\n \n
2024
2023
3
Hong
Singa-
Hong
Singa-
Kong
Korea
China
pore
UK
US
Other
Total
Kong
Korea
China
pore
UK
US
Other
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Performing
forborne loans
2
8
\u2013
3
\u2013
\u2013
39
52
\u2013
6
\u2013
3
\u2013
\u2013
29
38
Stage 3
forborne loans
118
18
77
25
78
1
415
732
104
22
114
37
46
1
643
967
Net forborne loans
120
26
77
28
78
1
454
784
104
28
114
40
46
1
672
1,005
\n
3
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances)
\n\n
Credit Risk mit
igat
ion
\n
Potential credit losses from any given account, customer or portfolio are mit
igated us
ing a range of tools such as collateral,
\n
netting arrangements, credit insurance and credit derivat
ives, tak
ing into account expected volatil
ity and guarantees.
\n
The reliance that can be placed on these mit
igants
is carefully assessed in light of issues such as legal certainty and
\n
enforceabil
ity, market valuat
ion correlation and counterparty risk of the guarantor.
\n
Collateral (audited)
\n
A secured loan is one where the borrower pledges an asset as collateral of which the Group is able to take possession in the
\n
event that the borrower defaults.
\n
The collateral values in the table below (which covers loans and advances to banks and customers, excluding those held at fair
\n
value through pro\ufb01t or loss) are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of
\n
over-collateralisat
ion. The extent of over-collateral
isat
ion has been determ
ined with reference to both the drawn and undrawn
\n
components of exposure as this best re\ufb02ects the effect of collateral and other credit enhancements on the amounts aris
ing
\n
from ECL. The value of collateral re\ufb02ects management\u2019s best estimate and is backtested against our prior experience.
\n
Collateral held on loans and advances
\n
The table below details collateral held against exposures, separately disclos
ing stage 2 and stage 3 exposure and
\n
corresponding collateral.
\n\n \n
2024
Net amount outstanding
Collateral
Net exposure
Credit-
Credit-
Credit-
Stage 2
impa
ired
Stage 2
impa
ired
Stage 2
impa
ired
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
Total
assets
assets (S3)
Total
2
assets
assets (S3)
Total
assets
assets (S3)
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment Banking
1
181,897
8,657
1,376
36,750
3,052
298
145,147
5,605
1,078
Wealth & Retail Banking
119,248
1,758
858
85,163
891
584
34,085
867
274
Ventures
1,389
25
1
\u2013
\u2013
\u2013
1,389
25
1
Central & other items
22,091
35
98
80
35
\u2013
22,011
\u2013
98
Total
324,625
10,475
2,333
121,993
3,978
882
202,632
6,497
1,451
2023
Corporate &
Investment Banking
1
175,382
8,175
2,046
36,458
2,972
623
138,924
5,203
1,423
Wealth & Retail Banking
126,059
2,163
724
86,827
1,136
554
39,232
1,027
170
Ventures
1,033
33
\u2013
\u2013
\u2013
\u2013
1,033
33
\u2013
Central & other items
29,478
964
209
2,475
964
\u2013
27,003
\u2013
209
Total
331,952
11,335
2,979
125,760
5,072
1,177
206,192
6,263
1,802
\n
1
Includes loans and advances to banks
\n
2
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
\n
Collateral \u2013 Corporate & Investment Banking (audited)
\n
Our underwrit
ing standards encourage tak
ing specif
ic charges on assets and we cons
istently seek high-quality, investment-
\n
grade collateral.
\n
Collateral taken for longer-term and sub-investment grade corporate loans increased to 49 per cent (31 December 2023:
\n
41 per cent).
\n
The unadjusted market value of collateral across all asset types, in respect of CIB, without adjust
ing for over collateral
isat
ion,
\n
increased to $383 bill
ion (31 December 2023: $290 b
ill
ion) predom
inantly due to an increase in reverse repos.
\n
88 per cent (31 December 2023: 83 per cent) of tangible collateral excluding reverse repurchase agreements and \ufb01nanc
ial
\n
guarantees held comprises physical assets with the remainder held in cash. Overall collateral remained broadly stable at
\n
$37 bill
ion (31 December 2023: $36 b
ill
ion).
\n
Non-tangible collateral, such as guarantees and standby letters of credit, is also held against corporate exposures, although the
\n
\ufb01nancial effect of th
is type of collateral is less sign
i\ufb01cant
in terms of recoveries. However, this is considered when determin
ing
\n
the loss given default and other credit-related factors. Collateral is also held against off-balance sheet exposures, includ
ing
\n
undrawn commitments and trade-related instruments.
\n\n
Corporate & Investment Banking
\n\n \n
2024
2023
Amortised cost
$mill
ion
$mill
ion
Maximum exposure
181,897
175,382
Property
8,504
9,339
Plant, machinery and other stock
935
933
Cash
1,973
2,985
Reverse repos
12,568
13,826
AA- to AA+
938
1,036
A- to A+
8,324
10,606
BBB- to BBB+
1,437
855
Lower than BBB-
95
169
Unrated
1,774
1,160
Financ
ial guarantees and
insurance
7,075
5,057
Commodit
ies
33
5
Ships and aircraft
5,662
4,313
Total value of collateral
1
36,750
36,458
Net exposure
145,147
138,924
\n
1
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
\n
Collateral \u2013 Wealth & Retail Banking (audited)
\n
In WRB, fully secured products remain stable at 85 per cent of the total portfolio (31 December 2023: 85 per cent).
\n
The following table presents an analysis of loans to ind
iv
iduals by product \u2013 split between fully secured, partially secured
\n
and unsecured.
\n\n \n
2024
2023
Fully
Partially
Fully
Partially
secured\u00b9
secured\u00b9
Unsecured
Total2
secured\u00b9
secured\u00b9
Unsecured
Total\u00b2
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Maximum exposure
101,264
536
17,448
119,248
106,914
505
18,640
126,059
Loans to ind
iv
iduals
Mortgages
76,696
\u2013
\u2013
76,696
82,943
\u2013
\u2013
82,943
CCPL
463
\u2013
16,343
16,806
375
\u2013
17,395
17,770
Auto
160
\u2013
\u2013
160
312
\u2013
\u2013
312
Secured wealth products
21,928
\u2013
\u2013
21,928
20,303
\u2013
\u2013
20,303
Other
2,017
536
1,105
3,658
2,981
505
1,245
4,731
Total collateral
2
85,163
86,827
Net exposure
3
34,085
39,232
Percentage of total loans
85%
0%
15%
85%
0%
15%
\n
1
Secured loans are fully secured if the fair value of the collateral is equal to or greater than the loan at the time of orig
inat
ion. All other secured loans are considered
\n
to be partly secure
\n
2
Collateral values are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of over-collateralisat
ion
\n
3 Amounts net of ECL
\n
Mortgage loan-to-value ratios by geography (audited)
\n
Loan-to-value (LTV) ratios measure the ratio of the current mortgage outstanding to the current fair value of the properties on
\n
which they are secured.
\n
For the majority of mortgage loans, the value of property held as secur
ity sign
i\ufb01cantly exceeds the pr
inc
ipal outstand
ing of the
\n
loan. The average LTV of the overall mortgage portfolio increased to 48.9 per cent (31 December 2023: 47.1 per cent) driven by
\n
a decrease in property prices and regulatory relaxations in a few key markets, includ
ing Hong Kong and Korea. Hong Kong,
\n
which represents 34.3 per cent of WRB mortgage portfolio, has an average LTV of 58.6 per cent (31 December 2023: 55.7 per
\n
cent). The increase in Hong Kong resident
ial mortgage LTV was due to a decrease
in property prices. However, 29 per cent of
\n
the Hong Kong mortgage exposure is backed by credit insurance and, specif
ically, 95 per cent of mortgage exposure w
ith LTV
\n
greater than 80 per cent is backed by credit insurance.
\n
Our other key markets continued to have low portfolio average LTVs (Korea and Singapore at 42.1 per cent and 42.5 per cent
\n
respectively). Korea average LTV increased by 1.7 per cent ( 31 December 2023: 40.4 per cent) was mainly due to government
\n
relaxations whereby highly regulated areas have eased up to accommodate customers with higher LTV.
\n\n
An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.
\n\n \n
2024
2023
1
Hong
Hong
Kong
Singapore
Korea
Other
Total
Kong
Singapore
Korea
Other
Total
%
%
%
%
%
%
%
%
%
%
Amortised cost
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Less than 50 per cent
40.9
52.7
64.1
50.2
51.3
44.9
50.9
69.5
51.0
54.9
50 per cent to 59 per cent
17.6
21.8
13.2
15.4
16.5
19.5
24.7
11.0
16.7
17.1
60 per cent to 69 per cent
12.7
15.6
13.5
17.0
14.3
9.7
15.2
9.7
16.3
11.9
70 per cent to 79 per cent
5.5
9.6
8.3
12.7
8.5
4.3
8.7
8.9
11.6
7.9
80 per cent to 89 per cent
5.1
0.1
0.8
4.1
2.9
7.3
0.5
0.6
3.6
3.3
90 per cent to 99 per cent
8.2
0.0
0.1
0.5
3.0
7.4
\u2013
0.1
0.4
2.5
100 per cent and greater
10.1
0.1
0.1
0.2
3.5
7.0
\u2013
0.1
0.4
2.4
Average portfolio loan-to-value
58.6
42.5
42.1
48.0
48.9
55.7
43.4
40.4
47.8
47.1
Loans to ind
iv
iduals \u2013
mortgages ($mill
ion)
31,506
13,756
13,703
17,731
76,696
32,935
15,292
17,157
17,559
82,943
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
Collateral and other credit enhancements possessed or called upon (audited)
\n
The Group obtains assets by taking possession of collateral or calling upon other credit enhancements (such as guarantees).
\n
Repossessed properties are sold in an orderly fashion. Where the proceeds are in excess of the outstanding loan balance, the
\n
excess is returned to the borrower.
\n
Certain equity securit
ies acqu
ired may be held by the Group for investment purposes and are classif
ied as fa
ir value through
\n
pro\ufb01t or loss, and the related loan written off. The carrying value of collateral possessed and held by the Group is $23.7 mill
ion
\n
(31 December 2023: $16.5 mill
ion).
\n\n \n
2024
2023
$mill
ion
$mill
ion
Property, plant and equipment
6.1
10.5
Guarantees
4.7
6.0
Other
12.9
\u2013
Total
23.7
16.5
\n
Other Credit Risk mit
igat
ion (audited)
\n
Other forms of Credit Risk mit
igat
ion are set out below.
\n
Credit default swaps
\n
The Group has entered into credit default swaps for portfolio management purposes, referencing loan assets with a notional
\n
value of $3.5 bill
ion (31 December 2023: $3.5 b
ill
ion). These cred
it default swaps are accounted for as \ufb01nanc
ial guarantees as per
\n
IFRS 9 as they will only reimburse the holder for an incurred loss on an underlying debt instrument. The Group continues to hold
\n
the underlying assets referenced in the credit default swaps and it continues to be exposed to related Credit Risk and Foreign
\n
Exchange Rate Risk on these assets.
\n
Credit linked notes
\n
The Group has issued credit linked notes for portfolio management purposes, referencing loan assets with a notional value of
\n
$18.6 bill
ion (31 December 2023: $22.5 b
ill
ion). The Group cont
inues to hold the underlying assets for which the credit linked notes
\n
provide mit
igat
ion. The credit linked notes of $2.0 bill
ion (31 December 2023: $2.1 b
ill
ion) are recogn
ised as a \ufb01nanc
ial l
iab
il
ity at
\n
amortised cost on the balance sheet and are adjusted, where appropriate, for reductions in expected future cash \ufb02ows with a
\n
corresponding credit impa
irment
in the income
statement.
\n
Derivat
ive \ufb01nancial
instruments
\n
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the
\n
counterparty through netting the sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions.
\n
These are also set out under the \u2018Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion\u2019 section (page 249).
\n
Off-balance sheet exposures
\n
For certain types of exposures, such as letters of credit and guarantees, the Group obtains collateral such as cash depending
\n
on internal Credit Risk assessments, as well as in the case of letters of credit holding legal title to the underlying assets should
\n
a default take place.
\n
Other portfolio analysis
\n
This section provides maturity analysis by credit quality by industry and industry and retail products analysis by key geography.
\n
Maturity analysis of loans and advances by client segment
\n
Loans and advances to the CIB segment remain predominantly short-term, with $91 bill
ion (31 December 2023: $91 b
ill
ion)
\n
maturing in less than one year. 91 per cent (31 December 2023: 98 per cent) of loans to banks mature in less than one year,
\n
as net exposures decreased to $44 bill
ion (31 December 2023: $45 b
ill
ion). Shorter matur
it
ies g
ive us the \ufb02exib
il
ity to respond
\n
promptly to events and rebalance or reduce our exposure to clients or sectors that are facing increased pressure or uncertainty.
\n
The WRB short-term book of one year or less, is stable at 27 per cent (31 December 2023: 26 per cent). The WRB long-term book
\n
of over \ufb01ve years also remained stable at 62 per cent (31 December 2023: 63 per cent).
\n\n\n \n
2024
2023
One year
One to
Over
One year
One to
Over
or less
\ufb01ve years
\ufb01ve years
Total
or less
\ufb01ve years
\ufb01ve years
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate & Investment Banking
91,065
33,130
17,670
141,865
90,728
30,746
12,822
134,296
Wealth & Retail Banking
32,252
13,194
75,091
120,537
33,397
13,711
80,166
127,274
Ventures
1,001
442
\u2013
1,443
747
334
\u2013
1,081
Central & other items
22,085
2
4
22,091
29,448
43
3
29,494
Gross loans and advances to customers
146,403
46,768
92,765
285,936
154,320
44,834
92,991
292,145
Impairment provis
ions
(4,369)
(409)
(126)
(4,904)
(4,872)
(185)
(113)
(5,170)
Net loans and advances to customers
142,034
46,359
92,639
281,032
149,448
44,649
92,878
286,975
Net loans and advances to banks
39,591
3,699
303
43,593
43,955
1,021
1
44,977
\n
Credit quality by industry
\n
Loans and advances
\n
This section provides an analysis of the Group\u2019s amortised cost portfolio by industry on a gross, total credit impa
irment and
\n
net basis.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
ment
amount
balance
ment
amount
balance
ment
amount
balance
ment
amount
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
12,147
(9)
12,138
468
(57)
411
870
(559)
311
13,485
(625)
12,860
Manufacturing
19,942
(12)
19,930
840
(16)
824
418
(305)
113
21,200
(333)
20,867
Financ
ing,
insurance and
non-banking
34,452
(16)
34,436
1,238
(6)
1,232
154
(142)
12
35,844
(164)
35,680
Transport, telecom
and util
it
ies
16,099
(11)
16,088
2,309
(32)
2,277
330
(85)
245
18,738
(128)
18,610
Food and
household
products
8,425
(8)
8,417
267
(8)
259
251
(198)
53
8,943
(214)
8,729
Commercial
real estate
12,135
(10)
12,125
1,714
(126)
1,588
1,485
(1,265)
220
15,334
(1,401)
13,933
Min
ing and
quarrying
5,542
(3)
5,539
287
(12)
275
124
(57)
67
5,953
(72)
5,881
Consumer
durables
5,988
(6)
5,982
218
(26)
192
292
(259)
33
6,498
(291)
6,207
Construction
1,925
(2)
1,923
528
(5)
523
171
(160)
11
2,624
(167)
2,457
Trading
companies &
distr
ibutors
589
\u2013
589
24
(1)
23
88
(48)
40
701
(49)
652
Government
28,870
\u2013
28,870
441
(12)
429
205
(18)
187
29,516
(30)
29,486
Other
4,590
(3)
4,587
344
(2)
342
186
(82)
104
5,120
(87)
5,033
Total
150,704
(80) 150,624
8,678
(303)
8,375
4,574
(3,178)
1,396
163,956
(3,561) 160,395
Retail Products:
Mortgage
75,340
(8)
75,332
896
(2)
894
606
(136)
470
76,842
(146)
76,696
Credit Cards
8,037
(121)
7,916
222
(80)
142
71
(60)
11
8,330
(261)
8,069
Personal Loan
and other
unsecured lending
10,021
(228)
9,793
238
(53)
185
279
(131)
148
10,538
(412)
10,126
Auto
159
\u2013
159
1
\u2013
1
\u2013
\u2013
\u2013
160
\u2013
160
Secured wealth
products
21,404
(37)
21,367
402
(6)
396
518
(353)
165
22,324
(396)
21,928
Other
3,437
(9)
3,428
194
(29)
165
155
(90)
65
3,786
(128)
3,658
Total
118,398
(403)
117,995
1,953
(170)
1,783
1,629
(770)
859
121,980
(1,343) 120,637
Net carrying value
(customers)\u00b9
269,102
(483) 268,619
10,631
(473)
10,158
6,203
(3,948)
2,255
285,936
(4,904) 281,032
Net carrying
value (Banks)
1
43,208
(10)
43,198
318
(1)
317
83
(5)
78
43,609
(16)
43,593
\n
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $9,660 mill
ion for customers and $2,946 m
ill
ion for Banks.
\n\n\n \n
2023
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
ment
amount
balance
ment
amount
balance
ment
amount
balance
ment
amount
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
9,397
(8)
9,389
672
(22)
650
949
(535)
414
11,018
(565)
10,453
Manufacturing
21,239
(8)
21,231
708
(16)
692
656
(436)
220
22,603
(460)
22,143
Financ
ing,
insurance and
non-banking
31,633
(13)
31,620
571
(1)
570
80
(77)
3
32,284
(91)
32,193
Transport,
telecom and
util
it
ies
14,710
(8)
14,702
1,722
(36)
1,686
481
(178)
303
16,913
(222)
16,691
Food and
household
products
7,668
(15)
7,653
323
(7)
316
355
(262)
93
8,346
(284)
8,062
Commercial
real estate
12,261
(30)
12,231
1,848
(129)
1,719
1,712
(1,191)
521
15,821
(1,350)
14,471
Min
ing and
quarrying
5,995
(4)
5,991
220
(10)
210
151
(84)
67
6,366
(98)
6,268
Consumer
durables
5,815
(3)
5,812
300
(21)
279
329
(298)
31
6,444
(322)
6,122
Construction
2,230
(2)
2,228
502
(8)
494
358
(326)
32
3,090
(336)
2,754
Trading
companies &
distr
ibutors
581
\u2013
581
57
\u2013
57
107
(58)
49
745
(58)
687
Government
33,400
(6)
33,394
1,783
(5)
1,778
367
(33)
334
35,550
(44)
35,506
Other
4,262
(4)
4,258
161
(3)
158
187
(70)
117
4,610
(77)
4,533
Total
149,191
(101) 149,090
8,867
(258)
8,609
5,732
(3,548)
2,184
163,790
(3,907)
159,883
Retail Products:
Mortgage
81,210
(8)
81,202
1,350
(5)
1,345
519
(123)
396
83,079
(136)
82,943
Credit Cards
7,633
(104)
7,529
244
(65)
179
69
(50)
19
7,946
(219)
7,727
Personal Loan
and other
unsecured lending
10,867
(188)
10,679
324
(77)
247
315
(165)
150
11,506
(430)
11,076
Auto
310
\u2013
310
1
\u2013
1
1
\u2013
1
312
\u2013
312
Secured wealth
products
19,923
(22)
19,901
278
(10)
268
474
(340)
134
20,675
(372)
20,303
Other
4,558
(7)
4,551
161
(5)
156
118
(94)
24
4,837
(106)
4,731
Total
124,501
(329)
124,172
2,358
(162)
2,196
1,496
(772)
724
128,355
(1,263)
127,092
Net carrying value
(customers)\u00b9
273,692
(430) 273,262
11,225
(420)
10,805
7,228
(4,320)
2,908
292,145
(5,170) 286,975
Net carrying
value (Banks)
1
44,384
(8)
44,376
540
(10)
530
77
(6)
71
45,001
(24)
44,977
\n
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $13,996 mill
ion for customers and $1,738 m
ill
ion for Banks.
\n
Industry and Retail Products analysis of loans and advances by key geography
\n
This section provides an analysis of the Group\u2019s amortised cost loan portfolio, net of provis
ions, by
industry and geography.
\n
The Manufacturing sector group is spread across a diverse range of industr
ies,
includ
ing automob
iles and components, capital
\n
goods, pharmaceuticals, biotech and life sciences, technology hardware and equipment, chemicals, paper products and
\n
packaging, with lending spread over 3,251 clients.
\n\n
Corporate & Investment Banking
\n\n \n
2024
2023
1
Hong
Singa-
Hong
Singa-
Kong
China
pore
UK
US
Other
Total
Kong
China
pore
UK
US
Other
Total
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
2,200
59
1,552
1,744
1,750
5,551
12,856
3,118
42
1,162
1,341
3,638
1,130
10,431
Manufacturing
4,077
4,200
1,463
389
2,307
8,431
20,867
3,570
4,309
1,666
694
2,921
8,982
22,142
Financ
ing,
insurance
and non-banking
3,674
3,486
1,893
4,005
9,900 12,696
35,654
3,700
3,570
1,708
1,724
6,627
14,864
32,193
Transport, telecom
and util
it
ies
5,131
662
3,106
1,084
936
7,685
18,604
4,634
429
2,499
1,030
630
7,470
16,692
Food and household
products
1,038
428
1,414
962
685
4,202
8,729
541
519
911
816
664
4,611
8,062
Commercial
Real estate
4,512
334
1,404
1,039
1,650
4,994
13,933
3,895
588
1,125
1,436
1,236
6,192
14,472
Min
ing and Quarry
ing
608
606
847
1,426
224
2,170
5,881
1,028
735
427
1,729
279
2,071
6,269
Consumer durables
2,780
293
466
84
537
2,046
6,206
3,030
244
180
177
483
2,008
6,122
Construction
318
156
372
96
247
1,268
2,457
176
163
319
137
389
1,569
2,753
Trading Companies &
Distr
ibutors
95
103
106
31
40
277
652
119
75
121
31
20
321
687
Government
2,576
117
219
169
4
4,352
7,437
1,445
1
547
236
6
3,814
6,049
Other
1,419
563
786
377
233
1,650
5,028
1,676
265
646
257
264
1,425
4,533
Net Loans and
advances to
Customers
28,428
11,007
13,628
11,406
18,513 55,322 138,304
26,932
10,940
11,311
9,608
17,157 54,457 130,405
Net Loans and
advances to Banks
16,727
2,443
7,721
4,103
2,766
9,833
43,593
17,457
1,996
8,994
3,868
2,544
10,119
44,978
\n
Wealth & Retail Banking
\n\n \n
2024
2023
1
Hong
Hong
Kong
Korea
Singapore
Other
Total
Kong
Korea
Singapore
Other
Total
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Retail Products:
Mortgages
31,506
13,703
13,756
17,731
76,696
32,935
17,157
15,292
17,559
82,943
Credit Cards
3,447
38
1,679
1,517
6,681
3,325
114
1,705
1,549
6,693
Personal Loans and other
unsecured lending
1,057
2,796
301
5,972
10,126
950
3,230
220
6,676
11,076
Auto
\u2013
\u2013
122
38
160
\u2013
\u2013
240
72
312
Secured wealth products
5,229
24
10,793
5,882
21,928
5,164
33
9,388
5,718
20,303
Other Retail
579
2,153
72
853
3,657
644
3,149
82
856
4,731
Net Loans and advances
to Customers
41,818
18,714
26,723
31,993
119,248
43,018
23,683
26,927
32,430
126,058
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
High carbon sectors
\n
Sectors are ident
i\ufb01ed and grouped as per the Internat
ional Standard Industrial Classif
icat
ion (ISIC) system and exposure
\n
numbers have been updated to include all in-scope ISIC codes used for target setting among the high carbon sectors.
\n
The maximum exposures shown in the table include loans and advances to customers at amortised cost, Fair Value through
\n
pro\ufb01t or loss, and committed facil
it
ies available as per IFRS 9 \u2013 Financ
ial Instruments
in $mill
ion.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n
Maximum exposure
\n\n \n
2024
Maximum
on Balance
Sheet
Net On
Undrawn
Financ
ial
Net Off
Total On &
Exposure
Balance
Commitments
Guarantees
Balance
Off Balance
(net of credit
Sheet
(net of credit
(net of credit
Sheet
Sheet Net
impa
irment)
Collateral
Exposure
impa
irment)
impa
irment)
Exposure
Exposure
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Automotive manufacturers
3,881
69
3,812
3,331
605
3,936
7,748
Aviat
ion
1,829
960
869
842
928
1,770
2,639
Steel
1,526
316
1,210
816
325
1,141
2,351
Coal Min
ing
25
\u2013
25
\u2013
\u2013
\u2013
25
Alumin
ium
1,341
32
1,309
354
53
407
1,716
Cement
709
55
654
637
267
904
1,558
Shipp
ing
7,038
5,037
2,001
2,176
397
2,573
4,574
Commercial Real Estate
7,635
3,400
4,235
2,758
684
3,442
7,677
Oil & Gas
7,421
988
6,433
7,928
7,079
15,007
21,440
Power
6,341
1,500
4,841
4,538
1,124
5,662
10,503
Total\u00b9
37,746
12,357
25,389
23,380
11,462
34,842
60,231
Total Corporate & Investment Banking2
196,823
32,152
164,671
118,106
81,132
199,238
363,909
Total Group\u00b3
420,117
121,993
298,124
193,115
90,602
283,717
581,841
2023
Industry:
Automotive manufacturers
3,564
65
3,499
3,791
538
4,329
7,828
Aviat
ion
1,330
974
356
944
615
1,559
1,915
Steel
1,596
193
1,403
601
358
959
2,362
Coal Min
ing
29
9
20
51
99
150
170
Alumin
ium
526
9
517
338
188
526
1,043
Cement
671
47
624
769
259
1,028
1,652
Shipp
ing
5,964
3,557
2,407
2,261
291
2,552
4,959
Commercial Real Estate
7,498
3,383
4,115
1,587
112
1,699
5,814
Oil & Gas
6,278
894
5,384
7,845
6,944
14,789
20,173
Power
5,411
1,231
4,180
3,982
732
4,714
8,894
Total
1
32,867
10,362
22,505
22,169
10,136
32,305
54,810
Total Corporate & Investment Banking2
188,903
32,744
156,159
104,437
63,183
167,620
323,779
Total Group\u00b3
423,276
125,760
297,516
182,299
74,278
256,577
554,093
\n
1
Maximum on balance sheet exposure includes FVTPL amount of High Carbon sector is $749 mill
ion (31 December 2023: $125 m
ill
ion)
\n
2
Includes on balance sheet FVTPL amount of $58,519 mill
ion (31 December 2023: $58,498 m
ill
ion) for Corporate & Investment Bank
ing loans to customers
\n
3
Total Group includes net loans and advances to banks and net loans and advances to customers held at amortised cost of $43,593 mill
ion (31 December 2023:
\n
$44,977 mill
ion) and $281,032 m
ill
ion (31 December 2023: $286,975 m
ill
ion) respect
ively and loans to banks and loans and advances to customers held at FVTPL
\n
of $36,967 mill
ion (31 December 2023: $32,813 m
ill
ion) and $58, 525
mill
ion (31 December 2023: $58,511 m
ill
ion) respect
ively. Refer to credit quality table
\n
Maturity and ECL for high-carbon sectors
\n\n \n
2024
2023
Loans and
Maturity Buckets
1
Loans and
Maturity Buckets
1
advances
advances
(Drawn
Less than
More than
More than
Expected
(Drawn
Less than
More than
More than
Expected
funding)
1 year
1 to 5 years
5 years
Credit Loss
funding)
1 year
1 to 5 years
5 years
Credit Loss
Sector
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Automotive Manufacturers
3,883
3,458
369
56
2
3,566
3,106
460
\u2013
2
Aviat
ion
1,833
231
404
1,198
4
1,339
149
145
1,045
9
Cement
724
356
368
\u2013
15
719
512
189
18
48
Coal Min
ing
38
25
13
\u2013
13
42
9
33
\u2013
13
Steel
1,598
941
133
524
72
1,649
1,258
185
206
53
Alumin
ium
1,352
1,089
177
86
11
537
442
63
32
11
Oil & Gas
7,580
2,601
2,407
2,572
159
6,444
2,980
1,576
1,888
166
Power
6,401
1,700
1,404
3,297
60
5,516
1,933
1,533
2,050
105
Shipp
ing
7,053
1,035
2,450
3,568
15
5,971
1,051
2,568
2,352
7
Commercial Real Estate
7,773
3,880
3,680
213
138
7,664
3,722
3,935
7
166
Total balance
1
38,235
15,316
11,405
11,514
489
33,447
15,162
10,687
7,598
580
\n
1
Gross of credit impa
irment
\n\n
Sectors of interest
\n
Commercial Real Estate
\n\n \n
2024
Maximum on
Balance Sheet
Undrawn
Financ
ial
Exposure (net
Net On
Commitments
Guarantees
Net Off
Total On & Off
of credit
Balance Sheet
(net of credit
(net of credit
Balance Sheet
Balance Sheet
impa
irment)
1
Collateral
Exposure
impa
irment)
impa
irment)
Exposure
Net Exposure
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Commercial Real Estate
14,037
5,947
8,090
4,932
670
5,602
13,692
2023
Commercial Real Estate
14,533
6,363
8,170
4,658
311
4,969
13,139
\n
1
Includes net loans and advances of $13,933 mill
ion (31 December 2023: $14,471 m
ill
ion) as deta
iled in the table below
\n
Analysis of credit quality of loans and advances of Commercial Real Estate
\n\n \n
2024
2023
Gross
Gross
Amortised costs
$mill
ion
$mill
ion
Strong
7,222
7,326
Satisfactory
6,515
6,751
Higher risk
112
32
Credit impa
ired (stage 3)
1,485
1,712
Total Gross Balance
15,334
15,821
Strong
(83)
(20)
Satisfactory
(44)
(139)
Higher risk
(9)
\u2013
Credit impa
ired (stage 3)
(1,265)
(1,191)
Total Credit Impairment
(1,401)
(1,350)
Total Net of Credit Impairment
13,933
14,471
Strong
1.1%
0.3%
Satisfactory
0.7%
2.1%
Higher risk
8.0%
0.0%
Credit impa
ired (stage 3)
85.1%
69.6%
Cover Ratio
9.1%
8.5%
\n
An analysis of the net CRE loans and advances by key geography, is set out on page 232.
\n
China commercial real estate
\n
The table below represents the on and off-balance sheet items that are exposed to China CRE by credit quality.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Rest of
Rest of
China
Hong Kong
Group
1
Total
China
Hong Kong
Group
1
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Loans to customers
324
1,598
\u2013
1,922
584
1,821
39
2,444
Off balance sheet
1
40
\u2013
41
42
82
\u2013
124
Total as at 31 December
325
1,638
\u2013
1,963
626
1,903
39
2,568
Loans to customers \u2013 By Credit quality
Gross
Strong
\u2013
12
\u2013
12
33
\u2013
\u2013
33
Satisfactory
172
338
\u2013
510
339
619
39
997
Higher risk
12
42
\u2013
54
8
\u2013
\u2013
8
Credit impa
ired (stage 3)
140
1,206
\u2013
1,346
204
1,202
\u2013
1,406
Total as at 31 December
324
1,598
\u2013
1,922
584
1,821
39
2,444
Loans to customers \u2013 ECL
Strong
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Satisfactory
(2)
(73)
\u2013
(75)
(3)
(134)
(12)
(149)
Higher risk
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
Credit impa
ired (stage 3)
(63)
(1,111)
\u2013
(1,174)
(70)
(941)
\u2013
(1,011)
Total as at 31 December
(65)
(1,185)
\u2013
(1,250)
(73)
(1,075)
(12)
(1,160)
\n
1
Rest of Group mainly includes Singapore
\n\n
Debt securit
ies and other el
ig
ible b
ills (audited)
\n
This section provides further detail on gross debt securit
ies and treasury b
ills.
\n
The credit quality descript
ions
in the table below align to those used for CIB and Central and other items, as described on
\n
page 212. Debt securit
ies held that have a short-term external rat
ing are reported against the long-term rating of the issuer.
\n
For securit
ies that are unrated, the Group appl
ies an internal credit rating, as described under the \u2018Credit rating and
\n
measurement\u2019 section on page 201.
\n
Total gross debt securit
ies and other el
ig
ible b
ills decreased by $16.8 bill
ion to $144 b
ill
ion (31 December 2023: $160 b
ill
ion) due
\n
to maturity of exposures, primar
ily
in stage 1.
\n
Stage 1 gross balance decreased by $16.5 bill
ion to $142 b
ill
ion (31 December 2023: $158 b
ill
ion), ma
inly due to the maturity of
\n
exposures in Hong Kong.
\n
Stage 2 gross balance decreased by $0.2 bill
ion to $1.6 b
ill
ion (31 December 2023: $1.9 b
ill
ion).
\n
Stage 3 gross balance was broadly stable at $0.1 bill
ion (31 December 2023: $0.2 b
ill
ion).
\n\n \n
2024
2023
Gross
ECL
Net
2
Gross
ECL
Net
2
Amortised cost and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
141,862
(23)
141,839
158,314
(26)
158,288
\u2013 Strong
138,353
(19)
138,334
155,568
(23)
155,545
\u2013 Satisfactory
3,509
(4)
3,505
2,746
(3)
2,743
Stage 2
1,614
(4)
1,610
1,860
(34)
1,826
\u2013 Strong
562
\u2013
562
917
(3)
914
\u2013 Satisfactory
31
\u2013
31
50
(1)
49
\u2013 High Risk
1,021
(4)
1,017
893
(30)
863
Stage 3
103
(2)
101
164
(61)
103
Gross balance\u00b9
143,579
(29)
143,550
160,338
(121)
160,217
\n
1
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith Nil impa
irment (31 December 2023: $14 m
ill
ion)
\n
2
FVOCI instruments are not presented net of ECL on the balance sheet. While the presentation is on a net basis for the table, the total net on-balance sheet
\n
amount is $143,562 mill
ion (31\u00a0December 2023: $160,263 m
ill
ion). Refer to the Analys
is of \ufb01nanc
ial
instrument by stage table
\n\n
IFRS 9 ECL methodology (audited)
\n
Approach for determin
ing ECL
\n
Credit loss terminology
\n\n \n
Component
De\ufb01nit
ion
Probabil
ity of default (PD)
The probabil
ity that a counterparty w
ill default, over the next 12 months from the reporting
date (stage 1) or over the lifet
ime of the product (stage 2),
incorporating the impact of forward
looking economic assumptions that have an effect on Credit Risk, such as unemployment rates
and GDP forecasts. The PD estimates will \ufb02uctuate in line with the economic cycle. The lifet
ime
(or term structure) PDs are based on statist
ical models, cal
ibrated using histor
ical data and
adjusted to incorporate forward-looking economic assumptions.
Loss given default (LGD)
The loss that is expected to arise on default, incorporating the impact of forward-looking
economic assumptions where relevant, which represents the difference between the
contractual cash\ufb02ows due and those that the bank expects to receive. The Group estimates
LGD based on the history of recovery rates and considers the recovery of any collateral that is
integral to the \ufb01nanc
ial asset, tak
ing into account forward-looking economic assumptions
where relevant.
Exposure at default (EAD)
The expected balance sheet exposure at the time of default, taking into account expected
changes over the lifet
ime of the exposure. Th
is incorporates the impact of drawdowns of
facil
it
ies with lim
its, repayments of pr
inc
ipal and
interest, and amortisat
ion.
\n
To determine the ECL, these components are multipl
ied
\n
together: PD for the reference period (up to 12 months or
\n
lifet
ime) x LGD x EAD and d
iscounted to the balance sheet
\n
date using the effective interest rate as the discount rate.
\n
IFRS 9 ECL models have been developed for the CIB businesses
\n
on a global basis, in line with their respective portfolios.
\n
However, for some of the key countries, country-specif
ic
\n
models have also been developed.
\n
The calibrat
ion of forward-look
ing informat
ion
is assessed
\n
at a country or region level to take into account local
\n
macroeconomic condit
ions.
\n
Retail ECL models are country and product specif
ic, g
iven the
\n
local nature of the WRB business.
\n
For less material retail portfolios, the Group has adopted less
\n
sophist
icated approaches based on h
istor
ical roll rates or
\n
loss rates:
\n
\u2022
For medium-sized retail portfolios, a roll rate model is
\n
applied, which uses a matrix that gives the average loan
\n
migrat
ion rate between del
inquency states from period
\n
to period. A matrix multipl
icat
ion is then performed to
\n
generate the \ufb01nal PDs by delinquency bucket over different
\n
time horizons.
\n
\u2022
For smaller retail portfolios, a loss rate approach is applied.
\n
These use an adjusted gross charge-off rate, developed
\n
using monthly write-off and recoveries over the preceding
\n
12 months and total outstanding balances.
\n
\u2022
While the loss rate approaches do not incorporate
\n
forward looking informat
ion, to the extent that there are
\n
sign
i\ufb01cant changes
in the macroeconomic forecasts an
\n
assessment will be completed on whether an adjustment
\n
to the modelled output is required.
\n
For a lim
ited number of exposures, proxy parameters or
\n
approaches are used where the data is not available to
\n
calculate the orig
inat
ion PDs for the purpose of applying the
\n
SICR criter
ia; or for some reta
il portfolios where a full history
\n
of LGD data is not available, estimates based on the loss
\n
experience from sim
ilar portfol
ios are used. The use of proxies
\n
is monitored and will reduce over time.
\n
The following processes are in place to assess the ongoing
\n
performance of the models:
\n
\u2022
Quarterly model monitor
ing that uses recent data to
\n
compare the differences between model predict
ions and
\n
actual outcomes against approved thresholds.
\n
\u2022
Annual independent validat
ion
is performed by Group
\n
Model Validat
ion (GMV); Depth of GMV\u2019s val
idat
ion var
ies
\n
depending on the model material
ity. Mater
ial models
\n
would go through a full annual re-validat
ion process, wh
ile
\n
a less intens
ive val
idat
ion process w
ill be performed on
\n
non-material models.
\n
Applicat
ion of l
ifet
ime ECL
\n
ECL is estimated based on the period over which the Group
\n
is exposed to Credit Risk. For the major
ity of exposures th
is
\n
equates to the maximum contractual period. For retail credit
\n
cards and corporate overdraft facil
it
ies, however, the Group
\n
does not typically enforce the contractual period, which can
\n
be as short as one day. As a result, the period over which the
\n
Group is exposed to Credit Risk for these instruments re\ufb02ects
\n
their behavioural life, which incorporates expectations of
\n
customer behaviour and the extent to which Credit Risk
\n
management actions curtail the period of that exposure.
\n
The average behavioural life for retail credit cards is between
\n
3 and 6 years across our footprint markets.
\n
The behavioural life for corporate overdraft facil
it
ies was
\n
re-estimated from 24 months to 36 months. The impact of this
\n
change was not material.
\n\n
Composit
ion of cred
it impa
irment prov
is
ions (aud
ited)
\n
The table below summarises the key components of the Group\u2019s credit impa
irment prov
is
ion balances at 31 December 2024 and
\n
31 December 2023.
\n\n \n
2024
2023
Corporate &
Wealth &
Corporate &
Wealth &
Investment
Retail
Central &
Investment
Retail
Central &
Banking
Banking
Ventures
other items
Total
Banking
Banking
Ventures
other items
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
4
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
4
$mill
ion
Modelled ECL
provis
ions
(base forecast)
337
613
61
37
1,048
372
553
48
98
1,071
Impact of multiple
economic scenarios
1
24
19
\u2013
\u2013
43
20
18
\u2013
6
44
Modelled ECL
provis
ions before
management
judgements
361
632
61
37
1,091
392
571
48
104
1,115
Includes: Model
performance post
model adjustments
\u2013
14
\u2013
\u2013
14
(3)
(28)
\u2013
\u2013
(31)
Judgemental post
model adjustments
2
\u2013
(23)
\u2013
\u2013
(23)
\u2013
2
\u2013
\u2013
2
Management
overlays
3
\u2013 China commercial
real estate
70
\u2013
\u2013
\u2013
70
141
\u2013
\u2013
\u2013
141
\u2013 Other
109
27
7
\u2013
143
\u2013
5
\u2013
17
22
Total modelled
provis
ions
540
636
68
37
1,281
533
578
48
121
1,280
Of which:
Stage 1
133
392
30
34
589
151
325
15
68
559
Stage 2
362
151
27
1
541
318
140
21
49
528
Stage 3
45
93
11
2
151
64
113
12
4
193
Stage 3 non-modelled
provis
ions
3,267
665
\u2013
54
3,986
3,587
646
\u2013
88
4,321
Total credit
impa
irment prov
is
ions
3,807
1,301
68
91
5,267
4,120
1,224
48
209
5,601
\n
1
Includes upwards judgemental post-model adjustment of $28 mill
ion (31 December 2023: n
il)
\n
2
Excludes $28 mill
ion upwards judgemental post-model adjustment wh
ich is included in \u2018Impact of multiple economic scenarios\u2019
\n
3
$32 mill
ion (31 December 2023: $22 m
ill
ion)
is in stage 1, $181 mill
ion (31 December 2023: $141 m
ill
ion)
in stage 2 and $nil mill
ion (31 December 2023: n
il) in stage 3
\n
4
Includes ECL on cash and balances at central banks, accrued income, assets held for sale and other assets
\n
Model performance post model adjustments (PMAs)
\n
As part of model monitor
ing and
independent validat
ion processes, where a model\u2019s performance breaches the approved
\n
monitor
ing thresholds or val
idat
ion standards, an assessment
is performed to determine whether a model performance PMA
\n
is required to temporarily remediate the model issue. The process for the determinat
ion of PMAs
is set out in the \u2018Governance
\n
of PMAs and applicat
ion of expert cred
it judgement in respect of ECL\u2019 section on page 246.
\n
As at 31 December 2024, model performance PMAs have been applied for \ufb01ve models out of the total of 110 models.
\n
In aggregate, these PMAs increase the Group\u2019s impa
irment prov
is
ions by $14 m
ill
ion (1 per cent of modelled prov
is
ions)
\n
compared with a $31 mill
ion decrease at 31 December 2023. The reduct
ion was primar
ily due to the
implementat
ion of
\n
new models, thereby removing the need for PMAs on the old models.
\n
In addit
ion to these model performance PMAs, separate judgemental post model and management adjustments have also
\n
been applied as set out on page 241.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Model performance PMAs
Corporate & Investment Banking
\u2013
(3)
Wealth & Retail Banking
14
(28)
Total model performance PMAs
14
(31)
\n\n
Key assumptions and judgements in determin
ing ECL
\n
Incorporation of forward-looking informat
ion
\n
The evolving economic environment is a key determinant
\n
of the abil
ity of a bank\u2019s cl
ients to meet their obligat
ions as
\n
they fall due. It is a fundamental princ
iple of IFRS 9 that the
\n
provis
ions banks hold aga
inst potential future Credit Risk
\n
losses should depend, not just on the health of the economy
\n
today, but should also take into account potential changes
\n
to the economic environment. For example, if a bank were to
\n
antic
ipate a sharp slowdown
in the world economy over the
\n
coming year, it should hold more provis
ions today to absorb
\n
the credit losses likely to occur in the near future.
\n
To capture the effect of changes to the economic
\n
environment, the PDs and LGDs used to calculate ECL
\n
incorporate forward-looking informat
ion
in the form of
\n
forecasts of the values of economic variables and asset
\n
prices that are likely to have an effect on the repayment
\n
abil
ity of the Group\u2019s cl
ients.
\n
The \u2018base forecast\u2019 of the economic variables and asset prices
\n
is based on management\u2019s view of the \ufb01ve-year outlook,
\n
supported by projections from the Group\u2019s
in-house research
\n
team and outputs from a third-party model that project
\n
specif
ic econom
ic variables and asset prices. The research
\n
team takes consensus views into considerat
ion, and sen
ior
\n
management review project
ions for some core country
\n
variables against consensus when forming their view of the
\n
outlook. For the period beyond \ufb01ve years, management
\n
util
ises the
in-house research view and third-party model
\n
outputs, which allow for a reversion to long-term growth rates
\n
or norms. All projections are updated on a quarterly bas
is.
\n
Forecast of key macroeconomic variables underlying the ECL
\n
calculation and the impact on non-linear
ity
\n
In the Base Forecast \u2013 management\u2019s view of the most likely
\n
outcome \u2013 the pace of growth of the world economy is
\n
expected to remain broadly unchanged from 2024 at
\n
around 3 per cent in 2025. This compares to the average of
\n
3.7 per cent growth for the 10 years prior to COVID-19
\n
(between 2010 and 2019). Support from easing \ufb01nanc
ial
\n
condit
ions and expans
ionary \ufb01scal policy may be partly offset
\n
by protection
ist trade pol
ic
ies and st
ill-high interest rates in
\n
the US and elsewhere. The US economy is set to moderate
\n
in 2025, after a resil
ient 2024 performance desp
ite elevated
\n
interest rates. The euro area continues to struggle with major
\n
European economies includ
ing Germany and France who r
isk
\n
slipp
ing
into recession. Asia is relatively healthy, although
\n
growth at the regional level is set to moderate slightly in
\n
2025 as both China and India slow down. The Middle-East is
\n
expected also to remain a bright spot for global growth, with
\n
the region\u2019s non-oil growth exceeding overall global growth.
\n
The uncertainty around the economic outlook remains
\n
elevated. In particular, the change in US Presidency is
\n
expected to lead to sign
i\ufb01cant changes
in US polic
ies,
\n
includ
ing new and h
igher tariffs on key US trading partners.
\n
On the geopolit
ical front, tens
ions remain elevated over the
\n
con\ufb02ict in Ukraine and the situat
ion
in the Middle-East.
\n
While the quarterly Base Forecasts inform the Group\u2019s
\n
strategic plan, one key requirement of IFRS 9 is that the
\n
assessment of provis
ions should cons
ider multiple future
\n
economic environments. For example, the global economy
\n
may grow more quickly or more slowly than the Base Forecast,
\n
and these variat
ions would have d
ifferent impl
icat
ions for the
\n
provis
ions that the Group should hold today. As the negat
ive
\n
impact of an economic downturn on credit losses tends to
\n
be greater than the posit
ive
impact of an economic upturn,
\n
if the Group sets provis
ions only on the ECL under the Base
\n
Forecast it might mainta
in a level of prov
is
ions that does
\n
not appropriately capture the range of potential outcomes.
\n
To address the inherent uncertainty in economic forecast,
\n
and the property of skewness (or non-linear
ity), IFRS 9 requ
ires
\n
reported ECL to be a probabil
ity-we
ighted ECL, calculated
\n
over a range of possible outcomes.
\n
To assess the range of possible outcomes the Group simulates
\n
a set of 50 scenarios around the Base Forecast, calculates
\n
the ECL under each of them and assigns an equal weight of
\n
2 per cent to each scenario outcome. These scenarios are
\n
generated by a Monte Carlo simulat
ion, wh
ich addresses the
\n
challenges of crafting many realist
ic alternat
ive scenarios in
\n
the many countries in which the Group operates by means of
\n
a model, which produces these alternative scenarios while
\n
consider
ing the degree of h
istor
ical uncerta
inty (or volatil
ity)
\n
observed from Q1 1990 to Q3 2023 around economic
\n
outcomes, the trends in each macroeconomic variable
\n
modelled and the correlation in the unexplained movements
\n
around these trends. This naturally means that each of the
\n
50 scenarios do not have a specif
ic narrat
ive, although
\n
collectively they explore a range of hypothetical alternative
\n
outcomes for the global economy, includ
ing scenar
ios that
\n
turn out better than expected and scenarios that amplify
\n
antic
ipated stresses.
\n
The GDP graphs below illustrate the shape of the Base
\n
Forecast for key footprint markets in relation to prior periods\u2019
\n
actuals. The long-term growth rates are based on the pace
\n
of economic expansion expected for 2030. The tables below
\n
provide a summary of the Group\u2019s Base Forecast for these
\n
markets. The peak/trough amounts show the highest and
\n
lowest points with
in the Base Forecast.
\n
China\u2019s GDP growth is expected to ease slightly to 4.5 per cent
\n
in 2025 from 4.8 per cent in 2024. This re\ufb02ects persistent
\n
weakness in the property sector, though it is expected to
\n
moderate external headwinds and low consumer con\ufb01dence.
\n
Growth in India is also expected to ease with GDP expanding
\n
by 6.5 per cent from 6.9 per cent in 2024 as the impact from
\n
recent one-off factors such as construction activ
ity and
\n
electric
ity demand (am
id below normal rains) fade. GDP
\n
growth for Singapore is expected to slow to 2.4 per cent in
\n
2025 from 3.5 per cent last year. An uncertain global trade
\n
outlook will weigh on sentiment in trade-reliant economies.
\n
Recent economic activ
ity may have also been partly dr
iven
\n
by front-loading of orders of electronics ahead of potentially
\n
negative trade polic
ies
in 2025. Sim
ilarly, the uncerta
in
\n
external environment and likely trade protection
ist measures
\n
will lim
it the ups
ide to growth for both South Korea and Hong
\n
Kong which are expected to grow by 2.0 per cent and 2.9 per
\n
cent respectively in 2025.
China GDP
YoY%
Hong Kong GDP
YoY%
Korea GDP
YoY%
20
10
8
Actual
Forecast
Actual
Forecast
Actual
Forecast
8
7
16
6
6
5
4
12
4
2
3
8
Long-term growth
0
2
-2
Long-term growth
4
1
Long-term growth
-4
0
0
-6
-1
-8
-2
-4
-10
-3
-8
-12
-4
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Singapore GDP
YoY%
India GDP
YoY%
20
30
Actual
Actual
Forecast
Forecast
15
20
10
10
5
Long-term growth
0
Long-term growth
0
-10
-5
-20
-10
-15
-30
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
\n \n
2024 year-end forecasts
China
Hong Kong
3-month
3-month
GDP growth
Unemployment
interest rates
House prices
5
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY %)
(YoY %)
%
%
(YoY %)
Base forecast
1
2024
4.8
3.6
2.0
(3.7)
2.6
3.0
4.4
(11.1)
2025
4.5
3.5
1.7
(5.3)
2.9
3.1
2.5
1.8
2026
4.3
3.3
1.6
(3.2)
2.5
3.2
2.2
6.5
2027
4.1
3.2
1.6
(0.9)
2.1
3.2
2.4
4.8
2028
3.9
3.2
1.8
0.9
1.9
3.2
2.4
3.4
5-year average
2
4.1
3.3
1.7
(1.3)
2.2
3.1
2.4
3.8
Quarterly peak
5.3
3.5
1.9
2.3
3.5
3.2
2.9
6.8
Quarterly trough
3.2
3.1
1.6
(5.6)
1.5
3.0
2.1
(2.6)
Monte Carlo
Low
3
(1.0)
2.8
0.6
(10.1)
(1.8)
1.8
0.3
(13.1)
High
4
9.3
3.7
3.0
7.8
5.8
5.1
5.3
22.2
\n \n
2024 year-end forecasts
Singapore
Korea
3-month
3-month
GDP growth
Unemployment
6
interest rates
House prices
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY %)
Base forecast
1
2024
3.5
2.9
3.6
4.3
2.5
2.8
3.6
(0.4)
2025
2.4
2.7
1.9
0.4
2.0
2.8
3.0
4.3
2026
2.1
2.7
1.9
2.2
2.2
2.8
2.9
3.4
2027
2.2
2.7
2.0
3.0
2.1
2.8
2.9
2.4
2028
2.4
2.7
2.0
3.1
1.9
2.8
2.9
2.1
5-year average
2
2.3
2.7
2.0
2.4
2.0
2.8
2.9
2.8
Quarterly peak
3.4
2.8
2.4
3.2
2.2
2.9
3.2
4.8
Quarterly trough
0.6
2.7
1.6
(0.4)
1.5
2.8
2.9
1.9
Monte Carlo
Low
3
(2.7)
2.0
0.3
(10.5)
(1.3)
2.2
0.8
(4.3)
High
4
7.0
3.6
3.9
17.5
5.2
3.5
5.7
9.8
240
Standard Chartered
\u2013 Annual Report 2024
\n
Risk review
Risk pro\ufb01le
\n\n \n
2024 year-end forecasts
India
3-month
GDP growth
Unemployment
7
interest rates
House prices
Brent Crude
(YoY%)
%
%
(YoY%)
$ pb
Base forecast
1
2024
6.9
NA
6.4
6.3
78.3
2025
6.5
NA
6.1
6.5
77.1
2026
6.5
NA
6.0
6.4
76.4
2027
6.6
NA
6.0
6.4
77.3
2028
6.6
NA
6.0
6.3
75.3
5-year average
2
6.6
NA
6.0
6.4
76.2
Quarterly peak
7.1
NA
6.2
7.3
77.8
Quarterly trough
5.9
NA
6.0
6.0
74.8
Monte Carlo
Low
3
3.2
NA
1.9
(0.1)
44.5
High
4
10.0
NA
10.3
12.6
107.8
\n\n \n
2023 year-end forecasts
China
Hong Kong
3-month
3-month
GDP growth
Unemployment
interest rates
House prices
5
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY%)
5-year average
2
4.3
4.0
2.1
4.6
2.5
3.4
3.4
2.8
Quarterly peak
5.7
4.1
2.5
7.2
3.8
3.4
5.0
4.6
Quarterly trough
3.8
3.8
1.7
1.5
1.5
3.4
2.3
(1.1)
Monte Carlo
Low
3
0.6
3.3
0.8
(1.5)
(3.8)
1.4
0.3
(19.3)
High
4
7.7
4.4
3.8
12.0
8.2
6.4
8.3
25.5
\n\n \n
2023 year-end forecasts
Singapore
Korea
3-month
3-month
GDP growth
Unemployment
6
interest rates
House prices
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY%)
5-year average
2
2.9
2.8
2.9
2.2
2.3
3.1
3.1
3.3
Quarterly peak
3.8
2.9
4.1
3.9
2.6
3.5
3.7
5.3
Quarterly trough
1.9
2.8
2.3
(0.7)
2.0
3.0
3.1
(0.3)
Monte Carlo
Low
3
(2.4)
1.7
0.6
(16.2)
(2.3)
1.4
0.7
(6.1)
High
4
8.5
3.8
5.9
19.2
7.0
5.8
6.3
12.5
\n\n \n
2023 year-end forecasts
India
3-month
GDP growth
Unemployment
interest rates
House prices
Brent crude
(YoY%)
%
%
(YoY%)
$ pb
5-year average
2
6.2
NA
6.2
6.1
88.2
Quarterly peak
9.1
NA
6.3
6.5
93.8
Quarterly trough
4.4
NA
5.8
4.7
82.8
Monte Carlo
Low
3
2.1
NA
2.7
(0.5)
46.0
High
4
10.5
NA
9.9
13.8
137.8
\n
1
Data presented are those used in the calculation of ECL and presented as average growth for the year. These may differ slightly to forecasts presented elsewhere
\n
in the Annual Report as they are \ufb01nal
ised before the per
iod end
\n
2
5 year averages covering 20 quarters from Q1 2025 to Q4 2029 for the 2024 annual report. They cover Q1 2024 to Q4 2028 for the numbers reported for the 2023
\n
annual report
\n
3
Represents the 10th percentile in the range of economic scenarios used to determine non-linear
ity
\n
4
Represents the 90th percentile in the range of economic scenarios used to determine non-linear
ity
\n
5
A judgemental management adjustment is held in respect of the China commercial real estate sector, as discussed on page 241
\n
6
Singapore unemployment rate covers the resident unemployment rate, which refers to cit
izens and permanent res
idents
\n
7
India unemployment is not available due to insuff
ic
ient data
\n\n
Impact of multiple economic scenarios
\n
The \ufb01nal probabil
ity we
ighted ECL reported by the Group is a simple average of the ECL for each of the 50 scenarios simulated
\n
using a Monte Carlo model. The Monte Carlo approach has the advantage that it generates many alternative scenarios that
\n
cover our global footprint. The range of scenarios is restricted through the use of ceil
ings and \ufb02oors appl
ied to the underlying
\n
macroeconomic variables. The current set of ceil
ings and \ufb02oors generated a relat
ively narrow range of forecasts at 31
\n
December 2024 and will be redeveloped in the \ufb01rst quarter of 2025.
\n
Prior to this, a $28 mill
ion non-l
inear
ity PMA has been appl
ied, $13 mill
ion for CIB and $15 m
ill
ion for WRB. The total amount of
\n
non-linear
ity has been est
imated by assign
ing probab
il
ity we
ights of 68 per cent, 22 per cent and 10 per cent respectively to
\n
the Base Forecast, \u2018Higher for Longer Commodit
ies and Rates\u2019, and \u2018Global Trade and Geopol
it
ical Tens
ions\u2019 scenarios which
\n
are presented on page 243 and comparing this to the unweighted Base Forecast ECL. The non-linear
ity PMA represents the
\n
difference between the probabil
ity we
ighted ECL calculated using the three scenarios and the probabil
ity we
ighted ECL
\n
calculated by the Monte Carlo model.
\n
The total amount of non-linear
ity
includ
ing the PMA
is $43 mill
ion (31 December 2023: $44 m
ill
ion). The CIB portfol
io accounted
\n
for $24 mill
ion (31 December 2023: $20 m
ill
ion) of the calculated non-l
inear
ity, w
ith the remain
ing $19 m
ill
ion (31 December 2023:
\n
$18 mill
ion) attr
ibutable to WRB portfolios.
\n
The impact of multiple economic scenarios on total modelled ECL is set out in the table below, together with the management
\n
overlay and other judgemental adjustments.
\n\n \n
Management
overlays
Multiple
and other
economic
judgemental
Total
Base forecast
scenarios
1
adjustments
modelled ECL
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Total modelled expected credit loss at 31 December 2024
1,048
43
190
1,281
Total modelled expected credit loss at 31 December 2023
1,071
44
165
1,280
\n
1
Includes an upwards judgemental PMA of $28 mill
ion (31 December 2023: n
il)
\n
2
Total modelled ECL comprises stage 1 and stage 2 balances of $1,130 mill
ion (31 December 2023: $1,105 m
ill
ion) and $151 m
ill
ion (31 December 2023: $193 m
ill
ion) of
\n
modelled ECL on stage 3 loans
\n
The average ECL under multiple scenarios is 4 per cent (31 December 2023: 4 per cent) higher than the ECL calculated using
\n
only the most likely scenario (the Base Forecast). Portfolios that are more sensit
ive to non-l
inear
ity
include those with greater
\n
leverage and/or a longer tenor, such as Project and Shipp
ing F
inance portfolios. Other portfolios display min
imal non-l
inear
ity
\n
owing to lim
ited respons
iveness to macroeconomic impacts for structural reasons, such as sign
i\ufb01cant collateral
isat
ion as w
ith
\n
the WRB mortgage portfolios.
\n
Judgemental adjustments
\n
As at 31 December 2024, the Group held judgemental adjustments for ECL as set out in the table below. All of the judgemental
\n
adjustments have been determined after taking account of the model performance PMAs reported on page 237. They are
\n
reassessed quarterly and are reviewed and approved by the IFRS 9 Impairment Committee (IIC) and will be released when no
\n
longer relevant.
\n\n \n
Corporate &
Wealth & Retail Banking
Investment
Credit
Central &
Banking
Mortgages
Cards
Other
Total
Ventures
other
Total
31 December 2024
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Judgemental post model adjustments
13
\u2013
9
(17)
(8)
\u2013
\u2013
5
Judgemental management overlays:
\u2013 China CRE
70
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
70
\u2013 Other
109
\u2013
5
22
27
7
\u2013
143
Total judgemental adjustments
192
\u2013
14
5
19
7
\u2013
218
Judgemental adjustments by stage:
Stage 1
27
\u2013
10
(11)
(1)
4
-
30
Stage 2
165
\u2013
5
25
30
3
\u2013
198
Stage 3
\u2013
\u2013
(1)
(9)
(10)
\u2013
\u2013
(10)
31 December 2023
Judgemental post model adjustments
\u2013
\u2013
1
1
2
\u2013
\u2013
2
Judgemental management overlays:
\u2013 China CRE
141
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
141
\u2013 Other
\u2013
1
2
2
5
\u2013
17
22
Total judgemental adjustments
141
1
3
3
7
\u2013
17
165
Judgemental adjustments by stage:
Stage 1
17
1
3
6
10
\u2013
\u2013
27
Stage 2
124
\u2013
\u2013
(3)
(3)
\u2013
17
138
Stage 3
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\n\n
Judgemental PMAs
\n
As at 31 December 2024, judgemental PMAs to increase ECL
\n
by a net $5 mill
ion (31 December 2023: $2 m
ill
ion
increase)
\n
have been applied. $28 mill
ion (31 December 2023: n
il) of
\n
the increase in ECL related to multiple economic scenarios,
\n
$13 mill
ion
in CIB and $15 mill
ion
in WRB (see \u2018Impact of
\n
multiple economic scenarios\u2019 section). This was partly offset
\n
by a reduction of ECL of $23 mill
ion for certa
in WRB models,
\n
primar
ily to adjust for temporary factors
impact
ing modelled
\n
outputs. These will be released when these factors normalise.
\n
Judgemental management overlays
\n
China CRE
\n
The real estate market in China has been in a downturn since
\n
late 2021, as evidenced by continued decline in sales, and
\n
investments in the sector. Liqu
id
ity issues experienced by
\n
Chinese property developers continued into 2023, with more
\n
developers defaulting on their obligat
ions both offshore and
\n
onshore. During 2023, authorit
ies on the ma
inland introduced
\n
a slew of polic
ies to help rev
ive the sector and restore buying
\n
sentiments. Relaxed monetary policy and \ufb01scal stimulus
\n
packages continued in 2024, which had assisted in arresting
\n
the drop in new home sales and stabil
is
ing new home sales in
\n
late 2024 to an extent in some cit
ies, but home pr
ices remain
\n
muted overall. Continued policy relaxations, includ
ing those
\n
related to house purchase restrict
ions, complet
ion support for
\n
elig
ible projects from onshore \ufb01nancial
inst
itut
ions, relaxation
\n
in mortgage rates, and further support for affordable housing,
\n
are key for reversing the continued decline in sales and
\n
investments and ensuring continued stabil
isat
ion in 2025.
\n
The Group\u2019s loans and advances to China CRE clients was
\n
$1.9 bill
ion at 31 December 2024 (31 December 2023: $2.4
\n
bill
ion). He
ightened risk management continues to be carried
\n
out, with a focus on managing upcoming maturit
ies through
\n
re\ufb01nancing and/or repayment. No new \ufb01nancing transact
ions
\n
were entered into, and total repayments amounted to around
\n
$500 mill
ion dur
ing 2024. Clients with exposure maturing
\n
with
in the next 12 months have been placed on purely
\n
precautionary or non-purely precautionary early alert, where
\n
appropriate, for closer monitor
ing. G
iven the evolving nature
\n
of the risks in the China CRE sector, a management overlay of
\n
$70 mill
ion (31 December 2023: $141 m
ill
ion) has been taken by
\n
estimat
ing the
impact of further deteriorat
ion to exposures
in
\n
this sector. The decrease from 31 December 2023 was primar
ily
\n
driven by repayments and util
isat
ion due to movement to
\n
stage 3.
\n
Other
\n
In CIB, addit
ional overlays of $109 m
ill
ion (31 December 2023:
\n
nil) have been taken, $58 mill
ion of wh
ich is in Hong Kong,
\n
with the remainder relating to Bangladesh and an immater
ial
\n
amount for climate risks. The overlay in Hong Kong re\ufb02ects
\n
subdued economic activ
ity and
increas
ing commerc
ial
\n
property vacancy rates, which contributes to an uncertain
\n
outlook that are not yet fully re\ufb02ected in the credit grades
\n
and modelled ECL. The risk of further impa
irment rema
ins as
\n
a result of subdued economic activ
ity
in the property sector
\n
and the related liqu
id
ity constraints faced by counterparties
\n
as a result. The overlay in Bangladesh re\ufb02ects the polit
ical
\n
situat
ion that has contr
ibuted to an increas
ing level of
\n
uncertainty in the macroeconomic outlook. The overlays for
\n
Hong Kong and Bangladesh have been determined by
\n
estimat
ing the
impact of a deteriorat
ion to certa
in exposures
\n
in these countries.
\n
In WRB, overlays of $27 mill
ion
includes $21 mill
ion
in Korea
\n
to cover the risks relating to the failure of two e-commerce
\n
payment platforms in 2024, increased bankruptcy trends
\n
in certain markets and an immater
ial adjustment for
\n
climate risks.
\n
Further details on the adjustment for Climate Risk are set out
\n
in Note 1 of the \u2018Notes to the \ufb01nanc
ial statements\u2019 sect
ion.
\n
Overlays held at 31 December 2023 of $5 mill
ion
in WRB to
\n
capture macroeconomic environment challenges caused by
\n
sovereign defaults or heightened sovereign risk, and $17 mill
ion
\n
applied in Central and other items due to a temporary market
\n
dislocat
ion
in the Africa and Middle East region which were
\n
fully released during 2024.
\n
Stage 3 assets
\n
Credit-impa
ired assets managed by Stressed Asset Group
\n
(SAG) incorporate forward-looking economic assumptions
\n
in respect of the recovery outcomes ident
i\ufb01ed and are
\n
assigned ind
iv
idual probabil
ity we
ight
ings per IFRS 9.
\n
These assumptions are not based on a Monte Carlo
\n
simulat
ion but are
informed by the Base Forecast.
\n
Sensit
iv
ity of ECL calculation to macroeconomic variables
\n
The ECL calculation relies on multiple variables and is
\n
inherently non-linear and portfolio-dependent, which impl
ies
\n
that no single analysis can fully demonstrate the sensit
iv
ity
\n
of the ECL to changes in the macroeconomic variables.
\n
The Group has conducted a series of analyses with the aim of
\n
ident
ify
ing the macroeconomic variables which might have
\n
the greatest impact on the overall ECL. These encompassed
\n
single variable and multi-variable exercises, using simple up/
\n
down variat
ion and extracts from actual calculat
ion data,
\n
as well as bespoke scenario design assessments.
\n
The primary conclusion of these exercises is that no ind
iv
idual
\n
macroeconomic variable is materially in\ufb02uent
ial. The Group
\n
believes this is plausible as the number of variables used
\n
in the ECL calculation is large. This does not mean that
\n
macroeconomic variables are unin\ufb02uent
ial; rather, that the
\n
Group believes that considerat
ion of macroeconom
ics should
\n
involve whole scenarios, as this aligns with the multi-variable
\n
nature of the calculation.
\n
The Group faces downside risks in the operating
\n
environment related to the uncertaint
ies surround
ing the
\n
macroeconomic outlook. To explore this, a sensit
iv
ity analysis
\n
of ECL was undertaken to explore the effect of slower
\n
economic recoveries across the Group\u2019s footprint markets.
\n
Two downside scenarios were considered in particular to
\n
explore the current uncertaint
ies over commod
ity prices.
\n
The \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario is
\n
characterised by an escalating trade war between the US
\n
and China and other economies. The \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io explores the impact from
\n
stick
ier than expected
in\ufb02at
ion due to pers
istent shipp
ing
\n
disrupt
ions and r
ise in energy prices amid fears of an
\n
escalation of the Middle East con\ufb02ict.
\n\n\n \n
Global Trade and
Higher for longer:
Baseline
Geopolit
ical Tens
ions
Commodit
ies and Rates
Five year
Five year
Five year
average
Peak/Trough
average
Peak/Trough
average
Peak/Trough
China GDP
4.1
5.3/3.2
0.8
3.8/(2.6)
3.5
4.3/1.8
China unemployment
3.3
3.5/3.1
4.9
5.5/3.8
4.3
5.2/3.1
China property prices
(1.3)
2.3/(5.6)
(5.1)
11.1 /(47.6)
(1.4)
8.6/(24.5)
Hong Kong GDP
2.2
3.5/1.5
(1.0)
1.6/(8.0)
1.4
2.2/(0.1)
Hong Kong unemployment
3.1
3.2/3.0
6.2
7.2/3.7
4.7
6.3/3.2
Hong Kong property prices
3.8
6.8/(2.6)
(0.1)
30.9/(34.8)
2.8
8.9/(3.5)
US GDP
2.0
2.6/1.1
0.3
2.2/(3.2)
1.1
2.5/(2.1)
Singapore GDP
2.3
3.4/0.6
0.0
3.1/(5.9)
1.6
2.8/(2.3)
India GDP
6.6
7.1/5.9
4.7
6.7/0.8
6.1
7.4/4.3
Crude oil
76.2
77.8/74.8
59.1
86. 2/46.2
84.9
113.4/74.8
\n
Period covered from Q1 2025 to Q4 2029
\n\n \n
Base (GDP, YoY%)
Global Trade and Geopolit
ical Tens
ions
Difference from Base
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
China
4.5
4.3
4.1
3.9
3.8
2.1
(2.0)
(1.0)
1.4
3.5
(2.4)
(6.3)
(5.1)
(2.6)
(0.3)
Hong Kong
2.9
2.5
2.1
1.9
1.6
(6.3)
(1.4)
0.1
0.9
1.4
(9.1)
(3.9)
(2.0)
(1.0)
(0.2)
US
1.4
2.2
2.4
2.1
2.0
(0.9)
(2.2)
0.8
1.8
2.2
(2.3)
(4.4)
(1.6)
(0.3)
0.1
Singapore
2.4
2.1
2.2
2.4
2.5
(2.9)
(3.5)
1.0
2.8
2.6
(5.3)
(5.6)
(1.2)
0.4
0.1
India
6.8
6.3
6.7
6.5
6.5
4.6
1.8
5.3
5.8
6.1
(2.2)
(4.4)
(1.4)
(0.8)
(0.4)
\n
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025.
\n\n \n
Base (GDP, YoY%)
Higher for longer: Commodit
ies and Rates
Difference from Base
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
China
4.5
4.3
4.1
3.9
3.8
2.5
3.3
4.1
3.9
3.8
(2.0)
(1.0)
0.0
0.0
(0.0)
Hong Kong
2.9
2.5
2.1
1.9
1.6
0.3
1.1
2.1
1.9
1.6
(2.6)
(1.4)
(0.0)
(0.0)
0.0
US
1.4
2.2
2.4
2.1
2.0
(1.4)
0.5
2.4
2.1
2.0
(2.8)
(1.7)
(0.0)
0.0
0.0
Singapore
2.4
2.1
2.2
2.4
2.5
(0.2)
0.9
2.2
2.4
2.5
(2.6)
(1.2)
(0.0)
(0.0)
0.0
India
6.8
6.3
6.7
6.5
6.5
4.9
5.8
6.7
6.5
6.5
(1.9)
(0.5)
(0.0)
0.0
0.0
\n
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025
\n
The total modelled stage 1 and 2 ECL provis
ions (
includ
ing
\n
both on and off-balance sheet instruments) would be
\n
approximately $84 mill
ion h
igher under the \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io, and $258 mill
ion h
igher
\n
under the \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario
\n
than the baseline ECL provis
ions (wh
ich excluded the impact
\n
of multiple economic scenarios and management overlays
\n
which may already capture some of the risks in these
\n
scenarios). Stage 2 exposures as a proportion of stage 1 and 2
\n
exposures would increase from 2.7 per cent in the base case
\n
to 2.8 per cent and 3.5 per cent respectively under the \u2018Higher
\n
for Longer Commodit
ies and Rates\u2019, and \u2018Global Trade and
\n
Geopolit
ical Tens
ions\u2019 scenarios. This includes the impact of
\n
exposures transferring to stage 2 from stage 1 but does not
\n
consider an increase in stage 3 defaults.
\n
Under both scenarios, the major
ity of the
increase in ECL in
\n
CIB came from the main corporate CRE and Project Finance
\n
portfolios. For the main corporate portfolios, ECL would
\n
increase by $18 mill
ion and $47 m
ill
ion for \u2018H
igher for Longer
\n
Commodit
ies and Rates\u2019, and \u2018Global Trade and Geopol
it
ical
\n
Tensions\u2019 scenarios respectively and the proportion of stage 2
\n
exposures would increase from 4.1 per cent in the base case to
\n
4.3 per cent and 6.1 per cent respectively.
\n
For the WRB portfolios, most of the increase in ECL came from
\n
the unsecured retail portfolios, particularly Korea Personal
\n
Loans and the credit card portfolios in Hong Kong and
\n
Singapore, although Private Banking was also impacted in
\n
the \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario. Under
\n
the \u2018Higher for Longer Commodit
ies and Rates\u2019, and \u2018Global
\n
Trade and Geopolit
ical Tens
ions\u2019 scenarios, Credit card ECL
\n
would increase by $18 mill
ion and $32 m
ill
ion respect
ively,
\n
largely in the Singapore and Hong Kong portfolios and the
\n
proportion of stage 2 credit card exposures would increase
\n
from 1.8 per cent in the base case to 2.3 per cent and
\n
2.9 per cent for each scenario respectively, with the Singapore
\n
portfolio most impacted. Mortgages ECL would increase by
\n
$2 mill
ion and $19 m
ill
ion for each scenar
io respectively,
\n
with portfolios in Korea impacted in the \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io, and Malaysia in the \u2018Global
\n
Trade and Geopolit
ical Tens
ions\u2019 scenario, and the proportion
\n
of stage 2 mortgages would increase from 1.0 per cent in the
\n
base case to 1.4 per cent and 1.3 per cent respectively.
\n
There was no material change in modelled stage 3 provis
ions
\n
as these primar
ily relate to unsecured WRB exposures
\n
for which the LGD is not sensit
ive to changes
in the
\n
macroeconomic forecasts. There is also no material change
\n
for non-modelled stage 3 exposures as these are more
\n
sensit
ive to cl
ient specif
ic factors than to alternat
ive
\n
macroeconomic scenarios.
\n
The actual outcome of any scenario may be materially
\n
different due to, among other factors, the effect of
\n
management actions to mit
igate potent
ial increases in
\n
risk and changes in the underlying portfolio.
\n\n\n \n
Higher for
Longer
Global Trade
Gross as
ECL as
Commodit
ies
and Geopolit
ical
reported
1
reported
2
ECL Base case
and Rates
Tensions
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1 modelled
Corporate & Investment Banking
367,106
106
95
113
125
Wealth & Retail Banking
179,580
397
387
406
428
Ventures
1,391
27
27
27
27
Central & Other items
172,602
22
22
23
25
Total stage 1 excluding management judgements
720,679
552
531
569
605
Stage 2 modelled
Corporate & Investment Banking
14,869
198
185
206
315
Wealth & Retail Banking
2,030
116
107
132
161
Ventures
48
24
24
24
24
Central & Other items
1,660
1
1
1
1
Total stage 2 excluding management judgements
18,607
339
317
363
501
Total Stage 1 & 2 modelled
Corporate & Investment Banking
381,975
304
280
319
440
Wealth & Retail Banking
181,610
513
494
538
589
Ventures
1,439
51
51
51
51
Central & Other items
174,262
23
23
24
26
Total excluding management judgements
739,286
891
848
932
1,106
Stage 3 exposures excluding other assets
6,999
4,095
Other \ufb01nancial assets
3
101,755
63
ECL from management judgements
218
Total \ufb01nancial assets reported at 31 December 2024
848,040
5,267
\n
1
Gross balances includes both on- and off- balance sheet instruments; allocation between stage 1 and 2 will differ by scenario
\n
2
Includes ECL for both on- and off-balance sheet instruments
\n
3
Includes cash and balances at central banks, Accrued income, Other \ufb01nanc
ial assets; and Assets held for sale
\n
Sign
i\ufb01cant
increase in Credit Risk (SICR)
\n
Quantitat
ive cr
iter
ia
\n
SICR is assessed by comparing the risk of default at the
\n
reporting date to the risk of default at orig
inat
ion. Whether a
\n
change in the risk of default is sign
i\ufb01cant or not
is assessed
\n
using quantitat
ive and qual
itat
ive cr
iter
ia. These cr
iter
ia
\n
have been separately de\ufb01ned for each business and where
\n
meaningful are consistently applied across business lines.
\n
Assets are considered to have experienced SICR if they have
\n
breached both relative and absolute thresholds for the
\n
change in the average annualised IFRS 9 lifet
ime probab
il
ity
\n
of default (IFRS 9 PD) over the residual term of the exposure.
\n
The absolute measure of increase in credit risk is used to
\n
capture instances where the IFRS 9 PDs on exposures are
\n
relatively low at in
it
ial recognit
ion as these may
increase by
\n
several multiples without representing a sign
i\ufb01cant
increase
\n
in credit risk. Where IFRS 9 PDs are relatively high at in
it
ial
\n
recognit
ion, a relat
ive measure is more appropriate in
\n
assessing whether there is a sign
i\ufb01cant
increase in credit risk,
\n
as the IFRS 9 PDs increase more quickly.
\n
The SICR thresholds have been calibrated based on the
\n
following princ
iples:
\n
\u2022
Stabil
ity \u2013 The thresholds are set to ach
ieve a stable stage 2
\n
population at a portfolio level, trying to min
im
ise the
\n
number of accounts moving back and forth between
\n
stage 1 and stage 2 in a short period of time
\n
\u2022
Accuracy \u2013 The thresholds are set such that there is a
\n
materially higher propensity for stage 2 exposures to
\n
eventually default than is the case for stage 1 exposures
\n
\u2022
Dependency from backstops \u2013 The thresholds are stringent
\n
enough such that a high proportion of accounts transfer to
\n
stage 2 due to movements in forward-looking IFRS 9 PDs
\n
rather than relying on backward-looking backstops such
\n
as arrears
\n
\u2022
Relationsh
ip w
ith business and product risk pro\ufb01les \u2013 the
\n
thresholds re\ufb02ect the relative risk differences between
\n
different products, and are aligned to business processes
\n
For CIB clients the quantitat
ive thresholds are a relat
ive
\n
100 per cent increase in IFRS 9 PD and an absolute change
\n
in IFRS 9 PD of between 50 and 100 bps for investment
\n
grade and sub-investment grade assets. For debt securit
ies
\n
orig
inated before 1 January 2018, the bank
is util
is
ing the
\n
low Credit Risk simpl
i\ufb01ed approach, where debt secur
it
ies
\n
with an internal credit rating mapped to an investment
\n
grade equivalent are allocated to stage 1 and all other debt
\n
securit
ies are allocated to stage 2.
\n
For WRB (excluding Private Banking) clients, portfolio specif
ic
\n
quantitat
ive thresholds are appl
ied to Credit Card portfolios in
\n
Hong Kong, Singapore, Malaysia and UAE and Personal Loan
\n
portfolios in Taiwan (with a revis
ion to the thresholds appl
ied
\n
in 2024). During 2024 portfolio specif
ic quant
itat
ive thresholds
\n
are also now being applied to Hong Kong Personal Loans and
\n
Business Clients Mortgage portfolio in India. The impact of
\n
the threshold changes in 2024 was not material. For Credit
\n
Card portfolios, the thresholds include relative and absolute
\n
increases in IFRS 9 PD with average lifet
ime IFRS 9 PD cut-offs
\n
for those exposures that are with
in a range of customer
\n
util
isat
ion lim
it. For Personal Loans portfol
ios, the thresholds
\n
include relative and absolute increases in IFRS 9 PD cut-offs for
\n
those exposures that are over six months old in the portfolio,
\n
have certain months left in the loan tenor and have certain
\n
behaviour scores. For Business Clients Mortgage, the threshold
\n
includes relative and absolute increases in IFRS 9 PD cut-offs
\n
for those exposures that were in high arrear grade bucket at
\n
least once in the last 12 months.
\n\n
The range of thresholds applied are:
\n\n \n
Relative IFRS 9
Absolute IFRS 9
Customer
Average
PD increase
PD increase
util
isat
ion
Remain
ing tenor
IFRS 9 PD
Portfolio
(%)
(%)
(%)
(months)
(lifet
ime)
Credit cards \u2013 Current
50\u2013150%
3.4% \u2013 9.3%
15% \u2013 90%
\u2013
4.51% \u2013 11.6%
Credit cards \u2013 1-29 days past due
100% \u2013 210%
3.5% \u2013 6.1%
25% \u2013 67%
\u2013
1.5% \u2013 18.5%
Personal loans \u2013 Current
100% \u2013 250%
1.0%
\u2013
>60
\u2013
Personal loan \u2013 1-29 days past due
200% \u2013 300%
1.5%
\u2013
>12
\u2013
Business Client Mortgages \u2013 Current
100%
4.4%
\u2013
\u2013
\u2013
Business Client Mortgages \u2013 1-29 days past due
100%
7.0%
\u2013
\u2013
\u2013
\n
For all other material WRB portfolios (excluding Private
\n
Banking) for which a statist
ical model has been bu
ilt, the
\n
quantitat
ive SICR thresholds appl
ied are a relative threshold
\n
of 100 per cent increase in IFRS 9 PD and an absolute change
\n
in IFRS 9 PD of between 100 and 350 bps depending on the
\n
product. Certain countries have a higher absolute threshold
\n
re\ufb02ecting the lower default rate with
in the
ir personal loan
\n
portfolios compared with the Group\u2019s other personal loan
\n
portfolios. The orig
inal l
ifet
ime IFRS 9 PD term structure
is
\n
determined based on the orig
inal appl
icat
ion score or r
isk
\n
segment of the client.
\n
For all Private Banking classes, in line with risk management
\n
practice, an increase in credit risk is deemed to have occurred
\n
where margin
ing or loan-to-value covenants have been
\n
breached. For Class I assets (lending against divers
i\ufb01ed
\n
liqu
id collateral),
if these margin
ing requ
irements have not
\n
been met with
in 30 days of a tr
igger, a sign
i\ufb01cant
increase in
\n
credit risk is assumed to have occurred. For Class I and Class III
\n
assets (real-estate lending), a sign
i\ufb01cant
increase in credit
\n
risk is assumed to have occurred where the bank is unable
\n
to \u2018sell down\u2019 the applicable assets to meet revised collateral
\n
requirements with
in \ufb01ve days of a tr
igger. Class II assets are
\n
typically unsecured or partially secured, or secured against
\n
ill
iqu
id collateral such as shares in private companies.
\n
Sign
i\ufb01cant cred
it deteriorat
ion of these assets
is deemed
\n
to have occurred when any early alert trigger has
\n
been breached.
\n
Qualitat
ive cr
iter
ia
\n
Qualitat
ive factors that
ind
icate that there has been a
\n
sign
i\ufb01cant
increase in credit risk include processes linked to
\n
current risk management, such as placing loans on non-purely
\n
precautionary early alert or being assigned a CG12 rating.
\n
An account is placed on non-purely precautionary early alert
\n
if it exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion or attent
ion by
\n
management. Weaknesses in such a borrower\u2019s account, if
\n
left uncorrected, could result in deteriorat
ion of repayment
\n
prospects and the likel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry,
\n
concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and
\n
overdue balances, among other factors.
\n
All client assets that have been assigned a CG12 rating,
\n
equivalent to \u2018Higher risk\u2019, are deemed to have experienced
\n
a sign
i\ufb01cant
increase in credit risk. Accounts rated CG12 are
\n
primar
ily managed by relat
ionsh
ip managers
in the CIB unit
\n
with support from SAG for certain accounts. All CIB clients are
\n
placed in CG12 when they are 30 DPD unless they are granted
\n
a waiver through a strict governance process.
\n
In WRB, SICR is also assessed for where specif
ic r
isk elevation
\n
events have occurred in a market that are not yet re\ufb02ected
\n
in modelled outcomes or in other metrics. This is applied
\n
collectively either to impacted specif
ic products/customer
\n
cohorts or across the overall consumer banking portfolio in
\n
the affected market.
\n
Backstop
\n
Across all portfolios, accounts that are 30 or more days past
\n
due (DPD) on contractual payments of princ
ipal and/or
\n
interest that have not been captured by the criter
ia above are
\n
considered to have experienced a sign
i\ufb01cant
increase in credit
\n
risk. For less material portfolios, which are modelled based on
\n
a roll-rate or loss-rate approach, SICR is primar
ily assessed
\n
through the 30 DPD trigger.
\n
Expert credit judgement may be applied in assessing SICR to
\n
the extent that certain risks may not have been captured by
\n
the models or through the above criter
ia. Such
instances are
\n
expected to be rare, for example due to events and material
\n
uncertaint
ies ar
is
ing close to the report
ing date.
\n
Assessment of credit-impa
ired \ufb01nancial assets
\n
WRB clients
\n
The core components in determin
ing cred
it-impa
ired ECL
\n
provis
ions are the value of gross charge-off and recover
ies.
\n
Gross charge-off and/or loss provis
ions are recogn
ised when
\n
it is established that the account is unlikely to pay through
\n
the normal process. Recovery of unsecured debt post credit
\n
impa
irment
is recognised based on actual cash collected,
\n
either directly from clients or through the sale of defaulted
\n
loans to third-party inst
itut
ions. Release of credit impa
irment
\n
provis
ions for secured loans
is recognised if the loan
\n
outstanding is paid in full (release of full provis
ion), or the
\n
provis
ion
is higher than the loan outstanding (release of the
\n
excess provis
ion).
\n
CIB and Private Banking clients
\n
Credit-impa
ired accounts are managed by the Group\u2019s
\n
special
ist recovery un
it, Stressed Asset Group (SAG), which is
\n
independent of the Client Coverage/Relationsh
ip Managers.
\n
Where a portion of exposure is considered not recoverable,
\n
a stage 3 credit impa
irment prov
is
ion
is raised. This stage 3
\n
provis
ion
is the difference between the loan-carrying amount
\n
and the probabil
ity-we
ighted present value of estimated
\n
future cash \ufb02ows, re\ufb02ecting a range of scenarios (typically
\n
the \u2018upside\u2019, \u2018downside\u2019 and \u2018likely\u2019 recovery outcomes).
\n
Where the exposure is secured by collateral, the values used
\n
will incorporate the impact of forward-looking economic
\n
informat
ion on the value recoverable collateral and t
ime
\n
to realise the same.
\n
The ind
iv
idual circumstances of each client are considered
\n
when SAG estimates future cash\ufb02ows and the tim
ing of future
\n
recoveries which involves sign
i\ufb01cant judgement. All ava
ilable
\n
sources, such as cash\ufb02ow aris
ing from operat
ions, selling
\n
assets or subsid
iar
ies, realis
ing collateral or payments under
\n
guarantees, are considered. In any decis
ion relat
ing to the
\n
rais
ing of prov
is
ions, the Group attempts to balance
\n
economic condit
ions, local knowledge and exper
ience, and
\n
the results of independent asset reviews. The ind
iv
idual
\n
impa
irment prov
is
ions (v
iz. those not directly from a model)
\n
are approved by Stressed Assets Risk (SAR) who are in the
\n
Second Line of Defence.
\n
Write-offs
\n
Where it is considered that there is no realist
ic prospect
\n
of recovering a portion of an exposure against which an
\n
impa
irment prov
is
ion has been ra
ised, that amount will
\n
be written off.
\n\n
Governance of PMAs and applicat
ion of expert cred
it
\n
judgement in respect of ECL
\n
The Group\u2019s Credit Policy and Standards framework details
\n
the requirements for continuous monitor
ing to
ident
ify any
\n
changes in credit quality and resultant ratings, as well as
\n
ensuring a consistent approach to monitor
ing, manag
ing
\n
and mit
igat
ing credit risks. The framework aligns with the
\n
governance of ECL estimat
ion through the early recogn
it
ion
\n
of sign
i\ufb01cant deter
iorat
ions
in ratings which drive stage 2
\n
and 3 ECL.
\n
The models used in determin
ing ECL are rev
iewed and
\n
approved by the Group Credit Model Assessment Committee
\n
(CMAC) or Delegate Model Approver (DMA), which is
\n
appointed by the Model Risk Committee. CMAC has the
\n
responsib
il
ity to assess and approve the use of models and to
\n
review all IFRS 9 interpretat
ions related to models. CMAC also
\n
provides oversight on operational matters related to model
\n
development, performance monitor
ing and model val
idat
ion
\n
activ
it
ies, includ
ing standards and regulatory matters.
\n
Prior to submiss
ion to CMAC for approval, the models are
\n
validated by GMV, a function which is independent of
\n
the business and the model developers. GMV\u2019s analysis
\n
comprises review of model documentation, model design
\n
and methodology, data validat
ion, rev
iew of the model
\n
development and calibrat
ion process, out-of-sample
\n
performance testing, and assessment of compliance
\n
review against IFRS 9 rules and internal standards.
\n
Model performance PMAs
\n
The process of PMA ident
i\ufb01cation, calculat
ion and approval
\n
are prescribed in the Credit Risk IFRS 9 ECL Model Family
\n
Standards, which are approved by the Global Head, Model
\n
Risk Management. PMA calculations are reviewed by GMV
\n
and submitted to CMAC for approval and will be removed
\n
when the estimates return to being with
in the mon
itor
ing
\n
thresholds or validat
ion standards. The level of PMAs and
\n
remediat
ion plans are regularly tracked at CMAC.
\n
Judgemental adjustments
\n
These comprise judgemental PMAs and judgemental
\n
management overlays, and account for events that are
\n
not captured in the Base Case Forecast or the resulting ECL
\n
calculated by the models. Judgemental adjustments must
\n
be approved by the IIC having considered the nature of the
\n
event, why the risk is not captured in the model, and the basis
\n
on which the quantum of the overlay has been calculated.
\n
Judgemental adjustments are subject to quarterly review and
\n
re-approval by the IIC, and will be released when the risks are
\n
no longer relevant.
\n
The IFRS 9 Impairment Committee:
\n
\u2022
oversees the appropriateness of all Business Model
\n
Assessment and Solely Payments of Princ
ipal and Interest
\n
(SPPI) tests
\n
\u2022
reviews and approves ECL for \ufb01nanc
ial assets class
if
ied as
\n
stages 1, 2 and 3 for each \ufb01nancial report
ing period
\n
\u2022
reviews and approves stage allocation rules and thresholds
\n
\u2022
approves material adjustments in relation to ECL for fair
\n
value through other comprehensive income (FVOCI) and
\n
amortised cost \ufb01nanc
ial assets
\n
\u2022
reviews, challenges and approves base macroeconomic
\n
forecasts and the multiple macroeconomic scenarios
\n
approach that are util
ised
in the forward-looking
\n
ECL calculations
\n
The IIC consists of senior representatives from Risk and
\n
Finance. It meets at least twice every quarter \u2013 once before
\n
the models are run to approve key inputs into the calculation,
\n
and once after the models are run to approve the ECL
\n
provis
ions and any judgemental management overlays
\n
that may be necessary.
\n
The IIC is supported by an Expert Panel which also reviews
\n
and challenges the base case projections and mult
iple
\n
macroeconomic scenarios. The Expert Panel consists of
\n
members of Enterprise Risk Management (which includes the
\n
Scenario Design team), Finance, Group Economic Research
\n
and country representatives of major jur
isd
ict
ions.
\n\n
Traded Risk
\n
Market Risk (audited)
\n
Market Risk is the potential for fair value loss due to adverse
\n
moves in \ufb01nanc
ial markets. The Group\u2019s exposure to Market
\n
Risk arises predominantly from the following sources:
\n
\u2022 Trading book:
\n
\u2013 The Group provides clients with access to markets,
\n
facil
itat
ion of which entails the Group taking moderate
\n
Market Risk posit
ions. All trad
ing teams support client
\n
activ
ity. There are no propr
ietary trading teams. Hence,
\n
income earned from Market Risk-related activ
it
ies is
\n
primar
ily dr
iven by the volume of client activ
ity.
\n
\u2022 Non-trading book:
\n
\u2013 Treasury is required to hold a liqu
id assets buffer, much of
\n
which is held in high-quality marketable debt securit
ies
\n
\u2013 The Group underwrites and sells down loans, and
\n
invests in select investment grade debt securit
ies w
ith
\n
no trading intent
\n
\u2013 The Group has capital invested and related income
\n
streams denominated in currencies other than US dollars.
\n
To the extent that these income streams are not hedged,
\n
the Group is subject to Structural Foreign Exchange Risk
\n
which is re\ufb02ected in reserves.
\n
A summary of our current polic
ies and pract
ices regarding
\n
Market Risk management is provided in the \u2018Princ
ipal R
isks\u2019
\n
section (page 202).
\n
The primary categories of Market Risk for the Group are:
\n
\u2022
Interest Rate Risk: aris
ing from changes
in yield curves and
\n
impl
ied volat
il
it
ies
\n
\u2022
Foreign Exchange Risk: aris
ing from changes
in currency
\n
exchange rates and impl
ied volat
il
it
ies
\n
\u2022
Commodity Risk: aris
ing from changes
in commodity prices
\n
and impl
ied volat
il
it
ies
\n
\u2022
Credit Spread Risk: aris
ing from changes
in the price of
\n
debt instruments and credit-linked derivat
ives and dr
iven
\n
by factors other than the level of risk-free interest rates
\n
\u2022
Equity Risk: aris
ing from changes
in the prices of equit
ies
\n
and impl
ied volat
il
it
ies
\n
Market Risk movements (audited)
\n
Value at Risk (VaR) allows the Group to manage Market Risk
\n
across the trading book and most of the fair valued non-
\n
trading books.
\n
The average level of total trading and non-trading VaR
\n
in 2024 was $41.8 mill
ion, 22 per cent lower than 2023
\n
($53.3 mill
ion). The year end level of total trad
ing and non-
\n
trading VaR in 2024 was $43.3 mill
ion, 3 per cent lower than
\n
2023 ($44.5 mill
ion), due to a reduct
ion in market volatil
ity.
\n
For the trading book, the average level of VaR in 2024 was
\n
$21.1 mill
ion, 2 per cent lower than
in 2023 ($21.5 mill
ion).
\n
Trading activ
it
ies have remained relatively unchanged,
\n
and client driven.
\n
Daily Value at Risk (VaR at 97.5%, one day) (audited)
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Trading
1
and non-trading
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
32.8
43.9
18.6
38.8
39.5
54.1
23.2
30.5
Credit Spread Risk
20.4
31.3
12.8
16.6
33.8
48.0
25.0
31.7
Foreign Exchange Risk
9.2
15.0
5.0
7.4
7.0
12.2
4.2
7.4
Commodity Risk
5.3
10.0
2.9
4.6
5.8
9.7
3.7
4.3
Equity Risk
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(26.3)
NA
NA
(24.1)
(32.9)
NA
NA
(29.4)
Total
41.8
53.1
29.4
43.3
53.3
65.5
44.2
44.5
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Trading\u00b9
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
12.7
22.0
7.0
12.0
13.1
20.4
7.7
11.6
Credit Spread Risk
6.6
9.6
4.8
5.4
9.4
12.4
7.4
9.4
Foreign Exchange Risk
9.2
15.0
5.0
7.4
7.0
12.2
4.2
7.4
Commodity Risk
4.8
10.0
2.4
4.3
5.8
9.7
3.7
4.4
Equity Risk
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Divers
i\ufb01cation effect
3
(12.2)
NA
NA
(8.3)
(13.8)
NA
NA
(11.5)
Total
21.1
33.1
13.0
20.8
21.5
30.6
14.7
21.3
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Non-trading
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
28.0
35.5
17.4
32.5
34.2
43.6
19.7
23.9
Credit Spread Risk
17.2
24.8
10.0
15.7
28.3
40.1
21.5
24.4
Foreign Exchange Risk
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Commodity Risk
1.3
1.8
0.6
0.8
0.1
0.5
0.3
0.5
Equity Risk
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(12.7)
NA
NA
(10.2)
(18.7)
NA
NA
(13.2)
Total
34.2
44.3
28.6
38.8
44.0
53.4
32.0
35.6
\n\n
The following table sets out how trading and non-trading VaR is distr
ibuted across the Group\u2019s bus
inesses:
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Trading
1
and non-trading
2
41.8
53.1
29.4
43.3
53.3
65.5
44.2
44.5
Trading
1
Macro Trading
4
17.0
29.9
10.0
17.1
13.8
20.2
9.2
15.4
Global Credit
6.8
11.1
4.3
5.8
12.8
18.2
8.5
10.1
XVA
3.3
4.4
2.4
2.4
4.8
7.0
3.4
4.5
Divers
i\ufb01cation effect
3
(6.0)
NA
NA
(4.5)
(9.9)
NA
NA
(8.7)
Total
21.1
33.1
13.0
20.8
21.5
30.6
14.7
21.3
Non-trading
2
Treasury
32.9
40.8
26.9
38.6
43.4
50.2
31.1
34.9
Global Credit
5.0
13.4
2.4
8.8
3.9
13.6
2.0
4.0
Listed Private Equity
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(4.1)
NA
NA
(8.6)
(3.4)
NA
NA
(3.3)
Total
34.2
43.3
28.6
38.8
44.0
53.4
32.0
35.6
\n
1
The trading book for Market Risk is de\ufb01ned in accordance with the UK onshored Capital Requirements Regulation Part 3 Title I Chapter 3, which restricts the
\n
posit
ions perm
itted in the trading book
\n
2
The non-trading book VaR does not include the loan underwrit
ing bus
iness
\n
3
The total VaR is non-addit
ive across r
isk types due to divers
i\ufb01cation effects, wh
ich is measured as the difference between the sum of the VaR by ind
iv
idual risk
\n
type or business and the combined total VaR. As the maximum and min
imum occur on d
ifferent days for different risk types or businesses, it is not meaningful
\n
to calculate a portfolio divers
i\ufb01cation bene\ufb01t for these measures
\n
4 Macro Trading comprises the Rates, FX and Commodit
ies bus
inesses
\n
Risks not in VaR
\n
In 2024, the main market risks not re\ufb02ected in VaR were:
\n
\u2022
basis risks for which the histor
ical market pr
ice data is lim
ited and
is therefore proxied, giv
ing r
ise to potential proxy basis risk
\n
that is not captured in VaR
\n
\u2022
potential depeg risk from currencies currently pegged or managed, where the histor
ical one-year VaR observat
ion period
\n
may not re\ufb02ect the possib
il
ity of a change in the currency regime or a sudden depegging
\n
\u2022
potential understatement of VaR when abrupt increases in market volatil
ity are not adequately captured by the VaR model.
\n
Addit
ional cap
ital is set aside to cover such \u2018risks not in VaR\u2019.
\n
Backtesting
\n
In 2024, there were no regulatory backtesting negative exceptions at Group level (in 2023 there were \ufb01ve).
\n
An enhancement to the VaR model will be implemented from January 2025 to increase the model\u2019s responsiveness to abrupt
\n
upturns in market volatil
ity.
\n
The graph below illustrates the performance of the VaR model used in capital calculations. It compares the 99 percentile pro\ufb01t
\n
and loss con\ufb01dence level given by the VaR model with the hypothetical pro\ufb01t and loss of each day given the actual market
\n
movement ignor
ing any
intra-day trading activ
ity.
\n
-60
\n
-40
\n
-20
\n
0
\n
20
\n
40
\n
60
\n
80
\n
2024 Backtesting chart
\n
Internal model approach regulatory trading book at Group level
\n
Hypothetical pro\ufb01t and loss (P&L) versus VaR (99 per cent, one day)
\n
Hypothetical P&L
Posit
ive VaR at 99%
Negative VaR at 99%
Negative exceptions
\n
Jan 2024
Feb 2024
Mar 2024
Apr 2024
May 2024
Jun 2024
Jul 2024
Aug 2024
Sep 2024
Oct 2024
Nov 2024
Dec 2024
\n
Posit
ive except
ions
\n
Trading loss days
\n\n \n
2024
2023
Number of loss days reported for Markets trading book total product income
1
12
16
\n
1
Includes credit valuation adjustment (CVA) and funding valuation adjustment (FVA), and excludes Treasury business (non-trading), period
ic valuat
ion changes
\n
for Capital Markets, expected loss provis
ions, overn
ight indexed swap (OIS) discount
ing and account
ing adjustments such as debit valuation adjustments
\n\n
Average daily income earned from Market Risk-related activ
it
ies\u00b9 (audited)
\n
Trading: The average level of total trading daily income in 2024 was $13.3 mill
ion, 10.8 per cent h
igher than 2023 ($12 mill
ion).
\n
The increase is largely attributable higher client demand for derivat
ive products across Greater Ch
ina and North Asia coupled
\n
with larger holdings of government and corporate bonds in antic
ipat
ion of increased demand by clients.
\n
Non-trading: The average level of total non-trading daily income in 2024 was $2.7 mill
ion, attr
ibutable to translation gains on
\n
the revaluation of FX posit
ions
in Egypt, and FX revaluation gains across currencies in the Markets Credit Trading business.
\n \n \n
2024
2023
Trading
$mill
ion
$mill
ion
Interest Rate Risk
5.2
4.5
Credit Spread Risk
1.7
1.2
Foreign Exchange Risk
5.6
5.5
Commodity Risk
0.8
0.8
Equity Risk
\u2013
\u2013
Total
13.3
12.0
Non-trading
$mill
ion
$mill
ion
Interest Rate Risk
0.6
(0.1)
Credit Spread Risk
2.1
(0.7)
Equity Risk
\u2013
0.1
Total
2.7
(0.7)
\n
1
Re\ufb02ects total product income which is the sum of client income and own account income. Includes elements of trading income, interest income and non funded
\n
income which are generated from Market Risk-related activ
it
ies. Rates, XVA and Treasury income are included under Interest Rate Risk while Credit Trading
\n
income is included under Credit Spread Risk
\n
Structural foreign exchange exposures
\n
The table below sets out the princ
ipal structural fore
ign exchange exposures (net of investment hedges) of the Group.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Hong Kong dollar
4,232
4,662
Renminb
i
3,593
3,523
Indian rupee
3,480
3,309
Singapore dollar
3,306
2,415
Malaysian ringg
it
1,539
1,540
Korean won
1,363
2,114
Bangladeshi taka
1,113
1,007
Euro
1,112
1,125
Taiwanese dollar
1,087
1,222
UAE dirham
807
709
Thai baht
763
782
Pakistan
i rupee
392
306
Indonesian rupiah
230
293
Other
3,407
3,206
26,424
26,213
\n
As at 31 December 2024, the Group had taken net investment hedges using derivat
ive \ufb01nancial
instruments to partly cover
\n
its exposure to the Hong Kong dollar of $5,359 mill
ion (31 December 2023: $5,603 m
ill
ion), Korean won of $3,048 m
ill
ion
\n
(31 December 2023: $2,884 mill
ion), Ind
ian rupee of $1,784 mill
ion (31 December 2023: $1,809 m
ill
ion), Renm
inb
i of $1,640 m
ill
ion
\n
(31 December 2023: $1,516 mill
ion), UAE d
irham of $1,470 mill
ion (31 December 2023: $1,470 m
ill
ion), Ta
iwanese dollar of
\n
$1,092 mill
ion (31 December 2023: $1,025 m
ill
ion), S
ingapore dollar of $0 mill
ion (2023: $1,047 m
ill
ion) and South Afr
ican rand
\n
of $0 mill
ion (31 December 2023:$64 m
ill
ion). An analys
is has been performed on these exposures to assess the impact of a
\n
1 per cent fall in the US dollar exchange rates, adjusted to incorporate the impacts of correlations of these currencies to the
\n
US dollar. The impact on the posit
ions above would be an
increase of $262 mill
ion (31 December 2023: $260 m
ill
ion). Changes
in
\n
the valuation of these posit
ions are taken to reserves. For analys
is of the Group\u2019s capital posit
ion and requ
irements, refer to the
\n
\u2018Capital review\u2019 section (page 270).
\n
Counterparty Credit Risk
\n
Counterparty Credit Risk is the potential for loss in the event of the default of a derivat
ive counterparty, after tak
ing into
\n
account the value of elig
ible collaterals and r
isk mit
igat
ion techniques. The Group\u2019s counterparty credit exposures are included
\n
in the Credit Risk section.
\n
Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion
\n
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the
\n
counterparty through netting the sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions.
\n
In addit
ion, the Group enters
into credit support annexes (CSAs) with counterparties where collateral is deemed a necessary
\n
or desirable mit
igant to the exposure. Cash collateral
includes collateral called under a variat
ion marg
in process from
\n
counterparties if total uncollateralised mark-to-market exposure exceeds the threshold and min
imum transfer amount
\n
specif
ied
in the CSA. With certain counterparties, the CSA is reciprocal and requires us to post collateral if the overall mark-to-
\n
market values of posit
ions are
in the counterparty\u2019s favour and exceed an agreed threshold.
\n\n
Liqu
id
ity and Funding Risk
\n
Liqu
id
ity and Funding Risk is the risk that the Group may not
\n
have suf\ufb01cient stable or d
iverse sources of funding to meet its
\n
obligat
ions as they fall due.
\n
The Group\u2019s Liqu
id
ity and Funding Risk framework requires
\n
each country to ensure that it operates with
in prede\ufb01ned
\n
liqu
id
ity lim
its and rema
ins in compliance with Group
\n
liqu
id
ity polic
ies and pract
ices, as well as local regulatory
\n
requirements.
\n
The Group achieves this through a combinat
ion of sett
ing
\n
Risk Appetite and associated lim
its, pol
icy formation, risk
\n
measurement and monitor
ing, prudent
ial and internal stress
\n
testing, governance and review.
\n
Throughout 2024, the Group retained a robust liqu
id
ity
\n
posit
ion across key metr
ics. The Group continues to focus
\n
on improv
ing the qual
ity and divers
i\ufb01cation of
its funding
\n
mix and remains committed to supporting its clients.
\n
Primary sources of funding (audited)
\n
The Group\u2019s funding strategy is largely driven by its policy to
\n
mainta
in adequate l
iqu
id
ity at all times, in all geographic
\n
locations and for all currencies. This is done to ensure the
\n
Group can meet all of its obligat
ions as they fall due.
\n
The Group\u2019s funding pro\ufb01le is therefore well divers
i\ufb01ed
\n
across different sources, maturit
ies and currenc
ies.
\n
The Group\u2018s assets are funded predominantly by customer
\n
deposits, supplemented with wholesale funding, which is
\n
divers
i\ufb01ed by type and matur
ity.
\n
The Group mainta
ins access to wholesale fund
ing markets
\n
in all major \ufb01nanc
ial centres
in which it operates. This seeks
\n
to ensure that the Group has market intell
igence, ma
inta
ins
\n
stable funding lines and can obtain optimal pric
ing when
\n
performing cash\ufb02ow management activ
it
ies.
\n
In 2024, the Group issued approximately $9.1 bill
ion worth of
\n
securit
ies from
its holding company, Standard Chartered PLC
\n
(2023 $8.1 bill
ion of sen
ior debt securit
ies). The
issuances
\n
included $1.6 bill
ion of Add
it
ional T
ier 1 securit
ies and
\n
$7.5\u00a0bill
ion of sen
ior debt securit
ies across mult
iple currencies.
\n
Over this same period, there were Addit
ional T
ier 1 calls of
\n
$0.6\u00a0bill
ion, T
ier 2 redemptions (calls & maturit
ies) of around
\n
$1.6 bill
ion and sen
ior calls of $6.3 bill
ion. In the next 12 months,
\n
approximately $7.8 bill
ion of the Group\u2019s Add
it
ional T
ier 1,
\n
senior and subordinated debt securit
ies are e
ither falling
\n
due for repayment contractually or callable by the Group.
\n
Group\u2019s composit
ion of l
iab
il
it
ies and equ
ity
31 December 2024
\n
4.2
9.7
9.2
\n
Derivat
ive \ufb01nancial
\n
instruments
\n
Deposits by banks
\n
Debt securit
ies
in issue
\n
Customer accounts
\n
Other liab
il
it
ies
\n
Equity
\n
Subordinated liab
il
it
ies
\n
and other borrowed funds
\n
61.6
8.1
\n
1.2
\n
6.0
\n
100%
\n
Liqu
id
ity and Funding Risk metrics
\n
The Group continually monitors key liqu
id
ity metrics, both on
\n
a country basis and consolidated across the Group.
\n
The following liqu
id
ity and funding Board Risk Appetite
\n
metrics de\ufb01ne the maximum amount and type of risk that the
\n
Group is will
ing to assume
in pursuit of its strategy: liqu
id
ity
\n
coverage ratio (LCR), liqu
id
ity stress survival horizons, recovery
\n
capacity and net stable funding ratio (NSFR). In addit
ion to
\n
the Board Risk Appetite, there are further lim
its that apply at
\n
Group and country level such as external wholesale borrowing
\n
(WBE) and cross currency lim
its.
\n
Liqu
id
ity coverage ratio (LCR)
\n
The LCR is a regulatory requirement set to ensure the Group
\n
has suf\ufb01cient unencumbered h
igh-quality liqu
id assets
\n
to meet its liqu
id
ity needs in a 30-calendar-day liqu
id
ity
\n
stress scenario.
\n
The Group monitors and reports its liqu
id
ity posit
ions under
\n
the Liqu
id
ity Coverage Ratio per PRA rulebook and has
\n
mainta
ined
its LCR above the prudential requirement.
\n
The Group mainta
ined robust l
iqu
id
ity ratios throughout 2024.
\n
At the reporting date, the Group LCR was 138 per cent
\n
(31 December 2023: 145 per cent), with a surplus to both
\n
Board-approved Risk Appetite and regulatory requirements.
\n
Adequate liqu
id
ity was held across our footprint to meet all
\n
local prudential LCR requirements where applicable.
\n
The Liqu
id
ity buffer reported is after deductions made to
\n
re\ufb02ect the impact of lim
itat
ions in the transferabil
ity of ent
ity
\n
liqu
id
ity around the Group. This resulted in an adjustment of
\n
$35 bill
ion to LCR HQLA as at 31 December 2024.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Liqu
id
ity buffer
170,306
185,643
Total net cash out\ufb02ows
123,226
128,111
Liqu
id
ity coverage ratio
138%
145%
\n\n
Stressed coverage
\n
The Group intends to mainta
in a prudent and susta
inable
\n
funding and liqu
id
ity posit
ion,
in all countries and currencies,
\n
such that it can withstand a severe but plausible liqu
id
ity
\n
stress.
\n
Our approach to managing liqu
id
ity and funding is re\ufb02ected
\n
in the Board-level Risk Appetite Statement which includes
\n
the following:
\n
\u201cThe Group should have suf\ufb01cient stable and d
iverse sources
\n
of funding to meet its contractual and contingent obligat
ions
\n
as they fall due.\u201d
\n
The Group\u2019s internal liqu
id
ity adequacy assessment process
\n
(\u2018ILAAP\u2019) stress testing framework covers the following
\n
stress scenarios:
\n
\u2022
Standard Chartered-specif
ic \u2013 Captures the l
iqu
id
ity
\n
impact from an id
iosyncrat
ic event affecting Standard
\n
Chartered only with the rest of the market assumed to be
\n
operating normally.
\n
\u2022
Market wide \u2013 Captures the liqu
id
ity impact from a
\n
market-wide cris
is affect
ing all partic
ipants
in a country,
\n
region or globally.
\n
\u2022
Combined \u2013 Assumes both Standard Chartered-specif
ic
\n
and Market-wide events affect the Group simultaneously
\n
and hence is the most severe scenario.
\n
All scenarios include, but are not lim
ited to, modelled out\ufb02ows
\n
for retail and wholesale funding, off-balance sheet funding
\n
risk, cross-currency funding risk, intraday risk, franchise risk
\n
and risks associated with a deteriorat
ion of a \ufb01rm\u2019s cred
it
\n
rating. Concentration risk approach captures single name
\n
and industry concentration.
\n
ILAAP stress testing results show that, as at 31 December 2024,
\n
Group and all countries were able to survive for a period of
\n
time with posit
ive surpluses as de\ufb01ned under each scenar
io.
\n
The results take into account currency convertib
il
ity and
\n
portabil
ity constra
ints while calculating the liqu
id
ity surplus
\n
at Group level.
\n
Standard Chartered Bank\u2019s credit ratings as at 31 December
\n
2024 were A+ with stable outlook (Fitch), A+ with stable
\n
outlook (S&P) and A1 with posit
ive outlook (Moody\u2019s). As of
\n
31\u00a0December 2024, the estimated contractual out\ufb02ow of a
\n
three-notch long-term ratings downgrade is $1.0 bill
ion.
\n
External wholesale borrowing
\n
A risk trigger is set to prevent excessive reliance on wholesale
\n
borrowing. With
in the de\ufb01nit
ion of wholesale borrowing,
\n
triggers are applied to all branches and operating subsid
iar
ies
\n
in the Group.
\n
Advances-to-deposits ratio
\n
This is de\ufb01ned as the ratio of total loans and advances to
\n
customers relative to total customer deposits. An advances-
\n
to-deposits ratio below 100 per cent demonstrates that
\n
customer deposits exceed customer loans as a result of the
\n
emphasis placed on generating a high level of funding from
\n
customers.
\n
The Group\u2019s advances-to-deposits ratio has remained stable
\n
in 2024 at 53.3 per cent. Deposits from customers as at
\n
31\u00a0December 2024 are $486,261 mill
ion (31 December 2023:
\n
$486,666 mill
ion).
\n\n \n
2024
2023
$mill
ion
$mill
ion
Total loans and advances to customers
1,2
259,269
259,481
Total customer accounts
3
486,261
486,666
Advances-to-deposits ratio
53.3%
53.3%
\n
1
Excludes reverse repurchase agreement and other sim
ilar secured lend
ing of $9,660 mill
ion and
includes loans and advances to customers held at fair value
\n
through pro\ufb01t and loss of $7,084 mill
ion
\n
2
Loans and advances to customers for the purpose of the advances-to-deposits ratio excludes $19,187 mill
ion of approved balances held w
ith central banks,
\n
con\ufb01rmed as repayable at the point of stress (31 December 2023: $20,710 mill
ion)
\n
3
Includes customer accounts held at fair value through pro\ufb01t or loss of $21,772 mill
ion (31 December 2023: $17,248 m
ill
ion)
\n
Net stable funding ratio (NSFR)
\n
The NSFR is a PRA regulatory requirement that stipulates
\n
inst
itut
ions to mainta
in a stable fund
ing pro\ufb01le in relation to
\n
an assumed duration of their assets and off-balance sheet
\n
activ
it
ies over a one-year horizon. It is the ratio between the
\n
amount of available stable funding (ASF) and the amount
\n
of required stable funding (RSF). ASF factors are applied to
\n
balance sheet liab
il
it
ies and cap
ital, based on their perceived
\n
stabil
ity and the amount of stable fund
ing they provide.
\n
Likew
ise, RSF factors are appl
ied to assets and off-balance
\n
sheet exposures according to the amount of stable funding
\n
they require. The regulatory requirements for NSFR are to
\n
mainta
in a rat
io of at least 100 per cent. The average ratio
\n
for the past four quarters is 135 per cent.
\n
Liqu
id
ity pool
\n
The liqu
id
ity value of the Group\u2019s LCR elig
ible l
iqu
id
ity pool at the reporting date was $170 bill
ion. The \ufb01gures
in the table below
\n
account for haircuts, currency convertib
il
ity and portabil
ity constra
ints per PRA rules for transfer restrict
ions (amount
ing to
\n
$35 bill
ion as at 31 December 2024), and therefore are not d
irectly comparable with the consolidated balance sheet. A liqu
id
ity
\n
pool is held to offset stress out\ufb02ows as de\ufb01ned in the LCR per PRA rulebook.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Level 1 securit
ies
Cash and balances at central banks
76,094
81,675
Central banks, governments /public sector entit
ies
74,182
71,768
Multilateral development banks and internat
ional organ
isat
ions
14,386
16,917
Other
343
1,291
Total Level 1 securit
ies
165,005
171,651
Level 2 A securit
ies
4,367
13,268
Level 2 B securit
ies
934
724
Total LCR elig
ible assets
170,306
185,643
\n\n
Liqu
id
ity analysis of the Group\u2019s balance sheet (audited)
\n
Contractual maturity of assets and liab
il
it
ies
\n
The following table presents assets and liab
il
it
ies by matur
ity groupings based on the remain
ing per
iod to the contractual
\n
maturity date as at the balance sheet date on a discounted basis. Contractual maturit
ies do not necessar
ily re\ufb02ect actual
\n
repayments or cash\ufb02ows.
\n
With
in the tables below, cash and balances w
ith central banks, interbank placements and investment securit
ies that are
\n
fair valued through other comprehensive income are used by the Group princ
ipally for l
iqu
id
ity management purposes.
\n
As at the reporting date, assets remain predominantly short-dated, with 59 per cent maturing in less than one year.
\n\n \n
2024
Between
Between
Between
Between
Between
Between
More than
one month
three
six months
nine months
one year
two years
\ufb01ve years
One month
and three
months and
and nine
and one
and two
and \ufb01ve
and
or less
months
six months
months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks
55,646
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
7,801
63,447
Derivat
ive \ufb01nancial
instruments
22,939
15,556
12,217
7,265
4,328
7,067
7,448
4,652
81,472
Loans and advances
to banks
1,2
22,381
21,722
10,588
6,771
4,986
8,407
3,715
1,990
80,560
Loans and advances
to customers
1,2
65,688
58,765
25,739
15,479
16,192
31,240
31,766
94,688
339,557
Investment securit
ies
1
13,016
25,886
21,546
14,789
14,688
32,815
41,423
62,418
226,581
Other assets
1
12,601
32,130
1,333
381
931
71
64
10,560
58,071
Total assets
192,271
154,059
71,423
44,685
41,125
79,600
84,416
182,109
849,688
Liab
il
it
ies
Deposits by banks
1,3
24,293
2,345
1,621
848
571
4,342
1,939
3
35,962
Customer accounts
1,4
379,926
37,502
25,863
10,152
10,123
9,695
47,367
2,635
523,263
Derivat
ive \ufb01nancial
instruments
21,680
17,115
11,773
7,018
4,353
6,660
8,144
5,321
82,064
Senior debt
5
609
1,755
4,074
2,132
932
7,926
18,784
17,886
54,098
Other debt securit
ies
in issue
1
2,734
2,663
6,550
4,535
5,015
851
1,206
688
24,242
Other liab
il
it
ies
12,173
43,574
3,020
1,441
155
4,494
682
2,854
68,393
Subordinated liab
il
it
ies and
other borrowed funds
\u2013
64
23
180
13
359
1,978
7,765
10,382
Total liab
il
it
ies
441,415
105,018
52,924
26,306
21,162
34,327
80,100
37,152
798,404
Net liqu
id
ity gap
(249,144)
49,041
18,499
18,379
19,963
45,273
4,316
144,957
51,284
\n\n \n
2023
Assets
Cash and balances at
central banks
63,752
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6,153
69,905
Derivat
ive \ufb01nancial
instruments
12,269
10,632
6,910
3,611
2,921
4,650
6,038
3,403
50,434
Loans and advances
to banks
1,2
28,814
23,384
10,086
4,929
5,504
1,583
2,392
1,098
77,790
Loans and advances
to customers
1,2
86,695
55,009
25,492
15,392
14,537
25,987
26,545
95,829
345,486
Investment securit
ies
1
12,187
28,999
17,131
18,993
20,590
24,244
44,835
50,168
217,147
Other assets
1
17,611
31,729
1,286
409
587
67
93
10,300
62,082
Total assets
221,328
149,753
60,905
43,334
44,139
56,531
79,903
166,951
822,844
Liab
il
it
ies
Deposits by banks
1,3
26,745
1,909
1,398
503
778
1,326
2,848
2
35,509
Customer accounts
1,4
384,444
47,723
28,288
13,647
11,806
7,787
38,578
2,349
534,622
Derivat
ive \ufb01nancial
instruments
13,111
12,472
6,655
4,001
3,433
5,142
6,932
4,315
56,061
Senior debt
5
130
1,111
1,537
1,389
624
11,507
20,127
14,443
50,868
Other debt securit
ies
in issue
1
3,123
5,822
6,109
3,235
3,037
492
482
195
22,495
Other liab
il
it
ies
14,929
26,447
1,695
544
883
1,830
1,809
12,763
60,900
Subordinated liab
il
it
ies and
other borrowed funds
980
68
19
172
453
312
1,936
8,096
12,036
Total liab
il
it
ies
443,462
95,552
45,701
23,491
21,014
28,396
72,712
42,163
772,491
Net liqu
id
ity gap
(222,134)
54,201
15,204
19,843
23,125
28,135
7,191
124,788
50,353
\n
1
Loans and advances, investment securit
ies, depos
its by banks, customer accounts and debt securit
ies
in issue include \ufb01nanc
ial
instruments held at fair value
\n
through pro\ufb01t or loss, see Note 13 Financ
ial
instruments
\n
2
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing of $98.8 bill
ion (31 December 2023: $97.6 b
ill
ion)
\n
3
Deposits by banks include repurchase agreements and other sim
ilar secured borrow
ing of $8.7 bill
ion (31 December 2023: $5.6 b
ill
ion)
\n
4
Customer accounts include repurchase agreements and other sim
ilar secured borrow
ing of $37.0 bill
ion (31 December 2023: $48.0 b
ill
ion)
\n
5
Senior debt maturity pro\ufb01les are based upon contractual maturity, which may be later than call options over the debt held by the Group
\n\n
Behavioural maturity of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The cash\ufb02ows presented in the previous section re\ufb02ect the
\n
cash\ufb02ows that will be contractually payable over the residual
\n
maturity of the instruments. However, contractual maturit
ies
\n
do not necessarily re\ufb02ect the tim
ing of actual repayments or
\n
cash\ufb02ow. In practice, certain assets and liab
il
it
ies behave
\n
differently from their contractual terms, especially for short-
\n
term customer accounts, credit card balances and overdrafts,
\n
which extend to a longer period than their contractual
\n
maturity. On the other hand, mortgage balances tend to
\n
have a shorter repayment period than their contractual
\n
maturity date. Expected customer behaviour is assessed
\n
and managed on a country basis using qualitat
ive and
\n
quantitat
ive techn
iques, includ
ing analys
is of observed
\n
customer behaviour over time.
\n
Maturity of \ufb01nanc
ial l
iab
il
it
ies on an und
iscounted basis
\n
(audited)
\n
The following table analyses the contractual cash\ufb02ows
\n
payable for the Group\u2019s \ufb01nancial l
iab
il
it
ies by rema
in
ing
\n
contractual maturit
ies on an und
iscounted basis. The \ufb01nanc
ial
\n
liab
il
ity balances in the table below will not agree with the
\n
balances reported in the consolidated balance sheet as
\n
the table incorporates all contractual cash\ufb02ows, on an
\n
undiscounted basis, relating to both princ
ipal and
interest
\n
payments. Derivat
ives not treated as hedg
ing derivat
ives
\n
are included in the \u2018On demand\u2019 time bucket and not by
\n
contractual maturity.
\n
With
in the \u2018More than \ufb01ve years and undated\u2019 matur
ity band
\n
are undated \ufb01nancial l
iab
il
it
ies, the majority of wh
ich relate
\n
to subordinated debt, on which interest payments are not
\n
included as this informat
ion would not be mean
ingful, given
\n
the instruments are undated. Interest payments on these
\n
instruments are included with
in the relevant matur
it
ies up to
\n
\ufb01ve years.
\n\n \n
2024
Between
Between
Between
Between
Between
More than
one month
three
Between six
nine months
one year
two years
\ufb01ve years
One month
and three
months and
months and
and one
and two
and \ufb01ve
and
or less
months
six months
nine months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deposits by banks
24,303
2,360
1,660
862
589
4,347
1,939
4
36,064
Customer accounts
380,377
37,790
26,277
10,384
10,438
9,937
47,642
3,396
526,241
Derivat
ive \ufb01nancial
instruments\u00b9
80,055
13
12
10
3
216
592
1,163
82,064
Debt securit
ies
in issue
3,622
4,551
11,007
7,056
6,319
10,261
23,184
21,337
87,337
Subordinated liab
il
it
ies and
other borrowed funds
19
134
46
206
14
392
2,345
13,800
16,956
Other liab
il
it
ies
10,421
44,933
2,894
1,408
152
4,433
682
4,802
69,725
Total liab
il
it
ies
498,797
89,781
41,896
19,926
17,515
29,586
76,384
44,502
818,387
2023
Deposits by banks
26,759
1,921
1,417
513
790
1,328
2,848
4
35,580
Customer accounts
385,361
48,140
28,763
14,049
12,190
8,118
39,000
3,036
538,657
Derivat
ive \ufb01nancial
instruments\u00b9
53,054
517
46
44
103
202
887
1,208
56,061
Debt securit
ies
in issue
3,507
6,995
8,015
5,070
4,002
13,663
23,413
16,396
81,061
Subordinated liab
il
it
ies and
other borrowed funds
1,043
134
46
208
570
395
2,389
14,367
19,152
Other liab
il
it
ies
12,200
26,291
1,560
515
884
1,832
1,810
11,513
56,605
Total liab
il
it
ies
481,924
83,998
39,847
20,399
18,539
25,538
70,347
46,524
787,116
\n
1
Derivat
ives are on a d
iscounted basis
\n\n
Interest Rate Risk in the Banking Book
\n
The following table provides the estimated impact to a
\n
hypothetical base case project
ion of the Group\u2019s earn
ings
\n
under the following scenarios:
\n
\u2022
A 50 basis point parallel interest rate shock (up and down)
\n
to the current market-impl
ied path of rates, across all
\n
yield curves
\n
\u2022
A 100 basis point parallel interest rate shock (up and down)
\n
to the current market-impl
ied path of rates, across all
\n
yield curves
\n
These interest rate shock scenarios assume all other economic
\n
variables remain constant. The sensit
iv
it
ies shown represent
\n
the estimated change to a hypothetical base case projected
\n
net interest income (NII), plus the change in interest rate
\n
impl
ied
income and expense from FX swaps used to manage
\n
banking book currency posit
ions, under the d
ifferent interest
\n
rate shock scenarios.
\n
The base case projected NII is based on the current market-
\n
impl
ied path of rates and forward rate expectat
ions. The NII
\n
sensit
iv
it
ies below stress th
is base case by a further 50 or
\n
100bps. Actual observed interest rate changes will likely
\n
differ from market expectation. Accordingly, the shocked NII
\n
sensit
iv
ity does not represent a forecast of the Group\u2019s net
\n
interest income.
\n
The interest rate sensit
iv
it
ies are
ind
icat
ive stress tests and
\n
based on simpl
i\ufb01ed scenar
ios, estimat
ing the aggregate
\n
impact of an unantic
ipated,
instantaneous parallel shock
\n
across all yield curves over a one-year horizon, includ
ing the
\n
time taken to implement changes to pric
ing before becom
ing
\n
effective. The assessment assumes that the size and mix of
\n
the balance sheet remain constant and that there are no
\n
specif
ic management act
ions in response to the change in
\n
rates. No assumptions are made in relation to the impact on
\n
credit spreads in a changing rate environment.
\n
Sign
i\ufb01cant modell
ing and behavioural assumptions are made
\n
regarding scenario simpl
i\ufb01cation, market compet
it
ion,
\n
pass-through rates, asset and liab
il
ity re-pric
ing tenors, and
\n
price \ufb02ooring. In particular, the assumption that interest rates
\n
of all currencies and maturit
ies sh
ift by the same amount
\n
concurrently, and that no actions are taken to mit
igate the
\n
impacts aris
ing from th
is are considered unlikely. Reported
\n
sensit
iv
it
ies w
ill vary over time due to a number of factors
\n
includ
ing changes
in balance sheet composit
ion, market
\n
condit
ions, customer behav
iour and risk management
\n
strategy. Therefore, while the NII sensit
iv
it
ies are a relevant
\n
measure of the Group\u2019s interest rate exposure, they should
\n
not be considered an income or pro\ufb01t forecast.
\n\n \n
2024
Estimated one-year impact
Other
to earnings from a parallel
currency
shift in yield curves at the
USD bloc
HKD bloc
SGD bloc
KRW bloc
CNY bloc
INR bloc
EUR bloc
bloc\u00b9
Total
beginn
ing of the per
iod of:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
+ 50 basis points
20
30
10
20
20
30
10
70
210
- 50 basis points
(40)
(30)
(20)
(20)
(30)
(30)
(20)
(80)
(270)
+ 100 basis points
30
60
20
30
30
40
30
150
390
- 100 basis points
(90)
(50)
(40)
(50)
(50)
(40)
(40)
(190)
(550)
\n\n \n
2023
Estimated one-year impact
to earnings from a parallel
Other
shift in yield curves at the
USD bloc
HKD bloc
SGD bloc
KRW bloc
CNY bloc
INR bloc
EUR bloc
currency
Total
beginn
ing of the per
iod of:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
bloc\u00b9
$mill
ion
+ 50 basis points
90
10
50
10
30
20
30
110
350
- 50 basis points
(150)
(30)
(50)
(20)
(40)
(30)
(30)
(120)
(470)
+ 100 basis points
180
10
100
20
60
40
50
230
690
- 100 basis points
(280)
(40)
(100)
(40)
(80)
(60)
(60)
(230)
(890)
\n
1
The largest exposures with
in the Other currency bloc are GBP,JPY, MYR, TWD
\n
As at 31 December 2024, the Group estimates the one-year
\n
impact of an instantaneous, parallel increase across all
\n
yield curves of 50 basis points to increase projected NII by
\n
$210\u00a0mill
ion. The equ
ivalent impact from a parallel decrease
\n
of 50 basis points would result in a reduction in projected NII
\n
of $270 mill
ion. The Group est
imates the one-year impact of
\n
an instantaneous, parallel increase across all yield curves of
\n
100\u00a0basis points to increase projected NII by $390 mill
ion.
\n
The equivalent impact from a parallel decrease of
\n
100 basis points would result in a reduction in projected
\n
NII of $550 mill
ion.
\n
The bene\ufb01t from ris
ing
interest rates is primar
ily from
\n
reinvest
ing at h
igher yields and from assets re-pric
ing faster
\n
and to a greater extent than deposits. NII sensit
iv
ity in falling
\n
rate scenarios has decreased versus 31 December 2023, due to
\n
an increase in programmatic hedging as well as actions taken
\n
in discret
ionary portfol
ios to increase asset duration.
\n
Over the course of 2024 the notional of interest rate swaps
\n
and HTC-accounted bond portfolios used to reduce NII
\n
sensit
iv
ity through the cycle increased from $47 bill
ion to
\n
$64\u00a0bill
ion. As at December 2024, the portfol
ios had a
\n
weighted average maturity of 3.0 years, which re\ufb02ects the
\n
behavioural
ised l
ives of the rate-insens
it
ive deposit and
\n
equity balances that they hedge, and a yield of 3.5 per cent.
Operational and Technology Risk
Operational and Technology Risk pro\ufb01le
The implementat
ion of standard
ised non-\ufb01nanc
ial r
isk,
control and causal taxonomies is enabling improved risk
aggregation and reporting, and has provided opportunit
ies
for simpl
ify
ing the process for risk ident
i\ufb01cation and
assessment in the Group.
Operational and Technology Risk is elevated in areas such
as Change Mismanagement Risk and Third-Party Risk
Management, which are subject to ongoing control
enhancement programmes. Other key areas of focus are
Systems Health/Technology risk, Operational Resil
ience
and Regulatory Compliance. To address these areas, the
Group has focused on improv
ing the susta
inable operating
environment and has in
it
iated several programmes to
enhance the control environment. The Group continues to
monitor and manage Operational and Technology risks
associated with the external environment such as geopolit
ical
factors, the increas
ing r
isk of cyber-attacks and inappropr
iate
use of Artif
ic
ial Intelligence. This enables the Group to keep
pace with the new business developments, while ensuring
that its risk and control frameworks evolve accordingly.
The Group continues to strengthen its risk management
to understand the full spectrum of risks in the operating
environment, enhance its defences and improve resil
ience.
Operational and Technology risk events and losses
Operational losses are one ind
icator of the effect
iveness and
robustness of our non-\ufb01nancial r
isk and control environment.
The Group\u2019s pro\ufb01le of operational loss events in 2024 and
2023 is summarised in the table below, which shows the
distr
ibut
ion of gross operational losses by Basel business
line. There has been a sharp increase in Corporate Items
in 2024 due to a single large event pertain
ing to F
inance
Accounting Adjustment.
% Loss
Distr
ibut
ion of Operational losses by Basel business line
2024
2023\u00b9
Agency Services
0.0%
3.9%
Asset Management
0.0%
0.2%
Commercial Banking
1.4%
8.0%
Corporate Finance
0.1%
7.2%
Corporate Items
72.5%
34.3%
Payment and Settlements
7.6%
16.6%
Retail Banking
17.0%
21.3%
Retail Brokerage
0.0%
0.0%
Trading and Sales
1.4%
8.6%
1
Losses in 2023 have been restated to include incremental events recognised in 2024
The Group\u2019s pro\ufb01le of operational loss events in 2024 and 2023 is also summarised by Basel event type in the table below.
It shows the distr
ibut
ion of gross operational losses by Basel event type.
% Loss
Distr
ibut
ion of Operational losses by Basel event type
2024
2023\u00b9
Business disrupt
ion and system fa
ilures
1.8%
4.7%
Clients products and business practices
14.1%
2.9%
Damage to physical assets
0.0%
0.0%
Employment practices and workplace safety
0.1%
0.6%
Execution delivery and process management
81.5%
77.3%
External fraud
2.4%
14.4%
Internal fraud
0.1%
0.2%
1
Losses in 2023 have been restated to include incremental events recognised in 2024
Other princ
ipal r
isks
The losses aris
ing from operat
ional failures for other princ
ipal and
integrated risks are reported as operational losses.
Operational losses do not include operational risk-related credit impa
irments. Capital review
The Capital review provides an analysis of the Group\u2019s capital and leverage posit
ion,
and requirements.
Capital summary
The Group\u2019s capital, leverage and min
imum requ
irements for own funds and elig
ible l
iab
il
it
ies (MREL) pos
it
ion
is managed
with
in the Board-approved r
isk appetite. The Group is well capital
ised w
ith low leverage and high levels of loss-absorbing
capacity.
2024
2023
CET1 capital
14.2%
14.1%
Tier 1 capital
16.9%
16.3%
Total capital
21.5%
21.2%
Leverage ratio
4.8%
4.7%
MREL ratio
34.2%
33.3%
Risk-weighted assets (RWA) $mill
ion
247,065
244,151
The Group\u2018s capital, leverage and MREL posit
ions were all
above current requirements and Board-approved risk
appetite. For further detail see the Capital section in the
Standard Chartered PLC Pillar 3 Disclosures for FY 2024.
The Group\u2019s CET1 capital increased 19 basis points to
14.2 per cent of RWA since FY2023. Pro\ufb01ts, movements in
FVOCI, FX translation reserves and decrease in regulatory
deductions were partly offset by RWA growth and
distr
ibut
ions (includ
ing ord
inary share buybacks of
$2.5 bill
ion dur
ing the year).
The PRA updated the Group\u2019s Pillar 2A requirement during
Q4 2024. As at 31 December 2024 the Group\u2019s Pillar 2A was
3.7 per cent of RWA, of which at least 2.1 per cent must be
held in CET1 capital. The Group\u2019s min
imum CET1 cap
ital
requirement was 10.5 per cent at 31 December 2024.
The Group CET1 capital ratio at 31 December 2024 re\ufb02ects
the share buybacks of $2.5 bill
ion announced dur
ing the year.
The CET1 capital ratio also includes an accrual for the FY 2024
div
idend. The Board has recommended a \ufb01nal d
iv
idend for
FY 2024 of $679 mill
ion or 28 cents per share result
ing in a full
year 2024 div
idend of 37 cents per share, a 37 per cent
increase on the 2023 div
idend. In add
it
ion, the Board has
announced a further share buyback of $1.5 bill
ion, the
impact
of this will reduce the Group\u2019s CET1 capital by around 61 basis
points in the \ufb01rst quarter of 2025.
The Group expects to manage CET1 capital dynamically
with
in our 13-14 per cent target range,
in support of our aim
of deliver
ing future susta
inable shareholder distr
ibut
ions.
The Group\u2019s MREL leverage requirement as at 31 December
2024 was 27.6 per cent of RWA. This is composed of a
min
imum requ
irement of 23.7 per cent of RWA and the Group\u2019s
combined buffer (compris
ing the cap
ital conservation buffer,
the G-SII buffer and the countercyclical buffer). The Group\u2019s
MREL ratio was 34.2 per cent of RWA and 9.7 per cent of
leverage exposure at 31 December 2024.
During 2024, the Group successfully raised $9.1 bill
ion of MREL
elig
ible secur
it
ies from
its holding company, Standard
Chartered PLC. Issuance include $1.6 bill
ion of Add
it
ional T
ier 1
and $7.5 bill
ion of callable sen
ior debt.
The Group raised an addit
ional $1.0 b
ill
ion of Add
it
ional T
ier 1
and $2.5 bill
ion
in senior securit
ies post the balance sheet
date, i.e. not included in the FY 2024 MREL posit
ion.
The Group is a G-SII, with a 1.0 per cent G-SII CET1 capital
buffer. The Standard Chartered PLC G-SII disclosure is
published at: sc.com/en/investors/\ufb01nanc
ial-results.
\n\n
Capital base
\n
1
\n
(audited)
\n\n \n
2024
2023
$mill
ion
$mill
ion
CET1 capital instruments and reserves
Capital instruments and the related share premium accounts
5,201
5,321
Of which: share premium accounts
3,989
3,989
Retained earnings
24,950
24,930
Accumulated other comprehensive income (and other reserves)
8,724
9,171
Non-controlling interests (amount allowed in consolidated CET1)
235
217
Independently audited year-end pro\ufb01ts
4,072
3,542
Foreseeable div
idends
(923)
(768)
CET1 capital before regulatory adjustments
42,259
42,413
CET1 regulatory adjustments
Addit
ional value adjustments (prudent
ial valuation adjustments)
(624)
(730)
Intangible assets (net of related tax liab
il
ity)
(5,696)
(6,128)
Deferred tax assets that rely on future pro\ufb01tabil
ity (excludes those aris
ing from temporary d
ifferences)
(31)
(41)
Fair value reserves related to net losses on cash \ufb02ow hedges
(4)
(91)
Deduction of amounts resulting from the calculation of excess expected loss
(702)
(754)
Net gains on liab
il
it
ies at fa
ir value resulting from changes in own credit risk
278
(100)
De\ufb01ned-bene\ufb01t pension fund assets
(149)
(95)
Fair value gains aris
ing from the
inst
itut
ion\u2019s own credit risk related to derivat
ive l
iab
il
it
ies
(97)
(116)
Exposure amounts which could qualify for risk weight
ing of 1250%
(44)
(44)
Total regulatory adjustments to CET1
(7,069)
(8,099)
CET1 capital
35,190
34,314
Addit
ional T
ier 1 capital (AT1) instruments
6,502
5,512
AT1 regulatory adjustments
(20)
(20)
Tier 1 capital
41,672
39,806
Tier 2 capital instruments
11,449
11,965
Tier 2 regulatory adjustments
(30)
(30)
Tier 2 capital
11,419
11,935
Total capital
53,091
51,741
Total risk-weighted assets (unaudited)
247,065
244,151
\n
1
Capital base is prepared on the regulatory scope of consolidat
ion
\n\n
Movement in total capital (audited)
\n\n \n
2024
2023
$mill
ion
$mill
ion
CET1 at 1 January
34,314
34,157
Ordinary shares issued in the period and share premium
\u2013
\u2013
Share buyback
(2,500)
(2,000)
Pro\ufb01t for the period
4,072
3,542
Foreseeable div
idends deducted from CET1
(923)
(768)
Difference between div
idends pa
id and foreseeable div
idends
(469)
(372)
Movement in goodwill and other intang
ible assets
432
(326)
Foreign currency translation differences
(525)
(477)
Non-controlling interests
18
28
Movement in elig
ible other comprehens
ive income
636
464
Deferred tax assets that rely on future pro\ufb01tabil
ity
10
35
Decrease/(increase) in excess expected loss
52
(70)
Addit
ional value adjustments (prudent
ial valuation adjustment)
106
124
IFRS 9 transit
ional
impact on regulatory reserves includ
ing day one
2
(106)
Exposure amounts which could qualify for risk weight
ing
\u2013
59
Fair value gains aris
ing from the
inst
itut
ion\u2019s own Credit Risk related to derivat
ive l
iab
il
it
ies
19
(26)
Others
(54)
50
CET1 at 31 December
35,190
34,314
AT1 at 1 January
5,492
6,484
Net issuances (redemptions)
1,015
(1,000)
Foreign currency translation difference and others
(25)
8
AT1 at 31 December
6,482
5,492
Tier 2 capital at 1 January
11,935
12,510
Regulatory amortisat
ion
1,189
1,416
Net issuances (redemptions)
(1,517)
(2,160)
Foreign currency translation difference
(191)
146
Tier 2 inel
ig
ible minor
ity
interest
(3)
19
Others
6
4
Tier 2 capital at 31 December
11,419
11,935
Total capital at 31 December
53,091
51,741
\n
The main movements in capital in the period were:
\n
\u2022
CET1 capital increased by $0.9 bill
ion as reta
ined pro\ufb01ts of $4.1 bill
ion, movement
in FVOCI of $0.6 bill
ion and a reduct
ion in
\n
regulatory deductions and other movements of $0.6 bill
ion were partly offset by share buybacks of $2.5 b
ill
ion, d
istr
ibut
ions
\n
paid and foreseeable of $1.4 bill
ion, fore
ign currency translation impact of $0.5\u00a0bill
ion.
\n
\u2022
AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.0 bill
ion of 7.88 per cent secur
it
ies and $0.6 b
ill
ion of
\n
5.30\u00a0per\u00a0cent securit
ies partly offset by the redempt
ion of $0.6 bill
ion of 5.38 per cent secur
it
ies.
\n
\u2022
Tier 2 capital decreased by $0.5 bill
ion due to the redempt
ion of $1.6 bill
ion of T
ier 2 during the year partly offset by the
\n
reversal of regulatory amortisat
ion and fore
ign currency translation impact.
\n
Risk-weighted assets by business
\n\n \n
2024
Credit risk
Operational risk
Market risk
Total risk
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate & Investment Banking
112,100
19,987
24,781
156,868
Wealth & Retail Banking
41,002
9,523
\u2013
50,525
Ventures
2,243
142
21
2,406
Central & Other items
33,958
(173)
3,481
37,266
Total risk-weighted assets
189,303
29,479
28,283
247,065
2023
Corporate & Investment Banking
102,675
18,083
21,221
141,979
Wealth & Retail Banking
42,559
8,783
\u2013
51,342
Ventures
1,885
35
3
1,923
Central & Other items
44,304
960
3,643
48,907
Total risk-weighted assets
191,423
27,861
24,867
244,151
\n\n\n\n \n
Credit risk
Corporate &
Wealth &
Investment
Retail
Central &
Operational
Banking
Banking
Ventures
Other items
Total
risk
Market risk
Total risk
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January 2023
110,103
42,091
1,350
43,311
196,855
27,177
20,679
244,711
Assets growth & mix
(4,424)
728
535
1,183
(1,978)
\u2013
\u2013
(1,978)
Asset quality
(391)
390
\u2013
2,684
2,683
\u2013
\u2013
2,683
Risk-weighted assets ef\ufb01c
ienc
ies
\u2013
\u2013
\u2013
(688)
(688)
\u2013
\u2013
(688)
Model Updates
(597)
(151)
\u2013
(151)
(899)
\u2013
500
(399)
Methodology and policy changes
\u2013
(196)
\u2013
\u2013
(196)
\u2013
(800)
(996)
Acquis
it
ions and disposals
(1,630)
\u2013
\u2013
\u2013
(1,630)
\u2013
\u2013
(1,630)
Foreign currency translation
(386)
(303)
\u2013
(2,035)
(2,724)
\u2013
\u2013
(2,724)
Other, Including non-credit
risk movements
\u2013
\u2013
\u2013
\u2013
\u2013
684
4,488
5,172
At 31 December 2023
102,675
42,559
1,885
44,304
191,423
27,861
24,867
244,151
Assets growth & mix
11,412
341
358
(5,803)
6,308
\u2013
\u2013
6,308
Asset quality
(1,349)
112
\u2013
(1,935)
(3,172)
\u2013
\u2013
(3,172)
Risk-weighted assets ef\ufb01c
ienc
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Model Updates
1,620
(1)
\u2013
\u2013
1,619
\u2013
(400)
1,219
Methodology and policy changes
38
39
\u2013
\u2013
77
\u2013
(1,300)
(1,223)
Acquis
it
ions and disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign currency translation
(2,296)
(1,207)
\u2013
(1,374)
(4,877)
\u2013
\u2013
(4,877)
Other, Including non-credit
risk movements
\u2013
(841)
\u2013
(1,234)
(2,075)
1,618
5,116
4,659
At 31 December 2024
112,100
41,002
2,243
33,958
189,303
29,479
28,283
247,065
\n
Movements in risk-weighted assets
\n
RWA increased by $2.9 bill
ion, or 1.2 per cent from 31 December
\n
2023 to $247.1 bill
ion. Th
is was mainly due to decrease in
\n
Credit Risk RWA of $2.1 bill
ion, an
increase in Market Risk RWA
\n
of $3.4\u00a0bill
ion and Operat
ional Risk RWA of $1.6 bill
ion.
\n
Corporate & Investment Banking
\n
Credit Risk RWA increased by $9.4 bill
ion, or 9.2 per cent from
\n
31\u00a0December 2023 to $112.1 bill
ion ma
inly due to:
\n
\u2022
$11.4 bill
ion
increase from changes in asset growth & mix,
\n
of which:
\n
\u2013 $9.0 bill
ion
increase from asset growth
\n
\u2013 $3.1 bill
ion
increase from derivat
ives
\n
\u2013 $0.8 bill
ion decrease from opt
im
isat
ion actions
\n
\u2022
$1.6 bill
ion
increase from industry-wide regulatory changes
\n
to align IRB model performance from adjustment to
\n
commercial real estate counterparties
\n
\u2022
$2.3 bill
ion decrease from fore
ign currency translation
\n
\u2022
$1.3 bill
ion decrease ma
inly due to an improvement in asset
\n
quality re\ufb02ecting client upgrades
\n
Wealth & Retail Banking
\n
Credit Risk RWA decreased by $1.6 bill
ion, or 3.7 per cent from
\n
31 December 2023 to $41.0 bill
ion ma
inly due to:
\n
\u2022
$1.2 bill
ion decrease from fore
ign currency translation
\n
\u2022
$0.8 bill
ion decrease from reclass
if
icat
ion of credit cards
\n
in Asia
\n
\u2022
$0.3 bill
ion
increase from changes in asset growth & mix
\n
\u2022
$0.1 bill
ion
increase mainly due to deteriorat
ion
in asset
\n
quality mainly in Asia
\n
Ventures
\n
Ventures is comprised of Mox Bank Lim
ited, Trust Bank
\n
and SC Ventures. Credit Risk RWA increased by $0.4 bill
ion,
\n
or 19 per cent from 31 December 2023 to $2.2 bill
ion from
\n
asset balance growth, mainly from SC Ventures.
\n
Central & Other items
\n
Central & Other items RWA mainly relate to the Treasury
\n
Market\u2019s liqu
id
ity portfolio, equity investments and current &
\n
deferred tax assets.
\n
Credit Risk RWA decreased by $10.3 bill
ion, or 23.4 per cent
\n
from 31 December 2023 to $34.0 bill
ion ma
inly due to:
\n
\u2022
$5.8 bill
ion decrease from changes
in asset growth & mix
\n
primar
ily from opt
im
isat
ion activ
it
ies
\n
\u2022
$1.9 bill
ion decrease due to
improvement in asset quality
\n
mainly from sovereign upgrades in Asia and Africa
\n
\u2022
$1.4 bill
ion decrease from fore
ign currency translation
\n
\u2022
$1.2 bill
ion decrease due to report
ing enhancements
\n
Market Risk
\n
Total Market Risk RWA increased by $3.4 bill
ion, or
\n
13.7 per cent from 31 December 2023 to $28.3 bill
ion
\n
primar
ily dr
iven by:
\n
\u2022
$1.7 bill
ion
increase in Standardised Approach (SA) Specif
ic
\n
Interest Rate Risk RWA mainly due to increases in the
\n
Trading Book government bond portfolio
\n
\u2022
$2.7 bill
ion
increase in Internal Models Approach (IMA)
\n
RWA from increases in VaR and Stressed VaR RWA due
\n
mainly to increased interest rate exposures, offset by a
\n
reduction of addons for Risks not in VaR
\n
\u2022
$1.3 bill
ion
in the \ufb01rst quarter decrease due to a reduction
\n
in the IMA RWA multipl
ier result
ing from fewer back-
\n
testing exceptions
\n
Operational Risk
\n
\u2022
Operational Risk RWA increased by $1.6 bill
ion, or
\n
5.8 per cent from 31 December 2023 to $29.5 bill
ion, ma
inly
\n
due to a marginal increase in average income as measured
\n
over a rolling three-year time horizon for certain products.
Leverage ratio
The Group\u2019s leverage ratio, which excludes qualify
ing cla
ims on central banks, was 4.8 per cent at FY2024, which was above the
current min
imum requ
irement of 3.7 per cent. The leverage ratio was 10 basis points higher than FY2023. Leverage exposure
increased by $21.2 bill
ion from decrease
in claims on central banks of $15.5 bill
ion, an
increase in Derivat
ives of $15.9 b
ill
ion,
securit
ies \ufb01nancing transact
ions of $1.2 bill
ion, decrease
in asset amounts deducted in determin
ing T
ier 1 capital (Leverage)
of $0.6 bill
ion, partly offset by decrease
in Off-balance sheet items of $5.0 bill
ion, Other Assets of $4.7 b
ill
ion, and secur
it
ies
\ufb01nancing transact
ion add-on of $2.4 bill
ion. T
ier 1 capital increased by $1.9 bill
ion as CET1 cap
ital increased by $0.9 bill
ion
and AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.6 bill
ion partly offset by the redempt
ion of $0.6 bill
ion
AT1 securit
ies.
