SCBFF - Standard Chartered PLC (SCBFF) Q4 2023 Earnings Call Transcript
2024-02-23 12:40:19 ET
Standard Chartered PLC (SCBFF)
Q4 2023 Results Conference Call
February 23, 2024 03:00 AM ET
Company Participants
Bill Winters - Group Chief Executive
Diego De Giorgi - Group Chief Financial Officer
Gregg Powell - Investor Relations
Conference Call Participants
Joseph Dickerson - Jefferies
Aman Rakkar - Barclays
Alastair Ryan - Bank of America
Andrew Coombs - Citi
Rob Noble - Deutsche Bank
Perlie Mong - KBW
James Invine - SocieteGenerale
Guy Stebbings - BNP Paribas
Gurpreet Sahi - Goldman Sachs
Presentation
Bill Winters
Good morning and good afternoon, everybody, and welcome to our Full Year 2023 Results Presentation. Today, we have two first. For the first time in my career at Standard Chartered, I'm joined by a new CFO Diego De Giorgi, who succeeded Andy Halford at the start of the year. And for the first time since I became CEO in 2015, I'm pleased to say that we've hit our double-digit return on tangible equity target.
So first order of business, a very warm welcome to Diego. With over 30 years' experience in the global financial services sector, Diego brings with him a broad and unique skill set, and I very much look forward to working with him in the years ahead as we deliver the next phase of the group's strategy.
As we passed the double-digit RoTE milestone, I also want to recognize the immense contribution that Andy Halford made to that achievement. Andy joined the bank a year before I did and expertly navigated the group's course through some very, very difficult waters early in our partnership. Andy has been an invaluable member of the management team and a great partner for me and has been pivotal in getting the group to where it is today. I wish him the very best for his future.
As usual, I'll make some opening remarks, and Diego will take you through the numbers before we set out our plans for the next three years. And as usual, we will then both take your questions.
Our strong 2023 results are evidence that our strategy is working, delivering 13% income growth, disciplined cost control in an inflationary environment, and a prudent approach to risk management generated around a 240 basis point improvement in returns. This takes us above 10% RoTE for the first time since 2014. We've also made excellent progress in the strategic actions we announced in 2022. I'll talk more about this later, but I wanted to highlight a few specifics where delivery has impactful in getting us to where we are today.
We took a deliberate decision to invest in financial markets and wealth management over the past several years, leveraging what we saw as distinct advantages for us. These investments leave us extremely well positioned, will drive income growth for years to come, and that growth is also somewhat less dependent on the interest rate environment. Whilst overall FM results were slightly down following a very strong 2022, flow income was up 7% last year despite lower market volatility.
This income is supported by our investment in rates and credit products, digital platforms and cross-selling solutions. In Wealth Management, we've invested in relationship managers, products and platforms, building a wealth business of scale, which is the third largest wealth manager in Asia. With full reopening of some of our main wealth markets at the beginning of 2023, we have seen over 0.25 million of new-to-bank affluent clients.
We're monetizing these new relationships at pace with affluent net new money up $29 billion, which is equivalent to around 11% annualized growth in affluent assets under management. We remain fully focused on disciplined capital management. CCIB has delivered on its RWA returns and optimization targets a year ahead of plan, and we have successfully embedded this discipline into BAU. Efficient capital management has given us the optionality and capacity to flex the balance sheet in support of an expected acceleration in client assets in a lower rate environment.
Our focus on capital-light business has, in part, led to a loan loss rate below our through-the-cycle expectation in recent years. Now in doing all this, we've created a powerful equity generation engine, a full year dividend of $0.27 per share and a further $1 billion share buyback we're announcing today brings total capital distributions to over $5 billion since the 1st of January 2022, achieving our target almost a year ahead of schedule.
Lastly, after the usual seasonality in December, we've seen an encouraging start to 2024, particularly in wealth and financial markets, supported by the investments we've made. Looking at the strategic scorecard in more detail. In 2022, we set out five actions that would help accelerate the delivery of double-digit RoTE. We've achieved several of these targets a year ahead of plan, and most others are well on track.
In 2023, CCIB delivered an income return on risk-weighted assets of 7.8%, having removed $24 billion of low-returning RWA, ahead of target and time. We also grew financial institutions income to just short of our 50% target. In CPBB, we achieved a 60% cost-to-income target one year ahead of plan as we progress towards the target $500 million of structural expense savings. Around 85% of retail transactions are now digitized end-to-end. We've done less well in growing the mass retail client base.
In large part, this reflects a slower rollout of our nexus platform in Indonesia. That said, and nexus, we have created an innovative digital platform, which gives us greater optionality as we explore how best to use this technology to grow our mass market business....
Standard Chartered PLC (SCBFF) Q4 2023 Earnings Call Transcript