National Storage Mechanism

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RNS Number : 4901G
Standard Chartered PLC
04 March 2015

Capital

Capital Summary

Capital, leverage and RWA

	2014 %	2013¹ %
CET1 transitional	10.5	10.9
CET1 end point	10.7	11.2
Total capital transitional	16.7	17.0
Leverage end point ²	4.5	4.7
RWA ($ million)	341,648	331,296

¹ The 2013 column shows 31 December 2013 Basel II position adjusted for the CRD IV rules as at 1 January 2014
² The Leverage end point ratio at 31 December 2013 is not directly comparable; its calculation was on a different basis, following prevailing PRA guidance for the year

The Group is well capitalised with an end point Common Equity Tier 1 (CET1) ratio of 10.7 per cent that is well ahead of the PRA's current requirement for large UK banks of 7 per cent CET1 and the Group's current known 2019 minimum CET1 requirement of 8.7 per cent. The Group will continue to manage its capital position in the context of current and evolving CET1 requirements as they apply to the Group. The Group is not highly leveraged. Its CET1 leverage ratio of 4.5 per cent is well ahead of the current known 2019 leverage requirement of 3.35 per cent. Issuance of Additional Tier 1 (AT1) capital would further strengthen the Group's leverage ratio. The Group continues to manage its balance sheet proactively. In 2014, its increased focus on the disciplined management of RWA has delivered RWA efficiencies of $12.2 billion and released around $8.5 billion of RWA from the management of low return relationships. The efficient management of RWA supports the Group's ability to continue delivering organic capital accretion while funding growth and meeting regulatory requirements. The Group is well positioned: diversified, well capitalised and liquid with a conservative approach to balance sheet management. The Group currently operates at capital and leverage levels materially above the current minimum requirements and has a number of levers at its disposal to manage future regulatory requirements as they evolve.

CET 1 ratio

In Policy Statement PS7/13 the Prudential Regulation Authority (PRA) set out its approach to implementation of the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD) which together comprise CRD IV. CRD IV came into force on 1 January 2014. A number of areas of CRD IV remain subject to further consultation or await promulgation of the relevant European Banking Authority (EBA) Technical Standards and UK implementing rules. Further, CRD leaves considerable scope for national discretion. Accordingly, the position presented here is based on the Group's current understanding of the rules which may be subject to change.

As at 31 December 2014, the Group's transitional CET1 ratio was 10.5 per cent (30 June 2014: 10.5 per cent; 31 December 2013: 10.9 per cent). The Group's end point CET1 ratio is 10.7 per cent which reflects the inclusion of unrealised gains on available for sale securities in CET1 from 2015 onwards.

Capital movements

The main movements in capital between 1 January 2014 and 31 December 2014 were:

The transitional CET1 ratio declined by 40 basis points (bps) as strong underlying CET1 accretion of around 50bps was offset by the impact of model changes, deduction of foreseeable dividends and the civil monetary penalty of $300 million
CET1 capital was broadly flat as a result of the net effect of movements in profits less dividends, regulatory adjustments, foreign currency translation and movements in other comprehensive income
AT1 capital decreased by $1.7 billion, mainly as a result of the redemption of $1.5 billion of non-CRR compliant Innovative Tier 1 capital which would otherwise have been derecognised
Tier 2 capital increased by $2.4 billion as a result of the new issuance net of redemptions of $3.9 billion, partly offset by regulatory amortisation and foreign currency translation movements

Reflecting the above movements, the Group's total capital ratio has declined slightly from 17 per cent as at 1 January 2014 to 16.7 per cent as at 31 December 2014.

Capital ratios

	2014 %	2013¹ %
CET1 transitional	10.5	10.9
CET1 end point ²	10.7	11.2
Total capital transitional	16.7	17.0

CRD IV Capital base

	Transitional position 2014 $million	Transitional position 2013¹ $million
CET1 instruments and reserves
Capital instruments and the related share premium accounts	5,225	5,213
Of which: Share premium accounts	3,989	4,001
Retained earnings³	27,394	28,560
Accumulated other comprehensive income (and other reserves)	9,690	10,794
Non-controlling interests (amount allowed in consolidated CET1)	583	607
Independently reviewed interim and year-end profits⁴	2,640	-
Foreseeable dividends net of scrip⁵	(1,160)	-
CET1 capital before regulatory adjustments	44,372	45,174
CET1 regulatory adjustments
Additional value adjustments	(196)	(180)
Intangible assets (net of related tax liability)	(5,449)	(6,173)
Deferred tax assets that rely on future profitability	(180)	(273)
Fair value reserves related to gains or losses on cash flow hedges	55	(15)
Negative amounts resulting from the calculation of expected loss	(1,719)	(1,738)
Gains or losses on liabilities at fair value resulting from changes in own credit	(167)	(85)
Defined-benefit pension fund assets	(13)	(6)
Fair value gains and losses arising from the institution's own credit risk related to derivative liabilities	(9)	(5)
Exposure amounts which could qualify for risk weighting	(199)	(190)
Of which: securitisation positions	(177)	(184)
Of which: free deliveries	(22)	(6)
Regulatory adjustments relating to unrealised gains	(481)	(546)
Other	(1)	(2)
Total regulatory adjustments to CET1	(8,359)	(9,213)
CET 1 transitional	36,013	35,961
AT1 instruments	2,786	4,458
Tier 1 capital	38,799	40,419
Tier 2 capital instruments	18,304	15,961
Tier 2 regulatory adjustments	(4)	(11)
Tier 2 capital	18,300	15,950
Total capital transitional	57,099	56,369
Total risk-weighted assets⁶	341,648	331,296

¹ The 2013 column shows 31 December 2013 Basel II position adjusted for the CRD IV rules as at 1 January 2014
² For details of the Group's 2013 end point CET1 ratio of 11.2 per cent, please see the 2013 Annual Report, page 135
³ Retained earnings include the effect of regulatory consolidation adjustments, and for 2013 include year end profits
⁴ Independently reviewed interim and year-end profits for CRD IV are in accordance with the regulatory consolidation
⁵ Foreseeable dividends include the proposed final dividend for 2014.The final dividend is reported net of scrip using a 25 per cent scrip dividend assumption
⁶ The risk-weighted assets are not reviewed by the auditors

The table above summarises the consolidated capital position of the Group. The Group's Pillar 3 Disclosures contain the full prescribed EBA Own Funds template.

Movement in total capital 2014

	$million
CET1 at 1 January 2014	35,961
Ordinary shares issued in the year and share premium	11
Profit for the year	2,640
Dividends, net of scrip	(1,451)
Foreseeable dividends net of scrip	(1,160)
Decrease in goodwill and other intangible assets	724
Foreign currency translation differences	(1,042)
Decrease in unrealised gains on available for sale assets	65
Movement in eligible other comprehensive income	238
Net effect of regulatory consolidation and change in non-controlling interests	83
Decrease in excess expected loss	19
Decrease in securitisation positions	7
Own credit adjustment, net of tax	(82)
CET1 at 31 December 2014 (transitional)	36,013
AT1 at 1 January 2014	4,458
Redeemed capital	(1,800)
Other	128
AT1 at 31 December 2014	2,786
Tier 2 capital at 1 January 2014	15,950
Issuances net of redemptions	3,867
Regulatory amortisation	(701)
Foreign currency translation differences	(701)
Other	(115)
Tier 2 capital at 31 December 2014	18,300
Total capital at 31 December 2014 (transitional)	57,099

Movements in risk-weighted assets

RWA increased by $19.4 billion, or 6 per cent, from 31 December 2013. Of this, $9 billion was a result of the transition to CRD IV on 1 January 2014 as set out in the 'Movement in risk-weighted assets' table on page 61. This was comprised primarily of a $15.4 billion increase in credit risk RWA, which was partially offset by a benefit in market risk RWA of $6.4 billion. Excluding the impact of CRD IV, total RWA increased by $10.4 billion, or 3 per cent, to $341.6 billion and this is analysed below.

Corporate and Institutional and Commercial Credit risk increased $7.7 billion as a result of the following:

EAD model changes of $12.2 billion, resulting from a change in the method for calculating EAD for certain IRB models, under guidance from the PRA
Negative credit migration due to downgrades, primarily in the Europe and ASEAN regions, of $8.3 billion
Asset growth of $2 billion, mainly due to growth in Financial Markets. Asset growth is partially offset by an $8.5 billion decrease in RWA from the management of low return relationships in Transaction Banking and Lending
This was partly offset by translation impact of $4.0 billion as a result of depreciation of currencies in Europe, Africa and India, and efficiencies and optimisations of $12 billion which includes portfolio management activities, collateral management initiatives and some reduction in tenors.

Retail Clients Credit RWA decreased by $4.4 billion as a result of re-shaping and de-risking the portfolio. There was a reduction in the unsecured lending book, which generally attracts a higher RWA compared to secured lending in Wealth Management and Mortgages, which grew in 2014. Positive credit migration of $1.8 billion and a translation impact of $1.9 billion due to depreciation of currencies in Korea, Singapore, India, Taiwan and Indonesia, further contributed to lower RWA.# Private Banking Clients

Private Banking RWA increased by $1.7 billion, driven by the impact of CRD IV collateral eligibility policy changes and growth in Wealth Management lending of $0.4 billion.

Market risk

Excluding the impact of CRD IV, RWA increased by $3.5 billion mainly due to an increase in internal model RWA of $2.4 billion and an increase in foreign currency positions under standardised rules at the year end, adding $1.2 billion.

Operational risk

RWA increased by $1.8 billion to $35.1 billion, due to the change in income over a rolling three year time horizon (2013 income replacing 2010).

Risk-weighted assets by business

CRD IV 2014

$million	Credit Risk	Operational Risk	Market Risk	Total Risk
Corporate and Institutional Clients	201,978	22,322	20,295	244,595
Commercial Clients	21,874	2,778	-	24,652
Private Banking Clients	6,507	902	-	7,409
Retail Clients	55,887	9,105	-	64,992
Total risk-weighted assets	286,246	35,107	20,295	341,648

Basel II 2013

$million	Credit Risk	Operational Risk	Market Risk	Total Risk
Corporate and Institutional Clients	177,366	21,166	23,128	221,660
Commercial Clients	23,062	2,634	-	25,696
Private Banking Clients	4,779	855	-	5,634
Retail Clients	60,627	8,634	-	69,261
Total risk-weighted assets	265,834	33,289	23,128	322,251

Risk-weighted assets by geographic region

$million	CRD IV 2014	Basel II 2013
Greater China	66,585	63,284
North East Asia	23,990	26,701
South Asia	26,522	26,721
ASEAN	82,603	80,377
MENAP	29,775	29,402
Africa	20,289	19,729
Americas	13,692	12,454
Europe	89,592	74,389
Total	353,048	333,057
Netting balances¹	(11,400)	(10,806)
Total risk-weighted assets	341,648	322,251

¹ Risk-weighted assets by geographic region are reported gross of any netting benefits

Movement in risk-weighted assets

	Credit risk	Operational risk	Market risk	Total risk
	$million	$million	$million	$million
At 1 January 2013 (Basel II)	158,540	30,761	24,450	301,861
Assets growth/(decline)¹	15,661	-	-	17,688
Credit migration	9,075	-	-	8,954
Risk-weighted assets efficiencies	(1,986)	-	-	(3,916)
Model, methodology and policy changes	(73)	-	-	2,195
Acquisitions and disposals	-	-	-	301
Foreign currency translation differences	(3,851)	-	-	(6,038)
Non credit risk movements	-	2,528	(1,322)	1,206
At 31 December 2013 (Basel II)	177,366	33,289	23,128	322,251
Impact of CRD IV (at 1 January 2014)	16,602	-	(6,377)	9,045
At 1 January 2014 (CRD IV)	193,968	33,289	16,751	331,296
Assets growth/(decline)¹	2,614	-	-	1,468
Credit migration	6,780	-	-	6,400
Risk-weighted assets efficiencies	(10,393)	-	-	(12,166)
Model, methodology and policy changes	12,574	-	-	14,895
Acquisitions and disposals	-	-	-	331
Foreign currency translation differences	(3,565)	-	-	(5,938)
Non credit risk movements	-	1,818	3,544	5,362
At 31 December 2014 (CRD IV)	201,978	35,107	20,295	341,648

¹ $8.5 billion RWA released from the management of low return relationships is included within the Assets growth/(decline) category

Leverage ratio

The Basel Committee on Banking Supervision (BCBS) introduced the leverage ratio to constrain the build-up of leverage in the banking sector, and supplement risk-based capital requirements with a "simple, non-risk based backstop measure" of leverage. The leverage ratio compares Tier 1 capital to total exposures, which includes certain exposures held off balance sheet as adjusted by regulatory credit conversion factors. Final adjustments to the definition and calibration of the leverage ratio in the EU will be made during the first half of 2017, with a view to migrating the leverage ratio to a binding Pillar 1 requirement by 1 January 2018. In June 2014, in an update to Supervisory Statement SS3/13, the PRA set out a requirement for the eight major UK institutions (of which the Group is one) to meet an end point leverage ratio of at least 3 per cent from 1 July 2014. In July 2014 the Financial Policy Committee (FPC) issued a consultation on the UK leverage ratio, the results of which were published in November 2014. The FPC proposed a minimum leverage ratio of 3 per cent together with supplementary leverage ratio buffers set at 35 per cent of the corresponding risk-weighted global systemically important institutions (G-SII) and countercyclical buffers, as those buffers are applicable to individual banks and as phased in. Based on the FPC's proposals, the Group's future minimum leverage ratio requirement will be 3.35 per cent, which comprises (i) the minimum 3 per cent and (ii) a 0.35 per cent G-SII leverage buffer (calculated as 35 per cent of the Group's 1 per cent risk-weighted G-SII buffer). The basis of calculating the leverage ratio is set by the PRA. It uses the end point CRR definition of Tier 1 for the numerator and permits either (i) the BCBS January 2014 definition for the leverage exposure denominator or (ii) the CRR definition of leverage exposure adopted by a European Union delegated act in October 2014. The Group has used the October 2014 CRR definition. At 30 June 2014 the Group's leverage ratio was calculated using the PRA's prevailing guidance of: (i) a capital measure using the end point Tier 1 capital definition in the final CRR text and the Own Funds Regulatory Technical Standards published by the EBA and (ii) an exposure measure based on the BCBS January 2014 definition. The differences arising from the change in basis of calculation between 30 June 2014 and 31 December 2014 are not material for the Group. The Group's current leverage ratio of 4.5 per cent is above the current PRA minimum requirement and the FPC's proposed requirement. The Group has not yet issued any CRR-compliant AT1 capital, but the PRA permits 0.75 per cent of the leverage requirement to be met with CRR compliant AT1 capital.

