Standard Chartered PLC

Thank you. And good morning or good afternoon depending upon your time zone.

As usual on this call, before the line is opened for questions, I will add a bit of color to the key headlines and summarize our expectations for the remainder of the year. I said when we delivered our first half results at the beginning of August that we’re making encouraging progress on our refreshed strategic and financial priorities.

And I am pleased to say that, that certainly remains the case in the third quarter. I’ll begin by summarizing our resilient performance against the framework that we laid out in February starting with principal strategic priorities.

So, firstly we said that we would invest to accelerate growth in both our differentiated network and affluent client businesses. And income in both respect has grown year-to-date so by 7% on the network as our corporate and institutional clients turn to us to help them navigate the shifting trends of international trade and by 5% with our affluent personal clients, which is not bad, given client sentiment in many markets remains subdued, currently given the volatile macro environment.

We’ve recently won Triple A’s coveted Rising Star Award in the ultrahigh net worth private banking category, which shows that the hard work being put in by the team is being recognized by both clients and peers. Secondly, we’ve set out to optimize the performance in four large and strategically important markets and all four of those markets generated profit year-to-date and in aggregate their profitability for the nine months has improved compared to last year by 16%.

Thirdly, we committed to streamline our operations to enhance client satisfaction and drive profitability and we continue to make progress reshaping our legal entity structure to allow more efficient use of capital and liquidity. Our Taiwan and Korea subsidiaries have now been moved underneath the Hong Kong entity to sit alongside China which completes our Greater China and North Asia hub.

We’ve already started to realize tangible financial benefits from this with funding from Hong Kong to our China and Korea subsidiaries replacing more expensive externally sourced funds that they have been using previously. And from a more obvious P&L perspective, all of the productivity measures that we called out at the half year are going in the right direction driving positive jaws in the period.

For example, underlying cost income ratio improved over 4 percentage points in the third quarter to 63%, the best we have achieved for quite some time. We also said that we will embrace the digitization and partnerships to reinforce competitive advantage and profitably disrupt in the market in which we operate.

We continue to work with our partners and the regulator in Hong Kong to develop our virtual bank proposition there. We’re also pursuing digital retail banking initiatives with partners in both Taiwan and Korea and are keen to see how the government’s longer-term plans develop in Singapore.

And finally, on this topic, we are now live with our homegrown digital bank in eight markets in Africa and hope to launch in Nigeria before the end of the year. A couple of stats on that.

Firstly, around 80% of new current and saving account openings in those markets are coming via new digital mobile channel. And secondly, we’ve added around 100,000 new customers across those eight markets in less than a year, which how long it’s taken us to build a retail customer base around 1 million in the region over -- using traditional methods I think for multiple years, that’s an extremely encouraging response.

And last but certainly least, since our last results we have been following through on our commitment to do everything in our power to make the world cleaner and our communities more sustainable. We were founding signatory of the Principles for Responsible Banking, a set of commitments design to support the banking industry’s contribution to achieving UN’s sustainable Development Goals and the Paris Climate Agreement.

And having launched a heavily oversubscribed sustainable bond focused on emerging markets in June, we recently followed up by issuing a sustainable deposit product for both corporate and industrial clients in Singapore, the first of its type in Asia. The funds we raise from both will be used to help finance sustainable activities in developing market across our footprint in Asia, Africa and the Middle East.

Turning now to our performance against the financial framework that we laid out to help you gauge progress towards our objective of delivering a return on tangible equity of above 10%, I will start with income which in the third quarter in constant currency terms is up 8%, just above the top end of medium term range we reiterated in February. From a segment perspective, client segment perspective, corporate and institutional banking had another very strong quarter with financial markets in particular making the most of the current volatile market conditions.

The all four client segments grew with private banking continuing to impress both from a productivity and a net new money perspective. And similarly from a geographic perspective, income grew in all four regions with ASEAN and South Asia being the biggest contributor.

So, an encouraging performance, indeed it’s the highest third quarter income print since 2015. But do bear in mind that income usually seasonally slightly lower for us in the fourth quarter.

And on costs, we generated another period of significantly positive jaws by keeping costs basically flat year-on-year. You should note however that costs can move around a bit on a quarterly basis based on the timing of new investments.

