STANDARD CHARTERED PLC (02888) May 2026 Investor Update Transcript

Across the global economy, change is accelerating. A multipolar future is forming. Financial systems are evolving. Digital transformation is redefining productivity and client expectations. At the same time, demand for energy, infrastructure and resources is challenging the necessary transition to a more sustainable future. Global supply chains are shifting, new centres of growth are emerging, and the corridors of global trade and investment, the ones we call home, are more important than ever. These forces are reshaping client needs and their expectation of us. At Standard Chartered, we are a super connector, trusted to solve complex cross-border challenges. We are a bank that is distinctive, resilient, and built for growth. By doubling down on the corridors we know best, we are driving sustainable growth and stronger returns with the insight, connectivity, and capabilities to help our clients succeed in a more complex world.

Good morning. A very warm welcome to all of you here in Hong Kong. The last time we had one of these overseas investor trips was back in 2023. Some of you partook in it, including our newly minted CFO. Much has changed in the last three years. We've seen significant changes, structural changes, and shifts in the way flows are being wired and configured, whether they're in trade, supply chain, investment, FDI capital, in wealth flows, in currency mixes, all accelerated also by the advent and acceleration of digital transformation. Now, we're here in Hong Kong. Hong Kong has been very active over the last few years in this whole reconfiguration process. The industry is actually very, very vibrant, Whether you look at the IPO market, debt issuances are hitting record levels, sustainability angles. If you think about insurance sectors, it's really, really writing, underwriting record levels of AP, family offices, wealth, etc. Our own businesses are also delivering consecutive years of record performance. Obviously, the question in your head is, is this going to be just a flash in the pan or something structural? And perhaps this is something that you can judge yourself over the next couple of days by being here. Now, we're here in what we call One Causeway Bay, which is our seventh and newest wealth and priority banking, sorry, priority private wealth center in Hong Kong. So we have pioneered this, and we now have the broadest network of its kind. and you're experiencing it firsthand because this is not quite open yet. This will be open next month. Now, if you look that direction, just 30 kilometers, you will be, sorry, you can't see it because it's blocked by the mountains and whatnot, but 30 kilometers this way would be the China border. If you take the high-speed rail, it takes less than 15 minutes. On this end, literally 300 meters will be where the world's highest level of average rent per square foot. It's higher than New Bond, higher than Upper Fifth. So this is where mainland Chinese all love to come to stay, to eat, to shop, and increasingly to do banking and do their wealth. And that's why we're set up here. Now, if you look just right down, we'll get to do the coffee break, right down, that is actually where the first plot of public land was auctioned and sold in hong kong in 1860 and since then every day there's a firing of the noonday gun okay that has been a history marking time uh you might hear a bang at around noontime but that's also part of the tradition of hong kong now obviously you hear also the primary focus also for us to deliver you with our new three-year plan because we achieved our previous one ahead of time. So part of the process is also for us to share with you our aspirations and what we would like you to measure us against and hold us to in the foreseeable three years. So hopefully our objective for the two days is very, very simple, to share with you what we believe are durable and structural trends and opportunities that continue that we will face and how the bank is going to position ourselves against these opportunities. So I'm going to run very quickly with you with the agenda here. So Bill and Madison will cover these next chapter, three-year plans, financial targets, followed by Noel and Tanoosh, which go through the transformation agenda, followed by business updates via Roberto and Judy. And then we're going to have a very, very quick speed date breakout session, just to give you a sense of experience of some of the aspects we're doing on the ground here. And then we're going to have drinks and dinner on the opposite side of the harbour at M+, which is a West Kowloon cultural district. This is the world's most ambitious art and cultural centre, covering 40 hectares. And we're going to be taking, this is an underpass here, we can take a boat here, just a 15-minute boat right over there. If you're seasick or worried about that, there's a shuttle bus option, both towing and froing from that venue. And the next day, we will actually have, to start off, our central banker, chief executive of HKMA, to cover what's on his mind in terms of policies and what are his priorities for Hong Kong's financial services, covered by a bit of deep dive with myself and Gene and Mary, really going through the structural themes that Bill will be sharing shortly. and then we're going to have some fireside chat with clients just for you to get a sense of what is on their mind in terms of their priorities for their individual corporates followed by digital assets, what we're doing around there. So this is really the kind of next couple of days and hopefully there's enough time through presentations and more importantly through interactions because most of the insights may actually come outside of slides.

