Consolidated income statement

Financial statements Financial statements

Consolidated income statement

For the year ended 31 December 2018

Interest income Interest expense Net interest income Fees and commission income Fees and commission expense Net fee and commission income Net trading income Other operating income Operating income Staff costs Premises costs General administrative expenses Depreciation and amortisation Operating expenses Operating proft before impairment losses and taxation Credit impairment Other impairment

Goodwill Other Proft from associates and joint ventures Proft before taxation Taxation Proft for the year

Proft attributable to: Non-controlling interests Parent company shareholders Proft for the year

Earnings per share: Basic earnings per ordinary share Diluted earnings per ordinary share The Notes on pages 244 to 355 form an integral part of these fnancial statements.

Notes

3

4 5 6

7 8 9 9 32 10

31.12.18 $million

17,264 (8,471) 8,793 4,029

(537) 3,492 1,683

821 14,789 (7,074)

(790) (2,926)

(857) (11,647)

3,142 (653)

? (182) 241 2,548 (1,439) 1,109

31.12.17 $million

14,435 (6,254) 8,181 3,942

(430) 3,512 1,527 1,205 14,425 (6,758) (823) (2,007) (829) (10,417) 4,008 (1,362)

(320) (179) 268 2,415 (1,147) 1,268

29

55

49

1,054

1,219

1,109

1,268

cents

cents

12

18.7

23.5

12

18.5

23.3

236

Standard Chartered Annual Report 2018

Strategic report

Directors' report

Consolidated statement of comprehensive income

For the year ended 31 December 2018

Proft for the year Other comprehensive (loss)/income

Items that will not be reclassifed to income statement: Own credit gains/(losses) on fnancial liabilities designated at fair value through proft or loss Equity instruments at fair value through other comprehensive income Actuarial (losses)/gains on retirement beneft obligations Taxation relating to components of other comprehensive income

Items that may be reclassifed subsequently to income statement: Exchange differences on translation of foreign operations:

Net (losses)/gains taken to equity Net gains/(losses) on net investment hedges Share of other comprehensive income/(loss) from associates and joint ventures Debt instruments at fair value through other comprehensive income/available-for-sale investments: Net valuation (losses)/gains taken to equity Reclassifed to income statement Cash fow hedges: Net gains taken to equity Reclassifed to income statement Taxation relating to components of other comprehensive income Other comprehensive (loss)/income for the year, net of taxation Total comprehensive income for the year

Total comprehensive income attributable to: Non-controlling interests Parent company shareholders Total comprehensive income for the year

Notes

30 10

14 10

31.12.18 $million

1,109

382 394

36 (19) (29)

(1,189)

(1,462) 282 33

(128) 31

34 7 14

(807) 302

31.12.17 $million

1,268

(238) (249)

? 32 (21)

1,532

1,637 (288)

(1)

369 (233)

35 11 2 1,294 2,562

29

34

50

268

2,512

302

2,562

Risk review and capital review

Financial statements

Supplementary information

237

Financial statements Financial statements

Consolidated balance sheet

As at 31 December 2018

Assets Cash and balances at central banks Financial assets held at fair value through proft or loss Derivative fnancial instruments Loans and advances to banks1 Loans and advances to customers2 Investment securities Other assets Current tax assets Prepayments and accrued income Interests in associates and joint ventures Goodwill and intangible assets Property, plant and equipment Deferred tax assets Assets classifed as held for sale Total assets

Notes

13,35 13

13,14 13,15 13,15

13 20 10

32 17 18 10 21

31.12.18 $million

57,511 87,132 45,621 61,414 256,557 125,901 35,401

492 2,505 2,307 5,056 6,490 1,047 1,328 688,762

31.12.17 $million

58,864 27,564 47,031 78,188 282,288 117,025 33,490

491 2,307 2,307 5,013 7,211 1,177

545 663,501

Liabilities Deposits by banks Customer accounts Repurchase agreements and other similar secured borrowing Financial liabilities held at fair value through proft or loss Derivative fnancial instruments Debt securities in issue Other liabilities Current tax liabilities Accruals and deferred income Subordinated liabilities and other borrowed funds Deferred tax liabilities Provisions for liabilities and charges Retirement beneft obligations Liabilities included in disposal groups held for sale Total liabilities

