Standard Chartered PLC

National Storage Mechanism | Additional information RNS Number : 2463E Standard Chartered PLC 23 February 2024 Standard Chartered PLC 4Q'23 and FY'23 Results 23 February 2024 Registered in England under company No. 966425 Registered Office: 1 Basinghall Avenue, London, EC2V 5DD, UK Table of contents Performance highlights 4 Statement of results 7 Group Chairman's statement 8 Group Chief Executive's review 11 Group Chief Financial Officer's review 15 Supplementary financial information 26 Underlying versus reported results reconciliations 48 Group Chief Risk Officer's review 54 Risk review 63 Capital review 68 Financial statements 74 Other supplementary information 79 Shareholder information 86 This announcement contains inside information. Important Notice - Forward-looking statements The information included in this document may contain 'forward-looking statements' based upon current expectations or beliefs as well as statements formulated with assumptions about future events. 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The Group, its affiliates, directors, officers, employees or agents expressly disclaim any liability and responsibility for any decisions or actions which you may take and for any damage or losses you may suffer from your use of or reliance on the information contained in this document Page 3 Standard Chartered PLC - full-year and fourth quarter 2023 results All figures are presented on an underlying basis and comparisons are made to 2022 on a reported currency basis, unless otherwise stated. A reconciliation of restructuring and other items excluded from underlying results is set out on pages 48-53. Bill Winters, Group Chief Executive, said: " We produced strong results in 2023, continuing to demonstrate the value of our franchise and delivering our financial objective of a 10% RoTE for the year. We will now build on this success, taking action to deliver sustainably higher returns with a focus on driving income growth and improving operational leverage and targeting 12% RoTE in 2026. We have increased full year dividends, up 50%, and have announced a new $1bn share buyback, bringing our total shareholder distributions to $5.5bn since January 2022. We will continue to actively manage the Group's capital position with a target to return at least $5bn over the next three years" Selected information on 4Q'23 financial performance with comparisons to 4Q'22 unless otherwise stated �� Operating income up 7% to $4.0bn, up 7% at constant currency ('ccy') - Net interest income ('NII') up 6% to $2.4bn; Non NII up 8% to $1.6bn - Net interest margin ('NIM') 1.70%, up 3bps quarter-on-quarter ('QoQ') (normalised NIM 3Q'23: 1.67%), primarily mix improvements - Financial Markets ('FM') down 8% at ccy from subdued market volatility - Wealth Management ('WM') up 16% at ccy with continued strong Affluent new-to-bank ('NTB') client onboarding and net new money ('NNM') �� Operating expenses up 2% at ccy to $2.8bn; down $16m QoQ �� Credit impairment charge down $232m QoQ to $62m including CPBB flows of $131m, partly offset by a net release of $105m in CCIB - High risk assets of $10.6bn, up $1.2bn since 30.9.23 substantially from a change in instrument on an existing sovereign exposure with no increase in risk �� Underlying profit before tax of $1.1bn, up 74% at ccy �� Goodwill and Other impairment of $153m reflects a reduction in the carrying value of the Group's investment in China Bohai Bank ('Bohai') �� Other items of $262m reflect net gain from sale of Aviation Finance business �� The Group's balance sheet remains strong, liquid and well diversified - Loans and advances to customers of $287bn, up $6bn or 2% since 30.9.23; down $5bn or 2% on an underlying basis - Customer deposits of $469bn, up $16bn or 4% since 30.9.23; up $10bn or 2% at ccy - Liquidity coverage ratio 145% (30.9.23: 156%) back to historical levels; Advances-to-deposit ratio 53.3% (30.9.23: 54.5%) �� Risk-weighted assets ('RWA') of $244bn, up $3bn or 1% since 30.9.23 - Credit risk RWA up $3bn; includes change in asset mix and credit migration, partly offset by efficiency actions and Aviation Finance sale �� The Group remains strongly capitalised - Common equity tier 1 ('CET1') ratio 14.1% (30.9.23: 13.9%), above 13-14% target range - $1bn share buyback starting imminently is expected to reduce CET1 ratio by approximately 40bps Selected information on FY'23 financial performance with comparisons to FY'22 unless otherwise stated �� Return on Tangible Equity ('RoTE') of 10.1%, up 2%pts �� Operating income up 10% to $17.4bn, up 13% at ccy - NII up 23% at ccy to $9.6bn with NIM up 26bps to 1.67%; Non NII up 2% at ccy to $7.8bn - FM down 2% at ccy, up 3% excluding non-repeat of $244m gain on mark-to-market liabilities in FY'22 - WM up 10% at ccy supported by robust leading indicators in Affluent NTB client onboarding and NNM �� Operating expenses up 7% to $11bn, up 8% at ccy; increase due to inflation, business growth and targeted investments, partially funded by productivity saves - Positive 4% income-to-cost jaws in FY'23, with cost-to-income ratio improving 2% pts to 63% �� Credit impairment charge of $528m, down $308m. Annualised loan-loss rate ('LLR') of 17bps, down 4bps �� China Commercial Real Estate portfolio: total expected credit loss provisions $1.2bn, stage 3 exposures of $1.4bn with cover ratio including collateral of 88% and a remaining management overlay $141m Page 4 Standard Chartered PLC - full-year and fourth quarter 2023 results continued �� Underlying profit before tax of $5.7bn, up 27% at ccy �� Goodwill and Other impairment of $850m primarily reflects a reduction in the carrying value of Bohai �� Tax charge of $1.6bn: underlying effective tax rate of 29%, reduced by 1%pt �� Proposed final dividend of $560m or 21c per share will result in a full-year dividend of $728m or 27c, up 50% �� Underlying earnings per share ('EPS') increased 31.0 cents or 32% to 128.9 cents; Reported EPS increased 22.7 cents or 26% to 108.6 cents �� Tangible net asset value per share increased 144 cents or 12% to 1,393 cents Update on 2022-2024 strategic actions for FY'23 unless otherwise stated �� Drive improved returns in CCIB: Income return on risk-weighted assets of 7.8%, ahead of 2024 target of 6.5%; $24bn RWA optimised since 1.1.22, exceeding the $22bn target a year ahead of plan �� Transform profitability in CPBB: Cost-to-income ratio of 60%, improved by 9%pts year-on-year ('YoY'), delivering the target of 60% a year ahead of plan; $0.4bn of gross expense savings since 1.1.22, 2022-2024 target $0.5bn �� Seize China opportunity: China onshore and offshore profit before tax up 3x YoY to $1.3bn, nearly achieving the $1.4bn target a year ahead of plan �� Create operational leverage: $0.9bn gross productivity saves since 1.1.22, 2022-2024 target $1.3bn; Cost-to-income ratio improved by 2%pts YoY to 63%, 2024 target 60% �� Deliver substantial shareholder returns: $5.5bn of total distributions announced since 1.1.22, ahead of >$5bn 2022 to 2024 target Other updates �� Aviation exit: Sale of the Aviation Finance business completed in November 2023; increased CET1 ratio by 20bps in 4Q'23 �� Sustainability: Sustainable Finance income $720m, up 42% YoY; mobilised $87bn in Sustainable Finance from 1.1.21 to 30.9.23 �� Africa and Middle East exits: Closed the representative office in Lebanon; completed the sale of the Jordan branch; and signed agreements to sell the remaining 7 businesses Taking further action to deliver sustainably higher returns �� Deliver strong income growth - NII expected to grow in 2024 and beyond - Financial Markets and Wealth Management two engines of Non NII growth - Improve operational leverage through a programme called Fit for Growth - Aiming to simplify, standardise and digitise key elements of the Group - Addressing structural inefficiencies and complexities whilst protecting income - Improving productivity, client and employee experience - Creating capacity to reinvest in incremental growth initiatives �� Return substantial capital to shareholders Guidance We have updated our guidance for 2024 and have provided additional guidance for 2025 and 2026 as follows: �� Income: - Operating income to increase 5-7% for 2024-2026; around the top of 5-7% range in 2024 - Net interest income for 2024 of $10bn to $10.25bn, at ccy �� Expenses: - Operating expenses to be below $12bn in 2026, at ccy - Expense saves of around $1.5bn and cost to achieve of no more than $1.5bn from 2024 to 2026 - Positive income-to-cost jaws, excluding UK bank levy, at ccy in each year from 2024 to 2026 Page 5 Standard Chartered PLC - full-year and fourth quarter 2023 results continued �� Assets and RWA: - Low single-digit percentage growth in loans and advances to customers and RWA each year from 2024 to 2026 (pre-Basel 3.1 day-1 impact) - Basel 3.1 day-1 impact, pending clarification of rules no more than 5% incremental RWA �� Continue to expect LLR to normalise towards the historical through the cycle 30 to 35bps range �� Capital: - Continue to operate dynamically within the full 13-14% CET1 target range - Plan to return at least $5bn to shareholders cumulative 2024 to 2026 - Continue to increase full-year dividend per share over time �� RoTE increasing steadily from 10%, targeting 12% in 2026 and to progress thereafter Page 6 Statement of results 2023 $million 2022 $million Change �� % Underlying performance6 Operating income 17,378 15,762 10 Operating expenses (11,136) (10,409) (7) Credit impairment (528) (836) 37 Other impairment (130) (39) nm�� Profit from associates and joint ventures 94 167 (44) Profit before taxation 5,678 4,645 22 Profit attributable to ordinary shareholders�� 3,581 2,903 23 Return on ordinary shareholders' tangible equity (%) 10.1 7.7 240bps Cost-to-income ratio (excluding bank levy) (%) 63.4 65.4 195bps Reported performance�� Operating income 18,019 16,318 10 Operating expenses (11,551) (10,913) (6) Credit impairment (508) (836) 39 Goodwill and other impairment (1,008) (439) (130) Profit from associates and joint ventures 141 156 (10) Profit before taxation 5,093 4,286 19 Taxation (1,631) (1,384) (18) Profit for the period 3,462 2,902 19 Profit attributable to parent company shareholders 3,469 2,948 18 Profit attributable to ordinary shareholders2 3,017 2,547 18 Return on ordinary shareholders' tangible equity (%) 8.4 6.8 160bps Cost-to-income ratio (%) 64.1 66.9 280bps Net interest margin (%) (adjusted)�� 1.67 1.41 26bps Balance sheet and capital Total assets 822,844 819,922 - Total equity 50,353 50,016 1 Average tangible equity attributable to ordinary shareholders2 36,098 37,186 (3) Loans and advances to customers 286,975 310,647 (8) Customer accounts 469,418 461,677 2 Risk-weighted assets 244,151 244,711 - Total capital 51,741 53,151 (3) Total capital ratio (%) 21.2 21.7 (50)bps Common Equity Tier 1 34,314 34,157 - Common Equity Tier 1 ratio (%) 14.1 14.0 10bps Advances-to-deposits ratio (%)3 53.3 57.4 (410)bps Liquidity coverage ratio (%) 145.0 147.0 (200)bps Leverage ratio (%) 4.7 4.8 (10)bps Cents Cents Change�� Information per ordinary share Earnings per share- underlying4 128.9 97.9 31.0 - reported4 108.6 85.9 22.7 Net asset value per share5 1,629 1,453 175 Tangible net asset value per share5 1,393 1,249 144 Number of ordinary shares at period end (millions) 2,637 2,867 (8) 1 Variance is better/(worse) other than assets, liabilities and risk-weighted assets. Change is percentage points difference between two points rather than percentage change for total capital ratio (%), common equity tier 1 ratio (%), net interest margin (%), advances-to-deposits ratio (%), liquidity coverage ratio (%), UK leverage ratio (%). Change is cents difference between two points rather than percentage change for earnings per share, net asset value per share and tangible net asset value per share 2 Profit/(loss) attributable to ordinary shareholders is after the deduction of dividends payable to the holders of non-cumulative redeemable preference shares and Additional Tier 1 securities classified as equity 3 When calculating this ratio, total loans and advances to customers excludes reverse repurchase agreements and other similar secured lending, excludes approved balances held with central banks, confirmed as repayable at the point of stress and includes loans and advances to customers held at fair value through profit and loss. Total customer accounts include customer accounts held at fair value through profit or loss 4 Represents the underlying or reported earnings divided by the basic weighted average number of shares. 5 Calculated on period end net asset value, tangible net asset value and number of shares 6 Underlying performance for relevant periods in 2022 has been restated for removal of (i) AME exits (ii) Aviation Finance and (iii) DVA. No change to reported performance 7 Net interest margin is calculated as adjusted net interest income divided by average interest-earning assets, annualised 8 Reported performance/results within financial report means amounts reported under UK-adopted IAS and EU IFRS. In prior periods Reported performance/results were described as Statutory performance/results 9 Not meaningful Page 7 Group Chairman's statement Embedding a culture of excellence to deliver sustained value During 2023, the Group continued to improve profitability, delivering on our objective to achieve a double-digit Return on Tangible Equity (RoTE) for the full year. Our high-growth markets, where we are intent on making further investment, continue to deliver strongly despite an uncertain picture for the global economy. This performance came against a backdrop of rising interest rates in many large economies, which undoubtedly gave a strong tailwind for the business. However, it is also a product of our clear strategy, discipline and tireless execution - a significant achievement for our colleagues, led by our Group Chief Executive Bill Winters and his Management Team. Their skills and dedication remain essential to our performance, and my deepest thanks go to all of them. We have recently bid a fond farewell to Andy Halford, who formally stepped down as Group Chief Financial Officer on 3 January 2024. Since his arrival in the role in 2014, Andy has been a much-valued colleague and friend and made a phenomenal contribution by helping to steer the business through a challenging external environment. Under his watch we strengthened our foundations, reset our risk appetite and redefined the Group's strategy. He leaves with our very best wishes, and will continue in an advisory role until his retirement in August. It is with pleasure that we welcome Diego De Giorgi who joins us as Andy's successor. I am looking forward to working closely with Diego and Bill to drive further excellence for clients and higher value for shareholders. Advancing our strategic and financial goals I have said before that our objective is to grow income in a strong, safe and sustainable manner, while maintaining both cost and capital discipline, and I am delighted to say that was the case last year. We are confident that our improved RoTE, which reached 10.1 per cent in 2023, will be a milestone on the way to further long-term success for the Group, underpinned by strong performance across the business. We grew income 13 per cent on a constant currency basis while maintaining a strong capital and liquidity position and positive income-to-cost jaws. We expect our RoTE to steadily increase from 10 per cent, and are targeting 12 per cent in 2026 and to progress thereafter. The strength of our financial performance affirms that the strategy that we set out in 2021 is working. We remain focused on investment in high-growth markets and have made significant progress against our strategic priorities across Network, Affluent, Mass Retail, and Sustainability. I am acutely aware of the underperformance of our share price in recent months, which I believe does not reflect the progress we are making. Both the Board and the Management Team are absolutely focused on delivering sustained, long-term value for our shareholders. I believe our solid performance in 2023 gives us a good base from which to do this. As Bill details in the following pages, we have further sharpened the actions we will take to accelerate performance and future growth. Firstly, we will continue to rely on our stronger capabilities to further enhance returns in our Corporate, Commercial & Institutional Banking and Consumer, Private & Business Banking businesses, with a focus on driving income growth in high-returning areas. Secondly, we will improve operational leverage within the Group, addressing structural inefficiencies and complexities whilst protecting income. Finally, we will continue to return substantial capital to shareholders. This year, we are pleased to be able to provide an increased full-year dividend of 27 cents per share and are announcing a further share buyback of $1 billion. Alongside the importance of delivering improved financial performance, our Purpose and brand promise to be here for good remain cornerstones of our business. We are keenly aware of our role in supporting our clients and communities as they anticipate and respond to economic and social challenges. This is why we remain true to our Stands - Accelerating Zero, Resetting Globalisation and Lifting Participation - which are delivered through the execution of our strategy, and which give us an active framework for positive impact across our footprint. We updated our net zero roadmap in April 2023, committing to an absolute emissions target and trajectory for the oil and gas sector. In this year's Annual Report, we disclose the targets and science-based methodologies for our financed emissions in eleven of the twelve high-emitting sectors identified as decarbonisation priorities by the Net Zero Banking Alliance, demonstrating our commitment to support the transition of the real-world economy. Page 8 Group Chairman's statement continued We have also recently announced our decision to become an early adopter of the Taskforce on Nature-related Financial Disclosures, highlighting the rising importance of nature and biodiversity as a necessary consideration in sustainability. Given that our footprint represents some of the most complex and diverse natural capital in the world, working across our business and with our clients to preserve, restore and enhance nature is critically important. It is my honour to be able to act as a voice for our Stands on behalf of the Group as Co-Chair of the United Nations' Global Investors for Sustainable Development Alliance, as well as at various global platforms and by engaging with stakeholders across our markets. Driving higher standards The Board remains committed to firmly embedding a culture of excellence across the organisation, building high standards through a 'one bank' culture of ambition, action and accountability that puts our clients at the heart of all we do. We are at our best when we harness the full talent and potential of the diverse markets in which we operate. Both the Board and the Management Team are dedicated to maintaining our status as an employer of choice. That means offering our colleagues a variety of ways to build their skillset, attracting the best talent through our doors with a diverse set of career paths within the Group and progressive employee policies, such as the standardised parental leave announced last year. As the world continues to change around us, we also recognise the ongoing importance of technology and continuous improvement in maintaining our competitive edge, and in building an innovation-led culture that allows colleagues to try new things within an effective and comprehensive risk management framework. We are intent on capturing the benefits of new, game-changing technologies like artificial intelligence, whilst protecting the information and financial security of our clients. It has been an extremely active year for the Board, with frequent in-depth briefings on geopolitical, cyber and sectoral risks, and a sharp focus on corporate governance. We continue to build out our resilience in both the financial and non-financial dimensions of risk and compliance across our varied markets. This gives us the confidence to achieve our strategic goals and act decisively to grasp new business opportunities. We continue to maintain a diverse range of skillsets and backgrounds on our Board. Jasmine Whitbread, long-standing director and impactful former chair of the Culture and Sustainability Committee, stepped down from the Board at last year's AGM. As announced on 16 February 2024, Gay Huey Evans will step down from the Board with effect from 29 February 2024 after serving nine years and contributing significantly to the Board and its Committees, especially as Chair of the former Board Financial Crime Risk Committee. Carlson Tong, another much-valued Board member, will step down from the Board on 9 May 2024, ahead of the AGM. I would like to thank Jasmine, Gay and Carlson for their many contributions during their time with us. On 16 February 2024, we announced that Diane Jurgens will join the Board from 1 March 2024. Diane is a highly experienced and respected technologist who will bring significant technology and transformation expertise and insight to the Board having operated across a variety of sectors and the Group's key markets. Our dynamic markets In 2023 I continued to spend time across our markets, seeing their dynamism first-hand and experiencing the ambition of our colleagues as they work together for greater growth. Guided by our Purpose - to drive commerce and prosperity through our unique diversity - we are investing heavily in fast-growing economies and trade corridors in Asia, Africa and the Middle East, and bringing innovative digital products to new clients. A good example of this is Solv, our e-commerce platform for small and medium-size enterprises. We're also positioning ourselves to be a positive force in the expansion of sectors that will deliver a more sustainable global economy, like renewables and electric vehicles. I'm more confident than ever that we are investing in the right places for strong, safe and sustainable growth, and in our role as a connector bank in an ever more complex and fragmenting world. We provide our clients with the right solutions gained from deep experience of our markets, and continue to be a trusted partner for them as they look to seize opportunities across our footprint. Page 9 Group Chairman's statement continued Looking ahead with confidence We expect to see a 'soft landing' for the world economy in 2024. This is no small achievement as we have witnessed the most aggressive period of monetary policy tightening in decades. This, plus other favourable supply side developments have led to a fall in inflation in most countries, engendering expectations of official interest rate cuts in many economies this year. Growth, in turn, remains resilient, with emerging markets expected to keep growing considerably faster than developed economies, and Asia continuing to lead global growth. However, one cannot be complacent about the years ahead. The 'last mile' of inflation may prove stickier than expected, and geopolitical risks abound. As we begin 2024, the war between Ukraine and Russia continues, increasing uncertainty for nations in Europe and elsewhere. We see renewed conflict in the Middle East, bringing tragedy to many communities and disruption to the Red Sea, a key chokepoint in global supply chains. 2024 is also a year of major elections in the United States, India and probably the United Kingdom, as well as other markets in our footprint. These all have the potential to affect the economic situation. With so much at stake, we must take care not to needlessly damage the means of growth and wealth creation. I have frequently spoken in defence of the open, rules-based trade as a lynchpin of global economic growth. This year, the challenges around it remain powerful, with the risk of further fragmentation. I believe the system of global trade that has been created with such care over many decades is one of humanity's foremost achievements. It is not perfect by any means, but it has arguably brought more opportunity and prosperity to a greater number of people than any other force in history. Like every intricate system, it is easy to damage and hard to rebuild. Safeguarding and making it more inclusive and sustainable requires constant vigilance and cooperation from policymakers, legislators, and the private sector in an evolved, modernised multilateral system. While the external landscape remains uncertain, we are confident that we are well positioned to navigate the challenges and seize the opportunities ahead. Our results in 2023 show we are doing just that. We remain focused on continuing to deliver excellence for our clients, and sustained value for shareholders, in 2024 and beyond. Dr Jos�� Vi��als Group Chairman 23 February 2024 Page 10 Group Chief Executive's review Delivering sustainably higher returns We produced strong results in 2023, demonstrating the value of our franchise and delivering our target to push past the 10 per cent Return on Tangible Equity ('RoTE') milestone. But 10 per cent is not the extent of our ambition. We have the right strategy, business model and intent to build on this momentum. We have set out clear actions to deliver sustainably higher returns, with RoTE increasing steadily from 10 per cent, targeting 12 per cent in 2026, and to progress thereafter. Full year 2023 income of $17.4 billion was up 13 per cent on a constant currency basis, benefiting not only from rising interest rates but also encouraging underlying business momentum. Good cost discipline has enabled us to generate significantly positive income-to-cost jaws of 4 per cent for the year, even with continued underlying investment. Loan impairment declined, primarily due to reduced impairments from China commercial real estate and sovereign risks, with the portfolio overall remaining resilient. All this has helped us grow underlying profit before tax 27 per cent year-on-year, to $5.7 billion, the highest level for ten years. We remain highly liquid and strongly capitalised. We finished the year with a Common Equity Tier 1 ('CET1') ratio of 14.1 per cent, above the top of our target range, allowing us to increase our full-year ordinary dividend by 50 per cent to 27 cents per share. We undertook in February 2022 to return over $5 billion to shareholders by the end of 2024. With this full-year dividend and the $1 billion share buyback announced today, we will have exceeded that target well ahead of schedule. As we start the new year, I would like to take a moment to thank my friend and much valued colleague, Andy Halford, who decided to retire this year. Andy has been a great partner to me and the Board and has successfully helped steer the Group over the last ten years. I'd also like to extend a warm welcome to Diego De Giorgi as he takes over as the Group Chief Financial Officer. Diego brings with him over 30 years of financial services experience and I am sure he will continue to build on the progress we have made. Our strategy is driving success Our strategy is designed to deliver our Purpose: to drive commerce and prosperity through our unique diversity. We set out four strategic priorities in early 2021: continue to grow our Network and Affluent client businesses, return to growth in Mass Retail and advance on all fronts of our Sustainability agenda. We are making good progress in every area. �� Income from our cross-border Network business grew 31 per cent in 2023, with standout growth rates in our China offshore corridors to the Middle East and ASEAN, up 67 per cent and 53 per cent respectively �� We increased the total number of Affluent clients to 2.3 million. This helped drive significantly higher levels of net new money in 2023, with net inflows of $29 billion, up 50 per cent, year-on-year, and deliver 24 per cent growth in income from this client segment �� We grew our Mass Retail client base by over 1 million to 9.5 million. We have continued to grow our digital banks, Mox in Hong Kong and Trust in Singapore. They remain two of the fastest growing digital banks globally and underline our ability to partner and launch differentiated customer propositions. The Mass Retail business also serves a valuable strategic purpose as a pipeline for future Affluent clients, with 224,000 of our Mass Retail clients moving up to Affluent clients in 2023 �� Our dedicated Chief Sustainability Office unit acts as a centre of excellence and a catalyst for the execution of the Group-wide Sustainability strategy and the achievement of our net zero roadmap, further details of which are set out in the Annual Report. Our Sustainable Finance franchise generated over $0.7 billion income in 2023, a year-on-year growth rate of 42 per cent and we are well on our way to deliver a billion dollars in income by 2025. We have mobilised $87 billion of sustainable finance since the beginning of 2021, making good progress as we advance towards our $300 billion target by 2030 Page 11 Group Chief Executive's review continued Great execution on our 2022 strategic actions We set out five actions in 2022 designed to accelerate delivery of double-digit RoTE. The strong execution of these actions over the last two years, where we have either achieved our targets ahead of plan or they are well on-track, has enabled us to reach that milestone in 2023. �� We are ahead of schedule to drive improved returns in Corporate, Commercial & Institutional Banking ('CCIB'). We targeted around a 160 basis points improvement in income return on risk-weighted assets ('IRoRWA') to 6.5 per cent in 2024. The team exceeded this target in 2023, delivering an IRoRWA of 7.8 per cent. This was driven by particularly strong growth in income from Financial Institution clients, which now accounts for 49 per cent of CCIB income, delivering close to the 50 per cent target one year early. The team has also successfully executed $24 billion in risk-weighted assets optimisation over the last two years, exceeding the target of $22 billion. The completion of the sale of the Aviation Finance business also created further capacity for CCIB to grow higher returning business �� We are also ahead of our 2024 target to transform profitability in Consumer, Private and Business Banking ('CPBB'). The team has achieved its 60 per cent cost-to-income target one year ahead of plan, with a nine-percentage point improvement in 2023. They have delivered $0.4 billion of structural expense savings from rationalising the branch network, process re-engineering, headcount efficiencies and further automation �� We have continued to seize the China opportunity, with our China-related business performing well, despite post-COVID domestic recovery tracking below expectations. We set a target of doubling the operating profit before tax of our onshore and offshore China business by the end of 2024 and we almost achieved that in 2023, generating $1.3 billion. This was driven primarily by offshore-related income, which delivers significantly higher returns, growing 42 per cent. Our onshore income, despite the domestic headwinds, grew 4 per cent. Looking forward, we continue to be confident in the long-term opportunities that China re-opening will generate for our unique franchise �� We continued to create operational leverage, and are on-track to deliver the three-year $1.3 billion expense savings target, which has helped us absorb inflationary pressure and continue to invest. Our cost-to-income ratio is down 7 percentage points since the end of 2021 to 63 per cent for 2023, so we are well advanced towards our target of around 60 per cent by 2024 �� Our equity generation and discipline on risk-weighted assets this year have created capacity for us to continue to deliver substantial shareholder distributions. With the final ordinary share dividend for 2023 and a new $1 billion share buyback programme starting imminently, means we are well ahead of our total target of returning in excess of $5 billion by the end of 2024. We will continue to actively manage the Group's capital position with the target of a further capital return of at least $5 billion over the next three years Building on our achievements to deliver sustainably higher returns Our unique footprint