So wishing you a very, very fruitful next couple of days. with that i'm going to hand over to bill well thanks very much ben thanks uh ben mary as always for the great hospitality in hong kong sorry about the weather uh i hope we get a chance to to actually observe what's out there uh if you go into your pockets and you pull out your your standard charter issued bank notes 20 50 100 500 put them together you'll see the profile of the mountain range out there with lion's rock which is which is the local benchmark uh and uh if we get a sunny day later today, you'll be able to see it out there. If you don't, then you can just go into your pockets, take out your bank notes, leave them on the desk when you leave, and that will have been your small contribution to our event. We are super excited about what we're going to do here today. And before we get into the cut and thrust, I just wanted to hit a couple of things that we hope you take away from this, because it will resonate throughout each of the discussions that we have, we hope. First, that standard chartered, wherever we've come from, and we're going to spend a little bit of time on how we got to where we are, is a growth company. We're growing at a really good pace. We're growing, leveraging key competitive advantages that we've cultivated for some time. We've been investing into those. We focus our strategy on those growth opportunities, and we would like that to come through a little bit more clearly. Of course, you see it in financial targets getting to 18% return on tangible equity by 2030, obviously we have to grow to get there. But we want to explain how we're going to grow, why we're so confident that we can deliver that, and what's structural and differentiated about our bank. Second, we want to underscore the degree to which we have shifted our business mix very much with that growth and exploitation of those competitive advantages in mind. We're a very different bank today than we were five years ago or 10 years ago. We may continue to be a different bank going forward, but anchored in a set of very consistent strategic themes and areas of thematic change in financial markets that we've been focused on for some time. We want to share that with you and put that into the context of our business. And third, we'd like to build your confidence in the same way that our confidence has been built, that our consistent track record over now a good period of time positions us very well to deliver on the rest of the plan that we're talking about. So those are just three sort of high-level thematic things that I want to call out up front, and hopefully we'll be able to point to what's really going on to support each of those statements as we go through the next couple of days. So a few high-level thematic issues. First is, you'll hear the term super connector a lot. You saw it in the video. You heard it from Ben. You'll hear it from others. What we mean by that is that we have a network which is unique. Other people have networks. It's just ours is our network. It happens to be anchored in the fastest-growing markets of the world, connecting those to all of the major economic centers of the world with really good underlying financial infrastructure and products that are supporting that. That super connector role is at the heart of what Standard Chartered does. It leaves us saying that our network is our home market. Of course, we have a home market right here in Hong Kong, in Singapore, in London, in Dubai, etc. But the real home for us is our network, and we are the super connector. We're going to talk about the strategic growth drivers in just a few moments. We've identified five that I outlined back in our annual report, but we'll dig in on that. And I think you'll see those underlying driver themes present throughout the presentations because everything that we're doing, one way or the other, is either anchored in or heavily influenced by those key themes. Needless to say, we think we're very well positioned for those themes. We've got very clear plans to take the substantial investments with our shareholder dollars over years into our core infrastructure and into our products and services built off those core infrastructures to become an increasingly more productive bank. So you see that in terms of outcomes of financial guidance, which you've already seen, cost-to-income ratio is at 57%, et cetera. But we want you to understand a little bit better what we've done to get here in terms of being able to be increasingly more productive from here. And, of course, we'll set out those plans. And this is what's going to drive our growth. This is what's going to allow us to achieve what we think are probably supernormal growth rates and supernormal returns off a super-differentiated franchise that has a very long history, very strong underlying brand but now you know we're here sitting here in 2026 and we see a future that's that's super exciting we're not going to spend a lot of time on history and I don't know why we started in 2015 it's some sort of a fluky coincidence but you know in 2015 the certainly when I joined the bank the assessment I made as best I could was that this was a super franchise that had made some mistakes and fallen on some hard times and that we could to rectify the mistakes and the franchise could flourish. As you can see, we kind of split the history very, very broadly into three groupings. The reposition phase, you could call it cleanup, which was getting the balance sheet in place, but in many ways introducing the disciplines that had allowed us to stray with the super franchise into some not good areas at all. It took a while. We repositioned a lot. We took a lot of the income out of the bank in doing that. It was low-returning income, but it was income, so it looked like the bank wasn't growing. Actually, the things that mattered and the things that we're doing today were growing quite nicely, but it was obfuscated by that cleanup phase. We then moved into the execute phase. So we were clean. We were ready to go. We were investing in the growth engines. There was still quite a bit, in fact, of capital reallocation. You could call it reducing suboptimal risk-weighted assets, things like that, that continued to suppress the top line, but led to this steady improvement in returns. We now think we're in the compounding phase. The bank infrastructure is good. The core products and services are good. The strategic positioning is good. The areas of focus and the markets on which we're focused are good. And we think we can now compound. And by the way, the economic backdrop is good. We can talk about what could take that off track. We think that at this point we can compound. And ultimately, compounding is what it's about. This is how we think we can get to 15% return above that by 2028 and then continue to grow to around 18% in 2030. That's not where we stop. But we will focus increasingly on how we generate maximum shareholder value. You could say we could anchor that in measures of EVA, where ROT will become one measure that we look at. But the generation of EVA, by getting an extraordinary return on capital that we deploy, will become increasingly important during that period as well. That's for the future. We think we have a distinctive growth offering today. We are a scale player. I remember when I joined the bank 11 years or so ago, the number of times people, one of whom may be sitting in the front row right now, said, you're just not fully scaled. How can you compete against local banks here or global behemoths there? like that one global behemoth that you used to work for, you know, who's got a gajillion dollar tech budget, you know, how can you compete? The answer is, of course, I didn't have the answer when I joined the bank, but when I looked in, I said, you know, what we do, one, we do it well, and two, we're very scaled. You know, to be the number two transaction bank in Asia, to be the number two global trade bank, period, to be the number three wealth manager in Asia with the fastest growth, right? It's not just that we've got the size. we're also outperforming in terms of growth how can that be for a bank that's not the same size as as others uh with whom we compete it comes through focus it comes through focus it comes through and you'll hear noel and tanuish talk about this quite a bit the fact that we've converged onto technology platforms that are almost uniquely uniform for a global bank across the world which allow us to actually be more effective in these areas where scale is important that's led to network income growth. It's led to the measures of network income and affluent income within CIB and WRB that are improving in a way that obviously is continuing to improve returns. But our cross-border affluent strategy, where we have scale and the things that matter, is what will allow us to continue to exploit our competitive differentiation. We're also quite diversified, not because we chose to be diversified. I'm one of these corporate finance theoretical people who thinks that diversification in its own right is not so valuable. We have a diverse combination, whether it's by income type, interest income, non-interest income, whether it's by geography, whether it's by the product type, we're quite dispersed. Why? Because our customers are highly sophisticated. Whether they're cross-border multinational corporations or governments or financial institutions or affluent individuals, they're sophisticated, they have multiple and deep and sophisticated banking needs, and we've met those needs over generations in many cases, which has led to a dispersed business model, which is somewhat differentiated. It's also diverse, which is helpful because there are cycles that move in different ways, and I think this builds a resilience together with our much stronger balance sheet, and we'll talk about that in some detail. This allows us to continue this growth at a supernormal rate. Now, these five themes you'll see sort of weaving throughout the sessions that we have. I covered these in the annual report in a little bit more detail if you want to go back for reference. But we took a step back as a team and we said, what are the thematic areas of change in financial markets that are relevant for us? Are we positioned for these? If not, what are we going to do to address that? This just didn't come up in February of 2026. We've been working on these for years, but we thought it was helpful to put this down into a single schematic and then explore these themes in some detail. I'm going to cover each of these in turn on the following pages in the slide deck, but the emergence of a multipolar, multi-aligned world, we all know what that means. It's a fact. Threat or opportunity, the answer is yes, but we've been investing in being the super connector in a fragmented world, solving the complicated client problems, which is driving our outperformance in network income growth, right? It's nice to talk about themes. where's the money? The money is, you see it. That's what's driving the growth in standard chartered. The digital transformation, this is not, you know, customers want to do their banking online. That's one small part of it. The financial infrastructure is changing fundamentally into digitized money and supporting agentic commerce, all of which is very early stage. We've been investing in this for seven years. It's going to happen. Like, mark my word, it's going to happen. It will happen slower than we think for a little while, and then much faster than we think. We're right at the inflection point, in my opinion. You'll all have your own views. We're positioned for that. This, to us, will be one of our biggest opportunities. Getting it wrong could be one of the biggest threats. Obviously, we think we're well positioned. The changing role of banks in the economy. You know the stats. We'll go into the shift of capital from banks to non-banks. Threat or opportunity? we position ourselves overwhelmingly as a bank that's going to be servicing the non-bank sector. We always have. We will continue to. It's a huge area of growth for us. It's been a big driver of the improvement of our returns. Rising wealth participation, I don't need to tell you here, you know, Ben's comment about the real estate up the road being more expensive than anywhere in the world is a reflection of the fact that this is a very attractive destination for wealth to congregate. And thankfully, we have an extremely strong position to receive and help manage that wealth, as well as Singapore, as well in Dubai and the UK. And we will continue to expand that business. And we'll explore those trends in some detail. And the transition economy, which people aren't talking about as much as they did. We are because we're continuing to grow our sustainable finance income line at a rate that's faster than the rest of the bank. And that's because the clients that we serve are increasingly focused on executing their own transitions. That will accelerate with the disruption in the middle east and higher energy prices so this is not a flash in the pan this is not a political fad or political correctness this is money and and we're doing a a good job by the way the fact that we're doing the right thing in our thought and action leader really helps us to attract good good people and retain them and then when we can make money on top of that nirvana okay looking at these themes uh in turn we're not going to go slavishly go through these slides, but the multi-aligned, multi-polar world, which in our case substantially means very strong anchor in Hong Kong and China, very strong anchor in the U.S., given our leading position as a U.S. dollar clearer, very strong position in South Asia, ASEAN, Middle East, Africa, and an increasingly strong position with clients in North America and Europe. that's that's our network it is fragmenting at almost every fissure point and makes transaction flows harder on the margin it means makes regulation fragmented which means duplication of underlying services and capabilities we see that the underlying trend is a positive one so asia pacific is becoming an increasing percentage of gdp and global trade we've obviously seen that that China continues to be a major and growing exporter. At the same time, capital controls are actually going down, not going up. So Ben will talk in some detail, and I think quite insightfully, when we get to that session on Thursday, about why the opening up of China in particular we think is inexorable and why it's actually in the Chinese policymakers' interest. How are we positioned for that? Our transaction banking role, our leading role as an RMB bank globally, number one in 20 markets, leading FX and FM cross-border dealing capability, bond connect, stock connect, wealth connect. These are all positions where Standard Chartered is a leader in connecting across the fragmented world to the advantage of ourselves and our shareholders. The digital transformation, we can talk about a couple of things. One is, I will proposition, as I have many times and you've heard me say it, that the blockchain-based settlements are inevitable for much of what happens in financial markets. It's cheaper, ultimately. It's easier. It's more transparent. It's 24-7. It's real time. The underlying money in contracts are programmable. That's all sort of good stuff in and of itself. The game changer and the accelerator of this trend to digitization of money will be AI and agentic commerce. The agentic commerce, meaning agents are executing with agents. That's already happening in many securities markets. Look at Jane Street and Citadel's financial results. That's agentic commerce in writ large. AI enabled, low latency, 24-7 core infrastructure. We can go head-to-head with those guys. We're not making their P&L. That's the next objective, but that would take us well beyond 18% ROT. We are completely focused on serving our customers in the agentic commerce world. We've been investing in this trend for eight years. And, you know, when Alex and I first started talking about investing in digital assets with a market maker and a custodian and a tokenization engine eight, nine years ago, I don't think we had agentic commerce in mind specifically. But we knew that this was a super powerful tool that we had to understand well as a bank. We built capabilities. We built those capabilities in the bank. You can see that we're 20% market share in the minting and burning of USDC. We're the third largest minter and burner. Minting, you know, but minting and burning is the conversion from fiat to digital, digital to fiat through USDC, which is the most consistently used stablecoin in compliance markets. The number one and number two are crypto-native companies. Most stablecoin activity is confined to the crypto world today. We're number three with a 20% share of the conversions because we're the destination for people who are converting from the fiat economy to the digital economy and back again. We could not be better positioned for the next wave of evolution in the digitization of money. The AI tools that we built that Noel and Tanuja are going to talk about in some detail, the infrastructure that we've put in place, which you can't see today, we can just talk about it, that infrastructure is designed for this world. and we will absolutely be a leader in the space as we are today. We know that the migration of capital from banks to non-banks, you can see it in Notional Loan Outstandings, you can see it in the improving RWAs and return on RWAs for us, but also other banks. You can see that in the NII as a proportion of our bank's income, which is a little bit over half, but it has been decreasing consistently and will most likely continue to decrease. Obviously, there's a rate sensitivity component to that. But that aside, the structural trend is clear. We had a financial crisis. Banks were weak going into the financial crisis. Regulators have stepped up their strengthening of banks. Non-banks are not regulated in the same way. That's not a problem, and it's not wrong. They're also not leveraged the way banks are. And if I were the czar of financial system regulation, I would also be aggressively strengthening the banking system and allowing non-banks to take the unlevered risk. Oh, well, that's going to happen. we can either fight it and go to Washington and whinge, or go to London and whinge, or Basel, or we can say, yeah, there's a trend here that we can be part of. We can be the facilitator, given our origination capabilities, given our underlying financial plumbing capabilities. We can be the guys that are shepherding in this new world, making good money, improving returns dramatically while we do that. The wealth participation is clear. Asian wealth, Chinese wealth in particular is still a small proportion of global AUM, but it's growing very fast. And we're extremely well positioned for that. It's not just China. It's ASEAN. It's India and the rest of South Asia. Of course, it's the Middle East, which is going to go through its own set of changes, as we know. But we've matched that underlying growth trend with a set of products, capabilities, partnerships that are differentiated. And Judy and Ray Ang will talk about that. Gene, We'll talk about it in some detail. I don't want to get into too much on this, other than to say we are 100 percent behind this trend and have been for a couple of decades. This one preceded me by quite a bit, but we're definitely into acceleration mode. And full credit to the team for having done that. And sustainable finance and the transition economy, we've not seen a material slowdown in the pace of spend in sustainable infrastructure. That is actually going to increase now with the price of oil at $110 a barrel and the price of a PV cell pretty much unchanged. It's pretty obvious where the incremental power-generating dollars are going to go. And by the way, those PV cells are local. They're not going through the Straits of Hormuz or anywhere else. So I think the underlying economics are very compelling, but the policy objectives are also clear in most parts of the world. In our markets, there's been no pulling back. In China, there's been no pulling back on sustainability investments. In India, South Asia, no pulling back. And we're capitalizing on that with the increasing income. So these measures here are their outcome measures. We focus on the changing role of banks. That has the effect of reducing our NII as a percentage of income, increasing our non-NII as a percentage of income. Obviously, we're growing the non-NII because we're growing wealth. We're growing financial markets. We're growing our fees around our transaction banking services. The non-NII is growing. It's not growing as fast because we're optimizing returns. And increasingly, those RWAs are going into the non-banking sector, where they probably belong. Network income reflects the fact that we've got a distinct position vis-a-vis our sophisticated cross-border clients. They turn to us. It grows faster. Less capital intense. Generates higher returns. Financial institutions, same thing. We've always been a banker's bank. I mean, the correspondent banking is, in a lot of ways, where Standard Chartered started 170 years ago. But we've expanded that sort of deep knowledge of, frankly, the most sophisticated treasury clients in the world are other banks, to the broad range of financial institutions, asset managers, sovereign wealth funds, financial sponsors, et cetera. And then, obviously, affluent we've just talked about. And all of these are significantly improving trends. call them outputs. They are outputs, but they're coming on the back of very deliberate choices that we've made along the way. Our resilience is substantially improved. And I mean, from time to time, none of us are super big at like backpatting ourselves. We'll let you do that at the end of the session. But the, you know, I mean, this is just like a quick snapshot. We've improved our returns from zero or negative to 12% on the way to 15% and 18%. We've done that with doubling our capital position over that period. We've done that while reducing our risk-weighted assets, dramatically improving the quality of our underlying loan book, which of course has led to the improvement in return on risk-weighted assets. If I'd said that 10 years ago, we're going to significantly de-risk the bank, but grow income and dramatically improve returns and profits you would say well that's kind of stupid because that's not banking as we know it but that's that's what the bank has done not because we set out to do it because we just kind of look and talk to clients every day and said you know what do you need and what are you going to pay us for i mean we're quite mercantilist as well you know what are you going to pay us for and so we're not going to pay you for your money because it's undifferentiated we are going to pay you for all these interesting products and services where you're somewhat unique of course we invested heavily in those products and services we invested with your money for which i thank you but we're getting a good return on those investments and we're much more resilient than we are today now menace will talk about this in some detail but as over the past several years obviously when we were going through the the cleanup phase the reposition uh we weren't paying dividends we weren't buying back stock and we were conserving capital to reposition the bank The stock price was quite cheap, in our estimation. As we entertained shareholder returns, we focused on buybacks. We introduced the dividend a little bit later, still skewed to buybacks. We're now sitting with a stock price that's higher than it was. I won't say where it is relative to fair value. We think there's still tremendous value in our stock. We're very happy to buy that stock. We also want to make sure that those shareholders of ours that would like to have a steady dividend see that we will pay out in excess of 30% of our profits in dividends. And that, given our expectations for the company, would cause our dividend to continue to increase a progressive dividend strategy. When we think about what the balance is now going forward of what are we going to do with our capital, the substantial and increasing capital that we're generating, we will continue to invest in our business first and foremost. We're getting a very good return on organic investment in each of the strategic areas in which we focus. We feel like we are fully investing in our strategic areas today, which is why we then turn to returning capital via buybacks or increasing dividend. At the current share price, we would see a rebalancing of the distributions between dividends and buybacks. So we'll talk about roughly a third, a third, a third between organic, buyback, dividend. But, of course, we're going to look at that as a function of the investment opportunities, the share price relative to what we would consider to be fair value, and any changing expectations as it relates to dividends. As I said, Maness, and by the way, congratulations, Maness. Maness, he's been acting like the CFO for some time. So, I mean, sometimes he acts like the CEO. We'll keep him in that box, but that's okay. But no, we couldn't be happier with the team. And congratulations to Tanuj as Chief Operating Officer, who you're going to hear from shortly, and you'll see why. Tanuj is partnered up with Noel doing the session as our Chief Operating Officer. So congratulations to both of them. So productivity is a huge area of focus for us. It has been for some time. We've gone through different phases of focus on productivity, a lot of core infrastructure building in recent years. You've heard me and others talk about the massive investment that we made in financial crime compliance going back 10 or 15 years, 12 years. We have very, very solid compliance infrastructure today. Of course, it always needs to be refreshed. Very substantial investments in cybersecurity. We feel like we're well-positioned. There's zero complacency at Standard Charter Bank about cybersecurity. Mythos, non-mythos, Codex 55, anything. We've invested heavily in migrating our finance infrastructure from Oracle to a private cloud-based SAP platform for both finance and all of our HR applications. SAP considers us to be a poster child for large-scale migrations. You can hear that from them, but it reflects the focus and investment we've made in the bank. We've migrated our data centers in the eastern two-thirds of the world into a highly sophisticated private cloud with geo-resilience, i.e. Hong Kong, Singapore, Dubai. When the drones took out the AWS servers in Dubai, we were able to, and I'm going to steal one of Noel's lines, so adjust your script, but we were able to migrate our entire data estate from Dubai to Singapore in hours, and it continues to be mutually backed up. We had no impact in Dubai, just to be clear, that was precautionary. But we're not on the AWS cloud there. But, I mean, this would have been impossible a year ago, much less five years ago. So we've made those core investments in infrastructure. Now we can build these super productive machines on top of that. And that's exactly what we'll do. You'll hear about that in the transformation session. The income per employee increasing substantially is a result, obviously, of income growth, but also of a fundamentally different infrastructure growing in its cost at a very different pace than has been the case in the past or then certainly relative to revenue. And that's delivering that step change in cost-income ratio. We'll be digging in on this. Manus will, Noel and Tanush will be digging in on this. Plenty of opportunities. I just wanted to hit the high-level thematic. We're 100% focused on becoming a fundamentally more productive organization, and we've made the investments to do that. All of this is going to be enabled by AI. Again, Noel will speak in some detail about where we are in AI. I'm super proud of what our bank has done because we took the step back two years ago to build a core AI platform that's now hosting hundreds of models and use cases, tens of billions of tokens being processed on a very regular basis, done efficiently, safely, and soundly. So everybody stands up and gives a lot of BS, frankly, about AI. You'll probably get some BS from us as well. But fundamentally, this is real. And we're using this. It's making a difference. I think we're extremely well positioned, both for defense and for offense. Now, our transformation through the years has been powered by many, many episodes of innovation. This innovation has happened in SE Ventures, which we focused on specifically for a while. We were calling that out as a specific business line. A lot of the innovation is happening right in the core of the business. And given the core foundations that we built, the innovation machine can accelerate from here, not decelerate. These are just a few of the ventures or other initiatives that we've undertaken, consistent with the five themes that we've talked about. I'll let you peruse those. We have sessions that cover most of this. You can ask some questions about each of those as we go through this. Just restating the financial targets that you've already seen from, no doubt, your quick release this morning. In a way, I'm most excited about the high-teens CAGR for EPS. I think that's fundamentally what should drive recognition of value in a growth company. And I think if we can deliver consistently, as we have, high-teens growth in earnings per share through that combination of earnings growth and share count and management, I just think this is a fabulous growth opportunity, that it is our job to demonstrate to you why that's the case. and why you want to buy these shares. But there's no hype in there. These are just the numbers. The 15%, 18% ROTE we think is a good benchmark. But fundamentally what we want to do is deploy capital where we can get a great return, positive EVA, and to do that increasingly. So as we get into the higher teens ROTE, we probably focus a little bit less on ROTE and a lot more on EVA just to make this bank bigger and bigger and bigger because we've got a super, super franchise. But today's not about EVA. Menas didn't want me to say that at all. Once he's fully feet under the table as CFO, he's going to introduce an EVA framework, which he's going to take credit for, and I'm going to applaud him. With that, we're going to have, you'll see over the course of these sessions, we've actually got five outside perspectives from experts or world-class characters that are related to the five themes that we've got. The first that we've got is Parag Khanna. He'll be known to many of you as an academic and geopolitical commentator, talking about what this fragmentation means for all of us. There will be four others related to the other themes interspersed throughout the sessions. So thank you again for joining us. Thanks for listening to all of us. And please enjoy this video.

I'm Parag Khanna, and this is My Perspective. I believe the Asianization of the world is truly the great mega-trend of the post-Cold War era, of the past three to four decades. When we look back a couple of decades from now, I believe everyone will appreciate this. The rise of China is a component of the rise of Asia, and one of the main drivers of the rise of Asia. But as I always remind people, the story of Asia is much larger than just China. You're now seeing growth rates in what I call the third or fourth wave of Asian growth economies. South Asia in particular, India, Southeast Asian countries, whether it is Vietnam, Indonesia, Thailand and others, being higher than China's growth rate at the moment. So part of what's driving Asianization is, of course, that the world is looking to Asia not just as a place to produce, but also a place to sell. But there's also a calibration that's happening as China, India, and other Asian powers reach out across the Indian Ocean to Africa, to West Asian countries, to Europe, to Latin America, and use that playbook to build Asia-centric rules and institutions. We see this happening in trade, where the largest zone of trade growth in the world is indeed the Indian Ocean. Scholars call it Afro-Eurasia. The Afro-Eurasian system is truly the epicenter of global trade. and we see it with infrastructure investment and other means. The interrelated conflicts in the Middle East, whether it is the Israel-Gaza war or the current Iran war, and tensions and conflicts that date back several decades, has been a zone of turbulence, and it affects and has ripple effects around the world because of its central geography. The current conflagration has reminded us of how connected the world fundamentally is because of the shocks that we're experiencing in everything from fossil fuels, fertilizers, disruption of trade routes for the flow of goods. So it's a reminder, of course, that globalization is in fact thriving. As I like to say, even the supply chain has a supply chain because if you remain dependent on long distance, just-in-time, far-flung, vulnerable supply chains, you don't really have control over your fundamental resource dependencies and trade networks. Our global system is ever more organized according to infrastructure and supply chains. And infrastructure and supply chains fundamentally underpin global capitalism, the world economy, and commercial exchange as we know it. We couldn't have this pace of global trade if we did not have that fundamental underpinning of rapidly advancing, all-encompassing, globe-straddling infrastructure and supply chains.