I said in August that you should expect costs to be slightly higher in the second half than they were in the first half and that remains our guidance, which given costs were broadly flat quarter-on-quarter, means that costs in the fourth quarter, excluding the UK bank levy, will be slightly higher in the third quarter primarily due to the phasing of the investment spend. Turning now to credit impairment which increased year-on-year but remains at a cyclically low level on a year-to-date basis and asset quality overall has remained fairly stable.

You may recall in the third quarter last year that we had a net release of $35 million in the stage 1 and 2 category. So the $89 million swing to this year’s $54 million charge probably makes the actual position look worse than it is.

The stage 3 impairment element was also up but in relation to a few names with no particular pattern in terms of location or sector. Obviously we are highly vigilant in this area, because impairment has been running at historically very low levels for a while and macro uncertainty remains high.

You may ask me for a full year forecast, and as usual I will decline other than to remind you that credit impairment is usually highest in the fourth quarter. And finally, capital, where we are managing our strong resources carefully and proactively.

We committed in February to return to shareholders surplus capital that we don’t reinvest and as a evidence of that we recently finished buying back shares worth a $1 billion reducing the share count by 3.5% over the four month period. We will continue to evaluate future capital return opportunities whilst considering the earnings outlook, group and local regulatory capital requirements and opportunities to invest to grow the business.

And speaking of investing through the business, risk-weighted assets are 2% compared with a year ago and are slightly down compared with the previous quarter. This is well below the rate of income growth say for that same 12 month period, as a consequence of our increased focus on returns generally and RWAs specifically.

In terms of the development of risk-weighted assets over time you should bear in mind that there are two broad trends to consider. Firstly, the intra-year or seasonal trend where they tend to increase at the start, particularly in the first quarter as corporate and institutional clients reengage following year end, the various optimization initiatives we're pursuing then take more of a hold as the year goes on, which is what we're seeing again this year.

And secondly, the multiyear trend where as you know we guided to RWAs growing out to 2021 on a net basis i.e. after organic and inorganic optimization initiatives, below the rate of both asset and income growth.

So bringing together then, our primary performance measure, return on tangible equity increased just over 1.5% year-on-year to 8.9%. As always though at the risk of repeating myself, please bear in mind the seasonality of our results with income usually lower and expenses and credit impairment usually higher in the fourth quarter, plus we also have the UK bank levy of just over $300 million.

As you know we are targeting return on tangible equity of 10% in 2021. Our posted progress in the third quarter year-to-date is encouraging in this regard.

But as I mentioned earlier, the external environment has become more challenging than we anticipated as the year has gone on. The expectation now is that interest rates will continue to fall to the extent to which that impacts our top-line both mechanically and through changing client behavior, which remains to be seen and will depend on how much they fall and for how long.

The global economy is still slightly flowing but at a slower pace than previously expected. The significant silver lining for us is that what growth there is, continues to be generated disproportionately by markets in our footprint.

And we are ideally placed to help our clients to take advantage of that. Meanwhile, discussions between U.S.

and China on trade continue but in fits and starts. And with several significant issues on both sides that will be difficult to resolve.

And finally within Hong Kong which as you know is our largest market. We are monitoring portfolio in sectors such as retail most directly impacted by the protests very carefully but see no material new adders to the stress at the moment.

In terms of asset quality we saw a slight uptick in the third quarter but a reduction in stage 3 loans. We expect the economic environment to slow.

And whilst the cost of liquidity has increased slightly, we've not seen any material change to our balance sheet position. And our third quarter performance was reasonably robust with income growing 2% year-on-year or 3% if you exclude from last year's resulted income from our non-core ship leasing business that we have since taken below the line.

So while full year impact in Hong Kong is not likely to be material and it has long history of resilience generally, it is unrealistic to think there will be no financial impact on the economy and therefore our business there into 2020 and we are watching the situation carefully. So to conclude before we open the lines for Q&A, firstly, our performance since we presented our Investor Update in February shows that we are making tangible growth both on our strategic, operational and financial commitments.

Operating momentum is clearly present. And the things are in our control are going well and pretty much as we guided.

