Financial Analysis of Standard Chartered Bank - Research Paper Example

TABLE OF CONTENTS PAGE INTRODUCTION PART-I CHAPTER CONDITIONS OF REFERENCE 1. SCOPE OF THE MISSION 1 history of standard chartered bank 1 1.2 THE CHARTERED BANK 2 1.3 THE STANDARD BANK 2 1.4 REASONS BEHIND CHOOSING THE TOPIC 3 1.5 AIMS AND OBJECTIVES OF THE RESEARCH 5 1.6 EXECUTIVE SUMMARY 5 PART-II INFORMATION GATHERING 7 CHAPTER-2 RESEARCH 7 2.1 SECONDARY RESEARCH 7 2.2 PRIMARY RESEARCH 8 part-iii analysis 10 chapter-3 tools used for financial analysis 10 3.1 analyzing bank performance 10 3.2 camels frame work 10 3.3 ratios/trend analysis 11 3.4 enabling better informed business decisions. 11 3.5 the overall growth of the bank 13 3.6 risk analysis 14 3.7 critical success factor (csf) analysis 16 3.8 the bank's strength 17 3.9 fixed income and credit analysis 19 CHAPTER-4 CONCLUSION AND RECOMMENDATIONS 21 BIBLOGRAPHY 23 LIST OF APPENDICES 24 1 Part-I INTRODUCTION chapter-1: conditions of reference 1. Scope of the Mission: Focus is placed on the working capital conditions and position of the Standard Chartered Bank, which has its head quarters at London, England, UK. The study is conducted by comparing the trend of events and the vital performance of the indicators. The data for the research is collected for a period of three years (06-08). Audited financial statement for all the three years was used. Two other banks that is the HSBC Bank, London and Barclays Bank, London were selected for carrying out a comparative study. This comparison would lead to a fairer analysis of the financial situation with regard to the bank chosen for the research and study. 1.1 History of Standard Chartered Bank: In the year 1969 merger of 2 banks took place and institution of the Standard Chartered Group took place. The two banks which were merged were the Standard Bank of British which was founded in South Africa in the year 1863 and the Chartered bank which was in India, Australia and china established in 1853. Both the above mentioned companies were enthusiastic to take advantage of the vast development of trade. This gave an opportunity to earn good profits which could be derived from funding the motion of the European commodities to East and to Africa. 2 1.2 The Chartered Bank: James Wilson established this bank subsequent to the accord of a Royal Charter which was proclaimed in the year 1853 by Queen Victoria. The bank's first branches were opened at Bombay which is presently known as Mumbai. Branches at Calcutta and Shanghai were also instituted in the year 1858. This was later on followed by opening of branches in Hong Kong and Singapore in the year 1859. The different conventional business consisted of cotton from Mumbai, rice from Burma, Calcutta contributed tea and indigo, Java's contribution was sugar, Sumatra gave tobacco, Manila bestowed hemp and silk was taken from Yokohama. The bank had to play a key part in the growth of business deal with the East leading to the unfolding of the Suez Canal in the year 1869 and the prolongation of the telegraphy services to China in the year 1871. In the year 1957, Chartered Bank acquired the Eastern Bank and the Cyprus branches of the Ionian Bank's which led to a foundation of existence in the Gulf. 1.3 The Standard Bank: John Paterson instituted the Standard Bank in South Africa in the Province of the Cape during1862. The bank had a prominent business of funding the growth of the diamond fields at Kimberley since 1867. Later on the business was extended to the gold fields of Johannesburg. In the year1969, the Chartered and the Standard banks decided to go in for a gracious merger. But in the year 1986, an aggressive bid to acquire was attempted by 3 Lloyds Bank of UK. The proposal was thwarted and Standard Chartered moved into a period of transformation. The early period of the 1990s saw the Standard Chartered focusing its business in the development of a well-built its strong enfranchisements in the Middle East, Asia, and Africa utilizing its performances in the UK and North America to supply customers with bridgework connecting these markets. The Standard Chartered had its next focus centered on customer, commercial and institutional trust along with the prerequisite of treasury servicings. In the 20th century the group took over the Grindlays Bank which was a part of the ANZ Group. The group also acquired the Chase user banking procedures in Hong Kong in the year 2000. (http://www.csrsm.org/standard-chartered-talktmpl=component&print=1&page) Following this the group achieved many milestones with several strategic alliances and acquisitions which extends their customer or geographic reach and expands their product range. The total assets of the group are $435 billion (2007: $330 billion) as on 31st December 2008. The revenue of the bank during 2008 was $16,378 million; its Operating income was $4,568 million and its Net income $3,511 million. The bank provides financial services and as at 2008 it had 73,000 employees employed at its different branches. Standard Chartered has a network of over 1,750 branches and outlets in more than 70 countries across the Asia Pacific Region, South Asia, the Middle East, Africa, Europe and the Americas. 