Q1 2026 Standard Chartered PLC Earnings Call

April 30, 2026

Manus Costello: Good morning, and good afternoon, everyone. Thank you for joining us today. I'll take a few minutes to lead you through our Q1 2026 results, then Bill Winters and I will take your questions. In my remarks, I'll be comparing performance year-on-year at constant currency, unless otherwise stated. As a reminder, these results are now presented on a reported basis, as outlined in the press release we published on 25 March. We've had a strong start to the year, delivering record income on the back of continued momentum in Wealth Solutions, Global Banking, and Global Markets flow income. We are maintaining our 2026 guidance, and we continue to expect return on tangible equity to be greater than 12% this year. Since we last spoke to you, the conflict in the Middle East has developed.

Speaker #1: Good morning, and good afternoon, everyone. Thank you for joining us today. I'll take a few minutes to lead you through our first quarter 2026 results.

Speaker #1: Then Bill Mannis and I will take your questions. In my remarks, I'll be comparing performance year-on-year at constant currency, unless otherwise stated. As a reminder, these results are now presented on a reported basis, as outlined in the press release we published on March 25th.

Speaker #1: We've had a strong start to the year, delivering record income on the back of continued momentum in Wealth Solutions, Global Banking, and Global Markets' flow income.

Speaker #1: We are maintaining our 2026 guidance, and we continue to expect return on tangible equity to be greater than 12% this year. Since we last spoke to you, the conflict in the Middle East has developed.

Speaker #1: Our priority remains the safety of our people and serving our clients' needs. While there's been no material impact on our portfolios, we have taken precautionary ECL overlays in order to reflect the risk of a prolonged conflict.

Manus Costello: Our priority remains the safety of our people and serving our clients' needs. While there's been no material impact on our portfolios, we have taken precautionary ECL overlays in order to reflect the risk of a prolonged conflict. We remain watchful of the external environment, and we will continue to support our clients as they adjust to this evolving landscape. I'll now take you through the numbers in more detail. Q1 income of $5.9 billion was up 9%. This was driven by strong non-interest income growth, particularly in Wealth Solutions and Global Banking. Expenses were up 1%, with business growth largely funded by Fit for Growth and other efficiency savings. Credit impairment of $296 million included $190 million of precautionary overlays in relation to the Middle East conflict.

Speaker #1: We remain watchful of the external environment, and we will continue to support our clients as they adjust to this evolving landscape. I'll now take you through the numbers in more detail.

Speaker #1: First quarter income of $5.9 billion was up 9%. This was driven by strong non-interest income growth, particularly in Wealth Solutions and Global Banking. Expenses were up 1%, with business growth largely funded by Fit-for-Growth and other efficiency savings.

Speaker #1: Credit impairment of $296 million included $190 million of precautionary overlays in relation to the Middle East conflict. Put together, we delivered $2.5 billion in profit before tax, a return on tangible equity of 17.4%, and a 31% increase in our EPS.

Manus Costello: Put together, we delivered $2.5 billion in profit before tax, a return on tangible equity of 17.4%, and a 31% increase in our EPS. I will now cover each component in detail. NII was down 3% quarter on quarter, as volume growth and mix benefits were offset by the impact of lower rates during the quarter, especially HIBOR. Volume growth was supported by an increase in client activity in Global Banking, and we also saw a positive impact from improved liability mix, especially in transaction services and WRB CASA. While interest rate expectations have been volatile in recent months, our weighted average rate outlook remains largely unchanged, indicating a 42 basis point reduction in 2026. We continue to expect pass-through rates to normalize over time.

Speaker #1: I will now cover each component in detail. NII was down 3% quarter-on-quarter, as volume growth and mix benefits were offset by the impact of lower rates during the quarter.

Speaker #1: Especially HIBOR. Volume growth was supported by an increase in client activity in global banking. And we also saw a positive impact from improved liability mix, especially in transaction services and WRB KASA.

Speaker #1: While interest rate expectations have been volatile in recent months, our weighted average rate outlook remains largely unchanged, indicating a 42-basis-point reduction in 2026.

Speaker #1: We continue to expect pass-through rates to normalize over time, and as a reminder, WRB portfolio actions are expected to reduce NII by around 2% in 2026.

Manus Costello: As a reminder, WRB portfolio actions are expected to reduce NII by around 2% in 2026. These headwinds are expected to be mitigated by volume growth. As a result, we continue to expect NII to be broadly flat in 2026. Non-interest income, which was around 51% of group income in Q1, was up 16% year on year. This was driven by significant growth in Wealth Solutions and Global Banking. I'll talk to the product performance in more detail when I come to the business segments. Turning to expenses. Q1 operating expenses were up 1% year on year as business growth and inflation was largely offset by FFG. We incurred $119 million of FFG cost to achieve in the quarter and have achieved an exit run rate savings of around $900 million so far.

Speaker #1: These headwinds are expected to be mitigated by volume expect NII to be broadly flat in 2026. Non-interest income, which was around 51% of group income in Q1, was up 16% year-on-year.

Speaker #1: This was driven by significant growth in Wealth Solutions and Global Banking. I'll talk to the product performance in more detail when I come to the business segments.

Speaker #1: Turning to expenses. Q1 operating expenses were up 1% year-on-year, as business growth and inflation was largely offset by FFG. We incurred $119 million of FFG cost to achieve in the quarter, and have achieved an exit run rate savings of around $900 million so far.

Speaker #1: We continue to expect expenses to remain broadly flat in 2026 at constant currency, and excluding material notable items. Credit impairment for the quarter was $296 million.

Manus Costello: We continue to expect expenses to remain broadly flat in 2026 at constant currency and excluding material notable items. Credit impairment for the quarter was $296 million, including $190 million of management overlays and post-model adjustments relating to the Middle East conflict. This includes a new downside scenario, which considers the impact of a prolonged geopolitical crisis in the Middle East, leading to sustained disruptions in energy supply and elevated global commodity prices. In addition, we've taken overlays for the petrochemical sector and for potential sovereign downgrades which could result from a sustained conflict. CIB credit impairment was $111 million, reflecting a portion of these overlays offset by net recoveries across the rest of the portfolio. WRB remained resilient and continued to benefit from portfolio optimization actions, with impairment broadly flat despite the overlays.

Speaker #1: Including $190 million of management overlays and post-model adjustments relating to the Middle East conflict. This includes a new downside scenario, which considers the impact of a prolonged geopolitical crisis in the Middle East, leading to sustained disruptions in energy supply and elevated global commodity prices.

Speaker #1: In addition, we've taken overlays for the petrochemical sector, and for potential sovereign downgrades, which could result from a sustained conflict. COB credit impairment was $111 million, reflecting a portion of these overlays offset by net recoveries across the rest of the portfolio.

Speaker #1: WRB remained resilient, and continued to benefit from portfolio optimization actions. With impairment broadly flat despite the overlays. Our annualized loan loss rate in the quarter, including the overlays, was 32 basis points, within our 30 to 35 basis point through-the-cycle guidance.

Manus Costello: Our annualized loan loss rate in the quarter, including the overlays, was 32 basis points, within our 30 to 35 basis point through the cycle guidance. Overall credit quality remained resilient. Our high-risk assets were up around $700 million in the quarter due to an increase in early alerts as a result of the Middle East conflict. While credit grade 12 and net stage 3 remained broadly stable. The Middle East represents around 6% of the group's exposures. More than 90% is in CIB and weighted towards sovereigns and financial institutions. While WRB exposures are mostly secured. We've included details on this later in the deck. Moving on to balance sheet. We continue to see growth in underlying loans and advances to customers, which were up 3% or $10 billion in the quarter, primarily from Global Banking and secured wealth lending.

Speaker #1: Overall credit quality remained resilient. Our high-risk assets were up around $700 million in the quarter due to an increase in early alerts as a result of the Middle East conflict.

Speaker #1: While credit grade 12 and net stage 3 remained broadly stable. The Middle East represents around 6% of the group's exposures. More than 90% is in CIB and weighted toward sovereigns and financial institutions, while WRB exposures are mostly secured.

Speaker #1: We've included details on this later in the deck. Moving on to balance sheet. We continue to see growth in underlying loans and advances to customers, which were up 3%, or $10 billion in the quarter, primarily from global banking and secured wealth lending.

Speaker #1: Underlying customer deposits were up 3%, with strong growth in KASA across WRB and CIB. Risk-weighted assets were up 3% in the quarter, primarily driven by asset growth and mix, as well as a $3 billion increase in market risk RWA, as we continued to help clients capture market opportunities.

Manus Costello: Underlying customer deposits were up 3%, with strong growth in CASA across WRB and CIB. Risk-weighted assets were up 3% in the quarter, primarily driven by asset growth and mix, as well as $3 billion increase in market risk RWA as we continued to help clients capture market opportunities. These were partly offset by FX and optimization actions. Our CET1 ratio was 13.4% in the quarter, as capital generation was offset by distributions and business growth. Now let's take a look at our business segments. CIB income was $3.6 billion, up 6%. We saw continued momentum in Global Banking, with income up 19% on the back of increased origination volumes. Within Global Markets, we delivered record flow income, up 17%.

Speaker #1: These were partly offset by FX and optimization actions. Our CE21 ratio was 13.4% in the quarter, as capital generation was offset by distributions and business growth.

Speaker #1: Now let's take a look at our business segments. CIB income was $3.6 billion, up 6%. We saw continued momentum in Global Banking, with income up 19% on the back of increased origination volumes.

Speaker #1: Within Global Markets, we delivered record flow income, up 17%. We saw increased client activity across rates and FX products, while we also benefited from our continued investments in electronic platforms and people.

Manus Costello: We saw increased client activity across rates and FX products, while we also benefited from our continued investments in electronic platforms and people. Episodic income was lower against a strong comparator in Q1 2025, with 12-month rolling income now around $800 million. Turning to WRB. Income was up 13% to $2.5 billion. This was driven by a record quarter in affluent net new money and Wealth Solutions income. Wealth Solutions was up 32%, with strong client activity across multiple asset classes in investment products, while bank assurance was up 20%. Affluent net new money inflow of $18 billion was equivalent to 16% annualized growth in affluent AUM, and was driven primarily by wealth products. This demonstrates our strength in engaging a growing affluent client base, rapid idea execution on our open architecture platform, enabling value creation amidst market volatility.

Speaker #1: Episodic income was lower, against a strong competitor in Q1 2025, with 12-month rolling income now around $800 million. Turning to WRB, income was up 13%, to $2.5 billion.

Speaker #1: This was driven by a record quarter in affluent net new money and wealth solutions income. Wealth solutions was up 32%, with strong client activity across multiple asset classes and investment products, while bancassurance was up 20%.

Speaker #1: Affluent net new money inflow of $18 billion was equivalent to 16% annualized growth in affluent AUM, and was driven primarily by wealth products. This demonstrates our strength in engaging a growing affluent client base, rapid idea execution on our open architecture platform, enabling value creation amidst market volatility.

Speaker #1: As a reminder, the digital banks are now reported within WRB. Box was profitable in the first quarter, and trust also turned profitable in March.

Manus Costello: As a reminder, the digital banks are now reported within WRB. Mox was profitable in Q1, and Trust also turned profitable in March. To conclude, we've had a strong start to the year with a standout performance in Wealth Solutions, Global Banking, and Global Markets flow income. This reflects the continued success of our cross-border and affluent strategy. Our credit quality remains resilient, and we are watchful of the external environment. As mentioned, 2026 guidance remains unchanged, and we have provided medium-term financial framework at our investor event in May. With that, I'll hand back to the operator, and Bill, Manus, and I will be happy to take your questions. Thank you.

Speaker #1: So to conclude. We've had a strong start to the year, with a standout performance in wealth solutions, global banking, and global markets flow income.

Speaker #1: This reflects the continued success of our cross-border and affluent strategy. Our credit quality remains resilient, and we're watchful of the external environment. As mentioned, 2026 guidance remains unchanged, and we'll provide a medium-term financial framework at our investor event in May.

Speaker #1: With that, I'll hand back to the operator and Bill Mannis and I will be happy to take your questions. Thank you.

Speaker #2: As a reminder to ask a question on the phone, please press star 11 and wait for your name to be announced. To withdraw your question, please press star 11 again.

Operator: We are now going to proceed with our first question. The question's come from the line of Joseph Dickerson from Jefferies. Please ask your question.

Speaker #2: Once again, it's star 11 and wait for your name to be announced. To withdraw your question, please press star 11 again. If you wish to ask a question on the webcast, please type them in the question box and click submit.

Speaker #2: We are now going to proceed with our first question. The questions come from the land of Joseph Dickerson from Jefferies. Please ask your question.

Operator: We are now going to proceed with our first question. The question's come from the line of Joseph Dickerson from Jefferies. Please ask your question.

Speaker #3: Hi, good morning, guys. Really good quarter here, pretty much across the board. Maybe slightly an unfair question, but just on the 2026 guides—I guess we've started off the year very strong on NII and deposits and margin.

Joseph Dickerson: Hi, good morning, guys. A really good quarter here, pretty much across the board. Maybe slightly an unfair question, but just on the 2026 guides, I guess we've started off the year very strong on NII and deposits, and margin. It looks like your costs are tracking ahead. I suspect Q2, if you want to engage in my comments, since I suspect Q2 is probably at a pretty good start on wealth deposits as well. I guess I'm wondering why there's, you know, why you're keeping the guidance so conservative for this year, or is it just because you want to focus more on the medium term, in a few weeks, in May? I guess secondly, I suspect you'll touch on this in May as well.

Speaker #3: It looks like your KASA is tracking ahead. I suspect Q2, if you want to engage in my comments on this, I suspect Q2 is probably at a pretty good start on wealth deposits as well.

Speaker #3: So, I guess I'm wondering why you're keeping the guidance so conservative for this year—is it just because you want to focus more on the medium term, in a few weeks in May?

Speaker #3: And then I guess secondly, and I suspect you'll touch on this in May as well, how do you think about because you now have a return of loan demand in the footprint that's driving asset growth, but it's also driving some RWA growth on the credit side.

Joseph Dickerson: How do you think about, 'cause you now have a return of loan demand in the footprint, that's driving asset growth, but it's also driving some RWA growth on the credit side, obviously. I guess, how do you think about the RWA density of the group going forward? Should we expect this to continue to improve, or do you think that now that loan demand seems to be coming back, that that's a nice profitable activity to continue to drive growth for you? Thanks.

Speaker #3: Obviously, how do you think about the RWA density of the group going forward? Should we expect this to continue to improve, or do you think that now that loan demand seems to be coming back, that that's a nice profitable activity to continue to drive growth for you?

Speaker #3: Thanks.

Speaker #4: Yeah, thanks, Joe, very much for the question. And I'll turn to guidance. I'll turn to Mannis for the guidance question. But just a couple of upfront comments.

Bill Winters: Yeah, thanks, Joe, very much for the question. I'll turn to Manus for the guidance question. Just a couple of upfront comments. Yeah, the Q1 showed really strong momentum across the board. That momentum is carrying through into the early part of the Q2. We are encouraged by the business. Loan demand, maybe a better way to put it is lending opportunities for us. Opportunities to use our balance sheet profitably. That has been a feature in the Q1, hence the improvement in returns despite the RWA increases.

Speaker #4: Yeah, the first quarter showed really strong momentum across the board. That momentum is carrying through into the early part of the second quarter, so we are encouraged by the business.

Speaker #4: The loan demand maybe a better way to put it is lending opportunities for us, opportunities to use our balance sheet profitably. So that has been a feature in the first quarter, hence the improvement in returns despite the RWA increases.

Speaker #4: And that has also carried through to the second quarter, although one would imagine that if this conflict in the Middle East persists, we would see some shifting there.

Bill Winters: That has also carried through to Q2, although one would imagine that if this conflict in the Middle East persists, that we would see some shifting there, probably both in returns but also in loan demand. Overall, we're certainly confident about the prospects for the business. I'll turn to Manus for specific questions on guidance.

Speaker #4: Probably both in returns, but also in loan demand. But overall, we're certainly confident about the prospects for the business. I'll turn to Mannis for any specific questions on guidance.

Manus Costello: Thanks, Bill. Thanks, Joe, for noting that, yes, we did have a very good Q1, a good start to the year, up 9% in income terms. As you think about the year going forward, I would remind you of a couple of factors. Firstly, in Q2, remember that we are cycling a couple of events in Q2 2025, when we had a gain in our ventures business, and we also had a very strong episodic print in Q2 2025 as well. When thinking about growth year on year, do bear in those things in mind for Q2. The second thing is, of course, our NII guidance remains broadly flat. I'm sure we'll discuss that more later.

Speaker #5: Thanks, Bill. And thanks, Joe, for noting that, yes, we did have a very good first quarter—a good start to the year, up 9% in income terms.

Speaker #5: As you think about the year going forward, I would remind you of a couple of factors. Firstly, in the second quarter, remember that we are cycling a couple of events in Q2 '25, when we had a gain in our ventures business, and we also had a very strong episodic print in Q2 '25 as well.

Speaker #5: So when thinking about growth year on year, do bear in that those things in mind for the second quarter. The second thing is, of course, our NII guidance remains broadly flat.

Speaker #5: I'm sure we'll discuss that more later. But we still have some headwinds, both from the curve and from our own portfolio actions in WRB.

Manus Costello: We still have some headwinds, both from the curve and from our own portfolio actions in WRB. Do bear those in mind when you're thinking forward, despite the strong start to the year.

Speaker #5: So do bear those in mind when you're thinking forward, despite the strong start to the year.

Speaker #3: Great.

Joseph Dickerson: Great. Thanks. Can I just ask a follow-up, if you don't mind?

Speaker #6: A follow-up, if you don't mind.

Speaker #5: Go ahead, Joe.

Bill Winters: Go ahead, Joe.

Speaker #6: Yeah. No, just on your overlays, you called out because I guess it links to the RWA point. You called out some overlays you were taking regarding sovereign risk.