13 13 13,16 13 13,14 13,22 23 10

13,27 10 24 30 21

29,715 391,013

1,401 60,700 47,209 46,454 38,309

676 5,393 15,001

563 1,330

399 247 638,410

30,945 370,509

39,783 16,633 48,101 46,379 35,257

376 5,493 17,176

404 183 455

? 611,694

Equity Share capital and share premium account Other reserves Retained earnings Total parent company shareholders' equity Other equity instruments Total equity excluding non-controlling interests Non-controlling interests Total equity Total equity and liabilities

28

7,111

7,097

11,878

12,767

26,129

26,641

45,118

46,505

28

4,961

4,961

50,079

51,466

29

273

341

50,352

51,807

688,762

663,501

1 Reverse repurchase agreements and other similar secured lending balances held at amortised cost of $3,815 million (31 December 2017: $20,694 million) have been included with loans and advances to banks

2 Reverse repurchase agreements and other similar secured lending balances held at amortised cost of $3,151 million (31 December 2017: $33,581 million) have been included with loans and advances to customers

The Notes on pages 244 to 355 form an integral part of these fnancial statements.

These fnancial statements were approved by the Board of directors and authorised for issue on 26 February 2019 and signed on its behalf by:

Jos? Vi?als Chairman

238

Standard Chartered Annual Report 2018

Bill Winters Group Chief Executive

Andy Halford Group Chief Financial Offcer

Strategic report

Consolidated statement of changes in equity

For the year ended 31 December 2018

Directors' report

Risk review and capital review

Financial statements

Share capital

and share premium account $million

Capital and Own credit

merger adjustment reserves1 reserve $million $million

Fair value Fair value through through other other compre- comprehensive hensive

Available income income -for-sale reserve reserve reserve ? debt ? equity $million $million $million

Cash fow hedge reserve $million

Translation reserve $million

Parent

company

Non-

Retained shareholders' Other equity controlling

earnings

equity instruments interests

$million

$million $million $million

Total $million

At 1 January 2017

7,091 17,129

289

(4)

?

? (85) (5,805) 25,753 44,368 3,969 321 48,658

Proft after tax for the year

?

?

?

?

?

?

?

? 1,219

1,219

?

49 1,268

Other comprehensive (loss)/income

?

? (235) 87

?

?

40 1,351

502

1,293

?

1 1,294

Distributions

?

?

?

?

?

?

?

?

?

?

?

(51) (51)

Shares issued, net of

expenses

6

?

?

?

?

?

?

?

?

6

?

?

6

Other equity instruments

issued, net of expenses

?

?

?

?

?

?

?

?

?

?

992

? 992

Net own shares

adjustment

?

?

?

?

?

?

?

?

10

10

?

? 10

Share option expense,

net of taxation

?

?

?

?

?

?

?

? 125

125

?

? 125

Dividends3

?

?

?

?

?

?

?

? (445)

(445)

?

? (445)

Other movements4

?

?

?

?

?

?

?

?

(71)

(71)

?

215 (50)

As at 31 December 2017 7,097 17,129

54 83

?

?

(45) (4,454) 26,641 46,505 4,961 341 51,807

IFRS 9 reclassifcations6

?

?

? (83) (131) 45

?

? 169

?

?

?

?

IFRS 9 re-

measurements6

?

?

?

?

?

4

?

?

31

35

?

? 35

Expected credit loss, net

?

?

?

? 65

?

?

? (1,074)7 (1,009)

?

(8) (1,017)

Tax impact

?

?

?

? (11)

5

?

? 179

173

?

? 173

Impact of IFRS 9 on share

of joint ventures and

associates, net of tax

?

?

?

?

?

(1)

?

?

(51)

(52)

?

? (52)

IFRS 9 transition

adjustments

?

?

? (83) (77) 53

?

? (746)

(853)

?

(8) (861)

As at 1 January 2018

7,097 17,129

54

? (77) 53 (45) (4,454) 25,895 45,652 4,961 333 50,946

Proft after tax for the year

?

?

?

?

?

?

?

? 1,054 1,054

?

55 1,109

Other comprehensive income/(loss)

?

?

358

? (84) 67

35 (1,158)

(4)2

(786)

?

(21) (807)

Distributions

?

?

?

?

?

?

?

?

?

?

? (97) (97)

Shares issued,

net of expenses

14

?

?

?

?

?

?

?

?

14

?

? 14

Net own shares

adjustment

?

?

?

?

?

?

?

?

1

1

?

?

1

Share option expense,

net of taxation

?

?

?

?

?

?

?

? 158

158

?

? 158

Dividends3

?

?