1.4 Reasons behind choosing the topic 4 The past and current studies of ACCA, which I am undergoing familiarises me with the required theoretical knowledge on financial analysis and performance evaluations, which I try to apply to real situations. This modified my hope in this topic and coupled to this is the thirst which I have in making finance as my future carrier prompting me to take this topic for my research work. The Standard Chartered Bank has launched a guide to 'Standard Chartered - Working Capital Management in Asia; Asia, Africa and the Middle East 2008/09', which features business and regulatory insights from industry leading experts. The bank is listed on both the London Stock Exchange and the Hong Kong Stock Exchange and ranks among the top 25 companies in the Financial Times Stock Exchange (FTSE)-100 by market capitalisation. The group which has it head quarters in London has operated for over 150 years in some of the world's most dynamic markets, leading the way in Asia, Africa and the Middle East. Its income and the number of employees have more than doubled over the last five years primarily as a result of organic growth and supplemented by acquisitions. The aspiration of the Standard Chartered is to become the best international bank in its markets by being the right partner for its stakeholders and leading by example. The bank generates more than 90 per cent of its profits from Asia, Africa and 5 the Middle East, with balanced income derived from both Wholesale and Consumer Banking. 1.5 Aims and objectives of the research The principal aims of the project are: I. To compare and contrast Standard Chartered Bank with its competitor banks and determine the financial strength of the bank chosen for investigation. II. Making a critical analysis of Standard Chartered Bank in key areas like the capital adequacy, asset quality, management efficiency, profitability and liquidity using identified accounting tools. III. Working a trend analysis with regard to the banks financial situation for a minimum period of 3 years by making use of obtainable, sufficient and appropriate data. IV. Demonstrate the level of stability in the banking industry in UK and the extent to which some banks are financially sound, including Standard Chartered Bank. V. Locating area that strengthens the banks financial position as a going concern and then proposing possible recommendations to fortify this position further. 1.6 Executive summary A traditional ratio/trend analysis and key performance indicator was the major tool used in analyzing the financial situation of Standard Chartered Bank. 6 The performance indicators of the bank with regard to indicators like capital adequacy, Asset quality, management performance and efficiency in operations has been shown in the appendix. The main reason for the share holders to invest is to reap considerably high returns from their investments (John R. 1996). Standard Chartered announced that its operating profits rose 13% in 2008, to $4.5 billion. A strong focus on Asia is a key factor behind the good news. Other fundamental figures for the latest financial year include a 26% increase in operating income to $13.9 billion, and a 19% gain in profit before tax to $4.8 billion. The normalised cost-to-income ratio was 56% in 2008, the same as it was in 2007. Wholesale banking played a significant role in the strong results, with the division's income up 43% to $7.5 billion and operating profit up 27.8% to $3 billion. Income from the bank's top 50 clients rose by 45% in 2008 and the number of clients with an annual income of more than $10 million increased by 88%. 7 Part-II Information Gathering Chapter 2: RESEARCH 2.1 Secondary Research The progress of Standard Chartered Bank of UK is remarkable thanks to the application of their unique business strategy, and the innovated techniques adopted in accounting. They have relied more upon the blessings of Information technology to achieve the desired target. The interaction with the customers and the management, and the relationship between the management and the staff worked wonders in the Bank's overall prosperity. In order to assess the quantum and quality of the Bank's performance and phenomenal success various sources of relevant information were accessed. Discussions with several top executives of Banking fields and customer-client forums were also utilised for gathering information for preparing this study. Most of the data for the above purpose was collected from various sources such as books and print media and internet. Of course internet was the best and ideal source for collection of data of the Banks. This was due to the fact we get enough and updated information about the Bank's status in comparison with other Banks and their progress level are found. Therefore I have made inroads into the innumerable websites that covers the Bank's assets, accounting system, business strategies and techniques and so on. Since every day and every hour updated data came flowing in which compelled me to change the authenticity of the collected data at frequent intervals. If this was not done regularly, 8 my findings would go wrong because there might have errors crept into the statistical figures which I have already collected from the internet. The details collected from the library were not of much help. But the journals were reliable and contained much information required for the present work. However, I depended mostly on the internet as it was readily accessable and was more convenient to carry out my research. Information gathering was rather time consuming but less expensive as I was using the internet from my institute. Nevertheless some websites required prior subscriptions for access. Website visited included: http://www.standardchartered.com/about-us/history http://www.businessweek.com, www.standardchartered.com Standard Chartered announces its Annual Results. These were vital for business and industrial financial analysis. 