Joseph Dickerson: No, just on your overlays you called out, 'cause I guess it links to the RWA point. You know, you called out some overlays you were taking regarding sovereign risk. Do you have any? I'll have to look in the annual report perhaps, but do you have any sensitivities on what the sovereign downgrades could mean on RWAs, any RWA inflation that we could take a look at?

Speaker #6: Is there do you have any I'll have to look in the end of your report, perhaps. But do you have any sensitivities on what sovereign downgrades could mean on RWAs?

Speaker #6: Any RWA inflation that we could take a look at?

Speaker #5: I'll turn to Peter on that one. But also, we've always called out in the past the impact on our RWAs from sovereign risk downgrades.

Bill Winters: I'll turn to Pete on that one. Also we've always called out in the past the impact on our RWAs from sovereign risk downgrades. They were unrelated to the conflict. To the extent that we've got material changes, we will certainly call them out directly. Pete.

Speaker #5: They were unrelated to the conflict. But so, to the extent that we've got material changes, we will certainly call them out directly. But Pete?

Speaker #7: Thanks. With regards to the overlays, when we look for sovereign risk, we are really looking at countries that are potentially more sensitive to higher oil prices—oil importing countries—and might not have the fiscal headroom.

[Company Representative] (Standard Chartered): Thanks. With regards to the overlays that we took for sovereign risk are really looking at countries that are potentially more sensitive to higher oil price, oil importing countries, and might not have the fiscal headroom. As far as RWA potential impacts of that, I guess I would say they're manageable, not material, and well within our guidance.

Pete Burrill: Thanks. With regards to the overlays that we took for sovereign risk are really looking at countries that are potentially more sensitive to higher oil price, oil importing countries, and might not have the fiscal headroom. As far as RWA potential impacts of that, I guess I would say they're manageable, not material, and well within our guidance.

Speaker #7: As far as RWA, potential impacts of that, I guess I would say they're manageable, not material and well within our guidance.

James Invine: Fantastic. Thank you.

Joseph Dickerson: Fantastic. Thank you.

Speaker #3: Fantastic. Thank you.

Speaker #5: Great. Operator, can we take the next question, please?

Bill Winters: Great. Operator, can we take the next question, please?

Operator: Sure. We are now going to proceed with the next question. The question comes from the line of Amit Goel from Mediobanca. Please ask your question.

Speaker #2: Sure. We are now going to proceed with the next question. And the questions come from the land of Amit Cohen from Mediobanca. Please ask your question.

Amit Goel: Hi. Thank you. Yeah. Two for me. One, actually just coming onto the kind of capital and capital efficiency. Obviously it was a very strong quarter, deployed a bit more balance sheet to generate some more earnings. I guess the net capital generation was a bit more limited. It seems like with the targets, at least for this year unchanged, it is potentially using a bit more capital. I'm just wondering whether, you know, going forward, you're thinking that growth is a little bit more expensive from a capital standpoint or whether we should see capital generation kind of building from here. Secondly, just curious, like in terms of the sensitivity on your overlays to the conflict.

Speaker #8: Hi, thank you. So, yeah, two for me. One, actually, just coming onto the kind of capital and capital efficiency—so obviously it was a very strong quarter, deployed a bit more balance sheet.

Speaker #8: To generate some more earnings. But then I guess the net capital generation was a bit more limited. And it seems like with the targets at least for this year unchanged, it's potentially using a bit more capital.

Speaker #8: So I'm just wondering whether going forward, you're thinking that growth is a little bit more expensive from a capital standpoint, or whether we should see capital generation kind of building from here?

Speaker #8: And then secondly, just curious, like in terms of the sensitivity on your overlays, to the conflict, I mean, I guess if just if you give us a little bit more color in terms of some of the assumptions there and what could lead to some right back or incremental charges being taken.

Amit Goel: I mean, I guess if, you know, just if you give us a little bit more color in terms of some of the assumptions there and, you know, what could lead to some write back or incremental charges being taken. Thank you.

Speaker #8: Thank you.

Speaker #5: Thanks for the questions, Amit. I'll turn to Pete for some to cover on both of those. But the way I think about the capital or maybe more appropriately the return story in the first quarter is we had great volumes.

Bill Winters: Thanks for the questions on it. I'll turn to Pete to go on both of those. The way I think about the capital, or maybe more appropriately, the return story in Q1 is, we had great volumes coming through both in terms of lending opportunities, but also obviously financial markets. We captured those volumes and have retained that value. We grew some risk-weighted assets on the back of volumes, but also on the back of heightened volatility. We've said consistently that we'll operate throughout the 13% to 14% CET1 range, and we're obviously coming in at 13.4%, which is consistent with that.

Speaker #5: Coming through both in terms of lending opportunities, but also obviously financial markets. We captured those volumes. And have retained that value. We grew some risk-weighted assets on the back of volumes, but also on the back of heightened volatility.

Speaker #5: We've said consistently that we'll operate throughout the 13 to 14 percent CET1 range, and we're obviously coming in at 13.4, which is consistent with that.

Speaker #5: So where we see opportunities to deploy capital profitably and accretively, and obviously at 17 percent ROT quarter suggested that's what we did, we're going to use the capital for that.

Bill Winters: You know, where we see opportunities to deploy capital profitably and accretively, and obviously a 17% ROTE quarter suggested that's what we did. We're gonna use the capital for that. Where we don't see the same opportunities, we'll be in a position to either redeploy that into other parts of our business or give it back. Overall, I think this is a very, very strong and reassuring story. We're very happy, and we'll continue to manage capital in exactly that way. I'll turn to Pete for more color and then to pick up on the credit points.

Speaker #5: Where we don't see the same opportunities, we'll be in a position to either redeploy that into other parts of our business or give it back.

Speaker #5: So overall, I think this is a very, very strong and reassuring story we're very happy and will continue to manage capital in exactly that way.

Speaker #5: But I'll turn to Pete for more color and then to pick up on the credit points.

Speaker #7: Thanks, Bill. Thanks, Amit, for the question. Just to build a little bit on what Bill said on capital, I guess I would point out that Q1 to Q4 tends to be low in market risk.

[Company Representative] (Standard Chartered): Thanks, Bill, and thanks so much for the question. Just to build a little bit on what Bill said on capital. I guess I would point out that Q4 tends to be low in market risk and markets activity more generally. Q1 tends to be when market risk RWA comes back on, as well as there's a bit of counterparty credit risk due to what Bill mentioned as far as volatility in the markets in Q1. While I guess I'm trying to say that the rate of growth through the rest of the year won't be as great as it was in Q1. It should be more flattish and less growth in RWA through the remainder of the year. On the sensitivity on overlay.

Pete Burrill: Thanks, Bill, and thanks so much for the question. Just to build a little bit on what Bill said on capital. I guess I would point out that Q4 tends to be low in market risk and markets activity more generally. Q1 tends to be when market risk RWA comes back on, as well as there's a bit of counterparty credit risk due to what Bill mentioned as far as volatility in the markets in Q1. While I guess I'm trying to say that the rate of growth through the rest of the year won't be as great as it was in Q1. It should be more flattish and less growth in RWA through the remainder of the year. On the sensitivity on overlay.

Speaker #7: And markets activity more generally. And so Q1 tends to be when market risk RWA comes back on, as well as there's a bit of counterparty credit risk due to what Bill mentioned as far as volatility in the markets in Q1.

Speaker #7: So, what I'm trying to say is that the rate of growth through the rest of the year won't be as great as it was in Q1.

Speaker #7: So, it should be a more flattish and less growth in RWA through the remainder of the year. On the sensitivity on overlays, two things to call out and think about when you're thinking about the overlays.

[Company Representative] (Standard Chartered): Two things to call out and think about when you're thinking about the overlay. One is introduction of the new sustained Middle East conflict. If you look at our longer press release, there's actually quite a bit of detail on page 22 on all the various assumptions on GDP growth, oil price, et cetera, et cetera. The other component of that is the weightings. Right now we have 70% on the two downside scenarios. I would point out that actually the BCST or the Bank Capital Stress Test scenario is the more stressful of the two scenarios rather than the sustained Middle East conflict. We've got 45% on the sustained Middle East conflict, 25% on the harder downside.

Pete Burrill: Two things to call out and think about when you're thinking about the overlay. One is introduction of the new sustained Middle East conflict. If you look at our longer press release, there's actually quite a bit of detail on page 22 on all the various assumptions on GDP growth, oil price, et cetera, et cetera. The other component of that is the weightings. Right now we have 70% on the two downside scenarios. I would point out that actually the BCST or the Bank Capital Stress Test scenario is the more stressful of the two scenarios rather than the sustained Middle East conflict. We've got 45% on the sustained Middle East conflict, 25% on the harder downside.

Speaker #7: So, one is introduction of the new sustained Middle East conflict, and if you look at our longer press release, there's actually quite a bit of detail on page 22 on all the various assumptions on GDP growth, oil price, etc., etc.

Speaker #7: But the other component of that is the weightings. So right now we have 70 percent on the two downside scenarios. I would point out that actually the BCST or the bank capital stress test scenario is the more stressful of the two scenarios rather than the sustained Middle East conflict.

Speaker #7: So we've got 45 percent on the sustained Middle East conflict, 25 percent on the harder downside. So we believe we are appropriately what's the right word?

[Company Representative] (Standard Chartered): We believe we are appropriately, what's the right word? Thoughtful about how that could play out. The reason we've gone over 50% for those two is because the base was a pre-war base case scenario. I would expect that next time we do this, the base will reflect a different outlook, and we'll judge the weightings appropriately. If you take a look at the details that we've provided in the longer, the longer deck, you can get some of those more granular assumptions. Hope that helps.

Pete Burrill: We believe we are appropriately, what's the right word? Thoughtful about how that could play out. The reason we've gone over 50% for those two is because the base was a pre-war base case scenario. I would expect that next time we do this, the base will reflect a different outlook, and we'll judge the weightings appropriately. If you take a look at the details that we've provided in the longer, the longer deck, you can get some of those more granular assumptions. Hope that helps.

Speaker #7: Thoughtful about how that could play out. And the reason we've gone over 50 percent for those two is because the base was a pre-war base case scenario.

Speaker #7: So I would expect that the next time we do this, the base will reflect a different outlook and will judge the weightings appropriately. But if you take a look at the details that we've provided in the longer deck, you can get some of those more granular assumptions.

Speaker #7: But hope that helps. Thank you.

Amit Goel: Brilliant. Thank you.

Speaker #2: We are now going to proceed with our next question. And the questions come from the line of Andrew Combs from CT. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Andrew Coombs from Citi. Please ask your question.

Speaker #4: Good morning. If I can just do a couple of follow-ups. Just firstly on Wealth. Look, it's an absolutely stellar first quarter. But obviously the wealth that you earn has drifted down 4 percent quarter-on-quarter given the market moves.

Andrew Coombs: Morning. If I could just do a couple of follow-ups. Just firstly on Wealth, look, it's an absolute stellar Q1. Obviously the Wealth AUM has drifted down 4% Q on Q given the market moves, and that's despite the very strong net new money print. You specifically called out heightened transaction activity in Q1. Just interested in your thoughts on to what extent we can extrapolate the Q1 result, or if you think there are either a degree of, you know, abnormally strong activity in that Q1.

Speaker #4: And that's despite the very strong net new money print. And you specifically call out heightened transaction activity in the first quarter. So, just interested in your thoughts on to what extent we can extrapolate the Q1 result, or if you think there was a degree of abnormally strong activity in that first quarter.

Andrew Coombs: Second, you alluded to it on the rate assumptions. If I look at the slide at the back, I think you've now got lower Q1 and Q2 rate assumptions, but higher Q3 and Q4. That would kind of explain why your NII guide is unchanged for 2026. Does it mean that you now have a better exit run rate than you expected at the start of the year? Are you more confident on the NII trajectory going into 2027? Thank you.

Speaker #4: And second, you alluded to it, but on the rate assumptions, if I look at the slide at the back, I think you've now got lower Q1 and Q2 rate assumptions, but higher Q3 and Q4.

Speaker #4: So that would kind of explain why your NII guide is unchanged for 2026, but does it mean that you now have a better exit run rate than you expected at the start of the year?

Speaker #4: So, are you more confident on the NII trajectory going into 2027? Thank you.

Speaker #5: Thanks, Andy. I'm going to turn to Venice on both those questions. But just a little bit of color on the wealth business. Clearly a strong set of results.

Bill Winters: Thanks, Andy. I'm gonna turn to Manus on both those questions. Just a bit of color on the wealth business. Clearly a strong set of results. What we look at first and foremost is all the leading indicators. New clients, the money that they're bringing in, the migration then from deposits where the new money typically starts into wealth products. In this quarter, very importantly, the resilience to shifting market dynamics, whether that's in credit markets or in equity markets. All of those leading indicators are pretty encouraging for us. When you say, can we extrapolate the Q1? I don't think we can extrapolate 30% plus growth ad infinitum. The structural drivers are very clear, very consistent.

Speaker #5: And what we look at first and foremost is all the leading indicators. So new clients, the money that they're bringing in, the migration then from deposits where the new money typically starts.

Speaker #5: Into wealth products. And in this quarter, a very importantly, the resilience to shifting market dynamics. Whether that's in credit markets or in equity markets.

Speaker #5: And all of those leading indicators are pretty encouraging for us. So when you say, "Can we extrapolate the first quarter?" I don't think we can extrapolate 30 percent plus growth ad infinitum.

Speaker #5: But the structural drivers are very clear—very consistent. They're supported by the ongoing investments that we're making, which we've called out in each of our earnings presentations over the past several quarters.

Bill Winters: They're supported by the ongoing investments that we're making, that we've called out, you know, in each of our earnings presentations over the past several quarters, and which are ongoing. Supported by what is increasingly just a strong brand, if I could call it that. The clients in Asia, Middle East, and Africa recognize Standard Chartered as a good and safe place to go, in good times and bad. Can't extrapolate. I mean, I would love to compound at 30% for the rest of my working life, but we can certainly see good structural drivers for a long time to come. Manus.

Speaker #5: And which are ongoing, and supported by what is increasingly just a strong brand, if I could call it that. The clients in Asia, the Middle East, and Africa recognize Standard Chartered as a good and safe place to go.

Speaker #5: In good times and bad. So it can extrapolate. I mean, I would love to compound at 30 percent for the rest of my working life.

Speaker #5: But we can certainly see good structural drivers for a long time to come. Venice?

Manus Costello: Thanks, Bill. The only thing to add on the wealth comment when you're looking at the AUM moves is that you need to factor in FX as well, Andy, given that the dollar was strong during the quarter, so that also has an impact. As Bill said, the underlying momentum remains very strong. On your question on rates, I would just first of all point out that they're not our assumptions that we're using. It's market implied forward rates that we get from derivatives markets. There's no assumptions that we've made in here. I also am not gonna get into talking about our guidance for 2027, which won't surprise you.

Speaker #4: Thanks, Bill. The only thing to add on the wealth comment when you're looking at the AUM moves is that you need to factor in FX as well.

Speaker #4: Andy, given that the dollar was strong during the quarter, that also has an impact. But as Bill said, the underlying momentum remains very strong.

Speaker #4: On your question on rates, I would just first of all point out that they're not our assumptions. That we're using. It's market implied forward rates.

Speaker #4: That we get from derivatives markets, so that there's no assumptions that we've made in here. I also am not going to get into talking about our guidance for 2027, which won't surprise you.

Manus Costello: You're right that if you look at the curve on slide 16, that the shape of the curve has changed somewhat. I would just add a couple of cautionary caveats. Firstly, our guidance for this year includes the impact of our WRB actions and of PTRs coming down during the course of this year. That's something to bear in mind. Also, of course, just to state the obvious, the market's quite volatile. The move in rates can change quite materially week by week, quarter by quarter. We think that at the moment, given those different crosswinds, maintaining our guidance of broadly flat is still the right position for NII.

Speaker #4: But you're right that if you look at the curve on slide 16, the shape of the curve has changed somewhat. I would just add a couple of cautionary caveats.

Speaker #4: Firstly, our guidance for this year includes the impact of our WRB actions. And of PTRs coming down during the course of this year. So that's something to bear in mind.

Speaker #4: And also, of course, just to state the obvious, the market's quite volatile. The move in rates can change quite materially week by week, quarter by quarter.

Speaker #4: So we think that at the moment, given those different crosswinds, maintaining our guidance of broadly flat is still the right position for NII.

Speaker #5: Good, thanks. Operator, can we take the next question, please?

Bill Winters: Great. Thanks. Operator, can we take the next question, please?

Operator: Sure. We are now going to proceed with our next question. The question's come from the line of Kunpeng Ma from China Securities. Please ask your question.

Speaker #2: Sure. We are now going to proceed with our next question. The questions come from the line of Kunpeng Ma from China Securities. Please ask your question.

Speaker #7: Morning, guys. This is Kunpeng from China Securities. Congratulations to this very strong quarter. And I have two questions. The first is a quick follow-up on the Middle Eastern overlays.

Kunpeng Ma: Morning, guys. This is Kunpeng from China Securities. Congratulations to this very strong quarter. Now I have two questions. The first is a quick follow-up on the Middle Eastern overlays. I'm not sure if the current kind of situation persists for a while, say, in Q2. Is there any incremental overlays to be charged in Q2? If you do so, will the credit cost still be in the range of 30 to 35 bps? Also, is there any chance in the future that if we can see any write-backs of this overlays if, you know, if the situation recovers? The second is on the Global Markets business, which is also very strong.

Speaker #7: I'm not sure if the current situation persists for a while—say, in the second quarter—is there any incremental overlays to be charged in the second quarter?

Speaker #7: And if you do so, always will the credit cost still be in the range of 30 to 35 bps? And also, is there any chance in the future that if we can see any writebacks of this overlays, if the situation recovers?

Speaker #7: The second is about the global markets business, which is also very strong. And you mentioned the contribution from the investment in the electronic platform for your clients.