Leverage ratio
31.12.24
31.12.23
$mill
ion
$mill
ion
Tier 1 capital (end point)
41,672
39,806
Derivat
ive \ufb01nancial
instruments
81,472
50,434
Derivat
ive cash collateral
11,046
10,337
Securit
ies \ufb01nancing transact
ions (SFTs)
98,801
97,581
Loans and advances and other assets
658,369
664,492
Total on-balance sheet assets
849,688
822,844
Regulatory consolidat
ion adjustments
1
(76,197)
(92,709)
Derivat
ives adjustments
Derivat
ives nett
ing
(63,934)
(39,031)
Adjustments to cash collateral
(10,169)
(9,833)
Net written credit protection
2,075
1,359
Potential future exposure on derivat
ives
51,323
42,184
Total derivat
ives adjustments
(20,705)
(5,321)
Counterparty risk leverage exposure measure for SFTs
4,198
6,639
Off-balance sheet items
118,607
123,572
Regulatory deductions from Tier 1 capital
(7,247)
(7,883)
Total exposure measure excluding claims on central banks
868,344
847,142
Leverage ratio excluding claims on central banks (%)
4.8%
4.7%
Average leverage exposure measure excluding claims on central banks
894,296
853,968
Average leverage ratio excluding claims on central banks (%)
4.7%
4.6%
Countercyclical leverage ratio buffer
0.1%
0.1%
G-SII addit
ional leverage rat
io buffer
0.4%
0.4%
1
Includes adjustment for qualify
ing central bank cla
ims and unsettled regular way trades", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00480": { "value": "Risk review and Capital review
Annual
Report and
Risk Index
Accounts
Risk management
Enterprise Risk Management Framework
196
approach
Princ
ipal r
isks
201
Risk pro\ufb01le
Credit Risk
207
Basis of preparation
207
Credit Risk overview
207
Impairment model
207
Staging of \ufb01nanc
ial
instruments
207
IFRS 9 ECL princ
iples and approaches
207
Summary of Credit Risk performance
207
Maximum exposure to Credit Risk
209
Analysis of \ufb01nanc
ial
instruments by stage
210
Credit quality analysis
212
\u2022
Credit quality by client segment
212
\u2022
Credit quality by key geography
217
Movement in gross exposures and credit impa
irment for loans and advances, debt secur
it
ies,
undrawn commitments and \ufb01nanc
ial guarantees
219
Analysis of stage 2 balances
225
Credit impa
irment charge
226
Problem credit management and provis
ion
ing
226
\u2022
Forborne and other modif
ied loans by cl
ient segment
226
\u2022
Forborne and other modif
ied loans by key geography
226
Credit Risk mit
igat
ion
227
\u2022 Collateral
227
\u2022
Collateral held on loans and advances
227
\u2022
Collateral \u2013 Corporate and Investment Banking
227
\u2022
Collateral \u2013 Wealth and Retail Banking
228
\u2022
Mortgage loan-to-value ratios by geography
228
\u2022
Collateral and other credit enhancements possessed or called upon
229
\u2022
Other Credit Risk mit
igat
ion
229
Other portfolio analysis
229
\u2022
Maturity analysis of loans and advances by client segment
229
\u2022
Credit quality by industry
230
\u2022
Industry and Retail Products analysis of loans and advances by key geography
231
\u2022
High carbon sectors
232
\u2022
Commercial real estate
234
\u2022
Debt securit
ies and other el
ig
ible b
ills
235
IFRS 9 ECL methodology
236
Traded Risk
247
Market Risk movements
247
Counterparty Credit Risk
249
Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion
249
Liqu
id
ity and Funding Risk
250
Liqu
id
ity and Funding Risk metrics
250
Liqu
id
ity analysis of the Group\u2019s balance sheet
252
Interest Rate Risk in the Banking Book
254
Operational and Technology Risk
255
Operational and Technology Risk pro\ufb01le
255
Other princ
ipal r
isks
255
Climate Risk
256
Managing the \ufb01nanc
ial and non-\ufb01nancial r
isks from climate change
257
Assessing the resil
ience of our strategy us
ing scenario analysis
265
\n\n\n \n
Annual
Report and
Risk Index
Accounts
Capital
Capital summary
270
\u2022 Capital ratio
270
\u2022 Capital base
271
Movement in total capital
272
Risk-weighted asset
272
Leverage ratio
274
\n
The following parts of the Risk review and Capital review form part of these \ufb01nanc
ial statements and are aud
ited by the
\n
external auditors:
\n
a) Risk review:
Disclosures marked as \u2018audited\u2019 from the start of Credit risk section (page 207) to the end of other princ
ipal r
isks
\n
in the same section (page 255); and
\n
b) Capital review:
Tables marked as \u2018audited\u2019 from the start of \u2018Capital base\u2019 to the end of \u2018Movement in total capital\u2019, excluding
\n
\u2018Total risk-weighted assets\u2019 (pages 271 and 272).
\n\n
Enterprise Risk Management Framework
\n
Risk management is at the heart of banking, it is what we do. Managing risk effectively is how
\n
we drive commerce and prosperity for our clients and our communit
ies, and
it is how we grow
\n
sustainably and pro\ufb01tably as an organisat
ion.
\n
Effective risk management is essential in deliver
ing cons
istent
\n
and sustainable performance for all our stakeholders and is
\n
a central part of the \ufb01nancial and operat
ional management
\n
of the Group. The Group adds value to clients and the
\n
communit
ies
in which they operate by balancing risk and
\n
reward to generate returns for shareholders.
\n
The Enterprise Risk Management Framework (ERMF)
\n
enables the Group to manage enterprise-wide risks, with the
\n
objective of max
im
is
ing risk-adjusted returns while remain
ing
\n
with
in our R
isk Appetite (RA). The ERMF is complemented by
\n
frameworks, polic
ies and standards wh
ich are mainly aligned
\n
to the Princ
ipal R
isk Types (PRTs), and is embedded across the
\n
Group, includ
ing
its branches and subsid
iar
ies.
\n
1
\n
It is reviewed
\n
and approved by the Board annually, with the latest version
\n
being effective from August 2024.
\n
Risk culture
\n
Risk culture encompasses our general awareness, attitudes,
\n
and behaviours towards risk, as well as how risk is managed
\n
at enterprise level.
\n
A healthy risk culture is one in which everyone takes personal
\n
responsib
il
ity to ident
ify and assess, openly d
iscuss, and
\n
take prompt action to address exist
ing and emerg
ing risks.
\n
We expect our control functions to provide oversight and
\n
challenge constructively, collaboratively, and in a timely
\n
manner on the risks owned by the \ufb01rst line of defence.
\n
This effort is re\ufb02ected in our valued behaviours and
\n
underpinned by our Code of Conduct and Ethics.
\n
Further details on our Code of Conduct and Ethics can be
\n
found on
page 95
.
\n
The risks we face constantly evolve, and we must always
\n
look for ways to manage them as effectively as possible.
\n
While unfavourable outcomes will occur from time to time,
\n
a healthy risk culture means that we react quickly and
\n
transparently. We can then take the opportunity to learn from
\n
our experience and improve our framework and processes.
\n
Strategic risk management
\n
The Group\u2019s approach to strategic risk management includes
\n
the following:
\n
\u2022
Risk ident
i\ufb01cation:
impact analyses of risks that arise from
\n
the Group\u2019s growth plans, strategic in
it
iat
ives, and bus
iness
\n
model vulnerabil
it
ies are reviewed. This assesses how
\n
exist
ing r
isks have evolved in terms of relative importance
\n
and whether new risks have emerged.
\n
\u2022
Risk Appetite:
impact analysis is performed to assess if
\n
strategic in
it
iat
ives can be ach
ieved with
in RA and h
ighl
ight
\n
areas where addit
ional RA should be cons
idered.
\n
\u2022
Stress testing:
ident
i\ufb01ed r
isks are used to develop scenarios
\n
for enterprise stress tests.
\n
Roles and responsib
il
it
ies
\n
Senior Managers Regime
\n
2
\n
Roles and responsib
il
it
ies under the ERMF are al
igned to
\n
the objectives of the Sen
ior Managers Regime. The Group
\n
Chief Risk Of\ufb01cer (GCRO) is responsible for the overall
\n
development and maintenance of the Group\u2019s ERMF and for
\n
ident
ify
ing material risks which the Group may be exposed to.
\n
The GCRO delegates effective implementat
ion of the R
isk
\n
Type Frameworks (RTF) to Risk Framework Owners (RFO),
\n
who provide second line of defence oversight for their
\n
respective PRTs.
\n
The Risk function
\n
The Risk function provides oversight and challenge on the
\n
Group\u2019s risk management, ensuring that business is conducted
\n
in line with regulatory expectations. The GCRO directly
\n
manages the Risk function, which is independent from the
\n
orig
inat
ion, trading, and sales functions of the businesses.
\n
The Risk function is responsible for:
\n
\u2022
proposing the RA for approval by the Board
\n
\u2022
mainta
in
ing the ERMF, ensuring that it remains relevant
\n
and appropriate to the Group\u2019s business activ
it
ies, and
\n
is effectively communicated and implemented across
\n
the Group
\n
\u2022
ensuring that risks are properly assessed, risk and return
\n
decis
ions are transparent and r
isks are controlled in
\n
accordance with the Group\u2019s standards and RA
\n
\u2022
overseeing and challenging the management of PRTs under
\n
the ERMF
\n
\u2022
independence of the Risk function by ensuring that the
\n
necessary balance in making risk and return decis
ions
is not
\n
compromised by short-term pressures to generate revenues.
\n
The Risk function supports the Group\u2019s strategy by build
ing
\n
a sustainable ERMF that places regulatory and compliance
\n
standards, together with culture of appropriate conduct, at
\n
the forefront of the Group\u2019s agenda.
\n
Our Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
\n
function,
\n
3
\n
works alongside the Risk function with
in the ERMF
\n
to deliver a unif
ied second l
ine of defence. Compliance Risk
\n
and Financ
ial Cr
ime Risk, as PRTs, fall under the scope of the
\n
CFCR\u2019s responsib
il
it
ies.
\n
Three lines of defence model
\n
The Group applies a three lines of defence model to its
\n
day-to-day activ
it
ies for effective risk management,
\n
and to reinforce a strong governance and control
\n
environment. Typically:
\n
\u2022
Businesses and functions engaged in or supporting revenue
\n
generating activ
it
ies that own and manage risks constitute
\n
the \ufb01rst line of defence.
\n
1
The Group\u2019s ERMF and system of internal control applies only to wholly controlled subsid
iar
ies of the Group, and not to associates, jo
int ventures or structured
\n
entit
ies of the Group.
\n
2
Senior managers refer to ind
iv
iduals designated as senior management functions under the FCA and PRA Senior Managers Regime.
\n
3
From 1 January 2025, our Conduct, Financ
ial Cr
ime and Compliance (CFCC) function was renamed as Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR).
\n\n
\u2022
Control functions, independent of the \ufb01rst line of defence,
\n
that provide oversight and challenge of risk management
\n
activ
it
ies act as the second line of defence.
\n
\u2022
Internal Audit acts as the third line of defence, provid
ing
\n
independent assurance on the effectiveness of controls
\n
supporting the activ
it
ies of the \ufb01rst and second lines
\n
of defence.
\n
Each PRT has an RTF which outlines the areas of governance
\n
and risk management and is the formal mechanism through
\n
which authorit
ies are delegated. R
isk management plans,
\n
processes, activ
it
ies, and resource allocations are consistent
\n
with the three lines of defence model prescribed by the ERMF.
\n
Risk ident
i\ufb01cation and assessment
\n
Identif
icat
ion and assessment of potentially adverse risk
\n
events is an essential \ufb01rst step in managing the risks of any
\n
business or activ
ity. To ensure cons
istency we use PRTs to
\n
classify our risk exposures. However, we also recognise the
\n
need to mainta
in a hol
ist
ic perspect
ive since:
\n
\u2022
a single transaction or activ
ity may g
ive rise to multiple
\n
types of risk exposure
\n
\u2022
risk concentrations may arise from multiple exposures that
\n
are closely correlated
\n
\u2022
a given risk exposure may change its form from one risk
\n
type to another.
\n
There are also sources of risk that arise beyond our own
\n
operations, such as the Group\u2019s dependency on suppliers for
\n
the provis
ion of serv
ices and technology.
\n
As the Group remains accountable for risks aris
ing from the
\n
actions of such third parties, failure to adequately monitor
\n
and manage these relationsh
ips could mater
ially impact the
\n
Group\u2019s abil
ity to operate.
\n
The Group mainta
ins a taxonomy of r
isks inherent to the
\n
strategy and business model, as well as a risk inventory which
\n
captures ident
i\ufb01ed r
isks, includ
ing the Top
ical and Emerging
\n
Risks (TERs) to which the Group is or might be exposed to.
\n
Multiple ident
i\ufb01cation and assessment techn
iques are
\n
used to ensure breadth and depth of understanding of the
\n
internal and external risk environment, as well as potential
\n
opportunit
ies. A r
isk assessment of the corporate plan is
\n
undertaken annually, supplemented by risk assessments of
\n
new in
it
iat
ives. R
isk ident
i\ufb01cation \ufb01ndings
inform the related
\n
risk oversight process, and most importantly RA and controls
\n
setting, scenario selection and design, and model re\ufb01nement
\n
and development.
\n
The GCRO and the Group Risk Committee (GRC) regularly
\n
review reports on the risk pro\ufb01le for the PRTs, adherence to
\n
Group RA, stress test results and the Group risk inventory
\n
includ
ing TERs.
\n
Risk Appetite and pro\ufb01le
\n
The Group recognises the following constraints which
\n
determine the risks that we are will
ing to take
in pursuit of our
\n
strategy and the development of a sustainable business:
\n
\u2022
Risk capacity is the maximum level of risk the Group can
\n
assume, given its current capabil
it
ies and resources, before
\n
breaching constraints determined by capital and liqu
id
ity
\n
requirements or the internal operational environment, or
\n
otherwise fail
ing to meet the expectat
ions of regulator and
\n
law enforcement agencies.
\n
\u2022
RA is de\ufb01ned by the Group and approved by the Board.
\n
It is the boundary for the risk that the Group is will
ing to
\n
undertake to achieve its strategic object
ives and corporate
\n
plan. We set RA to enable us to grow sustainably while
\n
managing our risks, giv
ing con\ufb01dence to our stakeholders.
\n
The Group RA is supplemented by risk control tools such as
\n
granular level lim
its, pol
ic
ies, and standards to ma
inta
in the
\n
Group\u2019s risk pro\ufb01le with
in approved RA.
\n
The Board is responsible for approving the RA Statements,
\n
which are underpinned by a set of \ufb01nanc
ial and operat
ional
\n
control parameters known as RA metrics and their associated
\n
thresholds. These set boundaries for the aggregate risk
\n
exposures that can be taken across the Group.
\n
The Group RA is reviewed bi-annually to ensure that it is \ufb01t for
\n
purpose and aligned with strategy, with focus given to new or
\n
emerging risks.
\n
Risk Appetite Statement
\n
The Group\u2019s objective
is to not compromise adherence with its
\n
RA in order to pursue revenue growth or higher returns.
\n
See the table on page 198 for the set of RA Statements.
\n
Stress testing
\n
The objective of stress test
ing is to support the Group in
\n
assessing that it:
\n
\u2022
does not have exposure to excessive risk concentrations
\n
that could produce unacceptably high losses under severe
\n
but plausible scenarios
\n
\u2022
has suf\ufb01cient \ufb01nancial resources to w
ithstand severe but
\n
plausible scenarios
\n
\u2022
has the \ufb01nancial \ufb02ex
ib
il
ity to respond to extreme but
\n
plausible scenarios
\n
\u2022
understands key business model risks and considers what
\n
kind of event might crystallise those risks \u2013 even if extreme
\n
and with a low likel
ihood of occurr
ing
\n
\u2022
ident
i\ufb01es, as requ
ired, actions to mit
igate the l
ikel
ihood or
\n
impact of those events
\n
\u2022
has set RA metrics at appropriate levels.
\n
Enterprise stress tests incorporate capital and liqu
id
ity
\n
adequacy stress tests, includ
ing recovery and resolut
ion,
\n
as well as reverse stress tests.
\n
Stress tests are performed at the Group, country, business,
\n
and portfolio level under a wide range of risks and at varying
\n
degrees of severity. Unless specif
ically set by the regulator,
\n
scenario design is a bespoke process that aims to explore risks
\n
that can adversely impact the Group.
\n
The Board delegates approval of the Bank of England (BoE)
\n
stress test submiss
ions to the Board R
isk Committee (BRC),
\n
which reviews the recommendations from the GRC. Based on
\n
the stress test results, the Group Chief Financ
ial Of\ufb01cer (GCFO)
\n
and GCRO can recommend strategic actions to the Board to
\n
ensure that the Group\u2019s strategy remains with
in RA.
\n
In addit
ion, analys
is is run at the PRT level to assess specif
ic
\n
risks and concentrations that the Group may be exposed to.
\n
These include qualitat
ive assessments such as stress
ing of
\n
credit sectors or portfolios, and quantitat
ive assessments
\n
such as potential losses from severe but plausible market risk
\n
scenarios or internal stressed liqu
id
ity metrics.
\n\n
Stress testing plays a crit
ical role
in assessing the potential impact on portfolio values of extreme but plausible scenarios,
\n
leading to potential losses typically much larger than those predicted by the Value at Risk (VaR) model. The Group uses
\n
histor
ical and forward-look
ing scenarios. A common set of scenarios is used across all legal entit
ies complemented
in some
\n
cases with entity-specif
ic scenar
ios. RA for market risk stress losses is set at the Group as well as legal entity level.
\n
Non-\ufb01nancial r
isk types are also stressed to assess the necessary capital requirements under the Operational and
\n
Technology RTF.
\n
The Group has also undertaken a number of Climate Risk stress tests, both those mandated by regulators as well as
\n
management scenarios.
\n
Princ
ipal R
isk Types
\n
PRTs are those risks that are inherent in our strategy and business model and have been formally de\ufb01ned in the Group\u2019s ERMF.
\n
These risks are managed through dist
inct RTFs wh
ich are approved by the GCRO.
\n
The PRTs and associated RA Statements are reviewed annually. The table below shows the Group\u2019s current PRTs, their de\ufb01n
it
ion
\n
and RA Statement.
\n\n \n
Princ
ipal R
isk Types
De\ufb01nit
ion
Risk Appetite Statement
Credit Risk
Potential for loss due to failure of a counterparty to
The Group manages its credit exposures following
meet its agreed obligat
ions to pay the Group.
the princ
iple of d
ivers
i\ufb01cation across products,
geographies, client segments and industry sectors.
Traded Risk
Potential for loss resulting from activ
it
ies undertaken
The Group should control its \ufb01nanc
ial markets
by the Group in \ufb01nanc
ial markets.
activ
it
ies to ensure that market and counterparty
credit risk losses do not cause material damage to
the Group\u2019s franchise.
Treasury Risk
Potential for insuff
ic
ient capital, liqu
id
ity, or funding
The Group should mainta
in suf\ufb01cient cap
ital, liqu
id
ity
to support our operations, the risk of reductions in
and funding to support its operations, and an interest
earnings or value from movements in interest rates
rate pro\ufb01le ensuring that the reductions in earnings
impact
ing bank
ing book items and the potential for
or value from movements in interest rates impact
ing
losses from a shortfall in the Group\u2019s pension plans.
banking book items does not cause material damage
to the Group\u2019s franchise. In addit
ion, the Group should
ensure its pension plans are adequately funded.
Operational and
Potential for loss resulting from inadequate or failed
The Group aims to control operational and
Technology Risk
internal processes, technology events, human error,
technology risks to ensure that operational losses
or from the impact of external events (includ
ing
(\ufb01nancial or reputat
ional), includ
ing any related to the
legal risks).
conduct of business matters, do not cause material
damage to the Group\u2019s franchise.
Information and Cyber
Risk to the Group\u2019s assets, operations, and
The Group aims to mit
igate and control ICS r
isks
Security (ICS) Risk
ind
iv
iduals due to the potential for unauthorised
to ensure that inc
idents do not cause the Bank
access, use, disclosure, disrupt
ion, mod
if
icat
ion,
material harm, business disrupt
ion, \ufb01nancial loss
or destruction of informat
ion assets and/or
or reputational damage \u2013 recognis
ing that wh
ile
informat
ion systems.
inc
idents are unwanted, they cannot be ent
irely
avoided.
Financ
ial Cr
ime Risk
4
Potential for legal or regulatory penalties, material
The Group has no appetite for breaches of laws and
\ufb01nancial loss or reputat
ional damage resulting
regulations related to Financ
ial Cr
ime, recognis
ing
from the failure to comply with applicable laws
that while inc
idents are unwanted, they cannot be
and regulations relating to internat
ional sanct
ions,
entirely avoided.
anti-money laundering and anti-bribery and
corruption, and fraud.
Compliance Risk
Potential for penalties or loss to the Group or for
The Group has no appetite for breaches of laws and
an adverse impact to our clients, stakeholders
regulations related to regulatory non-compliance;
or to the integr
ity of the markets we operate
in
recognis
ing that wh
ile inc
idents are unwanted, they
through a failure on our part to comply with laws,
cannot be entirely avoided.
or regulations.
Environmental, Social
Potential or actual adverse impact on the
The Group aims to measure and manage \ufb01nanc
ial
and Governance
environment and/or society, the Group\u2019s \ufb01nanc
ial
and non-\ufb01nancial r
isks aris
ing from cl
imate change,
and Reputational
performance, operations, or the Group\u2019s name,
reduce emiss
ions
in line with our net zero strategy
(ESGR) Risk
brand or standing, aris
ing from env
ironmental,
and protect the Group from material reputational
social or governance factors, or as a result of the
damage by upholding responsible conduct and
Group\u2019s actual or perceived actions or inact
ions.
striv
ing to do no s
ign
i\ufb01cant env
ironmental and
social harm.
Model Risk
Potential loss that may occur because of decis
ions
The Group has no appetite for material adverse
or the risk of misest
imat
ion that could be princ
ipally
impl
icat
ions aris
ing from m
isuse of models or errors
based on the output of models, due to errors in
in the development or implementat
ion of models;
the development, implementat
ion, or use of
while accepting some model uncertainty.
such models.
\n
4
Fraud forms part of the Financ
ial Cr
ime RA Statement but, in line with market practice, does not apply a zero-tolerance approach.
\n
As of November 2024, the Climate Risk RA Statement was integrated into the ESGR PRT.
\n\n
ERMF effectiveness reviews
\n
The GCRO is responsible for annually af\ufb01rm
ing the
\n
effectiveness of the ERMF to the BRC via an effectiveness
\n
review. This review is based on the princ
iple of ev
idence-
\n
based self-assessments for all the RTFs and relevant polic
ies.
\n
A top-down review and challenge of the results is conducted
\n
by the GCRO with all RFOs and an opin
ion on the
internal
\n
control environment is provided by Internal Audit.
\n
The ERMF effectiveness review measures year-on-year
\n
progress. The key outcomes of the 2024 review are:
\n
\u2022
Continued focus on embedding the ERMF across the
\n
organisat
ion.
\n
\u2022
Financ
ial r
isks continue to be effectively managed, and the
\n
Group is making good progress in embedding non-\ufb01nanc
ial
\n
risk management.
\n
\u2022
Self-assessments performed in branches and banking
\n
subsid
iar
ies re\ufb02ect the embeddedness of the ERMF.
\n
Country and cluster risk committees continue to play an
\n
active role in overseeing and managing risks across our
\n
footprint markets.
\n
Ongoing effectiveness reviews allow for a structured
\n
approach to ident
ify
improvement opportunit
ies and bu
ild
\n
plans to address them.
\n
In 2025, the Group aims to further strengthen its risk
\n
management practices by improv
ing the management of
\n
non-\ufb01nancial r
isks with
in
its businesses, functions and across
\n
our footprint. As the regulatory environment continuously
\n
changes, the Group constantly monitors regulatory
\n
developments and take proactive actions for compliance.
\n
Executive and Board risk oversight
\n
Overview
\n
The corporate governance and committee structure helps
\n
the Group to conduct our business. The Board has ultimate
\n
responsib
il
ity for risk management and approves the ERMF
\n
based on the recommendation of the BRC, which also
\n
recommends the Group RA Statement for all PRTs and other
\n
risks. In addit
ion to the BRC and Aud
it Committee, the Culture
\n
and Sustainab
il
ity Committee oversees the Group\u2019s culture
\n
and key sustainab
il
ity prior
it
ies.
\n
See
page 113
for the Board and committee governance structure.
\n
Group Risk Committee
\n
The GRC, which derives its authority from the GCRO, is responsible for ensuring the effective management of risk throughout
\n
the Group in support of the Group\u2019s strategy. The GCRO chairs the GRC, whose members are drawn from the Group
\n
Management Team. The GRC oversees the effective implementat
ion of the ERMF for the Group,
includ
ing the delegat
ion
\n
of any part of its authorit
ies to appropr
iate ind
iv
iduals or sub-committees.
\n\n \n
Group Risk Committee
sub-committees
Chair
Roles and responsib
il
it
ies
Group Non-Financ
ial R
isk
Global Head, Operational,
Governs the in-scope non-\ufb01nanc
ial r
isks throughout the Group in support
Committee (GNFRC)
Technology and Cyber Risk
of the ERMF and the Group\u2019s strategy.
Group Financ
ial Cr
ime Risk
Group Head, CFCR
Ensures that the Financ
ial Cr
ime Risk pro\ufb01le (excluding Fraud Risk and
Committee (GFCRC)
Secondary Reputational Risk aris
ing from F
inanc
ial Cr
ime Risk) is
managed with
in RA and pol
ic
ies.
Group Responsib
il
ity and
GCRO
Ensures the effective management of Reputational and Sustainab
il
ity
Reputational Risk Committee
Risk across the Group. This includes provid
ing overs
ight of matters aris
ing
(GRRRC)
from clients, products, transactions and strategic coverage-related
decis
ions and matters escalated by the respect
ive RFOs.
International Financ
ial
Co-chaired by the Global
Ensures the effective management of expected credit loss (ECL)
Reporting Standards (IFRS) 9
Head Enterprise Risk
computations, as well as stage allocation of \ufb01nanc
ial assets for quarterly
Impairment Committee (IIC)
Management (ERM) and
\ufb01nancial report
ing.
Group Head, Central Finance
Model Risk Committee
Global Head, ERM
To support the Group strategy by ensuring the effective measurement
(MRC)
and management of Model Risk in line with internal polic
ies and
model RA.
Investment Committee
Global Head of Stressed
Ensures the optim
ised w
ind-down of the Group\u2019s non-core direct
Assets Risk
investment activ
it
ies in equit
ies, quas
i-equit
ies (exclud
ing mezzanine),
funds and other alternative investments (excluding debt/debt-like
instruments).
SC Ventures (SCV) Risk
CRO, SCV who receives
Oversees the effective management of risk throughout SCV and the
Committee
authority directly from the
portfolio of controlled entit
ies operat
ing under SCV.
GCRO
Climate Risk Management
Global Head, ERM
Oversees the effective implementat
ion of the Group\u2019s Cl
imate Risk
Committee (CRMC)
workplan, includ
ing relevant regulatory requ
irements. This includes
embedding Climate Risk and net zero oversight across Group businesses,
as part of the Group\u2019s commitment to manage Climate Risk related
\ufb01nancial and non-\ufb01nancial r
isks.
Regulatory Interpretation
Co-chaired by the Global
Provides oversight of material regulatory interpretat
ions for the Cap
ital
Committee (RIC)
Head ERM and Group Head,
Requirements Regulation (as amended by UK legislat
ion), the Prudent
ial
Central Finance
Regulatory Authority (PRA) rulebook and other relevant regulations
impact
ing Group regulatory cap
ital calculations and reporting. The
areas and risk types in scope are credit risk, traded risk, operational risk,
large exposures, leverage ratio and securit
isat
ion.
\n\n\n \n
Group Risk Committee
sub-committees
Chair
Roles and responsib
il
it
ies
Dig
ital Assets R
isk
CRO, SC Ventures & Global
Oversees effective risk management of the Dig
ital Assets (DA) R
isk
Committee (DRC)
Head, Dig
ital Asset R
isk
pro\ufb01le of the Group. This includes provid
ing overs
ight and subject matter
expertise of DA Risk matters across the PRTs.
Corporate & Investment
Co-Heads CRO CIB and CRO,
Ensures the effective management of \ufb01nanc
ial r
isk throughout CIB in
Banking Financ
ial R
isk
ASEAN & South Asia
support of the Group\u2019s strategy.
Committee (CIBFRC)
Wealth & Retail Banking
Chief Risk Of\ufb01cer, WRB &
Ensures the effective management of risk throughout WRB in support
Risk Committee (WRBRC)
GCNA
of the Group\u2019s strategy.
HK & GCNA Risk Committee
CRO, Hong Kong & GCNA
These committees ensure the effective management of risk in the
(HK&GCNA RC)
clusters in support of the Group\u2019s strategy.
SG & ASEAN Risk Committee
CRO, Singapore & ASEAN
(SG&ASEAN RC)
Standard Chartered Bank
CRO, India & South Asia
(SCB) India Country Risk
Committee (CRC & CNFRC)
UK & Europe Risk Committee
CRO & Chief Credit Of\ufb01cer,
(UK & ERC)
Europe
Americas Risk Committee
CRO, Americas
(ARC)
Middle East and Pakistan
CRO & Regional CCO AME
Risk Committee (MEPRC)
Africa Risk Committee
CRO & Regional CCO AME
\n
Group Asset and Liab
il
ity Committee
\n
The Group Asset and Liab
il
ity Committee (GALCO) is chaired
\n
by the GCFO. Its members are drawn princ
ipally from the
\n
Management Team. GALCO is responsible for determin
ing
\n
the Group\u2019s balance sheet strategy and ensuring that, in
\n
executing the Group\u2019s strategy, the Group operates with
in
\n
RA and regulatory requirements relating to capital, loss-
\n
absorbing capacity, liqu
id
ity, leverage, Interest Rate Risk in the
\n
Banking Book (IRRBB), Banking Book Basis Risk and Structural
\n
Foreign Exchange Risk. It also monitors the structural impact
\n
of decis
ions around susta
inable \ufb01nance, net zero and climate
\n
risk. GALCO is also responsible for ensuring that internal and
\n
external recovery planning requirements are met.
\n\n
Princ
ipal r
isks
\n
We manage and control our PRTs through
\n
dist
inct RTFs, pol
ic
ies and RA.
\n
See
page 198
for the Group\u2019s current PRT de\ufb01nit
ions and
\n
Risk Appetite Statements.
\n
Changes impact
ing PRTs
in 2024
\n
In May 2024, to further align with our risk strategy and
\n
promote consistency and ef\ufb01c
iency, the Operat
ional and
\n
Technology Risk and Information and Cyber Security Risk
\n
teams were unif
ied under the Operat
ional, Technology and
\n
Cyber Risk (OTCR) function. The PRT disclosures and RA
\n
Statements for ICS Risk and Operational and Technology
\n
Risk remain separate.
\n
Following Tracey McDermott\u2019s retirement as Group Head,
\n
Conduct, Financ
ial Cr
ime and Compliance at the end of
\n
2024, David Howes has been appointed as Group Head,
\n
Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
\n
from 1 January 2025 and will assume Senior Manager
\n
responsib
il
it
ies for F
inanc
ial Cr
ime,
includ
ing the Group Ent
ity
\n
Senior Manager Function, Compliance Oversight Function
\n
(SMF16) and Money Laundering Reporting Of\ufb01cer (MLRO)
\n
role (SMF 17).
\n
Credit Risk
\n
Mit
igat
ion
\n
Segment-specif
ic pol
ic
ies are
in place for Corporate &
\n
Investment Banking (CIB) and Wealth & Retail Banking
\n
(WRB) which set the princ
iples that must be followed for the
\n
end-to-end credit process covering in
it
iat
ion, assessment,
\n
documentation, approval, monitor
ing and governance.
\n
The Group also sets out standards for the elig
ib
il
ity,
\n
enforceabil
ity, and effect
iveness of mit
igat
ion arrangements.
\n
Potential losses are mit
igated us
ing a range of tools, such
\n
as collateral, netting agreements, credit insurance, credit
\n
derivat
ives and guarantees.
\n
Risk mit
igants are carefully assessed for the
ir market value,
\n
legal enforceabil
ity, correlat
ion, and counterparty risk of the
\n
protection provider. Collateral is valued prior to drawdown
\n
and regularly thereafter as required, to re\ufb02ect current market
\n
condit
ions, the probab
il
ity of recovery and the per
iod of time
\n
to realise the collateral in the event of liqu
idat
ion. The Group
\n
also seeks to divers
ify
its collateral holdings across asset
\n
classes and markets.
\n
Where guarantees, credit insurance, standby letters of
\n
credit or credit derivat
ives are used as Cred
it Risk mit
igat
ion,
\n
the creditworth
iness of the protect
ion provider is assessed
\n
and monitored using the same credit process applied to
\n
the obligor.
\n
Monitor
ing
\n
The Group regularly monitors credit exposures, portfolio
\n
performance, external trends and emerging risks that
\n
may impact risk management outcomes. Internal risk
\n
management reports that are presented to risk committees
\n
contain informat
ion on key pol
it
ical and econom
ic trends
\n
across major portfolios and countries, portfolio delinquency
\n
and loan impa
irment performance.
\n
In CIB, clients and portfolios are subject to addit
ional rev
iew
\n
when they display signs of actual or potential weakness; for
\n
example, where there is a decline in the client\u2019s posit
ion w
ith
in
\n
their industry, \ufb01nanc
ial deter
iorat
ion, a breach of covenants,
\n
or non-performance of an obligat
ion w
ith
in the st
ipulated
\n
period. Such accounts are subject to a dedicated process
\n
overseen by the Credit Issues Committee in the relevant
\n
countries where client account strategies and credit grades
\n
are re-evaluated. In addit
ion, remed
ial actions can be
\n
undertaken, such as placing accounts on early alert for
\n
exposure reduction, security enhancement or exit
ing the
\n
account. Credit-impa
ired accounts are managed by the
\n
Group\u2019s special
ist recovery un
it, Stressed Asset Group (SAG),
\n
which is independent of the Client Coverage/Relationsh
ip
\n
Managers. The Stressed Asset Risk (SAR) Group is the second
\n
line risk unit.
\n
On an annual basis, senior members from the CIB business
\n
and Risk partic
ipate
in a more extensive portfolio review
\n
(known as the \u2018industry portfolio review\u2019) for certain industry
\n
groups. In addit
ion to a rev
iew of the portfolio informat
ion,
\n
this industry portfolio review incorporates industry outlook,
\n
key elements of the business strategy, RA, credit pro\ufb01le and
\n
emerging and horizon risks. A summary of these industry
\n
portfolio reviews is also shared with the CIB Financ
ial R
isk
\n
Committee.
\n
For WRB, exposures and collateral monitor
ing are performed
\n
at the counterparty and/or portfolio level across different
\n
client segments to ensure transactions and portfolio
\n
exposures remain with
in RA. Portfol
io delinquency trends are
\n
also monitored. Accounts that are past due (or perceived as
\n
high risk but not yet past due) are subject to collections or
\n
recovery processes managed by a special
ist
independent
\n
function. In some countries, aspects of collections and
\n
recovery activ
it
ies are outsourced. For discret
ionary lend
ing
\n
portfolios, sim
ilar processes to those of CIB are followed.
\n
Any material in-country developments that may impact
\n
sovereign ratings are monitored closely by Country Risk with
in
\n
the ERM function. The Country Risk Early Warning system, a
\n
triage-based risk ident
i\ufb01cation system, categor
ises countries
\n
based on a forward-looking view of possible downgrades and
\n
the potential incremental risk-weighted assets (RWA) impact.
\n
In addit
ion, an
independent Credit Risk review team with
in the
\n
ERM function performs assessments of the Credit Risk pro\ufb01les
\n
at various portfolio levels. They focus on selected countries
\n
and segments through deep dives, comparative analysis,
\n
and review and challenge of the basis of credit approvals.
\n
The review aims to ensure that the evolving Credit Risk pro\ufb01les
\n
of CIB and WRB are well managed with
in RA and pol
ic
ies.
\n
Results of the reviews are reported to the GRC and BRC.
\n
Credit rating and measurement
\n
All credit proposals are subject to a robust credit risk
\n
assessment. It includes a comprehensive evaluation of the
\n
client\u2019s credit quality, includ
ing w
ill
ingness, ab
il
ity, and
\n
capacity to repay. The primary lending considerat
ion for
\n
counterparties is based on their credit quality and operating
\n
cash \ufb02ows, while for ind
iv
idual borrowers it is based on
\n
personal income or wealth. The risk assessment gives due
\n
considerat
ion to the cl
ient\u2019s liqu
id
ity and leverage posit
ion.
\n
Where applicable, the assessment includes a detailed
\n
analysis of the Credit Risk mit
igat
ion arrangements to
\n
determine the level of reliance on such arrangements as the
\n
secondary source of repayment in the event of a sign
i\ufb01cant
\n
deteriorat
ion
in a client\u2019s credit quality leading to default.
\n
Client income, net worth, and the liqu
id
ity of asset by class
\n
are considered for overall risk assessment for wealth lending.
\n
Wealth lending credit lim
its are subject to the ava
ilab
il
ity of
\n
qualif
ied collateral.
\n\n
A standard alphanumeric Credit Risk grade system is used for
\n
CIB, whereby credit grades 1 to 12 are assigned to performing
\n
customers, and credit grades 13 and 14 are assigned to
\n
non-performing or defaulted customers.
\n
WRB internal ratings-based portfolios use applicat
ion and
\n
behavioural credit scores that are calibrated to generate a
\n
probabil
ity of default. The R
isk Decis
ion Framework uses a
\n
credit rating system to de\ufb01ne the portfolio/new booking
\n
segmentation, shape and decis
ion cr
iter
ia for the unsecured
\n
consumer business segment.
\n
Advanced Internal Ratings-Based (AIRB) models cover the
\n
majority of our exposures and are used
in assessing risks at a
\n
customer and portfolio level, setting strategy, and optim
is
ing
\n
our risk-return decis
ions. The Model R
isk Committee (MRC)
\n
approves material internal ratings-based risk measurement
\n
models. Prior to review and approval, all internal ratings-
\n
based models are validated by an independent model
\n
validat
ion team. Rev
iews are also triggered if the
\n
performance of a model deteriorates materially against
\n
predetermined thresholds, measured through the ongoing
\n
model performance monitor
ing process.
\n
We adopt the AIRB approach under the Basel regulatory
\n
framework to calculate Credit Risk capital requirements for
\n
the majority of our exposures. The Group has also establ
ished
\n
a global programme to assess capital requirements necessary
\n
to be implemented to meet the latest revised Basel III
\n
regulation (referred to as Basel 3.1 or Basel IV).
\n
Credit Concentration Risk
\n
Credit Concentration Risk for CIB is managed through
\n
concentration lim
its cover
ing large exposure lim
it to a s
ingle
\n
counterparty or a group of connected counterparties (based
\n
on control and economic dependence criter
ia), or at portfol
io
\n
level for multiple exposures that are closely correlated.
\n
Portfolio RA metrics are set, where appropriate, by industry,
\n
products, tenor, collateralisat
ion level, top cl
ients, and
\n
exposure to holding companies.
\n
For concentrations that are material at a Group level,
\n
breaches and potential breaches are monitored by the
\n
respective governance committees and reported to the
\n
GRC and BRC.
\n
Credit impa
irment
\n
For CIB, in line with the regulatory guidel
ines, Stage 3 expected
\n
credit loss (ECL) is considered when an obligor is more than
\n
90 days past due on any amount payable to the Group, or
\n
the obligor has symptoms of unlikel
iness to pay
its credit
\n
obligat
ions
in full as they fall due. These credit-impa
ired
\n
accounts are managed by SAG.
\n
In WRB, loans to ind
iv
iduals and small businesses are
\n
considered credit-impa
ired as soon as any payment of
\n
interest or princ
ipal
is 90 days overdue or they meet other
\n
objective ev
idence of impa
irment, such as bankruptcy, debt
\n
restructuring, fraud, or death, with unlikely continuat
ion of
\n
contractual payments. Financ
ial assets are wr
itten off, in the
\n
amount that is determined to be irrecoverable, when they
\n
meet condit
ions set such that emp
ir
ical ev
idence suggests
\n
the client is unlikely to meet their contractual obligat
ions,
\n
or a loss of princ
ipal
is reasonably expected.
\n
Estimat
ing the amount and t
im
ing of future recover
ies
\n
involves sign
i\ufb01cant judgement and cons
iders the assessment
\n
of matters such as future economic condit
ions and the value
\n
of collateral, for which there may not be a readily accessible
\n
market. The total amount of the Group\u2019s impa
irment
\n
provis
ion
is inherently uncertain, being sensit
ive to changes
in
\n
economic and credit condit
ions across the markets
in which
\n
the Group operates.
\n
Further details on sensit
iv
ity analysis of ECL under IFRS 9 can be
\n
found in the \u2018Risk pro\ufb01le\u2019 section on
pages 236 to 246
.
\n
Underwrit
ing
\n
The underwrit
ing of secur
it
ies and loans
is in scope of the
\n
CIB\u00a0RA. Addit
ional l
im
its approved by the GCRO are set on
\n
sectoral concentration and maximum holding period.
\n
The Underwrit
ing Comm
ittee, under the authority of the
\n
GCRO, approves ind
iv
idual proposals to underwrite new
\n
security issues and loans for our clients. In July 2024, oversight
\n
of the Underwrit
ing Comm
ittee was transferred from Traded
\n
Risk to CIB Credit Risk.
\n
Traded Risk
\n
Mit
igat
ion
\n
Traded Risk lim
its are de\ufb01ned at a level wh
ich aims to ensure
\n
that the Group remains with
in RA. The Traded R
isk Policy
\n
sets the princ
iples that must be followed for the end-to-end
\n
traded risk management process includ
ing l
im
it sett
ing, risk
\n
capture and measurement, lim
it mon
itor
ing and escalat
ion,
\n
risk mit
igat
ion and stress testing. Polic
ies are rev
iewed and
\n
approved by the Global Head, Traded Risk Management
\n
period
ically to ensure the
ir ongoing effectiveness.
\n
Market Risk measurement
\n
The Group uses a VaR model to measure the risk of losses
\n
aris
ing from future potent
ial adverse movements in market
\n
rates, prices, and volatil
it
ies. VaR is a quantitat
ive measure
\n
of market risk that applies recent histor
ical market cond
it
ions
\n
to estimate the potential future loss in market value that
\n
will not be exceeded in a set time period at a set statist
ical
\n
con\ufb01dence level.
\n
VaR provides a consistent measure that can be applied across
\n
trading businesses and products over time and can be set
\n
against actual daily trading pro\ufb01t and loss outcomes.
\n
For day-to-day risk management, VaR is calculated as at the
\n
close of business, generally at UK time for expected market
\n
movements over one business day and to a con\ufb01dence level
\n
of 97.5 per cent. Intra-day risk levels may vary from those
\n
reported at the end of the day.
\n
The Group applies two VaR methodologies:
\n
\u2022
Histor
ical s
imulat
ion: th
is involves the revaluation of all
\n
exist
ing pos
it
ions to re\ufb02ect the effect of h
istor
ically
\n
observed changes in Market Risk factors on the valuation of
\n
the current portfolio. This approach is applied for general
\n
Market Risk factors and the major
ity of spec
if
ic (cred
it
\n
spread) risk factors. The enhanced Volatil
ity Scal
ing VaR
\n
(VSV) model went live in January 2025, where risk factors\u2019
\n
returns are scaled to re\ufb02ect histor
ical volat
il
ity. The VSV
\n
model is more responsive to volatil
ity changes observed
in
\n
the market.
\n
\u2022
Monte Carlo simulat
ion: th
is methodology is sim
ilar to
\n
histor
ical s
imulat
ion but w
ith considerably more input risk
\n
factor observations. These are generated by random
\n
sampling techniques, but the results retain the essential
\n
variab
il
ity and correlations of histor
ically observed r
isk
\n
factor changes. This approach is applied for capturing
\n
the id
iosyncrat
ic credit spread risk factors.
\n
As an input to regulatory capital, trading book VaR is
\n
calculated for expected movements over 10 business days
\n
and to a con\ufb01dence level of 99 per cent. Some types of
\n
market risk are not captured in the regulatory VaR measure
\n
and these risks not in VaR are subject to capital add-ons.
\n
An analysis of VaR results in 2024 is available in the \u2018Risk pro\ufb01le\u2019
\n
section
(pages 247 to 249)
.
\n\n
Counterparty Credit Risk measurement
\n
A Potential Future Exposure (PFE) model is used to measure
\n
the credit exposure aris
ing from the pos
it
ive mark-to-market
\n
of traded products. The PFE model provides a quantitat
ive
\n
estimate of future potential movements in market rates,
\n
prices, and volatil
it
ies at a certain con\ufb01dence level over
\n
different time horizons based on the tenor of the transactions.
\n
The Group applies two PFE methodologies: simulat
ion
\n
based, which is predominantly used, and an add-on based
\n
PFE methodology.
\n
Monitor
ing
\n
Traded Risk Management monitors the overall portfolio risk
\n
and ensures that it is with
in spec
if
ied l
im
its and therefore RA.
\n
Lim
its are typ
ically reviewed twice a year.
\n
All material Traded Risks are monitored daily against
\n
approved lim
its. Traded R
isk lim
its apply at all t
imes unless
\n
separate intra-day lim
its have been set.
\n
Treasury Risk
\n
Mit
igat
ion
\n
The Group develops polic
ies to address mater
ial Treasury
\n
Risks and aims to mainta
in
its risk pro\ufb01le with
in RA. In order
\n
to do this, metrics are set against Capital Risk, Liqu
id
ity and
\n
Funding Risk and IRRBB. Where appropriate, RA metrics are
\n
cascaded down to clusters and countries in the form of lim
its
\n
and management action triggers.
\n
Capital Risk
\n
In order to manage Capital Risk, strategic business and capital
\n
plans (Corporate Plan) are drawn up covering a \ufb01ve-year
\n
horizon and are approved by the Board annually. The plan
\n
ensures that adequate levels of capital, includ
ing loss-
\n
absorbing capacity, and an ef\ufb01c
ient m
ix of the different
\n
components of capital are mainta
ined to support our strategy
\n
and business plans.
\n
Treasury is responsible for the ongoing assessment of the
\n
demand for capital and the updating of the Group\u2019s
\n
capital plan.
\n
RA metrics includ
ing cap
ital, leverage, min
imum requ
irement
\n
for own funds and elig
ible l
iab
il
ity (MREL) and double
\n
leverage are assessed with
in the Corporate Plan to ensure
\n
that the strategy can be achieved with
in r
isk tolerances.
\n
Structural Foreign Exchange (FX) Risk
\n
The Group\u2019s structural FX posit
ion results from the Group\u2019s
\n
non-US dollar investment in the share capital and reserves of
\n
subsid
iar
ies and branches. The FX translation gains or losses
\n
are recorded in the Group\u2019s translation reserves with a direct
\n
impact on the Group\u2019s Common Equity Tier 1 ratio.
\n
The Group contracts hedges to manage its structural FX
\n
posit
ion
in accordance with the RA, and as a result the
\n
Group has taken net investment hedges to partially cover
\n
its exposure to certain non-US dollar currencies to mit
igate
\n
the FX impact of such posit
ions on
its capital ratios.
\n
Our structural foreign exchange exposures can be found
\n
on
page 249
.
\n
Liqu
id
ity and Funding Risk
\n
At Group, cluster and country level we implement various
\n
business-as-usual and stress risk metrics to monitor and
\n
manage Liqu
id
ity and Funding risk. This ensures that the
\n
Group mainta
ins an adequate and well-d
ivers
i\ufb01ed l
iqu
id
ity
\n
buffer, as well as a stable funding base, to meet its liqu
id
ity
\n
and funding regulatory requirements.
\n
The risk management approach and RA are assessed
\n
annually through the Internal Liqu
id
ity Adequacy Assessment
\n
Process. A funding plan is also developed for ef\ufb01c
ient l
iqu
id
ity
\n
projections to ensure that the Group
is adequately funded
\n
in the required currencies, to meet its obligat
ions and cl
ient
\n
funding needs. The funding plan is part of the overall
\n
Corporate Plan process align
ing to the cap
ital requirements.
\n
Further detail on Liqu
id
ity and Funding Risk can be found
\n
on
pages 250 to 253
.
\n
Interest Rate Risk in the Banking Book
\n
This risk arises from differences in the repric
ing pro\ufb01le,
interest
\n
rate basis, and optional
ity of bank
ing book assets, liab
il
it
ies
\n
and off-balance sheet items. IRRBB represents an economic
\n
and commercial risk to the Group and its capital adequacy.
\n
The Group monitors IRRBB against the RA.
\n
Further detail on IRRBB can be found on
page 254
.
\n
Pension Risk
\n
Pension Risk is the potential for loss due to having to meet an
\n
actuarially assessed shortfall in the Group\u2019s pension plans.
\n
Pension Risk arises from the Group\u2019s contractual or other
\n
liab
il
it
ies w
ith respect to its occupational pension plans or
\n
other long-term bene\ufb01t obligat
ion. For a funded plan,
it
\n
represents the risk that addit
ional contr
ibut
ions w
ill need to
\n
be made because of a future funding shortfall. For unfunded
\n
obligat
ions,
it represents the risk that the cost of meeting
\n
future bene\ufb01t payments is greater than currently antic
ipated.
\n
The Pension Risk is monitored against the RA and reported
\n
to the GRC. The RA metric is calculated as the total capital
\n
requirement (includ
ing both P
illar 1 and Pillar 2A capital) in
\n
respect of Pension Risk, expressed as a number of basis points
\n
of RWA.
\n
Recovery and resolution planning
\n
In line with PRA requirements, the Group mainta
ins a Recovery
\n
Plan, which is a live document to be used by management in
\n
the event of stress in order to restore the Group to a stable
\n
and sustainable posit
ion. The Recovery Plan
includes a set of
\n
recovery ind
icators, an escalat
ion framework, and a set of
\n
management actions capable of being implemented during
\n
a stress. A Recovery Plan is also mainta
ined w
ith
in each major
\n
entity, and all Recovery Plans are subject to period
ic \ufb01re-
\n
drill testing.
\n
As the UK resolution authority, the BoE set a single point of
\n
entry bail-in at the ultimate holding company level (Standard
\n
Chartered PLC) as the preferred resolution strategy for the
\n
Group. In support of this strategy, the Group has a set of
\n
capabil
it
ies, arrangements, and resources in place to
\n
mainta
in, test and
improve resolution capabil
it
ies, and
\n
continue to meet the required resolvabil
ity outcomes on an
\n
ongoing basis.
\n
Following the BoE\u2019s \ufb01rst resolvabil
ity assessment and publ
ic
\n
disclosure for major UK \ufb01rms in 2022, the Group submitted its
\n
Resolvabil
ity Self-Assessment Report to the BoE and PRA, and
\n
subsequently published its resolvabil
ity publ
ic disclosure in
\n
August 2024 as part of the second Resolvabil
ity Assessment
\n
Framework cycle.
\n\n
Monitor
ing
\n
On a day-to-day basis, Treasury Risk is managed by Treasury,
\n
Finance and country CEOs. The Group regularly reports and
\n
monitors Treasury Risk inherent in its business activ
it
ies and
\n
those that arise from internal and external events.
\n
Internal risk management reports covering the balance
\n
sheet and the capital and liqu
id
ity posit
ion are presented
\n
to the relevant country Asset and Liab
il
ity Committee.
\n
The reports contain key informat
ion on balance sheet trends,
\n
exposures against RA and supporting risk measures which
\n
enable members to make informed decis
ions around the
\n
overall management of the balance sheet. In addit
ion, an
\n
independent Treasury CRO with
in ERM rev
iews the prudency
\n
and effectiveness of Treasury Risk management.
\n
Pension Risk is managed by the Head of Pensions and Reward
\n
Analytics, and monitored by the Global Head, ERM on a
\n
period
ic bas
is.
\n
Operational and
\n
Technology Risk
\n
Mit
igat
ion
\n
The Operational and Technology RTF sets out the Group\u2019s
\n
overall approach to the management of Operational and
\n
Technology Risk in line with the Group\u2019s Operational and
\n
Technology RA. This is supported by the Risk and Control
\n
Self-Assessment (RCSA), which provides a systematic
\n
approach for ident
i\ufb01cation and assessment of operat
ional
\n
risks, includ
ing des
ign and operation of mit
igat
ing
\n
controls (applicable to all risks as per the Non-Financ
ial
\n
Risk Taxonomy).
\n
The RCSA is used to determine the design and operating
\n
effectiveness of each process, and requires:
\n
\u2022
the recording of end-to-end processes which deliver our
\n
key client journey and business outcomes
\n
\u2022
the ident
i\ufb01cation of r
isks to support the achievement of
\n
client and business outcomes
\n
\u2022
the assessment of inherent risk on the impact to client and
\n
business outcomes, and likel
ihood of occurrence
\n
\u2022
the design and monitor
ing of key controls to effect
ively
\n
and ef\ufb01ciently m
it
igate pr
ior
it
ised risks with
in acceptable
\n
levels and
\n
\u2022
the assessment of residual risk and timely treatment of
\n
elevated risks.
\n
Elevated Residual Risks require treatment plans to address
\n
the underlying causes and reduce the risks to with
in the RA.
\n
Monitor
ing
\n
To deliver services to clients and to partic
ipate
in the \ufb01nanc
ial
\n
services sector, the Group runs processes which are exposed
\n
to Operational and Technology risks. The Group prior
it
ises
\n
and manages risks which are sign
i\ufb01cant to our cl
ients and
\n
to the \ufb01nancial serv
ices sectors. The control ind
icators are
\n
regularly monitored to determine the Group\u2019s exposure to
\n
residual risk.
\n
The residual risk assessments and reporting of events form
\n
the Group\u2019s Operational and Technology Risk pro\ufb01le.
\n
The completeness of the Operational and Technology Risk
\n
pro\ufb01le ensures appropriate prior
it
isat
ion and t
imel
iness of
\n
risk decis
ions,
includ
ing r
isk acceptances with treatment
\n
plans for risks that exceed acceptable thresholds.
\n
The BRC is informed on adherence to Operational and
\n
Technology RA through metrics reported for selected risks.
\n
These metrics are monitored, and escalation thresholds are
\n
devised based on the material
ity and s
ign
i\ufb01cance of the
\n
risk. These Operational and Technology RA metrics are
\n
consolidated on a regular basis and reported at the relevant
\n
Group committees, provid
ing sen
ior management with the
\n
relevant informat
ion to
inform their risk decis
ions.
\n
Information and Cyber
\n
Security (ICS) Risk
\n
Mit
igat
ion
\n
ICS Risk is managed through the ICS RTF, compris
ing a r
isk
\n
assessment methodology and supporting policy, standards,
\n
and methodologies. The ICS Policy and standards are
\n
aligned to industry best practice models includ
ing the
\n
National Institute of Standards and Technology Cyber
\n
Security Framework and ISO 27001. We undertake an
\n
annual ICS Effectiveness Review to evaluate ICS Risk
\n
management practices in alignment with the ERMF.
\n
Monitor
ing
\n
The Group Chief Information Security Of\ufb01cer (CISO) function
\n
monitors the evolving threat landscape covering cyber
\n
threats, attack vectors and threat actors that could target the
\n
Group. This includes performing a threat-led risk assessment
\n
to ident
ify key threats,
in-scope applicat
ions and key controls
\n
required to ensure the Group remains with
in RA.
\n
The ICS Risk pro\ufb01les of all businesses, functions and countries
\n
are consolidated to present a holist
ic Group-level ICS R
isk
\n
pro\ufb01le for ongoing monitor
ing. Mandatory ICS learn
ing,
\n
phish
ing exerc
ises and role-specif
ic tra
in
ing support
\n
colleagues to monitor and manage this risk.
\n
During these reviews, the status of each risk is assessed
\n
against the Group\u2019s controls to ident
ify any changes to
\n
impact and likel
ihood, wh
ich affects the overall risk rating.
\n
The Group stress tests its cyber posture through extensive
\n
control testing and by executing offensive security testing
\n
exercises, includ
ing vulnerab
il
ity test
ing, code reviews,
\n
penetration tests and Red Team attack simulat
ion test
ing.
\n
This testing approach constantly stress tests the Group\u2019s
\n
defence and approach to cyber security. These show a wider
\n
picture of the Group\u2019s risk pro\ufb01le, leading to better vis
ib
il
ity on
\n
potential \u2018in \ufb02ight\u2019 risks. The Group also tracks remediat
ion of
\n
security matters ident
i\ufb01ed by external rev
iews, such as the
\n
BoE CBEST Threat Intelligence-Led Assessment and the
\n
Hong Kong Monetary Authority\u2019s (HKMA) Intelligence-led
\n
Cyber Attack Simulat
ion Test
ing (iCAST).
\n
The CISO and OTCR functions monitor the ICS Risk pro\ufb01le and
\n
ensure that breaches of RA are escalated to the appropriate
\n
governance committee or authority levels for remediat
ion
\n
and tracking.
\n\n
Financ
ial Cr
ime Risk
\n
Roles and responsib
il
it
ies
\n
The Group Head, CFCR is the Group\u2019s Compliance and
\n
Money-Laundering Reporting Of\ufb01cer and performs the
\n
Financ
ial Conduct Author
ity (FCA) controlled function
\n
and senior management function in accordance with
\n
requirements set out by the FCA, includ
ing those set out
\n
in their handbook on systems and controls.
\n
Mit
igat
ion
\n
The CFCR function is responsible for the establishment and
\n
maintenance of polic
ies, standards, and overs
ight of \ufb01rst line
\n
of defence controls to ensure continued compliance with
\n
\ufb01nancial cr
ime laws and regulations, and the mit
igat
ion
\n
of Financ
ial Cr
ime Risk. In this, the requirements of the
\n
Operational and Technology RTF are followed to ensure
\n
a consistent approach to the management of processes
\n
and controls.
\n
Financ
ial Cr
ime Risk management is built on a risk-based
\n
approach, meaning the risk management plans, processes,
\n
activ
it
ies, and resource allocations are determined according
\n
to the level of risk.
\n
Risk mit
igat
ion takes place through the process of
\n
ident
i\ufb01cation of new and amended regulat
ions and the
\n
implementat
ion of necessary process and control changes
\n
to address these.
\n
Monitor
ing
\n
The Group monitors enterprise-wide \ufb01nanc
ial cr
ime risks
\n
through the Financ
ial Cr
ime Risk Assessment. This is
\n
undertaken annually to assess the inherent \ufb01nanc
ial cr
ime
\n
risk exposures and the associated processes and controls by
\n
which these exposures are mit
igated.
\n
Financ
ial Cr
ime Risk controls are governed in line with the
\n
Operational and Technology RTF. The Group has a monitor
ing
\n
and reporting process in place for Financ
ial Cr
ime Risk, which
\n
includes escalation and reporting to the CFCR and relevant
\n
risk committees.
\n
While not a formal governance committee, the CFCR
\n
Oversight Group provides oversight of CFCR risks includ
ing
\n
the effective implementat
ion of the F
inanc
ial Cr
ime RTF.
\n
It also provides oversight, challenge and direct
ion to CFCR
\n
policy owners on material changes and posit
ions taken
in
\n
CFCR-owned polic
ies,
includ
ing
issues relating to regulatory
\n
interpretat
ion and Group\u2019s CFCR RA. The Regulatory
\n
Change Oversight Forum provides vis
ib
il
ity and overs
ight
\n
of material and/or complex large-scale regulatory change
\n
emanating from \ufb01nanc
ial serv
ices regulators impact
ing
\n
non-\ufb01nancial r
isks.
\n
Further details on how we manage \ufb01nanc
ial cr
ime can be
\n
found on
page 96
.
\n
Compliance Risk
\n
Roles and responsib
il
it
ies
\n
All activ
it
ies that the Group engages in must comply with the
\n
relevant country/local specif
ic and extraterr
itor
ial regulat
ions.
\n
Compliance Risk includes the risks associated with a failure
\n
to comply with all regulations that are applicable to the
\n
Group regardless of the issu
ing regulatory author
ity. Where
\n
Compliance Risk arises, or could arise, from failure to manage
\n
another PRT, the oversight and management processes for
\n
that specif
ic PRT must be followed, to ensure that effect
ive
\n
oversight and challenge of the \ufb01rst line of defence can be
\n
provided by the appropriate second line of defence function.
\n
Areas of regulation can be broadly div
ided
into two dist
inct
\n
categories: those issued by \ufb01nanc
ial serv
ice regulatory
\n
authorit
ies and those
issued by non-\ufb01nanc
ial serv
ice
\n
regulators. The Group is exposed to both categories of
\n
regulation, and roles and responsib
il
it
ies d
iffer depending
\n
on the category. For regulations issued by \ufb01nanc
ial serv
ices
\n
regulatory authorit
ies and other regulators that may
issue
\n
regulations pertain
ing to Compl
iance Risk, CFCR ident
i\ufb01es
\n
new and amended regulations as and when issued and
\n
communicates the relevant regulatory obligat
ions to the
\n
country RFO delegate. The areas where CFCR does not act
\n
in a second line of defence capacity are specif
ied
in the
\n
respective RTF with appropriate ownership.
\n
Each of the assigned second line of defence functions have
\n
responsib
il
it
ies,
includ
ing mon
itor
ing relevant regulatory
\n
developments from non-\ufb01nancial serv
ices regulators at
\n
both Group and country levels, policy development,
\n
implementat
ion, and val
idat
ion as well as overs
ight and
\n
challenge of \ufb01rst line of defence processes and controls.
\n
Mit
igat
ion
\n
The CFCR function is responsible for the establishment and
\n
maintenance of polic
ies, standards, and overs
ight of the \ufb01rst
\n
line of defence controls to ensure compliance with laws and
\n
regulations, and the mit
igat
ion of Compliance Risk. In this,
\n
the requirements of the Operational and Technology RTF are
\n
followed to ensure a consistent approach to the management
\n
of processes and controls.
\n
Monitor
ing
\n
The monitor
ing of controls des
igned to mit
igate the r
isk of
\n
regulatory non-compliance in processes is governed in line
\n
with the Operational and Technology RTF. Compliance Risk
\n
reporting includes escalation and reporting to the CFCR and
\n
relevant risk committees.
\n
While not a formal governance committee, the CFCR
\n
Oversight Group provides oversight of CFCR, risks includ
ing
\n
the effective implementat
ion of the Compl
iance RTF, and
\n
oversight, challenge and direct
ion to CFCR pol
icy owners on
\n
material changes and posit
ions taken
in CFCR-owned polic
ies,
\n
includ
ing
issues relating to regulatory interpretat
ion and the
\n
Group\u2019s CFCR RA. The Regulatory Change Oversight Forum
\n
provides vis
ib
il
ity and overs
ight of material and/or complex
\n
large-scale regulatory change emanating from \ufb01nanc
ial
\n
services regulators impact
ing non-\ufb01nancial r
isks.
\n\n
Environmental, Social
\n
and Governance and
\n
Reputational (ESGR)
\n
Risk
\n
Mit
igat
ion
\n
The ESGR RTF provides the overall risk management
\n
approach for Environmental, Social and Governance (ESG)
\n
and Reputational risks.
\n
The ESG Risk policy outlines the Group\u2019s commitment to
\n
integrat
ing ESG cons
iderat
ions
into its business, operations,
\n
and decis
ion-mak
ing process. The policy sets out the
\n
requirements for ident
ify
ing, assessing, and managing
\n
ESG risks, includ
ing Cl
imate Risk.
\n
The Reputational Risk policy sets out the princ
ipal sources
\n
of reputational risk driven by negative shifts in stakeholder
\n
perceptions, as well as the responsib
il
it
ies for manag
ing
\n
Reputational Risk aris
ing out of cl
ient onboarding and due
\n
dil
igence, from transact
ions, product design and product
\n
features, or strategic coverages such as exposure to sensit
ive
\n
industr
ies, markets, or
investments. Whenever potential
\n
for stakeholder concerns is ident
i\ufb01ed,
issues are subject to
\n
review and decis
ion by both the \ufb01rst and second l
ines of
\n
defence. The Reputational Risk policy also sets out the key
\n
considerat
ions for m
it
igat
ing greenwashing risk that can
\n
arise during product and/or deal lifecycle, sustainab
il
ity
\n
reporting and disclosures, and external campaigns related
\n
to sustainab
il
ity themes.
\n
Monitor
ing
\n
Exposure to reputational risks aris
ing from transact
ions,
\n
clients, products and strategic coverage is monitored
\n
through established triggers to prompt the appropriate
\n
risk-based considerat
ions and assessment by the \ufb01rst l
ine
\n
of defence and escalations to the second line of defence.
\n
Risk acceptance decis
ions and themat
ic trends are also
\n
reviewed on a period
ic bas
is.
\n
Exposure to ESG Risks is monitored through triggers
\n
embedded with
in the \ufb01rst l
ine of defence processes. The
\n
environmental and social risks are considered for clients and
\n
transactions via Environmental and Social Risk Assessments
\n
and/or Climate Risk Assessments (CRAs). Vendors that are
\n
presenting as high risk are assessed for modern slavery risk.
\n
Based on responses provided by the supplier at onboarding,
\n
those that meet the high-risk category-country combinat
ions
\n
are subjected to further risk assessment.
\n
Exposure to Climate Risk is monitored in conjunct
ion w
ith
\n
other PRTs. We have embedded qualitat
ive and quant
itat
ive
\n
climate considerat
ions
into the Group\u2019s Credit Underwrit
ing
\n
Princ
iples for O
il and Gas, Min
ing, Sh
ipp
ing, Commerc
ial Real
\n
Estate and Project Finance portfolio. We have expanded
\n
coverage of Climate and Credit Risk considerat
ions to phys
ical
\n
collateral, as they serve as key risk mit
igants, espec
ially in
\n
default events. We assess physical risk concentrations for our
\n
WRB portfolio on a quarterly basis and assess the physical
\n
risk vulnerabil
it
ies of our sites period
ically and when new s
ites
\n
are onboarded.
\n
Our Net Zero Climate Risk Working Forum meets quarterly
\n
to discuss account plans for high climate risk and net zero
\n
divergent clients. Stress testing and scenario analysis are
\n
used to assess the impact of ESGR-related risks. The impact
\n
on capital requirements has been included in the PLC Group
\n
Internal Capital Adequacy Assessment Process. Management
\n
informat
ion
is reviewed at a quarterly frequency and any
\n
breaches in RA are reported to the GRC and BRC.
\n
Model Risk
\n
Mit
igat
ion
\n
The Model Risk Policy and Standards de\ufb01ne requirements
\n
for model development, validat
ion,
implementat
ion and use,
\n
includ
ing regular model performance mon
itor
ing and, where
\n
required, model risk mit
igants.
\n
Model de\ufb01cienc
ies ident
i\ufb01ed through the development or
\n
validat
ion process, or model performance
issues ident
i\ufb01ed
\n
through ongoing monitor
ing, are m
it
igated through
\n
respective model risk mit
igants. M
it
igants
include model
\n
overlays as either post-model adjustments (PMAs) or
\n
management adjustments, model restrict
ions and potent
ially
\n
a model recalibrat
ion or redevelopment, all of wh
ich undergo
\n
independent review, challenge, and approval. PMAs are used
\n
to address observed de\ufb01cienc
ies caused from with
in the
\n
model, by adjusting the model output e
ither directly or
\n
ind
irectly (e.g. adjusting parameters). Where a PMA
is applied
\n
as a mit
igant for a model used
in Pillar 1 or Pillar 2 calculations
\n
or models with material impact on \ufb01nanc
ial account
ing
\n
disclosures (e.g. IFRS 9), the independent review must be
\n
performed by Group Model Validat
ion (GMV) w
ith sign-off
\n
from the Model Approver prior to implementat
ion.
\n
Management adjustments are used to address issues by
\n
applying management decis
ions w
ithout adjust
ing a d
irect
\n
modelling component.
\n
As with all PRTs, operational controls are used to govern all
\n
Model Risk-related processes, with regular risk assessments
\n
performed to assess appropriateness and effectiveness of
\n
those controls, in line with the Operational and Technology
\n
RTF, with remediat
ion plans
implemented where necessary.
\n
Group Model Risk Policy and Standards also de\ufb01ne
\n
requirements for determin
ist
ic quantitat
ive methods
\n
(DQMs) that are used as part of an end-to-end modelled
\n
process. DQMs are sim
ilar
in nature to a model, however the
\n
processing component is either purely determin
ist
ic or has an
\n
element of expert judgement. Unlike a model, there is no use
\n
of statist
ical, econom
ic \ufb01nanc
ial or mathemat
ical theories.
\n
The regulatory framework around Model Risk is continuously
\n
evolving, the PRA\u2019s Supervisory Statement 1/23 (SS1/23) is
\n
an example. The Group proactively monitors regulatory
\n
changes to take the required actions timely for compliance.
\n
Regarding SS1/23, the Group is currently deliver
ing to a
\n
roadmap to compliance, which commenced in 2024 and
\n
will continue over the next two years.
\n
Monitor
ing
\n
The Group monitors Model Risk via a set of RA metrics.
\n
Adherence to Model RA and any threshold breaches are
\n
reported to the BRC, GRC and MRC. These metrics and
\n
thresholds are reviewed twice per year to ensure that
\n
threshold calibrat
ion rema
ins appropriate, and the themes
\n
adequately cover the current risks.
\n
Models undergo regular performance monitor
ing based on
\n
their level of perceived Model Risk, with monitor
ing results
\n
presented, and breaches escalated to the Model Sponsor,
\n
Model Owner, GMV and respective MRC or Indiv
idual
\n
Delegated Model Approvers.
\n
Model Risk management produces Model Risk reports
\n
covering the model landscape, which include performance
\n
metrics, ident
i\ufb01ed model
issues and remediat
ion plans.
\n
These are presented for discuss
ion at the Model R
isk
\n
governance committees on a regular basis.
Risk pro\ufb01le
Credit Risk (audited)
Basis of preparation
Unless otherwise stated, the balance sheet and income
statement informat
ion presented w
ith
in th
is section is based
on the Group\u2019s management view. This is princ
ipally the
location from which a client relationsh
ip
is managed, which
may differ from where it is \ufb01nanc
ially booked and may be
shared between businesses and/or regions. This view re\ufb02ects
how the client segments and regions are managed internally.
Loans and advances to customers and banks held at
amortised cost in this \u2018Risk pro\ufb01le\u2019 section include reverse
repurchase agreement balances held at amortised cost,
per Note 16 Reverse repurchase and repurchase agreements
includ
ing other s
im
ilar secured lend
ing and borrowing.
Credit Risk overview
Credit Risk is the potential for loss due to the failure of a
counterparty to meet its contractual obligat
ions to pay the
Group. Credit exposures arise from both the banking and
trading books.
Impairment model
IFRS 9 mandates an impa
irment model that requ
ires the
recognit
ion of expected cred
it losses (ECL) on all \ufb01nanc
ial
debt instruments held at amortised cost, Fair Value through
Other Comprehensive Income (FVOCI), undrawn loan
commitments and \ufb01nanc
ial guarantees.
Staging of \ufb01nanc
ial
instruments
Financ
ial
instruments that are not already credit-impa
ired
are orig
inated
into stage 1 and a 12-month ECL provis
ion
is recognised.
Instruments will remain in stage 1 until they are repaid, unless
they experience sign
i\ufb01cant cred
it deteriorat
ion (stage 2) or
they become credit-impa
ired (stage 3).
Instruments will transfer to stage 2 and a lifet
ime ECL
provis
ion
is recognised when there has been a sign
i\ufb01cant
change in the Credit Risk compared to what was expected
at orig
inat
ion.
The framework used to determine a Sign
i\ufb01cant Increase
in
Credit Risk (SICR) is set out below.
\n \n
Stage 1
Stage 2
Stage 3
\u2022 12-month ECL
\u2022
Lifet
ime expected cred
it loss
\u2022 Credit-impa
ired
\u2022 Performing
\u2022
Performing but has exhib
ited SICR
\u2022 Non-performing
IFRS 9 ECL princ
iples and approaches
The main methodology princ
iples and approach adopted by the Group are set out
in the following table.
\n \n
Title
Supplementary Information
Page
Approach for determin
ing ECL
\u2022
IFRS 9 ECL methodology
236
\u2022
Applicat
ion of l
ifet
ime ECL
236
Key assumptions and judgements in determin
ing ECL
\u2022
Incorporation of forward-looking informat
ion
238
\u2022
Forecast of key macroeconomic variables underlying the
238
ECL calculation and the impact of non-linear
ity
\u2022
Impact of multiple economic scenarios
241
\u2022
Judgemental adjustments and management overlays
241
\u2022
Sensit
iv
ity of ECL calculation to macroeconomic variables
242
Sign
i\ufb01cant
increase in Credit risk (SICR)
\u2022
Quantitat
ive and qual
itat
ive cr
iter
ia
244
Assessment of credit-impa
ired \ufb01nancial assets
\u2022
Wealth and Retail Banking (WRB) clients
245
\u2022
Corporate and Investment Banking (CIB) and Private
245
Banking clients
\u2022 Write-offs
245
Transfers between stages
\u2022
Movement in gross exposures and credit impa
irment
219
Modif
ied \ufb01nancial assets
\u2022
Forborne and other modif
ied loans
226
Governance of PMAs and applicat
ion of expert cred
it
\u2022
IFRS 9 Impairment Committee
246
judgement in respect of ECL
Summary of Credit Risk performance
Maximum exposure
The Group\u2019s on-balance sheet maximum exposure to Credit
Risk increased by $25 bill
ion to $823 b
ill
ion (31 December 2023:
$798 bill
ion). Cash and balances at Central banks decreased
by $6.5 bill
ion to $63 b
ill
ion (31 December 2023: $70 b
ill
ion) due
to reduced placements. Loans to banks held at amortised
cost decreased by $1.4 bill
ion to $44 b
ill
ion (31 December 2023:
$45 bill
ion). Fa
ir value through pro\ufb01t and loss increased by
$27.8 bill
ion to $172 b
ill
ion (31 December 2023: $144 b
ill
ion),
largely due to increases in debt securit
ies and reverse repos,
but this was partially offset by a $16.7 bill
ion reduct
ion in
debt securit
ies not held at fa
ir value through pro\ufb01t and loss.
Loans and advances to customers decreased by $5.9 bill
ion to
$281\u00a0bill
ion (31 December 2023: $287 b
ill
ion), due to a reduct
ion
in mortgages in Korea, Singapore and Hong Kong, given
continued headwinds, includ
ing fore
ign currency movements.
\n\n
Loans and advances to customers in the CIB segment
\n
increased by $7.6 bill
ion, ma
inly due to the execution of
\n
pipel
ine deals
in Global Banking, but this was offset by a
\n
$7.4\u00a0bill
ion decrease
in Central and other items. Derivat
ive
\n
\ufb01nancial
instruments increased by $31 bill
ion to $81 b
ill
ion
\n
(31\u00a0December 2023: $50 bill
ion). Off-balance sheet
instruments
\n
increased by $16 bill
ion to $273 b
ill
ion (31\u00a0December 2023:
\n
$257\u00a0bill
ion), due to an
increase in \ufb01nanc
ial guarantees and
\n
other equivalents, which was driven by new\u00a0business.
\n
Further details can be found in the \u2018Maximum exposure to Credit Risk\u2019
\n
section on
page 209
; \u2018Credit quality by client segment\u2019 section on
\n
page\u00a0212
.
\n
Loans and advances
\n
94 per cent (31 December 2023: 94 per cent) of the Group\u2019s
\n
gross loans and advances to customers remain in stage 1 at
\n
$269 bill
ion (31 December 2023: $274 b
ill
ion), re\ufb02ect
ing our
\n
continued focus on high-quality orig
inat
ion. For WRB, stage 1
\n
balances decreased by $6.5 bill
ion to $117 b
ill
ion (31 December
\n
2023: $123 bill
ion), of wh
ich $5.9 bill
ion was ma
inly due to a
\n
reduction in the mortgage portfolios in Korea, Singapore and
\n
Hong Kong, mainly driven by slower booking momentum and
\n
higher attrit
ion as a result of
intense interest rate competit
ion.
\n
For CIB, stage 1 balances increased by $8\u00a0bill
ion to $129 b
ill
ion
\n
(31 December 2023: $121 bill
ion) ma
inly driven by the Energy,
\n
Financ
ing, Insurance and Transport sectors. For Central and
\n
other items, stage 1 balances decreased by 6.3 bill
ion to
\n
$22 bill
ion (31 December 2023: $28\u00a0b
ill
ion) due to a reduct
ion
\n
in exposures to the Government sector, across a number of
\n
our markets.
\n
Stage 2 loans and advances to customers decreased by
\n
$0.6\u00a0bill
ion to $11 b
ill
ion (31 December 2023: $11 b
ill
ion). For
\n
WRB, stage 2 balances decreased by $0.4 bill
ion to $1.9 b
ill
ion
\n
(31 December 2023: $2.3 bill
ion), due to decrease
in the
\n
mortgage portfolio. For Central and other items, higher risk
\n
exposures decreased by $0.9 bill
ion to $0.1 b
ill
ion (31 December
\n
2023: $1 bill
ion), was due to the matur
ity of short-term loan
\n
exposures that were replaced with debt securit
ies
in Pakistan.
\n
Stage 3 loans and advances decreased by $1 bill
ion to
\n
$6.2\u00a0bill
ion (31 December 2023: $7.2 b
ill
ion) due to debt sales,
\n
repayments, write-offs and upgrades to Stage 2 loans in CIB.
\n
WRB stage 3 balances remained broadly stable at $1.6 bill
ion
\n
(31 December 2023: $1.5 bill
ion). For Central and other
items,
\n
stage 3 balances decreased by $0.1 bill
ion to $0.1 b
ill
ion
\n
(31 December 2023: $0.2 bill
ion).
\n
Further details can be found in the \u2018Analysis of \ufb01nanc
ial
instruments by
\n
stage\u2019 section on
page 210
; \u2018Credit quality by client segment\u2019 section
\n
on
page 212
; \u2018Credit quality by industry\u2019 section on
page 230
.
\n
Analysis of Stage 2
\n
The key SICR driver which caused exposures to be classif
ied
\n
as stage 2 remains an increase in probabil
ity of default (PD).
\n
The proportion of CIB exposures in stage 2 decreased due to
\n
a reduction in clients placed on non-purely precautionary
\n
early alert that have not breached PD thresholds. In WRB, the
\n
exposures in stage 2 loans with more than 30 days past due
\n
remained stable at $0.3 bill
ion (31 December 2023: $0.3 b
ill
ion).
\n
In Central and other items, the $0.5 bill
ion decrease
in CG12
\n
balances to $1.5\u00a0bill
ion (31 December 2023: $2 b
ill
ion) was
\n
due to the maturity of short-term loan exposures that were
\n
replaced with debt securit
ies
in Pakistan. \u2018Others\u2019 category
\n
includes exposures where orig
inat
ion data is incomplete and
\n
the exposures are allocated into stage 2.
\n
Further details can be found in the \u2018Credit quality by client segment\u2019
\n
section in
page
212
; \u2018Analysis of stage 2 balances\u2019 section on
page 225.
\n
Credit impa
irment charges
\n
The Group\u2019s ongoing credit impa
irment was a net charge of
\n
$547 mill
ion (31 December 2023: $508 m
ill
ion).
\n
WRB contributed a net charge of $644 mill
ion (31 December
\n
2023: $354 mill
ion), dr
iven by a higher interest rate
\n
environment impact
ing repayments on cred
it cards and
\n
personal loans and to a few non-repeating ECL releases
\n
recorded in 2023. The increase in impa
irments was also due
\n
to the maturity and portfolio growth of dig
ital partnersh
ips
\n
in China and Indonesia, as well as a $21 mill
ion overlay
\n
aris
ing from the settlement fa
ilure of two e-commerce
\n
platforms in Korea.
\n
CIB contributed a net release of $106 mill
ion (31 December
\n
2023: $123 mill
ion charge) due to a number of stage 3 releases
\n
and repayments.
\n
Further details can be found in the \u2018Financ
ial rev
iew\u2018 section on
page 51
;
\n
\u2018Credit impa
irment charge\u2019 sect
ion on
page 226
.
\n
Commercial Real Estate (CRE)
\n
The Group provides loans to CRE counterparties of which
\n
$8.8\u00a0bill
ion
is to counterparties in the CIB segment where the
\n
source of repayment is substantially derived from rental or
\n
sale of real estate and is secured by real estate collateral.
\n
The remain
ing CRE loans compr
ise working capital loans to
\n
real estate corporates, loans with non-property collateral,
\n
unsecured loans and loans to real estate entit
ies of d
ivers
i\ufb01ed
\n
conglomerates. The average LTV ratio of the performing book
\n
CRE portfolio has increased to 54 per cent (31 December 2023:
\n
52 per cent). The proportion of loans with an LTV greater than
\n
80 per cent has increased to 4 per cent (31 December 2023:
\n
3 per cent).
\n
China CRE
\n
Total exposure to China CRE decreased by $0.6 bill
ion to
\n
$2\u00a0bill
ion (31 December 2023: $2.6 b
ill
ion) ma
inly from exposure
\n
reductions. The proportion of credit impa
ired exposures
\n
increased to 70 per cent (31 December 2023: 58 per cent)
\n
due to repayments with
in the non-cred
it impa
ired portfol
io.
\n
The overall provis
ion coverage
increased to 87 per cent
\n
(31\u00a0December 2023: 72 per cent), re\ufb02ecting increased provis
ion
\n
charges during the year. The proportion of the loan book
\n
rated as Higher Risk increased to 3 per cent (31 December
\n
2023: 0.3 per cent) primar
ily due to downgrades dur
ing
\n
the year.
\n
The Group continues to hold a judgemental management
\n
overlay, which decreased by $71 mill
ion to $70 m
ill
ion
\n
(31\u00a0December 2023: $141 mill
ion), re\ufb02ect
ing repayments
\n
and util
isat
ions during the year.
\n
The Group is further ind
irectly exposed to Ch
ina CRE through
\n
its associate investment in China Bohai Bank.
\n
Further details can be found in the \u2018China commercial real estate\u2019 section
\n
on
page 234
; \u2018Judgemental adjustments\u2019 section on
page 241
.
\n
High carbon sectors
\n
With the Group\u2019s expansion in the asset-backed lending
\n
business, the total on-and-off balance sheet exposure for
\n
the Aviat
ion sector
increased to $2.6 bill
ion (31 December
\n
2023: $1.9 bill
ion), wh
ile the Shipp
ing sector decreased to
\n
$4.6 bill
ion (31 December 2023: $5 b
ill
ion). The Group\u2019s pos
it
ion
\n
statements mandates that for newer vessels and aircraft,
\n
only carbon ef\ufb01cient ones can be \ufb01nanced.
\n
While exposures to the Oil and Gas sector increased to
\n
$21\u00a0bill
ion (31 December 2023: $20 b
ill
ion) due to
increased
\n
funding towards more emiss
ions-ef\ufb01cient counterpart
ies,
\n
exposures to the Power sector increased to $11 bill
ion
\n
(31\u00a0December 2023: $9 bill
ion) due to
increased lending to
\n
renewables and ef\ufb01cient gas generat
ion counterparties.
\n
Further details on net zero targets and progress in managing transit
ion
\n
risk of the high carbon sectors can be found in the \u2018Sustainab
il
ity review\u2019
\n
section on
page 57
; \u2018High carbon sectors\u2019 section on
page 232
.
\n\n
Maximum exposure to Credit Risk (audited)
\n
The table below presents the Group\u2019s maximum exposure to Credit Risk for its on-balance sheet and off-balance sheet \ufb01nanc
ial
\n
instruments as at 31 December 2024, before and after taking into account any collateral held or other Credit Risk mit
igat
ion.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Credit risk management
Credit risk management
Master
Master
Maximum
netting
Net
Maximum
netting
Net
exposure
Collateral
8
agreements
Exposure
exposure
Collateral
8
agreements
Exposure
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
On-balance sheet
Cash and balances at central banks
63,447
\u2013
\u2013
63,447
69,905
\u2013
\u2013
69,905
Loans and advances to banks
1
43,593
2,946
40,647
44,977
1,738
43,239
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
7
2,946
2,946
\u2013
\u2013
1,738
1,738
\u2013
\u2013
Loans and advances to customers
1
281,032
119,047
\u2013
161,985
286,975
118,492
168,483
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending\u2077
9,660
9,660
\u2013
\u2013
13,996
13,996
\u2013
\u2013
Investment securit
ies \u2013 Debt secur
it
ies
and other elig
ible b
ills
2
143,562
143,562
160,263
\u2013
\u2013
160,263
Fair value through pro\ufb01t or loss
3, 7
172,031
86,195
\u2013
85,836
144,276
81,847
\u2013
62,429
Loans and advances to banks
2,213
\u2013
\u2013
2,213
2,265
\u2013
\u2013
2,265
Loans and advances to customers
7,084
\u2013
\u2013
7,084
7,212
\u2013
\u2013
7,212
Reverse repurchase agreements and
other sim
ilar lend
ing
7
86,195
86,195
\u2013
\u2013
81,847
81,847
\u2013
\u2013
Investment securit
ies \u2013 Debt secur
it
ies
and other elig
ible b
ills
2
76,539
\u2013
\u2013
76,539
52,952
\u2013
\u2013
52,952
Derivat
ive \ufb01nancial
instruments
4, 7
81,472
15,005
60,280
6,187
50,434
8,440
39,293
2,701
Accrued income
2,776
\u2013
\u2013
2,776
2,673
\u2013
\u2013
2,673
Assets held for sale
9
889
\u2013
\u2013
889
701
\u2013
\u2013
701
Other assets
5
34,585
\u2013
\u2013
34,585
38,140
\u2013
\u2013
38,140
Total balance sheet
823,387
223,193
60,280
539,914
798,344
210,517
39,293
548,534
Off-balance sheet
6
Undrawn Commitments
182,529
2,489
\u2013
180,040
182,390
2,940
\u2013
179,450
Financ
ial Guarantees and
other equivalents
90,632
1,807
\u2013
88,825
74,414
2,590
\u2013
71,824
Total off-balance sheet
273,161
4,296
\u2013
268,865
256,804
5,530
\u2013
251,274
Total
1,096,548
227,489
60,280
808,779
1,055,148
216,047
39,293
799,808
\n
1
Amounts are net of ECL provis
ions. An analys
is of credit quality is set out in the credit quality analysis section (page 212). Further details of collateral held by
\n
client segment and stage are set out in the collateral analysis section (page 227). The Group also has credit mit
igat
ion through Credit Linked Notes as set out
\n
on page 229
\n
2
Excludes equity and other investments of $994 mill
ion (31 December 2023: $992 m
ill
ion). Further deta
ils are set out in Note 13 \ufb01nanc
ial
instruments
\n
3
Excludes equity and other investments of $5,486 mill
ion (31 December 2023: $2,940 m
ill
ion). Further deta
ils are set out in Note 13 \ufb01nanc
ial
instruments
\n
4
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the
\n
sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions
\n
5
Other assets include Hong Kong certif
icates of
indebtedness, cash collateral, and acceptances, in addit
ion to unsettled trades and other \ufb01nancial assets
\n
6
Excludes ECL provis
ions of $255 m
ill
ion (31 December 2023: $227 m
ill
ion) wh
ich are reported under Provis
ions for l
iab
il
it
ies and charges
\n
7
Collateral capped at maximum exposure (over-collateralised)
\n
8
Adjusted for over-collateralisat
ion, wh
ich has been determined with reference to the drawn and undrawn component as this best re\ufb02ects the effect on the
\n
amount aris
ing from expected cred
it losses
\n
9
The amount is after ECL. provis
ions. Further deta
ils are set out in Note 21 Assets held for sale and associated liab
il
it
ies
\n\n
Analysis of \ufb01nanc
ial
instruments by stage (audited)
\n
The table below presents the gross and credit impa
irment balances by stage for the Group\u2019s amort
ised cost and FVOCI
\n
\ufb01nancial
instruments as at 31 December 2024.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and
balances at
central banks
62,597
\u2013
62,597
432
(4)
428
426
(4)
422
63,455
(8)
63,447
Loans and
advances
to banks
(amortised cost)
43,208
(10)
43,198
318
(1)
317
83
(5)
78
43,609
(16)
43,593
Loans and
advances to
customers
(amortised cost)
269,102
(483) 268,619
10,631
(473)
10,158
6,203
(3,948)
2,255
285,936
(4,904) 281,032
Debt securit
ies
and other
elig
ible b
ills
5
141,862
(23)
1,614
(4)
103
(2)
143,579
(29)
Amortised cost
54,637
(15)
54,622
475
(2)
473
42
\u2013
42
55,154
(17)
55,137
FVOCI
2
87,225
(8)
1,139
(2)
61
(2)
88,425
(12)
\u2013
Accrued income
(amortised cost)
4
2,776
2,776
\u2013
\u2013
2,776
\u2013
2,776
Assets held
for sale
4
840
(7)
833
38
\u2013
38
58
(45)
13
936
(52)
884
Other assets
34,585
\u2013
34,585
\u2013
\u2013
\u2013
3
(3)
\u2013
34,588
(3)
34,585
Undrawn
commitments
3
178,516
(50)
4,006
(52)
7
(1)
182,529
(103)
Financ
ial
guarantees,
trade credits
and irrevocable
letter of credits
3
87,991
(16)
2,038
(7)
603
(129)
90,632
(152)
Total
821,477
(589)
19,077
(541)
7,486
(4,137)
848,040
(5,267)
\n
1
Gross carrying amount for off-balance sheet refers to notional values
\n
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
\n
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a \ufb01nanc
ial l
iab
il
ity and therefore there is no \u201cnet carrying amount\u201d.
\n
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
\n
be separately ident
i\ufb01ed. Otherw
ise they will be reported against the drawn component
\n
4 Stage 1 ECL is not material
\n
5
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $N
il mill
ion (31 December 2023:
\n
$14 mill
ion)
\n\n\n \n
2023
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
balance
1
ment
value
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and
balances at
central banks
69,313
\u2013
69,313
207
(7)
200
404
(12)
392
69,924
(19)
69,905
Loans and
advances
to banks
(amortised cost)
44,384
(8)
44,376
540
(10)
530
77
(6)
71
45,001
(24)
44,977
Loans and
advances to
customers
(amortised cost)
273,692
(430) 273,262
11,225
(420)
10,805
7,228
(4,320)
2,908
292,145
(5,170) 286,975
Debt securit
ies
and other
ible b
elig
ills
5
158,314
(26)
1,860
(34)
164
(61)
160,338
(121)
Amortised cost
56,787
(16)
56,771
103
(2)
101
120
(57)
63
57,010
(75)
56,935
FVOCI
2
101,527
(10)
1,757
(32)
44
(4)
103,328
(46)
Accrued income
(amortised cost)
4
2,673
2,673
\u2013
\u2013
2,673
\u2013
2,673
Assets held
for sale
4
661
(33)
628
76
(4)
72
1
\u2013
1
738
(37)
701
Other assets
38,139
\u2013
38,139
\u2013
\u2013
\u2013
4
(3)
1
38,143
(3)
38,140
Undrawn
commitments
3
176,654
(52)
5,733
(39)
3
\u2013
182,390
(91)
Financ
ial
guarantees,
trade credits
and irrevocable
letter of credits
3
70,832
(10)
2,910
(14)
672
(112)
74,414
(136)
Total
834,662
(559)
22,551
(528)
8,553
(4,514)
865,766
(5,601)
\n
1
Gross carrying amount for off-balance sheet refers to notional values
\n
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
\n
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a \ufb01nanc
ial l
iab
il
ity and therefore there is no \u201cnet carrying amount\u201d.
\n
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
\n
be separately ident
i\ufb01ed. Otherw
ise they will be reported against the drawn component
\n
4 Stage 1 ECL is not material
\n
5
Stage 3 gross includes $80 mill
ion or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $14 m
ill
ion
\n\n
Credit quality analysis (audited)
\n
Credit quality by client segment
\n
For CIB, exposures are analysed by credit grade (CG), which plays a central role in the quality assessment and monitor
ing of r
isk.
\n
All loans are assigned a CG, which is reviewed period
ically and amended
in light of changes in the borrower\u2019s circumstances or
\n
behaviour. CGs 1 to 12 are assigned to stage 1 and stage 2 (performing) clients or accounts, while CGs 13 and 14 are assigned to
\n
stage 3 (credit-impa
ired) cl
ients. Consumer and Business Banking portfolios are analysed by days past due and Private Banking
\n
by the type of collateral held.
\n
Mapping of credit quality
\n
The Group uses the following internal risk mapping to determine the credit quality for loans.
\n\n \n
Corporate & Investment Banking
Private Banking
1
Wealth & Retail Banking
4
Credit quality
Internal grade
S&P external ratings
Regulatory
Internal grade
descript
ion
mapping
equivalent
PD range (%)
Internal ratings
mapping
Strong
1A to 5B
AAA/AA+ to
0 to 0.425
Class I and Class IV
Current loans (no past
BBB-/BB+
2
dues nor impa
ired)
Satisfactory
6A to 11C
BB to CCC+
3
0.426 to 15.75
Class II and Class III
Loans past due till
29 days
Higher risk
Grade 12
CCC+ to C
15.751 to 99.999
Stressed Assets Group
Past due loans
(SAG) Managed
30 days and over till
90 days
\n
1
For Private Banking, classes of risk represent the type of collateral held. Class I represents facil
it
ies with liqu
id collateral, such as cash and marketable secur
it
ies.
\n
Class II represents unsecured/partially secured facil
it
ies and those with ill
iqu
id collateral, such as equity in private enterprises. Class III represents facil
it
ies with
\n
resident
ial or commerc
ial real estate collateral. Class IV covers margin trading facil
it
ies
\n
2
Banks\u2019 rating: AAA/AA+ to BB+/BB. Sovereigns\u2019 rating: AAA to BB+
\n
3
Banks\u2019 rating: BB to \u201cCCC+ to C\u201d. Sovereigns\u2019 rating: BB+/BB to B-/CCC+
\n
4
Wealth & Retail Banking excludes Private Banking. Medium enterprise clients with
in Bus
iness Banking are managed using the same internal credit grades as CIB
\n
The table below sets out the gross loans and advances held at amortised cost, ECL provis
ions and expected cred
it loss
\n
coverage by business segment and stage. ECL coverage represents the ECL reported for each segment and stage as a
\n
proportion of the gross loan balance for each segment and stage.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n
Loans and advances by client segment (audited)
\n\n \n
2024
Customers
Corporate &
Wealth &
Investment
Retail
Central &
Customer
Undrawn
Financ
ial
Banks
Banking
Banking
Ventures
other items
Total
commitments
Guarantees
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
43,208
128,746
117,015
1,383
21,958
269,102
178,516
87,991
\u2013 Strong
31,239
90,725
111,706
1,367
21,540
225,338
162,574
56,070
\u2013 Satisfactory
11,969
38,021
5,309
16
418
43,764
15,942
31,921
Stage 2
318
8,643
1,905
48
35
10,631
4,006
2,038
\u2013 Strong
8
1,229
1,413
31
\u2013
2,673
994
471
\u2013 Satisfactory
125
6,665
155
6
\u2013
6,826
2,862
1,403
\u2013 Higher risk
185
749
337
11
35
1,132
150
164
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
55
155
6
\u2013
216
\u2013
\u2013
\u2013 More than 30 days past due
2
7
337
11
\u2013
355
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
83
4,476
1,617
12
98
6,203
7
603
Gross balance\u00b9
43,609
141,865
120,537
1,443
22,091
285,936
182,529
90,632
Stage 1
(10)
(80)
(383)
(20)
\u2013
(483)
(50)
(16)
\u2013 Strong
(7)
(28)
(325)
(18)
\u2013
(371)
(33)
(7)
\u2013 Satisfactory
(3)
(52)
(58)
(2)
\u2013
(112)
(17)
(9)
Stage 2
(1)
(303)
(147)
(23)
\u2013
(473)
(52)
(7)
\u2013 Strong
\u2013
(41)
(70)
(14)
\u2013
(125)
(10)
\u2013
\u2013 Satisfactory
(1)
(218)
(32)
(3)
\u2013
(253)
(32)
(4)
\u2013 Higher risk
\u2013
(44)
(45)
(6)
\u2013
(95)
(10)
(3)
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
(1)
(32)
(3)
\u2013
(36)
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
\u2013
(45)
(6)
\u2013
(51)
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
(5)
(3,178)
(759)
(11)
\u2013
(3,948)
(1)
(129)
Total credit impa
irment
(16)
(3,561)
(1,289)
(54)
\u2013
(4,904)
(103)
(152)
Net carrying value
43,593
138,304
119,248
1,389
22,091
281,032
Stage 1
0.0%
0.1%
0.3%
1.4%
0.0%
0.2%
0.0%
0.0%
\u2013 Strong
0.0%
0.0%
0.3%
1.3%
0.0%
0.2%
0.0%
0.0%
\u2013 Satisfactory
0.0%
0.1%
1.1%
12.5%
0.0%
0.3%
0.1%
0.0%
Stage 2
0.3%
3.6%
7.7%
47.9%
0.0%
4.4%
1.3%
0.3%
\u2013 Strong
0.0%
3.3%
5.0%
45.2%
0.0%
4.7%
1.0%
0.0%
\u2013 Satisfactory
0.8%
3.3%
20.6%
50.0%
0.0%
3.7%
1.1%
0.3%
\u2013 Higher risk
0.0%
5.9%
13.4%
54.5%
0.0%
8.4%
6.7%
1.8%
Of which (stage 2):
\u2013 Less than 30 days past due
0.0%
1.8%
20.6%
50.0%
0.0%
16.7%
0.0%
0.0%
\u2013 More than 30 days past due
0.0%
0.0%
13.4%
54.5%
0.0%
14.4%
0.0%
0.0%
Stage 3, credit-impa
ired
\ufb01nancial assets (S3)
6.0%
71.0%
46.9%
91.7%
0.0%
63.6%
14.3%
21.4%
\u2013 Stage 3 Collateral
1
297
584
\u2013
\u2013
881
\u2013
46
\u2013 Stage 3 Cover ratio
(after collateral)
7.2%
77.6%
83.1%
91.7%
0.0%
77.8%
14.3%
29.0%
Cover ratio
0.0%
2.5%
1.1%
3.7%
0.0%
1.7%
0.1%
0.2%
Fair value through pro\ufb01t or loss
Performing
36,967
58,506
6
\u2013
\u2013
58,512
\u2013
\u2013
\u2013 Strong
30,799
38,084
3
\u2013
\u2013
38,087
\u2013
\u2013
\u2013 Satisfactory
6,158
20,314
3
\u2013
\u2013
20,317
\u2013
\u2013
\u2013 Higher risk
10
108
\u2013
\u2013
\u2013
108
\u2013
\u2013
Defaulted (CG13-14)
\u2013
13
\u2013
\u2013
\u2013
13
\u2013
\u2013
Gross balance (FVTPL)
2
36,967
58,519
6
\u2013
\u2013
58,525
\u2013
\u2013
Net carrying value (incl FVTPL)
80,560
196,823
119,254
1,389
22,091
339,557
\u2013
\u2013
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $9,660 mill
ion under Customers and of $2,946 m
ill
ion under
\n
Banks, held at amortised cost
\n
2
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $51,441 mill
ion under Customers and of $34,754 m
ill
ion under
\n
Banks, held at fair value through pro\ufb01t or loss
\n\n\n \n
2023
Customers
Corporate &
Wealth &
Investment
Retail
Central &
Customer
Undrawn
Financ
ial
Banks
Banking
Banking
Ventures
other items
Total
commitments
Guarantees
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
44,384
120,886
123,486
1,015
28,305
273,692
176,654
70,832
\u2013 Strong
35,284
84,248
118,193
1,000
27,967
231,408
162,643
47,885
\u2013 Satisfactory
9,100
36,638
5,293
15
338
42,284
14,011
22,947
Stage 2
540
7,902
2,304
54
965
11,225
5,733
2,910
\u2013 Strong
55
1,145
1,761
34
\u2013
2,940
1,090
830
\u2013 Satisfactory
212
5,840
206
7
\u2013
6,053
4,169
1,823
\u2013 Higher risk
273
917
337
13
965
2,232
474
257
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
78
206
7
\u2013
291
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
10
337
13
\u2013
360
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
77
5,508
1,484
12
224
7,228
3
672
Gross balance\u00b9
45,001
134,296
127,274
1,081
29,494
292,145
182,390
74,414
Stage 1
(8)
(101)
(314)
(15)
\u2013
(430)
(52)
(10)
\u2013 Strong
(3)
(34)
(234)
(14)
\u2013
(282)
(31)
(2)
\u2013 Satisfactory
(5)
(67)
(80)
(1)
\u2013
(148)
(21)
(8)
Stage 2
(10)
(257)
(141)
(21)
(1)
(420)
(39)
(14)
\u2013 Strong
(1)
(18)
(65)
(14)
\u2013
(97)
(5)
\u2013
\u2013 Satisfactory
(2)
(179)
(22)
(3)
\u2013
(204)
(23)
(7)
\u2013 Higher risk
(7)
(60)
(54)
(4)
(1)
(119)
(11)
(7)
Of which (stage 2):
\u2013 Less than 30 days past due
\u2013
(2)
(22)
(3)
\u2013
(27)
\u2013
\u2013
\u2013 More than 30 days past due
\u2013
(1)
(54)
(4)
\u2013
(59)
\u2013
\u2013
Stage 3, credit-impa
ired
\ufb01nancial assets
(6)
(3,533)
(760)
(12)
(15)
(4,320)
\u2013
(112)
Total credit impa
irment
(24)
(3,891)
(1,215)
(48)
(16)
(5,170)
(91)
(136)
Net carrying value
44,977
130,405
126,059
1,033
29,478
286,975
\u2013
\u2013
Stage 1
0.0%
0.1%
0.3%
1.5%
0.0%
0.2%
0.0%
0.0%
\u2013 Strong
0.0%
0.0%
0.2%
1.4%
0.0%
0.1%
0.0%
0.0%
\u2013 Satisfactory
0.1%
0.2%
1.5%
6.7%
0.0%
0.4%
0.1%
0.0%
Stage 2
1.9%
3.3%
6.1%
38.9%
0.1%
3.7%
0.7%
0.5%
\u2013 Strong
1.8%
1.6%
3.7%
41.2%
0.0%
3.3%
0.5%
0.0%
\u2013 Satisfactory
0.9%
3.1%
10.7%
42.9%
0.0%
3.4%
0.6%
0.4%
\u2013 Higher risk
2.6%
6.5%
16.0%
30.8%
0.1%
5.3%
2.3%
2.7%
Of which (stage 2):
\u2013 Less than 30 days past due
0.0%
2.6%
10.7%
42.9%
0.0%
9.3%
0.0%
0.0%
\u2013 More than 30 days past due
0.0%
10.0%
16.0%
30.8%
0.0%
16.4%
0.0%
0.0%
Stage 3, credit-impa
ired
\ufb01nancial assets (S3)
7.8%
64.1%
51.2%
100.0%
6.7%
59.8%
0.0%
16.7%
\u2013 Stage 3 Collateral
2
621
554
\u2013
\u2013
1,175
\u2013
34
\u2013 Stage 3 Cover ratio
(after collateral)
10.4%
75.4%
88.5%
100.0%
6.7%
76.0%
0.0%
21.7%
Cover ratio
0.1%
2.9%
1.0%
4.4%
0.1%
1.8%
0.0%
0.2%
Fair value through pro\ufb01t or loss
Performing
32,813
58,465
13
\u2013
\u2013
58,478
\u2013
\u2013
\u2013 Strong
28,402
38,014
13
\u2013
\u2013
38,027
\u2013
\u2013
\u2013 Satisfactory
4,411
20,388
\u2013
\u2013
\u2013
20,388
\u2013
\u2013
\u2013 Higher risk
\u2013
63
\u2013
\u2013
\u2013
63
\u2013
\u2013
Defaulted (CG13-14)
\u2013
33
\u2013
\u2013
\u2013
33
\u2013
\u2013
Gross balance (FVTPL)
2
32,813
58,498
13
\u2013
\u2013
58,511
\u2013
\u2013
Net carrying value (incl FVTPL)
77,790
188,903
126,072
1,033
29,478
345,486
\u2013
\u2013
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $13,996 mill
ion under Customers and of $1,738 m
ill
ion under
\n
Banks, held at amortised cost
\n
2. Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $51,299 mill
ion under Customers and of $30,548 m
ill
ion under
\n
Banks, held at fair value through pro\ufb01t or loss
\n\n
Loans and advances by client segment credit quality analysis
\n\n \n
2024
Corporate & Investment Banking and Central & other items
Gross
Credit impa
irment
Regulatory 1 year
S&P external ratings
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Credit grade
PD range (%)
equivalent
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
112,265
1,229
\u2013
113,494
(28)
(41)
\u2013
(69)
1A-2B
0 \u2013 0.045
A+ and above
32,160
31
\u2013
32,191
(2)
\u2013
\u2013
(2)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
40,712
524
\u2013
41,236
(8)
(33)
\u2013
(41)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
39,393
674
\u2013
40,067
(18)
(8)
\u2013
(26)
Satisfactory
38,439
6,665
\u2013
45,104
(52)
(218)
\u2013
(270)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
24,928
2,677
\u2013
27,605
(21)
(24)
\u2013
(45)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
9,514
2,618
\u2013
12,132
(20)
(169)
\u2013
(189)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
3,997
1,370
\u2013
5,367
(11)
(25)
\u2013
(36)
Higher risk
\u2013
784
\u2013
784
\u2013
(44)
\u2013
(44)
12
15.751 \u2013 99.999
CCC/C
\u2013
784
\u2013
784
\u2013
(44)
\u2013
(44)
Credit-
impa
ired
\u2013
\u2013
4,574
4,574
\u2013
\u2013
(3,178)
(3,178)
13-14
100
Defaulted
\u2013
\u2013
4,574
4,574
\u2013
\u2013
(3,178)
(3,178)
Total
150,704
8,678
4,574
163,956
(80)
(303)
(3,178)
(3,561)
2023
Strong
112,215
1,145
\u2013
113,360
(34)
(18)
\u2013
(52)
1A-2B
0 \u2013 0.045
A+ and above
37,936
81
\u2013
38,017
\u2013
\u2013
\u2013
\u2013
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
32,004
558
\u2013
32,562
(3)
\u2013
\u2013
(3)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
42,275
506
\u2013
42,781
(31)
(18)
\u2013
(49)
Satisfactory
36,976
5,840
\u2013
42,816
(67)
(179)
\u2013
(246)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
24,598
1,873
\u2013
26,471
(38)
(77)
\u2013
(115)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
8,232
2,273
\u2013
10,505
(13)
(90)
\u2013
(103)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
4,146
1,694
\u2013
5,840
(16)
(12)
\u2013
(28)
Higher risk
\u2013
1,882
\u2013
1,882
\u2013
(61)
\u2013
(61)
12
15.751 \u2013 99.999
CCC/C
\u2013
1,882
\u2013
1,882
\u2013
(61)
\u2013
(61)
Credit-
impa
ired
\u2013
\u2013
5,732
5,732
\u2013
\u2013
(3,548)
(3,548)
13-14
100
Defaulted
\u2013
\u2013
5,732
5,732
\u2013
\u2013
(3,548)
(3,548)
Total
149,191
8,867
5,732
163,790
(101)
(258)
(3,548)
(3,907)
\n\n
Undrawn commitment and \ufb01nanc
ial guarantees \u2013 by cl
ient segment credit quality
\n\n \n
2024
Corporate & Investment Banking and Central & other items
Notional
Credit impa
irment
Regulatory 1 year
S&P external ratings
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Credit grade
PD range (%)
equivalent
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
140,733
1,265
\u2013
141,998
(22)
(6)
\u2013
(29)
1A-2B
0 \u2013 0.045
A+ and above
29,623
280
\u2013
29,903
(1)
\u2013
\u2013
(1)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
53,568
492
\u2013
54,060
(4)
\u2013
\u2013
(4)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
57,542
493
\u2013
58,035
(17)
(6)
\u2013
(23)
Satisfactory
46,394
4,200
\u2013
50,594
(23)
(33)
\u2013
(56)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
2,544
1,065
\u2013
3,609
(4)
(6)
\u2013
(10)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
30,438
1,162
\u2013
31,600
(11)
(16)
\u2013
(27)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
13,412
1,973
\u2013
15,385
(8)
(11)
\u2013
(19)
Higher risk
\u2013
286
\u2013
286
\u2013
(11)
\u2013
(11)
12
15.751 \u2013 99.999
CCC+/C
\u2013
286
\u2013
286
\u2013
(11)
\u2013
(11)
Credit-
impa
ired
\u2013
\u2013
593
593
\u2013
\u2013
(129)
(129)
13-14
100
Defaulted
\u2013
\u2013
593
593
\u2013
\u2013
(129)
(129)
Total
187,127
5,751
593
193,471
(45)
(50)
(129)
(224)
2023
Strong
129,331
1,649
\u2013
130,980
(19)
(3)
\u2013
(22)
1A-2B
0 \u2013 0.045
A+ and above
27,882
179
\u2013
28,061
(1)
\u2013
\u2013
(1)
3A-4A
0.046 \u2013 0.110
A/A\u2013 to BBB+/BBB
52,061
557
\u2013
52,618
(3)
(1)
\u2013
(4)
4B-5B
0.111 \u2013 0.425
BBB to BBB-/BB+
49,388
913
\u2013
50,301
(15)
(2)
\u2013
(17)
Satisfactory
35,405
5,921
\u2013
41,326
(23)
(28)
\u2013
(51)
6A-7B
0.426 \u2013 1.350
BB+/BB to BB-
2,581
1,065
\u2013
3,646
(2)
(6)
\u2013
(8)
8A-9B
1.351 \u2013 4.000
BB-/B+ to B
25,089
3,028
\u2013
28,117
(14)
(9)
\u2013
(23)
10A-11C
4.001 \u2013 15.75
B/B\u2013 to B-/CCC+
7,735
1,828
\u2013
9,563
(7)
(13)
\u2013
(20)
Higher risk
\u2013
697
\u2013
697
\u2013
(15)
\u2013
(15)
12
15.751 \u2013 99.999
CCC+/C
\u2013
697
\u2013
697
\u2013
(15)
\u2013
(15)
Credit-
impa
ired
\u2013
\u2013
663
663
\u2013
\u2013
(112)
(112)
13-14
100
Defaulted
\u2013
\u2013
663
663
\u2013
\u2013
(112)
(112)
Total
164,736
8,267
663
173,666
(42)
(46)
(112)
(200)
\n\n
Loans and advances by client segment credit quality analysis by key geography
\n\n \n
Corporate & Investment Banking and Central & other items
2024
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
32,552
12,079
44,631
230
1,539
64
1,833
1,272
1,272
(8)
(8)
(16)
(33)
(107)
(9)
(149)
(1,157)
(1,157)
(2.8)%
Corporate Lending
14,429
6,180
20,609
225
1,329
64
1,618
1,260
1,260
(5)
(4)
(9)
(33)
(102)
(9)
(144)
(1,157)
(1,157)
(5.6)%
Non Corporate
Lending
1
4,567
2,730
7,297
4
206
\u2013
210
12
12
(1)
(3)
(4)
\u2013
(5)
\u2013
(5)
\u2013
\u2013
(0.1)%
Banks
13,556
3,169
16,725
1
4
\u2013
5
\u2013
\u2013
(2)
(1)
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Singapore
31,129
7,769
38,898
500
955
35
1,490
407
407
\u2013
(8)
(8)
(4)
(14)
\u2013
(18)
(196)
(196)
(0.5)%
Corporate Lending
7,333
4,003
11,336
469
594
35
1,098
335
335
\u2013
(6)
(6)
(4)
(14)
\u2013
(18)
(195)
(195)
(1.7)%
Non Corporate
Lending
1
19,348
567
19,915
29
358
\u2013
387
\u2013
\u2013
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
4,448
3,199
7,647
2
3
\u2013
5
72
72
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
UK
11,029
3,939
14,968
48
479
3
530
316
316
(10)
(4)
(14)
\u2013
(27)
(6)
(33)
(258)
(258)
(1.9)%
Corporate Lending
325
871
1,196
47
479
1
527
258
258
(9)
(3)
(12)
\u2013
(27)
(6)
(33)
(237)
(237) (14.2)%
Non Corporate
Lending
1
8,690
982
9,672
1
\u2013
\u2013
1
57
57
(1)
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(21)
(21)
(0.2)%
Banks
2,014
2,086
4,100
\u2013
\u2013
2
2
1
1
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
US
16,244
4,456
20,700
92
433
33
558
31
31
(4)
(1)
(5)
(1)
(1)
\u2013
(2)
(3)
(3)
(0.0)%
Corporate Lending
5,426
2,761
8,187
77
322
\u2013
399
28
28
(3)
(1)
(4)
(1)
(1)
\u2013
(2)
\u2013
\u2013
(0.1)%
Non Corporate
Lending
1
9,688
123
9,811
15
79
\u2013
94
3
3
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(3)
(3)
(0.0)%
Banks
1,130
1,572
2,702
\u2013
32
33
65
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
China
10,380
2,794
13,174
49
133
14
196
171
171
(3)
(1)
(4)
\u2013
\u2013
\u2013
\u2013
(86)
(86)
(0.7)%
Corporate Lending
4,933
2,193
7,126
49
133
14
196
168
168
(1)
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(83)
(83)
(1.1)%
Non Corporate
Lending
1
3,241
363
3,604
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
2,206
238
2,444
\u2013
\u2013
\u2013
\u2013
3
3
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(3)
(3)
(0.2)%
Others
42,171
19,370
61,541
318
3,251
819
4,389
2,460
2,460
(10)
(33)
(43)
(3)
(70)
(29)
(102)
(1,483) (1,483)
(2.4)%
Corporate Lending
24,835
14,075
38,910
291
2,048
516
2,855
2,221
2,221
(6)
(26)
(32)
(3)
(38)
(28)
(69)
(1,333)
(1,333)
(3.3)%
Non Corporate
Lending
1
9,451
3,590
13,041
22
1,117
153
1,292
232
232
\u2013
(6)
(6)
\u2013
(31)
(1)
(32)
(149)
(149)
(1.3)%
Banks
7,885
1,705
9,590
5
86
150
241
7
7
(4)
(1)
(5)
\u2013
(1)
\u2013
(1)
(1)
(1)
(0.1)%
Total
143,505
50,407
193,912
1,237
6,790
968
8,996
4,657
4,657
(35)
(55)
(90)
(41)
(219)
(44)
(304)
(3,183)
(3,183)
(1.7)%
\n\n \n
Corporate & Investment Banking and Central & other items
2
2023
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Strong
factory
Total
Strong
factory
Risk
Total
Defaulted
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
36,776
10,151
46,927
167
937
30
1,134
1,284
1,284
(7)
(23)
(30)
(4)
(118)
(3)
(125)
(1,025)
(1,025)
(2.4)%
Corporate Lending
14,401
6,289
20,690
165
855
30
1,050
1,219
1,219
(5)
(20)
(25)
(3)
(118)
(3)
(124)
(1,024)
(1,024)
(5.1)%
Non Corporate
Lending
1
6,323
2,458
8,781
1
81
\u2013
82
65
65
(1)
(2)
(3)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
Banks
16,052
1,404
17,456
1
1
\u2013
2
\u2013
\u2013
(1)
(1)
(2)
(1)
\u2013
\u2013
(1)
\u2013
\u2013
(0.0)%
Singapore
34,526
6,046
40,572
361
509
36
906
285
285
(4)
(4)
(8)
(11)
(14)
(4)
(29)
(75)
(75)
(0.3)%
Corporate Lending
5,766
2,334
8,100
304
504
36
844
221
221
(4)
(3)
(7)
(11)
(13)
(4)
(28)
(74)
(74)
(1.2)%
Non Corporate
Lending
1
23,033
510
23,543
57
2
\u2013
59
\u2013
\u2013
\u2013
(1)
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
5,727
3,202
8,929
\u2013
3
\u2013
3
64
64
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
(1)
(1)
(0.0)%
UK
8,364
4,171
12,535
56
785
83
924
257
257
(5)
(5)
(10)
\u2013
(14)
(7)
(21)
(209)
(209)
(1.7)%
Corporate Lending
5,407
1,559
6,966
52
539
71
662
250
250
(4)
(5)
(9)
\u2013
(13)
(7)
(20)
(202)
(202)
(2.9)%
Non Corporate
Lending
1
558
1,244
1,802
\u2013
160
\u2013
160
3
3
(1)
\u2013
(1)
\u2013
(1)
\u2013
(1)
(3)
(3)
(0.3)%
Banks
2,399
1,368
3,767
4
86
12
102
4
4
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.1)%
US
14,550
4,742
19,292
219
176
19
414
5
5
(2)
(2)
(4)
\u2013
\u2013
\u2013
\u2013
(5)
(5)
(0.0)%
Corporate Lending
7,487
2,765
10,252
146
130
\u2013
276
1
1
(1)
(2)
(3)
\u2013
\u2013
\u2013
\u2013
(1)
(1)
(0.0)%
Non Corporate
Lending
1
6,181
425
6,606
25
4
\u2013
29
4
4
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.1)%
Banks
882
1,552
2,434
48
42
19
109
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
China
9,737
2,733
12,470
31
298
8
337
262
262
(3)
(4)
(7)
\u2013
\u2013
\u2013
\u2013
(125)
(125)
(1.0)%
Corporate Lending
4,723
2,179
6,902
31
297
8
336
259
259
(2)
(1)
(3)
\u2013
\u2013
\u2013
\u2013
(125)
(125)
(1.7)%
Non Corporate
Lending
1
3,254
318
3,572
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Banks
1,760
236
1,996
\u2013
1
\u2013
1
3
3
\u2013
(3)
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.2)%
Others
43,547
18,233
61,780
366
3,347
1,979
5,692
3,716
3,716
(16)
(34)
(50)
(4)
(35)
(54)
(93)
(2,115)
(2,115)
(3.2)%
Corporate Lending
16,189
15,034
31,223
345
2,322
678
3,345
3,335
3,335
(8)
(27)
(35)
(3)
(28)
(46)
(77)
(2,012)
(2,012)
(5.6)%
Non Corporate
Lending
1
18,894
1,861
20,755
19
946
1,059
2,024
375
375
(6)
(6)
(12)
(1)
(6)
(1)
(8)
(102)
(102)
(0.5)%
Banks
8,464
1,338
9,802
2
79
242
323
6
6
(2)
(1)
(3)
\u2013
(1)
(7)
(8)
(1)
(1)
(0.1)%
Total
147,500
46,076
193,576
1,200
6,052
2,155
9,407
5,809
5,809
(37)
(72)
(109)
(19)
(181)
(68)
(268)
(3,554)
(3,554)
(1.9)%
\n
1
Include \ufb01nancing,
insurance and non-banking corporations and governments
\n
2
Amounts have been re-presented from a regional basis (Asia; Africa & Middle East; and Europe & Americas) to key geographies covering the major
ity of the
\n
reported balances
\n\n\n \n
Wealth & Retail Banking and Ventures
2024
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
41,906
320
42,226
288
47
40
375
228
228
(59)
(14)
(73)
(33)
(20)
(4)
(57)
(69)
(69)
(0.5)%
Mortgages
31,080
265
31,345
55
14
24
93
75
75
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
(0.0)%
Credit cards
4,210
19
4,229
93
30
1
124
14
14
(36)
(11)
(47)
(27)
(19)
(1)
(47)
(14)
(14)
(2.5)%
Others
6,616
36
6,652
140
3
15
158
139
139
(23)
(3)
(26)
(6)
(1)
(3)
(10)
(48)
(48)
(1.2)%
Singapore
26,755
52
26,807
441
39
34
514
312
312
(29)
(26)
(55)
(6)
(6)
(6)
(18)
(265)
(265)
(1.2)%
Mortgages
13,531
12
13,543
160
32
15
207
9
9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.0)%
Credit cards
2,248
25
2,273
14
5
16
35
16
16
(9)
(26)
(35)
(5)
(5)
(4)
(14)
(19)
(19)
(2.9)%
Others
10,976
15
10,991
267
2
3
272
287
287
(20)
\u2013
(20)
(1)
(1)
(2)
(4)
(242)
(242)
(2.3)%
Korea
18,062
220
18,282
378
9
22
409
112
112
(22)
(1)
(23)
(28)
(4)
(1)
(33)
(33)
(33)
(0.5)%
Mortgages
13,198
171
13,369
250
8
17
275
62
62
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2)
(2)
(0.0)%
Credit cards
36
1
37
1
\u2013
\u2013
1
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2.6)%
Others
4,828
48
4,876
127
1
5
133
50
50
(21)
(1)
(22)
(28)
(4)
(1)
(33)
(31)
(31)
(1.7)%
Rest of World
26,085
4,998
31,083
338
76
241
655
977
977
(239)
(13)
(252)
(39)
(5)
(18)
(62)
(403)
(403)
(2.2)%
Mortgages
15,079
2,007
17,086
136
43
141
320
459
459
(4)
(2)
(6)
\u2013
\u2013
(1)
(1)
(124)
(124)
(0.7)%
Credit cards
1,148
351
1,499
29
12
19
60
40
40
(33)
(1)
(34)
(21)
\u2013
(1)
(22)
(27)
(27)
(5.2)%
Others
9,858
2,640
12,498
173
21
81
275
478
478
(202)
(10)
(212)
(18)
(5)
(16)
(39)
(252)
(252)
(3.8)%
Total
112,808
5,590
118,398
1,445
171
337
1,953
1,629
1,629
(349)
(54)
(403)
(106)
(35)
(29)
(170)
(770)
(770)
(1.1)%
\n\n \n
Wealth & Retail Banking and Ventures
1
2023
Gross
Credit Impairment
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Satis-
Satis-
Higher
Satis-
Satis-
Higher
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Strong
factory
Total
Strong
factory
Risk
Total
Impaired
Total
Coverage
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
%
Hong Kong
42,930
242
43,172
514
74
51
639
174
174
(24)
(34)
(58)
(28)
(13)
(12)
(53)
(49)
(49)
(0.4)%
Mortgages
32,376
152
32,528
282
53
13
348
63
63
\u2013
\u2013
\u2013
(1)
\u2013
\u2013
(1)
(1)
(1)
(0.0)%
Credit cards
4,045
44
4,089
80
17
24
121
18
18
(9)
(33)
(42)
(19)
(12)
(8)
(39)
(18)
(18)
(2.3)%
Others
6,509
46
6,555
152
4
14
170
93
93
(15)
(1)
(16)
(8)
(1)
(4)
(13)
(30)
(30)
(0.9)%
Singapore
26,644
68
26,712
379
41
34
454
282
282
(15)
(18)
(33)
(2)
(5)
(4)
(11)
(247)
(247)
(1.1)%
Mortgages
14,993
16
15,009
230
34
11
275
13
13
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(4)
(4)
(0.0)%
Credit cards
1,916
25
1,941
11
5
16
32
10
10
(7)
(17)
(24)
\u2013
(5)
(3)
(8)
(16)
(16)
(2.4)%
Others
9,735
27
9,762
138
2
7
147
259
259
(8)
(1)
(9)
(2)
\u2013
(1)
(3)
(227)
(227)
(2.4)%
Korea
22,966
211
23,177
462
20
9
491
93
93
(40)
\u2013
(40)
(18)
\u2013
\u2013
(18)
(19)
(19)
(0.3)%
Mortgages
16,535
164
16,699
364
18
8
390
69
69
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(0.0)%
Credit cards
113
2
115
3
\u2013
\u2013
3
\u2013
\u2013
(4)
\u2013
(4)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(3.4)%
Others
6,318
45
6,363
95
2
1
98
24
24
(36)
\u2013
(36)
(18)
\u2013
\u2013
(18)
(19)
(19)
(1.1)%
Rest of World
26,653
4,787
31,440
440
79
256
775
947
947
(169)
(29)
(198)
(31)
(7)
(42)
(80)
(457)
(457)
(2.2)%
Mortgages
14,678
2,297
16,975
156
48
134
338
375
375
(5)
(2)
(7)
(2)
\u2013
(1)
(3)
(118)
(118)
(0.7)%
Credit cards
1,419
68
1,487
73
1
15
89
40
40
(26)
(9)
(35)
(7)
\u2013
(10)
(17)
(16)
(16)
(4.2)%
Others
10,556
2,422
12,978
211
29
107
347
532
532
(138)
(18)
(156)
(22)
(7)
(31)
(60)
(323)
(323)
(3.9)%
Total
119,193
5,308
124,501
1,795
213
350
2,358
1,496
1,496
(248)
(81)
(329)
(79)
(25)
(58)
(162)
(772)
(772)
(1.0)%
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
Undrawn commitment and \ufb01nanc
ial guarantees \u2013 by cl
ient segment credit quality
\n\n \n
Wealth & Retail Banking and Ventures
2024
Notional
ECL
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
70,595
100
\u2013
70,695
(15)
(3)
\u2013
(18)
Satisfactory
850
11
\u2013
861
(5)
(1)
\u2013
(6)
Higher risk
\u2013
21
\u2013
21
\u2013
(3)
\u2013
(3)
Impaired
\u2013
\u2013
8
8
\u2013
\u2013
\u2013
\u2013
Total
71,445
132
8
71,585
(20)
(7)
\u2013
(27)
\n\n \n
2023
Notional
ECL
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Strong
73,819
160
\u2013
73,980
(15)
(3)
\u2013
(18)
Satisfactory
889
18
\u2013
907
(5)
(1)
\u2013
(6)
Higher risk
\u2013
33
\u2013
33
\u2013
(3)
\u2013
(3)
Impaired
\u2013
\u2013
3
3
\u2013
\u2013
\u2013
\u2013
Total
74,708
211
3
74,922
(20)
(7)
\u2013
(27)
\n\n
Movement in gross exposures and credit impa
irment for
\n
loans and advances, debt securit
ies, undrawn comm
itments
\n
and \ufb01nancial guarantees (aud
ited)
\n
The tables overleaf set out the movement in gross exposures
\n
and credit impa
irment by stage
in respect of amortised cost
\n
loans to banks and customers, undrawn commitments,
\n
\ufb01nancial guarantees and debt secur
it
ies class
if
ied at
\n
amortised cost and FVOCI. The tables are presented for the
\n
Group and separately for CIB and WRB (which also includes a
\n
separate presentation for secured and unsecured exposures).
\n
Methodology
\n
The movement lines with
in the tables are an aggregat
ion of
\n
monthly movements over the year and will therefore re\ufb02ect
\n
the accumulation of multiple trades during the year. The credit
\n
impa
irment charge
in the income statement comprises the
\n
amounts with
in the boxes
in the table below, less recoveries
\n
of amounts previously written off. Discount unwind is reported
\n
in net interest income and related to stage 3 \ufb01nanc
ial
\n
instruments only.
\n
The approach for determin
ing the key l
ine items in the tables
\n
is set out below.
\n
\u2022
Transfers
\u2013 transfers between stages are deemed to
\n
occur at the beginn
ing of a month based on pr
ior month
\n
closing balances.
\n
\u2022
Net remeasurement from stage changes
\u2013 the
\n
remeasurement of credit impa
irment prov
is
ions ar
is
ing
\n
from a change in stage is reported with
in the stage that the
\n
assets are transferred to. For example, assets transferred
\n
into stage 2 are remeasured from a 12-month to a lifet
ime
\n
ECL, with the effect of remeasurement reported in stage 2.
\n
For stage 3, this represents the in
it
ial remeasurement from
\n
specif
ic prov
is
ions recogn
ised on ind
iv
idual assets
\n
transferred into stage 3 in the year.
\n
\u2022
Net changes in exposures
\u2013 new business written less
\n
repayments in the year. With
in stage 1, new bus
iness written
\n
will attract up to 12 months of ECL charges. Repayments of
\n
non-amortis
ing loans (pr
imar
ily w
ith
in CIB) w
ill have low
\n
amounts of ECL provis
ions attr
ibuted to them, due to the
\n
release of provis
ions over the term to matur
ity. In stages 2
\n
and 3, the net change in exposures re\ufb02ect repayments
\n
although stage 2 may include new facil
it
ies where clients
\n
are on non-purely precautionary early alert, are CG 12, or
\n
when non-investment grade debt securit
ies are acqu
ired.
\n
\u2022
Changes in risk parameters
\u2013 for stages 1 and 2, this re\ufb02ects
\n
changes in the probabil
ity of default (PD), loss g
iven default
\n
(LGD) and exposure at default (EAD) of assets during the
\n
year, which includes the impact of releasing provis
ions over
\n
the term to maturity. It also includes the effect of changes
\n
in forecasts of macroeconomic variables during the year.
\n
In stage 3, this line represents addit
ional spec
if
ic prov
is
ions
\n
recognised on exposures held with
in stage 3.
\n
\u2022
Interest due but not paid
\u2013 change in contractual
\n
amount of interest due in stage 3 \ufb01nanc
ial
instruments
\n
but not paid, being the net of accruals, repayments and
\n
write-offs, together with the corresponding change in
\n
credit impa
irment.
\n
Changes to ECL models, which incorporate changes to
\n
model approaches and methodologies, are not reported as
\n
a separate line item as these have an impact over a number
\n
of lines and stages.
\n
Movements during the year
\n
Stage 1 gross exposures decreased by $3.2 bill
ion to $721 b
ill
ion
\n
(31 December 2023: $724 bill
ion). CIB exposure
increased by
\n
$30\u00a0bill
ion to $367 b
ill
ion (31 December 2023: $337 b
ill
ion),
\n
due to an increase in exposures in \ufb01nanc
ial guarantees
in
\n
the Energy, Financ
ing, Insurance and Transport sectors.
\n
WRB decreased by $11.4 bill
ion to $180 b
ill
ion (31 December
\n
2023: $191 bill
ion), largely dr
iven by fewer mortgages in Korea,
\n
Singapore and Hong Kong, as well as off-balance sheet
\n
commitments. Debt securit
ies decreased by $16.5 b
ill
ion,
\n
largely in the Central and other items segment which had
\n
also seen a $6.3 bill
ion reduct
ion in loan balances.
\n
Total stage 1 provis
ions
increased by $56 mill
ion to $582 m
ill
ion
\n
(31 December 2023: $526 mill
ion). CIB prov
is
ions decreased
\n
by $18\u00a0mill
ion to $133 m
ill
ion (31 December 2023: $151 m
ill
ion),
\n
due to a release in the China CRE overlay which was driven
\n
by repayments and portfolio movements. This was partly
\n
offset by new overlays of $27 mill
ion, pr
imar
ily
in Bangladesh.
\n
WRB provis
ions
increased by $67 mill
ion to $392 m
ill
ion
\n
(31 December 2023: $325 mill
ion), due to del
inquenc
ies
in
\n
the personal loans and unsecured lending portfolio.
\n
Stage 2 gross exposures decreased by $4 bill
ion to $19 b
ill
ion
\n
(31 December 2023: $22 bill
ion), pr
imar
ily dr
iven by a net
\n
reduction in CIB exposures from off-balance sheet
\n
instruments. WRB exposures decreased by $0.4 bill
ion to
\n
$2 bill
ion (31 December 2023: $2.5 b
ill
ion), ma
inly due to the
\n
mortgage portfolio.
\n
Stage 2 provis
ions
increased by $20 mill
ion to $537 m
ill
ion
\n
(31 December 2023: $517 mill
ion). CIB prov
is
ions
increased by
\n
$44\u00a0mill
ion to $362 m
ill
ion (31 December 2023: $318 m
ill
ion),
\n
due to $76 mill
ion new overlays, largely
in Hong Kong, and
\n
portfolio movements. This was offset by China CRE overlay
\n
releases, which were driven by repayments. WRB provis
ions
\n
increased by $11\u00a0mill
ion to $151 m
ill
ion (31 December 2023:
\n
$140 mill
ion) ma
inly driven by the overlay in Korea due
\n
to the settlement failure of two e-commerce platforms.
\n
Debt securit
ies pr
imar
ily held
in the Central and other items
\n
segment decreased by $31 mill
ion, due to sovere
ign upgrades.
\n
The impact of model and methodology updates in 2024
\n
reduced modelled provis
ions by $15 m
ill
ion across stages 1, 2
\n
and 3 in\u00a0WRB.
\n
Stage 3 gross exposures for CIB decreased by $1.1 bill
ion to
\n
$5.2 bill
ion (31 December 2023: $6.3 b
ill
ion) due to repayments
\n
and write-offs. CIB provis
ions decreased by $0.3 b
ill
ion to
\n
$3.3 bill
ion (31 December 2023: $3.7 b
ill
ion), due to releases
\n
from repayments and write-offs. WRB stage 3 loans
\n
remained broadly stable at $1.6 bill
ion (31 December 2023:
\n
$1.5 bill
ion) and prov
is
ions also rema
ined stable at $0.8 bill
ion
\n
(31 December 2023: $0.8 bill
ion). The amount of stage 3
\n
exposures written off during the year that remain subject
\n
to enforcement activ
ity
is $1.2 bill
ion (31 December 2023:
\n
$1 bill
ion).
\n\n
All segments (audited)
\n\n \n
Stage 1
Stage 2
Stage 3\u2075
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
3
ment
Net
balance
3
ment
Net
balance
3
ment
Net
balance
3
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
720,112
(645)
719,467
27,479
(618)
26,861
8,841
(4,724)
4,117
756,432
(5,987)
750,445
Transfers to stage 1
19,594
(661)
18,933
(19,583)
661
(18,922)
(11)
\u2013
(11)
\u2013
\u2013
\u2013
Transfers to stage 2
(42,628)
174
(42,454)
42,793
(182)
42,611
(165)
8
(157)
\u2013
\u2013
\u2013
Transfers to stage 3
(96)
6
(90)
(2,329)
326
(2,003)
2,425
(332)
2,093
\u2013
\u2013
\u2013
Net change in
exposures
23,717
(185)
23,532
(22,727)
22
(22,705)
(1,708)
624
(1,084)
(718)
461
(257)
Net remeasurement
from stage changes
\u2013
52
52
\u2013
(199)
(199)
\u2013
(163)
(163)
\u2013
(310)
(310)
Changes in risk
parameters
\u2013
202
202
\u2013
(32)
(32)
\u2013
(1,100)
(1,100)
\u2013
(930)
(930)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1,027)
1,027
\u2013
(1,027)
1,027
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(83)
83
\u2013
(83)
83
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
180
180
\u2013
180
180
Exchange translation
differences and
other movements\u00b9
3,177
531
3,708
(3,365)
(495)
(3,860)
(128)
(102)
(230)
(316)
(66)
(382)
As at 31 December
2023\u00b2
723,876
(526) 723,350
22,268
(517)
21,751
8,144
(4,499)
3,645
754,288
(5,542) 748,746
Income statement
ECL (charge)/release
69
(209)
(639)
(779)
Recoveries of
amounts previously
written off
\u2013
\u2013
271
271
Total credit
impa
irment
(charge)/release
69
(209)
(368)
(508)
As at 1 January 2024
723,876
(526) 723,350
22,268
(517)
21,751
8,144
(4,499)
3,645
754,288
(5,542) 748,746
Transfers to stage 1
16,433
(543)
15,890
(16,423)
543
(15,880)
(10)
\u2013
(10)
\u2013
\u2013
\u2013
Transfers to stage 2
(33,301)
128
(33,173)
33,770
(153)
33,617
(469)
25
(444)
\u2013
\u2013
\u2013
Transfers to stage 3
(1,631)
63
(1,568)
(146)
168
22
1,777
(231)
1,546
\u2013
\u2013
\u2013
Net change in
exposures
29,928
(173)
29,755
(18,435)
80
(18,355)
(1,383)
622
(761)
10,110
529
10,639
Net remeasurement
from stage changes
\u2013
61
61
\u2013
(185)
(185)
\u2013
(203)
(203)
\u2013
(327)
(327)
Changes in risk
parameters
\u2013
84
84
\u2013
(242)
(242)
\u2013
(873)
(873)
\u2013
(1,031)
(1,031)
Derecognised
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1,260)
1,260
\u2013
(1,260)
1,260
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
53
(53)
\u2013
53
(53)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
135
135
\u2013
135
135
Exchange translation
differences and
other movements\u00b9
(14,626)
324
(14,302)
(2,427)
(231)
(2,658)
147
(268)
(121)
(16,906)
(175)
(17,081)
As at 31 December
2024\u00b2
720,679
(582)720,097
18,607
(537)
18,070
6,999
(4,085)
2,914
746,285
(5,204) 741,081
Income statement
ECL (charge)/release\u2076
(28)
(347)
(454)
(829)
Recoveries of
amounts previously
written off
\u2013
\u2013
279
279
Total credit
impa
irment
(charge)/release
4
(28)
(347)
(175)
(550)
\n
1
Includes fair value adjustments and amortisat
ion on debt secur
it
ies
\n
2
Excludes Cash and balances at central banks, Accrued income, Assets held for sale and Other assets gross balances of $101,755 mill
ion (31 December 2023:
\n
$111,478\u00a0mill
ion) and Total cred
it impa
irment of $63 m
ill
ion (31 December 2023: $59 m
ill
ion)
\n
3
The gross balance includes the notional amount of off balance sheet instruments
\n
4 Reported basis
\n
5
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of $N
il mill
ion (31 December 2023:
\n
$14 mill
ion)
\n
6
Does not include release relating to Other assets of $3 mill
ion (31 December 2023: N
il)
\n\n
Corporate & Investment Banking (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
315,437
(194)
315,243
20,148
(411)
19,737
6,994
(3,822)
3,172
342,579
(4,427)
338,152
Transfers to stage 1
14,948
(347)
14,601
(14,948)
347
(14,601)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Transfers to stage 2
(34,133)
80
(34,053)
34,175
(88)
34,087
(42)
8
(34)
\u2013
\u2013
\u2013
Transfers to stage 3
(17)
\u2013
(17)
(1,270)
141
(1,129)
1,287
(141)
1,146
\u2013
\u2013
\u2013
Net change in
exposures
41,314
(73)
41,241
(20,084)
89
(19,995)
(1,335)
623
(712)
19,895
639
20,534
Net remeasurement
from stage changes
\u2013
15
15
\u2013
(45)
(45)
\u2013
(82)
(82)
\u2013
(112)
(112)
Changes in risk
parameters
\u2013
60
60
\u2013
(68)
(68)
\u2013
(668)
(668)
\u2013
(676)
(676)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(340)
340
\u2013
(340)
340
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(120)
120
\u2013
(120)
120
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
155
155
\u2013
155
155
Exchange translation
differences and
other movements
(360)
308
(52)
(1,148)
(283)
(1,431)
(188)
(184)
(372)
(1,696)
(159)
(1,855)
As at 31 December
2023
337,189
(151) 337,038
16,873
(318)
16,555
6,256
(3,651)
2,605
360,318
(4,120)
356,198
Income statement
ECL (charge)/release
2
(24)
(127)
(149)
Recoveries of
amounts previously
written off
\u2013
\u2013
31
31
Total credit
impa
irment
(charge)/release
2
(24)
(96)
(118)
As at 1 January 2024
337,189
(151) 337,038
16,873
(318)
16,555
6,256
(3,651)
2,605
360,318
(4,120) 356,198
Transfers to stage 1
10,390
(245)
10,145
(10,390)
245
(10,145)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Transfers to stage 2
(25,698)
47
(25,651)
25,810
(58)
25,752
(112)
11
(101)
\u2013
\u2013
\u2013
Transfers to stage 3
(186)
(4)
(190)
(186)
22
(164)
372
(18)
354
\u2013
\u2013
\u2013
Net change in
exposures
50,866
(50)
50,816
(16,508)
88
(16,420)
(1,063)
607
(456)
33,295
645
33,940
Net remeasurement
from stage changes
\u2013
16
16
(4)
(36)
(40)
\u2013
(100)
(100)
(4)
(120)
(124)
Changes in risk
parameters
\u2013
29
29
\u2013
(129)
(129)
\u2013
(336)
(336)
\u2013
(436)
(436)
Derecognised
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(321)
321
\u2013
(321)
321
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
25
(25)
\u2013
25
(25)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
104
104
\u2013
104
104
Exchange translation
differences and
other movements
(5,455)
225
(5,230)
(726)
(176)
(902)
13
(225)
(212)
(6,168)
(176)
(6,344)
As at 31 December
2024
367,106
(133) 366,973
14,869
(362)
14,507
5,170
(3,312)
1,858
387,145
(3,807) 383,338
Income statement
ECL (charge)/release
(5)
(77)
171
89
Recoveries of
amounts previously
written off
\u2013
\u2013
26
26
Total credit
impa
irment
(charge)/release
(5)
(77)
197
115
\n
1
The gross balance includes the notional amount of off balance sheet instruments
\n\n
Wealth & Retail Banking (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
193,239
(413)
192,826
1,821
(118)
1,703
1,454
(776)
678
196,514
(1,307) 195,207
Transfers to stage 1
4,265
(246)
4,019
(4,254)
246
(4,008)
(11)
\u2013
(11)
\u2013
\u2013
\u2013
Transfers to stage 2
(7,544)
73
(7,471)
7,667
(73)
7,594
(123)
\u2013
(123)
\u2013
\u2013
\u2013
Transfers to stage 3
(64)
1
(63)
(1,049)
187
(862)
1,113
(188)
925
\u2013
\u2013
\u2013
Net change in
exposures
1,965
(78)
1,887
(1,713)
14
(1,699)
(395)
\u2013
(395)
(143)
(64)
(207)
Net remeasurement
from stage changes
\u2013
31
31
\u2013
(137)
(137)
\u2013
(38)
(38)
\u2013
(144)
(144)
Changes in risk
parameters
\u2013
110
110
\u2013
(69)
(69)
\u2013
(426)
(426)
\u2013
(385)
(385)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(649)
649
\u2013
(649)
649
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
37
(37)
\u2013
37
(37)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
24
24
\u2013
24
24
Exchange translation
differences and other
movements
(862)
197
(665)
\u2013
(190)
(190)
59
33
92
(803)
40
(763)
As at 31 December
2023
190,999
(325)
190,674
2,472
(140)
2,332
1,485
(759)
726
194,956
(1,224)
193,732
Income statement
ECL (charge)/release
63
(192)
(464)
(593)
Recoveries of
amounts previously
written off
\u2013
\u2013
239
239
Total credit
impa
irment
(charge)/release
63
(192)
(225)
(354)
As at 1 January 2024
190,999
(325) 190,674
2,472
(140)
2,332
1,485
(759)
726
194,956
(1,224) 193,732
Transfers to stage 1
5,126
(288)
4,838
(5,116)
288
(4,828)
(10)
\u2013
(10)
\u2013
\u2013
\u2013
Transfers to stage 2
(7,393)
80
(7,313)
7,525
(80)
7,445
(132)
\u2013
(132)
\u2013
\u2013
\u2013
Transfers to stage 3
(98)
1
(97)
(1,254)
211
(1,043)
1,352
(212)
1,140
\u2013
\u2013
\u2013
Net change in
exposures
(3,926)
(89)
(4,015)
(1,505)
21
(1,484)
(431)
\u2013
(431)
(5,862)
(68)
(5,930)
Net remeasurement
from stage changes
\u2013
29
29
\u2013
(144)
(144)
\u2013
(44)
(44)
\u2013
(159)
(159)
Changes in risk
parameters
\u2013
19
19
\u2013
(152)
(152)
\u2013
(537)
(537)
\u2013
(670)
(670)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(808)
808
\u2013
(808)
808
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
28
(28)
\u2013
28
(28)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
30
30
\u2013
30
30
Exchange translation
differences and
other movements
(5,128)
181
(4,947)
(92)
(155)
(247)
139
(16)
123
(5,081)
10
(5,071)
As at 31 December
2024
179,580
(392)
179,188
2,030
(151)
1,879
1,623
(758)
865
183,233
(1,301)
181,932
Income statement
ECL (charge)/release
(41)
(275)
(581)
(897)
Recoveries of
amounts previously
written off
\u2013
\u2013
253
253
Total credit
impa
irment
(charge)/release
(41)
(275)
(328)
(644)
\n
1
The gross balance includes the notional amount of off-balance sheet instruments
\n\n
Wealth & Retail Banking \u2013 Secured (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
135,362
(60) 135,302
1,413
(17)
1,396
1,028
(552)
476
137,803
(629)
137,174
Transfers to stage 1
3,311
(20)
3,291
(3,302)
20
(3,282)
(9)
\u2013
(9)
\u2013
\u2013
\u2013
Transfers to stage 2
(5,340)
11
(5,329)
5,436
(9)
5,427
(96)
(2)
(98)
\u2013
\u2013
\u2013
Transfers to stage 3
(28)
1
(27)
(463)
1
(462)
491
(2)
489
\u2013
\u2013
\u2013
Net change in
exposures
(3,138)
(16)
(3,154)
(1,250)
3
(1,247)
(216)
\u2013
(216)
(4,604)
(13)
(4,617)
Net remeasurement
from stage changes
\u2013
4
4
\u2013
(16)
(16)
\u2013
(3)
(3)
\u2013
(15)
(15)
Changes in risk
parameters
\u2013
22
22
\u2013
24
24
\u2013
(110)
(110)
\u2013
(64)
(64)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(109)
109
\u2013
(109)
109
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(3)
3
\u2013
(3)
3
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
12
12
\u2013
12
12
Exchange translation
differences and
other movements
(369)
25
(344)
(7)
(22)
(29)
(24)
20
(4)
(400)
23
(377)
As at 31 December
2023
129,798
(33)
129,765
1,827
(16)
1,811
1,062
(525)
537
132,687
(574)
132,113
Income statement
ECL (charge)/release
10
11
(113)
(92)
Recoveries of
amounts previously
written off
\u2013
\u2013
68
68
Total credit
impa
irment
(charge)/release
10
11
(45)
(24)
As at 1 January 2024
129,798
(33) 129,765
1,827
(16)
1,811
1,062
(525)
537
132,687
(574)
132,113
Transfers to stage 1
3,839
(23)
3,816
(3,836)
23
(3,813)
(3)
\u2013
(3)
\u2013
\u2013
\u2013
Transfers to stage 2
(4,952)
13
(4,939)
5,054
(13)
5,041
(102)
\u2013
(102)
\u2013
\u2013
\u2013
Transfers to stage 3
(43)
\u2013
(43)
(566)
19
(547)
609
(19)
590
\u2013
\u2013
\u2013
Net change in
exposures
2,570
(11)
2,559
(917)
8
(909)
(268)
\u2013
(268)
1,385
(3)
1,382
Net remeasurement
from stage changes
\u2013
6
6
\u2013
(15)
(15)
\u2013
(7)
(7)
\u2013
(16)
(16)
Changes in risk
parameters
\u2013
(6)
(6)
\u2013
(6)
(6)
\u2013
(129)
(129)
\u2013
(141)
(141)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(114)
114
\u2013
(114)
114
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
53
(53)
\u2013
53
(53)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
16
16
\u2013
16
16
Exchange translation
differences and
other movements
(4,496)
6
(4,490)
(57)
(31)
(88)
(33)
47
14
(4,586)
22
(4,564)
As at 31 December
2024
126,716
(48) 126,668
1,505
(31)
1,474
1,204
(556)
648
129,425
(635) 128,790
Income statement
ECL (charge)/release
(11)
(13)
(136)
(160)
Recoveries of
amounts previously
written off
\u2013
\u2013
80
80
Total credit
impa
irment
(charge)/release
(11)
(13)
(56)
(80)
\n
1
The gross balance includes the notional amount of off balance sheet instruments
\n\n
Wealth & Retail Banking \u2013 Unsecured (audited)
\n\n \n
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
credit
credit
credit
Retail Banking
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Gross
impa
ir-
Amortised cost
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
balance
1
ment
Net
and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 1 January 2023
57,877
(353)
57,524
408
(101)
307
426
(224)
202
58,711
(678)
58,033
Transfers to stage 1
954
(226)
728
(952)
226
(726)
(2)
\u2013
(2)
\u2013
\u2013
\u2013
Transfers to stage 2
(2,204)
62
(2,142)
2,231
(64)
2,167
(27)
2
(25)
\u2013
\u2013
\u2013
Transfers to stage 3
(36)
\u2013
(36)
(586)
186
(400)
622
(186)
436
\u2013
\u2013
\u2013
Net change in
exposures
5,103
(62)
5,041
(463)
11
(452)
(179)
\u2013
(179)
4,461
(51)
4,410
Net remeasurement
from stage changes
\u2013
27
27
\u2013
(121)
(121)
\u2013
(35)
(35)
\u2013
(129)
(129)
Changes in risk
parameters
\u2013
88
88
\u2013
(93)
(93)
\u2013
(316)
(316)
\u2013
(321)
(321)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(540)
540
\u2013
(540)
540
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
40
(40)
\u2013
40
(40)
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
12
12
\u2013
12
12
Exchange
translation
differences and
other movements
(493)
172
(321)
7
(168)
(161)
83
13
96
(403)
17
(386)
As at 31 December
2023
61,201
(292)
60,909
645
(124)
521
423
(234)
189
62,269
(650)
61,619
Income statement
ECL (charge)/release
53
(203)
(351)
(501)
Recoveries of
amounts previously
written off
\u2013
\u2013
171
171
Total credit
impa
irment
(charge)/release
53
(203)
(180)
(330)
As at 1 January
2024
61,201
(292)
60,909
645
(124)
521
423
(234)
189
62,269
(650)
61,619
Transfers to stage 1
1,287
(265)
1,022
(1,280)
265
(1,015)
(7)
\u2013
(7)
\u2013
\u2013
\u2013
Transfers to stage 2
(2,441)
67
(2,374)
2,471
(67)
2,404
(30)
\u2013
(30)
\u2013
\u2013
\u2013
Transfers to stage 3
(55)
1
(54)
(688)
192
(496)
743
(193)
550
\u2013
\u2013
\u2013
Net change in
exposures
(6,496)
(78)
(6,574)
(588)
13
(575)
(163)
\u2013
(163)
(7,247)
(65)
(7,312)
Net remeasurement
from stage changes
\u2013
23
23
\u2013
(129)
(129)
\u2013
(37)
(37)
\u2013
(143)
(143)
Changes in risk
parameters
\u2013
25
25
\u2013
(146)
(146)
\u2013
(408)
(408)
\u2013
(529)
(529)
Write-offs
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(694)
694
\u2013
(694)
694
\u2013
Interest due
but unpaid
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
25
\u2013
(25)
25
\u2013
Discount unwind
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
14
14
\u2013
14
14
Exchange
translation
differences and
other movements
(632)
175
(457)
(35)
(124)
(159)
172
(63)
109
(495)
(12)
(507)
As at 31 December
2024
52,864
(344)
52,520
525
(120)
405
419
(202)
217
53,808
(666)
53,142
Income statement
ECL (charge)/release
(30)
(262)
(445)
(737)
Recoveries of
amounts previously
written off
\u2013
\u2013
172
172
Total credit
impa
irment
(charge)/release
(30)
(262)
(273)
(565)
\n
1
The gross balance includes the notional amount of off balance sheet instruments
\n\n
Analysis of stage 2 balances
\n
The table below analyses total stage 2 gross on-and off-balance sheet exposures and associated expected credit provis
ions
\n
by the key SICR driver that caused the exposures to be classif
ied as stage 2 as at 31 December 2024 and 31 December 2023 for
\n
each segment.