2.2 Primary Research: Similar to secondary data, primary research for data was equally crucial as it enabled me to get a thorough understanding of Standard Chartered Bank of UK. When I presented an introduction letter from my institute, the banks manager was very helpful and made available all the information which was required by me to complete the project. He also assured of the confidentially of the data in addition to the usefulness of the information for my research purpose. My interactions with the banks management helped me to get imminent knowledge of the banks operations, strategic objectives and direction. This assisted me 9 to realize the banks strength and weaknesses which made my analysis and evaluation easier. In addition to discussions with the bank management I spent some time to watch the moves when the bank conducts its daily transactions. I also could gather some relevant information with regard to the share holdings from a few customers. This also gave me an idea as to how the bank maintained its relationship with the customers. 10 Part-III ANALYSIS Chapter 3: Tools used for financial analysis: 3.1 Analyzing Bank Performance: (Source: http://www.pafkiet.edu.pk) Two indicators vital for gauging banks performance are: a. Deposits Growth in terms of GDP growth rate. b. CAMELS Approach to measure the integrated strength of the organization. Economic Value Added (EVA): Used to measure the surplus value of investment. Asset Profitability: Risk Adjusted Return on Capital (RAROC) and Return on Risk Adjusted Capital (RORAC). Basel I: The original Capital Adequacy Accord that provided a framework for quantifying credit risk by assigning credit-risk weights according to different classifications of assets and also provided a framework for the classification of Capital into different tiers (Tier-I and Tier-II). Basel II: The new proposal to replace Basel-I provides a comprehensive framework to measure credit, market and operational risks. The 3 pillars of Basel-II are minimum Capital Requirement Pillar, Supervisory Review Pillar and the Market Discipline Pillar. 3.2 Camels Framework This was developed by the International Monetary Fund (IMF) to assess the soundness of financial systems through preparation of financial system stability assessments. The standard chartered bank adopts the Basel -II principles for its operations. 11 3.3 Ratios/Trend analysis Well interpreted ratios are vital in analyzing the financial situation of organizations. This involves calculation and interpretation of key financial ratios. Neil D Stan 1996 identifies profitability, liquidity, solvency, shareholders and efficiency ratios as major aspects of traditional ratio analysis. According to Arist bulo De Juen ( 1985) , ratio analysis alone can not show how much, but will always need to be looked at together with the trend analysis (flow of events over a period of time); therefore, this research covers a flow of events over a period up to 31st Dec 08. 3.4 Enabling better-informed business decisions and increased flexibility through risk management: (Source: http://www.atosorigin.com) "As a leading international bank, Standard Chartered Bank is committed to achieving full compliance with all the requirements of Basel II Accord. The BCRS is part of our overall risk management framework that we have developed over the last few years not only to comply with regulatory requirements but also to enhance the quality of our services to our global customers. We would like to thank Atos Origin for their professional and excellent support in making the programme a success". - Keith Newington, Project Director BCRS, Standard Chartered Bank. Business Challenges Basel II, a revision of the original Basel Accord, aims to sharpen the regulatory framework, focusing particularly in enhancing the risk and capital management standards of financial institutions to further bolster the stability of the banking system. Basel II was 12 adopted by financial regulatory authorities around the world including many regions in which Standard Chartered Bank is operating. Over the last few years, the international financial market has become more competitive as a result of structural changes. Recent uncertainties in the major financial markets caused by huge corporate losses as a result of imprudent business and financial practices are adversely affecting business sentiments and eroding growth and margins for international banks. As a leading international bank, Standard Chartered Bank has to develop and implement systems and practices to achieve compliance with the requirements of Basel II. Concomitantly, it has to further strengthen its operations processes and systems to continuously improve its risk management practices, decision-making processes and delivery of innovative and high margin products and services. Solution In February 2006, Standard Chartered Bank initiated the Basel II Calculation and Reporting Solution Programme (BCRS) as part of its overall Basel II compliance initiatives. Atos Origin was selected as the partner to implement the BCRS project. The programme focused on developing effective data and information management systems and processes to enhance the Bank's risk management capability to meet the new standards of minimum capital requirements under Basel II. The scope of BCRS involved defining the system specifications and functionalities and identifying and deploying the IT solutions to support the Basel II aspects of the Bank's overall risk management framework. An external Basel II solution (Fermat) was selected as the software platform to provide the automated credit risk 13 calculations and reporting as well as tools for managing, analysing, reconciling and testing data and information integrity. 