Kunpeng Ma: You mentioned the contribution from the investment in the electronic platform for your clients. I want to know more color about your investments in such infrastructure and human resources to, you know, to support you to capture more market share in the Global Markets business. I think this is very promising business for banks for the next few years. Yeah. Thank you.

Speaker #7: So I want to know more about more color about your investments. In such infrastructure and human resources, to support you to capture more market share in the global markets business.

Speaker #7: I think this is quite a—this is a very promising business for banks for the next few years. Yeah. Thank you.

Speaker #5: Super. Thanks for the questions, Kunpeng. I'll hand over to Pete for color on the overlays. But I'll ll just say, of course, we're all watching every day, every minute, what the likelihood is for the duration of this conflict and the closure of the straits.

Bill Winters: Thanks for the questions, Kunpeng. I'll hand over to Pete for color on the overlays. I'll just say, of course, we're all watching every day, every minute, what the likelihood is for the duration of this conflict and the closure of the straits and the prospect for supply shocks. Independent of the price movements, but the supply shocks coming from limited access to some key feedstocks for other manufacturing processes. No one knows, obviously, exactly how long this conflict will last. I think the key manufacturers in the world have been buffering, I'd say most notably in China, have been buffering the impact of higher prices and supply shortages by drawing down strategic stocks.

Speaker #5: And the prospect for supply shocks—independent of the price movements—but the supply shocks coming from limited access to some key feedstocks for other manufacturing processes.

Speaker #5: And no one knows, obviously, exactly how long this conflict will last. I think the key manufacturers in the world have been buffering, I'd say most notably in China, have been buffering the impact of higher prices.

Speaker #5: And supply shortages by drawing down strategic stocks. There will be a limit to how much drawdown of strategic stocks can take place. And the supply shock is ongoing.

Bill Winters: There will be a limit to how much drawdown of strategic stocks can take place. The supply, the supply shock is ongoing. I don't know whether it's, you know, one month or three months or six months from now that we start to see, you know, some sort of an economic inflection point. So far, the markets are quite resilient. Processes are quite resilient. Trade is quite resilient. Therefore, credit has been quite resilient. We're taking overlays as opposed to recognizing any actual losses or specific impairments. We'll watch. We'll continue to watch. I would say we remain hopeful that this conflict will resolve before there's acute damage to the economy, but you can't preclude that possibility.

Speaker #5: So I don't know whether it's one month or three months or six months from now that we start to see some sort of an economic inflection point.

Speaker #5: So far, the markets are quite resilient. Processes are quite resilient. Trade is quite resilient. And therefore, credit has been quite resilient. Hence, we're taking overlays as opposed to recognizing any actual losses or specific impairments.

Speaker #5: But we'll watch. We'll continue to watch. I would say we remain hopeful that this conflict will resolve before there's acute damage to the economy.

Speaker #5: But you can't preclude that possibility. And our stress scenarios try to capture as much of that as possible. They're quite severe scenarios, right, when you get right down to it.

Bill Winters: In our stress scenarios, I try to capture as much of that as possible. They're quite severe scenarios, right, when you get right down to it. I'll turn to Pete. We haven't changed our guidance in terms of expected credit costs through the cycle of 30 to 35 basis points. That's not a comment on this conflict. That's a comment on what we can expect through the cycle. Cycles are obviously much longer than this conflict, let's hope. In terms of the investments in markets, you know, you've watched our financial markets earnings evolve over the past 7, 8 years with good, strong underlying growth, but also a much higher quality of income and returns.

Speaker #5: But I'll turn to Pete. We haven't changed our guidance in terms of expected credit costs through the cycle of 30 to 35 basis points.

Speaker #5: But that's not a comment on this conflict. That's a comment on what we would expect through the cycle. And cycles are obviously much longer than this conflict.

Speaker #5: Let's hope. In terms of the investments in markets, you've watched our financial markets earnings evolve over the past seven, eight years, with good, strong underlying growth.

Speaker #5: But also at much higher quality of income and returns. From an income stream that was very focused and concentrated in FX trading, through to a really good build-out of a rates business, associated options, commodities increasingly, and credit.

Bill Winters: From an income stream that was very focused and concentrated in FX trading through to a really good build out of a rates business, associated options, commodities increasingly, and credit. All very consistent with the broader strategic thrust of the bank, which includes having a much higher velocity balance sheet, both in financial markets, but also it brought more broadly in the bank as a whole, originating and distributing more. The investment that we have been making, will continue to make are with those strategic directions in mind. In terms of specifics in Q2. Sorry, Q1. The 17% increase in flow income is really very encouraging for us. As I mentioned earlier, it suggests a couple things.

Speaker #5: All very consistent with the broader strategic thrust of the bank, which includes having a much higher velocity balance sheet—both in financial markets, but also more broadly in the bank as a whole, originating and distributing more.

Speaker #5: So the investment that we've had that we have been making will continue to make our with those strategic directions in mind. In terms of specifics in Q2, the 17% increase sorry, Q1.

Speaker #5: The 17% increase in flow income is really very encouraging for us. As I mentioned earlier, it suggests a couple of things. One is clients are turning to us during a time of stress or anxiety in markets.

Bill Winters: One is clients are turning to us during a time of stress or anxiety in markets. Two, we're able to capture those flows. It's always competitive. Third, we're able to capture the profitability, hence the substantially positive episodic income. Those things are all extremely encouraging, and they reflect investments in e-trading platforms, you know, improvements in portals, but also improvements in our observed latency in terms of the messaging within our systems to allow us to go head to head with the most sophisticated traders in the market who have invested massively in very low latency algorithmic trading. We hold our own in those markets, and we'll continue to improve and continue to capitalize on the flows that we see to be ever better traders.

Speaker #5: Two, we're able to capture those flows. It's always competitive. And third, we're able to capture the profitability—hence, the substantially positive episodic income. Those things are all extremely encouraging.

Speaker #5: And they reflect investments in e-trading platforms, improvements in portals, but also improvements in our observed latency in terms of the messaging within our systems.

Speaker #5: To allow us to go head-to-head with the most sophisticated traders in the market, who have invested massively, in very low latency algorithmic trading.

Speaker #5: We hold our own in those markets. And we'll continue to improve. And continue to capitalize on the flows that we see to be ever better traders.

Speaker #5: And I'd make another observation. Then I'll hand over to Pete, as I said. The investments that we've made to improve the connectivity within the flows of the bank.

Bill Winters: I make another observation, then I'll hand over to Pete. As I said, the investments that we've made to improve the connectivity within the flows of the bank, so between our cash management business, our trade finance business, our private banking and wealth management business, through to the financial market dealing desks, have improved dramatically. It's just much easier for clients to execute their risk management transactions along with their other transaction banking or day-to-day banking activities, which has been a material source of incremental profit for us, and we think we have much further to go on that. You know, encouraging progress so far, but I'd say that we're not yet quite halfway there. Pete.

Speaker #5: So between our cash management business, our trade finance business, our private banking and wealth management business. Through to the financial markets dealing desks. Have improved dramatically.

Speaker #5: So it's just much easier for clients to execute their risk management transactions along with their other transaction banking or day-to-day banking activities. Which has been a material source of incremental profit for us.

Speaker #5: And we think we have much further to go on that. So, encouraging progress so far, but I'd say that we're not yet quite halfway there.

Speaker #5: Pete? So, thanks. I think Bill covered the second question pretty thoroughly. Going back on the overlay, it's highly uncertain exactly how this is going to play out.

[Company Representative] (Standard Chartered): Thanks. I think Bill covered the second question pretty thoroughly. Going back on the overlay, highly uncertain exactly how this is going to play out. We've tried to take as much of what we could potentially see as a downside through the overlays already in Q1, as you can see by the weighting of 70% towards pretty severe outcomes on downside scenarios. Now, as Bill mentioned, those aren't things that have actually happened. Those are things that could happen and trying to guess what the second-order impacts will be. We'll update those every quarter. I would point out, though, that we were within the 30 to 35 basis point guidance this quarter, despite the fact that we took that overlay. As Bill mentioned, it's not a quarterly forecast.

Pete Burrill: Thanks. I think Bill covered the second question pretty thoroughly. Going back on the overlay, highly uncertain exactly how this is going to play out. We've tried to take as much of what we could potentially see as a downside through the overlays already in Q1, as you can see by the weighting of 70% towards pretty severe outcomes on downside scenarios. Now, as Bill mentioned, those aren't things that have actually happened. Those are things that could happen and trying to guess what the second-order impacts will be. We'll update those every quarter. I would point out, though, that we were within the 30 to 35 basis point guidance this quarter, despite the fact that we took that overlay. As Bill mentioned, it's not a quarterly forecast.

Speaker #5: We've tried to take as much of what we could potentially see as a downside through the overlays already in the first quarter, as you can see by the weighting of 70% towards pretty severe outcomes on downside scenarios.

Speaker #5: Now, as Bill mentioned, those aren't things that have actually happened. Those are things that could happen. And trying to guess what the second-order impacts will be will update those every quarter.

Speaker #5: I would point out, though, that we were within the 30-to-35-basis-point guidance this quarter, despite the fact that we took that overlay.

Speaker #5: So as Bill mentioned, it's not a quarterly it's not a quarterly forecast. It's a through-the-cycle forecast. But we're still comfortable with that and don't see any reason to change that.

[Company Representative] (Standard Chartered): It's a through the cycle forecast. We're still comfortable with that and don't see any reason to change that. Too early to start talking about kind of write backs or reversals. I will point out, though, that we now have almost $200 million in kind of downside risk protection within the portfolio through those just the downside scenarios themselves. It's quite significant. We hope we've broken the back of it, but too early to call an end.

Pete Burrill: It's a through the cycle forecast. We're still comfortable with that and don't see any reason to change that. Too early to start talking about kind of write backs or reversals. I will point out, though, that we now have almost $200 million in kind of downside risk protection within the portfolio through those just the downside scenarios themselves. It's quite significant. We hope we've broken the back of it, but too early to call an end.

Speaker #5: Too early to start talking about kind of right backs or reversals. I will point out, though, that we now have almost 200 million in kind of downside risk protection within the portfolio through those just the downside scenarios themselves.

Speaker #5: So it's quite significant. We hope we've broken the back of it. But too early to call an end. Thank you.

Bill Winters: Thank you, Pete. Thank you.

Kunpeng Ma: Thank you, Pete. Thank you.

Speaker #4: Thank you.

Speaker #6: As a reminder, to ask a question on the phone, please press star 11 and wait for your name to be announced. To withdraw your question, please press star 11 again.

Operator: As a reminder to ask a question on the phone, please press star one one and wait for your name to be announced. To withdraw your question, please press star one one again. If you wish to ask a question on the webcast, please type them in the question box and click submit. We are now going to proceed with our next question. The question come from the line of Perlie Mong from Bank of America. Please ask your question.

Speaker #6: If you wish to ask a question on the webcast, please type them in the question box and click Submit. We are now going to proceed with our next question.

Speaker #6: The questions come from the line of Pearly Mong from Bank of America. Please ask your question.

Speaker #7: Hello. Good morning. I just wanted to ask about deposit and behavior. So have you seen any behavioral change in terms of customers holding on to maybe deposits a little bit more?

Perlie Mong: Hello, good morning. I just wanted to ask about deposit behavior. Have you seen any behavioral change in terms of customers holding on to maybe deposits a little bit more? Because we've seen counter deposit was quite strong this quarter, and certainly some of the Hong Kong government officials have talked about Hong Kong potentially being a beneficiary of sort of flight to safety flows. Have you seen that happening? If so, does that give you more scope to price deposits assertively? Just how do we think about that NII going forward, even aside of the rate moves? That's number one. Number two, again, following up on this impairment scenario. Thank you very much for the details you've given.

Speaker #7: Because we've seen cards of deposit was quite strong this quarter. And certainly, some of the Hong Kong government officials have talked about Hong Kong potentially being a beneficiary of sort of flight to safety flows.

Speaker #7: Have you seen that happening? And if so, does that give you more scope to price deposits assertively? And just how do we think about that in IRPs going forward, even aside from the rate moves?

Speaker #7: So that's number one. And number two, again, following up on this impairment scenario. So thank you very much for the details you've given. I think you mentioned non-linearity a little bit in the scenario.

Perlie Mong: I think you mentioned nonlinearity a little bit in this scenario. I suppose the question I'm trying to get to is that qualitatively, what triggers that nonlinearity? Because clearly it's something that worries people a lot. You know, we've seen oil prices go up 9 days since $125. I think in the scenario, the peak is $135. Understand that there's a lot of moving parts in how the events are unfolding. In this scenario, in the 01 scenario that you have looked at, what triggers the nonlinearity and sort of how does it unfold in your planning assumptions?

Speaker #7: And I suppose the question I'm trying to get to is that qualitatively, what triggers that non-linearity? Because clearly, it's something that worries people a lot.

Speaker #7: And we've seen oil prices go up nine days since $125, I think. In the scenario of the peak, it's $135. So understand that there's a lot of moving parts in how the events are unfolding.

Speaker #7: But in this scenario, in the one scenario that you have looked at, what triggers the non-linearity, and sort of how does it unfold in your planning assumptions?

Speaker #5: Great, Peter. Thanks very much for those questions. I'm going to turn to Pete. For the detail. I will observe that the this market shock we've had quite a few in the past decade or so.

Bill Winters: Great, Perlie. Thanks very much for those questions. I'm gonna turn to Pete for the detail. I will observe that this market shock, we've had quite a few in the past decade or so. This market shock has been a little bit different in terms of the way that it's played out in first in equity markets, which have obviously remained very strong, but also in terms of the, our wealth investors' engagement with us. With their portfolios. We have seen very little stepping away from the market. We've absolutely seen some reallocations within portfolios. One is the funds have stayed within the bank. Two, it doesn't represent a wholesale shift into risk-off assets.

Speaker #5: This market shock has been a little bit different in terms of the way that it's played out, first in equity markets, which have obviously remained very strong.

Speaker #5: But also in terms of our wealth investors' engagement with us, and with their portfolios, we have seen very little stepping away from the market.

Speaker #5: We've seen absolutely seen some reallocations within portfolios. But one, the funds have stayed within the bank. And two, it wouldn't it doesn't represent a wholesale shift into risk-off assets.

Speaker #5: So, the second thing to note is that the steady migration that we've seen of net new money into deposits, and then flowing through to various wealth products, is largely unchanged in Q1 and then for what we've seen so far in Q2.

Bill Winters: The second thing to note is that the, you know, the steady migration that we've seen of net new money into deposits and then flowing through to various wealth products is largely unchanged in Q1 and then for all we've seen so far in Q2. The investment mix is changing a bit. Investors are staying very engaged, and hence we're seeing that good steady migration from deposits into our products as relationships mature. I hand over to Pete for any further color on that and then back into the impairment question.

Speaker #5: Which, as I said, the investment makes changing a bit. But investors are staying very engaged. And hence, we're seeing that good, steady migration from deposits into wealth products as relationships mature.

Speaker #5: But I'll hand over to Pete for any further comments on that, and then we can return to the impairment question.

Speaker #4: So thanks. Maybe covering off the first question on deposits. I wouldn't call out any specific behavioral change as Bill mentioned. And I think you can see that through the inflows in wealth being actually predominantly wealth solutions rather than deposits.

[Company Representative] (Standard Chartered): Thanks. Maybe just covering off the first question on deposits. I wouldn't call out any specific behavioral change as Bill mentioned. I think you can see that through the inflows in wealth being actually predominantly Wealth Solutions rather than deposits, as well as growth in deposits. The strong above 30% outcome in Wealth Solutions tells you that clients are still active in investing and not, if you will, just solely focused on deposits. Pleased with the deposit growth, but not seeing any particular flight to safety or any particular change in client behavior on that front. On impairments, we think about this scenario holistically. When we run the models, we say, What is the impact on oil price?

Pete Burrill: Thanks. Maybe just covering off the first question on deposits. I wouldn't call out any specific behavioral change as Bill mentioned. I think you can see that through the inflows in wealth being actually predominantly Wealth Solutions rather than deposits, as well as growth in deposits. The strong above 30% outcome in Wealth Solutions tells you that clients are still active in investing and not, if you will, just solely focused on deposits. Pleased with the deposit growth, but not seeing any particular flight to safety or any particular change in client behavior on that front. On impairments, we think about this scenario holistically. When we run the models, we say, What is the impact on oil price?

Speaker #4: As well as growth in deposits. And the strong above 30% outcome in wealth solutions tells you that clients are still active in investing and not, if you will, just solely focused on deposits.

Speaker #4: So, pleased with the deposit growth, but not seeing any particular flight to safety or any particular change in client behavior on that front. On impairments, so we think about this scenario holistically.

Speaker #4: So when we run the models, we say, what is the impact on oil price? What is the impact on GDP? Unemployment? Interest rates, et cetera, et cetera.

[Company Representative] (Standard Chartered): What is the impact on GDP, unemployment, interest rates, et cetera, et cetera?" We've laid out, on page 22 of the longer press release all those various assumptions. We don't break down the how much of that was GDP in this country versus that country, how much of that was oil price. We really look at those holistic scenarios and try to think about how it could play out more broadly and impact and estimate the impact of that. The nonlinearity is kind of the impact of everything other than the base case. By definition, it's the impact of those two downside scenarios that we've laid out, both a sustained Middle East conflict scenario, which is the new one, but also the Bank Capital Stress Test.

Pete Burrill: What is the impact on GDP, unemployment, interest rates, et cetera, et cetera?" We've laid out, on page 22 of the longer press release all those various assumptions. We don't break down the how much of that was GDP in this country versus that country, how much of that was oil price. We really look at those holistic scenarios and try to think about how it could play out more broadly and impact and estimate the impact of that. The nonlinearity is kind of the impact of everything other than the base case. By definition, it's the impact of those two downside scenarios that we've laid out, both a sustained Middle East conflict scenario, which is the new one, but also the Bank Capital Stress Test.

Speaker #4: We've laid out on page 22 of the longer press release all those various assumptions. Not going to we don't break down how much of that was GDP in this country versus that country.