across the world's most dynamic markets gives us a strategic advantage and underpins my confidence that we can continue to grow even in a less supportive interest rate environment. Our objective is to ensure that income growth translates into structurally higher profitability, striking a balance between maintaining the diversity that our clients value, while taking out unnecessary complexity that slows us and drags returns. We are therefore taking further action in each of our three client businesses to drive income growth: �� In CCIB we will seek to drive growth in high-returning businesses such as cross-border income, targeting an 8 to 10 per cent underlying growth rate over the next three years. Additionally, building on our strength as a top two network trade bank, we are targeting to grow Trade and Working Capital income by 6 to 8 per cent between 2024 and 2026. The team is also driving growth in financing related income (Global Credit and Lending) with a particular focus on accelerating the originate to distribute strategy, targeting an 8 to 10 per cent CAGR to 2026 �� In CPBB we will build on our strengths in the Affluent client business, targeting to attract over $80 billion of net new money over the next three years, a 19 per cent increase from the previous three years. We also intend on accelerating the growth in our international client business, with the target of increasing the number of international Affluent clients from 274,000 to over 375,000 by 2026 �� Building on the remarkable momentum in our two digital banks, Mox and Trust, we are targeting for the Ventures segment to be RoTE accretive by 2026 Page 12 Group Chief Executive's review continued By executing these actions, we expect to grow income at a compound annual rate of between 5 and 7 per cent over the next three years, well above the anticipated rate of growth for the global economy. We are also taking action to transform the way we operate, addressing structural inefficiencies and complexity whilst protecting income. Starting this year, we will run a bank-wide programme called Fit for Growth, to accelerate our previous efforts to simplify, standardise and digitise our business. We will fundamentally improve our productivity, client and employee experience and create capacity to reinvest in incremental growth initiatives. This programme will save around $1.5 billion of cumulative expenses over the next three years and we expect to incur a similar amount in terms of the cost to achieve these permanent organisational and financial benefits. This will help us to deliver positive income-to-cost jaws in each of the next three years and keep operating expenses below $12 billion in 2026. Continuing to deliver strong income growth, combined with improving operational leverage and maintaining our responsible approach to risk and capital, means we expect RoTE to increase steadily from 10 per cent, targeting 12 per cent in 2026 and to progress thereafter. Uniquely positioned and confident in the future We are in a privileged position to take advantage of significant growth opportunities that will continue to come from the markets in our footprint, generating value for our clients and the communities in which we operate. Whilst we expect global growth to stay below potential at 2.9 per cent in 2024, as high interest rates put a drag on consumers as well as investment spending, Asia is likely to be the fastest-growing region continuing to drive global growth, expanding by 4.9 per cent. Easing inflation is likely to allow major central banks to start cutting rates in the second half of 2024, with a focus on supporting softening economic activity. Downside risks to this outlook include a sharper than expected slowdown in major economies, sustained inflationary pressures, a sluggish housing market in China and increased geopolitical tensions. But we also see significant opportunities emerging: �� Higher capex to meet sustainability targets and moves towards digitalisation could boost productivity growth �� Within emerging markets, countries in Asia are best placed to take advantage of digitalisation, including generative AI �� Relatively younger populations, as well as the adoption of digital technology, will allow emerging markets to become increasingly important to global growth. Our share price reflects little of our optimism about prospects and seems heavily influenced by the downside concerns mentioned above. The concerns are real, and we take them seriously. We maintain a strong capital position and liquidity to absorb any adverse impact on us and our clients. We believe that the value of our franchise will become increasingly clear to the broader market as we continue to grow our profits and exceed market expectations in those very areas of most concern. In conclusion: significant progress with ambition for more We delivered a strong performance in 2023, achieving our 10 per cent RoTE milestone, while maintaining a strong balance sheet and a robust capital position. But we know we must do more. We have made significant progress on our five strategic actions, with most targets either delivered ahead of plan or well on-track, providing a strong platform to grow and drive sustainably higher returns. And while much external uncertainty persists, we are optimistic for the markets and strength of our businesses in our footprint. But we are far from complacent, and my Management Team and I remain focused on delivering on our targets, seizing the growth opportunities we have, driving a culture of excellence and creating exceptional long-term value for our clients, shareholders and communities. Page 13 Group Chief Executive's review continued Finally, I would like to acknowledge the remarkable efforts of our colleagues again this year. Their impressive dedication to our customers and the communities that we serve help to manifest our brand promise to be here for good. Bill Winters Group Chief Executive 23 February 2024 Page 14 Group Chief Financial Officer's review Summary of financial performance The Group delivered on its key financial objective for 2023, achieving a 10 per cent underlying return on tangible equity supported by significant progress on the five strategic actions set out in 2022. Underlying profit before tax increased 27 per cent at constant currency as the Group delivered 4 per cent positive income-to-cost jaws. Income grew 13 per cent on a constant currency basis as the Group took advantage of the favourable interest rate environment. Expenses increased 8 per cent at constant currency, while the Group incurred a loan loss rate of 17 basis points, well below its historical average. The Group reduced the carrying value of its investment in China Bohai Bank ('Bohai') by $850 million and booked a $262 million net gain from selling its Aviation Finance business. The Group remains well-capitalised and highly liquid with a liquidity coverage ratio of 145 per cent and a CET1 ratio of 14.1 per cent, above its target range, enabling the Board to announce a further $1 billion share buyback programme. The terms of the buyback will be published, and the programme will start shortly. All commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2022 on a reported currency basis, unless otherwise stated. �� Operating income of $17.4 billion increased by 10 per cent year-on-year or 13 per cent on a constant currency basis as the Group benefitted from the positive impact of rising interest rates, and a partial recovery in Wealth Management partly offset by losses from hedges �� Underlying net interest income increased 20 per cent or 23 per cent on a constant currency basis as the net interest margin increased 26 basis points or 18 per cent with the Group having increased its pricing on assets and the yield on its Treasury portfolio more quickly than it repriced its liability base, reflecting strong pricing discipline and passthrough rate management as interest rates increased in key footprint currencies. This was partly offset by an additional 15 basis points drag from short-term and structural hedges due to rising interest rates, 16 basis points headwind from migration into higher priced term deposits from lower rate paid current and savings accounts ('CASA') as well as adverse changes in the mix between Treasury and customer assets �� Underlying non NII was stable, or 2 per cent higher on a constant currency basis. This was in part due to a strong Wealth Management performance, which was up 10 per cent on a constant currency basis as it benefitted from a steady flow of new to bank clients and net new money. An accounting asymmetry resulting from Treasury management of business as usual FX positions also contributed to an increase in non NII, with a partial offset from reduced net interest income �� Operating expenses excluding the UK bank levy increased 7 per cent, or 8 per cent on a constant currency basis, reflecting the Group's continued investment into business growth initiatives, strategic investments and higher inflation partly funded by cost efficiency actions. The Group generated 4 per cent positive income-to-cost jaws at constant currency and the cost-to-income ratio improved by 2 percentage points to 63 per cent �� Credit impairment was a $528 million charge, a reduction of $308 million representing an annualised loan loss rate of 17 basis points. The impairment charge includes $282 million in relation to the China commercial real estate sector, $354 million in the Consumer, Private and Business Banking ('CPBB') portfolio and $85 million from Ventures partly offset by a $45 million net release from sovereign-related exposures and a net release in other Corporate exposures �� Other impairment increased by $91 million to $130 million primarily relating to write-off of software assets �� Profit from associates and joint ventures decreased 44 per cent to $94 million reflecting a lower profit share from Bohai �� Restructuring, other items and goodwill and other impairment totalled $585 million. This included an impairment charge of $850 million reflecting a reduction in the carrying value of the Group's investment in Bohai following a refresh of the value-in-use calculation. Other items include the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans. Restructuring charges of $14 million include the impact of actions to transform the organisation to improve productivity, partly offset by profits from businesses classified as held-for-sale. Movements in the Debit Valuation Adjustment ('DVA') were a positive $17 million Page 15 Group Chief Financial Officer's review continued �� Taxation was $1,631 million on a reported basis, with an underlying effective tax rate of 29.1 per cent down from 29.9 per cent in the prior year reflecting a favourable change in the geographic mix of profits partly offset by increased losses in the United Kingdom where the Group currently does not recognise a tax benefit �� Underlying return on tangible equity increased by 240 basis points to 10.1 per cent reflecting an increase in profits and lower average tangible equity benefitting from distributions to shareholders and movements in reserves primarily through the course of 2022 �� Underlying basic earnings per share ('EPS') increased 32 per cent to 128.9 cents and reported EPS of 108.6 cents increased by 26 per cent. �� A final ordinary dividend per share of 21 cents has been proposed taking the full-year total to 27 cents, a 50 per cent increase. The Group also completed two share buyback programmes totalling $2 billion which along with a new share buyback programme of $1 billion to be announced imminently. Since 1 January 2022, total shareholder distributions announced total $5.5 billion Summary of financial performance 4Q'23 $million 4Q'22�� $million Change % Constant currency change1 % 3Q'23 $million Change % Constant currency change1 % FY23 $million FY22�� $million Change % Constant currency change1 % Underlying net interest income5 2,392 2,256 6 6 2,388 - - 9,557 7,967 20 23 Underlying non NII5 1,632 1,509 8 8 2,015 (19) (19) 7,821 7,795 - 2 Underlying operating income 4,024 3,765 7 7 4,403 (9) (8) 17,378 15,762 10 13 Other operating expenses (2,754) (2,630) (5) (2) (2,770) 1 - (11,025) (10,307) (7) (8) UK bank levy (108) (107) (1) 5 - nm�� nm�� (111) (102) (9) (2) Underlying operating expenses (2,862) (2,737) (5) (2) (2,770) (3) (4) (11,136) (10,409) (7) (8) Underlying operating profit before impairment and taxation 1,162 1,028 13 22 1,633 (29) (29) 6,242 5,353 17 22 Credit impairment (62) (340) 82 77 (294) 79 76 (528) (836) 37 32 Other impairment (41) (38) (8) (3) (26) (58) (52) (130) (39) nm�� nm�� (Loss)/profit from associates and joint ventures (3) (2) (50) (50) 3 nm�� nm�� 94 167 (44) (43) Underlying profit/(loss) before taxation 1,056 648 63 74 1,316 (20) (20) 5,678 4,645 22 27 Restructuring (63) (90) 30 31 (7) nm�� nm�� (14) (99) 86 89 Goodwill and Other Impairment3 (153) (322) 52 52 (697) 78 78 (850) (322) (164) (164) DVA 35 (133) 126 127 21 67 67 17 42 (60) (60) Other items�� 262 20 nm�� nm�� - nm�� nm�� 262 20 nm�� nm�� Reported profit before taxation 1,137 123 nm�� nm�� 633 80 76 5,093 4,286 19 24 Taxation (199) (387) 49 49 (494) 60 59 (1,631) (1,384) (18) (25) Profit/(loss) for the period 938 (264) nm�� nm�� 139 nm�� nm�� 3,462 2,902 19 24 Net interest margin (%)2 1.70 1.58 12 1.63 7 1.67 1.41 26 Underlying return on tangible equity (%)2,3 9.4 2.7 672 7.0 240 10.1 7.7 240 Underlying earnings per share (cents)2,3 30.4 7.7 nm�� 23.2 31 128.9 97.9 32 1. Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2. Change is the basis points ('bps') difference between the two periods rather than the percentage change 3. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank ('Bohai') 4. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 5. To be consistent with how we the compute Net Interest Margin ('NIM'), and to align with the way we manage our business, we have changed our definition of Underlying Net Interest Income ('NII') and Underlying non NII. The adjustments made to NIM, including interest expense relating to funding our trading book, will now be shown against Underlying Non NII rather than Underlying NII. Prior periods have been restated. There is no impact on total income 6. Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 7. Not meaningful Page 16 Group Chief Financial Officer's review continued Reported financial performance summary 4Q'23 $million 4Q'22 $million Change % Constant currency change1 % 3Q'23 $million Change % Constant currency change1 % FY23 $million FY22 $million Change % Constant currency change1 % Net interest income 1,860 2,023 (8) (7) 1,925 (3) (3) 7,769 7,593 2 5 Non NII 2,509 1,741 44 44 2,598 (3) (3) 10,250 8,725 17 20 Reported operating income 4,369 3,764 16 17 4,523 (3) (3) 18,019 16,318 10 13 Reported operating expenses (3,013) (2,889) (4) (2) (2,870) (5) (6) (11,551) (10,913) (6) (7) Reported operating profit before impairment and taxation 1,356 875 55 70 1,653 (18) (18) 6,468 5,405 20 25 Credit impairment (55) (346) 84 80 (292) 81 78 (508) (836) 39 34 Goodwill & Other impairment (197) (393) 50 50 (734) 73 73 (1,008) (439) (130) (130) Profit/(loss) from associates and joint ventures 33 (13) nm�� nm�� 6 nm�� nm�� 141 156 (10) (10) Reported profit before taxation 1,137 123 nm�� nm�� 633 80 75 5,093 4,286 19 24 Taxation (199) (387) 49 49 (494) 60 59 (1,631) (1,384) (18) (25) Profit/(loss) for the period 938 (264) nm�� nm�� 139 nm�� nm�� 3,462 2,902 19 24 Reported return on tangible equity (%)2 10.0 (3.2) 1,320 (0.4) 1,040 8.4 6.8 160 Reported earnings per share (cents) 34.0 (10.1) nm�� (1.3) nm�� 108.6 85.9 26 1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2 Change is the basis points ('bps') difference between the two periods rather than the percentage change 3 Not meaningful Operating income by product 4Q'23 $million 4Q'22�� $million Change % Constant currency change1 % 3Q'23 $million Change % Constant currency change1 % FY23 $million FY22�� $million Change % Constant currency change1 % Transaction Banking 1,481 1,254 18 18 1,496 (1) (1) 5,837 3,874 51 54 Trade & Working capital 304 316 (4) (4) 325 (6) (7) 1,294 1,343 (4) (1) Cash Management 1,177 938 25 26 1,171 1 1 4,543 2,531 79 83 Financial Markets 1,041 1,147 (9) (8) 1,253 (17) (17) 5,099 5,345 (5) (2) Macro Trading 538 628 (14) (13) 634 (15) (15) 2,827 2,965 (5) (1) Credit Markets 409 436 (6) (6) 472 (13) (14) 1,803 1,761 2 5 Credit Trading 105 147 (29) (30) 137 (23) (26) 554 488 14 17 Financing Solutions & Issuance�� 304 289 5 6 335 (9) (9) 1,249 1,273 (2) - Financing & Securities Services�� 94 83 13 17 147 (36) (32) 469 619 (24) (22) Lending & Portfolio Management 111 112 (1) (6) 121 (8) (9) 498 558 (11) (9) Wealth Management 412 358 15 16 526 (22) (21) 1,944 1,796 8 10 Retail Products 1,238 1,147 8 9 1,279 (3) (3) 4,969 4,027 23 26 CCPL & other unsecured lending 288 294 (2) (1) 297 (3) (3) 1,161 1,202 (3) (1) Deposits 899 805 12 13 919 (2) (2) 3,437 2,021 70 74 Mortgage & Auto 17 12 42 13 31 (45) (42) 236 633 (63) (62) Other Retail Products 34 36 (6) (11) 32 6 (3) 135 171 (21) (19) Treasury (235) (173) (36) (38) (274) 14 14 (902) 337 nm�� nm�� Other (24) (80) 70 68 2 nm�� nm�� (67) (175) 62 52 Total underlying operating income 4,024 3,765 7 7 4,403 (9) (8) 17,378 15,762 10 13 1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 3. Shipping Finance is now reported under Financing Solutions & Issuance which was reported under Financing & Securities Services in 2022 4 Not meaningful The operating income by product commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2022 on a constant currency basis, unless otherwise stated. Page 17 Group Chief Financial Officer's review continued Transaction Banking income increased 54 per cent with Cash Management income up 83 per cent reflecting strong pricing discipline and passthrough rate management to take advantage of a rising interest rate environment. Trade & Working Capital decreased 1 per cent, reflecting lower balance sheet and contingent volumes due to a reduction in economic activity and clients' preference for local currency financing provided by local banks. This was partly offset by higher margins as the Group focused on higher-returning trade products. Financial Markets income decreased 2 per cent and was up 3 per cent excluding the non-repeat of $244 million gain on mark-to-market liabilities in 2022. Flow income grew by 7 per cent which was more than offset by the 15 per cent reduction in episodic income, driven by subdued market volatility, reduced issuances and the non-repeat of prior year fair value gains on mark-to-market liabilities. Macro Trading was down 1 per cent with declines in FX and Commodities partly offset by a double-digit increase in Rates from an expanded product offering. Credit Markets income was up 5 per cent primarily from higher Credit Trading income. Financing & Security Services income was down 22 per cent as the benefit of higher interest rates on Security Services balances was offset by negative movements in XVA and the non-repeat of mark-to-market gains. Lending and Portfolio Management income decreased 9 per cent reflecting the impact of risk-weighted assets optimisation actions which contributed to lower balances and an increase in portfolio management costs. Wealth Management income grew 10 per cent with Bancassurance up 17 per cent and Treasury Products up 16 per cent partly offset by lower income from Wealth Management Lending which was down 15 per cent on the back of client deleveraging and margin compression. There was continued strong growth in net new sales, which totalled $14 billion and offset adverse market movements as Wealth Management assets under management remained broadly stable. Retail Products income increased 26 per cent. Deposits income was up 74 per cent due to active passthrough rate management in a rising interest rate environment partly offset by migration of Retail CASA balances into Time Deposits. Mortgage & Auto income decreased 62 per cent on the back of lower volumes and the impact of the Best Lending Rate cap in Hong Kong restricting the ability to reprice mortgages, despite an increase in funding costs from higher interest rates. CCPL income decreased 1 per cent reflecting reduced margins from increased funding costs partly offset by increased balances, driven by partnerships and the new digital banks. Treasury income was a $902 million loss primarily due to losses from structural and short-term hedges in a rising interest rate environment. The remaining short-term hedges mature in February 2024. Profit before tax by client segment and geographic region 4Q'23 $million 4Q'222 $million Change % Constant currency change1 % 3Q'23 $million Change % Constant currency change1 % FY23 $million FY222 $million Change % Constant currency change1 % Corporate, Commercial & Institutional Banking 1,266 971 30 35 1,255 1 - 5,436 3,990 36 42 Consumer Private & Business Banking 445 398 12 15 669 (33) (33) 2,487 1,593 56 60 Ventures (133) (127) (5) (5) (117) (14) (16) (408) (363) (12) (12) Central & other items (segment) (522) (594) 12 11 (491) (6) (6) (1,837) (575) nm�� nm�� Underlying profit/(loss) before taxation 1,056 648 63 74 1,316 (20) (20) 5,678 4,645 22 27 Asia 928 787 18 15 1,063 (13) (13) 4,740 3,616 31 32 Africa & Middle East 385 91 nm�� nm�� 273 41 39 1,311 792 66 90 Europe & Americas (229) (56) nm�� nm�� (90) (154) (163) (330) 834 (140) (139) Central & other items (region) (28) (174) 84 90 70 (140) (133) (43) (597) 93 95 Underlying profit/(loss) before taxation 1,056 648 63 74 1,316 (20) (20) 5,678 4,645 22 27 1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 3 Not meaningful The client segment and geographic region commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2022 on a constant currency basis, unless otherwise stated. Page 18 Group Chief Financial Officer's review continued Corporate, Commercial & Institutional Banking ('CCIB') profit increased 42 per cent. Income grew 20 per cent with Cash Management benefitting from disciplined pricing initiatives in a rising interest rate environment partly offset by lower episodic income within Financial Markets and lower Lending income as CCIB delivered on its RWA optimisation initiatives. Expenses were 10 per cent higher while credit impairment decreased $302 million with lower charges in relation to the China commercial real estate sector and releases on historic provisions within the remaining portfolio. Consumer, Private & Business Banking ('CPBB') profit increased 60 per cent, with income up 22 per cent, benefitting from higher interest rates on Retail Deposits income and a recovery in Wealth Management. This was partly offset by lower Mortgage income negatively impacted by the Best Lending Rate cap in Hong Kong. Expenses increased 6 per cent while credit impairment was $92 million higher. Ventures loss increased 12 per cent to $408 million, reflecting the Group's continued investment in transformational digital initiatives. Income increased five-fold to $156 million while expenses grew by 27 per cent. This resulted in a lower operating loss before impairment year-on-year. The impairment charge increased $69 million to $85 million reflecting increased bankruptcy related write-offs in Mox where credit criteria have now been adjusted to reduce the current elevated delinquency rate. Central & other items (segment) recorded a loss of $1.8 billion as income declined by $1.3 billion mostly reflecting the losses from structural and short-term hedges booked within Treasury. Expenses increased by $43 million while there was a net release in credit impairment primarily relating to sovereign-related exposures. Associate income reduced by $65 million reflecting lower profits at Bohai. Asia profits increased 32 per cent as income grew 15 per cent, expenses increased by 8 per cent and credit impairments reduced by $146 million. The income growth reflects strong double-digit increases across Cash Management, Retail Deposits and Wealth Management partly offset by lower Mortgage income and a loss in Treasury Markets. The profit share from Bohai reduced by $65 million. The lower credit impairment charge reflects in part a lower level of impairments booked in the year relating to the China commercial real estate sector. Africa & Middle East ('AME') profits increased 90 per cent as income increased 26 per cent with strong growth in Cash Management and Retail Deposit income partly offset by a loss in Treasury Markets following de-risking actions in certain markets. Expenses grew 6 per cent while credit impairment charges were a net release of $91 million, a $210 million reduction, reflecting a non-repeat of the prior year's sovereign-related impairments and releases relating to historic Corporate provisions. Europe & Americas recorded a loss of $330 million as income reduced by 40 per cent, reflecting the increased cost of hedges within Treasury whilst strong growth in Transaction Banking income was partly offset by lower Financial Markets income. Expenses increased 12 per cent reflecting the impact of inflation and higher investment spend. There was a $59 million reduction in credit impairment releases. Central & other items (region) recorded a loss of $43 million compared to a $597 million loss in the prior year. This improvement is mainly due to higher returns paid to Treasury on the equity provided to the regions in a rising interest rate environment while expenses increased by 8 per cent. Adjusted net interest income and margin 4Q'23 $million 4Q'22 $million Change�� % 3Q'23 $million Change % FY23 $million FY22 $million Change�� $% Adjusted net interest income2 2,397 2,256 6 2,380 1 9,547 7,976 20 Average interest-earning assets 558,183 568,302 (2) 579,713 (4) 572,520 565,370 1 Average interest-bearing liabilities 537,916 524,610 3 548,297 (2) 540,350 525,351 3 Gross yield (%)3 4.98 3.76 122 5.06 (8) 4.76 2.70 206 Rate paid (%)3 3.40 2.36 104 3.63 (23) 3.27 1.38 189 Net yield (%)3 1.58 1.40 18 1.43 15 1.49 1.32 17 Net interest margin (%)3,4 1.70 1.58 12 1.63 7 1.67 1.41 26 1 Variance is better/(worse) other than assets and liabilities which is increase/(decrease) 2 Adjusted net interest income is reported net interest income less funding costs for the trading book and financial guarantee fees on interest-earning assets 3 Change is the basis points (bps) difference between the two periods rather than the percentage change 4 Adjusted net interest income divided by average interest-earning assets, annualised Page 19 Group Chief Financial Officer's review continued Adjusted net interest income increased 20 per cent driven by an 18 per cent increase in the net interest margin, which averaged 167 basis points in the year, 26 basis points year-on-year uplift benefiting from a rapid increase in policy interest rates across many of our markets slightly offset by an adverse change in asset mix. The net interest margin was also depressed by loss making hedges within Treasury and an accounting asymmetry from Treasury's business as usual management of FX positions within its portfolio. �� Average interest-earning assets grew 1 per cent, or 2 per cent excluding the impact of currency translation and risk-weighted asset optimisation actions, reflecting an increase in cash and balances at central banks partly offset by lower customer loan balances. Gross yields increased 206 basis points compared with the average in the prior year �� Average interest-bearing liabilities increased 3 per cent, or 4 per cent excluding the impact of currency translation, reflecting an increase in customer accounts while the rate paid on liabilities increased 189 basis points compared with the average in the prior year Credit risk summary Income statement (Underlying view) 4Q'23 $million 4Q'222 $million Change1 % 3Q'23 $million Change1 % FY23 $million FY222 $million Change1 % Total credit impairment charge/(release)3 62 340 (82) 294 (79) 528 836 (37) Of which stage 1 and 23 4 235 (98) 101 (96) 138 407 (66) Of which stage 33 58 105 (45) 193 (70) 390 429 (9) 1 Variance is increase/(decrease) comparing current reporting period to prior reporting period 2 Underlying credit impairment has been restated for the removal of (i) exit markets and businesses in AME and (ii) Aviation Finance. No change to reported credit impairment 3 Refer Group Chief Risk Officer's section Balance sheet 31.12.23 $million 30.09.23 $million Change1 % 30.06.23 $million Change1 % 31.12.22 $million Change1 % Gross loans and advances to customers2 292,145 286,531 2 295,508 (1) 316,107 (8) Of which stage 1 273,692 266,590 3 277,711 (1) 295,219 (7) Of which stage 2 11,225 12,431 (10) 10,110 11 13,043 (14) Of which stage 3 7,228 7,510 (4) 7,687 (6) 7,845 (8) Expected credit loss provisions (5,170) (5,522) (6) (5,371) (4) (5,460) (5) Of which stage 1 (430) (458) (6) (451) (5) (559) (23) Of which stage 2 (420) (440) (5) (400) 5 (444) (5) Of which stage 3 (4,320) (4,624) (7) (4,520) (4) (4,457) (3) Net loans and advances to customers 286,975 281,009 2 290,137 (1) 310,647 (8) Of which stage 1 273,262 266,132 3 277,260 (1) 294,660 (7) Of which stage 2 10,805 11,991 (10) 9,710 11 12,599 (14) Of which stage 3 2,908 2,886 1 3,167 (8) 3,388 (14) Cover ratio of stage 3 before/after collateral (%)3 60 / 76 62 / 79 (2) / (3) 59 / 78 1 / (2) 57 / 76 3 / 0 Credit grade 12 accounts ($million) 2,155 1,132 90 1,316 64 1,574 37 Early alerts ($million) 5,512 5,403 2 4,443 24 4,967 11 Investment grade corporate exposures (%)3 73 74 (1) 74 (1) 76 (3) 1 Variance is increase/(decrease) comparing current reporting period to prior reporting period 2 Includes reverse repurchase agreements and other similar secured lending held at amortised cost of $13,996 million at 31 December 2023, $10,267 million at 30 September 2023, $10,950 million at 30 June 2023 and $24,498 million at 31 December 2022 3 Change is the percentage points difference between the two points rather than the percentage change Credit quality remained resilient, reflected in lower year-on-year credit impairment charges and an improvement in a number of underlying credit metrics. The Group continues to actively manage the credit portfolio whilst remaining alert to a volatile and challenging external environment including increased geopolitical tensions which has led to idiosyncratic stress in a select number of markets and industry sectors. Page 20 Group Chief Financial Officer's review continued Credit impairment was a $528 million charge, down 37 per cent year-on-year, representing a loan loss rate of 17 basis points. There was a $282 million impairment charge relating to the China commercial real estate sector, including a $32 million decrease in the management overlay which now totals $141 million. The decrease in the management overlay reflects repayments and loans moving into stage 3. The Group has provided $1.2 billion in total, in relation to China commercial real estate sector primarily over the last three years. There was a net release of $45 million relating to sovereign downgrades. Excluding the China commercial real estate portfolio and sovereign-related exposures, there was a net release relating to Corporate exposures, primarily historical provisions. CPBB charge of $354 million reflects an uptick in delinquency trends across the year and the $85 million charge in Ventures is primarily from portfolio growth and increased bankruptcy related write-offs in Mox where credit criteria have now been adjusted to reduce the current elevated delinquency rate. Gross stage 3 loans and advances to customers of $7.2 billion were 8 per cent lower year-on-year as repayments, client upgrades and write-offs more than offset new inflows. Credit-impaired loans represented 2.5 per cent of gross loans and advances, flat on the prior year. The stage 3 cover ratio before collateral of 60 per cent increased by 3 percentage points, while the cover ratio post collateral at 76 per cent was flat on the prior year, with the cover ratio before collateral increasing due to an increase in stage 3 provisions in relation to the China commercial real estate sector and a reduction in gross stage 3 balances. Credit grade 12 balances have increased by 37 per cent to $2.2 billion substantially from a change in instrument on an existing sovereign exposure with no increase in risk. Excluding this temporary inflow, credit grade 12 balances declined 24 per cent reflecting both improvements into stronger credit grades and downgrades to stage 3. Early Alert accounts of $5.5 billion have increased by 11 per cent, reflecting new inflows relating to a select number of clients including sovereign-related exposures. The Group is continuing to carefully monitor its exposures in vulnerable sectors and select markets, given the unusual stresses caused by the currently challenging macro-economic environment. The proportion of investment grade corporate exposures fell by 3 percentage points to 73 per cent, mainly due to a reduction in repurchase agreement balances across various central clearing counterparties. Restructuring, goodwill impairment and other items FY23 FY22�� 4Q'23 Restructuring $million Goodwill and other impairment�� $million DVA $million Other items�� $million Restructuring $million Goodwill and other impairment�� $million DVA $million Other items $million Restructuring $million Goodwill and other impairment $million DVA $million Other items�� $million Operating income 362 - 17 262 494 - 42 20 48 - 35 262 Operating expenses (415) - - - (504) - - - (151) - - - Credit impairment 20 - - - - - - - 7 - - - Other impairment (28) (850) - - (78) (322) - - (3) (153) - - Profit from associates and joint ventures 47 - - - (11) - - - 36 - - - Loss before taxation (14) (850) 17 262 (99) (322) 42 20 (63) (153) 35 262 1. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank ('Bohai') 3. Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans The Group's reported performance is adjusted for profits or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other infrequent and/or exceptional transactions that are significant or material in the context of the Group's normal business earnings for the period and items which management and investors would ordinarily identify separately when assessing underlying performance period-by period. Page 21 Group Chief Financial Officer's review continued In 2022 the Group announced the exit of seven markets in the AME region and will focus solely on the CCIB segment in two more markets. In 2023, the Group completed the sale of its Jordan business, closed its Lebanon representative office and signed agreements for sale of the remaining exit markets. Additionally, the Group sold its global Aviation Finance leasing business to Aircraft Leasing Company ('AviLease') for proceeds of approximately $3.6 billion including $0.7 billion consideration and $2.9 billion repayment of net intra-group financing, giving rise to a gain on disposal of $309 million. The $1 billion Aviation loan business was sold separately, giving rise to a loss on disposal of $47 million. Both of these transactions are recorded in Other Items. As a result of these disposals, effective 1st January 2023, the Group has not included the exit markets and the Aviation Finance business within the Group's underlying operating profit before taxation but reported them within restructuring. The Group has also classified movements in the debit valuation adjustment ('DVA') out of its underlying operating profit before taxation and into Other Items. To aid comparisons with prior periods the Group has removed the exit markets, Aviation Finance business and DVA from its underlying operating profit before taxation for 2022. Restructuring loss of $14 million reflects the impact of actions to transform the organisation to improve productivity, primarily additional redundancy charges, technology simplification and optimising the Group's property footprint. This was partly offset by the profits from the AME exit markets and Aviation Finance business before the completion of their exit from the Group. Other impairment of $850 million is in relation to a further reduction in the carrying value of the Group's investment in its associate Bohai, to align to a lower value-in-use computation following banking industry challenges and property market uncertainties in Mainland China, that may impact Bohai's future profitability. The carrying value of the Group's investment in Bohai has reduced to $0.7 billion from $1.5 billion. Movements in DVA were a positive $17 million driven by the widening of the Group's asset swap spreads on derivative liability exposures. The portfolio subject to DVA did not change materially during the year. Balance sheet and liquidity 31.12.23 $million 30.09.23 $million Change1 % 30.06.23 $million Change1 % 31.12.22 $million Change1 % Assets Loans and advances to banks 44,977 46,111 (2) 44,602 1 39,519 14 Loans and advances to customers 286,975 281,009 2 290,137 (1) 310,647 (8) Other assets 490,892 498,713 (2) 503,972 (3) 469,756 4 Total assets 822,844 825,833 - 838,711 (2) 819,922 - Liabilities Deposits by banks 28,030 29,744 (6) 28,560 (2) 28,789 (3) Customer accounts 469,418 453,157 4 469,567 - 461,677 2 Other liabilities 275,043 294,576 (7) 290,903 (5) 279,440 (2) Total liabilities 772,491 777,477 (1) 789,030 (2) 769,906 - Equity 50,353 48,356 4 49,681 2 50,016 1 Total equity and liabilities 822,844 825,833 - 838,711 (2) 819,922 - Advances-to-deposits ratio (%)2 53.3% 54.5% 53.6% 57.4% Liquidity coverage ratio (%) 145% 156% 164% 147% 1 Variance is increase/(decrease)comparing current reporting period to prior reporting periods 2 The Group now excludes $20,710 million held with central banks (30.09.23: $21,241 million, 30.06.23: $24,749 million, 31.12.22: $20,798 million) that has been confirmed as repayable at the point of stress Page 22 Group Chief Financial Officer's review continued The Group's balance sheet remains strong, liquid and well diversified. �� Loans and advances to customers decreased 8 per cent, or $24 billion to $287 billion as at 31 December 2023 but declined 1 per cent on an underlying basis. The underlying reduction excludes the impact of $12 billion decrease in Treasury and securities backed loans held to collect, $7 billion reduction from risk-weighted asset optimisation actions undertaken by CCIB and a $1 billion reduction from currency translation �� Customer accounts increased $8 billion to $469 billion and up 2% excluding the $2 billion impact of currency translation. Retail time deposits increased $18 billion and Cash Management balances increased $11 billion partly offset by a $18 billion decrease in Corporate Term Deposits �� Other assets increased 4 per cent, or $21 billion from 31 December 2022 with a $41 billion increase in financial assets held at fair value through profit or loss, primarily reverse repurchase agreements and debt securities and other eligible bills. Cash and balances at central banks increased $12 billion. This was partly offset by a $13 billion reduction in derivative balances and a $8 billion reduction in investment securities fair valued through other comprehensive income �� Other liabilities decreased 2 per cent, or $4 billion from 31 December 2022 with a $14 billion decrease in derivative balances partly offset by a $10 billion increase in repurchase agreements The advances-to-deposits ratio decreased to 53.3 per cent from 57.4 per cent at 31 December 2022 reflecting the reduction in loans and advances to customers. The liquidity coverage ratio decreased 2 percentage points to 145 per cent as at 31 December 2023 after increasing in the first half of the year as the banking industry as a whole navigated turbulent external market conditions and remains well above the minimum regulatory requirement of 100 per cent. Risk-weighted assets 31.12.23 $million 30.09.23 $million Change1 % 30.06.23 $million Change1 % 31.12.22 $million Change1 % By risk type Credit risk 191,423 188,294 2 197,151 (3) 196,855 (3) Operational risk 27,861 27,861 - 27,861 - 27,177 3 Market risk 24,867 25,351 (2) 24,105 3 20,679 20 Total RWAs 244,151 241,506 1 249,117 (2) 244,711 - 1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods Total risk-weighted assets ('RWA') of $244.2 billion were broadly flat in comparison to 31 December 2022. �� Credit risk RWA decreased by $5.4 billion to $191.4 billion. There was a $10.3 billion reduction from optimisation actions, relating to the CCIB low-returning portfolio, a $2.1 billion reduction from other RWA efficiency actions, $2.7 billion reduction from currency translation, and a $1.1 billion reduction from model and methodology changes. The impairment of Bohai further reduced RWAs by $2.1 billion and the sale of the Aviation Finance business by a further $1.6 billion. This was partly offset by a $11.8 billion increase from asset mix and $2.7 billion increase relating to adverse credit migration �� Operational risk RWA increased $0.7 billion primarily due to an increase in average income as measured over a rolling three-year time horizon, with higher 2022 income replacing lower 2019 income �� Market risk RWA increased by $4.2 billion to $24.9 billion reflecting an increase in traded risk positions and market volatility Page 23 Group Chief Financial Officer's review continued Capital base and ratios 31.12.23 $million 30.09.23 $million Change�� % 30.06.23 $million Change�� % 31.12.22 $million Change�� % CET1 capital 34,314 33,569 2 34,896 (2) 34,157 - Additional Tier 1 capital (AT1) 5,492 5,492 - 5,492 - 6,484 (15) Tier 1 capital 39,806 39,061 2 40,388 (1) 40,641 (2) Tier 2 capital 11,935 12,051 (1) 12,281 (3) 12,510 (5) Total capital 51,741 51,112 1 52,669 (2) 53,151 (3) CET1 capital ratio (%)2 14.1 13.9 0.2 14.0 0.1 14.0 0.1 Total capital ratio (%)2 21.2 21.2 0.0 21.1 0.1 21.7 (0.5) Leverage ratio (%)2 4.7 4.7 - 4.8 (0.1) 4.8 (0.1) 1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods 2 Change is percentage points difference between two points rather than percentage change The Group's CET1 ratio of 14.1 per cent was 10 basis points higher than the ratio as at 31 December 2022. The Group was able to fund $2.7 billion of capital returns to ordinary shareholders from underlying profits. The CET1 ratio remains 3.5 percentage points above the Group's latest regulatory minimum of 10.5 per cent and above the top of the 13-14 per cent target range. As well as the 169 basis points of CET1 accretion from underlying profits, the Group's CET1 ratio decreased 34 basis points from an underlying $5.9 billion increase in risk-weighted assets as the Group exercised tight control over capital consumption. A further 22 basis points uplift was the result of an increase in Other Comprehensive Income from fair value gains on debt instruments as long-term interest rates began to fall in the latter half of the year. The sale of the Group's Aviation Finance business increased the CET1 ratio by 20 basis points. Ordinary shareholder distributions reduced the CET1 ratio by approximately 111 basis points. The Group spent $2 billion purchasing 230 million ordinary shares of $0.50 each during the year, representing a volume-weighted average price per share of ��7.06. These shares were subsequently cancelled, reducing the total issued share capital by 7.9 per cent and the CET1 ratio by 82 basis points. The Board has recommended a final dividend of 21 cents per share resulting in a total 2023 ordinary dividend of 27 cents per share or $728 million, reducing the CET1 ratio by approximately 30 basis points. Payments due to AT1 and preference shareholders cost approximately 17 basis points. The Board has announced a share buyback for up to a maximum consideration of $1 billion to further reduce the number of ordinary shares in issue by cancelling the repurchased shares. The terms of the buyback will be published, and the programme will start shortly and is expected to reduce the Group's CET1 ratio in the first quarter of 2024 by approximately 40 basis points. The $850 million impairment of Bohai also resulted in an RWA reduction of $2.1 billion, the net effect of which resulted in a reduction of the CET1 ratio by 23 basis points. The Group's leverage ratio of 4.7 per cent is 6 basis points lower than at 31 December 2022. This is primarily driven by a decrease in Tier 1 capital of $0.8 billion as CET1 capital increased by $0.2 billion and was more than offset by the redemption of $1.0 billion Additional Tier 1 securities. The reduction in Tier 1 capital was broadly offset by a $7.2 billion reduction in leverage exposures. The Group's leverage ratio remains significantly above its minimum requirement of 3.7 per cent. Page 24 Group Chief Financial Officer's review continued Outlook We have updated our guidance for 2024 and have provided additional guidance for 2025 and 2026 as follows: �� Income: - Operating income to increase 5-7 per cent for 2024 to 2026; and around the top of 5-7 per cent range in 2024 - Net interest income for 2024 of $10 billion to $10.25 billion, at constant currency �� Expenses: - Operating expenses to be below $12 billion in 2026, at constant currency - Expense saves of around $1.5 billion and cost to achieve of no more than $1.5 billion from 2024 to 2026 - Positive income-to-cost jaws, excluding UK bank levy, at constant currency in each year from 2024 to 2026 �� Assets and RWA: - Low single-digit percentage growth in loans and advances to customers and RWA each year from 2024 to 2026 (pre-Basel 3.1 day-1 impact) - Basel 3.1 day-1 impact, pending clarification of rules expected to add no more than 5 per cent incremental RWA �� Continue to expect the loan loss rate to normalise towards the historical through- the-cycle 30 to 35 basis points range �� Capital: - Continue to operate dynamically within the full 13-14 per cent CET1 target range - Plan to return at least $5 billion to shareholders cumulative 2024 to 2026 - Continue to increase full-year dividend per share over time �� RoTE increasing steadily from 10 per cent, targeting of 12 per cent in 2026 and to progress thereafter Diego De Giorgi Group Chief Financial Officer 23 February 2024 Page 25 Supplementary financial information Underlying performance by client segment 2023 Corporate, Commercial & Institutional Banking $million Consumer, Private & Business Banking $million Ventures $million Central & other items (segment) $million Total $million Operating income 11,218 7,106 156 (1,102) 17,378 External 8,543 3,902 157 4,776 17,378 Inter-segment 2,675 3,204 (1) (5,878) - Operating expenses (5,627) (4,261) (429) (819) (11,136) Operating profit/(loss) before impairment losses and taxation 5,591 2,845 (273) (1,921) 6,242 Credit impairment (123) (354) (85) 34 (528) Other impairment (32) (4) (26) (68) (130) (Loss)/profit from associates and joint ventures - - (24) 118 94 Underlying profit/(loss) before taxation 5,436 2,487 (408) (1,837) 5,678 Restructuring 32 (60) (4) 18 (14) Goodwill and other impairment1 - - - (850) (850) DVA 17 - - - 17 Other items4 262 - - - 262 Reported profit/(loss) before taxation 5,747 2,427 (412) (2,669) 5,093 Total assets 403,058 128,768 4,009 287,009 822,844 Of which: loans and advances to customers 189,395 126,117 1,035 28,939 345,486 loans and advances to customers 130,897 126,104 1,035 28,939 286,975 loans held at fair value through profit or loss (FVTPL)2 58,498 13 - - 58,511 Total liabilities 464,968 200,263 3,096 104,164 772,491 Of which: customer accounts3 328,211 195,678 2,825 7,908 534,622 Risk-weighted assets 141,979 51,342 1,923 48,907 244,151 Income return on risk-weighted assets (%) 7.8 14.0 10.3 (2.2) 28.6 Underlying return on tangible equity (%) 19.5 25.3 nm�� (27.0) 10.1 Cost-to-income ratio (%) 50.2 60.0 nm�� nm�� 63.4 1 Goodwill and other impairment include $850 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai). 2 Loans held at FVTPL includes $51,299 million of reverse repurchase agreements 3 Customer accounts includes $17,248 million of FVTPL and $47,956 million of reverse repurchase agreements 4 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 5 Not meaningful Page 26 Supplementary financial information continued 2022�� Corporate, Commercial & Institutional Banking $million Consumer, Private & Business Banking $million Ventures $million Central & other items (segment) $million Total $million Operating income 9,608 5,969 29 156 15,762 External 8,462 4,942 29 2,329 15,762 Inter-segment 1,146 1,027 - (2,173) - Operating expenses (5,193) (4,104) (336) (776) (10,409) Operating profit/(loss) before impairment losses and taxation 4,415 1,865 (307) (620) 5,353 Credit impairment (425) (262) (16) (133) (836) Other impairment - (10) (24) (5) (39) (Loss)/profit from associates and joint ventures - - (16) 183 167 Underlying profit/(loss) before taxation 3,990 1,593 (363) (575) 4,645 Restructuring 14 (56) (1) (56) (99) Goodwill and other impairment2 - - - (322) (322) DVA 42 - - - 42 Other items - - - 20 20 Reported profit/(loss) before taxation 4,046 1,537 (364) (933) 4,286 Total assets 401,567 133,956 2,451 281,948 819,922 Of which: loans and advances to customers 184,254 130,985 702 41,789 357,730 loans and advances to customers 139,756 130,957 702 39,232 310,647 loans held at fair value through profit or loss (FVTPL)3 44,498 28 - 2,557 47,083 Total liabilities 479,981 185,396 1,658 102,871 769,906 Of which: customer accounts4 332,176 180,659 1,548 5,846 520,229 Risk-weighted assets 143,582 50,730 1,358 49,041 244,711 Income return on risk-weighted assets (%) 6.2 11.4 4.2 0.3 6.1 Underlying return on tangible equity (%) 13.4 15.8 nm�� (14.2) 7.7 Cost-to-income ratio (%) 54.0 68.8 nm�� nm�� 65.4 1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2 Goodwill and other impairment include $308 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai). 3 Loans held at FVTPL includes $40,537 million of reverse repurchase agreements 4 Customer accounts includes $11,706 million of FVTPL and $46,846 million of reverse repurchase agreements 5 Not meaningful Page 27 Supplementary financial information continued Corporate, Commercial & Institutional Banking 4Q'23 $million 4Q'22�� $million Change3 % Constant currency change3,4 % 3Q'23 $million Change3 % Constant currency change3,4 % FY23 $million FY22�� $million Change3 % Constant currency change3,4 % Operating income 2,581 2,467 5 5 2,814 (8) (8) 11,218 9,608 17 20 Transaction Banking 1,435 1,216 18 18 1,449 (1) (1) 5,656 3,751 51 54 Trade & Working capital 292 305 (4) (5) 312 (6) (7) 1,246 1,288 (3) (1) Cash Management 1,143 911 25 26 1,137 1 1 4,410 2,463 79 83 Financial Markets 1,041 1,147 (9) (8) 1,253 (17) (17) 5,099 5,345 (5) (2) Macro Trading 538 628 (14) (13) 634 (15) (15) 2,827 2,965 (5) (1) Credit Markets 409 436 (6) (6) 472 (13) (14) 1,803 1,761 2 5 Credit Trading 105 147 (29) (30) 137 (23) (26) 554 488 14 17 Financing Solutions & Issuance�� 304 289 5 6 335 (9) (9) 1,249 1,273 (2) - Financing & Securities Services�� 94 83 13 17 147 (36) (32) 469 619 (24) (22) Lending & Portfolio Management 105 107 (2) (4) 115 (9) (9) 469 521 (10) (8) Wealth Management - 1 (100) nm9 - nm9 nm9 - 1 (100) (100) Retail Products - 1 (100) nm9 - nm9 nm9 1 1 nm9 nm9 Deposits - 1 (100) nm9 - nm9 nm9 1 1 nm9 nm9 Other - (5) 100 100 (3) 100 100 (7) (11) 36 56 Operating expenses (1,422) (1,352) (5) (3) (1,387) (3) (3) (5,627) (5,193) (8) (10) Operating profit before impairment losses and taxation 1,159 1,115 4 8 1,427 (19) (19) 5,591 4,415 27 32 Credit impairment 105 (144) 173 172 (159) 166 162 (123) (425) 71 69 Other impairment 2 - nm9 nm9 (13) 115 114 (32) - nm9 nm9 Underlying profit before taxation 1,266 971 30 35 1,255 1 nm9 5,436 3,990 36 42 Restructuring (52) (34) (53) (50) 11 nm9 nm9 32 14 129 nm9 DVA 35 (133) 126 127 21 67 67 17 42 (60) (60) Other items8 262 - nm9 nm9 - nm9 nm9 262 - nm9 nm9 Reported profit before taxation 1,511 804 88 96 1,287 17 16 5,747 4,046 42 49 Total assets 403,058 401,567 - 2 395,938 2 1 403,058 401,567 - 2 Of which: loans and advances to customers�� 189,395 184,254 3 4 177,542 7 6 189,395 184,254 3 4 Total liabilities 464,968 479,981 (3) (3) 471,272 (1) (2) 464,968 479,981 (3) (3) Of which: customer accounts�� 328,211 332,176 (1) (1) 319,785 3 2 328,211 332,176 (1) (1) Risk-weighted assets 141,979 143,582 (1) nm9 143,386 (1) nm9 141,979 143,582 (1) nm9 Income return on risk-weighted assets (%)�� 7.3 6.7 60bps nm9 7.8 (50)bps nm9 7.8 6.2 160bps nm9 Underlying return on tangible equity (%)�� 18.5 13.6 490bps nm9 17.9 60bps nm9 19.5 13.4 610bps nm9 Cost-to-income ratio (%)�� 55.1 54.8 (0.3) 1.3 49.3 (5.8) (6.0) 50.2 54.0 3.8 4.5 1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2 Shipping Finance is now reported under "Financing Solutions & Issuance" which was reported under "Financing & Securities Services" in 2022. 3 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 4 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 5 Loans and advances to customers and customer accounts includes FVTPL and reverse repurchase agreements 6 Change is the basis points (bps) difference between the two periods rather than the percentage change 7 Change is the percentage points difference between the two periods rather than the percentage change 8 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 9 Not meaningful Segment overview Corporate, Commercial and Institutional Banking supports local and large corporations, governments, banks and investors with their transaction banking, financial markets and borrowing needs. We provide solutions to nearly 20,000 clients in some of the world's fastest-growing economies and most active trade corridors. Our clients operate or invest across 45 markets across the globe. Page 28 Supplementary financial information continued Our strong and deep local presence enables us to help co-create bespoke financing solutions and connect our clients multilaterally to investors, suppliers, buyers and sellers. Our products and services enable our clients to move capital, manage risk and invest to create wealth. Our clients represent a large and important part of the economies we serve. Corporate, Commercial and Institutional Banking is at the heart of the Group's shared Purpose to drive commerce and prosperity through our unique diversity. We are also committed to promote sustainable finance in our markets and channelling capital to where the impact will be greatest. We are delivering on our ambition to support sustainable economic growth, increasing support and funding for financial offerings that have a positive impact on our communities and environment. Strategic priorities �� Deliver sustainable growth for clients by leveraging our network to facilitate trade, capital and investment flows across our footprint markets �� Generate high-quality returns by improving funding quality and income mix, growing capital-lite income and driving balance sheet velocity while maintaining disciplined risk management �� Be a digital-first and data-driven bank, that delivers enhanced client experiences �� Accelerate our sustainable finance offering to our clients through product innovation and enabling transition to a low-carbon future Progress �� Our underlying income performance is driven by our diversified product suite and expanded client solutions supported by the higher interest rate environment. Our cross-border income currently contributes to 61 per cent of total CCIB income with growth across strategic corridors �� Robust balance sheet quality with investment-grade net exposures representing 66 per cent of total corporate net exposures (2022: 70 per cent) and high-quality operating account balances broadly stable at 65 per cent of Transaction Banking and Securities Services customer balances (2022: 67 per cent) �� We defended against liabilities attrition through active pricing management �� Our client migration to the Straight to Bank NextGen platform is successfully completed. We achieved digital adoption of 65.7 per cent (2022: 61.5 per cent) across Cash, Trade and FX, by driving client awareness and adoption programs. Client experience remains at the centre of our digital transformation, with our Net Promoter Score at 78.6 per cent (2022: 68.4 per cent) �� We are ~70 per cent of the way towards delivering our $1 billion income from sustainable finance franchise by 2025, and have mobilised $87 billion in sustainable financing against our $300 billion commitment by 2030 Performance highlights �� Underlying profit before tax of $5,436 million up 42 per cent at constant currency ("ccy"), primarily driven by higher income and lower credit impairment charges, partially offset by higher expenses �� Underlying operating income of $11,218 million up 20 per cent at ccy primarily due to strong performance in Cash Management from pricing discipline in a rising interest rate environment. Financial Markets was down 2 per cent at ccy, mainly from lower revenue in FX and Commodities on the back of lower market volatility, subdued primary issuances and non-repeat of the gains on mark-to-market liabilities in 2022. Excluding the latter, Financial Markets was up 3 per cent �� Underlying operating expenses were up by 10 per cent at ccy largely due to inflationary pressure, targeted investments and strategic hires to support business growth �� Risk-weighted assets were down by $1.6 billion since 31 December 2022, mainly as a result of optimisation initiatives partly offset by business growth. We achieved $10.3 billion optimisation in risk-weighted assets in 2023 ($24.2 billion since January 2022) �� Underlying RoTE increased from 13.4 per cent to 19.5 per cent Page 29 Supplementary financial information continued Consumer, Private & Business Banking 4Q'23 $million 4Q'221 $million Change3 % Constant currency change2,3 % 3Q'23 $million Change3 % Constant currency change2,3 % FY23 $million FY221 $million Change3 % Constant currency change2,3 % Operating income 1,701 1,533 11 11 1,849 (8) (8) 7,106 5,969 19 22 Transaction Banking 46 38 21 18 47 (2) - 181 123 47 50 Trade & Working capital 12 11 9 8 13 (8) 8 48 55 (13) (11) Cash Management 34 27 26 21 34 - - 133 68 96 99 Lending & Portfolio Management 6 5 20 (38) 6 - (17) 29 37 (22) (19) Wealth Management 412 357 15 16 526 (22) (21) 1,944 1,795 8 10 Retail Products 1,227 1,142 7 8 1,266 (3) (3) 4,927 4,013 23 26 CCPL & other unsecured lending 259 284 (9) (7) 270 (4) (3) 1,068 1,180 (9) (7) Deposits 917 810 13 14 933 (2) (1) 3,488 2,029 72 76 Mortgage & Auto 17 12 42 13 31 (45) (42) 236 633 (63) (62) Other Retail Products 34 36 (6) (11) 32 6 - 135 171 (21) (19) Other 10 (9) nm�� 175 4 150 125 25 1 nm�� nm�� Operating expenses (1,121) (1,030) (9) (8) (1,065) (5) (6) (4,261) (4,104) (4) (6) Operating profit before impairment losses and taxation 580 503 15 19 784 (26) (26) 2,845 1,865 53 57 Credit impairment (131) (96) (36) (43) (115) (14) (15) (354) (262) (35) (42) Other impairment (4) (9) 56 67 - nm�� nm�� (4) (10) 60 50 Underlying profit/(loss) before taxation 445 398 12 15 669 (33) (33) 2,487 1,593 56 60 Restructuring (27) (17) (59) (42) (17) (59) (59) (60) (56) (7) 9 Reported profit/(loss) before taxation 418 381 10 13 652 (36) (36) 2,427 1,537 58 63 Total assets 128,768 133,956 (4) (4) 126,714 2 (1) 128,768 133,956 (4) (4) Of which: loans and advances to customers4 126,117 130,985 (4) (3) 124,178 2 (1) 126,117 130,985 (4) (3) Total liabilities 200,263 185,396 8 8 190,925 5 3 200,263 185,396 8 8 Of which: customer accounts4 195,678 180,659 8 9 186,131 5 4 195,678 180,659 8 9 Risk-weighted assets 51,342 50,730 1 nm�� 50,365 2 nm�� 51,342 50,730 1 nm�� Income return on risk-weighted assets (%)5 13.2 12.0 120bps nm�� 14.5 (130)bps nm�� 14.0 11.4 260bps nm�� Underlying return on tangible equity (%)5 17.9 16.1 180bps nm�� 27.2 (930)bps nm�� 25.3 15.8 950bps nm�� Cost-to-income ratio (%)6 65.9 67.2 1.3 2.0 57.6 (8.3) (8.4) 60.0 68.8 8.8 9.0 1 Underlying performance for relevant periods in 2022 has been restated for the removal of exit markets and businesses in AME. 2 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 3 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 4 Loans and advances to customers and customer accounts includes FVTPL and reverse repurchase agreements 5 Change is the basis points (bps) difference between the two periods rather than the percentage change 6 Change is the percentage points difference between the two periods rather than the percentage change 7 Not meaningful Segment overview Consumer, Private and Business Banking serves more than 11 million clients in many of the world's fastest-growing markets. Our client continuum spans from Mass Retail to Affluent, including high net-worth clients served by our Private Bank. We leverage digital banking channels with a human touch to provide clients with differentiated products and services such as deposits, payments, financing, wealth management and personalised advice. We also support small business clients with their business banking needs. We are committed to realising greater synergies from our international network and the Group's other client segments, from delivering holistic propositions to clients with cross-border investment needs to offering employee banking services to Corporate, Commercial and Institutional Banking clients. Consumer, Private and Business Banking also provides a source of high-quality liquidity for the Group. Page 30 Supplementary financial information continued Strategic priorities �� Maximise the value of our international network, with wealth hubs in Hong Kong, Singapore, UAE and Jersey, to provide Affluent clients with a global wealth proposition built on deep local expertise and seamless cross-border client experience �� Unlock synergies from nurturing clients up our client continuum, by helping them grow and protect their wealth through expert advice and best-in-class wealth propositions �� Grow Mass Retail profitably, via digital-first sales and service business models, partnerships, and data analytics �� Continue to improve client experience and efficiency through digitalisation, process simplification and operational excellence Progress �� Accelerated Affluent growth momentum in New to Bank clients, NNM and income across Priority Banking and Private Bank �� Rolled out Standard Chartered-INSEAD Wealth Academy to more markets with over 900 senior frontline staff upskilled to be future-ready advisors �� Enhanced cross border digital capabilities to improve client experience �� Expanded myWealth suite of digital advisory tools to enable RMs to provide personalised portfolio construction and investment ideas for clients �� Recognised as a leader in digital Wealth capabilities with 20 industry awards received in 2023 �� Enhanced digital capabilities in key markets focusing on frictionless mobile experience, leading to an average rating of 4.6 on App Store and Play Store in Hong Kong, Singapore, India, China and Pakistan �� Continued to transform our Mass Retail business by scaling sustainably through partnerships, digital client engagement, and automation �� Eight Mass Retail partnerships live across our footprint in China, Indonesia, Vietnam and Singapore, reaching more than 2.6 million clients Performance highlights �� Underlying profit before tax of $2,487 million was up 60 per cent at ccy driven by higher income, offsetting higher expenses and higher credit impairments �� Underlying operating income of $7,106 million was up 19 per cent (up 22 percent at ccy). Asia was up 20 per cent at ccy and Africa and the Middle East was up 36 per cent at ccy �� Strong income growth mainly from Deposits up 76 per cent at ccy with improved margins and balance sheet growth coupled with 10 per cent (ccy) growth from Wealth Management. This offsets lower income in Mortgages, and Unsecured Lending largely due to margin compression impacted by a rising interest rate environment �� Underlying RoTE increased from 15.8 per cent to 25.3 per cent Page 31 Supplementary financial information continued Ventures 4Q'23 $million 4Q'22 $million Change2 % Constant currency change1,2 % 3Q'23 $million Change2 % Constant currency change1,2 % FY23 $million FY22 $million Change2 % Constant currency change1,2 % Operating income 32 14 129 129 35 (9) (11) 156 29 nm5 nm5 Retail Products 11 4 175 nm5 13 (15) (29) 41 13 nm5 nm5 CCPL & other unsecured lending 29 10 190 nm5 27 7 4 93 22 nm5 nm5 Deposits (18) (6) nm5 nm5 (14) (29) (29) (52) (9) nm5 nm5 Other Retail Products - - nm5 nm5 - nm5 (100) - - nm5 nm5 Treasury 10 5 100 80 8 25 - 30 5 nm5 nm5 Other 11 5 120 117 14 (21) - 85 11 nm5 nm5 Operating expenses (109) (103) (6) (6) (109) - (1) (429) (336) (28) (27) Operating profit before impairment losses and taxation (77) (89) 13 13 (74) (4) (7) (273) (307) 11 12 Credit impairment (32) (9) nm5 nm5 (30) (7) (7) (85) (16) nm5 nm5 Other impairment (17) (24) 29 25 (9) (89) (100) (26) (24) (8) (8) Profit from associates and joint ventures (7) (5) (40) (20) (4) (75) (50) (24) (16) (50) (50) Underlying profit/(loss) before taxation (133) (127) (5) (5) (117) (14) (16) (408) (363) (12) (12) Restructuring (3) - nm5 nm5 - nm5 (100) (4) (1) nm5 nm5 Reported profit/(loss) before taxation (136) (127) (7) (6) (117) (16) (16) (412) (364) (13) (12) Total assets 4,009 2,451 64 74 3,398 18 21 4,009 2,451 64 74 Of which: loans and advances to customers3 1,035 702 47 47 1,014 2 1 1,035 702 47 47 Total liabilities 3,096 1,658 87 86 2,581 20 18 3,096 1,658 87 86 Of which: customer accounts3 2,825 1,548 82 82 2,316 22 20 2,825 1,548 82 82 Risk-weighted assets 1,923 1,358 42 nm5 1,786 8 nm5 1,923 1,358 42 70 Income return on risk-weighted assets (%)4 7.9 5.5 240bps nm5 8.3 (40)bps nm5 10.3 4.2 610bps nm5 Underlying return on tangible equity (%)4 nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 Cost-to-income ratio (%) nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 nm5 6 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 7 Loans and advances to customers and customer accounts includes FVTPL and reverse repurchase agreements 8 Change is the basis points (bps) difference between the two periods rather than the percentage change 9 Not meaningful Segment overview Formed in 2022 the Ventures client segment is a consolidation of SC Ventures and its related entities as well as the Group's two majority-owned digital banks Mox in Hong Kong and Trust in Singapore. �� SC Ventures is the platform and catalyst for the Group to promote innovation, invest in disruptive financial technology and explore alternative business models. It represents a diverse portfolio of over 30 ventures and more than 20 investments. �� Mox, a cloud-native, mobile only digital bank, was launched in Hong Kong as a joint venture with HKT, PCCW and Trip.com in September 2020. �� Trust Bank is Singapore's first cloud-native bank and was launched in a partnership with FairPrice Group in September 2022. Page 32 Supplementary financial information continued Strategic priorities �� SC Ventures' focus is on building and scaling new business models - across the four themes of Online Economy & Lifestyle, SMEs & World Trade, Digital Assets and Sustainability & Inclusion. We do this by connecting ecosystems, partners and clients to create value and new sources of revenue, providing optionality for the Bank. Through its fund SC Ventures advances the Fintech agenda by identifying, partnering, and taking minority interests in companies, which can be integrated into the Bank and Ventures. Focus is on innovative, fast-growing, technology-focused companies which accelerate transformation in the financial industry. �� Mox continues to grow the customer base and drive main bank relationships across mass and mass affluent segments in Hong Kong. Mox's vision is to set the global benchmark for digital banking from Hong Kong. It aims to be the leading Hong Kong virtual bank for Cards, Digital Lending and continues to further expand services, including the recent launch of Digital Wealth Management services. �� Trust Bank aims to become the fourth largest digital retail bank in Singapore by the end of 2024. To achieve this, it will scale through its partner ecosystem and deepen its customer relationships with the mass and mass affluent customer segments. Progress �� Business performance in 2023 saw continued positive momentum for SC Ventures - five ventures were launched, funds were raised amidst a challenging environment, geographical reach was expanded, and the business exited two investments successfully. As a result, the SC Ventures customer base grew by 25 per cent to reach 587,000 with Gross Transactional Value (GTV) growing by 15 per cent to $18 bn. One significant milestone for SC Ventures in 2023 was the establishment of a partnership with SBI Holdings setting up a $100m digital asset joint venture in the UAE, a region fast becoming a hub for fintechs in the digital asset space. SC Ventures, through a number of innovative fintech ventures (such as Shoal, Tawi and myZoi), continues to drive sustainability, financial inclusion and financial literacy for the underbanked. �� In 2023, Mox had a strong focus on expanding its card and digital lending services and recorded a strong performance and an engaged customer base. Mox has more than 523,000 customers, up 1.2 times YoY, with customers holding an average of 3.1x products. It delivered close to three times YOY growth in revenue with both deposits and lending expanding over 30 per cent YOY basis. Mox reached 36 per cent (ranked #1) and 30 per cent of (ranked #2) market share in lending and deposits respectively among all Hong Kong virtual banks in H1. The bank was recognised in Forbes' World's Best Banks 2023, and The Asian Banker Hong Kong Awards 2023 as the Best Digital-only Bank in Hong Kong, and was ranked fifth in the World's Top 50 Digital Banks 2023 by The Digital Banker. The Mox app is the top-rated Hong Kong virtual banking app in Apple App Store. Mox consistently has the best Net Promoter Score (NPS) among all Hong Kong virtual banks. �� Trust Bank continued to scale and, by reaching 12 per cent market share a year after launch, became one of the world's fastest growing digital banks. Product development remained on track, with the launch of unsecured loans, supplementary credit cards, and broadening of the general insurance offering. By the end of 2023, its customer base had grown 1.7 times YoY to 700,000 customers and deposit balances had grown 3.0 times YoY to $1.4bn. Customer engagement remained strong with card activation of 85 per cent and more than 2m digital coupons redeemed by customers in the Trust ecosystem. In its first year of operation, Trust was recognised as the best digital retail bank in Singapore and Southeast Asia by The Digital Banker and was the number one rated banking app in the Singapore Apple App Store. Performance highlights �� Underlying loss before tax of $408 million was up $45 million, driven mainly by higher expenses as we continue to invest in new and existing ventures. �� Risk-weighted assets of $1.9 billion have increased $0.6 billion mainly due to continued investment in new and existing ventures and minority interests. Page 33 Supplementary financial information continued Central & other items (segment) 4Q'23 $million 4Q'22 $million Change2 % Constant currency change1,2 % 3Q'23 $million Change2 % Constant currency change1,2 % FY23 $million FY22 $million Change2 % Constant currency change1,2 % Operating income (290) (249) (16) (24) (295) 2 4 (1,102) 156 nm6 nm6 Treasury (245) (178) (38) (40) (282) 13 13 (932) 332 nm6 nm6 Other (45) (71) 37 24 (13) nm6 (137) (170) (176) 3 (26) Operating expenses (210) (252) 17 26 (209) - (1) (819) (776) (6) (4) Operating loss before impairment losses and taxation (500) (501) - 4 (504) 1 2 (1,921) (620) nm6 nm6 Credit impairment (4) (91) 96 96 10 (140) (123) 34 (133) 126 135 Other impairment (22) (5) nm6 nm6 (4) nm6 nm6 (68) (5) nm6 nm6 Profit from associates and joint ventures 4 3 33 - 7 (43) (57) 118 183 (36) (35) Underlying loss before taxation (522) (594) 12 11 (491) (6.3) (6) (1,837) (575) nm6 nm6 Restructuring 19 (39) 149 154 (1) nm6 nm6 18 (56) 132 135 Goodwill and other impairment3 (153) (322) 52 52 (697) 78 78 (850) (322) (164) (164) Other items - 20 (100) (100) - nm6 nm6 - 20 (100) (100) Reported loss before taxation (656) (935) 30 29 (1,189) 45 45 (2,669) (933) (186) nm6 Total assets 287,162 281,948 2 2 299,783 (4) (6) 287,162 281,948 2 2 Of which: loans and advances to customers4 28,939 41,789 (31) (31) 26,686 8 5 28,939 41,789 (31) (31) Total liabilities 104,164 102,871 1 2 112,699 (8) (8) 104,164 102,871 1 2 Of which: customer accounts4 7,908 5,846 35 36 7,590 4 3 7,908 5,846 35 36 Risk-weighted assets 48,907 49,041 - nm6 45,969 6 nm6 48,907 49,041 - nm6 Income return on risk-weighted assets (%)5 (2.4) (1.9) (50)bps nm6 (2.4) - nm6 (2.2) 0.3 (250)bps nm6 Underlying return on tangible equity (%)5 (18.8) (38.4) 1,960bps nm6 (38.5) 1,970bps nm6 (27.0) (14.2) (1,280)bps nm6 Cost-to-income ratio (%) (excluding UK bank levy) nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 8 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 8 Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 8 Loans and advances to customers and customer accounts includes FVTPL and reverse repurchase agreements 8 Change is the basis points (bps) difference between the two periods rather than the percentage change 8 Not meaningful Performance highlights Underlying loss before tax increased to $1,837 million from $575 million in 2022, driven by hedging to smooth overall bank income which dampens positive interest margin in the business. This is partly offset by improved liquidity pool returns from rising interest rates and positive FX basis. Page 34 Supplementary financial information continued Underlying performance by region 2023 Asia $million Africa & Middle East $million Europe & Americas $million Central & other items (region) $million Total $million Operating income 12,429 2,806 1,397 746 17,378 Operating expenses (7,096) (1,571) (1,733) (736) (11,136) Operating profit/(loss) before impairment losses and taxation 5,333 1,235 (336) 10 6,242 Credit impairment (644) 91 19 6 (528) Other impairment (63) (15) (13) (39) (130) Profit/(loss) from associates and joint ventures 114 - - (20) 94 Underlying profit/(loss) before taxation 4,740 1,311 (330) (43) 5,678 Restructuring (97) (2) 32 53 (14) Goodwill and other impairment1 (850) - - - (850) DVA (16) 26 7 - 17 Other items4 35 (18) 263 (18) 262 Reported profit/(loss) before taxation 3,812 1,317 (28) (8) 5,093 Total assets 505,905 54,140 253,410 9,389 822,844 Of which: loans and advances to customers 256,400 25,870 63,216 - 345,486 loans and advances to customers 233,417 22,774 30,784 - 286,975 loans held at fair value through profit or loss (FVTPL)2 22,983 3,096 32,432 - 58,511 Total liabilities 461,568 40,612 181,417 88,894 772,491 Of which: customer accounts3 377,020 33,059 124,543 - 534,622 Risk-weighted assets 155,995 38,393 46,106 3,657 244,151 Income return on risk-weighted assets (%) 8.1 7.1 2.8 19.5 28.6 Underlying return on tangible equity (%) 16.4 16.6 (3.6) nm�� 10.1 Cost-to-income ratio (%) 57.1 56.0 124.1 nm�� 63.4 20225 Asia $million Africa & Middle East $million Europe & Americas $million Central & other items (region) $million Total $million Operating income 10,912 2,460 2,303 87 15,762 Operating expenses (6,675) (1,551) (1,548) (635) (10,409) Operating profit/(loss) before impairment losses and taxation 4,237 909 755 (548) 5,353 Credit impairment (790) (119) 78 (5) (836) Other impairment (10) 2 1 (32) (39) Profit/(loss) from associates and joint ventures 179 - - (12) 167 Underlying profit/(loss) before taxation 3,616 792 834 (597) 4,645 Restructuring (46) 21 (13) (61) (99) Goodwill and other impairment1 (308) - - (14) (322) DVA 20 8 14 - 42 Other items 20 - - - 20 Reported profit/(loss) before taxation 3,302 821 835 (672) 4,286 Total assets 488,399 53,086 268,960 9,477 819,922 Of which: loans and advances to customers 270,892 23,857 62,981 - 357,730 loans and advances to customers 257,171 21,570 31,906 - 310,647 loans held at fair value through profit or loss (FVTPL)2 13,721 2,287 31,075 - 47,083 Total liabilities 441,349 40,902 219,701 67,954 769,906 Of which: customer accounts3 346,832 31,860 141,537 - 520,229 Risk-weighted assets 150,816 40,716 50,174 3,005 244,711 Income return on risk-weighted assets (%) 6.7 5.5 4.5 4.0 6.1 Underlying return on tangible equity (%) 11.9 9.3 8.6 nm6 7.7 Cost-to-income ratio (%) 61.2 63.0 67.2 nm6 65.4 1 Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 2 Loans held at FVTPL includes $51,299 million (FY'22 $40,537 million) of reverse repurchase agreements 3 Customer accounts includes $17,248 million (FY'22 $11,706 million) of FVTPL and $47,956 million (FY'22 $46,846 million) of reverse repurchase agreements 4 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 5 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 6 Not meaningful Page 35 Supplementary financial information continued Asia 4Q'23 $million 4Q'22�� $million Change2 % Constant currency change1,2 % 3Q'23 $million Change2 % Constant currency change1,2 % FY23 $million FY22�� $million Change2 % Constant currency change1,2 % Operating income 2,905 2,682 8 8 3,169 (8) (8) 12,429 10,912 14 15 Operating expenses (1,772) (1,692) (5) (5) (1,797) 1 1 (7,096) (6,675) (6) (8) Operating profit before impairment losses and taxation 1,133 990 14 12 1,372 (17) (18) 5,333 4,237 26 27 Credit impairment (151) (199) 24 24 (311) 51 51 (644) (790) 18 18 Other impairment (54) (7) nm�� nm�� (7) nm�� nm�� (63) (10) nm�� nm�� Profit from associates and joint ventures - 3 (100) (133) 9 (100) (111) 114 179 (36) (36) Underlying profit/(loss) before taxation 928 787 18 15 1,063 (13) (13) 4,740 3,616 31 32 Restructuring (39) (23) (70) (77) (36) (8) (8) (97) (46) (111) (113) Goodwill and other impairment3 (153) (308) 50 50 (697) 78 78 (850) (308) (176) (176) DVA 6 (45) 113 114 - nm�� nm�� (16) 20 (180) (180) Other items7 35 20 75 75 - nm�� nm�� 35 20 75 75 Reported profit/(loss) before taxation 777 431 80 73 330 135 133 3,812 3,302 15 16 Total assets 505,905 488,399 4 4 498,242 2 - 505,905 488,399 4 4 Of which: loans and advances to customers4 256,400 270,892 (5) (5) 248,983 3 1 256,400 270,892 (5) (5) Total liabilities 461,568 441,349 5 5 451,638 2 1 461,568 441,349 5 5 Of which: customer accounts4 377,020 346,832 9 9 356,439 6 4 377,020 346,832 9 9 Risk-weighted assets 155,995 150,816 3 nm�� 150,842 3 nm�� 155,995 150,816 3 nm�� Income return on risk-weighted assets (%)5 7.6 6.9 70bps nm�� 8.2 (60)bps nm�� 8.1 6.7 140bps nm�� Underlying return on tangible equity (%)5 12.8 10.9 190bps nm�� 14.7 (190)bps nm�� 16.4 11.9 450bps nm�� Cost-to-income ratio (%)5 61.0 63.1 2.1 1.7 56.7 (4.3) (4.5) 57.1 61.2 4.0 3.9 1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 3 Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 4 Loans and advances to customers and customer accounts includes FVTPL and reverse repurchase agreements 5 Change is the percentage points difference between the two periods rather than the percentage change 6 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) Aviation Finance and (ii) DVA. No change to reported performance 7 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $59 million on the leasing business and a loss of $24 million in relation to a sale of a portfolio of Aviation loans 8 Not meaningful Region overview The Asia region has a long-standing and deep franchise across some of the world's fastest-growing economies. The region generates over two-thirds of the Group's income from its extensive network of 21 markets. Of these, Hong Kong and Singapore contributed the highest income, underpinned by a diversified franchise and deeply rooted presence. The region is highly interconnected, with three distinct and potent sub-engines of Greater China, ASEAN and South Asia. Our global footprint and strong regional presence, distinctive proposition, and continued investment position us strongly to capture opportunities as they arise from the continuing opening up of China's economy where we now earn two dollars offshore from Chinese clients for every dollar we earn onshore, the growing connectivity of ASEAN and the strong economic growth in India. The region is benefiting from rising trade flows, especially intra-Asia, continued strong investment, and a rising middle class which is driving consumption growth and improving digital connectivity. Page 36 Supplementary financial information continued Strategic priorities �� Leverage our network strength to serve the inbound and outbound cross-border trade and investment needs of our clients, particularly across high-growth corridors e.g., China-ASEAN, China-South Asia, China-AME and KR-ASEAN �� Capture and monetise opportunities arising from China's opening and accelerate growth in Asia �� Turbocharge our Affluent and Wealth Management businesses through differentiated propositions and service �� Continue to invest and advance in technology, digital capabilities and partnerships to enhance client experience and build scale efficiently �� Support clients' sustainable finance and transition needs and continue to strengthen our thought leadership status Progress �� We continue to advance our China strategy both on- and off-shore, and have also made a material increase in both the number of, and the income contribution from New to Bank affluent Mainland China customers and adding new clients through digital partnerships. The China business delivered record income on-shore and has grown network income strongly along a number of key corridors in ASEAN, up 53 per cent and ME up 67 per cent YoY. We have also made progress with digital partnerships launching new partnerships JD.com and KCB. �� Strong Asia cross border momentum including India Singapore corridor up 29 per cent YoY highlighting the role of Singapore as a financial hub for clients in ASEAN as well as India �� Our two strong international financial hubs in Hong Kong and Singapore, delivered strong income growth driven by Wealth Management with Affluent clients, increased Financial Markets activity with Corporate and Institutional clients and a material improvement in the net interest margin. �� Our digital agendas have progressed; and our virtual bank Mox has the largest loan book and the 2nd largest deposits base among virtual banks in Hong Kong, while our digital bank Trust, is becoming one of the world's fasting growing digital banks; more than one in ten Singaporeans now bank with Trust. Performance highlights �� Underlying profit before tax of $4,740 million was up 32 per cent at constant currency (ccy) on the back of higher income and lower credit impairment, partially offset by 8 per cent (ccy) increase in operating expenses �� Underlying operating income of $12,429 million was up 15 per cent at ccy, mainly from strong double-digit increases across Cash Management and Retail Deposits, underpinned by expansion in margins and Wealth Management partly offset by lower Mortgage income and a loss in Treasury Markets �� Credit Impairment improved 18 per cent year-on-year ('YoY') �� Loans and advances to customers were down 5 per cent (reported and ccy); Customer accounts were up 9 per cent (reported and ccy) YoY �� Risk-weighted assets up $5 billion YoY �� RoTE increased to 16.4 per cent from 11.9 per cent in FY22 Page 37 Supplementary financial information continued Africa & Middle East 4Q'23 $million 4Q'22�� $million Change�� % Constant currency change1,2 % 3Q'23 $million Change�� % Constant currency change1,2 % FY23 $million FY22�� $million Change�� % Constant currency change1,2 % Operating income 688 642 7 13 677 2 2 2,806 2,460 14 26 Operating expenses (377) (407) 7 7 (398) 5 5 (1,571) (1,551) (1) (6) Operating profit before impairment losses and taxation 311 235 32 52 279 11 13 1,235 909 36 63 Credit impairment 84 (145) 158 171 (2) nm�� nm�� 91 (119) 176 nm�� Other impairment (10) 1 nm�� nm�� (4) (150) (150) (15) 2 nm�� nm�� Underlying profit/(loss) before taxation 385 91 nm�� nm�� 273 41 39 1,311 792 66 90 Restructuring (18) (14) (29) (14) (19) 5 (14) (2) 21 (110) (150) DVA 13 (13) nm�� nm�� 16 (19) (29) 26 8 nm�� nm�� Other items�� (18) - nm�� nm�� - nm�� nm�� (18) - nm�� nm�� Reported profit/(loss) before taxation 362 64 nm�� nm�� 270 34 29 1,317 821 60 87 Total assets 54,140 53,086 2 10 51,170 6 7 54,140 53,086 2 10 Of which: loans and advances to customers3 25,870 23,857 8 15 22,273 16 17 25,870 23,857 8 15 Total liabilities 40,612 40,902 (1) 5 41,534 (2) (2) 40,612 40,902 (1) 5 Of which: customer accounts3 33,059 31,860 4 9 32,276 2 2 33,059 31,860 4 9 Risk-weighted assets 38,393 40,716 (6) nm�� 38,529 - nm�� 38,393 40,716 (6) nm�� Income return on risk-weighted assets (%)4 7.1 6.1 100bps nm�� 6.8 30bps nm�� 7 5.5 160bps nm�� Underlying return on tangible equity (%)4 20.5 4.8 1,570bps nm�� 13.1 740bps nm�� 17 9.3 730bps nm�� Cost-to-income ratio (%)4 54.8 63.4 8.6 11.6 58.8 4.0 4.2 56.0 63.0 7.0 10.2 1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 3 Loans and advances to customers and customer accounts includes FVTPL and reverse repurchase agreements 4 Change is the percentage points difference between the two periods rather than the percentage change 5 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME and (ii) DVA. No change to reported performance 6 Other items includes a loss of $18 million in relation to a sale of a portfolio of Aviation loans 7 Not meaningful Region overview We have a rich heritage in Africa and the Middle East (AME) with deep client relationships and historical contributions to the economy and the communities. Our unique footprint in the region, as well as across centres in Asia, Europe, and the Americas, enable us to seamlessly support our clients. AME is becoming increasingly important for global trade and investment corridors, and we are well placed to facilitate these flows. Gulf Cooperation Council (GCC) markets are expected to outpace global growth on the back of macro-economic tailwinds, higher government spend in diversified areas, bilateral trade negotiations and evolving economic partnerships. The macro-economic risk remains elevated in some markets in the region due to a high level of sovereign debt and FX liquidity challenges, but they remain integral to the economic corridors for our global clients. Overall, AME's medium and long-term attractiveness remains compelling and intact, and it is an important part of our global network proposition for our clients. Strategic priorities �� Provide best-in-class structuring and financing solutions and drive creation through client initiatives �� Accelerate growth in differentiated international network and Affluent client businesses �� Invest in market-leading digitisation initiatives in CPBB to protect and grow market share in core markets, continue with our transformation agenda to recalibrate our network and streamline structures �� Be an industry leader in the transition to net zero across the region �� Simplify footprint and refocus on strategic growth areas Page 38 Supplementary financial information continued Progress �� Topped the regional DCM league tables for the tenth consecutive year and secured the first rank in GCC G3 Bond and Sukuk issuance �� Supported Sustainable Finance across our footprint through our comprehensive product offering. ESG DCM volumes across the Middle East grew by over 160 per cent year on year, on the back of some of the largest and most innovative ESG deals in the region �� Strong cross-border income growth of 39 per cent with broad-based growth across all our key corridors �� Further embedded our International Banking proposition, activating our diverse footprint across Africa and the Middle East. This has resulted in more than 150 per cent growth in Priority Banking client base across our International Banking corridors for the region �� Enhanced our digital offering in Africa by becoming the first international bank with digital fixed income solutions in Kenya, Nigeria and Ghana, extending our micro-investment solution (SC Shillingi) to Uganda, and launching digital personal loans in Kenya �� Our Saudi franchise saw strong growth following the branch set-up in 2021 while a new branch launched recently in Egypt provides additional growth opportunities in the region �� The sale of the Jordan business has been completed and buyers have been announced for select sub-Saharan African businesses that were identified for exit as part of our strategic announcement in 2022 �� Sustained productivity actions have resulted in an improved Cost to Income Ratio at 56 per cent (vs. 63 per cent in FY'22) and an improvement in productivity with income per headcount (up 18 per cent year-on-year) Performance highlights �� Underlying profit before tax of $1,311 million, the highest annual profit since 2015, was up 66 per cent (up 90 per cent at ccy), driven by higher income and a net release in credit provisions partially offset by an increase in expenses �� Underlying operating income of $2,806 million was up 14 per cent (up 26 per cent at ccy) with strong growth in Cash Management, Retail Deposits and Financial Markets. Income was up 29 per cent (up 38 per cent at ccy) in Middle East, North Africa, & Pakistan and up 1 per cent (up 14 per cent at ccy) in Africa �� Credit Impairment net release of $91 million in FY23 compared to $119 million charge in FY22 reflecting a non-repeat of the prior year's sovereign related impairments and releases relating to historic CCIB provisions �� Loans and advances to customers were up 8 per cent YoY (up 15 per cent at ccy) and customer accounts were up 4 per cent (up 9 percent at ccy) since 31 December 2022 �� Risk-weighted assets were 6 per cent lower than 31 December 2022, despite the impact of sovereign downgrades, due to continuing RWA optimisation activities, de-risking in markets with elevated macro-economic risk and currency devaluation �� RoTE increased to 16.6 per cent from 9.3 per cent in FY22 Page 39 Supplementary financial information continued Europe & Americas 4Q'23 $million 4Q'22�� $million Change�� % Constant currency change1,2 % 3Q'23 $million Change�� % Constant currency change1,2 % FY23 $million FY22�� $million Change�� % Constant currency change1,2 % Operating income 210 348 (40) (41) 337 (38) (39) 1,397 2,303 (39) (40) Operating expenses (420) (415) (1) - (447) 6 6 (1,733) (1,548) (12) (12) Operating profit before impairment losses and taxation (210) (67) nm�� (196) (110) (91) (97) (336) 755 (145) (144) Credit impairment 5 13 (62) (50) 18 (72) (67) 19 78 (76) (74) Other impairment (24) (2) nm�� nm�� 2 nm�� nm�� (13) 1 nm�� nm�� Underlying profit/(loss) before taxation (229) (56) nm�� nm�� (90) (154) (163) (330) 834 (140) (139) Restructuring 19 (19) nm�� nm�� (6) nm�� nm�� 32 (13) nm�� nm�� DVA 16 (75) 121 123 5 nm�� nm�� 7 14 (50) (50) Other items 263 - nm�� nm�� - nm�� nm�� 263 - nm�� nm�� Reported profit/(loss) before taxation 69 (150) 146 144 (91) 176 177 (28) 835 (103) (103) Total assets 253,410 268,960 (6) (6) 267,503 (5) (6) 253,410 268,960 (6) (6) Of which: loans and advances to customers3 63,216 62,981 - - 58,164 9 8 63,216 62,981 - - Total liabilities 181,417 219,701 (17) (18) 202,250 (10) (11) 181,417 219,701 (17) (18) Of which: customer accounts3 124,543 141,537 (12) (13) 127,107 (2) (3) 124,543 141,537 (12) (13) Risk-weighted assets 46,106 50,174 (8) nm�� 48,227 (4) nm�� 46,106 50,174 (8) nm�� Income return on risk-weighted assets (%)4 1.8 2.7 (90)bps nm�� 2.7 (90)bps nm�� 2.8 4.5 (170)bps nm�� Underlying return on tangible equity (%)4 (10.4) (2.2) (820)bps nm�� (3.9) (650)bps nm�� (3.6) 8.6 (1,220)bps nm�� Cost-to-income ratio (%)4 200.0 119.3 (80.7) (82.3) 132.6 (67.4) (70.9) 124.1 67.2 (56.9) (57.2) 1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 3 Loans and advances to customers and customer accounts includes FVTPL and reverse repurchase agreements 4 Change is the percentage points difference between the two periods rather than the percentage change 5 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) Aviation Finance and (ii) DVA. No change to reported performance 6 Not meaningful Region overview The Group supports clients in Europe and the Americas through hubs in London, Frankfurt and New York as well as a presence in several other markets in Europe and Latin America. Our expertise in Asia, Africa and the Middle East allows us to offer our clients in the region unique network and product capabilities. The region generates significant income for the Group's Corporate, Commercial and Institutional Banking business. Clients based in Europe and the Americas contribute over one-third of the Group's CCIB client income. Over three-quarters of client income is booked in the network, generating above-average returns. In addition to being a key origination centre for CCIB, the region offers local, on-the-ground expertise and solutions to help internationally minded clients grow across Europe and the Americas. The region is home to the Group's two biggest payment clearing centres and the largest trading floor. Our Europe CPBB business focuses on serving clients with links to our footprint markets. Page 40 Supplementary financial information continued Strategic priorities �� Leverage our network capabilities to connect new and existing Corporate and Financial Institutions clients in the West to the fastest-growing and highest-potential economies across our footprint �� Supercharge our FI Franchise �� Grow the business we capture from inbound trade flows from our East to West Corridors �� Further develop our Sustainable Finance product offering and risk management capabilities �� Enhance capital efficiency, maintain strong risk oversight and further improve the quality of our funding base �� Expand assets under management in CPBB and continue to strengthen the franchise Progress �� Strong growth of 33 per cent in global cross-border network business with Europe and the Americas CCIB clients across key footprint markets �� Financial Institutions segment growth of 32 per cent, now accounting for 60 per cent of the CCIB business for European and Americas clients. �� Material growth in income from sustainable finance products and expansion of our sustainable product offering �� In CPBB we see positive momentum on Net New Money in 2023 coupled with strong growth in mortgage balances for our high net worth clients Performance highlights �� Underlying loss before tax of $330 million driven by lower income and increased expenses �� Underlying operating income of $1,397 million was down 40 per cent reflecting the increased cost of hedges within Treasury whilst strong growth in Transaction Banking income was partly offset by lower Financial Markets income �� Expenses increased by 12 per cent at ccy largely due to increased investment spend and the impact of inflation �� Credit impairments for the region remain well controlled �� FY23 RoTE negative 3.6 per cent down from 8.6 per cent in FY22 Page 41 Supplementary financial information continued Central & other items (region) 4Q'23 $million 4Q'22�� $million Change�� % Constant currency change1,2 % 3Q'23 $million Change�� % Constant currency change1,2 % FY23 $million FY22�� $million Change�� % Constant currency change1,2 % Operating income 221 93 138 137 220 - - 746 87 nm6 nm6 Operating expenses (293) (223) (31) (2) (128) (129) (129) (736) (635) (16) (8) Operating loss before impairment losses and taxation (72) (130) 45 64 92 (178) (173) 10 (548) 102 103 Credit impairment - (9) 100 100 1 (100) (100) 6 (5) nm6 nm6 Other impairment 47 (30) nm6 nm6 (17) nm6 nm6 (39) (32) (22) (18) Loss from associates and joint ventures (3) (5) 40 60 (6) 50 67 (20) (12) (67) (54) Underlying loss before taxation (28) (174) 84 90 70 (140) (133) (43) (597) 93 95 Restructuring (25) (34) 26 26 54 (146) (147) 53 (61) 187 183 Goodwill and other impairment - (14) 100 100 - nm6 nm6 - (14) 100 100 Other items5 (18) - nm6 nm6 - nm6 nm6 (18) - nm6 nm6 Reported loss before taxation (71) (222) 68 76 124 (157) (154) (8) (672) 99 100 Total assets 9,389 9,477 (1) (1) 8,918 5 5 9,389 9,477 (1) (1) Total liabilities 88,894 67,954 31 31 82,055 8 8 88,894 67,954 31 31 Risk-weighted assets 3,657 3,005 22 nm6 3,908 (6) nm6 3,657 3,005 22 nm6 Income return on risk-weighted assets (%)3 21.0 13.9 51bps nm6 22.1 nm6 nm6 19.5 4.0 1,550bps nm6 Underlying return on tangible equity (%)3 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 Cost-to-income ratio (%) (excluding bank levy)3 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 nm6 1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods 2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease) 3 Change is the percentage points difference between the two periods rather than the percentage change 4 Underlying performance for relevant periods in 2022 has been restated for the removal of Aviation Finance. No change to reported performance line 5 Other items includes the sale of the Aviation Finance business, of which there was a loss on sale of $18 million on the leasing business 6 Not meaningful Performance highlights Underlying loss before tax of $43 million compared to FY'22 loss of $597 million was mainly due to higher returns paid to Treasury on the equity provided to the regions in a higher interest rate environment, partially offset by increased expenses reflecting increased Ventures activity Page 42 Supplementary financial information continued Underlying performance by key market 2023 Hong Kong $million Korea $million China3 $million Taiwan $million Singapore $million India $million Indonesia $million UAE $million UK $million US $million Operating income 4,167 1,074 1,158 558 2,455 1,206 241 794 102 870 Operating expenses (1,927) (731) (894) (331) (1,214) (865) (191) (392) (870) (634) Operating profit/(loss) before impairment losses and taxation 2,240 343 264 227 1,241 341 50 402 (768) 236 Credit impairment (372) (48) (113) (42) (48) (31) (8) 24 14 12 Other impairment (17) 1 (5) (5) (14) (11) (2) (5) (15) (5) Profit from associates and joint ventures - - 114 - - - - - - - Underlying profit/(loss) before taxation 1,851 296 260 180 1,179 299 40 421 (769) 243 Total assets employed 190,484 56,638 41,661 21,638 102,724 33,781 5,470 20,376 149,982 88,113 Of which: loans and advances to customers1 87,590 33,443 15,882 11,634 62,030 13,832 2,533 8,495 31,067 27,434 Total liabilities employed 183,112 46,666 38,252 20,365 109,825 26,532 4,355 17,214 92,168 72,583 Of which: customer accounts1 155,446 37,032 31,211 18,621 86,282 18,709 3,024 13,924 72,610 40,846 Underlying return on tangible equity (%) 21.8 10.1 6.9 20.6 26.4 7.8 7.8 23.0 (13.6) 6.8 Cost to income ratio (%) 46.2 68.1 77.2 59.3 49.5 71.7 79.3 49.4 nm3 72.9 20222 Hong Kong $million Korea $million China $million Taiwan $million Singapore $million India $million Indonesia $million UAE $million UK $million US $million Operating income 3,441 1,140 1,154 473 1,909 1,222 214 621 1,013 1,031 Operating expenses (1,816) (733) (844) (336) (1,082) (766) (183) (369) (742) (603) Operating profit before impairment losses and taxation 1,625 407 310 137 827 456 31 252 271 428 Credit impairment (579) (55) (200) (15) 84 (31) 4 81 36 13 Other impairment (1) (1) (3) (1) (2) (1) - - 35 - Profit from associates and joint ventures - - 179 - - - - - - - Underlying profit before taxation 1,045 351 286 121 909 424 35 333 342 441 Total assets employed 171,086 68,903 39,508 21,919 97,914 30,412 5,237 19,624 187,832 67,019 Of which: loans and advances to customers1 85,359 49,264 15,652 11,283 59,872 15,025 2,403 7,913 39,356 19,951 Total liabilities employed 165,499 58,992 33,124 20,216 104,318 23,210 4,257 16,256 140,160 64,825 Of which: customer accounts1 138,713 43,620 24,347 18,509 79,409 15,199 2,924 12,710 104,482 28,424 Underlying return on tangible equity (%) 12.0 11.5 7.1 13.2 19.5 10.6 5.6 15.5 5.7 14.4 Cost to income ratio (%) 52.8 64.3 73.1 71.0 56.7 62.7 85.5 59.4 73.2 58.5 1 Loans and advances to customers and customer accounts includes FVTPL and repurchase agreements 2 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii)DVA. No change to reported performance 3 Not meaningful Page 43 Supplementary financial information continued 4Q'23 Hong Kong $million Korea $million China $million Taiwan $million Singapore $million India $million Indonesia $million UAE $million UK $million US $million Operating income 1,008 217 275 125 557 269 67 182 (103) 206 Operating expenses (489) (192) (234) (84) (312) (203) (51) (93) (218) (149) Operating profit/(loss) before impairment losses and taxation 519 25 41 41 245 66 16 89 (321) 57 Credit impairment (60) (3) (33) (9) (26) (18) - 3 7 2 Other impairment (16) 1 (4) (5) (11) (10) (2) (5) (15) (9) Loss from associates and joint ventures - - (1) - - - - - - - Underlying profit/(loss) before taxation 443 23 3 27 208 38 14 87 (329) 50 Total assets employed 190,484 56,638 41,661 21,638 102,724 33,781 5,470 20,376 149,982 88,113 Of which: loans and advances to customers1 87,590 33,443 15,882 11,634 62,030 13,832 2,533 8,495 31,067 27,434 Total liabilities employed 183,112 46,666 38,252 20,365 109,825 26,532 4,355 17,214 92,168 72,583 Of which: customer accounts1 155,446 37,032 31,211 18,621 86,282 18,709 3,024 13,924 72,610 40,846 Underlying return on tangible equity (%) 21.0 3.1 0.3 12.2 17.8 4.4 10.6 19.7 (25.3) 5.5 Cost to income ratio (%) 48.5 88.5 85.1 67.2 56.0 75.5 76.1 51.1 nm3 72.3 4Q'222 Hong Kong $million Korea $million China $million Taiwan $million Singapore $million India $million Indonesia $million UAE $million UK $million US $million Operating income 902 252 244 118 495 266 57 177 40 239 Operating expenses (450) (184) (214) (80) (290) (203) (51) (102) (203) (161) Operating profit/(loss) before impairment losses and taxation 452 68 30 38 205 63 6 75 (163) 78 Credit impairment (128) (27) (48) (6) (6) (19) - (1) 10 (7) Other impairment 4 (1) (1) - 1 2 - 1 12 2 Profit from associates and joint ventures - - 3 - - - - - - - Underlying profit/(loss) before taxation 328 40 (16) 32 200 46 6 75 (141) 73 Total assets employed 171,086 68,903 39,508 21,919 97,914 30,412 5,237 19,624 187,832 67,019 Of which: loans and advances to customers1 85,359 49,264 15,652 11,283 59,872 15,025 2,403 7,913 39,356 19,951 Total liabilities employed 165,499 58,992 33,124 20,216 104,318 23,210 4,257 16,256 140,160 64,825 Of which: customer accounts1 138,713 43,620 24,347 18,509 79,409 15,199 2,924 12,710 104,482 28,424 Underlying return on tangible equity (%) 15.3 5.4 (1.7) 14.4 18.0 5.1 4.7 14.8 (9.2) 8.2 Cost to income ratio (%) 49.9 73.0 87.7 67.8 58.6 76.3 89.5 57.6 507.5 67.4 1 Loans and advances to customers and customer accounts includes FVTPL and repurchase agreements 2 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii)DVA. No change to reported performance 3 Not meaningful Page 44 Supplementary financial information continued Quarterly underlying operating income by product 4Q'23 $million 3Q'23 $million 2Q'23 $million 1Q'23 $million 4Q'22�� $million 3Q'22�� $million 2Q'22�� $million 1Q'22�� $million Transaction Banking 1,481 1,496 1,461 1,399 1,254 1,067 824 729 Trade & Working capital 304 325 334 331 316 335 336 356 Cash Management 1,177 1,171 1,127 1,068 938 732 488 373 Financial Markets 1,041 1,253 1,391 1,414 1,147 1,386 1,255 1,557 Macro Trading 538 634 825 830 628 736 662 939 Credit Markets 409 472 462 460 436 455 396 474 Credit Trading 105 137 140 172 147 152 84 105 Financing Solutions & Issuance2 304 335 322 288 289 303 312 369 Financing & Securities Services2 94 147 104 124 83 195 197 144 Lending & Portfolio Management 111 121 132 134 112 164 136 146 Wealth Management 412 526 495 511 358 454 456 528 Retail Products 1,238 1,279 1,240 1,212 1,147 1,099 944 837 CCPL & other unsecured lending 288 297 286 290 294 298 310 300 Deposits 899 919 848 771 805 620 355 241 Mortgage & Auto 17 31 74 114 12 140 235 246 Other Retail Products 34 32 32 37 36 41 44 50 Treasury (235) (274) (160) (233) (173) (5) 201 314 Other (24) 2 (4) (41) (80) (27) (33) (35) Total underlying operating income 4,024 4,403 4,555 4,396 3,765 4,138 3,783 4,076 1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Shipping Finance is now reported under "Financing Solutions & Issuance" which was reported under "Financing & Securities Services" in 2022 Page 45 Supplementary financial information continued Earnings per ordinary share 4Q'23 $million 4Q'22�� $million Change % 3Q'23 $million Change % FY'23 $million FY'22�� $million Change % Profit/(loss) for the period attributable to equity holders 938 (265) nm�� 139 nm�� 3,462 2,902 19 Non-controlling interest (2) 36 nm�� 6 nm�� 7 46 (85) Dividend payable on preference shares and AT1 classified as equity (29) (62) 53 (180) 84 (452) (401) (13) Profit/(loss) for the period attributable to ordinary shareholders 907 (291) nm�� (35) nm�� 3,017 2,547 18 Items normalised: Restructuring 63 90 (30) 7 nm�� 14 99 (86) Goodwill and other impairment�� 153 322 (52) 697 (78) 850 322 164 DVA (35) 133 nm�� (21) (67) (17) (42) 60 Net gains on sale of Businesses�� (262) (20) nm�� - nm�� (262) (20) nm�� Tax on normalised items (17) (13) (31) (4) nm�� (21) (3) nm�� Underlying profit 809 221 nm�� 644 26 3,581 2,903 23 Basic - Weighted average number of shares (millions) 2,664 2,890 (8) 2,772 (4) 2,778 2,966 (6) Diluted - Weighted average number of shares (millions) 2,723 2,945 (8) 2,837 (4) 2,841 3,023 (6) Basic earnings per ordinary share (cents)4 34.0 (10.1) 44.1 (1.3) 35.3 108.6 85.9 22.7 Diluted earnings per ordinary share (cents)4 33.3 (9.9) 43.2 (1.2) 34.5 106.2 84.3 21.9 Underlying basic earnings per ordinary share (cents)4 30.4 7.7 22.7 23.2 7.2 128.9 97.9 31.0 Underlying diluted earnings per ordinary share (cents)4 29.7 7.5 22.2 22.7 7.0 126.0 96.0 30.0 1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and Other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3. Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 4 Change is the percentage points difference between the two periods rather than the percentage change 5 Not meaningful Page 46 Supplementary financial information continued Return on Tangible Equity 4Q'23 $million 4Q'22�� $million Change % 3Q'23 $million Change % FY'23 $million FY'22�� $million Change % Average parent company Shareholders' Equity4 43,456 43,145 1 43,135 1 43,549 44,237 (2) Less Average preference share capital and share premium (1,494) (1,494) - (1,494) - (1,494) (1,494) - Less Average intangible assets (6,106) (5,695) (7) (5,948) (3) (5,957) (5,557) (7) Average Ordinary Shareholders' Tangible Equity 35,856 35,956 - 35,693 - 36,098 37,186 (3) Profit/(loss) for the period attributable to equity holders 938 (266) nm5 139 nm5 3,462 2,902 19 Non-controlling interests (2) 36 nm5 6 nm5 7 46 (85) Dividend payable on preference shares and AT1 classified as equity (29) (61) 52 (180) 84 (452) (401) (13) Profit/(loss) for the period attributable to ordinary shareholders 907 (291) nm5 (35) nm5 3,017 2,547 18 Items normalised: Restructuring 63 90 (30) 7 nm5 14 99 (86) Goodwill and Other impairment2 153 322 (52) 697 (78) 850 322 164 Net gains on sale of Businesses3 (262) (20) nm5 - nm5 (262) (20) nm5 Ventures FVOCI unrealised gains/(losses) net of tax 37 21 76 (11) nm5 69 (36) nm5 DVA (35) 133 nm5 (21) (67) (17) (42) 60 Tax on normalised items (17) (13) (31) (4) nm5 (21) (3) nm5 Underlying profit for the period attributable to ordinary shareholders 846 242 nm5 633 34 3,650 2,867 27 Underlying Return on Tangible Equity 9.4% 2.7% 670bps 7.0% 240bps 10.1% 7.7% 240bps Reported Return on Tangible Equity 10.0% (3.2)% 1,320bps (0.4)% 1,040bps 8.4% 6.8% 160bps 1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and Other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3. Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 4 Excludes other equity instruments including AT1s 5 Not meaningful Net Tangible Asset Value per Share 31.12.23 $million 31.12.22 $million Change % 30.09.23 $million Change % Parent company shareholders equity 44,445 43,162 3 42,466 5 Less Preference share premium (1,494) (1,494) - (1,494) - Less Intangible assets (6,214) (5,869) (6) (5,997) (z4) Net shareholders tangible equity 36,737 35,799 3 34,975 5 Ordinary shares in issue, excluding own shares (millions) 2,637 2,867 (8) 2,724 (3) Net Tangible Asset Value per share (cents)1 1,393 1,249 144 1,284 109 1 Change is cents difference between the two periods rather than percentage change Page 47 Underlying versus reported results reconciliations Reconciliations between underlying and reported results are set out in the tables below: Operating income by client segment 2023 Corporate, Commercial & Institutional Banking $million Consumer Private & Business Banking $million Ventures $million Central & other items (segment) $million Total $million Underlying operating income 11,218 7,106 156 (1,102) 17,378 Restructuring 291 45 - 26 362 DVA 17 - - - 17 Other items�� 262 - - - 262 Reported operating income 11,788 7,151 156 (1,076) 18,019 2022�� Corporate, Commercial & Institutional Banking $million Consumer Private & Business Banking $million Ventures $million Central & other items (segment) $million Total $million Underlying operating income 9,608 5,969 29 156 15,762 Restructuring 436 47 - 11 494 DVA 42 - - - 42 Other items - - - 20 20 Reported operating income 10,086 6,016 29 187 16,318 1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans Operating income by region 2023 Asia $million Africa & Middle East $million Europe & Americas $million Central & other items (region) $million Total $million Underlying operating income 12,429 2,806 1,397 746 17,378 Restructuring 203 110 35 14 362 DVA (16) 26 7 - 17 Other items�� 35 (18) 263 (18) 262 Reported operating income 12,651 2,924 1,702 742 18,019 20221 Asia $million Africa & Middle East $million Europe & Americas $million Central & other items (region) $million Total $million Underlying operating income 10,912 2,460 2,303 87 15,762 Restructuring 304 140 35 15 494 DVA 20 8 14 - 42 Other items 20 - - - 20 Reported operating income 11,256 2,608 2,352 102 16,318 1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans Page 48 Underlying versus reported results reconciliations continued Net interest income and Non NII 2023 20221 Underlying $million Restructuring $million Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets $million Reported $million Underlying $million Restructuring $million Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets $million Reported $million Net interest income1,2 9,557 (10) (1,778) 7,769 7,967 9 (383) 7,593 Non NII1,2 7,821 651 1,778 10,250 7,795 547 383 8,725 Total income 17,378 641 - 18,019 15,762 556 - 16,318 1. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. To be consistent with how we the compute Net Interest Margin, we have changed our definition of Underlying Net Interest Income (NII) and Underlying Non NII. The adjustments made to NIM, including Interest expense relating to funding our trading book, will now be shown against Underlying Non NII to be updated as rather than Underlying NII. There is no impact on total income Profit before taxation (PBT) 2023 Underlying $million Restructuring $million Net gain on businesses disposed of�� $million Goodwill and other Impairment2 $million DVA $million Reported $million Operating income 17,378 362 262 - 17 18,019 Operating expenses (11,136) (415) - - - (11,551) Operating profit/(loss) before impairment losses and taxation 6,242 (53) 262 - 17 6,468 Credit impairment (528) 20 - - - (508) Other impairment (130) (28) - (850) - (1,008) Profit from associates and joint ventures 94 47 - - - 141 Profit/(loss) before taxation 5,678 (14) 262 (850) 17 5,093 20221 Underlying $million Restructuring $million Net gain on businesses disposed of $million Goodwill and other Impairment2 $million DVA $million Reported $million Operating income 15,762 494 20 - 42 16,318 Operating expenses (10,409) (504) - - - (10,913) Operating profit/(loss) before impairment losses and taxation 5,353 (10) - - 42 5,405 Credit impairment (836) - - - - (836) Other impairment (39) (78) - (322) - (439) Profit from associates and joint ventures 167 (11) - - - 156 Profit/(loss) before taxation 4,645 (99) 20 (322) 42 4,286 1. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3 Net gain on businesses disposed off includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans Page 49 Underlying versus reported results reconciliations continued Profit before taxation (PBT) by client segment 2023 Corporate, Commercial & Institutional Banking $million Consumer Private & Business Banking $million Ventures $million Central & other items (segment) $million Total $million Operating income 11,218 7,106 156 (1,102) 17,378 External 8,543 3,902 157 4,776 17,378 Inter-segment 2,675 3,204 (1) (5,878) - Operating expenses (5,627) (4,261) (429) (819) (11,136) Operating profit/(loss) before impairment losses and taxation 5,591 2,845 (273) (1,921) 6,242 Credit impairment (123) (354) (85) 34 (528) Other impairment (32) (4) (26) (68) (130) Profit from associates and joint ventures - - (24) 118 94 Underlying profit/(loss) before taxation 5,436 2,487 (408) (1,837) 5,678 Restructuring 32 (60) (4) 18 (14) Goodwill and other impairment2 - - - (850) (850) DVA 17 - - - 17 Other items�� 262 - - - 262 Reported profit/(loss) before taxation 5,747 2,427 (412) (2,669) 5,093 2022�� Corporate, Commercial & Institutional Banking $million Consumer Private & Business Banking $million Ventures $million Central & other items (segment) $million Total $million Operating income 9,608 5,969 29 156 15,762 External 8,462 4,942 29 2,329 15,762 Inter-segment 1,146 1,027 - (2,173) - Operating expenses (5,193) (4,104) (336) (776) (10,409) Operating profit/(loss) before impairment losses and taxation 4,415 1,865 (307) (620) 5,353 Credit impairment (425) (262) (16) (133) (836) Other impairment - (10) (24) (5) (39) Profit from associates and joint ventures - - (16) 183 167 Underlying profit/(loss) before taxation 3,990 1,593 (363) (575) 4,645 Restructuring 14 (56) (1) (56) (99) Goodwill and other impairment2 - - - (322) (322) DVA 42 - - - 42 Other items - - - 20 20 Reported profit/(loss) before taxation 4,046 1,537 (364) (933) 4,286 1. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans Page 50 Underlying versus reported results reconciliations continued Profit before taxation (PBT) by region 2023 Asia $million Africa & Middle East $million Europe & Americas $million Central & other items (region) $million Total $million Operating income 12,429 2,806 1,397 746 17,378 Operating expenses (7,096) (1,571) (1,733) (736) (11,136) Operating profit/(loss) before impairment losses and taxation 5,333 1,235 (336) 10 6,242 Credit impairment (644) 91 19 6 (528) Other impairment (63) (15) (13) (39) (130) Profit from associates and joint ventures 114 - - (20) 94 Underlying profit/(loss) before taxation 4,740 1,311 (330) (43) 5,678 Restructuring (97) (2) 32 53 (14) Goodwill and other impairment2 (850) - - - (850) DVA (16) 26 7 - 17 Other items�� 35 (18) 263 (18) 262 Reported profit/(loss) before taxation 3,812 1,317 (28) (8) 5,093 20221 Asia $million Africa & Middle East $million Europe & Americas $million Central & other items (region) $million Total $million Operating income 10,912 2,460 2,303 87 15,762 Operating expenses (6,675) (1,551) (1,548) (635) (10,409) Operating profit/(loss) before impairment losses and taxation 4,237 909 755 (548) 5,353 Credit impairment (790) (119) 78 (5) (836) Other impairment (10) 2 1 (32) (39) Profit from associates and joint ventures 179 - - (12) 167 Underlying profit/(loss) before taxation 3,616 792 834 (597) 4,645 Restructuring (46) 21 (13) (61) (99) Goodwill and other impairment2 (308) - - (14) (322) DVA 20 8 14 - 42 Other items 20 - - - 20 Reported profit/(loss) before taxation 3,302 821 835 (672) 4,286 1. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3 Other items includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans Page 51 Underlying versus reported results reconciliations continued Return on tangible equity (RoTE) 2023 $million 2022�� $million Average parent company Shareholders' Equity4 43,549 44,237 Less Average preference share capital and share premium (1,494) (1,494) Less Average intangible assets (5,957) (5,557) Average Ordinary Shareholders' Tangible Equity 36,098 37,186 Profit for the period attributable to equity holders 3,462 2,902 Non-controlling interests 7 46 Dividend payable on preference shares and AT1 classified as equity (452) (401) Profit for the period attributable to ordinary shareholders 3,017 2,547 Items normalised: Restructuring 14 99 Goodwill & other impairment2 850 322 Net gains on sale of businesses�� (262) (20) Ventures FVOCI unrealised losses/(gains) net of tax 69 (36) DVA (17) (42) Tax on normalised items (21) (3) Underlying profit for the period attributable to ordinary shareholders 3,650 2,867 Underlying Return on Tangible Equity 10.1% 7.7% Reported Return on Tangible Equity 8.4% 6.8% 1. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3 Includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 4. Excludes other equity instruments including AT1s 2023 Corporate, Commercial & Institutional Banking % Consumer Private & Business Banking % Ventures % Central & other Items (Segment) % Total % Underlying RoTE 19.5 25.3 nm�� (27.0) 10.1 Provision for regulatory matters - - - - - Restructuring Of which: Income 1.4 0.6 - 0.3 1.0 Of which: Expenses (1.3) (1.4) nm�� (0.6) (1.1) Of which: Credit impairment 0.1 - - 0.1 0.1 Of which: Other impairment (0.1) - - (0.2) (0.1) Of which: Profit from associates and joint ventures - - - 0.6 0.1 Net gain on businesses disposed/held for sale�� 1.3 - - - 0.7 Goodwill and other impairment�� - - - (11.1) (2.3) Ventures FVOCI Unrealised gains/(losses) net of Taxes - - - - (0.2) DVA 0.1 - - - - Tax on normalised items (0.4) 0.2 nm�� 1.1 0.1 Reported RoTE 20.6 24.7 nm�� (36.8) 8.4 1. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 2. Includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 3. Not meaningful 4. Segmental RoTE is the ratio of the current year's underlying profit to the average tangible equity. Average Tangible Equity has been derived based on average RWA Page 52 Underlying versus reported results reconciliations continued 2022�� Corporate, Commercial & Institutional Banking % Consumer Private & Business Banking % Ventures % Central & other Items (Segment) % Total % Underlying RoTE 13.4 15.8 nm�� (14.2) 7.7 Provision for regulatory matters - - - - - Restructuring Of which: Income 1.9 0.6 - 0.1 1.3 Of which: Expenses (1.6) (1.4) nm�� (0.5) (1.4) Of which: Credit impairment - - - - - Of which: Other impairment (0.2) - - (0.3) (0.2) Of which: Profit from associates and joint ventures - - - (0.1) - Net loss on businesses disposed/held for sale - - nm�� 0.3 0.1 Goodwill and other impairment2 - - - (4.5) (0.9) Ventures FVOCI Unrealised gains/(losses) net of Taxes - - - - 0.1 DVA 0.2 - - - 0.1 Tax on normalised items (0.1) 0.2 nm�� - - Reported RoTE 13.6 15.2 nm�� (19.2) 6.8 1. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance 2. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3. Not meaningful 4. Segmental RoTE is the ratio of the current year's underlying profit to the average tangible equity. Average Tangible Equity has been derived based on average RWA Net charge-off ratio 2023 2022 Credit impairment (charge)/ release for the year/ period $million Net average exposure $million Net Charge-off Ratio % Credit impairment (charge)/ release for the year/ period $million Net average exposure�� $million Net Charge-off Ratio�� % Stage 1 42 320,649 (0.01)% 5 321,099 (0.00)% Stage 2 (262) 11,674 2.24% (325) 13,162 2.47% Stage 3 (386) 3,117 12.38% (423) 3,074 13.76% Total exposure (606) 335,440 0.18% (743) 337,335 0.22% 1 Prior year has been restated Earnings per ordinary share (EPS) 2023 Underlying $ million Restructuring $ million DVA $ million Net gain on sale of businesses�� $ million Goodwill and other impairment�� $ million Tax on normalised items $ million Reported $ million Profit for the year attributable to ordinary shareholders 3,581 (14) 17 262 (850) 21 3,017 Basic - Weighted average number of shares (millions) 2,778 2,778 Basic earnings per ordinary share (cents) 128.9 108.6 20223 Underlying $ million Restructuring $ million DVA $ million Net loss on sale of businesses $ million Goodwill impairment2 $ million Tax on normalised items $ million Reported $ million Profit for the year attributable to ordinary shareholders 2,903 (99) 42 20 (322) 3 2,547 Basic - Weighted average number of shares (millions) 2,966 2,966 Basic earnings per ordinary share (cents) 97.9 85.9 1. Includes the sale of the Aviation Finance business, of which there was a gain on sale of $309 million on the leasing business and a loss of $47 million in relation to a sale of a portfolio of Aviation loans 2. Goodwill and other impairment include $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 3. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance Page 53 Group Chief Risk Officer's review Proactively managing our risks whilst keeping our focus on the execution of the Group's strategy Managing Risk 2023 presented challenges across many of our markets, with sustained high inflation levels from 2022 continuing to put pressure on the central banks to dampen rising prices through increases to interest rates. Increased levels of volatility were seen in early 2023 as several bank failures prompted fears of a global contagion. Despite having no material exposures to the failed banks, the Group took proactive steps to further strengthen our liquidity position and monitor for any signs of second order impacts. 2023 also saw a fundamental shift in global power dynamics, including with the BRICS expansion. Sovereign risks persisted across emerging markets in the Africa and Middle East region. In Asia, despite slower than expected economic growth in China, we saw positive signs of growth in the second half of the year. We continued to keep our focus on the challenges in the China real estate sector and any contagion risks. The Group has limited direct exposure in Ukraine and to the countries in the Middle East which are currently most impacted by conflict. However, we remained cognisant of the volatility and the potential second order market impacts, including those from elevated oil and commodity prices or supply chains disruption, which we continue to actively monitor through stress testing and portfolio reviews. As we enter 2024, we stay vigilant and continue to review our exposure and limits across our portfolios to identify vulnerable industries and clients for closer monitoring. Corporate, Commercial and Institutional Banking (CCIB) Our CCIB credit portfolio remained resilient with overall good asset quality, as evidenced by our largely investment grade corporate portfolio (31 December 2023: 73 per cent, 31 December 2022: 76 per cent). We actively tracked geopolitical risks to enable us to act should the need materialise. In consideration of the macroeconomic challenges, additional reviews were conducted throughout 2023 across US regional Banks, Non-Bank Financial Institutions (NBFI), Leveraged Lending books, Global Commercial Real Estate (CRE) portfolio and select geographies. We closely monitored vulnerable sectors and identified clients that may face difficulties on account of increased interest rates, foreign exchange movements, commodity volatility or increased prices of essential goods. In China, the property market recovery remained slower than expected amidst government support measures and we continued to monitor our developers and sponsors portfolios through dedicated reviews. Consumer, Private and Business Banking (CPBB) The CPBB credit portfolio remained alert to the risks of the uncertain economic outlook but continued to demonstrate resilience. An increase in delinquency rates (Stage 2 provisions as at 31 December 2023: $139 million, 31 December 2022: $118 million) highlights the emerging pressure on customers' debt servicing capacity, as our customers continue to adapt to the prolonged higher interest rate environment. We continued to monitor potential secondary impacts of local challenges arising from heightened country risks across Bangladesh, Ghana, Kenya, Nigeria, Pakistan, and Sri Lanka, amongst others. There was no material impact on the CPBB portfolio due to the war in Ukraine and the conflict in the Middle East. For both our secured and unsecured consumer credit portfolios, we continued to monitor customer affordability across our key markets and dynamically adjusted origination criteria, portfolio management and collections strategies, as appropriate. We were mindful of the higher credit risk associated with increased lending to the mass market segment through our digital partnerships and digital banks and have tailored our lending criteria and portfolio management approach to the unique risks and customer behaviours observed in these segments. Treasury Risk Our liquidity and capital risks are managed to ensure a strong and resilient balance sheet that supports sustainable growth. We continued to enhance our Treasury Risk framework to incorporate the lessons from recent market events as well as horizon risks. Liquidity remained resilient across the Group and major legal entities. Group liquidity coverage ratio (LCR) is 145.4 per cent as at December 2023 (31 December 2022: 147 per cent) with a surplus to both Risk Appetite and regulatory requirements. Common Equity Tier 1 (CET1) ratio was 14.1 per cent as at December 2023 (31 December 2022: 14.0 per cent) while Leverage ratio was 4.7 per cent (31 December 2022: 4.8 per cent). In March 2023, we saw sharp moves in funding markets and customer behaviours triggering several bank failures in the US and Switzerland. Page 54 Group Chief Risk Officer's review continued This resulted in a heightened focus on Treasury risks including capital, liquidity, and interest rate risk on the banking book, with problems most acute in the US market and reverberating globally. We maintained a resilient liquidity position throughout the period and continued to focus on managing risks even as those event risks receded. The Risk function remains actively engaged in providing independent review and challenge to internal and regulatory stress tests and recovery and resolution capabilities. Further details on Risk Management for our Principal Risk Types can be found in the full annual report. Further details on Climate Risk can be found in the full annual report. Risk Performance Summary Asset quality is resilient. The percentage of investment-grade corporate net exposure remained high at 73 per cent (31 December 2022: 76 per cent). Exposure to our top 20 corporate clients as a percentage of Tier 1 capital decreased to 62 per cent (31 December 2022: 65 per cent), mainly driven by reduction in Transaction Banking exposures. However, the Group remained vigilant of persistent challenging conditions in some markets and sectors. In 2023, we saw a $0.5 billion increase in Early Alerts exposure (31 December 2023: $5.5 billion, 31 December 2022: $5.0 billion), driven by inflows relating to a select number of clients including sovereign-related exposures, partially offset by transfers to Purely Precautionary, regularisations, exposure reductions and outflows to Credit grades 12-14. Credit grade 12 balances increased to $2.2 billion (31 December 2022: $1.6 billion) due to sovereign and client downgrades, partially offset by outflows to non-performing loans. Key indicators 2023 2022 Group total business1 292.1 316.1 Stage 1 loans ($ billion) 273.7 295.2 Stage 2 loans ($ billion) 11.2 13.0 Stage 3 loans, credit-impaired ($ billion) 7.2 7.9 Stage 3 cover ratio 60% 57% Stage 3 cover ratio (including collateral) 76% 76% Corporate, Commercial & Institutional Banking Investment grade corporate net exposures as a percentage of total corporate net exposures 73% 76% Loans and advances maturing in one year or less as a percentage of total loans and advances to customers3 68% 68% Early Alert portfolio net exposures ($ billion) 5.5 5.0 Credit grade 12 balances ($ billion) 2.2 1.6 Aggregate top 20 corporate net exposures as a percentage of Tier 1 capital2 62% 65% Collateralisation of sub-investment grade net exposures maturing in more than one year 41% 53% Consumer, Private & Business Banking Loan-to-value ratio of Consumer, Private & Business Banking mortgages 47.2% 44.7% 1 These numbers represent total gross loans and advances to customers 2 Excludes reverse repurchase agreements 3 The 2022 figure has been restated from 65 per cent to 68 per cent The Group's credit impairment was a net charge of $508 million (31 December 2022: $836 million), a decrease of $328 million. 2022 included overlays for sovereign downgrades and China commercial real estate, which was partly offset by a full release of COVID-19 overlays. Stage 3 was a charge of $369 million (31 December 2022: $430 million), and the reduction was driven by CCIB releases and lower impairment charges for our China commercial real estate clients. This reduction was offset by higher bankruptcy related write-offs in CPBB across Singapore, Hong Kong and Korea, and portfolio growth in digital partners. Page 55 Group Chief Risk Officer's review continued Credit impairment 2023 20221 Stage 1 & 2 $million Stage 3 $million Total $million Stage 1 & 2 $million Stage 3 $million Total $million Ongoing business portfolio Corporate, Commercial & Institutional Banking 11 112 123 148 277 425 Consumer, Private & Business Banking 129 225 354 151 111 262 Ventures 42 43 85 13 3 16 Central & other items (44) 10 (34) 95 38 133 Credit impairment charge/(release) 138 390 528 407 429 836 Restructuring business portfolio - - - - - - Others 1 (21) (20) (1) 1 - Credit impairment charge/(release) 1 (21) (20) (1) 1 - Total credit impairment charge/(release) 139 369 508 406 430 836 1 Underlying credit impairment has been restated for the removal of (i) exit markets and businesses in AME and (ii) Aviation Finance. No change in reported credit impairment An update on our risk management approach Our Enterprise Risk Management Framework (ERMF) outlines how we manage risk across the Group, as well as at branch and subsidiary level1. It gives us the structure to manage existing risks effectively in line with our Group Risk Appetite, as well as allowing for holistic risk identification. The ERMF also sets out the roles and responsibilities and the minimum governance requirements for the management of Principal Risks. In revisions made in the ERMF in 2023, effective 1 January 2024, the concepts of Integrated Risk Types (IRTs) and IRT Owner roles were discontinued. Oversight on existing IRTs, i.e. Climate Risk, Digital Asset and Third Party Risk, is achieved through the Risk Type Frameworks (RTFs) and dedicated policies. The subject matter experts, as the policy owners for these risks, provide overall governance and ensure a holistic view of how risks are monitored and managed across the Principal Risk Types (PRTs). Principal Risk Types PRTs are risks inherent in our strategy and business model. These are formally defined in our ERMF, which provides a structure for monitoring and controlling these risks through the Risk Appetite Statement. We will not compromise compliance with our Risk Appetite in order to pursue revenue growth or higher returns. The table below provides an overview of the Group's PRTs and their corresponding risk appetite statements. Risk Types Risk Appetite Statement Credit Risk The Group manages its credit exposures following the principle of diversification across products, geographies, client segments and industry sectors. Traded Risk The Group should control its financial markets and activities to ensure that market and counterparty credit risk losses do not cause material damage to the Group's franchise. Treasury Risk The Group should maintain sufficient capital, liquidity and funding to support its operations, and an interest rate profile ensuring that the reductions in earnings or value from movements in interest rates impacting banking book items does not cause material damage to the Group's franchise. In addition, the Group should ensure its Pension plans are adequately funded. Operational and Technology Risk The Group aims to control operational and technology risks to ensure that operational losses (financial or reputational), including any related to conduct of business matters, do not cause material damage to the Group's franchise. Financial Crime Risk The Group has no appetite for breaches in laws and regulations related to Financial Crime, recognising that whilst incidents are unwanted, they cannot be entirely avoided. Compliance Risk The Group has no appetite for breaches in laws and regulations related to regulatory non-compliance; recognising that whilst incidents are unwanted, they cannot be entirely avoided. Information and Cyber Security Risk The Group aims to mitigate and control ICS risks to ensure that incidents do not cause the Bank material harm, business disruption, financial loss or reputational damage - recognising that whilst incidents are unwanted, they cannot be entirely avoided. Reputational and Sustainability Risk The Group aims to protect the franchise from material damage to its reputation by ensuring that any business activity is satisfactorily assessed and managed with the appropriate level of management and governance oversight. This includes a potential failure to uphold responsible business conduct in striving to do no significant environmental and social harm. Model Risk The Group has no appetite for material adverse implications arising from misuse of models or errors in the development or implementation of models; whilst accepting some model uncertainty. 1 The Group's Enterprise Risk Management Framework and system of internal control applies only to wholly controlled subsidiaries of the Group, and not to Associates, Joint Ventures or Structured Entities of the Group. Page 56 Group Chief Risk Officer's review continued In addition to the PRTs, the Group has defined the following Risk Appetite statement for Climate Risk: "The Group aims to measure and manage financial and non-financial risks arising from climate change, and reduce emissions related to our own activities and those related to the financing of clients in alignment with the Paris Agreement." Further details on our Risk Management Approach can be found in the full annual report. Topical and Emerging Risks (TERs) Emerging Risks refer to unpredictable and uncontrollable outcomes from certain events which may have the potential to adversely impact our business. Topical Risks refer to themes that may have emerged but are still evolving rapidly. As part of our continuous risk identification process, we have updated the Group's TERs from those disclosed in the 2022 Annual Report and 2023 Half-Year Report; these remain applicable, with nuances in their evolution noted where pertinent. Below is a summary of the TERs, and the mitigating actions we are taking based on our current knowledge and assumptions. This reflects the latest internal assessment as performed by senior management. The TER list is not exhaustive and there may be additional risks which could have an adverse effect on the Group. There are some horizon risks that, although not highly likely at present, could evolve into a threat in the future and we are therefore monitoring them. These include future pandemics and the world's preparedness for them, and other potential cross-border conflicts. Our mitigation approach for these risks may not eliminate them but demonstrates the Group's awareness and attempt to reduce or manage the risks. As certain risks develop and materialise over time, management will take appropriate steps to mitigate them based on their materiality on the Group. Macroeconomic and geopolitical considerations There is interconnectedness between risks due to the importance of US Dollar financing conditions for global markets, the global or concentrated nature of key supply chains for energy, food, semi-conductors and rare metals, and the direct influence of geopolitics on geoeconomics. The Group is exposed to these risks directly through investments, infrastructure and staff, and also indirectly through its clients. Whilst the main impacts are financial, other ramifications may exist such as reputational, compliance or operational considerations. Expanding array of global tensions and new geopolitical order Global power dynamics have shifted, with different political and economic alliances beginning to create a multipolar power system. This has been accelerated by the war in Ukraine and conflicts in the Middle East. Whilst the Group has limited direct exposure to Russia, Ukraine or Israel, it may be impacted by second order effects on its clients and markets for agricultural commodities, oil or gas. The positioning of 'middle powers' is complex and evolving, and could tip the geopolitical scales. The negotiating power of exporters of energy and other natural resources has expanded and can shape global markets, as they can use global divisions to raise their own profile. One such example is the envisaged expansion of BRICS to seek a counterweight to Western power axes. US-China tensions remain, with protectionist measures imposed by both sides. Tariffs, embargos, sanctions, new taxes such as that on carbon, and restrictions on technology exports and investments, are being used to achieve goals beyond just economic. Further economic or political actions could escalate distrust and accelerate the decoupling of trade links, leading to increasingly inefficient production and in��ation pressures. Despite attempts to become more pragmatic, a number of potential flashpoints remain. A push by China to increase RMB trade and establish RMB as a secondary global reserve currency presents new business opportunities but also potential disruption to the balance of power. With many elections due across the world in the next twelve months, there is uncertainty over the political direction of domestic and foreign policy. There is a risk of short-term political expediency taking precedence over long-term strategic decision making. The malicious use of AI-enabled disinformation could also cause disruption and undermine trust in the political process. Page 57 Group Chief Risk Officer's review continued There is an ongoing threat of terrorism, with unpredictability exacerbated by the wider range of ideologies at play. Cyber warfare by state related actors could also be used to disrupt infrastructure or institutions in rival countries. A more complex and less integrated global political and economic landscape has the potential to challenge cross border business models, but also provides new business opportunities. Persistent high inflation and interest rates Although rate cuts have been signalled by the Federal Reserve, global rates could remain elevated for longer. Structurally higher spending and continued supply disruptions increase the probability of inflation remaining sticky. During 2023, the International Monetary Fund (IMF) and World Trade Organisation lowered their initial forecasts for trade growth and increased that of inflation in 2024, suggesting that several economies will walk a fine line between recession and stagflation. Concern for the credit environment spans both commercial and retail lending, with price inflation and the cliff effects of energy, mortgage and debt re-pricing ultimately leading to higher defaults. This is visible in bond markets with yields widening markedly and prone to high volatility. Drives to de-risk supply chains combined with no obvious resolution to ongoing conflicts continue to disrupt supply chains. This complicates efforts to combat inflation as supply constrained markets dent the effectiveness of monetary policy. Some sectors are particularly sensitive to high rates, notably commercial real estate, non-bank financial institutions (NBFI) and leveraged finance due to their reliance on the availability of cheap financing. Bank failures in Q1 2023 highlighted challenges in managing liquidity, credit, refinancing and market risks. They also raised questions of competence and confidence in the finance industry. Economic slowdown in China Whilst China's exit from COVID restrictions has had an overall positive impact, it has failed to deliver a sustained boost to the global economy as the country contends with strain in several sectors such as real estate. There has also been a change in the corporate operating environment, with reduced clarity on the economic outlook. Given China's importance to global trade a slowdown would have wider implications across the supply chain, especially for its trading partners, as well as to countries which rely on it for investment, such as those in Africa. However, opportunities arise from the diversification of intra-Asia trade and other global trade routes, and growth acceleration in South Asia, especially India. Sovereign risk Credit fundamentals have been eroding across both emerging and advanced economies due to persistently high interest rates, food and energy prices. Emerging markets will also be affected by weakness in local currencies versus the US Dollar and the resultant cost of refinancing existing debt, or availability of hard currency liquidity. Issues and challenges have already been observed across several of the Group's footprint markets, including the recent default of Ghana, political instability in Pakistan, high inflation in Turkey, economic turmoil in Sri Lanka, and coups in Africa. For some countries there is a heightened risk of failure to manage social demands, which might culminate in increased political vulnerability. Furthermore, food security exacerbated by the influences of armed conflict and climate change, and energy security challenges have the potential to drive social unrest. Debt moratoria and refinancing initiatives are complicated by larger number of financiers, with much financing done on a bilateral basis outside of the Paris Club. Whilst the Global Sovereign Debt Roundtable has made some progress on coordinating approaches between the Paris Club and other lenders their interests do not always match. This can lead to delays in negotiations on debt resolutions for developing nations. Page 58 Group Chief Risk Officer's review continued Supply chain issues and material shortages Demand and supply imbalances in global supply chains are increasingly becoming structural in nature and affect a wide range of commodities including food, energy, minerals and raw materials, plus targeted restrictions on certain industry sectors. There is growing political awareness around the need for key component and resource security at national level. Countries are enacting rules to "de-risk" by reducing reliance on rivals or concentrated suppliers (for example semiconductors) and look to either re-industrialise or make use of near-shoring and friend-shoring production. The growing need for minerals and rare earth metals to power green energy technologies could increase the geopolitical standing of the main refiners, such as China, Indonesia and some African nations. However, there are also environmental and social costs to rapidly increasing extraction. A desire to avoid dependence may slow down the move by some nations towards the transition. How these risks are mitigated/next steps �� We remain vigilant in monitoring risk and assessing impacts from geopolitical and macroeconomic risks to portfolio concentrations. �� We conduct thematic stress tests and portfolio reviews at the Group, country, and business level, with regular reviews on vulnerable sectors, and undertake any necessary mitigating actions. �� We maintain a diversified portfolio across products and geographies, with specific risk appetite metrics to monitor concentrations. �� Increased scrutiny is applied when onboarding clients and in ensuring compliance with sanctions. �� Collateral and credit insurance are used to manage concentrations. �� We track the participation of our footprint countries in the G20's Common Framework Agreement and Debt Service Suspension Initiative for Debt Treatments and the associated exposure. �� Our NBFI exposure is closely monitored in terms of both limits, products and counterparties. Regulatory considerations Changing regulatory environment Given notable bank failures in 2023 (and the response of resolution authorities to those failures), the regulatory framework for banks remains subject to continued change in addition to the implementation of Basel 3.1 in various jurisdictions. Additionally, the differing pace and scale of regulatory adoption between jurisdictions, along with increasing extraterritorial reach and prescriptiveness, can make it challenging for multinational groups to manage their business. Implementation timelines are a focus. The scale of upcoming regulatory change in 2024 and 2025 is significant with major regime changes in capital and operational resilience due to take effect. How these risks are mitigated/next steps �� We actively monitor regulatory developments, including those related to sustainable finance and ESG, and respond to consultations either bilaterally or through well-established industry bodies. ESG considerations ESG stakeholder expectations Organisations across the corporate and financial sectors are setting ambitious sustainability goals and net zero targets with many embedding them in their business models. This has prompted increased attention from various stakeholders in ensuring that net zero targets are being met with credible action plans. Stakeholder scrutiny around greenwashing risk relating to ESG focused financial products, as well as companies' commitments, transpires in the various regulatory developments and early enforcement actions taken by several key regulators. Fragmentation in the pace and scale of adoption of ESG regulations around the world remains, particularly around taxonomies and disclosure requirements, which may lead to unintended consequences including misallocation of capital, increased implementation costs and litigation risks. Page 59 Group Chief Risk Officer's review continued The Group's net zero aspirations may be impacted by governments or corporates scaling back their sustainability targets, especially as economic conditions remain challenging, and budgets are constrained. There have been examples in developed nations, such as the UK revisiting its electric vehicle transition timeline. A slower transition from key clients may also weigh reputational pressure on the Group's roadmap. Higher frequencies of extreme weather-related events such as wildfires, floods and famines may lead to physical climate risk and the cost of managing it becoming a heavier burden on global economies. This will be particularly impactful to developing markets. Alongside climate change, biodiversity loss, pollution, and depletion of key resources, such as water, pose incremental risks to food and health systems, energy security and contribute to the disruption of supply chains. Human rights concerns are increasingly in focus, with the scope expanding beyond direct abuses to cover other areas such as technological advancement and supply chains. How these risks are mitigated/next steps �� We update our environmental and social standards for providing financial services to clients every two years, with a new version scheduled for 2024. �� We focus on embedding our values through our Position Statements for sensitive sectors and a list of prohibited activities �� We integrate the management of greenwashing risks into our Reputational and Sustainability Risk Framework and policies �� 'Green', 'sustainable' and 'transition' labels for products and transactions reflect the criteria set out in the Group's Sustainable Finance frameworks, which are regularly reviewed. We obtain external verification on the Group's Sustainable Finance asset pool. �� We assess our clients and suppliers against various international human rights principles, as well as through our social safeguards and supplier charter. �� Detailed portfolio reviews and stress tests are conducted to test resilience to climate-related risks and enhance modelling capabilities to understand the financial risks and opportunities from climate change. �� Work is underway to embed Climate Risk considerations across all relevant PRTs. This includes client-level Climate Risk assessments, including setting adequate mitigants or controls as part of decision making and portfolio management activities. Technological considerations Data and digital The Group's digital footprint will expand as more services and products are digitised and made more accessible. Scale in operations and interactions with digital systems will further reduce the tolerance for errors and outages. The risk of data breaches is amplified by highly organised actors, with threats such as 'Ransomware as a Service' and affordable, sophisticated AI systems helping to facilitate attacks on organisations and individuals. Data regulation continues to be fluid and fragmented. Geopolitical tensions have accelerated the implementation of data sovereignty laws, including data localisation requirements and cross-border access restrictions. These regulations often have an extraterritorial reach which could increase operating costs significantly, and also impact cross-border business models. Stakeholder expectations on data management have also increased, particularly relating to quality, integrity, record keeping, privacy, sovereignty, the ethical use of data and application of AI. The sophistication and adoption of AI solutions are growing exponentially and will increase exposure to existing risks such as model, fraud, financial crime, compliance and Information and Cyber Security (ICS) risks. In response, regulation is accelerating, particularly around the ethical application of AI in decision-making, necessitating robust governance measures. The Group needs to ensure that it develops sufficient in-house subject matter expertise. Page 60 Group Chief Risk Officer's review continued New business structures, channels and competition Failure to harness new technologies and new business models would place banks at a competitive disadvantage. The continued exploration of partnerships, alliances, digital assets, generative AI and nascent technologies, such as quantum computing, provides both opportunities and unique challenges. This is increasingly important as digital assets and distributed ledger technology become progressively prevalent and interconnected with the financial ecosystem. Supply chains are becoming more complex, interconnected and digital. Highly extended enterprises expand opportunities available for malicious actors, with risk cascading further down supply chains beyond just direct and third party risks. These innovations require specialist in-house expertise, new operating models and adapting risk frameworks to perform robust risk assessment and management of new threats. There is also growing regulatory attention in many of these areas. Balancing resilience and agility is essential given the global nature of new technologies alongside the maintenance of existing systems. It is imperative to establish clear ownership, frameworks, and oversight of the use of emerging technologies. How these risks are mitigated/next steps �� We monitor emerging trends, opportunities and developments in technology as well as emerging business models that may have implications for the banking sector. �� We invest in our capabilities, to better prepare and protect ourselves against possible disruption and new risks. �� We track the evolving regulatory landscape affecting key areas such as data management, digital assets and AI, including country-specific requirements, and actively collaborate with regulators to support important initiatives. �� We have established enhanced governance for novel areas through the Digital Asset Risk Committee and Responsible AI Council, which considers emerging regulatory guidance. �� We manage data risks through our Compliance Risk Type Framework and information security risks through our ICS Risk Type Framework. �� We have developed a Group Data Strategy, to strengthen ownership of related data risks. �� We maintain a dedicated Data Compliance Policy with globally applicable standards. These standards undergo regular review to ensure alignment with evolving regulations and industry best practice. �� We maintain programmes to enhance our data risk management capabilities and controls, including compliance with BCBS239 requirements on effective risk data aggregation, with progress tracked at executive level risk governance committees �� The Group has implemented a 'defence-in-depth' ICS control environment strategy to protect, detect and respond to known and emerging ICS threats. �� New risks arising from partnerships, alliances, digital assets and generative technologies are identified through the New Initiatives Risk Assessment and Third Party Risk Management Policy and Standards. Demographic considerations Talent pools of the future The expectations of the workforce, especially skilled workers, continue to evolve. The COVID pandemic accelerated changes on how people work, connect and collaborate, with expectations on hybrid working now a given. The focus is increasingly on 'what' work people do and 'how' they get to deliver it, which are becoming differentiators in the war for future talents. There is greater desire to seek meaning and personal fulfilment at work that is aligned to individual purpose. These trends are even more distinct among Millennials and Generation Z who make up an increasing proportion of the global talent pool, and as digital natives possess the attributes and skills we seek to pursue our strategy. To sustainably attract, grow and retain talent, we must continue to invest in and further strengthen our Employee Value Proposition (EVP) and our brand promise, here for good, through both firm-wide interventions as well as targeted action. Page 61 Group Chief Risk Officer's review continued Demographic trends Divergent demographic trends across developed and emerging markets create contrasting challenges. Developed markets' state budgets could be strained by ageing and shrinking populations, whilst political stances reduce the ability to fill skills gaps through immigration. Conversely emerging markets are experiencing fast-growing, younger workforces. Whilst it is an opportunity to develop talent, population growth will put pressure on key resources such as food, water, education and health, as well as government budgets. Population displacement, whether as a result of climate events, lack of key resources, political issues or war, may increase the fragility of societal structures in vulnerable centres. Large scale movement could cause social unrest, as well as propagate disease transmission and accelerate the spread of future pandemics. How these risks are mitigated/next steps �� Our culture and EVP work aims to address the emerging expectations of the diverse talent we seek. The Brand and Culture Dashboard monitors our diversity and inclusion, colleagues' perceptions of our EVP, and whether we are living our Valued Behaviours. Management teams discuss many of these metrics (including employee survey responses) to identify actions. �� We are undertaking a multi-year journey of developing future-skills amongst our colleagues by focusing on continuous learning, to balance appropriately between 'building' and 'inducting' skills into the Group. �� Our internal Talent Marketplace provides colleagues with opportunities to learn through experience by signing up for cross-functional (or even cross-geography) projects. �� Employees in 44 markets are on agreed flexible working arrangements. We continue to enhance support and resources to People Leaders and colleagues to help balance productivity, collaboration and wellbeing. �� Our Stands continue to be operationalised through our strategy, and help address the talent pool's increased expectations of us being purpose-led. Sadia Ricke Group Chief Risk Officer 23 February 2024 Page 62 Risk review Credit quality by client segment Amortised cost 2023 Banks $million Customers Undrawn commitments $million Financial Guarantees $million Corporate, Commercial & Institutional Banking $million Consumer, Private & Business Banking $million Ventures $million Central & other items $million Customer Total $million Stage 1 44,384 120,886 123,486 1,015 28,305 273,692 176,654 70,832 - Strong 35,284 84,248 118,193 1,000 27,967 231,408 162,643 47,885 - 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 - Strong 55 1,145 1,761 34 - 2,940 1,090 830 - Satisfactory 212 5,840 206 7 - 6,053 4,169 1,823 - Higher risk 273 917 337 13 965 2,232 474 257 Of which (stage 2): - Less than 30 days past due - 78 206 7 - 291 - - - More than 30 days past due - 10 337 13 - 360 - - Stage 3, credit-impaired financial assets 77 5,508 1,484 12 224 7,228 3 672 Gross balance�� 45,001 134,296 127,274 1,081 29,494 292,145 182,390 74,414 Stage 1 (8) (101) (314) (15) - (430) (52) (10) - Strong (3) (34) (234) (14) - (282) (31) (2) - Satisfactory (5) (67) (80) (1) - (148) (21) (8) Stage 2 (10) (257) (141) (21) (1) (420) (39) (14) - Strong (1) (18) (65) (14) - (97) (5) - - Satisfactory (2) (179) (22) (3) - (204) (23) (7) - Higher risk (7) (60) (54) (4) (1) (119) (11) (7) Of which (stage 2): - Less than 30 days past due - (2) (22) (3) - (27) - - - More than 30 days past due - (1) (54) (4) - (59) - - Stage 3, credit-impaired financial assets (6) (3,533) (760) (12) (15) (4,320) - (112) Total credit impairment (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 Stage 1 0.0% 0.1% 0.3% 1.5% 0.0% 0.2% 0.0% 0.0% - Strong 0.0% 0.0% 0.2% 1.4% 0.0% 0.1% 0.0% 0.0% - 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% - Strong 1.8% 1.6% 3.7% 41.2% 0.0% 3.3% 0.5% 0.0% - Satisfactory 0.9% 3.1% 10.7% 42.9% 0.0% 3.4% 0.6% 0.4% - Higher risk 2.6% 6.5% 16.0% 30.8% 0.1% 5.3% 2.3% 2.7% Of which (stage 2): - Less than 30 days past due 0.0% 2.6% 10.7% 42.9% 0.0% 9.3% 0.0% 0.0% - 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-impaired financial assets (S3) 7.8% 64.1% 51.2% 100.0% 6.7% 59.8% 0.0% 16.7% Cover ratio 0.1% 2.9% 1.0% 4.4% 0.1% 1.8% 0.0% 0.2% Fair value through profit or loss Performing 32,813 58,465 13 - - 58,478 - - - Strong 28,402 38,014 13 - - 38,027 - - - Satisfactory 4,411 20,388 - - - 20,388 - - - Higher risk - 63 - - - 63 - - Defaulted (CG13-14) - 33 - - - 33 - - Gross balance (FVTPL)2 32,813 58,498 13 - - 58,511 - - Net carrying value (incl FVTPL) 77,790 188,903 126,072 1,033 29,478 345,486 - - 1. Loans and advances includes reverse repurchase agreements and other similar secured lending of $13,996 million under Customers and of $1,738 million under Banks, held at amortised cost 2. Loans and advances includes reverse repurchase agreements and other similar secured lending of $51,299 million under Customers and of $30,548 million under Banks, held at fair value through profit or loss Page 63 Risk review continued Amortised cost 2022 Banks $million Customers Undrawn commitments $million Financial Guarantees $million Corporate, Commercial & Institutional Banking $million Consumer, Private & Business Banking $million Ventures $million Central & other items $million Customer Total $million Stage 1 39,149 126,261 129,134 691 39,133 295,219 162,958 56,683 - Strong 27,941 89,567 124,734 685 39,133 254,119 148,303 39,612 - Satisfactory 11,208 36,694 4,400 6 - 41,100 14,655 17,071 Stage 2 337 11,355 1,670 18 - 13,043 5,582 3,062 - Strong 148 2,068 1,215 10 - 3,293 1,449 522 - Satisfactory 119 7,783 146 4 - 7,933 3,454 2,134 - Higher risk 70 1,504 309 4 - 1,817 679 406 Of which (stage 2): - Less than 30 days past due 5 109 148 4 - 261 - - - More than 30 days past due 6 23 310 4 - 337 - - Stage 3, credit-impaired financial assets 59 6,143 1,453 1 248 7,845 128 665 Gross balance1 39,545 143,759 132,257 710 39,381 316,107 168,668 60,410 Stage 1 (9) (143) (406) (10) - (559) (41) (11) - Strong (3) (43) (332) (10) - (385) (28) (3) - Satisfactory (6) (100) (74) - - (174) (13) (8) Stage 2 (3) (323) (120) (1) - (444) (53) (28) - Strong - (30) (62) (1) - (93) (6) - - Satisfactory (2) (159) (17) - - (176) (42) (15) - Higher risk (1) (134) (41) - - (175) (5) (13) Of which (stage 2): - Less than 30 days past due - (2) (17) - - (19) - - - More than 30 days past due - (1) (41) - - (42) - - Stage 3, credit-impaired financial assets (14) (3,662) (776) (1) (18) (4,457) - (147) Total credit impairment (26) (4,128) (1,302) (12) (18) (5,460) (94) (186) Net carrying value 39,519 139,631 130,955 698 39,363 310,647 Stage 1 0.0% 0.1% 0.3% 1.4% 0.0% 0.2% 0.0% 0.0% - Strong 0.0% 0.0% 0.3% 1.5% 0.0% 0.2% 0.0% 0.0% - Satisfactory 0.1% 0.3% 1.7% 0.0% 0.0% 0.4% 0.1% 0.0% Stage 2 0.9% 2.8% 7.2% 5.6% 0.0% 3.4% 0.9% 0.9% - Strong 0.0% 1.5% 5.1% 10.0% 0.0% 2.8% 0.4% 0.0% - Satisfactory 1.7% 2.0% 11.6% 0.0% 0.0% 2.2% 1.2% 0.7% - Higher risk 1.4% 8.9% 13.3% 0.0% 0.0% 9.6% 0.7% 3.2% Of which (stage 2): - Less than 30 days past due 0.0% 1.8% 11.5% 0.0% 0.0% 7.3% 0.0% 0.0% - More than 30 days past due 0.0% 4.3% 13.2% 0.0% 0.0% 12.5% 0.0% 0.0% Stage 3, credit-impaired financial assets (S3) 23.7% 59.6% 53.4% 100.0% 7.3% 56.8% 0.0% 22.1% Cover ratio 0.1% 2.9% 1.0% 1.7% 0.0% 1.7% 0.1% 0.3% Fair value through profit or loss Performing 24,930 44,461 28 - 2,557 47,046 - - - Strong 21,451 36,454 27 - 2,409 38,890 - - - Satisfactory 3,479 8,007 1 - 148 8,156 - - - Higher risk - - - - - - - - Defaulted (CG13-14) - 37 - - - 37 - - Gross balance (FVTPL)2 24,930 44,498 28 - 2,557 47,083 - - Net carrying value (incl FVTPL) 64,449 184,129 130,983 698 41,920 357,730 - - 1. Loans and advances includes reverse repurchase agreements and other similar secured lending of $24,498 million under Customers and of $978 million under Banks, held at amortised cost 2. Loans and advances includes reverse repurchase agreements and other similar secured lending of $40,537 million under Customers and of $23,954 million under Banks, held at fair value through profit or loss Page 64 Risk review continued Credit impairment charge (audited) The table below analyses credit impairment charges or releases of the ongoing business portfolio and restructuring business portfolio for the year ended 31 December 2023. 2023 20221 Stage 1 & 2 $million Stage 3 $million Total $million Stage 1 & 2 $million Stage 3 $million Total $million Ongoing business portfolio Corporate, Commercial & Institutional Banking 11 112 123 148 277 425 Consumer, Private & Business Banking 129 225 354 151 111 262 Ventures 42 43 85 13 3 16 Central & other items (44) 10 (34) 95 38 133 Credit impairment charge/(release) 138 390 528 407 429 836 Restructuring business portfolio Others 1 (21) (20) (1) 1 - Credit impairment charge/(release) 1 (21) (20) (1) 1 - Total credit impairment charge/(release) 139 369 508 406 430 836 1 Underlying credit impairment has been restated for the removal of (i) exit markets and businesses in AME and (ii) Aviation Finance. No change to reported credit impairment Vulnerable Sectors Maximum exposure 2023 Maximum on Balance Sheet Exposure (net of credit impairment) $million Collateral $million Net On Balance Sheet Exposure $million Undrawn Commitments (net of credit impairment) $million Financial Guarantees (net of credit impairment) $million Net Off Balance Sheet Exposure $million Total On & Off Balance Sheet Net Exposure $million Industry: Automotive manufacturers�� 3,564 65 3,499 3,791 538 4,329 7,828 Aviation1,2 1,775 974 801 1,794 668 2,462 3,263 Of which : High Carbon Sector 1,330 974 356 944 615 1,559 1,915 Commodity Traders2 7,406 303 7,103 2,591 6,281 8,872 15,975 Metals & Mining1.2 4,589 307 4,282 3,373 1,218 4,591 8,873 Of which: Steel1 1,596 193 1,403 601 358 959 2,362 Of which: Coal Mining1 29 9 20 51 99 150 170 Of which: Aluminium1 526 9 517 338 188 526 1,043 Of which: Other Metals & Mining1 2,438 96 2,342 2,383 573 2,956 5,298 Shipping1 5,964 3,557 2,407 2,261 291 2,552 4,959 Construction2 2,853 448 2,405 2,753 5,927 8,680 11,085 Commercial Real Estate2 14,533 6,363 8,170 4,658 311 4,969 13,139 Of which: High Carbon Sector 7,498 3,383 4,115 1,587 112 1,699 5,814 Hotels & Tourism2 1,680 715 965 1,339 227 1,566 2,531 Oil & Gas1,2 6,278 894 5,384 7,845 6,944 14,789 20,173 Power1 5,411 1,231 4,180 3,982 732 4,714 8,894 Total3 54,053 14,857 39,196 34,387 23,137 57,524 96,720 Of which: Vulnerable and cyclical sectors 38,880 9,983 28,897 24,842 21,511 46,353 75,250 Of which: High carbon sectors 34,634 10,411 24,223 23,783 10,450 34,233 58,456 Total Corporate, Commercial & Institutional Banking 130,405 32,744 97,661 104,437 63,183 167,620 265,281 Total Group 331,952 125,760 206,192 182,299 74,278 256,577 462,769 1 High carbon sectors 2 Vulnerable and cyclical sectors 3 Maximum On Balance sheet exposure include FVTPL portion of $955 million, of which Vulnerable sector is $821 million and High Carbon sector is $443 million Page 65 Risk review continued 2022 Maximum On Balance Sheet Exposure (net of credit impairment) $million Collateral $million Net On Balance Sheet Exposure $million Undrawn Commitments (net of credit impairment) $million Financial Guarantees (net of credit impairment) $million Net Off Balance Sheet Exposure $million Total On & Off Balance Sheet Net Exposure $million Industry: Automotive manufacturers1 3,167 84 3,083 3,683 560 4,243 7,326 Aviation1,2,3 3,154 1,597 1,557 1,762 632 2,394 3,951 Of which : High Carbon Sector 2,540 1,582 958 695 555 1,250 2,208 Commodity Traders2 8,133 341 7,792 2,578 6,095 8,673 16,465 Metals & Mining1.2 4,990 333 4,657 3,732 930 4,662 9,319 Of which: Steel1 1,227 157 1,070 1,450 327 1,777 2,847 Of which: Coal Mining1 48 15 33 8 7 15 48 Of which: Aluminium1 728 107 621 285 74 359 980 Of which: Other Metals & Mining1 2,987 54 2,933 1,989 522 2,511 5,444 Shipping1 5,322 3,167 2,155 1,870 256 2,126 4,281 Construction2 2,909 552 2,357 2,762 5,969 8,731 11,088 Commercial Real Estate2 16,286 7,205 9,081 6,258 224 6,482 15,563 Of which: High Carbon Sector 6,547 2,344 4,203 3,996 90 4,086 8,289 Hotels & Tourism2 1,741 919 822 1,346 138 1,484 2,306 Oil & Gas1,2 6,668 806 5,862 7,630 7,158 14,788 20,650 Power1 4,771 1,258 3,513 4,169 1,176 5,345 8,858 Total4 57,141 16,262 40,879 35,790 23,138 58,928 99,807 Of which: Vulnerable and cyclical sectors 43,678 11,741 31,937 25,761 21,068 46,829 78,766 Of which: High carbon sectors 34,005 9,574 24,431 25,775 10,725 36,500 60,931 Total Corporate, Commercial & Institutional Banking 139,631 35,229 104,402 95,272 51,662 146,934 251,336 Total Group 350,166 141,715 208,451 168,574 60,224 228,798 437,249 1 High carbon sectors 2 Vulnerable and cyclical sectors 3 In addition to the aviation sector loan exposures, the Group owns $3.2 billion of aircraft under operating leases in 2022 4 Maximum On Balance sheet exposure include FVTPL portion of $1,251 million, of which Vulnerable sector is $1,072 million and High Carbon sector is $574 million Page 66 Risk review continued Loans and advances by stage Amortised Cost 2023 Stage 1 Stage 2 Stage 3 Total Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Industry: Aviation 1,619 - 1,619 55 (1) 54 74 (15) 59 1,748 (16) 1,732 Commodity Traders 6,912 (2) 6,910 129 (1) 128 555 (504) 51 7,596 (507) 7,089 Metals & Mining 3,934 (1) 3,933 140 (8) 132 154 (88) 66 4,228 (97) 4,131 Construction 2,230 (2) 2,228 502 (8) 494 358 (326) 32 3,090 (336) 2,754 Commercial Real Estate 12,261 (30) 12,231 1,848 (129) 1,719 1,712 (1,191) 521 15,821 (1,350) 14,471 Hotels & Tourism 1,468 (2) 1,466 61 - 61 126 (25) 101 1,655 (27) 1,628 Oil & Gas 5,234 (4) 5,230 615 (15) 600 571 (147) 424 6,420 (166) 6,254 Total 33,658 (41) 33,617 3,350 (162) 3,188 3,550 (2,296) 1,254 40,558 (2,499) 38,059 Total Corporate, Commercial & Institutional Banking 120,886 (101) 120,785 7,902 (257) 7,645 5,508 (3,533) 1,975 134,296 (3,891) 130,405 Total Group 318,076 (438) 317,638 11,765 (430) 11,335 7,305 (4,326) 2,979 337,146 (5,194) 331,952 Amortised Cost 2022 Stage 1 Stage 2 Stage 3 Total Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Gross Balance $million Total Credit Impair-ment $million Net Carrying Amount $million Industry: Aviation�� 2,377 (1) 2,376 573 - 573 155 (32) 123 3,105 (33) 3,072 Commodity Traders 7,187 (6) 7,181 138 (2) 136 689 (435) 254 8,014 (443) 7,571 Metals & Mining 4,184 (1) 4,183 475 (4) 471 257 (157) 100 4,916 (162) 4,754 Construction 2,424 (2) 2,422 407 (5) 402 497 (412) 85 3,328 (419) 2,909 Commercial Real Estate 12,393 (43) 12,350 3,217 (195) 3,022 1,305 (761) 544 16,915 (999) 15,916 Hotels & Tourism 1,448 (2) 1,446 108 (1) 107 206 (18) 188 1,762 (21) 1,741 Oil & Gas 5,468 (4) 5,464 708 (6) 702 919 (442) 477 7,095 (452) 6,643 Total 35,481 (59) 35,422 5,626 (213) 5,413 4,028 (2,257) 1,771 45,135 (2,529) 42,606 Total Corporate, Commercial & Institutional Banking 126,261 (143) 126,118 11,355 (323) 11,032 6,143 (3,662) 2,481 143,759 (4,128) 139,631 Total Group 334,368 (568) 333,800 13,380 (447) 12,933 7,904 (4,471) 3,433 355,652 (5,486) 350,166 1 In addition to the aviation sector loan exposures, the Group owns $3.2 billion of aircraft under operating leases in 2022 Page 67 Capital review Capital ratios 31.12.23 30.09.23 Change4 30.06.23 Change4 31.12.22 Change4 CET1 14.1% 13.9% 0.2 14.0% 0.1 14.0% 0.1 Tier 1 capital 16.3% 16.2% 0.1 16.2% 0.1 16.6% (0.3) Total capital 21.2% 21.2% - 21.1% 0.1 21.7% (0.5) Capital base1 (audited) 31.12.23 $million 30.09.23 $million Change5 % 30.06.23 $million Change5 % 31.12.22 $million Change5 % CET1 capital instruments and reserves Capital instruments and the related share premium accounts 5,321 5,352 (1) 5,389 (1) 5,436 (2) Of which: share premium accounts 3,989 3,989 - 3,989 - 3,989 - Retained earnings2 24,930 25,202 (1) 26,549 (6) 25,154 (1) Accumulated other comprehensive income (and other reserves) 9,171 7,838 17 7,932 16 8,165 12 Non-controlling interests (amount allowed in consolidated CET1) 217 215 1 190 14 189 15 Independently audited year-end profits 3,542 2,586 37 2,386 48 2,988 19 Foreseeable dividends (768) (446) (72) (377) (104) (648) (19) CET1 capital before regulatory adjustments 42,413 40,747 4 42,069 1 41,284 3 CET1 regulatory adjustments - - Additional value adjustments (prudential valuation adjustments) (730) (613) (19) (693) (5) (854) 15 Intangible assets (net of related tax liability)3 (6,128) (5,940) (3) (5,825) (5) (5,802) (6) Deferred tax assets that rely on future profitability (excludes those arising from temporary differences) (41) (31) (32) (86) 52 (76) 46 Fair value reserves related to net losses on cash flow hedges (91) 195 (147) 317 (129) 564 (116) Deduction of amounts resulting from the calculation of excess expected loss (754) (710) (6) (787) 4 (684) (10) Net gains on liabilities at fair value resulting from changes in own credit risk (100) 203 (149) 203 (149) 63 (259) Defined-benefit pension fund assets (95) (113) 16 (134) 29 (116) 18 Fair value gains arising from the institution's own credit risk related to derivative liabilities (116) (84) (38) (64) (81) (90) (29) Exposure amounts which could qualify for risk weighting of 1250% (44) (36) (22) (52) 15 (103) 57 Other regulatory adjustments to CET1 capital 3 - (49) 100 (52) 100 (29) 100 Total regulatory adjustments to CET1 (8,099) (7,178) (13) (7,173) (13) (7,127) (14) CET1 capital 34,314 33,569 2 34,896 (2) 34,157 - Additional Tier 1 capital (AT1) instruments 5,512 5,512 - 5,512 - 6,504 (15) AT1 regulatory adjustments (20) (20) - (20) - (20) - Tier 1 capital 39,806 39,061 2 40,388 (1) 40,641 (2) - - Tier 2 capital instruments 11,965 12,081 (1) 12,311 (3) 12,540 (5) Tier 2 regulatory adjustments (30) (30) - (30) - (30) - Tier 2 capital 11,935 12,051 (1) 12,281 (3) 12,510 (5) Total capital 51,741 51,112 1 52,669 (2) 53,151 (3) Total risk-weighted assets (unaudited) 244,151 241,506 1 249,117 (2) 244,711 - 1 Capital is prepared on the regulatory scope of consolidation 2 Retained earnings includes IFRS9 capital relief (transitional) of nil (2022: $106 million) 3 Other regulatory adjustments to CET1 capital includes Insufficient coverage for non-performing exposures of nil (2022: $(29) million) 4 Change is the percentage point difference between two periods, rather than percentage change 5 Variance is increase/(decrease) comparing current reporting period to prior reporting periods Page 68 Capital review continued Movement in total capital (audited) Year ended 31.12.23 $million Year ended 31.12.22 $million CET1 at 1 January 34,157 38,362 Share buy-back (2,000) (1,258) Profit for the period 3,542 2,988 Foreseeable dividends deducted from CET1 (768) (648) Difference between dividends paid and foreseeable dividends (372) (301) Movement in goodwill and other intangible assets (326) (1,410) Foreign currency translation differences (477) (1,892) Non-controlling interests 28 (12) Movement in eligible other comprehensive income 464 (1,224) Deferred tax assets that rely on future profitability 35 74 Decrease/(increase) in excess expected loss (70) (104) Additional value adjustments (prudential valuation adjustment) 124 (189) IFRS 9 transitional impact on regulatory reserves including day one (106) (146) Exposure amounts which could qualify for risk weighting 59 (67) Fair value gains arising from the institution's own Credit Risk related to derivative liabilities (26) (30) Other 50 14 CET1 at 31 December 34,314 34,157 AT1 at 1 January 6,484 6,791 Issuances net of redemptions (1,000) 241 Foreign currency translation difference 8 9 Excess on AT1 grandfathered limit (ineligible) - (557) AT1 at 31 December 5,492 6,484 Tier 2 capital at 1 January 12,510 12,491 Regulatory amortisation 1,416 778 Issuances net of redemptions (2,160) (1,098) Foreign currency translation difference 146 (337) Tier 2 ineligible minority interest 19 102 Recognition of ineligible AT1 - 557 Other 4 17 Tier 2 capital at 31 December 11,935 12,510 Total capital at 31 December 51,741 53,151 The main movements in capital in the period were: �� CET1 capital increased by $0.2 billion as retained profits of $3.5 billion, movement in FVOCI of $0.6bn were partly offset by share buy-backs of $2.0 billion, distributions paid and foreseeable of $1.1 billion, foreign currency translation impact of $0.5 billion and an increase in regulatory deductions and other movements of $0.3bn. �� AT1 capital decreased by $1.0 billion following the redemption of $1.0 billion of 7.75 per cent securities. �� Tier 2 capital decreased by $0.6 billion due to the redemption of $2.2 billion of Tier 2 during the year partly offset by the reversal of regulatory amortisation and foreign currency translation impact. Page 69 Capital review continued Risk-weighted assets by business 31.12.23 Credit risk $million Operational risk $million Market risk $million Total risk $million Corporate, Commercial & Institutional Banking 102,675 18,083 21,221 141,979 Consumer, Private & Business Banking 42,559 8,783 - 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 30.09.23 Credit risk $million Operational risk $million Market risk $million Total risk $million Corporate, Commercial & Institutional Banking 104,015 18,083 21,288 143,386 Consumer, Private & Business Banking 41,582 8,783 - 50,365 Ventures 1,749 35 2 1,786 Central & other items 40,948 960 4,061 45,969 Total risk-weighted assets 188,294 27,861 25,351 241,506 30.06.23 Credit risk $million Operational risk $million Market risk $million Total risk $million Corporate, Commercial & Institutional Banking 109,343 18,083 19,832 147,258 Consumer, Private & Business Banking 41,881 8,783 - 50,664 Ventures 1,888 35 2 1,925 Central & other items 44,039 960 4,271 49,270 Total risk-weighted assets 197,151 27,861 24,105 249,117 31.12.22 Credit risk $million Operational risk $million Market risk $million Total risk $million Corporate, Commercial & Institutional Banking 110,103 17,039 16,440 143,582 Consumer, Private & Business Banking 42,091 8,639 - 50,730 Ventures 1,350 6 2 1,358 Central & other items 43,311 1,493 4,237 49,041 Total risk-weighted assets 196,855 27,177 20,679 244,711 Risk-weighted assets by geographic region 31.12.23 $million 30.09.23 $million Change1 % 30.06.21 $million Change1 % 31.12.22 $million Change1 % ASIA2 155,995 150,842 3 155,410 - 150,816 3 Africa & Middle East 38,393 38,529 - 41,068 (7) 40,716 (6) Europe & Americas 46,106 48,227 (4) 48,787 (5) 50,174 (8) Central & other items 3,657 3,908 (6) 3,852 (5) 3,005 22 Total risk-weighted assets 244,151 241,506 1 249,117 (2) 244,711 - 1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods Page 70 Capital review continued Movement in risk-weighted assets Credit risk Operational risk $million Market risk $million Total risk $million Commercial, Corporate &Institutional Banking $million Consumer, Private & Business Banking $million Ventures $million Central & other items $million Total $million At 31 December 2021 125,813 42,731 756 50,288 219,588 27,116 24,529 271,233 At 1 January 2022 125,813 42,731 756 50,288 219,588 27,116 24,529 271,233 Assets growth & mix (13,213) (985) 594 (10,033) (23,637) - - (23,637) Asset quality (4,258) 431 - 7,344 3,517 - - 3,517 Risk-weighted assets efficiencies - - - - - - - - Model Updates 4,329 1,420 - - 5,749 - (1,000) 4,749 Methodology and policy changes 2,024 85 - 93 2,202 - 1,500 3,702 Acquisitions and disposals - - - - - - - - Foreign currency translation (4,883) (1,591) - (3,376) (9,850) - - (9,850) Other, Including non-credit risk movements 291 - - (1,005) (714) 61 (4,350) (5,003) At 31 December 2022 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) - - (1,978) Asset quality (391) 390 - 2,684 2,683 - - 2,683 Risk-weighted assets efficiencies - - - (688) (688) - - (688) Model Updates (597) (151) - (151) (899) - 500 (399) Methodology and policy changes - (196) - - (196) - (800) (996) Acquisitions and disposals (1,630) - - - (1,630) - - (1,630) Foreign currency translation (386) (303) - (2,035) (2,724) - - (2,724) Other, Including non-credit risk movements - - - - - 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 Movements in risk-weighted assets Movements in risk-weighted assets RWA decreased by $0.5 billion, or 0.1 per cent from 31 December 2022 to $244.2 billion. This was mainly due to decrease in Credit Risk RWA of $5.4 billion, an increase in Market Risk RWA of $4.2 billion and Operational Risk RWA of $0.7 billion. Corporate, Commercial & Institutional Banking Credit Risk RWA decreased by $7.4 billion, or 6.7 per cent from 31 December 2022 to $102.7 billion mainly due to: �� $4.4 billion decrease from changes in asset growth & mix of which: o $10.3 billion decrease from optimisation actions including reduction in lower returning portfolios o $5.9 billion increase from asset balance growth �� $1.6 billion decrease from sale of Aviation business �� $0.9 billion decrease from industry-wide regulatory changes to align IRB model performance �� $0.4 billion decrease from foreign currency translation �� $0.4 billion decrease from asset quality movements reflecting client upgrades in Asia, Europe & Americas, partially offset by sovereign downgrades in Africa & Middle East �� $0.3 billion increase from changes in model in Financial Markets and Lending Page 71 Capital review continued Consumer, Private & Business Banking Credit Risk RWA increased by $0.5 billion, or 1.1 per cent from 31 December 2022 to $42.6 billion mainly due to: �� $0.7 billion increase from changes in asset growth & mix mainly from Asia �� $0.4 billion increase due to deterioration in asset quality mainly in Asia �� $0.3 billion decrease from foreign currency translation �� $0.2 billion decrease from methodology change relating to an unsecured lending portfolio in Africa & Middle East �� $0.1 billion decrease from industry-wide regulatory changes to align IRB model performance. Ventures Ventures is comprised of Mox Bank Limited, Trust Bank and SC Ventures. Credit Risk RWA increased by $0.5 billion, or 39.7 per cent from 31 December 2022 to $1.9 billion from asset balance growth, mainly from SC Ventures Central & Other items Central & Other items RWA mainly relate to the Treasury Markets liquidity portfolio, equity investments and current & deferred tax assets. Credit Risk RWA increased by $1 billion, or 2.3 per cent from 31 December 2022 to $44.3 billion mainly due to: �� $2.7 billion increase due to deterioration in asset quality mainly from sovereign downgrades in Africa & Middle East �� $1.2 billion increase from changes in asset growth & mix. �� $2.0 billion decrease from foreign currency translation �� $0.7 billion decrease from RWA efficiencies �� $0.2 billion decrease from changes in model in Treasury Markets. Market Risk Total Market Risk RWA increased by $4.2 billion, or 20.3 per cent from 31 December 2022 to $24.9 billion due to: �� $2.4 billion increase in Standardised Approach (SA) RWA driven by higher Specific Interest Rate Risk relating to the traded credit portfolio, offset by lower net Structural FX positions �� $2.1 billion increase in Internal Models Approach (IMA) RWA due to increased positions and increased market volatility. �� $0.5 billion increase in IMA RWA due to introduction of a new VaR model to address the rise in VaR backtesting exceptions in 2022. �� $0.3 billion increase in SA RWA due to other smaller RWA movements in 2023. �� $0.8 billion decrease in IMA RWA due to reduction in the IMA multiplier with fewer VaR backtesting exceptions in 2023 than in 2022. Operational Risk �� Operational Risk RWA increased by $0.7 billion, or 2.5 per cent from 31 December 2022 to $27.9 billion, mainly due to a marginal increase in average income as measured over a rolling three-year time horizon for certain products. Page 72 Capital review continued Leverage ratio 31.12.23 $million 30.09.23 $million Change2 % 30.06.23 $million Change2 % 31.12.22 $million Change2 % Tier 1 capital 39,806 39,061 2 40,388 (1) 40,641 (2) Derivative financial instruments 50,434 62,449 (19) 60,388 (16) 63,717 (21) Derivative cash collateral 10,337 10,035 3 9,304 11 12,515 (17) Securities financing transactions (SFTs) 97,581 85,481 14 87,118 12 89,967 8 Loans and advances and other assets 664,492 667,868 (1) 681,901 (3) 653,723 2 Total on-balance sheet assets 822,844 825,833 - 838,711 (2) 819,922 - Regulatory consolidation adjustments1 (92,709) (105,534) 12 (102,523) 10 (71,728) (29) Derivatives adjustments - - - Derivatives netting (39,031) (46,329) 16 (44,747) 13 (47,118) 17 Adjustments to cash collateral (9,833) (8,725) (13) (7,267) (35) (10,640) 8 Net written credit protection 1,359 1,139 19 931 46 548 148 Potential future exposure on derivatives 42,184 40,737 4 39,239 8 35,824 18 Total derivatives adjustments (5,321) (13,178) 60 (11,844) 55 (21,386) 75 Counterparty risk leverage exposure measure for SFTs 6,639 4,586 45 7,591 (13) 15,553 (57) Off-balance sheet items 123,572 119,136 4 120,355 3 119,049 4 Regulatory deductions from Tier 1 capital (7,883) (7,297) (8) (7,311) (8) (7,099) (11) Total exposure measure excluding claims on central banks 847,142 823,546 3 844,979 - 854,311 (1) Leverage ratio excluding claims on central banks (%) 4.7% 4.7% (0.0) 4.8% (0.1) 4.8% (0.1) Average leverage exposure measure excluding claims on central banks 853,968 838,666 2 842,493 1 864,605 (1) Average leverage ratio excluding claims on central banks (%) 4.6% 4.7% (0.1) 4.7% (0.1) 4.7% (0.1) Countercyclical leverage ratio buffer 0.1% 0.1% - 0.1% - 0.1% - G-SII additional leverage ratio buffer 0.4% 0.4% 0.1 0.4% 5.0 0.4% 0.1 1 Includes adjustment for qualifying central bank claims and unsettled regular way trades 2 Change is the percentage point difference between two periods, rather than percentage change Page 73 Financial statements Consolidated income statement For the year ended 31 December 2023 Notes 2023 $million 2022 $million Interest income 27,227 15,252 Interest expense (19,458) (7,659) Net interest income 3 7,769 7,593 Fees and commission income 4,067 3,972 Fees and commission expense (815) (859) Net fee and commission income 4 3,252 3,113 Net trading income 5 6,292 5,310 Other operating income 6 706 302 Operating income 18,019 16,318 Staff costs (8,256) (7,618) Premises costs (422) (401) General administrative expenses (1,802) (1,708) Depreciation and amortisation (1,071) (1,186) Operating expenses 7 (11,551) (10,913) Operating profit before impairment losses and taxation 6,468 5,405 Credit impairment 8 (508) (836) Goodwill, property, plant and equipment and other impairment 9 (1,008) (439) Profit from associates and joint ventures 32 141 156 Profit before taxation 5,093 4,286 Taxation 10 (1,631) (1,384) Profit for the year 3,462 2,902 Profit attributable to: Non-controlling interests 29 (7) (46) Parent company shareholders 3,469 2,948 Profit for the year 3,462 2,902 cents cents Earnings per share: Basic earnings per ordinary share 12 108.6 85.9 Diluted earnings per ordinary share 12 106.2 84.3 The notes form an integral part of these financial statements. Page 74 Financial statements continued Consolidated statement of comprehensive income For the year ended 31 December 2023 Notes 2023 $million 2022 $million Profit for the year 3,462 2,902 Other comprehensive income: Items that will not be reclassified to income statement: 239 (75) Own credit gains/(losses) on financial liabilities designated at fair value through profit or loss 212 (56) Equity instruments at fair value through other comprehensive income 181 (75) Actuarial (losses)/gains on retirement benefit obligations 30 (47) 41 Taxation relating to components of other comprehensive income 10 (107) 15 Items that may be reclassified subsequently to income statement: 562 (3,703) Exchange differences on translation of foreign operations: Net loss taken to equity (734) (2,466) Net gains on net investment hedges 14 215 512 Share of other comprehensive loss from associates and joint ventures 32 (7) (79) Debt instruments at fair value through other comprehensive income: Net valuation gain/(loss) taken to equity 383 (1,528) Reclassified to income statement 6 115 207 Net impact of expected credit losses (48) 118 Cash flow hedges: Net movements in cash flow hedge reserve 14 767 (619) Taxation relating to components of other comprehensive income 10 (129) 152 Other comprehensive income/(loss) for the year, net of taxation 801 (3,778) Total comprehensive income/(loss) for the year 4,263 (876) Total comprehensive income/(loss) attributable to: Non-controlling interests 29 (38) (88) Parent company shareholders 4,301 (788) Total comprehensive income/(loss) for the year 4,263 (876) Page 75 Financial statements continued Consolidated balance sheet As at 31 December 2023 Notes 2023 $million 2022 $million Assets Cash and balances at central banks 13,35 69,905 58,263 Financial assets held at fair value through profit or loss 13 147,222 105,812 Derivative financial instruments 13,14 50,434 63,717 Loans and advances to banks 13,15 44,977 39,519 Loans and advances to customers 13,15 286,975 310,647 Investment securities 13 161,255 172,448 Other assets 20 47,594 50,383 Current tax assets 10 484 503 Prepayments and accrued income 3,033 3,149 Interests in associates and joint ventures 32 966 1,631 Goodwill and intangible assets 17 6,214 5,869 Property, plant and equipment 18 2,274 5,522 Deferred tax assets 10 702 834 Assets classified as held for sale 21 809 1,625 Total assets 822,844 819,922 Liabilities Deposits by banks 13 28,030 28,789 Customer accounts 13 469,418 461,677 Repurchase agreements and other similar secured borrowing 13,16 12,258 2,108 Financial liabilities held at fair value through profit or loss 13 83,096 79,903 Derivative financial instruments 13,14 56,061 69,862 Debt securities in issue 13,22 62,546 61,242 Other liabilities 23 39,221 43,527 Current tax liabilities 10 811 583 Accruals and deferred income 6,975 5,895 Subordinated liabilities and other borrowed funds 13,27 12,036 13,715 Deferred tax liabilities 10 770 769 Provisions for liabilities and charges 24 299 383 Retirement benefit obligations 30 183 146 Liabilities included in disposal groups held for sale 21 787 1,307 Total liabilities 772,491 769,906 Equity Share capital and share premium account 28 6,815 6,930 Other reserves 9,171 8,165 Retained earnings 28,459 28,067 Total parent company shareholders' equity 44,445 43,162 Other equity instruments 28 5,512 6,504 Total equity excluding non-controlling interests 49,957 49,666 Non-controlling interests 29 396 350 Total equity 50,353 50,016 Total equity and liabilities 822,844 819,922 The notes form an integral part of these financial statements. These financial statements were approved by the Board of directors and authorised for issue on 23 February 2024 and signed on its behalf by: Jos�� Vi��als Bill Winters Diego De Giorgi Group Chairman Group Chief Executive Group Chief Financial Officer Page 76 Financial statements continued Consolidated statement of changes in equity For the year ended 31 December 2023 Ordinary share capital and share premium account $million Preference share capital and share premium account $million Capital and merger reserves1 $million Own credit adjust-ment reserve $million Fair value through other compre-hensive income reserve - debt $million Fair value through other compre-hensive income reserve - equity $million Cash- flow hedge reserve $million Trans-lation reserve $million Retained earnings $million Parent company share-holders' equity $million Other equity instru-ments $million Non-controlling interests $million Total $million As at 1 January 2022 5,528 1,494 17,246 (15) 103 249 (34) (5,744) 27,184 46,011 6,254 371 52,636 Profit/(loss) for the year - - - - - - - - 2,948 2,948 - (46) 2,902 Other comprehensive (loss)/income�� - - - (48) (1,219) (43) (530) (1,904) 82 (3,736) - (42) (3,778) Distributions - - - - - - - - - - - (31) (31) Other equity instruments issued, net of expenses - - - - - - - - - - 1,240 - 1,240 Redemption of other equity instruments - - - - - - - - - - (999) - (999) Treasury shares net movement - - - - - - - - (203) (203) - - (203) Share option expenses - - - - - - - - 163 163 - - 163 Dividends on ordinary shares - - - - - - - - (393) (393) - - (393) Dividends on preference shares and AT1 securities - - - - - - - - (401) (401) - - (401) Share buy-back3,4 (92) - 92 - - - - - (1,258) (1,258) - - (1,258) Other movements - - - - - - - 125 195,6 31 9�� 987 138 As at 31 December 2022 5,436 1,494 17,338 (63) (1,116) 206 (564) (7,636) 28,067 43,162 6,504 350 50,016 Profit/(loss) for the year - - - - - - - - 3,469 3,469 - (7) 3,462 Other comprehensive income/(loss)�� - - - 163 426 124 655 (489) (47)2 832 - (31) 801 Distributions - - - - - - - - - - - (26) (26) Redemption of other equity instruments - - - - - - - - - - (1,000) - (1,000) Treasury shares net movement - - - - - - - - (189) (189) - - (189) Share option expenses - - - - - - - - 173 173 - - 173 Dividends on ordinary shares - - - - - - - - (568) (568) - - (568) Dividends on preference shares and AT1 securities - - - - - - - - (452) (452) - - (452) Share buyback8,9 (115) - 115 - - - - - (2,000) (2,000) - - (2,000) Other movements - - - - - - - 125 65 18 8�� 11010 136 As at 31 December 2023 5,321 1,494 17,453 100 (690) 330 91 (8,113) 28,459 44,445 5,512 396 50,353 1 Includes capital reserve of $5 million, capital redemption reserve of $337 million and merger reserve of $17,111 million 2 Comprises actuarial gain on Group defined benefit schemes 3 On 18 February 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $56 million, and the total consideration paid was $754 million, the buy-back completed on 19 May 2022. The total number of shares purchased was 111,295,408, representing 3.61 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account 4 On 1 August 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $36 million, and the total consideration paid was $504 million. The total number of shares purchased was 73,073,837 representing 2.5 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account 5 Movement related to Translation adjustment and AT1 Securities charges 6 Movement mainly related to $21million NCI on Power2SME Pte Ltd. and $8 million on CurrencyFair Limited & $(9) million related to AT1 securities charges 7 Movements primarily from non-controlling interest pertaining to Mox Bank Limited ($39 million), Trust Bank Singapore Limited ($47 million) , Zodia Markets Holdings Limited ($3 million) and Power2SME Pte Ltd. ($9 million) 8 On 16 February 2023, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $58 million, and the total consideration paid was $1,000 million and the buy-back completed on 29 September 2023. The total number of shares purchased was 116,710,492, representing 4.03 per cent of the ordinary shares in issue as at the commencement of the buy-back. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account 9 On 28 July 2023, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $57 million, and the total consideration paid was $1,000 million and the buy-back completed on 6 November 2023. The total number of shares purchased was 112,982,802, representing 3.90 per cent of the ordinary shares in issue as at the commencement of the buy-back. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account 10 Movements primarily from non-controlling interest pertaining to Mox Bank Limited ($48 million), Trust Bank Singapore Limited ($34 million) and Zodia Custody Limited ($28 million) 11 All the amounts are net of tax Note 28 includes a description of each reserve. The notes form an integral part of these financial statements. Page 77 Financial statements continued Basis of preparation The consolidated and Company financial statements have been prepared on a going concern basis and under the historical cost convention, as modified by the revaluation of cash-settled share-based payments, fair value through other comprehensive income, and financial assets and liabilities (including derivatives) at fair value through profit or loss. The consolidated financial statements are presented in United States dollars ($), being the presentation currency of the Group and functional currency of the Company, and all values are rounded to the nearest million dollars, except when otherwise indicated. Going concern These financial statements were approved by the Board of directors on 23 February 2024. The directors have made an assessment of the Group's ability to continue as a going concern. This assessment has been made having considered the current macroeconomic and geopolitical headwinds, including: �� Review of the Group Strategy and Corporate Plan �� An assessment of the actual performance to date, loan book quality, credit impairment, legal, regulatory and compliance matters, and the updated annual budget �� Consideration of stress testing performed, including both the Bank of England annual stress test and a Group Recovery and Resolution Plan (RRP) as submitted to the PRA. Both these submissions include the application of stressed scenarios. Under the tests and through the range of scenarios, the results of these exercises and the RRP demonstrate that the Group has sufficient capital and liquidity to continue as a going concern and meet minimum regulatory capital and liquidity requirements �� Analysis of the capital, funding and liquidity position of the Group, including the capital and leverage ratios, and ICAAP which summarises the Group's capital and risk assessment processes, assesses its capital requirements and the adequacy of resources to meet them. Further, funding and liquidity was considered in the context of the risk appetite metrics, including the LCR ratio. �� The Group's Internal Liquidity Adequacy Assessment Process (ILAAP), which considers the Group's liquidity position, its framework and whether sufficient liquidity resources are being maintained to meet liabilities as they fall due, was also reviewed �� The level of debt in issue, including redemptions and issuances during the year, debt falling due for repayment in the next 12 months and further planned debt issuances, including the appetite in the market for the Group's debt �� A detailed review of all principal and emerging risks Based on the analysis performed, the directors confirm they are satisfied that the Group has adequate resources to continue in business for a period of at least 12 months from 23 February 2024. For this reason, the Group continues to adopt the going concern basis of accounting for preparing the financial statements. Page 78 Other supplementary financial information Five-year summary 2023 $million 2022 $million 2021 $million 2020 $million 2019 $million Operating profit before impairment losses and taxation 6,468 5,405 3,777 4,374 4,484 Impairment losses on loans and advances and other credit risk provisions (508) (836) (254) (2,325) (908) Other impairment1 (1,008) (425) (372) (98) (136) Profit before taxation 5,093 4,286 3,347 1,613 3,713 Profit attributable to shareholders 3,469 2,948 2,315 724 2,303 Loans and advances to banks2 44,977 39,519 44,383 44,347 53,549 Loans and advances to customers2 286,975 310,647 298,468 281,699 268,523 Total assets 822,844 819,922 827,818 789,050 720,398 Deposits by banks2 28,030 28,789 30,041 30,255 28,562 Customer accounts2 469,418 461,677 474,570 439,339 405,357 Shareholders' equity 44,445 43,162 46,011 45,886 44,835 Total capital resources3 62,389 63,731 69,282 67,383 66,868 Information per ordinary share Basic earnings per share 108.6c 85.9c 61.3c 10.4c 57.0c Underlying earnings per share 128.9c 97.9c 85.8c 36.1c 75.7c Dividends per share4 27.0c 18.0c 12.0c - 22.0c Net asset value per share 1,629.0c 1,453.3c 1,456.4c 1,409.3c 1,358.3c Net tangible asset value per share 1,393.0c 1,249.0c 1,277.0c 1,249.0c 1,192.5c Return on assets5 0.4% 0.4% 0.3% 0.1% 0.3% Ratios Reported return on ordinary shareholders' equity 7.2% 6.0% 4.2% 0.8% 4.2% Reported return on ordinary shareholders' tangible equity 8.4% 6.8% 4.8% 0.9% 4.8% Underlying return on ordinary shareholders' equity 8.7% 6.9% 5.9% 2.6% 5.6% Underlying return on ordinary shareholders' tangible equity 10.1% 7.7% 6.8% 3.0% 6.4% Reported cost to income ratio (excluding UK Bank Levy) 63.5% 66.3% 73.6% 68.1% 68.7% Reported cost to income ratio (including UK Bank Levy) 64.1% 66.9% 74.3% 70.4% 70.9% Underlying cost to income ratio (excluding UK Bank levy) 63.4% 65.5% 69.8% 66.4% 65.9% Underlying cost to income ratio (including UK Bank levy) 64.1% 66.2% 70.5% 68.7% 68.2% Capital ratios: CET 16 14.1% 14.0% 14.1% 14.4% 13.8% Total capital6 21.2% 21.7% 21.3% 21.2% 21.2% 1 Other Impairment includes $850 million (2022: $308 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai) 2 Excludes amounts held at fair value through profit or loss 3�� Shareholders' funds, non-controlling interests and subordinated loan capital 4 Dividend paid during the year per share 5 Represents profit attributable to shareholders divided by the total assets of the Group 6 Unaudited Page 79 Other supplementary financial information continued Insured and uninsured deposits SCB operates and provides services to customers across many countries and insured deposit is determined on the basis of limits enacted within local regulations. 2023 2022 Bank deposits $million Customer accounts $million Bank deposits $million Customer accounts $million Insured deposits 10 66,753 28 60,008 Current accounts 9 15,767 8 16,373 Savings deposits - 27,376 - 26,973 Time deposits 1 23,517 20 16,599 Other deposits - 93 - 63 Uninsured deposits 35,500 467,868 36,795 460,221 Current accounts 20,969 150,559 22,425 144,931 Savings deposits - 91,425 - 90,937 Time deposits 8,295 176,977 6,870 176,090 Other deposits 6,236 48,907 7,500 48,263 Total 35,510 534,621 36,823 520,229 UK and non-UK deposits The following table summarises the split of Bank and Customer deposits into UK and Non-UK deposits for respective account lines based on the domicile or residence of the clients. 2023 2022 Bank deposits $million Customer accounts $million Bank deposits $million Customer accounts $million UK deposits 2,918 29,318 4,163 38,557 Current accounts 925 7,062 903 8,955 Savings deposits - 330 - 420 Time deposits 310 5,412 1,004 6,760 Other deposits 1,683 16,514 2,256 22,422 Non-UK deposits 32,592 505,303 32,660 481,672 Current accounts 20,053 159,264 21,530 152,349 Savings deposits - 118,471 - 117,490 Time deposits 7,986 195,082 5,886 185,929 Other deposits 4,553 32,486 5,244 25,904 Total 35,510 534,621 36,823 520,229 Contractual maturity of Loans, Investment securities and Deposits 2023 Loans and advances to banks $million Loans and advances to customers $million Investment securities - Treasury and other eligible Bills $million Investment securities - Debt securities $million Investment securities - Equity shares $million Bank deposits $million Customer accounts $million One year or less 72,717 197,125 38,877 59,023 - 31,333 485,908 Between one and five years 3,975 52,532 4 69,075 - 4,174 46,365 Between five and ten years 837 19,184 1 18,804 - 2 567 Between ten years and fifteen years 35 14,084 - 9,276 - - 1,341 More than fifteen years and undated 226 62,561 - 18,155 3,932 - 441 Total 77,790 345,486 38,882 174,333 3,932 35,509 534,622 Total amortised cost and FVOCI exposures 44,977 286,975 Fixed interest rate exposures 38,505 168,697 Floating interest rate exposures 6,472 118,278 Page 80 Other supplementary financial information continued 2022 Loans and advances to banks $million Loans and advances to customers $million Investment securities - Treasury and other eligible Bills $million Investment securities - Debt securities $million Investment securities - Equity shares $million Bank deposits $million Customer accounts $million One year or less 60,132 208,691 42,269 47,193 - 35,240 508,125 Between one and five years 3,630 52,563 482 63,523 - 1,576 10,281 Between five and ten years 411 18,067 - 20,078 - 7 694 Between ten years and fifteen years 92 13,305 - 12,921 - - 598 More than fifteen years and undated 184 65,104 - 15,720 4,037 - 531 Total 64,449 357,730 42,751 159,435 4,037 36,823 520,229 Total amortised cost and FVOCI exposures 39,519 310,647 Fixed interest rate exposures 36,218 170,609 Floating interest rate exposures 3,301 140,038 Maturity and yield of Debt securities, alternative tier one and other eligible bills held at amortised cost One year or less Between one and five years Between five and ten years More than ten years Total $million Yield % $million Yield % $million Yield % $million Yield % $million Yield % Central and Central and other government agencies - US 1,861 1.39 9,171 1.61 5,799 1.67 4,524 3.89 21,355 2.09 - UK 39 2.75 85 1.06 101 0.67 - - 225 1.18 - Other 5,045 2.72 9,560 2.80 2,289 3.12 81 4.74 16,975 2.84 Other debt securities 2,487 6.45 2,658 5.37 2,262 5.44 10,973 5.13 18,380 5.38 As at 31 December 2023 9,432 3.44 21,474 2.61 10,451 2.79 15,578 4.77 56,935 3.37 One year or less Between one and five years Between five and ten years More than ten years Total $million Yield % $million Yield % $million Yield % $million Yield % $million Yield % Central and other government agencies - US 2,208 1.58 5,437 1.41 6,317 1.32 4,498 3.47 18,460 1.90 - UK - - 85 1.98 60 0.50 47 0.90 192 1.26 - Other 3,599 2.71 9,659 1.98 3,541 2.24 44 4.00 16,843 2.19 Other debt securities 4,752 4.53 2,869 5.07 1,454 4.09 15,144 3.55 24,219 3.96 As at 31 December 2022 10,559 3.29 18,050 2.30 11,372 1.96 19,733 3.53 59,714 2.82 Page 81 Other supplementary financial information continued The maturity distributions are presented in the above table on the basis of residual contractual maturity dates. The weighted average yield for each range of maturities is calculated by dividing the annualised interest income for the year by the book amount of debt securities at that date. Average balance sheets and yields and volume and price variances Average balance sheets and yields The following tables set out the average balances and yields for the Group's assets and liabilities for the periods ended 31 December 2023 and 31 December 2022 under the revised definition of net interest margin. For the purpose of these tables, average balances have been determined on the basis of daily balances, except for certain categories, for which balances have been determined less frequently. The Group does not believe that the information presented in these tables would be significantly different had such balances been determined on a daily basis. Average assets 2023 Average non-interest earning balance $million Average interest earning balance $million Interest income $million Gross yield % Gross yield total balance % Cash and balances at central banks 10,466 67,634 2,833 4.19 3.63 Gross loans and advances to banks 34,743 44,161 2,095 4.74 2.66 Gross loans and advances to customers 55,235 301,570 15,698 5.20 4.40 Impairment provisions against loans and advances to banks and customers - (5,894) - - - Investment securities - Treasury and Other Eligible Bills 7,955 32,026 1,596 4.98 3.99 Investment securities - Debt Securities 29,912 133,023 5,005 3.76 3.07 Investment securities - Equity Shares 3,190 - - - - Property, plant and equipment and intangible assets 8,861 - - - - Prepayments, accrued income and other assets 126,539 - - - - Investment associates and joint ventures 1,628 - - - - Total average assets 278,529 572,520 27,227 4.76 3.20 Average assets 2022 Average non-interest earning balance $million Average interest earning balance $million Interest income $million Gross yield % Gross yield total balance % Cash and balances at central banks 19,700 54,503 765 1.40 1.03 Gross loans and advances to banks 29,576 42,953 853 1.99 1.18 Gross loans and advances to customers 61,480 306,880 10,168 3.31 2.76 Impairment provisions against loans and advances to banks and customers - (5,867) - - - Investment securities - Treasury and Other Eligible Bills 5,564 25,924 630 2.43 2.00 Investment securities - Debt Securities 23,618 140,977 2,836 2.01 1.72 Investment securities - Equity Shares 4,152 - - - - Property, plant and equipment and intangible assets 8,821 - - - - Prepayments, accrued income and other assets 142,599 - - - - Investment associates and joint ventures 2,152 - - - - Total average assets 297,662 565,370 15,252 2.70 1.77 Page 82 Other supplementary financial information continued Average liabilities Average liabilities 2023 Average non-interest bearing balance $million Average interest bearing balance $million Interest expense $million Rate paid % Rate paid total balance % Deposits by banks 14,238 24,066 796 3.31 2.08 Customer accounts: Current accounts 41,911 132,537 3,619 2.73 2.07 Savings deposits - 112,046 1,981 1.77 1.77 Time deposits 15,345 186,287 8,204 4.40 4.07 Other deposits 44,211 6,527 488 7.48 0.96 Debt securities in issue 12,259 65,579 3,367 5.13 4.33 Accruals, deferred income and other liabilities 132,442 1,009 52 5.15 0.04 Subordinated liabilities and other borrowed funds - 12,299 951 7.73 7.73 Non-controlling interests 373 - - - - Shareholders' funds 49,920 - - - - 310,699 540,350 19,458 3.60 2.29 Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets (1,778) Total average liabilities and shareholders' funds 310,699 540,350 17,680 3.27 2.08 Average liabilities 2022 Average non-interest bearing balance $million Average interest bearing balance $million Interest expense $million Rate paid % Rate paid total balance % Deposits by banks 17,039 27,241 433 1.59 0.98 Customer accounts: Current accounts 51,375 132,709 1,480 1.12 0.80 Savings deposits - 131,571 832 0.63 0.63 Time deposits 11,586 152,118 3,021 1.99 1.85 Other deposits 52,962 5,094 110 2.16 0.19 Debt securities in issue 6,720 60,559 1,169 1.93 1.74 Accruals, deferred income and other liabilities 147,814 1,065 44 4.13 0.03 Subordinated liabilities and other borrowed funds - 14,994 570 3.80 3.80 Non-controlling interests 312 - - - - Shareholders' funds 49,873 - - - - 337,681 525,351 7,659 1.46 0.89 Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets (383) Total average liabilities and shareholders' funds 337,681 525,351 7,276 1.38 0.84 Page 83 Other supplementary financial information continued Net interest margin 2023 $million 2022 $million Interest income (Reported) 27,227 15,252 Average interest earning assets 572,520 565,370 Gross yield (%) 4.76 2.70 Interest expense (Reported) 19,458 7,659 Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets (1,778) (383) Interest expense adjusted for Financial Markets trading book funding costs and financial guarantee fees on interest-earning assets 17,680 7,276 Average interest-bearing liabilities 540,350 525,351 Rate paid (%) 3.27 1.38 Net yield (%) 1.49 1.32 Net interest income adjusted for Financial Markets funding costs and Financial guarantee fees on interest earing assets 9,547 7,976 Net interest margin (%) 1.67 1.41 Volume and price variances The following table analyses the estimated change in the Group's net interest income attributable to changes in the average volume of interest-earning assets and interest-bearing liabilities, and changes in their respective interest rates for the years presented. Volume and rate variances have been determined based on movements in average balances and average exchange rates over the year and changes in interest rates on average interest-earning assets and average interest-bearing liabilities. 2023 versus 2022 Net increase/ (decrease) in interest $million Volume $million Rate $million Cash and unrestricted balances at central banks 550 1,518 2,068 Loans and advances to banks 57 1,185 1,242 Loans and advances to customers (284) 5,814 5,530 Investment securities (74) 3,209 3,135 Total interest earning assets 249 11,726 11,975 Interest bearing liabilities Subordinated liabilities and other borrowed funds (208) 589 381 Deposits by banks (105) 468 363 Customer accounts: Current accounts and savings deposits (458) 3,769 3,311 Time and other deposits 1,601 3,945 5,546 Debt securities in issue 258 1,940 2,198 Total interest bearing liabilities 1,088 10,711 11,799 Page 84 Other supplementary financial information continued 2022 versus 2021 (Decrease)/increase in interest due to: Net increase/(decrease) in interest $million Volume $million Rate $million Interest earning assets Cash and unrestricted balances at central banks (21) 694 673 Loans and advances to banks (60) 423 363 Loans and advances to customers (17) 2,611 2,594 Investment securities 228 1,148 1,376 Total interest earning assets 130 4,876 5,006 Interest bearing liabilities Subordinated liabilities and other borrowed funds (58) 131 73 Deposits by banks (3) 300 297 Customer accounts: Current accounts and savings deposits 18 1,428 1,446 Time and other deposits 157 1,635 1,792 Debt securities in issue 27 576 603 Total interest bearing liabilities 141 4,070 4,211 Page 85 Shareholder information Dividend and interest payment dates Ordinary shares Final dividend Results and dividend announced 23 February 2024 Ex-dividend date 7 (UK) 6 (HK) March 2024 Record date for dividend 8 March 2024 Last date to amend currency election instructions for cash dividend* 23 April 2024 Dividend payment date 17 May 2024 * In either United States dollars, sterling or Hong Kong dollars Preference shares 1st half yearly dividend 2nd half yearly dividend 73��8 per cent non-cumulative irredeemable preference shares of ��1 each 1 April 2024 1 October 2024 81��4 per cent non-cumulative irredeemable preference shares of ��1 each 1 April 2024 1 October 2024 6.409 per cent non-cumulative redeemable preference shares of $5 each 30 January and 30 April 2024 30 July and 30 October 2024 7.014 per cent non-cumulative redeemable preference shares of $5 each 30 January 2024 30 July 2024 Annual General Meeting The Annual General Meeting (AGM) will be held on Friday 10 May 2024 at 11:00 UK time (18:00 Hong Kong time). Further details regarding the format, location and business to be transacted at the meeting will be disclosed within the 2024 Notice of AGM. Details of voting at the Company's AGM and of proxy votes cast can be found on the Company's website at sc.com/agm Interim results The interim results will be announced to the London Stock Exchange and the Stock Exchange of Hong Kong Limited and put on the Company's website. Country-by-Country Reporting In accordance with the requirements of the Capital Requirements (Country-by-Country Reporting) Regulations 2013, the Group will publish additional country-by-country information in respect of the year ended 31 December 2023, on or before 31 December 2024. We have also published our approach to tax and tax policy. This information will be available on the Group's website at sc.com Pillar 3 Reporting In accordance with the Pillar 3 disclosure requirements, the Group will publish the Pillar 3 Disclosures in respect of the year ended 31 December 2023, on or before 23 February 2024. This information will be available on the Group's website at sc.com ShareCare ShareCare is available to shareholders on the Company's UK register who have a UK address and bank account. It allows you to hold your Standard Chartered PLC shares in a nominee account. Your shares will be held in electronic form so you will no longer have to worry about keeping your share certificates safe. If you join ShareCare, you will still be invited to attend the Company's AGM and you will receive any dividend at the same time as everyone else. ShareCare is free to join and there are no annual fees to pay. If you would like to receive more information, please visit our website at https://www.sc.com/sharecare or contact the shareholder helpline on 0370 702 0138 Page 86 Shareholder information continued Donating shares to ShareGift Shareholders who have a small number of shares often find it uneconomical to sell them. An alternative is to consider donating them to the charity ShareGift (registered charity 1052686), which collects donations of unwanted shares until there are enough to sell and uses the proceeds to support UK charities. There is no implication for capital gains tax (no gain or loss) when you donate shares to charity and UK taxpayers may be able to claim income tax relief on the value of their donation. Further information can be obtained from the Company's registrars or from ShareGift on 020 7930 3737 or from sharegift.org Bankers' Automated Clearing System (BACS) Dividends can be paid straight into your bank or building society account. Please register online at investorcentre.co.uk or contact our registrar for a dividend mandate form Registrars and shareholder enquiries If you have any enquiries relating to your shareholding and you hold your shares on the UK register, please contact our registrar at investorcentre.co.uk and click on the 'ASK A QUESTION' link at the bottom of the page. Alternatively, please contact Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or call the shareholder helpline number on 0370 702 0138. If you hold your shares on the Hong Kong branch register and you have enquiries, please contact Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. You can check your shareholding at computershare.com/hk/investors Substantial shareholders The Company and its shareholders have been granted partial exemption from the disclosure requirements under Part XV of the Securities and Futures Ordinance (SFO). As a result of this exemption, shareholders, directors and chief executives, no longer have an obligation under Part XV of the SFO (other than Divisions 5, 11 and 12 thereof) to notify the Company of substantial shareholding interests, and the Company is no longer required to maintain a register of interests of substantial shareholders under section 336 of the SFO, nor a register of directors' and chief executives' interests under section 352 of the SFO. The Company is, however, required to file with The Stock Exchange of Hong Kong Limited any disclosure of interests made in the UK. Page 87 Shareholder information continued Taxation No tax is currently withheld from payments of dividends by Standard Chartered PLC. Shareholders and prospective purchasers should consult an appropriate independent professional adviser regarding the tax consequences of an investment in shares in light of their particular circumstances, including the effect of any national, state or local laws. Previous dividend payments (unadjusted for the impact of the 2015/2010/2008 rights issues) Dividend and ��nancial year Payment date Dividend per ordinary share Cost of one new ordinary share under share dividend scheme Final 2008 15 May 2009 42.32c/28.4693p/HK$3.279597 ��8.342/$11.7405 Interim 2009 8 October 2009 21.23c/13.25177p/HK$1.645304 ��13.876/$22.799 Final 2009 13 May 2010 44.80c/29.54233p/HK$3.478306 ��17.351/$26.252 Interim 2010 5 October 2010 23.35c/14.71618p/HK$1.811274/INR0.9841241 ��17.394/$27.190 Final 2010 11 May 2011 46.65c/28.272513p/HK$3.623404/INR1.99751701 ��15.994/$25.649 Interim 2011 7 October 2011 24.75c/15.81958125p/HK$1.928909813/INR1.137971251 ��14.127/$23.140 Final 2011 15 May 2012 51.25c/31.63032125p/HK$3.9776083375/INR2.66670151 ��15.723/$24.634 Interim 2012 11 October 2012 27.23c/16.799630190p/HK$2.111362463/INR1.3498039501 ��13.417/$21.041 Final 2012 14 May 2013 56.77c/36.5649893p/HK$4.4048756997/INR2.9762835751 ��17.40/$26.28792 Interim 2013 17 October 2013 28.80c/17.8880256p/HK$2.233204992/INR1.68131 ��15.362/$24.07379 Final 2013 14 May 2014 57.20c/33.9211444p/HK$4.43464736/INR3.3546261 ��11.949/$19.815 Interim 2014 20 October 2014 28.80c/17.891107200p/HK$2.2340016000/INR1.6718425601 ��12.151/$20.207 Final 2014 14 May 2015 57.20c/37.16485p/HK$4.43329/INR3.5140591 ��9.797/$14.374 Interim 2015 19 October 2015 14.40c/9.3979152p/HK$1.115985456/INR0.861393721 ��8.5226/$13.34383 Final 2015 No dividend declared N/A N/A Interim 2016 No dividend declared N/A N/A Final 2016 No dividend declared N/A N/A Interim 2017 No dividend declared N/A N/A Final 2017 17 May 2018 11.00c/7.88046p/HK$0.86293/INR0.6536433401 ��7.7600/$10.83451 Interim 2018 22 October 2018 6.00c/4.59747p/HK$0.46978/INR0.36961751 ��6.7104/$8.51952 Final 2018 16 May 2019 15.00c/11.569905p/HK$1.176260/INR0.9576916501 N/A Interim 2019 21 October 2019 7.00c/5.676776p/HK$0.548723/INR0.4250286001 N/A Final 2019 Dividend withdrawn N/A N/A Interim 2020 No dividend declared N/A N/A Final 2020 20 May 2021 9.00c/6.472413p/HK$0.698501 N/A Interim 2021 22 October 2021 3.00c/2.204877p/HK$0.233592 N/A Final 2021 12 May 2022 9.00c/6.894144p/HK$0.705772 N/A Interim 2022 14 October 2022 4.00c/3.675912p/HK$0.313887 N/A Final 2022 11 May 2023 14.00c/11.249168p/HK$1.098083 N/A Interim 2023 13 October 2023 6.00c/4.910412p/HK$0.469085 N/A 1 The INR dividend is per Indian Depository Receipt. In March 2020, the Group announced the termination of the IDR programme. The IDR programme was formally delisted from the BSE Limited (formerly the Bombay Stock Exchange) and National Stock Exchange of India Limited with effect from 22 July 2020 Page 88 Shareholder information continued Chinese translation If you would like a Chinese language version of the 2023 Annual Report, please contact Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. ��183��17M�� Shareholders on the Hong Kong branch register who have asked to receive corporate communications in either Chinese or English can change this election by contacting Computershare. If there is a dispute between any translation and the English version of this Annual Report, the English text shall prevail. Electronic communications If you hold your shares on the UK register and in future you would like to receive the Annual Report electronically rather than by post, please register online at: investorcentre.co.uk. Click on 'register now' and follow the instructions. You will need to have your Shareholder or ShareCare reference number to hand. You can find this on your share certi��cate or ShareCare statement. Once you have registered and confirmed your email communication preference, you will receive future notifications via email enabling you to submit your proxy vote online. In addition, as a member of Investor Centre, you will be able to manage your shareholding online and change your bank mandate or address information. Page 89 Shareholder information continued Important notices Basis of Preparation and Caution Regarding Data Limitations This section is specifically relevant to, amongst others, the sustainability and climate models, calculations and disclosures throughout this report. The information contained in this document has been prepared on the following basis: i. certain information in this document is unaudited; ii. all information, positions and statements set out in this document are subject to change without notice; iii. the information included in this document does not constitute any investment, accounting, legal, regulatory or tax advice or an invitation or recommendation to enter into any transaction; iv. the information included in this document may have been prepared using models, methodologies and data which are subject to certain limitations. These limitations include: the limited availability of reliable data, data gaps, and the nascent nature of the methodologies and technologies underpinning this data; the limited standardisation of data (given, amongst other things, limited international coordination on data and methodology standards); and future uncertainty (due, amongst other things, to changing projections relating to technological development and global and regional laws, regulations and policies, and the current inability to make use of strong historical data); v. models, external data and methodologies used in information included in this document are or could be subject to adjustment which is beyond our control; vi. any opinions and estimates should be regarded as indicative, preliminary and for illustrative purposes only. Expected and actual outcomes may differ from those set out in this document (as explained in the "Forward-looking statements" section above); vii. some of the related information appearing in this document may have been obtained from public and other sources and, while the Group believes such information to be reliable, it has not been independently verified by the Group and no representation or warranty is made by the Group as to its quality, completeness, accuracy, fitness for a particular purpose or noninfringement of such information; viii. for the purposes of the information included in this document, a number of key judgements and assumptions have been made. It is possible that the assumptions drawn, and the judgement exercised may subsequently turn out to be inaccurate. The judgements and data presented in this document are not a substitute for judgements and analysis made independently by the reader; ix. any opinions or views of third parties expressed in this document are those of the third parties identified, and not of the Group, its affiliates, directors, officers, employees or agents. By incorporating or referring to opinions and views of third parties, the Group is not, in any way, endorsing or supporting such opinions or views; x. whilst the Group bears primary responsibility for the information included in this document, it does not accept responsibility for the external input provided by any third parties for the purposes of developing the information included in this document; xi. the data contained in this document reflects available information and estimates at the relevant time; xii. where the Group has used any methodology or tools developed by a third party, the application of the methodology or tools (or consequences of its application) shall not be interpreted as conflicting with any legal or contractual obligations and such legal or contractual obligations shall take precedence over the application of the methodology or tools; Page 90 Shareholder information continued xiii. where the Group has used any underlying data provided or sourced by a third party, the use of the data shall not be interpreted as conflicting with any legal or contractual obligations and such legal or contractual obligations shall take precedence over the use of the data; xiv. this Important Notice is not limited in applicability to those sections of the document where limitations to data, metrics and methodologies are identified and where this Important Notice is referenced. This Important Notice applies to the whole document; xv. further development of reporting, standards or other principles could impact the information included in this document or any metrics, data and targets included in this document (it being noted that ESG reporting and standards are subject to rapid change and development); and xvi. while all reasonable care has been taken in preparing the information included in this document, neither the Group nor any of its affiliates, directors, officers, employees or agents make any representation or warranty as to its quality, accuracy or completeness, and they accept no responsibility or liability for the contents of this information, including any errors of fact, omission or opinion expressed. You are advised to exercise your own independent judgement (with the advice of your professional advisers as necessary) with respect to the risks and consequences of any matter contained in this document. The Group, its affiliates, directors, officers, employees or agents expressly disclaim any liability and responsibility for any decisions or actions which you may take and for any damage or losses you may suffer from your use of or reliance on the information contained in this document. Copyright in all materials, text, articles and information contained in this document (other than third party materials, text, articles and information) is the property of, and may only be reproduced with permission of an authorised signatory of, the Group. Copyright in materials, text, articles and information created by third parties and the rights under copyright of such parties are hereby acknowledged. Copyright in all other materials not belonging to third parties and copyright in these materials as a compilation vests and shall remain at all times copyright of the Group and should not be reproduced or used except for business purposes on behalf of the Group or save with the express prior written consent of an authorised signatory of the Group. All rights reserved. Page 91 Shareholder information continued CONTACT INFORMATION Global headquarters Standard Chartered Group 1 Basinghall Avenue London, EC2V 5DD United Kingdom telephone: +44 (0)20 7885 8888 facsimile: +44 (0)20 7885 9999 Digital Annual Report sc.com/annualreport Shareholder enquiries ShareCare information website: sc.com/shareholders helpline: +44 (0)370 702 0138 ShareGift information website: ShareGift.org helpline: +44 (0)20 7930 3737 Registrar information UK Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol, BS99 6ZZ helpline: +44 (0)370 702 0138 Hong Kong Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre 183 Queen's Road East Wan Chai Hong Kong website: computershare.com/hk/investors Chinese translation Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre 183 Queen's Road East Wan Chai Hong Kong Register for electronic communications website: investorcentre.co.uk Page 92 This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy. END FR FIFFSFTIVFIS

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