\n
Where multiple drivers apply, the exposure is allocated based on the table order. For example, a loan may have breached
\n
the PD thresholds and could also be on non-purely precautionary early alert; in this instance, the exposure is reported under
\n
\u2018Increase in PD\u2019.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Corporate &
Wealth &
Investment Banking
Retail Banking
Ventures
Central & other items
1
Total
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
Gross
ECL
Coverage
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
$mill
ion
$mill
ion
%
Increase in PD
8,465
112
1.3%
1,366
104
7.6%
48
20
31.3%
154
\u2013
0.0%
10,033
236
2.4%
Non-purely
precautionary early alert
3,473
44
1.3%
30
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
3,503
44
1.3%
Higher risk (CG12)
686
24
3.5%
18
\u2013
0.0%
\u2013
\u2013
0.0%
1,488
1
0.4%
2,192
25
1.1%
Top up/Sell down
(Private Banking)
\u2013
\u2013
0.0%
254
1
0.4%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
254
1
0.4%
Others
2,245
25
1.1%
150
5
3.3%
\u2013
\u2013
0.0%
482
\u2013
0.0%
2,877
30
1.0%
30 days past due
\u2013
\u2013
0.0%
212
19
9.0%
6
4
66.7%
\u2013
\u2013
0.0%
218
23
10.6%
Management overlay
\u2013
157
0.0%
\u2013
22
0.0%
\u2013
3
0.0%
\u2013
\u2013
0.0%
\u2013
182
0.0%
Total stage 2
14,869
362
2.4%
2,030
151
7.4%
54
27
40.7%
2,124
1
0.3%
19,077
541
2.8%
2023
Increase in PD
8,262
75
0.9%
1,962
109
5.6%
96
23
24.0%
599
13
2.2%
10,919
220
2.0%
Non-purely
precautionary early alert
5,136
26
0.5%
37
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
5,173
26
0.5%
Higher risk (CG12)
1,008
56
5.6%
26
1
3.8%
\u2013
\u2013
0.0%
2,020
17
0.8%
3,054
74
2.4%
Top up/Sell down
(Private Banking)
\u2013
\u2013
0.0%
148
2
1.4%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
148
2
1.7%
Others
2,467
37
1.5%
151
16
10.6%
\u2013
\u2013
0.0%
489
\u2013
0.0%
3,107
53
1.7%
30 days past due
\u2013
\u2013
0.0%
148
12
8.1%
2
\u2013
0.0%
\u2013
\u2013
0.0%
150
12
7.7%
Management overlay
\u2013
124
0.0%
\u2013
\u2013
0.0%
\u2013
\u2013
0.0%
\u2013
17
0.0%
\u2013
141
0.0%
Total stage 2
16,873
318
1.9%
2,472
140
5.7%
98
23
23.5%
3,108
47
1.5%
22,551
528
2.3%
\n
1
Includes Gross and ECL for Cash and balances at central banks and Assets held for sale
\n\n
Credit impa
irment charge (aud
ited)
\n
The table below analyses credit impa
irment charges or releases of the ongo
ing business portfolio and restructuring business
\n
portfolio for the year ended 31 December 2024.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Stage 1 & 2
Stage 3
Total
Stage 1 & 2
Stage 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Ongoing business portfolio
Corporate & Investment Banking
81
(187)
(106)
11
112
123
Wealth & Retail Banking
317
327
644
129
225
354
Ventures
10
64
74
42
43
85
Central & other items
(37)
(18)
(55)
(44)
10
(34)
Credit impa
irment charge/(release)
371
186
557
138
390
528
Restructuring business portfolio
Others
1
(11)
(10)
1
(21)
(20)
Credit impa
irment charge/(release)
1
(11)
(10)
1
(21)
(20)
Total credit impa
irment
charge/(release)
372
175
547
139
369
508
\n
Problem credit management and provis
ion
ing (audited)
\n
Forborne and other modif
ied loans by cl
ient segment
\n
A forborne loan arises when a concession has been made to the contractual terms of a loan in response to a customer\u2019s
\n
\ufb01nancial d
iff
icult
ies.
\n
Net forborne loans decreased by $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to repayments in CIB
\n
non-performing forborne loans. Net non-performing forborne loans decreased by $235 mill
ion to $732 m
ill
ion (31 December
\n
2023: $967 mill
ion), wh
ich was partly offset by a $17 mill
ion
increase in CIB performing forborne loans.
\n\n \n
2024
2023
Corporate &
Corporate &
Investment
Wealth &
Investment
Wealth &
Banking
Retail Banking
Total
Banking
Retail Banking
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Gross stage 1 and 2 forborne loans
17
36
53
\u2013
40
40
Modif
icat
ion of terms and condit
ions
1
17
36
53
\u2013
40
40
Impairment provis
ions
\u2013
(1)
(1)
\u2013
(2)
(2)
Modif
icat
ion of terms and condit
ions
1
\u2013
(1)
(1)
\u2013
(2)
(2)
Net stage 1 and 2 forborne loans
17
35
52
\u2013
38
38
Collateral
\u2013
27
27
\u2013
31
31
Gross stage 3 forborne loans
2,065
258
2,323
2,340
274
2,614
Modif
icat
ion of terms and condit
ions
1
1,824
258
2,082
2,113
274
2,387
Re\ufb01nancing
2
241
\u2013
241
227
\u2013
227
Impairment provis
ions
(1,481)
(110)
(1,591)
(1,529)
(118)
(1,647)
Modif
icat
ion of terms and condit
ions
1
(1,242)
(110)
(1,352)
(1,337)
(118)
(1,454)
Re\ufb01nancing
2
(239)
\u2013
(239)
(192)
\u2013
(192)
Net stage 3 forborne loans
584
148
732
811
156
967
Collateral
172
55
227
341
49
390
Net carrying value of forborne loans
601
183
784
811
194
1,005
\n
1
Modif
icat
ion of terms is any contractual change apart from re\ufb01nanc
ing, as a result of cred
it stress of the counterparty, i.e. interest reductions, loan
\n
covenant waivers
\n
2
Re\ufb01nancing
is a new contract to a borrower in credit stress, such that they are re\ufb01nanced and can pay other debt contracts that they were unable to honour
\n
Forborne and other modif
ied loans by key geography
\n
Net forborne loans decreased by $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to non-performing
\n
forborne loans.
\n\n \n
2024
2023
3
Hong
Singa-
Hong
Singa-
Kong
Korea
China
pore
UK
US
Other
Total
Kong
Korea
China
pore
UK
US
Other
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Performing
forborne loans
2
8
\u2013
3
\u2013
\u2013
39
52
\u2013
6
\u2013
3
\u2013
\u2013
29
38
Stage 3
forborne loans
118
18
77
25
78
1
415
732
104
22
114
37
46
1
643
967
Net forborne loans
120
26
77
28
78
1
454
784
104
28
114
40
46
1
672
1,005
\n
3
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances)
\n\n
Credit Risk mit
igat
ion
\n
Potential credit losses from any given account, customer or portfolio are mit
igated us
ing a range of tools such as collateral,
\n
netting arrangements, credit insurance and credit derivat
ives, tak
ing into account expected volatil
ity and guarantees.
\n
The reliance that can be placed on these mit
igants
is carefully assessed in light of issues such as legal certainty and
\n
enforceabil
ity, market valuat
ion correlation and counterparty risk of the guarantor.
\n
Collateral (audited)
\n
A secured loan is one where the borrower pledges an asset as collateral of which the Group is able to take possession in the
\n
event that the borrower defaults.
\n
The collateral values in the table below (which covers loans and advances to banks and customers, excluding those held at fair
\n
value through pro\ufb01t or loss) are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of
\n
over-collateralisat
ion. The extent of over-collateral
isat
ion has been determ
ined with reference to both the drawn and undrawn
\n
components of exposure as this best re\ufb02ects the effect of collateral and other credit enhancements on the amounts aris
ing
\n
from ECL. The value of collateral re\ufb02ects management\u2019s best estimate and is backtested against our prior experience.
\n
Collateral held on loans and advances
\n
The table below details collateral held against exposures, separately disclos
ing stage 2 and stage 3 exposure and
\n
corresponding collateral.
\n\n \n
2024
Net amount outstanding
Collateral
Net exposure
Credit-
Credit-
Credit-
Stage 2
impa
ired
Stage 2
impa
ired
Stage 2
impa
ired
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
\ufb01nancial
Total
assets
assets (S3)
Total
2
assets
assets (S3)
Total
assets
assets (S3)
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment Banking
1
181,897
8,657
1,376
36,750
3,052
298
145,147
5,605
1,078
Wealth & Retail Banking
119,248
1,758
858
85,163
891
584
34,085
867
274
Ventures
1,389
25
1
\u2013
\u2013
\u2013
1,389
25
1
Central & other items
22,091
35
98
80
35
\u2013
22,011
\u2013
98
Total
324,625
10,475
2,333
121,993
3,978
882
202,632
6,497
1,451
2023
Corporate &
Investment Banking
1
175,382
8,175
2,046
36,458
2,972
623
138,924
5,203
1,423
Wealth & Retail Banking
126,059
2,163
724
86,827
1,136
554
39,232
1,027
170
Ventures
1,033
33
\u2013
\u2013
\u2013
\u2013
1,033
33
\u2013
Central & other items
29,478
964
209
2,475
964
\u2013
27,003
\u2013
209
Total
331,952
11,335
2,979
125,760
5,072
1,177
206,192
6,263
1,802
\n
1
Includes loans and advances to banks
\n
2
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
\n
Collateral \u2013 Corporate & Investment Banking (audited)
\n
Our underwrit
ing standards encourage tak
ing specif
ic charges on assets and we cons
istently seek high-quality, investment-
\n
grade collateral.
\n
Collateral taken for longer-term and sub-investment grade corporate loans increased to 49 per cent (31 December 2023:
\n
41 per cent).
\n
The unadjusted market value of collateral across all asset types, in respect of CIB, without adjust
ing for over collateral
isat
ion,
\n
increased to $383 bill
ion (31 December 2023: $290 b
ill
ion) predom
inantly due to an increase in reverse repos.
\n
88 per cent (31 December 2023: 83 per cent) of tangible collateral excluding reverse repurchase agreements and \ufb01nanc
ial
\n
guarantees held comprises physical assets with the remainder held in cash. Overall collateral remained broadly stable at
\n
$37 bill
ion (31 December 2023: $36 b
ill
ion).
\n
Non-tangible collateral, such as guarantees and standby letters of credit, is also held against corporate exposures, although the
\n
\ufb01nancial effect of th
is type of collateral is less sign
i\ufb01cant
in terms of recoveries. However, this is considered when determin
ing
\n
the loss given default and other credit-related factors. Collateral is also held against off-balance sheet exposures, includ
ing
\n
undrawn commitments and trade-related instruments.
\n\n
Corporate & Investment Banking
\n\n \n
2024
2023
Amortised cost
$mill
ion
$mill
ion
Maximum exposure
181,897
175,382
Property
8,504
9,339
Plant, machinery and other stock
935
933
Cash
1,973
2,985
Reverse repos
12,568
13,826
AA- to AA+
938
1,036
A- to A+
8,324
10,606
BBB- to BBB+
1,437
855
Lower than BBB-
95
169
Unrated
1,774
1,160
Financ
ial guarantees and
insurance
7,075
5,057
Commodit
ies
33
5
Ships and aircraft
5,662
4,313
Total value of collateral
1
36,750
36,458
Net exposure
145,147
138,924
\n
1
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
\n
Collateral \u2013 Wealth & Retail Banking (audited)
\n
In WRB, fully secured products remain stable at 85 per cent of the total portfolio (31 December 2023: 85 per cent).
\n
The following table presents an analysis of loans to ind
iv
iduals by product \u2013 split between fully secured, partially secured
\n
and unsecured.
\n\n \n
2024
2023
Fully
Partially
Fully
Partially
secured\u00b9
secured\u00b9
Unsecured
Total2
secured\u00b9
secured\u00b9
Unsecured
Total\u00b2
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Maximum exposure
101,264
536
17,448
119,248
106,914
505
18,640
126,059
Loans to ind
iv
iduals
Mortgages
76,696
\u2013
\u2013
76,696
82,943
\u2013
\u2013
82,943
CCPL
463
\u2013
16,343
16,806
375
\u2013
17,395
17,770
Auto
160
\u2013
\u2013
160
312
\u2013
\u2013
312
Secured wealth products
21,928
\u2013
\u2013
21,928
20,303
\u2013
\u2013
20,303
Other
2,017
536
1,105
3,658
2,981
505
1,245
4,731
Total collateral
2
85,163
86,827
Net exposure
3
34,085
39,232
Percentage of total loans
85%
0%
15%
85%
0%
15%
\n
1
Secured loans are fully secured if the fair value of the collateral is equal to or greater than the loan at the time of orig
inat
ion. All other secured loans are considered
\n
to be partly secure
\n
2
Collateral values are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of over-collateralisat
ion
\n
3 Amounts net of ECL
\n
Mortgage loan-to-value ratios by geography (audited)
\n
Loan-to-value (LTV) ratios measure the ratio of the current mortgage outstanding to the current fair value of the properties on
\n
which they are secured.
\n
For the majority of mortgage loans, the value of property held as secur
ity sign
i\ufb01cantly exceeds the pr
inc
ipal outstand
ing of the
\n
loan. The average LTV of the overall mortgage portfolio increased to 48.9 per cent (31 December 2023: 47.1 per cent) driven by
\n
a decrease in property prices and regulatory relaxations in a few key markets, includ
ing Hong Kong and Korea. Hong Kong,
\n
which represents 34.3 per cent of WRB mortgage portfolio, has an average LTV of 58.6 per cent (31 December 2023: 55.7 per
\n
cent). The increase in Hong Kong resident
ial mortgage LTV was due to a decrease
in property prices. However, 29 per cent of
\n
the Hong Kong mortgage exposure is backed by credit insurance and, specif
ically, 95 per cent of mortgage exposure w
ith LTV
\n
greater than 80 per cent is backed by credit insurance.
\n
Our other key markets continued to have low portfolio average LTVs (Korea and Singapore at 42.1 per cent and 42.5 per cent
\n
respectively). Korea average LTV increased by 1.7 per cent ( 31 December 2023: 40.4 per cent) was mainly due to government
\n
relaxations whereby highly regulated areas have eased up to accommodate customers with higher LTV.
\n\n
An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.
\n\n \n
2024
2023
1
Hong
Hong
Kong
Singapore
Korea
Other
Total
Kong
Singapore
Korea
Other
Total
%
%
%
%
%
%
%
%
%
%
Amortised cost
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Gross
Less than 50 per cent
40.9
52.7
64.1
50.2
51.3
44.9
50.9
69.5
51.0
54.9
50 per cent to 59 per cent
17.6
21.8
13.2
15.4
16.5
19.5
24.7
11.0
16.7
17.1
60 per cent to 69 per cent
12.7
15.6
13.5
17.0
14.3
9.7
15.2
9.7
16.3
11.9
70 per cent to 79 per cent
5.5
9.6
8.3
12.7
8.5
4.3
8.7
8.9
11.6
7.9
80 per cent to 89 per cent
5.1
0.1
0.8
4.1
2.9
7.3
0.5
0.6
3.6
3.3
90 per cent to 99 per cent
8.2
0.0
0.1
0.5
3.0
7.4
\u2013
0.1
0.4
2.5
100 per cent and greater
10.1
0.1
0.1
0.2
3.5
7.0
\u2013
0.1
0.4
2.4
Average portfolio loan-to-value
58.6
42.5
42.1
48.0
48.9
55.7
43.4
40.4
47.8
47.1
Loans to ind
iv
iduals \u2013
mortgages ($mill
ion)
31,506
13,756
13,703
17,731
76,696
32,935
15,292
17,157
17,559
82,943
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
Collateral and other credit enhancements possessed or called upon (audited)
\n
The Group obtains assets by taking possession of collateral or calling upon other credit enhancements (such as guarantees).
\n
Repossessed properties are sold in an orderly fashion. Where the proceeds are in excess of the outstanding loan balance, the
\n
excess is returned to the borrower.
\n
Certain equity securit
ies acqu
ired may be held by the Group for investment purposes and are classif
ied as fa
ir value through
\n
pro\ufb01t or loss, and the related loan written off. The carrying value of collateral possessed and held by the Group is $23.7 mill
ion
\n
(31 December 2023: $16.5 mill
ion).
\n\n \n
2024
2023
$mill
ion
$mill
ion
Property, plant and equipment
6.1
10.5
Guarantees
4.7
6.0
Other
12.9
\u2013
Total
23.7
16.5
\n
Other Credit Risk mit
igat
ion (audited)
\n
Other forms of Credit Risk mit
igat
ion are set out below.
\n
Credit default swaps
\n
The Group has entered into credit default swaps for portfolio management purposes, referencing loan assets with a notional
\n
value of $3.5 bill
ion (31 December 2023: $3.5 b
ill
ion). These cred
it default swaps are accounted for as \ufb01nanc
ial guarantees as per
\n
IFRS 9 as they will only reimburse the holder for an incurred loss on an underlying debt instrument. The Group continues to hold
\n
the underlying assets referenced in the credit default swaps and it continues to be exposed to related Credit Risk and Foreign
\n
Exchange Rate Risk on these assets.
\n
Credit linked notes
\n
The Group has issued credit linked notes for portfolio management purposes, referencing loan assets with a notional value of
\n
$18.6 bill
ion (31 December 2023: $22.5 b
ill
ion). The Group cont
inues to hold the underlying assets for which the credit linked notes
\n
provide mit
igat
ion. The credit linked notes of $2.0 bill
ion (31 December 2023: $2.1 b
ill
ion) are recogn
ised as a \ufb01nanc
ial l
iab
il
ity at
\n
amortised cost on the balance sheet and are adjusted, where appropriate, for reductions in expected future cash \ufb02ows with a
\n
corresponding credit impa
irment
in the income
statement.
\n
Derivat
ive \ufb01nancial
instruments
\n
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the
\n
counterparty through netting the sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions.
\n
These are also set out under the \u2018Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion\u2019 section (page 249).
\n
Off-balance sheet exposures
\n
For certain types of exposures, such as letters of credit and guarantees, the Group obtains collateral such as cash depending
\n
on internal Credit Risk assessments, as well as in the case of letters of credit holding legal title to the underlying assets should
\n
a default take place.
\n
Other portfolio analysis
\n
This section provides maturity analysis by credit quality by industry and industry and retail products analysis by key geography.
\n
Maturity analysis of loans and advances by client segment
\n
Loans and advances to the CIB segment remain predominantly short-term, with $91 bill
ion (31 December 2023: $91 b
ill
ion)
\n
maturing in less than one year. 91 per cent (31 December 2023: 98 per cent) of loans to banks mature in less than one year,
\n
as net exposures decreased to $44 bill
ion (31 December 2023: $45 b
ill
ion). Shorter matur
it
ies g
ive us the \ufb02exib
il
ity to respond
\n
promptly to events and rebalance or reduce our exposure to clients or sectors that are facing increased pressure or uncertainty.
\n
The WRB short-term book of one year or less, is stable at 27 per cent (31 December 2023: 26 per cent). The WRB long-term book
\n
of over \ufb01ve years also remained stable at 62 per cent (31 December 2023: 63 per cent).
\n\n\n \n
2024
2023
One year
One to
Over
One year
One to
Over
or less
\ufb01ve years
\ufb01ve years
Total
or less
\ufb01ve years
\ufb01ve years
Total
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate & Investment Banking
91,065
33,130
17,670
141,865
90,728
30,746
12,822
134,296
Wealth & Retail Banking
32,252
13,194
75,091
120,537
33,397
13,711
80,166
127,274
Ventures
1,001
442
\u2013
1,443
747
334
\u2013
1,081
Central & other items
22,085
2
4
22,091
29,448
43
3
29,494
Gross loans and advances to customers
146,403
46,768
92,765
285,936
154,320
44,834
92,991
292,145
Impairment provis
ions
(4,369)
(409)
(126)
(4,904)
(4,872)
(185)
(113)
(5,170)
Net loans and advances to customers
142,034
46,359
92,639
281,032
149,448
44,649
92,878
286,975
Net loans and advances to banks
39,591
3,699
303
43,593
43,955
1,021
1
44,977
\n
Credit quality by industry
\n
Loans and advances
\n
This section provides an analysis of the Group\u2019s amortised cost portfolio by industry on a gross, total credit impa
irment and
\n
net basis.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
ment
amount
balance
ment
amount
balance
ment
amount
balance
ment
amount
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
12,147
(9)
12,138
468
(57)
411
870
(559)
311
13,485
(625)
12,860
Manufacturing
19,942
(12)
19,930
840
(16)
824
418
(305)
113
21,200
(333)
20,867
Financ
ing,
insurance and
non-banking
34,452
(16)
34,436
1,238
(6)
1,232
154
(142)
12
35,844
(164)
35,680
Transport, telecom
and util
it
ies
16,099
(11)
16,088
2,309
(32)
2,277
330
(85)
245
18,738
(128)
18,610
Food and
household
products
8,425
(8)
8,417
267
(8)
259
251
(198)
53
8,943
(214)
8,729
Commercial
real estate
12,135
(10)
12,125
1,714
(126)
1,588
1,485
(1,265)
220
15,334
(1,401)
13,933
Min
ing and
quarrying
5,542
(3)
5,539
287
(12)
275
124
(57)
67
5,953
(72)
5,881
Consumer
durables
5,988
(6)
5,982
218
(26)
192
292
(259)
33
6,498
(291)
6,207
Construction
1,925
(2)
1,923
528
(5)
523
171
(160)
11
2,624
(167)
2,457
Trading
companies &
distr
ibutors
589
\u2013
589
24
(1)
23
88
(48)
40
701
(49)
652
Government
28,870
\u2013
28,870
441
(12)
429
205
(18)
187
29,516
(30)
29,486
Other
4,590
(3)
4,587
344
(2)
342
186
(82)
104
5,120
(87)
5,033
Total
150,704
(80) 150,624
8,678
(303)
8,375
4,574
(3,178)
1,396
163,956
(3,561) 160,395
Retail Products:
Mortgage
75,340
(8)
75,332
896
(2)
894
606
(136)
470
76,842
(146)
76,696
Credit Cards
8,037
(121)
7,916
222
(80)
142
71
(60)
11
8,330
(261)
8,069
Personal Loan
and other
unsecured lending
10,021
(228)
9,793
238
(53)
185
279
(131)
148
10,538
(412)
10,126
Auto
159
\u2013
159
1
\u2013
1
\u2013
\u2013
\u2013
160
\u2013
160
Secured wealth
products
21,404
(37)
21,367
402
(6)
396
518
(353)
165
22,324
(396)
21,928
Other
3,437
(9)
3,428
194
(29)
165
155
(90)
65
3,786
(128)
3,658
Total
118,398
(403)
117,995
1,953
(170)
1,783
1,629
(770)
859
121,980
(1,343) 120,637
Net carrying value
(customers)\u00b9
269,102
(483) 268,619
10,631
(473)
10,158
6,203
(3,948)
2,255
285,936
(4,904) 281,032
Net carrying
value (Banks)
1
43,208
(10)
43,198
318
(1)
317
83
(5)
78
43,609
(16)
43,593
\n
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $9,660 mill
ion for customers and $2,946 m
ill
ion for Banks.
\n\n\n \n
2023
Stage 1
Stage 2
Stage 3
Total
Total
Total
Total
Total
credit
Net
credit
Net
credit
Net
credit
Net
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
Gross
impa
ir-
carrying
balance
ment
amount
balance
ment
amount
balance
ment
amount
balance
ment
amount
Amortised cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
9,397
(8)
9,389
672
(22)
650
949
(535)
414
11,018
(565)
10,453
Manufacturing
21,239
(8)
21,231
708
(16)
692
656
(436)
220
22,603
(460)
22,143
Financ
ing,
insurance and
non-banking
31,633
(13)
31,620
571
(1)
570
80
(77)
3
32,284
(91)
32,193
Transport,
telecom and
util
it
ies
14,710
(8)
14,702
1,722
(36)
1,686
481
(178)
303
16,913
(222)
16,691
Food and
household
products
7,668
(15)
7,653
323
(7)
316
355
(262)
93
8,346
(284)
8,062
Commercial
real estate
12,261
(30)
12,231
1,848
(129)
1,719
1,712
(1,191)
521
15,821
(1,350)
14,471
Min
ing and
quarrying
5,995
(4)
5,991
220
(10)
210
151
(84)
67
6,366
(98)
6,268
Consumer
durables
5,815
(3)
5,812
300
(21)
279
329
(298)
31
6,444
(322)
6,122
Construction
2,230
(2)
2,228
502
(8)
494
358
(326)
32
3,090
(336)
2,754
Trading
companies &
distr
ibutors
581
\u2013
581
57
\u2013
57
107
(58)
49
745
(58)
687
Government
33,400
(6)
33,394
1,783
(5)
1,778
367
(33)
334
35,550
(44)
35,506
Other
4,262
(4)
4,258
161
(3)
158
187
(70)
117
4,610
(77)
4,533
Total
149,191
(101) 149,090
8,867
(258)
8,609
5,732
(3,548)
2,184
163,790
(3,907)
159,883
Retail Products:
Mortgage
81,210
(8)
81,202
1,350
(5)
1,345
519
(123)
396
83,079
(136)
82,943
Credit Cards
7,633
(104)
7,529
244
(65)
179
69
(50)
19
7,946
(219)
7,727
Personal Loan
and other
unsecured lending
10,867
(188)
10,679
324
(77)
247
315
(165)
150
11,506
(430)
11,076
Auto
310
\u2013
310
1
\u2013
1
1
\u2013
1
312
\u2013
312
Secured wealth
products
19,923
(22)
19,901
278
(10)
268
474
(340)
134
20,675
(372)
20,303
Other
4,558
(7)
4,551
161
(5)
156
118
(94)
24
4,837
(106)
4,731
Total
124,501
(329)
124,172
2,358
(162)
2,196
1,496
(772)
724
128,355
(1,263)
127,092
Net carrying value
(customers)\u00b9
273,692
(430) 273,262
11,225
(420)
10,805
7,228
(4,320)
2,908
292,145
(5,170) 286,975
Net carrying
value (Banks)
1
44,384
(8)
44,376
540
(10)
530
77
(6)
71
45,001
(24)
44,977
\n
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $13,996 mill
ion for customers and $1,738 m
ill
ion for Banks.
\n
Industry and Retail Products analysis of loans and advances by key geography
\n
This section provides an analysis of the Group\u2019s amortised cost loan portfolio, net of provis
ions, by
industry and geography.
\n
The Manufacturing sector group is spread across a diverse range of industr
ies,
includ
ing automob
iles and components, capital
\n
goods, pharmaceuticals, biotech and life sciences, technology hardware and equipment, chemicals, paper products and
\n
packaging, with lending spread over 3,251 clients.
\n\n
Corporate & Investment Banking
\n\n \n
2024
2023
1
Hong
Singa-
Hong
Singa-
Kong
China
pore
UK
US
Other
Total
Kong
China
pore
UK
US
Other
Total
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Energy
2,200
59
1,552
1,744
1,750
5,551
12,856
3,118
42
1,162
1,341
3,638
1,130
10,431
Manufacturing
4,077
4,200
1,463
389
2,307
8,431
20,867
3,570
4,309
1,666
694
2,921
8,982
22,142
Financ
ing,
insurance
and non-banking
3,674
3,486
1,893
4,005
9,900 12,696
35,654
3,700
3,570
1,708
1,724
6,627
14,864
32,193
Transport, telecom
and util
it
ies
5,131
662
3,106
1,084
936
7,685
18,604
4,634
429
2,499
1,030
630
7,470
16,692
Food and household
products
1,038
428
1,414
962
685
4,202
8,729
541
519
911
816
664
4,611
8,062
Commercial
Real estate
4,512
334
1,404
1,039
1,650
4,994
13,933
3,895
588
1,125
1,436
1,236
6,192
14,472
Min
ing and Quarry
ing
608
606
847
1,426
224
2,170
5,881
1,028
735
427
1,729
279
2,071
6,269
Consumer durables
2,780
293
466
84
537
2,046
6,206
3,030
244
180
177
483
2,008
6,122
Construction
318
156
372
96
247
1,268
2,457
176
163
319
137
389
1,569
2,753
Trading Companies &
Distr
ibutors
95
103
106
31
40
277
652
119
75
121
31
20
321
687
Government
2,576
117
219
169
4
4,352
7,437
1,445
1
547
236
6
3,814
6,049
Other
1,419
563
786
377
233
1,650
5,028
1,676
265
646
257
264
1,425
4,533
Net Loans and
advances to
Customers
28,428
11,007
13,628
11,406
18,513 55,322 138,304
26,932
10,940
11,311
9,608
17,157 54,457 130,405
Net Loans and
advances to Banks
16,727
2,443
7,721
4,103
2,766
9,833
43,593
17,457
1,996
8,994
3,868
2,544
10,119
44,978
\n
Wealth & Retail Banking
\n\n \n
2024
2023
1
Hong
Hong
Kong
Korea
Singapore
Other
Total
Kong
Korea
Singapore
Other
Total
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Retail Products:
Mortgages
31,506
13,703
13,756
17,731
76,696
32,935
17,157
15,292
17,559
82,943
Credit Cards
3,447
38
1,679
1,517
6,681
3,325
114
1,705
1,549
6,693
Personal Loans and other
unsecured lending
1,057
2,796
301
5,972
10,126
950
3,230
220
6,676
11,076
Auto
\u2013
\u2013
122
38
160
\u2013
\u2013
240
72
312
Secured wealth products
5,229
24
10,793
5,882
21,928
5,164
33
9,388
5,718
20,303
Other Retail
579
2,153
72
853
3,657
644
3,149
82
856
4,731
Net Loans and advances
to Customers
41,818
18,714
26,723
31,993
119,248
43,018
23,683
26,927
32,430
126,058
\n
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
\n
reported balances.
\n
High carbon sectors
\n
Sectors are ident
i\ufb01ed and grouped as per the Internat
ional Standard Industrial Classif
icat
ion (ISIC) system and exposure
\n
numbers have been updated to include all in-scope ISIC codes used for target setting among the high carbon sectors.
\n
The maximum exposures shown in the table include loans and advances to customers at amortised cost, Fair Value through
\n
pro\ufb01t or loss, and committed facil
it
ies available as per IFRS 9 \u2013 Financ
ial Instruments
in $mill
ion.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n
Maximum exposure
\n\n \n
2024
Maximum
on Balance
Sheet
Net On
Undrawn
Financ
ial
Net Off
Total On &
Exposure
Balance
Commitments
Guarantees
Balance
Off Balance
(net of credit
Sheet
(net of credit
(net of credit
Sheet
Sheet Net
impa
irment)
Collateral
Exposure
impa
irment)
impa
irment)
Exposure
Exposure
Amortised Cost
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Industry:
Automotive manufacturers
3,881
69
3,812
3,331
605
3,936
7,748
Aviat
ion
1,829
960
869
842
928
1,770
2,639
Steel
1,526
316
1,210
816
325
1,141
2,351
Coal Min
ing
25
\u2013
25
\u2013
\u2013
\u2013
25
Alumin
ium
1,341
32
1,309
354
53
407
1,716
Cement
709
55
654
637
267
904
1,558
Shipp
ing
7,038
5,037
2,001
2,176
397
2,573
4,574
Commercial Real Estate
7,635
3,400
4,235
2,758
684
3,442
7,677
Oil & Gas
7,421
988
6,433
7,928
7,079
15,007
21,440
Power
6,341
1,500
4,841
4,538
1,124
5,662
10,503
Total\u00b9
37,746
12,357
25,389
23,380
11,462
34,842
60,231
Total Corporate & Investment Banking2
196,823
32,152
164,671
118,106
81,132
199,238
363,909
Total Group\u00b3
420,117
121,993
298,124
193,115
90,602
283,717
581,841
2023
Industry:
Automotive manufacturers
3,564
65
3,499
3,791
538
4,329
7,828
Aviat
ion
1,330
974
356
944
615
1,559
1,915
Steel
1,596
193
1,403
601
358
959
2,362
Coal Min
ing
29
9
20
51
99
150
170
Alumin
ium
526
9
517
338
188
526
1,043
Cement
671
47
624
769
259
1,028
1,652
Shipp
ing
5,964
3,557
2,407
2,261
291
2,552
4,959
Commercial Real Estate
7,498
3,383
4,115
1,587
112
1,699
5,814
Oil & Gas
6,278
894
5,384
7,845
6,944
14,789
20,173
Power
5,411
1,231
4,180
3,982
732
4,714
8,894
Total
1
32,867
10,362
22,505
22,169
10,136
32,305
54,810
Total Corporate & Investment Banking2
188,903
32,744
156,159
104,437
63,183
167,620
323,779
Total Group\u00b3
423,276
125,760
297,516
182,299
74,278
256,577
554,093
\n
1
Maximum on balance sheet exposure includes FVTPL amount of High Carbon sector is $749 mill
ion (31 December 2023: $125 m
ill
ion)
\n
2
Includes on balance sheet FVTPL amount of $58,519 mill
ion (31 December 2023: $58,498 m
ill
ion) for Corporate & Investment Bank
ing loans to customers
\n
3
Total Group includes net loans and advances to banks and net loans and advances to customers held at amortised cost of $43,593 mill
ion (31 December 2023:
\n
$44,977 mill
ion) and $281,032 m
ill
ion (31 December 2023: $286,975 m
ill
ion) respect
ively and loans to banks and loans and advances to customers held at FVTPL
\n
of $36,967 mill
ion (31 December 2023: $32,813 m
ill
ion) and $58, 525
mill
ion (31 December 2023: $58,511 m
ill
ion) respect
ively. Refer to credit quality table
\n
Maturity and ECL for high-carbon sectors
\n\n \n
2024
2023
Loans and
Maturity Buckets
1
Loans and
Maturity Buckets
1
advances
advances
(Drawn
Less than
More than
More than
Expected
(Drawn
Less than
More than
More than
Expected
funding)
1 year
1 to 5 years
5 years
Credit Loss
funding)
1 year
1 to 5 years
5 years
Credit Loss
Sector
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Automotive Manufacturers
3,883
3,458
369
56
2
3,566
3,106
460
\u2013
2
Aviat
ion
1,833
231
404
1,198
4
1,339
149
145
1,045
9
Cement
724
356
368
\u2013
15
719
512
189
18
48
Coal Min
ing
38
25
13
\u2013
13
42
9
33
\u2013
13
Steel
1,598
941
133
524
72
1,649
1,258
185
206
53
Alumin
ium
1,352
1,089
177
86
11
537
442
63
32
11
Oil & Gas
7,580
2,601
2,407
2,572
159
6,444
2,980
1,576
1,888
166
Power
6,401
1,700
1,404
3,297
60
5,516
1,933
1,533
2,050
105
Shipp
ing
7,053
1,035
2,450
3,568
15
5,971
1,051
2,568
2,352
7
Commercial Real Estate
7,773
3,880
3,680
213
138
7,664
3,722
3,935
7
166
Total balance
1
38,235
15,316
11,405
11,514
489
33,447
15,162
10,687
7,598
580
\n
1
Gross of credit impa
irment
\n\n
Sectors of interest
\n
Commercial Real Estate
\n\n \n
2024
Maximum on
Balance Sheet
Undrawn
Financ
ial
Exposure (net
Net On
Commitments
Guarantees
Net Off
Total On & Off
of credit
Balance Sheet
(net of credit
(net of credit
Balance Sheet
Balance Sheet
impa
irment)
1
Collateral
Exposure
impa
irment)
impa
irment)
Exposure
Net Exposure
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Commercial Real Estate
14,037
5,947
8,090
4,932
670
5,602
13,692
2023
Commercial Real Estate
14,533
6,363
8,170
4,658
311
4,969
13,139
\n
1
Includes net loans and advances of $13,933 mill
ion (31 December 2023: $14,471 m
ill
ion) as deta
iled in the table below
\n
Analysis of credit quality of loans and advances of Commercial Real Estate
\n\n \n
2024
2023
Gross
Gross
Amortised costs
$mill
ion
$mill
ion
Strong
7,222
7,326
Satisfactory
6,515
6,751
Higher risk
112
32
Credit impa
ired (stage 3)
1,485
1,712
Total Gross Balance
15,334
15,821
Strong
(83)
(20)
Satisfactory
(44)
(139)
Higher risk
(9)
\u2013
Credit impa
ired (stage 3)
(1,265)
(1,191)
Total Credit Impairment
(1,401)
(1,350)
Total Net of Credit Impairment
13,933
14,471
Strong
1.1%
0.3%
Satisfactory
0.7%
2.1%
Higher risk
8.0%
0.0%
Credit impa
ired (stage 3)
85.1%
69.6%
Cover Ratio
9.1%
8.5%
\n
An analysis of the net CRE loans and advances by key geography, is set out on page 232.
\n
China commercial real estate
\n
The table below represents the on and off-balance sheet items that are exposed to China CRE by credit quality.
\n
Further details can be found in the \u2018Summary of Credit Risk performance\u2019 section on
page 207
.
\n\n \n
2024
2023
Rest of
Rest of
China
Hong Kong
Group
1
Total
China
Hong Kong
Group
1
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Loans to customers
324
1,598
\u2013
1,922
584
1,821
39
2,444
Off balance sheet
1
40
\u2013
41
42
82
\u2013
124
Total as at 31 December
325
1,638
\u2013
1,963
626
1,903
39
2,568
Loans to customers \u2013 By Credit quality
Gross
Strong
\u2013
12
\u2013
12
33
\u2013
\u2013
33
Satisfactory
172
338
\u2013
510
339
619
39
997
Higher risk
12
42
\u2013
54
8
\u2013
\u2013
8
Credit impa
ired (stage 3)
140
1,206
\u2013
1,346
204
1,202
\u2013
1,406
Total as at 31 December
324
1,598
\u2013
1,922
584
1,821
39
2,444
Loans to customers \u2013 ECL
Strong
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Satisfactory
(2)
(73)
\u2013
(75)
(3)
(134)
(12)
(149)
Higher risk
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
Credit impa
ired (stage 3)
(63)
(1,111)
\u2013
(1,174)
(70)
(941)
\u2013
(1,011)
Total as at 31 December
(65)
(1,185)
\u2013
(1,250)
(73)
(1,075)
(12)
(1,160)
\n
1
Rest of Group mainly includes Singapore
\n\n
Debt securit
ies and other el
ig
ible b
ills (audited)
\n
This section provides further detail on gross debt securit
ies and treasury b
ills.
\n
The credit quality descript
ions
in the table below align to those used for CIB and Central and other items, as described on
\n
page 212. Debt securit
ies held that have a short-term external rat
ing are reported against the long-term rating of the issuer.
\n
For securit
ies that are unrated, the Group appl
ies an internal credit rating, as described under the \u2018Credit rating and
\n
measurement\u2019 section on page 201.
\n
Total gross debt securit
ies and other el
ig
ible b
ills decreased by $16.8 bill
ion to $144 b
ill
ion (31 December 2023: $160 b
ill
ion) due
\n
to maturity of exposures, primar
ily
in stage 1.
\n
Stage 1 gross balance decreased by $16.5 bill
ion to $142 b
ill
ion (31 December 2023: $158 b
ill
ion), ma
inly due to the maturity of
\n
exposures in Hong Kong.
\n
Stage 2 gross balance decreased by $0.2 bill
ion to $1.6 b
ill
ion (31 December 2023: $1.9 b
ill
ion).
\n
Stage 3 gross balance was broadly stable at $0.1 bill
ion (31 December 2023: $0.2 b
ill
ion).
\n\n \n
2024
2023
Gross
ECL
Net
2
Gross
ECL
Net
2
Amortised cost and FVOCI
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1
141,862
(23)
141,839
158,314
(26)
158,288
\u2013 Strong
138,353
(19)
138,334
155,568
(23)
155,545
\u2013 Satisfactory
3,509
(4)
3,505
2,746
(3)
2,743
Stage 2
1,614
(4)
1,610
1,860
(34)
1,826
\u2013 Strong
562
\u2013
562
917
(3)
914
\u2013 Satisfactory
31
\u2013
31
50
(1)
49
\u2013 High Risk
1,021
(4)
1,017
893
(30)
863
Stage 3
103
(2)
101
164
(61)
103
Gross balance\u00b9
143,579
(29)
143,550
160,338
(121)
160,217
\n
1
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith Nil impa
irment (31 December 2023: $14 m
ill
ion)
\n
2
FVOCI instruments are not presented net of ECL on the balance sheet. While the presentation is on a net basis for the table, the total net on-balance sheet
\n
amount is $143,562 mill
ion (31\u00a0December 2023: $160,263 m
ill
ion). Refer to the Analys
is of \ufb01nanc
ial
instrument by stage table
\n\n
IFRS 9 ECL methodology (audited)
\n
Approach for determin
ing ECL
\n
Credit loss terminology
\n\n \n
Component
De\ufb01nit
ion
Probabil
ity of default (PD)
The probabil
ity that a counterparty w
ill default, over the next 12 months from the reporting
date (stage 1) or over the lifet
ime of the product (stage 2),
incorporating the impact of forward
looking economic assumptions that have an effect on Credit Risk, such as unemployment rates
and GDP forecasts. The PD estimates will \ufb02uctuate in line with the economic cycle. The lifet
ime
(or term structure) PDs are based on statist
ical models, cal
ibrated using histor
ical data and
adjusted to incorporate forward-looking economic assumptions.
Loss given default (LGD)
The loss that is expected to arise on default, incorporating the impact of forward-looking
economic assumptions where relevant, which represents the difference between the
contractual cash\ufb02ows due and those that the bank expects to receive. The Group estimates
LGD based on the history of recovery rates and considers the recovery of any collateral that is
integral to the \ufb01nanc
ial asset, tak
ing into account forward-looking economic assumptions
where relevant.
Exposure at default (EAD)
The expected balance sheet exposure at the time of default, taking into account expected
changes over the lifet
ime of the exposure. Th
is incorporates the impact of drawdowns of
facil
it
ies with lim
its, repayments of pr
inc
ipal and
interest, and amortisat
ion.
\n
To determine the ECL, these components are multipl
ied
\n
together: PD for the reference period (up to 12 months or
\n
lifet
ime) x LGD x EAD and d
iscounted to the balance sheet
\n
date using the effective interest rate as the discount rate.
\n
IFRS 9 ECL models have been developed for the CIB businesses
\n
on a global basis, in line with their respective portfolios.
\n
However, for some of the key countries, country-specif
ic
\n
models have also been developed.
\n
The calibrat
ion of forward-look
ing informat
ion
is assessed
\n
at a country or region level to take into account local
\n
macroeconomic condit
ions.
\n
Retail ECL models are country and product specif
ic, g
iven the
\n
local nature of the WRB business.
\n
For less material retail portfolios, the Group has adopted less
\n
sophist
icated approaches based on h
istor
ical roll rates or
\n
loss rates:
\n
\u2022
For medium-sized retail portfolios, a roll rate model is
\n
applied, which uses a matrix that gives the average loan
\n
migrat
ion rate between del
inquency states from period
\n
to period. A matrix multipl
icat
ion is then performed to
\n
generate the \ufb01nal PDs by delinquency bucket over different
\n
time horizons.
\n
\u2022
For smaller retail portfolios, a loss rate approach is applied.
\n
These use an adjusted gross charge-off rate, developed
\n
using monthly write-off and recoveries over the preceding
\n
12 months and total outstanding balances.
\n
\u2022
While the loss rate approaches do not incorporate
\n
forward looking informat
ion, to the extent that there are
\n
sign
i\ufb01cant changes
in the macroeconomic forecasts an
\n
assessment will be completed on whether an adjustment
\n
to the modelled output is required.
\n
For a lim
ited number of exposures, proxy parameters or
\n
approaches are used where the data is not available to
\n
calculate the orig
inat
ion PDs for the purpose of applying the
\n
SICR criter
ia; or for some reta
il portfolios where a full history
\n
of LGD data is not available, estimates based on the loss
\n
experience from sim
ilar portfol
ios are used. The use of proxies
\n
is monitored and will reduce over time.
\n
The following processes are in place to assess the ongoing
\n
performance of the models:
\n
\u2022
Quarterly model monitor
ing that uses recent data to
\n
compare the differences between model predict
ions and
\n
actual outcomes against approved thresholds.
\n
\u2022
Annual independent validat
ion
is performed by Group
\n
Model Validat
ion (GMV); Depth of GMV\u2019s val
idat
ion var
ies
\n
depending on the model material
ity. Mater
ial models
\n
would go through a full annual re-validat
ion process, wh
ile
\n
a less intens
ive val
idat
ion process w
ill be performed on
\n
non-material models.
\n
Applicat
ion of l
ifet
ime ECL
\n
ECL is estimated based on the period over which the Group
\n
is exposed to Credit Risk. For the major
ity of exposures th
is
\n
equates to the maximum contractual period. For retail credit
\n
cards and corporate overdraft facil
it
ies, however, the Group
\n
does not typically enforce the contractual period, which can
\n
be as short as one day. As a result, the period over which the
\n
Group is exposed to Credit Risk for these instruments re\ufb02ects
\n
their behavioural life, which incorporates expectations of
\n
customer behaviour and the extent to which Credit Risk
\n
management actions curtail the period of that exposure.
\n
The average behavioural life for retail credit cards is between
\n
3 and 6 years across our footprint markets.
\n
The behavioural life for corporate overdraft facil
it
ies was
\n
re-estimated from 24 months to 36 months. The impact of this
\n
change was not material.
\n\n
Composit
ion of cred
it impa
irment prov
is
ions (aud
ited)
\n
The table below summarises the key components of the Group\u2019s credit impa
irment prov
is
ion balances at 31 December 2024 and
\n
31 December 2023.
\n\n \n
2024
2023
Corporate &
Wealth &
Corporate &
Wealth &
Investment
Retail
Central &
Investment
Retail
Central &
Banking
Banking
Ventures
other items
Total
Banking
Banking
Ventures
other items
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
4
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
4
$mill
ion
Modelled ECL
provis
ions
(base forecast)
337
613
61
37
1,048
372
553
48
98
1,071
Impact of multiple
economic scenarios
1
24
19
\u2013
\u2013
43
20
18
\u2013
6
44
Modelled ECL
provis
ions before
management
judgements
361
632
61
37
1,091
392
571
48
104
1,115
Includes: Model
performance post
model adjustments
\u2013
14
\u2013
\u2013
14
(3)
(28)
\u2013
\u2013
(31)
Judgemental post
model adjustments
2
\u2013
(23)
\u2013
\u2013
(23)
\u2013
2
\u2013
\u2013
2
Management
overlays
3
\u2013 China commercial
real estate
70
\u2013
\u2013
\u2013
70
141
\u2013
\u2013
\u2013
141
\u2013 Other
109
27
7
\u2013
143
\u2013
5
\u2013
17
22
Total modelled
provis
ions
540
636
68
37
1,281
533
578
48
121
1,280
Of which:
Stage 1
133
392
30
34
589
151
325
15
68
559
Stage 2
362
151
27
1
541
318
140
21
49
528
Stage 3
45
93
11
2
151
64
113
12
4
193
Stage 3 non-modelled
provis
ions
3,267
665
\u2013
54
3,986
3,587
646
\u2013
88
4,321
Total credit
impa
irment prov
is
ions
3,807
1,301
68
91
5,267
4,120
1,224
48
209
5,601
\n
1
Includes upwards judgemental post-model adjustment of $28 mill
ion (31 December 2023: n
il)
\n
2
Excludes $28 mill
ion upwards judgemental post-model adjustment wh
ich is included in \u2018Impact of multiple economic scenarios\u2019
\n
3
$32 mill
ion (31 December 2023: $22 m
ill
ion)
is in stage 1, $181 mill
ion (31 December 2023: $141 m
ill
ion)
in stage 2 and $nil mill
ion (31 December 2023: n
il) in stage 3
\n
4
Includes ECL on cash and balances at central banks, accrued income, assets held for sale and other assets
\n
Model performance post model adjustments (PMAs)
\n
As part of model monitor
ing and
independent validat
ion processes, where a model\u2019s performance breaches the approved
\n
monitor
ing thresholds or val
idat
ion standards, an assessment
is performed to determine whether a model performance PMA
\n
is required to temporarily remediate the model issue. The process for the determinat
ion of PMAs
is set out in the \u2018Governance
\n
of PMAs and applicat
ion of expert cred
it judgement in respect of ECL\u2019 section on page 246.
\n
As at 31 December 2024, model performance PMAs have been applied for \ufb01ve models out of the total of 110 models.
\n
In aggregate, these PMAs increase the Group\u2019s impa
irment prov
is
ions by $14 m
ill
ion (1 per cent of modelled prov
is
ions)
\n
compared with a $31 mill
ion decrease at 31 December 2023. The reduct
ion was primar
ily due to the
implementat
ion of
\n
new models, thereby removing the need for PMAs on the old models.
\n
In addit
ion to these model performance PMAs, separate judgemental post model and management adjustments have also
\n
been applied as set out on page 241.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Model performance PMAs
Corporate & Investment Banking
\u2013
(3)
Wealth & Retail Banking
14
(28)
Total model performance PMAs
14
(31)
\n\n
Key assumptions and judgements in determin
ing ECL
\n
Incorporation of forward-looking informat
ion
\n
The evolving economic environment is a key determinant
\n
of the abil
ity of a bank\u2019s cl
ients to meet their obligat
ions as
\n
they fall due. It is a fundamental princ
iple of IFRS 9 that the
\n
provis
ions banks hold aga
inst potential future Credit Risk
\n
losses should depend, not just on the health of the economy
\n
today, but should also take into account potential changes
\n
to the economic environment. For example, if a bank were to
\n
antic
ipate a sharp slowdown
in the world economy over the
\n
coming year, it should hold more provis
ions today to absorb
\n
the credit losses likely to occur in the near future.
\n
To capture the effect of changes to the economic
\n
environment, the PDs and LGDs used to calculate ECL
\n
incorporate forward-looking informat
ion
in the form of
\n
forecasts of the values of economic variables and asset
\n
prices that are likely to have an effect on the repayment
\n
abil
ity of the Group\u2019s cl
ients.
\n
The \u2018base forecast\u2019 of the economic variables and asset prices
\n
is based on management\u2019s view of the \ufb01ve-year outlook,
\n
supported by projections from the Group\u2019s
in-house research
\n
team and outputs from a third-party model that project
\n
specif
ic econom
ic variables and asset prices. The research
\n
team takes consensus views into considerat
ion, and sen
ior
\n
management review project
ions for some core country
\n
variables against consensus when forming their view of the
\n
outlook. For the period beyond \ufb01ve years, management
\n
util
ises the
in-house research view and third-party model
\n
outputs, which allow for a reversion to long-term growth rates
\n
or norms. All projections are updated on a quarterly bas
is.
\n
Forecast of key macroeconomic variables underlying the ECL
\n
calculation and the impact on non-linear
ity
\n
In the Base Forecast \u2013 management\u2019s view of the most likely
\n
outcome \u2013 the pace of growth of the world economy is
\n
expected to remain broadly unchanged from 2024 at
\n
around 3 per cent in 2025. This compares to the average of
\n
3.7 per cent growth for the 10 years prior to COVID-19
\n
(between 2010 and 2019). Support from easing \ufb01nanc
ial
\n
condit
ions and expans
ionary \ufb01scal policy may be partly offset
\n
by protection
ist trade pol
ic
ies and st
ill-high interest rates in
\n
the US and elsewhere. The US economy is set to moderate
\n
in 2025, after a resil
ient 2024 performance desp
ite elevated
\n
interest rates. The euro area continues to struggle with major
\n
European economies includ
ing Germany and France who r
isk
\n
slipp
ing
into recession. Asia is relatively healthy, although
\n
growth at the regional level is set to moderate slightly in
\n
2025 as both China and India slow down. The Middle-East is
\n
expected also to remain a bright spot for global growth, with
\n
the region\u2019s non-oil growth exceeding overall global growth.
\n
The uncertainty around the economic outlook remains
\n
elevated. In particular, the change in US Presidency is
\n
expected to lead to sign
i\ufb01cant changes
in US polic
ies,
\n
includ
ing new and h
igher tariffs on key US trading partners.
\n
On the geopolit
ical front, tens
ions remain elevated over the
\n
con\ufb02ict in Ukraine and the situat
ion
in the Middle-East.
\n
While the quarterly Base Forecasts inform the Group\u2019s
\n
strategic plan, one key requirement of IFRS 9 is that the
\n
assessment of provis
ions should cons
ider multiple future
\n
economic environments. For example, the global economy
\n
may grow more quickly or more slowly than the Base Forecast,
\n
and these variat
ions would have d
ifferent impl
icat
ions for the
\n
provis
ions that the Group should hold today. As the negat
ive
\n
impact of an economic downturn on credit losses tends to
\n
be greater than the posit
ive
impact of an economic upturn,
\n
if the Group sets provis
ions only on the ECL under the Base
\n
Forecast it might mainta
in a level of prov
is
ions that does
\n
not appropriately capture the range of potential outcomes.
\n
To address the inherent uncertainty in economic forecast,
\n
and the property of skewness (or non-linear
ity), IFRS 9 requ
ires
\n
reported ECL to be a probabil
ity-we
ighted ECL, calculated
\n
over a range of possible outcomes.
\n
To assess the range of possible outcomes the Group simulates
\n
a set of 50 scenarios around the Base Forecast, calculates
\n
the ECL under each of them and assigns an equal weight of
\n
2 per cent to each scenario outcome. These scenarios are
\n
generated by a Monte Carlo simulat
ion, wh
ich addresses the
\n
challenges of crafting many realist
ic alternat
ive scenarios in
\n
the many countries in which the Group operates by means of
\n
a model, which produces these alternative scenarios while
\n
consider
ing the degree of h
istor
ical uncerta
inty (or volatil
ity)
\n
observed from Q1 1990 to Q3 2023 around economic
\n
outcomes, the trends in each macroeconomic variable
\n
modelled and the correlation in the unexplained movements
\n
around these trends. This naturally means that each of the
\n
50 scenarios do not have a specif
ic narrat
ive, although
\n
collectively they explore a range of hypothetical alternative
\n
outcomes for the global economy, includ
ing scenar
ios that
\n
turn out better than expected and scenarios that amplify
\n
antic
ipated stresses.
\n
The GDP graphs below illustrate the shape of the Base
\n
Forecast for key footprint markets in relation to prior periods\u2019
\n
actuals. The long-term growth rates are based on the pace
\n
of economic expansion expected for 2030. The tables below
\n
provide a summary of the Group\u2019s Base Forecast for these
\n
markets. The peak/trough amounts show the highest and
\n
lowest points with
in the Base Forecast.
\n
China\u2019s GDP growth is expected to ease slightly to 4.5 per cent
\n
in 2025 from 4.8 per cent in 2024. This re\ufb02ects persistent
\n
weakness in the property sector, though it is expected to
\n
moderate external headwinds and low consumer con\ufb01dence.
\n
Growth in India is also expected to ease with GDP expanding
\n
by 6.5 per cent from 6.9 per cent in 2024 as the impact from
\n
recent one-off factors such as construction activ
ity and
\n
electric
ity demand (am
id below normal rains) fade. GDP
\n
growth for Singapore is expected to slow to 2.4 per cent in
\n
2025 from 3.5 per cent last year. An uncertain global trade
\n
outlook will weigh on sentiment in trade-reliant economies.
\n
Recent economic activ
ity may have also been partly dr
iven
\n
by front-loading of orders of electronics ahead of potentially
\n
negative trade polic
ies
in 2025. Sim
ilarly, the uncerta
in
\n
external environment and likely trade protection
ist measures
\n
will lim
it the ups
ide to growth for both South Korea and Hong
\n
Kong which are expected to grow by 2.0 per cent and 2.9 per
\n
cent respectively in 2025.
China GDP
YoY%
Hong Kong GDP
YoY%
Korea GDP
YoY%
20
10
8
Actual
Forecast
Actual
Forecast
Actual
Forecast
8
7
16
6
6
5
4
12
4
2
3
8
Long-term growth
0
2
-2
Long-term growth
4
1
Long-term growth
-4
0
0
-6
-1
-8
-2
-4
-10
-3
-8
-12
-4
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Singapore GDP
YoY%
India GDP
YoY%
20
30
Actual
Actual
Forecast
Forecast
15
20
10
10
5
Long-term growth
0
Long-term growth
0
-10
-5
-20
-10
-15
-30
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
\n \n
2024 year-end forecasts
China
Hong Kong
3-month
3-month
GDP growth
Unemployment
interest rates
House prices
5
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY %)
(YoY %)
%
%
(YoY %)
Base forecast
1
2024
4.8
3.6
2.0
(3.7)
2.6
3.0
4.4
(11.1)
2025
4.5
3.5
1.7
(5.3)
2.9
3.1
2.5
1.8
2026
4.3
3.3
1.6
(3.2)
2.5
3.2
2.2
6.5
2027
4.1
3.2
1.6
(0.9)
2.1
3.2
2.4
4.8
2028
3.9
3.2
1.8
0.9
1.9
3.2
2.4
3.4
5-year average
2
4.1
3.3
1.7
(1.3)
2.2
3.1
2.4
3.8
Quarterly peak
5.3
3.5
1.9
2.3
3.5
3.2
2.9
6.8
Quarterly trough
3.2
3.1
1.6
(5.6)
1.5
3.0
2.1
(2.6)
Monte Carlo
Low
3
(1.0)
2.8
0.6
(10.1)
(1.8)
1.8
0.3
(13.1)
High
4
9.3
3.7
3.0
7.8
5.8
5.1
5.3
22.2
\n \n
2024 year-end forecasts
Singapore
Korea
3-month
3-month
GDP growth
Unemployment
6
interest rates
House prices
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY %)
Base forecast
1
2024
3.5
2.9
3.6
4.3
2.5
2.8
3.6
(0.4)
2025
2.4
2.7
1.9
0.4
2.0
2.8
3.0
4.3
2026
2.1
2.7
1.9
2.2
2.2
2.8
2.9
3.4
2027
2.2
2.7
2.0
3.0
2.1
2.8
2.9
2.4
2028
2.4
2.7
2.0
3.1
1.9
2.8
2.9
2.1
5-year average
2
2.3
2.7
2.0
2.4
2.0
2.8
2.9
2.8
Quarterly peak
3.4
2.8
2.4
3.2
2.2
2.9
3.2
4.8
Quarterly trough
0.6
2.7
1.6
(0.4)
1.5
2.8
2.9
1.9
Monte Carlo
Low
3
(2.7)
2.0
0.3
(10.5)
(1.3)
2.2
0.8
(4.3)
High
4
7.0
3.6
3.9
17.5
5.2
3.5
5.7
9.8
240
Standard Chartered
\u2013 Annual Report 2024
\n
Risk review
Risk pro\ufb01le
\n\n \n
2024 year-end forecasts
India
3-month
GDP growth
Unemployment
7
interest rates
House prices
Brent Crude
(YoY%)
%
%
(YoY%)
$ pb
Base forecast
1
2024
6.9
NA
6.4
6.3
78.3
2025
6.5
NA
6.1
6.5
77.1
2026
6.5
NA
6.0
6.4
76.4
2027
6.6
NA
6.0
6.4
77.3
2028
6.6
NA
6.0
6.3
75.3
5-year average
2
6.6
NA
6.0
6.4
76.2
Quarterly peak
7.1
NA
6.2
7.3
77.8
Quarterly trough
5.9
NA
6.0
6.0
74.8
Monte Carlo
Low
3
3.2
NA
1.9
(0.1)
44.5
High
4
10.0
NA
10.3
12.6
107.8
\n\n \n
2023 year-end forecasts
China
Hong Kong
3-month
3-month
GDP growth
Unemployment
interest rates
House prices
5
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY%)
5-year average
2
4.3
4.0
2.1
4.6
2.5
3.4
3.4
2.8
Quarterly peak
5.7
4.1
2.5
7.2
3.8
3.4
5.0
4.6
Quarterly trough
3.8
3.8
1.7
1.5
1.5
3.4
2.3
(1.1)
Monte Carlo
Low
3
0.6
3.3
0.8
(1.5)
(3.8)
1.4
0.3
(19.3)
High
4
7.7
4.4
3.8
12.0
8.2
6.4
8.3
25.5
\n\n \n
2023 year-end forecasts
Singapore
Korea
3-month
3-month
GDP growth
Unemployment
6
interest rates
House prices
GDP growth
Unemployment
interest rates
House prices
(YoY%)
%
%
(YoY%)
(YoY%)
%
%
(YoY%)
5-year average
2
2.9
2.8
2.9
2.2
2.3
3.1
3.1
3.3
Quarterly peak
3.8
2.9
4.1
3.9
2.6
3.5
3.7
5.3
Quarterly trough
1.9
2.8
2.3
(0.7)
2.0
3.0
3.1
(0.3)
Monte Carlo
Low
3
(2.4)
1.7
0.6
(16.2)
(2.3)
1.4
0.7
(6.1)
High
4
8.5
3.8
5.9
19.2
7.0
5.8
6.3
12.5
\n\n \n
2023 year-end forecasts
India
3-month
GDP growth
Unemployment
interest rates
House prices
Brent crude
(YoY%)
%
%
(YoY%)
$ pb
5-year average
2
6.2
NA
6.2
6.1
88.2
Quarterly peak
9.1
NA
6.3
6.5
93.8
Quarterly trough
4.4
NA
5.8
4.7
82.8
Monte Carlo
Low
3
2.1
NA
2.7
(0.5)
46.0
High
4
10.5
NA
9.9
13.8
137.8
\n
1
Data presented are those used in the calculation of ECL and presented as average growth for the year. These may differ slightly to forecasts presented elsewhere
\n
in the Annual Report as they are \ufb01nal
ised before the per
iod end
\n
2
5 year averages covering 20 quarters from Q1 2025 to Q4 2029 for the 2024 annual report. They cover Q1 2024 to Q4 2028 for the numbers reported for the 2023
\n
annual report
\n
3
Represents the 10th percentile in the range of economic scenarios used to determine non-linear
ity
\n
4
Represents the 90th percentile in the range of economic scenarios used to determine non-linear
ity
\n
5
A judgemental management adjustment is held in respect of the China commercial real estate sector, as discussed on page 241
\n
6
Singapore unemployment rate covers the resident unemployment rate, which refers to cit
izens and permanent res
idents
\n
7
India unemployment is not available due to insuff
ic
ient data
\n\n
Impact of multiple economic scenarios
\n
The \ufb01nal probabil
ity we
ighted ECL reported by the Group is a simple average of the ECL for each of the 50 scenarios simulated
\n
using a Monte Carlo model. The Monte Carlo approach has the advantage that it generates many alternative scenarios that
\n
cover our global footprint. The range of scenarios is restricted through the use of ceil
ings and \ufb02oors appl
ied to the underlying
\n
macroeconomic variables. The current set of ceil
ings and \ufb02oors generated a relat
ively narrow range of forecasts at 31
\n
December 2024 and will be redeveloped in the \ufb01rst quarter of 2025.
\n
Prior to this, a $28 mill
ion non-l
inear
ity PMA has been appl
ied, $13 mill
ion for CIB and $15 m
ill
ion for WRB. The total amount of
\n
non-linear
ity has been est
imated by assign
ing probab
il
ity we
ights of 68 per cent, 22 per cent and 10 per cent respectively to
\n
the Base Forecast, \u2018Higher for Longer Commodit
ies and Rates\u2019, and \u2018Global Trade and Geopol
it
ical Tens
ions\u2019 scenarios which
\n
are presented on page 243 and comparing this to the unweighted Base Forecast ECL. The non-linear
ity PMA represents the
\n
difference between the probabil
ity we
ighted ECL calculated using the three scenarios and the probabil
ity we
ighted ECL
\n
calculated by the Monte Carlo model.
\n
The total amount of non-linear
ity
includ
ing the PMA
is $43 mill
ion (31 December 2023: $44 m
ill
ion). The CIB portfol
io accounted
\n
for $24 mill
ion (31 December 2023: $20 m
ill
ion) of the calculated non-l
inear
ity, w
ith the remain
ing $19 m
ill
ion (31 December 2023:
\n
$18 mill
ion) attr
ibutable to WRB portfolios.
\n
The impact of multiple economic scenarios on total modelled ECL is set out in the table below, together with the management
\n
overlay and other judgemental adjustments.
\n\n \n
Management
overlays
Multiple
and other
economic
judgemental
Total
Base forecast
scenarios
1
adjustments
modelled ECL
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Total modelled expected credit loss at 31 December 2024
1,048
43
190
1,281
Total modelled expected credit loss at 31 December 2023
1,071
44
165
1,280
\n
1
Includes an upwards judgemental PMA of $28 mill
ion (31 December 2023: n
il)
\n
2
Total modelled ECL comprises stage 1 and stage 2 balances of $1,130 mill
ion (31 December 2023: $1,105 m
ill
ion) and $151 m
ill
ion (31 December 2023: $193 m
ill
ion) of
\n
modelled ECL on stage 3 loans
\n
The average ECL under multiple scenarios is 4 per cent (31 December 2023: 4 per cent) higher than the ECL calculated using
\n
only the most likely scenario (the Base Forecast). Portfolios that are more sensit
ive to non-l
inear
ity
include those with greater
\n
leverage and/or a longer tenor, such as Project and Shipp
ing F
inance portfolios. Other portfolios display min
imal non-l
inear
ity
\n
owing to lim
ited respons
iveness to macroeconomic impacts for structural reasons, such as sign
i\ufb01cant collateral
isat
ion as w
ith
\n
the WRB mortgage portfolios.
\n
Judgemental adjustments
\n
As at 31 December 2024, the Group held judgemental adjustments for ECL as set out in the table below. All of the judgemental
\n
adjustments have been determined after taking account of the model performance PMAs reported on page 237. They are
\n
reassessed quarterly and are reviewed and approved by the IFRS 9 Impairment Committee (IIC) and will be released when no
\n
longer relevant.
\n\n \n
Corporate &
Wealth & Retail Banking
Investment
Credit
Central &
Banking
Mortgages
Cards
Other
Total
Ventures
other
Total
31 December 2024
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Judgemental post model adjustments
13
\u2013
9
(17)
(8)
\u2013
\u2013
5
Judgemental management overlays:
\u2013 China CRE
70
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
70
\u2013 Other
109
\u2013
5
22
27
7
\u2013
143
Total judgemental adjustments
192
\u2013
14
5
19
7
\u2013
218
Judgemental adjustments by stage:
Stage 1
27
\u2013
10
(11)
(1)
4
-
30
Stage 2
165
\u2013
5
25
30
3
\u2013
198
Stage 3
\u2013
\u2013
(1)
(9)
(10)
\u2013
\u2013
(10)
31 December 2023
Judgemental post model adjustments
\u2013
\u2013
1
1
2
\u2013
\u2013
2
Judgemental management overlays:
\u2013 China CRE
141
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
141
\u2013 Other
\u2013
1
2
2
5
\u2013
17
22
Total judgemental adjustments
141
1
3
3
7
\u2013
17
165
Judgemental adjustments by stage:
Stage 1
17
1
3
6
10
\u2013
\u2013
27
Stage 2
124
\u2013
\u2013
(3)
(3)
\u2013
17
138
Stage 3
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\n\n
Judgemental PMAs
\n
As at 31 December 2024, judgemental PMAs to increase ECL
\n
by a net $5 mill
ion (31 December 2023: $2 m
ill
ion
increase)
\n
have been applied. $28 mill
ion (31 December 2023: n
il) of
\n
the increase in ECL related to multiple economic scenarios,
\n
$13 mill
ion
in CIB and $15 mill
ion
in WRB (see \u2018Impact of
\n
multiple economic scenarios\u2019 section). This was partly offset
\n
by a reduction of ECL of $23 mill
ion for certa
in WRB models,
\n
primar
ily to adjust for temporary factors
impact
ing modelled
\n
outputs. These will be released when these factors normalise.
\n
Judgemental management overlays
\n
China CRE
\n
The real estate market in China has been in a downturn since
\n
late 2021, as evidenced by continued decline in sales, and
\n
investments in the sector. Liqu
id
ity issues experienced by
\n
Chinese property developers continued into 2023, with more
\n
developers defaulting on their obligat
ions both offshore and
\n
onshore. During 2023, authorit
ies on the ma
inland introduced
\n
a slew of polic
ies to help rev
ive the sector and restore buying
\n
sentiments. Relaxed monetary policy and \ufb01scal stimulus
\n
packages continued in 2024, which had assisted in arresting
\n
the drop in new home sales and stabil
is
ing new home sales in
\n
late 2024 to an extent in some cit
ies, but home pr
ices remain
\n
muted overall. Continued policy relaxations, includ
ing those
\n
related to house purchase restrict
ions, complet
ion support for
\n
elig
ible projects from onshore \ufb01nancial
inst
itut
ions, relaxation
\n
in mortgage rates, and further support for affordable housing,
\n
are key for reversing the continued decline in sales and
\n
investments and ensuring continued stabil
isat
ion in 2025.
\n
The Group\u2019s loans and advances to China CRE clients was
\n
$1.9 bill
ion at 31 December 2024 (31 December 2023: $2.4
\n
bill
ion). He
ightened risk management continues to be carried
\n
out, with a focus on managing upcoming maturit
ies through
\n
re\ufb01nancing and/or repayment. No new \ufb01nancing transact
ions
\n
were entered into, and total repayments amounted to around
\n
$500 mill
ion dur
ing 2024. Clients with exposure maturing
\n
with
in the next 12 months have been placed on purely
\n
precautionary or non-purely precautionary early alert, where
\n
appropriate, for closer monitor
ing. G
iven the evolving nature
\n
of the risks in the China CRE sector, a management overlay of
\n
$70 mill
ion (31 December 2023: $141 m
ill
ion) has been taken by
\n
estimat
ing the
impact of further deteriorat
ion to exposures
in
\n
this sector. The decrease from 31 December 2023 was primar
ily
\n
driven by repayments and util
isat
ion due to movement to
\n
stage 3.
\n
Other
\n
In CIB, addit
ional overlays of $109 m
ill
ion (31 December 2023:
\n
nil) have been taken, $58 mill
ion of wh
ich is in Hong Kong,
\n
with the remainder relating to Bangladesh and an immater
ial
\n
amount for climate risks. The overlay in Hong Kong re\ufb02ects
\n
subdued economic activ
ity and
increas
ing commerc
ial
\n
property vacancy rates, which contributes to an uncertain
\n
outlook that are not yet fully re\ufb02ected in the credit grades
\n
and modelled ECL. The risk of further impa
irment rema
ins as
\n
a result of subdued economic activ
ity
in the property sector
\n
and the related liqu
id
ity constraints faced by counterparties
\n
as a result. The overlay in Bangladesh re\ufb02ects the polit
ical
\n
situat
ion that has contr
ibuted to an increas
ing level of
\n
uncertainty in the macroeconomic outlook. The overlays for
\n
Hong Kong and Bangladesh have been determined by
\n
estimat
ing the
impact of a deteriorat
ion to certa
in exposures
\n
in these countries.
\n
In WRB, overlays of $27 mill
ion
includes $21 mill
ion
in Korea
\n
to cover the risks relating to the failure of two e-commerce
\n
payment platforms in 2024, increased bankruptcy trends
\n
in certain markets and an immater
ial adjustment for
\n
climate risks.
\n
Further details on the adjustment for Climate Risk are set out
\n
in Note 1 of the \u2018Notes to the \ufb01nanc
ial statements\u2019 sect
ion.
\n
Overlays held at 31 December 2023 of $5 mill
ion
in WRB to
\n
capture macroeconomic environment challenges caused by
\n
sovereign defaults or heightened sovereign risk, and $17 mill
ion
\n
applied in Central and other items due to a temporary market
\n
dislocat
ion
in the Africa and Middle East region which were
\n
fully released during 2024.
\n
Stage 3 assets
\n
Credit-impa
ired assets managed by Stressed Asset Group
\n
(SAG) incorporate forward-looking economic assumptions
\n
in respect of the recovery outcomes ident
i\ufb01ed and are
\n
assigned ind
iv
idual probabil
ity we
ight
ings per IFRS 9.
\n
These assumptions are not based on a Monte Carlo
\n
simulat
ion but are
informed by the Base Forecast.
\n
Sensit
iv
ity of ECL calculation to macroeconomic variables
\n
The ECL calculation relies on multiple variables and is
\n
inherently non-linear and portfolio-dependent, which impl
ies
\n
that no single analysis can fully demonstrate the sensit
iv
ity
\n
of the ECL to changes in the macroeconomic variables.
\n
The Group has conducted a series of analyses with the aim of
\n
ident
ify
ing the macroeconomic variables which might have
\n
the greatest impact on the overall ECL. These encompassed
\n
single variable and multi-variable exercises, using simple up/
\n
down variat
ion and extracts from actual calculat
ion data,
\n
as well as bespoke scenario design assessments.
\n
The primary conclusion of these exercises is that no ind
iv
idual
\n
macroeconomic variable is materially in\ufb02uent
ial. The Group
\n
believes this is plausible as the number of variables used
\n
in the ECL calculation is large. This does not mean that
\n
macroeconomic variables are unin\ufb02uent
ial; rather, that the
\n
Group believes that considerat
ion of macroeconom
ics should
\n
involve whole scenarios, as this aligns with the multi-variable
\n
nature of the calculation.
\n
The Group faces downside risks in the operating
\n
environment related to the uncertaint
ies surround
ing the
\n
macroeconomic outlook. To explore this, a sensit
iv
ity analysis
\n
of ECL was undertaken to explore the effect of slower
\n
economic recoveries across the Group\u2019s footprint markets.
\n
Two downside scenarios were considered in particular to
\n
explore the current uncertaint
ies over commod
ity prices.
\n
The \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario is
\n
characterised by an escalating trade war between the US
\n
and China and other economies. The \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io explores the impact from
\n
stick
ier than expected
in\ufb02at
ion due to pers
istent shipp
ing
\n
disrupt
ions and r
ise in energy prices amid fears of an
\n
escalation of the Middle East con\ufb02ict.
\n\n\n \n
Global Trade and
Higher for longer:
Baseline
Geopolit
ical Tens
ions
Commodit
ies and Rates
Five year
Five year
Five year
average
Peak/Trough
average
Peak/Trough
average
Peak/Trough
China GDP
4.1
5.3/3.2
0.8
3.8/(2.6)
3.5
4.3/1.8
China unemployment
3.3
3.5/3.1
4.9
5.5/3.8
4.3
5.2/3.1
China property prices
(1.3)
2.3/(5.6)
(5.1)
11.1 /(47.6)
(1.4)
8.6/(24.5)
Hong Kong GDP
2.2
3.5/1.5
(1.0)
1.6/(8.0)
1.4
2.2/(0.1)
Hong Kong unemployment
3.1
3.2/3.0
6.2
7.2/3.7
4.7
6.3/3.2
Hong Kong property prices
3.8
6.8/(2.6)
(0.1)
30.9/(34.8)
2.8
8.9/(3.5)
US GDP
2.0
2.6/1.1
0.3
2.2/(3.2)
1.1
2.5/(2.1)
Singapore GDP
2.3
3.4/0.6
0.0
3.1/(5.9)
1.6
2.8/(2.3)
India GDP
6.6
7.1/5.9
4.7
6.7/0.8
6.1
7.4/4.3
Crude oil
76.2
77.8/74.8
59.1
86. 2/46.2
84.9
113.4/74.8
\n
Period covered from Q1 2025 to Q4 2029
\n\n \n
Base (GDP, YoY%)
Global Trade and Geopolit
ical Tens
ions
Difference from Base
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
China
4.5
4.3
4.1
3.9
3.8
2.1
(2.0)
(1.0)
1.4
3.5
(2.4)
(6.3)
(5.1)
(2.6)
(0.3)
Hong Kong
2.9
2.5
2.1
1.9
1.6
(6.3)
(1.4)
0.1
0.9
1.4
(9.1)
(3.9)
(2.0)
(1.0)
(0.2)
US
1.4
2.2
2.4
2.1
2.0
(0.9)
(2.2)
0.8
1.8
2.2
(2.3)
(4.4)
(1.6)
(0.3)
0.1
Singapore
2.4
2.1
2.2
2.4
2.5
(2.9)
(3.5)
1.0
2.8
2.6
(5.3)
(5.6)
(1.2)
0.4
0.1
India
6.8
6.3
6.7
6.5
6.5
4.6
1.8
5.3
5.8
6.1
(2.2)
(4.4)
(1.4)
(0.8)
(0.4)
\n
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025.
\n\n \n
Base (GDP, YoY%)
Higher for longer: Commodit
ies and Rates
Difference from Base
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
2025
2026
2027
2028
2029
China
4.5
4.3
4.1
3.9
3.8
2.5
3.3
4.1
3.9
3.8
(2.0)
(1.0)
0.0
0.0
(0.0)
Hong Kong
2.9
2.5
2.1
1.9
1.6
0.3
1.1
2.1
1.9
1.6
(2.6)
(1.4)
(0.0)
(0.0)
0.0
US
1.4
2.2
2.4
2.1
2.0
(1.4)
0.5
2.4
2.1
2.0
(2.8)
(1.7)
(0.0)
0.0
0.0
Singapore
2.4
2.1
2.2
2.4
2.5
(0.2)
0.9
2.2
2.4
2.5
(2.6)
(1.2)
(0.0)
(0.0)
0.0
India
6.8
6.3
6.7
6.5
6.5
4.9
5.8
6.7
6.5
6.5
(1.9)
(0.5)
(0.0)
0.0
0.0
\n
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025
\n
The total modelled stage 1 and 2 ECL provis
ions (
includ
ing
\n
both on and off-balance sheet instruments) would be
\n
approximately $84 mill
ion h
igher under the \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io, and $258 mill
ion h
igher
\n
under the \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario
\n
than the baseline ECL provis
ions (wh
ich excluded the impact
\n
of multiple economic scenarios and management overlays
\n
which may already capture some of the risks in these
\n
scenarios). Stage 2 exposures as a proportion of stage 1 and 2
\n
exposures would increase from 2.7 per cent in the base case
\n
to 2.8 per cent and 3.5 per cent respectively under the \u2018Higher
\n
for Longer Commodit
ies and Rates\u2019, and \u2018Global Trade and
\n
Geopolit
ical Tens
ions\u2019 scenarios. This includes the impact of
\n
exposures transferring to stage 2 from stage 1 but does not
\n
consider an increase in stage 3 defaults.
\n
Under both scenarios, the major
ity of the
increase in ECL in
\n
CIB came from the main corporate CRE and Project Finance
\n
portfolios. For the main corporate portfolios, ECL would
\n
increase by $18 mill
ion and $47 m
ill
ion for \u2018H
igher for Longer
\n
Commodit
ies and Rates\u2019, and \u2018Global Trade and Geopol
it
ical
\n
Tensions\u2019 scenarios respectively and the proportion of stage 2
\n
exposures would increase from 4.1 per cent in the base case to
\n
4.3 per cent and 6.1 per cent respectively.
\n
For the WRB portfolios, most of the increase in ECL came from
\n
the unsecured retail portfolios, particularly Korea Personal
\n
Loans and the credit card portfolios in Hong Kong and
\n
Singapore, although Private Banking was also impacted in
\n
the \u2018Global Trade and Geopolit
ical Tens
ions\u2019 scenario. Under
\n
the \u2018Higher for Longer Commodit
ies and Rates\u2019, and \u2018Global
\n
Trade and Geopolit
ical Tens
ions\u2019 scenarios, Credit card ECL
\n
would increase by $18 mill
ion and $32 m
ill
ion respect
ively,
\n
largely in the Singapore and Hong Kong portfolios and the
\n
proportion of stage 2 credit card exposures would increase
\n
from 1.8 per cent in the base case to 2.3 per cent and
\n
2.9 per cent for each scenario respectively, with the Singapore
\n
portfolio most impacted. Mortgages ECL would increase by
\n
$2 mill
ion and $19 m
ill
ion for each scenar
io respectively,
\n
with portfolios in Korea impacted in the \u2018Higher for Longer
\n
Commodit
ies and Rates\u2019 scenar
io, and Malaysia in the \u2018Global
\n
Trade and Geopolit
ical Tens
ions\u2019 scenario, and the proportion
\n
of stage 2 mortgages would increase from 1.0 per cent in the
\n
base case to 1.4 per cent and 1.3 per cent respectively.
\n
There was no material change in modelled stage 3 provis
ions
\n
as these primar
ily relate to unsecured WRB exposures
\n
for which the LGD is not sensit
ive to changes
in the
\n
macroeconomic forecasts. There is also no material change
\n
for non-modelled stage 3 exposures as these are more
\n
sensit
ive to cl
ient specif
ic factors than to alternat
ive
\n
macroeconomic scenarios.
\n
The actual outcome of any scenario may be materially
\n
different due to, among other factors, the effect of
\n
management actions to mit
igate potent
ial increases in
\n
risk and changes in the underlying portfolio.
\n\n\n \n
Higher for
Longer
Global Trade
Gross as
ECL as
Commodit
ies
and Geopolit
ical
reported
1
reported
2
ECL Base case
and Rates
Tensions
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Stage 1 modelled
Corporate & Investment Banking
367,106
106
95
113
125
Wealth & Retail Banking
179,580
397
387
406
428
Ventures
1,391
27
27
27
27
Central & Other items
172,602
22
22
23
25
Total stage 1 excluding management judgements
720,679
552
531
569
605
Stage 2 modelled
Corporate & Investment Banking
14,869
198
185
206
315
Wealth & Retail Banking
2,030
116
107
132
161
Ventures
48
24
24
24
24
Central & Other items
1,660
1
1
1
1
Total stage 2 excluding management judgements
18,607
339
317
363
501
Total Stage 1 & 2 modelled
Corporate & Investment Banking
381,975
304
280
319
440
Wealth & Retail Banking
181,610
513
494
538
589
Ventures
1,439
51
51
51
51
Central & Other items
174,262
23
23
24
26
Total excluding management judgements
739,286
891
848
932
1,106
Stage 3 exposures excluding other assets
6,999
4,095
Other \ufb01nancial assets
3
101,755
63
ECL from management judgements
218
Total \ufb01nancial assets reported at 31 December 2024
848,040
5,267
\n
1
Gross balances includes both on- and off- balance sheet instruments; allocation between stage 1 and 2 will differ by scenario
\n
2
Includes ECL for both on- and off-balance sheet instruments
\n
3
Includes cash and balances at central banks, Accrued income, Other \ufb01nanc
ial assets; and Assets held for sale
\n
Sign
i\ufb01cant
increase in Credit Risk (SICR)
\n
Quantitat
ive cr
iter
ia
\n
SICR is assessed by comparing the risk of default at the
\n
reporting date to the risk of default at orig
inat
ion. Whether a
\n
change in the risk of default is sign
i\ufb01cant or not
is assessed
\n
using quantitat
ive and qual
itat
ive cr
iter
ia. These cr
iter
ia
\n
have been separately de\ufb01ned for each business and where
\n
meaningful are consistently applied across business lines.
\n
Assets are considered to have experienced SICR if they have
\n
breached both relative and absolute thresholds for the
\n
change in the average annualised IFRS 9 lifet
ime probab
il
ity
\n
of default (IFRS 9 PD) over the residual term of the exposure.
\n
The absolute measure of increase in credit risk is used to
\n
capture instances where the IFRS 9 PDs on exposures are
\n
relatively low at in
it
ial recognit
ion as these may
increase by
\n
several multiples without representing a sign
i\ufb01cant
increase
\n
in credit risk. Where IFRS 9 PDs are relatively high at in
it
ial
\n
recognit
ion, a relat
ive measure is more appropriate in
\n
assessing whether there is a sign
i\ufb01cant
increase in credit risk,
\n
as the IFRS 9 PDs increase more quickly.
\n
The SICR thresholds have been calibrated based on the
\n
following princ
iples:
\n
\u2022
Stabil
ity \u2013 The thresholds are set to ach
ieve a stable stage 2
\n
population at a portfolio level, trying to min
im
ise the
\n
number of accounts moving back and forth between
\n
stage 1 and stage 2 in a short period of time
\n
\u2022
Accuracy \u2013 The thresholds are set such that there is a
\n
materially higher propensity for stage 2 exposures to
\n
eventually default than is the case for stage 1 exposures
\n
\u2022
Dependency from backstops \u2013 The thresholds are stringent
\n
enough such that a high proportion of accounts transfer to
\n
stage 2 due to movements in forward-looking IFRS 9 PDs
\n
rather than relying on backward-looking backstops such
\n
as arrears
\n
\u2022
Relationsh
ip w
ith business and product risk pro\ufb01les \u2013 the
\n
thresholds re\ufb02ect the relative risk differences between
\n
different products, and are aligned to business processes
\n
For CIB clients the quantitat
ive thresholds are a relat
ive
\n
100 per cent increase in IFRS 9 PD and an absolute change
\n
in IFRS 9 PD of between 50 and 100 bps for investment
\n
grade and sub-investment grade assets. For debt securit
ies
\n
orig
inated before 1 January 2018, the bank
is util
is
ing the
\n
low Credit Risk simpl
i\ufb01ed approach, where debt secur
it
ies
\n
with an internal credit rating mapped to an investment
\n
grade equivalent are allocated to stage 1 and all other debt
\n
securit
ies are allocated to stage 2.
\n
For WRB (excluding Private Banking) clients, portfolio specif
ic
\n
quantitat
ive thresholds are appl
ied to Credit Card portfolios in
\n
Hong Kong, Singapore, Malaysia and UAE and Personal Loan
\n
portfolios in Taiwan (with a revis
ion to the thresholds appl
ied
\n
in 2024). During 2024 portfolio specif
ic quant
itat
ive thresholds
\n
are also now being applied to Hong Kong Personal Loans and
\n
Business Clients Mortgage portfolio in India. The impact of
\n
the threshold changes in 2024 was not material. For Credit
\n
Card portfolios, the thresholds include relative and absolute
\n
increases in IFRS 9 PD with average lifet
ime IFRS 9 PD cut-offs
\n
for those exposures that are with
in a range of customer
\n
util
isat
ion lim
it. For Personal Loans portfol
ios, the thresholds
\n
include relative and absolute increases in IFRS 9 PD cut-offs for
\n
those exposures that are over six months old in the portfolio,
\n
have certain months left in the loan tenor and have certain
\n
behaviour scores. For Business Clients Mortgage, the threshold
\n
includes relative and absolute increases in IFRS 9 PD cut-offs
\n
for those exposures that were in high arrear grade bucket at
\n
least once in the last 12 months.
\n\n
The range of thresholds applied are:
\n\n \n
Relative IFRS 9
Absolute IFRS 9
Customer
Average
PD increase
PD increase
util
isat
ion
Remain
ing tenor
IFRS 9 PD
Portfolio
(%)
(%)
(%)
(months)
(lifet
ime)
Credit cards \u2013 Current
50\u2013150%
3.4% \u2013 9.3%
15% \u2013 90%
\u2013
4.51% \u2013 11.6%
Credit cards \u2013 1-29 days past due
100% \u2013 210%
3.5% \u2013 6.1%
25% \u2013 67%
\u2013
1.5% \u2013 18.5%
Personal loans \u2013 Current
100% \u2013 250%
1.0%
\u2013
>60
\u2013
Personal loan \u2013 1-29 days past due
200% \u2013 300%
1.5%
\u2013
>12
\u2013
Business Client Mortgages \u2013 Current
100%
4.4%
\u2013
\u2013
\u2013
Business Client Mortgages \u2013 1-29 days past due
100%
7.0%
\u2013
\u2013
\u2013
\n
For all other material WRB portfolios (excluding Private
\n
Banking) for which a statist
ical model has been bu
ilt, the
\n
quantitat
ive SICR thresholds appl
ied are a relative threshold
\n
of 100 per cent increase in IFRS 9 PD and an absolute change
\n
in IFRS 9 PD of between 100 and 350 bps depending on the
\n
product. Certain countries have a higher absolute threshold
\n
re\ufb02ecting the lower default rate with
in the
ir personal loan
\n
portfolios compared with the Group\u2019s other personal loan
\n
portfolios. The orig
inal l
ifet
ime IFRS 9 PD term structure
is
\n
determined based on the orig
inal appl
icat
ion score or r
isk
\n
segment of the client.
\n
For all Private Banking classes, in line with risk management
\n
practice, an increase in credit risk is deemed to have occurred
\n
where margin
ing or loan-to-value covenants have been
\n
breached. For Class I assets (lending against divers
i\ufb01ed
\n
liqu
id collateral),
if these margin
ing requ
irements have not
\n
been met with
in 30 days of a tr
igger, a sign
i\ufb01cant
increase in
\n
credit risk is assumed to have occurred. For Class I and Class III
\n
assets (real-estate lending), a sign
i\ufb01cant
increase in credit
\n
risk is assumed to have occurred where the bank is unable
\n
to \u2018sell down\u2019 the applicable assets to meet revised collateral
\n
requirements with
in \ufb01ve days of a tr
igger. Class II assets are
\n
typically unsecured or partially secured, or secured against
\n
ill
iqu
id collateral such as shares in private companies.
\n
Sign
i\ufb01cant cred
it deteriorat
ion of these assets
is deemed
\n
to have occurred when any early alert trigger has
\n
been breached.
\n
Qualitat
ive cr
iter
ia
\n
Qualitat
ive factors that
ind
icate that there has been a
\n
sign
i\ufb01cant
increase in credit risk include processes linked to
\n
current risk management, such as placing loans on non-purely
\n
precautionary early alert or being assigned a CG12 rating.
\n
An account is placed on non-purely precautionary early alert
\n
if it exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion or attent
ion by
\n
management. Weaknesses in such a borrower\u2019s account, if
\n
left uncorrected, could result in deteriorat
ion of repayment
\n
prospects and the likel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry,
\n
concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and
\n
overdue balances, among other factors.
\n
All client assets that have been assigned a CG12 rating,
\n
equivalent to \u2018Higher risk\u2019, are deemed to have experienced
\n
a sign
i\ufb01cant
increase in credit risk. Accounts rated CG12 are
\n
primar
ily managed by relat
ionsh
ip managers
in the CIB unit
\n
with support from SAG for certain accounts. All CIB clients are
\n
placed in CG12 when they are 30 DPD unless they are granted
\n
a waiver through a strict governance process.
\n
In WRB, SICR is also assessed for where specif
ic r
isk elevation
\n
events have occurred in a market that are not yet re\ufb02ected
\n
in modelled outcomes or in other metrics. This is applied
\n
collectively either to impacted specif
ic products/customer
\n
cohorts or across the overall consumer banking portfolio in
\n
the affected market.
\n
Backstop
\n
Across all portfolios, accounts that are 30 or more days past
\n
due (DPD) on contractual payments of princ
ipal and/or
\n
interest that have not been captured by the criter
ia above are
\n
considered to have experienced a sign
i\ufb01cant
increase in credit
\n
risk. For less material portfolios, which are modelled based on
\n
a roll-rate or loss-rate approach, SICR is primar
ily assessed
\n
through the 30 DPD trigger.
\n
Expert credit judgement may be applied in assessing SICR to
\n
the extent that certain risks may not have been captured by
\n
the models or through the above criter
ia. Such
instances are
\n
expected to be rare, for example due to events and material
\n
uncertaint
ies ar
is
ing close to the report
ing date.
\n
Assessment of credit-impa
ired \ufb01nancial assets
\n
WRB clients
\n
The core components in determin
ing cred
it-impa
ired ECL
\n
provis
ions are the value of gross charge-off and recover
ies.
\n
Gross charge-off and/or loss provis
ions are recogn
ised when
\n
it is established that the account is unlikely to pay through
\n
the normal process. Recovery of unsecured debt post credit
\n
impa
irment
is recognised based on actual cash collected,
\n
either directly from clients or through the sale of defaulted
\n
loans to third-party inst
itut
ions. Release of credit impa
irment
\n
provis
ions for secured loans
is recognised if the loan
\n
outstanding is paid in full (release of full provis
ion), or the
\n
provis
ion
is higher than the loan outstanding (release of the
\n
excess provis
ion).
\n
CIB and Private Banking clients
\n
Credit-impa
ired accounts are managed by the Group\u2019s
\n
special
ist recovery un
it, Stressed Asset Group (SAG), which is
\n
independent of the Client Coverage/Relationsh
ip Managers.
\n
Where a portion of exposure is considered not recoverable,
\n
a stage 3 credit impa
irment prov
is
ion
is raised. This stage 3
\n
provis
ion
is the difference between the loan-carrying amount
\n
and the probabil
ity-we
ighted present value of estimated
\n
future cash \ufb02ows, re\ufb02ecting a range of scenarios (typically
\n
the \u2018upside\u2019, \u2018downside\u2019 and \u2018likely\u2019 recovery outcomes).
\n
Where the exposure is secured by collateral, the values used
\n
will incorporate the impact of forward-looking economic
\n
informat
ion on the value recoverable collateral and t
ime
\n
to realise the same.
\n
The ind
iv
idual circumstances of each client are considered
\n
when SAG estimates future cash\ufb02ows and the tim
ing of future
\n
recoveries which involves sign
i\ufb01cant judgement. All ava
ilable
\n
sources, such as cash\ufb02ow aris
ing from operat
ions, selling
\n
assets or subsid
iar
ies, realis
ing collateral or payments under
\n
guarantees, are considered. In any decis
ion relat
ing to the
\n
rais
ing of prov
is
ions, the Group attempts to balance
\n
economic condit
ions, local knowledge and exper
ience, and
\n
the results of independent asset reviews. The ind
iv
idual
\n
impa
irment prov
is
ions (v
iz. those not directly from a model)
\n
are approved by Stressed Assets Risk (SAR) who are in the
\n
Second Line of Defence.
\n
Write-offs
\n
Where it is considered that there is no realist
ic prospect
\n
of recovering a portion of an exposure against which an
\n
impa
irment prov
is
ion has been ra
ised, that amount will
\n
be written off.
\n\n
Governance of PMAs and applicat
ion of expert cred
it
\n
judgement in respect of ECL
\n
The Group\u2019s Credit Policy and Standards framework details
\n
the requirements for continuous monitor
ing to
ident
ify any
\n
changes in credit quality and resultant ratings, as well as
\n
ensuring a consistent approach to monitor
ing, manag
ing
\n
and mit
igat
ing credit risks. The framework aligns with the
\n
governance of ECL estimat
ion through the early recogn
it
ion
\n
of sign
i\ufb01cant deter
iorat
ions
in ratings which drive stage 2
\n
and 3 ECL.
\n
The models used in determin
ing ECL are rev
iewed and
\n
approved by the Group Credit Model Assessment Committee
\n
(CMAC) or Delegate Model Approver (DMA), which is
\n
appointed by the Model Risk Committee. CMAC has the
\n
responsib
il
ity to assess and approve the use of models and to
\n
review all IFRS 9 interpretat
ions related to models. CMAC also
\n
provides oversight on operational matters related to model
\n
development, performance monitor
ing and model val
idat
ion
\n
activ
it
ies, includ
ing standards and regulatory matters.
\n
Prior to submiss
ion to CMAC for approval, the models are
\n
validated by GMV, a function which is independent of
\n
the business and the model developers. GMV\u2019s analysis
\n
comprises review of model documentation, model design
\n
and methodology, data validat
ion, rev
iew of the model
\n
development and calibrat
ion process, out-of-sample
\n
performance testing, and assessment of compliance
\n
review against IFRS 9 rules and internal standards.
\n
Model performance PMAs
\n
The process of PMA ident
i\ufb01cation, calculat
ion and approval
\n
are prescribed in the Credit Risk IFRS 9 ECL Model Family
\n
Standards, which are approved by the Global Head, Model
\n
Risk Management. PMA calculations are reviewed by GMV
\n
and submitted to CMAC for approval and will be removed
\n
when the estimates return to being with
in the mon
itor
ing
\n
thresholds or validat
ion standards. The level of PMAs and
\n
remediat
ion plans are regularly tracked at CMAC.
\n
Judgemental adjustments
\n
These comprise judgemental PMAs and judgemental
\n
management overlays, and account for events that are
\n
not captured in the Base Case Forecast or the resulting ECL
\n
calculated by the models. Judgemental adjustments must
\n
be approved by the IIC having considered the nature of the
\n
event, why the risk is not captured in the model, and the basis
\n
on which the quantum of the overlay has been calculated.
\n
Judgemental adjustments are subject to quarterly review and
\n
re-approval by the IIC, and will be released when the risks are
\n
no longer relevant.
\n
The IFRS 9 Impairment Committee:
\n
\u2022
oversees the appropriateness of all Business Model
\n
Assessment and Solely Payments of Princ
ipal and Interest
\n
(SPPI) tests
\n
\u2022
reviews and approves ECL for \ufb01nanc
ial assets class
if
ied as
\n
stages 1, 2 and 3 for each \ufb01nancial report
ing period
\n
\u2022
reviews and approves stage allocation rules and thresholds
\n
\u2022
approves material adjustments in relation to ECL for fair
\n
value through other comprehensive income (FVOCI) and
\n
amortised cost \ufb01nanc
ial assets
\n
\u2022
reviews, challenges and approves base macroeconomic
\n
forecasts and the multiple macroeconomic scenarios
\n
approach that are util
ised
in the forward-looking
\n
ECL calculations
\n
The IIC consists of senior representatives from Risk and
\n
Finance. It meets at least twice every quarter \u2013 once before
\n
the models are run to approve key inputs into the calculation,
\n
and once after the models are run to approve the ECL
\n
provis
ions and any judgemental management overlays
\n
that may be necessary.
\n
The IIC is supported by an Expert Panel which also reviews
\n
and challenges the base case projections and mult
iple
\n
macroeconomic scenarios. The Expert Panel consists of
\n
members of Enterprise Risk Management (which includes the
\n
Scenario Design team), Finance, Group Economic Research
\n
and country representatives of major jur
isd
ict
ions.
\n\n
Traded Risk
\n
Market Risk (audited)
\n
Market Risk is the potential for fair value loss due to adverse
\n
moves in \ufb01nanc
ial markets. The Group\u2019s exposure to Market
\n
Risk arises predominantly from the following sources:
\n
\u2022 Trading book:
\n
\u2013 The Group provides clients with access to markets,
\n
facil
itat
ion of which entails the Group taking moderate
\n
Market Risk posit
ions. All trad
ing teams support client
\n
activ
ity. There are no propr
ietary trading teams. Hence,
\n
income earned from Market Risk-related activ
it
ies is
\n
primar
ily dr
iven by the volume of client activ
ity.
\n
\u2022 Non-trading book:
\n
\u2013 Treasury is required to hold a liqu
id assets buffer, much of
\n
which is held in high-quality marketable debt securit
ies
\n
\u2013 The Group underwrites and sells down loans, and
\n
invests in select investment grade debt securit
ies w
ith
\n
no trading intent
\n
\u2013 The Group has capital invested and related income
\n
streams denominated in currencies other than US dollars.
\n
To the extent that these income streams are not hedged,
\n
the Group is subject to Structural Foreign Exchange Risk
\n
which is re\ufb02ected in reserves.
\n
A summary of our current polic
ies and pract
ices regarding
\n
Market Risk management is provided in the \u2018Princ
ipal R
isks\u2019
\n
section (page 202).
\n
The primary categories of Market Risk for the Group are:
\n
\u2022
Interest Rate Risk: aris
ing from changes
in yield curves and
\n
impl
ied volat
il
it
ies
\n
\u2022
Foreign Exchange Risk: aris
ing from changes
in currency
\n
exchange rates and impl
ied volat
il
it
ies
\n
\u2022
Commodity Risk: aris
ing from changes
in commodity prices
\n
and impl
ied volat
il
it
ies
\n
\u2022
Credit Spread Risk: aris
ing from changes
in the price of
\n
debt instruments and credit-linked derivat
ives and dr
iven
\n
by factors other than the level of risk-free interest rates
\n
\u2022
Equity Risk: aris
ing from changes
in the prices of equit
ies
\n
and impl
ied volat
il
it
ies
\n
Market Risk movements (audited)
\n
Value at Risk (VaR) allows the Group to manage Market Risk
\n
across the trading book and most of the fair valued non-
\n
trading books.
\n
The average level of total trading and non-trading VaR
\n
in 2024 was $41.8 mill
ion, 22 per cent lower than 2023
\n
($53.3 mill
ion). The year end level of total trad
ing and non-
\n
trading VaR in 2024 was $43.3 mill
ion, 3 per cent lower than
\n
2023 ($44.5 mill
ion), due to a reduct
ion in market volatil
ity.
\n
For the trading book, the average level of VaR in 2024 was
\n
$21.1 mill
ion, 2 per cent lower than
in 2023 ($21.5 mill
ion).
\n
Trading activ
it
ies have remained relatively unchanged,
\n
and client driven.
\n
Daily Value at Risk (VaR at 97.5%, one day) (audited)
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Trading
1
and non-trading
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
32.8
43.9
18.6
38.8
39.5
54.1
23.2
30.5
Credit Spread Risk
20.4
31.3
12.8
16.6
33.8
48.0
25.0
31.7
Foreign Exchange Risk
9.2
15.0
5.0
7.4
7.0
12.2
4.2
7.4
Commodity Risk
5.3
10.0
2.9
4.6
5.8
9.7
3.7
4.3
Equity Risk
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(26.3)
NA
NA
(24.1)
(32.9)
NA
NA
(29.4)
Total
41.8
53.1
29.4
43.3
53.3
65.5
44.2
44.5
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Trading\u00b9
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
12.7
22.0
7.0
12.0
13.1
20.4
7.7
11.6
Credit Spread Risk
6.6
9.6
4.8
5.4
9.4
12.4
7.4
9.4
Foreign Exchange Risk
9.2
15.0
5.0
7.4
7.0
12.2
4.2
7.4
Commodity Risk
4.8
10.0
2.4
4.3
5.8
9.7
3.7
4.4
Equity Risk
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Divers
i\ufb01cation effect
3
(12.2)
NA
NA
(8.3)
(13.8)
NA
NA
(11.5)
Total
21.1
33.1
13.0
20.8
21.5
30.6
14.7
21.3
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
Non-trading
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest Rate Risk
28.0
35.5
17.4
32.5
34.2
43.6
19.7
23.9
Credit Spread Risk
17.2
24.8
10.0
15.7
28.3
40.1
21.5
24.4
Foreign Exchange Risk
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Commodity Risk
1.3
1.8
0.6
0.8
0.1
0.5
0.3
0.5
Equity Risk
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(12.7)
NA
NA
(10.2)
(18.7)
NA
NA
(13.2)
Total
34.2
44.3
28.6
38.8
44.0
53.4
32.0
35.6
\n\n
The following table sets out how trading and non-trading VaR is distr
ibuted across the Group\u2019s bus
inesses:
\n\n \n
2024
2023
Average
High
Low
Year end
Average
High
Low
Year end
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Trading
1
and non-trading
2
41.8
53.1
29.4
43.3
53.3
65.5
44.2
44.5
Trading
1
Macro Trading
4
17.0
29.9
10.0
17.1
13.8
20.2
9.2
15.4
Global Credit
6.8
11.1
4.3
5.8
12.8
18.2
8.5
10.1
XVA
3.3
4.4
2.4
2.4
4.8
7.0
3.4
4.5
Divers
i\ufb01cation effect
3
(6.0)
NA
NA
(4.5)
(9.9)
NA
NA
(8.7)
Total
21.1
33.1
13.0
20.8
21.5
30.6
14.7
21.3
Non-trading
2
Treasury
32.9
40.8
26.9
38.6
43.4
50.2
31.1
34.9
Global Credit
5.0
13.4
2.4
8.8
3.9
13.6
2.0
4.0
Listed Private Equity
0.4
0.9
\u2013
\u2013
0.1
0.4
\u2013
\u2013
Divers
i\ufb01cation effect
3
(4.1)
NA
NA
(8.6)
(3.4)
NA
NA
(3.3)
Total
34.2
43.3
28.6
38.8
44.0
53.4
32.0
35.6
\n
1
The trading book for Market Risk is de\ufb01ned in accordance with the UK onshored Capital Requirements Regulation Part 3 Title I Chapter 3, which restricts the
\n
posit
ions perm
itted in the trading book
\n
2
The non-trading book VaR does not include the loan underwrit
ing bus
iness
\n
3
The total VaR is non-addit
ive across r
isk types due to divers
i\ufb01cation effects, wh
ich is measured as the difference between the sum of the VaR by ind
iv
idual risk
\n
type or business and the combined total VaR. As the maximum and min
imum occur on d
ifferent days for different risk types or businesses, it is not meaningful
\n
to calculate a portfolio divers
i\ufb01cation bene\ufb01t for these measures
\n
4 Macro Trading comprises the Rates, FX and Commodit
ies bus
inesses
\n
Risks not in VaR
\n
In 2024, the main market risks not re\ufb02ected in VaR were:
\n
\u2022
basis risks for which the histor
ical market pr
ice data is lim
ited and
is therefore proxied, giv
ing r
ise to potential proxy basis risk
\n
that is not captured in VaR
\n
\u2022
potential depeg risk from currencies currently pegged or managed, where the histor
ical one-year VaR observat
ion period
\n
may not re\ufb02ect the possib
il
ity of a change in the currency regime or a sudden depegging
\n
\u2022
potential understatement of VaR when abrupt increases in market volatil
ity are not adequately captured by the VaR model.
\n
Addit
ional cap
ital is set aside to cover such \u2018risks not in VaR\u2019.
\n
Backtesting
\n
In 2024, there were no regulatory backtesting negative exceptions at Group level (in 2023 there were \ufb01ve).
\n
An enhancement to the VaR model will be implemented from January 2025 to increase the model\u2019s responsiveness to abrupt
\n
upturns in market volatil
ity.
\n
The graph below illustrates the performance of the VaR model used in capital calculations. It compares the 99 percentile pro\ufb01t
\n
and loss con\ufb01dence level given by the VaR model with the hypothetical pro\ufb01t and loss of each day given the actual market
\n
movement ignor
ing any
intra-day trading activ
ity.
\n
-60
\n
-40
\n
-20
\n
0
\n
20
\n
40
\n
60
\n
80
\n
2024 Backtesting chart
\n
Internal model approach regulatory trading book at Group level
\n
Hypothetical pro\ufb01t and loss (P&L) versus VaR (99 per cent, one day)
\n
Hypothetical P&L
Posit
ive VaR at 99%
Negative VaR at 99%
Negative exceptions
\n
Jan 2024
Feb 2024
Mar 2024
Apr 2024
May 2024
Jun 2024
Jul 2024
Aug 2024
Sep 2024
Oct 2024
Nov 2024
Dec 2024
\n
Posit
ive except
ions
\n
Trading loss days
\n\n \n
2024
2023
Number of loss days reported for Markets trading book total product income
1
12
16
\n
1
Includes credit valuation adjustment (CVA) and funding valuation adjustment (FVA), and excludes Treasury business (non-trading), period
ic valuat
ion changes
\n
for Capital Markets, expected loss provis
ions, overn
ight indexed swap (OIS) discount
ing and account
ing adjustments such as debit valuation adjustments
\n\n
Average daily income earned from Market Risk-related activ
it
ies\u00b9 (audited)
\n
Trading: The average level of total trading daily income in 2024 was $13.3 mill
ion, 10.8 per cent h
igher than 2023 ($12 mill
ion).
\n
The increase is largely attributable higher client demand for derivat
ive products across Greater Ch
ina and North Asia coupled
\n
with larger holdings of government and corporate bonds in antic
ipat
ion of increased demand by clients.
\n
Non-trading: The average level of total non-trading daily income in 2024 was $2.7 mill
ion, attr
ibutable to translation gains on
\n
the revaluation of FX posit
ions
in Egypt, and FX revaluation gains across currencies in the Markets Credit Trading business.
\n \n \n
2024
2023
Trading
$mill
ion
$mill
ion
Interest Rate Risk
5.2
4.5
Credit Spread Risk
1.7
1.2
Foreign Exchange Risk
5.6
5.5
Commodity Risk
0.8
0.8
Equity Risk
\u2013
\u2013
Total
13.3
12.0
Non-trading
$mill
ion
$mill
ion
Interest Rate Risk
0.6
(0.1)
Credit Spread Risk
2.1
(0.7)
Equity Risk
\u2013
0.1
Total
2.7
(0.7)
\n
1
Re\ufb02ects total product income which is the sum of client income and own account income. Includes elements of trading income, interest income and non funded
\n
income which are generated from Market Risk-related activ
it
ies. Rates, XVA and Treasury income are included under Interest Rate Risk while Credit Trading
\n
income is included under Credit Spread Risk
\n
Structural foreign exchange exposures
\n
The table below sets out the princ
ipal structural fore
ign exchange exposures (net of investment hedges) of the Group.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Hong Kong dollar
4,232
4,662
Renminb
i
3,593
3,523
Indian rupee
3,480
3,309
Singapore dollar
3,306
2,415
Malaysian ringg
it
1,539
1,540
Korean won
1,363
2,114
Bangladeshi taka
1,113
1,007
Euro
1,112
1,125
Taiwanese dollar
1,087
1,222
UAE dirham
807
709
Thai baht
763
782
Pakistan
i rupee
392
306
Indonesian rupiah
230
293
Other
3,407
3,206
26,424
26,213
\n
As at 31 December 2024, the Group had taken net investment hedges using derivat
ive \ufb01nancial
instruments to partly cover
\n
its exposure to the Hong Kong dollar of $5,359 mill
ion (31 December 2023: $5,603 m
ill
ion), Korean won of $3,048 m
ill
ion
\n
(31 December 2023: $2,884 mill
ion), Ind
ian rupee of $1,784 mill
ion (31 December 2023: $1,809 m
ill
ion), Renm
inb
i of $1,640 m
ill
ion
\n
(31 December 2023: $1,516 mill
ion), UAE d
irham of $1,470 mill
ion (31 December 2023: $1,470 m
ill
ion), Ta
iwanese dollar of
\n
$1,092 mill
ion (31 December 2023: $1,025 m
ill
ion), S
ingapore dollar of $0 mill
ion (2023: $1,047 m
ill
ion) and South Afr
ican rand
\n
of $0 mill
ion (31 December 2023:$64 m
ill
ion). An analys
is has been performed on these exposures to assess the impact of a
\n
1 per cent fall in the US dollar exchange rates, adjusted to incorporate the impacts of correlations of these currencies to the
\n
US dollar. The impact on the posit
ions above would be an
increase of $262 mill
ion (31 December 2023: $260 m
ill
ion). Changes
in
\n
the valuation of these posit
ions are taken to reserves. For analys
is of the Group\u2019s capital posit
ion and requ
irements, refer to the
\n
\u2018Capital review\u2019 section (page 270).
\n
Counterparty Credit Risk
\n
Counterparty Credit Risk is the potential for loss in the event of the default of a derivat
ive counterparty, after tak
ing into
\n
account the value of elig
ible collaterals and r
isk mit
igat
ion techniques. The Group\u2019s counterparty credit exposures are included
\n
in the Credit Risk section.
\n
Derivat
ive \ufb01nancial
instruments Credit Risk mit
igat
ion
\n
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the
\n
counterparty through netting the sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions.
\n
In addit
ion, the Group enters
into credit support annexes (CSAs) with counterparties where collateral is deemed a necessary
\n
or desirable mit
igant to the exposure. Cash collateral
includes collateral called under a variat
ion marg
in process from
\n
counterparties if total uncollateralised mark-to-market exposure exceeds the threshold and min
imum transfer amount
\n
specif
ied
in the CSA. With certain counterparties, the CSA is reciprocal and requires us to post collateral if the overall mark-to-
\n
market values of posit
ions are
in the counterparty\u2019s favour and exceed an agreed threshold.
\n\n
Liqu
id
ity and Funding Risk
\n
Liqu
id
ity and Funding Risk is the risk that the Group may not
\n
have suf\ufb01cient stable or d
iverse sources of funding to meet its
\n
obligat
ions as they fall due.
\n
The Group\u2019s Liqu
id
ity and Funding Risk framework requires
\n
each country to ensure that it operates with
in prede\ufb01ned
\n
liqu
id
ity lim
its and rema
ins in compliance with Group
\n
liqu
id
ity polic
ies and pract
ices, as well as local regulatory
\n
requirements.
\n
The Group achieves this through a combinat
ion of sett
ing
\n
Risk Appetite and associated lim
its, pol
icy formation, risk
\n
measurement and monitor
ing, prudent
ial and internal stress
\n
testing, governance and review.
\n
Throughout 2024, the Group retained a robust liqu
id
ity
\n
posit
ion across key metr
ics. The Group continues to focus
\n
on improv
ing the qual
ity and divers
i\ufb01cation of
its funding
\n
mix and remains committed to supporting its clients.
\n
Primary sources of funding (audited)
\n
The Group\u2019s funding strategy is largely driven by its policy to
\n
mainta
in adequate l
iqu
id
ity at all times, in all geographic
\n
locations and for all currencies. This is done to ensure the
\n
Group can meet all of its obligat
ions as they fall due.
\n
The Group\u2019s funding pro\ufb01le is therefore well divers
i\ufb01ed
\n
across different sources, maturit
ies and currenc
ies.
\n
The Group\u2018s assets are funded predominantly by customer
\n
deposits, supplemented with wholesale funding, which is
\n
divers
i\ufb01ed by type and matur
ity.
\n
The Group mainta
ins access to wholesale fund
ing markets
\n
in all major \ufb01nanc
ial centres
in which it operates. This seeks
\n
to ensure that the Group has market intell
igence, ma
inta
ins
\n
stable funding lines and can obtain optimal pric
ing when
\n
performing cash\ufb02ow management activ
it
ies.
\n
In 2024, the Group issued approximately $9.1 bill
ion worth of
\n
securit
ies from
its holding company, Standard Chartered PLC
\n
(2023 $8.1 bill
ion of sen
ior debt securit
ies). The
issuances
\n
included $1.6 bill
ion of Add
it
ional T
ier 1 securit
ies and
\n
$7.5\u00a0bill
ion of sen
ior debt securit
ies across mult
iple currencies.
\n
Over this same period, there were Addit
ional T
ier 1 calls of
\n
$0.6\u00a0bill
ion, T
ier 2 redemptions (calls & maturit
ies) of around
\n
$1.6 bill
ion and sen
ior calls of $6.3 bill
ion. In the next 12 months,
\n
approximately $7.8 bill
ion of the Group\u2019s Add
it
ional T
ier 1,
\n
senior and subordinated debt securit
ies are e
ither falling
\n
due for repayment contractually or callable by the Group.
\n
Group\u2019s composit
ion of l
iab
il
it
ies and equ
ity
31 December 2024
\n
4.2
9.7
9.2
\n
Derivat
ive \ufb01nancial
\n
instruments
\n
Deposits by banks
\n
Debt securit
ies
in issue
\n
Customer accounts
\n
Other liab
il
it
ies
\n
Equity
\n
Subordinated liab
il
it
ies
\n
and other borrowed funds
\n
61.6
8.1
\n
1.2
\n
6.0
\n
100%
\n
Liqu
id
ity and Funding Risk metrics
\n
The Group continually monitors key liqu
id
ity metrics, both on
\n
a country basis and consolidated across the Group.
\n
The following liqu
id
ity and funding Board Risk Appetite
\n
metrics de\ufb01ne the maximum amount and type of risk that the
\n
Group is will
ing to assume
in pursuit of its strategy: liqu
id
ity
\n
coverage ratio (LCR), liqu
id
ity stress survival horizons, recovery
\n
capacity and net stable funding ratio (NSFR). In addit
ion to
\n
the Board Risk Appetite, there are further lim
its that apply at
\n
Group and country level such as external wholesale borrowing
\n
(WBE) and cross currency lim
its.
\n
Liqu
id
ity coverage ratio (LCR)
\n
The LCR is a regulatory requirement set to ensure the Group
\n
has suf\ufb01cient unencumbered h
igh-quality liqu
id assets
\n
to meet its liqu
id
ity needs in a 30-calendar-day liqu
id
ity
\n
stress scenario.
\n
The Group monitors and reports its liqu
id
ity posit
ions under
\n
the Liqu
id
ity Coverage Ratio per PRA rulebook and has
\n
mainta
ined
its LCR above the prudential requirement.
\n
The Group mainta
ined robust l
iqu
id
ity ratios throughout 2024.
\n
At the reporting date, the Group LCR was 138 per cent
\n
(31 December 2023: 145 per cent), with a surplus to both
\n
Board-approved Risk Appetite and regulatory requirements.
\n
Adequate liqu
id
ity was held across our footprint to meet all
\n
local prudential LCR requirements where applicable.
\n
The Liqu
id
ity buffer reported is after deductions made to
\n
re\ufb02ect the impact of lim
itat
ions in the transferabil
ity of ent
ity
\n
liqu
id
ity around the Group. This resulted in an adjustment of
\n
$35 bill
ion to LCR HQLA as at 31 December 2024.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Liqu
id
ity buffer
170,306
185,643
Total net cash out\ufb02ows
123,226
128,111
Liqu
id
ity coverage ratio
138%
145%
\n\n
Stressed coverage
\n
The Group intends to mainta
in a prudent and susta
inable
\n
funding and liqu
id
ity posit
ion,
in all countries and currencies,
\n
such that it can withstand a severe but plausible liqu
id
ity
\n
stress.
\n
Our approach to managing liqu
id
ity and funding is re\ufb02ected
\n
in the Board-level Risk Appetite Statement which includes
\n
the following:
\n
\u201cThe Group should have suf\ufb01cient stable and d
iverse sources
\n
of funding to meet its contractual and contingent obligat
ions
\n
as they fall due.\u201d
\n
The Group\u2019s internal liqu
id
ity adequacy assessment process
\n
(\u2018ILAAP\u2019) stress testing framework covers the following
\n
stress scenarios:
\n
\u2022
Standard Chartered-specif
ic \u2013 Captures the l
iqu
id
ity
\n
impact from an id
iosyncrat
ic event affecting Standard
\n
Chartered only with the rest of the market assumed to be
\n
operating normally.
\n
\u2022
Market wide \u2013 Captures the liqu
id
ity impact from a
\n
market-wide cris
is affect
ing all partic
ipants
in a country,
\n
region or globally.
\n
\u2022
Combined \u2013 Assumes both Standard Chartered-specif
ic
\n
and Market-wide events affect the Group simultaneously
\n
and hence is the most severe scenario.
\n
All scenarios include, but are not lim
ited to, modelled out\ufb02ows
\n
for retail and wholesale funding, off-balance sheet funding
\n
risk, cross-currency funding risk, intraday risk, franchise risk
\n
and risks associated with a deteriorat
ion of a \ufb01rm\u2019s cred
it
\n
rating. Concentration risk approach captures single name
\n
and industry concentration.
\n
ILAAP stress testing results show that, as at 31 December 2024,
\n
Group and all countries were able to survive for a period of
\n
time with posit
ive surpluses as de\ufb01ned under each scenar
io.
\n
The results take into account currency convertib
il
ity and
\n
portabil
ity constra
ints while calculating the liqu
id
ity surplus
\n
at Group level.
\n
Standard Chartered Bank\u2019s credit ratings as at 31 December
\n
2024 were A+ with stable outlook (Fitch), A+ with stable
\n
outlook (S&P) and A1 with posit
ive outlook (Moody\u2019s). As of
\n
31\u00a0December 2024, the estimated contractual out\ufb02ow of a
\n
three-notch long-term ratings downgrade is $1.0 bill
ion.
\n
External wholesale borrowing
\n
A risk trigger is set to prevent excessive reliance on wholesale
\n
borrowing. With
in the de\ufb01nit
ion of wholesale borrowing,
\n
triggers are applied to all branches and operating subsid
iar
ies
\n
in the Group.
\n
Advances-to-deposits ratio
\n
This is de\ufb01ned as the ratio of total loans and advances to
\n
customers relative to total customer deposits. An advances-
\n
to-deposits ratio below 100 per cent demonstrates that
\n
customer deposits exceed customer loans as a result of the
\n
emphasis placed on generating a high level of funding from
\n
customers.
\n
The Group\u2019s advances-to-deposits ratio has remained stable
\n
in 2024 at 53.3 per cent. Deposits from customers as at
\n
31\u00a0December 2024 are $486,261 mill
ion (31 December 2023:
\n
$486,666 mill
ion).
\n\n \n
2024
2023
$mill
ion
$mill
ion
Total loans and advances to customers
1,2
259,269
259,481
Total customer accounts
3
486,261
486,666
Advances-to-deposits ratio
53.3%
53.3%
\n
1
Excludes reverse repurchase agreement and other sim
ilar secured lend
ing of $9,660 mill
ion and
includes loans and advances to customers held at fair value
\n
through pro\ufb01t and loss of $7,084 mill
ion
\n
2
Loans and advances to customers for the purpose of the advances-to-deposits ratio excludes $19,187 mill
ion of approved balances held w
ith central banks,
\n
con\ufb01rmed as repayable at the point of stress (31 December 2023: $20,710 mill
ion)
\n
3
Includes customer accounts held at fair value through pro\ufb01t or loss of $21,772 mill
ion (31 December 2023: $17,248 m
ill
ion)
\n
Net stable funding ratio (NSFR)
\n
The NSFR is a PRA regulatory requirement that stipulates
\n
inst
itut
ions to mainta
in a stable fund
ing pro\ufb01le in relation to
\n
an assumed duration of their assets and off-balance sheet
\n
activ
it
ies over a one-year horizon. It is the ratio between the
\n
amount of available stable funding (ASF) and the amount
\n
of required stable funding (RSF). ASF factors are applied to
\n
balance sheet liab
il
it
ies and cap
ital, based on their perceived
\n
stabil
ity and the amount of stable fund
ing they provide.
\n
Likew
ise, RSF factors are appl
ied to assets and off-balance
\n
sheet exposures according to the amount of stable funding
\n
they require. The regulatory requirements for NSFR are to
\n
mainta
in a rat
io of at least 100 per cent. The average ratio
\n
for the past four quarters is 135 per cent.
\n
Liqu
id
ity pool
\n
The liqu
id
ity value of the Group\u2019s LCR elig
ible l
iqu
id
ity pool at the reporting date was $170 bill
ion. The \ufb01gures
in the table below
\n
account for haircuts, currency convertib
il
ity and portabil
ity constra
ints per PRA rules for transfer restrict
ions (amount
ing to
\n
$35 bill
ion as at 31 December 2024), and therefore are not d
irectly comparable with the consolidated balance sheet. A liqu
id
ity
\n
pool is held to offset stress out\ufb02ows as de\ufb01ned in the LCR per PRA rulebook.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Level 1 securit
ies
Cash and balances at central banks
76,094
81,675
Central banks, governments /public sector entit
ies
74,182
71,768
Multilateral development banks and internat
ional organ
isat
ions
14,386
16,917
Other
343
1,291
Total Level 1 securit
ies
165,005
171,651
Level 2 A securit
ies
4,367
13,268
Level 2 B securit
ies
934
724
Total LCR elig
ible assets
170,306
185,643
\n\n
Liqu
id
ity analysis of the Group\u2019s balance sheet (audited)
\n
Contractual maturity of assets and liab
il
it
ies
\n
The following table presents assets and liab
il
it
ies by matur
ity groupings based on the remain
ing per
iod to the contractual
\n
maturity date as at the balance sheet date on a discounted basis. Contractual maturit
ies do not necessar
ily re\ufb02ect actual
\n
repayments or cash\ufb02ows.
\n
With
in the tables below, cash and balances w
ith central banks, interbank placements and investment securit
ies that are
\n
fair valued through other comprehensive income are used by the Group princ
ipally for l
iqu
id
ity management purposes.
\n
As at the reporting date, assets remain predominantly short-dated, with 59 per cent maturing in less than one year.
\n\n \n
2024
Between
Between
Between
Between
Between
Between
More than
one month
three
six months
nine months
one year
two years
\ufb01ve years
One month
and three
months and
and nine
and one
and two
and \ufb01ve
and
or less
months
six months
months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks
55,646
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
7,801
63,447
Derivat
ive \ufb01nancial
instruments
22,939
15,556
12,217
7,265
4,328
7,067
7,448
4,652
81,472
Loans and advances
to banks
1,2
22,381
21,722
10,588
6,771
4,986
8,407
3,715
1,990
80,560
Loans and advances
to customers
1,2
65,688
58,765
25,739
15,479
16,192
31,240
31,766
94,688
339,557
Investment securit
ies
1
13,016
25,886
21,546
14,789
14,688
32,815
41,423
62,418
226,581
Other assets
1
12,601
32,130
1,333
381
931
71
64
10,560
58,071
Total assets
192,271
154,059
71,423
44,685
41,125
79,600
84,416
182,109
849,688
Liab
il
it
ies
Deposits by banks
1,3
24,293
2,345
1,621
848
571
4,342
1,939
3
35,962
Customer accounts
1,4
379,926
37,502
25,863
10,152
10,123
9,695
47,367
2,635
523,263
Derivat
ive \ufb01nancial
instruments
21,680
17,115
11,773
7,018
4,353
6,660
8,144
5,321
82,064
Senior debt
5
609
1,755
4,074
2,132
932
7,926
18,784
17,886
54,098
Other debt securit
ies
in issue
1
2,734
2,663
6,550
4,535
5,015
851
1,206
688
24,242
Other liab
il
it
ies
12,173
43,574
3,020
1,441
155
4,494
682
2,854
68,393
Subordinated liab
il
it
ies and
other borrowed funds
\u2013
64
23
180
13
359
1,978
7,765
10,382
Total liab
il
it
ies
441,415
105,018
52,924
26,306
21,162
34,327
80,100
37,152
798,404
Net liqu
id
ity gap
(249,144)
49,041
18,499
18,379
19,963
45,273
4,316
144,957
51,284
\n\n \n
2023
Assets
Cash and balances at
central banks
63,752
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6,153
69,905
Derivat
ive \ufb01nancial
instruments
12,269
10,632
6,910
3,611
2,921
4,650
6,038
3,403
50,434
Loans and advances
to banks
1,2
28,814
23,384
10,086
4,929
5,504
1,583
2,392
1,098
77,790
Loans and advances
to customers
1,2
86,695
55,009
25,492
15,392
14,537
25,987
26,545
95,829
345,486
Investment securit
ies
1
12,187
28,999
17,131
18,993
20,590
24,244
44,835
50,168
217,147
Other assets
1
17,611
31,729
1,286
409
587
67
93
10,300
62,082
Total assets
221,328
149,753
60,905
43,334
44,139
56,531
79,903
166,951
822,844
Liab
il
it
ies
Deposits by banks
1,3
26,745
1,909
1,398
503
778
1,326
2,848
2
35,509
Customer accounts
1,4
384,444
47,723
28,288
13,647
11,806
7,787
38,578
2,349
534,622
Derivat
ive \ufb01nancial
instruments
13,111
12,472
6,655
4,001
3,433
5,142
6,932
4,315
56,061
Senior debt
5
130
1,111
1,537
1,389
624
11,507
20,127
14,443
50,868
Other debt securit
ies
in issue
1
3,123
5,822
6,109
3,235
3,037
492
482
195
22,495
Other liab
il
it
ies
14,929
26,447
1,695
544
883
1,830
1,809
12,763
60,900
Subordinated liab
il
it
ies and
other borrowed funds
980
68
19
172
453
312
1,936
8,096
12,036
Total liab
il
it
ies
443,462
95,552
45,701
23,491
21,014
28,396
72,712
42,163
772,491
Net liqu
id
ity gap
(222,134)
54,201
15,204
19,843
23,125
28,135
7,191
124,788
50,353
\n
1
Loans and advances, investment securit
ies, depos
its by banks, customer accounts and debt securit
ies
in issue include \ufb01nanc
ial
instruments held at fair value
\n
through pro\ufb01t or loss, see Note 13 Financ
ial
instruments
\n
2
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing of $98.8 bill
ion (31 December 2023: $97.6 b
ill
ion)
\n
3
Deposits by banks include repurchase agreements and other sim
ilar secured borrow
ing of $8.7 bill
ion (31 December 2023: $5.6 b
ill
ion)
\n
4
Customer accounts include repurchase agreements and other sim
ilar secured borrow
ing of $37.0 bill
ion (31 December 2023: $48.0 b
ill
ion)
\n
5
Senior debt maturity pro\ufb01les are based upon contractual maturity, which may be later than call options over the debt held by the Group
\n\n
Behavioural maturity of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The cash\ufb02ows presented in the previous section re\ufb02ect the
\n
cash\ufb02ows that will be contractually payable over the residual
\n
maturity of the instruments. However, contractual maturit
ies
\n
do not necessarily re\ufb02ect the tim
ing of actual repayments or
\n
cash\ufb02ow. In practice, certain assets and liab
il
it
ies behave
\n
differently from their contractual terms, especially for short-
\n
term customer accounts, credit card balances and overdrafts,
\n
which extend to a longer period than their contractual
\n
maturity. On the other hand, mortgage balances tend to
\n
have a shorter repayment period than their contractual
\n
maturity date. Expected customer behaviour is assessed
\n
and managed on a country basis using qualitat
ive and
\n
quantitat
ive techn
iques, includ
ing analys
is of observed
\n
customer behaviour over time.
\n
Maturity of \ufb01nanc
ial l
iab
il
it
ies on an und
iscounted basis
\n
(audited)
\n
The following table analyses the contractual cash\ufb02ows
\n
payable for the Group\u2019s \ufb01nancial l
iab
il
it
ies by rema
in
ing
\n
contractual maturit
ies on an und
iscounted basis. The \ufb01nanc
ial
\n
liab
il
ity balances in the table below will not agree with the
\n
balances reported in the consolidated balance sheet as
\n
the table incorporates all contractual cash\ufb02ows, on an
\n
undiscounted basis, relating to both princ
ipal and
interest
\n
payments. Derivat
ives not treated as hedg
ing derivat
ives
\n
are included in the \u2018On demand\u2019 time bucket and not by
\n
contractual maturity.
\n
With
in the \u2018More than \ufb01ve years and undated\u2019 matur
ity band
\n
are undated \ufb01nancial l
iab
il
it
ies, the majority of wh
ich relate
\n
to subordinated debt, on which interest payments are not
\n
included as this informat
ion would not be mean
ingful, given
\n
the instruments are undated. Interest payments on these
\n
instruments are included with
in the relevant matur
it
ies up to
\n
\ufb01ve years.
\n\n \n
2024
Between
Between
Between
Between
Between
More than
one month
three
Between six
nine months
one year
two years
\ufb01ve years
One month
and three
months and
months and
and one
and two
and \ufb01ve
and
or less
months
six months
nine months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deposits by banks
24,303
2,360
1,660
862
589
4,347
1,939
4
36,064
Customer accounts
380,377
37,790
26,277
10,384
10,438
9,937
47,642
3,396
526,241
Derivat
ive \ufb01nancial
instruments\u00b9
80,055
13
12
10
3
216
592
1,163
82,064
Debt securit
ies
in issue
3,622
4,551
11,007
7,056
6,319
10,261
23,184
21,337
87,337
Subordinated liab
il
it
ies and
other borrowed funds
19
134
46
206
14
392
2,345
13,800
16,956
Other liab
il
it
ies
10,421
44,933
2,894
1,408
152
4,433
682
4,802
69,725
Total liab
il
it
ies
498,797
89,781
41,896
19,926
17,515
29,586
76,384
44,502
818,387
2023
Deposits by banks
26,759
1,921
1,417
513
790
1,328
2,848
4
35,580
Customer accounts
385,361
48,140
28,763
14,049
12,190
8,118
39,000
3,036
538,657
Derivat
ive \ufb01nancial
instruments\u00b9
53,054
517
46
44
103
202
887
1,208
56,061
Debt securit
ies
in issue
3,507
6,995
8,015
5,070
4,002
13,663
23,413
16,396
81,061
Subordinated liab
il
it
ies and
other borrowed funds
1,043
134
46
208
570
395
2,389
14,367
19,152
Other liab
il
it
ies
12,200
26,291
1,560
515
884
1,832
1,810
11,513
56,605
Total liab
il
it
ies
481,924
83,998
39,847
20,399
18,539
25,538
70,347
46,524
787,116
\n
1
Derivat
ives are on a d
iscounted basis
\n\n
Interest Rate Risk in the Banking Book
\n
The following table provides the estimated impact to a
\n
hypothetical base case project
ion of the Group\u2019s earn
ings
\n
under the following scenarios:
\n
\u2022
A 50 basis point parallel interest rate shock (up and down)
\n
to the current market-impl
ied path of rates, across all
\n
yield curves
\n
\u2022
A 100 basis point parallel interest rate shock (up and down)
\n
to the current market-impl
ied path of rates, across all
\n
yield curves
\n
These interest rate shock scenarios assume all other economic
\n
variables remain constant. The sensit
iv
it
ies shown represent
\n
the estimated change to a hypothetical base case projected
\n
net interest income (NII), plus the change in interest rate
\n
impl
ied
income and expense from FX swaps used to manage
\n
banking book currency posit
ions, under the d
ifferent interest
\n
rate shock scenarios.
\n
The base case projected NII is based on the current market-
\n
impl
ied path of rates and forward rate expectat
ions. The NII
\n
sensit
iv
it
ies below stress th
is base case by a further 50 or
\n
100bps. Actual observed interest rate changes will likely
\n
differ from market expectation. Accordingly, the shocked NII
\n
sensit
iv
ity does not represent a forecast of the Group\u2019s net
\n
interest income.
\n
The interest rate sensit
iv
it
ies are
ind
icat
ive stress tests and
\n
based on simpl
i\ufb01ed scenar
ios, estimat
ing the aggregate
\n
impact of an unantic
ipated,
instantaneous parallel shock
\n
across all yield curves over a one-year horizon, includ
ing the
\n
time taken to implement changes to pric
ing before becom
ing
\n
effective. The assessment assumes that the size and mix of
\n
the balance sheet remain constant and that there are no
\n
specif
ic management act
ions in response to the change in
\n
rates. No assumptions are made in relation to the impact on
\n
credit spreads in a changing rate environment.
\n
Sign
i\ufb01cant modell
ing and behavioural assumptions are made
\n
regarding scenario simpl
i\ufb01cation, market compet
it
ion,
\n
pass-through rates, asset and liab
il
ity re-pric
ing tenors, and
\n
price \ufb02ooring. In particular, the assumption that interest rates
\n
of all currencies and maturit
ies sh
ift by the same amount
\n
concurrently, and that no actions are taken to mit
igate the
\n
impacts aris
ing from th
is are considered unlikely. Reported
\n
sensit
iv
it
ies w
ill vary over time due to a number of factors
\n
includ
ing changes
in balance sheet composit
ion, market
\n
condit
ions, customer behav
iour and risk management
\n
strategy. Therefore, while the NII sensit
iv
it
ies are a relevant
\n
measure of the Group\u2019s interest rate exposure, they should
\n
not be considered an income or pro\ufb01t forecast.
\n\n \n
2024
Estimated one-year impact
Other
to earnings from a parallel
currency
shift in yield curves at the
USD bloc
HKD bloc
SGD bloc
KRW bloc
CNY bloc
INR bloc
EUR bloc
bloc\u00b9
Total
beginn
ing of the per
iod of:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
+ 50 basis points
20
30
10
20
20
30
10
70
210
- 50 basis points
(40)
(30)
(20)
(20)
(30)
(30)
(20)
(80)
(270)
+ 100 basis points
30
60
20
30
30
40
30
150
390
- 100 basis points
(90)
(50)
(40)
(50)
(50)
(40)
(40)
(190)
(550)
\n\n \n
2023
Estimated one-year impact
to earnings from a parallel
Other
shift in yield curves at the
USD bloc
HKD bloc
SGD bloc
KRW bloc
CNY bloc
INR bloc
EUR bloc
currency
Total
beginn
ing of the per
iod of:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
bloc\u00b9
$mill
ion
+ 50 basis points
90
10
50
10
30
20
30
110
350
- 50 basis points
(150)
(30)
(50)
(20)
(40)
(30)
(30)
(120)
(470)
+ 100 basis points
180
10
100
20
60
40
50
230
690
- 100 basis points
(280)
(40)
(100)
(40)
(80)
(60)
(60)
(230)
(890)
\n
1
The largest exposures with
in the Other currency bloc are GBP,JPY, MYR, TWD
\n
As at 31 December 2024, the Group estimates the one-year
\n
impact of an instantaneous, parallel increase across all
\n
yield curves of 50 basis points to increase projected NII by
\n
$210\u00a0mill
ion. The equ
ivalent impact from a parallel decrease
\n
of 50 basis points would result in a reduction in projected NII
\n
of $270 mill
ion. The Group est
imates the one-year impact of
\n
an instantaneous, parallel increase across all yield curves of
\n
100\u00a0basis points to increase projected NII by $390 mill
ion.
\n
The equivalent impact from a parallel decrease of
\n
100 basis points would result in a reduction in projected
\n
NII of $550 mill
ion.
\n
The bene\ufb01t from ris
ing
interest rates is primar
ily from
\n
reinvest
ing at h
igher yields and from assets re-pric
ing faster
\n
and to a greater extent than deposits. NII sensit
iv
ity in falling
\n
rate scenarios has decreased versus 31 December 2023, due to
\n
an increase in programmatic hedging as well as actions taken
\n
in discret
ionary portfol
ios to increase asset duration.
\n
Over the course of 2024 the notional of interest rate swaps
\n
and HTC-accounted bond portfolios used to reduce NII
\n
sensit
iv
ity through the cycle increased from $47 bill
ion to
\n
$64\u00a0bill
ion. As at December 2024, the portfol
ios had a
\n
weighted average maturity of 3.0 years, which re\ufb02ects the
\n
behavioural
ised l
ives of the rate-insens
it
ive deposit and
\n
equity balances that they hedge, and a yield of 3.5 per cent.
Operational and Technology Risk
Operational and Technology Risk pro\ufb01le
The implementat
ion of standard
ised non-\ufb01nanc
ial r
isk,
control and causal taxonomies is enabling improved risk
aggregation and reporting, and has provided opportunit
ies
for simpl
ify
ing the process for risk ident
i\ufb01cation and
assessment in the Group.
Operational and Technology Risk is elevated in areas such
as Change Mismanagement Risk and Third-Party Risk
Management, which are subject to ongoing control
enhancement programmes. Other key areas of focus are
Systems Health/Technology risk, Operational Resil
ience
and Regulatory Compliance. To address these areas, the
Group has focused on improv
ing the susta
inable operating
environment and has in
it
iated several programmes to
enhance the control environment. The Group continues to
monitor and manage Operational and Technology risks
associated with the external environment such as geopolit
ical
factors, the increas
ing r
isk of cyber-attacks and inappropr
iate
use of Artif
ic
ial Intelligence. This enables the Group to keep
pace with the new business developments, while ensuring
that its risk and control frameworks evolve accordingly.
The Group continues to strengthen its risk management
to understand the full spectrum of risks in the operating
environment, enhance its defences and improve resil
ience.
Operational and Technology risk events and losses
Operational losses are one ind
icator of the effect
iveness and
robustness of our non-\ufb01nancial r
isk and control environment.
The Group\u2019s pro\ufb01le of operational loss events in 2024 and
2023 is summarised in the table below, which shows the
distr
ibut
ion of gross operational losses by Basel business
line. There has been a sharp increase in Corporate Items
in 2024 due to a single large event pertain
ing to F
inance
Accounting Adjustment.
% Loss
Distr
ibut
ion of Operational losses by Basel business line
2024
2023\u00b9
Agency Services
0.0%
3.9%
Asset Management
0.0%
0.2%
Commercial Banking
1.4%
8.0%
Corporate Finance
0.1%
7.2%
Corporate Items
72.5%
34.3%
Payment and Settlements
7.6%
16.6%
Retail Banking
17.0%
21.3%
Retail Brokerage
0.0%
0.0%
Trading and Sales
1.4%
8.6%
1
Losses in 2023 have been restated to include incremental events recognised in 2024
The Group\u2019s pro\ufb01le of operational loss events in 2024 and 2023 is also summarised by Basel event type in the table below.
It shows the distr
ibut
ion of gross operational losses by Basel event type.
% Loss
Distr
ibut
ion of Operational losses by Basel event type
2024
2023\u00b9
Business disrupt
ion and system fa
ilures
1.8%
4.7%
Clients products and business practices
14.1%
2.9%
Damage to physical assets
0.0%
0.0%
Employment practices and workplace safety
0.1%
0.6%
Execution delivery and process management
81.5%
77.3%
External fraud
2.4%
14.4%
Internal fraud
0.1%
0.2%
1
Losses in 2023 have been restated to include incremental events recognised in 2024
Other princ
ipal r
isks
The losses aris
ing from operat
ional failures for other princ
ipal and
integrated risks are reported as operational losses.
Operational losses do not include operational risk-related credit impa
irments. Capital review
The Capital review provides an analysis of the Group\u2019s capital and leverage posit
ion,
and requirements.
Capital summary
The Group\u2019s capital, leverage and min
imum requ
irements for own funds and elig
ible l
iab
il
it
ies (MREL) pos
it
ion
is managed
with
in the Board-approved r
isk appetite. The Group is well capital
ised w
ith low leverage and high levels of loss-absorbing
capacity.
2024
2023
CET1 capital
14.2%
14.1%
Tier 1 capital
16.9%
16.3%
Total capital
21.5%
21.2%
Leverage ratio
4.8%
4.7%
MREL ratio
34.2%
33.3%
Risk-weighted assets (RWA) $mill
ion
247,065
244,151
The Group\u2018s capital, leverage and MREL posit
ions were all
above current requirements and Board-approved risk
appetite. For further detail see the Capital section in the
Standard Chartered PLC Pillar 3 Disclosures for FY 2024.
The Group\u2019s CET1 capital increased 19 basis points to
14.2 per cent of RWA since FY2023. Pro\ufb01ts, movements in
FVOCI, FX translation reserves and decrease in regulatory
deductions were partly offset by RWA growth and
distr
ibut
ions (includ
ing ord
inary share buybacks of
$2.5 bill
ion dur
ing the year).
The PRA updated the Group\u2019s Pillar 2A requirement during
Q4 2024. As at 31 December 2024 the Group\u2019s Pillar 2A was
3.7 per cent of RWA, of which at least 2.1 per cent must be
held in CET1 capital. The Group\u2019s min
imum CET1 cap
ital
requirement was 10.5 per cent at 31 December 2024.
The Group CET1 capital ratio at 31 December 2024 re\ufb02ects
the share buybacks of $2.5 bill
ion announced dur
ing the year.
The CET1 capital ratio also includes an accrual for the FY 2024
div
idend. The Board has recommended a \ufb01nal d
iv
idend for
FY 2024 of $679 mill
ion or 28 cents per share result
ing in a full
year 2024 div
idend of 37 cents per share, a 37 per cent
increase on the 2023 div
idend. In add
it
ion, the Board has
announced a further share buyback of $1.5 bill
ion, the
impact
of this will reduce the Group\u2019s CET1 capital by around 61 basis
points in the \ufb01rst quarter of 2025.
The Group expects to manage CET1 capital dynamically
with
in our 13-14 per cent target range,
in support of our aim
of deliver
ing future susta
inable shareholder distr
ibut
ions.
The Group\u2019s MREL leverage requirement as at 31 December
2024 was 27.6 per cent of RWA. This is composed of a
min
imum requ
irement of 23.7 per cent of RWA and the Group\u2019s
combined buffer (compris
ing the cap
ital conservation buffer,
the G-SII buffer and the countercyclical buffer). The Group\u2019s
MREL ratio was 34.2 per cent of RWA and 9.7 per cent of
leverage exposure at 31 December 2024.
During 2024, the Group successfully raised $9.1 bill
ion of MREL
elig
ible secur
it
ies from
its holding company, Standard
Chartered PLC. Issuance include $1.6 bill
ion of Add
it
ional T
ier 1
and $7.5 bill
ion of callable sen
ior debt.
The Group raised an addit
ional $1.0 b
ill
ion of Add
it
ional T
ier 1
and $2.5 bill
ion
in senior securit
ies post the balance sheet
date, i.e. not included in the FY 2024 MREL posit
ion.
The Group is a G-SII, with a 1.0 per cent G-SII CET1 capital
buffer. The Standard Chartered PLC G-SII disclosure is
published at: sc.com/en/investors/\ufb01nanc
ial-results.
\n\n
Capital base
\n
1
\n
(audited)
\n\n \n
2024
2023
$mill
ion
$mill
ion
CET1 capital instruments and reserves
Capital instruments and the related share premium accounts
5,201
5,321
Of which: share premium accounts
3,989
3,989
Retained earnings
24,950
24,930
Accumulated other comprehensive income (and other reserves)
8,724
9,171
Non-controlling interests (amount allowed in consolidated CET1)
235
217
Independently audited year-end pro\ufb01ts
4,072
3,542
Foreseeable div
idends
(923)
(768)
CET1 capital before regulatory adjustments
42,259
42,413
CET1 regulatory adjustments
Addit
ional value adjustments (prudent
ial valuation adjustments)
(624)
(730)
Intangible assets (net of related tax liab
il
ity)
(5,696)
(6,128)
Deferred tax assets that rely on future pro\ufb01tabil
ity (excludes those aris
ing from temporary d
ifferences)
(31)
(41)
Fair value reserves related to net losses on cash \ufb02ow hedges
(4)
(91)
Deduction of amounts resulting from the calculation of excess expected loss
(702)
(754)
Net gains on liab
il
it
ies at fa
ir value resulting from changes in own credit risk
278
(100)
De\ufb01ned-bene\ufb01t pension fund assets
(149)
(95)
Fair value gains aris
ing from the
inst
itut
ion\u2019s own credit risk related to derivat
ive l
iab
il
it
ies
(97)
(116)
Exposure amounts which could qualify for risk weight
ing of 1250%
(44)
(44)
Total regulatory adjustments to CET1
(7,069)
(8,099)
CET1 capital
35,190
34,314
Addit
ional T
ier 1 capital (AT1) instruments
6,502
5,512
AT1 regulatory adjustments
(20)
(20)
Tier 1 capital
41,672
39,806
Tier 2 capital instruments
11,449
11,965
Tier 2 regulatory adjustments
(30)
(30)
Tier 2 capital
11,419
11,935
Total capital
53,091
51,741
Total risk-weighted assets (unaudited)
247,065
244,151
\n
1
Capital base is prepared on the regulatory scope of consolidat
ion
\n\n
Movement in total capital (audited)
\n\n \n
2024
2023
$mill
ion
$mill
ion
CET1 at 1 January
34,314
34,157
Ordinary shares issued in the period and share premium
\u2013
\u2013
Share buyback
(2,500)
(2,000)
Pro\ufb01t for the period
4,072
3,542
Foreseeable div
idends deducted from CET1
(923)
(768)
Difference between div
idends pa
id and foreseeable div
idends
(469)
(372)
Movement in goodwill and other intang
ible assets
432
(326)
Foreign currency translation differences
(525)
(477)
Non-controlling interests
18
28
Movement in elig
ible other comprehens
ive income
636
464
Deferred tax assets that rely on future pro\ufb01tabil
ity
10
35
Decrease/(increase) in excess expected loss
52
(70)
Addit
ional value adjustments (prudent
ial valuation adjustment)
106
124
IFRS 9 transit
ional
impact on regulatory reserves includ
ing day one
2
(106)
Exposure amounts which could qualify for risk weight
ing
\u2013
59
Fair value gains aris
ing from the
inst
itut
ion\u2019s own Credit Risk related to derivat
ive l
iab
il
it
ies
19
(26)
Others
(54)
50
CET1 at 31 December
35,190
34,314
AT1 at 1 January
5,492
6,484
Net issuances (redemptions)
1,015
(1,000)
Foreign currency translation difference and others
(25)
8
AT1 at 31 December
6,482
5,492
Tier 2 capital at 1 January
11,935
12,510
Regulatory amortisat
ion
1,189
1,416
Net issuances (redemptions)
(1,517)
(2,160)
Foreign currency translation difference
(191)
146
Tier 2 inel
ig
ible minor
ity
interest
(3)
19
Others
6
4
Tier 2 capital at 31 December
11,419
11,935
Total capital at 31 December
53,091
51,741
\n
The main movements in capital in the period were:
\n
\u2022
CET1 capital increased by $0.9 bill
ion as reta
ined pro\ufb01ts of $4.1 bill
ion, movement
in FVOCI of $0.6 bill
ion and a reduct
ion in
\n
regulatory deductions and other movements of $0.6 bill
ion were partly offset by share buybacks of $2.5 b
ill
ion, d
istr
ibut
ions
\n
paid and foreseeable of $1.4 bill
ion, fore
ign currency translation impact of $0.5\u00a0bill
ion.
\n
\u2022
AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.0 bill
ion of 7.88 per cent secur
it
ies and $0.6 b
ill
ion of
\n
5.30\u00a0per\u00a0cent securit
ies partly offset by the redempt
ion of $0.6 bill
ion of 5.38 per cent secur
it
ies.
\n
\u2022
Tier 2 capital decreased by $0.5 bill
ion due to the redempt
ion of $1.6 bill
ion of T
ier 2 during the year partly offset by the
\n
reversal of regulatory amortisat
ion and fore
ign currency translation impact.
\n
Risk-weighted assets by business
\n\n \n
2024
Credit risk
Operational risk
Market risk
Total risk
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate & Investment Banking
112,100
19,987
24,781
156,868
Wealth & Retail Banking
41,002
9,523
\u2013
50,525
Ventures
2,243
142
21
2,406
Central & Other items
33,958
(173)
3,481
37,266
Total risk-weighted assets
189,303
29,479
28,283
247,065
2023
Corporate & Investment Banking
102,675
18,083
21,221
141,979
Wealth & Retail Banking
42,559
8,783
\u2013
51,342
Ventures
1,885
35
3
1,923
Central & Other items
44,304
960
3,643
48,907
Total risk-weighted assets
191,423
27,861
24,867
244,151
\n\n\n\n \n
Credit risk
Corporate &
Wealth &
Investment
Retail
Central &
Operational
Banking
Banking
Ventures
Other items
Total
risk
Market risk
Total risk
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January 2023
110,103
42,091
1,350
43,311
196,855
27,177
20,679
244,711
Assets growth & mix
(4,424)
728
535
1,183
(1,978)
\u2013
\u2013
(1,978)
Asset quality
(391)
390
\u2013
2,684
2,683
\u2013
\u2013
2,683
Risk-weighted assets ef\ufb01c
ienc
ies
\u2013
\u2013
\u2013
(688)
(688)
\u2013
\u2013
(688)
Model Updates
(597)
(151)
\u2013
(151)
(899)
\u2013
500
(399)
Methodology and policy changes
\u2013
(196)
\u2013
\u2013
(196)
\u2013
(800)
(996)
Acquis
it
ions and disposals
(1,630)
\u2013
\u2013
\u2013
(1,630)
\u2013
\u2013
(1,630)
Foreign currency translation
(386)
(303)
\u2013
(2,035)
(2,724)
\u2013
\u2013
(2,724)
Other, Including non-credit
risk movements
\u2013
\u2013
\u2013
\u2013
\u2013
684
4,488
5,172
At 31 December 2023
102,675
42,559
1,885
44,304
191,423
27,861
24,867
244,151
Assets growth & mix
11,412
341
358
(5,803)
6,308
\u2013
\u2013
6,308
Asset quality
(1,349)
112
\u2013
(1,935)
(3,172)
\u2013
\u2013
(3,172)
Risk-weighted assets ef\ufb01c
ienc
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Model Updates
1,620
(1)
\u2013
\u2013
1,619
\u2013
(400)
1,219
Methodology and policy changes
38
39
\u2013
\u2013
77
\u2013
(1,300)
(1,223)
Acquis
it
ions and disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Foreign currency translation
(2,296)
(1,207)
\u2013
(1,374)
(4,877)
\u2013
\u2013
(4,877)
Other, Including non-credit
risk movements
\u2013
(841)
\u2013
(1,234)
(2,075)
1,618
5,116
4,659
At 31 December 2024
112,100
41,002
2,243
33,958
189,303
29,479
28,283
247,065
\n
Movements in risk-weighted assets
\n
RWA increased by $2.9 bill
ion, or 1.2 per cent from 31 December
\n
2023 to $247.1 bill
ion. Th
is was mainly due to decrease in
\n
Credit Risk RWA of $2.1 bill
ion, an
increase in Market Risk RWA
\n
of $3.4\u00a0bill
ion and Operat
ional Risk RWA of $1.6 bill
ion.
\n
Corporate & Investment Banking
\n
Credit Risk RWA increased by $9.4 bill
ion, or 9.2 per cent from
\n
31\u00a0December 2023 to $112.1 bill
ion ma
inly due to:
\n
\u2022
$11.4 bill
ion
increase from changes in asset growth & mix,
\n
of which:
\n
\u2013 $9.0 bill
ion
increase from asset growth
\n
\u2013 $3.1 bill
ion
increase from derivat
ives
\n
\u2013 $0.8 bill
ion decrease from opt
im
isat
ion actions
\n
\u2022
$1.6 bill
ion
increase from industry-wide regulatory changes
\n
to align IRB model performance from adjustment to
\n
commercial real estate counterparties
\n
\u2022
$2.3 bill
ion decrease from fore
ign currency translation
\n
\u2022
$1.3 bill
ion decrease ma
inly due to an improvement in asset
\n
quality re\ufb02ecting client upgrades
\n
Wealth & Retail Banking
\n
Credit Risk RWA decreased by $1.6 bill
ion, or 3.7 per cent from
\n
31 December 2023 to $41.0 bill
ion ma
inly due to:
\n
\u2022
$1.2 bill
ion decrease from fore
ign currency translation
\n
\u2022
$0.8 bill
ion decrease from reclass
if
icat
ion of credit cards
\n
in Asia
\n
\u2022
$0.3 bill
ion
increase from changes in asset growth & mix
\n
\u2022
$0.1 bill
ion
increase mainly due to deteriorat
ion
in asset
\n
quality mainly in Asia
\n
Ventures
\n
Ventures is comprised of Mox Bank Lim
ited, Trust Bank
\n
and SC Ventures. Credit Risk RWA increased by $0.4 bill
ion,
\n
or 19 per cent from 31 December 2023 to $2.2 bill
ion from
\n
asset balance growth, mainly from SC Ventures.