Speaker #4: How much of that was oil price. So we really look at those holistic scenarios and try to think about how it could play out more broadly and impact and estimate the impact of that.

Speaker #4: The non-linearity is kind of the impact of everything other than the base case. So by definition, it's the impact of those two downside scenarios that we've laid out.

Speaker #4: Both the sustained Middle East conflict scenario—which is the new one—but also the bank capital stress test. We replaced an older scenario, which actually was a kind of inflation-down, rates-down scenario, which we didn't think was terribly relevant in the current period.

[Company Representative] (Standard Chartered): We replaced an older scenario, which actually was a kind of inflation down, rates down scenario, which we didn't think was terribly relevant in the current period. It's a combination, what you're seeing in the quarter, of changing scenarios and changing weightings. They're very broad-based across the various inputs. I hope that helps you understand it a bit better, Perlie.

Pete Burrill: We replaced an older scenario, which actually was a kind of inflation down, rates down scenario, which we didn't think was terribly relevant in the current period. It's a combination, what you're seeing in the quarter, of changing scenarios and changing weightings. They're very broad-based across the various inputs. I hope that helps you understand it a bit better, Perlie.

Speaker #4: So it's a combination, what you're seeing in the quarter, of changing scenarios and changing weightings. But at the very broad-based across the various inputs.

Speaker #4: So I hope that helps you understand it a bit better, Pearly.

Speaker #7: And can I just ask a follow-up? In terms of drawdowns, I don't know whether I've missed that in the report. But if the sustained Middle East conflict situation were to play out, on a standalone basis, what would the drawdown be?

Perlie Mong: Can I just ask a follow-up? In terms of drawdowns, I don't know whether I've missed that in the report, but if the sustained Middle East conflict situation were to play out, like on a standalone basis, what would the drawdown be?

Speaker #4: Drawdowns on client facilities, revolvers, things like that—we haven't seen material drawdowns as a result of the conflict, if that's what you're referring to.

[Company Representative] (Standard Chartered): Drawdowns on client facilities, revolvers, things like that. We haven't seen material drawdowns as a result of the conflict, if that's what you're referring to.

Pete Burrill: Drawdowns on client facilities, revolvers, things like that. We haven't seen material drawdowns as a result of the conflict, if that's what you're referring to.

Perlie Mong: I was more so just thinking like, I think in the annual report, like for each of the scenario, you can see sort of what the implied impairment losses would be in that scenario. I don't know whether you've given that this quarter for this scenario.

Speaker #7: I was more just thinking what the credit loss would be. I think in the annual report for each of the scenarios, you can see sort of what the implied impairment losses would be.

Speaker #7: In that scenario, I don't know whether you've given that this quarter for this scenario.

Speaker #4: We haven't. But I would point out, thanks for the question, that the bank capital stress test scenario, we did disclose in the annual report.

[Company Representative] (Standard Chartered): We haven't, but I would point out, thanks for the question, that the Bank Capital Stress Test scenario we did disclose in the annual report. I think it was around $500 million was the downside for that one, and that is the more severe of the scenarios, and we've already weighted that scenario at 25%. I think we are well covered. We didn't provide the what is the downside for the SMEC, but it's less severe than the BCST scenario that's included in the annual report.

Pete Burrill: We haven't, but I would point out, thanks for the question, that the Bank Capital Stress Test scenario we did disclose in the annual report. I think it was around $500 million was the downside for that one, and that is the more severe of the scenarios, and we've already weighted that scenario at 25%. I think we are well covered. We didn't provide the what is the downside for the SMEC, but it's less severe than the BCST scenario that's included in the annual report.

Speaker #4: I think it was around $500 million was the downside for that one. And that is the more severe of the scenarios. And we've already weighted that scenario at 25%.

Speaker #4: So I think we are well covered. We didn't provide what is the downside for the SMEC. But it's less severe than the BCST scenario that's included in the annual report.

Speaker #7: OK, understood. Thank you. We are not going to proceed with our next question. And the questions come from the line of advice from KBW.

Perlie Mong: Okay, understood. Thank you.

Operator: We are now going to proceed with our next question. The question's come from the line of Ed Firth from KBW. Please ask your question.

Speaker #7: Please ask your question.

Speaker #8: Thanks very much. Morning, everybody. I just had two questions. One, on slide 8 on your capital bridge, just wanted if you could explain a little bit more about the 0.2 other.

Ed Firth: Thanks very much. Morning, everybody. I just had 2 questions. One, on slide 8, on your capital bridge, I am just wondering if you could explain a little bit more about the 0.2 other. Because I mean, that's about a third of the money you made in Q1. Just, what should we think about that? Is that just like a Q1 thing, employee share options and stuff, or is that something that we should persist as a headwind or perhaps even though we should be see that reverse as it's going forward? How should we think about how that might play out on a sort of quarterly basis? That's the first question. Then the second question is just a sort of broader question, and I don't know if there's a precise answer to this.

Speaker #8: Because, I mean, that's about a third of the money you made in the first quarter. So just, what should we think about that? Is that just like a first-quarter thing—employee share options and stuff?

Speaker #8: Or is that something that we should persist as a headwind? Or perhaps even we should see that reverse as it's going forward? How should we think about how that might play out on a sort of quarterly basis?

Speaker #8: That's the first question. And then the second question is just a sort of broader question. And I don't know if there's a precise answer to this.

Speaker #8: But looking at Standard Chartered today, it just sort of feels like you're more of a volatility play than a credit play. Is that a fair observation?

Ed Firth: Looking at Standard Chartered today, it just sort of feels like you're more of a volatility play than a credit play. Is that a fair observation? I guess if it is, how should we expect that to play out if there is to be a peaceful settlement around Iran? If we see markets go back to a more stable environment without volatility, in theory, I'd have always thought that was a net positive for you. Is there a risk that actually that's a net negative? Thanks so much.

Speaker #8: And I guess if it is, how should we expect that to play out if there is to be a peaceful settlement around Iran? If we see markets go back to a more stable environment without volatility, in theory, I'd have always thought that was a net positive for you.

Speaker #8: But is there a risk that actually that's a net negative? Thanks very much. Thanks for those questions, Ed. I'm going to turn to Pete on the capital point.

Bill Winters: Thanks for those questions, Ed. I'm gonna turn to Pete on the capital point. On the second question, I'm gonna agree with you wholeheartedly on the fact that we're no longer a credit play. I don't think we've been a credit play for quite some time. I'm not sure what it means to be a volatility play. What I think we think of ourselves as being as a sort of a client excellence play. During kind of good times and bad, increasingly, clients are turning to us for their financial solutions, whether that's the way they interact with markets, the way they manage their risk, the way they raise their financing. Of course, different pieces of that will play out in different ways.

Speaker #8: But on the second question, I'm going to agree with you wholeheartedly on the fact that we're no longer a credit play. I don't think we've been a credit play for quite some time.

Speaker #8: I'm not sure what it means to be a volatility play. What I think we think of ourselves as being is a sort of a client excellence play.

Speaker #8: So during kind of good times and bad, increasingly, clients are turning to us for their financial solutions, whether that's the way they interact with markets, the way they manage their risk, or the way they raise their financing.

Speaker #8: And, of course, different pieces of that will play out in different ways. The increase in flow in financial markets and the strong episodic quarter—episodic, no doubt—had something to do with, or maybe a lot to do with, the volatility in the market.

Bill Winters: The increase in flow in financial markets and the strong episodic quarter in episodic no doubt had something to do with or maybe a lot to do with the volatility in the market. We've had really good, you know, so 10% compound growth on average or 10% compound growth in that flow income over a long period of time. Through volatile periods and not. It's not because of the volatility, it's because of the quality of the service that we're providing. In the fact that we've had a super strong quarter in Global Banking, up over 20% on the back of a strong year last year. Obviously, it's been quite volatile in Q1. Oftentimes-

Speaker #8: But we've had really good 10% compound growth on average, or 10% compound growth in that flow income, over a long period of time—through volatile periods and not.

Speaker #8: And it's not because of the volatility. It's because of the quality of the service that we're providing. In the fact that we've had a super strong quarter in global banking, up over 20% on the back of a strong year last year, is and obviously, it's been quite volatile in the first quarter.

Speaker #8: Oftentimes, you see financing volumes drop during volatile times. Our experience has been the opposite—that we've been able to address customer needs in the first quarter in a kind of an extraordinary way.

Manus Costello: Mm-hmm

Bill Winters: ... you see financing volumes drop during volatile times. Our experience has been the opposite, that we've been able to address customer needs in Q1 in a kind of an extraordinary way across the financing piece. I don't think we're a "vol play," quote-unquote, at all. I think we are a customer excellence play. I have to say, I think those indicators are extremely encouraging. Pete.

Bill Winters: you see financing volumes drop during volatile times. Our experience has been the opposite, that we've been able to address customer needs in Q1 in a kind of an extraordinary way across the financing piece. I don't think we're a "vol play," quote-unquote, at all. I think we are a customer excellence play. I have to say, I think those indicators are extremely encouraging. Pete.

Speaker #8: Across the financing piece, so I don't think we're an evolved play, quote unquote, at all. I think we are a customer excellence play. And I have to say, I think those indicators are extremely encouraging.

Speaker #8: Pete?

Manus Costello: Thanks, Ed. On your capital question, the 20 basis points of other movements within our capital lock. You hit on one of them, which is employee share awards, which does tend to be a Q1 impact. The other things in there tend to be, I mean, valuation adjustments. DVA shows up in income and then comes out in capital because it doesn't get to count for capital. We did have a DVA gain this quarter. There's PVA, Prudential valuation adjustments. When you've got volatility in financial markets, sometimes you have to take a bit more haircuts from a capital standpoint. It's things like that. There's a tiny bit of FVOCI, but it wasn't a material driver this quarter. Those are the main moving pieces. Ed, hope that helps.

Speaker #4: Thanks, Ed. On your capital question, the 20 basis points of other movements within our capital lock. So you hit on one of them, which is employee share awards, which does tend to be a Q1 impact.

Pete Burrill: Thanks, Ed. On your capital question, the 20 basis points of other movements within our capital lock. You hit on one of them, which is employee share awards, which does tend to be a Q1 impact. The other things in there tend to be, I mean, valuation adjustments. DVA shows up in income and then comes out in capital because it doesn't get to count for capital. We did have a DVA gain this quarter. There's PVA, Prudential valuation adjustments. When you've got volatility in financial markets, sometimes you have to take a bit more haircuts from a capital standpoint. It's things like that. There's a tiny bit of FVOCI, but it wasn't a material driver this quarter. Those are the main moving pieces. Ed, hope that helps.

Speaker #4: The other things in there tend to be, I mean, valuation adjustments. So DVA shows up in income and then comes out in capital because it doesn't get to count for capital.

Speaker #4: So, we did have a DVA gain this quarter. There's PVA, prudential valuation and judgment adjustments—when you get volatility in financial markets, sometimes you have to take a bit more haircuts from a capital standpoint.

Speaker #4: So it's things like that. There's a tiny bit of FDOCI, but it wasn't a material driver this quarter. So those are the main moving pieces, Ed.

Speaker #4: Hope that helps.

Speaker #8: So, going forward, that should be zero, broadly.

Ed Firth: Going forward, that should be zero broadly.

Speaker #4: So, it's hard to predict. I mean, the share awards are clearly skewed more towards Q1. I'm not going to predict how markets are going to play into DVA and PVA and some of the other things—that's why it's in 'other'—but it shouldn't have the same impact that it had in Q1.

Manus Costello: It's hard to, hard to predict. I mean, the share awards is clearly skewed more towards Q1. Not gonna predict how markets are gonna play into DVA and PVA and some of the other things. That's why it's in other. It shouldn't have the same impact that it had in Q1.

Pete Burrill: It's hard to, hard to predict. I mean, the share awards is clearly skewed more towards Q1. Not gonna predict how markets are gonna play into DVA and PVA and some of the other things. That's why it's in other. It shouldn't have the same impact that it had in Q1.

Speaker #8: Perfect. Thanks.

Ed Firth: Perfect. Thank you.

Speaker #7: We are not going to proceed with our next question. And the questions come from the line of Aman Rakhar from Barclays. Please ask your question.

Operator: We are now going to proceed with our next question. The question's come from the line of Aman Rakkar from Barclays. Please ask your question.

Speaker #9: Good morning, gents. I had a couple, please. So, could I just trouble you for somewhat of a kind of trading update for the quarter to date?

Aman Rakkar: Good morning, gents. I had a couple, please. Could I just trouble you for somewhat of a kind of trading update for the Q to date? I guess, you know, the Middle East conflict, you know, only directly impacted a third of the performance in the Q. I think you guys normally do give us some kind of trading commentary. I think you've kind of pointed to elements of it, but I was just wondering if I could kind of firm that up in terms of what you're seeing on wealth and momentum in markets, and banking, please. That'd be really helpful. The second question was around net interest income.

Speaker #9: I guess the Middle East conflict only directly impacted a third of the performance in the quarter. And I think you guys normally do give us some kind of trading commentary.

Speaker #9: I think you've kind of pointed to elements of it, but I was just wondering if I could firm that up in terms of what you're seeing on wealth, the momentum in markets, and banking, please.

Speaker #9: That'd be really helpful. And then the second question was around net interest income. So, obviously, you're run-rating well ahead of your full-year expectations.

Aman Rakkar: Obviously, your run rating well ahead of your full year expectations, and I guess you tell us not to take Q1 as a start point. You know, for a number of reasons. I do note that rates are actually not projected to be a headwind versus Q1. Presumably there's some conservatism there. I wanna drill back into this point around pass-through rates, because I think we've been talking about a normalization in pass-through rates for a very long time now. I wonder if this is a stale comment because the liquidity dynamic is so abundant in your footprint, and it continues to outperform. You know, can you give us some color as to exactly what you are referencing around this normalization in pass-through rates?

Speaker #9: And I guess you tell us not to take Q1 as a start point, for a number of reasons. I do note that rates are actually not projected to be a headwind versus Q1.

Speaker #9: But presumably, there's some conservatism there. But I want to drill back into this point around past three rates because I think we've been talking about a normalization in past three rates for a very long time now.

Speaker #9: And I wonder if this is a stale comment because the liquidity dynamic is so abundant in your footprint. And it continues to outperform. So can you give us some color as to exactly what you are referencing around this normalization in past three rates?

Speaker #9: And if you could help us quantify it, it seems like it's a couple of hundred million dollars that you're projecting to come out of net interest income.

Aman Rakkar: If you could help us quantify it. It seems like it's $200 million that you are projecting to come out of Net Interest Income. If you could help us with that, really appreciate that. Thank you so much.

Speaker #9: If you could help us with that, it'd be really appreciate that. Thank you so much.

Speaker #8: Thanks very much, Aman, for those questions. I mentioned earlier that the first quarter momentum in trends have carried through to the second beyond that with additional Q2 guidance, I'll let him do that.

Bill Winters: Thanks very much, Aman, for those questions. I mentioned earlier that the Q1 momentum and trends have carried through to the Q2. If Manus chooses to go beyond that with additional Q2 guidance, I'll let him do that. Manus will take up the NII questions as well.

Speaker #8: And Menace will take up the NAI questions as well.

Speaker #4: Thanks, Bill. No, I'm not going to get any further than that. I think it's a decent start. And obviously, we're seeing you in a few weeks in May.

Manus Costello: Thanks, Phil. No, I'm not gonna go any further than that. That I think is a decent start. Obviously, we're seeing you in a few weeks in May, so we'll continue to discuss that as well. In terms of PTRs and NII, look, first of all, the comment is focused on CIB at the moment rather than WRB. It's in CIB where the PTRs are elevated. I would note that we have still been in an environment where rates are falling, so there can be a lagged effect of PTRs.

Speaker #4: So, we'll continue to discuss that as well. In terms of PTRs and NII—look, first of all, the comment is focused on CIB at the moment rather than WRB.

Speaker #4: It's in CIB where the PTRs are elevated. I would note that we have still been in an environment where rates are falling, so there can be a lagged effect of PTRs.

Speaker #4: And that's really what we've been thinking about in terms of continuing to expect it to flow through, that it's not until you reach day stable or a turn in interest rates in the cycle that you'd really be able to see how those rates were flowing through.

Manus Costello: That is really what we have been thinking about in terms of continuing to expect it to flow through, that it is not until you have reached a stable or a turn in interest rates in the cycle that you would really be able to see how those rates were flowing through. Our models would still suggest that we will see some pressure going forwards from PTRs in CIB. We have seen nothing in the structure of our liability base or in the way that the market is behaving, which would suggest otherwise. I am not going to quantify exactly what the PTR pressure is that is in guidance. We have told you, Aman, that every point of PTRs is about $30 million of NII pressure that comes through.

Speaker #4: And our models would still suggest that we will see some pressure going forwards from PTRs in CIB. And we've seen nothing in the structure of our liability base or in the way that the market's behaving, which would suggest otherwise.

Speaker #4: I'm not going to quantify exactly what the PTR pressure is that's in guidance. We've told you, Aman, that every point of PTRs is about 30 million of NII pressure that comes through.

Speaker #4: So I think if you flow through the rest of the guidance on NII, you can do the maths on where you think we are on the PTR curve.

Manus Costello: I think if you flow through the rest of the guidance, on NII, you can do the math on where you think we are on the PTR curve. I know you think it's a stale piece of commentary and piece of guidance, the reality is that we're still working through the cycle, and our models suggest that it's still the right way for us to think about things.

Speaker #4: But I know you think it's a stale piece of commentary and a piece of guidance. But the reality is that we're still working through the cycle.

Speaker #4: And our models suggest that it's still the right way for us to think about things.

Speaker #9: Perhaps I'll ask a follow-up. Please.

Aman Rakkar: Possible to ask a follow-up, please?

Speaker #4: Sure.

Manus Costello: Sure.

Speaker #9: Just around your income expectations for the full year bottom end of '05 to '07, which is exactly where consensus is for the full year.