Hello, everybody, and welcome to Hong Kong. I am delighted to say that I know most of you in the room already. But for those online who are less familiar, my name is Manus. And for the avoidance of doubt, I am not Manus, the AI agent, which appears to have appropriated my unusual Irish name, and nor has Meta tried to invest $2 billion in me recently. I am, in fact, the head of investor relations at Standard Chartered, and for the last 24 hours, the interim CFO. I joined the bank a couple of years ago and I have been looking at the bank for a very long time because I was a sell side analyst previously and so I have seen standard charted through many different cycles and I can genuinely say that this is an extremely exciting time to be taking on this role. It's exciting because of the foundations that we have built. Those are foundations in terms of client relationships, foundations in terms of our core technology and foundations in terms of our strategy. And it is because of the strength of those foundations that we are now ready to enter into a phase of acceleration against the backdrop of those trends that Bill has talked about. but before we get into the future let's just look a little bit about those three phases that Bill talked about already reposition execute and compound back in 2015 the bank had to go through a significant period of repositioning and restructuring as it removed a number of high risk assets from the balance sheet and that meant that for a period of time both income and costs were broadly flat. By 2019 the bank was ready to grow again and to distribute capital again. In fact we'd initiated a share buyback at that time but of course just as we got going COVID hit which slowed our momentum in particular had an impact on net interest income. Coming out of COVID growth has accelerated but the important thing to understand is that that acceleration in growth has not just been because markets have been conducive it's been the direct result of the foundations that we have put in place over time. And we are now poised to continue that and to compound that growth going forwards. Let's look at the last couple of years in a bit more detail. Back in February 24, we laid out a three-year plan. And I'm delighted to say that we're able to deliver on that three-year plan in two years. We managed to deliver revenue growth of 16 percent which exceeded our three-year growth targets within two years we delivered positive income to cost jaws over that time frame we delivered an underlying return on tangible equity of 14.7 percent which well exceeded the 13 percent we were targeting and which itself had already been upgraded and we were able to distribute capital but not only did we do well. We did well relative to peers, we think, as well. We showed the best roti improvement amongst our peers over that time frame. We showed the strongest income growth, and we had exceptional EPS growth and TNAV per share growth as well. Those latter two were powered by a 15% reduction in our share count over that period, and that was enabled by the over 9 billion of capital distributions that we've announced since February 24. That nine billion, just to take a pause on it, represented 45% of the market capitalization of the bank when we announced it. But I know you know these numbers already. There's also an awful lot that's been going on beneath the surface during the course of that last couple of years. We have fundamentally been engaged in a transformation of the core of our bank, and you will hear more about that through the course of today. We have changed our organisational design and made our processes significantly simpler across the bank. And I think, I hope, we now present the bank to you in a way which is easier for you to understand and on a reported basis more accurately represents the banks that you own as shareholders. So let's look at the financial targets. Bill has already mentioned the ROTI and the EPS targets. I'm going to spend time talking to you about the building blocks to get there. First of all, we will deliver a CAGR in our income of 5% to 7%. That will be driven both by the macro trends, but also, importantly, by the investments that we've made to take advantage of those trends. We will deliver a cost-to-income ratio of 57% in 2028. That is down from 63% last year. We continue to expect our loan loss rate through the cycle to be 30 to 35 basis points, and we will operate across our CET1 ratio range of 13 to 14%. And lastly, we will deliver a dividend payout ratio of at least 30%, which will lead to a progressive dividend per share over the course of the plan. combined those are the factors which are going to take us to a greater than 15% roti in 28 and to a high teens EPS CAGR over the course of that period so how does that look in terms of our roti walk well I've given you two separate ways to think about the roti walk here the first is a more simple P&L view put simply we're going to grow revenues more quickly than we grow our expenses and that's because we believe we have powerful top-line trends and we are investing to ensure that we can scale our revenues at lower marginal cost, a topic we'll come back to frequently. This will be offset by an assumption that there will be some normalization of impairment if our impairment moves back to the 30 to 35 basis point range which we see is through the cycle. We delivered 19 basis points of impairment last year. For the avoidance of doubt, we're not seeing any new risks on the balance sheet at the moment but 30 to 35 basis points is the assumption for planning purposes and we will see a small uplift from operating dynamically across the quarter the CET1 ratio range but I think more interesting and that I'm going to spend more time on is the second part of this roti walk because really what drives this roti improvement is a mixed shift in our business we are going to continue to see our wrb business our retail business move towards the affluent space and our cab business will continue to see its growth being driven by the network and by financial institutions clients and combined those two factors will drive an uplift in roti of almost 400 basis points over the course of this period so let's take a look at that mixed shift in a bit more detail. You know about our CIB and WRB businesses because we've had investor seminars on them over the course of the last 18 months. In CIB, we are expecting our revenues to move from 54% financial institutions to 60% over the medium term. Our network income will move from about two-thirds of income to 70% of income by 28. And in WRB, our affluent business will move from 70% to 75% between last year and 2028. Those are the mixed shifts we're seeing, and they have a number of important impacts which will drive our returns higher going forwards. Firstly, moving into these businesses means we are moving into businesses which are higher income return on risk-weighted assets. So, within CIB, our network income and our financial institution, FI business, are both about 200 basis points higher in terms of income rower than the domestic business and the corporate business, respectively. And within WRB, our affluent business is much higher return on risk-weighted assets than our non-affluent business. But this is about more than just a more efficient use of capital from that mixed shift. Moving ourselves into those customer segments also allows us to move into much better areas of growth, which really tap into the areas that Bill has talked about already and which you will hear plenty about during the course of today. We also think that by moving into those areas, the customers that we serve will be stickier, and they'll be stickier because they tend to bank with us across different geographies and because they take multiple products from us. So it's a higher growth, stickier customer base that we're moving into. And the great thing is, we have already invested in the platforms which are allowing us to deliver that growth. So we expect to see strong operating leverage by focusing on those customer segments, which we know well. And lastly, we think that that mixed shift will lead us to a lower risk profile as a bank overall, which I'll come back to discuss in more detail later. and we think it will drive higher connectivity between our affluent client base and CIB. It's not just about a revenue mix shift, though. There is also a shift that we expect in the balance sheet as a result of our business moving. Put simply, we are seeing an increasing surplus in our WRB business as it generates cheaper liabilities. The cheapest form of funding we have comes from WRB, our CASA liabilities in WRB. And we are continuing to generate a surplus of liabilities, i.e. there's more deposits than ways to deploy them at the moment in WRB. And within CIB, lower cost, higher quality deposits in our CASA base there, the operating accounts, are also continuing to grow very effectively. What that means is two things. First of all, of course, it means a lower cost of funding going forwards. But secondly, by having those high-quality liabilities, we have options for deployment of those liabilities into different areas of the balance sheet, be that into the banking book or into the trading book. Now, that means that the treasury portion of our balance sheet, which has already fallen in recent years, is likely to continue to fall. And that's important because we estimate that going forwards, it will generate about a 50 basis point uplift to our roti through the course of the plan. Now, that 50 basis points, to be clear, is already embedded in the relative walks that I've given you, so it's not incremental. But I thought it was very important to highlight it to you because it is very fundamental to what we are doing as an institution. It's something that we've seen over recent years. It's something that we think is durable and will continue over the course of this plan, and we think it will carry on for the future, driving the synergies between our WRB business and our CIB business on the balance sheet as well as operationally. Let's look at the revenues in a bit more detail. We've grown revenues by 16%, as I said, over the last couple of years. And that's despite NII headwinds because of the rate environment. Rates have really affected the blue bits of this chart. So our transaction services business has seen good growth in operating accounts and good growth in fee income, but it's had NIM headwinds, which means it's gone backwards for the last couple of years in revenue terms. Similarly, our deposit and mortgage business within WRB has been broadly flat largely as a result of net interest margin headwinds the real drivers of growth have been coming from what we call our engines of non-interest income growth our global banking business which has grown at 13 percent compound adjusting for our aviation finance business our global markets business which has grown at 12 percent compound and our wealth solutions business which has grown at a fantastic 26 percent compound and together those non-interest income engines have meant that we have managed to grow our non-interest income by a 13% compound rate over the course of the last couple of years. And that is what we expect to continue going forward. So we are expecting growth of 5% to 7% compound over the next three years. Within that, we think that non-interest income will continue to grow faster than net interest income. We already generate 47 percent of our income from non-interest income which is higher than peers and because of that momentum that we're seeing we expect that to move to north of 50 percent by 2028 well higher than peers it is a unique feature of standard chartered that we are able to continue that growth and something which we think is critical to the future for the bank for the avoidance of doubt we're not changing our net interest income guidance for 2026 we continue to expect 2026 NII to be broadly flat on 2025 but we do expect some modest growth in net interest income thereafter now turning to expenses we've talked a lot about revenues but we know that we have structural inefficiencies in the bank which we need to address we have invested including through OFFG in efficiency programs which have allowed us to keep our back office costs broadly flat over the course of the last couple of years. We know that we now need to ensure that we can deliver improved efficiency for you going forwards without asking for any additional large below the line charges and that is the commitment that we're going to make for you today. We know that our operations and functions continue to benchmark somewhat less efficient than peers. And you're going to hear later today from Noel and Tanuj about all the efforts that we are making to ensure that our bank becomes simpler, more connected and faster to drive better efficiency going forward. Because the outcome for you as shareholders is clear. We're going to move from a cost-to-income ratio of 63% to 57% over the course of this plan, and we will deliver positive income to cost draws in each year during the course of the plan. We will also ensure that the revenue productivity of our employee base continues to improve, and that will be enabled partly through a rationalisation of our operations. We are a bank that is investing to grow. We have tremendous opportunities and we will continue to invest to grow. But I know that there are still inefficiencies in this organisation which we need to address. Our challenge now is to move to a process of continuous improvement to ensure that not only do we grow the top line each year, but that we also improve efficiency and returns each year. And that is what we're aiming to deliver. Let me be clear. We know and we are committed to ensure that the top-line growth that the bank is going to deliver over the next few years will deliver the maximum possible profitability for shareholders. Let's look a bit at risk now. Now, I talked before about how the business model is moving us into lower-risk customer segments, and I think that is really fundamental to what we're doing. This is not just about taking individual underwriting decisions differently. This is about an entire shift in the way that we think about the business. But let's look at it in numbers first of all. So within our CIB business, you probably know already that the investment grade proportion of our exposures has moved from 42% to 74% over the course of the last decade. And even in more recent years, if we look at the probability of default within our corporate book, It's continued to fall, this is based on Pillar 3 data, it's continued to fall quite sharply in recent years, and we think it now benchmarks very well versus peers, and we're very pleased with that. Within WRB, we have been moving to focus on affluent clients for some time, and that has enabled us to exit certain single product, unsecured relationships with customers, which means that the proportion of unsecured balances on the WRB balance sheet have moved from 19% to 12%, a 7 percentage point drop over the course of the last decade. So again, moving us to a lower risk place. Now, having said that, the world is an uncertain place and we are very happy to continue to guide to an expected through the cycle loan loss rate of 30 to 35 basis points. But we fundamentally believe that the mixed shift that I talked about previously will not only drive better income to return on risk-weighted assets, but will also drive us into a lower-risk business model that is enduring. Let's talk about the balance sheet and capital. We have maintained a very strong balance sheet over the course of the last decade, and we certainly intend to maintain that position going forwards. we have a ct1 ratio target range of 13 to 14 percent and we've tended to operate if you look back at the last seven years at the upper end or even above that range indeed at q1 2026 we had a ct1 ratio of 13.4 percent and that gives you an indication of where we expect to operate going forwards we will now operate dynamically across the range such that, on average, you should assume we'll be at the midpoint of the range. We are a very capital-generated bank, and we have generated more than 330 basis points of capital since 2023. And if you look at the uses of that capital in the last couple of years, we've retained about 25% and distributed about three-quarters of that capital to shareholders via dividends and share buybacks. Going forwards, we expect to generate more capital because we're going to be a more profitable institution. And very broadly speaking, you should assume that the uses of that capital will be about a third for RWA growth, a third for dividends, and a third will be available capital, including for buybacks. Let's look at that framework in a little bit more detail. Our first use of capital, as Bill mentioned, will be to support our business growth. We expect to grow the top line, as I've said, between 5% and 7%, and we expect our average risk-weighted assets to grow less than that. In other words, we are expecting our income return on risk-weighted assets to improve over the course of the plan. Secondly, as I've mentioned, we will deliver a dividend payout ratio of at least 30% with a progressive dividend per share. We believe after those two uses of capital, we will continue to have significant available capital for us. The first and most likely use of that capital will be for share buybacks. Because as Bill said, we continue to think that our shares represent exceptional value at these levels. However, we need to be aware as well that we operate in markets which offer us growth opportunities which we think many of our peer set do not have. And therefore, if we are able to find opportunities to deploy our capital in a way which both drives income growth above that 5% to 7% expectation and meets our income return on risk-weighted asset hurdles, we will consider that as an option. Lastly, we will continue to consider inorganic growth opportunities, but these will always be in line with our strategy. and for the avoidance of any doubt there is nothing included in the plan for inorganic growth and we don't have anything that we are planning at the moment and there's nothing on the table for that the guiding principle of our capital allocation is actually relatively straightforward we will allocate capital in order to drive the maximum economic value for our shareholders so So let me summarise what we have been saying, both Bill and I, during the course of today. We're going to deliver a roti in 2028 of over 15%. What's going to take us from that 12% level we did last year up to 15% is income growth driven by some strong structural trends supplemented by the investments that we've made in core areas. We are shifting our business mix into areas which enable us to access that growth and deliver higher returns at the same time. Because of the work that we have done on transforming the core of the bank and will continue to do, we're going to be able to scale at a lower marginal cost. So we will see strong operating leverage during the course of the plan. We will maintain tight discipline on risk, we will maintain a strong balance sheet And, of course, we will continue to distribute excess capital to shareholders. All of those factors can take us from 12 to north of 15 in 2028. But, importantly, all of those factors continue past 2028. And it is exactly the continuation of those factors that we have enormous confidence in and which will take us to an 18% roti in 2030. We've repositioned the bank. We've been executing very strongly against the plan. and we're now excited to be entering into a phase of compounding growth. Thank you. With that, Bill and I are happy to take some of your questions.

Let's get ready. Just a reminder that if you're asking a question, please wait for the microphone to come to you and speak really clearly so that everyone on the webcast can hear what you're saying. Thank you.

Good morning. Jason Napier from UBS. Thank you for having us here in Hong Kong and thank you for taking our questions. First of all, to Manus and on behalf of the South Side, congratulations. Thank you. There's certainly hope for us. Manus, first question for you. On the capital allocation piece that you were just describing, RWA growth is going to be a big focus, right? So you've mentioned that about a third of capital generation goes to RWA growth. But then in the third bucket, you've also got RWA growth. And a lot of the income growth is balance sheet light. So if you could be a little bit more precise about what you think, maybe your footprint demands or some other way to add color and RWA outlook. And then, Bill, for you, please, like really clear sort of analytical framework for the way you think the world is moving. You use words like inevitable and inexorable. Could you talk about what that means for the balance between income growth and cost growth? You want to be ahead of everything. You want to be in the right places and invest it appropriately. How do you balance those sort of factors in the delivery of JAWS over the next three years and indeed over the next four?