\n
Central & Other items
\n
Central & Other items RWA mainly relate to the Treasury
\n
Market\u2019s liqu
id
ity portfolio, equity investments and current &
\n
deferred tax assets.
\n
Credit Risk RWA decreased by $10.3 bill
ion, or 23.4 per cent
\n
from 31 December 2023 to $34.0 bill
ion ma
inly due to:
\n
\u2022
$5.8 bill
ion decrease from changes
in asset growth & mix
\n
primar
ily from opt
im
isat
ion activ
it
ies
\n
\u2022
$1.9 bill
ion decrease due to
improvement in asset quality
\n
mainly from sovereign upgrades in Asia and Africa
\n
\u2022
$1.4 bill
ion decrease from fore
ign currency translation
\n
\u2022
$1.2 bill
ion decrease due to report
ing enhancements
\n
Market Risk
\n
Total Market Risk RWA increased by $3.4 bill
ion, or
\n
13.7 per cent from 31 December 2023 to $28.3 bill
ion
\n
primar
ily dr
iven by:
\n
\u2022
$1.7 bill
ion
increase in Standardised Approach (SA) Specif
ic
\n
Interest Rate Risk RWA mainly due to increases in the
\n
Trading Book government bond portfolio
\n
\u2022
$2.7 bill
ion
increase in Internal Models Approach (IMA)
\n
RWA from increases in VaR and Stressed VaR RWA due
\n
mainly to increased interest rate exposures, offset by a
\n
reduction of addons for Risks not in VaR
\n
\u2022
$1.3 bill
ion
in the \ufb01rst quarter decrease due to a reduction
\n
in the IMA RWA multipl
ier result
ing from fewer back-
\n
testing exceptions
\n
Operational Risk
\n
\u2022
Operational Risk RWA increased by $1.6 bill
ion, or
\n
5.8 per cent from 31 December 2023 to $29.5 bill
ion, ma
inly
\n
due to a marginal increase in average income as measured
\n
over a rolling three-year time horizon for certain products.
Leverage ratio
The Group\u2019s leverage ratio, which excludes qualify
ing cla
ims on central banks, was 4.8 per cent at FY2024, which was above the
current min
imum requ
irement of 3.7 per cent. The leverage ratio was 10 basis points higher than FY2023. Leverage exposure
increased by $21.2 bill
ion from decrease
in claims on central banks of $15.5 bill
ion, an
increase in Derivat
ives of $15.9 b
ill
ion,
securit
ies \ufb01nancing transact
ions of $1.2 bill
ion, decrease
in asset amounts deducted in determin
ing T
ier 1 capital (Leverage)
of $0.6 bill
ion, partly offset by decrease
in Off-balance sheet items of $5.0 bill
ion, Other Assets of $4.7 b
ill
ion, and secur
it
ies
\ufb01nancing transact
ion add-on of $2.4 bill
ion. T
ier 1 capital increased by $1.9 bill
ion as CET1 cap
ital increased by $0.9 bill
ion
and AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.6 bill
ion partly offset by the redempt
ion of $0.6 bill
ion
AT1 securit
ies.
Leverage ratio
31.12.24
31.12.23
$mill
ion
$mill
ion
Tier 1 capital (end point)
41,672
39,806
Derivat
ive \ufb01nancial
instruments
81,472
50,434
Derivat
ive cash collateral
11,046
10,337
Securit
ies \ufb01nancing transact
ions (SFTs)
98,801
97,581
Loans and advances and other assets
658,369
664,492
Total on-balance sheet assets
849,688
822,844
Regulatory consolidat
ion adjustments
1
(76,197)
(92,709)
Derivat
ives adjustments
Derivat
ives nett
ing
(63,934)
(39,031)
Adjustments to cash collateral
(10,169)
(9,833)
Net written credit protection
2,075
1,359
Potential future exposure on derivat
ives
51,323
42,184
Total derivat
ives adjustments
(20,705)
(5,321)
Counterparty risk leverage exposure measure for SFTs
4,198
6,639
Off-balance sheet items
118,607
123,572
Regulatory deductions from Tier 1 capital
(7,247)
(7,883)
Total exposure measure excluding claims on central banks
868,344
847,142
Leverage ratio excluding claims on central banks (%)
4.8%
4.7%
Average leverage exposure measure excluding claims on central banks
894,296
853,968
Average leverage ratio excluding claims on central banks (%)
4.7%
4.6%
Countercyclical leverage ratio buffer
0.1%
0.1%
G-SII addit
ional leverage rat
io buffer
0.4%
0.4%
1
Includes adjustment for qualify
ing central bank cla
ims and unsettled regular way trades", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "ConsolidatedIncomeStatement_Label_002": { "value": "27862000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:RevenueFromInterest", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:USD" } }, "ConsolidatedIncomeStatement_Label_001": { "value": "27227000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:RevenueFromInterest", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:USD" } }, "ConsolidatedIncomeStatement_NegatedLabel_004": { "value": "21496000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestExpense", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": 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Jos\u00e9 Vi\u00f1als
Bill Winters
Diego De Giorg
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\n
Group Chairman
Group Chief Executive
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"10836000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:USD" } }, "CashFlowStatement_PeriodStartLabel_00437": { "value": "107635000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00", "unit": "iso4217:USD" } }, "CashFlowStatement_PeriodStartLabel_00438": { "value": "97595000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00", "unit": "iso4217:USD" } }, "CashFlowStatement_Label_00439": { "value": "-2045000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:USD" } }, "CashFlowStatement_Label_00440": { "value": "-796000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:USD" } }, "CashFlowStatement_PeriodEndLabel_00441": { "value": "89928000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2025-01-01T00:00:00", "unit": "iso4217:USD" } }, "CashFlowStatement_PeriodEndLabel_00442": { "value": "107635000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00734": { "value": "24000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:ScbZimbabweLimitedMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00735": { "value": "10000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:ScbAngolaSaMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00736": { "value": "17000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:ScbSierraLeoneLimitedMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00737": { "value": "17000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:ShoalLimitedMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00738": { "value": "6000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:AutumnLifePteLtdMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00739": { "value": "3570000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:DisposalOfAviationFinanceLeasingBusinessMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00740": { "value": "14000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:MetacoSaMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00741": { "value": "12000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:CardspalPteLtdMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00742": { "value": "7000000.0", "decimals": -6, "dimensions": { "concept": "stan:DisposalOfInvestmentInSubsidiariesAssociatesAndJointVenturesNetOfCashAcquired", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "ifrs-full:MeasurementAxis": "stan:KozagiMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00718": { "value": "28224000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestReceivedClassifiedAsOperatingActivities", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "ifrs-full:SegmentsAxis": "stan:CashReceivedMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00719": { "value": "27136000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestReceivedClassifiedAsOperatingActivities", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "ifrs-full:SegmentsAxis": "stan:CashReceivedMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00720": { "value": "21776000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestPaidClassifiedAsOperatingActivities", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "ifrs-full:SegmentsAxis": "stan:CashPaidMember", "unit": "iso4217:USD" } }, "CashFlowStatementParenthetical_Label_00721": { "value": "18379000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestPaidClassifiedAsOperatingActivities", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "ifrs-full:SegmentsAxis": "stan:CashPaidMember", "unit": "iso4217:USD" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00483": { "value": "1. Accounting polic
ies
Statement of compliance
The Group \ufb01nancial statements consol
idate Standard
Chartered PLC (the Company) and its subsid
iar
ies (together
referred to as the Group) and equity account the Group\u2019s
interests in associates and jo
intly controlled ent
it
ies.
The parent company \ufb01nancial statements present
informat
ion about the Company as a separate ent
ity.
The Group \ufb01nancial statements have been prepared
in
accordance with UK-adopted internat
ional account
ing
standards and International Financ
ial Report
ing Standards
(IFRS) (Accounting Standards) as adopted by the European
Union (EU IFRS). The Company \ufb01nanc
ial statements
have been prepared in accordance with UK-adopted
internat
ional account
ing standards as applied in
conformity with section 408 of the Companies Act 2006.
The \ufb01nancial statements have been prepared
in
accordance with the requirements of the Companies
Act 2006.
There are no sign
i\ufb01cant d
ifferences between UK-adopted
internat
ional account
ing standards and EU IFRS.
The following parts of the Risk review and Capital review
form part of these \ufb01nancial statements:
a) Risk review: Disclosures marked as \u2018audited\u2019 from the
start of the Credit Risk section (page 207) to the end of
Other princ
ipal r
isks in the same section (page 255).
b) Capital review: Tables marked as \u2018audited\u2019 from the start
of \u2018CRD Capital base\u2019 to the end of \u2018Movement in total
capital\u2019, excluding \u2018Total risk-weighted assets\u2019 (pages 271
to 272).
Basis of preparation
The consolidated and Company \ufb01nanc
ial statements have
been prepared on a going concern basis and under the
histor
ical cost convent
ion, as modif
ied by the revaluat
ion
of cash-settled share-based payments, fair value through
other comprehensive income, and \ufb01nanc
ial assets and
liab
il
it
ies (
includ
ing der
ivat
ives) at fa
ir value through pro\ufb01t
or loss.
The consolidated \ufb01nanc
ial statements are presented
in
United States dollars ($), being the presentation currency
of the Group and functional currency of the Company, and
all values are rounded to the nearest mill
ion dollars, except
when otherwise ind
icated.
Sign
i\ufb01cant and other account
ing estimates and
judgement
In determin
ing the carry
ing amounts of certain assets and
liab
il
it
ies, the Group makes assumpt
ions of the effects of
uncertain future events on those assets and liab
il
it
ies
at the balance sheet date. The Group\u2019s estimates and
assumptions are based on histor
ical exper
ience and
expectation of future events and are reviewed period
ically.
Further informat
ion about key assumpt
ions concerning
the future, and other key sources of estimat
ion uncerta
inty
and judgement, are set out in the relevant disclosure notes
for the areas set out under the relevant headings below:
Sign
i\ufb01cant account
ing estimates and crit
ical judgements
\u2022
Expected credit loss calculations (Note 8)
\u2022
Financ
ial
instruments measured at fair value (Note 13)
\u2022
Investments in subsid
iary undertak
ings, jo
int ventures
and associates \u2013 China Bohai associate accounting and
impa
irment analys
is (Note 32)
Sign
i\ufb01cant account
ing estimates and judgements
represent those items which have a sign
i\ufb01cant r
isk of
causing a material adjustment to the carrying amounts
of assets and liab
il
it
ies w
ith
in the next year. S
ign
i\ufb01cant
accounting estimates and judgements are:
Other areas of accounting estimate and judgement
Other areas of accounting estimate and judgement do not
meet the de\ufb01nit
ion under IAS 1 of sign
i\ufb01cant account
ing
estimates or crit
ical account
ing judgements, but the
recognit
ion of certa
in material assets and liab
il
it
ies are
based on assumptions and/or are subject to long-term
uncertaint
ies. The other areas of account
ing estimate and
judgement are:
\u2022 Taxation (Note 10)
\u2022
Goodwill and intang
ible assets - Goodw
ill impa
irment
and Capital
isat
ion of internally generated software
intang
ibles (Note 9 and Note 17)
\u2022
Provis
ions for l
iab
il
it
ies and charges \u2013 Other prov
is
ions
(Note 24)
\u2022
Legal and regulatory matters (Note 26)
\u2022
Retirement bene\ufb01t obligat
ions (Note 30)
\u2022
Share-based payments (Note 31)
Climate change impact on the Group\u2019s balance sheet
Climate, and the impact of climate on the Group\u2019s
balance sheet is considered as an area which can
impact accounting estimates and judgments through
the uncertainty of future events and the impact of
that uncertainty on the Group\u2019s assets and liab
il
it
ies.
However, the Group has concluded that Climate Change
does not have a \ufb01nancially mater
ial impact at this time.
The Group has assessed the impact of climate risk on the
\ufb01nancial report. Th
is is set out with
in the Susta
inab
il
ity
Overview and Sustainab
il
ity Review chapter which
incorporate the Group\u2019s Climate-related Financ
ial
Disclosures which align with the recommendations from
the Task Force for Climate related Financ
ial D
isclosures
(TCFD). Further risk disclosure has been provided in the
Princ
ipal R
isks and Uncertaint
ies sect
ion of the Annual
Report where the Group has described how it manages
climate risk, which is integrated across relevant Princ
ipal
Risk Types (PRTs) and is managed via the ESGR Risk
Type framework.
The areas of impact where judgements and the use of
estimates have been applied were credit risk and the
impact on lending portfolios; ESG features with
in
issued
loans and bonds; physical risk on our mortgage lending
portfolio; and the corporate plan, in respect of which
forward looking cash \ufb02ows impact the recoverabil
ity of
certain assets, includ
ing of goodw
ill, deferred tax assets
and investments in subsid
iary undertak
ings.
Transit
ion r
isk, as our clients move to lower carbon emitt
ing
revenues, (either by virtue of legislat
ion or chang
ing end
customer preference) is considered with reference to client
transit
ion pathways and man
ifests over a longer term than
the maturity of the loan book (up to 2050). The setting of
net zero targets, which as of this annual report covers our
12 highest emitt
ing sectors, manages trans
it
ion r
isk.
Net zero targets enable the portfolio managers to work
with our clients on their transit
ion and deploy cap
ital to
those clients which are engaged and have adequate
transit
ion pathways. All of these act
ions manage the
Group\u2019s transit
ion r
isk and engage clients before transit
ion
risk manifests itself into credit losses. We have also
evaluated transit
ion r
isk to achieve net zero in our
own operations.
While physical risk is included with
in the majority of our
mortgage lending decis
ions, we have appl
ied scenario
analysis against the pathways of different temperature
outcomes to examine exposure concentration risk in key
markets subject to the extreme risk of \ufb02oods and storms to
assess the acute physical risk, and sea level rise to assess
the chronic physical risk. Stranded assets analysis was
conducted for resident
ial mortgages to
ident
ify propert
ies
that are expected to become uninhab
itable and/or
unusable due to increased frequency and intens
ity of
physical risk events from acute and chronic risks. We assess
the physical risk vulnerabil
it
ies of our exist
ing s
ites on a
regular basis and for new sites during the onboarding
process. Addit
ionally, we assess the
impact of climate risk
on the classif
icat
ion of \ufb01nanc
ial
instruments under IFRS 9,
when Environmental, Social or Governance (ESG) triggers
may affect the cash \ufb02ows received by the Group under the
contractual terms of the instrument.
The ESGR Risk team has performed a quantitat
ive
assessment of the impact of climate risk on the IFRS 9
ECL provis
ion. Th
is assessment has been performed across
both the CIB and WRB portfolios. The Climate risk impact
assessment on IFRS 9 business as usual ECL has been
conducted based on newly developed and enhanced
internal climate risk models for corporates across six
prior
ity sectors (O
il and Gas, Power, Steel, Min
ing, Sh
ipp
ing,
and Automotive), one Generic model for the remain
ing
corporate sectors and Sovereigns, while the top-down
approach developed in 2022 was used for the remain
ing
portfolios. The impact assessment, which primar
ily focused
on transit
ion r
isk, resulted in only a marginal ECL increase
across CIB and WRB, which has been recorded as a
management overlay for the 2024 year end.
The Group\u2019s corporate plan has a 5 year outlook and
considers the highest emitt
ing sectors the Group \ufb01nances.
The majority of the Group sector targets are product
ion/
physical intens
it
ies which allow continued levels of
lending as long as the products the client produce have
a decreasing carbon cost. For Coal Min
ing and O
il and Gas,
these sectors have absolute targets which represent a
decreasing carbon budget. Coal Min
ing
is an immater
ial
book, while for Oil and Gas lending is being actively
monitored towards lower carbon counterparties and
technologies. The corporate plan is shorter term than many
of the climate scenario outlooks but seeks to capture the
nearer term performance as required by recoverabil
ity
models. The Group has for the third time in the 2025
corporate plan included antic
ipated cred
it impa
irment
charges, now across seven sectors (Oil and Gas, Metals
and Min
ing, Power, and Transport, along w
ith Cement,
Automobile, and Commercial Real Estate which have been
newly added this year). This addit
ion of cred
it impa
irment
has not in itself, materially impacted the recoverabil
ity of
assets supported by discounted cash \ufb02ow models (such as
Value in Use) which util
ise the Corporate plan.
The Group has progressively strengthened its scenario
analysis capabil
it
ies with the modelling of Climate Risk
impact over a 30-year period across multiple dimens
ions
includ
ing scenar
io data and pathways across CIB and WRB
portfolios. While we have taken the \ufb01rst step in our journey
to transit
ion from our rel
iance on vendor models to in-house
capabil
it
ies, challenges underpin the scenario analysis,
such as reliance on nascent methodologies, dependencies
on \ufb01rst generation models and data lim
itat
ions.
Notwithstand
ing these challenges, our work to date,
using certain assumptions and proxies, ind
icates that our
business is resil
ient to all Network of Central Banks and
Supervisors for Greening the Financ
ial System (NGFS) and
bespoke scenarios that were explored.
The Group, although acknowledging the lim
itat
ions of
current data available, increas
ing soph
ist
icat
ion of models
evolving and nascent nature of climate impacts on internal
and client assets, considers Climate Risk to have lim
ited
quantitat
ive
impact in the immed
iate term and as a
longer-term risk is expected to be addressed through its
business strategy and \ufb01nanc
ial plann
ing as the Group
implements its net zero journey.
IFRS and Hong Kong accounting requirements
As required by the Hong Kong List
ing Rules, an
explanation of the differences in accounting practices
between UK-adopted IFRS and Hong Kong Financ
ial
Reporting Standards is required to be disclosed. There
would be no sign
i\ufb01cant d
ifferences had these accounts
been prepared in accordance with Hong Kong Financ
ial
Reporting Standards.
Standard Chartered PLC has fully complied with the
new treasury share regime introduced under the revised
Hong Kong List
ing Rules from 11 June 2024 onwards and
will continue to comply with the new regime.
New accounting standards in issue but not yet effective
There were no new accounting standards or interpretat
ions
that had a material effect on the Group\u2019s Financ
ial
Statements in 2024.
IAS 21 Amendment \u2013 Lack of Exchangeabil
ity
In August 2023, the IASB issued amendments to IAS 21 The
Effects of Changes in Foreign Exchange Rates to specify how
an entity should assess whether a currency is exchangeable
and how it should determine a spot exchange rate when
exchangeabil
ity
is lacking. The amendments also require
disclosure of informat
ion that enables users to understand
the impact of a currency not being exchangeable. The
amendments will be effective for annual reporting periods
beginn
ing on or after 1 January 2025. The amendment
is
not expected to have a material impact on the Group\u2019s
\ufb01nancial statements.
IFRS 18 Presentation and Disclosure in Financ
ial Statements
The new standard IFRS 18 was issued in April 2024 and is
effective for annual reporting periods beginn
ing on or
after January 1, 2027 but earlier applicat
ion
is permitted.
This new standard replaces IAS 1 Presentation of Financ
ial
Statements and amends IAS 7 Statement of Cash Flows.
IFRS 18 introduces three de\ufb01ned categories for income and
expenses\u2014operating, invest
ing and \ufb01nancing\u2014to
improve
the structure of the income statement, and requires all
companies to provide new de\ufb01ned subtotals, includ
ing
operating pro\ufb01t. IFRS 18 will require disclosure of
explanations of company-specif
ic measures that are related
to the income statement, referred to as management-
de\ufb01ned performance measures. IFRS 18 sets out enhanced
guidance on how to organise informat
ion and whether to
provide it in the primary \ufb01nanc
ial statements or
in the notes.
The Group will apply IFRS 18 for annual reporting periods
beginn
ing on January 1, 2027 and
is currently not expected
to have a material impact on the Group\u2019s \ufb01nanc
ial
statements other than a change in the presentation of
the primary statements.
IFRS 9 Financ
ial Instruments and IFRS 7 F
inanc
ial
Instruments: Disclosures Amendments
In May 2024, the IASB issued Amendments to the
Classif
icat
ion and Measurement of Financ
ial Instruments
which amended requirements related to settling \ufb01nanc
ial
liab
il
it
ies us
ing an electronic payment system and assessing
contractual cash \ufb02ow characterist
ics of \ufb01nancial assets,
includ
ing those w
ith environmental, social and governance
(ESG)-linked features. The IASB also amended disclosure
requirements relating to investments in equity instruments
designated at fair value through other comprehensive
income and added disclosure requirements for \ufb01nanc
ial
instruments with contingent features that do not relate
directly to basic lending risks and costs. The amendments
will be effective for annual reporting periods beginn
ing on or
after 1 January 2026. The amendments are not expected to
have a material impact on the Group\u2019s \ufb01nanc
ial statements.
Going concern
These \ufb01nancial statements were approved by the Board
of directors on 21 February 2025. The directors have made
an assessment of the Group\u2019s abil
ity to cont
inue as a
going concern. This assessment has been made having
considered the current macroeconomic and geopolit
ical
headwinds, includ
ing:
\u2022
Review of the Group Strategy and Corporate Plan,
includ
ing the annual budget
\u2022
An assessment of the actual performance to date,
loan book quality, credit impa
irment, legal and
regulatory matters, compliance matters, recent
regulatory developments
\u2022
Considerat
ion of stress test
ing performed, includ
ing the
Group Recovery Plan (RP) which include the applicat
ion
of stressed scenarios. Under the tests and through the
range of scenarios, the results of these exercises and the
RP demonstrate that the Group has suf\ufb01cient cap
ital
and liqu
id
ity to continue as a going concern and meet
min
imum regulatory cap
ital and liqu
id
ity requirements
\u2022
Analysis of the capital posit
ion of the Group,
includ
ing
the capital and leverage ratios, and ICAAP which
summarises the Group\u2019s capital and risk assessment
processes, assesses its capital requirements and the
adequacy of resources to meet them
\u2022
Analysis of the funding and liqu
id
ity posit
ion of the Group,
includ
ing the Internal L
iqu
id
ity Adequacy Assessment
Process (ILAAP), which considers the Group\u2019s liqu
id
ity
posit
ion,
its framework and whether suf\ufb01c
ient l
iqu
id
ity
resources are being mainta
ined to meet l
iab
il
it
ies as they
fall due, was also reviewed. Further, funding and liqu
id
ity
was considered in the context of the risk appetite metrics,
includ
ing the LCR rat
io
\u2022
The level of debt in issue, includ
ing redempt
ions and
issuances during the year, debt falling due for repayment
in the next 12 months and further planned debt issuances,
includ
ing the appet
ite in the market for the Group\u2019s debt
\u2022
The Group\u2019s portfolio of debt securit
ies held at
amortised cost
\u2022
A detailed review of all princ
ipal r
isks as well as topical
and emerging risks
Based on the analysis performed, the directors con\ufb01rm
they are satisf
ied that the Group has adequate resources
to continue in business for a period of at least 12 months
from 21 February 2025.
For this reason, the Group continues to adopt the
going concern basis of accounting for preparing the
\ufb01nancial statements.Accounting policy
Interest income for \ufb01nanc
ial assets held at e
ither fair value through other comprehensive income or amortised cost,
and interest expense on all \ufb01nanc
ial l
iab
il
it
ies held at amort
ised cost is recognised in pro\ufb01t or loss using the effective
interest method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected
life of the \ufb01nanc
ial
instrument or, when appropriate, a shorter period, to the net carrying amount of the \ufb01nanc
ial
asset or \ufb01nancial l
iab
il
ity. When calculating the effective interest rate, the Group estimates cash \ufb02ows consider
ing all
contractual terms of the \ufb01nancial
instrument (for example prepayment options) but does not consider future credit losses.
The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or discounts. For \ufb02oating-rate \ufb01nanc
ial
instruments, period
ic
re-estimat
ion of cash \ufb02ows that re\ufb02ect the movements
in the market rates of interest alters the effective interest rate.
Where the estimates of cash \ufb02ows have been revised, the carrying amount of the \ufb01nanc
ial asset or l
iab
il
ity is adjusted to
re\ufb02ect the actual and revised cash \ufb02ows, discounted at the instruments orig
inal effect
ive interest rate. The adjustment is
recognised as interest income or expense in the period in which the revis
ion
is made as long as the change in estimates is
not due to credit issues.
Interest income for \ufb01nanc
ial assets that are e
ither held at fair value through other comprehensive income or amortised
cost that have become credit-impa
ired subsequent to
in
it
ial recognit
ion (stage 3) and have had amounts wr
itten off,
is recognised using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective
interest rate except that expected credit losses are included in the expected cash \ufb02ows. Interest income is therefore
recognised on the amortised cost of the \ufb01nanc
ial asset
includ
ing expected cred
it losses. Should the credit risk on a
stage 3 \ufb01nancial asset
improve such that the \ufb01nanc
ial asset
is no longer considered credit-impa
ired,
interest income
recognit
ion reverts to a computat
ion based on the rehabil
itated gross carry
ing value of the \ufb01nanc
ial asset.Accounting policy
The Group can act as trustee or in other Fiduc
iary capac
it
ies that result
in the holding or placing of assets on behalf of
ind
iv
iduals, trusts, retirement bene\ufb01t plans and other inst
itut
ions. The assets and income aris
ing thereon are excluded from
these \ufb01nancial statements, as they are not assets and
income of the Group.Accounting policy
Gains and losses aris
ing from changes
in the fair value of \ufb01nanc
ial
instruments held at fair value through pro\ufb01t or loss are
recorded in net trading income in the period in which they arise. This includes contractual interest receivable or payable.
When the in
it
ial fair value of a \ufb01nanc
ial
instrument held at fair value through pro\ufb01t or loss relies on unobservable inputs,
the difference between the in
it
ial valuation and the transaction price is amortised to net trading income as the inputs
become observable or over the life of the instrument, whichever is shorter. Any unamortised \u2018day one\u2019 gain is released to
net trading income if the transaction is terminated.
Income is recognised from the sale and purchase of trading posit
ions, marg
ins on market making and customer business
and fair value changes.Accounting policy
Sign
i\ufb01cant account
ing estimates and judgements
The Group\u2019s expected credit loss (ECL) calculations are outputs of complex models with a number of underlying
assumptions. The sign
i\ufb01cant judgements
in determin
ing expected cred
it loss include:
\u2022
The Group\u2019s criter
ia for assess
ing if there has been a sign
i\ufb01cant
increase in credit risk;
\u2022
Development of expected credit loss models, includ
ing the cho
ice of inputs relating to macroeconomic variables;
\u2022
Determin
ing est
imates of forward looking macroeconomic forecasts;
\u2022
Evaluation of management overlays and post-model adjustments;
\u2022
Determinat
ion of probab
il
ity we
ight
ings for Stage 3
ind
iv
idually assessed provis
ions
The calculation of credit impa
irment prov
is
ions also
involves expert credit judgement to be applied by the credit risk
management team based upon counterparty informat
ion they rece
ive from various sources includ
ing relat
ionsh
ip
managers and on external market informat
ion. Deta
ils on the approach for determin
ing expected cred
it loss can be found
in the credit risk section, under IFRS 9 Methodology (page 236).
Estimates of forecasts of key macroeconomic variables underlying the expected credit loss calculation can be found with
in
the Risk review, Key assumptions and judgements in determin
ing expected cred
it loss (page 238).
Expected credit losses
An ECL represents the present value of expected cash shortfalls over the residual term of a \ufb01nanc
ial asset, undrawn
commitment or \ufb01nanc
ial guarantee.
A cash shortfall is the difference between the cash \ufb02ows that are due in accordance with the contractual terms of the
instrument and the cash \ufb02ows that the Group expects to receive over the contractual life of the instrument.
Measurement
ECL are computed as unbiased, probabil
ity-we
ighted amounts which are determined by evaluating a range of reasonably
possible outcomes, the time value of money, and consider
ing all reasonable and supportable
informat
ion
includ
ing that
which is forward-looking.
For material portfolios, the estimate of expected cash shortfalls is determined by multiply
ing the probab
il
ity of default (PD)
with the loss given default (LGD) with the expected exposure at the time of default (EAD). There may be multiple default
events over the lifet
ime of an
instrument. Further details on the components of PD, LGD and EAD are disclosed in the Credit
risk section. For less material Retail Banking loan portfolios, the Group has adopted less sophist
icated approaches based
on histor
ical roll rates or loss rates.
Forward-looking economic assumptions are incorporated into the PD, LGD and EAD where relevant and where they
in\ufb02uence credit risk, such as GDP growth rates, interest rates, house price ind
ices and commod
ity prices among others.
These assumptions are incorporated using the Group\u2019s most likely forecast for a range of macroeconomic assumptions.
These forecasts are determined using all reasonable and supportable informat
ion, wh
ich includes both internally
developed forecasts and those available externally, and are consistent with those used for budgeting, forecasting and
capital planning.
To account for the potential non-linear
ity
in credit losses, multiple forward-looking scenarios are incorporated into the
range of reasonably possible outcomes for all material portfolios. For example, where there is a greater risk of downside
credit losses than upside gains, multiple forward-looking economic scenarios are incorporated into the range of
reasonably possible outcomes, both in respect of determin
ing the PD (and where relevant, the LGD and EAD) and
in
determin
ing the overall ECL amounts. These scenar
ios are determined using a Monte Carlo approach centred around
the Group\u2019s most likely forecast of macroeconomic assumptions.
The period over which cash shortfalls are determined is generally lim
ited to the max
imum contractual period for which
the Group is exposed to credit risk. However, for certain revolving credit facil
it
ies, which include credit cards or overdrafts,
the Group\u2019s exposure to credit risk is not lim
ited to the contractual per
iod. For these instruments, the Group estimates
an appropriate life based on the period that the Group is exposed to credit risk, which includes the effect of credit risk
management actions such as the withdrawal of undrawn facil
it
ies.
For credit-impa
ired \ufb01nancial
instruments, the estimate of cash shortfalls may require the use of expert credit judgement.
\n\n\n
The estimate of expected cash shortfalls on a collateralised \ufb01nanc
ial
instrument re\ufb02ects the amount and tim
ing of cash
\n
\ufb02ows that are expected from foreclosure on the collateral less the costs of obtain
ing and sell
ing the collateral, regardless
\n
of whether foreclosure is deemed probable.
\n
Cash \ufb02ows from unfunded credit enhancements held are included with
in the measurement of expected cred
it losses if
\n
they are part of, or integral to, the contractual terms of the instrument (this includes \ufb01nanc
ial guarantees, unfunded r
isk
\n
partic
ipat
ions and other non-derivat
ive cred
it insurance). Although non-integral credit enhancements do not impact the
\n
measurement of expected credit losses, a reimbursement asset is recognised to the extent of the ECL recorded.
\n
Cash shortfalls are discounted using the effective interest rate (or credit-adjusted effective interest rate for purchased or
\n
orig
inated cred
it-impa
ired
instruments (POCI)) on the \ufb01nanc
ial
instrument as calculated at in
it
ial recognit
ion or
if the
\n
instrument has a variable interest rate, the current effective interest rate determined under the contract.
\n\n \n
Instruments
Location of expected credit loss provis
ions
Financ
ial assets held at amort
ised cost
Loss provis
ions: netted aga
inst gross carrying value
1
Financ
ial assets held FVOCI \u2013 Debt
instruments
Other comprehensive income (FVOCI expected credit loss reserve)
2
Loan commitments
Provis
ions for l
iab
il
it
ies and charges
3
Financ
ial guarantees
Provis
ions for l
iab
il
it
ies and charges
3
\n
1
Purchased or orig
inated cred
it-impa
ired assets do not attract an expected cred
it loss provis
ion on
in
it
ial recognit
ion. An expected cred
it loss provis
ion w
ill
\n
be recognised only if there is an increase in expected credit losses from that considered at in
it
ial recognit
ion
\n
2
Debt and treasury securit
ies class
if
ied as fa
ir value through other comprehensive income (FVOCI) are held at fair value on the face of the balance sheet.
\n
The expected credit loss attributed to these instruments is held as a separate reserve with
in other comprehens
ive income (OCI) and is recycled to the pro\ufb01t
\n
and loss account along with any fair value measurement gains or losses held with
in FVOCI when the appl
icable instruments are derecognised
\n
3
Expected credit loss on loan commitments and \ufb01nanc
ial guarantees
is recognised as a liab
il
ity provis
ion. Where a \ufb01nancial
instrument includes both a loan
\n
(i.e. \ufb01nanc
ial asset component) and an undrawn comm
itment (i.e. loan commitment component), and it is not possible to separately ident
ify the expected
\n
credit loss on these components, expected credit loss amounts on the loan commitment are recognised together with expected credit loss amounts on
\n
the \ufb01nancial asset. To the extent the comb
ined expected credit loss exceeds the gross carrying amount of the \ufb01nanc
ial asset, the expected cred
it loss is
\n
recognised as a liab
il
ity provis
ion
\n
Recognit
ion
\n
12 months expected credit losses (stage 1)
\n
Expected credit losses are recognised at the time of in
it
ial recognit
ion of a \ufb01nancial
instrument and represent the
\n
lifet
ime cash shortfalls ar
is
ing from poss
ible default events up to 12 months into the future from the balance sheet date.
\n
Expected credit losses continue to be determined on this basis until there is either a sign
i\ufb01cant
increase in the credit risk of
\n
an instrument or the instrument becomes credit-impa
ired. If an
instrument is no longer considered to exhib
it a s
ign
i\ufb01cant
\n
increase in credit risk, expected credit losses will revert to being determined on a 12-month basis.
\n
Sign
i\ufb01cant
increase in credit risk (Stage 2)
\n
Sign
i\ufb01cant
increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk
\n
of default at orig
inat
ion (after taking into account the passage of time). Sign
i\ufb01cant does not mean stat
ist
ically s
ign
i\ufb01cant
\n
nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is sign
i\ufb01cant or
\n
not is assessed using a number of quantitat
ive and qual
itat
ive factors, the we
ight of which depends on the type of product
\n
and counterparty. Financ
ial assets that are 30 or more days past due and not cred
it-impa
ired w
ill always be considered to
\n
have experienced a sign
i\ufb01cant
increase in credit risk. For less material portfolios where a loss rate or roll rate approach is
\n
applied to compute expected credit loss, sign
i\ufb01cant
increase in credit risk is primar
ily based on 30 days past due.
\n
Quantitat
ive factors
include an assessment of whether there has been sign
i\ufb01cant
increase in the forward-looking
\n
probabil
ity of default (PD) s
ince orig
inat
ion. A forward-looking PD is one that is adjusted for future economic condit
ions
\n
to the extent these are correlated to changes in credit risk. We compare the residual lifet
ime PD at the balance sheet
\n
date to the residual lifet
ime PD that was expected at the t
ime of orig
inat
ion for the same point in the term structure
\n
and determine whether both the absolute and relative change between the two exceeds predetermined thresholds.
\n
To the extent that the differences between the measures of default outlined exceed the de\ufb01ned thresholds, the instrument
\n
is considered to have experienced a sign
i\ufb01cant
increase in credit risk (see page 244 to 245).
\n
Qualitat
ive factors assessed
include those linked to current credit risk management processes, such as lending placed on
\n
non-purely precautionary early alert (and subject to closer monitor
ing).
\n
A non-purely precautionary early alert account is one which exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion, or attent
ion by management. Weaknesses in such a borrower\u2019s account, if left
\n
uncorrected, could result in deteriorat
ion of repayment prospects and the l
ikel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry, concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and overdue balances among other factors.
\n\n\n
Credit-impa
ired (or defaulted) exposures (Stage 3)
\n
Financ
ial assets that are cred
it-impa
ired (or
in default) represent those that are at least 90 days past due in respect of
\n
princ
ipal and/or
interest. Financ
ial assets are also cons
idered to be credit-impa
ired where the obl
igors are unlikely to pay
\n
on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash \ufb02ows
\n
of the \ufb01nancial asset. It may not be poss
ible to ident
ify a s
ingle discrete event but instead the combined effect of several
\n
events may cause \ufb01nancial assets to become cred
it-impa
ired.
\n
\u2022
Evidence that a \ufb01nanc
ial asset
is credit-impa
ired
includes observable data about the following events:
\n
\u2022
Sign
i\ufb01cant \ufb01nancial d
iff
iculty of the
issuer or borrower;
\n
\u2022
Breach of contract such as default or a past due event;
\n
\u2022
For economic or contractual reasons relating to the borrower\u2019s \ufb01nanc
ial d
iff
iculty, the lenders of the borrower have
\n
granted the borrower concession/s that lenders would not otherwise consider. This would include forbearance actions
\n
(page 226);
\n
\u2022
Pending or actual bankruptcy or other \ufb01nanc
ial reorgan
isat
ion to avo
id or delay discharge of the borrower\u2019s
\n
obligat
ion/s;
\n
\u2022
The disappearance of an active market for the applicable \ufb01nanc
ial asset due to \ufb01nancial d
iff
icult
ies of the borrower;
\n
\u2022
Purchase or orig
inat
ion of a \ufb01nanc
ial asset at a deep d
iscount that re\ufb02ects incurred credit losses
\n
Lending commitments to a credit-impa
ired obl
igor that have not yet been drawn down are included to the extent that the
\n
commitment cannot be withdrawn. Loss provis
ions aga
inst credit-impa
ired \ufb01nancial assets are determ
ined based on an
\n
assessment of the present value of expected cash shortfalls (discounted at the instrument\u2019s orig
inal effect
ive interest rate)
\n
under a range of scenarios, includ
ing the real
isat
ion of any collateral held where appropr
iate. The Group\u2019s de\ufb01n
it
ion of
\n
default is aligned with the regulatory de\ufb01n
it
ion of default as set out in the UK\u2019s onshored capital requirements regulations
\n
(Art 178).
\n
Expert credit judgement
\n
For Corporate & Investment Banking and Private Banking, borrowers are graded by credit risk management on a credit
\n
grading (CG) scale from CG1 to CG14. Once a borrower starts to exhib
it cred
it deteriorat
ion,
it will move along the credit
\n
grading scale in the performing book and when it is classif
ied as CG12 (wh
ich is a qualitat
ive tr
igger for sign
i\ufb01cant
increase
\n
in credit risk (see page 245)the credit assessment and oversight of the loan will normally be performed by Stressed Assets
\n
Risk (SAR).
\n
Borrowers graded CG12 exhib
it well-de\ufb01ned weaknesses
in areas such as management and/or performance but there is
\n
no current expectation of a loss of princ
ipal or
interest in the likely scenario. Where the impa
irment assessment
ind
icates
\n
that there will be a loss of princ
ipal on a loan
in the likely scenario, the borrower is graded a CG14 while borrowers of other
\n
credit-impa
ired loans are graded CG13. Instruments graded CG13 or CG14 are regarded as stage 3.
\n
For ind
iv
idually sign
i\ufb01cant \ufb01nancial assets w
ith
in stage 3, SAR w
ill consider all judgements that have an impact on the
\n
expected future cash \ufb02ows of the asset. These include: the business prospects, industry and geopolit
ical cl
imate of
\n
the customer, quality of realisable value of collateral, the Group\u2019s legal posit
ion relat
ive to other claimants and any
\n
renegotiat
ion/forbearance/mod
if
icat
ion options. The future cash \ufb02ow calculation involves sign
i\ufb01cant judgements
\n
and estimates. As new informat
ion becomes ava
ilable and further negotiat
ions/ forbearance measures are taken the
\n
estimates of the future cash \ufb02ows will be revised, and will have an impact on the future cash \ufb02ow analysis.
\n
For \ufb01nancial assets wh
ich are not ind
iv
idually sign
i\ufb01cant, such as the Reta
il Banking portfolio or small business loans, which
\n
comprise a large number of homogenous loans that share sim
ilar character
ist
ics, stat
ist
ical est
imates and techniques are
\n
used, as well as credit scoring analysis.
\n
Consumer and Business Banking clients are considered credit-impa
ired where they are more 90 days past due, or
if the
\n
borrower \ufb01les for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in
\n
the case of a small business, or if the borrower surrenders the collateral, or there is an ident
i\ufb01ed fraud on the account.
\n
Addit
ionally,
if the account is unsecured and the borrower has other credit accounts with the Group that are considered
\n
credit-impa
ired, the account may be also be cred
it-impa
ired.
\n
Techniques used to compute impa
irment amounts use models wh
ich analyse histor
ical repayment and default rates over
\n
a time horizon. Where various models are used, judgement is required to analyse the available informat
ion prov
ided and
\n
select the appropriate model or combinat
ion of models to use.
\n
Expert credit judgement is also applied to determine whether any post-model adjustments are required for credit risk
\n
elements which are not captured by the models.
\n
Modif
ied \ufb01nancial
instruments
\n
Where the orig
inal contractual terms of a \ufb01nancial asset have been mod
if
ied for cred
it reasons and the instrument has
\n
not been derecognised (an instrument is derecognised when a modif
icat
ion results in a change in cash \ufb02ows that the
\n
Group would consider substantial), the resulting modif
icat
ion loss is recognised with
in cred
it impa
irment
in the income
\n
statement with a corresponding decrease in the gross carrying value of the asset. If the modif
icat
ion involved a concession
\n
that the bank would not otherwise consider, the instrument is considered to be credit-impa
ired and
is considered forborne.
\n
Expected credit loss for modif
ied \ufb01nancial assets that have not been derecogn
ised and are not considered to be
\n
credit-impa
ired w
ill be recognised on a 12-month basis, or a lifet
ime bas
is, if there is a sign
i\ufb01cant
increase in credit risk.
\n
These assets are assessed (by comparison to the orig
inat
ion date) to determine whether there has been a sign
i\ufb01cant
\n
increase in credit risk subsequent to the modif
icat
ion. Although loans may be modif
ied for non-cred
it reasons, a sign
i\ufb01cant
\n
increase in credit risk may occur. In addit
ion to the recogn
it
ion of mod
if
icat
ion gains and losses, the revised carrying value
\n
of modif
ied \ufb01nancial assets w
ill impact the calculation of expected credit losses, with any increase or decrease in expected
\n
credit loss recognised with
in
impa
irment.
Forborne loans
Forborne loans are those loans that have been modif
ied
in response to a customer\u2019s \ufb01nanc
ial d
iff
icult
ies. Forbearance
strategies assist clients who are temporarily in \ufb01nanc
ial d
istress and are unable to meet their orig
inal contractual
repayment terms. Forbearance can be in
it
iated by the client, the Group or a third-party includ
ing government sponsored
programmes or a conglomerate of credit inst
itut
ions. Forbearance may include debt restructuring such as new repayment
schedules, payment deferrals, tenor extensions, interest only payments, lower interest rates, forgiveness of princ
ipal,
interest or fees, or relaxation of loan covenants.
Forborne loans that have been modif
ied (and not derecogn
ised) on terms that are not consistent with those readily
available in the market and/or where we have granted a concession compared to the orig
inal terms of the loans are
considered credit-impa
ired
if there is a detrimental impact on cash \ufb02ows. The modif
icat
ion loss (see Classif
icat
ion and
measurement \u2013 Modif
icat
ions) is recognised in the pro\ufb01t or loss with
in cred
it impa
irment and the gross carry
ing value of
the loan reduced by the same amount. The modif
ied loan
is disclosed as \u2018Loans subject to forbearance \u2013 credit-impa
ired\u2019.
Loans that have been subject to a forbearance modif
icat
ion, but which are not considered credit-impa
ired (not class
if
ied
as CG13 or CG14), are disclosed as \u2018Forborne \u2013 not credit-impa
ired\u2019. Th
is may include amendments to covenants with
in the
contractual terms.
Write-offs of credit-impa
ired
instruments and reversal of impa
irment
To the extent a \ufb01nancial debt
instrument is considered irrecoverable, the applicable portion of the gross carrying value is
written off against the related loan provis
ion. Such loans are wr
itten off after all the necessary procedures have been
completed, it is decided that there is no realist
ic probab
il
ity of recovery and the amount of the loss has been determ
ined.
Subsequent recoveries of amounts previously written off decrease the amount of the provis
ion for cred
it impa
irment
in the
income statement.
Loss provis
ions on purchased or or
ig
inated cred
it-impa
ired
instruments (POCI)
The Group measures expected credit loss on a lifet
ime bas
is for POCI instruments throughout the life of the instrument.
However, expected credit loss is not recognised in a separate loss provis
ion on
in
it
ial recognit
ion for POCI
instruments as
the lifet
ime expected cred
it loss is inherent with
in the gross carry
ing amount of the instruments. The Group recognises
the change in lifet
ime expected cred
it losses aris
ing subsequent to
in
it
ial recognit
ion
in the income statement and the
cumulative change as a loss provis
ion. Where l
ifet
ime expected cred
it losses on POCI instruments are less than those at
in
it
ial recognit
ion, then the favourable d
ifferences are recognised as impa
irment ga
ins in the income statement (and as
impa
irment loss where the expected cred
it losses are greater).
Improvement in credit risk/curing
For \ufb01nancial assets that are cred
it-impa
ired (stage 3), a transfer to stage 2 or stage 1
is only permitted where the
instrument is no longer considered to be credit-impa
ired. An
instrument will no longer be considered credit-impa
ired
when there is no shortfall of cash \ufb02ows compared to the orig
inal contractual terms.
For \ufb01nancial assets w
ith
in stage 2, these can only be transferred to stage 1 when they are no longer cons
idered to have
experienced a sign
i\ufb01cant
increase in credit risk.
Where sign
i\ufb01cant
increase in credit risk was determined using quantitat
ive measures, the
instruments will automatically
transfer back to stage 1 when the orig
inal PD based transfer cr
iter
ia are no longer met. Where
instruments were
transferred to stage 2 due to an assessment of qualitat
ive factors, the
issues that led to the reclassif
icat
ion must be
cured before the instruments can be reclassif
ied to stage 1. Th
is includes instances where management actions led to
instruments being classif
ied as stage 2, requ
ir
ing that act
ion to be resolved before loans are reclassif
ied to stage 1.
A forborne loan can only be removed from being disclosed as forborne if the loan is performing (stage 1 or 2) and a further
two-year probation period is met.
In order for a forborne loan to become performing, the following criter
ia have to be sat
isf
ied:
\u2022
At least a year has passed with no default based upon the forborne contract terms
\u2022
The customer is likely to repay its obligat
ions
in full without realis
ing secur
ity
\u2022
The customer has no accumulated impa
irment aga
inst amount outstanding (except for ECL)
Subsequent to the criter
ia above, a further two-year probat
ion period has to be ful\ufb01lled, whereby regular payments are
made by the customer and none of the exposures to the customer are more than 30 days past due.Accounting policy Refer to the below referenced notes for the relevant accounting policy.Accounting policy
Income tax payable on pro\ufb01ts is based on the applicable tax law in each jur
isd
ict
ion and
is recognised as an expense in
the period in which pro\ufb01ts arise.
Deferred tax is provided on temporary differences aris
ing between the tax bases of assets and l
iab
il
it
ies and the
ir carrying
amounts in the consolidated \ufb01nanc
ial statements. Deferred tax
is determined using tax rates (and laws) that have been
enacted or substantively enacted as at the balance sheet date, and that are expected to apply when the related deferred
tax asset is realised or the deferred income tax liab
il
ity is settled.
Deferred tax assets are recognised where it is probable that future taxable pro\ufb01t will be available against which the
temporary differences can be util
ised. Where perm
itted, deferred tax assets and liab
il
it
ies are offset on an ent
ity basis
and not by component of deferred taxation.
Current and deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly
to equity and is subsequently recognised in the income statement together with the current or deferred gain or loss.
Other accounting estimates and judgements
\u2022
Determin
ing the Group\u2019s tax charge for the year
involves estimat
ion and judgement, wh
ich includes an interpretat
ion of
local tax laws and an assessment of whether the tax authorit
ies w
ill accept the posit
ion taken. These judgements take
account of external advice where appropriate, and the Group\u2019s view on settling with the relevant tax authorit
ies
\u2022
The Group provides for current tax liab
il
it
ies at the best est
imate of the amount that is expected to be paid to the tax
authorit
ies where an out\ufb02ow
is probable. In making its estimates the Group assumes that the tax authorit
ies w
ill
examine all the amounts reported to them and have full knowledge of all relevant informat
ion
\u2022
The recoverabil
ity of the Group\u2019s deferred tax assets
is based on management\u2019s judgement of the availab
il
ity of future
taxable pro\ufb01ts against which the deferred tax assets will be util
ised. In prepar
ing management forecasts the effect of
applicable laws and regulations relevant to the util
isat
ion of future taxable pro\ufb01ts have been considered.The Board considers a number of factors prior to div
idend declarat
ion which includes the rate of recovery in the Group\u2019s
\ufb01nancial performance, the macroeconom
ic environment, and opportunit
ies to further
invest in our business and grow pro\ufb01tably
in our markets.
Div
idends on equ
ity instruments are recognized as a liab
il
ity once they have been declared and no longer at the discret
ion of
the directors, and in certain situat
ions, approved by shareholders.Accounting policy
The Group also measures earnings per share on an underlying basis. This differs from earnings de\ufb01ned in IAS 33 Earnings
\n
per share. Underlying earnings is pro\ufb01t/(loss) attributable to ordinary shareholders adjusted for pro\ufb01ts or losses of a
\n
capital nature; amounts consequent to investment transactions driven by strategic intent; and other infrequent and/or
\n
exceptional transactions that are sign
i\ufb01cant or mater
ial in the context of the Group\u2019s normal business earnings for the year.Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputsAccounting policy
Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation
techniques, includ
ing d
iscounted cash \ufb02ow models and option pric
ing models, as appropr
iate. Where the in
it
ially
recognised fair value of a derivat
ive contract
is based on a valuation model that uses inputs which are not observable
in the market, it follows the same in
it
ial recognit
ion account
ing policy as for other \ufb01nanc
ial assets and l
iab
il
it
ies.
All derivat
ives are carr
ied as assets when fair value is posit
ive and as l
iab
il
it
ies when fa
ir value is negative.
Hedge accounting
Under certain condit
ions, the Group may des
ignate a recognised asset or liab
il
ity, a \ufb01rm commitment, highly probable
forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh
ip w
ith a derivat
ive
that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group, as a
policy choice to continue to apply hedge accounting in accordance with IAS 39. The Group applied IBOR reform Phase 2
reliefs in respect of hedging relationsh
ips d
irectly affected by IBOR reform.
There are three categories of hedge relationsh
ips:
\u2022
Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab
il
it
ies
or \ufb01rm commitments
\u2022
Cash \ufb02ow hedge: to manage interest rate or foreign exchange risk of highly probable future cash \ufb02ows attributable to
a recognised asset or liab
il
ity, or a forecasted transaction
\u2022
Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation
The Group assesses, both at hedge incept
ion and on a quarterly bas
is, whether the derivat
ives des
ignated in hedge
relationsh
ips are h
ighly effective in offsetting changes in fair values or cash \ufb02ows of hedged items. Hedges are considered
to be highly effective if all the following criter
ia are met:
\u2022
At incept
ion of the hedge and throughout
its life, the hedge is prospectively expected to be highly effective in achiev
ing
offsetting changes in fair value or cash \ufb02ows attributable to the hedged risk
\u2022
Prospective and retrospective effectiveness of the hedge should be with
in a range of 80\u2013125%. Th
is is tested using
regression analysis
\u2022
This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and
the data pairs between the hedged item and the hedging instrument are regressed to a 95% con\ufb01dence interval.
The regression co-ef\ufb01c
ient (R squared), wh
ich measures the correlation between the variables in the regression, is at
least 80%
In the case of the hedge of a forecast transaction, the transaction must have a high probabil
ity of occurr
ing and must
present an exposure to variat
ions
in cash \ufb02ows that are expected to affect reported pro\ufb01t or loss.
Fair value hedge
Changes in the fair value of derivat
ives that are des
ignated and qualify as fair value hedging instruments are recorded in
net trading income, together with any changes in the fair value of the hedged asset or liab
il
ity that are attributable to the
hedged risk. If the hedge no longer meets the criter
ia for hedge account
ing, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to the income statement over the remain
ing
term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is
recognised immed
iately
in the income statement. For \ufb01nanc
ial assets class
if
ied as fa
ir value through other comprehensive
income, the hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the
hedging derivat
ive.
Cash \ufb02ow hedge
The effective portion of changes in the fair value of derivat
ives that are des
ignated and qualify as cash \ufb02ow hedging
instruments are in
it
ially recognised in other comprehensive income, accumulating in the cash \ufb02ow hedge reserve with
in
equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects
pro\ufb01t or loss. Both the derivat
ive fa
ir value movement and any recycled amount are recorded in the \u2018Cash\ufb02ow hedges\u2019 line
item in other comprehensive income.
The Group assesses hedge effectiveness using the hypothetical derivat
ive method, wh
ich creates a derivat
ive
instrument
to serve as a proxy for the hedged transaction. The terms of the hypothetical derivat
ive match the cr
it
ical terms of the
hedged item and it has a fair value of zero at incept
ion. The hypothet
ical derivat
ive and the actual der
ivat
ive are
regressed to establish the statist
ical s
ign
i\ufb01cance of the hedge relat
ionsh
ip. Any
ineffect
ive port
ion of the gain or loss
on the hedging instrument is recognised in the net trading income immed
iately.
If a cash \ufb02ow hedge is discont
inued, the amount accumulated
in the cash \ufb02ow hedge reserve is released to the income
statement as and when the hedged item affects the income statement.
Should the Group consider the hedged future cash \ufb02ows are no longer expected to occur due to reasons, the cumulative
gain or loss will be immed
iately reclass
if
ied to pro\ufb01t or loss.
Net investment hedge
Hedges of net investments are accounted for in a sim
ilar manner to cash \ufb02ow hedges, w
ith gains and losses aris
ing on the
effective portion of the hedges recorded in the line \u2018Exchange differences on translation of foreign operations\u2019 in other
comprehensive income, accumulating in the translation reserve with
in equ
ity. These amounts remain in equity until the
net investment is disposed of. The ineffect
ive port
ion of the hedges is recognised in the net trading income immed
iately.Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy.Accounting policy
The Group purchases securit
ies (a reverse repurchase agreement \u2013 \u2018reverse repo\u2019) typ
ically with \ufb01nanc
ial
inst
itut
ions
subject to a commitment to resell or return the securit
ies at a predeterm
ined price. These securit
ies are not
included in the
balance sheet as the Group does not acquire the risks and rewards of ownership, however they are recorded off-balance
sheet as collateral received. Considerat
ion pa
id (or cash collateral provided) is accounted for as a loan asset at amortised
cost unless it is managed on a fair value basis or designated at fair value through pro\ufb01t or loss. In major
ity of cases through
the contractual terms of a reverse repo arrangement, the Group as the transferee of the security collateral has the right to
sell or repledge the asset concerned.
The Group also sells securit
ies (a repurchase agreement \u2013 \u2018repo\u2019) subject to a comm
itment to repurchase or redeem the
securit
ies at a predeterm
ined price. The securit
ies are reta
ined on the balance sheet as the Group retains substantially all
the risks and rewards of ownership and these securit
ies are d
isclosed as pledged collateral. Considerat
ion rece
ived (or cash
collateral received) is accounted for as a \ufb01nanc
ial l
iab
il
ity at amortised cost unless it is either mandatorily classif
ied as fa
ir
value through pro\ufb01t or loss or irrevocably designated at fair value through pro\ufb01t or loss at in
it
ial recognit
ion.
Repo and reverse repo transactions typically entitle the Group and its counterparties to have recourse to assets sim
ilar to
those provided as collateral in the event of a default. Securit
ies sold subject to repos, e
ither by way of a Global Master
Repurchase Agreement (GMRA), or through a securit
ies sale and Total Return Swap (TRS) cont
inue to be recognised on
the balance sheet as the Group retains substantially the associated risks and rewards of the securit
ies (the TRS
is not
recognised). Assets sold under repurchase agreements are considered encumbered as the Group cannot pledge these
to obtain fundingAccounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.Accounting policy
All property, plant and equipment is stated at cost less accumulated depreciat
ion and
impa
irment losses.
Land and build
ings compr
ise mainly branches and of\ufb01ces. Freehold land is not depreciated although it is subject to
impa
irment test
ing.
Depreciat
ion on other assets
is calculated using the straight-line method to allocate their cost to their residual values over
their estimated useful lives, as follows:
\n \n
\u2022 Owned premises
\u2022
up to 50 years
\u2022 Leasehold premises
\u2022
up to 50 years
\u2022 Leasehold improvements
\u2022
Shorter of remain
ing lease term and 10 years
\u2022
Equipment and motor vehicles
\u2022
three to 15 years
Where the Group is a lessee of a right-of-use asset, the leased assets are capital
ised and
included in Property, plant and
equipment with a corresponding liab
il
ity to the lessor recognised in other liab
il
it
ies. The account
ing policy for lease assets
is set out in Note 19.Accounting policy
Where the Group is a lessee and the lease is deemed in scope of IFRS 16, it recognises a liab
il
ity equal to the present value
of lease payments over the lease term, discounted using the incremental borrowing rate applicable in the economic
environment of the lease. The liab
il
ity is recognised in \u2018Other liab
il
it
ies\u2019. A correspond
ing right-of-use asset equal to the
liab
il
ity, adjusted for any lease payments made at or before the commencement date, is recognised in \u2018Property, plant and
equipment\u2019. The lease term includes any extension options contained in the contract that the Group is reasonably certain it
will exercise.
The Group subsequently depreciates the right-of-use asset using the straight-line method over the lease term and
measures the lease liab
il
ity using the effective interest method. Depreciat
ion on the asset
is recognised in \u2018Depreciat
ion
and amortisat
ion\u2019, and
interest on the lease liab
il
ity is recognised in \u2018Interest expense\u2019.
If a leased premise, or a physically dist
inct port
ion of a premise such as an ind
iv
idual \ufb02oor, is deemed by management
to be surplus to the Group\u2019s needs and action has been taken to abandon the space before the lease expires, this is
considered an ind
icator of
impa
irment. An
impa
irment loss
is recognised if the right-of-use asset, or portion thereof, has a
carrying value in excess of its value-in-use when taking into account factors such as the abil
ity and l
ikel
ihood of obta
in
ing
a subtenant.
The key judgement in determin
ing lease balances
is the determinat
ion of the lease term,
in particular whether the Group
is reasonably certain that it will exercise extension options present in lease contracts. On in
it
ial recognit
ion, the Group
considers a range of characterist
ics such as prem
ises function, regional trends and the term remain
ing on the lease to
determine whether it is reasonably certain that a contractual right to extend a lease will be exercised. When there are
changes to assumptions the lease balances are remeasured.
The estimates involved are the determinat
ion of
incremental borrowing rates in the respective economic environments.
The Group uses third-party broker quotes to estimate its USD cost of senior unsecured borrowing, then uses cross currency
swap pric
ing
informat
ion to determ
ine the equivalent cost of borrowing in other currencies. If it is not possible to estimate
an incremental borrowing rate through this process, other proxies such as local government bond yields are used.Accounting Policy
Upon reclassif
icat
ion property, plant and equipment are measured at the lower of their carrying amount and fair
value less costs to sell. Financ
ial
instruments continue to be measured per the accounting polic
ies
in Note 13
Financ
ial
instruments.Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy.Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy for \ufb01nanc
ial l
iab
il
it
ies, Note 19 Leased assets for
the accounting policy for leases, and Note 31 Share-based payments for the accounting policy for cash-settled share-
based payments.Accounting policy
The recognit
ion and measurement of prov
is
ions for l
iab
il
it
ies and charges requ
ires sign
i\ufb01cant judgement and the use of
estimates about uncertain future condit
ions or events.
Estimates include the best estimate of the probabil
ity of out\ufb02ow of econom
ic resources, cost of settling a provis
ion and
tim
ing of settlement. Judgements are requ
ired for inherently uncertain areas such as legal decis
ions (
includ
ing external
advice obtained), and outcome of regulator reviews.Accounting policy
Financ
ial guarantee contracts and loan comm
itments
Financ
ial guarantee contracts and any loan comm
itments issued at below-market interest rates are in
it
ially recognised
at their fair value as a \ufb01nanc
ial l
iab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative
amount of income recognised and their expected credit loss provis
ion. Loan comm
itments may be designated at fair value
through pro\ufb01t or loss where that is the business model under which such contracts are held. Notional values of \ufb01nanc
ial
guarantee contracts and loan commitments are disclosed in the table below.
Financ
ial guarantees, trade cred
its and irrevocable letters of credit are the notional values of contracts issued by the
Group\u2019s Transaction Banking business for which an obligat
ion to make a payment has not ar
isen at the reporting date.
Transaction Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the
contract is not paid, the Group will reimburse the holder of the contract for the actual \ufb01nanc
ial loss suffered. These
contracts have various legal forms such as letters of credit, guarantee contracts and performance bonds. The contracts
are issued to facil
itate trade through export and
import business, provide guarantees to \ufb01nanc
ial
inst
itut
ions where the
Group has a local presence, as well as guaranteeing project \ufb01nanc
ing
involv
ing large construct
ion projects undertaken by
sovereigns and corporates. The contracts may contain performance clauses which require the counterparty performing
services or provid
ing goods to meet certa
in condit
ions before a r
ight to payment is achieved, however the Group does not
guarantee this performance. The Group will only guarantee the credit of the counterparty paying for the services or goods.
Commitments are where the Group has con\ufb01rmed its intent
ion to prov
ide funds to a customer or on behalf of a customer
under prespecif
ied terms and cond
it
ions
in the form of loans, overdrafts, future guarantees whether cancellable or not
and the Group has not made payments at the balance sheet date; those instruments are included in these \ufb01nanc
ial
statements as commitments. Commitments and contingent liab
il
it
ies are generally cons
idered on demand as the Group
may have to honour them, or the client may draw down at any time.
Capital commitments are contractual commitments the Group has entered into to purchase non-\ufb01nanc
ial assets.Accounting policy
Where appropriate, the Group recognises a provis
ion for l
iab
il
it
ies when
it is probable that an out\ufb02ow of economic
resources embodying economic bene\ufb01ts will be required, and for which a reliable estimate can be made of the obligat
ion.
The uncertaint
ies
inherent in legal and regulatory matters affect the amount and tim
ing of any potent
ial out\ufb02ows with
respect to which provis
ions have been establ
ished. These uncertaint
ies also mean that
it is not possible to give an
aggregate estimate of contingent liab
il
it
ies ar
is
ing from such legal and regulatory matters.Accounting policy
Securit
ies wh
ich carry a discret
ionary coupon and have no \ufb01xed matur
ity or redemption date are classif
ied as other equ
ity
\n
instruments. Interest payments on these securit
ies are recogn
ised, net of tax, as distr
ibut
ions from equity in the period in
\n
which they are paid.
\n
Where the Company or other members of the consolidated Group purchase the Company\u2019s equity share capital, the
\n
considerat
ion pa
id is deducted from the total shareholders\u2019 equity of the Group and/or of the Company as treasury shares
\n
until they are cancelled. Where such shares are subsequently sold or reissued, any considerat
ion rece
ived is included in
\nshareholders\u2019 equity of the Group and/or the Company.Accounting policy
The Group operates pension and other post-retirement bene\ufb01t plans around the world, which can be categorised into
de\ufb01ned contribut
ion
plans and
de\ufb01ned bene\ufb01t
plans.
\u2022 For
de\ufb01ned contribut
ion
plans, the Group pays contribut
ions to publ
icly or privately admin
istered pens
ion plans on
a statutory or contractual basis, and such amounts are charged to operating expenses. The Group has no further
payment obligat
ions once the contr
ibut
ions have been pa
id.
\u2022 For
de\ufb01ned bene\ufb01t
plans, which promise levels of payments where the future cost is not known with certainty;
\u2013 the accounting obligat
ion
is calculated annually by independent actuaries using the projected unit method.
\u2013
Actuarial gains and losses that arise are recognised in shareholders\u2019 equity and presented in the statement of other
comprehensive income in the period they arise.
\u2013
The Group determines the net interest expense on the net de\ufb01ned bene\ufb01t liab
il
ity for the year by applying the
discount rate used to measure the de\ufb01ned bene\ufb01t obligat
ion at the beg
inn
ing of the annual per
iod to the net
de\ufb01ned bene\ufb01t liab
il
ity, taking into account any changes in the net de\ufb01ned bene\ufb01t liab
il
ity during the year as a
result of contribut
ions and bene\ufb01t payments. Net
interest expense, the cost of the accrual of new bene\ufb01ts, bene\ufb01t
enhancements (or reductions) and admin
istrat
ion expenses met directly from plan assets are recognized in the
income statement in the period in which they were incurred.
Other accounting estimates and judgements
There are many factors that affect the measurement of the retirement bene\ufb01t obligat
ions. Th
is measurement requires
the use of estimates, such as discount rates, in\ufb02at
ion, pens
ion increases, salary increases, and life expectancies which are
inherently uncertain. The table below summarises how these assumptions are set:
\n \n
Assumption
Detail
Discount rate
Determined by reference to market yields at the end of the reporting period on high-quality
corporate bonds (or, in countries where there is no deep market in such bonds, government bonds)
of a currency and term consistent with the currency and term of the post-employment bene\ufb01t
obligat
ions. Th
is is the approach adopted across all our geographies.
In\ufb02ation
Where there are in\ufb02at
ion-l
inked bonds available (e.g. United Kingdom and the eurozone), the
Group derives in\ufb02at
ion based on the market on those bonds, w
ith the market yield adjusted in
respect of the United Kingdom to take account of the fact that liab
il
it
ies are l
inked to Consumer
Price Index in\ufb02at
ion, whereas the reference bonds are l
inked to Retail Price Index in\ufb02at
ion. Where
no in\ufb02at
ion-l
inked bonds exist, we determine in\ufb02at
ion assumpt
ions based on a combinat
ion of
long-term forecasts and short-term in\ufb02at
ion data.
Salary growth
Salary growth assumptions re\ufb02ect the Group\u2019s long-term expectations, taking into account future
business plans and macroeconomic data (primar
ily expected future long-term
in\ufb02at
ion).
Demographic assumptions
Demographic assumptions, includ
ing mortal
ity and turnover rates, are typically set based on
the assumptions used in the most recent actuarial funding valuation, and will generally use
industry standard tables, adjusted where appropriate to re\ufb02ect recent histor
ic exper
ience and/or
future expectations.
The sensit
iv
ity of the liab
il
it
ies to changes
in these assumptions is shown in the Note below.31. Share-based payments
Accounting policy
The Group operates equity-settled and cash-settled share-based compensation plans. The fair value of the employee
services (measured by the fair value of the awards granted) received in exchange for the grant of the shares and awards is
recognised as an expense. For deferred share awards granted as part of an annual performance award, the expense is
recognised over the period from the start of the performance period to the vesting date. For example, the expense for
three-year awards granted in 2024 in respect of 2023 performance, which vest in 2025-2027, is recognised as an expense
over the period from 1 January 2023 to the vesting dates in 2025-2027. For all other awards, the expense is recognised over
the period from the date of grant to the vesting date.
For equity-settled awards, the total amount to be expensed over the vesting period is determined by reference to the fair
value of the shares and awards at the date of grant, which excludes the impact of any non-market vesting condit
ions
(for example, pro\ufb01tabil
ity and growth targets). The fair value of equity instruments granted is based on market prices,
if available, at the date of grant. In the absence of market prices, the fair value of the instruments is estimated using an
appropriate valuation technique, such as a binom
ial opt
ion pric
ing model. Non-market vest
ing condit
ions are
included
in assumptions for the number of shares and awards that are expected to vest.
At each balance sheet date, the Group revises its estimates of the number of shares and awards that are expected to
vest. It recognises the impact of the revis
ion of or
ig
inal est
imates, if any, in the income statement and a corresponding
adjustment to equity over the remain
ing vest
ing period. Forfeitures prior to vesting attributable to factors other than the
failure to satisfy service condit
ions and non-market vest
ing condit
ions are treated as a cancellat
ion and the remain
ing
unamortised charge is debited to the income statement at the time of cancellation. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium when awards in
the form of options are exercised.
Cash-settled awards are revalued at each balance sheet date and a liab
il
ity recognised on the balance sheet for all
unpaid amounts, with any changes in fair value charged or credited to staff costs in the income statement until the awards
are exercised. Where forfeitures occur prior to vesting that are attributable to factors other than a failure to satisfy service
condit
ions or market-based performance cond
it
ions, the cumulat
ive charge incurred up to the date of forfeiture is credited
to the income statement.
Other accounting estimates and judgements
Share-based payments involve judgement and estimat
ion uncerta
inty exists when determin
ing the expenses and carry
ing
values of share awards at the balance sheet date.
\u2022
LTIP awards are determined using an estimat
ion of the probab
il
ity of meet
ing certain metrics over a three-year
performance period using the Monte Carlo simulat
ion model.
\u2022
Deferred shares are determined using an estimat
ion of expected d
iv
idends.
\u2022
Sharesave Plan valuations are determined using a binom
ial opt
ion-pric
ing model.Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.Accounting policy
Structured entit
ies are consol
idated when the substance of the relationsh
ip between the Group and the structured ent
ity
ind
icates the Group has power over the contractual relevant act
iv
it
ies of the structured entity, is exposed to variable
returns, and can use that power to affect the variable return exposure.
In determin
ing whether to consol
idate a structured entity to which assets have been transferred, the Group takes into
account its abil
ity to d
irect the relevant activ
it
ies of the structured entity. These relevant activ
it
ies are generally evidenced
through a unilateral right to liqu
idate the structured ent
ity, investment in a substantial proportion of the securit
ies
issued
by the structured entity or where the Group holds specif
ic subord
inate securit
ies that embody certa
in controlling rights.
The Group may further consider relevant activ
it
ies embedded with
in contractual arrangements such as call opt
ions which
give the practical abil
ity to d
irect the entity, special relationsh
ips between the structured ent
ity and investors, and if a
single investor has a large exposure to variable returns of the structured entity.
Judgement is required in determin
ing control over structured ent
it
ies. The purpose and des
ign of the entity is considered,
along with a determinat
ion of what the relevant act
iv
it
ies are of the entity and who directs these. Further judgements are
made around which investor is exposed to and absorbs the variable returns of the structured entity. The Group will have to
weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ
ipal
in its own right
or as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured
entit
ies, spec
if
ically
if market condit
ions have an effect on the var
iable return exposure of different investors.Accounting policy
Cash and cash equivalents includes:
\u2022
Cash on hand and balances at central banks\u2019 that are on demand or placements which are contractually due to mature
overnight only, except for restricted balances; and
\u2022
Other balances listed in the table below, when they have less than three months\u2019 maturity from the date of acquis
it
ion,
are not subject to contractual restrict
ions, are subject to
ins
ign
if
icant changes
in value, are highly liqu
id and are held for
the purpose of meeting short-term cash commitments. This includes products such as treasury bills and other elig
ible
bills, short-term government securit
ies, loans and advances to banks (
includ
ing reverse repos), and loans and advances
to customers (only non demand or non overnight placements at central banks), which are held for appropriate business
purposes. On demand accounts with non central banks are reported as part of \u2018Loans & Advances to banks\u2019.", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00484": { "value": "1. Accounting polic
ies
Statement of compliance
The Group \ufb01nancial statements consol
idate Standard
Chartered PLC (the Company) and its subsid
iar
ies (together
referred to as the Group) and equity account the Group\u2019s
interests in associates and jo
intly controlled ent
it
ies.
The parent company \ufb01nancial statements present
informat
ion about the Company as a separate ent
ity.
The Group \ufb01nancial statements have been prepared
in
accordance with UK-adopted internat
ional account
ing
standards and International Financ
ial Report
ing Standards
(IFRS) (Accounting Standards) as adopted by the European
Union (EU IFRS). The Company \ufb01nanc
ial statements
have been prepared in accordance with UK-adopted
internat
ional account
ing standards as applied in
conformity with section 408 of the Companies Act 2006.
The \ufb01nancial statements have been prepared
in
accordance with the requirements of the Companies
Act 2006.
There are no sign
i\ufb01cant d
ifferences between UK-adopted
internat
ional account
ing standards and EU IFRS.
The following parts of the Risk review and Capital review
form part of these \ufb01nancial statements:
a) Risk review: Disclosures marked as \u2018audited\u2019 from the
start of the Credit Risk section (page 207) to the end of
Other princ
ipal r
isks in the same section (page 255).
b) Capital review: Tables marked as \u2018audited\u2019 from the start
of \u2018CRD Capital base\u2019 to the end of \u2018Movement in total
capital\u2019, excluding \u2018Total risk-weighted assets\u2019 (pages 271
to 272).
Basis of preparation
The consolidated and Company \ufb01nanc
ial statements have
been prepared on a going concern basis and under the
histor
ical cost convent
ion, as modif
ied by the revaluat
ion
of cash-settled share-based payments, fair value through
other comprehensive income, and \ufb01nanc
ial assets and
liab
il
it
ies (
includ
ing der
ivat
ives) at fa
ir value through pro\ufb01t
or loss.
The consolidated \ufb01nanc
ial statements are presented
in
United States dollars ($), being the presentation currency
of the Group and functional currency of the Company, and
all values are rounded to the nearest mill
ion dollars, except
when otherwise ind
icated.
Sign
i\ufb01cant and other account
ing estimates and
judgement
In determin
ing the carry
ing amounts of certain assets and
liab
il
it
ies, the Group makes assumpt
ions of the effects of
uncertain future events on those assets and liab
il
it
ies
at the balance sheet date. The Group\u2019s estimates and
assumptions are based on histor
ical exper
ience and
expectation of future events and are reviewed period
ically.
Further informat
ion about key assumpt
ions concerning
the future, and other key sources of estimat
ion uncerta
inty
and judgement, are set out in the relevant disclosure notes
for the areas set out under the relevant headings below:
Sign
i\ufb01cant account
ing estimates and crit
ical judgements
\u2022
Expected credit loss calculations (Note 8)
\u2022
Financ
ial
instruments measured at fair value (Note 13)
\u2022
Investments in subsid
iary undertak
ings, jo
int ventures
and associates \u2013 China Bohai associate accounting and
impa
irment analys
is (Note 32)
Sign
i\ufb01cant account
ing estimates and judgements
represent those items which have a sign
i\ufb01cant r
isk of
causing a material adjustment to the carrying amounts
of assets and liab
il
it
ies w
ith
in the next year. S
ign
i\ufb01cant
accounting estimates and judgements are:
Other areas of accounting estimate and judgement
Other areas of accounting estimate and judgement do not
meet the de\ufb01nit
ion under IAS 1 of sign
i\ufb01cant account
ing
estimates or crit
ical account
ing judgements, but the
recognit
ion of certa
in material assets and liab
il
it
ies are
based on assumptions and/or are subject to long-term
uncertaint
ies. The other areas of account
ing estimate and
judgement are:
\u2022 Taxation (Note 10)
\u2022
Goodwill and intang
ible assets - Goodw
ill impa
irment
and Capital
isat
ion of internally generated software
intang
ibles (Note 9 and Note 17)
\u2022
Provis
ions for l
iab
il
it
ies and charges \u2013 Other prov
is
ions
(Note 24)
\u2022
Legal and regulatory matters (Note 26)
\u2022
Retirement bene\ufb01t obligat
ions (Note 30)
\u2022
Share-based payments (Note 31)
Climate change impact on the Group\u2019s balance sheet
Climate, and the impact of climate on the Group\u2019s
balance sheet is considered as an area which can
impact accounting estimates and judgments through
the uncertainty of future events and the impact of
that uncertainty on the Group\u2019s assets and liab
il
it
ies.
However, the Group has concluded that Climate Change
does not have a \ufb01nancially mater
ial impact at this time.
The Group has assessed the impact of climate risk on the
\ufb01nancial report. Th
is is set out with
in the Susta
inab
il
ity
Overview and Sustainab
il
ity Review chapter which
incorporate the Group\u2019s Climate-related Financ
ial
Disclosures which align with the recommendations from
the Task Force for Climate related Financ
ial D
isclosures
(TCFD). Further risk disclosure has been provided in the
Princ
ipal R
isks and Uncertaint
ies sect
ion of the Annual
Report where the Group has described how it manages
climate risk, which is integrated across relevant Princ
ipal
Risk Types (PRTs) and is managed via the ESGR Risk
Type framework.
The areas of impact where judgements and the use of
estimates have been applied were credit risk and the
impact on lending portfolios; ESG features with
in
issued
loans and bonds; physical risk on our mortgage lending
portfolio; and the corporate plan, in respect of which
forward looking cash \ufb02ows impact the recoverabil
ity of
certain assets, includ
ing of goodw
ill, deferred tax assets
and investments in subsid
iary undertak
ings.
Transit
ion r
isk, as our clients move to lower carbon emitt
ing
revenues, (either by virtue of legislat
ion or chang
ing end
customer preference) is considered with reference to client
transit
ion pathways and man
ifests over a longer term than
the maturity of the loan book (up to 2050). The setting of
net zero targets, which as of this annual report covers our
12 highest emitt
ing sectors, manages trans
it
ion r
isk.
Net zero targets enable the portfolio managers to work
with our clients on their transit
ion and deploy cap
ital to
those clients which are engaged and have adequate
transit
ion pathways. All of these act
ions manage the
Group\u2019s transit
ion r
isk and engage clients before transit
ion
risk manifests itself into credit losses. We have also
evaluated transit
ion r
isk to achieve net zero in our
own operations.
While physical risk is included with
in the majority of our
mortgage lending decis
ions, we have appl
ied scenario
analysis against the pathways of different temperature
outcomes to examine exposure concentration risk in key
markets subject to the extreme risk of \ufb02oods and storms to
assess the acute physical risk, and sea level rise to assess
the chronic physical risk. Stranded assets analysis was
conducted for resident
ial mortgages to
ident
ify propert
ies
that are expected to become uninhab
itable and/or
unusable due to increased frequency and intens
ity of
physical risk events from acute and chronic risks. We assess
the physical risk vulnerabil
it
ies of our exist
ing s
ites on a
regular basis and for new sites during the onboarding
process. Addit
ionally, we assess the
impact of climate risk
on the classif
icat
ion of \ufb01nanc
ial
instruments under IFRS 9,
when Environmental, Social or Governance (ESG) triggers
may affect the cash \ufb02ows received by the Group under the
contractual terms of the instrument.
The ESGR Risk team has performed a quantitat
ive
assessment of the impact of climate risk on the IFRS 9
ECL provis
ion. Th
is assessment has been performed across
both the CIB and WRB portfolios. The Climate risk impact
assessment on IFRS 9 business as usual ECL has been
conducted based on newly developed and enhanced
internal climate risk models for corporates across six
prior
ity sectors (O
il and Gas, Power, Steel, Min
ing, Sh
ipp
ing,
and Automotive), one Generic model for the remain
ing
corporate sectors and Sovereigns, while the top-down
approach developed in 2022 was used for the remain
ing
portfolios. The impact assessment, which primar
ily focused
on transit
ion r
isk, resulted in only a marginal ECL increase
across CIB and WRB, which has been recorded as a
management overlay for the 2024 year end.
The Group\u2019s corporate plan has a 5 year outlook and
considers the highest emitt
ing sectors the Group \ufb01nances.
The majority of the Group sector targets are product
ion/
physical intens
it
ies which allow continued levels of
lending as long as the products the client produce have
a decreasing carbon cost. For Coal Min
ing and O
il and Gas,
these sectors have absolute targets which represent a
decreasing carbon budget. Coal Min
ing
is an immater
ial
book, while for Oil and Gas lending is being actively
monitored towards lower carbon counterparties and
technologies. The corporate plan is shorter term than many
of the climate scenario outlooks but seeks to capture the
nearer term performance as required by recoverabil
ity
models. The Group has for the third time in the 2025
corporate plan included antic
ipated cred
it impa
irment
charges, now across seven sectors (Oil and Gas, Metals
and Min
ing, Power, and Transport, along w
ith Cement,
Automobile, and Commercial Real Estate which have been
newly added this year). This addit
ion of cred
it impa
irment
has not in itself, materially impacted the recoverabil
ity of
assets supported by discounted cash \ufb02ow models (such as
Value in Use) which util
ise the Corporate plan.
The Group has progressively strengthened its scenario
analysis capabil
it
ies with the modelling of Climate Risk
impact over a 30-year period across multiple dimens
ions
includ
ing scenar
io data and pathways across CIB and WRB
portfolios. While we have taken the \ufb01rst step in our journey
to transit
ion from our rel
iance on vendor models to in-house
capabil
it
ies, challenges underpin the scenario analysis,
such as reliance on nascent methodologies, dependencies
on \ufb01rst generation models and data lim
itat
ions.
Notwithstand
ing these challenges, our work to date,
using certain assumptions and proxies, ind
icates that our
business is resil
ient to all Network of Central Banks and
Supervisors for Greening the Financ
ial System (NGFS) and
bespoke scenarios that were explored.
The Group, although acknowledging the lim
itat
ions of
current data available, increas
ing soph
ist
icat
ion of models
evolving and nascent nature of climate impacts on internal
and client assets, considers Climate Risk to have lim
ited
quantitat
ive
impact in the immed
iate term and as a
longer-term risk is expected to be addressed through its
business strategy and \ufb01nanc
ial plann
ing as the Group
implements its net zero journey.
IFRS and Hong Kong accounting requirements
As required by the Hong Kong List
ing Rules, an
explanation of the differences in accounting practices
between UK-adopted IFRS and Hong Kong Financ
ial
Reporting Standards is required to be disclosed. There
would be no sign
i\ufb01cant d
ifferences had these accounts
been prepared in accordance with Hong Kong Financ
ial
Reporting Standards.
Standard Chartered PLC has fully complied with the
new treasury share regime introduced under the revised
Hong Kong List
ing Rules from 11 June 2024 onwards and
will continue to comply with the new regime.
New accounting standards in issue but not yet effective
There were no new accounting standards or interpretat
ions
that had a material effect on the Group\u2019s Financ
ial
Statements in 2024.
IAS 21 Amendment \u2013 Lack of Exchangeabil
ity
In August 2023, the IASB issued amendments to IAS 21 The
Effects of Changes in Foreign Exchange Rates to specify how
an entity should assess whether a currency is exchangeable
and how it should determine a spot exchange rate when
exchangeabil
ity
is lacking. The amendments also require
disclosure of informat
ion that enables users to understand
the impact of a currency not being exchangeable. The
amendments will be effective for annual reporting periods
beginn
ing on or after 1 January 2025. The amendment
is
not expected to have a material impact on the Group\u2019s
\ufb01nancial statements.
IFRS 18 Presentation and Disclosure in Financ
ial Statements
The new standard IFRS 18 was issued in April 2024 and is
effective for annual reporting periods beginn
ing on or
after January 1, 2027 but earlier applicat
ion
is permitted.
This new standard replaces IAS 1 Presentation of Financ
ial
Statements and amends IAS 7 Statement of Cash Flows.
IFRS 18 introduces three de\ufb01ned categories for income and
expenses\u2014operating, invest
ing and \ufb01nancing\u2014to
improve
the structure of the income statement, and requires all
companies to provide new de\ufb01ned subtotals, includ
ing
operating pro\ufb01t. IFRS 18 will require disclosure of
explanations of company-specif
ic measures that are related
to the income statement, referred to as management-
de\ufb01ned performance measures. IFRS 18 sets out enhanced
guidance on how to organise informat
ion and whether to
provide it in the primary \ufb01nanc
ial statements or
in the notes.
The Group will apply IFRS 18 for annual reporting periods
beginn
ing on January 1, 2027 and
is currently not expected
to have a material impact on the Group\u2019s \ufb01nanc
ial
statements other than a change in the presentation of
the primary statements.
IFRS 9 Financ
ial Instruments and IFRS 7 F
inanc
ial
Instruments: Disclosures Amendments
In May 2024, the IASB issued Amendments to the
Classif
icat
ion and Measurement of Financ
ial Instruments
which amended requirements related to settling \ufb01nanc
ial
liab
il
it
ies us
ing an electronic payment system and assessing
contractual cash \ufb02ow characterist
ics of \ufb01nancial assets,
includ
ing those w
ith environmental, social and governance
(ESG)-linked features. The IASB also amended disclosure
requirements relating to investments in equity instruments
designated at fair value through other comprehensive
income and added disclosure requirements for \ufb01nanc
ial
instruments with contingent features that do not relate
directly to basic lending risks and costs. The amendments
will be effective for annual reporting periods beginn
ing on or
after 1 January 2026. The amendments are not expected to
have a material impact on the Group\u2019s \ufb01nanc
ial statements.
Going concern
These \ufb01nancial statements were approved by the Board
of directors on 21 February 2025. The directors have made
an assessment of the Group\u2019s abil
ity to cont
inue as a
going concern. This assessment has been made having
considered the current macroeconomic and geopolit
ical
headwinds, includ
ing:
\u2022
Review of the Group Strategy and Corporate Plan,
includ
ing the annual budget
\u2022
An assessment of the actual performance to date,
loan book quality, credit impa
irment, legal and
regulatory matters, compliance matters, recent
regulatory developments
\u2022
Considerat
ion of stress test
ing performed, includ
ing the
Group Recovery Plan (RP) which include the applicat
ion
of stressed scenarios. Under the tests and through the
range of scenarios, the results of these exercises and the
RP demonstrate that the Group has suf\ufb01cient cap
ital
and liqu
id
ity to continue as a going concern and meet
min
imum regulatory cap
ital and liqu
id
ity requirements
\u2022
Analysis of the capital posit
ion of the Group,
includ
ing
the capital and leverage ratios, and ICAAP which
summarises the Group\u2019s capital and risk assessment
processes, assesses its capital requirements and the
adequacy of resources to meet them
\u2022
Analysis of the funding and liqu
id
ity posit
ion of the Group,
includ
ing the Internal L
iqu
id
ity Adequacy Assessment
Process (ILAAP), which considers the Group\u2019s liqu
id
ity
posit
ion,
its framework and whether suf\ufb01c
ient l
iqu
id
ity
resources are being mainta
ined to meet l
iab
il
it
ies as they
fall due, was also reviewed. Further, funding and liqu
id
ity
was considered in the context of the risk appetite metrics,
includ
ing the LCR rat
io
\u2022
The level of debt in issue, includ
ing redempt
ions and
issuances during the year, debt falling due for repayment
in the next 12 months and further planned debt issuances,
includ
ing the appet
ite in the market for the Group\u2019s debt
\u2022
The Group\u2019s portfolio of debt securit
ies held at
amortised cost
\u2022
A detailed review of all princ
ipal r
isks as well as topical
and emerging risks
Based on the analysis performed, the directors con\ufb01rm
they are satisf
ied that the Group has adequate resources
to continue in business for a period of at least 12 months
from 21 February 2025.
For this reason, the Group continues to adopt the
going concern basis of accounting for preparing the
\ufb01nancial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00486": { "value": "1. Accounting polic
ies
Statement of compliance
The Group \ufb01nancial statements consol
idate Standard
Chartered PLC (the Company) and its subsid
iar
ies (together
referred to as the Group) and equity account the Group\u2019s
interests in associates and jo
intly controlled ent
it
ies.
The parent company \ufb01nancial statements present
informat
ion about the Company as a separate ent
ity.
The Group \ufb01nancial statements have been prepared
in
accordance with UK-adopted internat
ional account
ing
standards and International Financ
ial Report
ing Standards
(IFRS) (Accounting Standards) as adopted by the European
Union (EU IFRS). The Company \ufb01nanc
ial statements
have been prepared in accordance with UK-adopted
internat
ional account
ing standards as applied in
conformity with section 408 of the Companies Act 2006.
The \ufb01nancial statements have been prepared
in
accordance with the requirements of the Companies
Act 2006.
There are no sign
i\ufb01cant d
ifferences between UK-adopted
internat
ional account
ing standards and EU IFRS.
The following parts of the Risk review and Capital review
form part of these \ufb01nancial statements:
a) Risk review: Disclosures marked as \u2018audited\u2019 from the
start of the Credit Risk section (page 207) to the end of
Other princ
ipal r
isks in the same section (page 255).
b) Capital review: Tables marked as \u2018audited\u2019 from the start
of \u2018CRD Capital base\u2019 to the end of \u2018Movement in total
capital\u2019, excluding \u2018Total risk-weighted assets\u2019 (pages 271
to 272).
Basis of preparation
The consolidated and Company \ufb01nanc
ial statements have
been prepared on a going concern basis and under the
histor
ical cost convent
ion, as modif
ied by the revaluat
ion
of cash-settled share-based payments, fair value through
other comprehensive income, and \ufb01nanc
ial assets and
liab
il
it
ies (
includ
ing der
ivat
ives) at fa
ir value through pro\ufb01t
or loss.
The consolidated \ufb01nanc
ial statements are presented
in
United States dollars ($), being the presentation currency
of the Group and functional currency of the Company, and
all values are rounded to the nearest mill
ion dollars, except
when otherwise ind
icated.
Sign
i\ufb01cant and other account
ing estimates and
judgement
In determin
ing the carry
ing amounts of certain assets and
liab
il
it
ies, the Group makes assumpt
ions of the effects of
uncertain future events on those assets and liab
il
it
ies
at the balance sheet date. The Group\u2019s estimates and
assumptions are based on histor
ical exper
ience and
expectation of future events and are reviewed period
ically.
Further informat
ion about key assumpt
ions concerning
the future, and other key sources of estimat
ion uncerta
inty
and judgement, are set out in the relevant disclosure notes
for the areas set out under the relevant headings below:
Sign
i\ufb01cant account
ing estimates and crit
ical judgements
\u2022
Expected credit loss calculations (Note 8)
\u2022
Financ
ial
instruments measured at fair value (Note 13)
\u2022
Investments in subsid
iary undertak
ings, jo
int ventures
and associates \u2013 China Bohai associate accounting and
impa
irment analys
is (Note 32)
Sign
i\ufb01cant account
ing estimates and judgements
represent those items which have a sign
i\ufb01cant r
isk of
causing a material adjustment to the carrying amounts
of assets and liab
il
it
ies w
ith
in the next year. S
ign
i\ufb01cant
accounting estimates and judgements are:
Other areas of accounting estimate and judgement
Other areas of accounting estimate and judgement do not
meet the de\ufb01nit
ion under IAS 1 of sign
i\ufb01cant account
ing
estimates or crit
ical account
ing judgements, but the
recognit
ion of certa
in material assets and liab
il
it
ies are
based on assumptions and/or are subject to long-term
uncertaint
ies. The other areas of account
ing estimate and
judgement are:
\u2022 Taxation (Note 10)
\u2022
Goodwill and intang
ible assets - Goodw
ill impa
irment
and Capital
isat
ion of internally generated software
intang
ibles (Note 9 and Note 17)
\u2022
Provis
ions for l
iab
il
it
ies and charges \u2013 Other prov
is
ions
(Note 24)
\u2022
Legal and regulatory matters (Note 26)
\u2022
Retirement bene\ufb01t obligat
ions (Note 30)
\u2022
Share-based payments (Note 31)
Climate change impact on the Group\u2019s balance sheet
Climate, and the impact of climate on the Group\u2019s
balance sheet is considered as an area which can
impact accounting estimates and judgments through
the uncertainty of future events and the impact of
that uncertainty on the Group\u2019s assets and liab
il
it
ies.
However, the Group has concluded that Climate Change
does not have a \ufb01nancially mater
ial impact at this time.
The Group has assessed the impact of climate risk on the
\ufb01nancial report. Th
is is set out with
in the Susta
inab
il
ity
Overview and Sustainab
il
ity Review chapter which
incorporate the Group\u2019s Climate-related Financ
ial
Disclosures which align with the recommendations from
the Task Force for Climate related Financ
ial D
isclosures
(TCFD). Further risk disclosure has been provided in the
Princ
ipal R
isks and Uncertaint
ies sect
ion of the Annual
Report where the Group has described how it manages
climate risk, which is integrated across relevant Princ
ipal
Risk Types (PRTs) and is managed via the ESGR Risk
Type framework.
The areas of impact where judgements and the use of
estimates have been applied were credit risk and the
impact on lending portfolios; ESG features with
in
issued
loans and bonds; physical risk on our mortgage lending
portfolio; and the corporate plan, in respect of which
forward looking cash \ufb02ows impact the recoverabil
ity of
certain assets, includ
ing of goodw
ill, deferred tax assets
and investments in subsid
iary undertak
ings.
Transit
ion r
isk, as our clients move to lower carbon emitt
ing
revenues, (either by virtue of legislat
ion or chang
ing end
customer preference) is considered with reference to client
transit
ion pathways and man
ifests over a longer term than
the maturity of the loan book (up to 2050). The setting of
net zero targets, which as of this annual report covers our
12 highest emitt
ing sectors, manages trans
it
ion r
isk.
Net zero targets enable the portfolio managers to work
with our clients on their transit
ion and deploy cap
ital to
those clients which are engaged and have adequate
transit
ion pathways. All of these act
ions manage the
Group\u2019s transit
ion r
isk and engage clients before transit
ion
risk manifests itself into credit losses. We have also
evaluated transit
ion r
isk to achieve net zero in our
own operations.
While physical risk is included with
in the majority of our
mortgage lending decis
ions, we have appl
ied scenario
analysis against the pathways of different temperature
outcomes to examine exposure concentration risk in key
markets subject to the extreme risk of \ufb02oods and storms to
assess the acute physical risk, and sea level rise to assess
the chronic physical risk. Stranded assets analysis was
conducted for resident
ial mortgages to
ident
ify propert
ies
that are expected to become uninhab
itable and/or
unusable due to increased frequency and intens
ity of
physical risk events from acute and chronic risks. We assess
the physical risk vulnerabil
it
ies of our exist
ing s
ites on a
regular basis and for new sites during the onboarding
process. Addit
ionally, we assess the
impact of climate risk
on the classif
icat
ion of \ufb01nanc
ial
instruments under IFRS 9,
when Environmental, Social or Governance (ESG) triggers
may affect the cash \ufb02ows received by the Group under the
contractual terms of the instrument.
The ESGR Risk team has performed a quantitat
ive
assessment of the impact of climate risk on the IFRS 9
ECL provis
ion. Th
is assessment has been performed across
both the CIB and WRB portfolios. The Climate risk impact
assessment on IFRS 9 business as usual ECL has been
conducted based on newly developed and enhanced
internal climate risk models for corporates across six
prior
ity sectors (O
il and Gas, Power, Steel, Min
ing, Sh
ipp
ing,
and Automotive), one Generic model for the remain
ing
corporate sectors and Sovereigns, while the top-down
approach developed in 2022 was used for the remain
ing
portfolios. The impact assessment, which primar
ily focused
on transit
ion r
isk, resulted in only a marginal ECL increase
across CIB and WRB, which has been recorded as a
management overlay for the 2024 year end.
The Group\u2019s corporate plan has a 5 year outlook and
considers the highest emitt
ing sectors the Group \ufb01nances.
The majority of the Group sector targets are product
ion/
physical intens
it
ies which allow continued levels of
lending as long as the products the client produce have
a decreasing carbon cost. For Coal Min
ing and O
il and Gas,
these sectors have absolute targets which represent a
decreasing carbon budget. Coal Min
ing
is an immater
ial
book, while for Oil and Gas lending is being actively
monitored towards lower carbon counterparties and
technologies. The corporate plan is shorter term than many
of the climate scenario outlooks but seeks to capture the
nearer term performance as required by recoverabil
ity
models. The Group has for the third time in the 2025
corporate plan included antic
ipated cred
it impa
irment
charges, now across seven sectors (Oil and Gas, Metals
and Min
ing, Power, and Transport, along w
ith Cement,
Automobile, and Commercial Real Estate which have been
newly added this year). This addit
ion of cred
it impa
irment
has not in itself, materially impacted the recoverabil
ity of
assets supported by discounted cash \ufb02ow models (such as
Value in Use) which util
ise the Corporate plan.
The Group has progressively strengthened its scenario
analysis capabil
it
ies with the modelling of Climate Risk
impact over a 30-year period across multiple dimens
ions
includ
ing scenar
io data and pathways across CIB and WRB
portfolios. While we have taken the \ufb01rst step in our journey
to transit
ion from our rel
iance on vendor models to in-house
capabil
it
ies, challenges underpin the scenario analysis,
such as reliance on nascent methodologies, dependencies
on \ufb01rst generation models and data lim
itat
ions.
Notwithstand
ing these challenges, our work to date,
using certain assumptions and proxies, ind
icates that our
business is resil
ient to all Network of Central Banks and
Supervisors for Greening the Financ
ial System (NGFS) and
bespoke scenarios that were explored.
The Group, although acknowledging the lim
itat
ions of
current data available, increas
ing soph
ist
icat
ion of models
evolving and nascent nature of climate impacts on internal
and client assets, considers Climate Risk to have lim
ited
quantitat
ive
impact in the immed
iate term and as a
longer-term risk is expected to be addressed through its
business strategy and \ufb01nanc
ial plann
ing as the Group
implements its net zero journey.
IFRS and Hong Kong accounting requirements
As required by the Hong Kong List
ing Rules, an
explanation of the differences in accounting practices
between UK-adopted IFRS and Hong Kong Financ
ial
Reporting Standards is required to be disclosed. There
would be no sign
i\ufb01cant d
ifferences had these accounts
been prepared in accordance with Hong Kong Financ
ial
Reporting Standards.
Standard Chartered PLC has fully complied with the
new treasury share regime introduced under the revised
Hong Kong List
ing Rules from 11 June 2024 onwards and
will continue to comply with the new regime.
New accounting standards in issue but not yet effective
There were no new accounting standards or interpretat
ions
that had a material effect on the Group\u2019s Financ
ial
Statements in 2024.
IAS 21 Amendment \u2013 Lack of Exchangeabil
ity
In August 2023, the IASB issued amendments to IAS 21 The
Effects of Changes in Foreign Exchange Rates to specify how
an entity should assess whether a currency is exchangeable
and how it should determine a spot exchange rate when
exchangeabil
ity
is lacking. The amendments also require
disclosure of informat
ion that enables users to understand
the impact of a currency not being exchangeable. The
amendments will be effective for annual reporting periods
beginn
ing on or after 1 January 2025. The amendment
is
not expected to have a material impact on the Group\u2019s
\ufb01nancial statements.
IFRS 18 Presentation and Disclosure in Financ
ial Statements
The new standard IFRS 18 was issued in April 2024 and is
effective for annual reporting periods beginn
ing on or
after January 1, 2027 but earlier applicat
ion
is permitted.
This new standard replaces IAS 1 Presentation of Financ
ial
Statements and amends IAS 7 Statement of Cash Flows.
IFRS 18 introduces three de\ufb01ned categories for income and
expenses\u2014operating, invest
ing and \ufb01nancing\u2014to
improve
the structure of the income statement, and requires all
companies to provide new de\ufb01ned subtotals, includ
ing
operating pro\ufb01t. IFRS 18 will require disclosure of
explanations of company-specif
ic measures that are related
to the income statement, referred to as management-
de\ufb01ned performance measures. IFRS 18 sets out enhanced
guidance on how to organise informat
ion and whether to
provide it in the primary \ufb01nanc
ial statements or
in the notes.
The Group will apply IFRS 18 for annual reporting periods
beginn
ing on January 1, 2027 and
is currently not expected
to have a material impact on the Group\u2019s \ufb01nanc
ial
statements other than a change in the presentation of
the primary statements.
IFRS 9 Financ
ial Instruments and IFRS 7 F
inanc
ial
Instruments: Disclosures Amendments
In May 2024, the IASB issued Amendments to the
Classif
icat
ion and Measurement of Financ
ial Instruments
which amended requirements related to settling \ufb01nanc
ial
liab
il
it
ies us
ing an electronic payment system and assessing
contractual cash \ufb02ow characterist
ics of \ufb01nancial assets,
includ
ing those w
ith environmental, social and governance
(ESG)-linked features. The IASB also amended disclosure
requirements relating to investments in equity instruments
designated at fair value through other comprehensive
income and added disclosure requirements for \ufb01nanc
ial
instruments with contingent features that do not relate
directly to basic lending risks and costs. The amendments
will be effective for annual reporting periods beginn
ing on or
after 1 January 2026. The amendments are not expected to
have a material impact on the Group\u2019s \ufb01nanc
ial statements.
Going concern
These \ufb01nancial statements were approved by the Board
of directors on 21 February 2025. The directors have made
an assessment of the Group\u2019s abil
ity to cont
inue as a
going concern. This assessment has been made having
considered the current macroeconomic and geopolit
ical
headwinds, includ
ing:
\u2022
Review of the Group Strategy and Corporate Plan,
includ
ing the annual budget
\u2022
An assessment of the actual performance to date,
loan book quality, credit impa
irment, legal and
regulatory matters, compliance matters, recent
regulatory developments
\u2022
Considerat
ion of stress test
ing performed, includ
ing the
Group Recovery Plan (RP) which include the applicat
ion
of stressed scenarios. Under the tests and through the
range of scenarios, the results of these exercises and the
RP demonstrate that the Group has suf\ufb01cient cap
ital
and liqu
id
ity to continue as a going concern and meet
min
imum regulatory cap
ital and liqu
id
ity requirements
\u2022
Analysis of the capital posit
ion of the Group,
includ
ing
the capital and leverage ratios, and ICAAP which
summarises the Group\u2019s capital and risk assessment
processes, assesses its capital requirements and the
adequacy of resources to meet them
\u2022
Analysis of the funding and liqu
id
ity posit
ion of the Group,
includ
ing the Internal L
iqu
id
ity Adequacy Assessment
Process (ILAAP), which considers the Group\u2019s liqu
id
ity
posit
ion,
its framework and whether suf\ufb01c
ient l
iqu
id
ity
resources are being mainta
ined to meet l
iab
il
it
ies as they
fall due, was also reviewed. Further, funding and liqu
id
ity
was considered in the context of the risk appetite metrics,
includ
ing the LCR rat
io
\u2022
The level of debt in issue, includ
ing redempt
ions and
issuances during the year, debt falling due for repayment
in the next 12 months and further planned debt issuances,
includ
ing the appet
ite in the market for the Group\u2019s debt
\u2022
The Group\u2019s portfolio of debt securit
ies held at
amortised cost
\u2022
A detailed review of all princ
ipal r
isks as well as topical
and emerging risks
Based on the analysis performed, the directors con\ufb01rm
they are satisf
ied that the Group has adequate resources
to continue in business for a period of at least 12 months
from 21 February 2025.
For this reason, the Group continues to adopt the
going concern basis of accounting for preparing the
\ufb01nancial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00625": { "value": "Statement of compliance
The Group \ufb01nancial statements consol
idate Standard
Chartered PLC (the Company) and its subsid
iar
ies (together
referred to as the Group) and equity account the Group\u2019s
interests in associates and jo
intly controlled ent
it
ies.
The parent company \ufb01nancial statements present
informat
ion about the Company as a separate ent
ity.
The Group \ufb01nancial statements have been prepared
in
accordance with UK-adopted internat
ional account
ing
standards and International Financ
ial Report
ing Standards
(IFRS) (Accounting Standards) as adopted by the European
Union (EU IFRS). The Company \ufb01nanc
ial statements
have been prepared in accordance with UK-adopted
internat
ional account
ing standards as applied in
conformity with section 408 of the Companies Act 2006.
The \ufb01nancial statements have been prepared
in
accordance with the requirements of the Companies
Act 2006.
There are no sign
i\ufb01cant d
ifferences between UK-adopted
internat
ional account
ing standards and EU IFRS.
The following parts of the Risk review and Capital review
form part of these \ufb01nancial statements:
a) Risk review: Disclosures marked as \u2018audited\u2019 from the
start of the Credit Risk section (page 207) to the end of
Other princ
ipal r
isks in the same section (page 255).
b) Capital review: Tables marked as \u2018audited\u2019 from the start
of \u2018CRD Capital base\u2019 to the end of \u2018Movement in total
capital\u2019, excluding \u2018Total risk-weighted assets\u2019 (pages 271
to 272).", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00626": { "value": "Basis of preparation
The consolidated and Company \ufb01nanc
ial statements have
been prepared on a going concern basis and under the
histor
ical cost convent
ion, as modif
ied by the revaluat
ion
of cash-settled share-based payments, fair value through
other comprehensive income, and \ufb01nanc
ial assets and
liab
il
it
ies (
includ
ing der
ivat
ives) at fa
ir value through pro\ufb01t
or loss.
The consolidated \ufb01nanc
ial statements are presented
in
United States dollars ($), being the presentation currency
of the Group and functional currency of the Company, and
all values are rounded to the nearest mill
ion dollars, except
when otherwise ind
icated. ", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForBasisOfPreparationExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00627": { "value": "Sign
i\ufb01cant and other account
ing estimates and
judgement
In determin
ing the carry
ing amounts of certain assets and
liab
il
it
ies, the Group makes assumpt
ions of the effects of
uncertain future events on those assets and liab
il
it
ies
at the balance sheet date. The Group\u2019s estimates and
assumptions are based on histor
ical exper
ience and
expectation of future events and are reviewed period
ically.
Further informat
ion about key assumpt
ions concerning
the future, and other key sources of estimat
ion uncerta
inty
and judgement, are set out in the relevant disclosure notes
for the areas set out under the relevant headings below:
Sign
i\ufb01cant account
ing estimates and crit
ical judgements
\u2022
Expected credit loss calculations (Note 8)
\u2022
Financ
ial
instruments measured at fair value (Note 13)
\u2022
Investments in subsid
iary undertak
ings, jo
int ventures
and associates \u2013 China Bohai associate accounting and
impa
irment analys
is (Note 32)
Sign
i\ufb01cant account
ing estimates and judgements
represent those items which have a sign
i\ufb01cant r
isk of
causing a material adjustment to the carrying amounts
of assets and liab
il
it
ies w
ith
in the next year. S
ign
i\ufb01cant
accounting estimates and judgements are:
Other areas of accounting estimate and judgement
Other areas of accounting estimate and judgement do not
meet the de\ufb01nit
ion under IAS 1 of sign
i\ufb01cant account
ing
estimates or crit
ical account
ing judgements, but the
recognit
ion of certa
in material assets and liab
il
it
ies are
based on assumptions and/or are subject to long-term
uncertaint
ies. The other areas of account
ing estimate and
judgement are:
\u2022 Taxation (Note 10)
\u2022
Goodwill and intang
ible assets - Goodw
ill impa
irment
and Capital
isat
ion of internally generated software
intang
ibles (Note 9 and Note 17)
\u2022
Provis
ions for l
iab
il
it
ies and charges \u2013 Other prov
is
ions
(Note 24)
\u2022
Legal and regulatory matters (Note 26)
\u2022
Retirement bene\ufb01t obligat
ions (Note 30)
\u2022
Share-based payments (Note 31)
Climate change impact on the Group\u2019s balance sheet
Climate, and the impact of climate on the Group\u2019s
balance sheet is considered as an area which can
impact accounting estimates and judgments through
the uncertainty of future events and the impact of
that uncertainty on the Group\u2019s assets and liab
il
it
ies.
However, the Group has concluded that Climate Change
does not have a \ufb01nancially mater
ial impact at this time.
The Group has assessed the impact of climate risk on the
\ufb01nancial report. Th
is is set out with
in the Susta
inab
il
ity
Overview and Sustainab
il
ity Review chapter which
incorporate the Group\u2019s Climate-related Financ
ial
Disclosures which align with the recommendations from
the Task Force for Climate related Financ
ial D
isclosures
(TCFD). Further risk disclosure has been provided in the
Princ
ipal R
isks and Uncertaint
ies sect
ion of the Annual
Report where the Group has described how it manages
climate risk, which is integrated across relevant Princ
ipal
Risk Types (PRTs) and is managed via the ESGR Risk
Type framework.
The areas of impact where judgements and the use of
estimates have been applied were credit risk and the
impact on lending portfolios; ESG features with
in
issued
loans and bonds; physical risk on our mortgage lending
portfolio; and the corporate plan, in respect of which
forward looking cash \ufb02ows impact the recoverabil
ity of
certain assets, includ
ing of goodw
ill, deferred tax assets
and investments in subsid
iary undertak
ings.
Transit
ion r
isk, as our clients move to lower carbon emitt
ing
revenues, (either by virtue of legislat
ion or chang
ing end
customer preference) is considered with reference to client
transit
ion pathways and man
ifests over a longer term than
the maturity of the loan book (up to 2050). The setting of
net zero targets, which as of this annual report covers our
12 highest emitt
ing sectors, manages trans
it
ion r
isk.
Net zero targets enable the portfolio managers to work
with our clients on their transit
ion and deploy cap
ital to
those clients which are engaged and have adequate
transit
ion pathways. All of these act
ions manage the
Group\u2019s transit
ion r
isk and engage clients before transit
ion
risk manifests itself into credit losses. We have also
evaluated transit
ion r
isk to achieve net zero in our
own operations.
While physical risk is included with
in the majority of our
mortgage lending decis
ions, we have appl
ied scenario
analysis against the pathways of different temperature
outcomes to examine exposure concentration risk in key
markets subject to the extreme risk of \ufb02oods and storms to
assess the acute physical risk, and sea level rise to assess
the chronic physical risk. Stranded assets analysis was
conducted for resident
ial mortgages to
ident
ify propert
ies
that are expected to become uninhab
itable and/or
unusable due to increased frequency and intens
ity of
physical risk events from acute and chronic risks. We assess
the physical risk vulnerabil
it
ies of our exist
ing s
ites on a
regular basis and for new sites during the onboarding
process. Addit
ionally, we assess the
impact of climate risk
on the classif
icat
ion of \ufb01nanc
ial
instruments under IFRS 9,
when Environmental, Social or Governance (ESG) triggers
may affect the cash \ufb02ows received by the Group under the
contractual terms of the instrument.
The ESGR Risk team has performed a quantitat
ive
assessment of the impact of climate risk on the IFRS 9
ECL provis
ion. Th
is assessment has been performed across
both the CIB and WRB portfolios. The Climate risk impact
assessment on IFRS 9 business as usual ECL has been
conducted based on newly developed and enhanced
internal climate risk models for corporates across six
prior
ity sectors (O
il and Gas, Power, Steel, Min
ing, Sh
ipp
ing,
and Automotive), one Generic model for the remain
ing
corporate sectors and Sovereigns, while the top-down
approach developed in 2022 was used for the remain
ing
portfolios. The impact assessment, which primar
ily focused
on transit
ion r
isk, resulted in only a marginal ECL increase
across CIB and WRB, which has been recorded as a
management overlay for the 2024 year end.
The Group\u2019s corporate plan has a 5 year outlook and
considers the highest emitt
ing sectors the Group \ufb01nances.
The majority of the Group sector targets are product
ion/
physical intens
it
ies which allow continued levels of
lending as long as the products the client produce have
a decreasing carbon cost. For Coal Min
ing and O
il and Gas,
these sectors have absolute targets which represent a
decreasing carbon budget. Coal Min
ing
is an immater
ial
book, while for Oil and Gas lending is being actively
monitored towards lower carbon counterparties and
technologies. The corporate plan is shorter term than many
of the climate scenario outlooks but seeks to capture the
nearer term performance as required by recoverabil
ity
models. The Group has for the third time in the 2025
corporate plan included antic
ipated cred
it impa
irment
charges, now across seven sectors (Oil and Gas, Metals
and Min
ing, Power, and Transport, along w
ith Cement,
Automobile, and Commercial Real Estate which have been
newly added this year). This addit
ion of cred
it impa
irment
has not in itself, materially impacted the recoverabil
ity of
assets supported by discounted cash \ufb02ow models (such as
Value in Use) which util
ise the Corporate plan.
The Group has progressively strengthened its scenario
analysis capabil
it
ies with the modelling of Climate Risk
impact over a 30-year period across multiple dimens
ions
includ
ing scenar
io data and pathways across CIB and WRB
portfolios. While we have taken the \ufb01rst step in our journey
to transit
ion from our rel
iance on vendor models to in-house
capabil
it
ies, challenges underpin the scenario analysis,
such as reliance on nascent methodologies, dependencies
on \ufb01rst generation models and data lim
itat
ions.
Notwithstand
ing these challenges, our work to date,
using certain assumptions and proxies, ind
icates that our
business is resil
ient to all Network of Central Banks and
Supervisors for Greening the Financ
ial System (NGFS) and
bespoke scenarios that were explored.
The Group, although acknowledging the lim
itat
ions of
current data available, increas
ing soph
ist
icat
ion of models
evolving and nascent nature of climate impacts on internal
and client assets, considers Climate Risk to have lim
ited
quantitat
ive
impact in the immed
iate term and as a
longer-term risk is expected to be addressed through its
business strategy and \ufb01nanc
ial plann
ing as the Group
implements its net zero journey.", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00628": { "value": "IFRS and Hong Kong accounting requirements
As required by the Hong Kong List
ing Rules, an
explanation of the differences in accounting practices
between UK-adopted IFRS and Hong Kong Financ
ial
Reporting Standards is required to be disclosed. There
would be no sign
i\ufb01cant d
ifferences had these accounts
been prepared in accordance with Hong Kong Financ
ial
Reporting Standards.
Standard Chartered PLC has fully complied with the
new treasury share regime introduced under the revised
Hong Kong List
ing Rules from 11 June 2024 onwards and
will continue to comply with the new regime.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForIfrsAndHongKongAccountingRequirementsExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00629": { "value": "New accounting standards in issue but not yet effective There were no new accounting standards or interpretations that had a material effect on the Group\u2019s Financial Statements in 2024. IAS 21 Amendment \u2013 Lack of Exchangeability In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users to understand the impact of a currency not being exchangeable. The amendments will be effective for annual reporting periods beginning on or after 1 January 2025. The amendment is not expected to have a material impact on the Group\u2019s \ufb01nancial statements. IFRS 18 Presentation and Disclosure in Financial Statements The new standard IFRS 18 was issued in April 2024 and is effective for annual reporting periods beginning on or after January 1, 2027 but earlier application is permitted. This new standard replaces IAS 1 Presentation of Financial Statements and amends IAS 7 Statement of Cash Flows. IFRS 18 introduces three de\ufb01ned categories for income and expenses\u2014operating, investing and \ufb01nancing\u2014to improve the structure of the income statement, and requires all companies to provide new de\ufb01ned subtotals, including operating pro\ufb01t. IFRS 18 will require disclosure of explanations of company-specific measures that are related to the income statement, referred to as management- de\ufb01ned performance measures. IFRS 18 sets out enhanced guidance on how to organise information and whether to provide it in the primary \ufb01nancial statements or in the notes. The Group will apply IFRS 18 for annual reporting periods beginning on January 1, 2027 and is currently not expected to have a material impact on the Group\u2019s \ufb01nancial statements other than a change in the presentation of the primary statements. IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures Amendments In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments which amended requirements related to settling \ufb01nancial liabilities using an electronic payment system and assessing contractual cash \ufb02ow characteristics of \ufb01nancial assets, including those with environmental, social and governance (ESG)-linked features. The IASB also amended disclosure requirements relating to investments in equity instruments designated at fair value through other comprehensive income and added disclosure requirements for \ufb01nancial instruments with contingent features that do not relate directly to basic lending risks and costs. The amendments will be effective for annual reporting periods beginning on or after 1 January 2026. The amendments are not expected to have a material impact on the Group\u2019s \ufb01nancial statements.", "dimensions": { "concept": "ifrs-full:ExplanationOfNotAppliedNewStandardsOrInterpretations", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00630": { "value": "Going concern
These \ufb01nancial statements were approved by the Board
of directors on 21 February 2025. The directors have made
an assessment of the Group\u2019s abil
ity to cont
inue as a
going concern. This assessment has been made having
considered the current macroeconomic and geopolit
ical
headwinds, includ
ing:
\u2022
Review of the Group Strategy and Corporate Plan,
includ
ing the annual budget
\u2022
An assessment of the actual performance to date,
loan book quality, credit impa
irment, legal and
regulatory matters, compliance matters, recent
regulatory developments
\u2022
Considerat
ion of stress test
ing performed, includ
ing the
Group Recovery Plan (RP) which include the applicat
ion
of stressed scenarios. Under the tests and through the
range of scenarios, the results of these exercises and the
RP demonstrate that the Group has suf\ufb01cient cap
ital
and liqu
id
ity to continue as a going concern and meet
min
imum regulatory cap
ital and liqu
id
ity requirements
\u2022
Analysis of the capital posit
ion of the Group,
includ
ing
the capital and leverage ratios, and ICAAP which
summarises the Group\u2019s capital and risk assessment
processes, assesses its capital requirements and the
adequacy of resources to meet them
\u2022
Analysis of the funding and liqu
id
ity posit
ion of the Group,
includ
ing the Internal L
iqu
id
ity Adequacy Assessment
Process (ILAAP), which considers the Group\u2019s liqu
id
ity
posit
ion,
its framework and whether suf\ufb01c
ient l
iqu
id
ity
resources are being mainta
ined to meet l
iab
il
it
ies as they
fall due, was also reviewed. Further, funding and liqu
id
ity
was considered in the context of the risk appetite metrics,
includ
ing the LCR rat
io
\u2022
The level of debt in issue, includ
ing redempt
ions and
issuances during the year, debt falling due for repayment
in the next 12 months and further planned debt issuances,
includ
ing the appet
ite in the market for the Group\u2019s debt
\u2022
The Group\u2019s portfolio of debt securit
ies held at
amortised cost
\u2022
A detailed review of all princ
ipal r
isks as well as topical
and emerging risks
Based on the analysis performed, the directors con\ufb01rm
they are satisf
ied that the Group has adequate resources
to continue in business for a period of at least 12 months
from 21 February 2025.
For this reason, the Group continues to adopt the
going concern basis of accounting for preparing the
\ufb01nancial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00485": { "value": "2. Segmental informat
ion
Basis of preparation
The analysis re\ufb02ects how the client segments and geographic regions are managed internally. This is described as the
Management View (on an underlying basis) and is princ
ipally the locat
ion from which a client relationsh
ip
is managed,
which may differ from where it is \ufb01nanc
ially booked and may be shared between bus
inesses and/or regions. In certain
instances this approach is not appropriate and a Financ
ial V
iew is disclosed, that is, the location in which the transaction or
balance was booked. Typically, the Financ
ial V
iew is used in areas such as the Market and Liqu
id
ity Risk reviews where actual
booking location is more important for an assessment. Segmental informat
ion
is therefore on a Management View unless
otherwise stated.
Client segments
The Group\u2019s segmental reporting is in accordance with IFRS 8 Operating Segments and is reported consistently with the internal
performance framework and as presented to the Group\u2019s Management Team.
Restructuring items excluded from underlying results
The Group\u2019s reported IFRS performance is adjusted for certain items to arrive at alternative performance measures. These items
include pro\ufb01ts or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other
infrequent and/or exceptional transactions that are sign
i\ufb01cant or mater
ial in the context of the Group\u2019s normal business
earnings for the period and items which management and investors would ordinar
ily
ident
ify separately when assess
ing
consistent performance period by period. The alternative performance measures are not with
in the scope of IFRS and not
a substitute for IFRS measures. These adjustments are set out below.
Restructuring loss of $441 mill
ion pr
imar
ily relate to the ex
its in AME, Aviat
ion \ufb01nance bus
iness and re\ufb02ect the impact of actions
to transform the organisat
ion to
improve productiv
ity, pr
imar
ily add
it
ional redundancy charges, s
impl
ify
ing technology
platforms and optim
is
ing the Group\u2019s of\ufb01ce space and property footprint, Fit For Growth costs that are primar
ily severance
costs, costs of staff working on FFG in
it
iat
ives and legal and profess
ional fees. The Group is also reclassify
ing the movements
in the Debit Valuation Adjustment (DVA) into restructuring and other items.
Reconcil
iat
ions between underlying and reported results are set out in the tables below:
2024
Net (loss)/
Gain on
businesses
disposed of/
Goodwill
Underlying
Restructuring\u00b3
held for sale
1
impa
irment
\u2074
Other items
2
DVA
Reported
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Operating income
19,696
103
(232)
\u2013
\u2013
(24)
19,543
Operating expenses
(11,790)
(612)
\u2013
\u2013
(100)
\u2013
(12,502)
Operating pro\ufb01t/(loss) before
impa
irment losses and taxat
ion
7,906
(509)
(232)
\u2013
(100)
(24)
7,041
Credit impa
irment
(557)
10
\u2013
\u2013
\u2013
\u2013
(547)
Other impa
irment
(588)
\u2013
\u2013
\u2013
\u2013
\u2013
(588)
Pro\ufb01t from associates and jo
int ventures
50
58
\u2013
\u2013
\u2013
\u2013
108
Pro\ufb01t/(loss) before taxation
6,811
(441)
(232)
\u2013
(100)
(24)
6,014
2023
Operating income
17,378
362
262
\u2013
\u2013
17
18,019
Operating expenses
(11,136)
(415)
\u2013
\u2013
\u2013
\u2013
(11,551)
Operating pro\ufb01t/(loss) before
impa
irment losses and taxat
ion
6,242
(53)
262
\u2013
\u2013
17
6,468
Credit impa
irment
(528)
20
\u2013
\u2013
\u2013
\u2013
(508)
Other impa
irment
(130)
(28)
\u2013
(850)
\u2013
\u2013
(1,008)
Pro\ufb01t from associates and jo
int ventures
94
47
\u2013
\u2013
\u2013
\u2013
141
Pro\ufb01t/(loss) before taxation
5,678
(14)
262
(850)
\u2013
17
5,093
1
Net loss on businesses disposed of/ held for sale 2024 includes $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation losses from reserves into P&L on the sale
of Zimbabwe, $26 mill
ion loss on sale of Angola, $19 m
ill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the Av
iat
ion bus
iness disposal
2
Other items 2024 include $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io
3
Restructuring Operating expenses 2024 includes $156m of Fit For Growth costs that are primar
ily severance costs, costs of staff work
ing on FFG in
it
iat
ives and legal
and professional fees
4
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group\u2019s investment in its associate China Bohai Bank (Bohai)
Underlying performance by client segment
\n\n \n
2024
2023
Corporate &
Wealth &
Central &
Corporate &
Wealth &
Central &
Investment
Retail
other
Investment
Retail
other
Banking
Banking
Ventures
items
Total
Banking
Banking
Ventures
items
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Operating income
11,818
7,816
183
(121)
19,696
11,218
7,106
156
(1,102)
17,378
External
10,363
3,328
184
5,821
19,696
8,543
3,902
157
4,776
17,378
Inter-segment
1,455
4,488
(1)
(5,942)
\u2013
2,675
3,204
(1)
(5,878)
\u2013
Operating expenses
(6,033)
(4,589)
(464)
(704)
(11,790)
(5,627)
(4,261)
(429)
(819)
(11,136)
Operating pro\ufb01t/(loss) before
irment losses and taxat
impa
ion
5,785
3,227
(281)
(825)
7,906
5,591
2,845
(273)
(1,921)
6,242
Credit impa
irment
106
(644)
(74)
55
(557)
(123)
(354)
(85)
34
(528)
Other impa
irment
(310)
(120)
(18)
(140)
(588)
(32)
(4)
(26)
(68)
(130)
Pro\ufb01t from associates and
joint ventures
\u2013
\u2013
(17)
67
50
\u2013
\u2013
(24)
118
94
Underlying pro\ufb01t/(loss)
before taxation
5,581
2,463
(390)
(843)
6,811
5,436
2,487
(408)
(1,837)
5,678
Restructuring
(179)
(170)
(3)
(89)
(441)
32
(60)
(4)
18
(14)
Goodwill and other impa
irment\u2074
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(850)
(850)
DVA
(24)
\u2013
\u2013
\u2013
(24)
17
\u2013
\u2013
\u2013
17
Other items\u00b3
\u2013
(100)
\u2013
(232)
(332)
262
\u2013
\u2013
\u2013
262
Reported pro\ufb01t/(loss)
before taxation
5,378
2,193
(393)
(1,164)
6,014
5,747
2,427
(412)
(2,669)
5,093
Total assets
485,662
122,404
6,399
235,223
849,688
403,058
128,768
4,009
287,009
822,844
Of which: loans and
advances to customers
197,608
119,242
1,388
21,319
339,557
189,395
126,117
1,035
28,939
345,486
loans and advances
to customers
139,089
119,236
1,388
21,319
281,032
130,897
126,104
1,035
28,939
286,975
loans held at fair value
through pro\ufb01t or loss
(FVTPL)
1
58,519
6
\u2013
\u2013
58,525
58,498
13
\u2013
\u2013
58,511
Total liab
il
it
ies
476,502
220,501
5,277
96,124 798,404
464,968
200,263
3,096
104,164
772,491
Of which: customer accounts
2
297,005
216,476
5,028
4,754
523,263
328,211
195,678
2,825
7,908
534,622
\n
1
Loans held at FVTPL includes $51,441 mill
ion (2023: $51,299 m
ill
ion) of reverse repurchase agreements
\n
2
Customer accounts includes $21,772 mill
ion (2023: $17,248 m
ill
ion) of FVTPL and $37,002 m
ill
ion (2023: $47,956 m
ill
ion) of repurchase agreements
\n
3
Other items 2024 includes $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io, $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation
\n
losses from reserves into P&L on the sale of Zimbabwe, $26 mill
ion loss on sale of Angola, $19 m
ill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the
\n
Aviat
ion bus
iness disposal
\n
4
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group\u2019s investment in its associate China Bohai Bank (Bohai)
\n
Operating income by client segment
\n\n \n
2024
2023
Corporate &
Wealth &
Central &
Corporate &
Wealth &
Central &
Investment
Retail
other
Investment
Retail
other
Banking
Banking
Ventures
items
Total
Banking
Banking
Ventures
items
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Underlying versus reported:
Underlying operating income
11,818
7,816
183
(121)
19,696
11,218
7,106
156
(1,102)
17,378
Restructuring
69
23
\u2013
11
103
291
45
\u2013
26
362
DVA
(24)
\u2013
\u2013
\u2013
(24)
17
\u2013
\u2013
\u2013
17
Other items
1
\u2013
\u2013
\u2013
(232)
(232)
262
\u2013
\u2013
\u2013
262
Reported operating income
11,863
7,839
183
(342)
19,543
11,788
7,151
156
(1,076)
18,019
Addit
ional segmental
income:
Net interest income
2,090
5,175
100
(999)
6,366
4,541
4,970
81
(1,823)
7,769
Net fees and commiss
ion
income
1,938
1,855
52
(111)
3,734
1,753
1,538
43
(82)
3,252
Net trading and other income
7,835
809
31
768
9,443
5,494
643
32
829
6,998
Reported operating income
11,863
7,839
183
(342)
19,543
11,788
7,151
156
(1,076)
18,019
\n
1
Other items 2024 includes $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation losses from reserves into P&L on the sale of Zimbabwe, $26 mill
ion loss on sale
\n
of Angola, $19 mill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the Av
iat
ion bus
iness disposal
Addit
ional segmental
informat
ion (reported)
\n \n
2024
Hong
Kong
Korea
China
Taiwan
Singapore
India
UAE
UK
US
Other
Group
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Net interest income
790
723
410
177
462
646
369
(1,002)
540
3,251
6,366
Net fees and
commiss
ion
income
726
185
181
212
716
236
99
112
480
787
3,734
Net trading and
other income
3,281
177
736
188
1,395
441
369
1,168
268
1,420
9,443
Operating income
4,797
1,085
1,327
577
2,573
1,323
837
278
1,288
5,458
19,543
2023
Net interest income
1,946
684
520
154
937
654
390
(930)
170
3,244
7,769
Net fees and
commiss
ion
income
615
171
149
182
576
221
81
18
441
798
3,252
Net trading and
other income
2,052
216
487
214
929
330
330
1,277
263
900
6,998
Operating income
4,613
1,071
1,156
550
2,442
1,205
801
365
874
4,942
18,019
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00489": { "value": "3. Net interest income
Accounting policy
Interest income for \ufb01nanc
ial assets held at e
ither fair value through other comprehensive income or amortised cost,
and interest expense on all \ufb01nanc
ial l
iab
il
it
ies held at amort
ised cost is recognised in pro\ufb01t or loss using the effective
interest method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected
life of the \ufb01nanc
ial
instrument or, when appropriate, a shorter period, to the net carrying amount of the \ufb01nanc
ial
asset or \ufb01nancial l
iab
il
ity. When calculating the effective interest rate, the Group estimates cash \ufb02ows consider
ing all
contractual terms of the \ufb01nancial
instrument (for example prepayment options) but does not consider future credit losses.
The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or discounts. For \ufb02oating-rate \ufb01nanc
ial
instruments, period
ic
re-estimat
ion of cash \ufb02ows that re\ufb02ect the movements
in the market rates of interest alters the effective interest rate.
Where the estimates of cash \ufb02ows have been revised, the carrying amount of the \ufb01nanc
ial asset or l
iab
il
ity is adjusted to
re\ufb02ect the actual and revised cash \ufb02ows, discounted at the instruments orig
inal effect
ive interest rate. The adjustment is
recognised as interest income or expense in the period in which the revis
ion
is made as long as the change in estimates is
not due to credit issues.
Interest income for \ufb01nanc
ial assets that are e
ither held at fair value through other comprehensive income or amortised
cost that have become credit-impa
ired subsequent to
in
it
ial recognit
ion (stage 3) and have had amounts wr
itten off,
is recognised using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective
interest rate except that expected credit losses are included in the expected cash \ufb02ows. Interest income is therefore
recognised on the amortised cost of the \ufb01nanc
ial asset
includ
ing expected cred
it losses. Should the credit risk on a
stage 3 \ufb01nancial asset
improve such that the \ufb01nanc
ial asset
is no longer considered credit-impa
ired,
interest income
recognit
ion reverts to a computat
ion based on the rehabil
itated gross carry
ing value of the \ufb01nanc
ial asset.
\n \n
2024
2023
$mill
ion
$mill
ion
Balances at central banks
2,520
2,833
Loans and advances to banks
2,368
2,095
Loans and advances to customers
16,179
15,518
Debt securit
ies
5,165
5,005
Other elig
ible b
ills
1,495
1,596
Accrued on impa
ired assets (d
iscount unwind)
135
180
Interest income
27,862
27,227
Of which: \ufb01nanc
ial
instruments held at fair value through other comprehensive income
3,773
3,445
Deposits by banks
806
796
Customer accounts
1
16,276
14,292
Debt securit
ies
in issue
3,610
3,367
Subordinated liab
il
it
ies and other borrowed funds
744
951
Interest expense on IFRS 16 lease liab
il
it
ies
60
52
Interest expense
21,496
19,458
Net interest income
6,366
7,769
1
Deposit insurance premiums of $147 mill
ion have been reclass
if
ied from customer accounts related
interest expense to general operating expenses in 2024.
The prior year has not been reclassif
ied as
it is not deemed material", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00488": { "value": "3. Net interest income
Accounting policy
Interest income for \ufb01nanc
ial assets held at e
ither fair value through other comprehensive income or amortised cost,
and interest expense on all \ufb01nanc
ial l
iab
il
it
ies held at amort
ised cost is recognised in pro\ufb01t or loss using the effective
interest method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected
life of the \ufb01nanc
ial
instrument or, when appropriate, a shorter period, to the net carrying amount of the \ufb01nanc
ial
asset or \ufb01nancial l
iab
il
ity. When calculating the effective interest rate, the Group estimates cash \ufb02ows consider
ing all
contractual terms of the \ufb01nancial
instrument (for example prepayment options) but does not consider future credit losses.
The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or discounts. For \ufb02oating-rate \ufb01nanc
ial
instruments, period
ic
re-estimat
ion of cash \ufb02ows that re\ufb02ect the movements
in the market rates of interest alters the effective interest rate.
Where the estimates of cash \ufb02ows have been revised, the carrying amount of the \ufb01nanc
ial asset or l
iab
il
ity is adjusted to
re\ufb02ect the actual and revised cash \ufb02ows, discounted at the instruments orig
inal effect
ive interest rate. The adjustment is
recognised as interest income or expense in the period in which the revis
ion
is made as long as the change in estimates is
not due to credit issues.
Interest income for \ufb01nanc
ial assets that are e
ither held at fair value through other comprehensive income or amortised
cost that have become credit-impa
ired subsequent to
in
it
ial recognit
ion (stage 3) and have had amounts wr
itten off,
is recognised using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective
interest rate except that expected credit losses are included in the expected cash \ufb02ows. Interest income is therefore
recognised on the amortised cost of the \ufb01nanc
ial asset
includ
ing expected cred
it losses. Should the credit risk on a
stage 3 \ufb01nancial asset
improve such that the \ufb01nanc
ial asset
is no longer considered credit-impa
ired,
interest income
recognit
ion reverts to a computat
ion based on the rehabil
itated gross carry
ing value of the \ufb01nanc
ial asset.
\n \n
2024
2023
$mill
ion
$mill
ion
Balances at central banks
2,520
2,833
Loans and advances to banks
2,368
2,095
Loans and advances to customers
16,179
15,518
Debt securit
ies
5,165
5,005
Other elig
ible b
ills
1,495
1,596
Accrued on impa
ired assets (d
iscount unwind)
135
180
Interest income
27,862
27,227
Of which: \ufb01nanc
ial
instruments held at fair value through other comprehensive income
3,773
3,445
Deposits by banks
806
796
Customer accounts
1
16,276
14,292
Debt securit
ies
in issue
3,610
3,367
Subordinated liab
il
it
ies and other borrowed funds
744
951
Interest expense on IFRS 16 lease liab
il
it
ies
60
52
Interest expense
21,496
19,458
Net interest income
6,366
7,769
1
Deposit insurance premiums of $147 mill
ion have been reclass
if
ied from customer accounts related
interest expense to general operating expenses in 2024.
The prior year has not been reclassif
ied as
it is not deemed material ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00487": { "value": "3. Net interest income
Accounting policy
Interest income for \ufb01nanc
ial assets held at e
ither fair value through other comprehensive income or amortised cost,
and interest expense on all \ufb01nanc
ial l
iab
il
it
ies held at amort
ised cost is recognised in pro\ufb01t or loss using the effective
interest method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected
life of the \ufb01nanc
ial
instrument or, when appropriate, a shorter period, to the net carrying amount of the \ufb01nanc
ial
asset or \ufb01nancial l
iab
il
ity. When calculating the effective interest rate, the Group estimates cash \ufb02ows consider
ing all
contractual terms of the \ufb01nancial
instrument (for example prepayment options) but does not consider future credit losses.
The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or discounts. For \ufb02oating-rate \ufb01nanc
ial
instruments, period
ic
re-estimat
ion of cash \ufb02ows that re\ufb02ect the movements
in the market rates of interest alters the effective interest rate.
Where the estimates of cash \ufb02ows have been revised, the carrying amount of the \ufb01nanc
ial asset or l
iab
il
ity is adjusted to
re\ufb02ect the actual and revised cash \ufb02ows, discounted at the instruments orig
inal effect
ive interest rate. The adjustment is
recognised as interest income or expense in the period in which the revis
ion
is made as long as the change in estimates is
not due to credit issues.
Interest income for \ufb01nanc
ial assets that are e
ither held at fair value through other comprehensive income or amortised
cost that have become credit-impa
ired subsequent to
in
it
ial recognit
ion (stage 3) and have had amounts wr
itten off,
is recognised using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective
interest rate except that expected credit losses are included in the expected cash \ufb02ows. Interest income is therefore
recognised on the amortised cost of the \ufb01nanc
ial asset
includ
ing expected cred
it losses. Should the credit risk on a
stage 3 \ufb01nancial asset
improve such that the \ufb01nanc
ial asset
is no longer considered credit-impa
ired,
interest income
recognit
ion reverts to a computat
ion based on the rehabil
itated gross carry
ing value of the \ufb01nanc
ial asset.
\n \n
2024
2023
$mill
ion
$mill
ion
Balances at central banks
2,520
2,833
Loans and advances to banks
2,368
2,095
Loans and advances to customers
16,179
15,518
Debt securit
ies
5,165
5,005
Other elig
ible b
ills
1,495
1,596
Accrued on impa
ired assets (d
iscount unwind)
135
180
Interest income
27,862
27,227
Of which: \ufb01nanc
ial
instruments held at fair value through other comprehensive income
3,773
3,445
Deposits by banks
806
796
Customer accounts
1
16,276
14,292
Debt securit
ies
in issue
3,610
3,367
Subordinated liab
il
it
ies and other borrowed funds
744
951
Interest expense on IFRS 16 lease liab
il
it
ies
60
52
Interest expense
21,496
19,458
Net interest income
6,366
7,769
1
Deposit insurance premiums of $147 mill
ion have been reclass
if
ied from customer accounts related
interest expense to general operating expenses in 2024.
The prior year has not been reclassif
ied as
it is not deemed material ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00631": { "value": "Accounting policy
Interest income for \ufb01nanc
ial assets held at e
ither fair value through other comprehensive income or amortised cost,
and interest expense on all \ufb01nanc
ial l
iab
il
it
ies held at amort
ised cost is recognised in pro\ufb01t or loss using the effective
interest method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected
life of the \ufb01nanc
ial
instrument or, when appropriate, a shorter period, to the net carrying amount of the \ufb01nanc
ial
asset or \ufb01nancial l
iab
il
ity. When calculating the effective interest rate, the Group estimates cash \ufb02ows consider
ing all
contractual terms of the \ufb01nancial
instrument (for example prepayment options) but does not consider future credit losses.
The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or discounts. For \ufb02oating-rate \ufb01nanc
ial
instruments, period
ic
re-estimat
ion of cash \ufb02ows that re\ufb02ect the movements
in the market rates of interest alters the effective interest rate.
Where the estimates of cash \ufb02ows have been revised, the carrying amount of the \ufb01nanc
ial asset or l
iab
il
ity is adjusted to
re\ufb02ect the actual and revised cash \ufb02ows, discounted at the instruments orig
inal effect
ive interest rate. The adjustment is
recognised as interest income or expense in the period in which the revis
ion
is made as long as the change in estimates is
not due to credit issues.
Interest income for \ufb01nanc
ial assets that are e
ither held at fair value through other comprehensive income or amortised
cost that have become credit-impa
ired subsequent to
in
it
ial recognit
ion (stage 3) and have had amounts wr
itten off,
is recognised using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective
interest rate except that expected credit losses are included in the expected cash \ufb02ows. Interest income is therefore
recognised on the amortised cost of the \ufb01nanc
ial asset
includ
ing expected cred
it losses. Should the credit risk on a
stage 3 \ufb01nancial asset
improve such that the \ufb01nanc
ial asset
is no longer considered credit-impa
ired,
interest income
recognit
ion reverts to a computat
ion based on the rehabil
itated gross carry
ing value of the \ufb01nanc
ial asset.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00490": { "value": "4. Net fees and commiss
ion
Accounting policy
The Group can act as trustee or in other Fiduc
iary capac
it
ies that result
in the holding or placing of assets on behalf of
ind
iv
iduals, trusts, retirement bene\ufb01t plans and other inst
itut
ions. The assets and income aris
ing thereon are excluded from
these \ufb01nancial statements, as they are not assets and
income of the Group.
The Group applies the following practical expedients:
\u2022
informat
ion on amounts of transact
ion price allocated to unsatisf
ied (or part
ially unsatisf
ied) performance obl
igat
ions at
the end of the reporting period is not disclosed as almost all fee-earning contracts have an expected duration of less than
one year
\u2022
promised considerat
ion
is not adjusted for the effects of a sign
i\ufb01cant \ufb01nancing component as the per
iod between the Group
provid
ing a serv
ice and the customer paying for it is expected to be less than one year
\u2022
incremental costs of obtain
ing a fee-earn
ing contract are recognised upfront in \u2018Fees and commiss
ion expense\u2019 rather than
amortised, if the expected term of the contract is less than one year
The determinat
ion of the serv
ices performed for the customer, the transaction price, and when the services are completed
depends on the nature of the product with the customer. The main considerat
ions on
income recognit
ion by product are
as\u00a0follows:
Transaction Banking
The Group recognises fee income associated with transactional trade and cash management at the point in time the service
is provided. The Group recognises income associated with trade contingent risk exposures (such as letters of credit and
guarantees) over the period in which the service is provided.
Payment of fees is usually received at the same time the service is provided. In some cases, letters of credit and guarantees
issued by the Group have annual upfront premiums, which are amortised on a straight-line basis to fee income over the year.
Global Markets
The Group recognises fee income at the point in time the service is provided. Fee income is recognised for a sign
i\ufb01cant non-
lending service when the transaction has been completed and the terms of the contract with the customer entitle the Group to
the fee. This includes fees such as structuring and advisory fees. Fees are usually received shortly after the service is provided.
Syndicat
ion fees are recogn
ised when the syndicat
ion
is complete de\ufb01ned as achiev
ing the \ufb01nal approved hold pos
it
ion.
Fees are generally received before completion of the syndicat
ion, or w
ith
in 12 months of the transact
ion date.
Securit
ies serv
ices include custody services, fund accounting and admin
istrat
ion, and broker clearing. Fees are recognised over
the period the custody or fund management services are provided, or as and when broker services are requested.
Wealth Management
Upfront considerat
ion on bancassurance agreements
is amortised straight-line over the contractual term. Commiss
ions for
bancassurance activ
it
ies are recorded as they are earned through sales of third-party insurance products to customers.
These commiss
ions are rece
ived with
in a short t
ime frame of the commiss
ion be
ing earned. Target-linked fees are accrued
based on percentage of the target achieved, provided it is assessed as highly probable that the target will be met.
Cash payment is received at a contractually specif
ied date after ach
ievement of a target has been con\ufb01rmed.
Upfront and trail
ing comm
iss
ions for managed
investment placements are recorded as they are con\ufb01rmed. Income from
these activ
it
ies is relatively even throughout the period, and cash is usually received with
in a short t
ime frame after the
commiss
ion
is earned.
Retail Products
The Group recognises most income at the point in time the Group is entitled to the fee, since most services are provided at the
time of the customer\u2019s request.
In most of our retail markets there are circumstances under which fees are waived, income recognit
ion
is adjusted to re\ufb02ect
customer\u2019s intent to pay the annual fee. The Group defers the fair value of reward points on its credit card reward programmes,
and recognises income and costs associated with ful\ufb01ll
ing the reward at the t
ime of redemption.
\n \n
2024
2023
$mill
ion
$mill
ion
Fees and commiss
ions
income
4,623
4,067
Of which:
Financ
ial
instruments that are not fair valued through pro\ufb01t or loss
1,436
1,374
Trust and other \ufb01duciary act
iv
it
ies
632
508
Fees and commiss
ions expense
(889)
(815)
Of which:
Financ
ial
instruments that are not fair valued through pro\ufb01t or loss
(245)
(169)
Trust and other \ufb01duciary act
iv
it
ies
(50)
(52)
Net fees and commiss
ion
3,734
3,252
\n \n
2024
2023
Corporate &
Wealth &
Central &
Corporate &
Wealth &
Central &
Investment
Retail
other
Investment
Retail
other
Banking
Banking
Ventures
items
Total
Banking
Banking
Ventures
items
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Transaction Services
1,456
26
\u2013
\u2013
1,482
1,415
25
\u2013
\u2013
1,440
Payments and Liqu
id
ity
634
\u2013
\u2013
\u2013
634
567
\u2013
\u2013
\u2013
567
Securit
ies Serv
ices
254
\u2013
\u2013
\u2013
254
271
\u2013
\u2013
\u2013
271
Trade & Working Capital
568
26
\u2013
\u2013
594
577
25
\u2013
\u2013
602
Global Banking
937
\u2013
\u2013
\u2013
937
694
\u2013
\u2013
\u2013
694
Lending & Financ
ial Solut
ions
633
\u2013
\u2013
\u2013
633
499
\u2013
\u2013
\u2013
499
Capital Market & Advisory
304
\u2013
\u2013
\u2013
304
195
\u2013
\u2013
\u2013
195
Global Markets
36
\u2013
\u2013
\u2013
36
55
\u2013
\u2013
\u2013
55
Macro Trading
(3)
\u2013
\u2013
\u2013
(3)
(20)
\u2013
\u2013
\u2013
(20)
Credit Trading
40
\u2013
\u2013
\u2013
40
69
\u2013
\u2013
\u2013
69
Valuation & Other Adj
(1)
\u2013
\u2013
\u2013
(1)
6
\u2013
\u2013
\u2013
6
Wealth solutions
\u2013
1,598
2
\u2013
1,600
\u2013
1,225
\u2013
\u2013
1,225
Investment Products
\u2013
929
2
\u2013
931
\u2013
633
\u2013
\u2013
633
Bancassurance
\u2013
669
\u2013
\u2013
669
\u2013
592
\u2013
\u2013
592
CCPL & Other Unsecured
Lending
\u2013
321
42
\u2013
363
\u2013
372
32
\u2013
404
Deposits
\u2013
143
2
\u2013
145
\u2013
163
\u2013
\u2013
163
Mortgages & Other Secured
Lending
\u2013
79
\u2013
\u2013
79
\u2013
70
\u2013
\u2013
70
Treasury
\u2013
\u2013
\u2013
(22)
(22)
\u2013
\u2013
\u2013
(15)
(15)
Other Products
\u2013
1
32
(30)
3
\u2013
2
35
(6)
31
Fees and commiss
ion
income
2,429
2,168
78
(52)
4,623
2,164
1,857
67
(21)
4,067
Fees and commiss
ion expense
(491)
(313)
(26)
(59)
(889)
(411)
(319)
(24)
(61)
(815)
Net fees and commiss
ion
1,938
1,855
52
(111)
3,734
1,753
1,538
43
(82)
3,252
Upfront bancassurance considerat
ion amounts are amort
ised on a straight-line basis over the contractual period to which the
considerat
ion relates. Deferred
income on the balance sheet in respect of these activ
it
ies is $419 mill
ion (31 December 2023:
$474\u00a0mill
ion). Follow
ing renegotiat
ion of the contract
in 2023, the life of the contract was extended for a further 3 years and
the income will be earned evenly till June 2032. For the twelve months ended 31 December 2024, $56 mill
ion of fee
income was
released from deferred income (31 December 2023: $75 mill
ion).", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00632": { "value": "Accounting policy
The Group can act as trustee or in other Fiduc
iary capac
it
ies that result
in the holding or placing of assets on behalf of
ind
iv
iduals, trusts, retirement bene\ufb01t plans and other inst
itut
ions. The assets and income aris
ing thereon are excluded from
these \ufb01nancial statements, as they are not assets and
income of the Group.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00491": { "value": "5. Net trading income
Accounting policy
Gains and losses aris
ing from changes
in the fair value of \ufb01nanc
ial
instruments held at fair value through pro\ufb01t or loss are
recorded in net trading income in the period in which they arise. This includes contractual interest receivable or payable.
When the in
it
ial fair value of a \ufb01nanc
ial
instrument held at fair value through pro\ufb01t or loss relies on unobservable inputs,
the difference between the in
it
ial valuation and the transaction price is amortised to net trading income as the inputs
become observable or over the life of the instrument, whichever is shorter. Any unamortised \u2018day one\u2019 gain is released to
net trading income if the transaction is terminated.
Income is recognised from the sale and purchase of trading posit
ions, marg
ins on market making and customer business
and fair value changes.
\n \n
2024
2023
$mill
ion
$mill
ion
Net trading income
9,615
6,292
Sign
i\ufb01cant
items with
in net trad
ing income include:
Gains on instruments held for trading
1
7,418
4,625
Gains on \ufb01nanc
ial assets mandator
ily at fair value through pro\ufb01t or loss
5,392
4,270
Gains on \ufb01nanc
ial assets des
ignated at fair value through pro\ufb01t or loss
8
10
Losses on \ufb01nancial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
(3,252)
(2,649)
1
Includes $583 mill
ion ga
in (31 December 2023: $299 mill
ion loss) from the translat
ion of foreign currency monetary assets and liab
il
it
ies, out of wh
ich $157 mill
ion
(31\u00a0December 2023: $nil) relates to Egypt FX revaluation impact", "dimensions": { "concept": "ifrs-full:DisclosureOfTradingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00633": { "value": "Accounting policy
Gains and losses aris
ing from changes
in the fair value of \ufb01nanc
ial
instruments held at fair value through pro\ufb01t or loss are
recorded in net trading income in the period in which they arise. This includes contractual interest receivable or payable.
When the in
it
ial fair value of a \ufb01nanc
ial
instrument held at fair value through pro\ufb01t or loss relies on unobservable inputs,
the difference between the in
it
ial valuation and the transaction price is amortised to net trading income as the inputs
become observable or over the life of the instrument, whichever is shorter. Any unamortised \u2018day one\u2019 gain is released to
net trading income if the transaction is terminated.