Aman Rakkar: Just around, you know, your income expectations for the full year, you know, bottom end of $5 to 7, which is exactly where consensus is for the full year. I guess, you know, the Q1 beat in and of itself is a 2% beat versus market expectations. You know, the question is why do you not see a more constructive outlook for revenues? What would you encourage us to think about as the key area of uncertainty into the, into the kind of remainder of the year as to why you wouldn't lift that guide at this stage?

Speaker #9: But I guess the Q1 beat in and of itself is a 2% beat versus market expectations. So the question is, why do you not see a more constructive outlook for revenues?

Speaker #9: And is there any—what would you encourage us to think about as the key area of uncertainty into the remainder of the year as to why you wouldn't lift that guide at this stage?

Manus Costello: Well, look, I mean, I think there's lots of areas of uncertainty in the world, and on bank P&Ls. There's lots of different areas which can be better or worse than expected through the course of the year. Bill's talked about each of the different areas where we've been very happy with performance so far, but it's very difficult to see too far ahead. I would also just come back, Aman, to the comment that I made, I think, in response to the first question about remembering that in Q2, we do have a couple of items which we're cycling, which will make that year-over-year revenue growth more challenging to match that 9% level that we saw in Q1.

Speaker #4: Look, Aman, I think there's lots of areas of uncertainty in the world, and on banks' P&Ls. So there's lots of different areas which can be better or worse than expected through the course of the year.

Speaker #4: And Bill's talked about each of the different areas where we've been very happy with performance so far. But it's very difficult to see too far ahead.

Speaker #4: I would also just come back, Aman, to the comment that I made. I think in response to the first question about remembering that in the second quarter, we do have a couple of items which we're cycling which will make that year-over-year revenue growth more challenging to match that 9% level that we saw in the first quarter.

Speaker #4: So, do bear that in mind when you're modeling going forward, as well as the uncertain outlook.

Manus Costello: Do bear that in mind when you're modeling going forward, as well as the uncertain outlook.

Speaker #9: Thank you so much.

James Invine: Thank you so much.

Aman Rakkar: Thank you so much.

Speaker #7: We are not going to proceed with the next question. And the questions come from the line of James Inwin from Rothschild & Co. Redburn.

Operator: We are now going to proceed with the next question. The question's come from the line of James Invine from Rothschild & Co Redburn. Please ask your question.

Speaker #7: Please ask your question.

Speaker #10: Hi. Good morning, team. I'd like to ask Aman's first question again, please, but in a slightly different way. I was just wondering if you could give us a little bit of color about how some of your franchises have performed in March, so since the Middle East conflict started.

James Invine: Hi, good morning, team. I'd like to ask Aman's first question again, please, in a slightly different way. I was just wondering if you could give us a little bit of color about how some of your franchises have performed in March, since the Middle East conflict started. Specifically some of these really strong wealth flows that you've seen. Is that being driven by Middle East money that is looking to kind of move? Similarly for your markets flow business, how much of that, you know, did that really kind of step up in March? How much of that is driven by, you know, increased hedging of the oil price or whatever, since the conflict has started?

Speaker #10: So specifically, some of these really strong wealth flows that you've seen is that being driven by Middle East money that is looking to kind of move?

Speaker #10: And then similarly, for your markets flow business, how much of that did that really kind of step up in March? How much of that is driven by increased hedging of the oil price or whatever since the conflict has started?

Speaker #4: Good, thanks, James. I won't go too much further in terms of the trends into Q2. But just on—let's take the net new money first.

Bill Winters: Good. Thanks, James. I won't go too much further in terms of the trends into Q2. Let's take the net new money first. The net new money is coming from the same places it's been coming from for the past couple of years. We've had obviously global Indians, global Chinese, the rest of ASEAN, Middle East are all growing. We've had some reallocation of portfolios, not enormous, but some reallocation within our network. Of course, there were some outflows from the Middle East, but we captured the vast majority of that into the network, primarily in Hong Kong, but some obviously in Singapore, some interestingly, back onshore in some markets like India.

Speaker #4: The net new money is coming from the same places it's been coming from for the past couple of years. So we've had, obviously, global Indians and global Chinese.

Speaker #4: The rest of ASEAN, Middle East are all growing. We've had some reallocation of portfolios—not enormous, but some reallocation within our network. So, of course, there were some outflows from the Middle East.

Speaker #4: But we captured the vast majority of that into the network—primarily in Hong Kong, but some, obviously, in Singapore; some, interestingly, back onshore in some markets like India.

Speaker #4: So that it's not a source of net new money. It is the source of some reconfiguring within the portfolio. And I don't know if that's completely run its course.

Bill Winters: That it's not a source of net new money. It is a, the source of some reconfiguring within the portfolio. I don't know if that's completely run its course, but the underlying new money and new client trends are pretty consistent with what we've seen over the past period of time. The flow income was pretty consistent throughout the quarter, actually. Of course, we saw a pickup leading into the conflict and immediately afterwards. A lot of that flow volume is coming out of transaction flows, one way or the other. Transaction flows have remained strong for the bank. Not too much that we can say was specifically sort of conflict or incident driven.

Speaker #4: But the underlying new money and new client trends are pretty consistent with what we've seen over the past period of time. The flow income is was pretty consistent throughout the quarter, actually.

Speaker #4: So of course, we saw a pickup leading into the conflict and immediately afterwards. But a lot of that flow volume is coming out of transaction flows, one way or the other.

Speaker #4: And transaction flows have remained strong for the banks. So, not too much that we can say was specifically sort of conflict- or incident-driven. But clearly, the overall volatility in the market has increased the opportunity for us to capture these flows.

Bill Winters: Clearly, the overall volatility in the market has increased the opportunity for us to capture these flows. Specifically in energy trading, it's actually been quite tough to trade. I mean, we've been fine. Our commodity results are fine. It's been volatile in ways that as you will have observed, is very sensitive to the overnight tweet or X or Truth Social or whatever we call it. As a result, we've tried to stay, you know, relatively close to home in terms of satisfying the demand for our customer hedging in the energy markets. I suspect some in the market will have had a bit of noise in that line. Thankfully, we've come out okay. Pete, any additional color?

Speaker #4: Specifically in energy trading, it's actually been quite tough to trade. I mean, we've been fine. Our commodity results are fine. But it's been volatile in ways that, as you will have observed, are very sensitive to the overnight tweet.

Speaker #4: Or X or through social, or whatever we call it. And so, as a result, we've tried to stay relatively close to home in terms of satisfying the demand for customer hedging in the energy markets.

Speaker #4: I suspect some in the market will have had a bit of noise in that line thankfully. We've come out OK. But Pete, any additional color?

Speaker #8: Thank you. You've covered it thoroughly, so nothing to add from my side.

Manus Costello: I think you've covered it thoroughly, so nothing to add from my side.

Pete Burrill: I think you've covered it thoroughly, so nothing to add from my side.

Speaker #10: Great. Thanks, Bill.

James Invine: Great. Thanks, Bill.

Speaker #7: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Operator: We are now going to proceed with our next question.

Speaker #7: If you wish to ask a question on the webcast, please type them in the question box and click submit. We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question.

Bill Winters: Who are you asking to submit the next question?

Speaker #4: Who are you asking to submit the next question?

Bill Winters: Who are you asking to submit the next question?

Speaker #7: One moment, please. Please stand by. Once again, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Operator: We have no further questions at this time, so I'll now hand back to Bill Winters for closing remarks.

Speaker #7: If you wish to ask a question on the webcast, please type it in the question box and click submit. We have no further questions at this time.

Operator: We have no further questions at this time, so I'll now hand back to Bill Winters for closing remarks.

Speaker #7: So, I'll now hand back to Bill Winters for closing remarks.

Speaker #4: I think that's a wrap. Thanks, everyone, for joining the call, and for the good questions, as always. I really very much look forward to seeing all of you in Hong Kong in a few weeks' time.

Bill Winters: I think that's a wrap. Thanks everyone for joining the call, for the good questions as always, really very much look forward to seeing all of you in Hong Kong in a few weeks' time.

Operator: This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

Speaker #7: Good morning and good afternoon, everyone. Thank you for joining us today. I'll take a few minutes to lead you through our first quarter 2026 results.

Manus Costello: Good morning and good afternoon, everyone. Thank you for joining us today. I'll take a few minutes to lead you through our Q1 2026 results, then Bill Winters and I will take your questions. In my remarks, I'll be comparing performance year on year at constant currency, unless otherwise stated. As a reminder, these results are not presented on a reported basis, as outlined in the press release we published on 25 March. We've had a strong start to the year, delivering record income on the back of continued momentum in Wealth Solutions, Global Banking, and Global Markets flow income. We are maintaining our 2026 guidance, and we continue to expect return on tangible equity to be greater than 12% this year. Since we last spoke to you, the conflict in the Middle East has developed.

Speaker #7: Then Bill Mannis and I will take your questions. In my remarks, I'll be comparing performance year-on-year at constant currency, unless otherwise stated.

Speaker #7: As a reminder, these results are now presented on a reported basis, as outlined in the press release we published on March 25th. We've had a strong start to the year, delivering record income on the back of continued momentum in Wealth Solutions, Global Banking, and Global Markets flow income.

Speaker #7: We are maintaining our 2026 guidance, and we continue to expect return on tangible equity to be greater than 12% this year. Since we last spoke to you, the conflict in the Middle East has developed.

Speaker #7: Our priority remains the safety of our people and serving our clients' needs. There will be no material impact on our portfolios. We have taken precautionary ECL overlays in order to reflect the risk of a prolonged conflict.

Manus Costello: Our priority remains the safety of our people and serving our clients' needs. While there's been no material impact to our portfolios, we have taken precautionary ECL overlays in order to reflect the risk of a prolonged conflict. We remain watchful of the external environment, and we will continue to support our clients as they adjust to this evolving landscape. I'll now take you through the numbers in more detail. Q1 income of $5.9 billion was up 9%. This was driven by strong non-interest income growth, particularly in Wealth Solutions and Global Banking. Expenses were up 1%, with business growth largely funded by Fit for Growth and other efficiency savings. Credit impairment of $296 million included $190 million of precautionary overlays in relation to the Middle East conflict.

Speaker #7: We remain watchful of the external environment, and we will continue to support our clients as they adjust to this evolving landscape. I'll now take you through the numbers in more detail.

Speaker #7: First-quarter income of $5.9 billion was up 9%. This was driven by strong non-interest income growth, particularly in Wealth Solutions and Global Banking. Expenses were up 1%, with business growth largely funded by Fit for Growth and other efficiency savings.

Speaker #7: Credit impairment of $296 million included $190 million of precautionary overlays in relation to the Middle East conflict. Put together, we delivered $2.5 billion in profit before tax, a return on tangible equity of 17.4%, and a 31% increase in our EPS.

Manus Costello: Put together, we delivered $2.5 billion in profit before tax, a return on tangible equity of 17.4%, and a 31% increase in our EPS. I will now cover each component in detail. NII was down 2% quarter-on-quarter, as volume growth and mix benefits were offset by the impact of lower rates during the quarter, especially HIBOR. Volume growth was supported by an increase in client activity in Global Banking, and we also saw a positive impact from improved liability mix, especially in transaction services and WRB CASA. While interest rate expectations have been volatile in recent months, our weighted average rate outlook remains largely unchanged, indicating a 42 basis point reduction in 2026. We continue to expect pass-through rates to normalize over time.

Speaker #7: I will now cover each component in detail. NII was down 3% quarter on quarter, as volume growth and mixed benefits were offset by the impact of lower rates during the quarter.

Speaker #7: Especially HIBOR. Volume growth was supported by an increase in client activity and global banking. And we also saw a positive impact from improved liability mix, especially in transaction services and WRB KASA.

Speaker #7: While interest rate expectations have been volatile in recent months, our weighted average rate outlook remains largely unchanged, indicating a 42-basis-point reduction in 2026.

Speaker #7: We continue to expect pass-through rates to normalize over time, and as a reminder, WRB portfolio actions are expected to reduce NII by around 2% in 2026.

Speaker #7: These headwinds are expected to be mitigated by volume growth, and as a result, we continue to expect NII to be broadly flat in 2026.

Speaker #7: Non-interest income, which was around 51% of group income in Q1, was up 16% year on year. This was driven by significant growth in wealth solutions and global banking.

Speaker #7: I'll talk to the product performance in more detail when I come to the business segments. Turning to expenses, Q1 operating expenses were up 1% year on year, as business growth and inflation was largely offset by FFG.

Speaker #7: We incurred $119 million of FFG cost to achieve in the quarter and have achieved an exit run-rate savings of around $900 million so far.

Speaker #7: We continue to expect expenses to remain broadly flat in 2026 at constant currency, and excluding material notable items. Credit impairment for the quarter was $296 million.

Manus Costello: We continue to expect expenses to remain broadly flat in 2026 at constant currency and excluding material notable items. Credit impairment for the quarter was $296 million, including $190 million of management overlays and post-model adjustments relating to the Middle East conflict. This includes a new downside scenario, which considers the impact of a prolonged geopolitical crisis in the Middle East, leading to sustained disruptions in energy supply and elevated global commodity prices. We've taken overlays for the petrochemical sector and for potential sovereign downgrades, which could result from a sustained conflict. CIB credit impairment was $111 million, reflecting a portion of these overlays, offset by net recoveries across the rest of the portfolio. WRB remained resilient and continued to benefit from portfolio optimization actions, with impairment broadly flat despite the overlays.

Speaker #7: Including $190 million of management overlays and post-model adjustments relating to the Middle East conflict. This includes a new downside scenario, which considers the impact of a prolonged geopolitical crisis in the Middle East, leading to sustained disruptions in energy supply and elevated global commodity prices.

Speaker #7: In addition, we've taken overlays for the petrochemical sector, and for potential sovereign downgrades, which could result from a sustained conflict. CAB credit impairment was $111 million.

Speaker #7: Reflecting a portion of these overlays, offset by net recoveries across the rest of the portfolio. WRB remained resilient, and continued to benefit from portfolio optimization actions.

Speaker #7: With impairment broadly flat despite the overlays, our annualized loan loss rate in the quarter, including the overlays, was 32 basis points—within our 30 to 35 basis point through-the-cycle guidance.

Manus Costello: Our annualized loan loss rate in the quarter, including the overlays, was 32 basis points, within our 30 to 35 basis point through the cycle guidance. Overall credit quality remained resilient. Our high-risk assets were up around $700 million in the quarter due to an increase in early alerts as a result of the Middle East conflict. Credit grade 12 and net stage 3 remained broadly stable. The Middle East represents around 6% of the group's exposures. More than 90% is in CIB and weighted towards sovereigns and financial institutions. WRB exposures are mostly secured. We've included details on this later in the deck. Moving on to balance sheet. We continue to see growth in underlying loans and advances to customers, which were up 3% or $10 billion in the quarter, primarily from Global Banking and secured wealth lending.

Speaker #7: Overall credit quality remained resilient. Our high-risk assets were up around $700 million in the quarter due to an increase in early alerts as a result of the Middle East conflict.

Speaker #7: While credit grade 12 and net stage 3 remained broadly stable. The Middle East represents around 6% of the group's exposures. More than 90% is in CIB and weighted toward sovereigns and financial institutions.

Speaker #7: While WRB exposures are mostly secured. We've included details on this later in the deck. Moving on to balance sheet. We continue to see growth in underlying loans and advances to customers, which were up 3%, or $10 billion in the quarter.

Speaker #7: Primarily from global banking and secured wealth lending. Underlying customer deposits were up 3%, with strong growth in KASA across WRB and CIB. Risk-weighted assets were up 3% in the quarter.

Manus Costello: Underlying customer deposits were up 3%, with strong growth in CASA across WRB and CIB. Risk-weighted assets were up 3% in the quarter, primarily driven by asset growth and mix, as well as $3 billion increase in market risk RWA as we continued to help clients capture market opportunities. These were partly offset by FX and optimization actions. Our CET1 ratio was 13.4% in the quarter as capital generation was offset by distributions and business growth. Now let's take a look at our business segments. CIB income was $3.6 billion, up 6%. We saw continued momentum in Global Banking, with income up 19% on the back of increased origination volumes. Within Global Markets, we delivered record flow income, up 17%.

Speaker #7: Primarily driven by asset growth and mix, as well as a $3 billion increase in market risk RWA, as we continued to help clients capture market opportunities.

Speaker #7: These were partly offset by FX and optimization actions. Our CE21 ratio was 13.4% in the quarter, as capital generation was offset by distributions and business growth.

Speaker #7: Now let's take a look at our business segments. CIB income was $3.6 billion, up 6%. We saw continued momentum in Global Banking, with income up 19% on the back of increased origination volumes.

Speaker #7: Within global markets, we delivered record flow income, up 17%. We saw increased client activity across rates and FX products, while we also benefited from our continued investments in electronic platforms and people.

Manus Costello: We saw increased client activity across rates and FX products, while we also benefited from our continued investments in electronic platforms and people. Episodic income was lower against a strong comparator in Q1 2025, with 12-month rolling income now around $800 million. Turning to WRB. Income was up 13% to $2.5 billion. This was driven by a record quarter in affluent net new money and Wealth Solutions income. Wealth Solutions was up 32%, with strong client activity across multiple asset classes in investment products, while bancassurance was up 20%. Affluent net new money inflow of $18 billion was equivalent to 16% annualized growth in affluent AUM and was driven primarily by wealth products. This demonstrates our strength in engaging a growing affluent client base, rapid idea execution on our open architecture platform, enabling value creation amidst market volatility.

Speaker #7: Episodic income was lower, against a strong competitor in Q1 2025, with 12-month rolling income now around $800 million. Turning to WRB. Income was up 13% to $2.5 billion.

Speaker #7: This was driven by a record quarter in affluent net new money and wealth solutions income. Wealth solutions was up 32%, with strong client activity across multiple asset classes and investment products, while bancassurance was up 20%.

Speaker #7: Affluent net new money inflow of $18 billion was equivalent to 16% annualized growth in affluent AUM, and was driven primarily by wealth products. This demonstrates our strength in engaging a growing affluent client base, rapid idea execution on our open architecture platform, and enabling value creation amidst market volatility.