Leverage ratio 2014

$million
Tier 1 capital (transitional position)
Additional Tier 1 capital subject to phase out
Regulatory adjustments relating to unrealised gains
Tier 1 capital (end point)
Derivative financial instruments
Derivative cash collateral
Securities financing transactions (SFTs)
Loans and advances and other assets
Total on balance sheet assets
Regulatory consolidation adjustments
Derivatives adjustments
Derivatives netting
Adjustments to cash collateral
Net written credit protection
Potential future exposure on derivatives
Total derivatives adjustments
Counterparty risk leverage exposure measure for SFTs
Regulatory deductions and other adjustments
Off-balance sheet items
Total leverage exposure end point
Leverage ratio end point

CET1 Requirements

As the relevant rules are not yet fully implemented and the final outcome depends in part on the future shape of the Group, future management actions and the future view the Group's regulators take of the Group's business and risk profile, the Group's capital requirement is subject to change. Based on the Group's current understanding of the rules, its known future minimum CET1 capital requirement is 8.7 per cent comprising:
* A minimum CET1 requirement of 4.5 per cent by 1 January 2015
* A capital conservation buffer of 2.5 per cent by 1 January 2019
* A G-SII buffer of 1 per cent by 1 January 2019
* A Pillar 2A CET1 addition of around 0.65 per cent (subject to ongoing PRA review)

The Group's current CET1 position materially exceeds this requirement. The Group would also expect to continue to operate with a prudent management buffer above the minimum capital requirement. The UK authorities have yet to finalise the rules relating to, and calibration of, the countercyclical buffer, systemic risk buffers, the PRA Buffer assessment and additional sectoral capital requirements.

Capital buffers

In April 2014, the PRA published Policy Statement PS3/14 and Supervisory Statement SS6/14 which set out its approach to implementation of some of the CRD IV buffers. The Bank of England (BoE) was identified as the designated authority for the countercyclical capital buffer, with its powers delegated to the FPC. The FPC may set a countercyclical capital buffer for UK exposures and for non-EU exposures. In the UK, the capital conservation buffer, the countercyclical capital buffer, the GSII buffer and the systemic risk buffer (to the extent applicable to a firm) will comprise a Combined Buffer. If a firm does not meet its Combined Buffer;
* It will be required to notify the PRA within 5 days and calculate a maximum distributable amount (MDA)
* It must not make distributions of profits in excess of the applicable MDA

Where firms are in the first quartile of their Combined Buffer, (when they meet between 75 per cent and 100 per cent of it), 60 per cent of the MDA can be distributed. In the second quartile, 40 per cent can be distributed; in the third quartile, 20 per cent; and in the fourth quartile, 0 per cent. Relevant distributions include: distributions in connection with CET1, payment of variable remuneration or discretionary pensions and payments on AT1 instruments. To the extent a countercyclical capital buffer is applied to the Group, it would increase the Group's minimum CET1 requirement. The Hong Kong Monetary Authority has recently announced an intention to set a countercyclical capital buffer of 2.5 per cent in Hong Kong to be phased in from 2016 to 2019.# Regulatory Capital

Given the Group's diverse footprint, its future countercyclical capital buffer requirement is expected to be determined from applying various country specific countercyclical buffer rates to the Group's qualifying credit exposures in the relevant country (based on the jurisdiction of the obligor) on a weighted average basis.

Pillar 2

In addition to Pillar 1 capital requirements, the Group, like other UK banks, is subject to additional requirements set by the PRA and referred to as Individual Capital Guidance (ICG) which comprise:

A Pillar 2A buffer for material risks not addressed adequately by Pillar 1 capital requirements. These risks include (but are not limited to): pension obligation risk, interest rate risk in the non-trading book, credit concentration risk and operational risk. From 1 January 2015 the Group must hold at least 56 per cent of its Pillar 2A buffer in CET1 and can hold up to 19 per cent in AT1
A capital planning buffer (CPB) to ensure the Group remains well capitalised during periods of stress. From 1 January 2016, the CPB transitions to a PRA Buffer, the amount of which will be based on the results of the (BoE) annual stress testing of the UK banking system. This would be in addition to existing CRD IV buffer requirements where the PRA does not consider them to adequately address the Group's risk profile

The PRA is consulting during 2015 on the transition to a new Pillar 2 framework which includes the revised PRA Buffer approach. Based on current guidance received from the PRA during 2014, the Group's Pillar 2A guidance is around 115 bps of RWA, of which at least around 65bps must be held in CET1. The Group's Pillar 2A guidance will vary over time.

Total Loss Absorbing Capacity (TLAC)

The FSB published draft TLAC proposals in November 2014, setting out principles on the loss absorbing and recapitalisation capacity of G-SIIs in resolution and a high level draft term sheet for an international standard on the characteristics, and levels, of TLAC for G-SIIs. Under the FSB's proposals, G-SIIs would be subject to a Pillar 1 minimum TLAC requirement of between 16 per cent and 20 per cent of Group RWA in addition to the Combined Buffer. Including the Combined Buffer, under the current proposals, the Group would have a potential Pillar 1 TLAC requirement of between 19.5 per cent and 23.5 per cent, to be met from 1 January 2019 at the earliest. The FSB proposal also states that the Pillar 1 TLAC requirement would also be at least twice the quantum of capital that would be required to meet the Basel Tier 1 leverage ratio requirement. Assuming a minimum leverage ratio requirement of 3 per cent, as currently proposed by the BCBS, this means a TLAC requirement in the UK of at least 6 per cent of total leverage exposure. Based on its current understanding of the TLAC proposals, the Group estimates that, as at 31 December 2014, it has TLAC of above 20 per cent of RWA and around 9 per cent of leverage exposure. The Group's TLAC estimate includes:

Total regulatory capital
Senior liabilities issued by Standard Chartered PLC with at least one year remaining to maturity
That part of subordinated debt (issued by Standard Chartered PLC or Standard Chartered Bank) with at least one year remaining to maturity is outside the scope of regulatory capital recognition due to: (i) amortisation over the last five years of the relevant instrument's duration or (ii) other regulatory de-recognition.

Bank of England Stress Tests

The PRA conducted a stress test of the UK banking system, which included the Group, as recommended by the FPC. The Group conducted a number of scenario extensions to extend the impact of the BoE and EBA stress test parameters to its footprint markets. These scenario extensions resulted in cumulative falls in GDP over the stress period compared to the baseline forecasts and property price stresses in our markets at levels consistent with those applied to the UK. The BoE stress test therefore assessed the impact of a severe economic downturn in the Group's markets and represented a meaningful assessment of the Group's capital adequacy and resilience to stress. The BoE released the final results on 16 December 2014 for each of the eight participating institutions. The PRA Board stated that the stress test did not reveal any capital inadequacies for the Group and the PRA Board did not require the Group to submit a revised capital plan, recognising the Group's minimum stressed CET1 ratio of 8.1 per cent after the effect of strategic management actions. This result demonstrates the Group's resilience to macroeconomic stress and severe shocks across its key markets. In future, the Group expects that the results of the BoE stress test will be one of the inputs used by the PRA to inform the setting of the Group's PRA Buffer.

Global Systemically Important Institutions (G-SIIs)

The Group has been designated a G-SII by FSB since November 2012. The Group has been categorised with a 1 per cent G-SII CET1 requirement which will be phased in over the period from 1 January 2016 to 1 January 2019. The Group's calculations, based on publicly available data, indicate that its G-SII score is at the lower end of the 1 per cent range. On 5 June 2014, the EBA published the final draft Regulatory Technical Standards (RTS) on the methodology for identifying G-SIIs and the related disclosure requirements for G-SIIs. The Group's latest G-SII disclosure 'Standard Chartered's G-SII indicators' can be found at www.sc.com/en/news-and-media/news/global/31-07-2014-gsib-indicators.html

Consolidated income statement

For the year ended 31 December 2014

Notes	2014 $million	2013 $million
Interest income	16,984	17,593
Interest expense	(5,981)	(6,437)
Net interest income	11,003	11,156
Fees and commission income	4,651	4,581
Fees and commission expense	(472)	(480)
Net trading income	3	1,896
Other operating income	4	1,256
Non-interest income	7,331	7,621
Operating income	18,334	18,777
Staff costs	5	(6,788)
Premises costs	(910)	(877)
General administrative expenses	5	(2,708)
Depreciation and amortisation	6	(639)
Operating expenses	(11,045)	(10,193)
Operating profit before impairment losses and taxation	7,289	8,584
Impairment losses on loans and advances and other credit risk provisions	7	(2,141)
Other impairment
Goodwill	8	(758)
Other	8	(403)
Profit from associates and joint ventures	248	226
Profit before taxation	4,235	6,064
Taxation	9	(1,530)
Profit for the year	2,705	4,200
Profit attributable to:
Non-controlling interests	92	110
Parent company shareholders	2,613	4,090
Profit for the year	2,705	4,200

	Cents	Cents
Earnings per share:
Basic earnings per ordinary share	11	102.2
Diluted earnings per ordinary share	11	101.6
Dividend per ordinary share:
Interim dividend paid	10	28.80
Final proposed dividend¹	10	57.20

	$million	$million
Total dividend:
Interim dividend paid	10	710
Final proposed dividend¹	10	1,414

¹ The final proposed dividend in respect of 2014 will be accounted for in 2015 as explained in note 10.

Consolidated statement of comprehensive income

For the year ended 31 December 2014

Notes	2014 $million	2013 $million
Profit for the year	2,705	4,200
Other comprehensive income:
Items that will not be reclassified to Income statement:
Actuarial (losses)/gains on retirement benefit obligations	19	(61)
Items that may be reclassified subsequently to Income statement:
Exchange differences on translation of foreign operations:
Net losses taken to equity	(1,090)	(1,206)
Net gains/(losses) on net investment hedges	20	(35)
Share of other comprehensive income from associates and joint ventures	17	(15)
Available-for-sale investments:
Net valuation gains taken to equity	479	171
Reclassified to income statement	(423)	(248)
Cash flow hedges:
Net losses taken to equity	(116)	(83)
Reclassified to income statement	13	6
Taxation relating to components of other comprehensive income	(22)	34
Other comprehensive income for the year, net of taxation	(1,183)	(1,297)
Total comprehensive income for the year	1,522	2,903
Total comprehensive income attributable to:
Non-controlling interests	63	79
Parent company shareholders	1,459	2,824
	1,522	2,903

Consolidated balance sheet

For the year ended 31 December 2014

Notes	2014 $million	2013 $million
Assets
Cash and balances at central banks	12	97,282
Financial assets held at fair value through profit or loss	12	32,623
Derivative financial instruments	12, 13	65,834
Loans and advances to banks	12	83,890
Loans and advances to customers	12	284,695
Investment securities	12	104,238
Other assets	12, 14	38,689
Current tax assets	362	234
Prepayments and accrued income	2,647	2,510
Interests in associates and joint ventures	1,962	1,767
Goodwill and intangible assets	15	5,190
Property, plant and equipment	7,984	6,903
Deferred tax assets	518	529
Total assets	725,914	674,380

Liabilities
Deposits by banks	12	54,391
Customer accounts	12	405,353
Financial liabilities held at fair value through profit or loss	12	22,390
Derivative financial instruments	12, 13	63,313
Debt securities in issue	12, 16	71,951
Other liabilities	12, 17	31,274
Current tax liabilities	891	1,050
Accruals and deferred income	5,915	4,668
Subordinated liabilities and other borrowed funds	12, 18	22,947
Deferred tax liabilities	246	176
Provisions for liabilities and charges	92	107
Retirement benefit obligations	19	413
Total liabilities	679,176	627,539

Equity
Share capital	20	1,236
Reserves	45,196	45,032
Total parent company shareholders' equity	46,432	46,246
Non-controlling interests	306	595
Total equity	46,738	46,841
Total equity and liabilities	725,914	674,380

Consolidated statement of changes in equity

For the year ended 31 December 2014

v Share capital
Share premium account
Capital and capital redemption reserve¹
Merger reserve# Group Consolidated Statement of Changes in Equity

For the year ended 31 December 2014

Available-for-sale reserve	Cash flow hedge reserve	Translation reserve	Retained earnings	Parent company shareholders equity	Non-controlling interests	Total
$million	$million	$million	$million	$million	$million	$million
At 1 January 2013	1,207	5,476	18	12,421	478	81
Profit for the year	-	-	-	-	-	-
Other comprehensive income	-	-	-	-	(32)	(66)
Distributions	-	-	-	-	-	-
Shares issued, net of expenses	5	19	-	-	-	-
Net own shares adjustment	-	-	-	-	-	-
Share option expense, net of taxation	-	-	-	-	-	-
Capitalised on scrip dividend	2	(2)	-	-	-	-
Dividends, net of scrip	-	-	-	-	-	-
Other decreases³	-	-	-	-	-	-
At 31 December 2013	1,214	5,493	18	12,421	446	15
Profit for the year	-	-	-	-	-	-
Other comprehensive income	-	-	-	-	10	(72)
Distributions	-	-	-	-	-	-
Shares issued, net of expenses	3	8	-	-	-	-
Net own shares adjustment	-	-	-	-	-	-
Share option expense, net of taxation	-	-	-	-	-	-
Capitalised on scrip dividend	19	(19)	-	-	-	-
Dividends, net of scrip	-	-	-	-	-	-
Other increases/(decreases)⁴	-	-	-	-	-	-
At 31 December 2014	1,236	5,482	18	12,421	456	(57)

¹ Includes capital reserve of $5 million and capital redemption reserve of $13 million
² Comprises actuarial losses, net of taxation and non-controlling interests of $47 million (2013: gain of $58 million)
³ Relate to the impact of losing control in a subsidiary after divesting from the company
⁴ Relates mainly to redemption of $300 million 7.267% Hybrid Tier 1 securities issued by Standard Chartered Bank Korea Limited

Group Consolidated cash flow statement

For the year ended 31 December 2014

	2014	2013
	$million	$million
Cash flows from operating activities
Profit before taxation	4,235	6,064
Adjustments for non-cash items and other adjustments included within income statement	4,470	4,121
Change in operating assets	(13,657)	(44,138)
Change in operating liabilities	59,321	45,252
Contributions to defined benefit schemes	(98)	(168)
UK and overseas taxes paid	(1,708)	(1,716)
Net cash from operating activities	52,563	9,415
Cash flows from investing activities
Purchase of property, plant and equipment	(189)	(205)
Disposal of property, plant and equipment	67	156
Acquisition of investment in subsidiaries, associates, and joint ventures, net of cash acquired	(64)	(46)
Purchase of investment securities	(196,054)	(142,892)
Disposal and maturity of investment securities	192,055	137,161
Dividends received from investment in subsidiaries, associates and joint ventures	13	5
Net cash used in investing activities	(4,172)	(5,821)
Cash flows from financing activities
Issue of ordinary and preference share capital, net of expenses	11	24
Purchase of own shares	(110)	(154)
Exercise of share options through ESOP	17	30
Interest paid on subordinated liabilities	(1,090)	(813)
Gross proceeds from issue of subordinated liabilities	4,684	5,448
Repayment of subordinated liabilities	(2,114)	(2,616)
Repayment to non-controlling interests	(298)	(104)
Interest paid on senior debts	(740)	(563)
Gross proceeds from issue of senior debts	6,579	6,816
Repayment of senior debts	(6,408)	(3,730)
Dividends paid to non-controlling interests and preference shareholders, net of scrip	(161)	(178)
Dividends paid to ordinary shareholders, net of scrip	(1,350)	(1,967)
Net cash (used in) / from financing activities	(980)	2,193
Net increase in cash and cash equivalents	47,411	5,787
Cash and cash equivalents at beginning of year	84,156	79,518
Effect of exchange rate movements on cash and cash equivalents	(1,697)	(1,149)
Cash and cash equivalents at end of year	129,870	84,156

Notes to the financial statements

1. Basis of preparation

The Group financial statements consolidate those of Standard Chartered PLC (the Company) and its subsidiaries (together referred to as the Group) and equity account the Group's interest in associates and jointly controlled entities. These Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations as endorsed by the European Union (EU). The accounting policies are consistent with those applied by the Group in its 2013 Annual Report and Accounts except as described below.

Accounting standards effective 1 January 2014

The following amendments and interpretation have been adopted by the Group for the first time from 1 January 2014 and did not have a material impact on the Group:

Amendment to IAS 32 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities clarifies that the right of set-off must not be contingent on a future event. It must also be legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment also considers settlement mechanisms.
Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives have been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable amount of asset or CGU is measured at fair value less costs of disposal.
Amendments to IAS 39 Financial Instruments: Recognition and Measurement: Novation of Derivatives and Continuation of Hedge Accounting clarifies that there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are met.
IFRIC 21 Levies is an interpretation of IAS 37 Provisions and addresses what the obligating event is that gives rise to pay a levy imposed by a government and when a liability should be recognised.

New accounting standards in issue but not yet effective

A number of new standards and amendments to standards and interpretations are effective for periods beginning after 1 January 2015. They have not been endorsed by EU. These include:

IFRS 9 Financial Instruments - IFRS 9 was issued in July 2014 and has an effective date of 1 January 2018. IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement and introduces new requirements for the classification and measurement of financial assets and financial liabilities, a new model for recognising loan loss provisions based on expected losses and provide for simplified hedge accounting by aligning hedge accounting more closely with an entity's risk management methodology.
IFRS 15 Revenue from Contracts with Customers - The effective date of IFRS 15 is 1 January 2017 with early adoption permitted. The standard provides a principles-based approach for revenue recognition, and introduces the concept of recognising revenue for obligations as they are satisfied. The standard should be applied retrospectively. Whilst it is expected that a significant proportion of the Group's revenue will be outside the scope of IFRS 15, the impact of the standard is currently being assessed. It is not yet practicable to quantify the effect of IFRS 15 on these consolidated financial statements.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgements made by management in applying the Group's accounting policies and key sources of uncertainty were the same as those applied to the consolidated financial statements as at, and for, the year ended 31 December 2014. A summary of the Group's significant accounting policies will be included in the 2014 Annual Report and Accounts.

2. Segmental Information

The Group is organised on a worldwide basis for management and reporting purposes into four client segments: Corporate and Institutional, Commercial, Private Banking and Retail. The focus is on broadening and deepening the relationship with clients, rather than maximising a particular product line. Hence the Group evaluates segmental performance based on overall profit or loss before taxation (excluding corporate items not allocated) and not individual product profitability. Product revenue information is used as a way of assessing client needs and trends in the market place. The strategies adopted by the client segments need to be adapted to local market and regulatory requirements, which is the responsibility of country management teams. While not the primary driver of the business, country performance is an important part of the Group's structure and is also used to evaluate performance and reward staff. Corporate items not allocated are not aggregated into the client segments because of the one-off nature of these items. The Group's entity-wide disclosure which includes profit before tax, net interest margin and structure of the Group's deposits comprises geographic areas, classified by the location of the customer, except for Financial Market products which are classified by the location of the dealer. Transactions between the client segments and geographic areas are carried out on an arm's length basis.## 2. Segmental Information

Apart from the entities that have been acquired in the last two years, Group central expenses have been distributed between the client segments and geographic areas in proportion to their direct costs, and the benefit of the Group's capital has been distributed between segments in proportion to their average credit risk weighted assets. In the year in which an acquisition is made, the Group does not charge or allocate the benefit of the Group's capital. The distribution of central expenses is phased in over two years, based on the estimate of central management costs associated with the acquisition.

Performance by client segment

2014

$million	Corporate and Institutional	Commercial	Private Banking	Retail	Total reportable Segments	Corporate items not allocated	Total
Internal income	6	2	(6)	(2)	-	-	-
Net interest income	5,821	722	346	4,114	11,003	-	11,003
Non-interest income¹	4,704	458	272	1,897	7,331	-	7,331
Operating income¹	10,531	1,182	612	6,009	18,334	-	18,334
Operating expenses	(5,191)	(739)	(447)	(4,002)	(10,379)	(666)⁴	(11,045)
Operating profit before impairment losses and taxation	5,340	443	165	2,007	7,955	(666)	7,289
Impairment losses on loans and advances and other credit risk provisions	(991)	(212)	-	(938)	(2,141)	-	(2,141)
Other impairment
Goodwill impairment²	-	-	-	-	-	(758)	(758)
Other impairment	(307)	(35)	(16)	(45)	(403)	-	(403)
Profit from associates and joint ventures	198	22	-	28	248	-	248
Profit before taxation	4,240	218	149	1,052	5,659	(1,424)	4,235
Total assets employed	513,767	29,444	26,181	151,418	720,810	5,104	725,914
Loans to customers	157,970	14,651	18,056	97,922	288,599	-	288,599
Total liabilities employed	466,680	32,087	36,370	142,902	678,039	1,137	679,176
Customer accounts	244,731	22,787	29,621	117,050	414,189	-	414,189
Other segment items:
Capital expenditure³	2,264	120	44	98	2,526	-	2,526
Depreciation	305	13	4	112	434	-	434
Interests in associates and joint ventures	1,217	406	19	320	1,962	-	1,962
Amortisation of intangible assets	107	13	6	79	205	-	205

¹ Includes an own credit adjustment of $100 million
² Relates to $726 million and $32 million goodwill impairment charge in North East Asia and Greater China respectively
³ Includes capital expenditure $1,966 million in respect of operating lease asset
⁴ Relates to $366 million for UK bank levy and $300 million for US civil monetary penalty

2013

$million	Corporate and Institutional	Commercial	Private Banking	Retail	Total reportable segments	Corporate items not allocated	Total
Internal income	(53)	35	(44)	62	-	-	-
Net interest income	5,869	765	349	4,173	11,156	-	11,156
Non-interest income¹	4,946	711	281	1,683	7,621	-	7,621
Operating income	10,762	1,511	586	5,918	18,777	-	18,777
Operating expenses	(4,954)	(731)	(407)	(3,866)	(9,958)	(235)⁴	(10,193)
Operating profit before impairment losses and taxation	5,808	780	179	2,052	8,819	(235)	8,584
Impairment losses on loans and advances and other credit risk provisions	(488)	(157)	(8)	(964)	(1,617)	-	(1,617)
Other impairment
Goodwill Impairment²	-	-	-	-	-	(1,000)	(1,000)
Other impairment	(113)	(13)	-	(3)	(129)	-	(129)
Profit from associates and joint ventures	156	37	2	31	226	-	226
Profit before taxation	5,363	647	173	1,116	7,299	(1,235)	6,064
Total assets employed	456,661	35,767	23,669	152,313	668,410	5,970	674,380
Loans to customers	160,906	17,802	17,159	100,148	296,015	-	296,015
Total liabilities employed	404,097	45,845	38,191	138,180	626,313	1,226	627,539
Customer accounts	211,051	33,705	32,212	114,003	390,971	-	390,971
Other segment items:
Capital expenditure³	1,153	77	11	210	1,451	-	1,451
Depreciation	295	11	-	127	433	-	433
Interests in associates and joint ventures	982	417	36	332	1,767	-	1,767
Amortisation of intangible assets	174	14	8	85	281	-	281

¹ Includes an own credit adjustment of $106 million
² Relates to goodwill impairment charge on the Korea business in North East Asia
³ Includes capital expenditure of $874 million in respect of operating lease assets
⁴ Relates to UK bank levy

Performance by geographic regions and key countries

Entity-wide information

2014

$million	Greater China	North East Asia	South Asia	ASEAN	MENAP	Africa	Americas	Europe	Total
Internal income	(28)	(80)	(51)	54	82	93	(6)	(64)	-
Net interest income	3,006	1,238	1,267	2,251	951	988	396	906	11,003
Fees and commissions income, net	1,342	236	298	958	418	413	359	155	4,179
Net trading income	798	12	231	231	244	199	84	97	1,896
- Underlying	704	12	231	234	244	199	84	88	1,796
- Own credit adjustment	94	-	-	(3)	-	-	-	9	100
Other operating income	422	53	110	219	148	136	28	140	1,256
Operating income	5,540	1,459	1,855	3,713	1,843	1,829	861	1,234	18,334
Operating expenses¹	(2,911)	(1,179)	(793)	(2,078)	(984)	(990)	(968)	(1,142)	(11,045)
Operating profit before impairment losses and taxation	2,629	280	1,062	1,635	859	839	(107)	92	7,289
Impairment losses on loans and advances and other credit risk provisions	(469)	(394)	(183)	(698)	(89)	(175)	(21)	(112)	(2,141)
Other impairment²	(174)	(737)	(73)	(86)	(1)	(1)	(1)	(88)	(1,161)
Profit from associates and joint ventures	177	-	-	62	-	10	(1)	-	248
Profit/(loss) before taxation	2,163	(851)	806	913	769	673	(129)	(109)	4,235
Total assets employed³	213,196	64,896	35,941	160,286	44,225	26,456	91,999	172,274	-
Loans to customers⁴	89,646	29,582	22,859	78,541	22,775	13,103	10,952	21,141	-
Average interest-earning assets⁴	175,790	58,491	31,733	127,746	36,590	22,837	66,415	110,940	-
Net interest margin (%)	1.7	2.0	3.8	1.8	2.8	4.7	0.6	0.8	1.9
Capital expenditure⁵	2,008	40	28	377	12	38	2	21	2,526

¹ Includes $366 million UK bank levy in Europe and $300 million civil monetary penalty in Americas
² Includes $32 million and $726 million related to goodwill impairment charge in Greater China and North East Asia respectively
³ Includes intra-group assets
⁴ Based on the location of the customers rather than booking location
⁵ Includes capital expenditure in Greater China of $1,966 million in respect of operating lease assets. Other capital expenditure comprises additions to property and equipment and software related intangibles including any post-acquisition additions made by the acquired entities

2013

$million	Greater China	North East Asia	South Asia	ASEAN	MENAP	Africa	Americas	Europe	Total
Internal income	85	(73)	57	83	96	129	4	(381)	-
Net interest income	2,862	1,312	1,267	2,175	948	992	393	1,207	11,156
Fees and commissions income, net	1,129	255	326	976	419	417	356	223	4,101
Net trading income	794	88	224	597	338	184	96	193	2,514
- Underlying	795	86	224	552	338	184	96	133	2,408
- Own credit adjustment	(1)	2	-	45	-	-	-	60	106
Other operating income	327	59	166	225	64	29	9	127	1,006
Operating income	5,197	1,641	2,040	4,056	1,865	1,751	858	1,369	18,777
Operating expenses¹	(2,772)	(1,186)	(823)	(2,075)	(960)	(862)	(536)	(979)	(10,193)
Operating profit before impairment losses and taxation	2,425	455	1,217	1,981	905	889	322	390	8,584
Impairment losses on loans and advances and other credit risk provisions	(242)	(427)	(215)	(396)	(47)	(270)	(11)	(9)	(1,617)
Other impairment²	1	(1,029)	(105)	2	-	-	-	2	(1,129)
Profit from associates and joint ventures	146	-	-	78	-	-	-	2	226
Profit/(loss) before taxation	2,330	(1,001)	897	1,665	858	619	311	385	6,064
Total assets employed³	206,332	67,159	39,700	159,346	42,430	24,892	71,380	134,249	-
Loans to customers⁴	89,846	30,618	25,608	82,852	23,535	13,122	10,429	20,005	-
Average interest-earning assets⁴	163,023	57,885	33,576	123,715	35,725	20,066	60,087	83,323	-
Net interest margin (%)	1.8	2.1	3.9	1.8	2.9	5.6	0.7	1.0	2.1
Capital expenditure ⁵	944	28	31	344	11	45	5	43	1,451

¹ Includes $235 million UK bank levy charge in Europe
² Includes $1billion goodwill impairment charge on Korea business in North East Asia
³ Includes intra-group assets
⁴ The analysis is based on the location of the customers rather than booking location of the loan
⁵ Includes capital expenditure in Greater China of $874 million in respect of operating lease assets. Other capital expenditure comprises additions to property and equipment and software related intangibles including any post-acquisition additions made by the acquired entities

Performance by geographic regions and key countries

Entity-wide information

2014

$million	Hong Kong	Singapore	Korea	India	UAE	China	UK
Net interest income	1,906	1,164	1,109	966	605	779	731
Fees and commissions income, net	1,040	582	219	225	263	133	83
Net trading income	702	165	-	173	136	(6)	81
- Underlying	609	171	(1)	173	136	(7)	72
- Own credit adjustment	93	(6)	1	-	-	1	9
Other operating income	397	116	52	88	66	13	89
Operating income	4,045	2,027	1,380	1,452	1,070	919	984
Operating expenses	(1,792)	(1,093)	(1,121)	(647)	(569)	(758)	(942)
Operating profit before impairment losses and taxation	2,253	934	259	805	501	161	42
Impairment losses on loans and advances and other credit risk provisions	(272)	(80)	(392)	(171)	(63)	(177)	(108)
Other impairment	(169)	(2)	(737)	(73)	-	-	(88)
Profit from associates and joint ventures	-	(1)	-	-	-	177	-
Profit/(loss) before taxation	1,812	851	(870)	561	438	161	(154)
Total assets employed¹	156,528	120,845	54,437	30,083	28,322	36,250	172,259
Loans to customers²	61,643	55,830	28,600	19,718	14,358	15,939	18,344
Capital expenditure³	1,996	355	39	20	2	7	19

¹ Includes intra-group assets
² The analysis is based on the location of the customers rather than booking location of## 2. Segmental Information

The loan 3 Includes capital expenditure in Hong Kong of $1,966 million in respect of operating lease assets. Other capital expenditure comprises additions to property and equipment and software related intangibles including any post-acquisition additions made by the acquired entities

2013

	Hong Kong	Singapore	Korea	India	UAE	China	UK
$million	$million	$million	$million	$million	$million	$million
Net interest income	1,835	1,072	1,199	1,092	652	788	707
Fees and commissions income, net	875	579	236	264	291	129	161
Net trading income	722	311	73	159	233	(13)	161
- Underlying income	722	282	72	159	233	(12)	101
- Own credit adjustment	-	29	1	-	-	(1)	60
Other operating income	293	170	56	148	46	29	81
Operating income	3,725	2,132	1,564	1,663	1,222	933	1,110
Operating expenses	(1,666)	(1,129)	(1,120)	(684)	(573)	(753)	(812)
Operating profit before impairment losses and taxation	2,059	1,003	444	979	649	180	298
Impairment losses on loans and advances and other credit risk provisions	(135)	(88)	(427)	(195)	(52)	(58)	(6)
Other impairment	(4)	10	(1,029)	(105)	-	4	2
Profit from associates and joint ventures	-	-	-	-	-	146	2
Profit/(loss) before taxation	1,920	925	(1,012)	679	597	272	296
Total assets employed¹	149,318	115,561	55,921	34,470	28,813	35,128	132,162
Loans to customers²	61,173	57,540	29,760	22,767	15,734	15,489	16,543
Capital expenditure³	905	320	27	26	3	26	41

¹ Includes intra-group assets
² The analysis is based on the location of the customers rather than booking location of the loan
³ Includes capital expenditure in Hong Kong of $874 million in respect of operating lease assets. Other capital expenditure comprises additions to property and equipment and software related intangibles including any post-acquisition additions made by the acquired entities

2. Segmental Information continued

Deposits structure by geographic regions and key countries

The following tables set out the structure of the Group's deposits by principal geographic regions and key countries:

2014

	Greater China	North East Asia	South Asia	ASEAN	MENAP	Africa	Americas	Europe	Total
$million	$million	$million	$million	$million	$million	$million	$million	$million
Non-interest bearing current and demand accounts	12,670	514	3,201	10,579	7,969	5,826	2,610	2,582	45,951
Interest bearing current accounts and savings deposits	86,110	21,369	2,771	39,067	5,051	2,590	17,345	17,885	192,188
Time deposits	57,735	14,476	8,575	47,583	11,422	3,142	28,231	42,214	213,378
Other deposits	220	462	1,001	3,841	412	146	1,689	10,224	17,995
Total	156,735	36,821	15,548	101,070	24,854	11,704	49,875	72,905	469,512
Deposits by banks	5,200	4,202	338	7,283	2,374	687	16,496	18,743	55,323
Customer accounts	151,535	32,619	15,210	93,787	22,480	11,017	33,379	54,162	414,189
Protected under Government insurance Schemes	26,700	9,309	1,253	12,825	326	2,927	-	69	53,409
Other Accounts	124,835	23,310	13,957	80,962	22,154	8,090	33,379	54,093	360,780
	156,735	36,821	15,548	101,070	24,854	11,704	49,875	72,905	469,512
Debt securities in issue:
Senior debt	1,416	3,919	-	-	-	5	-	18,804	24,144
Other debt securities	3,569	6,234	388	5,004	-	137	17,325	23,987	56,644
Subordinated liabilities and other borrowed funds	1,342	337	-	-	25	46	-	21,197	22,947
Total	163,062	47,311	15,936	106,074	24,879	11,892	67,200	136,893	573,247

2013

	Greater China	North East Asia	South Asia	ASEAN	MENAP	Africa	Americas	Europe	Total
$million	$million	$million	$million	$million	$million	$million	$million	$million
Non-interest bearing current and demand accounts	10,022	409	3,093	10,815	9,696	5,465	3,513	2,469	45,482
Interest bearing current accounts and savings deposits	77,075	20,258	2,484	40,253	3,915	2,429	18,173	16,572	181,159
Time deposits	62,479	16,090	9,119	49,198	11,197	3,985	10,825	37,249	200,142
Other deposits	351	1,023	1,364	2,426	181	207	-	3,162	8,714
Total	149,927	37,780	16,060	102,692	24,989	12,086	32,511	59,452	435,497
Deposits by banks	4,652	3,719	542	6,917	1,491	566	17,739	8,900	44,526
Customer accounts	145,275	34,061	15,518	95,775	23,498	11,520	14,772	50,552	390,971
Protected under Government insurance Schemes	25,965	9,834	1,222	13,957	302	1,247	-	59	52,586
Other Accounts	119,310	24,227	14,296	81,818	23,196	10,273	14,772	50,493	338,385
	149,927	37,780	16,060	102,692	24,989	12,086	32,511	59,452	435,497
Debt securities in issue:
Senior debt	2,187	4,094	-	-	53	6	-	18,839	25,179
Other debt securities	2,848	6,069	46	2,961	-	214	14,450	19,645	46,233
Subordinated liabilities and other borrowed funds	1,696	635	-	-	24	51	-	17,991	20,397
Total	156,658	48,578	16,106	105,653	25,066	12,357	46,961	115,927	527,306

The above tables include financial instruments held at fair value (see note 12).

3. Net trading income

	2014	2013
$million	$million	$million
Gains less losses on instruments held for trading	1,980	2,437
Foreign currency¹	298	1,118
Trading securities	337	(203)
Interest rate derivatives	1,306	889
Credit and other derivatives	39	633
Gains less losses from fair value hedging	(29)	(15)
Gains less losses from fair value hedged items	(1,301)	1,307
Gains less losses from fair value hedging instruments	1,272	(1,322)
Gains less losses on instruments designated at fair value	(55)	92
Financial assets designated at fair value through profit or loss	(65)	97
Financial liabilities designated at fair value through profit or loss	(834)	172
Own credit adjustment (OCA)	100	106
Derivatives managed with financial instruments designated at fair value through profit or loss	744	(283)
	1,896	2,514

¹ Includes foreign currency gains and losses arising on the translation of foreign currency monetary assets and liabilities

Gains less losses on instruments held for trading is presented by product type. Gains or losses on certain trading securities are offset by gains or losses within interest rate derivatives and credit and other derivatives.

4. Other operating income

	2014	2013
$million	$million	$million
Other operating income includes:
Gains less losses on disposal of financial instruments:
Available-for-sale	426	248
Loans and receivables	8	17
Dividend income	97	104
Rental income from operating lease assets	562	485
Gain on disposal of property, plant and equipment	49	102
Receipt of tax refund related income	26	5
Profit on sale of businesses	13	-
Fair value loss on business classified as held for sale	(15)	(49)

5. Operating expenses

	2014	2013
$million	$million	$million
Staff costs:
Wages and salaries	5,035	4,982
Social security costs	168	160
Other pension costs (note 19)	333	336
Share based payment costs	234	264
Other staff costs	1,018	828
	6,788	6,570

Variable compensation is included within wages and salaries. Other staff costs primarily include redundancy, training and travel costs.

5. Operating expenses continued

General administrative expenses

	2014	2013
$million	$million	$million
UK bank levy¹	366	235
Civil monetary penalty²	300	-
Other general administrative expenses	2,042	1,797
	2,708	2,032

¹ The UK bank levy is applied on the chargeable equities and liabilities on the Group's consolidated balance sheet. Key exclusions from chargeable equities and liabilities include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain sovereign debt and liabilities subject to netting. The charge for 2013 was reduced by a refund of $31 million relating to prior years. The rate of the levy for 2014 is 0.156 per cent for chargeable short term liabilities, with a lower rate of 0.078 per cent generally applied to chargeable equity and long term liabilities (i.e. liabilities with a remaining maturity greater than one year).
² In August 2014, Standard Chartered reached a settlement with the New York Department of Financial Services (DFS) regarding deficiencies in its anti-money laundering transaction surveillance system at the New York branch

6. Depreciation and amortisation

	2014	2013
$million	$million	$million
Premises	105	108
Equipment:
Operating lease assets	234	206
Others	95	119
Intangibles:
Software	165	226
Acquired on business combinations	40	55
	639	714

During the year, the Group revised the useful life of certain technology assets from three years to five years. The revisions were accounted for prospectively as a change in accounting estimate and as a result, the current financial year depreciation charges of the Group for these assets decreased by $121 million compared to 2013.

7. Impairment losses on loans and advances and other credit risk provisions

The following table reconciles the charge for impairment provisions on loans and advances to the total impairment charge and other credit risk provision:

	2014	2013
$million	$million	$million
Net charge against profit on loans and advances:
Individual impairment charge	2,096	1,597
Portfolio impairment charge	38	15
	2,134	1,612
Provisions related to credit commitments	6	-
Impairment charges relating to debt securities classified as loans and receivables	1	5
Total impairment losses and other credit risk provisions on loans and advances	2,141	1,617

An analysis of impaired loans and advances by client segment is set out within the Risk and Capital review on page 52.

8. Other impairment

	2014	2013
$million	$million	$million
Impairment losses on available-for-sale financial assets:
- Debt securities	109	54
- Equity shares	47	90
	156	144
Impairment of investment in associates	97	-
Impairment of goodwill (see note 15)	758	1,000
Impairment of acquired intangible assets (see note 15)	8	-
Impairment of commodity assets	139	-
Other	9	14
	1,167	1,158
Recovery of impairment on disposal of instruments¹	(6)	(29)
	1,161	1,129

¹ Relates to private equity instruments sold during the year which had impairment provisions raised against them in prior years

9.# Taxation Analysis

of taxation charge in the year:

	2014	2013
	$million	$million
The charge for taxation based upon the profits for the year comprises:
Current tax:
United Kingdom corporation tax at 21.5 per cent (2013: 23.25 per cent):
Current tax on income for the year	169	139
Adjustments in respect of prior years (including double taxation relief)	(130)	(3)
Double taxation relief	(8)	(9)
Foreign tax:
Current tax on income for the year	1,460	1,594
Adjustments in respect of prior years	(29)	(37)
	1,462	1,684
Deferred tax:
Origination/reversal of temporary differences	(15)	165
Adjustments in respect of prior years	83	15
	68	180
Tax on profits on ordinary activities	1,530	1,864
Effective tax rate	36.1%	30.7%

The UK corporation tax rate was reduced from 23 per cent to 21 per cent with an effective date of 1 April 2014, giving a blended 21.5 per cent for the year. The effective tax rate increased to 36.1 per cent (2013: 30.7 per cent) primarily due to a change in profit mix and an increase in non-deductible expenses.

Foreign taxation includes current taxation on Hong Kong profits of $207 million (2013: $242 million) provided at a rate of 16.5 per cent (2013: 16.5 per cent) on the profits assessable in Hong Kong. Deferred taxation includes origination/reversal of temporary differences in Hong Kong profits of $4 million (2013: $1 million) provided at a rate of 16.5 per cent (2013: 16.5 per cent) on the profits assessable in Hong Kong.

10. Dividends

Ordinary equity shares

	2014		2013
	Cents per share	$million	Cents per share	$million
Final dividend declared and paid during the year¹	57.20	1,385	56.77	1,366
Interim dividend declared and paid during the year¹	28.80	710	28.80	696
	2,095		2,062

¹ The amounts are gross of scrip adjustments

The amounts in the table above reflect the actual dividends per share declared and paid to shareholders in 2014 and 2013. Dividends on ordinary equity shares are recorded in the period in which they are declared and, in respect of the final dividend, have been approved by the shareholders. Accordingly, the final ordinary equity share dividends set out above relate to the respective prior years. The 2013 final dividend of 57.20 cents per ordinary share ($1,385 million) was paid to eligible shareholders on 14 May 2014 and the interim dividend of 28.80 cents per ordinary share ($710 million) was paid to eligible shareholders on 20 October 2014.

The 2014 final ordinary equity share dividend recommended by the board is 57.20 cents per share ($1,414 million), which makes the total dividend for 2014 of 86.00 cents per share (2013: 86.00 cents per share).

The final dividend will be paid in either pounds sterling, Hong Kong dollars or US dollars on 14 May 2015 to shareholders on the UK register of members at the close of business in the UK (10:00 pm London time) on 13 March 2015 and to shareholders on the Hong Kong branch register of members at the opening of business in Hong Kong (9:00 am Hong Kong time) on 13 March 2015.The 2014 final ordinary equity share dividend will be paid in Indian rupees on 14 May 2015 to Indian Depository Receipt holder on the Indian register at the close of business in India on 13 March 2015. It is intended that shareholders on the UK register and Hong Kong branch register will be able to elect to receive shares credited as fully paid instead of all or part of the final cash dividend. Details of the dividend arrangements will be sent to shareholders on or around 27 March 2015. Indian Depository Receipt holders will receive their dividend in Indian rupees only.

10. Dividends continued

Preference shares

	2014	2013
	$million	$million
Non-cumulative irredeemable preference shares:
7 3/8 per cent preference shares of £1 each¹	13	11
8 1/4 per cent preference shares of £1 each¹	12	13
Non-cumulative redeemable preference shares:
8.125 per cent preference shares of $5 each¹,³	-	75
7.014 per cent preference shares of $5 each²	53	53
6.409 per cent preference shares of $5 each²	48	48

¹ Dividends on these preference shares are treated as interest expense and accrued accordingly
² Dividends on these preference shares classified as equity are recorded in the period in which they are declared
³ These preference shares were redeemed on 27 November 2013

11. Earnings per ordinary share

	2014			2013
	Profit¹	Weighted average number of shares	Per share amount	Profit¹	Weighted average number of shares	Per share amount
	$million	('000)	cents	$million	('000)	cents
Basic earnings per ordinary share	2,512	2,458,662	102.2	3,989	2,426,238	164.4
Effect of dilutive potential ordinary shares:
Options²		14,551			20,671
Diluted earnings per ordinary share	2,512	2,473,213	101.6	3,989	2,446,909	163.0

There were no ordinary shares issued after the balance sheet date that would have significantly affected the number of ordinary shares used in the above calculation had they been issued prior to the end of the balance sheet date.

The Group measures earnings per share on a normalised basis. This differs from earnings defined in IAS 33 Earnings per share. The table below provides a reconciliation

	2014	2013
	$million	$million
Operating income as reported	18,334	18,777
Items normalised:
Fair value gains on own credit adjustment	(100)	(106)
Gain on disposal of property	(49)	(77)
Gain arising on sale of business	(13)	-
Fair value loss on business classified as held for sale	15	49
	(147)	(134)
Normalised operating income	18,187	18,643
Operating expenses as reported	(11,045)	(10,193)
Items normalised:
Amortisation of intangible assets arising on business combinations	40	55
Civil monetary penalty⁴	300	-
	340	55
Normalised operating expenses	(10,705)	(10,138)
Other impairment as reported	(1,161)	(1,129)
Items normalised:
Impairment of associates	97	-
Impairment of property	-	9
Impairment of acquired intangibles	8	-
Impairment of goodwill	758	1,000
	863	1,009
Normalised other impairment	(298)	(120)
Taxation as reported	(1,530)	(1,864)
Tax on normalised items	3	20
Normalised taxation	(1,510)	(1,833)

	2014	2013
	$million	$million
Profit as reported ¹	2,512	3,989
Items normalised as above:
Operating income	(147)	(134)
Operating expenses	340	55
Other impairment	863	1,009
Taxation	20	31
	1,076	961
Normalised profit	3,588	4,950
Normalised basic earnings per ordinary share (cents)	145.9	204.0
Normalised diluted earnings per ordinary share (cents)	145.1	202.3

¹ The profit amounts represent the profit attributable to ordinary shareholders, which is profit for the year after non-controlling interest and the declaration of dividends payable to the holders of the non-cumulative redeemable preference shares classified as equity (see note 10)
² The impact of anti-dilutive options has been excluded from this amount as required by IAS 33
³ No tax is included in respect of the impairment of goodwill as no tax relief is available
⁴ In August 2014, Standard Chartered reached a settlement with the New York Department of Financial Services (DFS) regarding deficiencies in its anti-money laundering transaction surveillance system at the New York branch. There is no tax relief for this settlement

12. Financial instruments

Classification

The Group's classification of its principal financial assets and liabilities is summarised in the following tables.

	Assets at fair value	Assets at amortised cost	Non-financial assets	Total
	Trading Derivatives held for hedging	Designated at fair value through profit or loss	Available- for-sale	Loans and receivables
Notes	$million	$million	$million	$million
Total at 31 December 2014	94,323	1,723	2,411	101,217
Cash and balances at central banks	-	-	-	-
Financial assets held at fair value through profit or loss
Loans and advances to banks¹	3,368	-	242	-
Loans and advances to customers¹	2,833	-	1,071	-
Treasury bills and other eligible bills	1,720	-	92	-
Debt securities	17,735	-	-	-
Equity shares	4,556	-	1,006	-
	30,212	-	2,411	-
Derivative financial instruments ¹³	64,111	1,723	-	-
Loans and advances to banks¹	-	-	-	-
Loans and advances to customers¹	-	-	-	-
Investment securities
Treasury bills and other eligible bills	-	-	-	24,073
Debt securities	-	-	-	74,937
Equity shares	-	-	-	2,207
	-	-	-	101,217
Other assets ¹⁴	-	-	-	-

¹ Further analysed in Risk review on pages 40 to 52

12. Financial instruments continued

Classification continued

	Assets at fair value	Assets at amortised cost	Non-financial assets	Total
	Trading Derivatives held for hedging	Designated at fair value through profit or loss	Available- for-sale	Loans and receivables
Notes	$million	$million	$million	$million
Total at 31 December 2013	86,897	2,037	2,203	99,888
Cash and balances at central banks	-	-	-	-
Financial assets held at fair value through profit or loss
Loans and advances to banks¹	2,221	-	246	-
Loans and advances to customers¹	4,411	-	896	-
Treasury bills and other eligible bills	5,161	-	-	-
Debt securities	12,407	-	292	-
Equity shares	2,932	-	769	-
	27,132	-	2,203	-
Derivative financial instruments ¹³	59,765	2,037	-	-
Loans and advances to banks¹	-	-	-	-
Loans and advances to customers¹	-	-	-	-
Investment securities
Treasury bills and other eligible bills	-	-	-	26,243
Debt securities	-	-	-	70,546
Equity shares	-	-	-	3,099
	-	-	-	99,888
Other assets ¹⁴	-	-	-	-

¹ Further analysed in Risk and Capital review on pages 40 to 52

Liabilities at fair value

Liabilities## 12. Financial instruments continued

Classification

Liabilities at fair value

Trading Derivatives held for hedging	Designated at fair value through profit or loss	Amortised cost	Non-financial liabilities	Total
Notes	$million	$million	$million	$million
Financial liabilities held at fair value through profit or loss
Deposits by banks	-	-	932	-
Customer accounts	-	-	8,836	-
Debt securities in issue	-	-	8,837	-
Short positions	3,785	-	-	-
Subtotal	3,785	-	18,605	-
Derivative financial instruments	13	61,896	1,417	-
Deposits by banks	-	-	-	54,391
Customer accounts	-	-	-	405,353
Debt securities in issue	16	-	-	-
Other liabilities	17	-	-	-
Subordinated liabilities and other borrowed funds	18	-	-	-
Total at 31 December 2014	65,681	1,417	18,605	584,728

Liabilities at fair value

Trading Derivatives held for hedging	Designated at fair value through profit or loss	Amortised cost	Non-financial liabilities	Total
Notes	$million	$million	$million	$million
Financial liabilities held at fair value through profit or loss
Deposits by banks	-	-	1,009	-
Customer accounts	-	-	9,905	-
Debt securities in issue	-	-	6,823	-
Short positions	5,293	-	-	-
Subtotal	5,293	-	17,737	-
Derivative financial instruments	13	60,322	914	-
Deposits by banks	-	-	-	43,517
Customer accounts	-	-	-	381,066
Debt securities in issue	16	-	-	-
Other liabilities	17	-	-	-
Subordinated liabilities and other borrowed funds	18	-	-	-
Total at 31 December 2013	65,615	914	17,737	535,577

Valuation of financial instruments

The table below shows the classification of financial instruments held at fair value into the valuation hierarchy set out above as at 31 December 2014 and 31 December 2013.

Level 1	Level 2	Level 3	Total
Assets	$million	$million	$million
Financial instruments held at fair value through profit or loss
Loans and advances to banks	-	3,610	-
Loans and advances to customers	-	3,264	640
Treasury bills and other eligible bills	1,578	234	-
Debt securities	8,466	8,874	395
Equity shares	4,754	-	808
Subtotal	14,798	15,982	1,843
Derivative financial instruments	759	64,500	575
Of which:
Foreign exchange	40	43,665	379
Interest rate	-	15,157	47
Commodity	719	4,983	-
Credit	-	420	20
Equity and stock index	-	275	129
Investment securities
Treasury bills and other eligible bills	20,895	3,178	-
Debt securities	30,696	43,881	360
Of which:
Government bonds	16,321	6,053	66
Issued by corporates other than financial institutions	9,790	9,713	289
Issued by financial institutions	4,585	28,115	5
Equity shares	1,248	6	953
Total at 31 December 2014	68,396	127,547	3,731

12. Financial instruments continued

Liabilities

Level 1	Level 2	Level 3	Total
$million	$million	$million	$million
Financial instruments held at fair value through profit or loss
Deposits by banks	-	932	-
Customer accounts	-	8,835	1
Debt securities in issue	-	8,629	208
Short positions	3,267	518	-
Derivative financial instruments	863	62,154	296
Of which:
Foreign exchange	102	44,814	240
Interest rate	-	13,677	16
Commodity	761	2,161	-
Credit	-	955	10
Equity and stock index	-	547	30
Total at 31 December 2014	4,130	81,068	505

There are no significant transfers of financial assets and liabilities measured at fair value between Level 1 and Level 2 during the year.

Level 1	Level 2	Level 3	Total
Assets	$million	$million	$million
Financial instruments held at fair value through profit or loss
Loans and advances to banks	244	2,223	-
Loans and advances to customers	-	4,587	720
Treasury bills and other eligible bills	4,904	257	-
Debt securities	6,596	5,944	159
Equity shares	2,797	-	904
Derivative financial instruments	323	60,881	598
Investment securities	48,781	49,024	2,083
Total at 31 December 2013	63,645	122,916	4,464

Liabilities

Level 1	Level 2	Level 3	Total
$million	$million	$million	$million
Financial instruments held at fair value through profit or loss
Deposits by banks	-	1,009	-
Customer accounts	-	9,897	8
Debt securities in issue	7	6,777	39
Short positions	4,917	376	-
Derivative financial instruments	420	60,375	441
Total at 31 December 2013	5,344	78,434	488

There are no significant transfers of financial assets and liabilities measured at fair value between Level 1 and Level 2 during the year.

There have been no significant changes to valuation or levelling approaches in 2014

12. Financial instruments continued

Fair value adjustments

When establishing the fair value of a financial instrument using a valuation technique, the Group considers adjustments to the modelled price which market participants would make when pricing that instrument. In total, the Group has made $432 million (2013: $421 million) of valuation adjustments in determining fair value for financial assets and financial liabilities classified as Level 2 or Level 3 financial instruments. The main adjustments are described below:

Valuation adjustments	2014	2013
Bid-offer	66	69
Credit¹	160	187
Model	14	15
Funding Valuation Adjustment	111	84
Others (including Day 1)	81	66
Total	432	421

¹ Includes own credit valuation adjustments on derivatives

Level 3 movement tables - Financial assets

The table below analyses movements in level 3 financial assets carried at fair value.

Held at fair value through profit or loss	Derivative financial instruments	Investment securities
Assets	Loans and advances to customers	Debt securities
$million	$million	$million
At 1 January 2014	720	159
Total (losses)/gains recognised in income statement	(181)	7
Total losses recognised in other comprehensive income	-	-
Purchases	192	273
Sales	(231)	(38)
Settlements	(61)	(19)
Transfers out	(6)	(3)
Transfers in	207	16
At 31 December 2014	640	395
Total (losses)/gains recognised in the income statement relating to assets held at 31 December 2014	(154)	5

Transfers in during the year primarily relate to investment in structured notes, corporate debt securities and loans and advances where the valuation parameters become unobservable during the year. Transfers out during the year primarily relate to certain equity loans and advances and corporate debt securities where the valuation parameters became observable during the year and were transferred to Level 1 and Level 2 financial assets.

12. Financial instruments continued

Held at fair value through profit or loss	Derivative financial instruments	Investment securities
Assets	Loans and advances to customers	Debt securities
$million	$million	$million
At 1 January 2013	910	176
Total (losses)/gains recognised in income statement	(89)	63
Total losses recognised in other comprehensive income	-	-
Purchases	-	18
Sales	-	(30)
Settlements	(103)	(38)
Transfers out	-	(44)
Transfers in	2	14
At 31 December 2013	720	159
Total (losses)/gains recognised in the income statement relating to assets held at 31 December 2013	(86)	3

Level 3 movement tables - Financial liabilities

2014				2013
Liabilities	Customer accounts	Debt securities in issue	Derivative financial instruments	Total	Customer accounts	Debt securities in issue	Derivative financial instruments
$million	$million	$million	$million	$million	$million	$million	$million
At 1 January	8	39	441	488	-	114	563
Total gains/(losses) recognised in income statement	-	3	(18)	(15)	-	3	54
Issues	-	159	27	186	9	506	1
Settlements	(7)	(24)	(152)	(183)	(3)	(490)	(144)
Transfers out	-	-	-	-	-	(99)	(33)
Transfers in	-	31	(2)	29	2	5	-
At 31 December	1	208	296	505	8	39	441
Total losses recognised in the income statement relating to liabilities held at 31 December 2014	-	-	29	29	-	4	37

12.# Financial instruments continued

Sensitivities in respect of the fair values of level 3 assets and liabilities

Where the fair value of financial instruments are measured using valuation techniques that incorporate one or more significant inputs which are based on unobservable market data, we apply a 10 per cent increase or decrease on the values of these unobservable parameter inputs, to generate a range of reasonably possible alternative valuations in accordance with the requirements of IFRS 7. The percentage shift is determined by statistical analysis performed on a set of reference prices, which included certain equity indices, credit indices and volatility indices, based on the composition of our Level 3 assets. Favourable and unfavourable changes are determined on the basis of changes in the value of the instrument as a result of varying the levels of the unobservable parameters. This Level 3 sensitivity analysis assumes a one way market move and does not consider offsets for hedges. The reasonably possible alternatives could have increased or decreased the fair values of financial instruments held at fair value through profit or loss and those classified as available-for-sale by the amounts disclosed below.

Financial instruments	2014 $million	2013 $million
Designated at fair value through profit or loss
Possible increase	173	229
Possible decrease	(173)	(167)
Available-for-sale
Possible increase	121	166
Possible decrease	(118)	(167)

13. Derivative financial instruments

The tables below analyse the notional principal amounts and the positive and negative fair values of the Group's derivative financial instruments. Notional principal amounts are the amount of principal underlying the contract at the reporting date.

Derivatives	2014 Notional principal amounts Assets $million	2014 Notional principal amounts Liabilities $million	2013 Notional principal amounts Assets $million	2013 Notional principal amounts Liabilities $million
Foreign exchange derivative contracts:
Forward foreign exchange contracts	1,611,476	19,265	20,649	1,303,103
Currency swaps and options	1,589,989	24,819	24,507	1,086,784
Exchange traded futures and options	300	-	-	340
	3,201,765	44,084	45,156	2,390,227
Interest rate derivative contracts:
Swaps	2,264,473	14,325	12,874	1,974,451
Forward rate agreements and options	186,796	879	819	236,646
Exchange traded futures and options	1,313,920	-	-	694,212
	3,765,189	15,204	13,693	2,905,309
Credit derivative contracts	32,055	440	965	40,981
Equity and stock index options	16,585	404	577	15,684
Commodity derivative contracts	130,058	5,702	2,922	162,858
Total derivatives	7,145,652	65,834	63,313	5,515,059

The Group limits exposure to credit losses in the event of default by entering into master netting agreements with certain market counterparties. As required by IAS 32, exposures are only presented net in these accounts where they are subject to legal right of offset and intended to be settled net in the ordinary course of business.

13. Derivative financial instruments continued

Derivatives held for hedging

Hedge accounting is applied to derivatives and hedged items when the criteria under IAS 39 have been met. The tables below list the types of derivatives that the Group holds for hedge accounting.

	2014 Notional principal amounts Assets $million	2014 Notional principal amounts Liabilities $million	2013 Notional principal amounts Assets $million	2013 Notional principal amounts Liabilities $million
Derivatives designated as fair value hedges:
Interest rate swaps	48,427	671	335	41,598
Forward foreign exchange contracts	12	1	-	199
Currency swaps	30,953	905	892	22,026
	79,392	1,577	1,227	63,823
Derivatives designated as cash flow hedges:
Interest rate swaps	9,465	5	17	20,564
Forward foreign exchange contracts	2,375	4	75	2,150
Currency swaps	6,524	62	98	7,169
	18,364	71	190	29,883
Derivatives designated as net investment hedges:
Forward foreign exchange contracts	1,098	75	-	981
Total derivatives held for hedging	98,854	1,723	1,417	94,687

14. Other assets

	2014 $million	2013 $million
Financial assets held at amortised cost (note 12)
Hong Kong SAR Government certificates of indebtedness (note 17)¹	4,738	4,460
Cash collateral	10,311	9,240
Acceptances and endorsements	5,212	5,501
Unsettled trades and other financial assets	10,493	8,234
	30,754	27,435
Non-financial assets and assets held for sale
Commodities	4,432	3,965
Assets held for sale²	3,237	1,623
Other assets	266	547
	38,689	33,570

¹ The Hong Kong SAR Government certificates of indebtedness are subordinated to the claims of other parties in respect of bank notes issued.
² Includes the disposal groups held for sale disclosed below. The disposal groups below have been presented as held for sale following the approval of the Group management and the transactions are expected to complete in 2015. These consist of Standard Chartered Capital (Korea) Company Limited, Standard Chartered Savings Bank Korea Company Limited, Shenzhen PrimeCredit Limited (SZPC), PrimeCredit Limited (PCL), Standard Chartered Bank SAL, Standard Chartered Leasing Company Limited, Standard Chartered Modarba and Standard Chartered Services (Pvt) Limited. The assets and liabilities of the disposal groups were remeasured to the lower of carrying amount and fair value less costs to sell, this resulted in a fair value loss of $64 million ($49 million recognised in 2013 and $15 million in 2014). See note 4 for the fair value loss disclosure.

SZPC and PCL Businesses held for sale	2014 $million	2014 $million	2014 $million	2014 $million
	Others			Total
Assets
Cash and balances at central banks	2	8	16	26
Financial assets held at fair value through profit and loss	-	73	-	73
Loans and advances to banks	38	218	4	260
Loans and advances to customers (net of $78 million impairment provision)	1,615	971	146	2,732
Investment securities	-	2	19	21
Deferred tax assets	6	-	1	7
Other assets	13	-	1	14
Prepayments and accrued income	3	14	3	20
Goodwill and Intangible assets	68	-	-	68
Property, plant and equipment	7	3	1	11
Total assets	1,752	1,289	191	3,232
Liabilities
Deposits by banks	132	-	7	139
Customer accounts	104	248	76	428
Current tax liabilities	2	-	-	2
Other liabilities	24	16	31	71
Subordinated liabilities and other borrowed funds	-	-	58	58
Deferred tax liabilities	-	11	1	12
Total liabilities	262	275	173	710
Due (to)/ from Group Undertakings	(1,127)	(879)	8	(1,998)

³ Includes Standard Chartered Savings Company Limited and Standard Chartered Capital (Korea) Company Limited. The businesses were presented as held for sale in 2014 but due to developments beyond management's control the disposal of these businesses was not completed. On 19 January 2015 the sale of Standard Chartered Savings Company Limited was completed (see note 24) and the other transaction is expected to complete in 2015 The assets reported here are level 3 except for cash and balances at central banks (Level 2) and financial assets held at fair value through profit and loss (Level 2). The net liabilities due to Group undertakings will be transferred to the acquirers on completion of the sale.

15. Goodwill and intangible assets

	Goodwill	Acquired intangibles	Software	Total	Goodwill	Acquired intangibles	Software	Total
	2014 $million	2014 $million	2014 $million	2014 $million	2013 $million	2013 $million	2013 $million	2013 $million
Cost
At 1 January	5,207	678	1,103	6,988	6,378	658	923	7,959
Exchange translation differences	(120)	(18)	(67)	(205)	(187)	(15)	(15)	(217)
Acquisitions	-	-	-	-	16	35	-	51
Additions	-	-	371	371	-	-	372	372
Disposals	-	-	(1)	(1)	-	-	-	-
Impairment	(758)	-	-	(758)	(1,000)	-	-	(1,000)
Amounts written off	-	(96)	(58)	(154)	-	-	(175)	(175)
Held for sale	(68)	-	-	(68)	-	-	-	-
Other movements	(37)	-	-	(37)	-	-	(2)	(2)
At 31 December	4,224	564	1,348	6,136	5,207	678	1,103	6,988
Provision for amortisation
At 1 January	-	530	388	918	-	481	333	814
Exchange translation differences	-	(17)	(25)	(42)	-	(6)	2	(4)
Amortisation	-	40	165	205	-	55	226	281
Impairment charge	-	8	8	16	-	-	-	-
Disposals	-	-	(1)	(1)	-	-	-	-
Amounts written off	-	(94)	(56)	(150)	-	-	(173)	(173)
At 31 December	-	467	479	946	-	530	388	918
Net book value	4,224	97	869	5,190	5,207	148	715	6,070

Outcome of impairment assessment

The Group performed its annual impairment assessment on the level of goodwill assigned to the Group CGU as a result of its consideration of reduced expectation for future cash flows and fluctuations in the discount rate. Based on this analysis, the carrying amount was assessed as exceeding the recoverable value by $758 million for Korea and Corporate advisory business CGU which was recognised as an impairment charge. The pre-tax discount rate applied to the Korea CGU was 16.3 percent and 12.0 per cent in respect of the corporate advisory business CGU. At 31 December 2014, the results of our annual assessment review indicated that there is no other goodwill impairment to be recognised. The Group believes that a reasonable possible change in any of the key assumptions on which the recoverable amounts have been based would not cause the carrying amounts to exceed their recoverable amount. It continues to be possible that certain scenarios could be constructed where a combination of a material change in the discount rate coupled with a reduction in current business plan forecasts or the GDP growth rate, would potentially result in the carrying amount of the goodwill exceeding the recoverable amount in the future.

16.# Debt Securities in Issue

	2014	2013
Certificates of deposit of $100,000 or more	$million	$million
Other debt securities in issue	$million	$million
Total	$million	$million

Debt securities in issue	$million	$million	$million	$million	$million	$million
Debt securities in issue	28,585	43,366	71,951	21,082	43,507	64,589
Debt securities in issue included within: Financial liabilities held at fair value through profit or loss (note 12)	125	8,712	8,837	141	6,682	6,823
Total debt securities in issue	28,710	52,078	80,788	21,223	50,189	71,412

17. Other Liabilities

	2014	2013
	$million	$million
Financial liabilities held at amortised cost (note 12)
Notes in circulation1	4,738	4,460
Acceptances and endorsements	5,212	5,501
Cash collateral	7,005	5,147
Unsettled trades and other financial liabilities	13,131	10,900
	30,086	26,008
Non-financial liabilities
Cash-settled share based payments	37	73
Liabilities held for sale2	710	344
Other liabilities	441	913
	31,274	27,338

1 Hong Kong currency notes in circulation of $4,738 million (2013: $4,460 million) that are secured by the government of Hong Kong SAR certificates of indebtedness of the same amount included in other assets (note 14)

2 Relate to liabilities in disposal groups held for sale. The businesses held for sale also have total net liabilities due to Group undertakings of $2 billion which will be transferred to the acquirers on completion of the sale. See note 14 for the balance sheet of the disposal groups held for sale.

18. Subordinated liabilities and other borrowed funds

2014

	USD	GBP	Euro	Others	Total
	$million	$million	$million	$million	$million
Fixed rate subordinated debt	10,836	5,274	4,645	1,870	22,625
Floating rate subordinated debt	238	47	-	37	322
Total	11,074	5,321	4,645	1,907	22,947

2013

	USD	GBP	Euro	Others	Total
	$million	$million	$million	$million	$million
Fixed rate subordinated debt	9,663	3,922	4,426	2,060	20,071
Floating rate subordinated debt	238	50	-	38	326
Total	9,901	3,972	4,426	2,098	20,397

All subordinated liabilities are unsecured, unguaranteed and subordinated to the claims of other creditors including without limitation, customer deposits and deposits by banks. The Group has the right to settle these debt instruments in certain circumstances as set out in the contractual agreements.

Issuances

On 23 January 2014, Standard Chartered PLC (the Company) issued SGD700 million 4.4 per cent fixed interest rate notes due January 2026.

On 26 March 2014, the Company issued $2 billion 5.7 per cent fixed interest rate notes due March 2044.

On 6 June 2014, the Company issued £900 million 5.125 per cent fixed interest rate notes due June 2034.

On 19 November 2014, the Company issued €500 million 3.125 per cent fixed interest rate notes due November 2024.

Redemptions

On 13 March 2014, Standard Chartered Bank Korea Limited exercised its right to redeem its KRW300 billion 7.05 per cent subordinated debt in full on the first optional call date.

On 28 October 2014, Standard Chartered Bank (Taiwan) Limited exercised its right to redeem its TWD 10 billion 2.9 per cent subordinated debt due 2019 in full on the first optional call date.

On 24 December 2014, Standard Chartered Bank exercised its right to redeems its $1.5 billion 9.5 per cent Step up perpetual preferred securities in full on the first optional call date.

19. Retirement benefit obligations

Retirement benefit obligations comprise:

	2014	2013
	$million	$million
Total market value of assets	2,634	2,585
Present value of the schemes' liabilities	(3,025)	(2,926)
Defined benefit schemes obligation	(391)	(341)
Defined contribution schemes obligation	(22)	(24)
Net obligation	(413)	(365)

Retirement benefit charge comprises:

	2014	2013
	$million	$million
Defined benefit schemes	105	119
Defined contribution schemes	228	217
Charge against profit (note 5)	333	336

The pension cost for defined benefit schemes was:

	2014	2013
	$million	$million
Current service cost and administrative expenses	94	100
Past service cost and curtailments	(1)	4
Gain on settlements	(1)	-
Interest income on pension scheme assets	(108)	(93)
Interest on pension scheme liabilities	121	108
Total charge to profit before deduction of tax	105	119
Return on plan assets excluding interest income	(153)	(69)
Loss/(gain) on liabilities	214	(10)
Total loss/(gain) recognised directly in statement of comprehensive income before tax	61	(79)
Deferred taxation	(13)	21
Total loss/(gains) after tax	48	(58)

20. Share capital, reserves and own shares

Group and Company

	Number of ordinary shares	Ordinary share capital	Preference share capital	Total
	millions	$million	$million	$million
At 1 January 2013	2,413	1,207	-	1,207
Capitalised on scrip dividend	4	2	-	2
Shares issued	10	5	-	5
At 31 December 2013	2,427	1,214	-	1,214
Capitalised on scrip dividend	38	19	-	19
Shares issued	8	3	-	3
At 31 December 2014	2,473	1,236	-	1,236

2014

On 14 May 2014, the Company issued 36,260,040 new ordinary shares instead of the 2013 final dividend and on the 17 October 2014 the Company issued 1,315,836 new ordinary shares instead of the 2014 interim dividend. During the year 7,736,568 shares were issued under employee share plans at prices between nil and 1,463 pence.

2013

On 13 May 2013, the Company issued 1,727,682 new ordinary shares instead of the 2012 final dividend and on 17 October 2013 the Company issued 2,081,685 new ordinary shares instead of the 2013 interim dividend. During the year 10,542,375 new ordinary shares were issued under employee share plans at prices between nil and 1,463 pence.

Own shares

Bedell Cristin Trustees Limited is trustee of both the 1995 Employees' Share Ownership Plan Trust (the 1995 Trust), which is an employee benefit trust used in conjunction with some of the Group's employee share schemes, and of the Standard Chartered 2004 Employee Benefit Trust (the 2004 Trust) which is an employee benefit trust used in conjunction with the Group's deferred bonus plan. The trustee has agreed to satisfy a number of awards made under the employee share schemes, the deferred bonus arrangements and fixed pay allowances delivered in shares through the relevant employee benefit trust. As part of these arrangements, Group companies fund the trusts, from time to time, to enable the trustee to acquire shares to satisfy these awards. All shares have been acquired through the London Stock Exchange. Except as disclosed, neither the Company nor any of its subsidiaries has bought, sold or redeemed any securities of the company listed on The Stock Exchange of Hong Kong Limited during the year. Details of the shares purchased and held by the trusts are set out below.

	1995 Trust	2004 Trust	Total
	2014	2013	2014
Number of shares
Shares purchased	4,090,094	4,855,145	1,306,188
Market price of shares purchased ($ million)	84	133	26
Shares held at the end of the year	5,291,941	5,575,821	-
Maximum number of shares held during year	7,808,099	7,278,439

21. Restatement of prior year

Segmental information

In January 2014 the Group announced a change to its organisation structure effective 1 April 2014. In accordance with IFRS 8 Segmental reporting, the presentation of the Group accounts has been updated to reflect the Group's new client segments - Corporate and Institutional, Commercial, Private Banking and Retail. On 29 May 2014, the Group announced the restated segmental information for Half Year and Full Year 2013 under the new client segments and global product groups and the new geographic regions. The table below shows the changes in these accounts to the Full Year 2013 restatements announced for the new client segments to enhance the comparability of information presented. While these restatements affect the reported results of the divisions that comprise the Group's business, it has no impact on the Group's overall income statement, balance sheet or reported metrics.

	Corporate and Institutional	Commercial	Private Banking	Retail	Total
	$million	$million	$million	$million	$million
Loans to customers - as announced	159,894	19,025	17,208	99,888	296,015
Loans to customers - as restated	160,906	17,802	17,159	100,148	296,015
Restatement	1,012	(1,223)	(49)	260	-

22. Contingent liabilities and commitments

The table below shows the contract or underlying principal amounts and risk-weighted amounts of unmatured off-balance sheet transactions at the balance sheet date. The contract or underlying principal amounts indicate the volume of business outstanding and do not represent amounts at risk.

	2014	2013
	$million	$million
Contingent liabilities
Guarantees and irrevocable letters of credit	33,318	36,936
Other contingent liabilities	9,214	10,002
	42,532	46,938
Commitments
Documentary credits and short-term trade-related transactions	7,911	7,409
Forward asset purchases and forward deposits placed	78	459
Undrawn formal standby facilities, credit lines and other commitments to lend:
One year and over	44,629	43,294
Less than one year	20,451	22,019
Unconditionally cancellable	105,325	119,445
	178,394	192,626

The Group's share of contingent liabilities and commitments relating to joint venture is $336 million (2013: $388 million).

23. Legal and regulatory matters

While the Group seeks to comply with the letter and spirit of all applicable laws and regulations at all times, it has been, and may continue to be, subject to regulatory actions, reviews, requests for information (including subpoenas and requests for documents) and investigations across our markets, the outcomes of which are generally difficult to predict and can be material to the Group.# Regulatory Matters

The terms of settlements regarding US sanctions compliance reached with US authorities in 2012 include a number of conditions and ongoing obligations with regard to improving sanctions, Anti-Money Laundering and Bank Secrecy Act controls such as remediation programmes, reporting requirements, compliance reviews and programmes, banking transparency requirements, training measures, audit programmes, disclosure obligations and, in connection with the New York Department of Financial Services (NYDFS) Consent Order, the appointment of an independent monitor (the "Monitor").

On 19 August 2014, the Group announced that it had reached a final settlement with the NYDFS regarding deficiencies in the anti-money laundering transaction surveillance system in its New York branch (the "Branch"). The system, which is separate from the sanctions screening process, is one part of the Group's overall financial crime controls and is designed to alert the Branch to unusual transaction patterns that require further investigation on a post-transaction basis. The settlement provisions are summarised as follows: (i) a civil monetary penalty of $300 million; (ii) enhancements to the transaction surveillance system at the Branch; (iii) a two-year extension to the term of the Monitor; and (iv) a set of temporary remediation measures, which will remain in place until the transaction surveillance system's detection scenarios are operating to a standard approved by the Monitor.

On 9 December 2014, the Group announced that the Department of Justice (DOJ), District Attorney of New York (DANY) and the Group had agreed to a three-year extension of the Deferred Prosecution Agreements entered into in 2012 (DPAs) until 10 December 2017, and to the retention of a monitor to evaluate and make recommendations regarding the Group's sanctions compliance programme. The DOJ agreement acknowledges that the Group has taken a number of steps to comply with the requirements of the original DPAs and to enhance and optimise its sanctions compliance, including the implementation of more rigorous US sanctions policies and procedures, certified staff training, hiring of senior legal and financial crime compliance staff and recently implementing additional measures to block payment instructions for countries subject to US sanctions laws and regulations. The Group will work closely with the authorities to make additional substantial improvements to its US economic sanctions programme to reach the standard required by the DPAs.

The DOJ agreement also indicates that the Group is co-operating with an investigation related to possible historical violations of US sanctions laws and regulations, but that additional time is needed for the authorities to complete the investigation and determine whether any violations have occurred. At the current stage of this investigation, the Group cannot predict the nature or timing of its outcome. There is a range of potential penalties for sanctions compliance violations, which could ultimately include substantial monetary penalties, additional compliance and remediation requirements and/or additional business restrictions.

The Group recognises that its compliance with historical, current and future sanctions, as well as AML and BSA requirements, and customer due diligence practices, not just in the US but throughout its footprint, is and will remain a focus of the relevant authorities. As part of their remit to oversee market conduct, regulators and other agencies in certain markets are conducting investigations or requesting reviews into a number of areas of regulatory compliance and market conduct, including sales and trading, involving a range of financial products, and submissions made to set various market interest rates and other financial benchmarks, such as foreign exchange. At relevant times, certain of the Group's branches and/or subsidiaries were (and are) participants in some of those markets, in some cases submitting data to bodies that set such rates and other financial benchmarks. The Group is contributing to industry proposals to strengthen financial benchmarks processes in certain markets and continues to review its practices and processes in the light of the investigations, reviews and the industry proposals. The Group is co-operating with all relevant ongoing reviews, requests for information and investigations. The outcome of these reviews, requests for information and investigations is uncertain and could result in further actions, penalties or fines but it is not possible to predict the extent of any liabilities or other consequences that may arise.

In meeting regulatory expectations and demonstrating active risk management, the Group also takes steps to restrict or restructure or otherwise to mitigate higher risk business activities which could include divesting or closing businesses that exist beyond risk tolerances. In addition to these matters, the Group receives legal claims against it in a number of jurisdictions arising in the normal course of business. The Group considers none of these claims as material. Where appropriate, the Group recognises a provision for liabilities when it is probable that an outflow of economic resources embodying economic benefits will be required and for which a reliable estimate can be made of the obligation.

24. Post balance sheet events

Tax

On 3 December 2014, the UK government announced proposed legislation for banks, effective from 1 April 2015, to restrict the proportion of profits that can be offset by carriedforward tax losses. The Group has a deferred tax asset of $72 million which could be affected by the legislation. At 31 December 2014, this change had not been substantively enacted and accordingly has not been reflected in this annual report. If the law had been enacted at the balance sheet date, management estimates that the profits available to utilise this asset would be restricted by 80 to 90 per cent.

Business closure and disposal

On 8 January 2015, the Group announced the closure of its institutional cash equities, equity research and equity capital markets, as the Group continues to exit or reconfigure non-core and underperforming businesses. On 19 January 2015, the Group completed the disposal of Standard Chartered Savings Company Limited (disclosed as held for sale in note 14) to J. Trust Co. Limited after obtaining regulatory approval from the Financial Services Commission and other relevant authorities in South Korea.

25. Related party transactions

Directors and officers

Details of directors' remuneration and interests in shares are disclosed in the Directors' remuneration report. IAS 24 'Related party disclosures' requires the following additional information for key management compensation. Key management comprises non-executive directors, executive directors of Standard Chartered PLC and the Court Directors of Standard Chartered Bank.