Income is recognised from the sale and purchase of trading posit
ions, marg
ins on market making and customer business
and fair value changes.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradingIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00493": { "value": "6. Other operating income \n \n
2024
2023
$mill
ion
$mill
ion
Other operating income includes:
Rental income from operating lease assets
40
375
Net loss on disposal of fair value through other comprehensive income debt instruments
(237)
(115)
Net loss on amortized cost \ufb01nanc
ial assets
(27)
(94)
Net (loss)/gain on sale of businesses\u00b9
(210)
351
Div
idend
income
5
15
Other\u00b2
257
174
Other operating income
(172)
706
1
2024 includes loss on disposal of Africa subsid
iar
ies $217 mill
ion (SCB Z
imbabwe Lim
ited: $172 m
ill
ion, SCB Angola S.A.: $26 m
ill
ion and SCB S
ierra Leone Lim
ited:
$19 mill
ion) of wh
ich $246 mill
ion relates to real
izat
ion of translat
ion adjustment loss, partly offset by gain of $17 mill
ion from d
isposal of Venture entit
ies (Shoal
lim
ited and Autumn l
ife Pte. Ltd), Total cash considerat
ion rece
ived was $74 mill
ion (SCB Z
imbabwe Lim
ited: $24 m
ill
ion, SCB Angola S.A.: $10 m
ill
ion, SCB S
ierra
Leone Lim
ited: $17 m
ill
ion, Shoal L
im
ited: $17 m
ill
ion and Autumn l
ife Pte. Ltd: $6 mill
ion). 2023
includes $309 mill
ion ga
in from the sale of the aviat
ion \ufb01nance
leasing business, $18 mill
ion from sale of assoc
iate (Metaco SA), $16 mill
ion ga
in from sale of subsid
iary ($9 m
ill
ion from Cardspal and $7 m
ill
ion from Kozag
i)
and $8 mill
ion ga
in from the sale of Jordan one of Africa subsid
iary
2
2024 includes IAS 29 adjustment Ghana hyperin\ufb02at
ionary
impact ($139 mill
ion), Research and development expend
iture credit ($32 mill
ion), Rebates/
incent
ives
received from VISA card ($25 mill
ion), Ga
in on disposal of property plant and equipment ($23 mill
ion), Mark-to-market ga
ins from deferred compensation income
($17 mill
ion), and
immater
ial balances across other geograph
ies. 2023 mainly includes $59 mill
ion tax cred
it against Research & Development Expenditure,
$38 mill
ion ga
in on disposal of premises, $21 mill
ion
income from VISA sponsorship in Hong Kong, $10 mill
ion from ga
in on lease modif
icat
ion in Hong Kong and
$16 mill
ion
interest income from tax refund in India", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00492": { "value": "6. Other operating income \n \n
2024
2023
$mill
ion
$mill
ion
Other operating income includes:
Rental income from operating lease assets
40
375
Net loss on disposal of fair value through other comprehensive income debt instruments
(237)
(115)
Net loss on amortized cost \ufb01nanc
ial assets
(27)
(94)
Net (loss)/gain on sale of businesses\u00b9
(210)
351
Div
idend
income
5
15
Other\u00b2
257
174
Other operating income
(172)
706
1
2024 includes loss on disposal of Africa subsid
iar
ies $217 mill
ion (SCB Z
imbabwe Lim
ited: $172 m
ill
ion, SCB Angola S.A.: $26 m
ill
ion and SCB S
ierra Leone Lim
ited:
$19 mill
ion) of wh
ich $246 mill
ion relates to real
izat
ion of translat
ion adjustment loss, partly offset by gain of $17 mill
ion from d
isposal of Venture entit
ies (Shoal
lim
ited and Autumn l
ife Pte. Ltd), Total cash considerat
ion rece
ived was $74 mill
ion (SCB Z
imbabwe Lim
ited: $24 m
ill
ion, SCB Angola S.A.: $10 m
ill
ion, SCB S
ierra
Leone Lim
ited: $17 m
ill
ion, Shoal L
im
ited: $17 m
ill
ion and Autumn l
ife Pte. Ltd: $6 mill
ion). 2023
includes $309 mill
ion ga
in from the sale of the aviat
ion \ufb01nance
leasing business, $18 mill
ion from sale of assoc
iate (Metaco SA), $16 mill
ion ga
in from sale of subsid
iary ($9 m
ill
ion from Cardspal and $7 m
ill
ion from Kozag
i)
and $8 mill
ion ga
in from the sale of Jordan one of Africa subsid
iary
2
2024 includes IAS 29 adjustment Ghana hyperin\ufb02at
ionary
impact ($139 mill
ion), Research and development expend
iture credit ($32 mill
ion), Rebates/
incent
ives
received from VISA card ($25 mill
ion), Ga
in on disposal of property plant and equipment ($23 mill
ion), Mark-to-market ga
ins from deferred compensation income
($17 mill
ion), and
immater
ial balances across other geograph
ies. 2023 mainly includes $59 mill
ion tax cred
it against Research & Development Expenditure,
$38 mill
ion ga
in on disposal of premises, $21 mill
ion
income from VISA sponsorship in Hong Kong, $10 mill
ion from ga
in on lease modif
icat
ion in Hong Kong and
$16 mill
ion
interest income from tax refund in India", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00522": { "value": "7. Operating expenses \n \n
2024
2023
$mill
ion
$mill
ion
Staff costs:
Wages and salaries
6,567
6,459
Social security costs
246
233
Other pension costs (Note 30)
451
431
Share-based payment costs (Note 31)
334
226
Other staff costs
912
907
8,510
8,256
Premises and equipment expenses:
401
422
General admin
istrat
ive expenses:
UK bank levy
90
111
Other general admin
istrat
ive expenses
2,375
1,691
2,465
1,802
Depreciat
ion and amort
isat
ion:
Property, plant and equipment:
Premises
299
315
Equipment
128
103
Operating lease assets
\u2013
27
427
445
Intangibles:
Software
695
625
Acquired on business combinat
ions
4
1
1,126
1,071
Total operating expenses
12,502
11,551
Other staff costs include redundancy expenses of $186 mill
ion (31 December 2023: $106 m
ill
ion). Further costs
in this category
include train
ing, travel costs and other staff-related costs.
Details of directors\u2019 pay, bene\ufb01ts, pensions and bene\ufb01ts and interests in shares are disclosed in the Directors\u2019 remuneration
report (page 143).
Transactions with directors, of\ufb01cers and other related parties are disclosed in Note 36.
Operating expenses include research expenditures of $1,187 mill
ion (31 December 2023: $996 m
ill
ion), wh
ich was recognized as
an expense in the year
The UK bank levy is applied to chargeable equity and liab
il
it
ies on the balance sheet of UK operat
ions. Key exclusions from
chargeable equity and liab
il
it
ies
include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain
sovereign debt and liab
il
it
ies subject to nett
ing. The rates are 0.10 per cent for short-term liab
il
it
ies and0.05 per cent for
long-term liab
il
it
ies.17. Goodwill and intang
ible assets
Accounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.
\n \n
2024
2023
Acquired
Computer
Acquired
Computer
Goodwill
intang
ibles
software
Total
Goodwill
intang
ibles
software
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cost
At 1 January
2,429
278
6,168
8,875
2,471
295
5,178
7,944
Exchange translation differences
(42)
(18)
(109)
(169)
(24)
(12)
21
(15)
Addit
ions
\u2013
1
952
953
\u2013
\u2013
1,124
1,124
Disposals
\u2013
\u2013
(5)
(5)
\u2013
\u2013
\u2013
\u2013
Impairment
\u2013
\u2013
(663)\u00b9
(663)
\u2013
\u2013
(151)\u00b2
(151)
Amounts written off
\u2013
(9)
(42)
(51)
(18)
(5)
(4)
(27)
At 31 December
2,387
252
6,301
8,940
2,429
278
6,168
8,875
Provis
ion for amort
isat
ion
At 1 January
\u2013
265
2,396
2,661
\u2013
276
1,799
2,075
Exchange translation differences
\u2013
(20)
(48)
(68)
\u2013
(12)
11
(1)
Amortisat
ion
\u2013
4
695
699
\u2013
1
625
626
Impairment charge
\u2013
\u2013
(102)\u00b9
(102)
\u2013
\u2013
(39)\u00b2
(39)
Amounts written off
\u2013
\u2013
(41)
(41)
\u2013
\u2013
\u2013
\u2013
At 31 December
\u2013
249
2,900
3,149
\u2013
265
2,396
2,661
Net book value
2,387
3
3,401
5,791
2,429
13
3,772
6,214
1
During 2024, the Group performed a review of its computer software intang
ibles wh
ich were capital
ised as at 31 December 2023, and
impa
ired $483 m
ill
ion of
the 2024 net book value due to lim
itat
ions in the available evidence to support the continued capital
isat
ion of the assets. The Group has made improvements in
its processes and controls to capture the required evidence going forward. The Group has also performed its annual review of computer software intang
ibles to
determine instances when the Group is no longer using certain applicat
ions
in its ongoing business and impa
ired $78 m
ill
ion. A total of $561 m
ill
ion
is recorded
with
in
impa
irment to re\ufb02ect the above
2
Computer software impa
irment
includes $82.8 mill
ion charge relat
ing to write off on SaaS (Software as a Service) applicat
ions cap
ital
ised
in previous years
At 31 December 2024, accumulated goodwill impa
irment losses
incurred from 1 January 2005 amounted to $3,331 mill
ion
(31\u00a0December 2023: $3,331 mill
ion), of wh
ich $nil was recognised in 2024 (31 December 2023: $nil).
Outcome of impa
irment assessment
An annual assessment is made as to whether the current carrying value of goodwill is impa
ired. For the purposes of
impa
irment
testing, goodwill is allocated at the date of acquis
it
ion to a CGU. Goodwill is considered to be impa
ired
if the carrying amount
of the relevant CGU exceeds its recoverable amount. Indicators of impa
irment
include changes in the economic performance
and outlook of the region includ
ing geopol
it
ical changes, changes
in market value of regional investments, large credit defaults
and strategic decis
ions to ex
it certain regions. The recoverable amounts for all the CGUs were measured based on value in use
(VIU). The calculation of VIU for each CGU is calculated using \ufb01ve-year cash\ufb02ow project
ions and an est
imated terminal value
based on a perpetuity value after year \ufb01ve. The cash\ufb02ow project
ions are based on forecasts approved by management up
to 2029. The perpetuity terminal value amount is calculated using year \ufb01ve cash\ufb02ows using long-term GDP growth rates.
All cash\ufb02ows are discounted using discount rates which re\ufb02ect market rates appropriate to the CGU.
The cash \ufb02ows used as an input to the VIU calculations used in determin
ing whether goodw
ill allocated to CGUs should be
impa
ired were amended dur
ing 2024 to re\ufb02ect changes to the basis on which business performance is monitored. There has
been no impact from the change estimated in the current period. It is impract
icable for the Group to est
imate the amount of
the effect of this change in future periods.
The goodwill allocated to each CGU and key assumptions used in determin
ing the recoverable amounts are set out below and
are solely estimates for the purposes of assessing impa
irment of acqu
ired goodwill.
\n \n
2024
2023
Long-term
Long-term
Pre Tax
forecast GDP
Pre Tax
forecast GDP
Goodwill
Discount rates
growth rates
Goodwill
Discount rates
growth rates
Cash generating unit
$mill
ion
per cent
per cent
$mill
ion
per cent
per cent
Country CGUs
Asia
1,014
1,036
Hong Kong
359
13.0
1.1
357
12.9
1.6
Taiwan
316
12.2
1.5
333
12.4
1.5
Singapore
339
13.0
2.3
346
13.9
2.1
Africa & Middle East
81
80
Pakistan
32
35.9
3.3
31
35.5
3.2
Bahrain
49
12.4
0.8
49
12.4
0.5
Global CGUs
1,292
1,313
Wealth Management
83
15.0
1.8
83
15.3
1.9
Corporate & Investment Banking
1,209
15.5
2.3
1,230
15.7
2.3
2,387
2,429
In the current year, there are no CGUs for which any ind
iv
idual movement on key estimates (cash\ufb02ow, discount rate and GDP
growth) would cause an impa
irment.
Acquired intang
ibles
These primar
ily compr
ise those items recognised as part of the acquis
it
ions of Union Bank (now amalgamated into Standard
Chartered Bank (Pakistan) Lim
ited), Hs
inchu (now amalgamated into Standard Chartered Bank (Taiwan) Lim
ited), Amer
ican
Express Bank and ABSA\u2019s custody business in Africa.
The acquired intang
ibles are amort
ised over periods from four years to a maximum of 16 years. The constituents are as follows:
\n \n
2024
2023
$mill
ion
$mill
ion
Acquired intang
ibles compr
ise:
Brand names
1
\u2013
Customer relationsh
ips
\u2013
1
Licenses
2
12
Net book value
3
13
18. Property, plant and equipment
Accounting policy
All property, plant and equipment is stated at cost less accumulated depreciat
ion and
impa
irment losses.
Land and build
ings compr
ise mainly branches and of\ufb01ces. Freehold land is not depreciated although it is subject to
impa
irment test
ing.
Depreciat
ion on other assets
is calculated using the straight-line method to allocate their cost to their residual values over
their estimated useful lives, as follows:
\n \n
\u2022 Owned premises
\u2022
up to 50 years
\u2022 Leasehold premises
\u2022
up to 50 years
\u2022 Leasehold improvements
\u2022
Shorter of remain
ing lease term and 10 years
\u2022
Equipment and motor vehicles
\u2022
three to 15 years
Where the Group is a lessee of a right-of-use asset, the leased assets are capital
ised and
included in Property, plant and
equipment with a corresponding liab
il
ity to the lessor recognised in other liab
il
it
ies. The account
ing policy for lease assets
is set out in Note 19.
\n \n
Leased
Leased
Operating
premises
equipment
Premises
Equipment
lease assets
assets
assets
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cost or valuation
At 1 January 2024
1,741
810
\u2013
1,864
18
4,433
Exchange translation differences
(41)
(31)
\u2013
(38)
(4)
(114)
Addit
ions
112
1
194
1
\u2013
213
150
1
669
Disposals and fully depreciated assets
written off
(61)
2
(37)
2
\u2013
(13)
(1)
(112)
Other movements
(25)
\u2013
\u2013
\u2013
\u2013
(25)
As at 31 December 2024
1,726
936
\u2013
2,026
163
4,851
Depreciat
ion
Accumulated at 1 January
692
535
\u2013
914
18
2,159
Exchange translation differences
(28)
(15)
\u2013
(40)
(14)
(97)
Charge for the year
79
92
\u2013
220
36
427
Impairment charge
2
\u2013
\u2013
9
\u2013
11
Attributable to assets sold, transferred
or written off
(29)
2
(37)
2
\u2013
(7)
(1)
(74)
Accumulated at 31 December 2024
716
575
\u2013
1,096
39
2,426
Net book amount at 31 December 2024
1,010
361
\u2013
930
124
2,425
Cost or valuation
At 1 January 2023
1,773
840
4,420
1,652
29
8,714
Exchange translation differences
(27)
(22)
\u2013
(5)
(3)
(57)
Addit
ions
45
1
114
1
\u2013
286
1
446
Disposals and fully depreciated assets
written off
(68)
2
(122)
2
(4,420)
3
(69)
(9)
(4,688)
Transfers to assets held for sale
18
\u2013
\u2013
\u2013
\u2013
18
As at 31 December 2023
1,741
810
\u2013
1,864
18
4,433
Depreciat
ion
Accumulated at 1 January 2023
678
575
1,185
730
24
3,192
Exchange translation differences
(21)
(17)
1
(25)
(1)
(63)
Charge for the year
77
99
27
238
4
445
Impairment charge
3
\u2013
\u2013
9
\u2013
12
Attributable to assets sold, transferred
or written off
(47)
2
(122)
2
(1,213)
3
(38)
(9)
(1,429)
Transfers to assets held for sale
2
\u2013
\u2013
\u2013
\u2013
2
Accumulated at 31 December 2023
692
535
\u2013
914
18
2,159
Net book amount at 31 December 2023
1,049
275
\u2013
950
\u2013
2,274
\n
1
Refer to the cash \ufb02ow statement under cash \ufb02ows from invest
ing act
iv
it
ies section for the purchase of property, plant and equipment during the year of
\n
$456 mill
ion (2023: $159 m
ill
ion)
\n
2
Disposals for property, plant and equipment during the year of $56mill
ion (2023: $53 m
ill
ion)
in the cash \ufb02ow statement would include the gains and losses
\n
Incurred as part of other operating income (Note 6) on disposal of assets during the year and the net book value disposed
\n
3
Includes disposal of assets from aviat
ion \ufb01nance leas
ing business and sale of vessels", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00494": { "value": "7. Operating expenses \n \n
2024
2023
$mill
ion
$mill
ion
Staff costs:
Wages and salaries
6,567
6,459
Social security costs
246
233
Other pension costs (Note 30)
451
431
Share-based payment costs (Note 31)
334
226
Other staff costs
912
907
8,510
8,256
Premises and equipment expenses:
401
422
General admin
istrat
ive expenses:
UK bank levy
90
111
Other general admin
istrat
ive expenses
2,375
1,691
2,465
1,802
Depreciat
ion and amort
isat
ion:
Property, plant and equipment:
Premises
299
315
Equipment
128
103
Operating lease assets
\u2013
27
427
445
Intangibles:
Software
695
625
Acquired on business combinat
ions
4
1
1,126
1,071
Total operating expenses
12,502
11,551
Other staff costs include redundancy expenses of $186 mill
ion (31 December 2023: $106 m
ill
ion). Further costs
in this category
include train
ing, travel costs and other staff-related costs.
Details of directors\u2019 pay, bene\ufb01ts, pensions and bene\ufb01ts and interests in shares are disclosed in the Directors\u2019 remuneration
report (page 143).
Transactions with directors, of\ufb01cers and other related parties are disclosed in Note 36.
Operating expenses include research expenditures of $1,187 mill
ion (31 December 2023: $996 m
ill
ion), wh
ich was recognized as
an expense in the year
The UK bank levy is applied to chargeable equity and liab
il
it
ies on the balance sheet of UK operat
ions. Key exclusions from
chargeable equity and liab
il
it
ies
include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain
sovereign debt and liab
il
it
ies subject to nett
ing. The rates are 0.10 per cent for short-term liab
il
it
ies and0.05 per cent for
long-term liab
il
it
ies.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00536": { "value": "7. Operating expenses \n \n
2024
2023
$mill
ion
$mill
ion
Staff costs:
Wages and salaries
6,567
6,459
Social security costs
246
233
Other pension costs (Note 30)
451
431
Share-based payment costs (Note 31)
334
226
Other staff costs
912
907
8,510
8,256
Premises and equipment expenses:
401
422
General admin
istrat
ive expenses:
UK bank levy
90
111
Other general admin
istrat
ive expenses
2,375
1,691
2,465
1,802
Depreciat
ion and amort
isat
ion:
Property, plant and equipment:
Premises
299
315
Equipment
128
103
Operating lease assets
\u2013
27
427
445
Intangibles:
Software
695
625
Acquired on business combinat
ions
4
1
1,126
1,071
Total operating expenses
12,502
11,551
Other staff costs include redundancy expenses of $186 mill
ion (31 December 2023: $106 m
ill
ion). Further costs
in this category
include train
ing, travel costs and other staff-related costs.
Details of directors\u2019 pay, bene\ufb01ts, pensions and bene\ufb01ts and interests in shares are disclosed in the Directors\u2019 remuneration
report (page 143).
Transactions with directors, of\ufb01cers and other related parties are disclosed in Note 36.
Operating expenses include research expenditures of $1,187 mill
ion (31 December 2023: $996 m
ill
ion), wh
ich was recognized as
an expense in the year
The UK bank levy is applied to chargeable equity and liab
il
it
ies on the balance sheet of UK operat
ions. Key exclusions from
chargeable equity and liab
il
it
ies
include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain
sovereign debt and liab
il
it
ies subject to nett
ing. The rates are 0.10 per cent for short-term liab
il
it
ies and0.05 per cent for
long-term liab
il
it
ies.", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00537": { "value": "7. Operating expenses \n \n
2024
2023
$mill
ion
$mill
ion
Staff costs:
Wages and salaries
6,567
6,459
Social security costs
246
233
Other pension costs (Note 30)
451
431
Share-based payment costs (Note 31)
334
226
Other staff costs
912
907
8,510
8,256
Premises and equipment expenses:
401
422
General admin
istrat
ive expenses:
UK bank levy
90
111
Other general admin
istrat
ive expenses
2,375
1,691
2,465
1,802
Depreciat
ion and amort
isat
ion:
Property, plant and equipment:
Premises
299
315
Equipment
128
103
Operating lease assets
\u2013
27
427
445
Intangibles:
Software
695
625
Acquired on business combinat
ions
4
1
1,126
1,071
Total operating expenses
12,502
11,551
Other staff costs include redundancy expenses of $186 mill
ion (31 December 2023: $106 m
ill
ion). Further costs
in this category
include train
ing, travel costs and other staff-related costs.
Details of directors\u2019 pay, bene\ufb01ts, pensions and bene\ufb01ts and interests in shares are disclosed in the Directors\u2019 remuneration
report (page 143).
Transactions with directors, of\ufb01cers and other related parties are disclosed in Note 36.
Operating expenses include research expenditures of $1,187 mill
ion (31 December 2023: $996 m
ill
ion), wh
ich was recognized as
an expense in the year
The UK bank levy is applied to chargeable equity and liab
il
it
ies on the balance sheet of UK operat
ions. Key exclusions from
chargeable equity and liab
il
it
ies
include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain
sovereign debt and liab
il
it
ies subject to nett
ing. The rates are 0.10 per cent for short-term liab
il
it
ies and0.05 per cent for
long-term liab
il
it
ies.", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00495": { "value": "8. Credit impa
irment
Accounting policy
Sign
i\ufb01cant account
ing estimates and judgements
The Group\u2019s expected credit loss (ECL) calculations are outputs of complex models with a number of underlying
assumptions. The sign
i\ufb01cant judgements
in determin
ing expected cred
it loss include:
\u2022
The Group\u2019s criter
ia for assess
ing if there has been a sign
i\ufb01cant
increase in credit risk;
\u2022
Development of expected credit loss models, includ
ing the cho
ice of inputs relating to macroeconomic variables;
\u2022
Determin
ing est
imates of forward looking macroeconomic forecasts;
\u2022
Evaluation of management overlays and post-model adjustments;
\u2022
Determinat
ion of probab
il
ity we
ight
ings for Stage 3
ind
iv
idually assessed provis
ions
The calculation of credit impa
irment prov
is
ions also
involves expert credit judgement to be applied by the credit risk
management team based upon counterparty informat
ion they rece
ive from various sources includ
ing relat
ionsh
ip
managers and on external market informat
ion. Deta
ils on the approach for determin
ing expected cred
it loss can be found
in the credit risk section, under IFRS 9 Methodology (page 236).
Estimates of forecasts of key macroeconomic variables underlying the expected credit loss calculation can be found with
in
the Risk review, Key assumptions and judgements in determin
ing expected cred
it loss (page 238).
Expected credit losses
An ECL represents the present value of expected cash shortfalls over the residual term of a \ufb01nanc
ial asset, undrawn
commitment or \ufb01nanc
ial guarantee.
A cash shortfall is the difference between the cash \ufb02ows that are due in accordance with the contractual terms of the
instrument and the cash \ufb02ows that the Group expects to receive over the contractual life of the instrument.
Measurement
ECL are computed as unbiased, probabil
ity-we
ighted amounts which are determined by evaluating a range of reasonably
possible outcomes, the time value of money, and consider
ing all reasonable and supportable
informat
ion
includ
ing that
which is forward-looking.
For material portfolios, the estimate of expected cash shortfalls is determined by multiply
ing the probab
il
ity of default (PD)
with the loss given default (LGD) with the expected exposure at the time of default (EAD). There may be multiple default
events over the lifet
ime of an
instrument. Further details on the components of PD, LGD and EAD are disclosed in the Credit
risk section. For less material Retail Banking loan portfolios, the Group has adopted less sophist
icated approaches based
on histor
ical roll rates or loss rates.
Forward-looking economic assumptions are incorporated into the PD, LGD and EAD where relevant and where they
in\ufb02uence credit risk, such as GDP growth rates, interest rates, house price ind
ices and commod
ity prices among others.
These assumptions are incorporated using the Group\u2019s most likely forecast for a range of macroeconomic assumptions.
These forecasts are determined using all reasonable and supportable informat
ion, wh
ich includes both internally
developed forecasts and those available externally, and are consistent with those used for budgeting, forecasting and
capital planning.
To account for the potential non-linear
ity
in credit losses, multiple forward-looking scenarios are incorporated into the
range of reasonably possible outcomes for all material portfolios. For example, where there is a greater risk of downside
credit losses than upside gains, multiple forward-looking economic scenarios are incorporated into the range of
reasonably possible outcomes, both in respect of determin
ing the PD (and where relevant, the LGD and EAD) and
in
determin
ing the overall ECL amounts. These scenar
ios are determined using a Monte Carlo approach centred around
the Group\u2019s most likely forecast of macroeconomic assumptions.
The period over which cash shortfalls are determined is generally lim
ited to the max
imum contractual period for which
the Group is exposed to credit risk. However, for certain revolving credit facil
it
ies, which include credit cards or overdrafts,
the Group\u2019s exposure to credit risk is not lim
ited to the contractual per
iod. For these instruments, the Group estimates
an appropriate life based on the period that the Group is exposed to credit risk, which includes the effect of credit risk
management actions such as the withdrawal of undrawn facil
it
ies.
For credit-impa
ired \ufb01nancial
instruments, the estimate of cash shortfalls may require the use of expert credit judgement.
The estimate of expected cash shortfalls on a collateralised \ufb01nanc
ial
instrument re\ufb02ects the amount and tim
ing of cash
\n
\ufb02ows that are expected from foreclosure on the collateral less the costs of obtain
ing and sell
ing the collateral, regardless
\n
of whether foreclosure is deemed probable.
\n
Cash \ufb02ows from unfunded credit enhancements held are included with
in the measurement of expected cred
it losses if
\n
they are part of, or integral to, the contractual terms of the instrument (this includes \ufb01nanc
ial guarantees, unfunded r
isk
\n
partic
ipat
ions and other non-derivat
ive cred
it insurance). Although non-integral credit enhancements do not impact the
\n
measurement of expected credit losses, a reimbursement asset is recognised to the extent of the ECL recorded.
\n
Cash shortfalls are discounted using the effective interest rate (or credit-adjusted effective interest rate for purchased or
\n
orig
inated cred
it-impa
ired
instruments (POCI)) on the \ufb01nanc
ial
instrument as calculated at in
it
ial recognit
ion or
if the
\n
instrument has a variable interest rate, the current effective interest rate determined under the contract.
\n\n \n
Instruments
Location of expected credit loss provis
ions
Financ
ial assets held at amort
ised cost
Loss provis
ions: netted aga
inst gross carrying value
1
Financ
ial assets held FVOCI \u2013 Debt
instruments
Other comprehensive income (FVOCI expected credit loss reserve)
2
Loan commitments
Provis
ions for l
iab
il
it
ies and charges
3
Financ
ial guarantees
Provis
ions for l
iab
il
it
ies and charges
3
\n
1
Purchased or orig
inated cred
it-impa
ired assets do not attract an expected cred
it loss provis
ion on
in
it
ial recognit
ion. An expected cred
it loss provis
ion w
ill
\n
be recognised only if there is an increase in expected credit losses from that considered at in
it
ial recognit
ion
\n
2
Debt and treasury securit
ies class
if
ied as fa
ir value through other comprehensive income (FVOCI) are held at fair value on the face of the balance sheet.
\n
The expected credit loss attributed to these instruments is held as a separate reserve with
in other comprehens
ive income (OCI) and is recycled to the pro\ufb01t
\n
and loss account along with any fair value measurement gains or losses held with
in FVOCI when the appl
icable instruments are derecognised
\n
3
Expected credit loss on loan commitments and \ufb01nanc
ial guarantees
is recognised as a liab
il
ity provis
ion. Where a \ufb01nancial
instrument includes both a loan
\n
(i.e. \ufb01nanc
ial asset component) and an undrawn comm
itment (i.e. loan commitment component), and it is not possible to separately ident
ify the expected
\n
credit loss on these components, expected credit loss amounts on the loan commitment are recognised together with expected credit loss amounts on
\n
the \ufb01nancial asset. To the extent the comb
ined expected credit loss exceeds the gross carrying amount of the \ufb01nanc
ial asset, the expected cred
it loss is
\n
recognised as a liab
il
ity provis
ion
\n
Recognit
ion
\n
12 months expected credit losses (stage 1)
\n
Expected credit losses are recognised at the time of in
it
ial recognit
ion of a \ufb01nancial
instrument and represent the
\n
lifet
ime cash shortfalls ar
is
ing from poss
ible default events up to 12 months into the future from the balance sheet date.
\n
Expected credit losses continue to be determined on this basis until there is either a sign
i\ufb01cant
increase in the credit risk of
\n
an instrument or the instrument becomes credit-impa
ired. If an
instrument is no longer considered to exhib
it a s
ign
i\ufb01cant
\n
increase in credit risk, expected credit losses will revert to being determined on a 12-month basis.
\n
Sign
i\ufb01cant
increase in credit risk (Stage 2)
\n
Sign
i\ufb01cant
increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk
\n
of default at orig
inat
ion (after taking into account the passage of time). Sign
i\ufb01cant does not mean stat
ist
ically s
ign
i\ufb01cant
\n
nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is sign
i\ufb01cant or
\n
not is assessed using a number of quantitat
ive and qual
itat
ive factors, the we
ight of which depends on the type of product
\n
and counterparty. Financ
ial assets that are 30 or more days past due and not cred
it-impa
ired w
ill always be considered to
\n
have experienced a sign
i\ufb01cant
increase in credit risk. For less material portfolios where a loss rate or roll rate approach is
\n
applied to compute expected credit loss, sign
i\ufb01cant
increase in credit risk is primar
ily based on 30 days past due.
\n
Quantitat
ive factors
include an assessment of whether there has been sign
i\ufb01cant
increase in the forward-looking
\n
probabil
ity of default (PD) s
ince orig
inat
ion. A forward-looking PD is one that is adjusted for future economic condit
ions
\n
to the extent these are correlated to changes in credit risk. We compare the residual lifet
ime PD at the balance sheet
\n
date to the residual lifet
ime PD that was expected at the t
ime of orig
inat
ion for the same point in the term structure
\n
and determine whether both the absolute and relative change between the two exceeds predetermined thresholds.
\n
To the extent that the differences between the measures of default outlined exceed the de\ufb01ned thresholds, the instrument
\n
is considered to have experienced a sign
i\ufb01cant
increase in credit risk (see page 244 to 245).
\n
Qualitat
ive factors assessed
include those linked to current credit risk management processes, such as lending placed on
\n
non-purely precautionary early alert (and subject to closer monitor
ing).
\n
A non-purely precautionary early alert account is one which exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion, or attent
ion by management. Weaknesses in such a borrower\u2019s account, if left
\n
uncorrected, could result in deteriorat
ion of repayment prospects and the l
ikel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry, concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and overdue balances among other factors.
Credit-impa
ired (or defaulted) exposures (Stage 3)
\n
Financ
ial assets that are cred
it-impa
ired (or
in default) represent those that are at least 90 days past due in respect of
\n
princ
ipal and/or
interest. Financ
ial assets are also cons
idered to be credit-impa
ired where the obl
igors are unlikely to pay
\n
on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash \ufb02ows
\n
of the \ufb01nancial asset. It may not be poss
ible to ident
ify a s
ingle discrete event but instead the combined effect of several
\n
events may cause \ufb01nancial assets to become cred
it-impa
ired.
\n
\u2022
Evidence that a \ufb01nanc
ial asset
is credit-impa
ired
includes observable data about the following events:
\n
\u2022
Sign
i\ufb01cant \ufb01nancial d
iff
iculty of the
issuer or borrower;
\n
\u2022
Breach of contract such as default or a past due event;
\n
\u2022
For economic or contractual reasons relating to the borrower\u2019s \ufb01nanc
ial d
iff
iculty, the lenders of the borrower have
\n
granted the borrower concession/s that lenders would not otherwise consider. This would include forbearance actions
\n
(page 226);
\n
\u2022
Pending or actual bankruptcy or other \ufb01nanc
ial reorgan
isat
ion to avo
id or delay discharge of the borrower\u2019s
\n
obligat
ion/s;
\n
\u2022
The disappearance of an active market for the applicable \ufb01nanc
ial asset due to \ufb01nancial d
iff
icult
ies of the borrower;
\n
\u2022
Purchase or orig
inat
ion of a \ufb01nanc
ial asset at a deep d
iscount that re\ufb02ects incurred credit losses
\n
Lending commitments to a credit-impa
ired obl
igor that have not yet been drawn down are included to the extent that the
\n
commitment cannot be withdrawn. Loss provis
ions aga
inst credit-impa
ired \ufb01nancial assets are determ
ined based on an
\n
assessment of the present value of expected cash shortfalls (discounted at the instrument\u2019s orig
inal effect
ive interest rate)
\n
under a range of scenarios, includ
ing the real
isat
ion of any collateral held where appropr
iate. The Group\u2019s de\ufb01n
it
ion of
\n
default is aligned with the regulatory de\ufb01n
it
ion of default as set out in the UK\u2019s onshored capital requirements regulations
\n
(Art 178).
\n
Expert credit judgement
\n
For Corporate & Investment Banking and Private Banking, borrowers are graded by credit risk management on a credit
\n
grading (CG) scale from CG1 to CG14. Once a borrower starts to exhib
it cred
it deteriorat
ion,
it will move along the credit
\n
grading scale in the performing book and when it is classif
ied as CG12 (wh
ich is a qualitat
ive tr
igger for sign
i\ufb01cant
increase
\n
in credit risk (see page 245)the credit assessment and oversight of the loan will normally be performed by Stressed Assets
\n
Risk (SAR).
\n
Borrowers graded CG12 exhib
it well-de\ufb01ned weaknesses
in areas such as management and/or performance but there is
\n
no current expectation of a loss of princ
ipal or
interest in the likely scenario. Where the impa
irment assessment
ind
icates
\n
that there will be a loss of princ
ipal on a loan
in the likely scenario, the borrower is graded a CG14 while borrowers of other
\n
credit-impa
ired loans are graded CG13. Instruments graded CG13 or CG14 are regarded as stage 3.
\n
For ind
iv
idually sign
i\ufb01cant \ufb01nancial assets w
ith
in stage 3, SAR w
ill consider all judgements that have an impact on the
\n
expected future cash \ufb02ows of the asset. These include: the business prospects, industry and geopolit
ical cl
imate of
\n
the customer, quality of realisable value of collateral, the Group\u2019s legal posit
ion relat
ive to other claimants and any
\n
renegotiat
ion/forbearance/mod
if
icat
ion options. The future cash \ufb02ow calculation involves sign
i\ufb01cant judgements
\n
and estimates. As new informat
ion becomes ava
ilable and further negotiat
ions/ forbearance measures are taken the
\n
estimates of the future cash \ufb02ows will be revised, and will have an impact on the future cash \ufb02ow analysis.
\n
For \ufb01nancial assets wh
ich are not ind
iv
idually sign
i\ufb01cant, such as the Reta
il Banking portfolio or small business loans, which
\n
comprise a large number of homogenous loans that share sim
ilar character
ist
ics, stat
ist
ical est
imates and techniques are
\n
used, as well as credit scoring analysis.
\n
Consumer and Business Banking clients are considered credit-impa
ired where they are more 90 days past due, or
if the
\n
borrower \ufb01les for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in
\n
the case of a small business, or if the borrower surrenders the collateral, or there is an ident
i\ufb01ed fraud on the account.
\n
Addit
ionally,
if the account is unsecured and the borrower has other credit accounts with the Group that are considered
\n
credit-impa
ired, the account may be also be cred
it-impa
ired.
\n
Techniques used to compute impa
irment amounts use models wh
ich analyse histor
ical repayment and default rates over
\n
a time horizon. Where various models are used, judgement is required to analyse the available informat
ion prov
ided and
\n
select the appropriate model or combinat
ion of models to use.
\n
Expert credit judgement is also applied to determine whether any post-model adjustments are required for credit risk
\n
elements which are not captured by the models.
\n
Modif
ied \ufb01nancial
instruments
\n
Where the orig
inal contractual terms of a \ufb01nancial asset have been mod
if
ied for cred
it reasons and the instrument has
\n
not been derecognised (an instrument is derecognised when a modif
icat
ion results in a change in cash \ufb02ows that the
\n
Group would consider substantial), the resulting modif
icat
ion loss is recognised with
in cred
it impa
irment
in the income
\n
statement with a corresponding decrease in the gross carrying value of the asset. If the modif
icat
ion involved a concession
\n
that the bank would not otherwise consider, the instrument is considered to be credit-impa
ired and
is considered forborne.
\n
Expected credit loss for modif
ied \ufb01nancial assets that have not been derecogn
ised and are not considered to be
\n
credit-impa
ired w
ill be recognised on a 12-month basis, or a lifet
ime bas
is, if there is a sign
i\ufb01cant
increase in credit risk.
\n
These assets are assessed (by comparison to the orig
inat
ion date) to determine whether there has been a sign
i\ufb01cant
\n
increase in credit risk subsequent to the modif
icat
ion. Although loans may be modif
ied for non-cred
it reasons, a sign
i\ufb01cant
\n
increase in credit risk may occur. In addit
ion to the recogn
it
ion of mod
if
icat
ion gains and losses, the revised carrying value
\n
of modif
ied \ufb01nancial assets w
ill impact the calculation of expected credit losses, with any increase or decrease in expected
\n
credit loss recognised with
in
impa
irment.
Forborne loans
Forborne loans are those loans that have been modif
ied
in response to a customer\u2019s \ufb01nanc
ial d
iff
icult
ies. Forbearance
strategies assist clients who are temporarily in \ufb01nanc
ial d
istress and are unable to meet their orig
inal contractual
repayment terms. Forbearance can be in
it
iated by the client, the Group or a third-party includ
ing government sponsored
programmes or a conglomerate of credit inst
itut
ions. Forbearance may include debt restructuring such as new repayment
schedules, payment deferrals, tenor extensions, interest only payments, lower interest rates, forgiveness of princ
ipal,
interest or fees, or relaxation of loan covenants.
Forborne loans that have been modif
ied (and not derecogn
ised) on terms that are not consistent with those readily
available in the market and/or where we have granted a concession compared to the orig
inal terms of the loans are
considered credit-impa
ired
if there is a detrimental impact on cash \ufb02ows. The modif
icat
ion loss (see Classif
icat
ion and
measurement \u2013 Modif
icat
ions) is recognised in the pro\ufb01t or loss with
in cred
it impa
irment and the gross carry
ing value of
the loan reduced by the same amount. The modif
ied loan
is disclosed as \u2018Loans subject to forbearance \u2013 credit-impa
ired\u2019.
Loans that have been subject to a forbearance modif
icat
ion, but which are not considered credit-impa
ired (not class
if
ied
as CG13 or CG14), are disclosed as \u2018Forborne \u2013 not credit-impa
ired\u2019. Th
is may include amendments to covenants with
in the
contractual terms.
Write-offs of credit-impa
ired
instruments and reversal of impa
irment
To the extent a \ufb01nancial debt
instrument is considered irrecoverable, the applicable portion of the gross carrying value is
written off against the related loan provis
ion. Such loans are wr
itten off after all the necessary procedures have been
completed, it is decided that there is no realist
ic probab
il
ity of recovery and the amount of the loss has been determ
ined.
Subsequent recoveries of amounts previously written off decrease the amount of the provis
ion for cred
it impa
irment
in the
income statement.
Loss provis
ions on purchased or or
ig
inated cred
it-impa
ired
instruments (POCI)
The Group measures expected credit loss on a lifet
ime bas
is for POCI instruments throughout the life of the instrument.
However, expected credit loss is not recognised in a separate loss provis
ion on
in
it
ial recognit
ion for POCI
instruments as
the lifet
ime expected cred
it loss is inherent with
in the gross carry
ing amount of the instruments. The Group recognises
the change in lifet
ime expected cred
it losses aris
ing subsequent to
in
it
ial recognit
ion
in the income statement and the
cumulative change as a loss provis
ion. Where l
ifet
ime expected cred
it losses on POCI instruments are less than those at
in
it
ial recognit
ion, then the favourable d
ifferences are recognised as impa
irment ga
ins in the income statement (and as
impa
irment loss where the expected cred
it losses are greater).
Improvement in credit risk/curing
For \ufb01nancial assets that are cred
it-impa
ired (stage 3), a transfer to stage 2 or stage 1
is only permitted where the
instrument is no longer considered to be credit-impa
ired. An
instrument will no longer be considered credit-impa
ired
when there is no shortfall of cash \ufb02ows compared to the orig
inal contractual terms.
For \ufb01nancial assets w
ith
in stage 2, these can only be transferred to stage 1 when they are no longer cons
idered to have
experienced a sign
i\ufb01cant
increase in credit risk.
Where sign
i\ufb01cant
increase in credit risk was determined using quantitat
ive measures, the
instruments will automatically
transfer back to stage 1 when the orig
inal PD based transfer cr
iter
ia are no longer met. Where
instruments were
transferred to stage 2 due to an assessment of qualitat
ive factors, the
issues that led to the reclassif
icat
ion must be
cured before the instruments can be reclassif
ied to stage 1. Th
is includes instances where management actions led to
instruments being classif
ied as stage 2, requ
ir
ing that act
ion to be resolved before loans are reclassif
ied to stage 1.
A forborne loan can only be removed from being disclosed as forborne if the loan is performing (stage 1 or 2) and a further
two-year probation period is met.
In order for a forborne loan to become performing, the following criter
ia have to be sat
isf
ied:
\u2022
At least a year has passed with no default based upon the forborne contract terms
\u2022
The customer is likely to repay its obligat
ions
in full without realis
ing secur
ity
\u2022
The customer has no accumulated impa
irment aga
inst amount outstanding (except for ECL)
Subsequent to the criter
ia above, a further two-year probat
ion period has to be ful\ufb01lled, whereby regular payments are
made by the customer and none of the exposures to the customer are more than 30 days past due.
\n \n
2024
2023
$mill
ion
$mill
ion
Net credit impa
irment on loans and advances to banks and customers
590
606
Net credit impa
irment on debt secur
it
ies
1
(58)
(50)
Net credit impa
irment relat
ing to \ufb01nanc
ial guarantees and loan comm
itments
18
(48)
Net credit impa
irment relat
ing to other \ufb01nanc
ial assets
(3)
\u2013
Credit impa
irment
1
547
508
1
Includes impa
irment release of $14 m
ill
ion (2023: $1 m
ill
ion charge) on or
ig
inated cred
it-impa
ired debt secur
it
ies ", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00496": { "value": "8. Credit impa
irment
Accounting policy
Sign
i\ufb01cant account
ing estimates and judgements
The Group\u2019s expected credit loss (ECL) calculations are outputs of complex models with a number of underlying
assumptions. The sign
i\ufb01cant judgements
in determin
ing expected cred
it loss include:
\u2022
The Group\u2019s criter
ia for assess
ing if there has been a sign
i\ufb01cant
increase in credit risk;
\u2022
Development of expected credit loss models, includ
ing the cho
ice of inputs relating to macroeconomic variables;
\u2022
Determin
ing est
imates of forward looking macroeconomic forecasts;
\u2022
Evaluation of management overlays and post-model adjustments;
\u2022
Determinat
ion of probab
il
ity we
ight
ings for Stage 3
ind
iv
idually assessed provis
ions
The calculation of credit impa
irment prov
is
ions also
involves expert credit judgement to be applied by the credit risk
management team based upon counterparty informat
ion they rece
ive from various sources includ
ing relat
ionsh
ip
managers and on external market informat
ion. Deta
ils on the approach for determin
ing expected cred
it loss can be found
in the credit risk section, under IFRS 9 Methodology (page 236).
Estimates of forecasts of key macroeconomic variables underlying the expected credit loss calculation can be found with
in
the Risk review, Key assumptions and judgements in determin
ing expected cred
it loss (page 238).
Expected credit losses
An ECL represents the present value of expected cash shortfalls over the residual term of a \ufb01nanc
ial asset, undrawn
commitment or \ufb01nanc
ial guarantee.
A cash shortfall is the difference between the cash \ufb02ows that are due in accordance with the contractual terms of the
instrument and the cash \ufb02ows that the Group expects to receive over the contractual life of the instrument.
Measurement
ECL are computed as unbiased, probabil
ity-we
ighted amounts which are determined by evaluating a range of reasonably
possible outcomes, the time value of money, and consider
ing all reasonable and supportable
informat
ion
includ
ing that
which is forward-looking.
For material portfolios, the estimate of expected cash shortfalls is determined by multiply
ing the probab
il
ity of default (PD)
with the loss given default (LGD) with the expected exposure at the time of default (EAD). There may be multiple default
events over the lifet
ime of an
instrument. Further details on the components of PD, LGD and EAD are disclosed in the Credit
risk section. For less material Retail Banking loan portfolios, the Group has adopted less sophist
icated approaches based
on histor
ical roll rates or loss rates.
Forward-looking economic assumptions are incorporated into the PD, LGD and EAD where relevant and where they
in\ufb02uence credit risk, such as GDP growth rates, interest rates, house price ind
ices and commod
ity prices among others.
These assumptions are incorporated using the Group\u2019s most likely forecast for a range of macroeconomic assumptions.
These forecasts are determined using all reasonable and supportable informat
ion, wh
ich includes both internally
developed forecasts and those available externally, and are consistent with those used for budgeting, forecasting and
capital planning.
To account for the potential non-linear
ity
in credit losses, multiple forward-looking scenarios are incorporated into the
range of reasonably possible outcomes for all material portfolios. For example, where there is a greater risk of downside
credit losses than upside gains, multiple forward-looking economic scenarios are incorporated into the range of
reasonably possible outcomes, both in respect of determin
ing the PD (and where relevant, the LGD and EAD) and
in
determin
ing the overall ECL amounts. These scenar
ios are determined using a Monte Carlo approach centred around
the Group\u2019s most likely forecast of macroeconomic assumptions.
The period over which cash shortfalls are determined is generally lim
ited to the max
imum contractual period for which
the Group is exposed to credit risk. However, for certain revolving credit facil
it
ies, which include credit cards or overdrafts,
the Group\u2019s exposure to credit risk is not lim
ited to the contractual per
iod. For these instruments, the Group estimates
an appropriate life based on the period that the Group is exposed to credit risk, which includes the effect of credit risk
management actions such as the withdrawal of undrawn facil
it
ies.
For credit-impa
ired \ufb01nancial
instruments, the estimate of cash shortfalls may require the use of expert credit judgement.
\n\n\n
The estimate of expected cash shortfalls on a collateralised \ufb01nanc
ial
instrument re\ufb02ects the amount and tim
ing of cash
\n
\ufb02ows that are expected from foreclosure on the collateral less the costs of obtain
ing and sell
ing the collateral, regardless
\n
of whether foreclosure is deemed probable.
\n
Cash \ufb02ows from unfunded credit enhancements held are included with
in the measurement of expected cred
it losses if
\n
they are part of, or integral to, the contractual terms of the instrument (this includes \ufb01nanc
ial guarantees, unfunded r
isk
\n
partic
ipat
ions and other non-derivat
ive cred
it insurance). Although non-integral credit enhancements do not impact the
\n
measurement of expected credit losses, a reimbursement asset is recognised to the extent of the ECL recorded.
\n
Cash shortfalls are discounted using the effective interest rate (or credit-adjusted effective interest rate for purchased or
\n
orig
inated cred
it-impa
ired
instruments (POCI)) on the \ufb01nanc
ial
instrument as calculated at in
it
ial recognit
ion or
if the
\n
instrument has a variable interest rate, the current effective interest rate determined under the contract.
\n\n \n
Instruments
Location of expected credit loss provis
ions
Financ
ial assets held at amort
ised cost
Loss provis
ions: netted aga
inst gross carrying value
1
Financ
ial assets held FVOCI \u2013 Debt
instruments
Other comprehensive income (FVOCI expected credit loss reserve)
2
Loan commitments
Provis
ions for l
iab
il
it
ies and charges
3
Financ
ial guarantees
Provis
ions for l
iab
il
it
ies and charges
3
\n
1
Purchased or orig
inated cred
it-impa
ired assets do not attract an expected cred
it loss provis
ion on
in
it
ial recognit
ion. An expected cred
it loss provis
ion w
ill
\n
be recognised only if there is an increase in expected credit losses from that considered at in
it
ial recognit
ion
\n
2
Debt and treasury securit
ies class
if
ied as fa
ir value through other comprehensive income (FVOCI) are held at fair value on the face of the balance sheet.
\n
The expected credit loss attributed to these instruments is held as a separate reserve with
in other comprehens
ive income (OCI) and is recycled to the pro\ufb01t
\n
and loss account along with any fair value measurement gains or losses held with
in FVOCI when the appl
icable instruments are derecognised
\n
3
Expected credit loss on loan commitments and \ufb01nanc
ial guarantees
is recognised as a liab
il
ity provis
ion. Where a \ufb01nancial
instrument includes both a loan
\n
(i.e. \ufb01nanc
ial asset component) and an undrawn comm
itment (i.e. loan commitment component), and it is not possible to separately ident
ify the expected
\n
credit loss on these components, expected credit loss amounts on the loan commitment are recognised together with expected credit loss amounts on
\n
the \ufb01nancial asset. To the extent the comb
ined expected credit loss exceeds the gross carrying amount of the \ufb01nanc
ial asset, the expected cred
it loss is
\n
recognised as a liab
il
ity provis
ion
\n
Recognit
ion
\n
12 months expected credit losses (stage 1)
\n
Expected credit losses are recognised at the time of in
it
ial recognit
ion of a \ufb01nancial
instrument and represent the
\n
lifet
ime cash shortfalls ar
is
ing from poss
ible default events up to 12 months into the future from the balance sheet date.
\n
Expected credit losses continue to be determined on this basis until there is either a sign
i\ufb01cant
increase in the credit risk of
\n
an instrument or the instrument becomes credit-impa
ired. If an
instrument is no longer considered to exhib
it a s
ign
i\ufb01cant
\n
increase in credit risk, expected credit losses will revert to being determined on a 12-month basis.
\n
Sign
i\ufb01cant
increase in credit risk (Stage 2)
\n
Sign
i\ufb01cant
increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk
\n
of default at orig
inat
ion (after taking into account the passage of time). Sign
i\ufb01cant does not mean stat
ist
ically s
ign
i\ufb01cant
\n
nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is sign
i\ufb01cant or
\n
not is assessed using a number of quantitat
ive and qual
itat
ive factors, the we
ight of which depends on the type of product
\n
and counterparty. Financ
ial assets that are 30 or more days past due and not cred
it-impa
ired w
ill always be considered to
\n
have experienced a sign
i\ufb01cant
increase in credit risk. For less material portfolios where a loss rate or roll rate approach is
\n
applied to compute expected credit loss, sign
i\ufb01cant
increase in credit risk is primar
ily based on 30 days past due.
\n
Quantitat
ive factors
include an assessment of whether there has been sign
i\ufb01cant
increase in the forward-looking
\n
probabil
ity of default (PD) s
ince orig
inat
ion. A forward-looking PD is one that is adjusted for future economic condit
ions
\n
to the extent these are correlated to changes in credit risk. We compare the residual lifet
ime PD at the balance sheet
\n
date to the residual lifet
ime PD that was expected at the t
ime of orig
inat
ion for the same point in the term structure
\n
and determine whether both the absolute and relative change between the two exceeds predetermined thresholds.
\n
To the extent that the differences between the measures of default outlined exceed the de\ufb01ned thresholds, the instrument
\n
is considered to have experienced a sign
i\ufb01cant
increase in credit risk (see page 244 to 245).
\n
Qualitat
ive factors assessed
include those linked to current credit risk management processes, such as lending placed on
\n
non-purely precautionary early alert (and subject to closer monitor
ing).
\n
A non-purely precautionary early alert account is one which exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion, or attent
ion by management. Weaknesses in such a borrower\u2019s account, if left
\n
uncorrected, could result in deteriorat
ion of repayment prospects and the l
ikel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry, concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and overdue balances among other factors.
\n\n\n
Credit-impa
ired (or defaulted) exposures (Stage 3)
\n
Financ
ial assets that are cred
it-impa
ired (or
in default) represent those that are at least 90 days past due in respect of
\n
princ
ipal and/or
interest. Financ
ial assets are also cons
idered to be credit-impa
ired where the obl
igors are unlikely to pay
\n
on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash \ufb02ows
\n
of the \ufb01nancial asset. It may not be poss
ible to ident
ify a s
ingle discrete event but instead the combined effect of several
\n
events may cause \ufb01nancial assets to become cred
it-impa
ired.
\n
\u2022
Evidence that a \ufb01nanc
ial asset
is credit-impa
ired
includes observable data about the following events:
\n
\u2022
Sign
i\ufb01cant \ufb01nancial d
iff
iculty of the
issuer or borrower;
\n
\u2022
Breach of contract such as default or a past due event;
\n
\u2022
For economic or contractual reasons relating to the borrower\u2019s \ufb01nanc
ial d
iff
iculty, the lenders of the borrower have
\n
granted the borrower concession/s that lenders would not otherwise consider. This would include forbearance actions
\n
(page 226);
\n
\u2022
Pending or actual bankruptcy or other \ufb01nanc
ial reorgan
isat
ion to avo
id or delay discharge of the borrower\u2019s
\n
obligat
ion/s;
\n
\u2022
The disappearance of an active market for the applicable \ufb01nanc
ial asset due to \ufb01nancial d
iff
icult
ies of the borrower;
\n
\u2022
Purchase or orig
inat
ion of a \ufb01nanc
ial asset at a deep d
iscount that re\ufb02ects incurred credit losses
\n
Lending commitments to a credit-impa
ired obl
igor that have not yet been drawn down are included to the extent that the
\n
commitment cannot be withdrawn. Loss provis
ions aga
inst credit-impa
ired \ufb01nancial assets are determ
ined based on an
\n
assessment of the present value of expected cash shortfalls (discounted at the instrument\u2019s orig
inal effect
ive interest rate)
\n
under a range of scenarios, includ
ing the real
isat
ion of any collateral held where appropr
iate. The Group\u2019s de\ufb01n
it
ion of
\n
default is aligned with the regulatory de\ufb01n
it
ion of default as set out in the UK\u2019s onshored capital requirements regulations
\n
(Art 178).
\n
Expert credit judgement
\n
For Corporate & Investment Banking and Private Banking, borrowers are graded by credit risk management on a credit
\n
grading (CG) scale from CG1 to CG14. Once a borrower starts to exhib
it cred
it deteriorat
ion,
it will move along the credit
\n
grading scale in the performing book and when it is classif
ied as CG12 (wh
ich is a qualitat
ive tr
igger for sign
i\ufb01cant
increase
\n
in credit risk (see page 245)the credit assessment and oversight of the loan will normally be performed by Stressed Assets
\n
Risk (SAR).
\n
Borrowers graded CG12 exhib
it well-de\ufb01ned weaknesses
in areas such as management and/or performance but there is
\n
no current expectation of a loss of princ
ipal or
interest in the likely scenario. Where the impa
irment assessment
ind
icates
\n
that there will be a loss of princ
ipal on a loan
in the likely scenario, the borrower is graded a CG14 while borrowers of other
\n
credit-impa
ired loans are graded CG13. Instruments graded CG13 or CG14 are regarded as stage 3.
\n
For ind
iv
idually sign
i\ufb01cant \ufb01nancial assets w
ith
in stage 3, SAR w
ill consider all judgements that have an impact on the
\n
expected future cash \ufb02ows of the asset. These include: the business prospects, industry and geopolit
ical cl
imate of
\n
the customer, quality of realisable value of collateral, the Group\u2019s legal posit
ion relat
ive to other claimants and any
\n
renegotiat
ion/forbearance/mod
if
icat
ion options. The future cash \ufb02ow calculation involves sign
i\ufb01cant judgements
\n
and estimates. As new informat
ion becomes ava
ilable and further negotiat
ions/ forbearance measures are taken the
\n
estimates of the future cash \ufb02ows will be revised, and will have an impact on the future cash \ufb02ow analysis.
\n
For \ufb01nancial assets wh
ich are not ind
iv
idually sign
i\ufb01cant, such as the Reta
il Banking portfolio or small business loans, which
\n
comprise a large number of homogenous loans that share sim
ilar character
ist
ics, stat
ist
ical est
imates and techniques are
\n
used, as well as credit scoring analysis.
\n
Consumer and Business Banking clients are considered credit-impa
ired where they are more 90 days past due, or
if the
\n
borrower \ufb01les for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in
\n
the case of a small business, or if the borrower surrenders the collateral, or there is an ident
i\ufb01ed fraud on the account.
\n
Addit
ionally,
if the account is unsecured and the borrower has other credit accounts with the Group that are considered
\n
credit-impa
ired, the account may be also be cred
it-impa
ired.
\n
Techniques used to compute impa
irment amounts use models wh
ich analyse histor
ical repayment and default rates over
\n
a time horizon. Where various models are used, judgement is required to analyse the available informat
ion prov
ided and
\n
select the appropriate model or combinat
ion of models to use.
\n
Expert credit judgement is also applied to determine whether any post-model adjustments are required for credit risk
\n
elements which are not captured by the models.
\n
Modif
ied \ufb01nancial
instruments
\n
Where the orig
inal contractual terms of a \ufb01nancial asset have been mod
if
ied for cred
it reasons and the instrument has
\n
not been derecognised (an instrument is derecognised when a modif
icat
ion results in a change in cash \ufb02ows that the
\n
Group would consider substantial), the resulting modif
icat
ion loss is recognised with
in cred
it impa
irment
in the income
\n
statement with a corresponding decrease in the gross carrying value of the asset. If the modif
icat
ion involved a concession
\n
that the bank would not otherwise consider, the instrument is considered to be credit-impa
ired and
is considered forborne.
\n
Expected credit loss for modif
ied \ufb01nancial assets that have not been derecogn
ised and are not considered to be
\n
credit-impa
ired w
ill be recognised on a 12-month basis, or a lifet
ime bas
is, if there is a sign
i\ufb01cant
increase in credit risk.
\n
These assets are assessed (by comparison to the orig
inat
ion date) to determine whether there has been a sign
i\ufb01cant
\n
increase in credit risk subsequent to the modif
icat
ion. Although loans may be modif
ied for non-cred
it reasons, a sign
i\ufb01cant
\n
increase in credit risk may occur. In addit
ion to the recogn
it
ion of mod
if
icat
ion gains and losses, the revised carrying value
\n
of modif
ied \ufb01nancial assets w
ill impact the calculation of expected credit losses, with any increase or decrease in expected
\n
credit loss recognised with
in
impa
irment.
Forborne loans
Forborne loans are those loans that have been modif
ied
in response to a customer\u2019s \ufb01nanc
ial d
iff
icult
ies. Forbearance
strategies assist clients who are temporarily in \ufb01nanc
ial d
istress and are unable to meet their orig
inal contractual
repayment terms. Forbearance can be in
it
iated by the client, the Group or a third-party includ
ing government sponsored
programmes or a conglomerate of credit inst
itut
ions. Forbearance may include debt restructuring such as new repayment
schedules, payment deferrals, tenor extensions, interest only payments, lower interest rates, forgiveness of princ
ipal,
interest or fees, or relaxation of loan covenants.
Forborne loans that have been modif
ied (and not derecogn
ised) on terms that are not consistent with those readily
available in the market and/or where we have granted a concession compared to the orig
inal terms of the loans are
considered credit-impa
ired
if there is a detrimental impact on cash \ufb02ows. The modif
icat
ion loss (see Classif
icat
ion and
measurement \u2013 Modif
icat
ions) is recognised in the pro\ufb01t or loss with
in cred
it impa
irment and the gross carry
ing value of
the loan reduced by the same amount. The modif
ied loan
is disclosed as \u2018Loans subject to forbearance \u2013 credit-impa
ired\u2019.
Loans that have been subject to a forbearance modif
icat
ion, but which are not considered credit-impa
ired (not class
if
ied
as CG13 or CG14), are disclosed as \u2018Forborne \u2013 not credit-impa
ired\u2019. Th
is may include amendments to covenants with
in the
contractual terms.
Write-offs of credit-impa
ired
instruments and reversal of impa
irment
To the extent a \ufb01nancial debt
instrument is considered irrecoverable, the applicable portion of the gross carrying value is
written off against the related loan provis
ion. Such loans are wr
itten off after all the necessary procedures have been
completed, it is decided that there is no realist
ic probab
il
ity of recovery and the amount of the loss has been determ
ined.
Subsequent recoveries of amounts previously written off decrease the amount of the provis
ion for cred
it impa
irment
in the
income statement.
Loss provis
ions on purchased or or
ig
inated cred
it-impa
ired
instruments (POCI)
The Group measures expected credit loss on a lifet
ime bas
is for POCI instruments throughout the life of the instrument.
However, expected credit loss is not recognised in a separate loss provis
ion on
in
it
ial recognit
ion for POCI
instruments as
the lifet
ime expected cred
it loss is inherent with
in the gross carry
ing amount of the instruments. The Group recognises
the change in lifet
ime expected cred
it losses aris
ing subsequent to
in
it
ial recognit
ion
in the income statement and the
cumulative change as a loss provis
ion. Where l
ifet
ime expected cred
it losses on POCI instruments are less than those at
in
it
ial recognit
ion, then the favourable d
ifferences are recognised as impa
irment ga
ins in the income statement (and as
impa
irment loss where the expected cred
it losses are greater).
Improvement in credit risk/curing
For \ufb01nancial assets that are cred
it-impa
ired (stage 3), a transfer to stage 2 or stage 1
is only permitted where the
instrument is no longer considered to be credit-impa
ired. An
instrument will no longer be considered credit-impa
ired
when there is no shortfall of cash \ufb02ows compared to the orig
inal contractual terms.
For \ufb01nancial assets w
ith
in stage 2, these can only be transferred to stage 1 when they are no longer cons
idered to have
experienced a sign
i\ufb01cant
increase in credit risk.
Where sign
i\ufb01cant
increase in credit risk was determined using quantitat
ive measures, the
instruments will automatically
transfer back to stage 1 when the orig
inal PD based transfer cr
iter
ia are no longer met. Where
instruments were
transferred to stage 2 due to an assessment of qualitat
ive factors, the
issues that led to the reclassif
icat
ion must be
cured before the instruments can be reclassif
ied to stage 1. Th
is includes instances where management actions led to
instruments being classif
ied as stage 2, requ
ir
ing that act
ion to be resolved before loans are reclassif
ied to stage 1.
A forborne loan can only be removed from being disclosed as forborne if the loan is performing (stage 1 or 2) and a further
two-year probation period is met.
In order for a forborne loan to become performing, the following criter
ia have to be sat
isf
ied:
\u2022
At least a year has passed with no default based upon the forborne contract terms
\u2022
The customer is likely to repay its obligat
ions
in full without realis
ing secur
ity
\u2022
The customer has no accumulated impa
irment aga
inst amount outstanding (except for ECL)
Subsequent to the criter
ia above, a further two-year probat
ion period has to be ful\ufb01lled, whereby regular payments are
made by the customer and none of the exposures to the customer are more than 30 days past due.
\n \n
2024
2023
$mill
ion
$mill
ion
Net credit impa
irment on loans and advances to banks and customers
590
606
Net credit impa
irment on debt secur
it
ies
1
(58)
(50)
Net credit impa
irment relat
ing to \ufb01nanc
ial guarantees and loan comm
itments
18
(48)
Net credit impa
irment relat
ing to other \ufb01nanc
ial assets
(3)
\u2013
Credit impa
irment
1
547
508
1
Includes impa
irment release of $14 m
ill
ion (2023: $1 m
ill
ion charge) on or
ig
inated cred
it-impa
ired debt secur
it
ies ", "dimensions": { "concept": "stan:DisclosureOfCreditImpairmentExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00635": { "value": "Accounting policy
Sign
i\ufb01cant account
ing estimates and judgements
The Group\u2019s expected credit loss (ECL) calculations are outputs of complex models with a number of underlying
assumptions. The sign
i\ufb01cant judgements
in determin
ing expected cred
it loss include:
\u2022
The Group\u2019s criter
ia for assess
ing if there has been a sign
i\ufb01cant
increase in credit risk;
\u2022
Development of expected credit loss models, includ
ing the cho
ice of inputs relating to macroeconomic variables;
\u2022
Determin
ing est
imates of forward looking macroeconomic forecasts;
\u2022
Evaluation of management overlays and post-model adjustments;
\u2022
Determinat
ion of probab
il
ity we
ight
ings for Stage 3
ind
iv
idually assessed provis
ions
The calculation of credit impa
irment prov
is
ions also
involves expert credit judgement to be applied by the credit risk
management team based upon counterparty informat
ion they rece
ive from various sources includ
ing relat
ionsh
ip
managers and on external market informat
ion. Deta
ils on the approach for determin
ing expected cred
it loss can be found
in the credit risk section, under IFRS 9 Methodology (page 236).
Estimates of forecasts of key macroeconomic variables underlying the expected credit loss calculation can be found with
in
the Risk review, Key assumptions and judgements in determin
ing expected cred
it loss (page 238).
Expected credit losses
An ECL represents the present value of expected cash shortfalls over the residual term of a \ufb01nanc
ial asset, undrawn
commitment or \ufb01nanc
ial guarantee.
A cash shortfall is the difference between the cash \ufb02ows that are due in accordance with the contractual terms of the
instrument and the cash \ufb02ows that the Group expects to receive over the contractual life of the instrument.
Measurement
ECL are computed as unbiased, probabil
ity-we
ighted amounts which are determined by evaluating a range of reasonably
possible outcomes, the time value of money, and consider
ing all reasonable and supportable
informat
ion
includ
ing that
which is forward-looking.
For material portfolios, the estimate of expected cash shortfalls is determined by multiply
ing the probab
il
ity of default (PD)
with the loss given default (LGD) with the expected exposure at the time of default (EAD). There may be multiple default
events over the lifet
ime of an
instrument. Further details on the components of PD, LGD and EAD are disclosed in the Credit
risk section. For less material Retail Banking loan portfolios, the Group has adopted less sophist
icated approaches based
on histor
ical roll rates or loss rates.
Forward-looking economic assumptions are incorporated into the PD, LGD and EAD where relevant and where they
in\ufb02uence credit risk, such as GDP growth rates, interest rates, house price ind
ices and commod
ity prices among others.
These assumptions are incorporated using the Group\u2019s most likely forecast for a range of macroeconomic assumptions.
These forecasts are determined using all reasonable and supportable informat
ion, wh
ich includes both internally
developed forecasts and those available externally, and are consistent with those used for budgeting, forecasting and
capital planning.
To account for the potential non-linear
ity
in credit losses, multiple forward-looking scenarios are incorporated into the
range of reasonably possible outcomes for all material portfolios. For example, where there is a greater risk of downside
credit losses than upside gains, multiple forward-looking economic scenarios are incorporated into the range of
reasonably possible outcomes, both in respect of determin
ing the PD (and where relevant, the LGD and EAD) and
in
determin
ing the overall ECL amounts. These scenar
ios are determined using a Monte Carlo approach centred around
the Group\u2019s most likely forecast of macroeconomic assumptions.
The period over which cash shortfalls are determined is generally lim
ited to the max
imum contractual period for which
the Group is exposed to credit risk. However, for certain revolving credit facil
it
ies, which include credit cards or overdrafts,
the Group\u2019s exposure to credit risk is not lim
ited to the contractual per
iod. For these instruments, the Group estimates
an appropriate life based on the period that the Group is exposed to credit risk, which includes the effect of credit risk
management actions such as the withdrawal of undrawn facil
it
ies.
For credit-impa
ired \ufb01nancial
instruments, the estimate of cash shortfalls may require the use of expert credit judgement.
\n\n\n
The estimate of expected cash shortfalls on a collateralised \ufb01nanc
ial
instrument re\ufb02ects the amount and tim
ing of cash
\n
\ufb02ows that are expected from foreclosure on the collateral less the costs of obtain
ing and sell
ing the collateral, regardless
\n
of whether foreclosure is deemed probable.
\n
Cash \ufb02ows from unfunded credit enhancements held are included with
in the measurement of expected cred
it losses if
\n
they are part of, or integral to, the contractual terms of the instrument (this includes \ufb01nanc
ial guarantees, unfunded r
isk
\n
partic
ipat
ions and other non-derivat
ive cred
it insurance). Although non-integral credit enhancements do not impact the
\n
measurement of expected credit losses, a reimbursement asset is recognised to the extent of the ECL recorded.
\n
Cash shortfalls are discounted using the effective interest rate (or credit-adjusted effective interest rate for purchased or
\n
orig
inated cred
it-impa
ired
instruments (POCI)) on the \ufb01nanc
ial
instrument as calculated at in
it
ial recognit
ion or
if the
\n
instrument has a variable interest rate, the current effective interest rate determined under the contract.
\n\n \n
Instruments
Location of expected credit loss provis
ions
Financ
ial assets held at amort
ised cost
Loss provis
ions: netted aga
inst gross carrying value
1
Financ
ial assets held FVOCI \u2013 Debt
instruments
Other comprehensive income (FVOCI expected credit loss reserve)
2
Loan commitments
Provis
ions for l
iab
il
it
ies and charges
3
Financ
ial guarantees
Provis
ions for l
iab
il
it
ies and charges
3
\n
1
Purchased or orig
inated cred
it-impa
ired assets do not attract an expected cred
it loss provis
ion on
in
it
ial recognit
ion. An expected cred
it loss provis
ion w
ill
\n
be recognised only if there is an increase in expected credit losses from that considered at in
it
ial recognit
ion
\n
2
Debt and treasury securit
ies class
if
ied as fa
ir value through other comprehensive income (FVOCI) are held at fair value on the face of the balance sheet.
\n
The expected credit loss attributed to these instruments is held as a separate reserve with
in other comprehens
ive income (OCI) and is recycled to the pro\ufb01t
\n
and loss account along with any fair value measurement gains or losses held with
in FVOCI when the appl
icable instruments are derecognised
\n
3
Expected credit loss on loan commitments and \ufb01nanc
ial guarantees
is recognised as a liab
il
ity provis
ion. Where a \ufb01nancial
instrument includes both a loan
\n
(i.e. \ufb01nanc
ial asset component) and an undrawn comm
itment (i.e. loan commitment component), and it is not possible to separately ident
ify the expected
\n
credit loss on these components, expected credit loss amounts on the loan commitment are recognised together with expected credit loss amounts on
\n
the \ufb01nancial asset. To the extent the comb
ined expected credit loss exceeds the gross carrying amount of the \ufb01nanc
ial asset, the expected cred
it loss is
\n
recognised as a liab
il
ity provis
ion
\n
Recognit
ion
\n
12 months expected credit losses (stage 1)
\n
Expected credit losses are recognised at the time of in
it
ial recognit
ion of a \ufb01nancial
instrument and represent the
\n
lifet
ime cash shortfalls ar
is
ing from poss
ible default events up to 12 months into the future from the balance sheet date.
\n
Expected credit losses continue to be determined on this basis until there is either a sign
i\ufb01cant
increase in the credit risk of
\n
an instrument or the instrument becomes credit-impa
ired. If an
instrument is no longer considered to exhib
it a s
ign
i\ufb01cant
\n
increase in credit risk, expected credit losses will revert to being determined on a 12-month basis.
\n
Sign
i\ufb01cant
increase in credit risk (Stage 2)
\n
Sign
i\ufb01cant
increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk
\n
of default at orig
inat
ion (after taking into account the passage of time). Sign
i\ufb01cant does not mean stat
ist
ically s
ign
i\ufb01cant
\n
nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is sign
i\ufb01cant or
\n
not is assessed using a number of quantitat
ive and qual
itat
ive factors, the we
ight of which depends on the type of product
\n
and counterparty. Financ
ial assets that are 30 or more days past due and not cred
it-impa
ired w
ill always be considered to
\n
have experienced a sign
i\ufb01cant
increase in credit risk. For less material portfolios where a loss rate or roll rate approach is
\n
applied to compute expected credit loss, sign
i\ufb01cant
increase in credit risk is primar
ily based on 30 days past due.
\n
Quantitat
ive factors
include an assessment of whether there has been sign
i\ufb01cant
increase in the forward-looking
\n
probabil
ity of default (PD) s
ince orig
inat
ion. A forward-looking PD is one that is adjusted for future economic condit
ions
\n
to the extent these are correlated to changes in credit risk. We compare the residual lifet
ime PD at the balance sheet
\n
date to the residual lifet
ime PD that was expected at the t
ime of orig
inat
ion for the same point in the term structure
\n
and determine whether both the absolute and relative change between the two exceeds predetermined thresholds.
\n
To the extent that the differences between the measures of default outlined exceed the de\ufb01ned thresholds, the instrument
\n
is considered to have experienced a sign
i\ufb01cant
increase in credit risk (see page 244 to 245).
\n
Qualitat
ive factors assessed
include those linked to current credit risk management processes, such as lending placed on
\n
non-purely precautionary early alert (and subject to closer monitor
ing).
\n
A non-purely precautionary early alert account is one which exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion, or attent
ion by management. Weaknesses in such a borrower\u2019s account, if left
\n
uncorrected, could result in deteriorat
ion of repayment prospects and the l
ikel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry, concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and overdue balances among other factors.
\n\n\n
Credit-impa
ired (or defaulted) exposures (Stage 3)
\n
Financ
ial assets that are cred
it-impa
ired (or
in default) represent those that are at least 90 days past due in respect of
\n
princ
ipal and/or
interest. Financ
ial assets are also cons
idered to be credit-impa
ired where the obl
igors are unlikely to pay
\n
on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash \ufb02ows
\n
of the \ufb01nancial asset. It may not be poss
ible to ident
ify a s
ingle discrete event but instead the combined effect of several
\n
events may cause \ufb01nancial assets to become cred
it-impa
ired.
\n
\u2022
Evidence that a \ufb01nanc
ial asset
is credit-impa
ired
includes observable data about the following events:
\n
\u2022
Sign
i\ufb01cant \ufb01nancial d
iff
iculty of the
issuer or borrower;
\n
\u2022
Breach of contract such as default or a past due event;
\n
\u2022
For economic or contractual reasons relating to the borrower\u2019s \ufb01nanc
ial d
iff
iculty, the lenders of the borrower have
\n
granted the borrower concession/s that lenders would not otherwise consider. This would include forbearance actions
\n
(page 226);
\n
\u2022
Pending or actual bankruptcy or other \ufb01nanc
ial reorgan
isat
ion to avo
id or delay discharge of the borrower\u2019s
\n
obligat
ion/s;
\n
\u2022
The disappearance of an active market for the applicable \ufb01nanc
ial asset due to \ufb01nancial d
iff
icult
ies of the borrower;
\n
\u2022
Purchase or orig
inat
ion of a \ufb01nanc
ial asset at a deep d
iscount that re\ufb02ects incurred credit losses
\n
Lending commitments to a credit-impa
ired obl
igor that have not yet been drawn down are included to the extent that the
\n
commitment cannot be withdrawn. Loss provis
ions aga
inst credit-impa
ired \ufb01nancial assets are determ
ined based on an
\n
assessment of the present value of expected cash shortfalls (discounted at the instrument\u2019s orig
inal effect
ive interest rate)
\n
under a range of scenarios, includ
ing the real
isat
ion of any collateral held where appropr
iate. The Group\u2019s de\ufb01n
it
ion of
\n
default is aligned with the regulatory de\ufb01n
it
ion of default as set out in the UK\u2019s onshored capital requirements regulations
\n
(Art 178).
\n
Expert credit judgement
\n
For Corporate & Investment Banking and Private Banking, borrowers are graded by credit risk management on a credit
\n
grading (CG) scale from CG1 to CG14. Once a borrower starts to exhib
it cred
it deteriorat
ion,
it will move along the credit
\n
grading scale in the performing book and when it is classif
ied as CG12 (wh
ich is a qualitat
ive tr
igger for sign
i\ufb01cant
increase
\n
in credit risk (see page 245)the credit assessment and oversight of the loan will normally be performed by Stressed Assets
\n
Risk (SAR).
\n
Borrowers graded CG12 exhib
it well-de\ufb01ned weaknesses
in areas such as management and/or performance but there is
\n
no current expectation of a loss of princ
ipal or
interest in the likely scenario. Where the impa
irment assessment
ind
icates
\n
that there will be a loss of princ
ipal on a loan
in the likely scenario, the borrower is graded a CG14 while borrowers of other
\n
credit-impa
ired loans are graded CG13. Instruments graded CG13 or CG14 are regarded as stage 3.
\n
For ind
iv
idually sign
i\ufb01cant \ufb01nancial assets w
ith
in stage 3, SAR w
ill consider all judgements that have an impact on the
\n
expected future cash \ufb02ows of the asset. These include: the business prospects, industry and geopolit
ical cl
imate of
\n
the customer, quality of realisable value of collateral, the Group\u2019s legal posit
ion relat
ive to other claimants and any
\n
renegotiat
ion/forbearance/mod
if
icat
ion options. The future cash \ufb02ow calculation involves sign
i\ufb01cant judgements
\n
and estimates. As new informat
ion becomes ava
ilable and further negotiat
ions/ forbearance measures are taken the
\n
estimates of the future cash \ufb02ows will be revised, and will have an impact on the future cash \ufb02ow analysis.
\n
For \ufb01nancial assets wh
ich are not ind
iv
idually sign
i\ufb01cant, such as the Reta
il Banking portfolio or small business loans, which
\n
comprise a large number of homogenous loans that share sim
ilar character
ist
ics, stat
ist
ical est
imates and techniques are
\n
used, as well as credit scoring analysis.
\n
Consumer and Business Banking clients are considered credit-impa
ired where they are more 90 days past due, or
if the
\n
borrower \ufb01les for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in
\n
the case of a small business, or if the borrower surrenders the collateral, or there is an ident
i\ufb01ed fraud on the account.
\n
Addit
ionally,
if the account is unsecured and the borrower has other credit accounts with the Group that are considered
\n
credit-impa
ired, the account may be also be cred
it-impa
ired.
\n
Techniques used to compute impa
irment amounts use models wh
ich analyse histor
ical repayment and default rates over
\n
a time horizon. Where various models are used, judgement is required to analyse the available informat
ion prov
ided and
\n
select the appropriate model or combinat
ion of models to use.
\n
Expert credit judgement is also applied to determine whether any post-model adjustments are required for credit risk
\n
elements which are not captured by the models.
\n
Modif
ied \ufb01nancial
instruments
\n
Where the orig
inal contractual terms of a \ufb01nancial asset have been mod
if
ied for cred
it reasons and the instrument has
\n
not been derecognised (an instrument is derecognised when a modif
icat
ion results in a change in cash \ufb02ows that the
\n
Group would consider substantial), the resulting modif
icat
ion loss is recognised with
in cred
it impa
irment
in the income
\n
statement with a corresponding decrease in the gross carrying value of the asset. If the modif
icat
ion involved a concession
\n
that the bank would not otherwise consider, the instrument is considered to be credit-impa
ired and
is considered forborne.
\n
Expected credit loss for modif
ied \ufb01nancial assets that have not been derecogn
ised and are not considered to be
\n
credit-impa
ired w
ill be recognised on a 12-month basis, or a lifet
ime bas
is, if there is a sign
i\ufb01cant
increase in credit risk.
\n
These assets are assessed (by comparison to the orig
inat
ion date) to determine whether there has been a sign
i\ufb01cant
\n
increase in credit risk subsequent to the modif
icat
ion. Although loans may be modif
ied for non-cred
it reasons, a sign
i\ufb01cant
\n
increase in credit risk may occur. In addit
ion to the recogn
it
ion of mod
if
icat
ion gains and losses, the revised carrying value
\n
of modif
ied \ufb01nancial assets w
ill impact the calculation of expected credit losses, with any increase or decrease in expected
\n
credit loss recognised with
in
impa
irment.
Forborne loans
Forborne loans are those loans that have been modif
ied
in response to a customer\u2019s \ufb01nanc
ial d
iff
icult
ies. Forbearance
strategies assist clients who are temporarily in \ufb01nanc
ial d
istress and are unable to meet their orig
inal contractual
repayment terms. Forbearance can be in
it
iated by the client, the Group or a third-party includ
ing government sponsored
programmes or a conglomerate of credit inst
itut
ions. Forbearance may include debt restructuring such as new repayment
schedules, payment deferrals, tenor extensions, interest only payments, lower interest rates, forgiveness of princ
ipal,
interest or fees, or relaxation of loan covenants.
Forborne loans that have been modif
ied (and not derecogn
ised) on terms that are not consistent with those readily
available in the market and/or where we have granted a concession compared to the orig
inal terms of the loans are
considered credit-impa
ired
if there is a detrimental impact on cash \ufb02ows. The modif
icat
ion loss (see Classif
icat
ion and
measurement \u2013 Modif
icat
ions) is recognised in the pro\ufb01t or loss with
in cred
it impa
irment and the gross carry
ing value of
the loan reduced by the same amount. The modif
ied loan
is disclosed as \u2018Loans subject to forbearance \u2013 credit-impa
ired\u2019.
Loans that have been subject to a forbearance modif
icat
ion, but which are not considered credit-impa
ired (not class
if
ied
as CG13 or CG14), are disclosed as \u2018Forborne \u2013 not credit-impa
ired\u2019. Th
is may include amendments to covenants with
in the
contractual terms.
Write-offs of credit-impa
ired
instruments and reversal of impa
irment
To the extent a \ufb01nancial debt
instrument is considered irrecoverable, the applicable portion of the gross carrying value is
written off against the related loan provis
ion. Such loans are wr
itten off after all the necessary procedures have been
completed, it is decided that there is no realist
ic probab
il
ity of recovery and the amount of the loss has been determ
ined.
Subsequent recoveries of amounts previously written off decrease the amount of the provis
ion for cred
it impa
irment
in the
income statement.
Loss provis
ions on purchased or or
ig
inated cred
it-impa
ired
instruments (POCI)
The Group measures expected credit loss on a lifet
ime bas
is for POCI instruments throughout the life of the instrument.
However, expected credit loss is not recognised in a separate loss provis
ion on
in
it
ial recognit
ion for POCI
instruments as
the lifet
ime expected cred
it loss is inherent with
in the gross carry
ing amount of the instruments. The Group recognises
the change in lifet
ime expected cred
it losses aris
ing subsequent to
in
it
ial recognit
ion
in the income statement and the
cumulative change as a loss provis
ion. Where l
ifet
ime expected cred
it losses on POCI instruments are less than those at
in
it
ial recognit
ion, then the favourable d
ifferences are recognised as impa
irment ga
ins in the income statement (and as
impa
irment loss where the expected cred
it losses are greater).
Improvement in credit risk/curing
For \ufb01nancial assets that are cred
it-impa
ired (stage 3), a transfer to stage 2 or stage 1
is only permitted where the
instrument is no longer considered to be credit-impa
ired. An
instrument will no longer be considered credit-impa
ired
when there is no shortfall of cash \ufb02ows compared to the orig
inal contractual terms.
For \ufb01nancial assets w
ith
in stage 2, these can only be transferred to stage 1 when they are no longer cons
idered to have
experienced a sign
i\ufb01cant
increase in credit risk.
Where sign
i\ufb01cant
increase in credit risk was determined using quantitat
ive measures, the
instruments will automatically
transfer back to stage 1 when the orig
inal PD based transfer cr
iter
ia are no longer met. Where
instruments were
transferred to stage 2 due to an assessment of qualitat
ive factors, the
issues that led to the reclassif
icat
ion must be
cured before the instruments can be reclassif
ied to stage 1. Th
is includes instances where management actions led to
instruments being classif
ied as stage 2, requ
ir
ing that act
ion to be resolved before loans are reclassif
ied to stage 1.
A forborne loan can only be removed from being disclosed as forborne if the loan is performing (stage 1 or 2) and a further
two-year probation period is met.
In order for a forborne loan to become performing, the following criter
ia have to be sat
isf
ied:
\u2022
At least a year has passed with no default based upon the forborne contract terms
\u2022
The customer is likely to repay its obligat
ions
in full without realis
ing secur
ity
\u2022
The customer has no accumulated impa
irment aga
inst amount outstanding (except for ECL)
Subsequent to the criter
ia above, a further two-year probat
ion period has to be ful\ufb01lled, whereby regular payments are
made by the customer and none of the exposures to the customer are more than 30 days past due.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00634": { "value": "Accounting policy
Sign
i\ufb01cant account
ing estimates and judgements
The Group\u2019s expected credit loss (ECL) calculations are outputs of complex models with a number of underlying
assumptions. The sign
i\ufb01cant judgements
in determin
ing expected cred
it loss include:
\u2022
The Group\u2019s criter
ia for assess
ing if there has been a sign
i\ufb01cant
increase in credit risk;
\u2022
Development of expected credit loss models, includ
ing the cho
ice of inputs relating to macroeconomic variables;
\u2022
Determin
ing est
imates of forward looking macroeconomic forecasts;
\u2022
Evaluation of management overlays and post-model adjustments;
\u2022
Determinat
ion of probab
il
ity we
ight
ings for Stage 3
ind
iv
idually assessed provis
ions
The calculation of credit impa
irment prov
is
ions also
involves expert credit judgement to be applied by the credit risk
management team based upon counterparty informat
ion they rece
ive from various sources includ
ing relat
ionsh
ip
managers and on external market informat
ion. Deta
ils on the approach for determin
ing expected cred
it loss can be found
in the credit risk section, under IFRS 9 Methodology (page 236).
Estimates of forecasts of key macroeconomic variables underlying the expected credit loss calculation can be found with
in
the Risk review, Key assumptions and judgements in determin
ing expected cred
it loss (page 238).
Expected credit losses
An ECL represents the present value of expected cash shortfalls over the residual term of a \ufb01nanc
ial asset, undrawn
commitment or \ufb01nanc
ial guarantee.
A cash shortfall is the difference between the cash \ufb02ows that are due in accordance with the contractual terms of the
instrument and the cash \ufb02ows that the Group expects to receive over the contractual life of the instrument.
Measurement
ECL are computed as unbiased, probabil
ity-we
ighted amounts which are determined by evaluating a range of reasonably
possible outcomes, the time value of money, and consider
ing all reasonable and supportable
informat
ion
includ
ing that
which is forward-looking.
For material portfolios, the estimate of expected cash shortfalls is determined by multiply
ing the probab
il
ity of default (PD)
with the loss given default (LGD) with the expected exposure at the time of default (EAD). There may be multiple default
events over the lifet
ime of an
instrument. Further details on the components of PD, LGD and EAD are disclosed in the Credit
risk section. For less material Retail Banking loan portfolios, the Group has adopted less sophist
icated approaches based
on histor
ical roll rates or loss rates.
Forward-looking economic assumptions are incorporated into the PD, LGD and EAD where relevant and where they
in\ufb02uence credit risk, such as GDP growth rates, interest rates, house price ind
ices and commod
ity prices among others.
These assumptions are incorporated using the Group\u2019s most likely forecast for a range of macroeconomic assumptions.
These forecasts are determined using all reasonable and supportable informat
ion, wh
ich includes both internally
developed forecasts and those available externally, and are consistent with those used for budgeting, forecasting and
capital planning.
To account for the potential non-linear
ity
in credit losses, multiple forward-looking scenarios are incorporated into the
range of reasonably possible outcomes for all material portfolios. For example, where there is a greater risk of downside
credit losses than upside gains, multiple forward-looking economic scenarios are incorporated into the range of
reasonably possible outcomes, both in respect of determin
ing the PD (and where relevant, the LGD and EAD) and
in
determin
ing the overall ECL amounts. These scenar
ios are determined using a Monte Carlo approach centred around
the Group\u2019s most likely forecast of macroeconomic assumptions.
The period over which cash shortfalls are determined is generally lim
ited to the max
imum contractual period for which
the Group is exposed to credit risk. However, for certain revolving credit facil
it
ies, which include credit cards or overdrafts,
the Group\u2019s exposure to credit risk is not lim
ited to the contractual per
iod. For these instruments, the Group estimates
an appropriate life based on the period that the Group is exposed to credit risk, which includes the effect of credit risk
management actions such as the withdrawal of undrawn facil
it
ies.
For credit-impa
ired \ufb01nancial
instruments, the estimate of cash shortfalls may require the use of expert credit judgement.
\n\n\n
The estimate of expected cash shortfalls on a collateralised \ufb01nanc
ial
instrument re\ufb02ects the amount and tim
ing of cash
\n
\ufb02ows that are expected from foreclosure on the collateral less the costs of obtain
ing and sell
ing the collateral, regardless
\n
of whether foreclosure is deemed probable.
\n
Cash \ufb02ows from unfunded credit enhancements held are included with
in the measurement of expected cred
it losses if
\n
they are part of, or integral to, the contractual terms of the instrument (this includes \ufb01nanc
ial guarantees, unfunded r
isk
\n
partic
ipat
ions and other non-derivat
ive cred
it insurance). Although non-integral credit enhancements do not impact the
\n
measurement of expected credit losses, a reimbursement asset is recognised to the extent of the ECL recorded.
\n
Cash shortfalls are discounted using the effective interest rate (or credit-adjusted effective interest rate for purchased or
\n
orig
inated cred
it-impa
ired
instruments (POCI)) on the \ufb01nanc
ial
instrument as calculated at in
it
ial recognit
ion or
if the
\n
instrument has a variable interest rate, the current effective interest rate determined under the contract.
\n\n \n
Instruments
Location of expected credit loss provis
ions
Financ
ial assets held at amort
ised cost
Loss provis
ions: netted aga
inst gross carrying value
1
Financ
ial assets held FVOCI \u2013 Debt
instruments
Other comprehensive income (FVOCI expected credit loss reserve)
2
Loan commitments
Provis
ions for l
iab
il
it
ies and charges
3
Financ
ial guarantees
Provis
ions for l
iab
il
it
ies and charges
3
\n
1
Purchased or orig
inated cred
it-impa
ired assets do not attract an expected cred
it loss provis
ion on
in
it
ial recognit
ion. An expected cred
it loss provis
ion w
ill
\n
be recognised only if there is an increase in expected credit losses from that considered at in
it
ial recognit
ion
\n
2
Debt and treasury securit
ies class
if
ied as fa
ir value through other comprehensive income (FVOCI) are held at fair value on the face of the balance sheet.
\n
The expected credit loss attributed to these instruments is held as a separate reserve with
in other comprehens
ive income (OCI) and is recycled to the pro\ufb01t
\n
and loss account along with any fair value measurement gains or losses held with
in FVOCI when the appl
icable instruments are derecognised
\n
3
Expected credit loss on loan commitments and \ufb01nanc
ial guarantees
is recognised as a liab
il
ity provis
ion. Where a \ufb01nancial
instrument includes both a loan
\n
(i.e. \ufb01nanc
ial asset component) and an undrawn comm
itment (i.e. loan commitment component), and it is not possible to separately ident
ify the expected
\n
credit loss on these components, expected credit loss amounts on the loan commitment are recognised together with expected credit loss amounts on
\n
the \ufb01nancial asset. To the extent the comb
ined expected credit loss exceeds the gross carrying amount of the \ufb01nanc
ial asset, the expected cred
it loss is
\n
recognised as a liab
il
ity provis
ion
\n
Recognit
ion
\n
12 months expected credit losses (stage 1)
\n
Expected credit losses are recognised at the time of in
it
ial recognit
ion of a \ufb01nancial
instrument and represent the
\n
lifet
ime cash shortfalls ar
is
ing from poss
ible default events up to 12 months into the future from the balance sheet date.
\n
Expected credit losses continue to be determined on this basis until there is either a sign
i\ufb01cant
increase in the credit risk of
\n
an instrument or the instrument becomes credit-impa
ired. If an
instrument is no longer considered to exhib
it a s
ign
i\ufb01cant
\n
increase in credit risk, expected credit losses will revert to being determined on a 12-month basis.
\n
Sign
i\ufb01cant
increase in credit risk (Stage 2)
\n
Sign
i\ufb01cant
increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk
\n
of default at orig
inat
ion (after taking into account the passage of time). Sign
i\ufb01cant does not mean stat
ist
ically s
ign
i\ufb01cant
\n
nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is sign
i\ufb01cant or
\n
not is assessed using a number of quantitat
ive and qual
itat
ive factors, the we
ight of which depends on the type of product
\n
and counterparty. Financ
ial assets that are 30 or more days past due and not cred
it-impa
ired w
ill always be considered to
\n
have experienced a sign
i\ufb01cant
increase in credit risk. For less material portfolios where a loss rate or roll rate approach is
\n
applied to compute expected credit loss, sign
i\ufb01cant
increase in credit risk is primar
ily based on 30 days past due.
\n
Quantitat
ive factors
include an assessment of whether there has been sign
i\ufb01cant
increase in the forward-looking
\n
probabil
ity of default (PD) s
ince orig
inat
ion. A forward-looking PD is one that is adjusted for future economic condit
ions
\n
to the extent these are correlated to changes in credit risk. We compare the residual lifet
ime PD at the balance sheet
\n
date to the residual lifet
ime PD that was expected at the t
ime of orig
inat
ion for the same point in the term structure
\n
and determine whether both the absolute and relative change between the two exceeds predetermined thresholds.
\n
To the extent that the differences between the measures of default outlined exceed the de\ufb01ned thresholds, the instrument
\n
is considered to have experienced a sign
i\ufb01cant
increase in credit risk (see page 244 to 245).
\n
Qualitat
ive factors assessed
include those linked to current credit risk management processes, such as lending placed on
\n
non-purely precautionary early alert (and subject to closer monitor
ing).
\n
A non-purely precautionary early alert account is one which exhib
its r
isk or potential weaknesses of a material nature
\n
requir
ing closer mon
itor
ing, superv
is
ion, or attent
ion by management. Weaknesses in such a borrower\u2019s account, if left
\n
uncorrected, could result in deteriorat
ion of repayment prospects and the l
ikel
ihood of be
ing downgraded. Indicators
\n
could include a rapid erosion of posit
ion w
ith
in the
industry, concerns over management\u2019s abil
ity to manage operat
ions,
\n
weak/deteriorat
ing operat
ing results, liqu
id
ity strain and overdue balances among other factors.
\n\n\n
Credit-impa
ired (or defaulted) exposures (Stage 3)
\n
Financ
ial assets that are cred
it-impa
ired (or
in default) represent those that are at least 90 days past due in respect of
\n
princ
ipal and/or
interest. Financ
ial assets are also cons
idered to be credit-impa
ired where the obl
igors are unlikely to pay
\n
on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash \ufb02ows
\n
of the \ufb01nancial asset. It may not be poss
ible to ident
ify a s
ingle discrete event but instead the combined effect of several
\n
events may cause \ufb01nancial assets to become cred
it-impa
ired.
\n
\u2022
Evidence that a \ufb01nanc
ial asset
is credit-impa
ired
includes observable data about the following events:
\n
\u2022
Sign
i\ufb01cant \ufb01nancial d
iff
iculty of the
issuer or borrower;
\n
\u2022
Breach of contract such as default or a past due event;
\n
\u2022
For economic or contractual reasons relating to the borrower\u2019s \ufb01nanc
ial d
iff
iculty, the lenders of the borrower have
\n
granted the borrower concession/s that lenders would not otherwise consider. This would include forbearance actions
\n
(page 226);
\n
\u2022
Pending or actual bankruptcy or other \ufb01nanc
ial reorgan
isat
ion to avo
id or delay discharge of the borrower\u2019s
\n
obligat
ion/s;
\n
\u2022
The disappearance of an active market for the applicable \ufb01nanc
ial asset due to \ufb01nancial d
iff
icult
ies of the borrower;
\n
\u2022
Purchase or orig
inat
ion of a \ufb01nanc
ial asset at a deep d
iscount that re\ufb02ects incurred credit losses
\n
Lending commitments to a credit-impa
ired obl
igor that have not yet been drawn down are included to the extent that the
\n
commitment cannot be withdrawn. Loss provis
ions aga
inst credit-impa
ired \ufb01nancial assets are determ
ined based on an
\n
assessment of the present value of expected cash shortfalls (discounted at the instrument\u2019s orig
inal effect
ive interest rate)
\n
under a range of scenarios, includ
ing the real
isat
ion of any collateral held where appropr
iate. The Group\u2019s de\ufb01n
it
ion of
\n
default is aligned with the regulatory de\ufb01n
it
ion of default as set out in the UK\u2019s onshored capital requirements regulations
\n
(Art 178).
\n
Expert credit judgement
\n
For Corporate & Investment Banking and Private Banking, borrowers are graded by credit risk management on a credit
\n
grading (CG) scale from CG1 to CG14. Once a borrower starts to exhib
it cred
it deteriorat
ion,
it will move along the credit
\n
grading scale in the performing book and when it is classif
ied as CG12 (wh
ich is a qualitat
ive tr
igger for sign
i\ufb01cant
increase
\n
in credit risk (see page 245)the credit assessment and oversight of the loan will normally be performed by Stressed Assets
\n
Risk (SAR).
\n
Borrowers graded CG12 exhib
it well-de\ufb01ned weaknesses
in areas such as management and/or performance but there is
\n
no current expectation of a loss of princ
ipal or
interest in the likely scenario. Where the impa
irment assessment
ind
icates
\n
that there will be a loss of princ
ipal on a loan
in the likely scenario, the borrower is graded a CG14 while borrowers of other
\n
credit-impa
ired loans are graded CG13. Instruments graded CG13 or CG14 are regarded as stage 3.
\n
For ind
iv
idually sign
i\ufb01cant \ufb01nancial assets w
ith
in stage 3, SAR w
ill consider all judgements that have an impact on the
\n
expected future cash \ufb02ows of the asset. These include: the business prospects, industry and geopolit
ical cl
imate of
\n
the customer, quality of realisable value of collateral, the Group\u2019s legal posit
ion relat
ive to other claimants and any
\n
renegotiat
ion/forbearance/mod
if
icat
ion options. The future cash \ufb02ow calculation involves sign
i\ufb01cant judgements
\n
and estimates. As new informat
ion becomes ava
ilable and further negotiat
ions/ forbearance measures are taken the
\n
estimates of the future cash \ufb02ows will be revised, and will have an impact on the future cash \ufb02ow analysis.
\n
For \ufb01nancial assets wh
ich are not ind
iv
idually sign
i\ufb01cant, such as the Reta
il Banking portfolio or small business loans, which
\n
comprise a large number of homogenous loans that share sim
ilar character
ist
ics, stat
ist
ical est
imates and techniques are
\n
used, as well as credit scoring analysis.
\n
Consumer and Business Banking clients are considered credit-impa
ired where they are more 90 days past due, or
if the
\n
borrower \ufb01les for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in
\n
the case of a small business, or if the borrower surrenders the collateral, or there is an ident
i\ufb01ed fraud on the account.
\n
Addit
ionally,
if the account is unsecured and the borrower has other credit accounts with the Group that are considered
\n
credit-impa
ired, the account may be also be cred
it-impa
ired.
\n
Techniques used to compute impa
irment amounts use models wh
ich analyse histor
ical repayment and default rates over
\n
a time horizon. Where various models are used, judgement is required to analyse the available informat
ion prov
ided and
\n
select the appropriate model or combinat
ion of models to use.
\n
Expert credit judgement is also applied to determine whether any post-model adjustments are required for credit risk
\n
elements which are not captured by the models.
\n
Modif
ied \ufb01nancial
instruments
\n
Where the orig
inal contractual terms of a \ufb01nancial asset have been mod
if
ied for cred
it reasons and the instrument has
\n
not been derecognised (an instrument is derecognised when a modif
icat
ion results in a change in cash \ufb02ows that the
\n
Group would consider substantial), the resulting modif
icat
ion loss is recognised with
in cred
it impa
irment
in the income
\n
statement with a corresponding decrease in the gross carrying value of the asset. If the modif
icat
ion involved a concession
\n
that the bank would not otherwise consider, the instrument is considered to be credit-impa
ired and
is considered forborne.
\n
Expected credit loss for modif
ied \ufb01nancial assets that have not been derecogn
ised and are not considered to be
\n
credit-impa
ired w
ill be recognised on a 12-month basis, or a lifet
ime bas
is, if there is a sign
i\ufb01cant
increase in credit risk.
\n
These assets are assessed (by comparison to the orig
inat
ion date) to determine whether there has been a sign
i\ufb01cant
\n
increase in credit risk subsequent to the modif
icat
ion. Although loans may be modif
ied for non-cred
it reasons, a sign
i\ufb01cant
\n
increase in credit risk may occur. In addit
ion to the recogn
it
ion of mod
if
icat
ion gains and losses, the revised carrying value
\n
of modif
ied \ufb01nancial assets w
ill impact the calculation of expected credit losses, with any increase or decrease in expected
\n
credit loss recognised with
in
impa
irment.
Forborne loans
Forborne loans are those loans that have been modif
ied
in response to a customer\u2019s \ufb01nanc
ial d
iff
icult
ies. Forbearance
strategies assist clients who are temporarily in \ufb01nanc
ial d
istress and are unable to meet their orig
inal contractual
repayment terms. Forbearance can be in
it
iated by the client, the Group or a third-party includ
ing government sponsored
programmes or a conglomerate of credit inst
itut
ions. Forbearance may include debt restructuring such as new repayment
schedules, payment deferrals, tenor extensions, interest only payments, lower interest rates, forgiveness of princ
ipal,
interest or fees, or relaxation of loan covenants.
Forborne loans that have been modif
ied (and not derecogn
ised) on terms that are not consistent with those readily
available in the market and/or where we have granted a concession compared to the orig
inal terms of the loans are
considered credit-impa
ired
if there is a detrimental impact on cash \ufb02ows. The modif
icat
ion loss (see Classif
icat
ion and
measurement \u2013 Modif
icat
ions) is recognised in the pro\ufb01t or loss with
in cred
it impa
irment and the gross carry
ing value of
the loan reduced by the same amount. The modif
ied loan
is disclosed as \u2018Loans subject to forbearance \u2013 credit-impa
ired\u2019.
Loans that have been subject to a forbearance modif
icat
ion, but which are not considered credit-impa
ired (not class
if
ied
as CG13 or CG14), are disclosed as \u2018Forborne \u2013 not credit-impa
ired\u2019. Th
is may include amendments to covenants with
in the
contractual terms.
Write-offs of credit-impa
ired
instruments and reversal of impa
irment
To the extent a \ufb01nancial debt
instrument is considered irrecoverable, the applicable portion of the gross carrying value is
written off against the related loan provis
ion. Such loans are wr
itten off after all the necessary procedures have been
completed, it is decided that there is no realist
ic probab
il
ity of recovery and the amount of the loss has been determ
ined.
Subsequent recoveries of amounts previously written off decrease the amount of the provis
ion for cred
it impa
irment
in the
income statement.
Loss provis
ions on purchased or or
ig
inated cred
it-impa
ired
instruments (POCI)
The Group measures expected credit loss on a lifet
ime bas
is for POCI instruments throughout the life of the instrument.
However, expected credit loss is not recognised in a separate loss provis
ion on
in
it
ial recognit
ion for POCI
instruments as
the lifet
ime expected cred
it loss is inherent with
in the gross carry
ing amount of the instruments. The Group recognises
the change in lifet
ime expected cred
it losses aris
ing subsequent to
in
it
ial recognit
ion
in the income statement and the
cumulative change as a loss provis
ion. Where l
ifet
ime expected cred
it losses on POCI instruments are less than those at
in
it
ial recognit
ion, then the favourable d
ifferences are recognised as impa
irment ga
ins in the income statement (and as
impa
irment loss where the expected cred
it losses are greater).
Improvement in credit risk/curing
For \ufb01nancial assets that are cred
it-impa
ired (stage 3), a transfer to stage 2 or stage 1
is only permitted where the
instrument is no longer considered to be credit-impa
ired. An
instrument will no longer be considered credit-impa
ired
when there is no shortfall of cash \ufb02ows compared to the orig
inal contractual terms.
For \ufb01nancial assets w
ith
in stage 2, these can only be transferred to stage 1 when they are no longer cons
idered to have
experienced a sign
i\ufb01cant
increase in credit risk.
Where sign
i\ufb01cant
increase in credit risk was determined using quantitat
ive measures, the
instruments will automatically
transfer back to stage 1 when the orig
inal PD based transfer cr
iter
ia are no longer met. Where
instruments were
transferred to stage 2 due to an assessment of qualitat
ive factors, the
issues that led to the reclassif
icat
ion must be
cured before the instruments can be reclassif
ied to stage 1. Th
is includes instances where management actions led to
instruments being classif
ied as stage 2, requ
ir
ing that act
ion to be resolved before loans are reclassif
ied to stage 1.
A forborne loan can only be removed from being disclosed as forborne if the loan is performing (stage 1 or 2) and a further
two-year probation period is met.
In order for a forborne loan to become performing, the following criter
ia have to be sat
isf
ied:
\u2022
At least a year has passed with no default based upon the forborne contract terms
\u2022
The customer is likely to repay its obligat
ions
in full without realis
ing secur
ity
\u2022
The customer has no accumulated impa
irment aga
inst amount outstanding (except for ECL)
Subsequent to the criter
ia above, a further two-year probat
ion period has to be ful\ufb01lled, whereby regular payments are
made by the customer and none of the exposures to the customer are more than 30 days past due.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForCreditImpairmentExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00497": { "value": "9. Goodwill, property, plant and equipment and other impa
irment
Accounting policy
Refer to the below referenced notes for the relevant accounting policy.
\n \n
2024
2023
$mill
ion
$mill
ion
Impairment of property, plant and equipment (Note 18)
11
12
Impairment of other intang
ible assets (Note 17)
561
112
Other
16
884\u00b9
Goodwill, \ufb01xed assets and other impa
irment
588
1,008
1
Includes $850 mill
ion
impa
irment charge relat
ing to the Group\u2019s investment in its associate China Bohai Bank (Bohai), re\ufb02ecting Bohai\u2019s lower reported net pro\ufb01t
in 2023, as well as banking industry challenges and property market uncertaint
ies
in China, that may impact Bohai\u2019s future pro\ufb01tab
il
ity", "dimensions": { "concept": "stan:DisclosureOfGoodwillPropertyPlantAndEquipmentAndOtherImpairmentExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00636": { "value": "Accounting policy Refer to the below referenced notes for the relevant accounting policy.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForGoodwillPropertyPlantAndEquipmentAndOtherImpairmentExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00498": { "value": "10. Taxation
Accounting policy
Income tax payable on pro\ufb01ts is based on the applicable tax law in each jur
isd
ict
ion and
is recognised as an expense in
the period in which pro\ufb01ts arise.
Deferred tax is provided on temporary differences aris
ing between the tax bases of assets and l
iab
il
it
ies and the
ir carrying
amounts in the consolidated \ufb01nanc
ial statements. Deferred tax
is determined using tax rates (and laws) that have been
enacted or substantively enacted as at the balance sheet date, and that are expected to apply when the related deferred
tax asset is realised or the deferred income tax liab
il
ity is settled.
Deferred tax assets are recognised where it is probable that future taxable pro\ufb01t will be available against which the
temporary differences can be util
ised. Where perm
itted, deferred tax assets and liab
il
it
ies are offset on an ent
ity basis
and not by component of deferred taxation.
Current and deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly
to equity and is subsequently recognised in the income statement together with the current or deferred gain or loss.
Other accounting estimates and judgements
\u2022
Determin
ing the Group\u2019s tax charge for the year
involves estimat
ion and judgement, wh
ich includes an interpretat
ion of
local tax laws and an assessment of whether the tax authorit
ies w
ill accept the posit
ion taken. These judgements take
account of external advice where appropriate, and the Group\u2019s view on settling with the relevant tax authorit
ies
\u2022
The Group provides for current tax liab
il
it
ies at the best est
imate of the amount that is expected to be paid to the tax
authorit
ies where an out\ufb02ow
is probable. In making its estimates the Group assumes that the tax authorit
ies w
ill
examine all the amounts reported to them and have full knowledge of all relevant informat
ion
\u2022
The recoverabil
ity of the Group\u2019s deferred tax assets
is based on management\u2019s judgement of the availab
il
ity of future
taxable pro\ufb01ts against which the deferred tax assets will be util
ised. In prepar
ing management forecasts the effect of
applicable laws and regulations relevant to the util
isat
ion of future taxable pro\ufb01ts have been considered.
The following table provides analysis of taxation charge in the year:
\n \n
2024
2023
$mill
ion
$mill
ion
The charge for taxation based upon the pro\ufb01t for the year comprises:
Current tax:
United Kingdom corporation tax at 25 per cent (2023: 23.5 per cent):
Current tax charge on income for the year
16
(48)
Adjustments in respect of prior years (includ
ing double tax rel
ief)
1
14
Foreign tax:
Current tax charge on income for the year
1,752
1,695
Adjustments in respect of prior years
(8)
(11)
1,761
1,650
Deferred tax:
Orig
inat
ion/reversal of temporary differences
198
(22)
Adjustments in respect of prior years
13
3
211
(19)
Tax on pro\ufb01ts on ordinary activ
it
ies
1,972
1,631
Effective tax rate
32.8%
32.0%
The tax charge for the year of $1,972 mill
ion (31 December 2023: $1,631 m
ill
ion) on a pro\ufb01t before tax of $6,014 m
ill
ion
(31\u00a0December 2023: $5,093 mill
ion) re\ufb02ects the
impact of tax losses for which no deferred tax assets are recognised, non-
creditable withhold
ing taxes and other taxes and non-deduct
ible expenses. These are partly offset by countries with tax
rates lower than the UK, the most sign
i\ufb01cant of wh
ich are Hong Kong and Singapore, and tax exempt income.
Foreign tax includes current tax of $272 mill
ion (31 December 2023: $201 m
ill
ion) on the pro\ufb01ts assessable
in Hong Kong.
Deferred tax includes orig
inat
ion or reversal of temporary differences of $8 mill
ion (31 December 2023: $n
il mill
ion) prov
ided
at a rate of 16.5 per cent (31 December 2023: 16.5 per cent) on the pro\ufb01ts assessable in Hong Kong.
The Group falls with
in the P
illar Two global min
imum tax rules wh
ich apply in the UK from 1 January 2024. The IAS 12 exception
\n
to recognise and disclose informat
ion about deferred tax assets and l
iab
il
it
ies related to P
illar Two income taxes has been
\n
applied. The current tax charge for the period ended 31 December 2024 includes $17m in respect of Pillar Two income taxes
\n
(31\u00a0December 2023: N/A).
\n
Tax rate: The tax charge for the year is higher than the charge at the rate of corporation tax in the UK, 25 per cent. The
\n
differences are explained below:
\n\n \n
2024
2023
$mill
ion
%
$mill
ion
%
Pro\ufb01t on ordinary activ
it
ies before tax
6,014
5,093
Tax at 25 per cent (2023: 23.5 per cent)
1,504
25.0
1,197
23.5
Lower tax rates on overseas earnings
(425)
(7.1)
(330)
(6.5)
Higher tax rates on overseas earnings
269
4.5
306
6.0
Tax at domestic rates applicable where pro\ufb01ts earned
1,348
22.4
1,173
23.0
Non-creditable withhold
ing taxes and other taxes
260
4.3
85
1.7
Tax exempt income
(133)
(2.2)
(131)
(2.6)
Share of associates and jo
int ventures
(6)
(0.1)
(14)
(0.3)
Non-deductible expenses
243
4.0
219
4.3
Bank levy
23
0.4
26
0.5
Non-taxable losses on investments
1
35
0.6
64
1.3
Payments on \ufb01nancial
instruments in reserves
(72)
(1.2)
(68)
(1.3)
Deferred tax not recognised
298
5.0
278
5.4
Deferred tax rate changes
(3)
\u2013
(1)
\u2013
Adjustments to tax charge in respect of prior years
6
0.1
6
0.1
Other items
(27)
(0.5)
(6)
(0.1)
Tax on pro\ufb01t on ordinary activ
it
ies
1,972
32.8
1,631
32.0
\n
1
2024 Includes tax impact of $55m (2023:$nil) relating to loss on sale of subsid
iar
ies in Africa and $nil relating to China Bohai impa
irment (2023:$140m).
\n
Factors affecting the tax charge in future years: the Group\u2019s tax charge, and effective tax rate in future years could be affected
\n
by several factors includ
ing acqu
is
it
ions, disposals and restructuring of our businesses, the mix of pro\ufb01ts across jur
isd
ict
ions w
ith
\n
different statutory tax rates, changes in tax legislat
ion and tax rates and resolut
ion of uncertain tax posit
ions.
\n
The evaluation of uncertain tax posit
ions
involves an interpretat
ion of local tax laws wh
ich could be subject to challenge by a
\n
tax authority, and an assessment of whether the tax authorit
ies w
ill accept the posit
ion taken. The Group does not currently
\n
consider that assumptions or judgements made in assessing tax liab
il
it
ies have a s
ign
i\ufb01cant r
isk of resulting in a material
\n
adjustment with
in the next \ufb01nancial year.
\n\n \n
2024
2023
Tax recognised in other
Current tax
Deferred tax
Total
Current tax
Deferred tax
Total
comprehensive income
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Items that will not be reclassif
ied to
income statement
(16)
113
97
\u2013
(107)
(107)
Own credit adjustment
1
49
50
\u2013
(49)
(49)
Equity instruments at fair value through
other comprehensive income
(17)
76
59
\u2013
(69)
(69)
Retirement bene\ufb01t obligat
ions
\u2013
(12)
(12)
\u2013
11
11
Items that may be reclassed
subsequently to income statement
(7)
(30)
(37)
\u2013
(129)
(129)
Debt instruments at fair value through
other comprehensive income
(7)
(44)
(51)
\u2013
(17)
(17)
Cash \ufb02ow hedges
\u2013
14
14
\u2013
(112)
(112)
Total tax credit/(charge) recognised
in equity
(23)
83
60
\u2013
(236)
(236)
\n
Current tax:
The following are the movements in current tax during the year:
\n\n \n
2024
2023
Current tax comprises:
$mill
ion
$mill
ion
Current tax assets
484
503
Current tax liab
il
it
ies
(811)
(583)
Net current tax opening balance
(327)
(80)
Movements in income statement
(1,761)
(1,650)
Movements in other comprehensive income
(23)
\u2013
Taxes paid
2,045
1,367
Other movements
3
36
Net current tax balance as at 31 December
(63)
(327)
Current tax assets
663
484
Current tax liab
il
it
ies
(726)
(811)
Total
(63)
(327)
Deferred tax:
The following are the major deferred tax liab
il
it
ies and assets recogn
ised by the Group and movements thereon
during the year:
\n \n
Exchange
At 1 January
& other
(Charge)/credit
(Charge)/credit
At 31 December
2024
adjustments
to pro\ufb01t
to equity
2024
Deferred tax comprises:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Accelerated tax depreciat
ion
(424)
7
40
(3)
(380)
Impairment provis
ions on loans and advances
286
(2)
(94)
\u2013
190
Tax losses carried forward
97
(24)
1
\u2013
74
Equity Instruments at Fair value through other
comprehensive income
(144)
6
\u2013
76
(62)
Debt Instruments at Fair value through other
comprehensive income
27
3
(16)
(44)
(30)
Cash \ufb02ow hedges
(25)
2
\u2013
14
(9)
Own credit adjustment
(71)
26
\u2013
49
4
Retirement bene\ufb01t obligat
ions
4
(5)
6
(12)
(7)
Share-based payments
43
(1)
12
\u2013
54
Other temporary differences
139
(1)
(160)
35
13
Net deferred tax assets
(68)
11
(211)
115
(153)
\n \n
Exchange
& other
(Charge)/credit
(Charge)/credit
At 31 December
At 1 January 2023
adjustments
to pro\ufb01t
to equity
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deferred tax comprises:
Accelerated tax depreciat
ion
(589)
236
(71)
\u2013
(424)
Impairment provis
ions on loans and advances
334
(20)
(28)
\u2013
286
Tax losses carried forward
212
(106)
(9)
\u2013
97
Equity Instruments at Fair value through other
comprehensive income
(74)
(1)
\u2013
(69)
(144)
Debt Instruments at Fair value through other
comprehensive income
61
(14)
(3)
(17)
27
Cash \ufb02ow hedges
89
(2)
\u2013
(112)
(25)
Own credit adjustment
5
(27)
\u2013
(49)
(71)
Retirement bene\ufb01t obligat
ions
2
2
(11)
11
4
Share-based payments
36
\u2013
7
\u2013
43
Other temporary differences
(11)
16
134
\u2013
139
Net deferred tax assets
65
84
19
(236)
(68)
Deferred tax comprises assets and liab
il
it
ies as follows:
\n \n
2024
2023
Total
Asset
Liab
il
ity
Total
Asset
Liab
il
ity
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deferred tax comprises:
Accelerated tax depreciat
ion
(380)
19
(399)
(424)
3
(427)
Impairment provis
ions on loans and
advances
190
139
51
286
282
4
Tax losses carried forward
74
51
23
97
49
48
Equity Instruments at Fair value through
other comprehensive income
(62)
(12)
(50)
(144)
(1)
(143)
Debt Instruments at Fair value through
other comprehensive income
(30)
(14)
(16)
27
29
(2)
Cash \ufb02ow hedges
(9)
\u2013
(9)
(25)
12
(37)
Own credit adjustment
4
4
\u2013
(71)
(1)
(70)
Retirement bene\ufb01t obligat
ions
(7)
16
(23)
4
13
(9)
Share-based payments
54
12
42
43
9
34
Other temporary differences
13
199
(186)
139
307
(168)
(153)
414
(567)
(68)
702
(770)
The recoverabil
ity of the Group\u2019s deferred tax assets
is based on management\u2019s judgement of the availab
il
ity of future taxable
pro\ufb01ts against which the deferred tax assets will be util
ised. The Group\u2019s total deferred tax assets
include $74 mill
ion relat
ing
to tax losses carried forward, of which $23 mill
ion ar
ises in legal entit
ies w
ith offsetting deferred tax liab
il
it
ies. The rema
in
ing
deferred tax assets on losses of $51 mill
ion are forecast to be recovered before exp
iry and with
in \ufb01ve years.
Unrecognised deferred tax
\n \n
Net
Gross
Net
Gross
2024
2024
2023
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
No account has been taken of the following potential deferred tax
assets/(liab
il
it
ies):
Withhold
ing tax on unrem
itted earnings from overseas subsid
iar
ies
and associates
(611)
(6,827)
(653)
(7,685)
Tax losses
2,494
10,414
2,242
9,326
Held over gains on incorporation of overseas branches
(360)
(1,366)
(366)
(1,389)
Other temporary differences
356
1,363
397
1,516
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00638": { "value": "Accounting policy
Income tax payable on pro\ufb01ts is based on the applicable tax law in each jur
isd
ict
ion and
is recognised as an expense in
the period in which pro\ufb01ts arise.
Deferred tax is provided on temporary differences aris
ing between the tax bases of assets and l
iab
il
it
ies and the
ir carrying
amounts in the consolidated \ufb01nanc
ial statements. Deferred tax
is determined using tax rates (and laws) that have been
enacted or substantively enacted as at the balance sheet date, and that are expected to apply when the related deferred
tax asset is realised or the deferred income tax liab
il
ity is settled.
Deferred tax assets are recognised where it is probable that future taxable pro\ufb01t will be available against which the
temporary differences can be util
ised. Where perm
itted, deferred tax assets and liab
il
it
ies are offset on an ent
ity basis
and not by component of deferred taxation.
Current and deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly
to equity and is subsequently recognised in the income statement together with the current or deferred gain or loss.
Other accounting estimates and judgements
\u2022
Determin
ing the Group\u2019s tax charge for the year
involves estimat
ion and judgement, wh
ich includes an interpretat
ion of
local tax laws and an assessment of whether the tax authorit
ies w
ill accept the posit
ion taken. These judgements take
account of external advice where appropriate, and the Group\u2019s view on settling with the relevant tax authorit
ies
\u2022
The Group provides for current tax liab
il
it
ies at the best est
imate of the amount that is expected to be paid to the tax
authorit
ies where an out\ufb02ow
is probable. In making its estimates the Group assumes that the tax authorit
ies w
ill
examine all the amounts reported to them and have full knowledge of all relevant informat
ion
\u2022
The recoverabil
ity of the Group\u2019s deferred tax assets
is based on management\u2019s judgement of the availab
il
ity of future
taxable pro\ufb01ts against which the deferred tax assets will be util
ised. In prepar
ing management forecasts the effect of
applicable laws and regulations relevant to the util
isat
ion of future taxable pro\ufb01ts have been considered.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00637": { "value": "Accounting policy
Income tax payable on pro\ufb01ts is based on the applicable tax law in each jur
isd
ict
ion and
is recognised as an expense in
the period in which pro\ufb01ts arise.
Deferred tax is provided on temporary differences aris
ing between the tax bases of assets and l
iab
il
it
ies and the
ir carrying
amounts in the consolidated \ufb01nanc
ial statements. Deferred tax
is determined using tax rates (and laws) that have been
enacted or substantively enacted as at the balance sheet date, and that are expected to apply when the related deferred
tax asset is realised or the deferred income tax liab
il
ity is settled.
Deferred tax assets are recognised where it is probable that future taxable pro\ufb01t will be available against which the
temporary differences can be util
ised. Where perm
itted, deferred tax assets and liab
il
it
ies are offset on an ent
ity basis
and not by component of deferred taxation.
Current and deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly
to equity and is subsequently recognised in the income statement together with the current or deferred gain or loss.
Other accounting estimates and judgements
\u2022
Determin
ing the Group\u2019s tax charge for the year
involves estimat
ion and judgement, wh
ich includes an interpretat
ion of
local tax laws and an assessment of whether the tax authorit
ies w
ill accept the posit
ion taken. These judgements take
account of external advice where appropriate, and the Group\u2019s view on settling with the relevant tax authorit
ies
\u2022
The Group provides for current tax liab
il
it
ies at the best est
imate of the amount that is expected to be paid to the tax
authorit
ies where an out\ufb02ow
is probable. In making its estimates the Group assumes that the tax authorit
ies w
ill
examine all the amounts reported to them and have full knowledge of all relevant informat
ion
\u2022
The recoverabil
ity of the Group\u2019s deferred tax assets
is based on management\u2019s judgement of the availab
il
ity of future
taxable pro\ufb01ts against which the deferred tax assets will be util
ised. In prepar
ing management forecasts the effect of
applicable laws and regulations relevant to the util
isat
ion of future taxable pro\ufb01ts have been considered.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00499": { "value": "Deferred tax:
The following are the major deferred tax liab
il
it
ies and assets recogn
ised by the Group and movements thereon
during the year:
\n \n
Exchange
At 1 January
& other
(Charge)/credit
(Charge)/credit
At 31 December
2024
adjustments
to pro\ufb01t
to equity
2024
Deferred tax comprises:
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Accelerated tax depreciat
ion
(424)
7
40
(3)
(380)
Impairment provis
ions on loans and advances
286
(2)
(94)
\u2013
190
Tax losses carried forward
97
(24)
1
\u2013
74
Equity Instruments at Fair value through other
comprehensive income
(144)
6
\u2013
76
(62)
Debt Instruments at Fair value through other
comprehensive income
27
3
(16)
(44)
(30)
Cash \ufb02ow hedges
(25)
2
\u2013
14
(9)
Own credit adjustment
(71)
26
\u2013
49
4
Retirement bene\ufb01t obligat
ions
4
(5)
6
(12)
(7)
Share-based payments
43
(1)
12
\u2013
54
Other temporary differences
139
(1)
(160)
35
13
Net deferred tax assets
(68)
11
(211)
115
(153)
\n \n
Exchange
& other
(Charge)/credit
(Charge)/credit
At 31 December
At 1 January 2023
adjustments
to pro\ufb01t
to equity
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deferred tax comprises:
Accelerated tax depreciat
ion
(589)
236
(71)
\u2013
(424)
Impairment provis
ions on loans and advances
334
(20)
(28)
\u2013
286
Tax losses carried forward
212
(106)
(9)
\u2013
97
Equity Instruments at Fair value through other
comprehensive income
(74)
(1)
\u2013
(69)
(144)
Debt Instruments at Fair value through other
comprehensive income
61
(14)
(3)
(17)
27
Cash \ufb02ow hedges
89
(2)
\u2013
(112)
(25)
Own credit adjustment
5
(27)
\u2013
(49)
(71)
Retirement bene\ufb01t obligat
ions
2
2
(11)
11
4
Share-based payments
36
\u2013
7
\u2013
43
Other temporary differences
(11)
16
134
\u2013
139
Net deferred tax assets
65
84
19
(236)
(68)
Deferred tax comprises assets and liab
il
it
ies as follows:
\n \n
2024
2023
Total
Asset
Liab
il
ity
Total
Asset
Liab
il
ity
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deferred tax comprises:
Accelerated tax depreciat
ion
(380)
19
(399)
(424)
3
(427)
Impairment provis
ions on loans and
advances
190
139
51
286
282
4
Tax losses carried forward
74
51
23
97
49
48
Equity Instruments at Fair value through
other comprehensive income
(62)
(12)
(50)
(144)
(1)
(143)
Debt Instruments at Fair value through
other comprehensive income
(30)
(14)
(16)
27
29
(2)
Cash \ufb02ow hedges
(9)
\u2013
(9)
(25)
12
(37)
Own credit adjustment
4
4
\u2013
(71)
(1)
(70)
Retirement bene\ufb01t obligat
ions
(7)
16
(23)
4
13
(9)
Share-based payments
54
12
42
43
9
34
Other temporary differences
13
199
(186)
139
307
(168)
(153)
414
(567)
(68)
702
(770)
The recoverabil
ity of the Group\u2019s deferred tax assets
is based on management\u2019s judgement of the availab
il
ity of future taxable
pro\ufb01ts against which the deferred tax assets will be util
ised. The Group\u2019s total deferred tax assets
include $74 mill
ion relat
ing
to tax losses carried forward, of which $23 mill
ion ar
ises in legal entit
ies w
ith offsetting deferred tax liab
il
it
ies. The rema
in
ing
deferred tax assets on losses of $51 mill
ion are forecast to be recovered before exp
iry and with
in \ufb01ve years.
Unrecognised deferred tax
\n \n
Net
Gross
Net
Gross
2024
2024
2023
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
No account has been taken of the following potential deferred tax
assets/(liab
il
it
ies):
Withhold
ing tax on unrem
itted earnings from overseas subsid
iar
ies
and associates
(611)
(6,827)
(653)
(7,685)
Tax losses
2,494
10,414
2,242
9,326
Held over gains on incorporation of overseas branches
(360)
(1,366)
(366)
(1,389)
Other temporary differences
356
1,363
397
1,516
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00500": { "value": "11. Div
idends
The Board considers a number of factors prior to div
idend declarat
ion which includes the rate of recovery in the Group\u2019s
\ufb01nancial performance, the macroeconom
ic environment, and opportunit
ies to further
invest in our business and grow pro\ufb01tably
in our markets.
Div
idends on equ
ity instruments are recognized as a liab
il
ity once they have been declared and no longer at the discret
ion of
the directors, and in certain situat
ions, approved by shareholders.
Ordinary equity shares
\n \n
2024
2023
Cents per share
$mill
ion
Cents per share
$mill
ion
2023/2022 \ufb01nal div
idend declared and pa
id during the year
21
551
14
401
2024/2023 inter
im d
iv
idend declared and pa
id during the year
9
229
6
167
Div
idends on ord
inary equity shares are recorded in the period in which they are declared and, in respect of the \ufb01nal div
idend,
have been approved by the shareholders. Accordingly, the \ufb01nal ordinary equity share div
idends set out above relate to the
respective prior years.
2024 recommended \ufb01nal ordinary equity share div
idend
The 2024 \ufb01nal ordinary equity share div
idend recommended by the Board
is 28 cents per share. The \ufb01nanc
ial statements
for the year ended 31 December 2024 do not re\ufb02ect this div
idend as th
is will be accounted for in shareholders\u2019 equity as an
appropriat
ion of reta
ined pro\ufb01ts in the year ending 31 December 2025.
The div
idend w
ill be paid in either pounds sterling, Hong Kong dollars or US dollars on 19 May 2025 to shareholders on the
UK and HK register of members at the close of business in the UK on 28 March 2025.
Preference shares and Addit
ional T
ier 1 securit
ies
Div
idends on these preference shares and secur
it
ies class
if
ied as equ
ity are recorded in the period in which they are declared.
\n \n
2024
2023
$mill
ion
$mill
ion
Non-cumulative redeemable preference shares:
7.014 per cent preference shares of $5 each
53
53
Floating rate preference shares of $5 each\u00b9
54
50
107
103
Addit
ional T
ier 1 securit
ies: \ufb01xed rate resett
ing perpetual subordinated contingent convertible securit
ies
350
349
457
452
1
Floating rate is based on Secured Overnight Financ
ing Rate (SOFR), average rate pa
id for \ufb02oating preference shares is 7.21% (2023: 6.62%)", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00639": { "value": "The Board considers a number of factors prior to div
idend declarat
ion which includes the rate of recovery in the Group\u2019s
\ufb01nancial performance, the macroeconom
ic environment, and opportunit
ies to further
invest in our business and grow pro\ufb01tably
in our markets.
Div
idends on equ
ity instruments are recognized as a liab
il
ity once they have been declared and no longer at the discret
ion of
the directors, and in certain situat
ions, approved by shareholders.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00501": { "value": "12. Earnings per ordinary share
Accounting policy
\n
The Group also measures earnings per share on an underlying basis. This differs from earnings de\ufb01ned in IAS 33 Earnings
\n
per share. Underlying earnings is pro\ufb01t/(loss) attributable to ordinary shareholders adjusted for pro\ufb01ts or losses of a
\n
capital nature; amounts consequent to investment transactions driven by strategic intent; and other infrequent and/or
\n
exceptional transactions that are sign
i\ufb01cant or mater
ial in the context of the Group\u2019s normal business earnings for the year.
\n
The table below provides the basis of underlying earnings.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Pro\ufb01t for the period attributable to equity holders
4,042
3,462
Non-controlling interest
8
7
idend payable on preference shares and AT1 class
Div
if
ied as equ
ity
(457)
(452)
Pro\ufb01t for the period attributable to ordinary shareholders
3,593
3,017
Items normalised\u00b9:
Restructuring
441
14
Goodwill & other impa
irment
\u2013
850
Net loss/(gain) on sale of businesses
232
(262)
DVA
24
(17)
Other items
100
\u2013
Tax on normalised items
(114)
(21)
Underlying pro\ufb01t attributable to ordinary shareholders
4,276
3,581
Basic \u2013 weighted average number of shares (mill
ions)
2,543
2,778
Diluted \u2013 weighted average number of shares (mill
ions)
2,610
2,841
Basic earnings per ordinary share (cents)
141.3
108.6
Diluted earnings per ordinary share (cents)
137.7
106.2
Underlying basic earnings per ordinary share (cents)
168.1
128.9
Underlying diluted earnings per ordinary share (cents)
163.8
126.0
\n
1
Refer note 2 segmental informat
ion (page 298) for normal
ised items
\n
The calculation of basic earnings per share is based on the pro\ufb01t attributable to equity holders of the parent and the basic
\n
weighted average number of shares excluding treasury shares held in employees bene\ufb01t trust. When calculating the diluted
\n
earnings per share, the weighted average number of shares in issue is adjusted for the effects of all expected dilut
ive potent
ial
\n
ordinary shares held in respect of SC PLC totalling 59 mill
ion (2023: 56 m
ill
ion). The total number of share opt
ions outstanding,
\n
under schemes considered to be potentially dilut
ive, was 7 m
ill
ion (2023: 7 m
ill
ion). These opt
ions have strike prices ranging from
\n
$3.93 to $7.64.
\n
Of the total number of employee share options and share awards at 31 December 2024 there were nil share options and share
\n
awards which were anti-dilut
ive.
\n
The 235 mill
ion decrease (2023: 188 m
ill
ion decrease)
in the basic weighted average number of shares is primar
ily due to the
\nimpact of the share buyback programmes completed in the year.", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00640": { "value": "Accounting policy
The Group also measures earnings per share on an underlying basis. This differs from earnings de\ufb01ned in IAS 33 Earnings
\n
per share. Underlying earnings is pro\ufb01t/(loss) attributable to ordinary shareholders adjusted for pro\ufb01ts or losses of a
\n
capital nature; amounts consequent to investment transactions driven by strategic intent; and other infrequent and/or
\n
exceptional transactions that are sign
i\ufb01cant or mater
ial in the context of the Group\u2019s normal business earnings for the year.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00644": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00642": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfEachInvestmentInEquityInstrumentsDesignatedAsMeasuredAtFairValueThroughOtherComprehensiveIncomeExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00506": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsHeldForTradingExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00510": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00502": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00508": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfOffsettingOfFinancialAssetsAndFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00503": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00507": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00505": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsHeldForTradingExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00504": { "value": "13. Financ
ial
instruments
Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.
\n\n\n
The Group\u2019s classif
icat
ion of its \ufb01nanc
ial assets and l
iab
il
it
ies
is summarised in the following tables.
\n\n \n
Assets at fair value
Non-trading
mandatorily
Designated
Fair value
Total
Assets
Derivat
ives
at fair value
at fair value
through other
\ufb01nancial
held at
held for
through
through
comprehensive
assets at
amortised
Trading
hedging
pro\ufb01t or loss
pro\ufb01t or loss
income
fair value
cost
Total
Assets
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks\u00b9
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
63,447
63,447
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,213
\u2013
\u2013
\u2013
\u2013
2,213
\u2013
2,213
Loans and advances to customers
2
6,912
\u2013
172
\u2013
\u2013
7,084
\u2013
7,084
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
336
\u2013
85,859
\u2013
\u2013
86,195
\u2013
86,195
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
76,329
\u2013
140
70
\u2013
76,539
\u2013
76,539
Equity shares
5,285
\u2013
201
\u2013
\u2013
5,486
\u2013
5,486
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
91,075
\u2013
86,372
70
\u2013
177,517
\u2013
177,517
Derivat
ive \ufb01nancial
instruments
14
78,906
2,566
\u2013
\u2013
\u2013
81,472
\u2013
81,472
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
43,593
43,593
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,946
2,946
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
281,032
281,032
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
9,660
9,660
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
88,425
88,425
55,137
143,562
Equity shares
\u2013
\u2013
\u2013
\u2013
994
994
\u2013
994
\u2013
\u2013
\u2013
\u2013
89,419
89,419
55,137
144,556
Other assets
20
\u2013
\u2013
34,585
34,585
Assets held for sale
21
\u2013
\u2013
\u2013
5
\u2013
5
884
889
Total at 31 December 2024
169,981
2,566
86,372
75
89,419
348,413
478,678
827,091
Cash and balances at central banks\u00b9
\u2013
69,905
69,905
Financ
ial assets held at fa
ir value
through pro\ufb01t or loss
Loans and advances to banks
2
2,265
\u2013
\u2013
\u2013
\u2013
2,265
\u2013
2,265
Loans and advances to customers
2
6,930
\u2013
282
\u2013
\u2013
7,212
\u2013
7,212
Reverse repurchase agreements
and other sim
ilar secured lend
ing
16
9,997
\u2013
71,850
\u2013
\u2013
81,847
\u2013
81,847
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
52,776
\u2013
98
78
\u2013
52,952
\u2013
52,952
Equity shares
2,721
\u2013
219
\u2013
\u2013
2,940
\u2013
2,940
Other assets
\u2013
\u2013
6
\u2013
\u2013
6
\u2013
6
74,689
\u2013
72,455
78
\u2013
147,222
\u2013
147,222
Derivat
ive \ufb01nancial
instruments
14
48,333
2,101
\u2013
\u2013
\u2013
50,434
\u2013
50,434
Loans and advances to banks
2,3
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
44,977
44,977
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
16
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
1,738
1,738
Loans and advances to customers
2
15
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
286,975
286,975
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
13,996
13,996
Investment securit
ies
Debt securit
ies, alternat
ive tier one
and other elig
ible b
ills
\u2013
\u2013
\u2013
\u2013
103,328
103,328
56,935
160,263
Equity shares
\u2013
\u2013
\u2013
\u2013
992
992
\u2013
992
\u2013
\u2013
\u2013
\u2013
104,320
104,320
56,935
161,255
Other assets
20
\u2013
\u2013
38,140
38,140
Assets held for sale
21
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
701
701
Total at 31 December 2023
123,022
2,101
72,455
78
104,320
301,976
497,633
799,609
\n
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
\n
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
\n
2
Further analysed in Risk review and Capital review (pages 193 to 274)
\n
3
Loans and advances to banks include amounts due on demand from banks other than central banks
\n\n\n\n \n
Liab
il
it
ies at fa
ir value
Designated
Total
Derivat
ives
at fair value
\ufb01nancial
held for
through
liab
il
it
ies at
Amortised
Trading
hedging
pro\ufb01t or loss
fair value
cost
Total
Liab
il
it
ies
Notes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,893
1,893
\u2013
1,893
Customer accounts
\u2013
\u2013
21,772
21,772
\u2013
21,772
Repurchase agreements and other sim
ilar
secured borrowing
16
925
\u2013
32,614
33,539
\u2013
33,539
Debt securit
ies
in issue
22
1
\u2013
13,730
13,731
\u2013
13,731
Short posit
ions
14,527
\u2013
\u2013
14,527
\u2013
14,527
Other liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
15,453
\u2013
70,009
85,462
\u2013
85,462
Derivat
ive \ufb01nancial
instruments
14
80,037
2,027
\u2013
82,064
\u2013
82,064
Deposits by banks
\u2013
\u2013
\u2013
\u2013
25,400
25,400
Customer accounts
\u2013
\u2013
\u2013
\u2013
464,489
464,489
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,132
12,132
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
64,609
64,609
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
44,047
44,047
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
10,382
10,382
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
360
360
Total at 31 December 2024
95,490
2,027
70,009
167,526
621,419
788,945
Financ
ial l
iab
il
it
ies held at fa
ir value through pro\ufb01t
or loss
Deposits by banks
\u2013
\u2013
1,894
1,894
\u2013
1,894
Customer accounts
39
\u2013
17,209
17,248
\u2013
17,248
Repurchase agreements and other sim
ilar
secured borrowing
16
1,660
\u2013
39,623
41,283
\u2013
41,283
Debt securit
ies
in issue
22
\u2013
\u2013
10,817
10,817
\u2013
10,817
Short posit
ions
11,846
\u2013
\u2013
11,846
\u2013
11,846
Other liab
il
it
ies
\u2013
\u2013
8
8
\u2013
8
13,545
\u2013
69,551
83,096
\u2013
83,096
Derivat
ive \ufb01nancial
instruments
14
52,747
3,314
\u2013
56,061
\u2013
56,061
Deposits by banks
\u2013
\u2013
\u2013
\u2013
28,030
28,030
Customer accounts
\u2013
\u2013
\u2013
\u2013
469,418
469,418
Repurchase agreements and other sim
ilar
secured borrowing
16
\u2013
\u2013
\u2013
\u2013
12,258
12,258
Debt securit
ies
in issue
22
\u2013
\u2013
\u2013
\u2013
62,546
62,546
Other liab
il
it
ies
23
\u2013
\u2013
\u2013
\u2013
38,663
38,663
Subordinated liab
il
it
ies and other borrowed funds
27
\u2013
\u2013
\u2013
\u2013
12,036
12,036
Liab
il
it
ies
included in disposal groups held for sale
21
\u2013
\u2013
\u2013
\u2013
726
726
Total at 31 December 2023
66,292
3,314
69,551
139,157
623,677
762,834
\n
Offsetting of \ufb01nanc
ial
instruments
\n
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
\n
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
\n
liab
il
ity simultaneously.
\n
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
\n
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
\n
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
\n
particular counterparty can be offset but only in the event of default or other predetermined events.
\n
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
\n
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
\n
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
\n\n\n
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
\n
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
\n\n \n
Net amounts
Related amount not offset
Gross amounts
of \ufb01nancial
in the balance sheet
of recognised
Impact of
instruments
\ufb01nancial
offset in the
presented in the
Financ
ial
Financ
ial
instruments
balance sheet
balance sheet
instruments
collateral
Net amount
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December 2024
Derivat
ive \ufb01nancial
instruments
97,902
(16,430)
81,472
(60,280)
(15,005)
6,187
Reverse repurchase agreements and
other sim
ilar secured lend
ing
137,115
(38,314)
98,801
\u2013
(98,801)
\u2013
Total Assets
235,017
(54,744)
180,273
(60,280)
(113,806)
6,187
Derivat
ive \ufb01nancial
instruments
98,494
(16,430)
82,064
(60,280)
(11,046)
10,738
Repurchase agreements and other
sim
ilar secured borrow
ing
83,985
(38,314)
45,671
\u2013
(45,671)
\u2013
Total Liab
il
it
ies
182,479
(54,744)
127,735
(60,280)
(56,717)
10,738
At 31 December 2023
Derivat
ive \ufb01nancial
instruments
99,929
(49,495)
50,434
(39,293)
(8,440)
2,701
Reverse repurchase agreements and
other sim
ilar secured lend
ing
109,413
(11,832)
97,581
\u2013
(97,581)
\u2013
Total Assets
209,342
(61,327)
148,015
(39,293)
(106,021)
2,701
Derivat
ive \ufb01nancial
instruments
105,556
(49,495)
56,061
(39,293)
(10,337)
6,431
Repurchase agreements and other
sim
ilar secured borrow
ing
65,373
(11,832)
53,541
\u2013
(53,541)
\u2013
Total Liab
il
it
ies
170,929
(61,327)
109,602
(39,293)
(63,878)
6,431
\n
Related amounts not offset in the balance sheet comprises:
\n
\u2022
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
\n
master netting arrangements held against derivat
ive \ufb01nancial
instruments and excludes the effect of over-collateralisat
ion
\n
\u2022
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
\n
have been unable to obtain such opin
ion
\n
\u2022
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive \ufb01nancial
instruments and collateral bought
\n
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
\n
Financ
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss
\n\n \n
2024
2023
$mill
ion
$mill
ion
Carrying Balance aggregate fair value
70,009
69,551
Amount Contractually obliged to repay at maturity
70,166
71,240
Difference between aggregate fair value and contractually obliged to repay at maturity
(157)
(1,689)
Cumulative change in Fair Value accredited to Credit Risk Difference
(276)
156
\n
The net fair value loss on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through pro\ufb01t or loss was $3,252 mill
ion for the year
\n
(31\u00a0December 2023: net loss of $2,649 mill
ion).
\n
Further details of the Group\u2019s own credit adjustment (OCA) valuation technique is described later in this Note.
\n
Valuation of \ufb01nanc
ial
instruments
\n
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
\n
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
\n
valuations incorporated into the \ufb01nanc
ial statements are val
idated independent of the business area responsible for the
\n
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the \ufb01nanc
ial
instruments
\n
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the \ufb01nanc
ial
\n
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
\n
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
\n
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
\n
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
\n
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
\n
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
\n
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
\n
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
\n
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
\n
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
\n
to review investments and valuations.
Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs
Valuation techniques
Refer to the fair value hierarchy explanation \u2013 Level 1, 2 and 3 (page 322)
\u2022
Financ
ial
instruments held at fair value
\u2013
Debt securit
ies \u2013 asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers\u2019 quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash \ufb02ow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
\u2013
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
\u2013
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
i\ufb01cant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
\u2013
Equity shares \u2013 unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual \ufb01nanc
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash \ufb02ow model or net asset value (\u201cNAV\u201d) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash \ufb02ow method is applied.
\u2013
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other \ufb01nanc
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cash\ufb02ows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
\u2013
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
i\ufb01cant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
\n\n\n
\u2022
Financ
ial
instruments held at amortised cost
\n
The following sets out the Group\u2019s basis for establish
ing fa
ir values of amortised cost \ufb01nanc
ial
instruments and their
\n
classif
icat
ion between Levels 1, 2 and 3. As certain categories of \ufb01nanc
ial
instruments are not actively traded, there is a
\n
sign
i\ufb01cant level of management judgement
involved in calculating the fair values:
\n
\u2013
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
\n
\u2013
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
\n
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash \ufb02ow
\n
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
\n
\u2013
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
\n
demand. The estimated fair value of \ufb01xed interest-bearing deposits and other borrowings without quoted market prices
\n
is based on discounted cash \ufb02ows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
\n
maturity
\n
\u2013
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
\n
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
\n
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
\n
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
\n
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
\n
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
\n
fair value for such instruments is usually proxies from internal assessments of the underlying cash \ufb02ows
\n
\u2013
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of \ufb02oating rate placements
\n
and overnight deposits is their carrying amounts. The estimated fair value of \ufb01xed interest-bearing deposits is based on
\n
discounted cash \ufb02ows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
\n
The Group\u2019s loans and advances to customers\u2019 portfolio is well divers
i\ufb01ed by geography and
industry. Approximately a
\n
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
\n
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
\n
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
\n
residual maturity of more than one year represents the discounted amount of future cash \ufb02ows expected to be received,
\n
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash \ufb02ows are discounted at current market
\n
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
\n
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
\n
\u2013
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
\n
these \ufb01nancial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
\n
nature or re-price to current market rates frequently
\n
Fair value adjustments
\n
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group considers adjustments to
\n
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
\n
(described further below) in determin
ing fa
ir value for \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies are as follows:
\n\n \n
Movement
Movement
01.01.24
during the year
31.12.24
01.01.23
during the year
31.12.23
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Bid-offer valuation adjustment
115
2
117
118
(3)
115
Credit valuation adjustment
119
15
134
171
(52)
119
Debit valuation adjustment
(129)
24
(105)
(112)
(17)
(129)
Model valuation adjustment
4
1
5
3
1
4
Funding valuation adjustment
33
8
41
46
(13)
33
Other fair value adjustments
25
1
26
23
2
25
Total
167
51
218
249
(82)
167
Income deferrals
Day 1 and other deferrals
109
29
138
186
(77)
109
Total
109
29
138
186
(77)
109
\n
Note: Bracket represents an asset and credit to the income statement
\n
\u2022
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
\n
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness\u2019 posit
ions through
\n
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
\n
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
\n
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
\n
in the systems.
\n\n\n
\u2022
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
\n
adjustment to the fair value of the transactions to re\ufb02ect the possib
il
ity that our counterparties may default and we may
\n
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
\n
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
\n
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
\n
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
\n
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
\n
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
\n
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
\n
the uncertaint
ies assoc
iated with wrong-way risk in the Group\u2019s Prudential Valuation Adjustments framework.
\n
\u2022
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to re\ufb02ect changes
in
\n
its own credit standing. The Group\u2019s DVA adjustments will increase if its credit standing worsens and conversely, decrease
\n
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group\u2019s probabil
ity
\n
of default to the Group\u2019s negative expected exposure against the counterparty. The Group\u2019s probabil
ity of default and loss
\n
expected in the event of default is derived based on bond and CDS spreads associated with the Group\u2019s issuances and
\n
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
\n
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
\n
effects of master netting agreements.
\n
\u2022
Model valuation adjustment:
Valuation models may have pric
ing de\ufb01cienc
ies or lim
itat
ions that require a valuation
\n
adjustment. These pric
ing de\ufb01cienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
\n
model.
\n
\u2022
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
\n
derivat
ives. FVA re\ufb02ects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
\n
funding costs or bene\ufb01ts that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
\n
exposure at a counterparty level and then applying a funding rate to those exposures that re\ufb02ect the market cost of funding.
\n
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
\n
market funding cost or bene\ufb01t associated with funding these transactions.
\n
\u2022
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
\n
of market prices with differ
ing matur
ity, expiry and strike of the trades.
\n
\u2022
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
\n
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
\n
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
\n
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
\n
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
\n
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
\n
represent adjustments taken to re\ufb02ect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
\n
terminat
ion value at the measurement date.
\n
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
\n
notes, in order to re\ufb02ect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
\n
instruments would be issued or bought back at the measurement date as this re\ufb02ects the value from the perspective of a
\n
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
\n
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
\n
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
\n
comprehensive income. The Group\u2019s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
\n
of the trade and, conversely, decrease if its credit standing improves. The Group\u2019s OCA reserve will reverse over time as its
\n
liab
il
it
ies mature.
\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments held at fair value
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
\n
active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
informat
ion on
\n
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
\n
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
\n
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
\n
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash \ufb02ow analysis and pric
ing
\n
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
\n
by the Group.
\n
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
\n
the observabil
ity of the s
ign
i\ufb01cant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
i\ufb01cant valuat
ion
\n
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
\n
recognises transfers between levels of the fair value hierarchy when there is a sign
i\ufb01cant change
in either its princ
ipal market
\n
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
\n
\u2022
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
\n
or liab
il
it
ies.
\n
\u2022
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
\n
ident
ical or s
im
ilar
instruments in inact
ive markets and \ufb01nancial
instruments valued using models where all sign
i\ufb01cant
inputs
\n
are observable.
\n
\u2022
Level 3:
Fair value measurements are those where inputs which could have a sign
i\ufb01cant effect on the
instrument\u2019s valuation
\n
are not based on observable market data.
\n\n\n
The following tables show the classif
icat
ion of \ufb01nanc
ial
instruments held at fair value into the valuation hierarchy:
\n\n \n
2024
2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Loans and advances to banks
\u2013
2,213
\u2013
2,213
\u2013
2,265
\u2013
2,265
Loans and advances to customers
\u2013
5,147
1,937
7,084
\u2013
5,252
1,960
7,212
Reverse repurchase agreements and
other sim
ilar secured lend
ing
19
82,937
3,239
86,195
\u2013
79,484
2,363
81,847
Debt securit
ies and other el
ig
ible b
ills
32,331
42,615
1,593
76,539
27,055
24,635
1,262
52,952
Of which:
Issued by Central banks &
Governments
30,278
13,355
9
43,642
23,465
6,557
\u2013
30,022
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
7
4,860
399
5,266
4
4,062
346
4,412
Issued by \ufb01nancial
inst
itut
ions
1
2,046
24,400
1,185
27,631
3,586
14,016
916
18,518
Equity shares
5,287
8
191
5,486
2,386
370
184
2,940
Derivat
ive \ufb01nancial
instruments
386
80,958
128
81,472
954
49,400
80
50,434
Of which:
Foreign exchange
140
72,870
37
73,047
129
42,414
25
42,568
Interest rate
27
6,296
80
6,403
37
6,293
6
6,336
Credit
\u2013
388
9
397
\u2013
438
47
485
Equity and stock index options
\u2013
349
2
351
\u2013
73
2
75
Commodity
219
1,055
\u2013
1,274
788
182
\u2013
970
Investment securit
ies
Debt securit
ies and other el
ig
ible b
ills
50,249
38,176
\u2013
88,425
55,060
48,196
72
103,328
Of which:
Issued by Central banks &
Governments
41,395
16,916
\u2013
58,311
47,225
18,983
51
66,259
Issued by corporates other than
\ufb01nancial
inst
itut
ions
1
\u2013
490
\u2013
490
820
3,236
\u2013
4,056
Issued by \ufb01nancial
inst
itut
ions
1
8,854
20,770
\u2013
29,624
7,015
25,977
21
33,013
Equity shares
27
2
965
994
199
6
787
992
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6
6
Total assets at 31 December
2
88,299
252,056
8,053
348,408
85,654
209,608
6,714
301,976
Liab
il
it
ies
Financ
ial
instruments held at fair value
through pro\ufb01t or loss
Deposits by banks
\u2013
1,522
371
1,893
\u2013
1,560
334
1,894
Customer accounts
\u2013
19,058
2,714
21,772
\u2013
15,970
1,278
17,248
Repurchase agreements and other
sim
ilar secured borrow
ing
\u2013
33,539
\u2013
33,539
\u2013
41,283
\u2013
41,283
Debt securit
ies
in issue
\u2013
12,317
1,414
13,731
\u2013
9,776
1,041
10,817
Short posit
ions
8,789
5,558
180
14,527
7,152
4,591
103
11,846
Derivat
ive \ufb01nancial
instruments
419
81,387
258
82,064
749
55,116
196
56,061
Of which:
Foreign exchange
183
69,684
8
69,875
122
45,314
10
45,446
Interest rate
14
8,586
23
8,623
46
8,262
5
8,313
Credit
\u2013
2,131
189
2,320
\u2013
945
162
1,107
Equity and stock index options
\u2013
157
37
194
\u2013
147
19
166
Commodity
222
829
1
1,052
581
448
\u2013
1,029
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
8
8
Total liab
il
it
ies at 31 December
9,208
153,381
4,937
167,526
7,901
128,296
2,960
139,157
\n
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
\n
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
\n
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
\n
The fair value of \ufb01nanc
ial assets and \ufb01nancial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
\n
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
\n
There were no sign
i\ufb01cant changes to valuat
ion or levelling approaches in 2024.
\n
There were no sign
i\ufb01cant transfers of \ufb01nancial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
\n
the year.
\n\n\n
Fair value hierarchy \u2013 \ufb01nanc
ial
instruments measured at amortised cost
\n
The following table shows the carrying amounts and incorporates the Group\u2019s estimate of fair values of those \ufb01nanc
ial assets
\n
and liab
il
it
ies not presented on the Group\u2019s balance sheet at fa
ir value. These fair values may be different from the actual
\n
amount that will be received or paid on the settlement or maturity of the \ufb01nanc
ial
instrument. For certain instruments, the fair
\n
value may be determined using assumptions for which no observable prices are available.