3.5 The Overall growth of the bank (Source: http://files.shareholder.com): Standard Chartered has had a very strong performance, building on the very good start to the year. Trading in the main operating markets has benefited from robust economic growth, good local currency liquidity, and sound credit environments and disciplined execution of the Group's strategy. The Group has had excellent income momentum, driven by Wholesale Banking, and across almost all geographies. The Group has delivered a strong performance across a wide range of products and customer segments. For the Group overall, net interest margins have remained broadly stable. We continue to take a dynamic approach to managing expense growth. Expense growth reflects our continuing commitment to investing in our business as well as the impact of increasing inflationary pressures. For the half year we anticipate that expense growth will be broadly in line with income growth. The Group remains highly liquid, and has a loan to deposit ratio of around 90 per cent. We have taken a proactive approach to raising capital to support our strong organic growth. Having both completed the acquisition of American Express Bank and supported strong Risk Weighted Asset growth in Wholesale Banking, the bank is well capitalised; we anticipate being in the middle of our target range for Tier 1 and at the top end of our target range for Total capital at the half year. Asset quality in both businesses has remained good and impairments are at low levels. 14 In the Asset Backed Securitisation (ABS) portfolio, a combination of impairment and widening credit spreads has resulted in a charge to profits of USD108 million and an additional charge to the available-for-sale reserve of USD184 million for year to date at the end of May. These amounts are detailed in the Appendix to this document. The sale of our asset management business in India has now completed with profit before tax of approximately USD146 million. Performance highlights Income US$13.97bn UP 26% Operating profit US$4.57bn UP 13% Normalised EPS 174.9c UP 1% Dividend (per share)* 61.62c UP 3% Tier 1 capital 10.1% 3.6 Risk analysis: Standard Chartered Bank Uses an MSSP to Optimize Its Security Monitoring (source: http://www.forrester.com) In 2003, Standard Chartered Bank took a long, hard look at its security needs. The bank primarily wanted to focus on the value-adding parts of the security cycle, so it decided to outsource the repetitive elements of security monitoring to a managed security services provider (MSSP). Standard Chartered Bank leveraged the technical expertise of the MSSP and overall economies of scale. Standard Chartered Bank retained functions related to the interpretation data generated by its intrusion detection system (IDS) and the analysis of the potential impact on both infrastructure and business. The MSSP 15 engagement improved Standard Chartered Bank's security posture and freed up substantial amounts of time, money, and resources in the security department. This ultimately allowed the team to focus on more strategic aspects of its security and risk practice. Standard Chartered Bank is riffling a structured scam revealing and observance package to standardise peril direction across its worldwide operations. The shift will also modify savings by following the economies of scale. The bank is taking on an array of anti-fraud abilities from Norkom Technologies addressing functional risk managing, anti-money washing, dupery spying and avoidance, and keeps an eye on list direction. Implementation has by now started in the US and UK. This software will be amply distributed early in the year of 2006. A worldwide straightening throughout all the 50 countries where the bank has its operations will be completed during the year 2007. Till now the bank does not have such a fanatical universal anti-fraud scheme, but does have an internal arrangement to detect such possible fraudulent activity. The Norkom computer software will permit the bank to take on dependable international procedures which will then be tweaked to cope with the particular regulative environs of every country. The package will also assist to link anti-fraud works with regulative conformity processes in the bank. Michael McVicker, who is the chief of observance for the America bank branche's operations, pronounced that more and more governors want to have anti- 16 money washing schemes through which the result is either a determination to appropriate funds or a study on mistrustful activeness which can be communicated to regulators. The anti fraud software helps in monitoring the bank's transactions for doubtful action in batch mode as well as in real time. Real-time processing allows for filtering but has a limitation when compared to batch analysis. But in reality the real time process mulls over the motive to stop deceitful transaction action at the earliest. Real time as well as batch scrutiny produces prioritised warning signals for the analystr team of the bank to take up advanced probe. The package also supervises proceedings against several watch lists founded by external banking and regulative agencies to key out proceedings to or from persons, establishments or nations that are believed to be at high-risk. The system incorporates with the Swift electronic messaging and defrayal processing arrangement employed by the banking society. It can also dissect data from all customer linked dealings of Standard Chartered, dealings and defrayments system, a lot of which draw on clear origin software. The modules of Norkom's are information-sovereign, assuming flows from the bank's different schemes into a data storage house for study. McVicker pronounced that consolidation was anticipated to be comparatively straight, as it has turned out to be much more comfortable to transfer data to standard ports (http://www.computerweekly.com/Articles/2005/10/11/212271/standard-chartered-rolls-out-integrated-fraud-detection-and-compliance.htm). 3.7 Critical Success Factor (CSF) Analysis 17 These are areas in a business organization or its environment where if not well handled, could make a business go bust. Critical success factors are vital areas of a business where things must go right for a business to prosper in its goals, mission and vision. Key CSFs that affect financial institutions especially banks include -Financial systems and computerization (IT) -Resource mobilizations and utilization -Risk analysis and management -Profitability and returns to shareholders. Management need not only identify but also monitors the critical success factors that relate to a business because failures in such factors, management may fail achieving its corporate objectives and goals (John R). 3.8 The Bank's Strengths Widespread trail: With a widespread trail in over 50 countries, Standard Chartered Bank has a huge collection of associations with both up-and-coming Markets and OECD providers and emptors, which is then purchased by corresponding possible customers and springing up domestic and external deals. All-inclusive Consumer Reporting: Standard Chartered finishes proceedings for the all-inclusive Consumer range, from Para-statals, OECD founded MNCs, to fiscal establishments, and home Blue Chips and mid-cap corporations. 18 Product Invention: Standard Chartered purchases its originative coordinating capacities to furnish unparalleled and inventive results which are tailor made for the customers, which meets their requirements for the whole lot from simple vanilla contributing to structured proceedings such as prior to exporting funding, charter fundings, project linked fundings and the freshly inserted hedged stock products. Apart from this Standard Chartered Bank furnishes distinguished financing chances by the merchandising companies it has instituted in different countries. Strong Distribution Capabilities: Standard Chartered's guidance arrangement is founded on the underwriting capability, the capacity to precisely read market response, and the sales reporting an not on simply utilizing the balance sheet. With the help of the extensive step and thick market incursion, the capabilities to pool fundings across the world, enables the bank to take on huge dealings where the power to consortium is a grave success factor. Standard Chartered Trade Companies: Standard Chartered possessess 3 completely owned trade companies which are registered in Singapore, New York and Hong Kong. The trading companies are grouped to ease trade proceedings among the customers and their dealers/buyers, which cannot forever be finished by means of conventional banking services. These merchandising companies disagree from other selling companies as they can purchase or disperse goods for the customers and not to the bank's account; the trading company acts as an mediator in the customer's trade dealings by purchasing from the suppliers and marketing them to the buyers. 19 (http://globalmarkets.standardchartered.com/gvswse/site/treasury/content/content_items/files/structured_trade.jsp). Funds Management is a globally managed business and part of Standard Chartered Bank's Global Markets division. Using the expertise Standard Chartered has in money markets, fixed income and customer driven product structuring, several products have been launched to service the specific needs of the Bank's customers. These include: -Indian Rupee investments through Standard Chartered Mutual Fund, an Indian Rupee fund managed by Standard Chartered Asset Management Company in India -US$ Institutional liquidity through a Aaa rated US$ Money Market Fund -Structured Credit Investments who have been appointed to manage Whistle jacket Capital Ltd, a structured investment vehicle. Whistle jacket issues AAA/Aaa / A1+/P1 commercial paper and medium term notes and investment grade sub-debt. 3.9 Fixed Income and Credit Analysis (Source: http://globalmarkets) Standard Chartered's Fixed Income Research covers Hong Kong, India, Indonesia, Malaysia, Pakistan, the Philippines, Singapore, South Korea and Thailand, and Corporate Credit research coverage extends to Hong Kong, Malaysia, Singapore and Thailand. We provide timely commentary and analysis of regional debt markets, leading to trading and relative-value strategies to enhance portfolio returns for the investment community. Credit Analysis focuses on Asia's local currency and international bond 20 markets, and provides investors with in-depth knowledge of issuers, on an individual, sectoral and country basis. 21 CHAPTER-4 4. Conclusion & Recommendation: In the recent past the banking industry at the global has not been stable. The analysis mode has managed to identify the tools used in assessing the financial soundness of a bank and used the tools components like capital adequacy, asset quality, management efficiency, profitability and liquidity in analyzing Standard Chartered Bank's financial stability. The bank looks at investing customer funds in other investments as a better option than lending out these funds to customers. The problem here being the time span investments take to make a return could prove longer than the customers would take to pay back the funds. Management performance indicators assessed the banks management as good as compared to its selected competitor banks. More so, in trying to assess whereas a bank is financially stable, there was need to look at trend and direction of profit / earnings over a few years. By assessing the banks profitability, it was realized that Standard Chartered Bank is moving profitably. Many small emerging banks have therefore failed to penetrate these big markets but rather kept their operations at medium sales. This reduces profitability and threatens financial stability. The operational expenses have increased, it is necessary to have more control over operating expenses helping to cut costs there by increasing profits and hence earnings per share. The bank expects to get higher returns in the future by several factors, which include; 22 -Improvements in customer deposits and advances through strengthening the credit policy department -Strengthening the human resource department through personnel development and risk analysis establishments. -Investments in the number of operational branches, which gives a wider customer base. -Launch of new products on the market. Standard Chartered Structured Finance (Figure 8): (Source http://globalmarkets.standardchartered.com) The Structured Finance Group is a leading provider of cost efficient financing as well as lease- and asset-based financing solutions to clients in the Standard Chartered footprint. For our corporate clients, the search for cost efficiencies can often involve the use of tax-enhanced mechanisms including credit and sparing structures. We use innovative structuring to deliver value-adding solutions to clients - these are typically tailored structures that address the specific client's needs with the objective of enhancing shareholders' wealth and the client's market competitiveness Our products / solutions typically result in (a) lower funding costs, (b) upfront cash benefits, (c) effective balance sheet and / or profit & loss account management, and (d) increased efficiency in cross-border investments / funding. 23 BIBLIOGRAPHY: http://www.standardchartered.com/about-us/history/en/index.html http://www.businessweek.com/globalbiz/content/mar2009/gb2009034_223172.htm www.standardchartered.com Standard Chartered announces its Annual Results http://www.atosorigin.com http://www.pafkiet.edu.pk/dnnbeta/LinkClick.aspx Neil D Stein (1996) Interpretation of Accounts. The ACCA Students Newsleter, June. Oxford Brookes University Research and Analysis Project Guidelines. http://investors.standardchartered.com/charting.cfmSetID=36 24 Appendix: Figure: 1 Financial Performance Highlights GROUP (in US$mn) 2008 2007 % CHANGE Income 13,968 11,067 26 Expenses 7,611 6,215 22 Loan Impairments 1,321 761 74 Profit Before Tax 4,568 4,035 13 WHOLESALE BANKING Income 7,489 5,243 43 Profit Before Tax 3,001 2,347 28 CONSUMER BANKING Operating Income 5,952 5,806 3 Profit Before Tax 1,116 1,677 (33) Figure: 2 Operating Profit Before Tax by Regions REGION 2008 (in US$mn) 2007 (in US$mn) % CHANGE Hong Kong 1,014 1,193 (15) Singapore 744 446 67 Malaysia 235 236 (0) Korea 358 324 10 Other APR 463 572 (19) India 943 690 37 MESA 736 591 25 Africa 312 298 5 Figure: 3 NOTE: The numbers above are from our published report and accounts and our Hong Kong Listing Document, please refer to our published documents if there are any discrepencies. * Original accounts reported in GBP. Figures converted using Year End and Average exchange rates for the period. ** Restated numbers as the Group has fully adopted the accounting requirements of FRS17 'Retirement Benefits'. *** 2004 Results prepared under International Financial Reporting Standards excluding IAS 32/39. 2005 and 2006 Results have been prepared under International Financial Reporting Standards Following the acquistion of SCFB, Korea has been identified as a separately reportable geographic segment. Figure: 4 Expenses compared: Figure: 5 Expenses (US $ Millions) H1 H2 Full Year 2008 $3,900 $3,711 $7,611 2007 $2,918 $3,297 $6,215 2006 $2,225 $2,571 $4,796 2005 $1,708 $2,103 $3,811 2004 $1,410 $1,439 $2,849 2003 $1,296 $1,347 $2,643 2002 $1,244 $1,313 $2,557 2001 $1,267 $1,318 $2,585 2000 $1,152 $1,562 $2,714 1999 $1,080 $1,146 $2,226 1998 $990 $1,046 $2,036 Figure: 6 Figure: 7 Figure: 8 Figure: 9 Read More