?

?

?

?

?

? (975)

(975)

?

? (975)

Other movements

?

?

?

?

?

?

?

?

?

?

?

38

3

As at 31 December 2018 7,111 17,129

412

? (161) 120 (10) (5,612) 26,129 45,118 4,961 273 50,352

1 Includes capital reserve of $5 million, capital redemption reserve of $13 million and merger reserve of $17,111 million

2 Comprises actuarial gain/(loss), net of taxation and share from associates and joint ventures $(4) million (31 December 2017: $50 million)

3 Comprises dividends paid net of scrip $539 million (31 December 2017: $nil) and dividends on preference shares classifed as equity and Additional Tier 1 securities $436 million (31 December 2017: $445 million). (refer Note 11)

4 Other movements of $(71) million is mainly due to issue of shares by Nepal to its non-controlling interests including premium ($19 million) as the adjustment to the carrying value of Group's share of the issue. This is offset by other equity adjustments of $(90) million

5 Other movements of $21 million relates to issue of shares by Nepal to its non-controlling interests including premium ($12 million) as the increase in non-controlling interest. The remaining $9 million relates to an acquisition

6 As per Note 41 Transition to IFRS 9 Financial Instruments

7 The Group's initial estimate of credit impairment provisions on adoption of IFRS 9 was $6,720 million. Following refnement of the Group's expected loss models, the estimate of the opening credit impairment provisions has been revised down by $222 million to $6,498 million, and the net expected credit loss of $(1,296) million adjusted against retained earnings has similarly decreased by $222 million to $1,074 million

8 Mainly due to additional share capital issued by Angola subscribed by its non-controlling interests without change in shareholding percentage

Note 28 includes a description of each reserve.

The Notes on pages 244 to 355 form an integral part of these fnancial statements.

Supplementary information

239

Financial statements Financial statements

Cash fow statement

For the year ended 31 December 2018

Cash fows from operating activities: Proft before taxation Adjustments for non-cash items and other adjustments included within income statement

Change in operating assets Change in operating liabilities Contributions to defned beneft schemes UK and overseas taxes paid Net cash from/(used in) operating activities Cash fows from investing activities: Purchase of property, plant and equipment Disposal of property, plant and equipment Acquisition of investment in subsidiaries, associates, and joint ventures, net of cash acquired Dividends received from subsidiaries, associates and joint ventures Disposal of subsidiaries Purchase of investment securities Disposal and maturity of investment securities Net cash (used in)/from investing activities Cash fows from fnancing activities: Issue of ordinary and preference share capital, net of expenses Exercise of share options Purchase of own shares Issue of Additional Tier 1 capital, net of expenses Gross proceeds from issue of subordinated liabilities Interest paid on subordinated liabilities Repayment of subordinated liabilities Proceeds from issue of senior debts Repayment of senior debts Interest paid on senior debts Investment from non-controlling interests Dividends paid to non-controlling interests and preference shareholders Dividends paid to ordinary shareholders Net cash used in fnancing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Effect of exchange rate movements on cash and cash equivalents Cash and cash equivalents at end of the year

Notes

34 34 34 30 10

18

32 32

Group

31.12.18 $million

31.12.17 $million

2,548

2,635 (12,837) 33,859

(143) (770) 25,292

2,415

3,241 (13,625)

5,819 (143) (915)

(3,208)

(171) 85

?

67 7

(276,388) 263,983 (12,417)

(165) 29

(44)

2 ? (265,186) 261,316 (4,048)

28

14

6

9

10

(8)

?

28

?

992

34

500

?

34

(602)

(743)

34

(2,097)

(2,984)

34

9,766

2,292

34

(7,030)

(4,162)

34

(507)

(896)

?

21

(533) (539) (1,027) 11,848 87,231

(496) ?

(5,960) (13,216) 96,977

(1,579)

3,470

35

97,500

87,231

Company

31.12.18 $million

31.12.17 $million

790

232 61

(462) ? ?

621

207

615 459 575

? (14) 1,842

? ?

?

1,035 ? ?

621 1,656

? ?

(1,000)

392 ? ?

2,850 2,242

14 9 (8) ? 500 (507) (474) 4,552 (3,141) (355) ?

(436) (539) (385) 1,892 15,714

? 17,606

6 10

? 992

? (353) (1,249) 1,501 (3,237) (825)

?

(445) ?

(3,600) 484

15,230

? 15,714

240

Standard Chartered Annual Report 2018

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