\n\n \n
2024
2023
Carrying
Fair value
Carrying
Fair value
value
Level 1
Level 2
Level 3
Total
value
Level 1
Level 2
Level 3
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Cash and balances at
central banks\u00b9
63,447
\u2013
63,447
\u2013
63,447
69,905
\u2013
69,905
\u2013
69,905
Loans and advances to banks
43,593
\u2013
43,430
165
43,595
44,977
\u2013
44,921
\u2013
44,921
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
2,946
\u2013
2,948
\u2013
2,948
1,738
\u2013
1,738
\u2013
1,738
Loans and advances
to customers
281,032
\u2013
40,582
238,986
279,568
286,975
\u2013
53,472
226,211
279,683
of which \u2013 reverse repurchase
agreements and other sim
ilar
secured lending
9,660
\u2013
9,618
42
9,660
13,996
\u2013
13,827
169
13,996
Investment securit
ies\u00b2
55,137
\u2013
53,050
24
53,074
56,935
\u2013
54,419
33
54,452
Other assets\u00b9
34,585
\u2013
34,585
\u2013
34,585
38,140
\u2013
38,140
\u2013
38,140
Assets held for sale
884
58
353
473
884
701
101
541
59
701
Total assets at 31 December
478,678
58
235,447
239,648
475,153
497,633
101
261,398
226,303
487,802
Liab
il
it
ies
Deposits by banks
25,400
\u2013
25,238
\u2013
25,238
28,030
\u2013
28,086
\u2013
28,086
Customer accounts
464,489
\u2013
461,549
\u2013
461,549
469,418
\u2013
460,224
\u2013
460,224
Repurchase agreements and
other sim
ilar secured
borrowing
12,132
\u2013
12,133
\u2013
12,133
12,258
\u2013
12,258
\u2013
12,258
Debt securit
ies
in issue
64,609
32,209
32,181
\u2013
64,390
62,546
31,255
30,859
\u2013
62,114
Subordinated liab
il
it
ies and
other borrowed funds
10,382
9,599
429
\u2013
10,028
12,036
11,119
336
\u2013
11,455
Other liab
il
it
ies\u00b9
44,047
\u2013
44,047
\u2013
44,047
38,663
\u2013
38,663
\u2013
38,663
Liab
il
it
ies held for sale
360
89
271
\u2013
360
726
54
672
\u2013
726
Total liab
il
it
ies at 31 December
621,419
41,897
575,848
\u2013
617,745
623,677
42,428
571,098
\u2013
613,526
\n
1
The carrying amount of these \ufb01nanc
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
\n
current market rates frequently
\n
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
\n
Loans and advances to customers by client segment
\n
1
\n\n \n
2024
2023
Carrying value
Fair value
Carrying value
Fair value
Stage 1
Stage 1
Stage 1
Stage 1
and
and
and
and
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
Stage 3
stage 2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Corporate &
Investment
Banking
1,298
137,006 138,304
1,174
137,234 138,408
1,975
128,430
130,405
1,910
125,841
127,751
Wealth &
Retail Banking
858
118,390
119,248
858
116,823
117,681
724
125,335
126,059
721
120,701
121,422
Ventures
1
1,388
1,389
\u2013
1,388
1,388
\u2013
1,033
1,033
\u2013
1,032
1,032
Central &
other items
98
21,993
22,091
98
21,993
22,091
209
29,269
29,478
209
29,269
29,478
At 31 December
2,255 278,777
281,032
2,130
277,438
279,568
2,908
284,067
286,975
2,840
276,843
279,683
\n
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
\n
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
\n\n\n
Fair value of \ufb01nanc
ial
instruments
\n
Level 3 Summary and sign
i\ufb01cant unobservable
inputs
\n
The following table presents the Group\u2019s primary Level 3 \ufb01nanc
ial
instruments which are held at fair value. The table also
\n
presents the valuation techniques used to measure the fair value of those \ufb01nanc
ial
instruments, the sign
i\ufb01cant unobservable
\n
inputs, the range of values for those inputs and the weighted average of those inputs:
\n\n \n
Value as at
31 December 2024
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,937
\u2013
Discounted cash \ufb02ows
Price/yield
1.0% \u2013 100%
20.8%
to customers
Recovery rate
93.2% \u2013 95.6%
95.1%
Reverse repurchase agreements
3,239
\u2013
Discounted cash \ufb02ows
Repo curve
2.0% \u2013 7.6%
6.2%
and other sim
ilar secured lend
ing
Price/yield
2.3% \u2013 10.5%
6.4%
Debt securit
ies, alternat
ive tier
1,584
\u2013
Discounted cash \ufb02ows
Price/yield
0.7% \u2013 15.3%
6.9%
one and other elig
ible secur
it
ies
Recovery rate
0.01% \u2013 16.3%
9.2%
Government bonds and
9
\u2013
Discounted cash \ufb02ows
Price/yield
23.5% \u2013 23.5%
23.5%
treasury bills
Equity shares (includes private
1,156
\u2013
Comparable
EV/EBITDA multiples
5.3x \u2013 18.1x
14.8x
equity investments)
pric
ing/y
ield
EV/Revenue multiples
8.5x \u2013 12.9x
9.0x
P/E multiples
17.9x \u2013 48.3x
46.9x
P/B multiples
0.3x \u2013 3.2x
1.3x
P/S multiples
0.2x \u2013 1.3x
0.2x
Liqu
id
ity discount
10.0% \u2013 30.0%
16.8%
Discounted cash \ufb02ows
Discount rates
8.3% \u2013 20.4%
10.1%
Option pric
ing model
Equity value based on
5.7x \u2013 23.6x
16.2x
EV/Revenue multiples
Equity value based on
10.1x \u2013 10.1x
10.1x
EV/EBITDA multiples
Equity value based on
30.2% \u2013 50.0%
30.5%
volatil
ity
Derivat
ive \ufb01nancial
instruments
of which:
Foreign exchange
37
8
Option pric
ing model
Foreign exchange
10.2% \u2013 46.2%
42.0%
option impl
ied volat
il
ity
Interest rate curves
3.5% \u2013 9.0%
4.2%
Foreign exchange
(0.03)% \u2013 34.3%
6.1%
curves
Commodity
\u2013
1
Discounted cash \ufb02ows
Commodity prices
$383.0 \u2013 $391.0
$387.0
CM-CM correlation
73.7% \u2013 97.9%
86.0%
Interest rate
80
23
Discounted cash \ufb02ows
Interest rate curves
3.5% \u2013 43.9%
5.1%
Option pric
ing model
Bond option impl
ied
2.3% \u2013 4.7%
3.5%
volatil
ity
Credit
9
189
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 1.9%
0.9%
Price/yield
4.8% \u2013 6.6%
5.5%
Equity and stock index
2
37
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Deposits by banks
\u2013
371
Discounted cash \ufb02ows
Credit spreads
0.2% \u2013 3.5%
1.5%
Customer accounts
\u2013
2,714
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Discounted cash \ufb02ows
Interest rate curves
1.4% \u2013 4.4%
4.0%
Price/yield
0.7% \u2013 13.0%
8.5%
Debt securit
ies
in issue
\u2013
1,414
Discounted cash \ufb02ows
Credit spreads
0.05% \u2013 2.0%
0.8%
Price/yield
6.2% \u2013 14.8%
12.7%
Interest rate curves
3.5% \u2013 4.4%
4.1%
Internal pric
ing model
Equity-Equity correlation
44.9% \u2013 100%
80.0%
Equity-FX correlation
(36.4)% \u2013 48.9%
5.0%
Option pric
ing model
Bond option impl
ied
4.0% \u2013 15%
12.5%
volatil
ity
Short posit
ions
\u2013
180
Discounted cash \ufb02ows
Price/yield
5.9% \u2013 12.7%
6.3%
Total
8,053
4,937
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2024. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n\n \n
Value as at
31 December 2023
Assets
Liab
il
it
ies
Princ
ipal valuat
ion
Sign
i\ufb01cant
Weighted
Instrument
$mill
ion
$mill
ion
technique
unobservable inputs
Range
1
average
2
Loans and advances
1,960
\u2013
Discounted cash \ufb02ows
Price/yield
1.7% \u2013 100%
12.0%
to customers
Credit spreads
0.1% \u2013 1.0%
0.6%
Reverse repurchase
2,363
\u2013
Discounted cash \ufb02ows
Repo curve
5.1% \u2013 7.6%
6.3%
agreements and other
Price/yield
(2.7)%- 10.3%
6.0%
sim
ilar secured lend
ing
Debt securit
ies, alternat
ive
1,283
\u2013
Discounted cash \ufb02ows
Price/yield
(14.0)% \u2013 25.8%
10.1%
tier one and other elig
ible
Recovery rates
0.1% \u2013 1.0%
0.2%
securit
ies
Internal pric
ing model
Equity-Equity correlation
44.1%-100%
80.7%
Equity-FX correlation
(35.9)%-45.5%
14.2%
Government bonds and
51
\u2013
Discounted cash \ufb02ows
Price/yield
17.7% \u2013 21.8%
20.6%
treasury bills
Equity shares (includes private
971
\u2013
Comparable pric
ing/y
ield EV/EBITDA multiples
13.8x \u2013 15.6x
14.9x
equity investments)
EV/Revenue multiples
9.3x \u2013 30.9x
15.8x
P/E multiples
10.6x \u2013 51.8x
45.7x
P/B multiples
0.3x \u2013 2.7x
1.6x
P/S multiples
0.2x \u2013 1.6x
0.3x
Liqu
id
ity discount
7.5% \u2013 20.0%
15.1%
Discounted cash \ufb02ows
Discount rates
9.2% \u2013 35.6%
17.0%
Option pric
ing model
Equity value based on
8.4x \u2013 42.5x
27.5x
EV/Revenue multiples
Equity value based on
3.1x \u2013 3.1x
3.1x
EV/EBITDA multiples
Equity value based on
21.0% \u2013 65.0%
30.1%
volatil
ity
Other Assets
6
\u2013
NAV
N/A
N/A
N/A
Derivat
ive \ufb01nancial
instruments of which:
Foreign exchange
25
10
Option pric
ing model
Foreign exchange
0.5% \u2013 51%
31.8%
option impl
ied volat
il
ity
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 5.8%
3.8%
Foreign exchange
0.6% \u2013 64.2%
12.8%
curves
Interest rate
6
5
Discounted cash \ufb02ows
Interest rate curves
3.6% \u2013 8.6%
5.0%
Credit
47
162
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 1.0%
1.0%
Price/yield
1.7% \u2013 16.3%
8.6%
Equity and stock index
2
19
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
\u2013
\u2013
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Deposits by banks
\u2013
334
Discounted cash \ufb02ows
Credit spreads
0.1% \u2013 3.4%
1.9%
Customer accounts
\u2013
1,278
Discounted cash \ufb02ows
Credit spreads
1.0% \u2013 2.0%
1.2%
Interest rate curves
2.9% \u2013 8.6%
6.1%
Price/yield
4.8% \u2013 15.2%
9.9%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Debt securit
ies
in issue
\u2013
1,041
Discounted cash \ufb02ows
Credit spreads
0.3% \u2013 1.6%
1.1%
Price/yield
6.6% \u2013 20.9%
17.9%
Interest rate curves
2.9% \u2013 5.3%
4.4%
Internal pric
ing model
Equity-Equity correlation
44.1% \u2013 100%
80.7%
Equity-FX correlation
(35.9)% \u2013 45.5%
14.2%
Bond option impl
ied
2.9% \u2013 5.3%
4.4%
volatil
ity
Short posit
ion
\u2013
103
Discounted cash \ufb02ows
Price/yield
7.1% \u2013 7.1%
7.1%
Other Liab
il
it
ies
\u2013
8
Comparable pric
ing/y
ield EV/EBITDA multiples
5.8x \u2013 11.2x
8.5x
Total
6,714
2,960
\n
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group\u2019s Level 3 \ufb01nanc
ial
instruments as at
\n
31 December 2023. The ranges of values used are re\ufb02ective of the underlying characterist
ics of these Level 3 \ufb01nancial
instruments based on the market
\n
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group\u2019s Level 3
\n
\ufb01nancial
instruments
\n
2
Weighted average for non-derivat
ive \ufb01nancial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
\n
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
\n
ind
icator
\n\n\n
The following section describes the sign
i\ufb01cant unobservable
inputs ident
i\ufb01ed
in the valuation technique table:
\n
\u2022
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
\n
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash \ufb02ows
\n
in a discounted cash \ufb02ow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
\n
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
\n
a value for the instrument. The adjustment should account for relevant differences in the \ufb01nanc
ial
instruments such as
\n
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
\n
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
\n
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
\n
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
\n
fair value of the asset
\n
\u2022
Correlation
is the measure of how movement in one variable in\ufb02uences the movement in another variable. An equity
\n
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
\n
two swap rates, while commodity correlation is correlation between two commodity underlying prices
\n
\u2022
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
\n
\u2022
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
\n
of an instrument
\n
\u2022
Discount rate
refers to the rate of return used to convert expected cash \ufb02ows into present value
\n
\u2022
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
\n
\u2022
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
\n
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
\n
specif
ied per
iod
\n
\u2022
Net asset value (NAV)
is the value of an entity\u2019s assets after deducting any liab
il
it
ies
\n
\u2022
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
\n
\u2022
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted \ufb01rms\u2019
\n
investments to re\ufb02ect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
\n
unfavourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
\n
multiple will result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
\n
result in a favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
\n
favourable movement in the fair value of the unlisted \ufb01rm
\n
\u2022
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
\n
of default increases for a given instrument, the valuation of that instrument will increas
ingly re\ufb02ect
its expected recovery
\n
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
\n
of the loan
\n
\u2022
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
\n
\u2022
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
\n
Generally, the higher the volatil
ity, the more expens
ive the option will be
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial assets
\n
The table below analyses movements in Level 3 \ufb01nanc
ial assets carr
ied at fair value.
\n
Assets
\n\n \n
Held at fair value through pro\ufb01t or loss
Investment securit
ies
Reverse
repurchase
Debt
Debt
agreements
securit
ies,
securit
ies,
and other
alternative
alternative
Loans and
Loans and
sim
ilar
tier one
Derivat
ive
tier one
advances
advances to
secured
and other
Equity
Other
\ufb01nancial
and other
Equity
to banks
customers
lending
elig
ible b
ills
shares
Assets
instruments
elig
ible b
ills
shares
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Total (losses)/gains
recognised in
income statement
(1)
8
73
(114)
(15)
\u2013
(57)
\u2013
\u2013
(106)
Net trading income
(1)
8
73
(56)
(15)
\u2013
(57)
\u2013
\u2013
(48)
Other operating
income
\u2013
\u2013
\u2013
(58)
\u2013
\u2013
\u2013
\u2013
\u2013
(58)
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
50
39
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
74
74
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(11)
(24)
(35)
Purchases
\u2013
1,853
6,161
1,337
24
\u2013
227
\u2013
145
9,747
Sales
\u2013
(2,062)
(4,716)
(907)
(2)
\u2013
(160)
\u2013
(19)
(7,866)
Settlements
(7)
(42)
(782)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(831)
Transfers out
1
(13)
(263)
\u2013
(1)
\u2013
(6)
(1)
(61)
(2)
(347)
Transfers in
2
21
483
140
16
\u2013
\u2013
39
\u2013
4
703
At 31 December 2024
\u2013
1,937
3,239
1,593
191
\u2013
128
\u2013
965
8,053
Recognised in the
income statement
3
\u2013
7
1
7
(13)
\u2013
(9)
\u2013
\u2013
(7)
At 01 January 2023
21
1,805
1,998
1,153
182
7
44
\u2013
655
5,865
Total (losses)/gains
recognised in
income statement
\u2013
(35)
(107)
(292)
4
(1)
12
\u2013
\u2013
(419)
Net trading income
\u2013
(35)
(107)
(304)
5
\u2013
12
\u2013
\u2013
(429)
Other operating
income
\u2013
\u2013
\u2013
12
(1)
(1)
\u2013
\u2013
\u2013
10
Total (losses)/gains
recognised in other
comprehensive
income (OCI)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
101
100
Fair value through
OCI reserve
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
108
108
Exchange difference
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
(7)
(8)
Purchases
22
1,784
5,902
1,082
8
\u2013
189
21
61
9,069
Sales
(22)
(1,133)
(3,942)
(518)
(10)
\u2013
(115)
(23)
(5)
(5,768)
Settlements
\u2013
(442)
(1,488)
(305)
\u2013
\u2013
(25)
\u2013
\u2013
(2,260)
Transfers out
1
(21)
(225)
\u2013
(6)
\u2013
\u2013
(27)
(16)
(32)
(327)
Transfers in
2
\u2013
206
\u2013
148
\u2013
\u2013
2
91
7
454
At 31 December 2023
\u2013
1,960
2,363
1,262
184
6
80
72
787
6,714
Recognised in the
income statement
3
\u2013
(3)
3
(1)
4
\u2013
(12)
\u2013
\u2013
(9)
\n
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive \ufb01nancial
\n
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
\n
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
\n
derivat
ive \ufb01nancial
instruments where the valuation parameters become unobservable during the year
\n
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
\n\n\n
Level 3 movement tables \u2013 \ufb01nancial l
iab
il
it
ies
\n\n \n
Debt
Derivat
ive
Deposits
Customer
securit
ies
\ufb01nancial
Short
Other
by banks
accounts
in issue
instruments
posit
ions
liab
il
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 01 January 2024
334
1,278
1,041
196
103
8
2,960
Total losses/(gains) recognised in income statement
\u2013 net trading income
49
(27)
48
(6)
3
(8)
59
Issues
388
3,068
4,244
507
177
\u2013
8,384
Settlements
(400)
(1,627)
(2,795)
(438)
(103)
\u2013
(5,363)
Transfers out
1
\u2013
(26)
(1,194)
(7)
\u2013
\u2013
(1,227)
Transfers in
2
\u2013
48
70
6
\u2013
\u2013
124
At 31 December 2024
371
2,714
1,414
258
180
\u2013
4,937
Recognised in the income statement
3
29
5
2
(13)
\u2013
\u2013
23
At 01 January 2023
288
972
451
121
40
6
1,878
Total losses/(gains) recognised in income statement
\u2013 net trading income
7
(6)
39
(52)
3
3
(6)
Issues
628
1,789
1,489
447
100
\u2013
4,453
Settlements
(585)
(1,491)
(1,218)
(312)
(40)
\u2013
(3,646)
Transfers out
1
(4)
(9)
(85)
(11)
\u2013
(1)
(110)
Transfers in
2
\u2013
23
365
3
\u2013
\u2013
391
At 31 December 2023
334
1,278
1,041
196
103
8
2,960
Recognised in the income statement
3
\u2013
(21)
6
(47)
\u2013
\u2013
(62)
\n
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
became observable during the year and were transferred to Level 2 \ufb01nanc
ial l
iab
il
it
ies
\n
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive \ufb01nancial
instruments where the valuation parameters
\n
become unobservable during the year
\n
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
i\ufb01cant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group\u2019s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
\n \n
Held at fair value through pro\ufb01t or loss
Fair value through other comprehensive income
Favourable
Unfavourable
Favourable
Unfavourable
Net exposure
changes
changes
Net exposure
changes
changes
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Financ
ial
instruments held at fair value
Loans and advances
1,937
1,985
1,862
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
3,239
3,339
3,138
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,593
1,643
1,542
\u2013
\u2013
\u2013
Equity shares
191
210
172
965
1,032
888
Other Assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(130)
(115)
(147)
\u2013
\u2013
\u2013
Customers accounts
(2,714)
(2,540)
(2,883)
\u2013
\u2013
\u2013
Deposits by banks
(371)
(371)
(371)
\u2013
\u2013
\u2013
Short posit
ions
(180)
(178)
(182)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,414)
(1,352)
(1,476)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2024
2,151
2,621
1,655
965
1,032
888
Financ
ial
instruments held at fair value
Loans and advances
1,960
1,985
1,918
\u2013
\u2013
\u2013
Reverse Repurchase agreements and
other sim
ilar secured lend
ing
2,363
2,390
2,336
\u2013
\u2013
\u2013
Debt securit
ies, alternat
ive tier one and
other elig
ible b
ills
1,262
1,309
1,193
72
78
66
Equity shares
184
202
166
787
866
708
Other Assets
6
7
5
\u2013
\u2013
\u2013
Derivat
ive \ufb01nancial
instruments
(116)
(75)
(157)
\u2013
\u2013
\u2013
Customers accounts
(1,278)
(1,191)
(1,365)
\u2013
\u2013
\u2013
Deposits by banks
(334)
(334)
(334)
\u2013
\u2013
\u2013
Short posit
ions
(103)
(101)
(105)
\u2013
\u2013
\u2013
Debt securit
ies
in issue
(1,041)
(966)
(1,115)
\u2013
\u2013
\u2013
Other Liab
il
it
ies
(8)
(7)
(9)
\u2013
\u2013
\u2013
At 31 December 2023
2,895
3,219
2,533
859
944
774
The reasonably possible alternatives could have increased or decreased the fair values of \ufb01nanc
ial
instruments held at
fair value through pro\ufb01t or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
\n \n
Fair value changes
Possible increase
Possible decrease
2024
2023
2024
2023
Financ
ial
instruments
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Held at fair value through pro\ufb01t or loss
470
324
(496)
(362)
Fair value through other comprehensive income
67
85
(77)
(85)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesHeldForTradingExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00641": { "value": "Classif
icat
ion and measurement
Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00643": { "value": "Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.Sign
i\ufb01cant account
ing estimates and judgements
The Group evaluates the sign
i\ufb01cance of \ufb01nancial
instruments and material accuracy of the valuations incorporated in the
\ufb01nancial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of \ufb01nancial assets and l
iab
il
it
ies at the balance sheet date.
\u2022
Fair value of \ufb01nanc
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
i\ufb01cant valuat
ion inputs can materially affect the fair values of \ufb01nanc
ial
instruments
\u2022
When establish
ing the ex
it price of a \ufb01nanc
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
\u2022
In determin
ing the valuat
ion of \ufb01nanc
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
i\ufb01cant valuat
ion judgements in
respect of Level 3 instruments (page 325)
\u2022
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
i\ufb01cant degree of non-market-based unobservable
inputs", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00646": { "value": "Accounting policy
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash \ufb02ows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash \ufb02ows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the \ufb01nanc
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash \ufb02ows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
\u2022
Contingent events that would change the amount and tim
ing of cash \ufb02ows
\u2022 Leverage features
\u2022
Prepayment and extension terms
\u2022
Terms that lim
it the Group\u2019s cla
im to cash \ufb02ows from specif
ied assets (e.g. non-recourse asset arrangements)
\u2022
Features that modify considerat
ion of the t
ime value of money \u2013 e.g. period
ical reset of
interest rates
Whether \ufb01nancial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages \ufb01nanc
ial assets to generate cash \ufb02ows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
\u2022
How the performance of the product business line is evaluated and reported to the Group\u2019s management
\u2022
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash \ufb02ows collected
\u2022
The risks that affect the performance of the business model and how those risks are managed
\u2022
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group\u2019s business model assessment is as follows:
\n \n
Business model
Business object
ive
Characterist
ics
Businesses
Products
Hold to
Intent is to orig
inate
\u2022
Provid
ing \ufb01nancing and
\u2022 Global Banking
\u2022
Loans and advances
collect
\ufb01nancial assets and
orig
inat
ing assets to earn interest
\u2022 Transaction Banking
\u2022 Debt securit
ies
hold them to maturity,
income as primary income stream
\u2022 Retail Lending
collecting the
\u2022
Performing credit risk
\u2022 Treasury Markets
contractual cash \ufb02ows
management activ
it
ies
(Loans and
over the term of the
\u2022
Costs include funding costs,
Borrowings)
instrument
transaction costs and
impa
irment losses
Hold to
Business object
ive met
\u2022
Portfolios held for liqu
id
ity needs;
\u2022 Treasury Markets
\u2022 Debt securit
ies
collect
through both hold to
or where a certain interest yield
and sell
collect and by selling
pro\ufb01le is mainta
ined; or that are
\ufb01nancial assets
normally rebalanced to achieve
matching of duration of assets
and liab
il
it
ies
\u2022
Income streams come from
interest income, fair value
changes, and impa
irment losses
Fair value
All other business
\u2022
Assets held for trading
\u2022 Treasury Markets
\u2022 Derivat
ives
through
objectives,
includ
ing
\u2022
Assets that are orig
inated,
\u2022
All other business lines
\u2022 Equity shares
pro\ufb01t or loss
trading and managing
purchased, and sold for pro\ufb01t
\u2022 Trading portfolios
\ufb01nancial assets on
taking or underwrit
ing act
iv
ity
\u2022 Reverse repos
a fair value basis
\u2022
Performance of the portfolio is
\u2022
Bond and Loan
evaluated on a fair value basis
Syndicat
ion
\u2022
Income streams are from fair value
changes or trading gains or losses
\n\n\n
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
\n
\ufb01nancial assets to collect contractual cash\ufb02ows (hold to collect) are recorded at amort
ised cost. Conversely, \ufb01nanc
ial
\n
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
\n
contractual cash\ufb02ows and selling \ufb01nanc
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
\n
collect and hold to collect and sell business models involve holding \ufb01nanc
ial assets to collect the contractual cash\ufb02ows.
\n
However, the business models are dist
inct by reference to the frequency and s
ign
i\ufb01cance that asset sales play
in meeting
\n
the objective under wh
ich a particular group of \ufb01nanc
ial assets
is managed. Hold to collect business models are
\n
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
\n
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of \ufb01nanc
ial
\n
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cash\ufb02ows from the sale of \ufb01nancial assets under a
\n
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
\n
of \ufb01nancial assets are managed. Th
is may be the case where frequent sales of \ufb01nanc
ial assets are requ
ired to manage the
\n
Group\u2019s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of \ufb01nanc
ial
instruments.
\n
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
i\ufb01cant
in
\n
value than those under the hold to collect model.
\n
Equity instruments designated as held at FVOCI
\n
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
\n
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in pro\ufb01t
\n
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
\n
and losses, are recognised directly in equity and are never reclassif
ied to pro\ufb01t or loss even on derecogn
it
ion.
\n
Mandatorily classif
ied at fa
ir value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through pro\ufb01t or loss are split between two
\n
subcategories as follows:
\n
Trading, includ
ing:
\n
\u2022
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
\n
short-term
\n
\u2022 Derivat
ives
\n
Non-trading mandatorily at fair value through pro\ufb01t or loss, includ
ing:
\n
\u2022
Instruments in a business which has a fair value business model (see the Group\u2019s business model assessment) which are
\n
not trading or derivat
ives
\n
\u2022
Hybrid \ufb01nanc
ial assets that conta
in one or more embedded derivat
ives
\n
\u2022
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
\n
characterist
ics
\n
\u2022
Equity instruments that have not been designated as held at FVOCI
\n
\u2022
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
\n
Designated at fair value through pro\ufb01t or loss
\n
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through pro\ufb01t or loss when the designat
ion el
im
inates or
\n
sign
i\ufb01cantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
\n
liab
il
it
ies on a d
ifferent basis (\u2018accounting mismatch\u2019).
\n
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through pro\ufb01t or loss where they are managed on a fair value
\n
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
\n
derivat
ive component.
\n
Financ
ial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial l
iab
il
it
ies that are not \ufb01nancial guarantees or loan comm
itments and that are not classif
ied as \ufb01nancial l
iab
il
it
ies
\n
held at fair value through pro\ufb01t or loss are classif
ied as \ufb01nancial l
iab
il
it
ies held at amort
ised cost.
\n
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
\n
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as \ufb01nancial l
iab
il
it
ies and are presented
\n
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
\n
expense on an amortised cost basis using the effective interest method.
\n\n\n
Financ
ial guarantee contracts and loan comm
itments
\n
The Group issues \ufb01nanc
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
\n
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a \ufb01nanc
ial
\n
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
\n
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
\n
Loan commitments may be designated at fair value through pro\ufb01t or loss where that is the business model under which
\n
such contracts are held.
\n
Fair value of \ufb01nanc
ial assets and l
iab
il
it
ies
\n
The fair value of \ufb01nanc
ial
instruments is generally measured on the basis of the ind
iv
idual \ufb01nanc
ial
instrument. However,
\n
when a group of \ufb01nancial assets and \ufb01nancial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
\n
credit risk, the fair value of the group of \ufb01nanc
ial
instruments is measured on a net basis.
\n
The fair values of quoted \ufb01nanc
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
\n
as active if transactions for the asset or liab
il
ity take place with suf\ufb01c
ient frequency and volume to prov
ide pric
ing
\n
informat
ion on an ongo
ing basis. If the market for a \ufb01nanc
ial
instrument, and for unlisted securit
ies,
is not active, the
\n
Group establishes fair value by using valuation techniques.
\n
Init
ial recogn
it
ion
\n
Regular way purchases and sales of \ufb01nancial assets held at fa
ir value through pro\ufb01t or loss, and held at fair value through
\n
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
\n
or sell the asset). Loans and advances and other \ufb01nancial assets held at amort
ised cost are recognised on the settlement
\n
date (the date on which cash is advanced to the borrowers).
\n
All \ufb01nancial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
\n
attributable transaction costs for \ufb01nanc
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
\n
through pro\ufb01t or loss.
\n
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
\n
pro\ufb01ts or losses at the time of in
it
ial recognit
ion. However, these pro\ufb01ts or losses can only be recogn
ised when the valuation
\n
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
\n
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
\n
model is not recognised immed
iately
in the income statement, it will be recognised in pro\ufb01t or loss following the passage
\n
of time, or as the inputs become observable, or the transaction matures or is terminated.
\n
Subsequent measurement
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost
\n
Financ
ial assets and \ufb01nancial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
\n
effective interest method (see \u2018Interest income and expense\u2019). Foreign exchange gains and losses are recognised in the
\n
income statement.
\n
Where a \ufb01nancial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
\n
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
\n
Financ
ial assets held at FVOCI
\n
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
\n
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
\n
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
\n
recognised in the pro\ufb01t or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
\n
net of the cumulative expected credit loss reserve, are transferred to the pro\ufb01t or loss.
\n
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
\n
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
\n
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
\n
retained earnings and is not recycled to pro\ufb01t or loss.
\n
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through pro\ufb01t or loss
\n
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
\n
trading income line in the pro\ufb01t or loss.
Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss.
Modif
ied \ufb01nancial
instruments
Financ
ial assets and \ufb01nancial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash \ufb02ows and or interest rates among other factors.
Where derecognit
ion of \ufb01nancial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash \ufb02ows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI \ufb01nanc
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the pro\ufb01t or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of \u2018Credit Impairment\u2019 (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of \u2018Credit
Impairment\u2019 or with
in
income depending on whether there has been a change in the credit risk on the \ufb01nanc
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on \ufb01nancial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
isclosed in further detail in Risk Review.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00645": { "value": "Derecognit
ion of \ufb01nancial
instruments
Financ
ial assets wh
ich are subject to commercial re\ufb01nanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group\u2019s rights to the cash \ufb02ows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash \ufb02ows is \u2018substantially different\u2019 is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a \ufb01nancial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in pro\ufb01t or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A \ufb01nancial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a \ufb01nancial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash \ufb02ows and the or
ig
inal cash \ufb02ows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in \u2018Other income\u2019 except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
ity that are held in Other comprehensive income, which are never recycled to the pro\ufb01t or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00514": { "value": "14. Derivat
ive \ufb01nancial
instruments
Accounting policy
Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation
techniques, includ
ing d
iscounted cash \ufb02ow models and option pric
ing models, as appropr
iate. Where the in
it
ially
recognised fair value of a derivat
ive contract
is based on a valuation model that uses inputs which are not observable
in the market, it follows the same in
it
ial recognit
ion account
ing policy as for other \ufb01nanc
ial assets and l
iab
il
it
ies.
All derivat
ives are carr
ied as assets when fair value is posit
ive and as l
iab
il
it
ies when fa
ir value is negative.
Hedge accounting
Under certain condit
ions, the Group may des
ignate a recognised asset or liab
il
ity, a \ufb01rm commitment, highly probable
forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh
ip w
ith a derivat
ive
that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group, as a
policy choice to continue to apply hedge accounting in accordance with IAS 39. The Group applied IBOR reform Phase 2
reliefs in respect of hedging relationsh
ips d
irectly affected by IBOR reform.
There are three categories of hedge relationsh
ips:
\u2022
Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab
il
it
ies
or \ufb01rm commitments
\u2022
Cash \ufb02ow hedge: to manage interest rate or foreign exchange risk of highly probable future cash \ufb02ows attributable to
a recognised asset or liab
il
ity, or a forecasted transaction
\u2022
Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation
The Group assesses, both at hedge incept
ion and on a quarterly bas
is, whether the derivat
ives des
ignated in hedge
relationsh
ips are h
ighly effective in offsetting changes in fair values or cash \ufb02ows of hedged items. Hedges are considered
to be highly effective if all the following criter
ia are met:
\u2022
At incept
ion of the hedge and throughout
its life, the hedge is prospectively expected to be highly effective in achiev
ing
offsetting changes in fair value or cash \ufb02ows attributable to the hedged risk
\u2022
Prospective and retrospective effectiveness of the hedge should be with
in a range of 80\u2013125%. Th
is is tested using
regression analysis
\u2022
This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and
the data pairs between the hedged item and the hedging instrument are regressed to a 95% con\ufb01dence interval.
The regression co-ef\ufb01c
ient (R squared), wh
ich measures the correlation between the variables in the regression, is at
least 80%
In the case of the hedge of a forecast transaction, the transaction must have a high probabil
ity of occurr
ing and must
present an exposure to variat
ions
in cash \ufb02ows that are expected to affect reported pro\ufb01t or loss.
Fair value hedge
Changes in the fair value of derivat
ives that are des
ignated and qualify as fair value hedging instruments are recorded in
net trading income, together with any changes in the fair value of the hedged asset or liab
il
ity that are attributable to the
hedged risk. If the hedge no longer meets the criter
ia for hedge account
ing, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to the income statement over the remain
ing
term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is
recognised immed
iately
in the income statement. For \ufb01nanc
ial assets class
if
ied as fa
ir value through other comprehensive
income, the hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the
hedging derivat
ive.
Cash \ufb02ow hedge
The effective portion of changes in the fair value of derivat
ives that are des
ignated and qualify as cash \ufb02ow hedging
instruments are in
it
ially recognised in other comprehensive income, accumulating in the cash \ufb02ow hedge reserve with
in
equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects
pro\ufb01t or loss. Both the derivat
ive fa
ir value movement and any recycled amount are recorded in the \u2018Cash\ufb02ow hedges\u2019 line
item in other comprehensive income.
The Group assesses hedge effectiveness using the hypothetical derivat
ive method, wh
ich creates a derivat
ive
instrument
to serve as a proxy for the hedged transaction. The terms of the hypothetical derivat
ive match the cr
it
ical terms of the
hedged item and it has a fair value of zero at incept
ion. The hypothet
ical derivat
ive and the actual der
ivat
ive are
regressed to establish the statist
ical s
ign
i\ufb01cance of the hedge relat
ionsh
ip. Any
ineffect
ive port
ion of the gain or loss
on the hedging instrument is recognised in the net trading income immed
iately.
If a cash \ufb02ow hedge is discont
inued, the amount accumulated
in the cash \ufb02ow hedge reserve is released to the income
statement as and when the hedged item affects the income statement.
Should the Group consider the hedged future cash \ufb02ows are no longer expected to occur due to reasons, the cumulative
gain or loss will be immed
iately reclass
if
ied to pro\ufb01t or loss.
Net investment hedge
Hedges of net investments are accounted for in a sim
ilar manner to cash \ufb02ow hedges, w
ith gains and losses aris
ing on the
effective portion of the hedges recorded in the line \u2018Exchange differences on translation of foreign operations\u2019 in other
comprehensive income, accumulating in the translation reserve with
in equ
ity. These amounts remain in equity until the
net investment is disposed of. The ineffect
ive port
ion of the hedges is recognised in the net trading income immed
iately.
The tables below analyse the notional princ
ipal amounts and the pos
it
ive and negat
ive fair values of derivat
ive \ufb01nancial
\n
instruments. Notional princ
ipal amounts are the amounts of pr
inc
ipal underly
ing the contract at the reporting date.
\n\n \n
2024
2023
Notional
Notional
princ
ipal
princ
ipal
amounts
Assets
Liab
il
it
ies
amounts
Assets
Liab
il
it
ies
Derivat
ives
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Foreign exchange derivat
ive contracts:
Forward foreign exchange contracts
4,923,991
54,913
51,128
3,628,067
30,897
32,601
Currency swaps and options
1,377,308
18,104
18,720
1,145,702
11,671
12,845
6,301,299
73,017
69,848
4,773,769
42,568
45,446
Interest rate derivat
ive contracts:
Swaps
6,267,261
20,600
22,282
4,841,616
53,735
55,241
Forward rate agreements and options
294,705
2,233
2,771
313,253
2,057
2,520
6,561,966
22,833
25,053
5,154,869
55,792
57,761
Exchange traded futures and options
383,528
30
27
325,051
39
47
Credit derivat
ive contracts
227,675
397
2,320
281,130
485
1,107
Equity and stock index options
10,678
351
194
8,671
75
166
Commodity derivat
ive contracts
142,393
1,274
1,052
117,436
970
1,029
Gross total derivat
ives
13,627,539
97,902
98,494
10,660,926
99,929
105,556
Offset
1
\u2013
(16,430)
(16,430)
\u2013
(49,495)
(49,495)
Total derivat
ives
13,627,539
81,472
82,064
10,660,926
50,434
56,061
\n
1
In 2024, the Group migrated contracts from Collateralized to Market (CTM) to Settled to Market (STM) for house cleared contracts with London Clearing House
\n
The Group lim
its exposure to cred
it losses in the event of default by entering into master netting agreements with certain
\n
market counterparties. As required by IAS 32, exposures are only presented net in these accounts where they are subject to
\n
legal right of offset and intended to be settled net in the ordinary course of business.
\n
The Group applies balance sheet offsetting only in the instance where we are able to demonstrate legal enforceabil
ity of the
\n
right to offset (e.g. via legal opin
ion) and the ab
il
ity and
intent
ion to settle on a net bas
is (e.g. via operational practice).
\n
The Group may enter into economic hedges that do not qualify for IAS 39 hedge accounting treatment, includ
ing der
ivat
ive
\n
such as interest rate swaps, interest rate futures and cross currency swaps to manage interest rate and currency risks of the
\n
Group. These derivat
ives are measured at fa
ir value, with fair value changes recognised in net trading income: refer to Market
\n
Risk (page 247).
\n
Derivat
ives held for hedg
ing
\n
The Group enters into derivat
ive contracts for the purpose of hedg
ing interest rate, currency and structural foreign exchange
\n
risks inherent in assets, liab
il
it
ies and forecast transact
ions. The table below summarises the notional princ
ipal amounts and
\n
carrying values of derivat
ives des
ignated in hedge accounting relationsh
ips at the report
ing date.
\n
Included in the table above are derivat
ives held for hedg
ing purposes as follows:
\n\n \n
2024
2023
Notional
Notional
princ
ipal
princ
ipal
amounts
Assets
Liab
il
it
ies
amounts
Assets
Liab
il
it
ies
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Derivat
ives des
ignated as
fair value hedges:
Interest rate swaps
63,840
763
1,679
69,347
1,264
2,397
Currency swaps
1,035
\u2013
56
115
10
6
64,875
763
1,735
69,462
1,274
2,403
Derivat
ives des
ignated as
cash \ufb02ow hedges:
Interest rate swaps
49,309
165
282
41,834
184
537
Forward foreign exchange contracts
9,193
609
1
12,071
420
183
Currency swaps
14,305
729
2
14,321
191
150
72,807
1,503
285
68,226
795
870
Derivat
ives des
ignated as net
investment hedges:
Forward foreign exchange contracts
14,137
300
7
15,436
32
41
Total derivat
ives held for hedg
ing
151,819
2,566
2,027
153,124
2,101
3,314
Fair value hedges
The Group issues various long-term \ufb01xed-rate debt issuances that are measured at amortised cost, includ
ing some
denominated in foreign currency, such as unsecured senior and subordinated debt (see Notes 22 and 27). The Group also holds
various \ufb01xed rate debt securit
ies such as government and corporate bonds,
includ
ing some denom
inated in foreign currency
(see Note 13). These assets and liab
il
it
ies held are exposed to changes
in fair value due to movements in market interest and
foreign currency rates.
The Group uses interest rate swaps to exchange \ufb01xed rates for \ufb02oating rates on funding to match \ufb02oating rates received on
assets, or exchange \ufb01xed rates on assets to match \ufb02oating rates paid on funding. The Group further uses cross- currency swaps
to match the currency of the issued debt or held asset with that of the entity\u2019s functional currency.
Hedge ineffect
iveness from fa
ir value hedges is driven by cross-currency basis risk and interest cash\ufb02ows mismatch between
the hedging instruments and underlying hedged items. The amortisat
ion of fa
ir value hedge adjustments for hedged items no
longer designated is recognised in net interest income.
At 31 December 2024 the Group held the following interest rate and cross currency swaps as hedging instruments in fair value
hedges of interest and currency risk.
Hedging instruments and ineffect
iveness
\n \n
Change in fair
value used to
Ineffectiveness
Carrying Amount
calculate hedge
recognised in
Notional
Asset
Liab
il
ity
ineffect
iveness
2
pro\ufb01t or loss
Interest rate
1
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest rate swaps \u2013 debt securit
ies/subord
inated
notes issued
46,832
283
1,643
46
2
Interest rate swaps \u2013 loans and advances to customers
1,334
10
12
(5)
\u2013
Interest rate swaps \u2013 debt securit
ies and other
elig
ible b
ills
15,674
470
24
142
2
Interest and currency risk
1
Cross currency swaps \u2013 debt securit
ies/subord
inated
notes issued
1,035
\u2013
56
(52)
(1)
Cross currency swaps \u2013 debt securit
ies and other
elig
ible b
ills
\u2013
\u2013
\u2013
(10)
\u2013
Total at 31 December 2024
64,875
763
1,735
121
3
Interest rate swaps \u2013 debt securit
ies/subord
inated
notes issued
45,455
381
2,267
271
(4)
Interest rate swaps \u2013 loans and advances to customers
1,203
26
1
(20)
\u2013
Interest rate swaps \u2013 debt securit
ies and other
elig
ible b
ills
22,689
857
129
(459)
(17)
Interest and currency risk
1
Cross currency swaps \u2013 debt securit
ies/subord
inated
notes issued
70
\u2013
6
(2)
\u2013
Cross currency swaps \u2013 debt securit
ies and other
elig
ible b
ills
45
10
\u2013
11
\u2013
Total at 31 December 2023
69,462
1,274
2,403
(199)
(21)
1
Interest rate swaps are designated in hedges of the fair value of interest rate risk attributable to the hedged item. Cross currency swaps are used to hedge both
interest rate and currency risks. All the hedging instruments are derivat
ives, w
ith changes in fair value includ
ing hedge
ineffect
iveness recorded w
ith
in net
trading income
2
This represents a (loss)/gains change in fair value used for calculating hedge ineffect
iveness
Hedged items in fair value hedges
\n \n
Cumulative
balance of
fair value
Change in the
adjustments
Accumulated amount of fair value
value used for
from
hedge adjustments included in the
calculating
de-designated
Carrying Amount
carrying amount
hedge
hedge
Asset
Liab
il
ity
Asset
Liab
il
ity
ineffect
iveness
1
relationsh
ips
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Debt securit
ies/subord
inated
notes issued
\u2013
49,616
\u2013
1,485
7
178
Debt securit
ies and other el
ig
ible b
ills
15,183
\u2013
(353)
\u2013
(130)
235
Loans and advances to customers
1,330
\u2013
(4)
\u2013
5
4
Total at 31 December 2024
16,513
49,616
(357)
1,485
(118)
417
Debt securit
ies/subord
inated
notes issued
\u2013
46,156
\u2013
1,761
(273)
360
Debt securit
ies and other el
ig
ible b
ills
21,473
\u2013
(553)
\u2013
431
744
Loans and advances to customers
1,183
\u2013
(20)
\u2013
20
13
Total at 31 December 2023
22,656
46,156
(573)
1,761
178
1,117
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
2
This represents a credit/(debit) to the balance sheet value
Income statement impact of fair value hedges
\n \n
2024
2023
$mill
ion
$mill
ion
Change in fair value of hedging instruments
121
(199)
Change in fair value of hedged risks attributable to hedged items
(118)
178
Net ineffect
iveness ga
in/(loss) to net trading income
3
(21)
Amortisat
ion ga
in to net interest income
153
232
Cash \ufb02ow hedges
The Group has exposure to market movements in future interest cash \ufb02ows on portfolios of customer accounts, debt securit
ies
and loans and advances to customers. The amounts and tim
ing of future cash \ufb02ows, represent
ing both princ
ipal and
interest
\ufb02ows, are projected on the basis of contractual terms and other relevant factors, includ
ing est
imates of prepayments and
defaults.
The hedging strategy of the Group involves using interest rate swaps to manage the variab
il
ity in future cash \ufb02ows on assets
and liab
il
it
ies that have \ufb02oat
ing rates of interest by exchanging the \ufb02oating rates for \ufb01xed rates. It also uses foreign exchange
contracts and currency swaps to manage the variab
il
ity in future exchange rates on its assets and liab
il
it
ies and costs
in foreign
currencies. This is done on both a micro basis whereby a single interest rate or cross-currency swap is designated in a separate
relationsh
ip w
ith a single hedged item (such as a \ufb02oating-rate loan to a customer), and on a portfolio basis whereby each
hedging instrument is designated against a group of hedged items that share the same risk (such as a group of customer
accounts). Hedge ineffect
iveness for cash \ufb02ow hedges
is mainly driven by payment frequency mismatch between the hedging
instrument and the underlying hedged item.
The hedged risk is determined as the variab
il
ity of future cash \ufb02ows aris
ing from changes
in the designated benchmark interest
and/or foreign exchange rates.
Hedging instruments and ineffect
iveness
\n \n
Change in fair
Ineffectiveness
Amount
value used to
(loss)/gain
reclassif
ied
calculate
Gain
recognised in
from
Carrying Amount
hedge
recognised
net trading
reserves to
Notional
Asset
Liab
il
ity
ineffect
iveness
1
in OCI
income
income
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest rate risk
Interest rate swaps
49,309
165
282
(131)
(125)
(6)
\u2013
Currency risk
Forward foreign exchange contract
9,193
609
1
45
45
\u2013
\u2013
Cross currency swaps
14,305
729
2
650
648
2
\u2013
Total as at 31 December 2024
72,807
1,503
285
564
568
(4)
\u2013
Interest rate risk
Interest rate swaps
41,834
184
537
612
609
3
\u2013
Currency risk
Forward foreign exchange contract
12,071
420
183
104
103
1
\u2013
Cross currency swaps
14,321
191
150
185
183
2
\u2013
Total as at 31 December 2023
68,226
795
870
901
895
6
\u2013
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
Hedged items in cash \ufb02ow hedges
\n\n \n
2024
2023
Cumulative
Cumulative
balance in the
balance in the
Change in fair
cash \ufb02ow hedge
Change in fair
cash \ufb02ow hedge
value used for
reserve from
value used for
reserve from
calculating
de-designated
calculating
de-designated
hedge
Cash \ufb02ow
hedge
hedge
Cash \ufb02ow
hedge
ineffect
iveness
1
hedge reserve
relationsh
ips
ineffect
iveness
1
hedge reserve
relationsh
ips
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Customer accounts
(199)
(38)
104
(421)
(114)
136
Debt securit
ies and other el
ig
ible b
ills
(354)
(10)
(5)
(98)
(22)
(15)
Loans and advances to customers
124
(27)
(7)
(312)
134
\u2013
Intragroup lending currency hedge
(55)
(2)
\u2013
(64)
\u2013
\u2013
Intragroup borrowing currency hedge
(84)
4
\u2013
\u2013
\u2013
\u2013
Total at 31 December
(568)
(73)
92
(895)
(2)
121
\n
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
\n
Impact of cash \ufb02ow hedges on pro\ufb01t and loss and other comprehensive income
\n\n \n
2024
2023
$mill
ion
$mill
ion
Cash \ufb02ow hedge reserve balance as at 1 January
91
(564)
Gains recognised in other comprehensive income on effective portion of changes in fair value of
hedging instruments
568
895
Gains reclassif
ied to
income statement when hedged item affected net pro\ufb01t
(669)
(128)
Taxation charge relating to cash \ufb02ow hedges
14
(112)
Cash \ufb02ow hedge reserve balance as at 31 December
4
91
\n
Net investment hedges
\n
Foreign currency exposures arise from investments in subsid
iar
ies that have a different functional currency from that of the
\n
presentation currency of the Group. This risk arises from the \ufb02uctuation in spot exchange rates between the functional currency
\n
of the subsid
iar
ies and the Group\u2019s presentation currency, which causes the value of the investment to vary.
\n
The Group\u2019s policy is to hedge these exposures only when not doing so would be expected to have a sign
i\ufb01cant
impact on the
\n
regulatory ratios of the Group and its banking subsid
iar
ies. The Group uses foreign exchange forwards to manage the effect of
\n
exchange rates on its net investments in foreign subsid
iar
ies.
\n
Hedging instruments and ineffect
iveness
\n\n \n
Changes in
Change in fair
the value of
Amount
value used to
the hedging
reclassif
ied
calculate
instrument
Ineffectiveness
from
Carrying amount
hedge
recognised
recognised in
reserves to
Notional
Asset
Liab
il
ity
ineffect
iveness
2
in OCI
pro\ufb01t or loss
income
Derivat
ive forward currency contracts
1
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 31 December 2024
14,137
300
7
678
678
\u2013
\u2013
As at 31 December 2023
15,436
32
41
215
215
\u2013
\u2013
\n
1
These derivat
ive forward currency contracts have a matur
ity of less than one year. The hedges are rolled on a period
ic bas
is
\n
2
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
\n
Hedged items in net investment hedges
\n\n \n
2024
2023
Balances
Balances
remain
ing
in the
remain
ing
in the
translation
translation
reserve from
reserve from
Change in the
hedging
Change in the
hedging
value used for
relationsh
ips for
value used for
relationsh
ips for
calculating
which hedge
calculating
which hedge
hedge
Translation
accounting is no
hedge
Translation
accounting is no
ineffect
iveness
1
reserve\u00b2
longer applied
ineffect
iveness
1
reserve\u00b2
longer applied
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Net investments
(678)
293
\u2013
(215)
(9)
\u2013
\n
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
\n
2
This represents the mark-to-market includ
ing accrued
interest on live hedges at 31 December
\n
Impact of net investment hedges on other comprehensive income
\n\n \n
2024
2023
$mill
ion
$mill
ion
Gains recognised in other comprehensive income
678
215
Maturity of hedging instruments
\n \n
2024
2023
More than
More than
one month
one month
and less
and less
Less than
than
One to
More than
Less than
than
One to
More than
Fair value hedges
one month
one year
\ufb01ve years
\ufb01ve years
one month
one year
\ufb01ve years
\ufb01ve years
Interest rate swap
Notional
$mill
ion
2,763
11,260
32,030
17,787
3,242
9,789
41,545
14,771
Cross currency swap
Notional
$mill
ion
\u2013
\u2013
1,035
\u2013
\u2013
115
\u2013
\u2013
Average \ufb01xed interest
EUR
\u2013
\u2013
2.40
\u2013
\u2013
\u2013
\u2013
\u2013
rate (to USD) (%)
GBP
\u2013
\u2013
\u2013
\u2013
\u2013
1.33
\u2013
\u2013
CNH
\u2013
\u2013
\u2013
\u2013
\u2013
3.17
\u2013
\u2013
Average exchange rate
EUR/USD
\u2013
\u2013
0.91
\u2013
\u2013
\u2013
\u2013
\u2013
GBP/USD
\u2013
\u2013
\u2013
\u2013
\u2013
0.66
\u2013
\u2013
CNH/USD
\u2013
\u2013
\u2013
\u2013
\u2013
6.37
\u2013
\u2013
Cash \ufb02ow hedges
Interest rate swap
Notional
$mill
ion
2,428
15,589
25,943
5,349
2,129
27,634
11,664
407
Average \ufb01xed
interest rate (%)
USD
5.09
4.62
4.05
3.74
5.10
3.45
4.70
3.16
Cross currency swap
Notional
$mill
ion
880
12,232
1,193
\u2013
166
10,794
3,361
\u2013
Average \ufb01xed
HKD
\u2013
4.07
0.21
\u2013
\u2013
4.97
0.21
\u2013
interest rate (%)
KRO
\u2013
2.85
\u2013
\u2013
1.96
3.58
0.62
\u2013
USD
\u2013
5.64
\u2013
\u2013
TWD
(3.68)
0.77
0.81
\u2013
JPY/HKD
\u2013
(0.05)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
TWO
0.53
1.04
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
CNO
2.45
1.54
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
JPY
0.01
0.08
\u2013
\u2013
\u2013
(0.07)
(0.05)
\u2013
Average exchange rate
HKD/USD
\u2013
7.78
7.85
\u2013
\u2013
7.83
7.85
\u2013
KRO/USD
\u2013
1,386.94
1,300.90
\u2013
1,192.20
1,321
1,285
\u2013
USD/HKD
\u2013
0.13
\u2013
\u2013
TWD/USD
30.63
31.53
32.22
\u2013
TWO/USD
31.83
32.22
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
CNO/USD
7.18
7.20
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
JPY/HKD
\u2013
18.12
\u2013
\u2013
\u2013
17.86
18.09
\u2013
Forward foreign
exchange contracts
Notional
$mill
ion
2,044
7,149
\u2013
\u2013
2,194
9,877
\u2013
\u2013
Average exchange rate
BRL/USD
\u2013
6.54
\u2013
\u2013
\u2013
5.17
\u2013
\u2013
TWD/HKD
\u2013
\u2013
\u2013
\u2013
\u2013
3.81
\u2013
\u2013
JPY/USD
147.38
145.65
\u2013
\u2013
130.49
136
\u2013
\u2013
Net investment hedges
Foreign exchange
derivat
ives
Notional
$mill
ion
14,137
\u2013
\u2013
\u2013
15,436
\u2013
\u2013
\u2013
Average exchange rate
CNY/USD
7.13
\u2013
\u2013
\u2013
7.12
\u2013
\u2013
\u2013
KRW/USD
1,364.97
\u2013
\u2013
\u2013
1,283
\u2013
\u2013
\u2013
AED/USD
\u2013
\u2013
\u2013
\u2013
3.67
\u2013
\u2013
\u2013
HKD/USD
7.77
\u2013
\u2013
\u2013
7.80
\u2013
\u2013
\u2013
INR/USD
84.07
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
", "dimensions": { "concept": "ifrs-full:DisclosureOfDetailedInformationAboutHedgesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00511": { "value": "14. Derivat
ive \ufb01nancial
instruments
Accounting policy
Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation
techniques, includ
ing d
iscounted cash \ufb02ow models and option pric
ing models, as appropr
iate. Where the in
it
ially
recognised fair value of a derivat
ive contract
is based on a valuation model that uses inputs which are not observable
in the market, it follows the same in
it
ial recognit
ion account
ing policy as for other \ufb01nanc
ial assets and l
iab
il
it
ies.
All derivat
ives are carr
ied as assets when fair value is posit
ive and as l
iab
il
it
ies when fa
ir value is negative.
Hedge accounting
Under certain condit
ions, the Group may des
ignate a recognised asset or liab
il
ity, a \ufb01rm commitment, highly probable
forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh
ip w
ith a derivat
ive
that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group, as a
policy choice to continue to apply hedge accounting in accordance with IAS 39. The Group applied IBOR reform Phase 2
reliefs in respect of hedging relationsh
ips d
irectly affected by IBOR reform.
There are three categories of hedge relationsh
ips:
\u2022
Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab
il
it
ies
or \ufb01rm commitments
\u2022
Cash \ufb02ow hedge: to manage interest rate or foreign exchange risk of highly probable future cash \ufb02ows attributable to
a recognised asset or liab
il
ity, or a forecasted transaction
\u2022
Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation
The Group assesses, both at hedge incept
ion and on a quarterly bas
is, whether the derivat
ives des
ignated in hedge
relationsh
ips are h
ighly effective in offsetting changes in fair values or cash \ufb02ows of hedged items. Hedges are considered
to be highly effective if all the following criter
ia are met:
\u2022
At incept
ion of the hedge and throughout
its life, the hedge is prospectively expected to be highly effective in achiev
ing
offsetting changes in fair value or cash \ufb02ows attributable to the hedged risk
\u2022
Prospective and retrospective effectiveness of the hedge should be with
in a range of 80\u2013125%. Th
is is tested using
regression analysis
\u2022
This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and
the data pairs between the hedged item and the hedging instrument are regressed to a 95% con\ufb01dence interval.
The regression co-ef\ufb01c
ient (R squared), wh
ich measures the correlation between the variables in the regression, is at
least 80%
In the case of the hedge of a forecast transaction, the transaction must have a high probabil
ity of occurr
ing and must
present an exposure to variat
ions
in cash \ufb02ows that are expected to affect reported pro\ufb01t or loss.
Fair value hedge
Changes in the fair value of derivat
ives that are des
ignated and qualify as fair value hedging instruments are recorded in
net trading income, together with any changes in the fair value of the hedged asset or liab
il
ity that are attributable to the
hedged risk. If the hedge no longer meets the criter
ia for hedge account
ing, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to the income statement over the remain
ing
term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is
recognised immed
iately
in the income statement. For \ufb01nanc
ial assets class
if
ied as fa
ir value through other comprehensive
income, the hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the
hedging derivat
ive.
Cash \ufb02ow hedge
The effective portion of changes in the fair value of derivat
ives that are des
ignated and qualify as cash \ufb02ow hedging
instruments are in
it
ially recognised in other comprehensive income, accumulating in the cash \ufb02ow hedge reserve with
in
equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects
pro\ufb01t or loss. Both the derivat
ive fa
ir value movement and any recycled amount are recorded in the \u2018Cash\ufb02ow hedges\u2019 line
item in other comprehensive income.
The Group assesses hedge effectiveness using the hypothetical derivat
ive method, wh
ich creates a derivat
ive
instrument
to serve as a proxy for the hedged transaction. The terms of the hypothetical derivat
ive match the cr
it
ical terms of the
hedged item and it has a fair value of zero at incept
ion. The hypothet
ical derivat
ive and the actual der
ivat
ive are
regressed to establish the statist
ical s
ign
i\ufb01cance of the hedge relat
ionsh
ip. Any
ineffect
ive port
ion of the gain or loss
on the hedging instrument is recognised in the net trading income immed
iately.
If a cash \ufb02ow hedge is discont
inued, the amount accumulated
in the cash \ufb02ow hedge reserve is released to the income
statement as and when the hedged item affects the income statement.
Should the Group consider the hedged future cash \ufb02ows are no longer expected to occur due to reasons, the cumulative
gain or loss will be immed
iately reclass
if
ied to pro\ufb01t or loss.
Net investment hedge
Hedges of net investments are accounted for in a sim
ilar manner to cash \ufb02ow hedges, w
ith gains and losses aris
ing on the
effective portion of the hedges recorded in the line \u2018Exchange differences on translation of foreign operations\u2019 in other
comprehensive income, accumulating in the translation reserve with
in equ
ity. These amounts remain in equity until the
net investment is disposed of. The ineffect
ive port
ion of the hedges is recognised in the net trading income immed
iately.
\n\n\n
The tables below analyse the notional princ
ipal amounts and the pos
it
ive and negat
ive fair values of derivat
ive \ufb01nancial
\n
instruments. Notional princ
ipal amounts are the amounts of pr
inc
ipal underly
ing the contract at the reporting date.
\n\n \n
2024
2023
Notional
Notional
princ
ipal
princ
ipal
amounts
Assets
Liab
il
it
ies
amounts
Assets
Liab
il
it
ies
Derivat
ives
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Foreign exchange derivat
ive contracts:
Forward foreign exchange contracts
4,923,991
54,913
51,128
3,628,067
30,897
32,601
Currency swaps and options
1,377,308
18,104
18,720
1,145,702
11,671
12,845
6,301,299
73,017
69,848
4,773,769
42,568
45,446
Interest rate derivat
ive contracts:
Swaps
6,267,261
20,600
22,282
4,841,616
53,735
55,241
Forward rate agreements and options
294,705
2,233
2,771
313,253
2,057
2,520
6,561,966
22,833
25,053
5,154,869
55,792
57,761
Exchange traded futures and options
383,528
30
27
325,051
39
47
Credit derivat
ive contracts
227,675
397
2,320
281,130
485
1,107
Equity and stock index options
10,678
351
194
8,671
75
166
Commodity derivat
ive contracts
142,393
1,274
1,052
117,436
970
1,029
Gross total derivat
ives
13,627,539
97,902
98,494
10,660,926
99,929
105,556
Offset
1
\u2013
(16,430)
(16,430)
\u2013
(49,495)
(49,495)
Total derivat
ives
13,627,539
81,472
82,064
10,660,926
50,434
56,061
\n
1
In 2024, the Group migrated contracts from Collateralized to Market (CTM) to Settled to Market (STM) for house cleared contracts with London Clearing House
\n
The Group lim
its exposure to cred
it losses in the event of default by entering into master netting agreements with certain
\n
market counterparties. As required by IAS 32, exposures are only presented net in these accounts where they are subject to
\n
legal right of offset and intended to be settled net in the ordinary course of business.
\n
The Group applies balance sheet offsetting only in the instance where we are able to demonstrate legal enforceabil
ity of the
\n
right to offset (e.g. via legal opin
ion) and the ab
il
ity and
intent
ion to settle on a net bas
is (e.g. via operational practice).
\n
The Group may enter into economic hedges that do not qualify for IAS 39 hedge accounting treatment, includ
ing der
ivat
ive
\n
such as interest rate swaps, interest rate futures and cross currency swaps to manage interest rate and currency risks of the
\n
Group. These derivat
ives are measured at fa
ir value, with fair value changes recognised in net trading income: refer to Market
\n
Risk (page 247).
\n
Derivat
ives held for hedg
ing
\n
The Group enters into derivat
ive contracts for the purpose of hedg
ing interest rate, currency and structural foreign exchange
\n
risks inherent in assets, liab
il
it
ies and forecast transact
ions. The table below summarises the notional princ
ipal amounts and
\n
carrying values of derivat
ives des
ignated in hedge accounting relationsh
ips at the report
ing date.
\n
Included in the table above are derivat
ives held for hedg
ing purposes as follows:
\n\n \n
2024
2023
Notional
Notional
princ
ipal
princ
ipal
amounts
Assets
Liab
il
it
ies
amounts
Assets
Liab
il
it
ies
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Derivat
ives des
ignated as
fair value hedges:
Interest rate swaps
63,840
763
1,679
69,347
1,264
2,397
Currency swaps
1,035
\u2013
56
115
10
6
64,875
763
1,735
69,462
1,274
2,403
Derivat
ives des
ignated as
cash \ufb02ow hedges:
Interest rate swaps
49,309
165
282
41,834
184
537
Forward foreign exchange contracts
9,193
609
1
12,071
420
183
Currency swaps
14,305
729
2
14,321
191
150
72,807
1,503
285
68,226
795
870
Derivat
ives des
ignated as net
investment hedges:
Forward foreign exchange contracts
14,137
300
7
15,436
32
41
Total derivat
ives held for hedg
ing
151,819
2,566
2,027
153,124
2,101
3,314
Fair value hedges
The Group issues various long-term \ufb01xed-rate debt issuances that are measured at amortised cost, includ
ing some
denominated in foreign currency, such as unsecured senior and subordinated debt (see Notes 22 and 27). The Group also holds
various \ufb01xed rate debt securit
ies such as government and corporate bonds,
includ
ing some denom
inated in foreign currency
(see Note 13). These assets and liab
il
it
ies held are exposed to changes
in fair value due to movements in market interest and
foreign currency rates.
The Group uses interest rate swaps to exchange \ufb01xed rates for \ufb02oating rates on funding to match \ufb02oating rates received on
assets, or exchange \ufb01xed rates on assets to match \ufb02oating rates paid on funding. The Group further uses cross- currency swaps
to match the currency of the issued debt or held asset with that of the entity\u2019s functional currency.
Hedge ineffect
iveness from fa
ir value hedges is driven by cross-currency basis risk and interest cash\ufb02ows mismatch between
the hedging instruments and underlying hedged items. The amortisat
ion of fa
ir value hedge adjustments for hedged items no
longer designated is recognised in net interest income.
At 31 December 2024 the Group held the following interest rate and cross currency swaps as hedging instruments in fair value
hedges of interest and currency risk.
Hedging instruments and ineffect
iveness
\n \n
Change in fair
value used to
Ineffectiveness
Carrying Amount
calculate hedge
recognised in
Notional
Asset
Liab
il
ity
ineffect
iveness
2
pro\ufb01t or loss
Interest rate
1
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest rate swaps \u2013 debt securit
ies/subord
inated
notes issued
46,832
283
1,643
46
2
Interest rate swaps \u2013 loans and advances to customers
1,334
10
12
(5)
\u2013
Interest rate swaps \u2013 debt securit
ies and other
elig
ible b
ills
15,674
470
24
142
2
Interest and currency risk
1
Cross currency swaps \u2013 debt securit
ies/subord
inated
notes issued
1,035
\u2013
56
(52)
(1)
Cross currency swaps \u2013 debt securit
ies and other
elig
ible b
ills
\u2013
\u2013
\u2013
(10)
\u2013
Total at 31 December 2024
64,875
763
1,735
121
3
Interest rate swaps \u2013 debt securit
ies/subord
inated
notes issued
45,455
381
2,267
271
(4)
Interest rate swaps \u2013 loans and advances to customers
1,203
26
1
(20)
\u2013
Interest rate swaps \u2013 debt securit
ies and other
elig
ible b
ills
22,689
857
129
(459)
(17)
Interest and currency risk
1
Cross currency swaps \u2013 debt securit
ies/subord
inated
notes issued
70
\u2013
6
(2)
\u2013
Cross currency swaps \u2013 debt securit
ies and other
elig
ible b
ills
45
10
\u2013
11
\u2013
Total at 31 December 2023
69,462
1,274
2,403
(199)
(21)
1
Interest rate swaps are designated in hedges of the fair value of interest rate risk attributable to the hedged item. Cross currency swaps are used to hedge both
interest rate and currency risks. All the hedging instruments are derivat
ives, w
ith changes in fair value includ
ing hedge
ineffect
iveness recorded w
ith
in net
trading income
2
This represents a (loss)/gains change in fair value used for calculating hedge ineffect
iveness
Hedged items in fair value hedges
\n \n
Cumulative
balance of
fair value
Change in the
adjustments
Accumulated amount of fair value
value used for
from
hedge adjustments included in the
calculating
de-designated
Carrying Amount
carrying amount
hedge
hedge
Asset
Liab
il
ity
Asset
Liab
il
ity
ineffect
iveness
1
relationsh
ips
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Debt securit
ies/subord
inated
notes issued
\u2013
49,616
\u2013
1,485
7
178
Debt securit
ies and other el
ig
ible b
ills
15,183
\u2013
(353)
\u2013
(130)
235
Loans and advances to customers
1,330
\u2013
(4)
\u2013
5
4
Total at 31 December 2024
16,513
49,616
(357)
1,485
(118)
417
Debt securit
ies/subord
inated
notes issued
\u2013
46,156
\u2013
1,761
(273)
360
Debt securit
ies and other el
ig
ible b
ills
21,473
\u2013
(553)
\u2013
431
744
Loans and advances to customers
1,183
\u2013
(20)
\u2013
20
13
Total at 31 December 2023
22,656
46,156
(573)
1,761
178
1,117
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
2
This represents a credit/(debit) to the balance sheet value
Income statement impact of fair value hedges
\n \n
2024
2023
$mill
ion
$mill
ion
Change in fair value of hedging instruments
121
(199)
Change in fair value of hedged risks attributable to hedged items
(118)
178
Net ineffect
iveness ga
in/(loss) to net trading income
3
(21)
Amortisat
ion ga
in to net interest income
153
232
Cash \ufb02ow hedges
The Group has exposure to market movements in future interest cash \ufb02ows on portfolios of customer accounts, debt securit
ies
and loans and advances to customers. The amounts and tim
ing of future cash \ufb02ows, represent
ing both princ
ipal and
interest
\ufb02ows, are projected on the basis of contractual terms and other relevant factors, includ
ing est
imates of prepayments and
defaults.
The hedging strategy of the Group involves using interest rate swaps to manage the variab
il
ity in future cash \ufb02ows on assets
and liab
il
it
ies that have \ufb02oat
ing rates of interest by exchanging the \ufb02oating rates for \ufb01xed rates. It also uses foreign exchange
contracts and currency swaps to manage the variab
il
ity in future exchange rates on its assets and liab
il
it
ies and costs
in foreign
currencies. This is done on both a micro basis whereby a single interest rate or cross-currency swap is designated in a separate
relationsh
ip w
ith a single hedged item (such as a \ufb02oating-rate loan to a customer), and on a portfolio basis whereby each
hedging instrument is designated against a group of hedged items that share the same risk (such as a group of customer
accounts). Hedge ineffect
iveness for cash \ufb02ow hedges
is mainly driven by payment frequency mismatch between the hedging
instrument and the underlying hedged item.
The hedged risk is determined as the variab
il
ity of future cash \ufb02ows aris
ing from changes
in the designated benchmark interest
and/or foreign exchange rates.
Hedging instruments and ineffect
iveness
\n \n
Change in fair
Ineffectiveness
Amount
value used to
(loss)/gain
reclassif
ied
calculate
Gain
recognised in
from
Carrying Amount
hedge
recognised
net trading
reserves to
Notional
Asset
Liab
il
ity
ineffect
iveness
1
in OCI
income
income
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest rate risk
Interest rate swaps
49,309
165
282
(131)
(125)
(6)
\u2013
Currency risk
Forward foreign exchange contract
9,193
609
1
45
45
\u2013
\u2013
Cross currency swaps
14,305
729
2
650
648
2
\u2013
Total as at 31 December 2024
72,807
1,503
285
564
568
(4)
\u2013
Interest rate risk
Interest rate swaps
41,834
184
537
612
609
3
\u2013
Currency risk
Forward foreign exchange contract
12,071
420
183
104
103
1
\u2013
Cross currency swaps
14,321
191
150
185
183
2
\u2013
Total as at 31 December 2023
68,226
795
870
901
895
6
\u2013
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
\n\n\n
Hedged items in cash \ufb02ow hedges
\n\n \n
2024
2023
Cumulative
Cumulative
balance in the
balance in the
Change in fair
cash \ufb02ow hedge
Change in fair
cash \ufb02ow hedge
value used for
reserve from
value used for
reserve from
calculating
de-designated
calculating
de-designated
hedge
Cash \ufb02ow
hedge
hedge
Cash \ufb02ow
hedge
ineffect
iveness
1
hedge reserve
relationsh
ips
ineffect
iveness
1
hedge reserve
relationsh
ips
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Customer accounts
(199)
(38)
104
(421)
(114)
136
Debt securit
ies and other el
ig
ible b
ills
(354)
(10)
(5)
(98)
(22)
(15)
Loans and advances to customers
124
(27)
(7)
(312)
134
\u2013
Intragroup lending currency hedge
(55)
(2)
\u2013
(64)
\u2013
\u2013
Intragroup borrowing currency hedge
(84)
4
\u2013
\u2013
\u2013
\u2013
Total at 31 December
(568)
(73)
92
(895)
(2)
121
\n
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
\n
Impact of cash \ufb02ow hedges on pro\ufb01t and loss and other comprehensive income
\n\n \n
2024
2023
$mill
ion
$mill
ion
Cash \ufb02ow hedge reserve balance as at 1 January
91
(564)
Gains recognised in other comprehensive income on effective portion of changes in fair value of
hedging instruments
568
895
Gains reclassif
ied to
income statement when hedged item affected net pro\ufb01t
(669)
(128)
Taxation charge relating to cash \ufb02ow hedges
14
(112)
Cash \ufb02ow hedge reserve balance as at 31 December
4
91
\n
Net investment hedges
\n
Foreign currency exposures arise from investments in subsid
iar
ies that have a different functional currency from that of the
\n
presentation currency of the Group. This risk arises from the \ufb02uctuation in spot exchange rates between the functional currency
\n
of the subsid
iar
ies and the Group\u2019s presentation currency, which causes the value of the investment to vary.
\n
The Group\u2019s policy is to hedge these exposures only when not doing so would be expected to have a sign
i\ufb01cant
impact on the
\n
regulatory ratios of the Group and its banking subsid
iar
ies. The Group uses foreign exchange forwards to manage the effect of
\n
exchange rates on its net investments in foreign subsid
iar
ies.
\n
Hedging instruments and ineffect
iveness
\n\n \n
Changes in
Change in fair
the value of
Amount
value used to
the hedging
reclassif
ied
calculate
instrument
Ineffectiveness
from
Carrying amount
hedge
recognised
recognised in
reserves to
Notional
Asset
Liab
il
ity
ineffect
iveness
2
in OCI
pro\ufb01t or loss
income
Derivat
ive forward currency contracts
1
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
As at 31 December 2024
14,137
300
7
678
678
\u2013
\u2013
As at 31 December 2023
15,436
32
41
215
215
\u2013
\u2013
\n
1
These derivat
ive forward currency contracts have a matur
ity of less than one year. The hedges are rolled on a period
ic bas
is
\n
2
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
\n
Hedged items in net investment hedges
\n\n \n
2024
2023
Balances
Balances
remain
ing
in the
remain
ing
in the
translation
translation
reserve from
reserve from
Change in the
hedging
Change in the
hedging
value used for
relationsh
ips for
value used for
relationsh
ips for
calculating
which hedge
calculating
which hedge
hedge
Translation
accounting is no
hedge
Translation
accounting is no
ineffect
iveness
1
reserve\u00b2
longer applied
ineffect
iveness
1
reserve\u00b2
longer applied
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Net investments
(678)
293
\u2013
(215)
(9)
\u2013
\n
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
\n
2
This represents the mark-to-market includ
ing accrued
interest on live hedges at 31 December
\n
Impact of net investment hedges on other comprehensive income
\n\n \n
2024
2023
$mill
ion
$mill
ion
Gains recognised in other comprehensive income
678
215
Maturity of hedging instruments
\n \n
2024
2023
More than
More than
one month
one month
and less
and less
Less than
than
One to
More than
Less than
than
One to
More than
Fair value hedges
one month
one year
\ufb01ve years
\ufb01ve years
one month
one year
\ufb01ve years
\ufb01ve years
Interest rate swap
Notional
$mill
ion
2,763
11,260
32,030
17,787
3,242
9,789
41,545
14,771
Cross currency swap
Notional
$mill
ion
\u2013
\u2013
1,035
\u2013
\u2013
115
\u2013
\u2013
Average \ufb01xed interest
EUR
\u2013
\u2013
2.40
\u2013
\u2013
\u2013
\u2013
\u2013
rate (to USD) (%)
GBP
\u2013
\u2013
\u2013
\u2013
\u2013
1.33
\u2013
\u2013
CNH
\u2013
\u2013
\u2013
\u2013
\u2013
3.17
\u2013
\u2013
Average exchange rate
EUR/USD
\u2013
\u2013
0.91
\u2013
\u2013
\u2013
\u2013
\u2013
GBP/USD
\u2013
\u2013
\u2013
\u2013
\u2013
0.66
\u2013
\u2013
CNH/USD
\u2013
\u2013
\u2013
\u2013
\u2013
6.37
\u2013
\u2013
Cash \ufb02ow hedges
Interest rate swap
Notional
$mill
ion
2,428
15,589
25,943
5,349
2,129
27,634
11,664
407
Average \ufb01xed
interest rate (%)
USD
5.09
4.62
4.05
3.74
5.10
3.45
4.70
3.16
Cross currency swap
Notional
$mill
ion
880
12,232
1,193
\u2013
166
10,794
3,361
\u2013
Average \ufb01xed
HKD
\u2013
4.07
0.21
\u2013
\u2013
4.97
0.21
\u2013
interest rate (%)
KRO
\u2013
2.85
\u2013
\u2013
1.96
3.58
0.62
\u2013
USD
\u2013
5.64
\u2013
\u2013
TWD
(3.68)
0.77
0.81
\u2013
JPY/HKD
\u2013
(0.05)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
TWO
0.53
1.04
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
CNO
2.45
1.54
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
JPY
0.01
0.08
\u2013
\u2013
\u2013
(0.07)
(0.05)
\u2013
Average exchange rate
HKD/USD
\u2013
7.78
7.85
\u2013
\u2013
7.83
7.85
\u2013
KRO/USD
\u2013
1,386.94
1,300.90
\u2013
1,192.20
1,321
1,285
\u2013
USD/HKD
\u2013
0.13
\u2013
\u2013
TWD/USD
30.63
31.53
32.22
\u2013
TWO/USD
31.83
32.22
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
CNO/USD
7.18
7.20
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
JPY/HKD
\u2013
18.12
\u2013
\u2013
\u2013
17.86
18.09
\u2013
Forward foreign
exchange contracts
Notional
$mill
ion
2,044
7,149
\u2013
\u2013
2,194
9,877
\u2013
\u2013
Average exchange rate
BRL/USD
\u2013
6.54
\u2013
\u2013
\u2013
5.17
\u2013
\u2013
TWD/HKD
\u2013
\u2013
\u2013
\u2013
\u2013
3.81
\u2013
\u2013
JPY/USD
147.38
145.65
\u2013
\u2013
130.49
136
\u2013
\u2013
Net investment hedges
Foreign exchange
derivat
ives
Notional
$mill
ion
14,137
\u2013
\u2013
\u2013
15,436
\u2013
\u2013
\u2013
Average exchange rate
CNY/USD
7.13
\u2013
\u2013
\u2013
7.12
\u2013
\u2013
\u2013
KRW/USD
1,364.97
\u2013
\u2013
\u2013
1,283
\u2013
\u2013
\u2013
AED/USD
\u2013
\u2013
\u2013
\u2013
3.67
\u2013
\u2013
\u2013
HKD/USD
7.77
\u2013
\u2013
\u2013
7.80
\u2013
\u2013
\u2013
INR/USD
84.07
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00648": { "value": "Accounting policy
Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation
techniques, includ
ing d
iscounted cash \ufb02ow models and option pric
ing models, as appropr
iate. Where the in
it
ially
recognised fair value of a derivat
ive contract
is based on a valuation model that uses inputs which are not observable
in the market, it follows the same in
it
ial recognit
ion account
ing policy as for other \ufb01nanc
ial assets and l
iab
il
it
ies.
All derivat
ives are carr
ied as assets when fair value is posit
ive and as l
iab
il
it
ies when fa
ir value is negative.
Hedge accounting
Under certain condit
ions, the Group may des
ignate a recognised asset or liab
il
ity, a \ufb01rm commitment, highly probable
forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh
ip w
ith a derivat
ive
that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group, as a
policy choice to continue to apply hedge accounting in accordance with IAS 39. The Group applied IBOR reform Phase 2
reliefs in respect of hedging relationsh
ips d
irectly affected by IBOR reform.
There are three categories of hedge relationsh
ips:
\u2022
Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab
il
it
ies
or \ufb01rm commitments
\u2022
Cash \ufb02ow hedge: to manage interest rate or foreign exchange risk of highly probable future cash \ufb02ows attributable to
a recognised asset or liab
il
ity, or a forecasted transaction
\u2022
Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation
The Group assesses, both at hedge incept
ion and on a quarterly bas
is, whether the derivat
ives des
ignated in hedge
relationsh
ips are h
ighly effective in offsetting changes in fair values or cash \ufb02ows of hedged items. Hedges are considered
to be highly effective if all the following criter
ia are met:
\u2022
At incept
ion of the hedge and throughout
its life, the hedge is prospectively expected to be highly effective in achiev
ing
offsetting changes in fair value or cash \ufb02ows attributable to the hedged risk
\u2022
Prospective and retrospective effectiveness of the hedge should be with
in a range of 80\u2013125%. Th
is is tested using
regression analysis
\u2022
This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and
the data pairs between the hedged item and the hedging instrument are regressed to a 95% con\ufb01dence interval.
The regression co-ef\ufb01c
ient (R squared), wh
ich measures the correlation between the variables in the regression, is at
least 80%
In the case of the hedge of a forecast transaction, the transaction must have a high probabil
ity of occurr
ing and must
present an exposure to variat
ions
in cash \ufb02ows that are expected to affect reported pro\ufb01t or loss.
Fair value hedge
Changes in the fair value of derivat
ives that are des
ignated and qualify as fair value hedging instruments are recorded in
net trading income, together with any changes in the fair value of the hedged asset or liab
il
ity that are attributable to the
hedged risk. If the hedge no longer meets the criter
ia for hedge account
ing, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to the income statement over the remain
ing
term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is
recognised immed
iately
in the income statement. For \ufb01nanc
ial assets class
if
ied as fa
ir value through other comprehensive
income, the hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the
hedging derivat
ive.
Cash \ufb02ow hedge
The effective portion of changes in the fair value of derivat
ives that are des
ignated and qualify as cash \ufb02ow hedging
instruments are in
it
ially recognised in other comprehensive income, accumulating in the cash \ufb02ow hedge reserve with
in
equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects
pro\ufb01t or loss. Both the derivat
ive fa
ir value movement and any recycled amount are recorded in the \u2018Cash\ufb02ow hedges\u2019 line
item in other comprehensive income.
The Group assesses hedge effectiveness using the hypothetical derivat
ive method, wh
ich creates a derivat
ive
instrument
to serve as a proxy for the hedged transaction. The terms of the hypothetical derivat
ive match the cr
it
ical terms of the
hedged item and it has a fair value of zero at incept
ion. The hypothet
ical derivat
ive and the actual der
ivat
ive are
regressed to establish the statist
ical s
ign
i\ufb01cance of the hedge relat
ionsh
ip. Any
ineffect
ive port
ion of the gain or loss
on the hedging instrument is recognised in the net trading income immed
iately.
If a cash \ufb02ow hedge is discont
inued, the amount accumulated
in the cash \ufb02ow hedge reserve is released to the income
statement as and when the hedged item affects the income statement.
Should the Group consider the hedged future cash \ufb02ows are no longer expected to occur due to reasons, the cumulative
gain or loss will be immed
iately reclass
if
ied to pro\ufb01t or loss.
Net investment hedge
Hedges of net investments are accounted for in a sim
ilar manner to cash \ufb02ow hedges, w
ith gains and losses aris
ing on the
effective portion of the hedges recorded in the line \u2018Exchange differences on translation of foreign operations\u2019 in other
comprehensive income, accumulating in the translation reserve with
in equ
ity. These amounts remain in equity until the
net investment is disposed of. The ineffect
ive port
ion of the hedges is recognised in the net trading income immed
iately.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00647": { "value": "Accounting policy
Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation
techniques, includ
ing d
iscounted cash \ufb02ow models and option pric
ing models, as appropr
iate. Where the in
it
ially
recognised fair value of a derivat
ive contract
is based on a valuation model that uses inputs which are not observable
in the market, it follows the same in
it
ial recognit
ion account
ing policy as for other \ufb01nanc
ial assets and l
iab
il
it
ies.
All derivat
ives are carr
ied as assets when fair value is posit
ive and as l
iab
il
it
ies when fa
ir value is negative.
Hedge accounting
Under certain condit
ions, the Group may des
ignate a recognised asset or liab
il
ity, a \ufb01rm commitment, highly probable
forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh
ip w
ith a derivat
ive
that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group, as a
policy choice to continue to apply hedge accounting in accordance with IAS 39. The Group applied IBOR reform Phase 2
reliefs in respect of hedging relationsh
ips d
irectly affected by IBOR reform.
There are three categories of hedge relationsh
ips:
\u2022
Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab
il
it
ies
or \ufb01rm commitments
\u2022
Cash \ufb02ow hedge: to manage interest rate or foreign exchange risk of highly probable future cash \ufb02ows attributable to
a recognised asset or liab
il
ity, or a forecasted transaction
\u2022
Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation
The Group assesses, both at hedge incept
ion and on a quarterly bas
is, whether the derivat
ives des
ignated in hedge
relationsh
ips are h
ighly effective in offsetting changes in fair values or cash \ufb02ows of hedged items. Hedges are considered
to be highly effective if all the following criter
ia are met:
\u2022
At incept
ion of the hedge and throughout
its life, the hedge is prospectively expected to be highly effective in achiev
ing
offsetting changes in fair value or cash \ufb02ows attributable to the hedged risk
\u2022
Prospective and retrospective effectiveness of the hedge should be with
in a range of 80\u2013125%. Th
is is tested using
regression analysis
\u2022
This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and
the data pairs between the hedged item and the hedging instrument are regressed to a 95% con\ufb01dence interval.
The regression co-ef\ufb01c
ient (R squared), wh
ich measures the correlation between the variables in the regression, is at
least 80%
In the case of the hedge of a forecast transaction, the transaction must have a high probabil
ity of occurr
ing and must
present an exposure to variat
ions
in cash \ufb02ows that are expected to affect reported pro\ufb01t or loss.
Fair value hedge
Changes in the fair value of derivat
ives that are des
ignated and qualify as fair value hedging instruments are recorded in
net trading income, together with any changes in the fair value of the hedged asset or liab
il
ity that are attributable to the
hedged risk. If the hedge no longer meets the criter
ia for hedge account
ing, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to the income statement over the remain
ing
term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is
recognised immed
iately
in the income statement. For \ufb01nanc
ial assets class
if
ied as fa
ir value through other comprehensive
income, the hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the
hedging derivat
ive.
Cash \ufb02ow hedge
The effective portion of changes in the fair value of derivat
ives that are des
ignated and qualify as cash \ufb02ow hedging
instruments are in
it
ially recognised in other comprehensive income, accumulating in the cash \ufb02ow hedge reserve with
in
equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects
pro\ufb01t or loss. Both the derivat
ive fa
ir value movement and any recycled amount are recorded in the \u2018Cash\ufb02ow hedges\u2019 line
item in other comprehensive income.
The Group assesses hedge effectiveness using the hypothetical derivat
ive method, wh
ich creates a derivat
ive
instrument
to serve as a proxy for the hedged transaction. The terms of the hypothetical derivat
ive match the cr
it
ical terms of the
hedged item and it has a fair value of zero at incept
ion. The hypothet
ical derivat
ive and the actual der
ivat
ive are
regressed to establish the statist
ical s
ign
i\ufb01cance of the hedge relat
ionsh
ip. Any
ineffect
ive port
ion of the gain or loss
on the hedging instrument is recognised in the net trading income immed
iately.
If a cash \ufb02ow hedge is discont
inued, the amount accumulated
in the cash \ufb02ow hedge reserve is released to the income
statement as and when the hedged item affects the income statement.
Should the Group consider the hedged future cash \ufb02ows are no longer expected to occur due to reasons, the cumulative
gain or loss will be immed
iately reclass
if
ied to pro\ufb01t or loss.
Net investment hedge
Hedges of net investments are accounted for in a sim
ilar manner to cash \ufb02ow hedges, w
ith gains and losses aris
ing on the
effective portion of the hedges recorded in the line \u2018Exchange differences on translation of foreign operations\u2019 in other
comprehensive income, accumulating in the translation reserve with
in equ
ity. These amounts remain in equity until the
net investment is disposed of. The ineffect
ive port
ion of the hedges is recognised in the net trading income immed
iately.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00761": { "value": "Accounting policy
Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation
techniques, includ
ing d
iscounted cash \ufb02ow models and option pric
ing models, as appropr
iate. Where the in
it
ially
recognised fair value of a derivat
ive contract
is based on a valuation model that uses inputs which are not observable
in the market, it follows the same in
it
ial recognit
ion account
ing policy as for other \ufb01nanc
ial assets and l
iab
il
it
ies.
All derivat
ives are carr
ied as assets when fair value is posit
ive and as l
iab
il
it
ies when fa
ir value is negative.
Hedge accounting
Under certain condit
ions, the Group may des
ignate a recognised asset or liab
il
ity, a \ufb01rm commitment, highly probable
forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh
ip w
ith a derivat
ive
that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group, as a
policy choice to continue to apply hedge accounting in accordance with IAS 39. The Group applied IBOR reform Phase 2
reliefs in respect of hedging relationsh
ips d
irectly affected by IBOR reform.
There are three categories of hedge relationsh
ips:
\u2022
Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab
il
it
ies
or \ufb01rm commitments
\u2022
Cash \ufb02ow hedge: to manage interest rate or foreign exchange risk of highly probable future cash \ufb02ows attributable to
a recognised asset or liab
il
ity, or a forecasted transaction
\u2022
Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation
The Group assesses, both at hedge incept
ion and on a quarterly bas
is, whether the derivat
ives des
ignated in hedge
relationsh
ips are h
ighly effective in offsetting changes in fair values or cash \ufb02ows of hedged items. Hedges are considered
to be highly effective if all the following criter
ia are met:
\u2022
At incept
ion of the hedge and throughout
its life, the hedge is prospectively expected to be highly effective in achiev
ing
offsetting changes in fair value or cash \ufb02ows attributable to the hedged risk
\u2022
Prospective and retrospective effectiveness of the hedge should be with
in a range of 80\u2013125%. Th
is is tested using
regression analysis
\u2022
This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and
the data pairs between the hedged item and the hedging instrument are regressed to a 95% con\ufb01dence interval.
The regression co-ef\ufb01c
ient (R squared), wh
ich measures the correlation between the variables in the regression, is at
least 80%
In the case of the hedge of a forecast transaction, the transaction must have a high probabil
ity of occurr
ing and must
present an exposure to variat
ions
in cash \ufb02ows that are expected to affect reported pro\ufb01t or loss.
Fair value hedge
Changes in the fair value of derivat
ives that are des
ignated and qualify as fair value hedging instruments are recorded in
net trading income, together with any changes in the fair value of the hedged asset or liab
il
ity that are attributable to the
hedged risk. If the hedge no longer meets the criter
ia for hedge account
ing, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to the income statement over the remain
ing
term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is
recognised immed
iately
in the income statement. For \ufb01nanc
ial assets class
if
ied as fa
ir value through other comprehensive
income, the hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the
hedging derivat
ive.
Cash \ufb02ow hedge
The effective portion of changes in the fair value of derivat
ives that are des
ignated and qualify as cash \ufb02ow hedging
instruments are in
it
ially recognised in other comprehensive income, accumulating in the cash \ufb02ow hedge reserve with
in
equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects
pro\ufb01t or loss. Both the derivat
ive fa
ir value movement and any recycled amount are recorded in the \u2018Cash\ufb02ow hedges\u2019 line
item in other comprehensive income.
The Group assesses hedge effectiveness using the hypothetical derivat
ive method, wh
ich creates a derivat
ive
instrument
to serve as a proxy for the hedged transaction. The terms of the hypothetical derivat
ive match the cr
it
ical terms of the
hedged item and it has a fair value of zero at incept
ion. The hypothet
ical derivat
ive and the actual der
ivat
ive are
regressed to establish the statist
ical s
ign
i\ufb01cance of the hedge relat
ionsh
ip. Any
ineffect
ive port
ion of the gain or loss
on the hedging instrument is recognised in the net trading income immed
iately.
If a cash \ufb02ow hedge is discont
inued, the amount accumulated
in the cash \ufb02ow hedge reserve is released to the income
statement as and when the hedged item affects the income statement.
Should the Group consider the hedged future cash \ufb02ows are no longer expected to occur due to reasons, the cumulative
gain or loss will be immed
iately reclass
if
ied to pro\ufb01t or loss.
Net investment hedge
Hedges of net investments are accounted for in a sim
ilar manner to cash \ufb02ow hedges, w
ith gains and losses aris
ing on the
effective portion of the hedges recorded in the line \u2018Exchange differences on translation of foreign operations\u2019 in other
comprehensive income, accumulating in the translation reserve with
in equ
ity. These amounts remain in equity until the
net investment is disposed of. The ineffect
ive port
ion of the hedges is recognised in the net trading income immed
iately.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00512": { "value": "Hedging instruments and ineffect
iveness
\n \n
Change in fair
value used to
Ineffectiveness
Carrying Amount
calculate hedge
recognised in
Notional
Asset
Liab
il
ity
ineffect
iveness
2
pro\ufb01t or loss
Interest rate
1
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Interest rate swaps \u2013 debt securit
ies/subord
inated
notes issued
46,832
283
1,643
46
2
Interest rate swaps \u2013 loans and advances to customers
1,334
10
12
(5)
\u2013
Interest rate swaps \u2013 debt securit
ies and other
elig
ible b
ills
15,674
470
24
142
2
Interest and currency risk
1
Cross currency swaps \u2013 debt securit
ies/subord
inated
notes issued
1,035
\u2013
56
(52)
(1)
Cross currency swaps \u2013 debt securit
ies and other
elig
ible b
ills
\u2013
\u2013
\u2013
(10)
\u2013
Total at 31 December 2024
64,875
763
1,735
121
3
Interest rate swaps \u2013 debt securit
ies/subord
inated
notes issued
45,455
381
2,267
271
(4)
Interest rate swaps \u2013 loans and advances to customers
1,203
26
1
(20)
\u2013
Interest rate swaps \u2013 debt securit
ies and other
elig
ible b
ills
22,689
857
129
(459)
(17)
Interest and currency risk
1
Cross currency swaps \u2013 debt securit
ies/subord
inated
notes issued
70
\u2013
6
(2)
\u2013
Cross currency swaps \u2013 debt securit
ies and other
elig
ible b
ills
45
10
\u2013
11
\u2013
Total at 31 December 2023
69,462
1,274
2,403
(199)
(21)
1
Interest rate swaps are designated in hedges of the fair value of interest rate risk attributable to the hedged item. Cross currency swaps are used to hedge both
interest rate and currency risks. All the hedging instruments are derivat
ives, w
ith changes in fair value includ
ing hedge
ineffect
iveness recorded w
ith
in net
trading income
2
This represents a (loss)/gains change in fair value used for calculating hedge ineffect
iveness", "dimensions": { "concept": "ifrs-full:DisclosureOfDetailedInformationAboutHedgingInstrumentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00513": { "value": "Hedged items in fair value hedges \n \n
Cumulative
balance of
fair value
Change in the
adjustments
Accumulated amount of fair value
value used for
from
hedge adjustments included in the
calculating
de-designated
Carrying Amount
carrying amount
hedge
hedge
Asset
Liab
il
ity
Asset
Liab
il
ity
ineffect
iveness
1
relationsh
ips
2
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Debt securit
ies/subord
inated
notes issued
\u2013
49,616
\u2013
1,485
7
178
Debt securit
ies and other el
ig
ible b
ills
15,183
\u2013
(353)
\u2013
(130)
235
Loans and advances to customers
1,330
\u2013
(4)
\u2013
5
4
Total at 31 December 2024
16,513
49,616
(357)
1,485
(118)
417
Debt securit
ies/subord
inated
notes issued
\u2013
46,156
\u2013
1,761
(273)
360
Debt securit
ies and other el
ig
ible b
ills
21,473
\u2013
(553)
\u2013
431
744
Loans and advances to customers
1,183
\u2013
(20)
\u2013
20
13
Total at 31 December 2023
22,656
46,156
(573)
1,761
178
1,117
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
2
This represents a credit/(debit) to the balance sheet value", "dimensions": { "concept": "ifrs-full:DisclosureOfDetailedInformationAboutHedgedItemsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00516": { "value": "15. Loans and advances to banks and customers
Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy.
\n \n
2024
2023
$mill
ion
$mill
ion
Loans and advances to banks
43,609
45,001
Expected credit loss
(16)
(24)
43,593
44,977
Loans and advances to customers
285,936
292,145
Expected credit loss
(4,904)
(5,170)
281,032
286,975
Total loans and advances to banks and customers
1
324,625
331,952
1
Includes $2.5 bill
ion (31 December 2023: $3.6 b
ill
ion) of assets pledged as collateral. For more
informat
ion, please refer to page 127 of P
illar 3 disclosures
The Group has outstanding resident
ial mortgage loans to Korea res
idents of $13.7 bill
ion (2023: $17.2 b
ill
ion) and Hong Kong
residents of $31.1 bill
ion (2023: $32.7 b
ill
ion).
Analysis of loans and advances to customers by key geographies and client segment together with their related impa
irment
provis
ions are set out w
ith
in the R
isk review and Capital review (pages 193 to 274).", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00515": { "value": "15. Loans and advances to banks and customers
Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy.
\n \n
2024
2023
$mill
ion
$mill
ion
Loans and advances to banks
43,609
45,001
Expected credit loss
(16)
(24)
43,593
44,977
Loans and advances to customers
285,936
292,145
Expected credit loss
(4,904)
(5,170)
281,032
286,975
Total loans and advances to banks and customers
1
324,625
331,952
1
Includes $2.5 bill
ion (31 December 2023: $3.6 b
ill
ion) of assets pledged as collateral. For more
informat
ion, please refer to page 127 of P
illar 3 disclosures
The Group has outstanding resident
ial mortgage loans to Korea res
idents of $13.7 bill
ion (2023: $17.2 b
ill
ion) and Hong Kong
residents of $31.1 bill
ion (2023: $32.7 b
ill
ion).
Analysis of loans and advances to customers by key geographies and client segment together with their related impa
irment
provis
ions are set out w
ith
in the R
isk review and Capital review (pages 193 to 274).", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00649": { "value": "Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForLoansAndAdvancesToBanksAndCustomersExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00518": { "value": "16. Reverse repurchase and repurchase agreements includ
ing other s
im
ilar lend
ing and borrowing
Accounting policy
The Group purchases securit
ies (a reverse repurchase agreement \u2013 \u2018reverse repo\u2019) typ
ically with \ufb01nanc
ial
inst
itut
ions
subject to a commitment to resell or return the securit
ies at a predeterm
ined price. These securit
ies are not
included in the
balance sheet as the Group does not acquire the risks and rewards of ownership, however they are recorded off-balance
sheet as collateral received. Considerat
ion pa
id (or cash collateral provided) is accounted for as a loan asset at amortised
cost unless it is managed on a fair value basis or designated at fair value through pro\ufb01t or loss. In major
ity of cases through
the contractual terms of a reverse repo arrangement, the Group as the transferee of the security collateral has the right to
sell or repledge the asset concerned.
The Group also sells securit
ies (a repurchase agreement \u2013 \u2018repo\u2019) subject to a comm
itment to repurchase or redeem the
securit
ies at a predeterm
ined price. The securit
ies are reta
ined on the balance sheet as the Group retains substantially all
the risks and rewards of ownership and these securit
ies are d
isclosed as pledged collateral. Considerat
ion rece
ived (or cash
collateral received) is accounted for as a \ufb01nanc
ial l
iab
il
ity at amortised cost unless it is either mandatorily classif
ied as fa
ir
value through pro\ufb01t or loss or irrevocably designated at fair value through pro\ufb01t or loss at in
it
ial recognit
ion.
Repo and reverse repo transactions typically entitle the Group and its counterparties to have recourse to assets sim
ilar to
those provided as collateral in the event of a default. Securit
ies sold subject to repos, e
ither by way of a Global Master
Repurchase Agreement (GMRA), or through a securit
ies sale and Total Return Swap (TRS) cont
inue to be recognised on
the balance sheet as the Group retains substantially the associated risks and rewards of the securit
ies (the TRS
is not
recognised). Assets sold under repurchase agreements are considered encumbered as the Group cannot pledge these
to obtain funding
Reverse repurchase agreements and other sim
ilar secured lend
ing
\n \n
2024
2023
$mill
ion
$mill
ion
Banks
37,700
32,286
Customers
61,101
65,295
98,801
97,581
Of which:
Fair value through pro\ufb01t or loss
86,195
81,847
Banks
34,754
30,548
Customers
51,441
51,299
Held at amortised cost
12,606
15,734
Banks
2,946
1,738
Customers
9,660
13,996
Under reverse repurchase and securit
ies borrow
ing arrangements, the Group obtains securit
ies under usual and customary
terms which permit it to repledge or resell the securit
ies to others. Amounts on such terms are:
\n \n
2024
2023
$mill
ion
$mill
ion
Securit
ies and collateral rece
ived (at fair value)
103,007
101,935
Securit
ies and collateral wh
ich can be repledged or sold (at fair value)
102,741
101,845
Amounts repledged/transferred to others for \ufb01nancing act
iv
it
ies, to satisfy liab
il
it
ies under sale and
repurchase agreements (at fair value)
27,708
34,154
Repurchase agreements and other sim
ilar secured borrow
ing
\n \n
2024
2023
$mill
ion
$mill
ion
Banks
8,669
5,585
Customers
37,002
47,956
45,671
53,541
Of which:
Fair value through pro\ufb01t or loss
33,539
41,283
Banks
7,759
4,658
Customers
25,780
36,625
Held at amortised cost
12,132
12,258
Banks
910
927
Customers
11,222
11,331
The tables below set out the \ufb01nancial assets prov
ided as collateral for repurchase and other secured borrowing transactions:
\n \n
Fair value
Fair value
through other
through pro\ufb01t
comprehensive
Off-balance
or loss
income
Amortised cost
sheet
Total
Collateral pledged against repurchase agreements
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
On-balance sheet
Debt securit
ies and other el
ig
ible b
ills
4,698
6,366
7,592
\u2013
18,656
Off-balance sheet
Repledged collateral received
\u2013
\u2013
\u2013
27,708
27,708
At 31 December 2024
4,698
6,366
7,592
27,708
46,364
On-balance sheet
Debt securit
ies and other el
ig
ible b
ills
4,993
8,157
10,181
\u2013
23,331
Off-balance sheet
Repledged collateral received
\u2013
\u2013
\u2013
34,154
34,154
At 31 December 2023
4,993
8,157
10,181
34,154
57,485
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00517": { "value": "16. Reverse repurchase and repurchase agreements includ
ing other s
im
ilar lend
ing and borrowing
Accounting policy
The Group purchases securit
ies (a reverse repurchase agreement \u2013 \u2018reverse repo\u2019) typ
ically with \ufb01nanc
ial
inst
itut
ions
subject to a commitment to resell or return the securit
ies at a predeterm
ined price. These securit
ies are not
included in the
balance sheet as the Group does not acquire the risks and rewards of ownership, however they are recorded off-balance
sheet as collateral received. Considerat
ion pa
id (or cash collateral provided) is accounted for as a loan asset at amortised
cost unless it is managed on a fair value basis or designated at fair value through pro\ufb01t or loss. In major
ity of cases through
the contractual terms of a reverse repo arrangement, the Group as the transferee of the security collateral has the right to
sell or repledge the asset concerned.
The Group also sells securit
ies (a repurchase agreement \u2013 \u2018repo\u2019) subject to a comm
itment to repurchase or redeem the
securit
ies at a predeterm
ined price. The securit
ies are reta
ined on the balance sheet as the Group retains substantially all
the risks and rewards of ownership and these securit
ies are d
isclosed as pledged collateral. Considerat
ion rece
ived (or cash
collateral received) is accounted for as a \ufb01nanc
ial l
iab
il
ity at amortised cost unless it is either mandatorily classif
ied as fa
ir
value through pro\ufb01t or loss or irrevocably designated at fair value through pro\ufb01t or loss at in
it
ial recognit
ion.
Repo and reverse repo transactions typically entitle the Group and its counterparties to have recourse to assets sim
ilar to
those provided as collateral in the event of a default. Securit
ies sold subject to repos, e
ither by way of a Global Master
Repurchase Agreement (GMRA), or through a securit
ies sale and Total Return Swap (TRS) cont
inue to be recognised on
the balance sheet as the Group retains substantially the associated risks and rewards of the securit
ies (the TRS
is not
recognised). Assets sold under repurchase agreements are considered encumbered as the Group cannot pledge these
to obtain funding
Reverse repurchase agreements and other sim
ilar secured lend
ing
\n \n
2024
2023
$mill
ion
$mill
ion
Banks
37,700
32,286
Customers
61,101
65,295
98,801
97,581
Of which:
Fair value through pro\ufb01t or loss
86,195
81,847
Banks
34,754
30,548
Customers
51,441
51,299
Held at amortised cost
12,606
15,734
Banks
2,946
1,738
Customers
9,660
13,996
Under reverse repurchase and securit
ies borrow
ing arrangements, the Group obtains securit
ies under usual and customary
terms which permit it to repledge or resell the securit
ies to others. Amounts on such terms are:
\n \n
2024
2023
$mill
ion
$mill
ion
Securit
ies and collateral rece
ived (at fair value)
103,007
101,935
Securit
ies and collateral wh
ich can be repledged or sold (at fair value)
102,741
101,845
Amounts repledged/transferred to others for \ufb01nancing act
iv
it
ies, to satisfy liab
il
it
ies under sale and
repurchase agreements (at fair value)
27,708
34,154
Repurchase agreements and other sim
ilar secured borrow
ing
\n \n
2024
2023
$mill
ion
$mill
ion
Banks
8,669
5,585
Customers
37,002
47,956
45,671
53,541
Of which:
Fair value through pro\ufb01t or loss
33,539
41,283
Banks
7,759
4,658
Customers
25,780
36,625
Held at amortised cost
12,132
12,258
Banks
910
927
Customers
11,222
11,331
The tables below set out the \ufb01nancial assets prov
ided as collateral for repurchase and other secured borrowing transactions:
\n \n
Fair value
Fair value
through other
through pro\ufb01t
comprehensive
Off-balance
or loss
income
Amortised cost
sheet
Total
Collateral pledged against repurchase agreements
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
On-balance sheet
Debt securit
ies and other el
ig
ible b
ills
4,698
6,366
7,592
\u2013
18,656
Off-balance sheet
Repledged collateral received
\u2013
\u2013
\u2013
27,708
27,708
At 31 December 2024
4,698
6,366
7,592
27,708
46,364
On-balance sheet
Debt securit
ies and other el
ig
ible b
ills
4,993
8,157
10,181
\u2013
23,331
Off-balance sheet
Repledged collateral received
\u2013
\u2013
\u2013
34,154
34,154
At 31 December 2023
4,993
8,157
10,181
34,154
57,485
", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00520": { "value": "17. Goodwill and intang
ible assets
Accounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.
\n \n
2024
2023
Acquired
Computer
Acquired
Computer
Goodwill
intang
ibles
software
Total
Goodwill
intang
ibles
software
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cost
At 1 January
2,429
278
6,168
8,875
2,471
295
5,178
7,944
Exchange translation differences
(42)
(18)
(109)
(169)
(24)
(12)
21
(15)
Addit
ions
\u2013
1
952
953
\u2013
\u2013
1,124
1,124
Disposals
\u2013
\u2013
(5)
(5)
\u2013
\u2013
\u2013
\u2013
Impairment
\u2013
\u2013
(663)\u00b9
(663)
\u2013
\u2013
(151)\u00b2
(151)
Amounts written off
\u2013
(9)
(42)
(51)
(18)
(5)
(4)
(27)
At 31 December
2,387
252
6,301
8,940
2,429
278
6,168
8,875
Provis
ion for amort
isat
ion
At 1 January
\u2013
265
2,396
2,661
\u2013
276
1,799
2,075
Exchange translation differences
\u2013
(20)
(48)
(68)
\u2013
(12)
11
(1)
Amortisat
ion
\u2013
4
695
699
\u2013
1
625
626
Impairment charge
\u2013
\u2013
(102)\u00b9
(102)
\u2013
\u2013
(39)\u00b2
(39)
Amounts written off
\u2013
\u2013
(41)
(41)
\u2013
\u2013
\u2013
\u2013
At 31 December
\u2013
249
2,900
3,149
\u2013
265
2,396
2,661
Net book value
2,387
3
3,401
5,791
2,429
13
3,772
6,214
1
During 2024, the Group performed a review of its computer software intang
ibles wh
ich were capital
ised as at 31 December 2023, and
impa
ired $483 m
ill
ion of
the 2024 net book value due to lim
itat
ions in the available evidence to support the continued capital
isat
ion of the assets. The Group has made improvements in
its processes and controls to capture the required evidence going forward. The Group has also performed its annual review of computer software intang
ibles to
determine instances when the Group is no longer using certain applicat
ions
in its ongoing business and impa
ired $78 m
ill
ion. A total of $561 m
ill
ion
is recorded
with
in
impa
irment to re\ufb02ect the above
2
Computer software impa
irment
includes $82.8 mill
ion charge relat
ing to write off on SaaS (Software as a Service) applicat
ions cap
ital
ised
in previous years
At 31 December 2024, accumulated goodwill impa
irment losses
incurred from 1 January 2005 amounted to $3,331 mill
ion
(31\u00a0December 2023: $3,331 mill
ion), of wh
ich $nil was recognised in 2024 (31 December 2023: $nil).
Outcome of impa
irment assessment
An annual assessment is made as to whether the current carrying value of goodwill is impa
ired. For the purposes of
impa
irment
testing, goodwill is allocated at the date of acquis
it
ion to a CGU. Goodwill is considered to be impa
ired
if the carrying amount
of the relevant CGU exceeds its recoverable amount. Indicators of impa
irment
include changes in the economic performance
and outlook of the region includ
ing geopol
it
ical changes, changes
in market value of regional investments, large credit defaults
and strategic decis
ions to ex
it certain regions. The recoverable amounts for all the CGUs were measured based on value in use
(VIU). The calculation of VIU for each CGU is calculated using \ufb01ve-year cash\ufb02ow project
ions and an est
imated terminal value
based on a perpetuity value after year \ufb01ve. The cash\ufb02ow project
ions are based on forecasts approved by management up
to 2029. The perpetuity terminal value amount is calculated using year \ufb01ve cash\ufb02ows using long-term GDP growth rates.
All cash\ufb02ows are discounted using discount rates which re\ufb02ect market rates appropriate to the CGU.
The cash \ufb02ows used as an input to the VIU calculations used in determin
ing whether goodw
ill allocated to CGUs should be
impa
ired were amended dur
ing 2024 to re\ufb02ect changes to the basis on which business performance is monitored. There has
been no impact from the change estimated in the current period. It is impract
icable for the Group to est
imate the amount of
the effect of this change in future periods.
The goodwill allocated to each CGU and key assumptions used in determin
ing the recoverable amounts are set out below and
are solely estimates for the purposes of assessing impa
irment of acqu
ired goodwill.
\n \n
2024
2023
Long-term
Long-term
Pre Tax
forecast GDP
Pre Tax
forecast GDP
Goodwill
Discount rates
growth rates
Goodwill
Discount rates
growth rates
Cash generating unit
$mill
ion
per cent
per cent
$mill
ion
per cent
per cent
Country CGUs
Asia
1,014
1,036
Hong Kong
359
13.0
1.1
357
12.9
1.6
Taiwan
316
12.2
1.5
333
12.4
1.5
Singapore
339
13.0
2.3
346
13.9
2.1
Africa & Middle East
81
80
Pakistan
32
35.9
3.3
31
35.5
3.2
Bahrain
49
12.4
0.8
49
12.4
0.5
Global CGUs
1,292
1,313
Wealth Management
83
15.0
1.8
83
15.3
1.9
Corporate & Investment Banking
1,209
15.5
2.3
1,230
15.7
2.3
2,387
2,429
In the current year, there are no CGUs for which any ind
iv
idual movement on key estimates (cash\ufb02ow, discount rate and GDP
growth) would cause an impa
irment.
Acquired intang
ibles
These primar
ily compr
ise those items recognised as part of the acquis
it
ions of Union Bank (now amalgamated into Standard
Chartered Bank (Pakistan) Lim
ited), Hs
inchu (now amalgamated into Standard Chartered Bank (Taiwan) Lim
ited), Amer
ican
Express Bank and ABSA\u2019s custody business in Africa.
The acquired intang
ibles are amort
ised over periods from four years to a maximum of 16 years. The constituents are as follows:
\n \n
2024
2023
$mill
ion
$mill
ion
Acquired intang
ibles compr
ise:
Brand names
1
\u2013
Customer relationsh
ips
\u2013
1
Licenses
2
12
Net book value
3
13
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00521": { "value": "17. Goodwill and intang
ible assets
Accounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.
\n \n
2024
2023
Acquired
Computer
Acquired
Computer
Goodwill
intang
ibles
software
Total
Goodwill
intang
ibles
software
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cost
At 1 January
2,429
278
6,168
8,875
2,471
295
5,178
7,944
Exchange translation differences
(42)
(18)
(109)
(169)
(24)
(12)
21
(15)
Addit
ions
\u2013
1
952
953
\u2013
\u2013
1,124
1,124
Disposals
\u2013
\u2013
(5)
(5)
\u2013
\u2013
\u2013
\u2013
Impairment
\u2013
\u2013
(663)\u00b9
(663)
\u2013
\u2013
(151)\u00b2
(151)
Amounts written off
\u2013
(9)
(42)
(51)
(18)
(5)
(4)
(27)
At 31 December
2,387
252
6,301
8,940
2,429
278
6,168
8,875
Provis
ion for amort
isat
ion
At 1 January
\u2013
265
2,396
2,661
\u2013
276
1,799
2,075
Exchange translation differences
\u2013
(20)
(48)
(68)
\u2013
(12)
11
(1)
Amortisat
ion
\u2013
4
695
699
\u2013
1
625
626
Impairment charge
\u2013
\u2013
(102)\u00b9
(102)
\u2013
\u2013
(39)\u00b2
(39)
Amounts written off
\u2013
\u2013
(41)
(41)
\u2013
\u2013
\u2013
\u2013
At 31 December
\u2013
249
2,900
3,149
\u2013
265
2,396
2,661
Net book value
2,387
3
3,401
5,791
2,429
13
3,772
6,214
1
During 2024, the Group performed a review of its computer software intang
ibles wh
ich were capital
ised as at 31 December 2023, and
impa
ired $483 m
ill
ion of
the 2024 net book value due to lim
itat
ions in the available evidence to support the continued capital
isat
ion of the assets. The Group has made improvements in
its processes and controls to capture the required evidence going forward. The Group has also performed its annual review of computer software intang
ibles to
determine instances when the Group is no longer using certain applicat
ions
in its ongoing business and impa
ired $78 m
ill
ion. A total of $561 m
ill
ion
is recorded
with
in
impa
irment to re\ufb02ect the above
2
Computer software impa
irment
includes $82.8 mill
ion charge relat
ing to write off on SaaS (Software as a Service) applicat
ions cap
ital
ised
in previous years
At 31 December 2024, accumulated goodwill impa
irment losses
incurred from 1 January 2005 amounted to $3,331 mill
ion
(31\u00a0December 2023: $3,331 mill
ion), of wh
ich $nil was recognised in 2024 (31 December 2023: $nil).
Outcome of impa
irment assessment
An annual assessment is made as to whether the current carrying value of goodwill is impa
ired. For the purposes of
impa
irment
testing, goodwill is allocated at the date of acquis
it
ion to a CGU. Goodwill is considered to be impa
ired
if the carrying amount
of the relevant CGU exceeds its recoverable amount. Indicators of impa
irment
include changes in the economic performance
and outlook of the region includ
ing geopol
it
ical changes, changes
in market value of regional investments, large credit defaults
and strategic decis
ions to ex
it certain regions. The recoverable amounts for all the CGUs were measured based on value in use
(VIU). The calculation of VIU for each CGU is calculated using \ufb01ve-year cash\ufb02ow project
ions and an est
imated terminal value
based on a perpetuity value after year \ufb01ve. The cash\ufb02ow project
ions are based on forecasts approved by management up
to 2029. The perpetuity terminal value amount is calculated using year \ufb01ve cash\ufb02ows using long-term GDP growth rates.
All cash\ufb02ows are discounted using discount rates which re\ufb02ect market rates appropriate to the CGU.
The cash \ufb02ows used as an input to the VIU calculations used in determin
ing whether goodw
ill allocated to CGUs should be
impa
ired were amended dur
ing 2024 to re\ufb02ect changes to the basis on which business performance is monitored. There has
been no impact from the change estimated in the current period. It is impract
icable for the Group to est
imate the amount of
the effect of this change in future periods.
The goodwill allocated to each CGU and key assumptions used in determin
ing the recoverable amounts are set out below and
are solely estimates for the purposes of assessing impa
irment of acqu
ired goodwill.
\n \n
2024
2023
Long-term
Long-term
Pre Tax
forecast GDP
Pre Tax
forecast GDP
Goodwill
Discount rates
growth rates
Goodwill
Discount rates
growth rates
Cash generating unit
$mill
ion
per cent
per cent
$mill
ion
per cent
per cent
Country CGUs
Asia
1,014
1,036
Hong Kong
359
13.0
1.1
357
12.9
1.6
Taiwan
316
12.2
1.5
333
12.4
1.5
Singapore
339
13.0
2.3
346
13.9
2.1
Africa & Middle East
81
80
Pakistan
32
35.9
3.3
31
35.5
3.2
Bahrain
49
12.4
0.8
49
12.4
0.5
Global CGUs
1,292
1,313
Wealth Management
83
15.0
1.8
83
15.3
1.9
Corporate & Investment Banking
1,209
15.5
2.3
1,230
15.7
2.3
2,387
2,429
In the current year, there are no CGUs for which any ind
iv
idual movement on key estimates (cash\ufb02ow, discount rate and GDP
growth) would cause an impa
irment.
Acquired intang
ibles
These primar
ily compr
ise those items recognised as part of the acquis
it
ions of Union Bank (now amalgamated into Standard
Chartered Bank (Pakistan) Lim
ited), Hs
inchu (now amalgamated into Standard Chartered Bank (Taiwan) Lim
ited), Amer
ican
Express Bank and ABSA\u2019s custody business in Africa.
The acquired intang
ibles are amort
ised over periods from four years to a maximum of 16 years. The constituents are as follows:
\n \n
2024
2023
$mill
ion
$mill
ion
Acquired intang
ibles compr
ise:
Brand names
1
\u2013
Customer relationsh
ips
\u2013
1
Licenses
2
12
Net book value
3
13
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00519": { "value": "17. Goodwill and intang
ible assets
Accounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.
\n \n
2024
2023
Acquired
Computer
Acquired
Computer
Goodwill
intang
ibles
software
Total
Goodwill
intang
ibles
software
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cost
At 1 January
2,429
278
6,168
8,875
2,471
295
5,178
7,944
Exchange translation differences
(42)
(18)
(109)
(169)
(24)
(12)
21
(15)
Addit
ions
\u2013
1
952
953
\u2013
\u2013
1,124
1,124
Disposals
\u2013
\u2013
(5)
(5)
\u2013
\u2013
\u2013
\u2013
Impairment
\u2013
\u2013
(663)\u00b9
(663)
\u2013
\u2013
(151)\u00b2
(151)
Amounts written off
\u2013
(9)
(42)
(51)
(18)
(5)
(4)
(27)
At 31 December
2,387
252
6,301
8,940
2,429
278
6,168
8,875
Provis
ion for amort
isat
ion
At 1 January
\u2013
265
2,396
2,661
\u2013
276
1,799
2,075
Exchange translation differences
\u2013
(20)
(48)
(68)
\u2013
(12)
11
(1)
Amortisat
ion
\u2013
4
695
699
\u2013
1
625
626
Impairment charge
\u2013
\u2013
(102)\u00b9
(102)
\u2013
\u2013
(39)\u00b2
(39)
Amounts written off
\u2013
\u2013
(41)
(41)
\u2013
\u2013
\u2013
\u2013
At 31 December
\u2013
249
2,900
3,149
\u2013
265
2,396
2,661
Net book value
2,387
3
3,401
5,791
2,429
13
3,772
6,214
1
During 2024, the Group performed a review of its computer software intang
ibles wh
ich were capital
ised as at 31 December 2023, and
impa
ired $483 m
ill
ion of
the 2024 net book value due to lim
itat
ions in the available evidence to support the continued capital
isat
ion of the assets. The Group has made improvements in
its processes and controls to capture the required evidence going forward. The Group has also performed its annual review of computer software intang
ibles to
determine instances when the Group is no longer using certain applicat
ions
in its ongoing business and impa
ired $78 m
ill
ion. A total of $561 m
ill
ion
is recorded
with
in
impa
irment to re\ufb02ect the above
2
Computer software impa
irment
includes $82.8 mill
ion charge relat
ing to write off on SaaS (Software as a Service) applicat
ions cap
ital
ised
in previous years
At 31 December 2024, accumulated goodwill impa
irment losses
incurred from 1 January 2005 amounted to $3,331 mill
ion
(31\u00a0December 2023: $3,331 mill
ion), of wh
ich $nil was recognised in 2024 (31 December 2023: $nil).
Outcome of impa
irment assessment
An annual assessment is made as to whether the current carrying value of goodwill is impa
ired. For the purposes of
impa
irment
testing, goodwill is allocated at the date of acquis
it
ion to a CGU. Goodwill is considered to be impa
ired
if the carrying amount
of the relevant CGU exceeds its recoverable amount. Indicators of impa
irment
include changes in the economic performance
and outlook of the region includ
ing geopol
it
ical changes, changes
in market value of regional investments, large credit defaults
and strategic decis
ions to ex
it certain regions. The recoverable amounts for all the CGUs were measured based on value in use
(VIU). The calculation of VIU for each CGU is calculated using \ufb01ve-year cash\ufb02ow project
ions and an est
imated terminal value
based on a perpetuity value after year \ufb01ve. The cash\ufb02ow project
ions are based on forecasts approved by management up
to 2029. The perpetuity terminal value amount is calculated using year \ufb01ve cash\ufb02ows using long-term GDP growth rates.
All cash\ufb02ows are discounted using discount rates which re\ufb02ect market rates appropriate to the CGU.
The cash \ufb02ows used as an input to the VIU calculations used in determin
ing whether goodw
ill allocated to CGUs should be
impa
ired were amended dur
ing 2024 to re\ufb02ect changes to the basis on which business performance is monitored. There has
been no impact from the change estimated in the current period. It is impract
icable for the Group to est
imate the amount of
the effect of this change in future periods.
The goodwill allocated to each CGU and key assumptions used in determin
ing the recoverable amounts are set out below and
are solely estimates for the purposes of assessing impa
irment of acqu
ired goodwill.
\n \n
2024
2023
Long-term
Long-term
Pre Tax
forecast GDP
Pre Tax
forecast GDP
Goodwill
Discount rates
growth rates
Goodwill
Discount rates
growth rates
Cash generating unit
$mill
ion
per cent
per cent
$mill
ion
per cent
per cent
Country CGUs
Asia
1,014
1,036
Hong Kong
359
13.0
1.1
357
12.9
1.6
Taiwan
316
12.2
1.5
333
12.4
1.5
Singapore
339
13.0
2.3
346
13.9
2.1
Africa & Middle East
81
80
Pakistan
32
35.9
3.3
31
35.5
3.2
Bahrain
49
12.4
0.8
49
12.4
0.5
Global CGUs
1,292
1,313
Wealth Management
83
15.0
1.8
83
15.3
1.9
Corporate & Investment Banking
1,209
15.5
2.3
1,230
15.7
2.3
2,387
2,429
In the current year, there are no CGUs for which any ind
iv
idual movement on key estimates (cash\ufb02ow, discount rate and GDP
growth) would cause an impa
irment.
Acquired intang
ibles
These primar
ily compr
ise those items recognised as part of the acquis
it
ions of Union Bank (now amalgamated into Standard
Chartered Bank (Pakistan) Lim
ited), Hs
inchu (now amalgamated into Standard Chartered Bank (Taiwan) Lim
ited), Amer
ican
Express Bank and ABSA\u2019s custody business in Africa.
The acquired intang
ibles are amort
ised over periods from four years to a maximum of 16 years. The constituents are as follows:
\n \n
2024
2023
$mill
ion
$mill
ion
Acquired intang
ibles compr
ise:
Brand names
1
\u2013
Customer relationsh
ips
\u2013
1
Licenses
2
12
Net book value
3
13
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00652": { "value": "Accounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00650": { "value": "Accounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00651": { "value": "Accounting policy
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash \ufb02ows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash in\ufb02ows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group\u2019s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash \ufb02ows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash \ufb02ows and the
level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
i\ufb01able assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which re\ufb02ects market expectations of the probabil
ity that the future econom
ic
bene\ufb01ts embodied in the asset will \ufb02ow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset\u2019s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
i\ufb01able
internally generated software are capital
ised where
it is probable that future economic
bene\ufb01ts attributable to the software will \ufb02ow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset\u2019s useful life to a maximum of 10-years.
On an annual basis software assets\u2019 residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic bene\ufb01ts: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier\u2019s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the de\ufb01nit
ion of an intang
ible asset
in their own
right if it is separately ident
i\ufb01able and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic bene\ufb01ts \ufb02owing from the underlying resource and the Group can restrict others from
accessing those bene\ufb01ts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00523": { "value": "An annual assessment is made as to whether the current carrying value of goodwill is impa
ired. For the purposes of
impa
irment
testing, goodwill is allocated at the date of acquis
it
ion to a CGU. Goodwill is considered to be impa
ired
if the carrying amount
of the relevant CGU exceeds its recoverable amount. Indicators of impa
irment
include changes in the economic performance
and outlook of the region includ
ing geopol
it
ical changes, changes
in market value of regional investments, large credit defaults
and strategic decis
ions to ex
it certain regions. The recoverable amounts for all the CGUs were measured based on value in use
(VIU). The calculation of VIU for each CGU is calculated using \ufb01ve-year cash\ufb02ow project
ions and an est
imated terminal value
based on a perpetuity value after year \ufb01ve. The cash\ufb02ow project
ions are based on forecasts approved by management up
to 2029. The perpetuity terminal value amount is calculated using year \ufb01ve cash\ufb02ows using long-term GDP growth rates.
All cash\ufb02ows are discounted using discount rates which re\ufb02ect market rates appropriate to the CGU.
The cash \ufb02ows used as an input to the VIU calculations used in determin
ing whether goodw
ill allocated to CGUs should be
impa
ired were amended dur
ing 2024 to re\ufb02ect changes to the basis on which business performance is monitored. There has
been no impact from the change estimated in the current period. It is impract
icable for the Group to est
imate the amount of
the effect of this change in future periods.
The goodwill allocated to each CGU and key assumptions used in determin
ing the recoverable amounts are set out below and
are solely estimates for the purposes of assessing impa
irment of acqu
ired goodwill.
\n \n
2024
2023
Long-term
Long-term
Pre Tax
forecast GDP
Pre Tax
forecast GDP
Goodwill
Discount rates
growth rates
Goodwill
Discount rates
growth rates
Cash generating unit
$mill
ion
per cent
per cent
$mill
ion
per cent
per cent
Country CGUs
Asia
1,014
1,036
Hong Kong
359
13.0
1.1
357
12.9
1.6
Taiwan
316
12.2
1.5
333
12.4
1.5
Singapore
339
13.0
2.3
346
13.9
2.1
Africa & Middle East
81
80
Pakistan
32
35.9
3.3
31
35.5
3.2
Bahrain
49
12.4
0.8
49
12.4
0.5
Global CGUs
1,292
1,313
Wealth Management
83
15.0
1.8
83
15.3
1.9
Corporate & Investment Banking
1,209
15.5
2.3
1,230
15.7
2.3
2,387
2,429
In the current year, there are no CGUs for which any ind
iv
idual movement on key estimates (cash\ufb02ow, discount rate and GDP
growth) would cause an impa
irment", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationForIndividualAssetOrCashgeneratingUnitWithSignificantAmountOfGoodwillOrIntangibleAssetsWithIndefiniteUsefulLivesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00524": { "value": "18. Property, plant and equipment
Accounting policy
All property, plant and equipment is stated at cost less accumulated depreciat
ion and
impa
irment losses.
Land and build
ings compr
ise mainly branches and of\ufb01ces. Freehold land is not depreciated although it is subject to
impa
irment test
ing.
Depreciat
ion on other assets
is calculated using the straight-line method to allocate their cost to their residual values over
their estimated useful lives, as follows:
\n \n
\u2022 Owned premises
\u2022
up to 50 years
\u2022 Leasehold premises
\u2022
up to 50 years
\u2022 Leasehold improvements
\u2022
Shorter of remain
ing lease term and 10 years
\u2022
Equipment and motor vehicles
\u2022
three to 15 years
Where the Group is a lessee of a right-of-use asset, the leased assets are capital
ised and
included in Property, plant and
equipment with a corresponding liab
il
ity to the lessor recognised in other liab
il
it
ies. The account
ing policy for lease assets
is set out in Note 19.
\n\n\n\n \n
Leased
Leased
Operating
premises
equipment
Premises
Equipment
lease assets
assets
assets
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cost or valuation
At 1 January 2024
1,741
810
\u2013
1,864
18
4,433
Exchange translation differences
(41)
(31)
\u2013
(38)
(4)
(114)
Addit
ions
112
1
194
1
\u2013
213
150
1
669
Disposals and fully depreciated assets
written off
(61)
2
(37)
2
\u2013
(13)
(1)
(112)
Other movements
(25)
\u2013
\u2013
\u2013
\u2013
(25)
As at 31 December 2024
1,726
936
\u2013
2,026
163
4,851
Depreciat
ion
Accumulated at 1 January
692
535
\u2013
914
18
2,159
Exchange translation differences
(28)
(15)
\u2013
(40)
(14)
(97)
Charge for the year
79
92
\u2013
220
36
427
Impairment charge
2
\u2013
\u2013
9
\u2013
11
Attributable to assets sold, transferred
or written off
(29)
2
(37)
2
\u2013
(7)
(1)
(74)
Accumulated at 31 December 2024
716
575
\u2013
1,096
39
2,426
Net book amount at 31 December 2024
1,010
361
\u2013
930
124
2,425
Cost or valuation
At 1 January 2023
1,773
840
4,420
1,652
29
8,714
Exchange translation differences
(27)
(22)
\u2013
(5)
(3)
(57)
Addit
ions
45
1
114
1
\u2013
286
1
446
Disposals and fully depreciated assets
written off
(68)
2
(122)
2
(4,420)
3
(69)
(9)
(4,688)
Transfers to assets held for sale
18
\u2013
\u2013
\u2013
\u2013
18
As at 31 December 2023
1,741
810
\u2013
1,864
18
4,433
Depreciat
ion
Accumulated at 1 January 2023
678
575
1,185
730
24
3,192
Exchange translation differences
(21)
(17)
1
(25)
(1)
(63)
Charge for the year
77
99
27
238
4
445
Impairment charge
3
\u2013
\u2013
9
\u2013
12
Attributable to assets sold, transferred
or written off
(47)
2
(122)
2
(1,213)
3
(38)
(9)
(1,429)
Transfers to assets held for sale
2
\u2013
\u2013
\u2013
\u2013
2
Accumulated at 31 December 2023
692
535
\u2013
914
18
2,159
Net book amount at 31 December 2023
1,049
275
\u2013
950
\u2013
2,274
\n
1
Refer to the cash \ufb02ow statement under cash \ufb02ows from invest
ing act
iv
it
ies section for the purchase of property, plant and equipment during the year of
\n
$456 mill
ion (2023: $159 m
ill
ion)
\n
2
Disposals for property, plant and equipment during the year of $56mill
ion (2023: $53 m
ill
ion)
in the cash \ufb02ow statement would include the gains and losses
\n
Incurred as part of other operating income (Note 6) on disposal of assets during the year and the net book value disposed
\n
3
Includes disposal of assets from aviat
ion \ufb01nance leas
ing business and sale of vessels", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00657": { "value": "Accounting policy
All property, plant and equipment is stated at cost less accumulated depreciat
ion and
impa
irment losses.
Land and build
ings compr
ise mainly branches and of\ufb01ces. Freehold land is not depreciated although it is subject to
impa
irment test
ing.
Depreciat
ion on other assets
is calculated using the straight-line method to allocate their cost to their residual values over
their estimated useful lives, as follows:
\n \n
\u2022 Owned premises
\u2022
up to 50 years
\u2022 Leasehold premises
\u2022
up to 50 years
\u2022 Leasehold improvements
\u2022
Shorter of remain
ing lease term and 10 years
\u2022
Equipment and motor vehicles
\u2022
three to 15 years
Where the Group is a lessee of a right-of-use asset, the leased assets are capital
ised and
included in Property, plant and
equipment with a corresponding liab
il
ity to the lessor recognised in other liab
il
it
ies. The account
ing policy for lease assets
is set out in Note 19.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00525": { "value": "19. Leased assets
Accounting policy
Where the Group is a lessee and the lease is deemed in scope of IFRS 16, it recognises a liab
il
ity equal to the present value
of lease payments over the lease term, discounted using the incremental borrowing rate applicable in the economic
environment of the lease. The liab
il
ity is recognised in \u2018Other liab
il
it
ies\u2019. A correspond
ing right-of-use asset equal to the
liab
il
ity, adjusted for any lease payments made at or before the commencement date, is recognised in \u2018Property, plant and
equipment\u2019. The lease term includes any extension options contained in the contract that the Group is reasonably certain it
will exercise.
The Group subsequently depreciates the right-of-use asset using the straight-line method over the lease term and
measures the lease liab
il
ity using the effective interest method. Depreciat
ion on the asset
is recognised in \u2018Depreciat
ion
and amortisat
ion\u2019, and
interest on the lease liab
il
ity is recognised in \u2018Interest expense\u2019.
If a leased premise, or a physically dist
inct port
ion of a premise such as an ind
iv
idual \ufb02oor, is deemed by management
to be surplus to the Group\u2019s needs and action has been taken to abandon the space before the lease expires, this is
considered an ind
icator of
impa
irment. An
impa
irment loss
is recognised if the right-of-use asset, or portion thereof, has a
carrying value in excess of its value-in-use when taking into account factors such as the abil
ity and l
ikel
ihood of obta
in
ing
a subtenant.
The key judgement in determin
ing lease balances
is the determinat
ion of the lease term,
in particular whether the Group
is reasonably certain that it will exercise extension options present in lease contracts. On in
it
ial recognit
ion, the Group
considers a range of characterist
ics such as prem
ises function, regional trends and the term remain
ing on the lease to
determine whether it is reasonably certain that a contractual right to extend a lease will be exercised. When there are
changes to assumptions the lease balances are remeasured.
The estimates involved are the determinat
ion of
incremental borrowing rates in the respective economic environments.
The Group uses third-party broker quotes to estimate its USD cost of senior unsecured borrowing, then uses cross currency
swap pric
ing
informat
ion to determ
ine the equivalent cost of borrowing in other currencies. If it is not possible to estimate
an incremental borrowing rate through this process, other proxies such as local government bond yields are used.
The Group primar
ily enters lease contracts that grant
it the right to use premises such as of\ufb01ce build
ings and reta
il branches.
Exist
ing lease l
iab
il
it
ies may change
in future periods due to changes in assumptions or decis
ions to exerc
ise lease renewal or
terminat
ion opt
ions, changes in payments due to renegotiat
ions of market rental rates as perm
itted by those contracts and
changes to payments due to rent being contractually linked to an in\ufb02at
ion
index. In general the re-measurement of a lease
liab
il
ity under these circumstances leads to an equal change to the right-of-use asset balance, with no immed
iate effect on the
income statement.
The total cash out\ufb02ow during the year for premises and equipment leases was $265 mill
ion (2023: $283 m
ill
ion).
The right-of-use asset balances and depreciat
ion charges are d
isclosed in Note 18. The lease liab
il
ity balances are disclosed in
Note 23 and the interest expense on lease liab
il
it
ies
is disclosed in Note 3.
Maturity analysis
The maturity pro\ufb01le for lease liab
il
it
ies assoc
iated with leased premises and equipment assets is as follows:
\n \n
2024
2023
Between
Between
Between
Between
one year
two years
one year
two years
One year
and two
and \ufb01ve
More than
One year
and two
and \ufb01ve
More than
or less
years
years
\ufb01ve years
Total
or less
years
years
\ufb01ve years
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Other liab
il
it
ies \u2013 lease l
iab
il
it
ies
279
223
443
414
1,359
248
203
373
410
1,234
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00658": { "value": "Accounting policy
Where the Group is a lessee and the lease is deemed in scope of IFRS 16, it recognises a liab
il
ity equal to the present value
of lease payments over the lease term, discounted using the incremental borrowing rate applicable in the economic
environment of the lease. The liab
il
ity is recognised in \u2018Other liab
il
it
ies\u2019. A correspond
ing right-of-use asset equal to the
liab
il
ity, adjusted for any lease payments made at or before the commencement date, is recognised in \u2018Property, plant and
equipment\u2019. The lease term includes any extension options contained in the contract that the Group is reasonably certain it
will exercise.
The Group subsequently depreciates the right-of-use asset using the straight-line method over the lease term and
measures the lease liab
il
ity using the effective interest method. Depreciat
ion on the asset
is recognised in \u2018Depreciat
ion
and amortisat
ion\u2019, and
interest on the lease liab
il
ity is recognised in \u2018Interest expense\u2019.
If a leased premise, or a physically dist
inct port
ion of a premise such as an ind
iv
idual \ufb02oor, is deemed by management
to be surplus to the Group\u2019s needs and action has been taken to abandon the space before the lease expires, this is
considered an ind
icator of
impa
irment. An
impa
irment loss
is recognised if the right-of-use asset, or portion thereof, has a
carrying value in excess of its value-in-use when taking into account factors such as the abil
ity and l
ikel
ihood of obta
in
ing
a subtenant.
The key judgement in determin
ing lease balances
is the determinat
ion of the lease term,
in particular whether the Group
is reasonably certain that it will exercise extension options present in lease contracts. On in
it
ial recognit
ion, the Group
considers a range of characterist
ics such as prem
ises function, regional trends and the term remain
ing on the lease to
determine whether it is reasonably certain that a contractual right to extend a lease will be exercised. When there are
changes to assumptions the lease balances are remeasured.
The estimates involved are the determinat
ion of
incremental borrowing rates in the respective economic environments.
The Group uses third-party broker quotes to estimate its USD cost of senior unsecured borrowing, then uses cross currency
swap pric
ing
informat
ion to determ
ine the equivalent cost of borrowing in other currencies. If it is not possible to estimate
an incremental borrowing rate through this process, other proxies such as local government bond yields are used.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00526": { "value": "20. Other assets \n \n
2024
2023
Other assets include:
$mill
ion
$mill
ion
Financ
ial assets held at amort
ized cost (Note 13):
Hong Kong SAR Government certif
icates of
indebtedness (Note 23)\u00b9
6,369
6,568
Cash collateral
3
11,046
10,337
Acceptances and endorsements
5,476
5,326
Unsettled trades and other \ufb01nancial assets
11,694
15,909
34,585
38,140
Non-\ufb01nancial assets:
Commodit
ies and em
iss
ions cert
if
icates\u00b2
8,358
8,889
Other assets
525
565
43,468
47,594
1
The Hong Kong SAR Government certif
icates of
indebtedness are subordinated to the claims of other parties in respect of bank notes issued
2
Physically held commodit
ies and em
iss
ion cert
if
icates are
inventory that is carried at fair value less costs to sell, $5.6 bill
ion (31 December 2023: $5.1 b
ill
ion) are
classif
ied as Level 1 and $2.7 b
ill
ion are class
if
ied as Level 2 (31 December 2023: $3.7 b
ill
ion). For commod
it
ies, the fa
ir value is derived from observable spot or
short-term futures prices from relevant exchanges
3
Cash collateral are margins placed to collateralize net derivat
ive mark-to-market (MTM) pos
it
ions", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00527": { "value": "20. Other assets \n \n
2024
2023
Other assets include:
$mill
ion
$mill
ion
Financ
ial assets held at amort
ized cost (Note 13):
Hong Kong SAR Government certif
icates of
indebtedness (Note 23)\u00b9
6,369
6,568
Cash collateral
3
11,046
10,337
Acceptances and endorsements
5,476
5,326
Unsettled trades and other \ufb01nancial assets
11,694
15,909
34,585
38,140
Non-\ufb01nancial assets:
Commodit
ies and em
iss
ions cert
if
icates\u00b2
8,358
8,889
Other assets
525
565
43,468
47,594
1
The Hong Kong SAR Government certif
icates of
indebtedness are subordinated to the claims of other parties in respect of bank notes issued
2
Physically held commodit
ies and em
iss
ion cert
if
icates are
inventory that is carried at fair value less costs to sell, $5.6 bill
ion (31 December 2023: $5.1 b
ill
ion) are
classif
ied as Level 1 and $2.7 b
ill
ion are class
if
ied as Level 2 (31 December 2023: $3.7 b
ill
ion). For commod
it
ies, the fa
ir value is derived from observable spot or
short-term futures prices from relevant exchanges
3
Cash collateral are margins placed to collateralize net derivat
ive mark-to-market (MTM) pos
it
ions", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00530": { "value": "21. Assets held for sale and associated liab
il
it
ies
Accounting Policy
Upon reclassif
icat
ion property, plant and equipment are measured at the lower of their carrying amount and fair
value less costs to sell. Financ
ial
instruments continue to be measured per the accounting polic
ies
in Note 13
Financ
ial
instruments.
The assets below have been presented as held for sale following the approval of Group management and the transactions are
expected to complete in 2025.
Assets held for sale
The \ufb01nancial assets reported below are class
if
ied under Level 1 $58 m
ill
ion (31 December 2023: $101 m
ill
ion), Level 2 $353 m
ill
ion
(31 December 2023: $541 mill
ion) and Level 3 $473 m
ill
ion (31 December 2023: $59 m
ill
ion).
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial assets held at fa
ir value through pro\ufb01t or loss
5
\u2013
Loans and advances to banks
5
\u2013
Financ
ial assets held at amort
ised cost
884
701
Cash and balances at central banks
109
246
Loans and advances to banks
18
24
Loans and advances to customers
656\u00b2
251
Debt securit
ies held at amort
ised cost
101
180
Property, plant and equipment
15
59
Vessels
1
\u2013
43
Others
15
16
Others
28
49
932
809
1
Considerat
ion on d
isposal of Property, plant and equipment classif
ied under assets held for sale dur
ing 31 December 2024 was $53 mill
ion (31 December 2023:
$149 mill
ion)
2
Includes $414 mill
ion unsecured personal loan bus
iness from SC Bank India which was disposed on 23 January 2025 (refer note 37 \u2013 Post balance sheet events)
Liab
il
it
ies held for sale
The \ufb01nancial l
iab
il
it
ies reported below are class
if
ied under Level 1 $89 m
ill
ion (2023: $54 m
ill
ion) and Level 2 $271 m
ill
ion
(2023: $672 mill
ion).
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at amort
ised cost
360
726
Deposits by banks
\u2013
3
Customer accounts
360
723
Other liab
il
it
ies
16
51
Provis
ions for l
iab
il
it
ies and charges
5
10
381
787
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00528": { "value": "21. Assets held for sale and associated liab
il
it
ies
Accounting Policy
Upon reclassif
icat
ion property, plant and equipment are measured at the lower of their carrying amount and fair
value less costs to sell. Financ
ial
instruments continue to be measured per the accounting polic
ies
in Note 13
Financ
ial
instruments.
The assets below have been presented as held for sale following the approval of Group management and the transactions are
expected to complete in 2025.
Assets held for sale
The \ufb01nancial assets reported below are class
if
ied under Level 1 $58 m
ill
ion (31 December 2023: $101 m
ill
ion), Level 2 $353 m
ill
ion
(31 December 2023: $541 mill
ion) and Level 3 $473 m
ill
ion (31 December 2023: $59 m
ill
ion).
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial assets held at fa
ir value through pro\ufb01t or loss
5
\u2013
Loans and advances to banks
5
\u2013
Financ
ial assets held at amort
ised cost
884
701
Cash and balances at central banks
109
246
Loans and advances to banks
18
24
Loans and advances to customers
656\u00b2
251
Debt securit
ies held at amort
ised cost
101
180
Property, plant and equipment
15
59
Vessels
1
\u2013
43
Others
15
16
Others
28
49
932
809
1
Considerat
ion on d
isposal of Property, plant and equipment classif
ied under assets held for sale dur
ing 31 December 2024 was $53 mill
ion (31 December 2023:
$149 mill
ion)
2
Includes $414 mill
ion unsecured personal loan bus
iness from SC Bank India which was disposed on 23 January 2025 (refer note 37 \u2013 Post balance sheet events)
Liab
il
it
ies held for sale
The \ufb01nancial l
iab
il
it
ies reported below are class
if
ied under Level 1 $89 m
ill
ion (2023: $54 m
ill
ion) and Level 2 $271 m
ill
ion
(2023: $672 mill
ion).
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at amort
ised cost
360
726
Deposits by banks
\u2013
3
Customer accounts
360
723
Other liab
il
it
ies
16
51
Provis
ions for l
iab
il
it
ies and charges
5
10
381
787
", "dimensions": { "concept": "stan:DisclosureOfAssetsHeldForSaleAndAssociatedLiabilitiesExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00529": { "value": "21. Assets held for sale and associated liab
il
it
ies
Accounting Policy
Upon reclassif
icat
ion property, plant and equipment are measured at the lower of their carrying amount and fair
value less costs to sell. Financ
ial
instruments continue to be measured per the accounting polic
ies
in Note 13
Financ
ial
instruments.
The assets below have been presented as held for sale following the approval of Group management and the transactions are
expected to complete in 2025.
Assets held for sale
The \ufb01nancial assets reported below are class
if
ied under Level 1 $58 m
ill
ion (31 December 2023: $101 m
ill
ion), Level 2 $353 m
ill
ion
(31 December 2023: $541 mill
ion) and Level 3 $473 m
ill
ion (31 December 2023: $59 m
ill
ion).
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial assets held at fa
ir value through pro\ufb01t or loss
5
\u2013
Loans and advances to banks
5
\u2013
Financ
ial assets held at amort
ised cost
884
701
Cash and balances at central banks
109
246
Loans and advances to banks
18
24
Loans and advances to customers
656\u00b2
251
Debt securit
ies held at amort
ised cost
101
180
Property, plant and equipment
15
59
Vessels
1
\u2013
43
Others
15
16
Others
28
49
932
809
1
Considerat
ion on d
isposal of Property, plant and equipment classif
ied under assets held for sale dur
ing 31 December 2024 was $53 mill
ion (31 December 2023:
$149 mill
ion)
2
Includes $414 mill
ion unsecured personal loan bus
iness from SC Bank India which was disposed on 23 January 2025 (refer note 37 \u2013 Post balance sheet events)
Liab
il
it
ies held for sale
The \ufb01nancial l
iab
il
it
ies reported below are class
if
ied under Level 1 $89 m
ill
ion (2023: $54 m
ill
ion) and Level 2 $271 m
ill
ion
(2023: $672 mill
ion).
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at amort
ised cost
360
726
Deposits by banks
\u2013
3
Customer accounts
360
723
Other liab
il
it
ies
16
51
Provis
ions for l
iab
il
it
ies and charges
5
10
381
787
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00743": { "value": "Accounting Policy
Upon reclassif
icat
ion property, plant and equipment are measured at the lower of their carrying amount and fair
value less costs to sell. Financ
ial
instruments continue to be measured per the accounting polic
ies
in Note 13
Financ
ial
instruments.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00659": { "value": "Accounting Policy
Upon reclassif
icat
ion property, plant and equipment are measured at the lower of their carrying amount and fair
value less costs to sell. Financ
ial
instruments continue to be measured per the accounting polic
ies
in Note 13
Financ
ial
instruments.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForAssetsHeldForSaleAndAssociatedLiabilitiesExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00531": { "value": "2. Debt securit
ies
in issue
Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy.
\n \n
2024
2023
Certif
icates
Certif
icates
of deposit of
Other debt
of deposit of
Other debt
$100,000
securit
ies
$100,000
securit
ies
or more
in issue
Total
or more
in issue
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Debt securit
ies
in issue
18,113
46,496
64,609
15,533
47,013
62,546
Debt securit
ies
in issue included with
in:
Financ
ial l
iab
il
it
ies held at fa
ir value
through pro\ufb01t or loss (Note 13)
\u2013
13,731
13,731
\u2013
10,817
10,817
Total debt securit
ies
in issue
18,113
60,227
78,340
15,533
57,830
73,363
In 2024, the Company issued a total of $7.4 bill
ion sen
ior notes for general business purposes of the Group as shown below:
\n \n
Securit
ies
$mill
ion
$1,500 mill
ion \ufb01xed-rate sen
ior notes due 2035 (callable 2034)
1,500
SGD 335 mill
ion \ufb01xed-rate sen
ior notes due 2030 (callable 2029)
246
EUR1,000 mill
ion \ufb01xed-rate sen
ior notes due 2032 (callable 2031)
1,035
HKD 1,100 mill
ion \ufb01xed-rate sen
ior notes due 2027 (callable 2026)
142
$500 mill
ion \ufb02oat
ing-rate senior notes due 2028 (callable 2027)
500
$1,000 mill
ion \ufb01xed-rate sen
ior notes due 2028 (callable 2027)
1,000
$1,500 mill
ion \ufb01xed-rate sen
ior notes due 2035 (callable 2034)
1,500
$1,500 mill
ion \ufb01xed-rate sen
ior notes due 2030 (callable 2029)
1,500
Total Senior Notes issued
7,423
In 2023, the Company issued a total of $8.1 bill
ion sen
ior notes for general business purposes of the Group as shown below:
\n \n
Securit
ies
$mill
ion
$1,000 mill
ion \ufb01xed rate sen
ior notes due 2027 (callable 2026)
1,000
EUR 1,000 mill
ion \ufb01xed rate sen
ior notes due 2031 (callable 2030)
1,105
HKD 784 mill
ion \ufb01xed rate sen
ior notes due 2026 (callable 2025)
100
$1,000 mill
ion \ufb01xed rate sen
ior notes due 2034 (callable 2033)
1,000
$1,000 mill
ion \ufb01xed rate sen
ior notes due 2027 (callable 2026)
1,000
$500 mill
ion \ufb02oat
ing rate senior notes due 2027 (callable 2026)
500
$400 mill
ion \ufb02oat
ing rate senior notes due 2028 (callable 2027)
400
$1,500 mill
ion \ufb01xed rate sen
ior notes due 2029 (callable 2028)
1,500
$750 mill
ion \ufb01xed rate sen
ior notes due 2030 (callable 2029)
750
$750 mill
ion \ufb01xed rate sen
ior notes due 2028 (callable 2027)
750
Total Senior Notes issued
8,105
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00744": { "value": "Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForDebtSecuritiesInIssueExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00532": { "value": "23. Other liab
il
it
ies
Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy for \ufb01nanc
ial l
iab
il
it
ies, Note 19 Leased assets for
the accounting policy for leases, and Note 31 Share-based payments for the accounting policy for cash-settled share-
based payments.
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at amort
ised cost (Note 13)
Notes in circulat
ion
1
6,369
6,568
Acceptances and endorsements
5,476
5,386
Cash collateral
2
15,005
8,440
Property leases
1,041
1,054
Equipment leases
115
4
Unsettled trades and other \ufb01nancial l
iab
il
it
ies
16,041
17,211
44,047
38,663
Non-\ufb01nancial l
iab
il
it
ies
Cash-settled share-based payments
131
102
Other liab
il
it
ies
503
456
44,681
39,221
1
Hong Kong currency notes in circulat
ion of $6,369 m
ill
ion (31 December 2023: $6,568 m
ill
ion) that are secured by the Government of Hong Kong SAR cert
if
icates of
indebtedness of the same amount included in other assets (Note 20)
2
Cash collateral are margins received against collateralize net derivat
ive mark-to-market (MTM) pos
it
ions", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00534": { "value": "23. Other liab
il
it
ies
Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy for \ufb01nanc
ial l
iab
il
it
ies, Note 19 Leased assets for
the accounting policy for leases, and Note 31 Share-based payments for the accounting policy for cash-settled share-
based payments.
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at amort
ised cost (Note 13)
Notes in circulat
ion
1
6,369
6,568
Acceptances and endorsements
5,476
5,386
Cash collateral
2
15,005
8,440
Property leases
1,041
1,054
Equipment leases
115
4
Unsettled trades and other \ufb01nancial l
iab
il
it
ies
16,041
17,211
44,047
38,663
Non-\ufb01nancial l
iab
il
it
ies
Cash-settled share-based payments
131
102
Other liab
il
it
ies
503
456
44,681
39,221
1
Hong Kong currency notes in circulat
ion of $6,369 m
ill
ion (31 December 2023: $6,568 m
ill
ion) that are secured by the Government of Hong Kong SAR cert
if
icates of
indebtedness of the same amount included in other assets (Note 20)
2
Cash collateral are margins received against collateralize net derivat
ive mark-to-market (MTM) pos
it
ions
24. Provis
ions for l
iab
il
it
ies and charges
Accounting policy
The recognit
ion and measurement of prov
is
ions for l
iab
il
it
ies and charges requ
ires sign
i\ufb01cant judgement and the use of
estimates about uncertain future condit
ions or events.