Speaker #7: As a reminder, the digital banks are now reported within WRB. Box was profitable in the first quarter, and trust also turned profitable in March.

Manus Costello: As a reminder, the digital banks are now reported within WRB. Mox was profitable in Q1, and Trust also turned profitable in March. To conclude, we've had a strong start to the year with a standout performance in Wealth Solutions, Global Banking, and Global Markets flow income. This reflects the continued success of our cross-border and affluent strategy. Our credit quality remains resilient, and we are watchful of the external environment. As mentioned, 2026 guidance remains unchanged, and we'll provide a medium-term financial framework at our investor event in May. With that, I'll hand back to the operator, and Bill, Manus, and I will be happy to take your questions. Thank you.

Speaker #7: So to conclude. We've had a strong start to the year, with a standout performance in wealth solutions, global banking, and global markets flow income.

Speaker #7: This reflects the continued success of our cross-border and affluent strategy. Our credit quality remains resilient, and we are watchful of the external environment. As mentioned, 2026 guidance remains unchanged, and we will provide a medium-term financial framework at our investor event in May.

Speaker #7: With that, I'll hand back to the operator and Bill Mannis and I will be happy to take your questions. Thank you.

Speaker #2: As a reminder to ask a question on the phone, please press star 11 and wait for your name to be announced. To withdraw your question, please press star 11 again.

Operator: We are now going to proceed with our first question. The question's come from the line of Joseph Dickerson from Jefferies. Please ask your question.

Speaker #2: We are now going to proceed with our first question. The questions come from the land of Joseph Dickerson from Jefferies. Please ask your question.

Speaker #3: Hi, good morning, guys. Really good quarter here—pretty much across the board. Maybe slightly an unfair question, but just on the 2026 guides, I guess we've started off the year very strong on NII and deposits.

Joseph Dickerson: Hi. Good morning, guys. A really good quarter here, pretty much across the board. Maybe slightly an unfair question, but just on the 2026 guides, I guess we've started off the year very strong on NII and deposits, and margin. It looks like your cost is tracking ahead. I suspect Q2, if you want to engage in my comments, since I suspect Q2 is probably at a pretty good start on wealth deposits as well. I guess I'm wondering why there's some, you know, why you're keeping the guidance so conservative for this year, or is it just because you want to focus more on the medium term, in a few weeks, in May? I guess secondly, and I suspect you'll touch on this in May as well.

Speaker #3: And margin, it looks like your CASAs are tracking ahead. I suspect Q2, if you want to engage in my comments on this, I suspect Q2 is probably off to a pretty good start on wealth deposits as well.

Speaker #3: So, I guess I'm wondering why you're keeping the guidance so conservative for this year. Is it just because you want to focus more on the medium term?

Speaker #3: In a few weeks, in May. And then, I guess secondly—and I suspect you'll touch on this in May as well—how do you think about, because you now have a return of loan demand in the footprint.

Speaker #3: That's driving asset growth, but also driving some RWA growth on the credit side. Obviously, I guess how do you think about the RWA density of the group going forward?

Joseph Dickerson: How do you think about, because you now have a return of loan demand in the footprint, that's driving asset growth, but it's also driving some RWA growth on the credit side, obviously. I guess, how do you think about the RWA density of the group going forward? Should we expect this to continue to improve, or do you think that now that loan demand seems to be coming back, that's a nice profitable activity to continue to drive growth for you? Thanks.

Speaker #3: Should we expect this to continue to improve? Or do you think that, now that loan demand seems to be coming back, that's a nice, profitable activity to continue to drive growth for you?

Speaker #3: Thanks.

Speaker #4: Yeah, thanks, Joe, very much for the question. And I'll turn to guidance. I turn to Mannis for the guidance question. But just a couple of upfront comments.

Bill Winters: Yeah. Thanks, Joe, very much for the question. I'll turn to Manus for the guidance question. Just a couple of upfront comments. Yeah, the Q1 showed really strong momentum across the board. That momentum is carrying through into the early part of the Q2. We are encouraged by the business. The loan demand, maybe a better way to put it is lending opportunities for us. Opportunities to use our balance sheet profitably. That has been a feature in the Q1, hence the improvement in returns despite the RWA increases. That has also carried through to the Q2.

Speaker #4: Yeah, the first quarter showed really strong momentum across the board. That momentum is carrying through into the early part of the second quarter. So we are encouraged by the business.

Speaker #4: The loan demand may be a better way to put it is lending opportunities for us. Opportunities to use our balance sheet profitably. So that has been a feature in the first quarter, hence the improvement in returns despite the RWA increases.

Speaker #4: And that has also carried through to the second quarter, although one would imagine that if this conflict in the Middle East persists, that we would see some shifting there.

Bill Winters: Although one would imagine that if this conflict in the Middle East persists, that we would see some shifting there, probably both in returns but also in loan demand. Overall, we're certainly confident about the prospects for the business. I'll turn to Manus for specific questions on guidance.

Speaker #4: Probably both in returns, but also in loan demand. But overall, we're certainly confident about the prospects for the business. I'll turn to Mannis for specific questions on guidance.

Speaker #5: Thanks, Bill. And thanks, Joe, for noting that, yes, we did have a very good first quarter, a good start to the year, up 9% in income terms.

Speaker #5: And we also had a very strong episodic print in Q2 '25 as well. So, when thinking about growth year-on-year, do bear those things in mind for the second quarter.

Speaker #5: The second thing is, of course, our NII guidance remains broadly flat. I'm sure we'll discuss that more later. But we still have some headwinds, both from the curve and from our own portfolio actions in WRB.

Speaker #5: So do bear those in mind when you're thinking forwards despite the strong start to the year.

Speaker #3: Great.

Speaker #6: A follow-up if you don't mind. No, just on your overlays, you called out because I guess it links to the RWA point. You called out some overlays you were taking regarding sovereign risk.

Joseph Dickerson: Great. Thanks. Can I just ask a follow-up, if you don't mind?

Bill Winters: Go ahead, Joe.

Joseph Dickerson: No, just on your overlays you called out, because I guess it links to the RWA point. You know, you called out some overlays you were taking regarding sovereign risk. Do you have any, I'll have to look in the annual report perhaps, but do you have any sensitivities on what sovereign downgrades could mean on RWAs, any RWA inflation that we could take a look at?

Speaker #6: Is there do you have any I'll have to look in the end of your report, perhaps. But do you have any sensitivities on what sovereign downgrades could mean on RWAs?

Speaker #6: Any RWA inflation that we could take a look at?

Speaker #5: I'll turn to Peter on that one. But I'll say we've always called out in the past the impact on our RWAs from sovereign risk downgrades.

Bill Winters: I'll turn to Peter on that one. We've always called out in the past the impact on our RWAs from sovereign risk downgrades. They were unrelated to the conflict. To the extent that we've got material changes, we will certainly call them out directly. Pete.

Speaker #5: They were unrelated to the conflict. But so to the extent that we've got material changes, we will certainly call them out directly. But Pete.

Speaker #7: As far as RWA, potential impacts of that—I guess I would say they're manageable, not material, and well within our guidance.

Speaker #3: Fantastic. Thank you.

Speaker #5: Great. Operator, can we take the next question, please?

Speaker #2: Sure. We are now going to proceed with the next question. And the questions come from the land of Amit Cohen from Mediabank. Please ask your question.

Joseph Dickerson: Fantastic. Thank you.

Bill Winters: Great. Operator, can we take the next question, please?

Operator: Sure. We are now going to proceed with the next question. The question's come from the line of Amit Goel from Mediobanca. Please ask your question.

Speaker #8: Hi. Thank you. So yeah, so two for me. One, actually, just coming onto the kind of capital and capital efficiency. So obviously, it was a very strong quarter deployed a bit more balance sheet.

Amit Goel: Hi, thank you. Yeah, two for me. One, actually just coming onto the kind of capital and capital efficiency. Obviously it was a very strong quarter, deployed a bit more balance sheet to generate some more earnings. I guess the net capital generation was a bit more limited. It seems like with the targets at least for this year unchanged, it is potentially using a bit more capital. I'm just wondering whether, you know, going forward, you're thinking that growth is a little bit more expensive from a capital standpoint or whether we should see capital generation kind of building from here. Secondly, just curious, like in terms of the sensitivity on your overlays to the conflict.

Speaker #8: To generate some more earnings. But then I guess the net capital generation was a bit more limited. And it seems like, with the targets at least for this year unchanged, it's potentially using a bit more capital.

Speaker #8: So I'm just wondering whether going forward, you're thinking that growth is a little bit more expensive from a capital standpoint? Or whether we should see capital generation kind of building from here?

Speaker #8: And then secondly, just curious, like in terms of the sensitivity on your overlays, to the conflict, I mean, I guess little bit more color in terms of some of the assumptions there and what could lead to some right back or incremental charges being taken.

Amit Goel: I mean, I guess if, you know, just if you could give us a little bit more color in terms of some of the assumptions there and, you know, what could lead to some write back or incremental charges being taken. Thank you.

Speaker #8: Thank you.

Speaker #5: Thanks for the question, Mannis. I'll turn to Pete for some to cover on both of those. But the way I think about the capital or maybe more appropriately, the return story in the first quarter is we had great volumes.

Bill Winters: Thanks for the question. I'll turn to Pete for some to go on both of those. The way I think about the capital, or maybe more appropriately, the return story in Q1 is, we had great volumes coming through both in terms of lending opportunities, but also obviously financial markets. We captured those volumes and have retained that value. We grew some risk-weighted assets on the back of volumes, but also on the back of heightened volatility. We've said consistently that we'll operate throughout the 13% to 14% CET1 range, and we're obviously coming in at 13.4%, which is consistent with that.

Speaker #5: We've said consistently that we'll operate throughout the 13 to 14 percent CET1 range, and we're obviously coming in at 13.4, which is consistent with that.

Speaker #5: So where we see opportunities to deploy capital profitably and accretively, and obviously at 17 percent ROT quarter suggested that's what we did. We're going to use the capital for that.

Bill Winters: You know, where we see opportunities to deploy capital profitably and accretively, and obviously a 17% ROTE quarter, so that's what we did. We're gonna use the capital for that. Where we don't see the same opportunities, we'll be in a position to either redeploy that into other parts of our business or give it back. Overall, I think this is a very, very strong and reassuring story. We're very happy, and we'll continue to manage capital in exactly that way. I'll turn to Pete for more color and then to pick up on the credit points.

Speaker #5: Where we don't see the same opportunities, we'll be in a position to either redeploy that into other parts of our business or give it back.

Speaker #5: So overall, I think this is a very, very strong and reassuring story we're very happy and will continue to manage capital in exactly that way.

Speaker #5: But I'll turn to Pete for more color and then to pick up on the credit points.

Speaker #7: Thanks, Bill. And thanks, Amit, for the question. Just to build a little bit on what Bill said on capital, I guess I would point out that Q1, Q4 tends to be low in market risk.

[Company Representative] (Standard Chartered): Thanks, Bill. Thanks so much for the question. Just to build a little bit on what Bill said on capital. I guess I would point out that Q4 tends to be low in market risk and markets activity more generally, Q1 tends to be when market risk RWA comes back on. As well as there's a bit of counterparty credit risk due to what Bill mentioned as far as volatility in the markets in Q1. While I guess I'm trying to say that the rate of growth through the rest of the year won't be as great as it was in Q1. It should be more flattish and less growth in RWA through the remainder of the year. On the sensitivity on overlay.

Speaker #7: And markets activity more generally. And so Q1 tends to be when market risk RWA comes back on. As well as there's a bit of counterparty credit risk due to what Bill mentioned as far as volatility in the markets in Q1.

Speaker #7: So while I guess I'm trying to say that the rate of growth through the rest of the year won't be as great as it was in Q1.

Speaker #7: So it should be a more flattish and less growth in RWA through the remainder of the year. On the sensitivity on overlays. So two things to call out and think about when you're thinking about the overlays.

Speaker #7: So, one is the introduction of the new sustained Middle East conflict, and if you look at our longer press release, there's actually quite a bit of detail on page 22 on all the various assumptions on GDP growth, oil price, etc., etc.

Speaker #7: But the other component of that is the weightings. So right now we have 70 percent on the two downside scenarios. I would point out that actually the BCS tier to bank capital stress test scenario is the more stressful of the two scenarios rather than the sustained Middle East conflict.

Speaker #7: So we've got 45 percent on the sustained Middle East conflict, 25 percent on the harder downside. So we believe we are appropriately what's the right word?

Speaker #7: Full about how that could play out. And the reason we've gone over 50 percent for those two is because the base was a pre-war base case scenario.

[Company Representative] (Standard Chartered): We believe we are appropriately... What's the right word? Thoughtful about how that could play out. The reason we've gone over 50% for those two is because the base was a pre-war base case scenario. I would expect that next time we do this, the base will reflect a different outlook, and we'll judge the weightings appropriately. If you take a look at the details that we've provided in the longer, the longer deck, you can get some of those more granular assumptions. Hope that helps.

Speaker #7: But hope that helps. Thank you.

Speaker #2: We are now going to proceed with our next question. And the questions come from the line of Andrew Combs from CITI. Please ask your question.

Amit Goel: Thank you.

Operator: We are now going to proceed with our next question. The question's come from the line of Andrew Coombs from Citi. Please ask your question.

Speaker #9: Good morning. If I can just do a couple of follow-ups. Just firstly, I'm well. Looking absolutely stellar first quarter. But obviously the wealth that you earn has drifted down 4 percent Q1Q given the market moves.

Andrew Coombs: Morning. If I could just do a couple of follow-ups. Firstly on wealth, because it was an absolute stellar Q1. Obviously the wealth AUM has drifted down 4% Q on Q given the market moves, and that's despite the very strong net new money print. You specifically called out heightened transaction activity in Q1. Just interested in your thoughts on to what extent we can extrapolate the Q1 result, or if you think there are either a degree of, you know, abnormally strong activity in that Q1. Second, you alluded to it, on the rate assumptions, if I look at the slide at the back, I think you've now got lower Q1 and Q2 rate assumptions, but higher Q3 and Q4.

Speaker #9: And that's despite the very strong net new money print. And you specifically call out heightened transaction activity in the first quarter. So just interested in your thoughts on to what extent we can extrapolate the Q1 result or if you think there are a degree of abnormally strong activity in that first quarter.

Speaker #9: And second, you alluded to it, but on the rate assumptions, if I look at the slide at the back, I think you've now got lower Q1 and Q2 rate assumptions, but higher Q3 and Q4.

Speaker #9: So that would kind of explain why your NRI guide is unchanged for 2026, but does it mean that you now have a better exit run rate than you expected at the start of the year?

Andrew Coombs: That would kind of explain why your NII guide is unchanged for 2026, but does it mean that you now have a better exit run rate than you expected at the start of the year? Are you more confident on the NII trajectory going into 2027? Thank you.

Speaker #9: So, are you more confident on the NRI trajectory going into 2027? Thank you.

Speaker #5: Thanks, Andy. I'm going to turn to Mannis on both those questions. But just a little bit of color on the wealth business—clearly, a strong set of results.

Speaker #5: And what we look at first and foremost is all the leading indicators. So new clients, the money that they're bringing in, the migration then from deposits for the new money typically starts.

Bill Winters: Thanks, Andy. I'm gonna turn to Manus Costello on both of those questions. Just a bit of color on the wealth business. Clearly a strong set of results. What we look at first and foremost is all the leading indicators. New clients, the money that they're bringing in, the migration then from deposits where the new money typically starts into wealth products. In this quarter, very importantly, the resilience to shifting market dynamics, whether that's in credit markets or in equity markets. All of those leading indicators are pretty encouraging for us. When you say, can we extrapolate Q1, I don't think we can extrapolate 30% plus growth ad infinitum. The structural drivers are very clear, very consistent.

Speaker #5: Into wealth products. And in this quarter, a very importantly, the resilience to shifting market dynamics. Whether that's in credit markets or in equity markets.

Speaker #5: But the structural drivers are very clear. Very consistent. They're supported by the ongoing investments that we're making that we've called out in each of our earnings presentations over the past several quarters.

Bill Winters: They're supported by the ongoing investments that we're making, that we've called out, you know, in each of our earnings presentations over the past several quarters, and which are ongoing. Supported by what is increasingly just a strong brand, if I could call it that. The clients in Asia, Middle East, and Africa recognize Standard Chartered as a good and safe place to go in good times and bad. Can extrapolate. I mean, I would love to compound at 30% for the rest of my working life, but we can certainly see good structural drivers for a long time to come. Manus.

Speaker #5: In good times and bad. So it can extrapolate. I mean, I would love to compound at 30 percent for the rest of my working life.

Speaker #5: But we can certainly see good structural drivers for a long time to come. Mannis?

Speaker #4: Thanks, Bill. The only thing to add on the wealth comment when you're looking at the AUM moves is that you need to factor in FX as well and given that the dollar was strong during the quarter.

Speaker #4: So that also has an impact. But as Bill said, the underlying momentum remains very strong. On your question on rates, I would just first of all point out that they're not our assumptions that we're using.

Manus Costello: Thanks, Bill. The only thing to add on the wealth comment when you're looking at the AUM moves is that you need to factor in FX as well, Andy, given that the dollar was strong during the quarter. That also has an impact. As Bill said, the underlying momentum remains very strong. On your question on rates, I would just first of all point out that they're not our assumptions that we're using. It's market implied forward rates that we get from derivatives market, so that there's no assumptions that we've made in here. I also am not gonna get into talking about our guidance for 2027, which won't surprise you.

Speaker #4: It's market implied forward rates. That we get from derivatives markets. So there's no assumptions that we've made in here. I also am not going to get into talking about our guidance for 2027, which won't surprise you.

Speaker #4: But you're right that if you look at the curve on slide 16, the shape of the curve has changed somewhat. I would just add a couple of cautionary caveats.

Speaker #4: Firstly, our guidance for this year includes the impact of our WRB actions. And of PTRs coming down during the course of this year. So that's something to bear in mind.

Speaker #4: And also, of course, just to state the obvious, the market's quite volatile. The move in rates can change quite materially week by week, quarter by quarter.

Speaker #4: So, we think that at the moment, given those different crosswinds, maintaining our guidance of broadly flat is still the right position for NII.

Speaker #5: Good. Thanks. Operator, can we take the next question, please?

Speaker #2: Sure. We are now going to proceed with our next question. And the questions come from the line of Koon Peng Ma from China Securities.

Bill Winters: Great. Thanks. Operator, can we take the next question, please?

Speaker #2: Please ask your question.

Operator: Sure. We are now going to proceed with our next question. The question come from the line of Kunpeng Ma from China Securities. Please ask your question.

Speaker #7: Morning, guys. This is Koon Peng from China Securities. Congratulations to this very strong quarter. And I have two questions. The first is a quick follow-up on the Middle Eastern overlays.

Kunpeng Ma: Morning, guys. This is Kunpeng with China Securities. Congratulations to this very strong quarter. Now I have 2 questions. The first is a quick follow-up on the Middle East overlays. I'm not sure if the current kind of situation persists for a while, say, in Q2. Is there any incremental overlays to be charged in Q2? If you do so, will the credit cost still be in the range of 30 to 35 basis points? Also, is there any chance in the future that if we, if we can see any write-backs of this overlays if, you know, if the situation recovers? The second is on the Global Markets business, which is also very strong.

Speaker #7: I'm not sure if the current situation persists for a while, say, in the second quarter? Is there any incremental overlays to be charged in the second quarter?

Speaker #7: And if you do so, will the credit costs still be in the range of 30 to 35 bps? And also, is there any chance in the future that if we can see any right backs of this overlays if the situation recovers?

Speaker #7: The second is about the Global Markets business, which is also very strong. And you mentioned the contribution from the investment in the electronic platform for your clients.

Speaker #7: So I want to know more about more color about the investments. In such infrastructure and human resources, to support you to capture more market share in the global markets business.

Kunpeng Ma: You mentioned the contribution from the investment in the electronic platform for your clients. I want to know more about more color about the investments in such infrastructure and human resources to, you know, to support you to capture more market share in the Global Markets business. I think this is quite a very promising business for banks for the next few years. Yeah. Thank you.

Speaker #7: I think this is quite a this is a very promising business for banks for the next few years. Yeah. Thank you.

Speaker #5: Super. Thanks for the questions, Koon Peng. I'll hand over to Pete for color on the overlays. But I'll just say, of course, we're all watching every day, every minute, what the likelihood is for the duration of this conflict and the closure of the straits.

Bill Winters: Sure. Thanks for the questions, Kunpeng. I'll hand over to Pete for color on the overlays. I'll just say, of course, we're all watching every day, every minute, what the likelihood is for the duration of this conflict and the closure of the straits and the prospect for supply shocks. Independent of the price movements, the supply shocks coming from limited access to some key feedstocks for other manufacturing processes. No one knows, obviously, exactly how long this conflict will last. I think the key manufacturers in the world have been buffering, I would say most notably in China, have been buffering the impact of higher prices and supply shortages by drawing down strategic stocks.

Speaker #5: And the prospect for supply shocks. Independent of the price movements that the supply shocks coming from limited access to some key feedstocks for other manufacturing processes.

Speaker #5: And no one knows, obviously, exactly how long this conflict will last. I think the key manufacturers in the world have been buffering I'd say most notably in China have been buffering the impact of higher prices.

Speaker #5: And supply shortages by drawing down strategic stocks. There will be a limit to how much drawdown of strategic stocks can take place. And the supply shock is ongoing.

Speaker #5: So, I don't know whether it's one month, three months, or six months from now that we start to see some sort of an economic inflection point.

Bill Winters: There will be a limit to how much drawdown of strategic stocks can take place, and the supply, the supply shock is ongoing. I don't know whether it's, you know, one month or three months or six months from now that we start to see, you know, some sort of an economic inflection point. So far, the markets are quite resilient. Processes are quite resilient. Trade is quite resilient. Therefore, credit has been quite resilient. Hence, we're taking overlays as opposed to recognizing any actual losses or specific impairments. We'll watch. We'll continue to watch. I would say we remain hopeful that this conflict will resolve before there's acute damage to the economy, but you can't preclude that possibility.

Speaker #5: But we'll watch. We'll continue to watch. I would say we remain hopeful that this conflict will resolve before there's acute damage to the economy.

Speaker #5: But you can't preclude that possibility. And our stress scenarios try to capture as much of that as possible. They're quite severe scenarios, right, when you get right down to it.

Speaker #5: But I'll turn to Pete. We haven't changed our guidance in terms of expected credit costs through the cycle of 30 to 35 basis points.

Bill Winters: In our stress scenarios, I try to capture as much of that as possible. They're quite severe scenarios, right? When you get right down to it. I'll turn to Pete. We haven't changed our guidance in terms of expected credit costs through the cycle of 30 to 35 basis points, but that's not a comment on this conflict. That's a comment on what we can expect through the cycle. Cycles are obviously much longer than this conflict. Let's hope. In terms of the investments in markets, you watch our financial markets earnings evolve over the past 7, 8 years, with good, strong underlying growth, but also a much higher quality of income and returns.

Speaker #5: But that's not a common on this conflict. That's a common on what we would can expect through the cycle. And cycles are obviously much longer than this conflict.

Speaker #5: Let's hope. In terms of the investments in markets, you've watched our financial markets earnings evolve over the past seven, eight years. With good, strong, underlying growth.

Speaker #5: But also at a much higher quality of income and returns. From an income stream that was very focused and concentrated in FX trading, through to a really good build-out of the rates business, associated options, commodities increasingly, and credit.

Bill Winters: From an income stream that was very focused and concentrated in FX trading through to a really good build-out of a rates business, associated options, commodities increasingly, and credit. All very consistent with the broader strategic thrust of the bank, which includes having a much higher velocity balance sheet, both in financial markets, but also it brought them more broadly in the bank as a whole, originating and distributing more. The investment that we've had, that we have been making, we'll continue to make are with those strategic directions in mind. In terms of specifics in Q2, the 17% increase. Sorry, Q1. The 17% increase in flow income is really very encouraging for us. As I mentioned earlier, it suggests a couple of things.

Speaker #5: All very consistent with the broader strategic trust of the bank, which includes having a much higher velocity balance sheet. Both in financial markets, but also brought more broadly in the bank as a whole, originating and distributing more.

Speaker #5: So the investment that we've had that we have been making will continue to make our with those strategic directions in mind. In terms of specifics in Q2, the 17% increase sorry, Q1.

Speaker #5: Two, we're able to capture those flows. It's always competitive. And third, we're able to capture the profitability. Hence, the substantially positive episodic income. Those things are all extremely encouraging.

Bill Winters: One is clients are turning to us during a time of stress or anxiety in markets. Two, we're able to capture those flows. It's always competitive. Three, we're able to capture the profitability, hence the substantially positive episodic income. Those things are all extremely encouraging, and they reflect investments in e-trading platforms, you know, improvements in portals, but also improvements in our observed latency in terms of the messaging within our systems to allow us to go head-to-head with the most sophisticated traders in the market who have invested massively in very low latency algorithmic trading. We hold our own in those markets, and we'll continue to improve and continue to capitalize on the flows that we see to be ever better traders.

Speaker #5: And they reflect investments in e-trading platforms, improvements in portals, but also improvements in our observed latency in terms of the messaging within our systems.

Speaker #5: To allow us to go head-to-head with the most sophisticated traders in the market who have invested massively in very low latency algorithmic trading. We can hold our own in those markets.

Speaker #5: And we'll continue to improve. And continue to capitalize on the flows that we see to be ever better traders. And I'd make another observation.

Speaker #5: Then I'll hand over to Pete, as I said. The investments that we've made to improve the connectivity within the flows of the bank—so, between our cash management business, our trade finance business, and our private banking and wealth management business.

Bill Winters: I'd make another observation, then I'll hand over to Pete. As I said, the investments that we've made to improve the connectivity within the flows of the bank, so between our cash management business, our trade finance business, our private banking and wealth management business, through to the financial market dealing desks, have improved dramatically. It's just much easier for clients to execute their risk management transactions along with their other transaction banking or day-to-day banking activities, which has been a material source of incremental profit for us, and we think we have much further to go on that. You know, encouraging progress so far, but I'd say that we're not yet quite halfway there. Pete.

Speaker #5: Through to the financial markets dealing desks, things have improved dramatically. So it's just much easier for clients to execute their risk management transactions along with their other transaction banking or day-to-day banking activities.

Speaker #5: Which has been a material source of incremental profit for us. And we think we have a much further to go on that. So encouraging progress so far.

Speaker #5: But I'd say that we're not yet quite halfway there. Pete? So, thanks. I think Bill covered the second question pretty thoroughly. Going back on the overlay, it's highly uncertain exactly how this is going to play out.

Speaker #5: I would point out, though, that we were within the 30 to 35 basis point guidance this quarter, despite the fact that we took that overlay.

Speaker #5: So, as Bill mentioned, it's not a quarterly—it's not a quarterly forecast. It's a through-the-cycle forecast. But we're still comfortable with that and don't see any reason to change that.

[Company Representative] (Standard Chartered): We're still comfortable with that and don't see any reason to change that. Too early to start talking about kind of write backs or reversals. I will point out, though, that we now have almost $200 million in kind of downside risk protection within the portfolio through those just the downside scenarios themselves. It's quite significant. We hope we've broken the back of it, but too early to call an end.

Speaker #5: So it’s quite significant. We hope we’ve broken the back of it, but it’s too early to call an end. Thank you.

Speaker #4: Thank you.

Speaker #6: As a reminder, to ask a question on the phone, please press star 11 and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker #6: If you wish to ask a question on the webcast, please type them in the question box and click submit. We are now going to proceed with our next question.

Bill Winters: Thank you. Thank you.

Operator: As a reminder to ask a question on the phone, please press star one one and wait for your name to be announced. To withdraw your question, please press star one one again. If you wish to ask a question on the webcast, please type them in the question box and click Submit. We are now going to proceed with our next question. The question come from the line of Perlie Mong from Bank of America. Please ask your question.

Speaker #6: The questions come from the line of Pearly Mong from Bank of America. Please ask your question.

Speaker #7: Hello. Good morning. I just wanted to ask about deposit and behavior. So, have you seen any behavioral change in terms of customers holding on to maybe deposits a little bit more?

Perlie Mong: Hello, good morning. I just wanted to ask about deposit and behavior. Have you seen any behavioral change in terms of customers holding on to maybe deposits a little bit more? Because we've seen counter deposit was quite strong this quarter, and certainly some of the Hong Kong government officials have talked about Hong Kong potentially being a beneficiary of sort of flight to safety flows. Have you seen that happening? If so, does that give you more scope to price deposits assertively? Just how do we think about that NII going forward, even aside off the road moves? That's number one. Number two, in following up on this impairment scenario, thank you very much for the details you've given.

Speaker #7: Because we've seen cards of deposit were quite strong this quarter. And certainly, some of the Hong Kong government officials have talked about Hong Kong potentially being a beneficiary of sort of flight-to-safety flows.

Speaker #7: Have you seen that happening? And if so, does that give you more scope to price deposits assertively? And how do we think about that in IRPs going forward, even aside of the rate moves?

Speaker #7: So, that's number one. And number two, in following up on this impairment scenario—so thank you very much for the details you've given. I think you mentioned non-linearity a little bit in the scenario.

Speaker #7: And I suppose the question I'm trying to get to is that qualitatively, what triggers that non-linearity? Because clearly, it's something that worries people a lot.

Speaker #7: And we've seen oil prices go up nine days since 125. I think in the scenario of the peak, it's 135. So understand that there's a lot of moving parts in how the events are unfolding.

Speaker #7: But in this scenario, in the one scenario that you have looked at, what triggers the non-linearity and sort of how does it unfold in your planning assumptions?

Speaker #5: This market shock has been a little bit different in terms of the way that it's played out in first, in in equity markets, which have obviously remained very strong.

Bill Winters: Great. Perlie, thanks very much for those questions. I'm gonna turn to Pete for the detail. I will observe that this market shock, we've had quite a few in the past decade or so. This market shock has been a little bit different in terms of the way that it's played out in first in equity markets, which have obviously remained very strong, but also in terms of our wealth investors' engagement with us and with their portfolios. We have seen very little stepping away from the market. We've seen, absolutely, seen some reallocations within portfolios. One is the funds have stayed within the bank. Two, it wouldn't, it doesn't represent a wholesale shift into risk-off assets.

Speaker #5: But also in terms of the our wealth investors' engagement with us. And with their portfolios. We have seen very little stepping away from the market.

Speaker #5: We've absolutely seen some reallocations within portfolios. But one is that the funds have stayed within the bank. And two, it doesn't represent a wholesale shift into risk-off assets.

Bill Winters: The second thing to note is that, you know, the steady migration that we've seen of net new money into deposits and then flowing through to various wealth products, is largely unchanged in Q1 and then for what we've seen so far in Q2. The investment mix is changing a bit, but investors are staying very engaged, and hence we're seeing the good steady migration.

Speaker #5: Which, as I said, the investment makes a changing a bit. But investors are saying very engaged. And hence, we're seeing that good steady migration from deposits into wealth products as relationships mature.

Speaker #5: But I hand over to Pete for any further color on that. And then back into the impairment question.

Speaker #4: So thanks. Maybe just covering off the first question on deposits. I wouldn't call out any specific behavioral change as Bill mentioned. And I think you can see that through the inflows in wealth being actually predominantly wealth solutions rather than deposits.

Bill Winters: From deposits into our products as relationships mature. I hand over to Pete for any further color on that and then back into the impairment question.

Speaker #4: So, pleased with the deposit growth, but not seeing any particular flight to safety or any particular change in client behavior on that front. On impairments—so, we think about this scenario holistically.

Speaker #4: So when we run on oil price, what is the impact on GDP, unemployment, interest rates, et cetera, et cetera? We've laid out on page 22 of the longer press release all those various assumptions.

Speaker #4: I'm not going to we don't break down how much of that was GDP in this country versus that country, how much of that was oil price.

[Company Representative] (Standard Chartered): What is the impact on GDP, unemployment, interest rates," etc., etc. We've laid out on page 22 of the longer press release all those various assumptions. We don't break down the how much of that was GDP in this country versus that country, how much of that was oil price. We really look at those holistic scenarios and try to think about how it could play out more broadly and impact, and estimate the impact of that. The nonlinearity is kind of the impact of everything other than the base case. By definition, it's the impact of those two downside scenarios that we've laid out, both, a sustained Middle East conflict scenario, which is the new one, but also the Bank Capital Stress Test.

Speaker #4: So we really look at those holistic scenarios and try to think about how it could play out more broadly and impact and estimate the impact of that.

Speaker #4: The non-linearity is kind of the impact of everything other than the base case. So by definition, it's the impact of those two downside scenarios that we've laid out, both sustained Middle East conflict scenario, which is the new one, but also the bank capital stress test.

Speaker #4: We replaced an older scenario, which actually was a kind of inflation down, rates down scenario, which we didn't think was terribly relevant in the current period.

Speaker #4: So it's a combination, which you're seeing in the quarter, of changing scenarios and changing weightings. But at the very broad-based across the various inputs.

[Company Representative] (Standard Chartered): We replaced an older scenario, which actually was a kind of inflation down, rates down scenario, which we didn't think was terribly relevant in the current period. It's a combination, what you're seeing in the quarter, of changing scenarios and changing weightings, but they're very broad-based across the various inputs. I hope that helps you understand it a bit better, Perlie.

Speaker #4: So I hope that helps you understand it a bit better, Pearly.

Speaker #7: And can I just also follow up? In terms of drawdowns, I don't know whether I've missed that if the sustained Middle East conflict situation were to play out, on a standalone basis, what would the drawdown be?

Speaker #4: Drawdowns on client facilities, revolvers, things like that, we haven't seen material drawdowns as a result of the conflict, if that's what you're referring to.

Speaker #7: I was more just thinking, what the credit loss would be, I think, in the annual report for each of the scenarios. You can see sort of what the implied impairment losses would be.

Speaker #7: In that scenario, I don't know whether you've given that this quarter for this scenario.

Perlie Mong: I was more so just thinking like, what the credit loss would. I think in the annual report, like for each of the scenario, you can see sort of what the implied impairment losses would be in that scenario. I don't know whether you've given that this quarter for this scenario.

Speaker #4: We haven't. But I would point out, thanks for the question, that the bank capital stress test scenario, we did disclose in the annual report.

Speaker #4: I think it was around $500 million was the downside for that one. And that is the more severe of the scenarios. And we've already weighted that scenario at 25%.

Speaker #4: So I think we are well covered. We didn't provide what the downside is for the SMEC, but it's less severe than the BCST scenario that's included in the annual report.

Speaker #7: OK, understood. Thank you. We are not going to proceed with our next question. And the questions come from the line of advice from KBW.

Speaker #7: Please ask your question.

Perlie Mong: Okay, understood. Thank you.

Speaker #8: Thanks very much. Morning, everybody. I just had two questions. One, on slide 8 on your capital bridge, just wanted if you could explain a little bit more about the 0.2 other.

Operator: We are now going to proceed with our next question. The question's come from the line of Ed Firth from KBW. Please ask your question.

Speaker #8: Because, I mean, that's about a third of the money you made in the first quarter. So just what should we think about that? Is that just like a first-quarter thing, employee share options and stuff?

Ed Firth: Thanks very much. Morning, everybody. I just had 2 questions. One, on slide 8, on your capital bridge, just wondered if you could explain a little bit more about the 0.2 other. Because, I mean, that's about a third of the money you made in Q1. So just, what should we think about that? Is that just like a Q1 thing, employee share options and stuff, or is that something that we should persist as a headwind? Or perhaps even though we should be seeing that reverse as it's going forward. How should we think about how that might play out on a sort of quarterly basis? That's the 1st question. The 2nd question is just a sort of broader question, and I don't know if there's a precise answer to this.

Speaker #8: Or is that something that we should persist as a headwind? Or perhaps even should we see that reverse as it's going forward? How should we think about how that might play out on a sort of quarterly basis?

Speaker #8: That's the first question. And then the second question is just a sort of broader question, and I don't know if there's a precise answer to this.

Speaker #8: But looking at standard chartered today, it just sort of feels like you're more of a volatility play than a credit play. Is that a fair observation?

Ed Firth: Looking at Standard Chartered today, it just sort of feels like you're more of a volatility play than a credit play. Is that a fair observation? I guess if it is, how should we expect that to play out if there is to be a peaceful settlement around Iran? If we see markets go back to a more stable environment without volatility, in theory, I'd have always thought that was a net positive for you, but is there a risk that actually that's a net negative? Thanks so much.

Speaker #8: But is there a risk that actually that's a net negative? Thanks very much. Thanks for those questions, Ed. I'm going to turn to Pete on the capital point.

Speaker #8: But on the second question, I'm going to agree with you wholeheartedly on the fact that we're no longer a credit play. I don't think we've been a credit play for quite some time.

Speaker #8: I'm not sure what it means to be a volatility play. What I think we think of ourselves as being as a sort of a client excellence play.

Speaker #8: And of course, different pieces of that will play out in different ways. The increase in flow in financial markets and the strong episodic quarter in episodic no doubt had something to do with or maybe a lot to do with the volatility in the market.

Speaker #8: But we've had really good—sorry—10% compound growth on average, or 10% compound growth in that flow income over a long period of time.

Bill Winters: The increase in flow in financial markets and the strong episodic quarter in episodic no doubt had something to do with or maybe a lot to do with the volatility in the market. We've had really good, you know, so sort of 10% compound growth on average or 10% compound growth in that flow income over a long period of time through volatile periods and not. It's not because of the volatility, it's because of the quality of the service that we're providing. In the fact that we've had a super strong quarter in Global Banking up over 20% on the back of a strong year last year is. Obviously, it's been quite volatile in Q1. Oftentimes you see.

Speaker #8: Through volatile periods and not. And it's not because of the volatility; it's because of the quality of the service that we're providing. The fact that we've had a super strong quarter in global banking, up over 20% on the back of a strong year last year, is—and obviously, it's been quite volatile in the first quarter.

Speaker #8: Oftentimes, you see financing volumes drop during volatile times our experience has been the opposite. That we've been able to address customer needs in the first quarter in a kind of an extraordinary way.

Speaker #8: Across the financing piece. So I don't think we're evolved play, quote unquote, at all. I think we are a customer excellence play. And I have to say, I think those indicators are extremely encouraging.

Ed Firth: Mm-hmm

Ed Firth: ... financing volumes drop during volatile times. Our experience has been the opposite. We've been able to address customer needs in Q1 in a kind of an extraordinary way across the financing piece. I don't think we're a vol play, quote-unquote, at all. I think we are a customer excellence play, and I have to say, I think those indicators are extremely encouraging. Pete? Thanks, Ed Firth. On your capital question, the 20 basis points of other movements within our capital lock. You hit on one of them, which is employee share awards, which does tend to be a Q1 impact. The other things in there tend to be, I mean, valuation adjustments.

Speaker #8: Pete?

Speaker #4: The other things in there tend to be, I mean, valuation adjustments. So DVA shows up in income and then comes out in capital because it doesn't get to count for capital.

Speaker #4: So, we did have a DVA gain this quarter. There's PVA—prudential valuation and judgment adjustments—when you've got volatility in financial markets. Sometimes you have to take a bit more haircuts from a capital standpoint.

[Company Representative] (Standard Chartered): DVA shows up in income and then comes out in capital because it doesn't get to count for capital. We did have a DVA gain this quarter. There's PVA, Prudential valuation adjustments. When you've got volatility in financial markets, sometimes you have to take a bit more haircuts from a capital standpoint. It's things like that. There's a tiny bit of FVOCI, but it wasn't a material driver this quarter. Those are the main moving pieces. Ed, hope that helps.

Speaker #4: So it's things like that. There's a tiny bit of FDOCI, but it wasn't a material driver this quarter. So those are the main moving pieces, Ed.

Speaker #4: Hope that helps.

Speaker #8: So, going forward, that should be zero, broadly.

Ed Firth: Going forward, that should be zero broadly.

[Company Representative] (Standard Chartered): It's hard to predict. I mean, the share awards is clearly skewed more towards Q1. Not gonna predict how markets are gonna play into DVA and PVA and some of the other things. That's why it's in other. It shouldn't have the same impact that it had in Q1.

Speaker #8: Perfect. Thanks.

Speaker #7: We are not going to proceed with our next question. And the questions come from the line of Arman Rakhar from Barclays. Please ask your question.

Ed Firth: Perfect. Thank you.

Speaker #9: Good morning, gents. I had a couple, please. So could I just trouble you for somewhat of a kind of trading update for the quarter to date?

Operator: We are now going to proceed with our next question. The question comes from the line of Aman Rakkar from Barclays. Please ask your question.

Speaker #9: I guess the Middle East conflict only directly impacted a third of the performance in the quarter. And I think you guys normally do give us some kind of trading commentary.

Aman Rakkar: Good morning, gents. I had a couple, please. Could I just trouble you for somewhat of a kind of trading update for the Q1 to date? I guess, you know, the Middle East conflict only directly impacted a third of the performance in the Q1. I think you guys normally do give us some kind of trading commentary. I think you've kind of pointed to elements of it. I was just wondering if I could kind of firm that up in terms of what you're seeing on Wealth Solutions momentum in Global Markets, and Global Banking, please. That'd be very helpful. Then the second question was around Net Interest Income. Obviously you're run rating well ahead of your full year expectations, and I guess you tell us not to take Q1 as a start point.

Speaker #9: I think you've kind of pointed to elements of it, but I was just wondering if I could firm that up in terms of what you're seeing on Wealth, the momentum in Markets, and Banking, please.

Speaker #9: That’d be really helpful. And then the second question was around net interest income. So, obviously, you’re run-rating well ahead of your full-year expectations.

Speaker #9: And I guess you tell us not to take Q1 as a start point, for a number of reasons. I do note that rates are actually not projected to be a headwind versus Q1.

Speaker #9: But presumably, there's some conservatism there. But I want to drill back into this point around passthrough rates, because I think we've been talking about a normalization in passthrough rates for a very long time now.

Aman Rakkar: You know, for a number of reasons. I do note that rates are actually not projected to be a headwind versus Q1. Presumably there's some conservatism there. I wanna drill back into this point around pass-through rates because I think we've been talking about a normalization in pass-through rates for a very long time now. I wonder if this is a stale comment because the liquidity dynamic is so abundant in your footprint, and it continues to outperform. You know, can you give us some color as to exactly what you are referencing around this normalization in pass-through rates? If you could help us quantify it. It seems like it's a couple of hundred million dollars that you're projecting to come out of net interest income.

Speaker #9: And I wonder if I wonder if this is a stale comment because the liquidity dynamic is so abundant in your footprint. And it continues to outperform.

Speaker #9: So can you give us some color as to exactly what you are referencing around this normalization in past three rates? And if you could help us quantify it, it seems like it's a couple of hundred million dollars that you're projecting to come out of net interest income.

Speaker #9: If you could help us with that, it would be really appreciated. Thank you so much.

Speaker #8: Thanks very much, Arman. For those questions, I mentioned earlier that the first quarter momentum in trends have carried through to the second quarter. If Massachusetts to go beyond that with additional Q2 guidance, I'll let him do that.

Aman Rakkar: If you could help us with that, it'd be really appreciate that. Thank you so much.

Speaker #8: And Mattis will take up the NAI questions as well.

Speaker #4: Thanks, Bill. No, I'm not going to get any further than that. I think it's a decent start. And, obviously, we're seeing you in a few weeks in May.

Speaker #4: So we'll continue to discuss that as well. In terms of PTRs, and NII, look, first of all, the comment is focused on CIB at the moment rather than WRB.

Manus Costello: Thanks, Bill. No, I'm not gonna go any further than that. That I think is a decent start. Obviously we're seeing you in a few weeks in May. We'll continue to discuss that as well. In terms of PTRs and NII, look, first of all, the comment is focused on CIB at the moment rather than WRB. It's in CIB where the PTRs are elevated. I would note that we have still been in an environment where rates are falling, so there can be a lagged effect of PTRs.

Speaker #4: It's in CIB where the PTRs are elevated. I would note that we have still been in an environment where rates are falling. So there can be a lagged effect of PTRs.

Speaker #4: And that's really what we've been thinking about in terms of continuing to expect it to flow through, that it's not until you reach a day stable, or a turn in interest rates in the cycle, that you'd really be able to see how those rates were flowing through.

Manus Costello: That's really what we've been thinking about in terms of continuing to expect it to flow through, that it's not until you've reached a stable or a turn in interest rates in the cycle that you'd really be able to see how those rates were flowing through. Our models would still suggest that we will see some pressure going forwards from PTRs in CIB. We see nothing in the structure of our liability base or in the way that the market's behaving, which would suggest otherwise. I'm not gonna quantify exactly what the PTR pressure is that's in guidance. We've told you, Aman, that every point of PTRs is about $30 million of NII pressure that comes through.

Speaker #4: And our models would still suggest that we will see some pressure going forward from PTRs in CIB. And we've seen nothing in the structure of our liability base, or in the way that the market's behaving, which would suggest otherwise.

Speaker #4: I'm not going to quantify exactly what the PTR pressure is that's in guidance. We've told you, Arman, that every point of PTRs is about $30 million of NII pressure that comes through.

Speaker #4: So I think if you flow through the rest of the guidance on NII, you can do the maths on where you think we are on the PTR curve.

Speaker #4: But I know you think it's a stale piece of commentary and piece of guidance. But the reality is that we're still working through the cycle.

Manus Costello: I think if you flow through the rest of the guidance, on NII, you can do the math on where you think we are on the PTR curve. I know you think it's a stale, piece of commentary and piece of guidance, but the reality is that we're still working through the cycle, and our models suggest that it's still the right way for us to think about things.

Speaker #4: And our models suggest that it's still the right way for us to think about things.

Speaker #9: Possible to ask a follow-up? Please.

Speaker #4: Sure.

Speaker #9: Just around your income expectations for the full year bottom end of '05 to '07, which is exactly where consensus is for the full year.

Speaker #9: But I guess the Q1 beat in and of itself is a 2% beat versus market expectations. So the question is, why do you not see a more constructive outlook for revenues?

Aman Rakkar: Just one follow-up, please.

Manus Costello: Sure.

Aman Rakkar: Just around, you know, your income expectations for the full year. Bottom end of 5 to 7, which is exactly where consensus is for the full year. I guess, you know, the Q1 beat in and of itself is a 2% beat versus market expectation. The question is why do you not see a more constructive outlook for revenues? What would you encourage us to think about as the key area of uncertainty into the remainder of the year as to why you wouldn't lift that guide at this stage?

Speaker #9: And is there any what would you encourage us to think about as the key area of uncertainty into the kind of remainder of the year as to why you wouldn't lift that guide at this stage?

Speaker #4: Look, Arman, I think there's lots of areas of uncertainty in the world. And on banks, P&Ls. So there's lots of different areas which can be better or worse than expected through the course of the year.

Speaker #4: And Bill's talked about each of the different areas where we've been very happy with performance so far. But it's very difficult to see too far ahead.

Manus Costello: Look, Aman, I think there's lots of areas of uncertainty in the world and on bank's P&L. There's lots of different areas which can be better or worse than expected through the course of the year. Bill's talked about each of the different areas where we've been very happy with performance so far, but it's very difficult to see too far ahead. I would also just come back, Aman, to the comment that I made, I think, in response to the first question about remembering that in Q2 we do have a couple of items which we're cycling which will make that year-over-year revenue growth more challenging to match that 9% level that we saw in Q1.

Speaker #4: I would also just come back, Arman, to the comment that I made. I think in response to the first question about remembering that in the second quarter, we do have a couple of items which we're cycling which will make that year-over-year revenue growth more challenging to match that 9% level that we saw in the first quarter.

Speaker #4: So do bear that in mind when you're modeling going forwards as well as the uncertain outlook.

Speaker #9: Thank you so much.

Speaker #7: We are not going to proceed with the next question. And the questions come from the line of James Inwin from Rothschild & Co. Redburn.

Manus Costello: Do bear that in mind when you're modeling going forward, as well as the uncertain outlook.

Speaker #7: Please ask your question.

Aman Rakkar: Thank you so much.

Speaker #10: Hi. Good morning, team. I'd like to ask Arman's first question again, please, but in a slightly different way. I was just wondering if you could give us a little bit of color about how some of your franchises have performed in March, so since the Middle East conflict started.

Operator: We are now going to proceed with the next question. The question's come from the line of James Invine from Rothschild & Co Redburn. Please ask your question.

James Invine: Hi, good morning, team. I'd like to ask Aman's first question again, please. In a slightly different way. I was just wondering if you could give us a little bit of color about how some of your franchises have performed in March, since the Middle East conflict started. Specifically, some of these really strong wealth flows that you've seen. Is that being driven by Middle East money that is looking to kind of move? Similarly, for your markets flow business, how much of that, you know, did that really kind of step up in March? How much of that is driven by, you know, increased hedging of the oil price or whatever, since the conflict has started?

Speaker #10: So specifically, some of these really strong wealth flows that you've seen is that being driven by Middle East money that is looking to kind of move?

Speaker #10: And then, similarly, for your Markets Flow business, how much of that really kind of stepped up in March? How much of that is driven by increased hedging of the oil price or whatever?

Speaker #10: Since the conflict has started?

Speaker #4: Good, thanks, James. I won't go too much further in terms of the trends into Q2. But just on—let's take the net new money first.

Speaker #4: The net new money is coming from the same places it's been coming from for the past couple of years. So we've had, obviously, global Indians, global Chinese, the rest of ASEAN, and the Middle East are all growing.

Bill Winters: Good. Thanks, James. I won't go too much further in terms of the trends into Q2, but just on. Let's take the net new money first. The net new money is coming from the same places it's been coming from for the past couple of years. We've had, obviously, global Indians, global Chinese, the rest of ASEAN, Middle East are all growing. We've had some reallocation of portfolios, not enormous, but some reallocation within our network. Of course, there were some outflows from the Middle East, but we captured the vast majority of that into the network, primarily in Hong Kong, but some obviously in Singapore, some interestingly, back onshore in some markets like India.

Speaker #4: We've had some reallocation of portfolios, not enormous, but some reallocation within our network. So of course, there were some outflows from the Middle East.

Speaker #4: But we captured the vast majority of that into the network. Primarily in Hong Kong, but some obviously in Singapore, some interestingly back onshore in some markets like India.

Speaker #4: So that it's not a source of net new money. It is a source of some reconfiguring within the portfolio. And I don't know if that's completely run its course.

Speaker #4: But the underlying new money and new client trends are pretty consistent with what we've seen over the past period of time. The flow income was pretty consistent throughout the quarter, actually.

Bill Winters: That, it's not a source of net new money. It is the source of some reconfiguring within the portfolio. I don't know if that's completely run its course, but the underlying new money and new client trends are pretty consistent with what we've seen over the past period of time. The flow income was pretty consistent throughout the quarter, actually. Of course, we saw a pickup leading into the conflict and immediately afterwards. A lot of that flow volume is coming out of transaction flows, one way or the other. Transaction flows have remained strong for the bank. Not too much that we can say was specifically a sort of conflict or incident-driven.

Speaker #4: So of course, we saw a pickup leading into the conflict, and immediately afterwards. But a lot of that flow volume is coming out of transaction flows, one way or the other.

Speaker #4: And transaction flows have remained strong for the banks, so not too much that we can say was specifically sort of conflict- or incident-driven. But clearly, the overall volatility in the market has increased the opportunity for us to capture these flows.

Speaker #4: Specifically in energy trading, it's actually been quite tough to trade. I mean, we've been fine. Our commodity results are fine. But the it's been volatile in ways that, as you will have observed, is very sensitive to the overnight tweet.

Bill Winters: Clearly, the overall volatility in the market has increased the opportunity for us to capture these flows. Specifically in energy trading, it's actually been quite tough to trade. I mean, we've been fine. Our commodity results are fine. It's been volatile in ways that, as you will have observed, is very sensitive to the overnight tweet or X or Truth Social or whatever we call it. As a result, we've tried to stay, you know, relatively close to home in terms of satisfying the demand for customer hedging in the energy markets. I suspect some in the market will have had a bit of noise in that line. Thankfully, we've come out okay. Pete, any additional color?

Speaker #4: Or X. Or to social. Or whatever we call it. And the so as a relatively close to home in terms of satisfying the demand for customer hedging in the energy markets.

Speaker #4: I suspect some in the market will have had a bit of noise in that line thankfully. We've come out OK. But Pete, any additional color?

Speaker #8: Thank you. You've covered it thoroughly, so nothing to add from my side.

Speaker #10: Great. Thanks, Bill.

Speaker #7: As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

[Company Representative] (Standard Chartered): I think you've covered it thoroughly, so nothing to add from my side.

Speaker #7: If you wish to ask a question on the webcast, please type them in the question box and click submit. We are now going to proceed with our next question.

James Invine: Great. Thanks, Bill.

Operator: We are now going to proceed with our next question. We have no further questions at this time, so I'll now hand back to Bill Winters for closing remarks.

Speaker #7: We have no further questions at this time, so I'll now hand back to Bill Winters for closing remarks.

Speaker #4: I think that's a wrap. Thanks, everyone, for joining the call, for the good questions as always. And really, very much look forward to seeing all of you in Hong Kong in a few weeks' time.

Bill Winters: I think that's a wrap. Thanks everyone for joining the call, for the good questions as always, really very much look forward to seeing all of you in Hong Kong in a few weeks' time.

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