	2014	2013
	$million	$million
Salaries, allowances and benefits in kind	28	25
Pension contributions	9	5
Bonuses paid or receivable	1	7
Share based payments	37	28
Total	75	65

Transactions with directors, officers and others

At 31 December 2014, the total amounts to be disclosed under the Companies Act 2006 (the Act) and the Listing Rules of the Hong Kong Stock Exchange Limited (HK Listing Rules) about loans to directors were as follows:

	2014		2013
	Number	$million	Number	$million
Directors	3	6	5	6

As at 31 December 2014, Standard Chartered Bank had created a charge over $68 million (2013: $60 million) of cash assets in favour of the independent trustee of its employer financed retirement benefit scheme. Other than as disclosed in the Annual report and Accounts, there were no other transactions, arrangements or agreements outstanding for any director of the Company which have to be disclosed under the Act, the rules of the UK Listing Authority or the HK Listing Rules.

Associates

The Group has loans and advances to China Bohai Bank of $89 million at 31 December 2014 (2013: $20 million) and deposit takings of $nil (2013: $20 million) from China Bohai Bank. The Group has loans and advances to Clifford Capital Pte Limited totalling $30 million at 31 December 2014 with loan commitments and other guarantees of $50 million while Clifford Capital Pte Limited has deposits of $4 million with the Group. Except as disclosed, the Group did not have any other amounts due to or from associate investments.

Joint ventures

The Group has loans and advances to PT Bank Permata Tbk totalling $118 million at 31 December 2014 (2013: $31 million), and deposits of $40 million (2013: $31 million) while PT Bank Permata Tbk has deposits of $18 million (2013: $nil) with the Group. The Group has an investment in subordinated debt issued by PT Bank Permata Tbk of $120 million (2013: $114 million).

26. Corporate governance

The directors confirm that, throughout the year ended 31 December 2014, the Company has complied with the code provisions set out in the Corporate Governance Code contained in Appendix 14 of the Hong Kong Listing Rules, save that the Board Risk Committee is responsible for the oversight of internal control (other than internal control over financial reporting) and risk management systems (Hong Kong Corporate Governance Code provision C.3.3 paragraphs (f), (g) and (h)). If there were no Board Risk Committee, these matters would be the responsibility of the Audit Committee. The directors also confirm that the announcement of these results has been reviewed by the Company's Audit Committee.

The Company confirms that it has adopted a code of conduct regarding securities transactions by directors on terms no less exacting than the required standard set out in Appendix 10 of the Hong Kong Listing Rules and that the directors of the Company have complied with the required standards of the adopted code of conduct.

27.# Statutory accounts

The financial information included within this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2014 were approved by the Board on 4 March 2015. These accounts will be published on 16 March 2015 after which they will be delivered to the Registrar of Companies in England and Wales. The report of the auditors on these accounts was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 of the Companies Act 2006.

UK and Hong Kong accounting requirements

As required by the Hong Kong Listing Rules, an explanation of the differences in accounting practices between EU endorsed IFRS and Hong Kong Financial Reporting Standards is required to be disclosed. There would be no significant differences had these accounts been prepared in accordance with Hong Kong Financial Reporting Standards. EU endorsed IFRS may differ from IFRSs published by the International Accounting Standards Board if a standard has not been endorsed by the EU.

Standard Chartered PLC - Statement of directors' responsibilities

The directors confirm that to the best of their knowledge:
a) the consolidated financial information contained herein has been prepared in accordance with IFRSs as adopted by the European Union and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
b) this announcement includes:
(i) an indication of important events that have occurred during the year ended 31 December 2014 and their impact on the consolidated financial statements, and a description of the principal risks and uncertainties; and
(ii) details of material related party transactions in the year ended 31 December 2014 and any material changes in the related party transactions described in the last annual report of the Group.

By order of the Board

A Halford
Group Finance Director

4 March 2015

Standard Chartered PLC - Additional information

A. Remuneration

The Group employed 90,940 staff at 31 December 2014 (2013: 86,640).

Performance and reward philosophy and principles

Our approach to performance, reward and benefits supports and drives our business strategy and reinforces our values in the context of a clearly articulated risk appetite. Our approach:
* supports a strong performance-oriented culture, ensuring that individual reward and incentives relate directly to:
(i) the performance and behaviour of the individual
(ii) the performance of the business; and
(iii) the interests of shareholders
* ensures a competitive reward package that reflects our international nature and enable us to attract, retain and motivate our employees
* reflects the fact that many of our employees bring international experience and expertise, and we recruit from a global marketplace
* encourages an appropriate mix of fixed and variable compensation based on
(i) the individual's responsibility and
(ii) the individual's risk profile and that of the business

Total remuneration is typically delivered via a combination of base salary and benefits plus variable compensation. Consistent with our pay for performance culture, our discretionary variable compensation incentives play an integral role in enabling us to recognise and reward superior performance and behaviour that support our values.

B. Summarised consolidated income statement

	First and second half of 2014	1st half of 2014	2nd half of 2014	2014
	$million	$million	$million	$million
Interest income	8,603	8,381	16,984
Interest expense	(2,999)	(2,982)	(5,981)
Net interest income	5,604	5,399	11,003
Fees and commission income	2,284	2,367	4,651
Fees and commission expense	(223)	(249)	(472)
Net trading income¹	954	942	1,896
Other operating income	635	621	1,256
Total non-interest income	3,650	3,681	7,331
Operating income	9,254	9,080	18,334
Staff costs	(3,454)	(3,334)	(6,788)
Premises costs	(441)	(469)	(910)
General administrative expenses²	(875)	(1,833)	(2,708)
Depreciation and amortisation	(313)	(326)	(639)
Operating expenses	(5,083)	(5,962)	(11,045)
Operating profit before impairment losses and taxation	4,171	3,118	7,289
Impairment losses on loans and advances and other credit risk provisions	(846)	(1,295)	(2,141)
Other impairment: Goodwill Impairment	-	(758)	(758)
Other	(185)	(218)	(403)
Profit from associates and joint ventures	113	135	248
Profit before taxation	3,253	982	4,235
Taxation	(849)	(681)	(1,530)
Profit for the year	2,404	301	2,705
Profit attributable to:
Non-controlling interests	44	48	92
Parent company shareholders	2,360	253	2,613
Profit for the year	2,404	301	2,705
Earnings per share:
Basic earnings per ordinary share (cents)	94.6	8.3	102.2
Diluted earnings per ordinary share (cents)	94.0	8.2	101.6

¹ Includes own credit adjustment charge of $15 million in the first half of 2014 and benefit of $115 million in the second half of 2014, taking the full year benefit to $100 million (2013: $106 million)
² The second half of the 2014 includes a net charge of $366 million (2013 second half: $235 million) relating to the UK bank levy

Financial Calendar

Results and dividend announced: 4 March 2015
Ex-dividend date - Hong Kong: 11 March 2015
Ex-dividend date - United Kingdom: 12 March 2015
Record date for dividend: 13 March 2015
Last date to elect for share dividend or to change standing instructions: 23 April 2015
Annual General Meeting: 6 May 2015
Dividend payment date: 14 May 2015

Copies of this statement are available from: Investor Relations, Standard Chartered PLC, 1 Basinghall Avenue, London, EC2V 5DD or on our website at http://investors.sc.com

For further information please contact:

Steve Atkinson, Group Head of Corporate Affairs +44 20 7885 7245
James Hopkinson, Group Head, Investor Relations +44 20 7885 7151
Edwin Hui, Head of Investor Relations, Asia +852 2820 3050
Uttam Hazarika, Manager, Investor Relations, India +91 22 61158643
Jon Tracey, Group Head, Media Relations +44 20 7885 5573

The following information for the Full Year Results 2014 will be available on our website:
* The Video interviews with Peter Sands, Group Chief Executive and Andy Halford, Group Finance Director
* The Analyst presentation in pdf format
* The Webcast of the live analyst presentation in London with Q&A
* A Podcast of analyst presentation

Images of our Board of directors and senior management are available for the media at http://www.sc.com/en/about-us/our-people/index.html

Information regarding the Group's commitment to Sustainability is available at http://www.sc.com/sustainability

Standard Chartered PLC - Forward looking statements and Basis of preparation

Forward looking statements

It is possible that this document could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. The Group undertakes no obligation to revise or update any forward looking statement contained within this document, regardless of whether those statements are affected as a result of new information, future events or otherwise.

Disclaimer

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933 (the "U.S. Securities Act") and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. No public offering of the Placing Shares will be made in the United States.

Basis of preparation

Unless another currency is specified, the word 'dollar' or symbol '$' in this document means US dollar and the word 'cent' or symbol 'c' means one-hundredth of one US dollar.

Within this document, the Hong Kong Special Administrative Region of the People's Republic of China is referred to as 'Hong Kong'; The Republic of Korea is referred to as Korea or South Korea; Greater China includes Hong Kong, Taiwan, China and Macau; North East (NE) Asia includes Korea, Japan and Mongolia; Middle East, North Africa and Pakistan (MENAP) includes United Arab Emirates (UAE), Bahrain, Qatar, Lebanon, Jordan, Saudi Arabia, Egypt, Oman, Iraq and Pakistan; South Asia includes India, Bangladesh, Nepal and Sri Lanka; and ASEAN includes Singapore, Malaysia, Indonesia, Brunei, Cambodia, Laos, Philippines, Thailand, Vietnam, Myanmar and Australia.

Geographic presentation of results

The Group operates a number of central booking locations, primarily in the ASEAN and Europe regions.# Standard Chartered PLC - Index Page

Page
Balance sheet 66
Industry concentration in loans and advances 42
Capital base and ratios 58
Liquidity risk 55
Cash flow statement 68
Loan impairment coverage ratio 50
Contingent liabilities and commitments 92
Loans portfolio analysis 41
Country cross-border risk 53
Market risk 54
Credit risk 40
Normalised earnings 79
Customer accounts 75
Other assets 88
Debt securities in issue 89
Other impairment 77
Deposits by banks 75
Other liabilities 90
Depreciation and amortisation 77
Other operating income 76
Derivatives 86
Principal uncertainties 38
Dividends 78
Remuneration 94
Earnings per share 79
Restatement of prior periods 92
Financial calendar 98
Retirement benefit obligations 91
Financial Review: Risk weighted assets 58
* Performance summary 10
Segmental and entity-wide information:
* Client segment and products 11-12
* By client segment 70
Financial instruments:
* By geography 72
* Classification 80-81
* Net interest margin and yield 72
* Valuation 82
* By structure of deposits 75
Financial review of Group:
Share capital 91
* Operating income and profit 11
Shares held by share scheme trust 92
* Group summary consolidated balance sheet 31
Statement of changes in equity 67
Goodwill and intangible assets 89
Statement of comprehensive income 65
Hedging 87
Subordinated liabilities 90
Highlights 1
Summary of results 3
Impairment losses on loans and advances:
Taxation 78
* Total individual impairment 51
Trading income 76
Income statement 64

Lending financially booked in these locations may not correspond to the location of the customers or to the country of credit responsibility (as defined on page 34). We have used the following bases for disclosures across this report:

Within the geographic disclosures in the "Financial review" (pages 25 to 31) and in note 2 to the to the Financial statements (pages 72 to 71) Loans and Advanes to Customers are reported based on the location of the customer
The specific country disclosures within the "Risk overview" section (pages 34 to 36) of the "Risk review" are based on the Country of credit risk responsibility, i.e. primary country of parent entity and on a net exposure basis (as defined on page 34)
Within the geographic disclosures in the "Risk profile" section (pages 41 to 43) and the 'Capital" section (pages 60) of the "Risk and Capital review" Loans and Advances to Customers and Risk Weighted Assets are reported based on the financial booking location

This information is provided by RNS The company news service from the London Stock Exchange
END
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Standard Chartered PLC — Audit Report / Information 2014

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National Storage Mechanism

Capital

Capital Summary

CET 1 ratio

Capital movements

Movement in total capital 2014

Movements in risk-weighted assets

Market risk

Operational risk

Risk-weighted assets by business

CRD IV 2014

Basel II 2013

Risk-weighted assets by geographic region

Movement in risk-weighted assets

Leverage ratio

Leverage ratio 2014

CET1 Requirements

Capital buffers

Pillar 2

Total Loss Absorbing Capacity (TLAC)

Bank of England Stress Tests

Global Systemically Important Institutions (G-SIIs)

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated balance sheet

Consolidated statement of changes in equity

For the year ended 31 December 2014

Group Consolidated cash flow statement

For the year ended 31 December 2014

Notes to the financial statements

1. Basis of preparation

Accounting standards effective 1 January 2014

New accounting standards in issue but not yet effective

2. Segmental Information

Performance by client segment

2014

2013

Performance by geographic regions and key countries

Entity-wide information

2014

2013

Performance by geographic regions and key countries

Entity-wide information

2014

2013

2. Segmental Information continued

Deposits structure by geographic regions and key countries

2014

2013

3. Net trading income

4. Other operating income

5. Operating expenses

5. Operating expenses continued

General administrative expenses

6. Depreciation and amortisation

7. Impairment losses on loans and advances and other credit risk provisions

8. Other impairment

9.# Taxation Analysis

of taxation charge in the year:

10. Dividends

Ordinary equity shares

10. Dividends continued

Preference shares

11. Earnings per ordinary share

12. Financial instruments

Classification

12. Financial instruments continued

Classification continued

Liabilities at fair value

Liabilities## 12. Financial instruments continued

Classification

Liabilities at fair value

Liabilities at fair value

Valuation of financial instruments

12. Financial instruments continued

Liabilities

Liabilities

Standard Chartered PLC Audit Report / Information 2014