Estimates include the best estimate of the probabil
ity of out\ufb02ow of econom
ic resources, cost of settling a provis
ion and
tim
ing of settlement. Judgements are requ
ired for inherently uncertain areas such as legal decis
ions (
includ
ing external
advice obtained), and outcome of regulator reviews.
\n \n
2024
2023
Provis
ion
Provis
ion
for credit
Other
for credit
Other
commitments
1
provis
ions
2
Total
commitments
1
provis
ions
2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January
227
72
299
280
103
383
Exchange translation differences
10
(5)
5
(5)
4
(1)
Charge/(release) against pro\ufb01t\u2074
18
136
154
(48)
42
(6)
Provis
ions ut
il
ised\u2074
\u2013
(121)
(121)
\u2013
(71)
(71)
Other movements
3
\u2013
12
12
\u2013
(6)
(6)
At 31 December
255
94
349
227
72
299
1
Expected credit loss for credit commitment comprises those undrawn contractually committed facil
it
ies where there is doubt as to the borrowers\u2019 abil
ity to meet
their repayment obligat
ions
2
Other provis
ions cons
ist mainly of provis
ions for legal cla
ims and regulatory and enforcement invest
igat
ions and proceedings
3
Includes the provis
ions transferred to held for sale
4
$136 mill
ion (charge) and $121 m
ill
ion (prov
is
ion ut
il
ised)
includes provis
ion for Korea equ
ity linked securit
ies (ELS) portfol
io", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00533": { "value": "23. Other liab
il
it
ies
Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy for \ufb01nanc
ial l
iab
il
it
ies, Note 19 Leased assets for
the accounting policy for leases, and Note 31 Share-based payments for the accounting policy for cash-settled share-
based payments.
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial l
iab
il
it
ies held at amort
ised cost (Note 13)
Notes in circulat
ion
1
6,369
6,568
Acceptances and endorsements
5,476
5,386
Cash collateral
2
15,005
8,440
Property leases
1,041
1,054
Equipment leases
115
4
Unsettled trades and other \ufb01nancial l
iab
il
it
ies
16,041
17,211
44,047
38,663
Non-\ufb01nancial l
iab
il
it
ies
Cash-settled share-based payments
131
102
Other liab
il
it
ies
503
456
44,681
39,221
1
Hong Kong currency notes in circulat
ion of $6,369 m
ill
ion (31 December 2023: $6,568 m
ill
ion) that are secured by the Government of Hong Kong SAR cert
if
icates of
indebtedness of the same amount included in other assets (Note 20)
2
Cash collateral are margins received against collateralize net derivat
ive mark-to-market (MTM) pos
it
ions
24. Provis
ions for l
iab
il
it
ies and charges
Accounting policy
The recognit
ion and measurement of prov
is
ions for l
iab
il
it
ies and charges requ
ires sign
i\ufb01cant judgement and the use of
estimates about uncertain future condit
ions or events.
Estimates include the best estimate of the probabil
ity of out\ufb02ow of econom
ic resources, cost of settling a provis
ion and
tim
ing of settlement. Judgements are requ
ired for inherently uncertain areas such as legal decis
ions (
includ
ing external
advice obtained), and outcome of regulator reviews.
\n \n
2024
2023
Provis
ion
Provis
ion
for credit
Other
for credit
Other
commitments
1
provis
ions
2
Total
commitments
1
provis
ions
2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January
227
72
299
280
103
383
Exchange translation differences
10
(5)
5
(5)
4
(1)
Charge/(release) against pro\ufb01t\u2074
18
136
154
(48)
42
(6)
Provis
ions ut
il
ised\u2074
\u2013
(121)
(121)
\u2013
(71)
(71)
Other movements
3
\u2013
12
12
\u2013
(6)
(6)
At 31 December
255
94
349
227
72
299
1
Expected credit loss for credit commitment comprises those undrawn contractually committed facil
it
ies where there is doubt as to the borrowers\u2019 abil
ity to meet
their repayment obligat
ions
2
Other provis
ions cons
ist mainly of provis
ions for legal cla
ims and regulatory and enforcement invest
igat
ions and proceedings
3
Includes the provis
ions transferred to held for sale
4
$136 mill
ion (charge) and $121 m
ill
ion (prov
is
ion ut
il
ised)
includes provis
ion for Korea equ
ity linked securit
ies (ELS) portfol
io ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00745": { "value": "Accounting policy
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy for \ufb01nanc
ial l
iab
il
it
ies, Note 19 Leased assets for
the accounting policy for leases, and Note 31 Share-based payments for the accounting policy for cash-settled share-
based payments.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForOtherLiabilitiesExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00535": { "value": "24. Provis
ions for l
iab
il
it
ies and charges
Accounting policy
The recognit
ion and measurement of prov
is
ions for l
iab
il
it
ies and charges requ
ires sign
i\ufb01cant judgement and the use of
estimates about uncertain future condit
ions or events.
Estimates include the best estimate of the probabil
ity of out\ufb02ow of econom
ic resources, cost of settling a provis
ion and
tim
ing of settlement. Judgements are requ
ired for inherently uncertain areas such as legal decis
ions (
includ
ing external
advice obtained), and outcome of regulator reviews.
\n \n
2024
2023
Provis
ion
Provis
ion
for credit
Other
for credit
Other
commitments
1
provis
ions
2
Total
commitments
1
provis
ions
2
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January
227
72
299
280
103
383
Exchange translation differences
10
(5)
5
(5)
4
(1)
Charge/(release) against pro\ufb01t\u2074
18
136
154
(48)
42
(6)
Provis
ions ut
il
ised\u2074
\u2013
(121)
(121)
\u2013
(71)
(71)
Other movements
3
\u2013
12
12
\u2013
(6)
(6)
At 31 December
255
94
349
227
72
299
1
Expected credit loss for credit commitment comprises those undrawn contractually committed facil
it
ies where there is doubt as to the borrowers\u2019 abil
ity to meet
their repayment obligat
ions
2
Other provis
ions cons
ist mainly of provis
ions for legal cla
ims and regulatory and enforcement invest
igat
ions and proceedings
3
Includes the provis
ions transferred to held for sale
4
$136 mill
ion (charge) and $121 m
ill
ion (prov
is
ion ut
il
ised)
includes provis
ion for Korea equ
ity linked securit
ies (ELS) portfol
io", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00746": { "value": "Accounting policy
The recognit
ion and measurement of prov
is
ions for l
iab
il
it
ies and charges requ
ires sign
i\ufb01cant judgement and the use of
estimates about uncertain future condit
ions or events.
Estimates include the best estimate of the probabil
ity of out\ufb02ow of econom
ic resources, cost of settling a provis
ion and
tim
ing of settlement. Judgements are requ
ired for inherently uncertain areas such as legal decis
ions (
includ
ing external
advice obtained), and outcome of regulator reviews.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00540": { "value": "25. Contingent liab
il
it
ies and comm
itments
Accounting policy
Financ
ial guarantee contracts and loan comm
itments
Financ
ial guarantee contracts and any loan comm
itments issued at below-market interest rates are in
it
ially recognised
at their fair value as a \ufb01nanc
ial l
iab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative
amount of income recognised and their expected credit loss provis
ion. Loan comm
itments may be designated at fair value
through pro\ufb01t or loss where that is the business model under which such contracts are held. Notional values of \ufb01nanc
ial
guarantee contracts and loan commitments are disclosed in the table below.
Financ
ial guarantees, trade cred
its and irrevocable letters of credit are the notional values of contracts issued by the
Group\u2019s Transaction Banking business for which an obligat
ion to make a payment has not ar
isen at the reporting date.
Transaction Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the
contract is not paid, the Group will reimburse the holder of the contract for the actual \ufb01nanc
ial loss suffered. These
contracts have various legal forms such as letters of credit, guarantee contracts and performance bonds. The contracts
are issued to facil
itate trade through export and
import business, provide guarantees to \ufb01nanc
ial
inst
itut
ions where the
Group has a local presence, as well as guaranteeing project \ufb01nanc
ing
involv
ing large construct
ion projects undertaken by
sovereigns and corporates. The contracts may contain performance clauses which require the counterparty performing
services or provid
ing goods to meet certa
in condit
ions before a r
ight to payment is achieved, however the Group does not
guarantee this performance. The Group will only guarantee the credit of the counterparty paying for the services or goods.
Commitments are where the Group has con\ufb01rmed its intent
ion to prov
ide funds to a customer or on behalf of a customer
under prespecif
ied terms and cond
it
ions
in the form of loans, overdrafts, future guarantees whether cancellable or not
and the Group has not made payments at the balance sheet date; those instruments are included in these \ufb01nanc
ial
statements as commitments. Commitments and contingent liab
il
it
ies are generally cons
idered on demand as the Group
may have to honour them, or the client may draw down at any time.
Capital commitments are contractual commitments the Group has entered into to purchase non-\ufb01nanc
ial assets.
The table below shows the contract or underlying princ
ipal amounts of unmatured off-balance sheet transact
ions at the
balance sheet date. The contract or underlying princ
ipal amounts
ind
icate the volume of bus
iness outstanding and do not
represent amounts at risk.
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial guarantees and other cont
ingent liab
il
it
ies
Financ
ial guarantees, trade cred
its and irrevocable letters of credit
90,632
74,414
90,632
74,414
Commitments
Undrawn formal standby facil
it
ies, credit lines and other commitments to lend
One year and over
76,915
78,356
Less than one year
29,249
33,092
Uncondit
ionally cancellable
76,365
70,942
182,529
182,390
Capital Commitments
Contracted capital expenditure approved by the directors but not provided for in these accounts
123
217
As set out in Note 26, the Group has contingent liab
il
it
ies
in respect of certain legal and regulatory matters for which it is not
practicable to estimate the \ufb01nanc
ial
impact as there are many factors that may affect the range of possible outcomes.", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00539": { "value": "25. Contingent liab
il
it
ies and comm
itments
Accounting policy
Financ
ial guarantee contracts and loan comm
itments
Financ
ial guarantee contracts and any loan comm
itments issued at below-market interest rates are in
it
ially recognised
at their fair value as a \ufb01nanc
ial l
iab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative
amount of income recognised and their expected credit loss provis
ion. Loan comm
itments may be designated at fair value
through pro\ufb01t or loss where that is the business model under which such contracts are held. Notional values of \ufb01nanc
ial
guarantee contracts and loan commitments are disclosed in the table below.
Financ
ial guarantees, trade cred
its and irrevocable letters of credit are the notional values of contracts issued by the
Group\u2019s Transaction Banking business for which an obligat
ion to make a payment has not ar
isen at the reporting date.
Transaction Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the
contract is not paid, the Group will reimburse the holder of the contract for the actual \ufb01nanc
ial loss suffered. These
contracts have various legal forms such as letters of credit, guarantee contracts and performance bonds. The contracts
are issued to facil
itate trade through export and
import business, provide guarantees to \ufb01nanc
ial
inst
itut
ions where the
Group has a local presence, as well as guaranteeing project \ufb01nanc
ing
involv
ing large construct
ion projects undertaken by
sovereigns and corporates. The contracts may contain performance clauses which require the counterparty performing
services or provid
ing goods to meet certa
in condit
ions before a r
ight to payment is achieved, however the Group does not
guarantee this performance. The Group will only guarantee the credit of the counterparty paying for the services or goods.
Commitments are where the Group has con\ufb01rmed its intent
ion to prov
ide funds to a customer or on behalf of a customer
under prespecif
ied terms and cond
it
ions
in the form of loans, overdrafts, future guarantees whether cancellable or not
and the Group has not made payments at the balance sheet date; those instruments are included in these \ufb01nanc
ial
statements as commitments. Commitments and contingent liab
il
it
ies are generally cons
idered on demand as the Group
may have to honour them, or the client may draw down at any time.
Capital commitments are contractual commitments the Group has entered into to purchase non-\ufb01nanc
ial assets.
The table below shows the contract or underlying princ
ipal amounts of unmatured off-balance sheet transact
ions at the
balance sheet date. The contract or underlying princ
ipal amounts
ind
icate the volume of bus
iness outstanding and do not
represent amounts at risk.
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial guarantees and other cont
ingent liab
il
it
ies
Financ
ial guarantees, trade cred
its and irrevocable letters of credit
90,632
74,414
90,632
74,414
Commitments
Undrawn formal standby facil
it
ies, credit lines and other commitments to lend
One year and over
76,915
78,356
Less than one year
29,249
33,092
Uncondit
ionally cancellable
76,365
70,942
182,529
182,390
Capital Commitments
Contracted capital expenditure approved by the directors but not provided for in these accounts
123
217
As set out in Note 26, the Group has contingent liab
il
it
ies
in respect of certain legal and regulatory matters for which it is not
practicable to estimate the \ufb01nanc
ial
impact as there are many factors that may affect the range of possible outcomes.", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00538": { "value": "25. Contingent liab
il
it
ies and comm
itments
Accounting policy
Financ
ial guarantee contracts and loan comm
itments
Financ
ial guarantee contracts and any loan comm
itments issued at below-market interest rates are in
it
ially recognised
at their fair value as a \ufb01nanc
ial l
iab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative
amount of income recognised and their expected credit loss provis
ion. Loan comm
itments may be designated at fair value
through pro\ufb01t or loss where that is the business model under which such contracts are held. Notional values of \ufb01nanc
ial
guarantee contracts and loan commitments are disclosed in the table below.
Financ
ial guarantees, trade cred
its and irrevocable letters of credit are the notional values of contracts issued by the
Group\u2019s Transaction Banking business for which an obligat
ion to make a payment has not ar
isen at the reporting date.
Transaction Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the
contract is not paid, the Group will reimburse the holder of the contract for the actual \ufb01nanc
ial loss suffered. These
contracts have various legal forms such as letters of credit, guarantee contracts and performance bonds. The contracts
are issued to facil
itate trade through export and
import business, provide guarantees to \ufb01nanc
ial
inst
itut
ions where the
Group has a local presence, as well as guaranteeing project \ufb01nanc
ing
involv
ing large construct
ion projects undertaken by
sovereigns and corporates. The contracts may contain performance clauses which require the counterparty performing
services or provid
ing goods to meet certa
in condit
ions before a r
ight to payment is achieved, however the Group does not
guarantee this performance. The Group will only guarantee the credit of the counterparty paying for the services or goods.
Commitments are where the Group has con\ufb01rmed its intent
ion to prov
ide funds to a customer or on behalf of a customer
under prespecif
ied terms and cond
it
ions
in the form of loans, overdrafts, future guarantees whether cancellable or not
and the Group has not made payments at the balance sheet date; those instruments are included in these \ufb01nanc
ial
statements as commitments. Commitments and contingent liab
il
it
ies are generally cons
idered on demand as the Group
may have to honour them, or the client may draw down at any time.
Capital commitments are contractual commitments the Group has entered into to purchase non-\ufb01nanc
ial assets.
The table below shows the contract or underlying princ
ipal amounts of unmatured off-balance sheet transact
ions at the
balance sheet date. The contract or underlying princ
ipal amounts
ind
icate the volume of bus
iness outstanding and do not
represent amounts at risk.
\n \n
2024
2023
$mill
ion
$mill
ion
Financ
ial guarantees and other cont
ingent liab
il
it
ies
Financ
ial guarantees, trade cred
its and irrevocable letters of credit
90,632
74,414
90,632
74,414
Commitments
Undrawn formal standby facil
it
ies, credit lines and other commitments to lend
One year and over
76,915
78,356
Less than one year
29,249
33,092
Uncondit
ionally cancellable
76,365
70,942
182,529
182,390
Capital Commitments
Contracted capital expenditure approved by the directors but not provided for in these accounts
123
217
As set out in Note 26, the Group has contingent liab
il
it
ies
in respect of certain legal and regulatory matters for which it is not
practicable to estimate the \ufb01nanc
ial
impact as there are many factors that may affect the range of possible outcomes.", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00747": { "value": "Accounting policy
Financ
ial guarantee contracts and loan comm
itments
Financ
ial guarantee contracts and any loan comm
itments issued at below-market interest rates are in
it
ially recognised
at their fair value as a \ufb01nanc
ial l
iab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative
amount of income recognised and their expected credit loss provis
ion. Loan comm
itments may be designated at fair value
through pro\ufb01t or loss where that is the business model under which such contracts are held. Notional values of \ufb01nanc
ial
guarantee contracts and loan commitments are disclosed in the table below.
Financ
ial guarantees, trade cred
its and irrevocable letters of credit are the notional values of contracts issued by the
Group\u2019s Transaction Banking business for which an obligat
ion to make a payment has not ar
isen at the reporting date.
Transaction Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the
contract is not paid, the Group will reimburse the holder of the contract for the actual \ufb01nanc
ial loss suffered. These
contracts have various legal forms such as letters of credit, guarantee contracts and performance bonds. The contracts
are issued to facil
itate trade through export and
import business, provide guarantees to \ufb01nanc
ial
inst
itut
ions where the
Group has a local presence, as well as guaranteeing project \ufb01nanc
ing
involv
ing large construct
ion projects undertaken by
sovereigns and corporates. The contracts may contain performance clauses which require the counterparty performing
services or provid
ing goods to meet certa
in condit
ions before a r
ight to payment is achieved, however the Group does not
guarantee this performance. The Group will only guarantee the credit of the counterparty paying for the services or goods.
Commitments are where the Group has con\ufb01rmed its intent
ion to prov
ide funds to a customer or on behalf of a customer
under prespecif
ied terms and cond
it
ions
in the form of loans, overdrafts, future guarantees whether cancellable or not
and the Group has not made payments at the balance sheet date; those instruments are included in these \ufb01nanc
ial
statements as commitments. Commitments and contingent liab
il
it
ies are generally cons
idered on demand as the Group
may have to honour them, or the client may draw down at any time.
Capital commitments are contractual commitments the Group has entered into to purchase non-\ufb01nanc
ial assets.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForContingentLiabilitiesAndCommitmentsExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00541": { "value": "26. Legal and regulatory matters
Accounting policy
Where appropriate, the Group recognises a provis
ion for l
iab
il
it
ies when
it is probable that an out\ufb02ow of economic
resources embodying economic bene\ufb01ts will be required, and for which a reliable estimate can be made of the obligat
ion.
The uncertaint
ies
inherent in legal and regulatory matters affect the amount and tim
ing of any potent
ial out\ufb02ows with
respect to which provis
ions have been establ
ished. These uncertaint
ies also mean that
it is not possible to give an
aggregate estimate of contingent liab
il
it
ies ar
is
ing from such legal and regulatory matters.
The Group receives legal claims against it in a number of jur
isd
ict
ions and
is subject to regulatory and enforcement
invest
igat
ions and proceedings from time to time. Apart from the matters described below, the Group currently considers none
of the ongoing claims, invest
igat
ions or proceedings to be ind
iv
idually material. However, in light of the uncertaint
ies
involved
in such matters there can be no assurance that the outcome of a particular matter or matters currently not considered to be
material may not ultimately be material to the Group\u2019s results in a particular reporting period depending on, among other
things, the amount of the loss resulting from the matter(s) and the results otherwise reported for such period.
Since 2014, the Group has been named as a defendant in a series of lawsuits that have been \ufb01led in the United States Distr
ict
Courts for the Southern and Eastern Distr
icts of New York aga
inst a number of banks on behalf of plaint
iffs who are, or are
relatives of, vict
ims of attacks
in Iraq, Afghanistan and Israel. The plaint
iffs
in each of these lawsuits have alleged that the
defendant banks aided and abetted the unlawful conduct of parties with connections to terrorist organisat
ions
in breach of
the United States Anti-Terrorism Act. None of these lawsuits specify the amount of damages claimed. The Group continues to
defend these lawsuits.
In January 2020, a shareholder derivat
ive compla
int was \ufb01led by the City of Philadelph
ia
in New York State Court against
45 current and former directors and senior of\ufb01cers of the Group. It is alleged that the ind
iv
iduals breached their duties to the
Group and caused a waste of corporate assets by permitt
ing the conduct that gave r
ise to the costs and losses to the Group
related to legacy conduct and control issues. In February 2022, the New York State Court ruled in favour of Standard Chartered
PLC\u2019s motion to dism
iss the compla
int. The plaint
iffs are pursu
ing an appeal against the February 2022 ruling. A hearing date
for the plaint
iffs\u2019 appeal
is awaited.
Since October 2020, four lawsuits have been \ufb01led in the English High Court against Standard Chartered PLC on behalf of more
than 200 shareholders in relation to alleged untrue and/or mislead
ing statements and/or om
iss
ions
in informat
ion publ
ished by
Standard Chartered PLC in its rights issue prospectuses of 2008, 2010 and 2015 and/or public statements regarding the Group\u2019s
histor
ic sanct
ions, money laundering and \ufb01nanc
ial cr
ime compliance issues. These lawsuits have been brought under sections
90 and 90A of the Financ
ial Serv
ices and Markets Act 2000. The trial of these lawsuits is due to start in late 2026. The claimants
have alleged that their losses are in the region of \u00a31.56 bill
ion (exclud
ing any pre-judgment interest that may be awarded).
In addit
ion to hav
ing denied any and all liab
il
ity, Standard Chartered PLC will contest claimants\u2019 alleged losses.
Bernard Madoff\u2019s 2008 confession to running a Ponzi scheme through Bernard L. Madoff Investment Securit
ies LLC (BMIS) gave
rise to a number of lawsuits against the Group. BMIS and the Fairf
ield funds (wh
ich invested in BMIS) are in bankruptcy and
liqu
idat
ion, respectively. Between 2010 and 2012, \ufb01ve lawsuits were brought against the Group by the BMIS bankruptcy trustee
and the Fairf
ield funds\u2019 l
iqu
idators,
in each case seeking to recover funds paid to the Group\u2019s clients pursuant to redemption
requests made prior to BMIS\u2019 bankruptcy \ufb01l
ing. The total amount sought
in these cases exceeds $300 mill
ion, exclud
ing any
pre-judgment interest that may be awarded. Three of the four lawsuits commenced by the Fairf
ield funds\u2019 l
iqu
idators have
been dism
issed and the appeals of those d
ism
issals by the funds\u2019 l
iqu
idators are ongo
ing. The fourth lawsuit has been dism
issed
and is not the subject of any further appeal. The Group continues to defend the lawsuit brought by the BMIS bankruptcy trustee.
A number of Korean banks, includ
ing Standard Chartered Bank Korea, sold equ
ity linked securit
ies (ELS) to customers, the
redemption values of which are determined by the performance of various stock ind
ices. From January 2021 to May 2023
Standard Chartered Bank Korea sold relevant ELS to its customers with a notional value of approximately $900 mill
ion. Due to
the performance of the Hang Seng China Enterprise Index, several thousand Standard Chartered Bank Korea customers have
redeemed their ELS at a loss. Standard Chartered Bank Korea has offered compensation to impacted customers. Standard
Chartered Bank Korea may also receive a regulatory penalty. A $100 mill
ion prov
is
ion had been recogn
ised as at Q1 2024 with
respect to antic
ipated losses, $24 m
ill
ion of wh
ich remains recorded on the Group\u2019s balance sheet as at 31\u00a0December 2024.
With the exception of the Korea ELS matter described above, the Group has concluded that the threshold for recording
provis
ions pursuant to IAS 37 Prov
is
ions, Cont
ingent Liab
il
it
ies and Cont
ingent Assets is not met with respect to the above
matters; however, the outcomes of these matters are inherently uncertain and diff
icult to pred
ict.", "dimensions": { "concept": "stan:DisclosureOfLegalAndRegulatoryMattersExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00748": { "value": "Accounting policy
Where appropriate, the Group recognises a provis
ion for l
iab
il
it
ies when
it is probable that an out\ufb02ow of economic
resources embodying economic bene\ufb01ts will be required, and for which a reliable estimate can be made of the obligat
ion.
The uncertaint
ies
inherent in legal and regulatory matters affect the amount and tim
ing of any potent
ial out\ufb02ows with
respect to which provis
ions have been establ
ished. These uncertaint
ies also mean that
it is not possible to give an
aggregate estimate of contingent liab
il
it
ies ar
is
ing from such legal and regulatory matters.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForLegalAndRegulatoryMattersExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00543": { "value": "27. Subordinated liab
il
it
ies and other borrowed funds
2024
2023
$mill
ion
$mill
ion
Subordinated loan capital \u2013 issued by subsid
iary undertak
ings
$700 mill
ion 8.0 per cent subord
inated notes due 2031
1
326
342
NPR2.4 bill
ion \ufb01xed sub debt rate 10.3 per cent
2
18
18
344
360
Subordinated loan capital \u2013 issued by the Company
3
\u00a3900 mill
ion 5.125 per cent subord
inated notes due 2034
601
644
$2 bill
ion 5.7 per cent subord
inated notes due 2044
2,179
2,197
$1 bill
ion 5.2 per cent subord
inated notes due 2024
\u2013
1,001
$750 mill
ion 5.3 per cent subord
inated notes due 2043
691
697
\u20ac500 mill
ion 3.125 per cent subord
inated notes due 2024
\u2013
536
$1.25 bill
ion 4.3 per cent subord
inated notes due 2027
1,174
1,154
$1 bill
ion 3.516 per cent \ufb01xed rate reset subord
inated notes due 2030 (callable 2025)
996
964
$500 mill
ion 4.866 per cent \ufb01xed rate reset subord
inated notes due 2033 (callable 2028)
478
481
\u00a396.035 mill
ion 7.375 per cent Non-Cum Pref Shares (reclassed as Debt) \u2013 Other borrow
ings
121
122
\u00a399.250 mill
ion 8.25 per cent Non-Cum Pref Shares (reclassed as Debt) \u2013 Other borrow
ings
124
126
$750 mill
ion 3.603 per cent \ufb01xed rate reset subord
inated notes due 2033 (callable 2032)
634
648
\u20ac 1 bill
ion 2.5 per cent \ufb01xed rate reset subord
inated notes due 2030 (callable 2025)
1,015
1,044
$1.25 bill
ion 3.265 per cent \ufb01xed rate reset subord
inated notes due 2036 (callable 2030)
1,032
1,040
\u20ac1 bill
ion 1.200 per cent \ufb01xed rate reset subord
inated notes due 2031 (callable 2026)
993
1,022
10,038
11,676
Total for Group
10,382
12,036
\n
1
Issued by Standard Chartered Bank
\n
2
Issued by Standard Chartered Bank Nepal Lim
ited. NPR refers to Nepalese Rupee
\n
3
In the balance sheet of the Company the amount recognised is $10,338 mill
ion (2023: $11,945 m
ill
ion), w
ith the difference on account of hedge accounting achieved
\n
on a Group basis
2024
2023
USD
EUR
GBP
NPR
Total
USD
EUR
GBP
NPR
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Fixed rate subordinated debt
7,510
2,008
846
18
10,382
8,524
2,602
892
18
12,036
Total
7,510
2,008
846
18
10,382
8,524
2,602
892
18
12,036
\n
Redemptions and repurchases during the year.
\n
Standard Chartered PLC exercised its right to redeem $1 bill
ion 5.2 per cent subord
inated notes 2024 and \u20ac500 mill
ion
\n
3.125 per cent subordinated notes 2024
\n
Issuance during the year
\nThere was no issuance during the period.", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00542": { "value": "27. Subordinated liab
il
it
ies and other borrowed funds
2024
2023
$mill
ion
$mill
ion
Subordinated loan capital \u2013 issued by subsid
iary undertak
ings
$700 mill
ion 8.0 per cent subord
inated notes due 2031
1
326
342
NPR2.4 bill
ion \ufb01xed sub debt rate 10.3 per cent
2
18
18
344
360
Subordinated loan capital \u2013 issued by the Company
3
\u00a3900 mill
ion 5.125 per cent subord
inated notes due 2034
601
644
$2 bill
ion 5.7 per cent subord
inated notes due 2044
2,179
2,197
$1 bill
ion 5.2 per cent subord
inated notes due 2024
\u2013
1,001
$750 mill
ion 5.3 per cent subord
inated notes due 2043
691
697
\u20ac500 mill
ion 3.125 per cent subord
inated notes due 2024
\u2013
536
$1.25 bill
ion 4.3 per cent subord
inated notes due 2027
1,174
1,154
$1 bill
ion 3.516 per cent \ufb01xed rate reset subord
inated notes due 2030 (callable 2025)
996
964
$500 mill
ion 4.866 per cent \ufb01xed rate reset subord
inated notes due 2033 (callable 2028)
478
481
\u00a396.035 mill
ion 7.375 per cent Non-Cum Pref Shares (reclassed as Debt) \u2013 Other borrow
ings
121
122
\u00a399.250 mill
ion 8.25 per cent Non-Cum Pref Shares (reclassed as Debt) \u2013 Other borrow
ings
124
126
$750 mill
ion 3.603 per cent \ufb01xed rate reset subord
inated notes due 2033 (callable 2032)
634
648
\u20ac 1 bill
ion 2.5 per cent \ufb01xed rate reset subord
inated notes due 2030 (callable 2025)
1,015
1,044
$1.25 bill
ion 3.265 per cent \ufb01xed rate reset subord
inated notes due 2036 (callable 2030)
1,032
1,040
\u20ac1 bill
ion 1.200 per cent \ufb01xed rate reset subord
inated notes due 2031 (callable 2026)
993
1,022
10,038
11,676
Total for Group
10,382
12,036
\n
1
Issued by Standard Chartered Bank
\n
2
Issued by Standard Chartered Bank Nepal Lim
ited. NPR refers to Nepalese Rupee
\n
3
In the balance sheet of the Company the amount recognised is $10,338 mill
ion (2023: $11,945 m
ill
ion), w
ith the difference on account of hedge accounting achieved
\n
on a Group basis
2024
2023
USD
EUR
GBP
NPR
Total
USD
EUR
GBP
NPR
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Fixed rate subordinated debt
7,510
2,008
846
18
10,382
8,524
2,602
892
18
12,036
Total
7,510
2,008
846
18
10,382
8,524
2,602
892
18
12,036
\n
Redemptions and repurchases during the year.
\n
Standard Chartered PLC exercised its right to redeem $1 bill
ion 5.2 per cent subord
inated notes 2024 and \u20ac500 mill
ion
\n
3.125 per cent subordinated notes 2024
\n
Issuance during the year
\nThere was no issuance during the period.", "dimensions": { "concept": "stan:DisclosureOfSubordinatedLiabilitiesAndOtherBorrowedFundsExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00546": { "value": "28. Share capital, other equity instruments and reserves
Accounting policy
\n
Securit
ies wh
ich carry a discret
ionary coupon and have no \ufb01xed matur
ity or redemption date are classif
ied as other equ
ity
\n
instruments. Interest payments on these securit
ies are recogn
ised, net of tax, as distr
ibut
ions from equity in the period in
\n
which they are paid.
\n
Where the Company or other members of the consolidated Group purchase the Company\u2019s equity share capital, the
\n
considerat
ion pa
id is deducted from the total shareholders\u2019 equity of the Group and/or of the Company as treasury shares
\n
until they are cancelled. Where such shares are subsequently sold or reissued, any considerat
ion rece
ived is included in
\n
shareholders\u2019 equity of the Group and/or the Company.
Total share
Number of
Ordinary
Ordinary
Preference
capital and
Other equity
ordinary shares
share capital
1
Share premium
Share premium
2
share premium
instruments
mill
ions
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January 2023
2,895
1,447
3,989
1,494
6,930
6,504
Cancellation of shares includ
ing
share buyback
(230)
(115)
\u2013
\u2013
(115)
\u2013
Addit
ional T
ier 1 Redemption
\u2013
\u2013
\u2013
\u2013
\u2013
(992)
At 31 December 2023
2,665
1,332
3,989
1,494
6,815
5,512
Cancellation of shares includ
ing
share buyback
(240)
(120)
\u2013
\u2013
(120)
\u2013
Addit
ional T
ier 1 equity issuance
\u2013
\u2013
\u2013
\u2013
\u2013
1,568
Addit
ional T
ier 1 Redemption
\u2013
\u2013
\u2013
\u2013
\u2013
(553)
Other movements
3
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
At 31 December 2024
2,425
1,212
3,989
1,494
6,695
6,502
\n
1
Issued and fully paid ordinary shares of 50 cents each
\n
2
Includes preference share capital of $75,000
\n
3
Relates to realised translation loss on redemption of AT1 securit
ies of SGD 750 m
ill
ion
Financ
ial statements
\n\n
Share buyback
\n
On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each.
\n
Nominal value of share purchases was $57 mill
ion, the total cons
iderat
ion pa
id was $1,000 mill
ion, and the buyback completed
\n
on 25 June 2024. The total number of shares purchased was 113,266,516, representing 4.25 per cent of the ordinary shares in issue
\n
at the beginn
ing of the programme. The nom
inal value of the shares was transferred from the share capital to the capital
\n
redemption reserve account. The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the
\n
Hong Kong Stock Exchange, by private arrangement.
\n
On 30 July 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. As at
\n
FY 2024 the buyback is ongoing, with the total number of shares purchased of 126,262,414 representing 4.95 per cent of the
\n
ordinary shares in issue at the beginn
ing of the programme, the total cons
iderat
ion was $1,355 m
ill
ion and a further $145 m
ill
ion
\n
relating to irrevocable obligat
ion to buy back shares under the buyback programme has been recogn
ised. The nominal value of
\n
the shares was transferred from the share capital to the capital redemption reserve account.
\n
The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the Hong Kong Stock Exchange.
\n\n \n
Average
Highest
Lowest
price paid
Aggregate
Aggregate
Number of
price Paid
price paid
per share
price paid
price paid
ordinary shares
\u00a3
\u00a3
\u00a3
\u00a3
$
February 2024
6,418,285
6.6920
6.3700
6.5039
41,743,905
52,831,654
March 2024
45,113,015
7.0000
6.4400
6.6765
301,197,187
383,771,653
April 2024
24,716,649
7.1300
6.3800
6.7727
167,398,467
209,475,694
May 2024
19,525,751
7.9540
6.9080
7.6883
150,119,738
189,885,098
June 2024
17,492,816
7.8840
7.1220
7.3676
128,879,487
164,035,854
August 2024
27,834,474
7.8340
6.6740
7.3594
204,843,866
264,717,166
September 2024
33,245,826
8.1120
7.4260
7.7103
256,333,914
338,823,108
October 2024
34,497,109
9.1700
7.6880
8.3791
289,055,494
377,008,057
November 2024
20,250,801
9.8600
9.0240
9.4021
190,399,354
243,785,545
December 2024
10,434,204
10.0950
9.6380
9.8709
102,994,626
130,375,125
\n
Ordinary share capital
\n
In accordance with the Companies Act 2006 the Company does not have authorised share capital. The nominal value of each
\n
ordinary share is 50 cents.
\n
During the period nil shares were issued under employee share plans.
\n
Preference share capital
\n
At 31 December 2024, the Company has 15,000 $5 non-cumulative redeemable preference shares in issue, with a premium of
\n
$99,995 making a paid up amount per preference share of $100,000. The preference shares are redeemable at the option of the
\n
Company and are classif
ied
in equity.
\n
The available pro\ufb01ts of the Company are distr
ibuted to the holders of the
issued preference shares in prior
ity to payments
\n
made to holders of the ordinary shares and in prior
ity to, or par
i passu with, any payments to the holders of any other class of
\n
shares in issue. On a wind
ing up, the assets of the Company are appl
ied to the holders of the preference shares in prior
ity to
\n
any payment to the ordinary shareholders and in prior
ity to, or par
i passu with, the holders of any other shares in issue, for an
\n
amount equal to any div
idends payable (on approval of the Board) and the nom
inal value of the shares together with any
\n
premium as determined by the Board. The redeemable preference shares are redeemable at the paid up amount (which
\n
includes premium) at the option of the Company in accordance with the terms of the shares. The holders of the preference
\n
shares are not entitled to attend or vote at any general meeting except where any relevant div
idend due
is not paid in full or
\n
where a resolution is proposed varying the rights of the preference shares
\n
Other equity instruments
\n
The table provides details of outstanding Fixed Rate Resetting Perpetual Subordinated Contingent Convertible AT1 securit
ies
\n
issued by Standard Chartered PLC. All issuances are made for general business purposes and to increase the regulatory capital
\n
base of the Group.
\n\n \n
Conversion
Proceeds net of
Interest
price per
Issuance date
Nominal value
issue costs
rate
1
Coupon payment dates each year
2
First reset dates
3
ordinary share\u2075
26 Jun 2020
$1,000 mill
ion
$992 mill
ion
6%
26 January, 26 July
26 January 2026
$5.331
14 January 2021
$1,250 mill
ion
$1,239 mill
ion
4.75%
14 January, 14 July
14 July 2031
$6.353
19 August 2021
$1,500 mill
ion
$1,489 mill
ion
4.30%
19 February, 19 August
19 August 2028
$6.382
15 August 2022
$1,250 mill
ion
$1,239 mill
ion
7.75%
15 February, 15 August
15 February 2028
$7.333
08 March 2024
$1,000 mill
ion
$993 mill
ion
7.875%
8 March, 8 September
8 September 2030
$8.216
19 Sep 2024
SGD750 mill
ion
$575 mill
ion
5.300%
19 March, 19 September
19 March 2030
SGD12.929
Total\u2074
$6,527 mill
ion
\n
1
Interest rates for the period from (and includ
ing) the
issue date to (but excluding) the \ufb01rst reset date
\n
2
Interest payable semi-annually in arrears
\n
3
Securit
ies are resettable each date fall
ing \ufb01ve years, or an integral multiple of \ufb01ve years, after the \ufb01rst reset date
\n
4
Excludes realised translation loss ($25 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion
\n
5
Conversion price set at the time of pric
ing w
ith reference to closing share price and any applicable discount
Standard Chartered PLC redeemed SGD 750 mill
ion F
ixed Rate Resetting Perpetual Contingent Convertible Securit
ies on
its \ufb01rst
\n
optional redemption date of 3 October 2024 for $578 mill
ion (real
ised translation loss of $25 mill
ion).
\n
The AT1 issuances above are primar
ily purchased by
inst
itut
ional investors.
\n
The princ
ipal terms of the AT1 secur
it
ies are descr
ibed below:
\n
\u2022
The securit
ies are perpetual and redeemable, at the opt
ion of Standard Chartered PLC in whole but not in part, on the \ufb01rst
\n
interest reset date and each date falling \ufb01ve years after the \ufb01rst reset date.
\n
\u2022
The securit
ies are also redeemable for certa
in regulatory or tax reasons on any date at 100 per cent of their princ
ipal amount
\n
together with any accrued but unpaid interest up to (but excluding) the date \ufb01xed for redemption. Any redemption is subject
\n
to Standard Chartered PLC giv
ing not
ice to the relevant regulator and the regulator granting permiss
ion to redeem.
\n
\u2022
Interest payments on these securit
ies w
ill be accounted for as a div
idend.
\n
\u2022
Interest on the securit
ies
is due and payable only at the sole and absolute discret
ion of Standard Chartered PLC, subject to
\n
certain addit
ional restr
ict
ions set out
in the terms and condit
ions. Accord
ingly, Standard Chartered PLC may at any time elect
\n
to cancel any interest payment (or part thereof) which would otherwise be payable on any interest payment date.
\n
\u2022
The securit
ies convert
into ordinary shares of Standard Chartered PLC, at a pre-determined price detailed in the table above,
\n
should the fully loaded Common Equity Tier 1 ratio of the Group fall below 7.0 per cent. Approximately 970 mill
ion ord
inary
\n
shares would be required to satisfy the conversion of all the securit
ies ment
ioned above.
\n
The securit
ies rank beh
ind the claims against Standard Chartered PLC of (a) unsubordinated creditors, (b) which are expressed
\n
to be subordinated to the claims of unsubordinated creditors of Standard Chartered PLC but not further or otherwise; or (c)
\n
which are, or are expressed to be, jun
ior to the cla
ims of other creditors of Standard Chartered PLC, whether subordinated or
\n
unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or jun
ior to, the cla
ims of holders of the
\n
AT1 securit
ies
in a wind
ing\u2013up occurr
ing prior to the conversion trigger.
\n
Reserves
\n
The constituents of the reserves are summarised as follows:
\n
\u2022
The capital reserve represents the exchange difference on redenominat
ion of share cap
ital and share premium from sterling
\n
to US dollars in 2001. The capital redemption reserve represents the nominal value of preference shares redeemed
\n
\u2022
The amounts in the \u201cCapital and Merger Reserve\u201d represents the premium aris
ing on shares
issued using a cash box \ufb01nanc
ing
\n
structure, which required the Company to create a merger reserve under section 612 of the Companies Act 2006. Shares were
\n
issued using this structure in 2005 and 2006 to assist in the funding of Korea ($1.9 bill
ion) and Ta
iwan ($1.2 bill
ion) acqu
is
it
ions,
\n
in 2008, 2010 and 2015 for the shares issued by way of a rights issue, primar
ily for cap
ital maintenance requirements and for
\n
the shares issued in 2009 by way of an accelerated book build, the proceeds of which were used in the ordinary course of
\n
business of the Group. The funding raised by the 2008, 2010 and 2015 rights issues and 2009 share issue was fully retained
\n
with
in the Company. Of the 2015 fund
ing, $1.5 bill
ion was used to subscr
ibe to addit
ional equ
ity in Standard Chartered Bank,
\n
a wholly owned subsid
iary of the Company. Apart from the Korea, Ta
iwan and Standard Chartered Bank funding, the merger
\n
reserve is considered realised and distr
ibutable.
\n
\u2022
Own credit adjustment reserve represents the cumulative gains and losses on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value
\n
through pro\ufb01t or loss relating to own credit. Gains and losses on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through
\n
pro\ufb01t or loss relating to own credit in the year have been taken through other comprehensive income into this reserve.
\n
On derecognit
ion of appl
icable instruments the balance of any OCA will not be recycled to the income statement, but will
\n
be transferred with
in equ
ity to retained earnings
\n
\u2022
Fair value through other comprehensive income (FVOCI) debt reserve represents the unrealised fair value gains and losses in
\n
respect of \ufb01nancial assets class
if
ied as FVOCI, net of expected cred
it losses and taxation. Gains and losses are deferred in this
\n
reserve and are reclassif
ied to the
income statement when the underlying asset is sold, matures or becomes impa
ired.
\n
\u2022
FVOCI equity reserve represents unrealised fair value gains and losses in respect of \ufb01nanc
ial assets class
if
ied as FVOCI, net of
\n
taxation. Gains and losses are recorded in this reserve and never recycled to the income statement
\n
\u2022
Cash \ufb02ow hedge reserve represents the effective portion of the gains and losses on derivat
ives that meet the cr
iter
ia for
\n
these types of hedges. Gains and losses are deferred in this reserve and are reclassif
ied to the
income statement when the
\n
underlying hedged item affects pro\ufb01t and loss or when a forecast transaction is no longer expected to occur
\n
\u2022
Translation reserve represents the cumulative foreign exchange gains and losses on translation of the net investment of the
\n
Group in foreign operations. Since 1 January 2004, gains and losses are deferred to this reserve and are reclassif
ied to the
\n
income statement when the underlying foreign operation is disposed. Gains and losses aris
ing from der
ivat
ives used as
\n
hedges of net investments are netted against the foreign exchange gains and losses on translation of the net investment
\n
of the foreign operations
\n
\u2022
Retained earnings represents pro\ufb01ts and other comprehensive income earned by the Group and Company in the current
\n
and prior periods, together with the after tax increase relating to equity-settled share options, less div
idend d
istr
ibut
ions,
\n
own shares held (treasury shares) and share buybacks
\n
A substantial part of the Group\u2019s reserves is held in overseas subsid
iary undertak
ings and branches, princ
ipally to support local
\n
operations or to comply with local regulations. The maintenance of local regulatory capital ratios could potentially restrict
\n
the amount of reserves which can be remitted. In addit
ion,
if these overseas reserves were to be remitted, further unprovided
\n
taxation liab
il
it
ies m
ight arise.
\n
As at 31 December 2024, the distr
ibutable reserves of Standard Chartered PLC (the Company) were $14.1 b
ill
ion (31 December
\n
2023: $14.7 bill
ion). D
istr
ibutable reserves of SC PLC were $14.1 b
ill
ion, wh
ich is calculated from the Merger reserve and Retained
\n
earnings with considerat
ion for restr
icted items in line with sections 830 and 831 of the Companies Act 2006.
Own shares
\n
The 2004 Employee Bene\ufb01t Trust (2004 Trust) is used in conjunct
ion w
ith the Group\u2019s employee share schemes and other
\n
employee share-based payments (such as upfront shares and salary shares). Computershare Trustees (Jersey) Lim
ited
is the
\n
trustee of the 2004 Trust. Group companies fund the 2004 Trust from time to time to enable the trustees to acquire shares in
\n
Standard Chartered PLC to satisfy these arrangements.
\n
Details of the shares purchased and held by the 2004 Trust are set out below.
2004 Trust
2024
2023
Shares purchased during the period
19,604,557
29,069,539
Market price of shares purchased ($mill
ion)
223
237
Shares held at the end of the period
17,589,987
28,095,542
Maximum number of shares held during the period
28,085,688
28,893,930
\n
Except as disclosed, neither the Company nor any of its subsid
iar
ies has bought, sold or redeemed any securit
ies of the
\n
Company listed on The Stock Exchange of Hong Kong Lim
ited, on another exchange, by pr
ivate arrangement, or by way
\n
of a general offer during the period.
\n
Div
idend wa
ivers
\n
The trustees of the 2004 Trust, which holds ordinary shares in Standard Chartered PLC in connection with the operation of its
\n
employee share plans, waive any div
idend on the balance of ord
inary shares that have not been allocated to employees,
\n
except for 0.01p per share.
\n
Changes in share capital and other equity instruments of Standard Chartered PLC subsid
iar
ies
\n
The table below details the transactions in equity instruments (includ
ing convert
ible and hybrid instruments) of the Group\u2019s
\n
subsid
iar
ies, includ
ing
issuances, conversions, redemptions, purchase or cancellation. This is required under the Hong Kong
\n
List
ing requ
irements, appendix D2 paragraph 10.
Descript
ion of
Issued/(redeemed)
Issued/(redeemed)
Name
Shares
Shares
capital
Standard Chartered Bank Niger
ia L
im
ited
NGN1.00 Ordinary
8,581,235,698
NGN11,081,235,698
Furaha Finserve Uganda Lim
ited
USD1.00 Ordinary
199,500
USD199,500
SCV Research and Development Pvt. Ltd.
INR10.00 Ordinary
10,000
INR100,000
Furaha Holding Ltd
USD1.00 Ordinary
6,500,000
USD6,500,000
Qatalyst Pte. Ltd.
USD1.00 Ordinary
1,099,999
USD1,099,999
Standard Chartered I H Lim
ited
USD1.00 Ordinary
52,086,333
USD 52,086,333
Standard Chartered Strategic Investments Lim
ited
USD1.00 Ordinary
16,086,333
USD 16,086,333
Standard Chartered Capital Lim
ited
INR10.00 Equity
32,269,750
INR322,697,500
SC Ventures Holdings Lim
ited
USD1.00 Ordinary
59,386,000
USD 59,386,000
Standard Chartered Holdings Lim
ited
USD2.00 Ordinary
25,043,166
USD 50,086,332
Standard Chartered Luxembourg S.A.
EUR1.00 Ordinary
125,000
EUR125,000
Mox Bank Lim
ited
HKD Ordinary
54,740,000
HKD547,400,000
Standard Chartered Research and Technology India Private Lim
ited
INR10 Equity Class \u2013 A
10,821,311
INR108,213,110
myZoi Financ
ial Inclus
ion Technologies LLC
AED1.00 Ordinary
25,000,000
AED25,000,000
Zodia Holdings Lim
ited
USD1.00 A Ordinary
18,000,000
USD18,000,000
Audax Financ
ial Technology Pte. Ltd
USD Ordinary-A
8,500,000
USD8,500,000
Trust Bank Singapore Lim
ited
SGD Ordinary
185,000,000
SGD185,000,000
Zodia Markets Holdings Lim
ited
USD1.00 Ordinary
5,580
USD 5,580
Letsbloom Pte. Ltd.
USD Ordinary-A
9,406,219
USD9,406,219
Zodia Custody (Ireland) Lim
ited
USD1.00 Ordinary
1,000,000
USD1,000,000
SCV Research and Development Pte. Ltd.
USD Ordinary-A'
11,440,850
USD11,440,850
SCV Master Holding Company Pte. Ltd.
USD Ordinary
63,299,999
USD63,299,999
Financ
ial Inclus
ion Technologies Ltd
USD Ordinary-A
6,700,000
USD6,700,000
Appro Onboarding Solutions FZ-LLC
AED1,000 Ordinary
21,670
AED21,670,000
Solv-India Pte. Ltd.
USD Ordinary
38,963,752
USD38,963,752
Solvezy Technology Kenya Lim
ited
KES1,000.00 Ordinary
196,448
KES196,448,000
Tawi Fresh Kenya Lim
ited
KES1,000.00 Ordinary
454,890
KES454,890,000
Libeara Pte. Ltd.
USD Ordinary
10,258,400
USD10,258,400
CashEnable Pte. Ltd.
USD Ordinary-A
9,300,000
USD9,300,000
Solvezy Technology Ghana Ltd
GHS Ordinary
18,000,441
GHS18,000,441
Libeara (Singapore) Pte. Ltd.
USD Ordinary
10,258,400
USD10,258,400
Standard Chartered Securit
ies (Afr
ica) Holdings Lim
ited
USD1.00 Ordinary
(8,002,228)
USD(8,002,228)
Banco Standard Chartered en Liqu
idac
ion
USD75.133 Ordinary
(133,930)
USD(10,062,563)
\n
Please see Note 22 Debt securit
ies
in issue for issuances and redemptions of senior notes.
\n
Please see Note 27 Subordinated liab
il
it
ies and other borrowed funds for
issuance and redemptions of subordinated liab
il
it
ies
\n
and AT1 securit
ies.
\n
Please see Note 40 Related undertakings of the Group for subsid
iar
ies liqu
idated, d
issolved or sold during the year.", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00547": { "value": "28. Share capital, other equity instruments and reserves
Accounting policy
\n
Securit
ies wh
ich carry a discret
ionary coupon and have no \ufb01xed matur
ity or redemption date are classif
ied as other equ
ity
\n
instruments. Interest payments on these securit
ies are recogn
ised, net of tax, as distr
ibut
ions from equity in the period in
\n
which they are paid.
\n
Where the Company or other members of the consolidated Group purchase the Company\u2019s equity share capital, the
\n
considerat
ion pa
id is deducted from the total shareholders\u2019 equity of the Group and/or of the Company as treasury shares
\n
until they are cancelled. Where such shares are subsequently sold or reissued, any considerat
ion rece
ived is included in
\n
shareholders\u2019 equity of the Group and/or the Company.
Total share
Number of
Ordinary
Ordinary
Preference
capital and
Other equity
ordinary shares
share capital
1
Share premium
Share premium
2
share premium
instruments
mill
ions
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January 2023
2,895
1,447
3,989
1,494
6,930
6,504
Cancellation of shares includ
ing
share buyback
(230)
(115)
\u2013
\u2013
(115)
\u2013
Addit
ional T
ier 1 Redemption
\u2013
\u2013
\u2013
\u2013
\u2013
(992)
At 31 December 2023
2,665
1,332
3,989
1,494
6,815
5,512
Cancellation of shares includ
ing
share buyback
(240)
(120)
\u2013
\u2013
(120)
\u2013
Addit
ional T
ier 1 equity issuance
\u2013
\u2013
\u2013
\u2013
\u2013
1,568
Addit
ional T
ier 1 Redemption
\u2013
\u2013
\u2013
\u2013
\u2013
(553)
Other movements
3
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
At 31 December 2024
2,425
1,212
3,989
1,494
6,695
6,502
\n
1
Issued and fully paid ordinary shares of 50 cents each
\n
2
Includes preference share capital of $75,000
\n
3
Relates to realised translation loss on redemption of AT1 securit
ies of SGD 750 m
ill
ion
\n
Financ
ial statements
\n\n
Share buyback
\n
On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each.
\n
Nominal value of share purchases was $57 mill
ion, the total cons
iderat
ion pa
id was $1,000 mill
ion, and the buyback completed
\n
on 25 June 2024. The total number of shares purchased was 113,266,516, representing 4.25 per cent of the ordinary shares in issue
\n
at the beginn
ing of the programme. The nom
inal value of the shares was transferred from the share capital to the capital
\n
redemption reserve account. The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the
\n
Hong Kong Stock Exchange, by private arrangement.
\n
On 30 July 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. As at
\n
FY 2024 the buyback is ongoing, with the total number of shares purchased of 126,262,414 representing 4.95 per cent of the
\n
ordinary shares in issue at the beginn
ing of the programme, the total cons
iderat
ion was $1,355 m
ill
ion and a further $145 m
ill
ion
\n
relating to irrevocable obligat
ion to buy back shares under the buyback programme has been recogn
ised. The nominal value of
\n
the shares was transferred from the share capital to the capital redemption reserve account.
\n
The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the Hong Kong Stock Exchange.
\n\n \n
Average
Highest
Lowest
price paid
Aggregate
Aggregate
Number of
price Paid
price paid
per share
price paid
price paid
ordinary shares
\u00a3
\u00a3
\u00a3
\u00a3
$
February 2024
6,418,285
6.6920
6.3700
6.5039
41,743,905
52,831,654
March 2024
45,113,015
7.0000
6.4400
6.6765
301,197,187
383,771,653
April 2024
24,716,649
7.1300
6.3800
6.7727
167,398,467
209,475,694
May 2024
19,525,751
7.9540
6.9080
7.6883
150,119,738
189,885,098
June 2024
17,492,816
7.8840
7.1220
7.3676
128,879,487
164,035,854
August 2024
27,834,474
7.8340
6.6740
7.3594
204,843,866
264,717,166
September 2024
33,245,826
8.1120
7.4260
7.7103
256,333,914
338,823,108
October 2024
34,497,109
9.1700
7.6880
8.3791
289,055,494
377,008,057
November 2024
20,250,801
9.8600
9.0240
9.4021
190,399,354
243,785,545
December 2024
10,434,204
10.0950
9.6380
9.8709
102,994,626
130,375,125
\n
Ordinary share capital
\n
In accordance with the Companies Act 2006 the Company does not have authorised share capital. The nominal value of each
\n
ordinary share is 50 cents.
\n
During the period nil shares were issued under employee share plans.
\n
Preference share capital
\n
At 31 December 2024, the Company has 15,000 $5 non-cumulative redeemable preference shares in issue, with a premium of
\n
$99,995 making a paid up amount per preference share of $100,000. The preference shares are redeemable at the option of the
\n
Company and are classif
ied
in equity.
\n
The available pro\ufb01ts of the Company are distr
ibuted to the holders of the
issued preference shares in prior
ity to payments
\n
made to holders of the ordinary shares and in prior
ity to, or par
i passu with, any payments to the holders of any other class of
\n
shares in issue. On a wind
ing up, the assets of the Company are appl
ied to the holders of the preference shares in prior
ity to
\n
any payment to the ordinary shareholders and in prior
ity to, or par
i passu with, the holders of any other shares in issue, for an
\n
amount equal to any div
idends payable (on approval of the Board) and the nom
inal value of the shares together with any
\n
premium as determined by the Board. The redeemable preference shares are redeemable at the paid up amount (which
\n
includes premium) at the option of the Company in accordance with the terms of the shares. The holders of the preference
\n
shares are not entitled to attend or vote at any general meeting except where any relevant div
idend due
is not paid in full or
\n
where a resolution is proposed varying the rights of the preference shares
\n
Other equity instruments
\n
The table provides details of outstanding Fixed Rate Resetting Perpetual Subordinated Contingent Convertible AT1 securit
ies
\n
issued by Standard Chartered PLC. All issuances are made for general business purposes and to increase the regulatory capital
\n
base of the Group.
\n\n \n
Conversion
Proceeds net of
Interest
price per
Issuance date
Nominal value
issue costs
rate
1
Coupon payment dates each year
2
First reset dates
3
ordinary share\u2075
26 Jun 2020
$1,000 mill
ion
$992 mill
ion
6%
26 January, 26 July
26 January 2026
$5.331
14 January 2021
$1,250 mill
ion
$1,239 mill
ion
4.75%
14 January, 14 July
14 July 2031
$6.353
19 August 2021
$1,500 mill
ion
$1,489 mill
ion
4.30%
19 February, 19 August
19 August 2028
$6.382
15 August 2022
$1,250 mill
ion
$1,239 mill
ion
7.75%
15 February, 15 August
15 February 2028
$7.333
08 March 2024
$1,000 mill
ion
$993 mill
ion
7.875%
8 March, 8 September
8 September 2030
$8.216
19 Sep 2024
SGD750 mill
ion
$575 mill
ion
5.300%
19 March, 19 September
19 March 2030
SGD12.929
Total\u2074
$6,527 mill
ion
\n
1
Interest rates for the period from (and includ
ing) the
issue date to (but excluding) the \ufb01rst reset date
\n
2
Interest payable semi-annually in arrears
\n
3
Securit
ies are resettable each date fall
ing \ufb01ve years, or an integral multiple of \ufb01ve years, after the \ufb01rst reset date
\n
4
Excludes realised translation loss ($25 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion
\n
5
Conversion price set at the time of pric
ing w
ith reference to closing share price and any applicable discount
\n\n\n
Standard Chartered PLC redeemed SGD 750 mill
ion F
ixed Rate Resetting Perpetual Contingent Convertible Securit
ies on
its \ufb01rst
\n
optional redemption date of 3 October 2024 for $578 mill
ion (real
ised translation loss of $25 mill
ion).
\n
The AT1 issuances above are primar
ily purchased by
inst
itut
ional investors.
\n
The princ
ipal terms of the AT1 secur
it
ies are descr
ibed below:
\n
\u2022
The securit
ies are perpetual and redeemable, at the opt
ion of Standard Chartered PLC in whole but not in part, on the \ufb01rst
\n
interest reset date and each date falling \ufb01ve years after the \ufb01rst reset date.
\n
\u2022
The securit
ies are also redeemable for certa
in regulatory or tax reasons on any date at 100 per cent of their princ
ipal amount
\n
together with any accrued but unpaid interest up to (but excluding) the date \ufb01xed for redemption. Any redemption is subject
\n
to Standard Chartered PLC giv
ing not
ice to the relevant regulator and the regulator granting permiss
ion to redeem.
\n
\u2022
Interest payments on these securit
ies w
ill be accounted for as a div
idend.
\n
\u2022
Interest on the securit
ies
is due and payable only at the sole and absolute discret
ion of Standard Chartered PLC, subject to
\n
certain addit
ional restr
ict
ions set out
in the terms and condit
ions. Accord
ingly, Standard Chartered PLC may at any time elect
\n
to cancel any interest payment (or part thereof) which would otherwise be payable on any interest payment date.
\n
\u2022
The securit
ies convert
into ordinary shares of Standard Chartered PLC, at a pre-determined price detailed in the table above,
\n
should the fully loaded Common Equity Tier 1 ratio of the Group fall below 7.0 per cent. Approximately 970 mill
ion ord
inary
\n
shares would be required to satisfy the conversion of all the securit
ies ment
ioned above.
\n
The securit
ies rank beh
ind the claims against Standard Chartered PLC of (a) unsubordinated creditors, (b) which are expressed
\n
to be subordinated to the claims of unsubordinated creditors of Standard Chartered PLC but not further or otherwise; or (c)
\n
which are, or are expressed to be, jun
ior to the cla
ims of other creditors of Standard Chartered PLC, whether subordinated or
\n
unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or jun
ior to, the cla
ims of holders of the
\n
AT1 securit
ies
in a wind
ing\u2013up occurr
ing prior to the conversion trigger.
\n
Reserves
\n
The constituents of the reserves are summarised as follows:
\n
\u2022
The capital reserve represents the exchange difference on redenominat
ion of share cap
ital and share premium from sterling
\n
to US dollars in 2001. The capital redemption reserve represents the nominal value of preference shares redeemed
\n
\u2022
The amounts in the \u201cCapital and Merger Reserve\u201d represents the premium aris
ing on shares
issued using a cash box \ufb01nanc
ing
\n
structure, which required the Company to create a merger reserve under section 612 of the Companies Act 2006. Shares were
\n
issued using this structure in 2005 and 2006 to assist in the funding of Korea ($1.9 bill
ion) and Ta
iwan ($1.2 bill
ion) acqu
is
it
ions,
\n
in 2008, 2010 and 2015 for the shares issued by way of a rights issue, primar
ily for cap
ital maintenance requirements and for
\n
the shares issued in 2009 by way of an accelerated book build, the proceeds of which were used in the ordinary course of
\n
business of the Group. The funding raised by the 2008, 2010 and 2015 rights issues and 2009 share issue was fully retained
\n
with
in the Company. Of the 2015 fund
ing, $1.5 bill
ion was used to subscr
ibe to addit
ional equ
ity in Standard Chartered Bank,
\n
a wholly owned subsid
iary of the Company. Apart from the Korea, Ta
iwan and Standard Chartered Bank funding, the merger
\n
reserve is considered realised and distr
ibutable.
\n
\u2022
Own credit adjustment reserve represents the cumulative gains and losses on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value
\n
through pro\ufb01t or loss relating to own credit. Gains and losses on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through
\n
pro\ufb01t or loss relating to own credit in the year have been taken through other comprehensive income into this reserve.
\n
On derecognit
ion of appl
icable instruments the balance of any OCA will not be recycled to the income statement, but will
\n
be transferred with
in equ
ity to retained earnings
\n
\u2022
Fair value through other comprehensive income (FVOCI) debt reserve represents the unrealised fair value gains and losses in
\n
respect of \ufb01nancial assets class
if
ied as FVOCI, net of expected cred
it losses and taxation. Gains and losses are deferred in this
\n
reserve and are reclassif
ied to the
income statement when the underlying asset is sold, matures or becomes impa
ired.
\n
\u2022
FVOCI equity reserve represents unrealised fair value gains and losses in respect of \ufb01nanc
ial assets class
if
ied as FVOCI, net of
\n
taxation. Gains and losses are recorded in this reserve and never recycled to the income statement
\n
\u2022
Cash \ufb02ow hedge reserve represents the effective portion of the gains and losses on derivat
ives that meet the cr
iter
ia for
\n
these types of hedges. Gains and losses are deferred in this reserve and are reclassif
ied to the
income statement when the
\n
underlying hedged item affects pro\ufb01t and loss or when a forecast transaction is no longer expected to occur
\n
\u2022
Translation reserve represents the cumulative foreign exchange gains and losses on translation of the net investment of the
\n
Group in foreign operations. Since 1 January 2004, gains and losses are deferred to this reserve and are reclassif
ied to the
\n
income statement when the underlying foreign operation is disposed. Gains and losses aris
ing from der
ivat
ives used as
\n
hedges of net investments are netted against the foreign exchange gains and losses on translation of the net investment
\n
of the foreign operations
\n
\u2022
Retained earnings represents pro\ufb01ts and other comprehensive income earned by the Group and Company in the current
\n
and prior periods, together with the after tax increase relating to equity-settled share options, less div
idend d
istr
ibut
ions,
\n
own shares held (treasury shares) and share buybacks
\n
A substantial part of the Group\u2019s reserves is held in overseas subsid
iary undertak
ings and branches, princ
ipally to support local
\n
operations or to comply with local regulations. The maintenance of local regulatory capital ratios could potentially restrict
\n
the amount of reserves which can be remitted. In addit
ion,
if these overseas reserves were to be remitted, further unprovided
\n
taxation liab
il
it
ies m
ight arise.
\n
As at 31 December 2024, the distr
ibutable reserves of Standard Chartered PLC (the Company) were $14.1 b
ill
ion (31 December
\n
2023: $14.7 bill
ion). D
istr
ibutable reserves of SC PLC were $14.1 b
ill
ion, wh
ich is calculated from the Merger reserve and Retained
\n
earnings with considerat
ion for restr
icted items in line with sections 830 and 831 of the Companies Act 2006.
\n\n\n
Own shares
\n
The 2004 Employee Bene\ufb01t Trust (2004 Trust) is used in conjunct
ion w
ith the Group\u2019s employee share schemes and other
\n
employee share-based payments (such as upfront shares and salary shares). Computershare Trustees (Jersey) Lim
ited
is the
\n
trustee of the 2004 Trust. Group companies fund the 2004 Trust from time to time to enable the trustees to acquire shares in
\n
Standard Chartered PLC to satisfy these arrangements.
\n
Details of the shares purchased and held by the 2004 Trust are set out below.
2004 Trust
2024
2023
Shares purchased during the period
19,604,557
29,069,539
Market price of shares purchased ($mill
ion)
223
237
Shares held at the end of the period
17,589,987
28,095,542
Maximum number of shares held during the period
28,085,688
28,893,930
\n
Except as disclosed, neither the Company nor any of its subsid
iar
ies has bought, sold or redeemed any securit
ies of the
\n
Company listed on The Stock Exchange of Hong Kong Lim
ited, on another exchange, by pr
ivate arrangement, or by way
\n
of a general offer during the period.
\n
Div
idend wa
ivers
\n
The trustees of the 2004 Trust, which holds ordinary shares in Standard Chartered PLC in connection with the operation of its
\n
employee share plans, waive any div
idend on the balance of ord
inary shares that have not been allocated to employees,
\n
except for 0.01p per share.
\n
Changes in share capital and other equity instruments of Standard Chartered PLC subsid
iar
ies
\n
The table below details the transactions in equity instruments (includ
ing convert
ible and hybrid instruments) of the Group\u2019s
\n
subsid
iar
ies, includ
ing
issuances, conversions, redemptions, purchase or cancellation. This is required under the Hong Kong
\n
List
ing requ
irements, appendix D2 paragraph 10.
Descript
ion of
Issued/(redeemed)
Issued/(redeemed)
Name
Shares
Shares
capital
Standard Chartered Bank Niger
ia L
im
ited
NGN1.00 Ordinary
8,581,235,698
NGN11,081,235,698
Furaha Finserve Uganda Lim
ited
USD1.00 Ordinary
199,500
USD199,500
SCV Research and Development Pvt. Ltd.
INR10.00 Ordinary
10,000
INR100,000
Furaha Holding Ltd
USD1.00 Ordinary
6,500,000
USD6,500,000
Qatalyst Pte. Ltd.
USD1.00 Ordinary
1,099,999
USD1,099,999
Standard Chartered I H Lim
ited
USD1.00 Ordinary
52,086,333
USD 52,086,333
Standard Chartered Strategic Investments Lim
ited
USD1.00 Ordinary
16,086,333
USD 16,086,333
Standard Chartered Capital Lim
ited
INR10.00 Equity
32,269,750
INR322,697,500
SC Ventures Holdings Lim
ited
USD1.00 Ordinary
59,386,000
USD 59,386,000
Standard Chartered Holdings Lim
ited
USD2.00 Ordinary
25,043,166
USD 50,086,332
Standard Chartered Luxembourg S.A.
EUR1.00 Ordinary
125,000
EUR125,000
Mox Bank Lim
ited
HKD Ordinary
54,740,000
HKD547,400,000
Standard Chartered Research and Technology India Private Lim
ited
INR10 Equity Class \u2013 A
10,821,311
INR108,213,110
myZoi Financ
ial Inclus
ion Technologies LLC
AED1.00 Ordinary
25,000,000
AED25,000,000
Zodia Holdings Lim
ited
USD1.00 A Ordinary
18,000,000
USD18,000,000
Audax Financ
ial Technology Pte. Ltd
USD Ordinary-A
8,500,000
USD8,500,000
Trust Bank Singapore Lim
ited
SGD Ordinary
185,000,000
SGD185,000,000
Zodia Markets Holdings Lim
ited
USD1.00 Ordinary
5,580
USD 5,580
Letsbloom Pte. Ltd.
USD Ordinary-A
9,406,219
USD9,406,219
Zodia Custody (Ireland) Lim
ited
USD1.00 Ordinary
1,000,000
USD1,000,000
SCV Research and Development Pte. Ltd.
USD Ordinary-A'
11,440,850
USD11,440,850
SCV Master Holding Company Pte. Ltd.
USD Ordinary
63,299,999
USD63,299,999
Financ
ial Inclus
ion Technologies Ltd
USD Ordinary-A
6,700,000
USD6,700,000
Appro Onboarding Solutions FZ-LLC
AED1,000 Ordinary
21,670
AED21,670,000
Solv-India Pte. Ltd.
USD Ordinary
38,963,752
USD38,963,752
Solvezy Technology Kenya Lim
ited
KES1,000.00 Ordinary
196,448
KES196,448,000
Tawi Fresh Kenya Lim
ited
KES1,000.00 Ordinary
454,890
KES454,890,000
Libeara Pte. Ltd.
USD Ordinary
10,258,400
USD10,258,400
CashEnable Pte. Ltd.
USD Ordinary-A
9,300,000
USD9,300,000
Solvezy Technology Ghana Ltd
GHS Ordinary
18,000,441
GHS18,000,441
Libeara (Singapore) Pte. Ltd.
USD Ordinary
10,258,400
USD10,258,400
Standard Chartered Securit
ies (Afr
ica) Holdings Lim
ited
USD1.00 Ordinary
(8,002,228)
USD(8,002,228)
Banco Standard Chartered en Liqu
idac
ion
USD75.133 Ordinary
(133,930)
USD(10,062,563)
\n
Please see Note 22 Debt securit
ies
in issue for issuances and redemptions of senior notes.
\n
Please see Note 27 Subordinated liab
il
it
ies and other borrowed funds for
issuance and redemptions of subordinated liab
il
it
ies
\n
and AT1 securit
ies.
\n
Please see Note 40 Related undertakings of the Group for subsid
iar
ies liqu
idated, d
issolved or sold during the year.", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00548": { "value": "28. Share capital, other equity instruments and reserves
Accounting policy
\n
Securit
ies wh
ich carry a discret
ionary coupon and have no \ufb01xed matur
ity or redemption date are classif
ied as other equ
ity
\n
instruments. Interest payments on these securit
ies are recogn
ised, net of tax, as distr
ibut
ions from equity in the period in
\n
which they are paid.
\n
Where the Company or other members of the consolidated Group purchase the Company\u2019s equity share capital, the
\n
considerat
ion pa
id is deducted from the total shareholders\u2019 equity of the Group and/or of the Company as treasury shares
\n
until they are cancelled. Where such shares are subsequently sold or reissued, any considerat
ion rece
ived is included in
\n
shareholders\u2019 equity of the Group and/or the Company.
Total share
Number of
Ordinary
Ordinary
Preference
capital and
Other equity
ordinary shares
share capital
1
Share premium
Share premium
2
share premium
instruments
mill
ions
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January 2023
2,895
1,447
3,989
1,494
6,930
6,504
Cancellation of shares includ
ing
share buyback
(230)
(115)
\u2013
\u2013
(115)
\u2013
Addit
ional T
ier 1 Redemption
\u2013
\u2013
\u2013
\u2013
\u2013
(992)
At 31 December 2023
2,665
1,332
3,989
1,494
6,815
5,512
Cancellation of shares includ
ing
share buyback
(240)
(120)
\u2013
\u2013
(120)
\u2013
Addit
ional T
ier 1 equity issuance
\u2013
\u2013
\u2013
\u2013
\u2013
1,568
Addit
ional T
ier 1 Redemption
\u2013
\u2013
\u2013
\u2013
\u2013
(553)
Other movements
3
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
At 31 December 2024
2,425
1,212
3,989
1,494
6,695
6,502
\n
1
Issued and fully paid ordinary shares of 50 cents each
\n
2
Includes preference share capital of $75,000
\n
3
Relates to realised translation loss on redemption of AT1 securit
ies of SGD 750 m
ill
ion
\n
Financ
ial statements
\n\n
Share buyback
\n
On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each.
\n
Nominal value of share purchases was $57 mill
ion, the total cons
iderat
ion pa
id was $1,000 mill
ion, and the buyback completed
\n
on 25 June 2024. The total number of shares purchased was 113,266,516, representing 4.25 per cent of the ordinary shares in issue
\n
at the beginn
ing of the programme. The nom
inal value of the shares was transferred from the share capital to the capital
\n
redemption reserve account. The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the
\n
Hong Kong Stock Exchange, by private arrangement.
\n
On 30 July 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. As at
\n
FY 2024 the buyback is ongoing, with the total number of shares purchased of 126,262,414 representing 4.95 per cent of the
\n
ordinary shares in issue at the beginn
ing of the programme, the total cons
iderat
ion was $1,355 m
ill
ion and a further $145 m
ill
ion
\n
relating to irrevocable obligat
ion to buy back shares under the buyback programme has been recogn
ised. The nominal value of
\n
the shares was transferred from the share capital to the capital redemption reserve account.
\n
The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the Hong Kong Stock Exchange.
\n\n \n
Average
Highest
Lowest
price paid
Aggregate
Aggregate
Number of
price Paid
price paid
per share
price paid
price paid
ordinary shares
\u00a3
\u00a3
\u00a3
\u00a3
$
February 2024
6,418,285
6.6920
6.3700
6.5039
41,743,905
52,831,654
March 2024
45,113,015
7.0000
6.4400
6.6765
301,197,187
383,771,653
April 2024
24,716,649
7.1300
6.3800
6.7727
167,398,467
209,475,694
May 2024
19,525,751
7.9540
6.9080
7.6883
150,119,738
189,885,098
June 2024
17,492,816
7.8840
7.1220
7.3676
128,879,487
164,035,854
August 2024
27,834,474
7.8340
6.6740
7.3594
204,843,866
264,717,166
September 2024
33,245,826
8.1120
7.4260
7.7103
256,333,914
338,823,108
October 2024
34,497,109
9.1700
7.6880
8.3791
289,055,494
377,008,057
November 2024
20,250,801
9.8600
9.0240
9.4021
190,399,354
243,785,545
December 2024
10,434,204
10.0950
9.6380
9.8709
102,994,626
130,375,125
\n
Ordinary share capital
\n
In accordance with the Companies Act 2006 the Company does not have authorised share capital. The nominal value of each
\n
ordinary share is 50 cents.
\n
During the period nil shares were issued under employee share plans.
\n
Preference share capital
\n
At 31 December 2024, the Company has 15,000 $5 non-cumulative redeemable preference shares in issue, with a premium of
\n
$99,995 making a paid up amount per preference share of $100,000. The preference shares are redeemable at the option of the
\n
Company and are classif
ied
in equity.
\n
The available pro\ufb01ts of the Company are distr
ibuted to the holders of the
issued preference shares in prior
ity to payments
\n
made to holders of the ordinary shares and in prior
ity to, or par
i passu with, any payments to the holders of any other class of
\n
shares in issue. On a wind
ing up, the assets of the Company are appl
ied to the holders of the preference shares in prior
ity to
\n
any payment to the ordinary shareholders and in prior
ity to, or par
i passu with, the holders of any other shares in issue, for an
\n
amount equal to any div
idends payable (on approval of the Board) and the nom
inal value of the shares together with any
\n
premium as determined by the Board. The redeemable preference shares are redeemable at the paid up amount (which
\n
includes premium) at the option of the Company in accordance with the terms of the shares. The holders of the preference
\n
shares are not entitled to attend or vote at any general meeting except where any relevant div
idend due
is not paid in full or
\n
where a resolution is proposed varying the rights of the preference shares
\n
Other equity instruments
\n
The table provides details of outstanding Fixed Rate Resetting Perpetual Subordinated Contingent Convertible AT1 securit
ies
\n
issued by Standard Chartered PLC. All issuances are made for general business purposes and to increase the regulatory capital
\n
base of the Group.
\n\n \n
Conversion
Proceeds net of
Interest
price per
Issuance date
Nominal value
issue costs
rate
1
Coupon payment dates each year
2
First reset dates
3
ordinary share\u2075
26 Jun 2020
$1,000 mill
ion
$992 mill
ion
6%
26 January, 26 July
26 January 2026
$5.331
14 January 2021
$1,250 mill
ion
$1,239 mill
ion
4.75%
14 January, 14 July
14 July 2031
$6.353
19 August 2021
$1,500 mill
ion
$1,489 mill
ion
4.30%
19 February, 19 August
19 August 2028
$6.382
15 August 2022
$1,250 mill
ion
$1,239 mill
ion
7.75%
15 February, 15 August
15 February 2028
$7.333
08 March 2024
$1,000 mill
ion
$993 mill
ion
7.875%
8 March, 8 September
8 September 2030
$8.216
19 Sep 2024
SGD750 mill
ion
$575 mill
ion
5.300%
19 March, 19 September
19 March 2030
SGD12.929
Total\u2074
$6,527 mill
ion
\n
1
Interest rates for the period from (and includ
ing) the
issue date to (but excluding) the \ufb01rst reset date
\n
2
Interest payable semi-annually in arrears
\n
3
Securit
ies are resettable each date fall
ing \ufb01ve years, or an integral multiple of \ufb01ve years, after the \ufb01rst reset date
\n
4
Excludes realised translation loss ($25 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion
\n
5
Conversion price set at the time of pric
ing w
ith reference to closing share price and any applicable discount
\n\n\n
Standard Chartered PLC redeemed SGD 750 mill
ion F
ixed Rate Resetting Perpetual Contingent Convertible Securit
ies on
its \ufb01rst
\n
optional redemption date of 3 October 2024 for $578 mill
ion (real
ised translation loss of $25 mill
ion).
\n
The AT1 issuances above are primar
ily purchased by
inst
itut
ional investors.
\n
The princ
ipal terms of the AT1 secur
it
ies are descr
ibed below:
\n
\u2022
The securit
ies are perpetual and redeemable, at the opt
ion of Standard Chartered PLC in whole but not in part, on the \ufb01rst
\n
interest reset date and each date falling \ufb01ve years after the \ufb01rst reset date.
\n
\u2022
The securit
ies are also redeemable for certa
in regulatory or tax reasons on any date at 100 per cent of their princ
ipal amount
\n
together with any accrued but unpaid interest up to (but excluding) the date \ufb01xed for redemption. Any redemption is subject
\n
to Standard Chartered PLC giv
ing not
ice to the relevant regulator and the regulator granting permiss
ion to redeem.
\n
\u2022
Interest payments on these securit
ies w
ill be accounted for as a div
idend.
\n
\u2022
Interest on the securit
ies
is due and payable only at the sole and absolute discret
ion of Standard Chartered PLC, subject to
\n
certain addit
ional restr
ict
ions set out
in the terms and condit
ions. Accord
ingly, Standard Chartered PLC may at any time elect
\n
to cancel any interest payment (or part thereof) which would otherwise be payable on any interest payment date.
\n
\u2022
The securit
ies convert
into ordinary shares of Standard Chartered PLC, at a pre-determined price detailed in the table above,
\n
should the fully loaded Common Equity Tier 1 ratio of the Group fall below 7.0 per cent. Approximately 970 mill
ion ord
inary
\n
shares would be required to satisfy the conversion of all the securit
ies ment
ioned above.
\n
The securit
ies rank beh
ind the claims against Standard Chartered PLC of (a) unsubordinated creditors, (b) which are expressed
\n
to be subordinated to the claims of unsubordinated creditors of Standard Chartered PLC but not further or otherwise; or (c)
\n
which are, or are expressed to be, jun
ior to the cla
ims of other creditors of Standard Chartered PLC, whether subordinated or
\n
unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or jun
ior to, the cla
ims of holders of the
\n
AT1 securit
ies
in a wind
ing\u2013up occurr
ing prior to the conversion trigger.
\n
Reserves
\n
The constituents of the reserves are summarised as follows:
\n
\u2022
The capital reserve represents the exchange difference on redenominat
ion of share cap
ital and share premium from sterling
\n
to US dollars in 2001. The capital redemption reserve represents the nominal value of preference shares redeemed
\n
\u2022
The amounts in the \u201cCapital and Merger Reserve\u201d represents the premium aris
ing on shares
issued using a cash box \ufb01nanc
ing
\n
structure, which required the Company to create a merger reserve under section 612 of the Companies Act 2006. Shares were
\n
issued using this structure in 2005 and 2006 to assist in the funding of Korea ($1.9 bill
ion) and Ta
iwan ($1.2 bill
ion) acqu
is
it
ions,
\n
in 2008, 2010 and 2015 for the shares issued by way of a rights issue, primar
ily for cap
ital maintenance requirements and for
\n
the shares issued in 2009 by way of an accelerated book build, the proceeds of which were used in the ordinary course of
\n
business of the Group. The funding raised by the 2008, 2010 and 2015 rights issues and 2009 share issue was fully retained
\n
with
in the Company. Of the 2015 fund
ing, $1.5 bill
ion was used to subscr
ibe to addit
ional equ
ity in Standard Chartered Bank,
\n
a wholly owned subsid
iary of the Company. Apart from the Korea, Ta
iwan and Standard Chartered Bank funding, the merger
\n
reserve is considered realised and distr
ibutable.
\n
\u2022
Own credit adjustment reserve represents the cumulative gains and losses on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value
\n
through pro\ufb01t or loss relating to own credit. Gains and losses on \ufb01nanc
ial l
iab
il
it
ies des
ignated at fair value through
\n
pro\ufb01t or loss relating to own credit in the year have been taken through other comprehensive income into this reserve.
\n
On derecognit
ion of appl
icable instruments the balance of any OCA will not be recycled to the income statement, but will
\n
be transferred with
in equ
ity to retained earnings
\n
\u2022
Fair value through other comprehensive income (FVOCI) debt reserve represents the unrealised fair value gains and losses in
\n
respect of \ufb01nancial assets class
if
ied as FVOCI, net of expected cred
it losses and taxation. Gains and losses are deferred in this
\n
reserve and are reclassif
ied to the
income statement when the underlying asset is sold, matures or becomes impa
ired.
\n
\u2022
FVOCI equity reserve represents unrealised fair value gains and losses in respect of \ufb01nanc
ial assets class
if
ied as FVOCI, net of
\n
taxation. Gains and losses are recorded in this reserve and never recycled to the income statement
\n
\u2022
Cash \ufb02ow hedge reserve represents the effective portion of the gains and losses on derivat
ives that meet the cr
iter
ia for
\n
these types of hedges. Gains and losses are deferred in this reserve and are reclassif
ied to the
income statement when the
\n
underlying hedged item affects pro\ufb01t and loss or when a forecast transaction is no longer expected to occur
\n
\u2022
Translation reserve represents the cumulative foreign exchange gains and losses on translation of the net investment of the
\n
Group in foreign operations. Since 1 January 2004, gains and losses are deferred to this reserve and are reclassif
ied to the
\n
income statement when the underlying foreign operation is disposed. Gains and losses aris
ing from der
ivat
ives used as
\n
hedges of net investments are netted against the foreign exchange gains and losses on translation of the net investment
\n
of the foreign operations
\n
\u2022
Retained earnings represents pro\ufb01ts and other comprehensive income earned by the Group and Company in the current
\n
and prior periods, together with the after tax increase relating to equity-settled share options, less div
idend d
istr
ibut
ions,
\n
own shares held (treasury shares) and share buybacks
\n
A substantial part of the Group\u2019s reserves is held in overseas subsid
iary undertak
ings and branches, princ
ipally to support local
\n
operations or to comply with local regulations. The maintenance of local regulatory capital ratios could potentially restrict
\n
the amount of reserves which can be remitted. In addit
ion,
if these overseas reserves were to be remitted, further unprovided
\n
taxation liab
il
it
ies m
ight arise.
\n
As at 31 December 2024, the distr
ibutable reserves of Standard Chartered PLC (the Company) were $14.1 b
ill
ion (31 December
\n
2023: $14.7 bill
ion). D
istr
ibutable reserves of SC PLC were $14.1 b
ill
ion, wh
ich is calculated from the Merger reserve and Retained
\n
earnings with considerat
ion for restr
icted items in line with sections 830 and 831 of the Companies Act 2006.
\n\n\n
Own shares
\n
The 2004 Employee Bene\ufb01t Trust (2004 Trust) is used in conjunct
ion w
ith the Group\u2019s employee share schemes and other
\n
employee share-based payments (such as upfront shares and salary shares). Computershare Trustees (Jersey) Lim
ited
is the
\n
trustee of the 2004 Trust. Group companies fund the 2004 Trust from time to time to enable the trustees to acquire shares in
\n
Standard Chartered PLC to satisfy these arrangements.
\n
Details of the shares purchased and held by the 2004 Trust are set out below.
2004 Trust
2024
2023
Shares purchased during the period
19,604,557
29,069,539
Market price of shares purchased ($mill
ion)
223
237
Shares held at the end of the period
17,589,987
28,095,542
Maximum number of shares held during the period
28,085,688
28,893,930
\n
Except as disclosed, neither the Company nor any of its subsid
iar
ies has bought, sold or redeemed any securit
ies of the
\n
Company listed on The Stock Exchange of Hong Kong Lim
ited, on another exchange, by pr
ivate arrangement, or by way
\n
of a general offer during the period.
\n
Div
idend wa
ivers
\n
The trustees of the 2004 Trust, which holds ordinary shares in Standard Chartered PLC in connection with the operation of its
\n
employee share plans, waive any div
idend on the balance of ord
inary shares that have not been allocated to employees,
\n
except for 0.01p per share.
\n
Changes in share capital and other equity instruments of Standard Chartered PLC subsid
iar
ies
\n
The table below details the transactions in equity instruments (includ
ing convert
ible and hybrid instruments) of the Group\u2019s
\n
subsid
iar
ies, includ
ing
issuances, conversions, redemptions, purchase or cancellation. This is required under the Hong Kong
\n
List
ing requ
irements, appendix D2 paragraph 10.
Descript
ion of
Issued/(redeemed)
Issued/(redeemed)
Name
Shares
Shares
capital
Standard Chartered Bank Niger
ia L
im
ited
NGN1.00 Ordinary
8,581,235,698
NGN11,081,235,698
Furaha Finserve Uganda Lim
ited
USD1.00 Ordinary
199,500
USD199,500
SCV Research and Development Pvt. Ltd.
INR10.00 Ordinary
10,000
INR100,000
Furaha Holding Ltd
USD1.00 Ordinary
6,500,000
USD6,500,000
Qatalyst Pte. Ltd.
USD1.00 Ordinary
1,099,999
USD1,099,999
Standard Chartered I H Lim
ited
USD1.00 Ordinary
52,086,333
USD 52,086,333
Standard Chartered Strategic Investments Lim
ited
USD1.00 Ordinary
16,086,333
USD 16,086,333
Standard Chartered Capital Lim
ited
INR10.00 Equity
32,269,750
INR322,697,500
SC Ventures Holdings Lim
ited
USD1.00 Ordinary
59,386,000
USD 59,386,000
Standard Chartered Holdings Lim
ited
USD2.00 Ordinary
25,043,166
USD 50,086,332
Standard Chartered Luxembourg S.A.
EUR1.00 Ordinary
125,000
EUR125,000
Mox Bank Lim
ited
HKD Ordinary
54,740,000
HKD547,400,000
Standard Chartered Research and Technology India Private Lim
ited
INR10 Equity Class \u2013 A
10,821,311
INR108,213,110
myZoi Financ
ial Inclus
ion Technologies LLC
AED1.00 Ordinary
25,000,000
AED25,000,000
Zodia Holdings Lim
ited
USD1.00 A Ordinary
18,000,000
USD18,000,000
Audax Financ
ial Technology Pte. Ltd
USD Ordinary-A
8,500,000
USD8,500,000
Trust Bank Singapore Lim
ited
SGD Ordinary
185,000,000
SGD185,000,000
Zodia Markets Holdings Lim
ited
USD1.00 Ordinary
5,580
USD 5,580
Letsbloom Pte. Ltd.
USD Ordinary-A
9,406,219
USD9,406,219
Zodia Custody (Ireland) Lim
ited
USD1.00 Ordinary
1,000,000
USD1,000,000
SCV Research and Development Pte. Ltd.
USD Ordinary-A'
11,440,850
USD11,440,850
SCV Master Holding Company Pte. Ltd.
USD Ordinary
63,299,999
USD63,299,999
Financ
ial Inclus
ion Technologies Ltd
USD Ordinary-A
6,700,000
USD6,700,000
Appro Onboarding Solutions FZ-LLC
AED1,000 Ordinary
21,670
AED21,670,000
Solv-India Pte. Ltd.
USD Ordinary
38,963,752
USD38,963,752
Solvezy Technology Kenya Lim
ited
KES1,000.00 Ordinary
196,448
KES196,448,000
Tawi Fresh Kenya Lim
ited
KES1,000.00 Ordinary
454,890
KES454,890,000
Libeara Pte. Ltd.
USD Ordinary
10,258,400
USD10,258,400
CashEnable Pte. Ltd.
USD Ordinary-A
9,300,000
USD9,300,000
Solvezy Technology Ghana Ltd
GHS Ordinary
18,000,441
GHS18,000,441
Libeara (Singapore) Pte. Ltd.
USD Ordinary
10,258,400
USD10,258,400
Standard Chartered Securit
ies (Afr
ica) Holdings Lim
ited
USD1.00 Ordinary
(8,002,228)
USD(8,002,228)
Banco Standard Chartered en Liqu
idac
ion
USD75.133 Ordinary
(133,930)
USD(10,062,563)
\n
Please see Note 22 Debt securit
ies
in issue for issuances and redemptions of senior notes.
\n
Please see Note 27 Subordinated liab
il
it
ies and other borrowed funds for
issuance and redemptions of subordinated liab
il
it
ies
\n
and AT1 securit
ies.
\n
Please see Note 40 Related undertakings of the Group for subsid
iar
ies liqu
idated, d
issolved or sold during the year.", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00750": { "value": "Accounting policy
Securit
ies wh
ich carry a discret
ionary coupon and have no \ufb01xed matur
ity or redemption date are classif
ied as other equ
ity
\n
instruments. Interest payments on these securit
ies are recogn
ised, net of tax, as distr
ibut
ions from equity in the period in
\n
which they are paid.
\n
Where the Company or other members of the consolidated Group purchase the Company\u2019s equity share capital, the
\n
considerat
ion pa
id is deducted from the total shareholders\u2019 equity of the Group and/or of the Company as treasury shares
\n
until they are cancelled. Where such shares are subsequently sold or reissued, any considerat
ion rece
ived is included in
\nshareholders\u2019 equity of the Group and/or the Company.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00749": { "value": "Accounting policy
Securit
ies wh
ich carry a discret
ionary coupon and have no \ufb01xed matur
ity or redemption date are classif
ied as other equ
ity
\n
instruments. Interest payments on these securit
ies are recogn
ised, net of tax, as distr
ibut
ions from equity in the period in
\n
which they are paid.
\n
Where the Company or other members of the consolidated Group purchase the Company\u2019s equity share capital, the
\n
considerat
ion pa
id is deducted from the total shareholders\u2019 equity of the Group and/or of the Company as treasury shares
\n
until they are cancelled. Where such shares are subsequently sold or reissued, any considerat
ion rece
ived is included in
\nshareholders\u2019 equity of the Group and/or the Company.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForShareCapitalOtherEquityInstrumentsAndReservesExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00549": { "value": "Own shares
The 2004 Employee Bene\ufb01t Trust (2004 Trust) is used in conjunct
ion w
ith the Group\u2019s employee share schemes and other
\n
employee share-based payments (such as upfront shares and salary shares). Computershare Trustees (Jersey) Lim
ited
is the
\n
trustee of the 2004 Trust. Group companies fund the 2004 Trust from time to time to enable the trustees to acquire shares in
\n
Standard Chartered PLC to satisfy these arrangements.
\n
Details of the shares purchased and held by the 2004 Trust are set out below.
2004 Trust
2024
2023
Shares purchased during the period
19,604,557
29,069,539
Market price of shares purchased ($mill
ion)
223
237
Shares held at the end of the period
17,589,987
28,095,542
Maximum number of shares held during the period
28,085,688
28,893,930
\n
Except as disclosed, neither the Company nor any of its subsid
iar
ies has bought, sold or redeemed any securit
ies of the
\n
Company listed on The Stock Exchange of Hong Kong Lim
ited, on another exchange, by pr
ivate arrangement, or by way
\nof a general offer during the period.", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00550": { "value": "29. Non-controlling interests \n \n
2024
2023
$mill
ion
$mill
ion
As at 1 January
396
350
Comprehensive income for the year
(22)
(38)
Income in equity attributable to non-controlling interests
(14)
(31)
Other pro\ufb01ts attributable to non-controlling interests
(8)
(7)
Distr
ibut
ions
(43)
(26)
Other increases
1
63
110
As at 31 December
394
396
1
Movements in 2024 are primar
ily from non-controll
ing interests pertain
ing to Trust Bank S
ingapore Lim
ited ($55 m
ill
ion) and Mox Bank L
im
ited ($14 m
ill
ion) partly
offset by disposal of SCB Angola S.A. ($6 mill
ion). Cash rece
ived from addit
ional
investment was $55 mill
ion (2023: $116 m
ill
ion). Movements
in 2023 primar
ily from
non-controlling interest pertain
ing to Mox Bank L
im
ited ($48 m
ill
ion), Trust Bank S
ingapore Lim
ited ($34 m
ill
ion) and Zod
ia Custody Lim
ited ($28 m
ill
ion). ", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00551": { "value": "30. Retirement bene\ufb01t obligat
ions
Accounting policy
The Group operates pension and other post-retirement bene\ufb01t plans around the world, which can be categorised into
de\ufb01ned contribut
ion
plans and
de\ufb01ned bene\ufb01t
plans.
\u2022 For
de\ufb01ned contribut
ion
plans, the Group pays contribut
ions to publ
icly or privately admin
istered pens
ion plans on
a statutory or contractual basis, and such amounts are charged to operating expenses. The Group has no further
payment obligat
ions once the contr
ibut
ions have been pa
id.
\u2022 For
de\ufb01ned bene\ufb01t
plans, which promise levels of payments where the future cost is not known with certainty;
\u2013 the accounting obligat
ion
is calculated annually by independent actuaries using the projected unit method.
\u2013
Actuarial gains and losses that arise are recognised in shareholders\u2019 equity and presented in the statement of other
comprehensive income in the period they arise.
\u2013
The Group determines the net interest expense on the net de\ufb01ned bene\ufb01t liab
il
ity for the year by applying the
discount rate used to measure the de\ufb01ned bene\ufb01t obligat
ion at the beg
inn
ing of the annual per
iod to the net
de\ufb01ned bene\ufb01t liab
il
ity, taking into account any changes in the net de\ufb01ned bene\ufb01t liab
il
ity during the year as a
result of contribut
ions and bene\ufb01t payments. Net
interest expense, the cost of the accrual of new bene\ufb01ts, bene\ufb01t
enhancements (or reductions) and admin
istrat
ion expenses met directly from plan assets are recognized in the
income statement in the period in which they were incurred.
Other accounting estimates and judgements
There are many factors that affect the measurement of the retirement bene\ufb01t obligat
ions. Th
is measurement requires
the use of estimates, such as discount rates, in\ufb02at
ion, pens
ion increases, salary increases, and life expectancies which are
inherently uncertain. The table below summarises how these assumptions are set:
\n \n
Assumption
Detail
Discount rate
Determined by reference to market yields at the end of the reporting period on high-quality
corporate bonds (or, in countries where there is no deep market in such bonds, government bonds)
of a currency and term consistent with the currency and term of the post-employment bene\ufb01t
obligat
ions. Th
is is the approach adopted across all our geographies.
In\ufb02ation
Where there are in\ufb02at
ion-l
inked bonds available (e.g. United Kingdom and the eurozone), the
Group derives in\ufb02at
ion based on the market on those bonds, w
ith the market yield adjusted in
respect of the United Kingdom to take account of the fact that liab
il
it
ies are l
inked to Consumer
Price Index in\ufb02at
ion, whereas the reference bonds are l
inked to Retail Price Index in\ufb02at
ion. Where
no in\ufb02at
ion-l
inked bonds exist, we determine in\ufb02at
ion assumpt
ions based on a combinat
ion of
long-term forecasts and short-term in\ufb02at
ion data.
Salary growth
Salary growth assumptions re\ufb02ect the Group\u2019s long-term expectations, taking into account future
business plans and macroeconomic data (primar
ily expected future long-term
in\ufb02at
ion).
Demographic assumptions
Demographic assumptions, includ
ing mortal
ity and turnover rates, are typically set based on
the assumptions used in the most recent actuarial funding valuation, and will generally use
industry standard tables, adjusted where appropriate to re\ufb02ect recent histor
ic exper
ience and/or
future expectations.
The sensit
iv
ity of the liab
il
it
ies to changes
in these assumptions is shown in the Note below.
Net Retirement bene\ufb01t obligat
ion and charge compr
ise:
\n \n
Net Obligat
ion
Charge
1,2
2024
2023
2024
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
De\ufb01ned bene\ufb01t plans
101
166
62
66
De\ufb01ned contribut
ion plans
1
14
17
389
365
Total
2
115
183
451
431
1
The Group during the year util
ised aga
inst de\ufb01ned contribut
ion payments, $5m forfe
ited pension contribut
ions
in respect of employees who left before their
interests vested fully. The residual balance of forfeited contribut
ions
is $17m
2
Refer note 7: \u201cOperating expenses\u201d
The Group operates over 60 de\ufb01ned bene\ufb01t plans across its geographies, many of which are closed to new entrants who now
\n
join de\ufb01ned contr
ibut
ion arrangements. The a
im of all these plans is, as part of the Group\u2019s commitment to \ufb01nanc
ial wellbe
ing
\n
for employees, to give employees the opportunity to save appropriately for retirement in a way that is consistent with local
\n
regulations, taxation requirements and market condit
ions. The de\ufb01ned bene\ufb01t plans expose the Group to currency r
isk, interest
\n
rate risk, investment risk and actuarial risks such as longevity risk.
\n
The material holdings of government and corporate bonds shown partially hedge movements in the liab
il
it
ies result
ing from
\n
interest rate and in\ufb02at
ion changes. Sett
ing aside movements from other drivers such as currency \ufb02uctuation, the increases in
\n
discount rates in most geographies over 2024 have led to lower liab
il
it
ies. These have been partly offset by decreases
in the
\n
value of bonds held, however growth assets such as equit
ies and property performed well over 2024, lead
ing to a fall in the
\n
pension de\ufb01c
it reported. These movements are shown as actuar
ial gains and losses in the tables below. Contribut
ions
into a
\n
number of plans in excess of the amounts required to fund bene\ufb01ts accruing have also helped to reduce the net de\ufb01c
it over
\n
the\u00a0year.
\n
The disclosures required under IAS 19 have been calculated by independent qualif
ied actuar
ies based on the most recent full
\n
actuarial valuations updated, where necessary, to 31 December 2024.
\n
UK Fund
\n
The Standard Chartered Pension Fund (the \u2018UK Fund\u2019) is the Group\u2019s largest pension plan, representing 46 per cent (31
\n
December 2023: 53 per cent) of total pension liab
il
it
ies. The UK Fund
is set up under a trust that is legally separate from the Bank
\n
(its formal sponsor) and, as required by UK legislat
ion, at least one th
ird of the trustee directors are nominated by members; the
\n
remainder are appointed by the Bank. The trustee directors have a \ufb01duc
iary duty to members and are respons
ible for governing
\n
the UK Fund in accordance with its Trust Deed and Rules.
\n
The UK Fund was closed to new entrants from 1 July 1998 and closed to the accrual of new bene\ufb01ts from 1 April 2018: all UK
\n
employees are now offered membership of a de\ufb01ned contribut
ion plan.
\n
The \ufb01nancial pos
it
ion of the UK Fund
is regularly assessed by an independent qualif
ied actuary. The fund
ing valuation as at
\n
31\u00a0December 2023 was completed in December 2024 by the Scheme Actuary, T Kripps of Will
is Towers Watson, us
ing
\n
assumptions different from those used for IAS19, and agreed with the UK Fund trustee. It showed that the UK Fund was 96%
\n
funded at that date, revealing a past service de\ufb01c
it of $48 m
ill
ion (\u00a338 m
ill
ion).
\n
To repair the de\ufb01c
it, three annual cash payments each of $13 m
ill
ion (\u00a310 m
ill
ion) were agreed, w
ith the \ufb01rst of these paid in
\n
December 2024, and two further instalments to be paid in December 2025 and December 2026. However, the agreement
\n
allowed that the payments due in 2025 and 2026 may be varied depending on the funding posit
ion at the preced
ing 30 June
\n
provided that total payments over the three year recovery plan period do not exceed $38 mill
ion (\u00a330 m
ill
ion). As part of the
\n
2023 valuation agreement, it was agreed that gilts with a nominal value of $200 mill
ion (\u00a3160 m
ill
ion) would rema
in in escrow
\n
to provide addit
ional secur
ity the Trustee.
\n
The Group has not recognised any addit
ional l
iab
il
ity under IFRIC 14, as the Bank has control of any pension surplus under the
\n
Trust Deed and Rules.
\n
Overseas plans
\n
The princ
ipal overseas de\ufb01ned bene\ufb01t arrangements operated by the Group are
in Hong Kong, India, Jersey, Korea, Taiwan,
\n
United Arab Emirates (UAE) and the United States of America (US). Plans in Hong Kong, India, Korea, Taiwan and UAE remain
\n
open for accrual of future bene\ufb01ts.
\n
Key assumptions
\n
The princ
ipal \ufb01nancial assumpt
ions used at 31 December 2024 were:
\n\n \n
2024
2023
UK Funded
Overseas Plans
1
Unfunded Plans
2
UK Funded
Overseas Plans
1
Unfunded Plans
2
%
%
%
%
%
%
Discount rate
5.5
1.6 \u2013 6.9
2.5 \u2013 6.9
4.6
1.2\u20134.9
3.1\u20137.4
Price in\ufb02at
ion
2.5
2.0 \u2013 5.0
2.0 \u2013 5.0
2.5
2.0\u20132.9
2.0\u20135.0
Salary increases
n/a
3.5 \u2013 8.5
4.0 \u2013 8.5
n/a
3.5\u20134.5
4.0\u20138.5
Pension increases
2.3
2.9
0.0 \u2013 2.3
2.3
2.9
0.0\u20132.3
Post-retirement medical rate
n/a
8% in 2024
8% in 2023
reducing
reducing
by 0.5%
by 0.5%
per annum to
per annum to
5% in 2030
5% in 2029
\n
1
The range of assumptions shown is for the funded de\ufb01ned bene\ufb01t overseas plans in Hong Kong, India, Jersey, Korea, Taiwan, and the US. These comprise around
\n
85 per cent of the total liab
il
it
ies of overseas funded plans
\n
2
The range of assumptions shown is for the main unfunded de\ufb01ned bene\ufb01t plans in India, Korea, Thailand, UAE, UK and the US. They comprise over 90 per cent of
\n
the total liab
il
it
ies of unfunded plans
\n
The princ
ipal non-\ufb01nancial assumpt
ions are those made for UK life expectancy. The UK mortality tables are S4PMA for males
\n
and S4PFA for females, projected by year of birth with the CMI 2023 improvement model with a 1.25 Per cent annual trend and
\n
in
it
ial addit
ion parameter of 0.25 Per cent. Scal
ing factors of 81 Per cent for male pensioners, 93 Per cent for female pensioners,
\n
81 Per cent for male dependants and 81 Per cent for female dependants have been applied.
The resulting assumptions for life expectancy for the UK Fund are that a male member currently aged 60 will live for 28 years
\n
(2023: 27 years) and a female member for 29 years (2023: 30 years) and a male member currently aged 40 will live for 29 years
\n
(2023: 29 years) and a female member for 31 years (2023: 32 years) after their 60th birthdays.
\n
Both \ufb01nancial and non-\ufb01nancial assumpt
ions can be expected to change in the future, which would affect the value placed
\n
on the liab
il
it
ies. For example, changes at the report
ing date to one of the relevant actuarial assumptions, holding other
\n
assumptions constant, would have affected the de\ufb01ned bene\ufb01t obligat
ion by the amounts shown below:
\n
\u2022
If the discount rate increased by 25 basis points the liab
il
ity would reduce by approximately $25 mill
ion for the UK Fund
\n
(2023: $35 mill
ion) and $20 m
ill
ion for the other plans (2023: $20 m
ill
ion)
\n
\u2022
If the rate of in\ufb02at
ion
increased by 25 basis points the liab
il
ity, allowing for the consequent impact on pension and salary
\n
increases, would increase by approximately $15 mill
ion for the UK Fund (2023: $20 m
ill
ion) and $15 m
ill
ion for the other plans
\n
(2023: $15 mill
ion)
\n
\u2022
If the rate of salary growth relative to in\ufb02at
ion
increased by 25 basis points the liab
il
ity would increase by nil for the UK Fund
\n
(2023: nil) and approximately $10 mill
ion for the other plans (2023: $10 m
ill
ion)
\n
\u2022
If longevity expectations increased by one year the liab
il
ity would increase by approximately $35 mill
ion for the UK Fund
\n
(2023: $35 mill
ion) and $10 m
ill
ion for the other plans (2023: $10 m
ill
ion)
\n
Although this analysis does not take account of the full distr
ibut
ion of cash \ufb02ows expected, it does provide an approximat
ion
\n
of the sensit
iv
ity to the main assumptions. While changes in other assumptions would also have an impact, the effect would
\n
not be as sign
i\ufb01cant.
\n
Pro\ufb01le of plan obligat
ions
\n\n \n
Funded plans
Unfunded
UK Fund
Overseas
plans
Duration of the de\ufb01ned bene\ufb01t obligat
ion (
in years)
10
8
8
Duration of the de\ufb01ned bene\ufb01t obligat
ion \u2013 2023
11
8
8
Bene\ufb01ts expected to be paid from plans
Bene\ufb01ts expected to be paid during 2025
83
76
20
Bene\ufb01ts expected to be paid during 2026
85
115
17
Bene\ufb01ts expected to be paid during 2027
88
97
17
Bene\ufb01ts expected to be paid during 2028
90
104
17
Bene\ufb01ts expected to be paid during 2029
92
113
16
Bene\ufb01ts expected to be paid during 2030 to 2034
495
526
82
\n
Fund values:
\n\n \n
2024
2023
UK Fund
Overseas plans
UK Fund
Overseas plans
Quoted
Unquoted
Total
Quoted
Unquoted
Total
Quoted
Unquoted
Total
Quoted
Unquoted
Total
assets
assets
assets
assets
assets
assets
assets
assets
assets
assets
assets
assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 31 December
2024
Equit
ies
2
-
2
132
-
132
2
\u2013
2
160
\u2013
160
Government
bonds
342
-
342
269
-
269
443
\u2013
443
173
\u2013
173
Corporate bonds
357
126
483
291
-
291
360
113
473
179
\u2013
179
Hedge funds
-
5
5
-
-
-
\u2013
9
9
\u2013
\u2013
\u2013
Infrastructure
-
170
170
-
-
-
\u2013
166
166
\u2013
\u2013
\u2013
Property
-
81
81
-
15
15
\u2013
84
84
\u2013
\u2013
\u2013
Derivat
ives
22
(1)
21
-
-
-
2
5
7
\u2013
\u2013
\u2013
Cash and
equivalents
35
-
35
60
153\u00b2
213
66
\u2013
66
37
166
203
Others
7
2
9
-
156
156
7
2
9
\u2013
145
145
Total fair value
of assets
1
765
383
1,148
752
324
1,076
880
379
1,259
549
311
860
\n
1
Self-investment is monitored closely and is less than $1 mill
ion of Standard Chartered equ
it
ies and bonds for 2024 (31 December 2023: <$1 m
ill
ion). Self-
investment
\n
is only allowed where it is not practical to exclude it \u2013 for example through investment in index-tracking funds where the Group is a constituent of the relevant
\n
index
\n
2
Cash and equivalents includes the value of insurance contracts held in Korea which invest only in short term money market instruments
\n \n
At 31 December 2024
At 31 December 2023
Funded plans
Unfunded
Funded plans
Unfunded
UK Fund
Overseas Plans
Plans
UK Fund
Overseas Plans
Plans
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Total fair value of assets
1,148
1,076
N/A
1,259
860
N/A
Present value of liab
il
it
ies
(1,070)
(1,075)
(180)
(1,219)
(877)
(189)
Net pension plan asset/(obligat
ion)
78
1
(180)
40
(17)
(189)
Of which: Total pension assets in
respect of plans in surplus
78
73
\u2013
40
54
\u2013
Of which: Total pension obligat
ions
in
respect of plans in de\ufb01c
it
\u2013
(72)
(180)
\u2013
(71)
(189)
\n
The pension cost for de\ufb01ned bene\ufb01t plans was:
\n\n \n
2024
2023
Funded plans
Funded plans
Overseas
Unfunded
Overseas
Unfunded
UK Fund
plans
plans
Total
UK Fund
plans
plans
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Current service cost
1
\u2013
44
8
52
\u2013
39
11
50
Past service cost and curtailments
2
\u2013
2
(1)
1
8
\u2013
1
9
Settlement cost
3
\u2013
3
\u2013
3
\u2013
2
\u2013
2
Interest income on pension plan assets
(56)
(41)
\u2013
(97)
(57)
(43)
\u2013
(100)
Interest on pension plan liab
il
it
ies
54
41
8
103
56
41
8
105
Total charge to pro\ufb01t before deduction
of tax
(2)
49
15
62
7
39
20
66
Losses/(gains) on plan assets
4
78
(32)
\u2013
46
(18)
(52)
(70)
Losses/(gains) on liab
il
it
ies
(103)
6
(1)
(98)
30
79
8
117
Total losses/(gains) recognised directly
in statement of comprehensive income
before tax
(25)
(26)
(1)
(52)
12
27
8
47
Deferred taxation
5
7
\u2013
12
(1)
(10)
\u2013
(11)
Total losses/(gains) after tax
(20)
(19)
(1)
(40)
11
17
8
36
\n
1
Includes admin
istrat
ive expenses paid out of plan assets of $1 mill
ion (2023:$1 m
ill
ion ) and actuar
ial losses of $1 mill
ion (2023: $2 m
ill
ion) that are
immed
iately
\n
recognised through P&L in line with the requirements of IAS 19
\n
2
Relates to plan amendments in India
\n
3
Terminat
ion bene\ufb01ts pa
id from the pension plan in Indonesia
\n
4
The actual return on the UK Fund assets was a loss of $22 mill
ion (2023: $75 m
ill
ion ga
in) and on overseas plan assets was a gain of $73 mill
ion (2023: $95 m
ill
ion
\n
gain)
\n
Movement in the de\ufb01c
it dur
ing the year comprise:
\n\n \n
2024
2023
Funded plans
Funded plans
Overseas
Unfunded
Overseas
Unfunded
UK Fund
plans
plans
Total
UK Fund
plans
plans
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Surplus/(De\ufb01cit)
40
(17)
(189)
(166)
48
1
(177)
(128)
Contribut
ions
13
39
16
68
8
59
14
81
Current service cost
1
\u2013
(44)
(8)
(52)
\u2013
(39)
(11)
(50)
Past service cost and curtailments
\u2013
(2)
1
(1)
(8)
\u2013
(1)
(9)
Settlement costs and transfers impact
\u2013
(3)
\u2013
(3)
\u2013
(2)
\u2013
(2)
Net interest on the net de\ufb01ned bene\ufb01t
asset/liab
il
ity
2
\u2013
(8)
(6)
1
2
(8)
(5)
Actuarial (losses)/gains
25
26
1
52
(12)
(27)
(8)
(47)
Asset held for Sale
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
6
(1)
Other Movement
2
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
Exchange rate adjustment
(2)
3
7
8
3
(4)
(4)
(5)
Surplus/(De\ufb01cit)
78
1
(180)
(101)
40
(17)
(189)
(166)
\n
1
Includes admin
istrat
ive expenses paid out of plan assets of $1 mill
ion (31 December 2023: $1 m
ill
ion)
\n
2
This relates to the Standard Chartered India Provident Fund, which has previously been treated as a de\ufb01ned contribut
ion plan. However, w
ith effect from
\n
November 2024, a min
imum rate of return
is applicable to the plan, and so going forward it will be treated as a de\ufb01ned bene\ufb01t plan as required by IAS 19. For 2023
\n
this included the impact of plans in Cameroon, Cote D\u2019Ivoire, Jordan and Zimbabwe being excluded from the closing balances and classif
ied separately under
\n
Assets held for Sale
The Group\u2019s expected contribut
ion to
its de\ufb01ned bene\ufb01t pension plans in 2025 is $ 68 mill
ion.
\n \n
2024
2023
Assets
Obligat
ions
Total
Assets
Obligat
ions
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
At 1 January 2024
2,119
(2,285)
(166)
2,004
(2,132)
(128)
Contribut
ions
1
69
(1)
68
82
(1)
81
Current service cost
2
\u2013
(52)
(52)
\u2013
(50)
(50)
Past service cost and curtailments
\u2013
(1)
(1)
\u2013
(9)
(9)
Settlement costs
3
\u2013
(3)
(3)
\u2013
(2)
(2)
Interest cost on pension plan liab
il
it
ies
\u2013
(103)
(103)
\u2013
(105)
(105)
Interest income on pension plan assets
97
\u2013
97
100
\u2013
100
Bene\ufb01ts paid out
2
(169)
169
\u2013
(161)
161
\u2013
Actuarial gains/(losses)
4
(46)
98
52
70
(117)
(47)
Asset held for Sale
\u2013
\u2013
\u2013
(7)
6
(1)
Other Movement
5
212
(213)
(1)
\u2013
\u2013
\u2013
Exchange rate adjustment
(58)
66
8
31
(36)
(5)
At 31 December 2024
2,224
(2,325)
(101)
2,119
(2,285)
(166)
1
Includes employee contribut
ions of $1 m
ill
ion (31 December 2023: $1 m
ill
ion)
2
Includes admin
istrat
ive expenses paid out of plan assets of $1 mill
ion (31 December 2023: $1 m
ill
ion)
3
Impact of settlements relates terminat
ion bene\ufb01ts pa
id out in Indonesia
4
Actuarial gain on obligat
ion compr
ises of $127 mill
ion ga
in (31 December 2023: $50 mill
ion loss) from \ufb01nancial assumpt
ion changes, $1 mill
ion ga
in (31 December
2023: $1 mill
ion loss) from demograph
ic assumption changes and $30 mill
ion loss (31 December 2023: $66 m
ill
ion loss) from exper
ience
5
These are assets and liab
il
it
ies of the Standard Chartered Ind
ia Provident Fund, which has previously been treated as a de\ufb01ned contribut
ion plan. However, w
ith
effect from November 2024, a min
imum rate of return
is applicable to the plan, and so going forward it will be treated as a de\ufb01ned bene\ufb01t plan as required by
IAS\u00a019", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00751": { "value": "Accounting policy
The Group operates pension and other post-retirement bene\ufb01t plans around the world, which can be categorised into
de\ufb01ned contribut
ion
plans and
de\ufb01ned bene\ufb01t
plans.
\u2022 For
de\ufb01ned contribut
ion
plans, the Group pays contribut
ions to publ
icly or privately admin
istered pens
ion plans on
a statutory or contractual basis, and such amounts are charged to operating expenses. The Group has no further
payment obligat
ions once the contr
ibut
ions have been pa
id.
\u2022 For
de\ufb01ned bene\ufb01t
plans, which promise levels of payments where the future cost is not known with certainty;
\u2013 the accounting obligat
ion
is calculated annually by independent actuaries using the projected unit method.
\u2013
Actuarial gains and losses that arise are recognised in shareholders\u2019 equity and presented in the statement of other
comprehensive income in the period they arise.
\u2013
The Group determines the net interest expense on the net de\ufb01ned bene\ufb01t liab
il
ity for the year by applying the
discount rate used to measure the de\ufb01ned bene\ufb01t obligat
ion at the beg
inn
ing of the annual per
iod to the net
de\ufb01ned bene\ufb01t liab
il
ity, taking into account any changes in the net de\ufb01ned bene\ufb01t liab
il
ity during the year as a
result of contribut
ions and bene\ufb01t payments. Net
interest expense, the cost of the accrual of new bene\ufb01ts, bene\ufb01t
enhancements (or reductions) and admin
istrat
ion expenses met directly from plan assets are recognized in the
income statement in the period in which they were incurred.
Other accounting estimates and judgements
There are many factors that affect the measurement of the retirement bene\ufb01t obligat
ions. Th
is measurement requires
the use of estimates, such as discount rates, in\ufb02at
ion, pens
ion increases, salary increases, and life expectancies which are
inherently uncertain. The table below summarises how these assumptions are set:
\n \n
Assumption
Detail
Discount rate
Determined by reference to market yields at the end of the reporting period on high-quality
corporate bonds (or, in countries where there is no deep market in such bonds, government bonds)
of a currency and term consistent with the currency and term of the post-employment bene\ufb01t
obligat
ions. Th
is is the approach adopted across all our geographies.
In\ufb02ation
Where there are in\ufb02at
ion-l
inked bonds available (e.g. United Kingdom and the eurozone), the
Group derives in\ufb02at
ion based on the market on those bonds, w
ith the market yield adjusted in
respect of the United Kingdom to take account of the fact that liab
il
it
ies are l
inked to Consumer
Price Index in\ufb02at
ion, whereas the reference bonds are l
inked to Retail Price Index in\ufb02at
ion. Where
no in\ufb02at
ion-l
inked bonds exist, we determine in\ufb02at
ion assumpt
ions based on a combinat
ion of
long-term forecasts and short-term in\ufb02at
ion data.
Salary growth
Salary growth assumptions re\ufb02ect the Group\u2019s long-term expectations, taking into account future
business plans and macroeconomic data (primar
ily expected future long-term
in\ufb02at
ion).
Demographic assumptions
Demographic assumptions, includ
ing mortal
ity and turnover rates, are typically set based on
the assumptions used in the most recent actuarial funding valuation, and will generally use
industry standard tables, adjusted where appropriate to re\ufb02ect recent histor
ic exper
ience and/or
future expectations.
The sensit
iv
ity of the liab
il
it
ies to changes
in these assumptions is shown in the Note below.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00552": { "value": "31. Share-based payments
Accounting policy
The Group operates equity-settled and cash-settled share-based compensation plans. The fair value of the employee
services (measured by the fair value of the awards granted) received in exchange for the grant of the shares and awards is
recognised as an expense. For deferred share awards granted as part of an annual performance award, the expense is
recognised over the period from the start of the performance period to the vesting date. For example, the expense for
three-year awards granted in 2024 in respect of 2023 performance, which vest in 2025-2027, is recognised as an expense
over the period from 1 January 2023 to the vesting dates in 2025-2027. For all other awards, the expense is recognised over
the period from the date of grant to the vesting date.
For equity-settled awards, the total amount to be expensed over the vesting period is determined by reference to the fair
value of the shares and awards at the date of grant, which excludes the impact of any non-market vesting condit
ions
(for example, pro\ufb01tabil
ity and growth targets). The fair value of equity instruments granted is based on market prices,
if available, at the date of grant. In the absence of market prices, the fair value of the instruments is estimated using an
appropriate valuation technique, such as a binom
ial opt
ion pric
ing model. Non-market vest
ing condit
ions are
included
in assumptions for the number of shares and awards that are expected to vest.
At each balance sheet date, the Group revises its estimates of the number of shares and awards that are expected to
vest. It recognises the impact of the revis
ion of or
ig
inal est
imates, if any, in the income statement and a corresponding
adjustment to equity over the remain
ing vest
ing period. Forfeitures prior to vesting attributable to factors other than the
failure to satisfy service condit
ions and non-market vest
ing condit
ions are treated as a cancellat
ion and the remain
ing
unamortised charge is debited to the income statement at the time of cancellation. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium when awards in
the form of options are exercised.
Cash-settled awards are revalued at each balance sheet date and a liab
il
ity recognised on the balance sheet for all
unpaid amounts, with any changes in fair value charged or credited to staff costs in the income statement until the awards
are exercised. Where forfeitures occur prior to vesting that are attributable to factors other than a failure to satisfy service
condit
ions or market-based performance cond
it
ions, the cumulat
ive charge incurred up to the date of forfeiture is credited
to the income statement.
Other accounting estimates and judgements
Share-based payments involve judgement and estimat
ion uncerta
inty exists when determin
ing the expenses and carry
ing
values of share awards at the balance sheet date.
\u2022
LTIP awards are determined using an estimat
ion of the probab
il
ity of meet
ing certain metrics over a three-year
performance period using the Monte Carlo simulat
ion model.
\u2022
Deferred shares are determined using an estimat
ion of expected d
iv
idends.
\u2022
Sharesave Plan valuations are determined using a binom
ial opt
ion-pric
ing model.
The Group operates a number of share-based arrangements for its executive directors and employees. Details of the share-
\n
based payment charge are set out below.
\n\n \n
2024\u00b9
2023\u00b9
Cash
Equity
Total
Cash
Equity
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Deferred share awards
31
160
191
34
103
137
Other share awards
34
109
143
19
70
89
Total share-based payments
2
65
269
334
53
173
226
\n
1
No forfeiture assumed
\n
2
The total share-based payments charge during the year includes costs relating to Business ventures. Business ventures are established as separate legal entit
ies
\n
with their own employee share ownership plans (ESOP) to attract and incent
iv
ise talent. ESOPs have been set up with share-based payment charges recorded in
\n
2024 with $2 mill
ion (2023: $14 m
ill
ion)
in cash settled and $14 mill
ion (2023: $3 m
ill
ion) equ
ity settled deferred awards spread across 19 entit
ies
\n
Discret
ionary share plans
\n
The 2021 Standard Chartered Share Plan (the \u20182021 Plan\u2019) was approved by shareholders in May 2021 and is the Group\u2019s main
\n
share plan, replacing the 2011 Standard Chartered Share Plan (the \u20182011 Plan\u2019) for new awards from June 2021. It is used to
\n
deliver various types of share awards to employees and former employees of the Group, includ
ing d
irectors and former
\n
executive directors:
\n\n \n
Award type
Descript
ion and performance measures
Valuation
Long-Term Incentive
The vesting of awards granted in 2024, 2023 and
The fair value of the relative TSR component is
Plan (LTIP) awards
2022 are subject to the following performance
calculated using the probabil
ity of meet
ing the
measures:
measures over a three-year performance period,
\u2022
relative total shareholder return (TSR);
using a Monte Carlo simulat
ion model.
\u2022
return on tangible equity (RoTE) (with a
The value of the remain
ing components
is based on
Common Equity Tier 1 (CET1) underpin); and
the expected performance against the RoTE and
\u2022
strategic measures (includ
ing targets set for
strategic measures in the scorecard and the resulting
sustainab
il
ity linked to business strategy)
estimated number of shares expected to vest at each
Each measure is assessed independently over a
reporting date. These combined values are used to
three-year period. LTIP awards have an ind
iv
idual
determine the accounting charge.
conduct gateway requirement that results in the
No div
idend equ
ivalents accrue for the LTIP awards
award lapsing if not met.
made in 2024, 2023 or 2022 and the fair value takes
this into account, calculated by reference to market
consensus div
idend y
ield.
Deferred shares
Used to deliver:
The fair value for deferred shares, which are granted
\u2022
the deferred portion of year-end variable
to employees who are not categorised as material risk
remuneration, in line with both market practice
takers, is based on 100 per cent of the face value of
and regulatory requirements. These awards vest
the shares at the date of grant as the share price will
in instalments on anniversar
ies of the award date
re\ufb02ect expectations of all future div
idends.
specif
ied at the t
ime of grant. This enables the
For awards granted to material risk takers in 2024,
Group to meet regulatory requirements relating to
the fair value of awards takes into account the lack
deferral levels, and is in line with market practice.
of div
idend equ
ivalents, calculated by reference to
\u2022
replacement buy-out awards to new joiners who
market consensus div
idend y
ield.
forfeit awards on leaving their previous employers.
These vest in the quarter most closely following
the date when the award would have vested at
the previous employer. This enables the Group
to meet regulatory requirements relating to
buy-outs, and is in line with market practice.
Deferred share awards are not subject to any
performance measures.
\n
The remain
ing l
ife of the 2021 Standard Chartered Share Plan during which new awards can be made is seven years.
\n
LTIP awards
\n\n \n
2024
2023
Grant date
12\u2013March
13\u2013March
Share price at grant date (\u00a3)
6.60
7.40
Vesting period (years)
3\u20137
3\u20137
Expected div
ided y
ield (%)
4.2
3.1
Fair value (RoTE) (\u00a3)
1.55, 1.61, 1.68
1.91, 1.85
Fair value (TSR) (\u00a3)
0.95, 1.01, 1.06
1.08, 1.04
Fair value (Strategic) (\u00a3)
2.06, 2.15, 2.24
2.54, 2.46
Deferred shares \u2013 year-end
\n\n \n
2024
Grant date
17 June
11 March
Share price at grant date (\u00a3)
7.24
6.56
Expected
Expected
div
idend y
ield
Fair value
div
idend y
ield
Fair value
Vesting period (years)
(%)
(\u00a3)
(%)
(\u00a3)
1-3 years
N/A
9.17
4.2, 4.2
7.65, 8.30
1-5 years
3.8, 3.8, 3.8
8.05, 8.20,
4.2, 4.2, NA
7.19, 7.49, 8.30
3-7 years
8.35
4.2, 4.2
6.49, 6.76
\n\n \n
2023
Grant date
18 September
19 June
13 March
Share price at grant date (\u00a3)
7.43
6.75
7.40
Expected
Expected
Expected
div
idend
div
idend
div
idend
yield
Fair value
yield
Fair value
yield
Fair value
Vesting period (years)
(%)
(\u00a3)
(%)
(\u00a3)
(%)
(\u00a3)
1-3 years
N/A
7.43
3.3
6.75
3.1
7.4
1-5 years
3.0
6.51
3.3, 3.3
6.23, 5.83
3.1, 3.1
6.85, 6.65
3-7 years
\u2013
\u2013
\u2013
\u2013
3.1, 3.1,
6.65, 6.75,
3.1, 3.1
6.35, 6.16
\n
Deferred shares \u2013 buy-outs
\n\n \n
2024
Grant date
18-Nov
23-Sep
17-Jun
11-Mar
Share price at grant date (\u00a3)
9.43
7.59
7.24
6.56
Expected
Expected
Expected
Expected
div
idend
div
idend
div
idend
div
idend
yield
Fair value
yield
Fair value
yield
Fair value
yield
Fair value
Vesting period (years)
(%)
(\u00a3)
(%)
(\u00a3)
(%)
(\u00a3)
(%)
(\u00a3)
3 months
4.2
9.59
3.8
9.07
4.2
8.22
4 months
4.2
11.83
6 months
4.2
9.49
3.8
8.99
4.2
8.14
7 months
4.2
11.69
9 months
4.2
9.4
3.8
8.90
4.2
8.06
10 months
1 year
4.2
11.22, 11.36
4.2
9.02, 9.11,
3.8
8.58, 8.66,
4.2
7.73, 7.81,
9.21, 9.30
8.74
7.89, 7.97
2 years
4.2
10.77,
4.2
8.65, 8.74,
3.8
8.26, 8.34
4.2
7.42, 7.50,
10.90
8.83, 8.93
7.57, 7.65
3 years
4.2
10.46
4.2
8.39
4.2
7.20, 7.34
4 years
4.2
10.04
4.2
7.05
5 years
\n\n \n
2023
Grant date
20-Nov
18-Sep
19-Jun
13-Mar
Share price at grant date (\u00a3)
6.60
7.43
6.75
7.40
Expected
Expected
Expected
Expected
div
idend
div
idend
div
idend
div
idend
yield
Fair value
yield
Fair value
yield
Fair value
yield
Fair value
Vesting period (years)
(%)
(\u00a3)
(%)
(\u00a3)
(%)
(\u00a3)
(%)
(\u00a3)
3 months
3.0
7.38
3.3
6.7
3.1
7.34
4 months
3.0
6.54
6 months
3.0
7.32
3.3
6.64
7 months
3.0
6.49
9 months
3.0
7.27
3.3
6.48, 6.59
10 months
3.0
6.44
1 year
3.0
6.25, 6.30,
3.0
7.06, 7.11,
3.3
6.18, 6.38,
3.1
7.12, 7.18
6.35, 6.39
7.16, 7.22
6.43, 6.54
2 years
3.0
6.12, 6.16,
3.0
6.85, 6.9,
3.3
5.98, 6.18,
3.1
6.91, 6.96
6.21
6.95, 7.01
6.33
3 years
3.0
5.94, 5.98,
3.0
6.65, 6.7,
3.3
5.79, 5.98,
3.1
6.70, 6.75
6.03
6.8
6.13
4 years
3.0
5.76
3.1
6.50, 6.55
5 years
3.1
6.35
All Employee Sharesave Plans
\n
Under the 2023 Sharesave Plan, employees may open a savings contract and save up to \u00a3500 (increased from \u00a3250 since 2024)
\n
per month over three years to purchase ordinary shares in the Company at a discount of up to 20 per cent (the \u2018option exercise
\n
price\u2019). The discount applies to higher of: the 5-day average share price prior to the inv
itat
ion or the closing share price on the
\n
last trading day prior to the inv
itat
ion. At the end of the savings contract they have a period of six months to exercise the option.
\n
There are no performance measures attached to Sharesave options, and no exercise price is payable to receive an option.
\n
In some countries in which the Group operates, it is not possible to operate equity-settled Sharesave, typically due to securit
ies
\n
law and regulatory restrict
ions. In these countr
ies, where possible, the Group offers an equivalent cash-based alternative to
\n
its employees.
\n
The remain
ing l
ife of the 2023 Sharesave Plan during which new awards can be made is nine years.
\n
Valuation \u2013 Sharesave:
\n
Options under the Sharesave plans are valued using a binom
ial opt
ion-pric
ing model. The same fa
ir value is applied to all
\n
employees includ
ing execut
ive directors. The fair value per option granted and the assumptions used in the calculation are
\n
as\u00a0follows:
\n
All Employee Sharesave Plan (Sharesave)
\n\n \n
2024
2023
Grant date
23 September
18 September
Share price at grant date (\u00a3)
7.59
7.35
Exercise price (\u00a3)
6.10
5.88
Vesting period (years)
3
3
Expected volatil
ity (%)
32.9
36.7
Expected option life (years)
3.5
3.5
Risk-free rate (%)
3.88
4.48
Expected div
idend y
ield (%)
4.2
3.0
Fair value (\u00a3)
2.73
3.05
\n
The expected volatil
ity
is based on histor
ical volat
il
ity over the last three years, or the three years pr
ior to grant. The expected
\n
life is the average expected period to exercise. The risk-free rate of return is the yield on zero-coupon UK Government bonds
\n
of a term consistent with the assumed option life. The expected div
idend y
ield is calculated by reference to market consensus
\n
div
idend y
ield.
\n
Lim
its
\n
An award shall not be granted under the 2021 Plan in any calendar year if, at the time of its proposed grant, it would cause the
\n
number of Standard Chartered PLC ordinary shares allocated in the period of 10 calendar years, ending with that calendar year,
\n
under the 2021 Plan and under any other discret
ionary share plan operated by Standard Chartered PLC to exceed 5 per cent of
\n
the ordinary share capital of Standard Chartered PLC in issue at that time.
\n
An award shall not be granted under the 2021 Plan or 2023 Sharesave Plan in any calendar year if, at the time of its proposed
\n
grant, it would cause the number of Standard Chartered PLC ordinary shares allocated in the period of 10 calendar years ending
\n
with that calendar year, under the 2021 Plan or 2023 Sharesave Plan and under any other employee share plan operated by
\n
Standard Chartered PLC to exceed 10 per cent of the ordinary share capital of Standard Chartered PLC in issue at that time.
\n
An award shall not be granted under the 2021 Plan or 2023 Sharesave Plan in any calendar year if, at the time of its proposed
\n
grant, it would cause the number of Standard Chartered PLC ordinary shares which may be issued or transferred pursuant to
\n
awards then outstanding under the 2021 Plan or 2023 Sharesave Plan as relevant to exceed such number as represents 10 per
\n
cent of the ordinary share capital of Standard Chartered PLC in issue at that time.
\n
The number of Standard Chartered PLC ordinary shares which may be issued pursuant to awards granted to an ind
iv
idual
\n
under the 2021 or 2023 Plan in any 12-month period must not exceed 1 per cent of the ordinary share capital of Standard
\n
Chartered PLC in issue at that time.
\n
As at 1 January 2024 and 31 December 2024, the shareholder dilut
ion under our d
iscret
ionary and Sharesave plans adopted by
\n
Standard Chartered PLC and its subsid
iar
ies represented 4.5 per cent and 4.9 per cent of the issued ordinary share capital of
\n
Standard Chartered PLC respectively. Accordingly, the number of Standard Chartered PLC shares available to be granted under
\n
all discret
ionary and Sharesave plans at the beg
inn
ing and the end of the year ended 31 December 2024 were 147,876,885 and
\n
123,504,051 respectively.
\n
The maximum number of Standard Chartered PLC shares that may be issued in respect of share options and awards granted
\n
under the discret
ionary and Sharesave plans dur
ing the year ended 31 December 2024 div
ided by the we
ighted average
\n
number of Standard Chartered PLC shares in issue for the year ended 31 December 2024 is 1.5 per cent.
\n
Standard Chartered PLC has been granted a waiver from strict compliance with Rules 17.03A, 17.03B(1), 17.03E and 17.03(18) of the
\n
Rules Governing the List
ing of Secur
it
ies on the Stock Exchange of Hong Kong. Deta
ils are set out in the market announcement
\n
made on 30 March 2023. In relation to the waiver of strict compliance with Note 1 to 17.03(18), in 2024 no changes to the plan
\n
rules have been proposed that fall with
in scope of d
isclosure requirements under the terms of the waiver.
Reconcil
iat
ion of share award movements for the year to 31 December 2024
\n \n
Weighted
average
Sharesave
Discret
ionary
1
exercise price
LTIP
Deferred shares
Sharesave
4,5
(\u00a3)
Outstanding at 1 January 2024
10,947,382
47,068,204
16,902,217
4.49
Granted
2,3
2,320,695
25,712,216
9,707,454
\u2013
Lapsed
6
(2,703,518)
(1,431,969)
(1,289,780)
4.88
Vested/Exercised
(923,866)
(19,654,725)
(4,754,780)
3.42
Outstanding at 31 December 2024
9,640,693
51,693,726
20,565,111
5.48
Total number of securit
ies ava
ilable for issue under the plan
9,640,693
51,693,726
20,565,111
5.48
Percentage of the issued shares this represents as at 31 December 2024
0.40
2.13
0.85
Exercisable as at 31 December 2024
\u2013
250,094
1,121,867
3.78
Range of exercise prices (\u00a3)
3
\u2013
\u2013
3.67 \u2013 6.10
Intrins
ic value of vested but not exerc
ised options ($ mill
ion)
\u2013
3.10
8.57
Weighted average contractual remain
ing l
ife (years)
7.32
8.22
2.58
Weighted average share price for awards exercised during the period (\u00a3)
6.60
6.68
8.20
1
Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards
2
2,315,422 (LTIP) granted on 12 March 2024; 5,059 (LTIP) granted as a notional div
idend on 1 March 2024; 214 (LTIP) granted as a not
ional div
idend on 8 August 2024.
24,381,791 (Deferred shares) granted on 11 March 2024; 229,896 (Deferred shares) granted as a notional div
idend on 1 March 2024; 463,694 (Deferred shares)
granted on 17 June 2024; 86,702 (Deferred shares) granted as a notional div
idend on 8 August 2024; 287,533 (Deferred shares) granted on 23 September 2024;
262,600 (Deferred shares) granted on 18 November 2024. 9,707,454 (Sharesave) granted on 23 September 2024
3
No discret
ionary awards (LTIP or deferred/buy-out awards) have been granted
in the form of options since June 2015. For histor
ic awards granted as opt
ions and
exercised in the period to 31 December 2024, the exercise price of deferred/ buy-out shares options was nil
4
For Sharesave granted in 2024 the exercise price is \u00a36.10 per share, a 20% discount from the closing share price on 16 August 2024 (\u00a37.624). The average of the
closing prices over the \ufb01ve days to the inv
itat
ion date of 19 August 2024 was \u00a37.421
5
All Sharesave awards are in the form of options. The exercise price of Sharesave options is \u00a3 6.10 for options granted in 2024 \u00a3 5.88 for options granted in 2023,
\u00a34.23 for options granted in 2022, \u00a33.67 for options granted in 2021 and \u00a33.14 for options granted in 2020
6
No options or share awards were cancelled in the period
Reconcil
iat
ion of share award movements for the year to 31 December 2023
\n \n
Weighted
average
Sharesave
Discret
ionary
1
exercise price
LTIP
Deferred shares
Sharesave
(\u00a3)
Outstanding at 1 January 2023
11,339,951
46,449,040
17,109,519
3.81
Granted
2,3
2,142,057
21,668,459
5,668,325
\u2013
Lapsed
(1,911,931)
(1,231,514)
(1,407,502)
4.14
Exercised
(622,695)
(19,817,781)
(4,468,125)
3.75
Outstanding at 31 December 2023
10,947,382
47,068,204
16,902,217
4.49
Total number of securit
ies ava
ilable for issue under the plan
10,947,382
47,068,204
16,902,217
Percentage of the issued shares this represents as at 31 December 2023
0.41
1.76
0.63
4.49
Exercisable as at 31 December 2023
\u2013
685,077
2,482,392
3.16
Range of exercise prices (\u00a3)
3
\u2013
\u2013
3.14 \u2013 5.88
Intrins
ic value of vested but not exerc
ised options ($ mill
ion)
\u2013
5.81
11.08
Weighted average contractual remain
ing l
ife (years)
7.59
8.11
2.30
Weighted average share price for awards exercised during the period (\u00a3)
6.94
7.04
6.65
1
Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards
2
2,134,238 (LTIP) granted on 13 March 2023, 6,501 (LTIP) granted as a notional div
idend on 1 March 2023, 1318 (LTIP) granted as a not
ional div
idend on 1 September
2023, 20,828,385 (Deferred shares) granted on 13 March 2023, 121,314 (Deferred shares) granted as a notional div
idend on 1 March 2023, 338,583 (Deferred shares)
granted on 19 June 2023, 235,186 (Deferred shares) granted on 18 September 2023, 52,082 (Deferred shares) granted as a notional div
idend on 1 September 2023,
92,909 (Deferred shares) granted on 20 November 2023; 5,668,325 (Sharesave) granted on 18 September 2023 under the 2023 Sharesave Plan
3
For Sharesave granted in 2023 the exercise price is \u00a35.88 per share, a 20% discount from the average of the closing prices over the \ufb01ve days to the inv
itat
ion date
of 21 August 2023. The closing share price on 18 August 2013 was \u00a37.214
See pages 211 and 212 of the Standard Chartered PLC Annual Report 2023 for informat
ion spec
if
ic to D
irectors", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00752": { "value": "Accounting policy
The Group operates equity-settled and cash-settled share-based compensation plans. The fair value of the employee
services (measured by the fair value of the awards granted) received in exchange for the grant of the shares and awards is
recognised as an expense. For deferred share awards granted as part of an annual performance award, the expense is
recognised over the period from the start of the performance period to the vesting date. For example, the expense for
three-year awards granted in 2024 in respect of 2023 performance, which vest in 2025-2027, is recognised as an expense
over the period from 1 January 2023 to the vesting dates in 2025-2027. For all other awards, the expense is recognised over
the period from the date of grant to the vesting date.
For equity-settled awards, the total amount to be expensed over the vesting period is determined by reference to the fair
value of the shares and awards at the date of grant, which excludes the impact of any non-market vesting condit
ions
(for example, pro\ufb01tabil
ity and growth targets). The fair value of equity instruments granted is based on market prices,
if available, at the date of grant. In the absence of market prices, the fair value of the instruments is estimated using an
appropriate valuation technique, such as a binom
ial opt
ion pric
ing model. Non-market vest
ing condit
ions are
included
in assumptions for the number of shares and awards that are expected to vest.
At each balance sheet date, the Group revises its estimates of the number of shares and awards that are expected to
vest. It recognises the impact of the revis
ion of or
ig
inal est
imates, if any, in the income statement and a corresponding
adjustment to equity over the remain
ing vest
ing period. Forfeitures prior to vesting attributable to factors other than the
failure to satisfy service condit
ions and non-market vest
ing condit
ions are treated as a cancellat
ion and the remain
ing
unamortised charge is debited to the income statement at the time of cancellation. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium when awards in
the form of options are exercised.
Cash-settled awards are revalued at each balance sheet date and a liab
il
ity recognised on the balance sheet for all
unpaid amounts, with any changes in fair value charged or credited to staff costs in the income statement until the awards
are exercised. Where forfeitures occur prior to vesting that are attributable to factors other than a failure to satisfy service
condit
ions or market-based performance cond
it
ions, the cumulat
ive charge incurred up to the date of forfeiture is credited
to the income statement.
Other accounting estimates and judgements
Share-based payments involve judgement and estimat
ion uncerta
inty exists when determin
ing the expenses and carry
ing
values of share awards at the balance sheet date.
\u2022
LTIP awards are determined using an estimat
ion of the probab
il
ity of meet
ing certain metrics over a three-year
performance period using the Monte Carlo simulat
ion model.
\u2022
Deferred shares are determined using an estimat
ion of expected d
iv
idends.
\u2022
Sharesave Plan valuations are determined using a binom
ial opt
ion-pric
ing model.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00553": { "value": "32. Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.
\n \n
2024
2023
Investments in subsid
iary undertak
ings
$mill
ion
$mill
ion
As at 1 January
60,791
60,975
Addit
ions
1
1,631
1,566
Disposal
2
(803)
(1,750)
Other Movements
3
(26)
\u2013
As at 31 December
61,593
60,791
1
Includes internal Addit
ional T
ier 1 Issuances of $980 mill
ion by Standard Chartered Bank, $600 m
ill
ion by Standard Chartered Bank (Hong Kong) L
im
ited
(31 December 2023: Includes internal Addit
ional T
ier 1 Issuances of $992 mill
ion by Standard Chartered Bank, $575 m
ill
ion add
it
ional
investment in Standard
Chartered Holdings Lim
ited)
2
Includes redemption of Preference share capital of $553 mill
ion by Standard Chartered Bank S
ingapore Lim
ited and add
it
ional T
ier 1 capital of $250 mill
ion by
Standard Chartered Bank (Hong Kong) Lim
ited (31 December 2023: Add
it
ional T
ier1 capital of $1,000 mill
ion by Standard Chartered Bank)
3
Relates to realised translation gain ($26 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion ($553 m
ill
ion)
At 31 December 2024, the princ
ipal subs
id
iary undertak
ings, all ind
irectly held except for Standard Chartered Bank (Hong Kong)
\n
Lim
ited, and pr
inc
ipally engaged
in the business of banking and provis
ion of other \ufb01nancial serv
ices, were as follows:
\n\n \n
Group interest
in ordinary
share capital
Total Issued share capital
Princ
ipal subs
id
iary\u00b9
Main areas of operation
%
(mill
ions)
Standard Chartered Bank
Refer footnote\u00b3
100
US$ 20,597\u2074
Standard Chartered Bank (Hong Kong) Lim
ited
Hong Kong
100
Refer footnote\u2075
Standard Chartered Bank (Singapore) Lim
ited
Singapore
100
Refer footnote\u2076
Standard Chartered Bank Korea Lim
ited
Korea
100
KRW 1,313,043
Standard Chartered Bank (China) Lim
ited\u00b2
China
100
CNY 10,727
Standard Chartered Bank (Taiwan) Lim
ited
Taiwan
100
TWD 29,106
Standard Chartered Bank AG
Germany
100
EUR 180
Standard Chartered Bank Malaysia Berhad
Malaysia
100
RM 880\u2077
Standard Chartered Bank (Thai) Public Company Lim
ited
Thailand
99.87
THB 14,837
Standard Chartered Bank (Pakistan) Lim
ited
Pakistan
98.99
PKR 38,716
Standard Chartered Bank Botswana Lim
ited
Botswana
75.83
BWP 298
Standard Chartered Bank Kenya Lim
ited
Kenya
74.32
KES 2,169\u2078
Mox Bank Lim
ited
Hong Kong
71.58
HKD 5,279
Standard Chartered Bank Nepal Lim
ited
Nepal
70.21
NPR 9,429
Standard Chartered Bank Ghana PLC
Ghana
69.42
GHS 409\u2079
\n
1
Unless other wise stated the share capital comprises of ordinary or common shares refer to note 40 for proportion of shares held and for country of incorporation
\n
2
Registered as a Lim
ited company under the Law of Ch
ina
\n
3
Includes United Kingdom, Middle East, South Asia, Asia Pacif
ic, Amer
icas and, through Group companies, Africa
\n
4
US$1.00 Ordinary 20,596,529,642; US$0.01 Non-Cumulative Irredeemable Preference 24,000 and US$5.00 Non-Cumulative Redeemable Preference 37500
\n
5
HKD Ordinary-A 12,502,836,515; HKD Ordinary-B -78,000,000; US$ Ordinary-C 2,698,156,122 and US$ Ordinary-D 3,010,485,610
\n
6
SGD Ordinary-A 1,653,000,000; SGD Non-cumulative Class D Tier-1 Preference 400,000,000; US$ Ordinary-A 3,383,000,000; US$ Non-cumulative Class B Tier-1
\n
Preference 500,000,000; US$ Ordinary-B 733,000,000 and US$ Ordinary-C 333,000,000
\n
7
RM Ordinary 499,999,988 and RM Irredeemable Convertible Preference 380,190,000
\n
8
KES5.00 Ordinary 1,889,252,945 and KES5.00 Preference 280,000,000
\n
9
GHS Ordinary 400,000,000 and GHS0.52 Non-cumulative Irredeemable Preference Shares 9,092,858
\n
A complete list of subsid
iary undertak
ing is included in Note 40.
\n
The Group does not have any material non-controlling interest except as listed above, which contribute $36 mill
ion (31
\n
December 2023: $35 mill
ion) of the (loss)/Pro\ufb01t attr
ibutable to non-controlling interest and $292 mill
ion (31 December 2023:
\n
$290 mill
ion) of the equ
ity attributable to non-controlling interests
\n
During 2024 the Group disposed of its investments in subsid
iar
ies and the gain/loss on disposal was SCB Zimbabwe Lim
ited
\n
& Africa Enterprise Network Trust (loss:$172 mill
ion
includ
ing translat
ion adjustment loss: $190 mill
ion), SCB Angola S.A.
\n
(loss: $26 mill
ion
includ
ing translat
ion adjustment loss:$31 mill
ion), SCB S
ierra Leone Lim
ited (loss: $19 m
ill
ion
includ
ing translat
ion
\n
adjustment loss:$25 mill
ion), Shoal L
im
ited (ga
in:$14 mill
ion) and Autumn l
ife Pte. Ltd. (gain:$3 mill
ion).
\n
While the Group\u2019s subsid
iar
ies are subject to local statutory capital and liqu
id
ity requirements in relation to foreign exchange
\n
remittance, these restrict
ions ar
ise in the normal course of business and do not sign
i\ufb01cantly restr
ict the Group\u2019s abil
ity to access
\n
or use assets and settle liab
il
it
ies of the Group.
\n
The Group does not have sign
i\ufb01cant restr
ict
ions on
its abil
ity to access or use
its assets and settle its liab
il
it
ies other than those
\n
resulting from the regulatory framework with
in wh
ich the banking subsid
iar
ies operate. These frameworks require banking
\n
operations to keep certain levels of regulatory capital, liqu
id assets, exposure l
im
its and comply w
ith other required ratios.
\n
These restrict
ions are summar
ised below:
\n
Regulatory and liqu
id
ity requirements
\n
The Group\u2019s subsid
iar
ies are required to mainta
in m
in
imum cap
ital, leverage ratios, liqu
id
ity and exposure ratios which therefore
\n
restrict the abil
ity of these subs
id
iar
ies to distr
ibute cash or other assets to the parent company.
\n
The subsid
iar
ies are also required to mainta
in balances w
ith central banks and other regulatory authorit
ies
in the countries in
\n
which they operate. At 31 December 2024, the total cash and balances with central banks was $63 bill
ion (31 December 2023:
\n
$70 bill
ion) of wh
ich $8 bill
ion (31 December 2023: $6 b
ill
ion)
is restricted.
\n
Statutory requirements
\n
The Group\u2019s subsid
iar
ies are subject to statutory requirements not to make distr
ibut
ions of capital and unrealised pro\ufb01ts to the
\n
parent company, generally to mainta
in solvency. These requ
irements restrict the abil
ity of subs
id
iar
ies to remit div
idends to the
\n
Group. Certain subsid
iar
ies are also subject to local exchange control regulations which provide for restrict
ions on export
ing
\n
capital from the country other than through normal div
idends.
Contractual requirements
\n
The encumbered assets in the balance sheet of the Group\u2019s subsid
iar
ies are not available for transfer around the Group.
\n
Share of pro\ufb01t from investment in associates and jo
int ventures compr
ises:
\n\n \n
2024
2023
$mill
ion
$mill
ion
Loss from Investment in Joint Ventures
(10)
(13)
Pro\ufb01t from Investment in Associates
118
154
Total
108
141
2024
2023
Interests in associates and jo
int ventures
$mill
ion
$mill
ion
As at 1 January
966
1,631
Exchange translation difference
(40)
16
Addit
ions
1
22
64
Share of pro\ufb01ts
108
141
Div
idend rece
ived
2
(36)
(11)
Impairment
\u2013
(872)
Share of FVOCI and Other reserves
9
(7)
Other movements
3
(9)
4
As at 31 December
1,020
966
\n
1
Includes non-cash considerat
ion of $6.4 m
ill
ion (d
isposal of Autumn Life) from Vault 22 Solutions Holdings Ltd and $3.6 mill
ion (convert
ible notes) from Verif
ied
\n
Impacts Holdings Pte Ltd
\n
2
Includes $30 mill
ion cap
ital distr
ibut
ion from Ascenta IV
\n
3
Includes Investment in Seychelles International Mercantile Banking Corporation Lim
ited class
if
ieds as held for sale
\n
A complete list of the Group\u2019s interest in associates is included in Note 40. The Group\u2019s princ
ipal assoc
iates are:
\n\n \n
Group interest
in ordinary
Nature of
Main areas
share capital
Associate
activ
it
ies
of operation
%
China Bohai Bank
Banking
China
16.26
CurrencyFair Lim
ited Exchange Ireland
Banking
Ireland
43.42
\n
The Group\u2019s ownership percentage in China Bohai Bank is 16.26%.
\n
Although the Group\u2019s investment in China Bohai Bank is less than 20 per cent, it is an associate because of the sign
i\ufb01cant
\n
in\ufb02uence the Group can exercise over its management and \ufb01nanc
ial and operat
ing polic
ies. Th
is in\ufb02uence is exercised through
\n
Board representation and the provis
ion of techn
ical expertise to Bohai. The Group applies the equity method of accounting for
\n
investments in associates.
\n
If the Group did not have sign
i\ufb01cant
in\ufb02uence over Bohai, the investment would be measured at fair value rather than the
\n
current carrying value, which is based on the applicat
ion of the equ
ity method as described in the accounting policy note.
\n
Bohai publishes their results after the Group. As it is impract
icable for Boha
i to prepare \ufb01nanc
ial statements sooner, the Group
\n
recognises its share of Bohai\u2019s earnings on a three-month lag basis. Therefore, the Group recognised its share of Bohai\u2019s pro\ufb01ts
\n
and movements in other comprehensive income for the 12 months ended 30 September 2024 in the Group\u2019s consolidated
\n
statement of income and consolidated statement of comprehensive income for the year ended 31 December 2024, also
\n
consider
ing any known changes or events
in the subsequent period from 1 October 2024 to 31 December 2024 that would
\n
have materially affected Bohai\u2019s results.
