STANCHART(US:SCBFY)2023-07-28 18:11Financial Data and Key Metrics Changes - Total income for Q2 2023 was $4.6 billion, up 24% year-on-year on a constant currency basis, marking the eighth consecutive quarter of top-line growth [3][4] - Underlying profit before tax for Q2 was $1.6 billion, up 32% year-on-year, with a return on tangible equity (RoTE) of 12.1% [5][8] - For the first half of 2023, total income increased by 18% to $9 billion, with a RoTE of 12.0%, up three percentage points year-on-year [6][8] Business Line Data and Key Metrics Changes - Wealth Management income was up 10% year-on-year in Q2, marking the first quarter of growth after five quarters of declines [4] - Financial Markets delivered record income of $2.8 billion in Q2, up 15% year-on-year [4][17] - CCIB (Corporate, Commercial & Institutional Banking) income was $5.8 billion, up 33%, while CPBB (Consumer, Private & Business Banking) income rose 30% to $3.6 billion [24] Market Data and Key Metrics Changes - The China offshore business saw strong growth, up around 60% in the first half of 2023 [7] - Cross-border income in CCIB was up 44% to $3.4 billion, with significant growth in Asia and Europe [25] - The Asia region delivered record first-half income and a RoTE of 19%, with 11 markets achieving record income [27] Company Strategy and Development Direction - The company is focused on capturing structural growth opportunities in Asia, with GDP growth in the region expected to exceed 5% [49][50] - Strategic investments in Financial Markets and Wealth Management are expected to drive long-term growth [30][69] - The company aims to mobilize $300 billion of sustainable finance by 2030, with $65 billion delivered so far [70][71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for most markets despite recent challenges, particularly in Asia [48] - The company expects to see continued growth in regional trade flows and a reconfiguration of supply chains [51] - Credit impairment charges are expected to remain low, with a full-year loan loss rate projected between 17 and 25 basis points [46] Other Important Information - The CET1 ratio was 14.0%, at the top of the target range, with a $1 billion share buyback announced [9][43] - The company upgraded its 2023 income growth guidance to 12% to 14% at constant FX [45] - The Ventures portfolio, including digital banks Mox and Trust, is on a strong growth trajectory, with profitability expected in 2024 and 2025 respectively [67][68] Q&A Session Summary Question: Full-year 10% RoTE guidance and moving parts for Q4 - Management acknowledged the strong first half but noted that the second half typically sees lower RoTE due to seasonal factors and potential credit impairments [76][79] Question: Expectations for 2024 guidance based on deposit performance - Management expressed satisfaction with deposit growth and noted that while they do not provide specific guidance for 2024, the current performance suggests a positive outlook [81][82] Question: Sustainability of Financial Markets revenue growth - Management highlighted structural investments that support steady growth in Financial Markets, with a focus on flow income and the ability to capitalize on market volatility [90]