Let me start with the second question and then make a little bit of a tee-up question on the RWA comment. And I know you directed that one to Madison appropriately. Yeah, we do have a – I mean, analytical framework sounds a bit rigid, but I think we identified – I mean, we're going back years, some underlying trends. And we have been investing in that. We also understood, and you'll hear a lot about this from Noel and Tanuj, that we needed to invest in our underlying infrastructure. If you're trying to optimize ROTE in the coming year, those aren't investments that you make. But we have. And certainly during that repositioning period when income was flat-ish and costs were flat-ish, both down 1% per minute to slide. We definitely could have cut costs faster at the expense of the future, and we definitely could have flattered income by not exiting those sub-optimal RWAs, which would have had the unfortunate effect of not having that nice upward sloping ROTE line over that period. Maybe out of naivete, maybe out of confidence, maybe just because it's the right thing to do, we've been investing in the future all the way through. we're not going to stop now. Now we've got a more balanced payoff. The things that we've been investing in are paying off. So it gets to a 12% underlying, 11.9, ROTE on the way to 15 and 18. Obviously, a chunk of that also reflects stepped-up investment and fit for growth and other things. But we're not going to stop investing in the future. We are going to see an increasing amount of the fruits of our earlier labor flow to improving ROTE and EVA, which then takes me very quickly to RWA's. Our RWA's have decreased significantly, but our balance sheet is more or less the same, i.e. density has decreased. So we're finding very attractive ways to use our balance sheet in a higher returning way. What we've always been focused on is returns, so optimized returns. Of course, we have an eye to client franchise, and having gone through these RWA optimization efforts at other banks, I mean, several of them, they were all called JP Morgan, but we kept on going through the same thing with different owners. You can go too fast. You can also go too slow. And then you can get it just right. And only time will tell whether we got it just right, but it feels pretty good to us in terms of pacing. A little bit slower than one might have liked. Might explain why our share price went no place for the better part of five years. But we're definitely ending up in a good place. and, as the saying goes, all's well that ends well. Not that we're done.

Yeah, it's not ended, Bill. It's just beginning. So, Jason, on the capital allocation framework, just to clarify, we're expecting 5% to 7% revenue growth. And what I was saying on stage was that our RWA growth within our base case will be below that 5% to 7%. That's what will drive the improvement in return on risk-weighted assets. I was also saying that over the course of this time frame, it is possible that there will be opportunities to deploy capital which will take us above that five to seven percent if it can take us above that five to seven percent and if it meets our income return on risk weighted asset hurdles we will consider it but just for the avoidance of doubt that gray bar that you saw the available capital our planning assumption is that that will be delivered back by share buybacks that's what we built into the model we are not assuming any incremental rwa growth we are simply retaining the ability to commit to that rwa growth if it is EVA generative, and if it is the right thing to do for shareholders.

Let's go to Kunpeng, and then...

Thank you. Thank you for your second, Manus. This is Kunpeng of China Securities. Congratulations for this very strong guidance, and thank you so much for the very nice presentations just now. I also have two questions. First, for Manus, and I'm so happy to see the exact numbers of the royalty contribution from the two core businesses, CIB and WRB, but can you give us a little bit more colour on the exact product categories or income categories of these relative contributions of these two businesses. And the second is for Bill, because this question is a bit rough, so I have to put it the second. So as we have the guidance till 2030, so does this mean you're going to stay with us for the next four and a half years? Thank you.

Let's go minutes first. I'll think about that. I'll think about that second question because it hadn't occurred to me that that might come up.

So thank you, Kumpeng, for the question. So look, we don't give roti by product. I know some of you have asked for that in the past. It is complex to give roti by product because the reality is that we look at our roti on a client basis and on a full relationship basis. So looking by product is not right. Hopefully, what you'll be able to take away from the presentation is that if you look at our CIB business, It, like the rest of the group, will see its growth driven more likely by the engines of non-interest income. So we would expect the banking business, the markets business to continue to grow more quickly. You've seen the good growth there. We think that will continue. And of course, within WRB, we expect to see our wealth business continue to grow at a double digit rate, as you'll hear from Judy a bit later on. But those are the trends that both underlie the group. They underlie the improvement in ROTI within those divisions, and they're what we're comfortable in going forwards. I would just caveat that because I'm now a CFO and I need to caveat things, but it is based on the current interest rate outlook. So we're using current curves for that. Of course, that could vary.

To your second question, Kumbeng, am I going to be around to deliver this plan? Let me say what I'm going to do for sure. None of us can control perfectly our destiny from day to day. Number one is we're going to take the team that you're going to see today and on Thursday and that you're seeing from time to time and continue to strengthen that as a team. I think where we are right now, this is obviously my personal opinion, but where we are right now, especially with the addition of Manus as a CFO, it's the best team that I've had the pleasure of working with in standard chartered. I'm not saying that everyone is better than somebody else. I'm saying that as a team, it's exceptionally capable. And this team, to different degrees, has been driving the improvement that we've had. I want to really lock that down. Second is the delivery of this strategy. So there's no major step change in the strategy that we're laying out in these three days. What we're doing is taking a step back and saying the direction of travel that we've been undertaking and enjoying will carry on, but with the need for very, very significant ongoing modifications, in particular as the state of the world changes. those external conditions. And we think the strategy is quite clear. It's working for us. Really want to bed this down and make sure that we're in an excellent position to deliver that 18% in 2030. I can tell you, in 2030, if we're generating 18%, I'm not going to be doing high fives with the team. I don't think that that's the potential of this bank. But I'm not allowed to say that because the slide says 18% by around, 18% by 2030. But this potential of this bank is far greater. I want to do everything that I can to make sure we land that. And we have, obviously, new members of the team, not least Manus, that I want to make sure are completely bedded down. The final thing is I would really like, when it's time for me to hang up the spurs or get my spurs hung up, that the next CEO comes from inside standard chartered. I can't control that. It won't be my choice. All I can do is prepare the team to the greatest extent possible, giving people the best opportunities. I think we have that talent inside our bank. The board will always, when they come to that, review the external marketplace, as we did for CFO, which is why we only announced this yesterday, whatever we might have thought the outcome was likely to be. But I'm not taking anything away from what I think the board will do. But those are my objectives. Now, can I get that done in six months? Definitely not. Do I need 10 years? Definitely not. Someplace in between. Actually, Chris, you had a...

Thank you. Chris Hallam from Goldman Sachs. It feels like just one question. It feels as though perhaps the core message so far is you're sort of, in this event, asking shareholders to entrust you with a license to redeploy additional capital into some growth opportunities as and when they may become available. I suppose you kind of saw that already in Q1, and that would naturally cause a pivot in the way that capital is distributed versus invested. With that in mind, it sort of begs the question, how big is the growth runway you can see? And perhaps more importantly, as you get to 2030, you've got the 18% target. When does that become a question of what you could do versus what you should do? Because you, the leadership team, and the board need to think about, you know, do we keep going and try and maximizing returns? Or is there a broadening of the product suites? Is there EVA opportunities that are maybe 17.5%, not 20%? So where do you try and balance that RIT maximization versus what's right for the five-year forward of the business come 2030?

Yeah, it's an excellent question. and it is definitely the framework that we're considering, we're already making ROTE versus EVA trade-off decisions. We've got a wealth business with a super-strong ROTE. It could go further and further. If there are opportunities to deploy capital around that opportunity to generate meaningful EVA that may not take the ROTE from 35% to 45%, that's still good for shareholders. The mindset is already there. in terms of the incremental decisions that we're taking. I think you're asking, at what point does that sort of flip the center of focus for the entire group? We'll get there, right? And we'll be watching that very carefully. I think we've executed in a very disciplined way, and we will continue to execute in a very disciplined way. Menas, do you?

The driving focus will continue to be to grow income and excessive risk-weighted assets, So let's not take away from that as a very important focus we want to look forward to. And I would just add to Bill's comment, you mentioned Q1. I think the point about Q1 demonstrates that quite nicely. We grew income year over year significantly faster than we grew RWAs year over year. So all we're saying is that we see tremendous opportunities within our footprint to generate very strong value. And we have opportunities to deploy our capital to do that. And we will do that in service of delivering that 15%, greater than 15% roti, and driving up towards 18%. And I look forward to the debates about at what point we should stop and maximize on EVA. But we've got a way to go.

I want to go back, though, to when we talk about growth, we inevitably are first drawn to income growth and the areas of profitable income growth. One of the great enablers of our growth is going to be what we have done and are doing on the infrastructure side. And we'll obviously talk about that in the context of transformation. But the opportunity for us to take these really, really solid foundations. you're going to have to form your own views just how solid they are we think they're exceptionally solid at this point and to be able to deploy capital deploy resources quickly and with super normal profits by virtue of the underlying infrastructure that we built i mean you work at goldman sachs you have a reputation as a firm for having done that for a long time i won't say that that's a role model i don't think we're that far away from being recognized as a player that can deliver a best-in-class infrastructure that allows very aggressive tactical reallocation of business lines and capital. You'll form your own views how close we are to that, but we feel pretty good, and that's at the thrust of, at the heart of what Noel and Tanuj will be talking about, and that will absolutely enable growth in ways that we couldn't have imagined growing five years ago or maybe even three years ago. Let's go to the back there. I can't see the faces all the way, but...

I can see Ed and James at the back.

Why don't we start with Ed?

Thanks very much indeed. It's Ed Firth from KBW. I suppose one area I was very interested in hearing about was financial institutions and sort of non-bank financial institutions, and that seems to be a very big area of growth for you and emphasis. It's also an area where I think a number of regulators have expressed concerns, and I guess there have been a number of market concerns about what's going on in some of those areas. So I just wondered if you could give us a little more colour about what exact areas of growth you're seeing there. and what sort of competitive advantages that you see that you have, and perhaps how you're navigating some of the risks that do seem to be out there. Thanks very much.

That's great. Thanks for that question. Roberto will be talking about that in some detail when we get to the CIV section, but the non-bank financial institutions is a pretty broad swathe of activities. So I think maybe at the beginning of your question, you probably had private credit in mind, and obviously it's been a lot in the press. We think and have thought for some time that the extension of credit from things other than bank balance sheets was absolutely inevitable. It happened in the U.S. for decades. Now it's happening in a slightly accelerated way. And it happened more recently post-financial crisis in Europe and Asia. But it's happening for good reasons, and we are leaning into it. But we're also leaning into it very cautiously. I mean, Jason, our chief risk officer, is here who will be available to answer these questions if you want to get an offline perspective as well. But we don't have a big proportion of our loan book to private credit companies. We don't provide a lot of back leverage to private credit portfolios. We do a bit of each. We do some subscription line to underlying funds. Mostly what we do with the private credit companies is we originate credit and sell it to them. And sometimes we sell it clean, as in the way we bought it. Sometimes it gets restructured or sliced or diced in some way. But we do that because they've got a lower cost of capital than we do in some areas, or they're just a better bid for some other reason. That is something that I think is an extra rule. We've seen the mood music change in regulation. The U.S. obviously has gone from seeking to add a material amount of capital to U.S. bank requirements, but kind of back down to where they started. They haven't gone backwards. The UK and Europe have also stopped advancing the capital engine, as it were, but they haven't gone backwards. I don't think we're going to see big releases of capital by regulation, and I don't think we're going to see a big increase in cost of capital from the non-banks on the back of the credit cycle. They may converge a little bit, but it just makes sense for credit to reside in the hands of people that aren't carrying a lot of leverage and that aren't undertaking a lot of maturity transformation. And that's not a bad thing, as long as we can continue to originate credit and distribute it. Insurance companies are kind of the same thing, but obviously under a different regulatory umbrella. But insurance companies have reasonably complex operational requirements, and we are, amongst many other things, an operational bank. So we have very deep relationships with institutional asset managers, represented by many of the people in the room, insurance companies, pension funds directly. sovereign wealth funds globally who need us for operational reasons they need us for acquisition of assets they need us for for management managing managing of risk associated with their portfolios in the markets where we operate you know we needed to build quite a strong service infrastructure around those non-bank institutions we were we were very poor 14 years ago i've mentioned in this kind of grouping before uh you know one of the very large asset managers of the world, it happened to know the principles quite well, said to me on my first day in Santa Charger, or in the first few days, we rank our broker-dealers. You're 17 out of 17, and frankly, you're only in the list of rankings because we have to deal with you because of the markets where you operate. Otherwise, we wouldn't be talking to you at all. That's very helpful. What do we need to do to get into your top three or five, excluding equity trading, which you're going to have to handle uh the the inclusion of multiple funds for a particular trading strategy you're going to have to cover the markets where we operate you're going to have to have the an account opening and compliance regime that isn't doesn't incur massive amounts of brain cell usage every time we talk to you etc and we invested very deliberately for years after that and we're now top one two three always in the markets where we operate and top three four or five in G10, ex-equity trading, through operational improvement, and then the hard work and personal relationships developed by our relationship managers. But none of that came easy, but it was very deliberate. And, you know, but where did it start? We heard from customers what they wanted us to do, and then we did it. Not different than what you'll hear from Judy. I'm not changing the subject, but the customer improvement, the customer improvements, customer satisfaction improvements in wealth management during Judy and Ben's and Mary's time running that function have gone from bottom quartile to number one. It didn't happen because we had better products. It happened because we invested in customer service and customer satisfaction. So for non-banks, being relevant, understanding what they want, originating product for them, providing the ancillary services that come along with that, and then continuing to grow. Okay, Joseph.

Hi, thank you for taking my question. This is Joe Dickerson from Jefferies. I thought it was very interesting, the point you made on the efficiencies that come from the liability surplus. First question. What deposit growth have you assumed over this plan? Is it roughly in line with the income growth? Because there's clearly a very favorable trend coming from the mainland, particularly this year, in terms of deposit maturities and so forth, which could make their way south of the border. So what's the deposit growth there, and could there be any scope to augment the 50 basis points? And then I'm sure this will come up in another session, but you mentioned in the release today the migration of some of the WRB clients into MOCs.

What is the, across the franchise in WRB, what is the opportunity to, for lack of a better word, push uh clients or or transition with them into digital banking is there a broader opportunity in terms of roe and uh income here for the bank just quickly and judy's going to cover the second uh question very very directly in her comments so i'll save that for her but you know you've seen a a changing composition of our of our retail business uh obviously this the 70 up to 75 percent of income coming from affluent, but you've seen a very aggressive reshaping of our mass market portfolio, including the investments in the digital banks, but also the divestitures of a number of the mass market businesses across, in particular, our smaller markets, which is ongoing as we speak. And the migration of individual, you've also seen asset dispositions of unsecured loan books or asset pools in India, Korea, etc. And we'll continue to optimize there. But then in Hong Kong and Singapore, you're seeing a migration of unsecured assets into the digital banks. Lower cost to serve, surplus deposits in those entities that can deploy effectively into those asset bases. This is all in the spirit of ongoing optimization, but also recognizing that in some very important markets like Hong Kong, mass market banking is very profitable. In its own right, we have a good position. We want to make sure that we grow that. But again, I don't want to take too much away from what Judy's saying. But that sort of leads into the whole deposit question.

Yeah. You'll note, Joe, that we haven't put out loan growth targets or deposit growth targets for a reason, because we see those as outputs rather than inputs to what we're going to achieve as we seek to move our business to improve return on risk-weighted assets going forward. Your assumption about what underlies the plan would be broadly correct. And within that, you should assume, as I was implying on the slide that our wrb base will grow somewhat faster than our cib deposit base but actually on that slide it may be worth just asking our treasurer uh dan uh who is here dan hodge uh if you want to say a couple of words about future expectations on on how you think that will impact returns yeah absolutely thanks very much for the question no i mean i completely agree with that we're not sort of giving overall sort of targets for growth in the in the funded balance sheet but it's very much a sort of a mixed the mixed improvement and so what we're saying is that The 50 basis points is coming from two areas.

Firstly, the weighted average cost of funding of our liabilities is going to fall. And that's because we're actually growing all sources of funding. Don't get the impression we're starting to shrink corporate cash for wholesale. We're growing them all, but we're growing the cheaper, more stable retail funding at a faster rate than the other sources of funding. So you get that mix enhancement. And because you're growing the more stable deposits at a faster rate, it means you actually need to hold less liquidity. per dollar of funded balance sheets, and obviously the average treasury asset is going to yield a lower spread, and a lower sort of NIM than the average commercial asset. So it's a combination of those things together that generates 50. Can we do more than 50? Obviously, we'd like to, and we constantly seek to try and optimise the balance sheet and sort of the volume and the mix of our funding and what we do with that funding across our various legal entities.

Good morning, it's Andrew Coombs from City. I'd just like to come back to capital allocation. If I look at slide 35, your uses of capital over the last two years versus the indicative use of capital going forward, it is quite a marked step change. You're obviously very heavily weighted towards buybacks. You're now talking about this third mix. So just in terms of PRWA development from here, is it because you think you've already transitioned to a more capital-like and efficient model and there's less to do on RWA takeout or is it because you see more opportunistic ways to deploy the RWAs going forward? I'm just trying to think of the gross parts of that RWA equation. And then the second part to it, I appreciate there's nothing inorganic in the plan but at the same time I think this is the first time I can remember you explicitly calling out in the slides as a potential. So can you just talk to that high hurdle rate, where you think the obvious gaps in the franchise are, et cetera, et cetera?

Let me start. The menace will definitely fill in. We had $80 billion of suboptimal RWAs when we started this. We're down into the, depending on how you look at it, the 9 to 19 range. Some of that is just stable. There's always going to be an in and out of clients that haven't generated strong returns over the past three years, but that we are happy to continue to invest in. So we can definitely squeeze a bit more out of the low-returning RWAs, but that's just a matter of hygiene and ongoing discipline. I think it's very well embedded. Roberta will talk about that. There's not a huge opportunity to expunge big chunks of RWAs in the ordinary course. Obviously, we could divest things, and some of the mass market retail divestitures are expunging some RWAs. They're not low-returning. They're high-returning, and we're getting paid a premium for those assets as it happens. But that's not really the point. The opportunities to deploy assets are quite interesting. Right now, obviously, we've had some mini-wobbles in the market on the back of some of the private credit noise and a couple of frauds that have caused spreads to increase a bit, but spreads are still quite tight. So the deployment opportunities are likely to be episodic and idiosyncratic. But we've got the capital to deploy there if we want, which is why we give ourselves some breathing room. We're only going to deploy capital into RWAs if we're getting a good return. There's nothing that we have to do. So those are just opportunities, and that's why Mattis refers to available capital being deployable into a number of things, including RWA growth, if we can generate creative returns. In terms of the inorganic, I mean, I think we went to, like, great lengths. Of course, everybody wants to know exactly what the criteria are. We kind of will know it when we see it, but we know that the bar for strategic relevance is very high. We spent a lot of time focusing our bank into things where we see core competitive advantages. Highly unlikely to deploy capital into something that isn't directly related to one of those core and tried and tested competitive advantages. And we further said that we are very happy to buy back shares at anything like this price because we see, we've guided you to an 18% return on tangible equity from 11.9. And we think that the market is pricing in something a lot closer to 11.9 than 18%. So that's a simple observation. We would love to own more and more of our shares. Something inorganic would have to exceed the financial returns and be strategically relevant. So if we had something in mind, we could talk about it. So beyond that, it becomes hypothetical.

And it may be the first time you've seen it on a slide, Andy, but it's not the first time that we've said it. It's a statement of what we've been saying previously. So there's no change in our position just because it's on a slide. Don't assume there's any change. In direct answer to your question on RWAs, I think it's both, really. It is because, as Bill said, we've been very successful in driving down the level of suboptimal RWAs that we've got on the bank balance sheet. We still have more to do. we'll always have some sub-optimals but we will continue to work on that but that pool of sub-optimals is somewhat lower and it's because we are more confident in the outlook we are more confident in being able to see ways to deploy our capital but just to be clear again deploying capital is not the objective the objective is to maximize growth and returns we will use the capital to do that in any way that we can but we have regular conversations at a client level at a business level and at a bank level about how we can make ourselves more efficient both in our new business and in our existing business. So deploying capital is not an end in its own. The end is driving the business forward in the maximum value generating way possible.

Stick to the front row. Thank you. It's Guy Stemmings from BMP Paribas.

Another question on capital but this time on the CT1 target which you kept with 30 to 40 which I guess was expected but talked about more operating, perhaps more in the middle of that range on average rather than slightly above it. I guess the context here is some US banks have obviously seen a reduction. We've had the Bank of England talk about changes but without necessarily moving things materially at this stage in terms of the real core of requirements. I guess I'm thinking out to 2030 and how much we think of that target as very much it's going to stay there or whether it was sort of considered that you might particular it more or whether there's much you would need to see from the regulator before that target could be shifted down slightly?

We actually have a fair amount of capacity above our regulatory minimum. So we have quite a large buffer. That's part of what gave us comfort going being more actively dynamic throughout the 13% to 14% range. We just reset that verbiage around our capital range. We're unlikely to change that anytime soon. But we are perfectly comfortable, as we've already demonstrated, going down into the bottom half of the range. It's not because the world is a perfectly wonderful and peaceful place. There's plenty of scenarios that we could worry about, but we think that we've built in a resilience in our business that allows us to be just much more dynamic than we have been. It would be interesting, as we go out to 2030, and we imagine the kind of capital generation around an 18% return on tangible equity and the business mix shift that we've indicated quite clearly in my and Manis' comments, and it will be very clear through the subsequent presentations, That structural business makeshift also makes the bank much more resilient. Manus made the point about the lower risk profile of the bank. A more resilient, bigger profitability buffer and different makeshift, higher quality and makeshift business may very well allow a structurally lower level of capital to be run. It's not in our models. It's not something that we're guiding to. But when we're thinking about upside from here, that's certainly one source of upside in terms of incremental capital returns. It just comes from the fact that we've built a more resilient, we will have built a more resilient business.

But it's not, just to clarify, that the assumption out to 2030 is the midpoint of the range. We continue to have that within our model.

That's what I tried to say.

Just clarifying.

Good to clarify. we will be around obviously so please if you don't get a question now I'll just break the rules we'll go Kian and then Pearlie yeah thanks for taking my question one is on cost you clearly outlined some further opportunity on cost I'm just trying to see if you can unpack cost a little bit more in terms of how you think about cost inflation hiring and the offsets around that And then the second question is a bit, and also platforms, I'm quite interested, are you done with back office platform or middle office platform as a first investments to go? And then the second question is regarding more second order effects from the energy crisis that we're seeing, because you operate in a lot of countries which are energy deficit countries. and I'm just wondering what risk you see in those countries and how we should think about the risks going forward impacting you in particular.

I'll give you some quick answers because we've got a whole section in transformation that Noel and Tanuzha are going to take us through. There's more platform investment to go but we've broken the back of the major infrastructure is in place. We have some fill-in to do including completing the rollout of our core banking platform to places like Korea and Taiwan as the significant two remaining markets. I say that there is an obsessive cost focus. There is from me, and I know there is from Manus, but also from the rest of the management team in terms of becoming a more productive company. It's not about cost-cutting, although that will be the result for sure. It's about having a structurally more productive environment that is fit for future, given the financial markets and the financial infrastructure world that we're going into. It's design right in the first place and then allow for genuine scale and growth with non-linear cost increases, like far less. But that's an obsessive focus because we know that in this agentic commerce world and the digital money world, margins are coming down. Margins are always coming down in our business, but they will come down faster than in the core plumbing businesses in a completely AI-driven, agentic world. We have to be ahead of that. So there's an obsessive focus. I think we can win in that race. But obviously, we have to do that. And the second question. Geopolitical risk. Yeah, we watch very carefully. There's the global macro impact of structurally higher energy prices. Obviously, it's driving inflation, which is leading to higher interest rates. We're seeing that in every market. We're seeing a pickup in inflation up to a point. That's a helpful thing for us. Beyond that, it becomes obviously growth suppressive and negative. And then we're looking at the particular vulnerable parts of our footprint where higher energy prices are taking what was in many cases a fragile recovery from the kind of the restructuring post-COVID increased inflation period to higher interest rates. A number of the markets in our footprint were beginning to recover. It's more challenging for them. We don't see anything that's flashing red, but there's plenty that's amber that we're watching and calling that out along the way.

Just to add on, Kostler, we've given you our guidance for 26, which I should have made sure you'd seen in the back of the pack, but that remains unchanged. We've given you the 2028 guidance, but really we have a wonderful session coming up with Noel and Tanuj to talk about those platforms more, so I'll leave it there.

Last but not least.

I could just be loud enough. It's Pernimau from Bank of America. Just a quick follow-up on cost. AI investments. It looks like a lot of your cost of planning is based on productivity and probably help by AI. I think it's probably fair to say that as a sector, we're still quite early in the AI investment cycle, just because how quickly things have moved on. So how are you thinking about that investment piece? And I can't help but notice that Fitful Growth, we still have about a third left for that. So how much of that would be potentially earmarked for AI-type investments? So that's number one. And number two, very quickly on wealth. I don't think there is a debate that the wealth flows are coming and coming thick and fast. But in terms of the channels it's coming, so far we've seen a lot of growth from mass affluent. But it looks like a lot of people are now talking about the generational wealth transfers and family offices. So how do you see the different segments of the wealth flows coming through? and to tie that into the AUM, I've noticed that you've brought forward that net new money piece, which is about 50 billion per year average now, which is actually quite similar to what you've done in the last five quarters average. Now, how do we think about the margin piece? Because if you're doing similar amount of net new money, mechanically, you would expect the fee income growth to slow down. But in Q1, we've seen 30% growth. So how do we square that piece?

We're going to kick the wealth question entirely to Judy. I think we've given the high level. You understand our conviction, and we'll get to that. We've not broken out an AI cost number because having built the platform that Noel will describe in just a few minutes, the AI is now embedded in everything that we do. Almost every process, almost every productivity program, almost every revenue investment has an AI component. It's almost meaningless at this point to say, you know, what are we investing in AI? It was not meaningless to get the infrastructure layer right in the first place. That was a meaningful investment, but it's built at this point, and it's working. And as Inouye will say, there's hundreds of models that are operating on that platform and billions and billions and billions of tokens being processed in the various use cases. So AI will be centrally important to the productivity initiatives from here as well, both from a diagnostic perspective, identifying the inefficiencies and vulnerabilities, but also in automating process and removing burdensome either human or machine interventions that can now be done much more efficiently through a generic machine. But Noel and Tanuzha are going to talk about that in some detail, so let's just save that for a few minutes.

And on the Fit for Growth program, we remain committed to finishing it this year. The numbers are, as we've guided to previously, we will stick to it. There's been no question of redirecting those funds into some other way. It's a discrete program, which we've talked about. You'll hear, and this is a good tee-up for the coffee break and the next session, about how we are turning the learnings from Fit for Growth into a muscle that we're using going forwards.

That's great. There will be more time for interaction and more time for questions, and you'll have all of our colleagues on the management team available during their presentations for some of the deep dives. So let's carry on. Next step. David, are you going to compare us and direct us?

Yes.

Welcome back, everyone. We're now going to move into our transformation session. So I'd like to invite up Tanuj and Noel.

Good morning and good afternoon, everyone. Good afternoon to the ones joining virtually. I did check. There are some colleagues joining from Australia today. So thank you very much for joining us. I'm Tanuj Kapila Shrami. I'm the Chief Operating Officer. I'm joined by Noelle, our Global Head of Technology and Transformation. In my role, I look after strategy, transformation, and our corporate functions. I've been in financial services, specifically banking, for over 25 years. I've had the great fortune of living and working across many of our footprint markets, including lovely Hong Kong. I'm delighted to be talking to you today about our transformation journey, both what has been delivered and what's going to happen next. Bill started the session today by saying that Standard Chartered has a very clear ambition. We want to be the world's super connector, not just a global bank, but a global financial network, solving for cross-border needs of our clients, connecting capital, trade, payments across the network in a world that is becoming increasingly fragmented. Delivering on this ambition requires more than geographic reach. It requires an operating model encompassing people, processes, and technology that is interconnected and purpose-built. An operating model that can be scalable, reusable, and is standardized. And that's what I'm hoping we are going to be talking to you today. The world is not standing still, and neither is our response. Our transformation is not technology-led for the sake of technology. It is strategy-led, with increasingly sophisticated interplay between people, processes, and technology to deliver very differentiated outcomes for our clients, colleagues, and for our shareholders. Noel will get in a minute to talk about the tech architecture, but I really wanted to highlight the fact that this is not just a tech story for us. It's a process people technology story, and that's one of the key reasons why Noel and I have chosen to do the session jointly today. I want to be clear from the start, and Bill said this as well, that this is not a defensive cost action for us. Our whole transformation agenda is about creating operating leverage to deliver exponential growth. That's the objective of our transformation work. There are cost targets that I'm going to get into, which is an outcome of the work, but that's not the real objective. And a lot of the work that we are going to be talking about today is the work that's already been done, which is enabling growth, and how we feel by enabling AI on top of it, that growth is going to be delivered further. The other thing that Bill said, which I want to double click on, is that we are a global bank. We don't have one or two home markets. Our network is our home, and that is one of our biggest structural strengths. So to build an operating model that leverages the value of the network to deliver on our super connector aspiration requires a response, which is a very distinctive response. So like I said, we are going to be telling you today the investments that have already been made, the outcomes they have achieved, and what happens next, especially with the advent of AI. At its heart, our ambition is to deliver a bank that is simple, connected, and fast. Simple means global core platforms, fewer variance, and standardization where it creates scale. Connected means shared cross-border capabilities that serve multiple markets. Fast means executing at pace, but Jason will love this, with very, very clear guardrails. So that is simple, connected, fast. We're going to talk about simple, connected, fast a lot today. We are not measuring our transformation just by program volume, KPIs, end dates, etc. We've got very clear financial metrics that we are linking this to, very clear commercial outcomes. A 20% increase in income per employee by 2028, 15% reduction in our corporate functions headcount, this is technology, operations, all of our support areas, resulting in ultimately a structurally lower cost base, so a cost-income ratio of 57% by 2028. Our transformation is not new to us. This has been a journey that's been on. The first slide that Bill flashed today in his presentation outlines the financial outcomes. We started our transformation by tackling our operating model because we firmly believe that technology follows the operating model. If your operating model is complex, technology will be complex. And I think, candidly speaking, if you go back a couple of years, we did operate in a matrix with a very strong local orientation. What that did for us is resulted in duplication, inefficient capital allocation, and unscalable investment decisions. So one of the big pieces of work that's been happening for a long time, predating FFG but accelerated by FFG, was the work that we have done in simplifying our operating model. We stripped out regional layers, radically simplified our executive and leadership bench, and clarified decision rights between our global businesses and market leaders. To just give you a sense of numbers, we moved in my time in the bank from eight regions to four and now three. We've got our market CEOs double-hatting with one of the two global businesses. Today, almost 80% of our market CEOs double-hat with one of the two global businesses. And one of the big changes we did was aligned all of our markets to one of the two global businesses. Now, this is not just a reporting line change. This is the way we do capital allocation. This is the way we report on performance. this is the way we take investment decisions. It's been a pretty fundamental change. What this has done, and again, not just a cost outcome, what this has done for us is accelerated decision making, is reduced the path to decision making. But what it's also done is brought accountability much closer to our clients. And that's been the two big outcomes of the operating model changes that we have done. One number on this slide I want to double click on is the size of our workforce in our global capability centers, we call them GBSs, global business services, 43% of our headcount now sits in one of our capability centers. Again, this is not just a defensive cost action play. What it does for us is by co-locating a critical mass of our processes and people, it puts us in a position to be able to standardize, automate, and deploy AI at scale. far more far difficult to do when you're trying to do it in a much more geographically fragmented model so these organizational changes have been the foundation of everything that we have done till now and with that i'm going to pass on to noel who's going to talk about uh modernization of our tech architecture thank you hello everyone process of elimination i'm noel um and here's the good news for you today um bill and manis were so excited about the talk that i'm about to give that

they gave a good portion of it already. So what you all know is we have BCP in our management team in case anything happens to me up here, we know they can step in. So I've been in technology and operations for a little more than 30 years. And so I've been leading change across technology cycles and across multiple organizations in different sectors. So I know when you hear the word transformation sounds a bit lofty maybe there are a couple of skeptical people in the room but what i'm what tanush and i are going to share with you today i think is a very based my experience is a very credible story about people and technology coming together and changing what this bank is capable of doing okay so so i'm going to start by talking about significant work that's been underway for the last few years. Bill talked a little bit about it. Manus talked a little bit about it. Where we have been modernizing our technology foundations for resilience and growth. And that work is now starting to pay off. So Bill talked about our journey in cybersecurity and our journey in financial crime or anti-crime. And we then focused on three additional pillars. And all of these things together form the very core of this bank. So those three critical pillars are what I'm going to talk to you about for the next few minutes. First, in the fourth quarter of last year, we completed our global private cloud. We now have 10 times the processing horsepower that we had previously, and we have geographic resilience against domestic disturbances, data center outages, subsea cable disruptions, climate issues with unprecedented levels of automation. We have redesigned and rebuilt our connections to third parties. We use a concept called abstraction, which means that we can move them to any location. So put simply, we can be in any market quickly, in any market with Internet access. So that's the first thing. And I want to pause there for just a moment because that wasn't just a feat of engineering. It was actually a feat of engineering. But to have a global private cloud, to have geo-resilience, and to have third-party flexibility the way that we have it is really quite differentiated and very, very important for a network bank like ours. Second, in March of this year, we migrated our largest market, which we're all sitting in, Hong Kong. From the mainframe to our global core banking platform, we now have more than 90% of our markets on a single platform. And what that means is we can build, we can test, and we can deploy code much more quickly. And because we own the source code, we are no longer beholden to third-party roadmaps or geopolitical tensions. we can and have started integrating digital assets blockchain and ai natively on our own terms at commodity prices and sustainable scale okay that's the second thing third thing our modern payments platform okay so we're at the infrastructure core banking now we're up at payments payments is an out-of-the-box service offering the same levels of choice and service excellence consistently across markets. What this means is that our businesses can open new digital services, new payment corridors, and facilitate trade quickly and easily. Okay, so those are the three things that we've been focused on for the last several years. Significant investment has gone in, and you might be able to tell that we're quite proud of them. And so these systems are future ready and resilience is built in and i'm going to give you four reasons why that's true first they're commodity based so what that means is they're scalable they're standardized they're performant at the best possible price second they're cloud native so we are significantly moving away from mainframes third they're api first so no more bespoke integrations and last the source code is owned by us as i already mentioned now we did not set out to rebuild everything everywhere all at once even though there might be somebody in the room who published that just a little while ago um we focused on creating operating leverage for the bank by targeting the systems modernizing the systems that all of our products rely on we made them industrial grade and future ready okay now we can extend up above that core where differentiation matters at the client interface level okay so we're standardizing it at the core and we're differentiated at the client edge and the balance between the two is critical okay standardization gives us speed and efficiency and specialization and configuration gives us new products new services and new experiences for clients our transformation program is it's it's it doesn't have an end date okay it is increasingly the way that we operate we've gone from large infrequent releases to small frequent changes every day feedback loops whether they're customer operational or risk are built into these platforms and data is not an output it is a live signal. And what that means is it streams and it's analyzed in real time. And it drives decisions and it drives improvements every single day. Now, let's talk a little bit about the results we're seeing from all of the work that I just described. So as Tanuj mentioned earlier, we've been on a continuous improvement journey. So over the last couple of years, we've seen a 30% improvement in operations in throughput per FTE. Our digital services are now always on in any market 24-7. We've seen a nine-fold increase in transactions process per second, supported by, as I mentioned earlier, a 10x increase in processing power. And our downtime has been reduced by 80% while run costs have remained flat. So we think our results are getting better. We expect more. As you probably heard from Bill, we're constructively dissatisfied fairly frequently. So the key point is this. Scale, speed, and resilience are no longer constrained by linear cost increases. And for for a network bank that's pretty that's pretty transformational so that's our modern foundation okay now we're going to talk about the people and processes that sit on top of it and bring it to life because tech for tech sake is not what we're about right we are an applied technology company and people in process bring this to life for us okay thanks thank you noelle um continuous improvement is a word that we have spoken about quite a bit um our transformation is not a program with an end date.

We were transforming before Fit for Growth, but Fit for Growth was a very important accelerant, and we can pick up your question when we get to FAQ later today. We are on track to deliver $1.3 billion, which is going to be a one-to-one ratio in terms of spend and cost saves. Over 300 initiatives across all parts of the organization, driving improved customer experience, increased straight-through processing rate, much faster turnaround time on our applications. Perhaps what's been less visible on Fit for Growth is the amount of investment we have done in securing our plumbing. I wasn't going to use the word, but then Bill used it in his opening, so I am going to use it. We have mapped 100% of our processes in the organization, and we have mapped a consistent set of skills that underpin all of those processes. And that roadmap heat map blueprint that we have developed becomes incredibly important when we talk to you about AI deployment going later. So 100% of processes mapped, consistent set of underlying skills sort of mapped, which gives us a very good sense of how work gets done. Some really clear outcomes on the slide, 53% straight through processing rates increase in wealth solution. What's not here is a 10% reduction in our technology estate that has happened because of all of the work that we have done. So what Fit for Growth has helped us do is build that muscle of continuous improvement. So it's not just a one-off efficiency gain, but a muscle that sort of sustains beyond the program, which is going to finish by end of this year. So moving on, we call this the bridging slide because we will talk about having secured the foundation, what happens to us next. But I will go back to why Simple Connected Fast is not just a transformation tagline for us. It's an economic logic that helps a super connector bank deliver to its full potential and beyond. So again, I've said this a few times, we are not anchored to a single market. And for us, that's a structural strength. That means we are not constrained by one growth cycle, one domestic balance sheet, one regulatory environment. Quite the opposite. We are very well positioned to be able to capitalize on opportunities that arise anywhere in our network. To do that, we do need an operating model, which is simple, connected, fast, which basically means we want to scale without multiplying cost. And for that, the bank has to be simple. To harness the power of our network, the bank has to be connected. And to do this safely and repeatedly at the speed required across the globe, the bank has to be fast. And what that does collectively for all of you is high income growth, greater operating leverage, and a workforce that is much more upskilled to be able to compete with the future direction of the bank and compete with the future of banking.

So like I said, not just a transformation tagline for us, but an economic logic that helps a super connector bank deliver on its aspirations. so let's go just a little bit deeper into how we're transforming to be simple connected and fast okay we've modernized our technology through a simplification approach that retains optionality standardized at the core differentiated at the client edge and our principles are straightforward build once and deploy across markets and businesses differentiate through configuration rather than custom code, and reduce fragmentation. This lowers the unit cost to serve, it improves resilience, and it makes growth more scalable, easier to achieve. Let me just give you a couple of examples to try to bring this to life. The first one is the one I've mentioned already. Standardizing on commodity infrastructure, one pattern across the estate. Second, we have a single identity and access management layer for Standard Chartered. Three, we have one payments backbone for the company. And fourth, we have a single enterprise AI platform with reusable services. We built in operations. This is a good example. We've unified over 100 applications into 30 standardized workflows accessible for our operations people through a single user interface. Over time, that interface becomes a single pane of glass to manage client onboarding, servicing, risk and governance workflows, and more around the world.

What it really means for a client is that a capability that we build in one market, let's say a real-time payment solution, can be deployed in multiple markets at a fraction of cost and in a far more speedy deployment way. So that's the real value of the model that we are doing. We are constantly simplifying, standardizing our processes and data. And a lot of that, leveraging our fit-for-growth investments, has happened in our capability centers. So we have demonstrated reduced timelines, more efficient processes in our KYC onboarding customer due diligence processes. So we talked about simple.

Now we're going to move on to connected. So the power of a super connector is in the connections. a super connector creates network value so a single capability can be reused across clients products and markets our platform architecture is designed so that one client engaging with us in a single product in a single market has access to our full capability globally so trade finance will link to payments and cash management will link to foreign exchange the client doesn't see seams they see a network and the real unlock over time is deeply integrated client and transactional data which gives us advanced analytics more precise personalization more seamless payments across geographies more straight through processing for our teams and that reduces friction it improves the client experience and it helps our our businesses deepen relationships with their customers?

So basically what happens is clients don't see product market boundaries. They see one standard chartered. At the beginning of the slide, when I spoke about the work we have done on our global capability centers, that's a really good proof point that helps deliver on connected because by centralizing processes and people in big shared service centers, we are able to drive that connectivity across the network, which was not possible in a geography by geography model. So a really good example of leveraging our shared service centers to drive that level of connectivity.

So we've talked about simple. We've talked about connected. The two together have a multiplicative effect on making us fast. Okay? So we're not just digitizing. We're building the capability to operate in a fundamentally different ecosystem. And Bill talked about it this morning. Agentic commerce, the digitization of money, the speed at which financial services will move, I think in the not-too-distant future, is something that we are preparing ourselves for. The winners will be those who can sense, decide, and act in real time. Dynamically changing products, dynamically managing risk, and strengthening with scale. the most important part about this ecosystem from my perspective and perhaps this is somebody from technology talking but serving customers has to be quick easy and fast whether they're human or machine right but always and we've referred to jason in this conversation he happens to be our chief risk officer but always with the guardrails that this industry requires Architecturally, we've separated our foundations from our product delivery, and we're running those foundations as utilities. So our run costs, our predictable time to market is faster, and scaling across borders is easier. One example for you, in technology delivery, we've moved from 18 manual approvals to get code across our markets to clients. We now have an automated pipeline-based process. Okay, so that's the from-to in the kind of ecosystem we're building. And we're preparing all of these systems for AI by rolling out standards-based APIs across them all. What that means is that these systems can be orchestrated by humans and by machines. The result, our product owners can make changes much more quickly and be able to respond to the dynamic markets that we operate in.

So in summary, simple reduces friction and risk. Connected removes latency, and together they multiply so we can execute much faster at scale and with the right level of control. Just leaving you with some numbers before we move to AI. Our clients are already seeing results. 97% of our tech releases are now fully automated. We are deploying products 30% faster than we have done previously, and we have reported 28%, Judy will share some of the customer satisfaction data later, but 28% reduction in manual client payment queries in a relatively short period of time. So that's been the impact of this work that has been seen by our customers. All of this resulting in much better client experience, which is what this work is in service of ultimately. The foundations are now in place for us and the focus goes from building to scaling. And that's where the beauty of AI comes in.

Yeah, so now we're going to talk about AI. And I wrote down some of the questions that were asked. So if I don't get to them, we're going to have a little session at the end where you can ask us questions. So the scale that Tanush talked about really only matters if complexity is reduced and it stays reduced. AI exposes complexity immediately through data quality issues, through hidden dependencies, through technical debt. And its capability curve is exponential, not linear. So the pace is not just fast. This thing is structurally different from any technology advancement that comes before it. So we are increasingly simple. We're more standardized and more connected across platforms. At our core, we are increasingly one unified financial platform across 54 markets. that creates a simple ambition that we work on every single day build a bank that gets better with every transaction and every client interaction our next frontier is to take that ai platform that bill described and embed it deeply into the foundation as a structural capability not as a bolt on. So the bank in every transaction learns from each one. And we're doing that through three reinforcing elements. First, one enterprise AI platform, as I mentioned earlier, with intelligence built in so AI can scale consistently across markets and businesses. Second, an operating model that identifies and automates routine repeatable transactions while keeping human judgment where trust matters most. And third, a data and AI architecture that learns. Improving accuracy, improving cycle times, and improving marginal cost as we scale. Excuse me. So what this enables is a business that can sense change, adapt faster, and act more quickly. So let's double click on the platform for just a moment because it has three key characteristics to it that are really important to us as we continue to scale it. First, risk management. As I mentioned, we are, after all, a bank. And so regulatory change, regulatory standards, the control environment are critical to us. And they absorb significant capacity across the organization. An AI platform and a network bank in particular must be able to codify controls, monitor them through automated guardrails, and be able to absorb regulatory change that happens very frequently with ease. Okay, second, productivity. AI, our AI platform can handle routine initiation, validation, approvals, and again, that frees up people to focus on trust, clients, advice, relationships. And third, precision. And, you know, in my opinion, this is the game changer for an AI platform because it's all about data and the quality and accessibility of data. And so we're moving from 150 fragmented data lakes across the state to a single global data supply chain. That's cloud-native, standards-based, with compliance built in. Better data improves model accuracy. Model accuracy gives us more straight-through processing. Straight-through processing frees up capacity for clients and for growth. So what you see on the slides behind me are really just examples. They're not an exhaustive list, but they are the kinds of outcomes that we're experiencing now as we scale into this capability. And we can see this very clearly across the bank as AI is applied end-to-end. In payment operations, our AI platform can route routine transactions while surfacing exceptions in context so that people can make decisions more quickly. That improves our client experience, and it lowers our unit cost per transaction over time. AI-enabled software engineering, so in our SDLC, software development lifecycle, AI is helping us develop faster, increasing our time to market, with fewer defects across the estate. and we've also deployed co-pilot across the enterprise and you can see the numbers behind me and we are targeting work that can work that has low value where time can be reallocated to higher order judgment-led client-focused work so for us the large the logic is very clear we lower run costs we lower production incidents we increase time to market and capacity for differentiation So stepping back, a platform changes the economics of change itself. Each new capability builds on what's come before it. So AI deployments become faster and cheaper over time. It also changes how work scales. So growth no longer requires proportional cost increases because machines handle speed and volume while humans focus on clients, trust, relationships, and growth. That creates flexible, AI-enabled capacity, and it's a powerful lever on cost of income over time. And because the system learns, the economics improve in a reinforcing loop. Better data, better models, more straight-through processing, more capacity-free. So the investment thesis is straightforward. We're building a bank where the marginal cost of growth declines with scale. And we believe that's what an AI-native enterprise delivers, and it's already underway here.

Thank you, Noelle. This brings us to a really critical inflection point, and I'm conscious we are running on time, so I'll make this very quick. We have secured our foundations. The work now is for us to accelerate transformation by embedding AI into our business processes. and that's the work that we have already kick-started and that's really going to be the focus over the next couple of years. A key enabler of this work has been the work we have done to identify our processes and pivot the organization to becoming a much more skill-based organization. This is not a tagline, but by deconstructing work into a set of consistent skills and identifying the activities that sit under the work, we can be very precise on what gets automated what gets augmented, and what needs to remain human-led. And that's really the embedding of AI into our processes that sits on top of the foundation. So just to bring this to life by giving you some examples, in Singapore and India, where we have more than 50% of our hiring demand, we have launched agent-enabled employee onboarding. So AI agents coordinate end-to-end onboarding, manage tasks, data, exceptions across systems, while humans retain the final decision on risk management and the end decision of the process. This work has reduced hiring manager effort by 35% and has led to a value creation framework which we are deploying into sizing the size of our HR operations outfit. So it's a really tangible example of deconstruct work, decide where we deploy agents, what gets left behind on humans. And that is the process that we have been deploying across multiple of our processes. Treasury is another area where there's been some fabulous AI deployments that we have done. So we have driven AI-driven decision-making in enhancing liquidity management with faster, clearer insights, demonstrating how we can scale AI, deploy AI in complex regulated environments. Across both of these examples, returns compound as each AI deployment accelerates the next. And that's when our economics start improving. And that's when we structurally start decoupling volume growth in our businesses from headcount growth. So that is the way we see. We already are, but we see deploying AI across our business processes. So, look, bringing you back to where this all started, our transformation, it's a journey. It's a continuum. Noam, what we are sharing with you today is a point in time as we see it today. What are the outcomes? A very clear set of productivity metrics. Bill's alluded to their manners. I won't go through the numbers, but you can see it. 20% increase in revenue per FTE. At least a 15% reduction in back office headcount over the longer term. And a structurally efficient organization with a much improved cost-income ratio. There are three messages before we open for Q&A that Noel and I want to leave with you today. First, we have delivered significant structural change in our organization, simplified the organization, modernized our core, and addressed complexity and risk. It's creating a more resilient and scalable foundation for the bank. Second, our transformation is about building an agile operating model, an agile operating system. this is what allows us to operate as a single global network so we can scale without rebuilding cost every time and the third we are not standing still that we are continuously improving innovating and harnessing ai to accelerate better outcomes for our clients thank you very much and noel and i will take any questions that you might have for us now okay thank you uh noel and tanish

So we're going to do questions, but I think we already had Perly had asked a couple of questions on this. So why don't we just take those first, which I think was, there was one around fit for growth, so how this was different to fit for growth. So maybe if Tanuj could take that. And then there was a second one, which was around AI and how much AI adoption is embedded into the revenue FTE targets that we've announced. So Noelle for that one. So Tanuj first.

I exceeded the time limit on my presentation to answer your question in more detail. So look, we are going to complete FFG by end of the year, and I think the point I was hoping that I make, it's not just on the $1.3 billion that we are delivering, but it's the investments that have been made in our foundation work that we've done, including a lot of the core investments that we have made on AI. So things like AI Factory, you know, the foundational work on AI did come out of FFG. So it was a very important accelerator. The program will finish by the end of the year and will give back $1.3 billion in terms of cost saves.

Let me ask if we answered your second question already or if there's a nuance to it you'd like us to address.

No, I think you've pretty much answered it already.

I think it's too fast. and in terms of at what point when you see the next version of Claude or whichever technology comes through how do you think about maybe just working with what you have yeah so you want me to take that one so let me talk about how we think about our AI stack and maybe that will help a little bit so at the foundational layer I've mentioned commodity we're very very interested in ensuring that we have best possible pricing for GPUs, et cetera, and so forth. Above that, we're at the data layer. We have a partnership with Databricks to help us really get to that high quality accessible data in the global data supply chain that I talked about. And above that is the model layer. And we are agnostic at the model layer. And the reason we're agnostic is because we agree with you, the capability curve here is like nothing we have seen before. And so the idea that we're going to out-innovate the market or any particular third-party relationship we have is going to out-innovate the market is unlikely. And so we deploy a concept called portability. As much as possible, we are not perfect, but we deploy portability as much as we can. And what that means is there are architectural patterns where you can move your models from one place to another. And so we try to help our businesses be agnostic and be able to ascertain for themselves based on the value created for their clients and for their businesses which model is best over time and but we don't think for a moment that the world will remain static okay any questions in the room okay Nick yeah so it's Nick Lord Morgan Stamming thank you very much presentation at the first is just about mythos and sort of how you are thinking about that I mean I presume you've not seen it yet but I'd be interested from what I do here there's quite a lot

of work that is required once you've seen it so I'd be interested to know how you're thinking about that and second you might have partly answered this already with Pearlie's question but which models are you using at the moment are you using open source models as well as sort of your anthropics and your GBTs are using some of the Chinese models as well as some of the U.S. models. Just be interested in more detail on that.

So I think both of those are for you, Noelle. So Mythos first.

So Mythos, and we've talked a lot about this as a management team. We've talked a lot about it with our board, obviously with our CISO. I think, or we think, Mythos can best be interpreted as a signal in a much broader trend around, you know, sort of the curve on vulnerabilities. I think everybody knows what Mythos is, but just in case you don't, it's a frontier model that reports to be able to sort of detect and move to exploitation on zero-day vulnerabilities. And so, you know, the bank has a sort of a two-part response. The first part is very operational in orientation. We have vulnerability management practices. We have software development practices. We have a defense in-depth set of controls implemented in the bank. And so we continue to tune those and advance those. And both our software development organization and our architecture and cybersecurity organizations have been on top of this trend since long ago. And so Mythos is a point in time on a curve, but the trend has existed for quite some time. And so we have really been putting our energy into shifting left across the capability curve. So software and how AI is used inside the software development lifecycle, as I mentioned earlier, to help our software developers sort of identify, predict, determine where they might need to resolve something before it goes out the door. From a more strategic standpoint, vulnerabilities take advantage of complexity. They take advantage of technical debt, legacy, architecture, et cetera. And so you heard us talk today about our technology and really our bank game plan, which is to resolve the questions about technology lifecycle funding and obsolescence and really take that estate to the next level of modernization. that is as large a defense against vulnerabilities as anything else. And so our cybersecurity perimeter defenses, our threat intelligence is really, really quite strong. We have a defense in-depth strategy. We're shifting left. And then from a technology standpoint overall, the strategy helps by eliminating complexity and legacy technical depth.

Nick, can I just add one of the points I made when we were talking about FFG is the 10% reduction in our tech estate as one of the outcomes of the work just in the last two, two and a half years. We are doing the same with very clear targets on reducing our third-party suppliers. So this idea is how do we contain that estate in a way that we can mitigate against the risks better?

Yeah, and it's a great point because the third-party ecosystem, obviously not under immediate and direct control by standard charter, right? And so advancing our third-party security assessments in partnership with Tunisia's organization who has procurement and relationship management for us with third parties has been an integral part of the last year and we're well served by it now in my view.

I think Nick had a second question just on which models specifically we're using at the moment.

Yeah, so our businesses predominantly make choices around models because they really create the business cases, they create the value propositions, they are closest to our clients and can really ascertain so my suggestion would be that Judy is going to be speaking this afternoon she's very well versed on this and can discuss it at length in terms of WRB and what we're doing there with regard to models but I would just say to you yes in answer to your question about which models are being used right we're quite agnostic we're a pretty large bank we have a large number of businesses and they have different needs and different interest levels And so over time, from a technology strategy standpoint, what we endeavor to do is make sure that we are precise with regard to model utilization so that the value matches the cost of the model. The improvement of the model matches the value and the expectations of the client. And so that's what we try to do to enable the businesses.

Jason.

Thank you. Jason Napier from UBS. Tanish, with Fit for Growth, restructuring charges and growth saves, we've slightly lost track of what organic cost inflation in the bank is. If you could give us a sense as to what the underlying rate of inflation costs is. And then, Noel, within that context, I think we all agree that the AI companies of today are not making any money and are spending a lot of it. What proportion of group costs is IT, broadly defined, and is it a problem that we don't really know how they'll be charging in a year or two from now?

Okay, so I think on the first one, I'll probably turn actually to Manus to help come in on that and then on the second to Tanuj.

Thanks, Jason. I mean, obviously what we're doing is Tanuj and I and the rest of the team will be working very closely together on managing the cost of the bank going forwards. We've given you an indication in the past of what the inflation and growth rates of the bank are and you've seen those walks previously and I think you should assume that that's a natural run rate that we'll be at but you should also assume that we have flexibility ourselves both in terms of what we see in the environment and in terms of how we want to invest and the pace of investment that we go at so you've seen, we've called it out in historic cost walks in the past and I'm not calling out anything differently now but you should place that in the context of what we think we can achieve in terms of the top line and what you think we can achieve in terms of improving on this efficiency as well the managing the cost of tech and i know now i'd like noel to come in on this as well i mean one of the big things that we are doing

is being very very thoughtful on the cost of ai so i mean the big one was co-pilot which we did very recently rolled out to a large percentage of our workforce and i'm going to be very honest to say we did our time we took our time doing it quite intentionally right we took our time to roll out in a way which was a much more structured way so deep analysis across job families. What is the value creation framework for a job family that we roll it out in, et cetera? So yes, we are incurring the cost, but developing a very clear value creation framework to ensure that we have the right return on investment that we are doing with our colleagues from an augmentation perspective. In terms of buying tech with the overlay of AI, I know that's something you've been thinking a lot about, Noelle.

Yeah, I mean, I think Bill, you know, sort of referenced the points earlier today that I would give you first. I think it may appear to people that we might be a little slower than others with regard to AI. We don't publish numbers on, you know, sort of massive amounts of use cases and all these kinds of things that we see in the press. What we spent our time doing was investing in a platform because we fundamentally believe that the platform gives us scale, it gives us reusable capabilities, and it helps us sharpen our value creation framework, whether that is with regard to revenue and growth and client experience or whether that is operational efficiency. And our AI book is about 50-50 across both. But the marginal cost of reusing these capabilities is much lower than sort of a significant new build every time we have an idea. And so then one more thing I would add, which is I mentioned in my remarks that we have moved from large infrequent releases to small frequent changes daily, okay? So in my experience and in my opinion, that's how AI works best because oftentimes in generative AI in particular it doesn't come out of the box behaving itself like one might hope, right? And so what you're doing is sort of constantly tuning your hypothesis around the problem statement and you're tuning the model to sort of get it to work. So if you go big in that frame, you're going to spend a lot of money trying to get to an outcome that you could have proven at much lower cost. So we try to have that discipline. And the fact that we took our time on this platform, I think gave us the opportunity to really establish those frameworks. And we have two co-heads of AI. We have two folks leading it on the tech side. They work together on this framework to help our businesses and our functional groups really use this effectively.

Hi, thank you. Here's Catherine from JPMorgan. So I have two questions. One is that STAN operates across many jurisdictions, and I think different governments may have different guardrail when it comes to AI implementations, right? So how do we reconcile that? So say, for example, one example in China, I think they have very specific requirement on data storage and how to use data. So something that you build outside of China may be very challenging to implement it onshore, right? I'm not so sure about the other jurisdictions. I think they may have their own thing. So how do you reconcile that and make sure that within this connected bank, this will still work for Stan? I think this is question number one. Maybe this question first and then I'll go for question number two if it's possible.

Why don't you give the second question now and then we'll...

Oh, okay, okay, okay. I think for the second question, I think, okay, it's not easy to... Let me think about how to put it. It's about layoff, it's about staff management, right? Now we have AI. I think just now you mentioned a very good point is that AI handles the process where human handles the trust, the relationship, the growth, right? I think that's a very ideal picture. But in reality, I think some of our existing staff may not be the best fit in this type of model. So how do we handle that relationship? Like, some of the tech companies in the U.S. are making very, I would say, chunky cuts, like 20% of the workforce and all those. As a bank, how do we think about, like, human resources and staff management on that front?

Sure. So, I think the first one on jurisdictions and AI restrictions, Noelle, and then we'll turn to the second for Taneesh.

So, it's a good question, and we are in 54 different markets, so there are a lot of rules. The majority of rules are around data sovereignty and data storage. That really, that's the majority of the rules. The AI frameworks from a regulatory standpoint are coming forward, but I don't think they're substantiated enough to sort of, for me to comment on them really at the moment. So let me tell you about our architectural approach to AI, because we saw this coming, right? And we've had a lot of experience over a lot of years in all of these markets. And so we use two concepts that are really quite important to this thesis. The first is orchestration. And what that means is essentially where data is rule-based at rest, meaning it needs to be kept inside of a particular country and come to rest there and stay there and be encrypted, we honor that. And what orchestration does is it will pull that data across the network if a client who owns that data wants access to that data. And so we manage the complexity in the network itself. And so the network really becomes a big part of the strength. The second concept I mentioned earlier is portability. and portability is a concept that says essentially if something happens I can move from one market to another market and I'll give you an example it's not in AI but it is in data and Bill referenced it this morning when Amazon had three availability zones taken out in the Middle East and we do a lot of business in the Middle East we have data stored in the Middle East we have regulatory considerations about that data in the Middle East And so what we did is partnered with our regulators and our risk teams and our businesses to move that data to the geo-resilient data centers that I spoke about earlier in my remarks. And we did it in a matter of hours. And so that kind of concept is the portability concept. And so we are employing that concept. Again, we're not perfect, but we are employing that concept as much as we can to be able to facilitate on behalf of our clients across multiple jurisdictions, which is really one of the huge value propositions of the bank for them.

Let's go to sort of people. I mean, before that, I'd say we had a responsible AI council in our bank before generative AI became a thing. So, you know, even before generative AI came up, we were talking about exactly the kind of questions you're asking today. You know, how do you kind of compete with AI native companies when you have multi-geography, multi-regulatory set of frameworks? So this is something we obsess about a lot, as you would expect us to. I mean, on people, I mean, I spoke in my presentation about becoming a much more skills-based organization, and we've been on this journey now six, seven years. It's really not a tagline, but it is this realization that with AI coming in, the construct of jobs that we understand today is going to become irrelevant. So AI is going to impact every job, all of our jobs. We believe there will be very few jobs that will fully go away, but we believe there will be loads of activities in the jobs that we all do that will go away. So I think that mindset of what does it mean to become a company where people's work is defined by the jobs they occupy, to a company where you underpin all of the work by a consistent set of skills has been a journey we've been on for the last five years. And we've made a huge amount of progress on it. And what that has led is a big focus in our company on reskilling and redeployment. And I looked at the numbers just last week. If I look at last year, over 50% of the new jobs that have been created in the bank have been filled by people internally by reskilling and redeployment. That number was less than 30% even 18 months ago. So this idea that these are skills needed for the future, we are going to upskill our colleagues and deploy them in those roles is going to go away. We have been very clear in our presentation that structurally our back office or our corporate functions will be 15% lesser. And that means people's jobs are going to be impacted. We are going to give our colleagues all the support for them to be able to reskill themselves for opportunities within our bank or opportunities outside. So that's going to be the philosophy within which we will operate.

Thank you. I know there's a few more questions, but I think we are going to have to stop there. But Noel and Tanisha will be around the next break if you want to ask them any other questions. So thank you, Noel and Tanisha.

I represent PIMCO and we are a two plus trillion dollar fixed income asset manager with both a private side and a public side. We're trying to find attractive opportunity to invest, and that's sort of what we get paid to do. And we want to partner with banks to basically be a more efficient provider of capital than banks are. When you think of partnership, it's much easier to partner with somebody who has capital constraint and wants to work with us rather than someone who thinks they can do everything themselves. and that we are capable of analyzing the risk that for capital reasons banks don't want to own and that the risk which fits what we do will take and the risk where we don't think we're the perfect bid will just tell you, listen, there are better people than us to own it and vice versa. So the relationship is quite symbiotic and we have a very, very strong appetite for quasi and sovereign risk in emerging markets. So we run a big pool of emerging market. I think it is not believable that someone who's not a bank is going to manage to rebuild the origination capabilities of a full-scale bank. The bank has a lot of other things. They can flex, and they also think about all the ancillary revenue, cash management, currency, transaction finance, all of these things that they do by winning the debt ahead of the direct lenders, I think that some assets are going to be capital inefficient for banks because of what the regulator forces them to hold and not to hold. And those assets will end up in the hands of people like me. And I think that makes sense. I think a good partnership is a partnership where you have a longstanding trust. You know how to work together. and you go out of your way to make sure that you don't go around your partner to try to source your own risk. So one of the things which has worked very well with us with Standard Chartered is we've used your origination capability to structure very good transaction, and we feel that our skills are complementary, and I feel that you have looked after the interest of our clients, and we have found the right middle ground where we maximize our fiduciary duty and so have you.

Roberto, just confirming you can hear us.

I can hear you, David.

Yes, we can.

Great. Thank you very much. And thank you, Manny. Hello, everyone. Many apologies for not being able to join you live in person today. Not many things could have kept me from being in Hong Kong with all of you on the team, but my son's university graduation is one of them, and that's happening tomorrow morning. A year ago, we delineated our CIB business strategy at an investor seminar in London. And today, we're going to focus on how this strategy links to the themes that Bill has already outlined, and how the areas that we are confident will continue to drive momentum in our business. CIB has several competitive advantages that we've built over the past few years. One, our network is critical for our clients and it can be reconfigured quickly in anticipation of supply chains and capital flows. Network income is higher returning than single market domestic income and it is growing rapidly. Two, our corporate business is unique due to our footprint and trusted long-term relationships. Credit origination from the corporate franchise and risk distribution into our global FI client base have driven balance sheet velocity and significantly higher returns. We're focused on significantly scaling this activity. Third, our sustainable finance income has crossed the $1 billion mark in 2025. We've had great results by introducing new sustainable technology into emerging markets and then financing it by a global fi client base in digital assets we've shown the ability to compete at the front end of the pack we're moving from thought leadership to monetization having completed a variety of transactions including some firsts for gsib as you will hear from jeff caught on thursday rising wealth participation in our footprint is a big opportunity for our business and one that we're positioned to capitalize on across our WRB and CIB franchises. CIB has the products, advice, and solutions that our wealth clients seek. Ray Ang, our Global Head of Private Banking, will talk to you about this later. Before we drill down, it's worth recapping a little bit on where we've come from in the past 10 years. Our financial performance has improved as we've narrowed our focus to areas of competitive differentiation. We've become much more disciplined in how we allocate capital using metrics and incentives that are directly linked to our desired client outcomes having established network income as our sweet spot we've made it the biggest contributor to our revenue clients value our ability to originate and transform risk by our markets and banking teams and prize other transaction services business can facilitate the seamless movement of cash, trade, and custody around the global network. We returned to accretive growth. We exited business lines that were not aligned to our strategy, such as principal finance and aviation leasing, and we reduced our exposure to local corporates. All of this has put us in a position where we can focus on structural, long-term value creation. This makes us more resilient. Top-line growth slowed a little over the last two years due to the falling rates headwind, and we have increased the quantum of our rates hedge to decrease sensitivity. We've built technology solutions that our clients value, making it easier for them to transact whilst improving our own operating efficiency. To take a very topical example, we now provide digital front-end solutions for fiat underlying, which will also manage digital asset underlying in the medium term. We can deliver fiat and digital, whether one ends up dominating or whether they will end up coexisting. From a platform's point of view, deploying the straight-to-bank engine and payments, or the Sabre tool at the heart of our risk management offering in markets, reflect our successful execution of single solutions. This makes us simpler, faster, and less error-prone. We target international corporates and financial institutions that need our network for distribution, execution, and sourcing risk. And the league tables bear testament to what we've achieved in our chosen products and geographies. Importantly, we've not yet maximized the addressable wallet that is available from our largest multinational, FI, and corporate clients. This presents a very significant upside opportunity. We're driving the cross-sell between products by measuring and then rewarding collaboration that delivers a tangible client outcome. We're building a far more sophisticated client wallet measuring tools and aligning our resources accordingly. Client review meetings and discipline around wallet planning have been introduced with a new level of focus, all led by a coverage banking division. Our MIS tracks performance daily and measures how effective our resource deployment is in generating accretive shareholder returns. As we look to the future, the goal is simple. Deliver a best-in-class experience to our clients with a relevant product suite by innovative platforms. We're nowhere near saturation point, and this is very exciting for the short, medium, and long-term prospects of our business. There are good reasons why we talk about our network, how it is unique, and how it drives high returns. Clients need a bank that can provide deposits, financing, and derivative solutions at speed, with seamless pricing and execution across the globe. We historically focused on domestic, local market, corporate business, but we've been aggressively pivoting by exiting or up-tiering clients for whom we cannot deliver the best value, and by serving corporates and FIs who treasure our cross-border strategy. This is why network income is now over two-thirds of our total income. Network income is growing faster than many of the external benchmarks that we all monitor, such as global market and trade volume growth, credit growth, global GDP growth, and swift payment volume growth. Our goal is to take network income above 70% of our total revenue stream, and we're well on the way to reaching that target. If we now look at the patterns in our network. Our corridors are reconfiguring and growing as the world's trade and investment destinations shift. This plays entirely to our existing competitive advantage. Our clients are showing a resilience to the change in the macro environment, and we are able to follow them. The fact that we have multiple corridors and no singular dominant corridor diversifies our revenue stream. China, for example, is one end of many of these corridors. They've adapted their supply chains and distribution channels and we have facilitated this change across our footprint and we've located native speakers in relevant markets to best service our clients' needs wherever they operate. We see China into ASEAN and China into South Asia as growth corridors now and in the future. Looking at the Middle East, the region has increasingly been providing an attractive investment in recent years. We've participated in this trend with people, technology and capital, and we expect the geopolitical situation to amplify inbound opportunities into the GCC, particularly from North Carolina solutions across borders, we enjoy a far better return. Through time, we managed to go deeper with our clients by adding new markets and new products. We solved their complex issues, and we gained positive wallet share convexity. Our network deals enjoy an excess return on RWA of more than 200 basis points relative to domestic income flows. Our stats on cross-sell and the positive linkage between product penetration and the income multiplier tell a very good story. The multiple we achieve as we go deeper with a client is clear. We make 25 times more from the clients in the green box versus those in the gray box. We now transact in three or more products or markets with 44% of our clients, up from 32% in 2019, and we still see further room for improvement. When the Venn diagrams of our network and clients' needs overlap, we build an enduring, valuable, and trusted relationship. Having discussed the overall trends for trade and investment corridors, I'd like to give you a snapshot of what this means for corporates and financial institutions. MNCs are having to adapt to evolving legal frameworks, regulation, technology, and the impact of climate change. The importance of operational resiliency is increasing year by year. COVID, tariffs, deglobalization, geopolitical changes are all leading to an increased need for infrastructure spend, French shoring, defense spend, energy and food security, amongst Certainty of delivery is becoming more important than price. It is unrealistic that we will revert to a world where all goods are manufactured locally for domestic needs only. A new equilibrium will be found with key players expecting sovereignty over the key nodes in their supply chains. All of this creates enormous opportunity for our network business, playing to our strengths in the corridors that matter, regardless of whether they already exist or will emerge in the coming years. Now, the corridors for our financial institution client base are often quite different to those of the MNCs. Developed market FI clients want access to yield and new markets. Our footprint offers risk diversification and returns enhancement. And few banks can grant the access, liquidity, and structure solutions that we do by our branch and subsidiary network. This has been a huge strength of ours for many years. but only in more recent history have we really concentrated on targeting FI flows. Conversely, the developing and emerging markets in our network need developed market solutions as populations age. Their need for long-term assets and asset liability management structures to fund pension and life insurance products is very real and tangible. We're in the right places at exactly the right time to meet the demand from local market insurance companies, pension funds, and asset managers who rely on our capabilities to solve their issues in an increasingly affluent aging world. FI is 54% of our CIV business today. The client base within FI is highly diversified and we see growth opportunities in each and every one of these client segments. Banks and broker-dealers value our clearing licenses and access to markets where they lack presence and scale. Investors look to us for yield enhancement. We source EM macro and credit risk via our corporate and FI footprint engines, and we then distribute this risk. From vanilla to more complex structures such as TRS and CLOs, our clients value our offering tremendously. The ability to originate and transform risk to suit client preferences is something we excel at, and something that sets us apart from our competition. Network income and FI income offer superior returns on RWA, which is why we're optimizing the allocation of our financial resources towards these lines. Our aim is to maintain our trajectory in FI, which as mentioned currently makes up 54% of our income today, and our goal is to have this reach 60% by 2030. Last year, we spoke to you about O2D Originated Distribute at our CIB Investor Day. It's a model that has existed since the 1970s, when banks started evolving from originate to hold, where they were long-term holders of credit risk, into arrangers, structurers, and distributors of risk. I highlight this because O2D represents one of the most impactful chapters in the convergence of commercial banking and investment banking, but also in the development of standard chartered over the last 10 years. We've shown an ability to push origination higher by taking market share and by adding new product capabilities. Our corporate clients value us addressing their financing needs in terms of capital and solutions, and our FI clients reward us as we enable access to diversified structures with attractive yields. This is still a massive opportunity for us. Our goal is to grow origination at double-digit percentages and then distribute at even higher levels, and this will enable double-digit income growth and single-digit balance sheet growth. The reason we've built this capability over time, and we continue to do so, is because it is absolutely critical to our client strategy. Growing the FI client base and expanding CIB's capabilities in Europe and the U.S. has given us a far better traction on the distribution side. The very clear headroom to expand this space is why we're so focused on growing both our origination and distribution engines. Another most recent strategic priority, and one which we are now amongst the market leaders, is deploying capital towards sustainable solutions. The world clearly needs energy, and in the long term, it needs it to be plentiful and clean. Demand from clients and investors remains very tangible, even in a universe of shifting priorities. The $1 billion we made in this segment last year achieved this public commitment one year early. A couple of real-world examples, we finance the world's first greenfield sustainable aviation fuel project and the UK's largest battery storage asset. We provide sustainability-linked sovereign lending and non-recourse nature-based project finance. These transactions demonstrate our ability to combine balance sheet strength, structuring capabilities, and risk-bearing capacity to unlock new markets, mobilize capital, and deliver tangible decarbonization and resilience outcomes in both developed and emerging economies. So in terms of CIB priorities, you can think of them as follows. Growing the FI client base, improving our originate to distribute capabilities, developing a leading sustainable and transition finance franchise, and building a world-class digital assets offering. On the latter, Client demand is increasing as use cases become reality, whether that be for access, execution, custody, tokenization, or interoperability. In the last two years, we've executed payments on chain and distributed notes on chain, and we provide liquidity in crypto. We keep adding capabilities. As of today, the pure play stable coin and tokenized deposit providers are limited by licenses, regulation, and access to central bank windows. Each of these barriers will potentially drop away and we'll be ready for a world where assets and libraries move in real time and on a 24-7 basis. CIB is investing in people and tech so that we'll continue to deliver for our clients as we enter a highly disruptive period for the banking sector. We see opportunity in this disruption and we're investing for growth. With our recent hire of Oli Mathewson, we're creating a single digital stream that works across all our product horizontals with full implementation and P&L accountability. As Bill has said, we've positioned ourselves as a trusted bridge between TradFi and DeFi, providing institutional-grade advice and rails to access, transact, trade, store, and manage digital asset risk safely and efficiently. And we're deeply involved in the development of market infrastructure, working with regulators and governments to help create secure and interoperable ecosystems for digital assets. We've been experimenting in this space since 2016 and now see an inflection point with stablecoins and related tokenized assets finding their way into the mainstream. Using transaction services as an example of monetization, having a single payments platform across the network in the form of S2B NextGen makes us simpler and faster to scale. Clients connect their platforms via APIs into our easy-to-use solutions, and we're seeing rapid growth in products such as digitized cash and FX as a result. Simple and effective connectivity to our platforms translates into steady, repeatable business. Other client use cases, in addition to custody and real-time settlements, include tokenized money market funds, risk mitigation via hedging of crypto, and collateral mirroring. Beyond digital assets, we'll continue to invest more broadly into our technology capabilities across CIB. In global markets, this means building scalable platforms and infrastructure that meet the needs of an increasingly sophisticated client base. Our market's business has been transformed. We focus on client needs and build content, products, risk transformation capability, and technology to service them with intent and purpose, delivering value at speed. We moved away from being a largely effects-dependent business to one that competes in rates, commodities, and credit. We're a leading diversified EMFIC franchise and have increased market share significantly with key clients across the globe. We're now top three in EMFX and rates in APAC and a top five EMFIC franchise. A core outcome of our focus has been the growth in flow income, which we've shown you before. This is our income from regular, predictable, and consistent client deals as they transact in relatively liquid products. Flow business is high quality, recurring, and stable, and it is not dependent on market movements or outsized financing or M&A. And we've focused on growing this income stream steadily. In the last year, we've hired exceptional talent and deployed technology to keep growing our market share by streaming more products and prices to venues where we have the expertise to assess risk and provide liquidity. These investments enable the expansion of the business, and we will continue to further scale this model, driving a growing and even more resilient flow income stream. So in conclusion, our strategy will drive the group outlook of 5% to 7% income growth from 2025 to 2028. FIs and corporates value our ability to originate, transform, and distribute risk by our markets and banking teams. In markets, we'll keep growing our client flows, and in banking, we'll keep origination and distribution growth at double-digit levels. And clients rely on the transaction service business for the seamless movement of cash, trade, and custody around the globe. We will expand the transaction services business as the rate's headwind is slowing, and we are better hedged. We'll continue to innovate within the digital asset space. Lastly, we'll continue to upskill our coverage banking team to provide more value to clients by ensuring that all our products are delivered seamlessly. and Jan Metzger will be joining us soon to lead this effort. Our income outlook is underpinned by the five long-term structural shifts that I've talked you through.