Impairment testing
\n
On 31 December 2024, the listed equity value of Bohai is below the carrying amount of the Group\u2018s investment in associate.
\n
The Group assessed the carrying value of its investment in Bohai for impa
irment and concluded that no
impa
irment was
\n
required for the period ended 31 December 2024 ($850 mill
ion for the year ended 31 December 2023; $1,459 m
ill
ion of
\n
accumulated impa
irment as at 31 December 2024) . The carry
ing value of the Group\u2019s investment in Bohai of $738 mill
ion
\n
(2023: $700 mill
ion) represents the h
igher of the value in use and fair value less costs of disposal. The \ufb01nanc
ial forecasts used
\n
in the recoverable amount, a value in use (VIU) calculation, re\ufb02ects Group management\u2019s best estimate of Bohai\u2019s future
\n
earnings, in line with current economic condit
ions and latest Boha
i\u2019s reported results.
\n\n \n
31.12.24
31.12.23
Bohai
$mill
ion
$mill
ion
VIU
738
700
Carrying amount
1
738
700
Market capital
isat
ion
2
338
418
\n
1
The Group\u2019s 16.26% share in the net assets less other equity instruments which the Group does not hold
\n
2
Number of shares held by the Group multipl
ied by the quoted share pr
ice at period end
\n
Basis of recoverable amount
\n
The impa
irment test was performed by compar
ing the recoverable amount of Bohai, determined as the higher of VIU and fair
\n
value less costs to dispose, with its carrying amount.
\n
The VIU is calculated using a div
idend d
iscount model (DDM), which estimates the distr
ibutable future cash\ufb02ows to the equ
ity
\n
holders, after adjusting for regulatory cap
ital requirements, for a 5-year period, after which a terminal value (TV) is calculated
\n
based on the Price to Earnings (P/E) exit multiple. The key assumptions in the VIU are as follows:
\n
\u2022
Short to medium term project
ions are based on Group management\u2019s best est
imates of future pro\ufb01ts available to ordinary
\n
shareholders and have been determined with reference to the latest published \ufb01nanc
ial results, the h
istor
ical performance of
\n
Bohai and forward looking macro-economic variables for Mainland China.
\n
\u2022
The projections use ava
ilable informat
ion and
include normalised performance over the forecast period, inclus
ive of: (
i)
\n
balance sheet growth assumptions based on the short to medium term GDP growth rates for Mainland China; (i
i) Net Interest
\n
Income (NII) projecting
interest income (primar
ily the 1-year Loan Pr
ime Rate, 1-year LPR, as basis) and interest expenses
\n
(Shanghai Interbank Offered Rate, 3m SHIBOR, as basis) which reference to forecast third party market interest rates plus/
\n
minus a observed histor
ical spread to the benchmark rate; (
i
i
i) Non-interest income estimated according to the latest
\n
available performance of Bohai, with considerat
ion of the contr
ibut
ion of the const
ituent parts of the non-interest income; (iv)
\n
ECL assumptions using Bohai\u2019s histor
ical reported ECL, based on the proport
ion of ECL from loans and advances to customers
\n
and \ufb01nancial
investments measured at amortised cost and FVOCI; and (v) Statutory tax rate of 25% was applied to the
\n
taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable elements, cons
istent with histor
ical reported results;
\n
\u2022
The distr
ibutable reserves under the DDM are calculated as the d
ifference between the capital resources and the capital
\n
requirements in each of the forecast periods. The calculation assumes a target CET 1 capital ratio and risk weighted asset
\n
(RWA) growth consistent with total assets.
\n
\u2022
The discount rate applied to these cash \ufb02ows was estimated with reference to a capital asset pric
ing model (CAPM), wh
ich
\n
includes a long-term risk-free rate, beta, and company risk premium assumptions for Bohai; and
\n
\u2022
A long-term average P/E multiple of comparable companies is used to derive a TV after the 5-year forecast period.
\n
The VIU model was re\ufb01ned during 2024 to include more granular forecasting assumptions for each period. While it is
\n
impract
icable for the Group to est
imate the impact on future periods, the key changes to the 2024 model are summarised
\n
as follows:
\n
\u2022
Separately forecast interest income and interest expenses, by applying an estimated yield and cost to forecasted interest-
\n
earning assets and interest-bearing liab
il
it
ies of each forecast per
iod. In the previous model, net interest income was
\n
estimated by applying a net interest margin (NIM) percentage to the interest earning assets of each period.
\n
\u2022
Non-interest income was calculated by applying the histor
ical average return on the respect
ive components of the non-
\n
interest income, grown at the relevant GDP rate for Mainland China, over the forecasted period. In the previous model, the
\n
non-interest income was projected based on the latest actual results reported by Bohai and grown according to long-term
\n
GDP rate
\n
\u2022
A statutory tax rate of 25% was applied to the taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable
\n
elements, consistent with the 5yr-average of histor
ical reported results. In prev
ious model, the calculation of the tax expenses
\n
was based on the reported effective tax rate as per published \ufb01nanc
ial statements of Boha
i; and
\n
\u2022
A P/E multiple was used to calculate the TV. The Gordon Growth model was used in the previous period. The Group will
\n
continue to evaluate the TV under both methods.
The key assumptions used for the VIU calculation:
\n \n
31.12.24
31.12.23
Post-tax discount rate
1
10.5%
11.0%
Total balance-sheet (and risk weighted assets) growth rate
3.77% \u2013 4.52%
4.00%
P/E multiple used to calculate TV\u00b2
5.6x
N/A
Interest income
3
3.00%\u20133.56%
N/A
Interest expense
3
1.77%\u20132.01%
N/A
Net fee income growth rate
3.77%\u20134.52%
4.00%
Expected credit losses as a percentage of customer loans
4
0.84%\u20131.36%
0.80%\u20131.24%
Expected credit losses as a percentage of \ufb01nanc
ial
investments measured at amortised cost
and FVOCI
4
0.48%\u20131.26%
0.35%\u20130.67%
Tax expense
5
5.4% \u2013 14.1%
12.0% \u2013 16.0%
Capital maintenance ratio
8.00%
8.00%
1
Pre-tax Discount rate of 15.31% was used in 2024 (2023: 13.68%). The difference in pre-tax discount rates relates to changes in effective tax rate
2
P/E multiple approach was introduced in 2024, therefore comparative not applicable to previous period
3
1yr LPR and 3m SHIBOR rate forecasts were sourced from an external third-party provider, and with a spread derived from long term histor
ical averages, are used
to produce the interest income and interest expense forecasts. These assumptions were introduced in 2024 and are therefore not applicable to previous period.
For 31 December 2023, NIM range of 1.21%-1.48% was used in the model
4
The low end of the range is based on histor
ical loss rates, and the h
igh end of the range includes adjustments for incremental judgemental management overlays
5
The tax rates disclosed are the impl
ied effect
ive tax rates (%) over the 5-yr forecast period. The 31 December 2024 tax expense forecasts, calculated from the
taxable pro\ufb01t, considered the 5-year histor
ical average of non-taxable
income (16.09%) and non-deductible expenses (12.53%). A statutory tax rate of 25% was
applied to the taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable elements. In per
iods when losses are forecast, the effective tax rate applied
was 0%. For the 31 December 2023 VIU, the calculation of the tax expenses was based on the reported effective tax rate. The 5-year histor
ical average effect
ive
tax rate (2019 to 2023) of Bohai is 11.5%, with the 5-year low being 1.6% (2023) and the 5-year high being 17.3% (2019)
The table below discloses sensit
iv
it
ies to the key assumpt
ions of Bohai, according to management\u2019s judgement of reasonably
possible changes. Changes were applied to every cash \ufb02ow year on an ind
iv
idual basis. The percentage change to the
assumptions re\ufb02ects the level at which management assess the reasonableness of the assumptions used and their impact
on the Value in Use.
\n \n
Key assumption
Key assumption
increase
decrease
Increase/
Increase/
(decrease)
(decrease)
in VIU
in VIU
Sensit
iv
it
ies
basis points
$ mill
ion
$ mill
ion
Discount Rate
100
(31)
33
Total balance sheet (and risk weighted asset) growth rate
100
(26)
24
P/E multiple used to calculate TV
1.0x
120
(120)
Net interest income \u2013 Scenario 1\u00b9
10
(15)
15
Net interest income \u2013 Scenario 2\u00b2
Various\u00b2
360
(230)
Net fee income
100
43
(42)
Expected credit losses as a percentage of customer loans
10
(147)
145
Expected credit losses as a percentage of \ufb01nanc
ial
investments measured at amortised
cost and FVOCI
10
(78)
77
Tax expense
3
300
23
(23)
Capital maintenance ratio
50
(142)
142
1
In September 2024, the People\u2019s Bank of China announced a stimulus package aimed at guid
ing the loan pr
ime rate and deposit rates downward in tandem,
ensuring the stabil
ity of commerc
ial banks\u2019 net interest margins. This scenario assumes that 1yr LPR and 3m SHIBOR increase or decrease by the same amount,
to demonstrate the impact on the VIU of a sim
ilar scenar
io
2
An alternative scenario is that Bohai\u2019s asset yield and liab
il
ity cost move in the same direct
ion, albe
it by different amounts, through the \ufb01ve year forecast period
includ
ing the term
inal value. The key assumption increase sensit
iv
ity assumes that asset yields increase by 25 basis points and liab
il
ity costs increase by 10 basis
points in each period. The key assumption decrease sensit
iv
ity assumes that asset yields decrease by 25 basis points and liab
il
ity costs decrease by 15 basis points
in each period
3
Changes in tax expense applied only to both average percentages of non-taxable income (16.09%) and non-deductible expenses (12.53%). Refer to footnote 5
of the key assumptions table for more details
The following table sets out the summarised \ufb01nanc
ial statements of Ch
ina Bohai Bank prior to the Group\u2019s share of the
associate\u2019s pro\ufb01t being applied:
\n \n
30.09.24
30.09.23
$mill
ion
$mill
ion
Total assets
244,510
246,212
Total liab
il
it
ies
229,259
230,101
Operating income
1
3,583
3,640
Net pro\ufb01t
2
681
811
Other comprehensive income
1
69
(38)
1
This represents twelve months of earnings (1 October to 30 September)
2
Bohai only publishes its effective tax rate on a semi-annual basis. The effective tax rate of Bohai for the period that ended 30 June 2024 was 10.1% (1.6%,
31\u00a0December 2023)", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00555": { "value": "32. Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.
\n \n
2024
2023
Investments in subsid
iary undertak
ings
$mill
ion
$mill
ion
As at 1 January
60,791
60,975
Addit
ions
1
1,631
1,566
Disposal
2
(803)
(1,750)
Other Movements
3
(26)
\u2013
As at 31 December
61,593
60,791
1
Includes internal Addit
ional T
ier 1 Issuances of $980 mill
ion by Standard Chartered Bank, $600 m
ill
ion by Standard Chartered Bank (Hong Kong) L
im
ited
(31 December 2023: Includes internal Addit
ional T
ier 1 Issuances of $992 mill
ion by Standard Chartered Bank, $575 m
ill
ion add
it
ional
investment in Standard
Chartered Holdings Lim
ited)
2
Includes redemption of Preference share capital of $553 mill
ion by Standard Chartered Bank S
ingapore Lim
ited and add
it
ional T
ier 1 capital of $250 mill
ion by
Standard Chartered Bank (Hong Kong) Lim
ited (31 December 2023: Add
it
ional T
ier1 capital of $1,000 mill
ion by Standard Chartered Bank)
3
Relates to realised translation gain ($26 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion ($553 m
ill
ion)
\n\n\n
At 31 December 2024, the princ
ipal subs
id
iary undertak
ings, all ind
irectly held except for Standard Chartered Bank (Hong Kong)
\n
Lim
ited, and pr
inc
ipally engaged
in the business of banking and provis
ion of other \ufb01nancial serv
ices, were as follows:
\n\n \n
Group interest
in ordinary
share capital
Total Issued share capital
Princ
ipal subs
id
iary\u00b9
Main areas of operation
%
(mill
ions)
Standard Chartered Bank
Refer footnote\u00b3
100
US$ 20,597\u2074
Standard Chartered Bank (Hong Kong) Lim
ited
Hong Kong
100
Refer footnote\u2075
Standard Chartered Bank (Singapore) Lim
ited
Singapore
100
Refer footnote\u2076
Standard Chartered Bank Korea Lim
ited
Korea
100
KRW 1,313,043
Standard Chartered Bank (China) Lim
ited\u00b2
China
100
CNY 10,727
Standard Chartered Bank (Taiwan) Lim
ited
Taiwan
100
TWD 29,106
Standard Chartered Bank AG
Germany
100
EUR 180
Standard Chartered Bank Malaysia Berhad
Malaysia
100
RM 880\u2077
Standard Chartered Bank (Thai) Public Company Lim
ited
Thailand
99.87
THB 14,837
Standard Chartered Bank (Pakistan) Lim
ited
Pakistan
98.99
PKR 38,716
Standard Chartered Bank Botswana Lim
ited
Botswana
75.83
BWP 298
Standard Chartered Bank Kenya Lim
ited
Kenya
74.32
KES 2,169\u2078
Mox Bank Lim
ited
Hong Kong
71.58
HKD 5,279
Standard Chartered Bank Nepal Lim
ited
Nepal
70.21
NPR 9,429
Standard Chartered Bank Ghana PLC
Ghana
69.42
GHS 409\u2079
\n
1
Unless other wise stated the share capital comprises of ordinary or common shares refer to note 40 for proportion of shares held and for country of incorporation
\n
2
Registered as a Lim
ited company under the Law of Ch
ina
\n
3
Includes United Kingdom, Middle East, South Asia, Asia Pacif
ic, Amer
icas and, through Group companies, Africa
\n
4
US$1.00 Ordinary 20,596,529,642; US$0.01 Non-Cumulative Irredeemable Preference 24,000 and US$5.00 Non-Cumulative Redeemable Preference 37500
\n
5
HKD Ordinary-A 12,502,836,515; HKD Ordinary-B -78,000,000; US$ Ordinary-C 2,698,156,122 and US$ Ordinary-D 3,010,485,610
\n
6
SGD Ordinary-A 1,653,000,000; SGD Non-cumulative Class D Tier-1 Preference 400,000,000; US$ Ordinary-A 3,383,000,000; US$ Non-cumulative Class B Tier-1
\n
Preference 500,000,000; US$ Ordinary-B 733,000,000 and US$ Ordinary-C 333,000,000
\n
7
RM Ordinary 499,999,988 and RM Irredeemable Convertible Preference 380,190,000
\n
8
KES5.00 Ordinary 1,889,252,945 and KES5.00 Preference 280,000,000
\n
9
GHS Ordinary 400,000,000 and GHS0.52 Non-cumulative Irredeemable Preference Shares 9,092,858
\n
A complete list of subsid
iary undertak
ing is included in Note 40.
\n
The Group does not have any material non-controlling interest except as listed above, which contribute $36 mill
ion (31
\n
December 2023: $35 mill
ion) of the (loss)/Pro\ufb01t attr
ibutable to non-controlling interest and $292 mill
ion (31 December 2023:
\n
$290 mill
ion) of the equ
ity attributable to non-controlling interests
\n
During 2024 the Group disposed of its investments in subsid
iar
ies and the gain/loss on disposal was SCB Zimbabwe Lim
ited
\n
& Africa Enterprise Network Trust (loss:$172 mill
ion
includ
ing translat
ion adjustment loss: $190 mill
ion), SCB Angola S.A.
\n
(loss: $26 mill
ion
includ
ing translat
ion adjustment loss:$31 mill
ion), SCB S
ierra Leone Lim
ited (loss: $19 m
ill
ion
includ
ing translat
ion
\n
adjustment loss:$25 mill
ion), Shoal L
im
ited (ga
in:$14 mill
ion) and Autumn l
ife Pte. Ltd. (gain:$3 mill
ion).
\n
While the Group\u2019s subsid
iar
ies are subject to local statutory capital and liqu
id
ity requirements in relation to foreign exchange
\n
remittance, these restrict
ions ar
ise in the normal course of business and do not sign
i\ufb01cantly restr
ict the Group\u2019s abil
ity to access
\n
or use assets and settle liab
il
it
ies of the Group.
\n
The Group does not have sign
i\ufb01cant restr
ict
ions on
its abil
ity to access or use
its assets and settle its liab
il
it
ies other than those
\n
resulting from the regulatory framework with
in wh
ich the banking subsid
iar
ies operate. These frameworks require banking
\n
operations to keep certain levels of regulatory capital, liqu
id assets, exposure l
im
its and comply w
ith other required ratios.
\n
These restrict
ions are summar
ised below:
\n
Regulatory and liqu
id
ity requirements
\n
The Group\u2019s subsid
iar
ies are required to mainta
in m
in
imum cap
ital, leverage ratios, liqu
id
ity and exposure ratios which therefore
\n
restrict the abil
ity of these subs
id
iar
ies to distr
ibute cash or other assets to the parent company.
\n
The subsid
iar
ies are also required to mainta
in balances w
ith central banks and other regulatory authorit
ies
in the countries in
\n
which they operate. At 31 December 2024, the total cash and balances with central banks was $63 bill
ion (31 December 2023:
\n
$70 bill
ion) of wh
ich $8 bill
ion (31 December 2023: $6 b
ill
ion)
is restricted.
\n
Statutory requirements
\n
The Group\u2019s subsid
iar
ies are subject to statutory requirements not to make distr
ibut
ions of capital and unrealised pro\ufb01ts to the
\n
parent company, generally to mainta
in solvency. These requ
irements restrict the abil
ity of subs
id
iar
ies to remit div
idends to the
\n
Group. Certain subsid
iar
ies are also subject to local exchange control regulations which provide for restrict
ions on export
ing
\n
capital from the country other than through normal div
idends.
\n\n\n
Contractual requirements
\n
The encumbered assets in the balance sheet of the Group\u2019s subsid
iar
ies are not available for transfer around the Group.
\n
Share of pro\ufb01t from investment in associates and jo
int ventures compr
ises:
\n\n \n
2024
2023
$mill
ion
$mill
ion
Loss from Investment in Joint Ventures
(10)
(13)
Pro\ufb01t from Investment in Associates
118
154
Total
108
141
2024
2023
Interests in associates and jo
int ventures
$mill
ion
$mill
ion
As at 1 January
966
1,631
Exchange translation difference
(40)
16
Addit
ions
1
22
64
Share of pro\ufb01ts
108
141
Div
idend rece
ived
2
(36)
(11)
Impairment
\u2013
(872)
Share of FVOCI and Other reserves
9
(7)
Other movements
3
(9)
4
As at 31 December
1,020
966
\n
1
Includes non-cash considerat
ion of $6.4 m
ill
ion (d
isposal of Autumn Life) from Vault 22 Solutions Holdings Ltd and $3.6 mill
ion (convert
ible notes) from Verif
ied
\n
Impacts Holdings Pte Ltd
\n
2
Includes $30 mill
ion cap
ital distr
ibut
ion from Ascenta IV
\n
3
Includes Investment in Seychelles International Mercantile Banking Corporation Lim
ited class
if
ieds as held for sale
\n
A complete list of the Group\u2019s interest in associates is included in Note 40. The Group\u2019s princ
ipal assoc
iates are:
\n\n \n
Group interest
in ordinary
Nature of
Main areas
share capital
Associate
activ
it
ies
of operation
%
China Bohai Bank
Banking
China
16.26
CurrencyFair Lim
ited Exchange Ireland
Banking
Ireland
43.42
\n
The Group\u2019s ownership percentage in China Bohai Bank is 16.26%.
\n
Although the Group\u2019s investment in China Bohai Bank is less than 20 per cent, it is an associate because of the sign
i\ufb01cant
\n
in\ufb02uence the Group can exercise over its management and \ufb01nanc
ial and operat
ing polic
ies. Th
is in\ufb02uence is exercised through
\n
Board representation and the provis
ion of techn
ical expertise to Bohai. The Group applies the equity method of accounting for
\n
investments in associates.
\n
If the Group did not have sign
i\ufb01cant
in\ufb02uence over Bohai, the investment would be measured at fair value rather than the
\n
current carrying value, which is based on the applicat
ion of the equ
ity method as described in the accounting policy note.
\n
Bohai publishes their results after the Group. As it is impract
icable for Boha
i to prepare \ufb01nanc
ial statements sooner, the Group
\n
recognises its share of Bohai\u2019s earnings on a three-month lag basis. Therefore, the Group recognised its share of Bohai\u2019s pro\ufb01ts
\n
and movements in other comprehensive income for the 12 months ended 30 September 2024 in the Group\u2019s consolidated
\n
statement of income and consolidated statement of comprehensive income for the year ended 31 December 2024, also
\n
consider
ing any known changes or events
in the subsequent period from 1 October 2024 to 31 December 2024 that would
\n
have materially affected Bohai\u2019s results.
\n\n\n
Impairment testing
\n
On 31 December 2024, the listed equity value of Bohai is below the carrying amount of the Group\u2018s investment in associate.
\n
The Group assessed the carrying value of its investment in Bohai for impa
irment and concluded that no
impa
irment was
\n
required for the period ended 31 December 2024 ($850 mill
ion for the year ended 31 December 2023; $1,459 m
ill
ion of
\n
accumulated impa
irment as at 31 December 2024) . The carry
ing value of the Group\u2019s investment in Bohai of $738 mill
ion
\n
(2023: $700 mill
ion) represents the h
igher of the value in use and fair value less costs of disposal. The \ufb01nanc
ial forecasts used
\n
in the recoverable amount, a value in use (VIU) calculation, re\ufb02ects Group management\u2019s best estimate of Bohai\u2019s future
\n
earnings, in line with current economic condit
ions and latest Boha
i\u2019s reported results.
\n\n \n
31.12.24
31.12.23
Bohai
$mill
ion
$mill
ion
VIU
738
700
Carrying amount
1
738
700
Market capital
isat
ion
2
338
418
\n
1
The Group\u2019s 16.26% share in the net assets less other equity instruments which the Group does not hold
\n
2
Number of shares held by the Group multipl
ied by the quoted share pr
ice at period end
\n
Basis of recoverable amount
\n
The impa
irment test was performed by compar
ing the recoverable amount of Bohai, determined as the higher of VIU and fair
\n
value less costs to dispose, with its carrying amount.
\n
The VIU is calculated using a div
idend d
iscount model (DDM), which estimates the distr
ibutable future cash\ufb02ows to the equ
ity
\n
holders, after adjusting for regulatory cap
ital requirements, for a 5-year period, after which a terminal value (TV) is calculated
\n
based on the Price to Earnings (P/E) exit multiple. The key assumptions in the VIU are as follows:
\n
\u2022
Short to medium term project
ions are based on Group management\u2019s best est
imates of future pro\ufb01ts available to ordinary
\n
shareholders and have been determined with reference to the latest published \ufb01nanc
ial results, the h
istor
ical performance of
\n
Bohai and forward looking macro-economic variables for Mainland China.
\n
\u2022
The projections use ava
ilable informat
ion and
include normalised performance over the forecast period, inclus
ive of: (
i)
\n
balance sheet growth assumptions based on the short to medium term GDP growth rates for Mainland China; (i
i) Net Interest
\n
Income (NII) projecting
interest income (primar
ily the 1-year Loan Pr
ime Rate, 1-year LPR, as basis) and interest expenses
\n
(Shanghai Interbank Offered Rate, 3m SHIBOR, as basis) which reference to forecast third party market interest rates plus/
\n
minus a observed histor
ical spread to the benchmark rate; (
i
i
i) Non-interest income estimated according to the latest
\n
available performance of Bohai, with considerat
ion of the contr
ibut
ion of the const
ituent parts of the non-interest income; (iv)
\n
ECL assumptions using Bohai\u2019s histor
ical reported ECL, based on the proport
ion of ECL from loans and advances to customers
\n
and \ufb01nancial
investments measured at amortised cost and FVOCI; and (v) Statutory tax rate of 25% was applied to the
\n
taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable elements, cons
istent with histor
ical reported results;
\n
\u2022
The distr
ibutable reserves under the DDM are calculated as the d
ifference between the capital resources and the capital
\n
requirements in each of the forecast periods. The calculation assumes a target CET 1 capital ratio and risk weighted asset
\n
(RWA) growth consistent with total assets.
\n
\u2022
The discount rate applied to these cash \ufb02ows was estimated with reference to a capital asset pric
ing model (CAPM), wh
ich
\n
includes a long-term risk-free rate, beta, and company risk premium assumptions for Bohai; and
\n
\u2022
A long-term average P/E multiple of comparable companies is used to derive a TV after the 5-year forecast period.
\n
The VIU model was re\ufb01ned during 2024 to include more granular forecasting assumptions for each period. While it is
\n
impract
icable for the Group to est
imate the impact on future periods, the key changes to the 2024 model are summarised
\n
as follows:
\n
\u2022
Separately forecast interest income and interest expenses, by applying an estimated yield and cost to forecasted interest-
\n
earning assets and interest-bearing liab
il
it
ies of each forecast per
iod. In the previous model, net interest income was
\n
estimated by applying a net interest margin (NIM) percentage to the interest earning assets of each period.
\n
\u2022
Non-interest income was calculated by applying the histor
ical average return on the respect
ive components of the non-
\n
interest income, grown at the relevant GDP rate for Mainland China, over the forecasted period. In the previous model, the
\n
non-interest income was projected based on the latest actual results reported by Bohai and grown according to long-term
\n
GDP rate
\n
\u2022
A statutory tax rate of 25% was applied to the taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable
\n
elements, consistent with the 5yr-average of histor
ical reported results. In prev
ious model, the calculation of the tax expenses
\n
was based on the reported effective tax rate as per published \ufb01nanc
ial statements of Boha
i; and
\n
\u2022
A P/E multiple was used to calculate the TV. The Gordon Growth model was used in the previous period. The Group will
\n
continue to evaluate the TV under both methods.
The key assumptions used for the VIU calculation:
\n \n
31.12.24
31.12.23
Post-tax discount rate
1
10.5%
11.0%
Total balance-sheet (and risk weighted assets) growth rate
3.77% \u2013 4.52%
4.00%
P/E multiple used to calculate TV\u00b2
5.6x
N/A
Interest income
3
3.00%\u20133.56%
N/A
Interest expense
3
1.77%\u20132.01%
N/A
Net fee income growth rate
3.77%\u20134.52%
4.00%
Expected credit losses as a percentage of customer loans
4
0.84%\u20131.36%
0.80%\u20131.24%
Expected credit losses as a percentage of \ufb01nanc
ial
investments measured at amortised cost
and FVOCI
4
0.48%\u20131.26%
0.35%\u20130.67%
Tax expense
5
5.4% \u2013 14.1%
12.0% \u2013 16.0%
Capital maintenance ratio
8.00%
8.00%
1
Pre-tax Discount rate of 15.31% was used in 2024 (2023: 13.68%). The difference in pre-tax discount rates relates to changes in effective tax rate
2
P/E multiple approach was introduced in 2024, therefore comparative not applicable to previous period
3
1yr LPR and 3m SHIBOR rate forecasts were sourced from an external third-party provider, and with a spread derived from long term histor
ical averages, are used
to produce the interest income and interest expense forecasts. These assumptions were introduced in 2024 and are therefore not applicable to previous period.
For 31 December 2023, NIM range of 1.21%-1.48% was used in the model
4
The low end of the range is based on histor
ical loss rates, and the h
igh end of the range includes adjustments for incremental judgemental management overlays
5
The tax rates disclosed are the impl
ied effect
ive tax rates (%) over the 5-yr forecast period. The 31 December 2024 tax expense forecasts, calculated from the
taxable pro\ufb01t, considered the 5-year histor
ical average of non-taxable
income (16.09%) and non-deductible expenses (12.53%). A statutory tax rate of 25% was
applied to the taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable elements. In per
iods when losses are forecast, the effective tax rate applied
was 0%. For the 31 December 2023 VIU, the calculation of the tax expenses was based on the reported effective tax rate. The 5-year histor
ical average effect
ive
tax rate (2019 to 2023) of Bohai is 11.5%, with the 5-year low being 1.6% (2023) and the 5-year high being 17.3% (2019)
The table below discloses sensit
iv
it
ies to the key assumpt
ions of Bohai, according to management\u2019s judgement of reasonably
possible changes. Changes were applied to every cash \ufb02ow year on an ind
iv
idual basis. The percentage change to the
assumptions re\ufb02ects the level at which management assess the reasonableness of the assumptions used and their impact
on the Value in Use.
\n \n
Key assumption
Key assumption
increase
decrease
Increase/
Increase/
(decrease)
(decrease)
in VIU
in VIU
Sensit
iv
it
ies
basis points
$ mill
ion
$ mill
ion
Discount Rate
100
(31)
33
Total balance sheet (and risk weighted asset) growth rate
100
(26)
24
P/E multiple used to calculate TV
1.0x
120
(120)
Net interest income \u2013 Scenario 1\u00b9
10
(15)
15
Net interest income \u2013 Scenario 2\u00b2
Various\u00b2
360
(230)
Net fee income
100
43
(42)
Expected credit losses as a percentage of customer loans
10
(147)
145
Expected credit losses as a percentage of \ufb01nanc
ial
investments measured at amortised
cost and FVOCI
10
(78)
77
Tax expense
3
300
23
(23)
Capital maintenance ratio
50
(142)
142
1
In September 2024, the People\u2019s Bank of China announced a stimulus package aimed at guid
ing the loan pr
ime rate and deposit rates downward in tandem,
ensuring the stabil
ity of commerc
ial banks\u2019 net interest margins. This scenario assumes that 1yr LPR and 3m SHIBOR increase or decrease by the same amount,
to demonstrate the impact on the VIU of a sim
ilar scenar
io
2
An alternative scenario is that Bohai\u2019s asset yield and liab
il
ity cost move in the same direct
ion, albe
it by different amounts, through the \ufb01ve year forecast period
includ
ing the term
inal value. The key assumption increase sensit
iv
ity assumes that asset yields increase by 25 basis points and liab
il
ity costs increase by 10 basis
points in each period. The key assumption decrease sensit
iv
ity assumes that asset yields decrease by 25 basis points and liab
il
ity costs decrease by 15 basis points
in each period
3
Changes in tax expense applied only to both average percentages of non-taxable income (16.09%) and non-deductible expenses (12.53%). Refer to footnote 5
of the key assumptions table for more details
The following table sets out the summarised \ufb01nanc
ial statements of Ch
ina Bohai Bank prior to the Group\u2019s share of the
associate\u2019s pro\ufb01t being applied:
\n \n
30.09.24
30.09.23
$mill
ion
$mill
ion
Total assets
244,510
246,212
Total liab
il
it
ies
229,259
230,101
Operating income
1
3,583
3,640
Net pro\ufb01t
2
681
811
Other comprehensive income
1
69
(38)
1
This represents twelve months of earnings (1 October to 30 September)
2
Bohai only publishes its effective tax rate on a semi-annual basis. The effective tax rate of Bohai for the period that ended 30 June 2024 was 10.1% (1.6%,
31\u00a0December 2023)", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00554": { "value": "32. Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.
\n \n
2024
2023
Investments in subsid
iary undertak
ings
$mill
ion
$mill
ion
As at 1 January
60,791
60,975
Addit
ions
1
1,631
1,566
Disposal
2
(803)
(1,750)
Other Movements
3
(26)
\u2013
As at 31 December
61,593
60,791
1
Includes internal Addit
ional T
ier 1 Issuances of $980 mill
ion by Standard Chartered Bank, $600 m
ill
ion by Standard Chartered Bank (Hong Kong) L
im
ited
(31 December 2023: Includes internal Addit
ional T
ier 1 Issuances of $992 mill
ion by Standard Chartered Bank, $575 m
ill
ion add
it
ional
investment in Standard
Chartered Holdings Lim
ited)
2
Includes redemption of Preference share capital of $553 mill
ion by Standard Chartered Bank S
ingapore Lim
ited and add
it
ional T
ier 1 capital of $250 mill
ion by
Standard Chartered Bank (Hong Kong) Lim
ited (31 December 2023: Add
it
ional T
ier1 capital of $1,000 mill
ion by Standard Chartered Bank)
3
Relates to realised translation gain ($26 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion ($553 m
ill
ion)
\n\n\n
At 31 December 2024, the princ
ipal subs
id
iary undertak
ings, all ind
irectly held except for Standard Chartered Bank (Hong Kong)
\n
Lim
ited, and pr
inc
ipally engaged
in the business of banking and provis
ion of other \ufb01nancial serv
ices, were as follows:
\n\n \n
Group interest
in ordinary
share capital
Total Issued share capital
Princ
ipal subs
id
iary\u00b9
Main areas of operation
%
(mill
ions)
Standard Chartered Bank
Refer footnote\u00b3
100
US$ 20,597\u2074
Standard Chartered Bank (Hong Kong) Lim
ited
Hong Kong
100
Refer footnote\u2075
Standard Chartered Bank (Singapore) Lim
ited
Singapore
100
Refer footnote\u2076
Standard Chartered Bank Korea Lim
ited
Korea
100
KRW 1,313,043
Standard Chartered Bank (China) Lim
ited\u00b2
China
100
CNY 10,727
Standard Chartered Bank (Taiwan) Lim
ited
Taiwan
100
TWD 29,106
Standard Chartered Bank AG
Germany
100
EUR 180
Standard Chartered Bank Malaysia Berhad
Malaysia
100
RM 880\u2077
Standard Chartered Bank (Thai) Public Company Lim
ited
Thailand
99.87
THB 14,837
Standard Chartered Bank (Pakistan) Lim
ited
Pakistan
98.99
PKR 38,716
Standard Chartered Bank Botswana Lim
ited
Botswana
75.83
BWP 298
Standard Chartered Bank Kenya Lim
ited
Kenya
74.32
KES 2,169\u2078
Mox Bank Lim
ited
Hong Kong
71.58
HKD 5,279
Standard Chartered Bank Nepal Lim
ited
Nepal
70.21
NPR 9,429
Standard Chartered Bank Ghana PLC
Ghana
69.42
GHS 409\u2079
\n
1
Unless other wise stated the share capital comprises of ordinary or common shares refer to note 40 for proportion of shares held and for country of incorporation
\n
2
Registered as a Lim
ited company under the Law of Ch
ina
\n
3
Includes United Kingdom, Middle East, South Asia, Asia Pacif
ic, Amer
icas and, through Group companies, Africa
\n
4
US$1.00 Ordinary 20,596,529,642; US$0.01 Non-Cumulative Irredeemable Preference 24,000 and US$5.00 Non-Cumulative Redeemable Preference 37500
\n
5
HKD Ordinary-A 12,502,836,515; HKD Ordinary-B -78,000,000; US$ Ordinary-C 2,698,156,122 and US$ Ordinary-D 3,010,485,610
\n
6
SGD Ordinary-A 1,653,000,000; SGD Non-cumulative Class D Tier-1 Preference 400,000,000; US$ Ordinary-A 3,383,000,000; US$ Non-cumulative Class B Tier-1
\n
Preference 500,000,000; US$ Ordinary-B 733,000,000 and US$ Ordinary-C 333,000,000
\n
7
RM Ordinary 499,999,988 and RM Irredeemable Convertible Preference 380,190,000
\n
8
KES5.00 Ordinary 1,889,252,945 and KES5.00 Preference 280,000,000
\n
9
GHS Ordinary 400,000,000 and GHS0.52 Non-cumulative Irredeemable Preference Shares 9,092,858
\n
A complete list of subsid
iary undertak
ing is included in Note 40.
\n
The Group does not have any material non-controlling interest except as listed above, which contribute $36 mill
ion (31
\n
December 2023: $35 mill
ion) of the (loss)/Pro\ufb01t attr
ibutable to non-controlling interest and $292 mill
ion (31 December 2023:
\n
$290 mill
ion) of the equ
ity attributable to non-controlling interests
\n
During 2024 the Group disposed of its investments in subsid
iar
ies and the gain/loss on disposal was SCB Zimbabwe Lim
ited
\n
& Africa Enterprise Network Trust (loss:$172 mill
ion
includ
ing translat
ion adjustment loss: $190 mill
ion), SCB Angola S.A.
\n
(loss: $26 mill
ion
includ
ing translat
ion adjustment loss:$31 mill
ion), SCB S
ierra Leone Lim
ited (loss: $19 m
ill
ion
includ
ing translat
ion
\n
adjustment loss:$25 mill
ion), Shoal L
im
ited (ga
in:$14 mill
ion) and Autumn l
ife Pte. Ltd. (gain:$3 mill
ion).
\n
While the Group\u2019s subsid
iar
ies are subject to local statutory capital and liqu
id
ity requirements in relation to foreign exchange
\n
remittance, these restrict
ions ar
ise in the normal course of business and do not sign
i\ufb01cantly restr
ict the Group\u2019s abil
ity to access
\n
or use assets and settle liab
il
it
ies of the Group.
\n
The Group does not have sign
i\ufb01cant restr
ict
ions on
its abil
ity to access or use
its assets and settle its liab
il
it
ies other than those
\n
resulting from the regulatory framework with
in wh
ich the banking subsid
iar
ies operate. These frameworks require banking
\n
operations to keep certain levels of regulatory capital, liqu
id assets, exposure l
im
its and comply w
ith other required ratios.
\n
These restrict
ions are summar
ised below:
\n
Regulatory and liqu
id
ity requirements
\n
The Group\u2019s subsid
iar
ies are required to mainta
in m
in
imum cap
ital, leverage ratios, liqu
id
ity and exposure ratios which therefore
\n
restrict the abil
ity of these subs
id
iar
ies to distr
ibute cash or other assets to the parent company.
\n
The subsid
iar
ies are also required to mainta
in balances w
ith central banks and other regulatory authorit
ies
in the countries in
\n
which they operate. At 31 December 2024, the total cash and balances with central banks was $63 bill
ion (31 December 2023:
\n
$70 bill
ion) of wh
ich $8 bill
ion (31 December 2023: $6 b
ill
ion)
is restricted.
\n
Statutory requirements
\n
The Group\u2019s subsid
iar
ies are subject to statutory requirements not to make distr
ibut
ions of capital and unrealised pro\ufb01ts to the
\n
parent company, generally to mainta
in solvency. These requ
irements restrict the abil
ity of subs
id
iar
ies to remit div
idends to the
\n
Group. Certain subsid
iar
ies are also subject to local exchange control regulations which provide for restrict
ions on export
ing
\n
capital from the country other than through normal div
idends.
\n\n\n
Contractual requirements
\n
The encumbered assets in the balance sheet of the Group\u2019s subsid
iar
ies are not available for transfer around the Group.
\n
Share of pro\ufb01t from investment in associates and jo
int ventures compr
ises:
\n\n \n
2024
2023
$mill
ion
$mill
ion
Loss from Investment in Joint Ventures
(10)
(13)
Pro\ufb01t from Investment in Associates
118
154
Total
108
141
2024
2023
Interests in associates and jo
int ventures
$mill
ion
$mill
ion
As at 1 January
966
1,631
Exchange translation difference
(40)
16
Addit
ions
1
22
64
Share of pro\ufb01ts
108
141
Div
idend rece
ived
2
(36)
(11)
Impairment
\u2013
(872)
Share of FVOCI and Other reserves
9
(7)
Other movements
3
(9)
4
As at 31 December
1,020
966
\n
1
Includes non-cash considerat
ion of $6.4 m
ill
ion (d
isposal of Autumn Life) from Vault 22 Solutions Holdings Ltd and $3.6 mill
ion (convert
ible notes) from Verif
ied
\n
Impacts Holdings Pte Ltd
\n
2
Includes $30 mill
ion cap
ital distr
ibut
ion from Ascenta IV
\n
3
Includes Investment in Seychelles International Mercantile Banking Corporation Lim
ited class
if
ieds as held for sale
\n
A complete list of the Group\u2019s interest in associates is included in Note 40. The Group\u2019s princ
ipal assoc
iates are:
\n\n \n
Group interest
in ordinary
Nature of
Main areas
share capital
Associate
activ
it
ies
of operation
%
China Bohai Bank
Banking
China
16.26
CurrencyFair Lim
ited Exchange Ireland
Banking
Ireland
43.42
\n
The Group\u2019s ownership percentage in China Bohai Bank is 16.26%.
\n
Although the Group\u2019s investment in China Bohai Bank is less than 20 per cent, it is an associate because of the sign
i\ufb01cant
\n
in\ufb02uence the Group can exercise over its management and \ufb01nanc
ial and operat
ing polic
ies. Th
is in\ufb02uence is exercised through
\n
Board representation and the provis
ion of techn
ical expertise to Bohai. The Group applies the equity method of accounting for
\n
investments in associates.
\n
If the Group did not have sign
i\ufb01cant
in\ufb02uence over Bohai, the investment would be measured at fair value rather than the
\n
current carrying value, which is based on the applicat
ion of the equ
ity method as described in the accounting policy note.
\n
Bohai publishes their results after the Group. As it is impract
icable for Boha
i to prepare \ufb01nanc
ial statements sooner, the Group
\n
recognises its share of Bohai\u2019s earnings on a three-month lag basis. Therefore, the Group recognised its share of Bohai\u2019s pro\ufb01ts
\n
and movements in other comprehensive income for the 12 months ended 30 September 2024 in the Group\u2019s consolidated
\n
statement of income and consolidated statement of comprehensive income for the year ended 31 December 2024, also
\n
consider
ing any known changes or events
in the subsequent period from 1 October 2024 to 31 December 2024 that would
\n
have materially affected Bohai\u2019s results.
\n\n\n
Impairment testing
\n
On 31 December 2024, the listed equity value of Bohai is below the carrying amount of the Group\u2018s investment in associate.
\n
The Group assessed the carrying value of its investment in Bohai for impa
irment and concluded that no
impa
irment was
\n
required for the period ended 31 December 2024 ($850 mill
ion for the year ended 31 December 2023; $1,459 m
ill
ion of
\n
accumulated impa
irment as at 31 December 2024) . The carry
ing value of the Group\u2019s investment in Bohai of $738 mill
ion
\n
(2023: $700 mill
ion) represents the h
igher of the value in use and fair value less costs of disposal. The \ufb01nanc
ial forecasts used
\n
in the recoverable amount, a value in use (VIU) calculation, re\ufb02ects Group management\u2019s best estimate of Bohai\u2019s future
\n
earnings, in line with current economic condit
ions and latest Boha
i\u2019s reported results.
\n\n \n
31.12.24
31.12.23
Bohai
$mill
ion
$mill
ion
VIU
738
700
Carrying amount
1
738
700
Market capital
isat
ion
2
338
418
\n
1
The Group\u2019s 16.26% share in the net assets less other equity instruments which the Group does not hold
\n
2
Number of shares held by the Group multipl
ied by the quoted share pr
ice at period end
\n
Basis of recoverable amount
\n
The impa
irment test was performed by compar
ing the recoverable amount of Bohai, determined as the higher of VIU and fair
\n
value less costs to dispose, with its carrying amount.
\n
The VIU is calculated using a div
idend d
iscount model (DDM), which estimates the distr
ibutable future cash\ufb02ows to the equ
ity
\n
holders, after adjusting for regulatory cap
ital requirements, for a 5-year period, after which a terminal value (TV) is calculated
\n
based on the Price to Earnings (P/E) exit multiple. The key assumptions in the VIU are as follows:
\n
\u2022
Short to medium term project
ions are based on Group management\u2019s best est
imates of future pro\ufb01ts available to ordinary
\n
shareholders and have been determined with reference to the latest published \ufb01nanc
ial results, the h
istor
ical performance of
\n
Bohai and forward looking macro-economic variables for Mainland China.
\n
\u2022
The projections use ava
ilable informat
ion and
include normalised performance over the forecast period, inclus
ive of: (
i)
\n
balance sheet growth assumptions based on the short to medium term GDP growth rates for Mainland China; (i
i) Net Interest
\n
Income (NII) projecting
interest income (primar
ily the 1-year Loan Pr
ime Rate, 1-year LPR, as basis) and interest expenses
\n
(Shanghai Interbank Offered Rate, 3m SHIBOR, as basis) which reference to forecast third party market interest rates plus/
\n
minus a observed histor
ical spread to the benchmark rate; (
i
i
i) Non-interest income estimated according to the latest
\n
available performance of Bohai, with considerat
ion of the contr
ibut
ion of the const
ituent parts of the non-interest income; (iv)
\n
ECL assumptions using Bohai\u2019s histor
ical reported ECL, based on the proport
ion of ECL from loans and advances to customers
\n
and \ufb01nancial
investments measured at amortised cost and FVOCI; and (v) Statutory tax rate of 25% was applied to the
\n
taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable elements, cons
istent with histor
ical reported results;
\n
\u2022
The distr
ibutable reserves under the DDM are calculated as the d
ifference between the capital resources and the capital
\n
requirements in each of the forecast periods. The calculation assumes a target CET 1 capital ratio and risk weighted asset
\n
(RWA) growth consistent with total assets.
\n
\u2022
The discount rate applied to these cash \ufb02ows was estimated with reference to a capital asset pric
ing model (CAPM), wh
ich
\n
includes a long-term risk-free rate, beta, and company risk premium assumptions for Bohai; and
\n
\u2022
A long-term average P/E multiple of comparable companies is used to derive a TV after the 5-year forecast period.
\n
The VIU model was re\ufb01ned during 2024 to include more granular forecasting assumptions for each period. While it is
\n
impract
icable for the Group to est
imate the impact on future periods, the key changes to the 2024 model are summarised
\n
as follows:
\n
\u2022
Separately forecast interest income and interest expenses, by applying an estimated yield and cost to forecasted interest-
\n
earning assets and interest-bearing liab
il
it
ies of each forecast per
iod. In the previous model, net interest income was
\n
estimated by applying a net interest margin (NIM) percentage to the interest earning assets of each period.
\n
\u2022
Non-interest income was calculated by applying the histor
ical average return on the respect
ive components of the non-
\n
interest income, grown at the relevant GDP rate for Mainland China, over the forecasted period. In the previous model, the
\n
non-interest income was projected based on the latest actual results reported by Bohai and grown according to long-term
\n
GDP rate
\n
\u2022
A statutory tax rate of 25% was applied to the taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable
\n
elements, consistent with the 5yr-average of histor
ical reported results. In prev
ious model, the calculation of the tax expenses
\n
was based on the reported effective tax rate as per published \ufb01nanc
ial statements of Boha
i; and
\n
\u2022
A P/E multiple was used to calculate the TV. The Gordon Growth model was used in the previous period. The Group will
\n
continue to evaluate the TV under both methods.
The key assumptions used for the VIU calculation:
\n \n
31.12.24
31.12.23
Post-tax discount rate
1
10.5%
11.0%
Total balance-sheet (and risk weighted assets) growth rate
3.77% \u2013 4.52%
4.00%
P/E multiple used to calculate TV\u00b2
5.6x
N/A
Interest income
3
3.00%\u20133.56%
N/A
Interest expense
3
1.77%\u20132.01%
N/A
Net fee income growth rate
3.77%\u20134.52%
4.00%
Expected credit losses as a percentage of customer loans
4
0.84%\u20131.36%
0.80%\u20131.24%
Expected credit losses as a percentage of \ufb01nanc
ial
investments measured at amortised cost
and FVOCI
4
0.48%\u20131.26%
0.35%\u20130.67%
Tax expense
5
5.4% \u2013 14.1%
12.0% \u2013 16.0%
Capital maintenance ratio
8.00%
8.00%
1
Pre-tax Discount rate of 15.31% was used in 2024 (2023: 13.68%). The difference in pre-tax discount rates relates to changes in effective tax rate
2
P/E multiple approach was introduced in 2024, therefore comparative not applicable to previous period
3
1yr LPR and 3m SHIBOR rate forecasts were sourced from an external third-party provider, and with a spread derived from long term histor
ical averages, are used
to produce the interest income and interest expense forecasts. These assumptions were introduced in 2024 and are therefore not applicable to previous period.
For 31 December 2023, NIM range of 1.21%-1.48% was used in the model
4
The low end of the range is based on histor
ical loss rates, and the h
igh end of the range includes adjustments for incremental judgemental management overlays
5
The tax rates disclosed are the impl
ied effect
ive tax rates (%) over the 5-yr forecast period. The 31 December 2024 tax expense forecasts, calculated from the
taxable pro\ufb01t, considered the 5-year histor
ical average of non-taxable
income (16.09%) and non-deductible expenses (12.53%). A statutory tax rate of 25% was
applied to the taxable pro\ufb01t of Bohai, after considerat
ion of taxable and non-taxable elements. In per
iods when losses are forecast, the effective tax rate applied
was 0%. For the 31 December 2023 VIU, the calculation of the tax expenses was based on the reported effective tax rate. The 5-year histor
ical average effect
ive
tax rate (2019 to 2023) of Bohai is 11.5%, with the 5-year low being 1.6% (2023) and the 5-year high being 17.3% (2019)
The table below discloses sensit
iv
it
ies to the key assumpt
ions of Bohai, according to management\u2019s judgement of reasonably
possible changes. Changes were applied to every cash \ufb02ow year on an ind
iv
idual basis. The percentage change to the
assumptions re\ufb02ects the level at which management assess the reasonableness of the assumptions used and their impact
on the Value in Use.
\n \n
Key assumption
Key assumption
increase
decrease
Increase/
Increase/
(decrease)
(decrease)
in VIU
in VIU
Sensit
iv
it
ies
basis points
$ mill
ion
$ mill
ion
Discount Rate
100
(31)
33
Total balance sheet (and risk weighted asset) growth rate
100
(26)
24
P/E multiple used to calculate TV
1.0x
120
(120)
Net interest income \u2013 Scenario 1\u00b9
10
(15)
15
Net interest income \u2013 Scenario 2\u00b2
Various\u00b2
360
(230)
Net fee income
100
43
(42)
Expected credit losses as a percentage of customer loans
10
(147)
145
Expected credit losses as a percentage of \ufb01nanc
ial
investments measured at amortised
cost and FVOCI
10
(78)
77
Tax expense
3
300
23
(23)
Capital maintenance ratio
50
(142)
142
1
In September 2024, the People\u2019s Bank of China announced a stimulus package aimed at guid
ing the loan pr
ime rate and deposit rates downward in tandem,
ensuring the stabil
ity of commerc
ial banks\u2019 net interest margins. This scenario assumes that 1yr LPR and 3m SHIBOR increase or decrease by the same amount,
to demonstrate the impact on the VIU of a sim
ilar scenar
io
2
An alternative scenario is that Bohai\u2019s asset yield and liab
il
ity cost move in the same direct
ion, albe
it by different amounts, through the \ufb01ve year forecast period
includ
ing the term
inal value. The key assumption increase sensit
iv
ity assumes that asset yields increase by 25 basis points and liab
il
ity costs increase by 10 basis
points in each period. The key assumption decrease sensit
iv
ity assumes that asset yields decrease by 25 basis points and liab
il
ity costs decrease by 15 basis points
in each period
3
Changes in tax expense applied only to both average percentages of non-taxable income (16.09%) and non-deductible expenses (12.53%). Refer to footnote 5
of the key assumptions table for more details
The following table sets out the summarised \ufb01nanc
ial statements of Ch
ina Bohai Bank prior to the Group\u2019s share of the
associate\u2019s pro\ufb01t being applied:
\n \n
30.09.24
30.09.23
$mill
ion
$mill
ion
Total assets
244,510
246,212
Total liab
il
it
ies
229,259
230,101
Operating income
1
3,583
3,640
Net pro\ufb01t
2
681
811
Other comprehensive income
1
69
(38)
1
This represents twelve months of earnings (1 October to 30 September)
2
Bohai only publishes its effective tax rate on a semi-annual basis. The effective tax rate of Bohai for the period that ended 30 June 2024 was 10.1% (1.6%,
31\u00a0December 2023)", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00756": { "value": "Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00755": { "value": "Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00754": { "value": "Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00753": { "value": "Accounting policy
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group\u2019s investment in associates and jo
int ventures
includes goodwill ident
i\ufb01ed on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group\u2019s share of its associates\u2019 and jo
int ventures\u2019 post-acqu
is
it
ion pro\ufb01ts or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group\u2019s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group\u2019s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
i\ufb01cant or prolonged decl
ine in the fair value of the Group\u2019s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
i\ufb01cant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
i\ufb01cant
in\ufb02uence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
i\ufb01cantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
i\ufb01cant
in\ufb02uence (being the power to partic
ipate
in the
\ufb01nancial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group\u2019s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of \ufb01nanc
ial d
iff
iculty, or breaches of contracts/regulatory \ufb01nes of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash \ufb02ows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash \ufb02ows. The estimat
ion
of future cash \ufb02ows and the level to which they are discounted is inherently uncertain and requires sign
i\ufb01cant judgement.
Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForInvestmentsInSubsidiaryUndertakingsJointVenturesAndAssociatesExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00757": { "value": "Business combinat
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company\u2019s \ufb01nancial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion pro\ufb01ts received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
in the Group accounts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00616": { "value": "33. Structured entit
ies
Accounting policy
Structured entit
ies are consol
idated when the substance of the relationsh
ip between the Group and the structured ent
ity
ind
icates the Group has power over the contractual relevant act
iv
it
ies of the structured entity, is exposed to variable
returns, and can use that power to affect the variable return exposure.
In determin
ing whether to consol
idate a structured entity to which assets have been transferred, the Group takes into
account its abil
ity to d
irect the relevant activ
it
ies of the structured entity. These relevant activ
it
ies are generally evidenced
through a unilateral right to liqu
idate the structured ent
ity, investment in a substantial proportion of the securit
ies
issued
by the structured entity or where the Group holds specif
ic subord
inate securit
ies that embody certa
in controlling rights.
The Group may further consider relevant activ
it
ies embedded with
in contractual arrangements such as call opt
ions which
give the practical abil
ity to d
irect the entity, special relationsh
ips between the structured ent
ity and investors, and if a
single investor has a large exposure to variable returns of the structured entity.
Judgement is required in determin
ing control over structured ent
it
ies. The purpose and des
ign of the entity is considered,
along with a determinat
ion of what the relevant act
iv
it
ies are of the entity and who directs these. Further judgements are
made around which investor is exposed to and absorbs the variable returns of the structured entity. The Group will have to
weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ
ipal
in its own right
or as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured
entit
ies, spec
if
ically
if market condit
ions have an effect on the var
iable return exposure of different investors.
Interests in consolidated structured entit
ies:
A structured entity is consolidated into the Group\u2019s \ufb01nanc
ial statements where
the Group controls the structured entity, as per the determinat
ion
in the accounting policy above.
The following table presents the Group\u2019s interests in consolidated structured entit
ies.
\n \n
31.12.24
31.12.23
$mill
ion
$mill
ion
Shipp
ing lease
14
52
Princ
ipal and other structured \ufb01nance
474
353
Total
488
405
Interests in unconsolidated structured entit
ies:
Unconsolidated structured entit
ies are all structured ent
it
ies that are not
controlled by the Group. The Group enters into transactions with unconsolidated structured entit
ies
in the normal course of
business to facil
itate customer transact
ions and for specif
ic
investment opportunit
ies. An
interest in a structured entity is
contractual or non-contractual involvement which creates variab
il
ity of the returns of the Group aris
ing from the performance
of the structured entity.
The table below presents the carrying amount of the assets recognised in the \ufb01nanc
ial statements relat
ing to variable interests
held in unconsolidated structured entit
ies, the max
imum exposure to loss relating to those interests and the total assets of the
structured entit
ies. Max
imum exposure to loss is primar
ily l
im
ited to the carry
ing amount of the Group\u2019s on-balance sheet
exposure to the structured entity. For derivat
ives, the max
imum exposure to loss represents the on-balance sheet valuation
and not the notional amount. For commitments and guarantees, the maximum exposure to loss is the notional amount of
potential future losses.
\n \n
2024
2023
Asset-
Princ
ipal
Asset-
Princ
ipal
backed
Structured
Finance
Other
backed
Structured
Finance
Other
securit
ies
Lending
Finance
funds
activ
it
ies
Total
securit
ies
Lending
\ufb01nance
funds
activ
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Group\u2019s interest \u2013
assets
Financ
ial assets
held at fair value
through pro\ufb01t
or loss
1,222
255
178
124
\u2013
1,779
954
269
143
137
\u2013
1,503
Loans and
advances/
Investment securit
ies
at amortised cost
16,305
16,735
12,656
\u2013
97
45,793
17,795
15,105
13,353
\u2013
190
46,443
Investment
securit
ies (fa
ir value
through other
comprehensive
income)
2,371
\u2013
\u2013
\u2013
\u2013
2,371
2,443
\u2013
\u2013
\u2013
\u2013
2,443
Other assets
\u2013
\u2013
1
\u2013
\u2013
1
\u2013
\u2013
34
\u2013
\u2013
34
Total assets
19,898
16,990
12,835
124
97
49,944
21,192
15,374
13,530
137
190
50,423
Off-balance sheet
\u2013
11,075
6,901
63
73
18,112
\u2013
8,869
6,691
\u2013
20
15,580
Group\u2019s maximum
exposure to loss
19,898
28,065
19,736
187
170
68,056
21,192
24,243
20,221
137
210
66,003
Total assets of
structured entit
ies
129,864
17,579
14,758
226
\u2013
162,427
191,627
15,374
31,806
250
1,688 240,745
The main types of activ
it
ies for which the Group util
ises unconsol
idated structured entit
ies cover synthet
ic credit default swaps
for managed investment funds (includ
ing spec
ial
ised Pr
inc
ipal F
inance funds), portfolio management purposes, structured
\ufb01nance and asset-backed securit
ies. These are deta
iled as follows:
\u2022
Asset-backed securit
ies (ABS):
The Group also has investments in asset-backed securit
ies
issued by third-party sponsored
and managed structured entit
ies. For the purpose of market mak
ing and at the discret
ion of ABS trad
ing desk, the Group
may hold an immater
ial amount of debt secur
it
ies from structured ent
it
ies or
ig
inated by cred
it portfolio management.
This is disclosed in the ABS column above.
\u2022
Portfolio management (Group sponsored entit
ies):
For the purposes of portfolio management, the Group purchased credit
protection via synthetic credit default swaps from note-issu
ing structured ent
it
ies. Th
is credit protection creates credit risk
which the structured entity and subsequently the end investor absorbs. The referenced assets remain on the Group\u2019s balance
sheet as they are not assigned to these structured entit
ies. The Group cont
inues to own or hold all of the risks and returns
relating to these assets. The credit protection obtained from the regulatory-compliant securit
isat
ion only serves to protect
the Group against losses upon the occurrence of elig
ible cred
it events and the underlying assets are not derecognised
from the Group\u2019s balance sheet. The Group does not hold any equity interests in the structured entit
ies, but may hold an
ins
ign
if
icant amount of the
issued notes for market making purposes. This is disclosed in the ABS section above. The proceeds
of the notes\u2019 issuance are typically held as cash collateral in the issuer\u2019s account operated by a trustee or invested in AAA-
rated government-backed securit
ies to collateral
ise the structured entit
ies swap obl
igat
ions to the Group, and to repay the
princ
ipal to
investors at maturity. The structured entit
ies re
imburse the Group on actual losses incurred, through the use of the
cash collateral or realisat
ion of the collateral secur
ity. Correspondingly, the structured entit
ies wr
ite down the notes issued by
an equal amount of the losses incurred, in reverse order of senior
ity. All fund
ing is committed for the life of these vehicles and
the Group has no ind
irect exposure
in respect of the vehicles\u2019 liqu
id
ity posit
ion. The Group has reputat
ional risk in respect of
certain portfolio management vehicles and investment funds either because the Group is the arranger and lead manager or
because the structured entit
ies have Standard Chartered brand
ing.
\u2022
Structured \ufb01nance:
Structured \ufb01nance comprises interests in transactions that the Group or, more usually, a customer has
structured, using one or more structured entit
ies, wh
ich provide bene\ufb01c
ial arrangements for customers. The Group\u2019s exposure
primar
ily represents the prov
is
ion of fund
ing to these structures as a \ufb01nanc
ial
intermed
iary, for wh
ich it receives a lender\u2019s
return. The transactions largely relate to real estate \ufb01nanc
ing and the prov
is
ion of a
ircraft leasing and ship \ufb01nance.
\u2022
Princ
ipal F
inance Fund:
The Group\u2019s exposure to Princ
ipal F
inance Funds represents committed or invested capital in
unleveraged investment funds, primar
ily
invest
ing
in pan-Asian infrastructure, real estate and private equity.
\u2022
Other activ
it
ies:
Other activ
it
ies include structured entit
ies created to support marg
in \ufb01nanc
ing transact
ions, the re\ufb01nanc
ing
of exist
ing cred
it and debt facil
it
ies, as well as setting up of bankruptcy remote structured entit
ies.
In the above table, the Group determined the total assets of the structured entit
ies us
ing following bases:
\u2022
Asset Backed Securit
ies, Pr
inc
ipal F
inance, and other activ
it
ies are based on the published total assets of the structured
entit
ies
\u2022
Lending and Structured Finance are estimated based on the Group\u2019s loan values to the structured entit
ies ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInUnconsolidatedStructuredEntitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00556": { "value": "33. Structured entit
ies
Accounting policy
Structured entit
ies are consol
idated when the substance of the relationsh
ip between the Group and the structured ent
ity
ind
icates the Group has power over the contractual relevant act
iv
it
ies of the structured entity, is exposed to variable
returns, and can use that power to affect the variable return exposure.
In determin
ing whether to consol
idate a structured entity to which assets have been transferred, the Group takes into
account its abil
ity to d
irect the relevant activ
it
ies of the structured entity. These relevant activ
it
ies are generally evidenced
through a unilateral right to liqu
idate the structured ent
ity, investment in a substantial proportion of the securit
ies
issued
by the structured entity or where the Group holds specif
ic subord
inate securit
ies that embody certa
in controlling rights.
The Group may further consider relevant activ
it
ies embedded with
in contractual arrangements such as call opt
ions which
give the practical abil
ity to d
irect the entity, special relationsh
ips between the structured ent
ity and investors, and if a
single investor has a large exposure to variable returns of the structured entity.
Judgement is required in determin
ing control over structured ent
it
ies. The purpose and des
ign of the entity is considered,
along with a determinat
ion of what the relevant act
iv
it
ies are of the entity and who directs these. Further judgements are
made around which investor is exposed to and absorbs the variable returns of the structured entity. The Group will have to
weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ
ipal
in its own right
or as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured
entit
ies, spec
if
ically
if market condit
ions have an effect on the var
iable return exposure of different investors.
Interests in consolidated structured entit
ies:
A structured entity is consolidated into the Group\u2019s \ufb01nanc
ial statements where
the Group controls the structured entity, as per the determinat
ion
in the accounting policy above.
The following table presents the Group\u2019s interests in consolidated structured entit
ies.
\n \n
31.12.24
31.12.23
$mill
ion
$mill
ion
Shipp
ing lease
14
52
Princ
ipal and other structured \ufb01nance
474
353
Total
488
405
Interests in unconsolidated structured entit
ies:
Unconsolidated structured entit
ies are all structured ent
it
ies that are not
controlled by the Group. The Group enters into transactions with unconsolidated structured entit
ies
in the normal course of
business to facil
itate customer transact
ions and for specif
ic
investment opportunit
ies. An
interest in a structured entity is
contractual or non-contractual involvement which creates variab
il
ity of the returns of the Group aris
ing from the performance
of the structured entity.
The table below presents the carrying amount of the assets recognised in the \ufb01nanc
ial statements relat
ing to variable interests
held in unconsolidated structured entit
ies, the max
imum exposure to loss relating to those interests and the total assets of the
structured entit
ies. Max
imum exposure to loss is primar
ily l
im
ited to the carry
ing amount of the Group\u2019s on-balance sheet
exposure to the structured entity. For derivat
ives, the max
imum exposure to loss represents the on-balance sheet valuation
and not the notional amount. For commitments and guarantees, the maximum exposure to loss is the notional amount of
potential future losses.
\n \n
2024
2023
Asset-
Princ
ipal
Asset-
Princ
ipal
backed
Structured
Finance
Other
backed
Structured
Finance
Other
securit
ies
Lending
Finance
funds
activ
it
ies
Total
securit
ies
Lending
\ufb01nance
funds
activ
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Group\u2019s interest \u2013
assets
Financ
ial assets
held at fair value
through pro\ufb01t
or loss
1,222
255
178
124
\u2013
1,779
954
269
143
137
\u2013
1,503
Loans and
advances/
Investment securit
ies
at amortised cost
16,305
16,735
12,656
\u2013
97
45,793
17,795
15,105
13,353
\u2013
190
46,443
Investment
securit
ies (fa
ir value
through other
comprehensive
income)
2,371
\u2013
\u2013
\u2013
\u2013
2,371
2,443
\u2013
\u2013
\u2013
\u2013
2,443
Other assets
\u2013
\u2013
1
\u2013
\u2013
1
\u2013
\u2013
34
\u2013
\u2013
34
Total assets
19,898
16,990
12,835
124
97
49,944
21,192
15,374
13,530
137
190
50,423
Off-balance sheet
\u2013
11,075
6,901
63
73
18,112
\u2013
8,869
6,691
\u2013
20
15,580
Group\u2019s maximum
exposure to loss
19,898
28,065
19,736
187
170
68,056
21,192
24,243
20,221
137
210
66,003
Total assets of
structured entit
ies
129,864
17,579
14,758
226
\u2013
162,427
191,627
15,374
31,806
250
1,688 240,745
The main types of activ
it
ies for which the Group util
ises unconsol
idated structured entit
ies cover synthet
ic credit default swaps
for managed investment funds (includ
ing spec
ial
ised Pr
inc
ipal F
inance funds), portfolio management purposes, structured
\ufb01nance and asset-backed securit
ies. These are deta
iled as follows:
\u2022
Asset-backed securit
ies (ABS):
The Group also has investments in asset-backed securit
ies
issued by third-party sponsored
and managed structured entit
ies. For the purpose of market mak
ing and at the discret
ion of ABS trad
ing desk, the Group
may hold an immater
ial amount of debt secur
it
ies from structured ent
it
ies or
ig
inated by cred
it portfolio management.
This is disclosed in the ABS column above.
\u2022
Portfolio management (Group sponsored entit
ies):
For the purposes of portfolio management, the Group purchased credit
protection via synthetic credit default swaps from note-issu
ing structured ent
it
ies. Th
is credit protection creates credit risk
which the structured entity and subsequently the end investor absorbs. The referenced assets remain on the Group\u2019s balance
sheet as they are not assigned to these structured entit
ies. The Group cont
inues to own or hold all of the risks and returns
relating to these assets. The credit protection obtained from the regulatory-compliant securit
isat
ion only serves to protect
the Group against losses upon the occurrence of elig
ible cred
it events and the underlying assets are not derecognised
from the Group\u2019s balance sheet. The Group does not hold any equity interests in the structured entit
ies, but may hold an
ins
ign
if
icant amount of the
issued notes for market making purposes. This is disclosed in the ABS section above. The proceeds
of the notes\u2019 issuance are typically held as cash collateral in the issuer\u2019s account operated by a trustee or invested in AAA-
rated government-backed securit
ies to collateral
ise the structured entit
ies swap obl
igat
ions to the Group, and to repay the
princ
ipal to
investors at maturity. The structured entit
ies re
imburse the Group on actual losses incurred, through the use of the
cash collateral or realisat
ion of the collateral secur
ity. Correspondingly, the structured entit
ies wr
ite down the notes issued by
an equal amount of the losses incurred, in reverse order of senior
ity. All fund
ing is committed for the life of these vehicles and
the Group has no ind
irect exposure
in respect of the vehicles\u2019 liqu
id
ity posit
ion. The Group has reputat
ional risk in respect of
certain portfolio management vehicles and investment funds either because the Group is the arranger and lead manager or
because the structured entit
ies have Standard Chartered brand
ing.
\u2022
Structured \ufb01nance:
Structured \ufb01nance comprises interests in transactions that the Group or, more usually, a customer has
structured, using one or more structured entit
ies, wh
ich provide bene\ufb01c
ial arrangements for customers. The Group\u2019s exposure
primar
ily represents the prov
is
ion of fund
ing to these structures as a \ufb01nanc
ial
intermed
iary, for wh
ich it receives a lender\u2019s
return. The transactions largely relate to real estate \ufb01nanc
ing and the prov
is
ion of a
ircraft leasing and ship \ufb01nance.
\u2022
Princ
ipal F
inance Fund:
The Group\u2019s exposure to Princ
ipal F
inance Funds represents committed or invested capital in
unleveraged investment funds, primar
ily
invest
ing
in pan-Asian infrastructure, real estate and private equity.
\u2022
Other activ
it
ies:
Other activ
it
ies include structured entit
ies created to support marg
in \ufb01nanc
ing transact
ions, the re\ufb01nanc
ing
of exist
ing cred
it and debt facil
it
ies, as well as setting up of bankruptcy remote structured entit
ies.
In the above table, the Group determined the total assets of the structured entit
ies us
ing following bases:
\u2022
Asset Backed Securit
ies, Pr
inc
ipal F
inance, and other activ
it
ies are based on the published total assets of the structured
entit
ies
\u2022
Lending and Structured Finance are estimated based on the Group\u2019s loan values to the structured entit
ies ", "dimensions": { "concept": "stan:DisclosureOfStructuredEntitiesExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00617": { "value": "33. Structured entit
ies
Accounting policy
Structured entit
ies are consol
idated when the substance of the relationsh
ip between the Group and the structured ent
ity
ind
icates the Group has power over the contractual relevant act
iv
it
ies of the structured entity, is exposed to variable
returns, and can use that power to affect the variable return exposure.
In determin
ing whether to consol
idate a structured entity to which assets have been transferred, the Group takes into
account its abil
ity to d
irect the relevant activ
it
ies of the structured entity. These relevant activ
it
ies are generally evidenced
through a unilateral right to liqu
idate the structured ent
ity, investment in a substantial proportion of the securit
ies
issued
by the structured entity or where the Group holds specif
ic subord
inate securit
ies that embody certa
in controlling rights.
The Group may further consider relevant activ
it
ies embedded with
in contractual arrangements such as call opt
ions which
give the practical abil
ity to d
irect the entity, special relationsh
ips between the structured ent
ity and investors, and if a
single investor has a large exposure to variable returns of the structured entity.
Judgement is required in determin
ing control over structured ent
it
ies. The purpose and des
ign of the entity is considered,
along with a determinat
ion of what the relevant act
iv
it
ies are of the entity and who directs these. Further judgements are
made around which investor is exposed to and absorbs the variable returns of the structured entity. The Group will have to
weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ
ipal
in its own right
or as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured
entit
ies, spec
if
ically
if market condit
ions have an effect on the var
iable return exposure of different investors.
Interests in consolidated structured entit
ies:
A structured entity is consolidated into the Group\u2019s \ufb01nanc
ial statements where
the Group controls the structured entity, as per the determinat
ion
in the accounting policy above.
The following table presents the Group\u2019s interests in consolidated structured entit
ies.
\n \n
31.12.24
31.12.23
$mill
ion
$mill
ion
Shipp
ing lease
14
52
Princ
ipal and other structured \ufb01nance
474
353
Total
488
405
Interests in unconsolidated structured entit
ies:
Unconsolidated structured entit
ies are all structured ent
it
ies that are not
controlled by the Group. The Group enters into transactions with unconsolidated structured entit
ies
in the normal course of
business to facil
itate customer transact
ions and for specif
ic
investment opportunit
ies. An
interest in a structured entity is
contractual or non-contractual involvement which creates variab
il
ity of the returns of the Group aris
ing from the performance
of the structured entity.
The table below presents the carrying amount of the assets recognised in the \ufb01nanc
ial statements relat
ing to variable interests
held in unconsolidated structured entit
ies, the max
imum exposure to loss relating to those interests and the total assets of the
structured entit
ies. Max
imum exposure to loss is primar
ily l
im
ited to the carry
ing amount of the Group\u2019s on-balance sheet
exposure to the structured entity. For derivat
ives, the max
imum exposure to loss represents the on-balance sheet valuation
and not the notional amount. For commitments and guarantees, the maximum exposure to loss is the notional amount of
potential future losses.
\n \n
2024
2023
Asset-
Princ
ipal
Asset-
Princ
ipal
backed
Structured
Finance
Other
backed
Structured
Finance
Other
securit
ies
Lending
Finance
funds
activ
it
ies
Total
securit
ies
Lending
\ufb01nance
funds
activ
it
ies
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Group\u2019s interest \u2013
assets
Financ
ial assets
held at fair value
through pro\ufb01t
or loss
1,222
255
178
124
\u2013
1,779
954
269
143
137
\u2013
1,503
Loans and
advances/
Investment securit
ies
at amortised cost
16,305
16,735
12,656
\u2013
97
45,793
17,795
15,105
13,353
\u2013
190
46,443
Investment
securit
ies (fa
ir value
through other
comprehensive
income)
2,371
\u2013
\u2013
\u2013
\u2013
2,371
2,443
\u2013
\u2013
\u2013
\u2013
2,443
Other assets
\u2013
\u2013
1
\u2013
\u2013
1
\u2013
\u2013
34
\u2013
\u2013
34
Total assets
19,898
16,990
12,835
124
97
49,944
21,192
15,374
13,530
137
190
50,423
Off-balance sheet
\u2013
11,075
6,901
63
73
18,112
\u2013
8,869
6,691
\u2013
20
15,580
Group\u2019s maximum
exposure to loss
19,898
28,065
19,736
187
170
68,056
21,192
24,243
20,221
137
210
66,003
Total assets of
structured entit
ies
129,864
17,579
14,758
226
\u2013
162,427
191,627
15,374
31,806
250
1,688 240,745
The main types of activ
it
ies for which the Group util
ises unconsol
idated structured entit
ies cover synthet
ic credit default swaps
for managed investment funds (includ
ing spec
ial
ised Pr
inc
ipal F
inance funds), portfolio management purposes, structured
\ufb01nance and asset-backed securit
ies. These are deta
iled as follows:
\u2022
Asset-backed securit
ies (ABS):
The Group also has investments in asset-backed securit
ies
issued by third-party sponsored
and managed structured entit
ies. For the purpose of market mak
ing and at the discret
ion of ABS trad
ing desk, the Group
may hold an immater
ial amount of debt secur
it
ies from structured ent
it
ies or
ig
inated by cred
it portfolio management.
This is disclosed in the ABS column above.
\u2022
Portfolio management (Group sponsored entit
ies):
For the purposes of portfolio management, the Group purchased credit
protection via synthetic credit default swaps from note-issu
ing structured ent
it
ies. Th
is credit protection creates credit risk
which the structured entity and subsequently the end investor absorbs. The referenced assets remain on the Group\u2019s balance
sheet as they are not assigned to these structured entit
ies. The Group cont
inues to own or hold all of the risks and returns
relating to these assets. The credit protection obtained from the regulatory-compliant securit
isat
ion only serves to protect
the Group against losses upon the occurrence of elig
ible cred
it events and the underlying assets are not derecognised
from the Group\u2019s balance sheet. The Group does not hold any equity interests in the structured entit
ies, but may hold an
ins
ign
if
icant amount of the
issued notes for market making purposes. This is disclosed in the ABS section above. The proceeds
of the notes\u2019 issuance are typically held as cash collateral in the issuer\u2019s account operated by a trustee or invested in AAA-
rated government-backed securit
ies to collateral
ise the structured entit
ies swap obl
igat
ions to the Group, and to repay the
princ
ipal to
investors at maturity. The structured entit
ies re
imburse the Group on actual losses incurred, through the use of the
cash collateral or realisat
ion of the collateral secur
ity. Correspondingly, the structured entit
ies wr
ite down the notes issued by
an equal amount of the losses incurred, in reverse order of senior
ity. All fund
ing is committed for the life of these vehicles and
the Group has no ind
irect exposure
in respect of the vehicles\u2019 liqu
id
ity posit
ion. The Group has reputat
ional risk in respect of
certain portfolio management vehicles and investment funds either because the Group is the arranger and lead manager or
because the structured entit
ies have Standard Chartered brand
ing.
\u2022
Structured \ufb01nance:
Structured \ufb01nance comprises interests in transactions that the Group or, more usually, a customer has
structured, using one or more structured entit
ies, wh
ich provide bene\ufb01c
ial arrangements for customers. The Group\u2019s exposure
primar
ily represents the prov
is
ion of fund
ing to these structures as a \ufb01nanc
ial
intermed
iary, for wh
ich it receives a lender\u2019s
return. The transactions largely relate to real estate \ufb01nanc
ing and the prov
is
ion of a
ircraft leasing and ship \ufb01nance.
\u2022
Princ
ipal F
inance Fund:
The Group\u2019s exposure to Princ
ipal F
inance Funds represents committed or invested capital in
unleveraged investment funds, primar
ily
invest
ing
in pan-Asian infrastructure, real estate and private equity.
\u2022
Other activ
it
ies:
Other activ
it
ies include structured entit
ies created to support marg
in \ufb01nanc
ing transact
ions, the re\ufb01nanc
ing
of exist
ing cred
it and debt facil
it
ies, as well as setting up of bankruptcy remote structured entit
ies.
In the above table, the Group determined the total assets of the structured entit
ies us
ing following bases:
\u2022
Asset Backed Securit
ies, Pr
inc
ipal F
inance, and other activ
it
ies are based on the published total assets of the structured
entit
ies
\u2022
Lending and Structured Finance are estimated based on the Group\u2019s loan values to the structured entit
ies ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00615": { "value": "Accounting policy
Structured entit
ies are consol
idated when the substance of the relationsh
ip between the Group and the structured ent
ity
ind
icates the Group has power over the contractual relevant act
iv
it
ies of the structured entity, is exposed to variable
returns, and can use that power to affect the variable return exposure.
In determin
ing whether to consol
idate a structured entity to which assets have been transferred, the Group takes into
account its abil
ity to d
irect the relevant activ
it
ies of the structured entity. These relevant activ
it
ies are generally evidenced
through a unilateral right to liqu
idate the structured ent
ity, investment in a substantial proportion of the securit
ies
issued
by the structured entity or where the Group holds specif
ic subord
inate securit
ies that embody certa
in controlling rights.
The Group may further consider relevant activ
it
ies embedded with
in contractual arrangements such as call opt
ions which
give the practical abil
ity to d
irect the entity, special relationsh
ips between the structured ent
ity and investors, and if a
single investor has a large exposure to variable returns of the structured entity.
Judgement is required in determin
ing control over structured ent
it
ies. The purpose and des
ign of the entity is considered,
along with a determinat
ion of what the relevant act
iv
it
ies are of the entity and who directs these. Further judgements are
made around which investor is exposed to and absorbs the variable returns of the structured entity. The Group will have to
weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ
ipal
in its own right
or as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured
entit
ies, spec
if
ically
if market condit
ions have an effect on the var
iable return exposure of different investors.
Interests in consolidated structured entit
ies:
A structured entity is consolidated into the Group\u2019s \ufb01nanc
ial statements where
the Group controls the structured entity, as per the determinat
ion
in the accounting policy above.
The following table presents the Group\u2019s interests in consolidated structured entit
ies.
\n \n
31.12.24
31.12.23
$mill
ion
$mill
ion
Shipp
ing lease
14
52
Princ
ipal and other structured \ufb01nance
474
353
Total
488
405
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutConsolidatedStructuredEntitiesExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00758": { "value": "Accounting policy
Structured entit
ies are consol
idated when the substance of the relationsh
ip between the Group and the structured ent
ity
ind
icates the Group has power over the contractual relevant act
iv
it
ies of the structured entity, is exposed to variable
returns, and can use that power to affect the variable return exposure.
In determin
ing whether to consol
idate a structured entity to which assets have been transferred, the Group takes into
account its abil
ity to d
irect the relevant activ
it
ies of the structured entity. These relevant activ
it
ies are generally evidenced
through a unilateral right to liqu
idate the structured ent
ity, investment in a substantial proportion of the securit
ies
issued
by the structured entity or where the Group holds specif
ic subord
inate securit
ies that embody certa
in controlling rights.
The Group may further consider relevant activ
it
ies embedded with
in contractual arrangements such as call opt
ions which
give the practical abil
ity to d
irect the entity, special relationsh
ips between the structured ent
ity and investors, and if a
single investor has a large exposure to variable returns of the structured entity.
Judgement is required in determin
ing control over structured ent
it
ies. The purpose and des
ign of the entity is considered,
along with a determinat
ion of what the relevant act
iv
it
ies are of the entity and who directs these. Further judgements are
made around which investor is exposed to and absorbs the variable returns of the structured entity. The Group will have to
weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ
ipal
in its own right
or as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured
entit
ies, spec
if
ically
if market condit
ions have an effect on the var
iable return exposure of different investors.", "dimensions": { "concept": "stan:DescriptionOfAccountingPolicyForStructuredEntitiesExplanatoryPolicyTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00618": { "value": "34. Cash \ufb02ow statement
Adjustment for non-cash items and other adjustments included with
in
income statement
\n \n
Group
Company
2024
2023
2024
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Amortisat
ion of d
iscounts and premiums of investment securit
ies
(815)
(704)
\u2013
\u2013
Interest expense on subordinated liab
il
it
ies
744
951
578
632
Interest expense on senior debt securit
ies
in issue
2,584
2,068
1,855
1,434
Other non-cash items
(122)
(227)
(12)
8
Net loss/(gain) on sale of businesses
210\u00b9
(351)
\u2013
\u2013
Pension costs for de\ufb01ned bene\ufb01t schemes
62
61
\u2013
\u2013
Share-based payment costs
334
219
\u2013
\u2013
Impairment losses on loans and advances and other credit risk provis
ions
547
508
\u2013
\u2013
Div
idend
income from subsid
iar
ies
\u2013
\u2013
(4,101)
(4,738)
Other impa
irment
588
1,008
\u2013
\u2013
Gain on disposal of property, plant and equipment
(23)
(31)
\u2013
\u2013
Loss on disposal of FVOCI and AMCST \ufb01nanc
ial assets
264
209
\u2013
\u2013
Depreciat
ion and amort
isat
ion
1,126
1,071
\u2013
\u2013
Fair value changes taken to income statement
(2,140)
(1,666)
9
(202)
Foreign Currency revaluation
(583)
299
1
19
Pro\ufb01t from associates and jo
int ventures
(108)
(141)
\u2013
\u2013
Total
2,668
3,274
(1,670)
(2,847)
1
Refer note 6 (page 303)
Change in operating assets
\n \n
2024
2023
2024
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
(Increase)/decrease in derivat
ive \ufb01nancial
instruments
(31,939)
13,061
(32)
(19)
(Increase)/decrease in debt securit
ies, treasury b
ills and equity shares
held at fair value through pro\ufb01t or loss
(25,823)
(29,477)
376
(4,068)
Increase in loans and advances to banks and customers
(13,776)
(787)
\u2013
\u2013
Net (increase)/decrease in prepayments and accrued income
(224)
82
\u2013
\u2013
Net decrease in other assets
5,331
2,663
338
268
Total
(66,431)
(14,458)
682
(3,819)
Change in operating liab
il
it
ies
\n \n
2024
2023
2024
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Increase/(Decrease) in derivat
ive \ufb01nancial
instruments
26,951
(13,629)
(39)
(239)
Net increase in deposits from banks, customer accounts, debt securit
ies
in issue, Hong Kong notes in circulat
ion and short pos
it
ions
7,253
17,877
613
4,479
Increase in accruals and deferred income
79
1,106
101
153
Net increase/(decrease) in other liab
il
it
ies
5,090
(3,377)
(1,574)
(1,154)
Increase in amount due to parents/subsid
iar
ies/other related parties
\u2013
\u2013
35
\u2013
Total
39,373
1,977
(864)
3,239
Disclosures
\n \n
Group
Company
2024
2023
2024
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Subordinated debt (includ
ing accrued
interest):
Opening balance
12,216
13,928
12,123
13,895
Proceeds from the issue
\u2013
18
\u2013
\u2013
Interest paid
(519)
(563)
(505)
(545)
Repayment
(1,517)
(2,160)
(1,517)
(2,160)
Foreign exchange movements
(191)
146
(190)
146
Fair value changes from hedge accounting
48
311
97
271
Accrued interest and Others
499
536
483
516
Closing balance
10,536
12,216
10,491
12,123
Senior debt (includ
ing accrued
interest):
Opening balance
41,350
32,288
17,518
14,080
Proceeds from the issue
11,044
15,261
3,887
5,105
Interest paid
(1,366)
(1,145)
(708)
(434)
Repayment
(11,185)
(6,471)
(2,619)
(2,037)
Foreign exchange movements
(454)
(21)
(248)
(2)
Fair value changes from hedge accounting
42
119
6
188
Accrued interest and Others
1,145
1,319
824
618
Closing balance
40,576
41,350
18,660
17,518
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00619": { "value": "35. Cash and cash equivalents
Accounting policy
Cash and cash equivalents includes:
\u2022
Cash on hand and balances at central banks\u2019 that are on demand or placements which are contractually due to mature
overnight only, except for restricted balances; and
\u2022
Other balances listed in the table below, when they have less than three months\u2019 maturity from the date of acquis
it
ion,
are not subject to contractual restrict
ions, are subject to
ins
ign
if
icant changes
in value, are highly liqu
id and are held for
the purpose of meeting short-term cash commitments. This includes products such as treasury bills and other elig
ible
bills, short-term government securit
ies, loans and advances to banks (
includ
ing reverse repos), and loans and advances
to customers (only non demand or non overnight placements at central banks), which are held for appropriate business
purposes. On demand accounts with non central banks are reported as part of \u2018Loans & Advances to banks\u2019.
Group
Company
2024
2023
2024
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks
63,447
69,905
\u2013
\u2013
Less: restricted balances
(7,799)
(6,153)
\u2013
\u2013
Treasury bills and other elig
ible b
ills
5,472
5,931
\u2013
\u2013
Loans and advances to banks
9,654
11,879
\u2013
\u2013
Loans and advances to Customers
18,120
25,829
\u2013
\u2013
Investments
1,034
244
\u2013
\u2013
Amounts owed by and due to subsid
iary undertak
ings
\u2013
\u2013
11,601
10,294
Total
89,928
107,635
11,601
10,294
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00509": { "value": "35. Cash and cash equivalents
Accounting policy
Cash and cash equivalents includes:
\u2022
Cash on hand and balances at central banks\u2019 that are on demand or placements which are contractually due to mature
overnight only, except for restricted balances; and
\u2022
Other balances listed in the table below, when they have less than three months\u2019 maturity from the date of acquis
it
ion,
are not subject to contractual restrict
ions, are subject to
ins
ign
if
icant changes
in value, are highly liqu
id and are held for
the purpose of meeting short-term cash commitments. This includes products such as treasury bills and other elig
ible
bills, short-term government securit
ies, loans and advances to banks (
includ
ing reverse repos), and loans and advances
to customers (only non demand or non overnight placements at central banks), which are held for appropriate business
purposes. On demand accounts with non central banks are reported as part of \u2018Loans & Advances to banks\u2019.
Group
Company
2024
2023
2024
2023
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Cash and balances at central banks
63,447
69,905
\u2013
\u2013
Less: restricted balances
(7,799)
(6,153)
\u2013
\u2013
Treasury bills and other elig
ible b
ills
5,472
5,931
\u2013
\u2013
Loans and advances to banks
9,654
11,879
\u2013
\u2013
Loans and advances to Customers
18,120
25,829
\u2013
\u2013
Investments
1,034
244
\u2013
\u2013
Amounts owed by and due to subsid
iary undertak
ings
\u2013
\u2013
11,601
10,294
Total
89,928
107,635
11,601
10,294
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00759": { "value": "Accounting policy
Cash and cash equivalents includes:
\u2022
Cash on hand and balances at central banks\u2019 that are on demand or placements which are contractually due to mature
overnight only, except for restricted balances; and
\u2022
Other balances listed in the table below, when they have less than three months\u2019 maturity from the date of acquis
it
ion,
are not subject to contractual restrict
ions, are subject to
ins
ign
if
icant changes
in value, are highly liqu
id and are held for
the purpose of meeting short-term cash commitments. This includes products such as treasury bills and other elig
ible
bills, short-term government securit
ies, loans and advances to banks (
includ
ing reverse repos), and loans and advances
to customers (only non demand or non overnight placements at central banks), which are held for appropriate business
purposes. On demand accounts with non central banks are reported as part of \u2018Loans & Advances to banks\u2019.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00620": { "value": "36. Related party transactions
Directors and of\ufb01cers
Details of directors\u2019 remuneration and interests in shares are disclosed in the Directors\u2019 remuneration report.
IAS 24 Related party disclosures requires the following addit
ional
informat
ion for key management compensat
ion. Key
management comprises non-executive directors, executive directors of Standard Chartered PLC, the Court directors of
Standard Chartered Bank and the persons discharg
ing manager
ial responsib
il
it
ies (PDMR) of Standard Chartered PLC.
2024
2023
$mill
ion
$mill
ion
Salaries, allowances and bene\ufb01ts in kind
41
42
Share-based payments
38
26
Bonuses paid or receivable
7
5
Terminat
ion bene\ufb01ts
2
\u2013
Total
88
73
Transactions with directors and others
As at 31 December 2024, the total amounts to be disclosed under the Companies Act 2006 (the Act) and the List
ing Rules of the
Hong Kong Stock Exchange Lim
ited (Hong Kong L
ist
ing Rules) about loans to d
irectors were as follows:
2024
2023
Number
$mill
ion
Number
$mill
ion
Directors
1
3
\u2013
4
\u2013
1
Outstanding loan balances were below $50,000
The loan transactions provided to the directors of Standard Chartered PLC were a connected transaction under Chapter 14A of
the Hong Kong List
ing Rules. It was fully exempt as \ufb01nancial ass
istance under Rule 14A.87(1), as it was provided in our ordinary
and usual course of business and on normal commercial terms.
As at 31 December 2024, Standard Chartered Bank had in place a charge over $68 mill
ion (31 December 2023: $68 m
ill
ion) of
cash assets in favour of the independent trustee of its employer \ufb01nanced retirement bene\ufb01t scheme.
Other than as disclosed in the Annual Report and Accounts, there were no other transactions, arrangements or agreements
outstanding for any director, connected person or of\ufb01cer of the Company which have to be disclosed under the Act, the rules
of the UK List
ing Author
ity or the Hong Kong List
ing Rules.
Details of non-revenue transactions with Temasek Holdings (Private) Lim
ited are set out below.
Company
The Company has received $1,838 mill
ion (31 December 2023: $1,469 m
ill
ion) of net
interest income from its subsid
iar
ies.
The Company issues debt externally and lends proceeds to Group companies.
The Company has an agreement with Standard Chartered Bank that in the event of Standard Chartered Bank defaulting on
its debt coupon interest payments, where the terms of such debt requires it, the Company shall issue shares as settlement for
non-payment of the coupon interest.
2024
2023
Standard
Standard
Chartered Bank
Chartered Bank
Standard
(Hong Kong)
Standard
(Hong Kong)
Chartered Bank
Lim
ited
Others
1
Chartered Bank
Lim
ited
Others
1
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Due from subsid
iar
ies
11,318
135
147
10,208
60
25
Derivat
ive \ufb01nancial
instruments
98
\u2013
\u2013
62
12
\u2013
Debt securit
ies
18,124
5,512
1,221
20,524
4,775
1,070
Total assets
29,540
5,647
1,368
30,794
4,847
1,095
Liab
il
it
ies
Derivat
ive \ufb01nancial
instruments
1,042
23
\u2013
1,104
\u2013
\u2013
Total liab
il
it
ies
1,042
23
\u2013
1,104
\u2013
\u2013
1
Others include Standard Chartered Bank (Singapore) Lim
ited, Standard Chartered Hold
ings Lim
ited and Standard Chartered I H L
im
ited
Associate and jo
int ventures
\n
The following transactions with related parties are on an arm\u2019s length basis:
\n\n \n
2024
2023
$mill
ion
$mill
ion
Assets
Financ
ial Assets held at FVTPL
\u2013
14
Derivat
ive assets
5
12
Total assets
5
26
Liab
il
it
ies
Deposits
209
959
Derivat
ive l
iab
il
it
ies
4
\u2013
Other Liab
il
it
ies
\u2013
2
Total liab
il
it
ies
213
961
Loan commitments and other guarantees\u00b9
14
113
\n
1
The maximum loan commitments and other guarantees during the period were $14 mill
ion (31 December 2023:$113 m
ill
ion) ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00621": { "value": "37. Post balance sheet events
On 16 January 2025 Standard Chartered PLC issued AT1 of $1.0 bill
ion and on 21 January 2025 Standard Chartered PLC
issued
\n
$1.0 bill
ion 6.228 per cent F
ixed Rate Reset Notes due 2036, $1.0 bill
ion 5.545\u00a0per cent F
ixed Rate Reset Notes due 2029 and
\n
$0.5\u00a0bill
ion Float
ing Rate Notes due 2029. Standard Chartered PLC redeemed $2.0 bill
ion sen
ior debt on 30 January 2025 and
\n
redeemed $1.0 bill
ion subord
inated debt on 12 February 2025.
\n
On 23 January 2025, the Indian branch of Standard Charted Bank sold its Unsecured Personal Loan business to Kotak Mahindra
\n
Bank Lim
ited for a purchase cons
iderat
ion of INR32 b
ill
ion ($375 m
ill
ion) aga
inst a book value of $389 mill
ion on that date, g
iv
ing
\n
rise to a loss on disposal of $14 mill
ion.
\n
A share buyback for up to a maximum considerat
ion of $1.5 b
ill
ion has been declared by the d
irectors after 31 December 2024.
\n
This will reduce the number of ordinary shares in issue by cancelling the repurchased shares.
\n
A \ufb01nal div
idend for 2024 of 28 cents per ord
inary share was declared by the directors after 31 December 2024.", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00622": { "value": "38. Auditor\u2019s remuneration
Auditor\u2019s remuneration is included with
in other general adm
in
istrat
ion expenses. The amounts paid by the Group to their
\n
princ
ipal aud
itor, Ernst & Young LLP and its associates (together Ernst & Young LLP), are set out below. All services are approved
\n
by the Group Audit Committee and are subject to controls to ensure the external auditor\u2019s independence is unaffected by the
\n
provis
ion of other serv
ices.
\n\n \n
2024
2023
$mill
ion
$mill
ion
Audit fees for the Group statutory audit
31.3
27.8
Of which fees for the audit of Standard Chartered Bank Group
23.2
20.6
Fees payable to EY for other services provided to the SC PLC Group:
Audit of Standard Chartered PLC subsid
iar
ies
13.5
13.4
Total audit fees
44.8
41.2
Audit-related assurance services
6.6
6.0
Other assurance services
5.4
7.0
Other non-audit services
0.4
0.8
Transaction related services
0.6
0.3
Total non-audit fees
13.0
14.1
Total fees payable
57.8
55.3
\n
The following is a descript
ion of the type of serv
ices included with
in the categor
ies listed above:
\n
\u2022
Audit fees for the Group statutory audit are in respect of fees payable to Ernst & Young LLP for the statutory audit of the
\n
consolidated \ufb01nanc
ial statements of the Group and the separate \ufb01nancial statements of Standard Chartered PLC
\n
\u2022
Audit-related fees consist of fees such as those for services required by law or regulation to be provided by the auditor, reviews
\n
of inter
im \ufb01nancial
informat
ion, report
ing on regulatory returns, reporting to a regulator on client assets and extended work
\n
performed over \ufb01nancial
informat
ion and controls author
ised by those charged with governance
\n
\u2022
Other assurance services include agreed-upon-procedures in relation to statutory and regulatory \ufb01l
ings
\n
\u2022
Transaction related services are fees payable to Ernst & Young LLP for issu
ing comfort letters
\n
Expenses incurred in respect of their role as auditor, were reimbursed to EY LLP $1 mill
ion (2023: $0.9 m
ill
ion).", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00623": { "value": "39. Standard Chartered PLC (Company)
Classif
icat
ion and measurement of \ufb01nanc
ial
instruments
\n \n
2024
2023
Non-trading
Non-trading
mandatorily
mandatorily
Derivat
ives
at fair value
Derivat
ives
at fair value
held for
Amortised
through
held for
Amortised
through
hedging
cost
pro\ufb01t or loss
Total
hedging
cost
pro\ufb01t or loss
Total
Financ
ial assets
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Derivat
ives
112
\u2013
\u2013
112
80
\u2013
\u2013
80
Investment securit
ies
\u2013
5,808
19,049
1
24,857
\u2013
6,944
19,425
1
26,369
Amounts owed by subsid
iary
undertakings
\u2013
11,601
\u2013
11,601
\u2013
10,294
\u2013
10,294
Total
112
17,409
19,049
36,570
80
17,238
19,425
36,743
1
Standard Chartered Bank, Standard Chartered Bank (Hong Kong) Lim
ited, Standard Chartered Bank (Ch
ina) Lim
ited and Standard Chartered Bank (S
ingapore)
Lim
ited
issued Loss Absorbing Capacity (LAC) elig
ible debt secur
it
ies
Instruments classif
ied as amort
ised cost, which include investment securit
ies and amounts owed by subs
id
iary undertak
ings, are
recorded in stage 1 for the recognit
ion of expected cred
it losses.
Derivat
ives held for hedg
ing are held at fair value and are classif
ied as Level 2 and Level 3 wh
ile the counterparty is Standard
Chartered Bank and external counterparties.
Debt securit
ies compr
ise securit
ies held at amort
ised cost issued by Standard Chartered Bank and SC Ventures Holdings Lim
ited
and have a fair value equal to carrying value of $5,808 mill
ion (31 December 2023: $6,944 m
ill
ion).
In 2024 and 2023, amounts owed by subsid
iary undertak
ings have a fair value equal to carrying value.
\n \n
2024
2023
Designated
Designated
Derivat
ives
at fair value
Derivat
ives
at fair value
held for
Amortised
through
held for
Amortised
through
hedging
cost
pro\ufb01t or loss
Total
hedging
cost
pro\ufb01t or loss
Total
Financ
ial l
iab
il
it
ies
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Derivat
ives
1,065
\u2013
\u2013
1,065
1,104
\u2013
\u2013
1,104
Debt securit
ies
in issue
\u2013
18,167
14,175
32,342
\u2013
17,142
14,007
31,149
Subordinated liab
il
it
ies and other
borrowed funds
\u2013
7,661
2,677
10,338
\u2013
9,248
2,697
11,945
Amounts owed to subsid
iary
undertakings
\u2013
35
\u2013
35
\u2013
\u2013
\u2013
\u2013
Total
1,065
25,863
16,852
43,780
1,104
26,390
16,704
44,198
Derivat
ives held for hedg
ing are held at fair value and are classif
ied as Level 2 wh
ile the counterparty is Standard Chartered
Bank and Standard Chartered Bank (Hong Kong) Lim
ited.
The fair value of debt securit
ies
in issue held at amortised cost is $18,313 mill
ion (2023: $17,195 m
ill
ion).
The fair value of subordinated liab
il
it
ies and other borrowed funds held at amort
ised cost is $7,336 mill
ion (2023: $8,717 m
ill
ion).
Derivat
ive \ufb01nancial
instruments
\n \n
2024
2023
Notional
Notional
princ
ipal
princ
ipal
amounts
Assets
Liab
il
it
ies
amounts
Assets
Liab
il
it
ies
Derivat
ives
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Foreign exchange derivat
ive contracts:
Forward foreign exchange
9,077
46
30
8,968
32
\u2013
Currency swaps
545
20
\u2013
563
\u2013
35
Interest rate derivat
ive contracts:
Swaps
14,863
32
1,035
14,819
43
1,069
Forward rate agreements and options
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Credit derivat
ive contracts
4,030
14
\u2013
4,030
5
\u2013
Total
28,515
112
1,065
28,380
80
1,104
Credit risk
\n\n \n
2024
2023
$mill
ion
$mill
ion
Derivat
ive \ufb01nancial
instruments
112
80
Debt securit
ies
24,857
26,369
Amounts owed by subsid
iary undertak
ings
11,601
10,294
Total
36,570
36,743
\n
In 2024 and 2023, amounts owed by subsid
iary undertak
ings were neither past due nor impa
ired; the Company had no
\n
ind
iv
idually impa
ired loans.
\n
In 2024 and 2023, the Company had no impa
ired debt secur
it
ies. The debt secur
it
ies held by the Company are
issued by
\n
Standard Chartered Bank, Standard Chartered Bank (Hong Kong) Lim
ited, Standard Chartered Bank (Ch
ina) Lim
ited and
\n
Standard Chartered Bank (Singapore) Lim
ited, subs
id
iary undertak
ings with credit ratings of A+.
\n
There is no material expected credit loss on these instruments as they are Stage 1 assets, and of a high quality.
\n
Liqu
id
ity risk
\n
The following table analyses the residual contractual maturity of the assets and liab
il
it
ies of the Company on a d
iscounted
\n
basis:
\n\n \n
2024
Between
Between
Between
Between
Between
Between
More than
one month
three
six months
nine months
one year
two years
\ufb01ve years
One month
and three
months and
and nine
and one
and two
and \ufb01ve
and
or less
months
six months
months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Derivat
ive \ufb01nancial
instruments
45
23
\u2013
20
\u2013
24
\u2013
\u2013
112
Investment securit
ies
\u2013
\u2013
\u2013
\u2013
\u2013
1,725
7,205
15,927
24,857
Amount owed by subsid
iary
undertakings
1,763
1,536
1,931
110
53
2,355
2,695
1,158
11,601
Investments in subsid
iary
undertakings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
61,593
61,593
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Total assets
1,808
1,559
1,931
130
53
4,104
9,900
78,678
98,163
Liab
il
it
ies
Derivat
ive \ufb01nancial
instruments
30
\u2013
22
\u2013
\u2013
53
147
813
1,065
Senior debt
\u2013
\u2013
992
\u2013
\u2013
4,979
12,887
13,484
32,342
Amount owed to subsid
iary
undertakings
35
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
35
Other liab
il
it
ies
304
512
126
14
3
\u2013
\u2013
\u2013
959
Subordinated liab
il
it
ies and
other borrowed funds
2
46
14
187
\u2013
376
1,995
7,718
10,338
Total liab
il
it
ies
371
558
1,154
201
3
5,408
15,029
22,015
44,739
Net liqu
id
ity gap
1,437
1,001
777
(71)
50
(1,304)
(5,129)
56,663
53,424
\n \n
2023
Between
Between
Between
Between
Between
Between
More than
one month
three
six months
nine months
one year
two years
\ufb01ve years
One month
and three
months and
and nine
and one
and two
and \ufb01ve
and
or less
months
six months
months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Assets
Derivat
ive \ufb01nancial
instruments
32
\u2013
\u2013
\u2013
\u2013
10
27
11
80
Investment securit
ies
\u2013
\u2013
\u2013
\u2013
\u2013
3,853
5,581
16,935
26,369
Amount owed by subsid
iary
undertakings
1,598
504
1,530
12
1,073
1,082
3,254
1,241
10,294
Investments in subsid
iary
undertakings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
60,791
60,791
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Total assets
1,630
504
1,530
12
1,073
4,945
8,862
78,978
97,534
Liab
il
it
ies
Derivat
ive \ufb01nancial
instruments
11
26
17
\u2013
\u2013
93
171
786
1,104
Senior debt
\u2013
\u2013
\u2013
\u2013
\u2013
7,242
14,020
9,887
31,149
Amount owed to subsid
iary
undertakings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Other liab
il
it
ies
278
202
135
30
5
\u2013
\u2013
\u2013
650
Subordinated liab
il
it
ies and
other borrowed funds
996
51
8
172
440
330
1,952
7,996
11,945
Total liab
il
it
ies
1,285
279
160
202
445
7,665
16,143
18,669
44,848
Net liqu
id
ity gap
345
225
1,370
(190)
628
(2,720)
(7,281)
60,309
52,686
Financ
ial l
iab
il
it
ies on an und
iscounted basis
\n \n
2024
Between
Between
Between
Between
Between
Between
More than
one month
three
six months
nine months
one year
two years
\ufb01ve years
One month
and three
months and
and nine
and one
and two
and \ufb01ve
and
or less
months
six months
months
year
years
years
undated
Total
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
$mill
ion
Derivat
ive \ufb01nancial
instruments
30
\u2013
22
\u2013
\u2013
53
147
813
1,065
Debt securit
ies
in issue
276
151
1,355
368
308
6,333
15,780
15,635
40,206
Subordinated liab
il
it
ies
and other borrowed funds
33
134
34
206
\u2013
407
2,261
13,473
16,548
Other liab
il
it
ies
\u2013
959
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
959
Total liab
il
it
ies
339
1,244
1,411
574
308
6,793
18,188
29,921
58,778
2023
Derivat
ive \ufb01nancial
instruments
11
26
17
\u2013
\u2013
93
171
786
1,104
Debt securit
ies
in issue
247
57
328
398
278
8,490
16,396
11,279
37,473
Subordinated liab
il
it
ies and
other borrowed funds
1,059
134
34
208
556
410
2,304
13,968
18,673
Other liab
il
it
ies
5
91
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
96
Total liab
il
it
ies
1,322
308
379
606
834
8,993
18,871
26,033
57,346
", "dimensions": { "concept": "stan:DisclosureOfStandardCharteredPlcCompanyExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00624": { "value": "40. Related undertakings of the Group
As at 31 December 2024, the Group\u2019s interests in related
\n
undertakings are disclosed below. Unless otherwise stated,
\n
the share capital disclosed comprises ordinary or common
\n
shares which are held by subsid
iar
ies of the Group. Standard
\n
Chartered Bank (Hong Kong) Lim
ited, Standard Chartered
\n
Funding (Jersey) Lim
ited, Stanchart Nom
inees Lim
ited,
\n
Standard Chartered Holdings Lim
ited and Standard
\n
Chartered Nominees Lim
ited are d
irectly held subsid
iar
ies,
\n
all other related undertakings are held ind
irectly. Unless
\n
otherwise stated, the princ
ipal country of operat
ion of each
\n
subsid
iary
is the same as its country of incorporation Note 32
\n
details undertakings that have a sign
i\ufb01cant contr
ibut
ion to
\n
the Group\u2019s net pro\ufb01t or net assets.
\n
Subsid
iary Undertak
ings
\n\n \n
Proportion of
shares held
Name
(%)
Footnotes
FinVentures UK Lim
ited
v
100
1 , 163, 166
SC (Secretaries) Lim
ited
x
100
1
SC Transport Leasing 1 LTD
vi
100
1, 163, 166
SC Transport Leasing 2 Lim
ited
vi
100
1, 163, 166
SC Ventures G.P. Lim
ited
v
100
1
SC Ventures Innovation Investment L.P.
v
100
Y
1
SCMB Overseas Lim
ited
v
100
1, 163, 166
Standard Chartered Africa Lim
ited
v
100
1, 163, 166
Standard Chartered Bank
i
100; 100
Q,T
1
Standard Chartered Foundation
x
100
AE
1 , 158
Standard Chartered Health Trustee (UK)
Lim
ited
x
100
1
Standard Chartered I H Lim
ited
v
100
1, 163, 166
Standard Chartered Leasing (UK)
Lim
ited
vi
100
1, 163, 166
Standard Chartered Nominees (Private
Clients UK) Lim
ited
i
100
1
Standard Chartered Securit
ies (Afr
ica)
Holdings Lim
ited
v
100
1, 163, 166
Standard Chartered Strategic Investments
Lim
ited
v
100
1, 163, 166
Standard Chartered Trustees (UK)
Lim
ited
x
100
1
SC Ventures Holdings Lim
ited
v
100; 100
M
1
The SC Transport Leasing Partnership 1
vi
100
Y
1, 163, 166
The SC Transport Leasing Partnership 2
vi
100
Y
1, 163, 166
The SC Transport Leasing Partnership 3
vi
100
Y
1, 163, 166
The SC Transport Leasing Partnership 4
vi
100
Y
1, 163, 166
Zodia Markets (UK) Lim
ited
i
100
1
Zodia Markets Holdings Lim
ited
v
83.96
1
Bricks (C&K) LP
x
100
Y
2 , 158
Bricks (C) LP
x
100
Y
2 , 158
Bricks (T) LP
x
100
Y
2 , 158
Corrasi Covered Bonds LLP
x
75
AA
3
Zodia Custody Lim
ited
iv
95.1; 15.132
K
107
Zodia Holdings Lim
ited
v
100
A
107
Assembly Payments UK Ltd
iv
100
4 , 158
CurrencyFair (UK) Lim
ited
i
100
4 , 158
Zai Technologies Lim
ited
iv
100
4 , 158
Standard Chartered Grindlays Pty Lim
ited
v
100
5
Assembly Payments Australia Pty Ltd
iv
100
131 , 158
Zai Australia Pty Ltd
iv
100
131
CurrencyFair Australia Pty Ltd
iv
100
6 , 158
Standard Chartered Bank Insurance
Agency (Proprietary) Lim
ited
i
100
7
Standard Chartered Investment Services
(Proprietary) Lim
ited
i
100
7
Standard Chartered Bank Botswana
Lim
ited
i
75.827
7
\n\n \n
Proportion of
shares held
Name
(%)
Footnotes
Standard Chartered Botswana Nominees
(Proprietary) Lim
ited
i
100
7
Standard Chartered Botswana Education
Trust
x
100
AB
7
Standard Chartered Representa\u00e7\u00e3o e
Partic
ipa\u00e7\u00f5es Ltd
ai
100
8
Standard Chartered Securit
ies (B) Sdn Bhd
i
100
108
Standard Chartered Bank Cameroon S.A.
i
100
9
CurrencyFair (Canada) Ltd
iv
100
10 , 158
SCB Investment Holding Company
Lim
ited
v
99.999
A
114
Standard Chartered Global Business
Services Co., Ltd
vi
i
i
100
12 , 160
Standard Chartered Global Business
Services (Guangzhou) Co., Ltd.
vi
i
i
100
121 , 160
Guangzhou CurrencyFair Information
Technology Lim
ited
iv
100
13,166
Standard Chartered Bank Cote d\u2019Ivoire SA
i
100
14
Standard Chartered Bank Gambia
Lim
ited
i
74.852
15
Standard Chartered Bank AG
i
100
16
Solvezy Technology Ghana Ltd
iv
100
17
Standard Chartered Bank Ghana PLC
i
69.416;
87.043
T
18
Standard Chartered Ghana Nominees
Lim
ited
i
100
18
Standard Chartered Wealth
Management Lim
ited Company
i
100
19
Standard Chartered PF Real Estate (Hong
Kong) Lim
ited
v
100
81
Standard Chartered Private Equity
Lim
ited
v
100
20
Standard Chartered Asia Lim
ited
v
100; 100
AD
20
Assembly Payments HK Lim
ited
iv
100
21 , 158
CurrencyFair Asia Lim
ited
iv
100
91 , 158
Zodia Custody (Hong Kong) Lim
ited
iv
100
132
Assembly Payments India Private Lim
ited
iv
100
92
Standard Chartered Global Business
Services Private Lim
ited
ix
100
22
Standard Chartered Finance Private
Lim
ited
ix
98.675
23
St Helen\u2019s Nominees India Private Lim
ited
i
100
24
Standard Chartered Private Equity
Advisory (India) Private Lim
ited
ix
100
24
Standard Chartered Research and
Technology India Private Lim
ited
iv
100
A,R
136
Standard Chartered Capital Lim
ited
i
100
153
Standard Chartered Securit
ies (Ind
ia)
Lim
ited
i
100
93
Standard Chartered (India) Modeling and
Analytics Centre Private Lim
ited
ix
100
26
SCV Research and Development Pvt. Ltd.
iv
100
117
PT Labamu Sejahtera Indonesia
iv
100
27
CurrencyFair (Canada) Lim
ited
iv
100
28
CurrencyFair Lim
ited
iv
27.951; 100
A
28 , 158, 165
CurrencyFair Nominees Lim
ited
iv
100
28 , 158
Zodia Markets (Ireland) Lim
ited
i
100
133
Zodia Custody (Ireland) Lim
ited
iv
100
134
Standard Chartered Assurance Lim
ited
i
100; 100
M
29
Standard Chartered Isle of Man Lim
ited
i
100
29
Standard Chartered Securit
ies (Japan)
Lim
ited
i
100
30
SCB Nominees (CI) Lim
ited
i
100
31
Solvezy Technology Kenya Lim
ited
iv
100
32
Standard Chartered Bancassurance
Intermediary Lim
ited
i
100
32
\n \n
Proportion of
shares held
Name
(%)
Footnotes
Standard Chartered Investment Services
Lim
ited
v
100
32
Standard Chartered Bank Kenya Lim
ited
i
74.318; 100
J
32
Standard Chartered Securit
ies (Kenya)
Lim
ited
i
100
32
Standard Chartered Financ
ial Serv
ices
Lim
ited
i
100
32
Standard Chartered Kenya Nominees
Lim
ited
i
100
32
Tawi Fresh Kenya Lim
ited
iv
100
32
Standard Chartered Metropolitan
Holdings SAL
v
99.9
A
33
Cartaban (Malaya) Nominees Sdn
Berhad
i
100
34
Cartaban Nominees (Asing) Sdn Bhd
i
100
34
Cartaban Nominees (Tempatan) Sdn Bhd
i
100
34
Golden Maestro Sdn Bhd
v
100
34
Price Solutions Sdn Bhd
i
100
34
SCBMB Trustee Berhad
x
100
34
Standard Chartered Bank Malaysia
Berhad
i
100; 100
S
34
Standard Chartered Saadiq Berhad
i
100
34
Resolution Alliance Sdn Bhd
v
91
35
Standard Chartered Global Business
Services Sdn Bhd
ix
100
115
Assembly Payments Malaysia Sdn. Bhd.
iv
100
37 , 158
Standard Chartered Bank (Maurit
ius)
Lim
ited
i
100
38
Standard Chartered Private Equity
(Maurit
ius) L
im
ited
i
100
113
Standard Chartered Private Equity
(Maurit
ius) II L
im
ited
i
100
113
Standard Chartered Private Equity
(Maurit
ius) lll L
im
ited
i
100
113
Subcontinental Equit
ies L
im
ited
v
100
39
Actis Treit Holdings (Maurit
ius) L
im
ited
v
62.001
A
;
62.001
B
149 , 158
Standard Chartered Bank Nepal Lim
ited
i
70.21
40
Standard Chartered Holdings (Africa) B.V.
v
100
1 , 161
Standard Chartered Holdings (Asia
Pacif
ic) B.V.
v
100
1 , 161
Standard Chartered Holdings
(International) B.V.
v
100
1 , 161
Standard Chartered MB Holdings B.V.
v
100
1 , 161
PromisePay Lim
ited
iv
100
41 , 158
Standard Chartered Bank Niger
ia L
im
ited
i
100; 100
N,T
42
Standard Chartered Capital & Advisory
Niger
ia L
im
ited
i
100
42
Standard Chartered Nominees (Niger
ia)
Lim
ited
i
100
42
Standard Chartered Bank (Pakistan)
Lim
ited
i
98.986
43
Standard Chartered Group Services,
Manila Incorporated
ix
100
44
Standard Chartered Global Business
Services sp\u00f3\u0142ka z ograniczon\u0105
odpowiedz
ialno\u015bc
i\u0105
ix
100
45
Standard Chartered Capital (Saudi
Arabia)
i
100
116
Actis Treit Holdings No.1 (Singapore)
Private Lim
ited
v
100
156
Actis Treit Holdings No.2 (Singapore)
Private Lim
ited
v
100
156
\n\n \n
Proportion of
shares held
Name
(%)
Footnotes
Standard Chartered Private Equity
(Singapore) Pte. Ltd
v
100
46
Standard Chartered Real Estate
Investment Holdings (Singapore) Private
Lim
ited
v
100
46
Raf\ufb02es Nominees (Pte.) Lim
ited
i
100
47
SCTS Capital Pte. Ltd
i
100
48
SCTS Management Pte. Ltd.
i
100
48
Standard Chartered Bank (Singapore)
100
A, B, C, U, V,
Lim
ited
i
W
48
Standard Chartered Trust (Singapore)
Lim
ited
x
100
48
Standard Chartered Holdings (Singapore)
Private Lim
ited
v
100
48
Standard Chartered Nominees
(Singapore) Pte Ltd
i
100
48
Audax Financ
ial Technology Pte. Ltd
iv
100
A
90
CashEnable Pte. Ltd.
iv
100
A
90
Letsbloom Pte. Ltd.
iv
100
A
90
Libeara (Singapore) Pte. Ltd.
iv
100
90
Libeara Pte. Ltd.
v
100
90
SCV Research and Development Pte. Ltd.
iv
100
A
90
Zodia Custody (Singapore) Pte. Ltd.
iv
100
46
Pegasus Dealmaking Pte. Ltd.
iv
100
46
Power2SME Pte. Ltd.
v
90.6
90
SCV Master Holding Company Pte. Ltd.
v
100
46
Solv-India Pte. Ltd.
v
100
90
Trust Bank Singapore Lim
ited
i
60
49 , 158
130
CurrencyFair (Singapore) Pte.Ltd
iv
100
Assembly Payments SGP Pte. Ltd.
iv
100
50 , 158
Assembly Payments Pte. Ltd.
iv
100; 100
J
50 , 158
Standard Chartered Nominees South
Africa Proprietary Lim
ited (RF)
i
100
52
Promisepay (PTY) Ltd
iv
100
137 , 158
Standard Chartered Bank Tanzania
Lim
ited
i
100; 100
J
53
Standard Chartered Tanzania Nominees
Lim
ited
i
100
53
Standard Chartered Bank (Thai) Public
Company Lim
ited
i
99.871
54
Standard Chartered Yatir
im Bankas
i Turk
Anonim Sirket
i
100
55
Standard Chartered Bank Uganda
Lim
ited
i
100
56
Furaha Finserve Uganda Lim
ited
i
100
57
Appro Onboarding Solutions FZ-LLC
iv
100
58
Financ
ial Inclus
ion Technologies Ltd
v
100
A
94
Furaha Holding Ltd
v
100; 100
B
59
myZoi Financ
ial Inclus
ion Technologies
LLC
iv
100
61
Standard Chartered Bank International
(Americas) Lim
ited
i
100
111
Standard Chartered Holdings Inc.
v
100
62
Standard Chartered Securit
ies (North
America) LLC
i
100
AA
62
CurrencyFair (USA) Inciv
100
AC
64 , 158
Standard Chartered Trade Services
Corporation
i
100
89
Standard Chartered Bank (Vietnam)
Lim
ited
i
100
X
65
Sky Harmony Holdings Lim
ited
v
100
118
Standard Chartered Bank Zambia Plc
i
90
119
Standard Chartered Zambia Securit
ies
Services Nominees Lim
ited
i
100
138
Stanchart Nominees Lim
ited
i
100
1 , 164
\n \n
Proportion of
shares held
Name
(%)
Footnotes
Standard Chartered Holdings Lim
ited
v
100
1 , 163, 164, 166
Standard Chartered NEA Lim
ited
v
100
1 , 163, 166
Standard Chartered Nominees Lim
ited
i
100
1 , 164
Standard Chartered (Guangzhou)
Business Management Co., Ltd.
i
i
100
120, 166
Standard Chartered Bank (China) Lim
ited
i
100
75 , 160, 166
Standard Chartered Securit
ies (Ch
ina)
Lim
ited
i
100
76, 166
Horsford Nominees Lim
ited
i
100
77
Marina Acacia Shipp
ing L
im
ited
vi
100
78
Marina Amethyst Shipp
ing L
im
ited
vi
100
78
Marina Angelite Shipp
ing L
im
ited
vi
100
78
Marina Beryl Shipp
ing L
im
ited
vi
100
78
Marina Emerald Shipp
ing L
im
ited
vi
100
78
Marina Flax Shipp
ing L
im
ited
vi
100
78
Marina Gloxin
ia Sh
ipp
ing L
im
ited
vi
100
78
Marina Hazel Shipp
ing L
im
ited
vi
100
78
Marina Ilex Shipp
ing L
im
ited
vi
100
78
Marina Iridot Shipp
ing L
im
ited
vi
100
78
Marina Mimosa Shipp
ing L
im
ited
vi
100
78
Marina Moonstone Shipp
ing L
im
ited
vi
100
78
Marina Peridot Shipp
ing L
im
ited
vi
100
78
Marina Sapphire Shipp
ing L
im
ited
vi
100
78
Marina Tourmaline Shipp
ing L
im
ited
vi
100
78
Standard Chartered Securit
ies (Hong
Kong) Lim
ited
i
100
78
Marina Leasing Lim
ited
vi
100
78
Standard Chartered Leasing Group
Lim
ited
v
100
78
Standard Chartered Trade Support (HK)
Lim
ited
i
100
78
Mox Bank Lim
ited
i
71.579
79
Standard Chartered Bank (Hong Kong)
Lim
ited
i
100
A,B,C,D
80
Standard Chartered Trust (Hong Kong)
Lim
ited
i
100
82
Standard Chartered Trustee (Hong Kong)
Lim
ited
x
100
82
Standard Chartered Funding (Jersey)
Lim
ited
v
100
83
Standard Chartered Bank Korea Lim
ited
i
100
84
Standard Chartered Securit
ies Korea Co.,
Ltd
i
100
85
Marina Morganite Shipp
ing L
im
ited
vi
100
125 , 162
Marina Moss Shipp
ing L
im
ited
vi
100
125 , 162
Marina Tanzanite Shipp
ing L
im
ited
vi
100
125 , 162
Marina Angelica Shipp
ing L
im
ited
vi
100
86 , 162
Marina Aventurine Shipp
ing L
im
ited
vi
100
86 , 162
Marina Citr
ine Sh
ipp
ing L
im
ited
vi
100
86 , 162
Marina Dahlia Shipp
ing L
im
ited
vi
100
86 , 162
Marina Dittany Shipp
ing L
im
ited
vi
100
86 , 162
Marina Lilac Shipp
ing L
im
ited
vi
100
86 , 162
Marina Lolite Shipp
ing L
im
ited
vi
100
86 , 162
Marina Obsid
ian Sh
ipp
ing L
im
ited
vi
100
86 , 162
Marina Quartz Shipp
ing L
im
ited
vi
100
86 , 162
Marina Remora Shipp
ing L
im
ited
vi
100
86 , 162
Marina Turquoise Shipp
ing L
im
ited
vi
100
86 , 162
Marina Zircon Shipp
ing L
im
ited
vi
100
86 , 162
Price Solution Pakistan (Private) Lim
ited
i
100
87
Marina Partawati Shipp
ing Pte. Ltd.
vi
100
152
\n\n \n
Proportion of
shares held
Name
(%)
Footnotes
Standard Chartered Bank (Taiwan)
Lim
ited
i
100
88
CMB Nominees (RF) Proprietary Lim
ited
x
100
52
Letsbloom India Private Lim
ited
iv
100
97
PointSource Technologies Pte. Ltd.
x
100
90
Qatalyst Pte. Ltd.
iv
72.727
90
SC Ventures Management Consulting
(Shenzhen) Lim
ited
x
100
74, 154, 166
Solv Vietnam Company Lim
ited
iv
100
X
98
Standard Chartered Funds VCC
x
100
48
TASConnect (Hong Kong) Private Lim
ited
iv
100
99
TASConnect (Malaysia) Sdn. Bhd.
iv
100
36
TASConnect (Shanghai) Financ
ial
Technology Pte. Ltd
iv
100
151
NewCo Holding EUR 19 S.A.
x
100
128
Zodia Custody Australia Pty. Ltd.
iv
100
126
Zodia Markets (AME) Lim
ited
iv
100
127
Zodia Markets (Jersey) Lim
ited
iv
100
129
Standard Chartered Luxembourg S.A.
i
100
106
Solv Holding Ltd
v
100
155
\n\n \n
Joint ventures
Proportion of
shares held
Name
(%)
Footnotes
Olea Global Pte. Ltd.
iv
47; 100
J
46
Global Dig
ital Asset Hold
ings Lim
ited
v
100
60
\n\n \n
Associates
Proportion of
shares held
Name
(%)
Footnotes
Clifford Capital Holdings Pte. Ltd.
v
9.9
109
Verif
ied Impact Exchange Hold
ings Pte. Ltd
i
13.421
110
Seychelles International Mercantile Banking
Corporation Lim
ited.
i
22
66
SWIAT GmbH
iv
30
67
SBI Zodia Custody Co. Ltd
iv
100
68
Partior Holdings Pte. Ltd.
i
25; 25
H
;
11.111
I
69
China Bohai Bank Co., Ltd.
i
16.263
95, 166
Vault22 Solutions Holdings Ltd
iv
100
E
135
\n
Sign
i\ufb01cant
investment holdings and other related
\n
undertakings
\n\n \n
Proportion of
shares held
Name
(%)
Footnotes
Corrasi Covered Bonds (LM) Lim
ited
i
20
3
ATSC Cayman Holdco Lim
ited
v
5.272
A
;
100
B
140
Actis Temple Stay Holdings (HK) Lim
ited
v
39.689
A
;
39.689
B
141
Mikado Realtors Private Lim
ited
x
26
142
Industrial Minerals and Chemical Co. Pvt.
Ltd
x
26
157
Ascenta III
v
31
G
70
SCIAIGF Liqu
idat
ing Trust
v
43.96
AB
112
Paxata, Inc.
i
i
i
40.74
O
;
8.908
P
64
\n \n
Proportion of
shares held
Name
(%)
Footnotes
Standard Chartered Masterbrand Licens
ing
Lim
ited
x
100
122
Standard Chartered Leasing (UK) 3
Lim
ited
vi
100
122
Birdsong Lim
ited
x
100
71
Nominees One Lim
ited
x
100
71
Nominees Two Lim
ited
x
100
71
Songbird Lim
ited
x
100
71
Standard Chartered Secretaries (Guernsey)
Lim
ited
x
100
71
Standard Chartered Trust (Guernsey)
Lim
ited
x
100
71
Standard Chartered Financ
ial Serv
ices
(Luxembourg) S.A.
x
100
72
Standard Chartered IL&FS Management
(Singapore) Pte. Lim
ited
x
50
51
Banco Standard Chartered en Liqu
idac
ion
x
100
123
Standard Chartered Uruguay
Representacion S.A.
x
100
73
Marina Opah Shipp
ing Pte. Ltd.
vi
100
152
Marina Cobia Shipp
ing Pte. Ltd
vi
100
152
Marina Aquata Shipp
ing Pte. Ltd.
vi
100
152
Marina Aruana Shipp
ing Pte. Ltd.
vi
100
152
Fintech for International development Ltd
x
58.901
A
96
Ascenta IV
x
39.1
Z
70
Cerulean Investments LP
x
100
Y
11
\n
Subsid
iary/Assoc
iate undertakings and Sign
i\ufb01cant
\n
investment holdings \u2013 Liqu
idated/d
issolved/sold
\n\n \n
Proportion of
shares held
Name
(%)
Footnotes
Assembly Payments, Inc
i
100
143
Assembly Escrow Inc
i
100
144 , 158
Shoal Lim
ited
iv
100
1
Standard Chartered Bank Zimbabwe
Lim
ited
i
100
145
Africa Enterprise Network Trust
x
100
AB
145 , 159
Standard Chartered Nominees Zimbabwe
(Private) Lim
ited
x
100
145
Standard Chartered Trading (Shanghai)
Lim
ited
x
100
148 , 160
Standard Chartered Bank Angola S.A.
i
60
146
Standard Chartered Bank Sierra Leone
Lim
ited
i
80.656
147
Marina Fatmarin
i Sh
ipp
ing Pte. Ltd.
vi
100
152
Marina Frabandari Shipp
ing Pte. Ltd.
vi
100
152
Marina Gerbera Shipp
ing Pte. Ltd.
vi
100
152
The BW Leasing Partnership 1 LP
vi
100
Y
107
The BW Leasing Partnership 2 LP
vi
100
Y
107
The BW Leasing Partnership 3 LP
vi
100
Y
107
The BW Leasing Partnership 4 LP
vi
100
Y
107
The BW Leasing Partnership 5 LP
vi
100
Y
107
Standard Chartered Overseas Investment,
Inc.
v
100
63
Actis Rivendell Holdings (HK) Lim
ited
v
39.671
A,B
141
Autumn Life Pte. Ltd.
iv
100
A
46
\n
Footnotes
\n
Registered address
\n
Address in country of incorporation
\n\n \n
1
1 Basinghall Avenue, London, EC2V 5DD, United Kingdom
2
2 More London Rivers
ide, London, SE1 2JT, Un
ited Kingdom
3
1 Bartholomew Lane, London, EC2N 2AX, United Kingdom
4
1 Poultry, London, EC2R 8EJ, United Kingdom
5
Level 5, 345 George St, Sydney NSW 2000, Australia
6
Milsons Landing, Level 5, 6A Glen Street, Milsons Point NSW
2061, Australia
7
5th Floor Standard House Bldg, The Mall, Queens Road, PO
Box 496, Gaborone, Botswana
8
Avenida Brigade
iro Far
ia Lima, no 3.477, 6\u00ba andar, conjunto
62 \u2013 Torre Norte, Condomin
io Pat
io Victor Malzoni, CEP
04538-133, Sao Paulo, Brazil
9
1155, Boulevard de la Libert\u00e9, Douala, B.P. 1784, Cameroon
10
66 Wellington Street, West, Suite 4100, Toronto Domin
ion
Centre, Toronto ON M5K 1B7, Canada
11
Maples Corporate Services Lim
ited, PO Box 309, Ugland
House, Grand Cayman, KY1-1104 , Cayman Islands
12
No. 35, Xinhuanbe
i Road, TEDA, T
ianjin, 300457, China
13
Room 2619, No 9, Linhe West Road, Tianhe Distr
ict,
Guangzhou, China
14
23 Boulevard de la R\u00e9publique, Abidjan 17, 17 B.P. 1141, Cote
d\u2019Ivoire
15
8 Ecowas Avenue, Banjul, Gambia
16
Taunusanlage 16, 60325, Frankfurt am Main, Germany
17
Standard Chartered Bank Build
ing, 87 Independance
Avenue, Ridge, ACCRA, Greater ACCRA, GA-016-4621,
Ghana
18
Standard Chartered Bank Build
ing, No. 87, Independence
Avenue, P.O. Box 768, Accra, Ghana
19
87, Independence Avenue, Post Of\ufb01ce Box 678, Accra,
Ghana
20
13/F Standard Chartered Bank Build
ing, 4-4A Des Voeux
Road Central, Hong Kong
21
31/F, Tower 2 Times Square, 1 Matheson St, Causeway Bay,
Hong Kong
22
1st Floor, Europe Build
ing, No.1, Haddows Road,
Nungambakkam, Chennai, 600 006, India
23
90 M.G.Road, II Floor, Fort, Mumbai, Maharashtra, 400001,
India
24
Ground Floor, Crescenzo Build
ing, G Block, C 38/39 , Bandra
Kurla Complex, Bandra (East) , Mumbai , Maharashtra ,
400051, India
25
Crescenzo, 6th Floor, Plot No 38-39 G Block , Bandra Kurla
Complex, Bandra East , Mumbai , Maharashtra , 400051,
India
26
Vaishnav
i Seren
ity, First Floor, No. 112, Koramangala
Industrial Area, 5th Block, Koramangala, Bangalore,
Karnataka, 560095, India
27
The Icon Business Park Blok P Nomor 03, RT 03/RW
09Sampora, Kec, Cisauk, Kabupaten Tangerang, Banten,
15345, Indonesia
28
91 Pembroke Road, Dublin 4, Ballsbridge, Dublin, DO4 EC42,
Ireland
29
1st Floor, Goldie House, 1-4 Goldie Terrace, Upper Church
Street, Douglas, IM1 1EB, Isle of Man
30
21/F, Sanno Park Tower, 2-11-1 Nagatacho, Chiyoda-ku,
Tokyo, 100-6155, Japan
31
15 Castle Street, St Helier, JE4 8PT, Jersey
32
Standard Chartered@Chiromo, 48 Westlands Road,
P. O. Box 30003 \u2013 00100, Nairob
i , Kenya
33
Atrium Build
ing, Maarad Street, 3rd Floor, P.O. Box 11-4081
Raid El Solh, Beirut Central Distr
ict, Lebanon
34
Level 25, Equatorial Plaza, Jalan Sultan Ismail, 50250 Kuala
Lumpur, Malaysia
35
Suite 18-1, Level 18, Vertical Corporate Tower B, Avenue 10,
The Vertical, Bangsar South City , No. 8, Jalan Kerinch
i ,
59200 Kuala Lumpur, Wilayah Persekutuan, Malaysia
\n \n
Address in country of incorporation
36
12th Floor, Menara Symphony , No. 5, Jalan Prof. Khoo Kay
Kim, Seksyen 13, 46200 Petaling Jaya , Selangor, Malaysia
37
Level 13, Menara 1 Sentrum 201, Jalan Tun Sambanthan,
Brickf
ields, 50470 Kuala Lumpur, Malays
ia
38
6th Floor, Standard Chartered Tower , 19, Bank Street,
Cybercity, Ebene, 72201, Maurit
ius
39
Mondial Management Services Ltd, Unit 2L, 2nd Floor
Standard Chartered Tower, 19 Cybercity, Ebene, Maurit
ius
40
Madan Bhandari Marg. Ward No.31, Kathmandu
Metropolitan City, Kathmandu Distr
ict, Bagmat
i Province,
Kathmandu, 44600, Nepal
41
PromisePay, 4 All good Place, Rototuna North, Hamilton,
3210, New Zealand
42
142, Ahmadu Bello Way, Victor
ia Island, Lagos, 101241,
Niger
ia
43
P.O. Box No. 5556, I.I. Chundrigar Road , Karachi , 74000,
Pakistan
44
8th Floor, Makati Sky Plaza Build
ing 6788, Ayala Avenue San
Lorenzo, City of Makati, Fourth Distr
ict, Nat
ional Capi, 1223,
Phil
ipp
ines
45
Rondo Ignacego Daszy\u0144skiego 2B, 00-843, Warsaw, Poland
46
9 Raf\ufb02es Place, #26-01 Republic Plaza, 048619, Singapore
47
7 Changi Business Park Crescent, #03-00 Standard
Chartered @ Changi, 486028, Singapore
48
8 Marina Boulevard, #27-01 Marina Bay Financ
ial Centre
Tower 1, 018981, Singapore
49
1 Robinson Road, #17-00, AIA Tower, 048542, Singapore
50
38 Beach Road, #29-11 South Beach Tower, 189767,
Singapore
51
Abogado Pte Ltd, No. 8 Marina Boulevard, #05-02 MBFC
Tower 1, 018981, Singapore
52
2nd Floor, 115 West Street, Sandton, Johannesburg, 2196,
South Africa
53
1 Floor, International House, Shaaban Robert Street/Garden
Avenue, PO Box 9011, Dar Es Salaam, Tanzania, United
Republic of
54
No. 140, 11th, 12th and 14th Floor, Wireless Road, Lumpin
i,
Patumwan, Bangkok, 10330, Thailand
55
Buyukdere Cad. Yapi Kredi Plaza C Blok, Kat 15, Levent,
Istanbul, 34330, Turkey
56
Standard Chartered Bank Bldg, 5 Speke Road, PO Box 7111,
Kampala, Uganda
57
14 Mackinnon Road, Nakasero, Kampala, 141769, Uganda
58
EX-26, Ground Floor, Bldg 16-Co Work, Dubai Internet City,
Dubai, United Arab Emirates
59
Unit GV-00-10-07-OF-02, Level 7, Gate Village Build
ing 10,
Dubai International Financ
ial Centre, Duba
i, United Arab
Emirates
60
7th Floor, Build
ing One, Gate Prec
inct, DIFC, PO Box 999,
Dubai, United Arab Emirates
61
Part of Level 15, Standard Chartered Bank Build
ing, Plot 8,
Burj Downtown, Dubai, United Arab Emirates
62
Corporation Trust Center, 1209 Orange Street, Wilm
ington
DE 19801, United States
63
50 Fremont Street, San Francisco CA 94105, United States
64
251 Little Falls Drive, Wilm
ington DE 19808, Un
ited States
65
Level 3, #CP1.L01 and #CP2.L01, Capital Place, 29 Lieu Gia
i
Street, Ngoc Khanh Ward, Ba Dinh Distr
ict, Ha No
i, 10000,
Vietnam
66
Victor
ia House, State House Avenue, V
ictor
ia, MAHE,
Seychelles
67
Gervinusstrasse 17, 60322, Frankfurt am Main, Hesse,
Germany
68
Izumi Garden Tower 19F, 1-6-1 Roppongi, Minato-ku, Tokyo,
Japan
\n \n
Address in country of incorporation
69
60B, Orchard Road, #06-18, Tower 2, The Atrium @ Orchard,
238891, Singapore
70
17F, 47, Jong-ro, Jongno-gu, (17F, 100, Gongpyeong-dong,
Jongno-gu), Seoul, Korea, Republic of
71
Bucktrout House, Glategny Esplanade, St Peter Port, GY1
3HQ, Guernsey
72
30 Rue Schrobilgen, 2526, Luxembourg
73
Luis Alberto de Herrera 1248, Torre II, Piso 11, Esc. 1111,
Uruguay
74
8A, Hony Tower, 1st Financ
ial Street, Nanshan D
istr
ict,
Shenzen, China
75
Standard Chartered Tower, 201 Century Avenue, Pudong,
Shanghai, 200120, China
76
1201 1-2, 15-16, 12/F, Unit No.1, Build
ing No.1, No. 1
Dongsanhuan Zhong Road, Chaoyang Distr
ict, Be
ijing,
China
77
18/F., Standard Chartered Tower, 388 Kwun Tong Road,
Kwun Tong, Kowloon, Hong Kong
78
15/F., Two International Finance Centre, No. 8 Finance
Street, Central, Hong Kong
79
39/F., Oxford House, Taikoo Place, 979 King\u2019s Road, Quarry
Bay, Hong Kong
80
32/F., 4-4A Des Voeux Road, Central , Hong Kong
81
14th Floor, One Taikoo Place, 979 King\u2019s Road, Quarry Bay,
Hong Kong
82
14/F, Standard Chartered Bank Build
ing, 4-4A Des Voeux
Road , Central, Hong Kong
83
IFC 5, St Helier, JE1 1ST, Jersey
84
47, Jong-ro, Jongno-gu, Seoul, 110-702, Korea, Republic of
85
2F, 47, Jong-ro, Jongno-gu, Seoul, Korea, Republic of
86
Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, MH96960, Marshall Islands
87
3rd Floor Main SCB Build
ing, I.I Chundr
igar Road, Karachi,
Sindh, 74000, Pakistan
88
1F, No.177 & 3F-6F, 17F-19F, No.179, Liaon
ing Street,
Zhongshan Dist., Taipe
i, 104, Ta
iwan
89
C/O Corporation Service Company, 251 Little Falls Drive,
Wilm
ington DE 19808, Un
ited States
90
16 Raf\ufb02es Quay, #16-02, Hong Leong Build
ing, S
ingapore,
048581, Singapore
91
Suite 12100, 12/F., YF Life Tower, 33 Lockhart Road, Wan
Chai, Hong Kong
92
1st Floor, UB Plaza, No. 1 & 2, Vittal Mallya Road, Bengalur,
India
93
2nd Floor, 23-25 M.G. Road, Fort, Mumbai 400 001, India
94
16th Floor, WeWork Hub 71, Al Khatem Tower, ADGM
Square, Al Maryah Island, Abu Dhabi, United Arab Emirates
95
218 Haihe East Road, Hedong Distr
ict, T
ianjin, 300012, China
96
Parker Andrews Ltd, 5th Floor. The Union Build
ing, 51-59
Rose Lane, Norwich, NR1 1BY
97
Unit 1 \u2013 127A, WeWork Futura, Magarpatta Road, Kirtane
Baug, Hadpsar I.E., Pune \u2013 411013, Maharashtra, India
98
L17-11, Floor 17, Vincom Center, 72 Le Thanh Ton, Ben Nghe
Ward, Distr
ict 1, Ho Ch
i Minh City, Vietnam
99
30th \ufb02oor, One Taikoo Place, 979 King\u2019s Road, Hong Kong,
Hong Kong
100
Ground Floor, Two Dockland Central, Guild Street, North
Dock, Dublin, D01 K2C5, Ireland
101
2701, 27th Floor, Central Plaza, 18 Harbour Road, Wanchai,
Hong Kong
102
12E, rue Guillaume Kroll, L-1882 Helios, Luxembourg
103
1 Raf\ufb02es Place, #36-01, One Raf\ufb02es Place, 048616, Singapore
104
Duo, Level 6, 280 Bishopsgate, London, EC2M 4RB, United
Kingdom
105
138 Arab Street , 199826, Singapore
106
53 Boulevard Royal, Grand Duchy of Luxembourg, 2449,
Luxembourg
107
5th Floor, Holland House, 1-4 Bury Street, London, EC3A
5AW, United Kingdom
\n \n
Address in country of incorporation
108
G01-02, Wisma Haj
i Mohd Taha Bu
ild
ing, , Jalan Gadong,
BE4119, Brunei Darussalam
109
1 Raf\ufb02es Quay , #23-01 , One Raf\ufb02es Quay, 048583 ,
Singapore
110
10 Marina Boulevard #08-08, Marina Bay Financ
ial Centre,
018983, Singapore
111
1095 Avenue of Americas, New York City NY 10036, United
States
112
3 Jalan Pisang, c/o Watiga Trust Ltd, 199070, Singapore
113
c/o Ocorian Corporate Services (Maurit
ius) Ltd, 6th Floor,
Tower A,1, Exchange Square, Wall Street, Ebene, Maurit
ius
\u2013 72201, Maurit
ius
114
c/o Maples Finance Lim
ited, PO Box 1093 GT, Queensgate
House, Georgetown, Grand Cayman, Cayman Islands
115
Level 1, Wisma Standard Chartered, Jalan Teknologi 8, ,
Taman Teknologi Malaysia, Bukit Jalil, , 57000 Kuala
Lumpur, Wilayah Persekutuan, Malaysia
116
Al Faisal
iah Of\ufb01ce Tower Floor No 7 (T07D) , K
ing Fahad
Highway, Olaya Distr
ict, P.O box 295522 , R
iyadh, 11351 ,
Saudi Arabia
117
B001, Metrotech Forest View, Sy No 67/5 BSK, 6th Stage,
Thalaghattapura Bengaluru , Karnataka, India, 560062
118
The Company\u2019s Registered Of\ufb01ce, Vistra Corporate Services
Centre, Wickhams Cay II, Road Town, Tortola, VG1110, Virg
in
Islands, Brit
ish
119
Standard Chartered House, Stand No. 4642, Corner of
Mwaimwene Road and Addis Ababa Drive, Lusaka, Lusaka,
10101, Zambia
120
Units 1101B (Of\ufb01ce use only), No. 235 Tianhebe
i Rd., T
ianhe
Distr
ict, Guangzhou C
ity, Guangdong Province, China
121
Unit 802B, 803, 1001A,1002B,1003-1005,1101-1105, 201-
1205,1302C,1303, No. 235 Tianhe North Road, Tianhe Distr
ict,
Guangzhou City, Guangdong Province, China
122
C/O Teneo Financ
ial Adv
isory Lim
ited, The Colmore
Build
ing, 20 Colmore C
ircus, Queensway, Birm
ingham, B4
6AT, United Kingdom
123
Jiron Huascar 2055, Jesus Maria, Lima, 15072, Peru
124
77 Robinson Road, #13-00, Robinson 77, 068896, Singapore
125
TMF Trust Labuan Lim
ited, Brumby Centre, Lot 42, Jalan
Muhibbah, 87000 Labuan F.T., Malaysia
126
c/o King & Wood Mallesons, Level 61, Governor Phill
ip Tower,
1 Farrer Place, Sydney NSW 2000, Australia
127
2402C, 24th Floor, Tamouh Tower, Tamouh, Abu Dhabi, Al
Reem Island, United Arab Emirates
128
8-10 Avenue de la Gare, 1610, Luxembourg
129
No 1 Grenville Street, St Helier, JE2 4UF, Jersey
130
77 Robinson Road, #25-00 Robinson 77, 068896, Singapore
131
Level 22, 120 Spencer Street, Melbourne VIC 3000 VIC 3000,
Australia
132
5/F, Manulife Place, 348 Kwun Tong Road, Kowloon, Hong
Kong
133
32 Molesworth Street, Dublin 2, D02Y512, Ireland
134
27 Fitzw
ill
iam Street, Dublin, D02 TP23, Ireland
135
Dubai International Financ
ial Centre, Level 14 , The Gate ,
PO Box 74777, Dubai, United Arab Emirates
136
No. 2734, Sector-I, HSR Layout, HSR Layout, Bangalore ,
Bangalore South, Karnataka, 560102, India
137
1st Floor Build
ing 33, Waterford Of\ufb01ce Park, Waterford
Drive, Fourways, Gauteng, 2191, South Africa
138
Stand No. 4642 , Corner of Mwaimwena Road and Addis
Ababa Drive, Lusaka, 10101, Zambia
139
3 Jalan Pisang, c/o Watiga Trust Ltd, 199070, Singapore
140
Intertrust Corporate Services (Cayman) Lim
ited, 190 Elg
in
Avenue,George Town, Grand Cayman , KY1-9005, Cayman
Islands
141
Unit 605-07, 6/F Wing OnCentre, 111 Connaught Road,
Central,Sheung Wan, Hong Kong
\n\n \n
Address in country of incorporation
142
1221 A, Devika Tower, 12th Floor, 6 Nehru Place, New Delhi
110019
143
555 Washington Av, St Louis, MO, United States of America,
63101
144
25 Taylor St, San Francisco CA 94102-3916, United States
145
Africa Unity Square Build
ing, 68 Nelson Mandela Avenue,
Harare, Zimbabwe
146
Edif\u00edc
io K
ilamba, 8\u00ba Andar Avenida 4 de Fevereiro, Marginal,
Luanda, Angola
147
9 & 11, Lightfoot Boston Street, Freetown, Sierra Leone
148
No. 188 Yeshen Rd, 11F, A-1161 RM,Pudong New Distr
ict,
Shanghai, 31, 201308, China
149
IQEQ Corporate Services (Maurit
ius) Ltd, 33, Ed
ith Cavell
Street, Port Louis, 11324, Maurit
ius
150
9 Raf\ufb02es Place, #27-00 Republic Plaza, 048619, Singapore
151
Level C, No. 888 2nd Huanhu West Road, Nanhui New
Town, Pudong New Area, Shanghai
152
8 Marina Boulevard, Level 26, Marina Bay Financ
ial Centre,
Tower 1, 018981, Singapore
153
12th Floor, Parinee Crescenzo Build
ing, Plot C-38 & 39, G
Block Bandra (E) Opp. MCA Ground, Mumbai, 400051, India
154
Unit 8C-17B, Xinl
ikang Bu
ild
ing, 3044 X
ingha
i Blvd, Nanshan
Distr
ict, Shenzhen, Ch
ina
155
Dedicated desk # 14-123-039, 15th Floor, Al Khatem Tower,
ADGM Square, Abu Dhabi, United Arab Emirates
156
6 Battery Road #13-01, 049909, Singapore
157
4thFloor, 274, Chital
ia House, Dr. Cawasji Hormusji Road,
Dhobi Talao, Mumbai City, Maharashtra, India 400 002,
Mumbai, 400 002, India
\n\n \n
Other notes
158
The Group has determined that these undertakings are
excluded from being consolidated into the Groups
accounts, and do not meet the de\ufb01nit
ion of a Subsid
iary
under IFRS. See note 32 for the consolidat
ion pol
icy and
disclosure of the undertaking.
159
No share capital by virtue of being a trust
160
Lim
ited l
iab
il
ity company
161
The Group has determined the prin
icpal place of operat
ion
to be United Kingdom
162
The Group has determined the prin
icpal place of operat
ion
to be Hong Kong
163
Company is exempt from the requirement of an audit of its
ind
iv
idual accounts by virtue of Section 479A of the
Companies Act 2006. Company names and associated
numbers of the qualify
ing subs
id
iar
ies taking an audit
exemption for the year ended 31 December 2024 are:
Finventures UK Lim
ited 04275894, Standard Chartered I H
Lim
ited 08414408, Standard Chartered Strateg
ic
Investments Lim
ited 01388304, Standard Chartered
Holdings Lim
ited 02426156, Standard Chartered NEA
Lim
ited 05345091, SCMB Overseas L
im
ited 01764223,
Standard Chartered Africa Lim
ited 00002877, Standard
Chartered Securit
ies (Afr
ica) Holdings Lim
ited 05843604,
Standard Chartered Leasing (UK) Lim
ited 05513184, SC
Transport Leasing 2 Lim
ited 06787090 and SC Transport
Leasing 1 LTD 06787116, The SC Transport Leasing
Partnership 1 LP13441, The SC Transport Leasing Partnership
2 LP13440, The SC Transport Leasing Partnership 3 LP13442,
The SC Transport Leasing Partnership 4 LP13443. In line with
section 479C of the Companies Act 2006, the Parent
undertaking (Standard Chartered PLC Company)
guarantees all outstanding liab
il
it
ies to wh
ich the
subsid
iary company
is subject at the end of the \ufb01nanc
ial
year includ
ing external l
iab
il
it
ies of F
inventures UK Lim
ited
($2.3mill
ion), Standard Chartered NEA L
im
ited ($15.6m
ill
ion)
and SCMB Overseas Lim
ited ($5.9m
ill
ion)
164
Directly held related undertaking
165
Group\u2019s ultimate ownership for CurrencyFair entit
ies
is
43.422%
166
Registered as a Lim
ited company under the Law of
China
Descript
ion of shares
A
Class A Ordinary shares
B
Class B Ordinary shares
C
Class C Ordinary shares
D
Class D Ordinary shares
E
Class A2 shares
F
Class B Shares
G
Class B Equity interest
H
Series A Preferred
I
Series B Preferred
J
Preference shares
K
Series A preference shares
L
Series B preference shares
M
Redeemable preference shares
N
Series B Redeemable preference shares
O
Series C2 preference shares
P
Series C3 preference shares
Q
Redeemable non-cumulative preference shares
R
Compulsory convertible cumulative preference shares
S
Irredeemable convertible preference shares
T
Irredeemable non-cumulative preference shares
U
Class B Non-cumulative preference shares
V
Class C Non-cumulative preference shares
W
Class D Non-cumulative preference shares
X
Charter capital
Y
Lim
ited Partnersh
ip
Z
Partnership Interest
AA
Membership interest
AB
Trust
AC
Uncertif
icated
AD
Deferred shares
AE
Guarantee
Business activ
ity
i
Banking & Financ
ial Serv
ices
i
i
Commercial real estate
i
i
i
Data Analytics
iv
Dig
ital Venture
v
Investment holding company
vi
Leasing and Finance
vi
i
To manage intellectual property for Group
vi
i
i
Research & development
ix
Support Services
x
Others
Save for those disclosed in this Annual Report, there were no
other sign
i\ufb01cant
investments held, nor were there material
acquis
it
ions or disposals of subsid
iar
ies during the year under
review. Apart from those disclosed in this Annual Report, there
were no material investments or addit
ions of cap
ital assets
authorised by the Board at the date of this Annual Report.", "dimensions": { "concept": "stan:DisclosureOfRelatedUndertakingsOfTheGroupExplanatoryTextBlock", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00471": { "value": "1 Basinghall Avenue London, EC2V 5DD \nUnited Kingdom", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00470": { "value": "United Kingdom", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:U4LOSYZ7YG4W3S5F2G91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } } } }