Standard Chartered’s (SCBFF) Q1 2017

Andy Halford – Chief Financial Officer

On corporate and institutional banking

“In corporate and institutional banking, we saw some early signs of balance sheet momentum towards the end of the quarter that income was lower than in the fourth quarter in 2016. That was mainly due to the timing of corporate finance transactions, where you will recall we had a very strong finish to 2016 and to foreign exchange, where volatility was lower than in the period immediately after the U.S. election results in the fourth quarter of last year.”

Expenses are up

“Moving on to expenses, year-on-year, they were up 3%, excluding regulatory costs, despite significant investment and underlying cost inflation”

Interest rate hikes in the US on margins

“…we have got the rough estimate of 50 basis points of increase in U.S. interest rates as being $300 million to $400 million full year effect. We said that that did assume that those interest rates were updated sort of globally, irrespective whether it was dollar or local currency…I think after a number of quarters when we have seen overall margin decline, it is encouraging that we are now sort of sequentially flat and flat year-on-year. And back to the previous point, obviously one of the things that’s helped that has been the increase in the U.S. interest rates. ”

They are assessing the impact of IFRS 9

“IFRS 9 obviously is going to come in at the end of this year and clearly per your note and other notes, that will tend to be a slight drag rather than the opposite. And Basel III/IV, a little bit unclear quite where that is in this process now. So there are sort of one or two things still wobbling around out there, but hopefully, over time, those will clarify certainly the former of those two. .”