And secondly, while incremental challenges and increased risk to revenue have arisen since the start of the year, we have various self-help levers to deploy in pursuit of our double-digit return on tangible equity. We are determined to build a sustainable and differentiated business driven by our people and our purpose and we’ll not take shortcuts to get there.

With that, I’ll hand back to Steve and take your questions.

Good morning. It’s Martin here from Goldman.

Just two questions please. And the first one, congratulations to the strong revenue print.

And I’m just trying to scrap the guidance here in terms of strong performance in terms of revenues this quarter, but not only this quarter, also the first half of the year, and there is slightly more cautious tone in terms of outlook. And I was just wondering, looking at your prior guidance of a revenue growth of 5% to 7% looking at prior comments on the benefits arising from legal entity restructuring and better use of excess deposits within the group, how shall we think of revenue progression from here?

Is it fair to assume this would be potentially towards the lower end of the prior range of 5% to 7% just given rates and global growth? Or do you still see scope for this to be somewhere in the middle of that range?

And connected to that, I was just wondering how the various risk items in Asia, whether that’s Hong Kong, whether that’s trade, impacts international banks such as Standard Chartered, do you see any benefit from this arising from potentially less competition from local player and the beneficial impact of margin or is this the situation just difficult for everyone? And the second question, just briefly on capital.

You mentioned in the release a net increase in requirement of around 20 basis points. And I was just wondering whether that impacts to any degree your 13% to 14% range.

I think previously, language was that you expect to be well within that range. And I was just wondering whether that's still the case or whether there's a little bit of upward pressure there.

Thank you.

Thanks, Martin. I'm not sure that was three or two questions but I’ll have a go at answering anyway.

So on income, so one of the stats that we've got on a constant currency basis an 8% print 3Q-on-3Q, we are year-to-date at 5%. So I think for the current year, we will realistically be in the range, albeit at the lower end of the range, but nonetheless, there or thereabouts.

I think if we've been sitting here back in February, when interest rates expectations were on the up, I would’ve been a little bit more optimistic about being sort of in the higher part of that range, whereas now with interest rate expectations now being on to the down, I think that obviously would put us into a slightly lower place in that range. Albeit having said that, the 5% to 7% is a multiyear number.

And just as interest rate expectations have changed in the last six or seven months, it doesn't mean to say that they can't change again in the next six or seven or whatever it is. So I think that we need to be careful not to be too precise about all of that.

But 5% to 7% still remains what we are gunning for. Legal entity restructuring will be helpful, it will be progressive.

And I think as I have said before, that should provide some offset against what would otherwise be downward pressures on NIM because of interest rates. So hopefully we can maintain, as has been the case this quarter, the reasonably stable NIM.

In terms of local competitors and risk, I mean we're going to have to see sort of how this plays out because obviously this is quite evolutionary interest rate changes, macros doesn't happens overnight. I think generally I'd say that the sort of U.S.-China situation for actually has got the number of supporters that sit there in the sense that we are much more involved in the Asia sort of connected chain than we are the Northern Asia to U.S.

and certainly the flows there have continued. Our business in China is doing well.

It's very focused, obviously, on the cross-border activity, which there is a lot that is still going on. So I wouldn't call out any particular change on that front.

And then your final question on the 20 basis points. No, that doesn't have any impact at all on our 13% to 14%.

We set 13% to 14% giving ourselves a little bit of slack there. So that does not impact that target range at all.

Good morning, Andy. Chris Manners here.

Yes, a couple of questions if I may. First one was just on Greater China and North Asia and Hong Kong basically in terms of revenue growth.

Looks like a good year-on-year and quarter-on-quarter revenue trend. I guess quarter-on-quarter you had a day count benefit.

Can you just help us think through a little bit on the net interest income drivers that you've got there in terms of where we might have on volume growth? And I guess asset yields might come down a little bit because of HIBOR and how difficult that competition is.

And can you help us think through that a little bit? And then the second question was just on your RoTE objective.

Again, so I don't know if this might be getting too subtle. But it just seemed to say in your release that your RoTE objective is 10%, whereas previously I think you were saying great than 10%.

Is that one nuance too many or is sort of 10% what we are looking for now? Thanks.

Okay, Chris. So let’s just take these in order.

So the Northern Asia performance which has clearly impacted by Hong Kong being a very, very big part of that business, I think has had a reasonable both the quarter and year-to-date particularly in the context of what has been going on in Hong Kong. So we’ve actually got -- the region we’ve got 2% third quarter income increase.

It's actually 3% ex out the ship leasing and normalize it and that is sort of pretty much the mirror of what you have got for the GCNA region overall with the highest growth being in China and the low growth being in Taiwan. Margins again, Hong Kong actually has been very stable.

So even though earlier in the year there was some degree of volatility in HIBOR actually in the third quarter itself. HIBOR and current rate, service rates were all actually pretty stable, so we’ve actually seen NIMs in Hong Kong and the region stay reasonably flat and therefore the growth being slightly more driven by volume.

Hong Kong balance sheet, if you go back to this time last year, we are higher now on client lending and we are higher on private accounts, slightly more of that growth in the first nine months, slightly more moderated last three months which is not surprising. So I think against that backdrop, it’s a reasonable performance.

The question is, how much has the unrest impacted us, I guess possibly the growth might have been a bit high if that had not been the case. But nonetheless it’s certainly not been a calamity and we have got the business growing both at top-line and bottom-line and quite nicely.

And on your second question, I think you are being a very, very, very subtle and precise and generally our view is that to get to over 10% we have to go through 10 as a number. And if we do get to 10, you can rest assure, we're not going to stop on that day and not seek to get any higher than it and we will make a note to make because our words are precise going forwards.

So if I could just follow up on the Hong Kong net interest income then. Because when I look at HIBOR it’s down about 30 bps versus the average of what you had in Q3 and I thought that would actually give quite a bit of pressure on the asset yield.

So maybe you could make a forward-looking comment on where these Hong Kong margins might go, whether you can take anything out of your deposit cost or any mix shift that might actually hold up? That was I guess what I was getting at.

I think outwardly people look at the sort of movement over time in HIBOR and sort of wonder why the NIM in our business sort of doesn’t move around more. I think if you actually look the relative size of our asset and liability book, you take account of the mortgage book and interrelationship with the prime rate and the caps that come in there, actually you see a pretty good normalization that tends to occur.

And if you go about many, many quarters with quite a bit of volatility in HIBOR and actually see the NIM in our Hong Kong business has remained pretty constant through that period. So we do manage it carefully.

And we have, in the past, we’ve cut back a bit on the mortgage lending because we just didn’t like the sort of margins that in there, we cut a little bit more of that recently. So overall it’s not -- it’s something that’s because of the balance of the book and because of the interactivity with other rates and caps.

It actually doesn’t produce the volatility that is implicit in your question.

A couple from me actually, just to follow up on Chris' questions on NII. I noticed that your deposits are down quarter-on-quarter with CIB pricing away some of its deposit base.

I wondered if you wanted to give us a bit more color on that, if that is something that will support the NIM in the future. And if so why you haven't done it in the past?

And I also just wanted to reaffirm, Andy, were you saying that you are happy to stick to 2020 constant currency 5% to 7% revenue growth as well as 2019 given the outlook? Thank you.

Thanks, Manus. So, we are very, very focused in the CIB business on margins returns.

We are much more focusing over time on return on RWAs and taking out the RWAs that are lower. And we will absolutely be counting on the deposit side to see where we can improve the overall mix of the deposits and I think what you can see in these numbers is the combined impact of that, particularly in the CIB business has been a very, very strong print.

On the top-line the [FM] has been a major contributor to that. The NIMs overall for the group have stayed pretty confident with where they were last year.

And again there are many factors go into that customer accounting part of it, what we are doing in legal restructuring is part of that. So, I think if you sort of look forwards, I would say that we probably would expect a reasonably stable NIM and I think we would expect sort of volume growth that we have clearly being seeing that over several quarters, we would hope that we would continue to see that.

I think it is testament to what’s been going on in this business. I think there is a more natural momentum and I think that implies -- applies both to the big corporates and also in the commercial bank which although didn’t print quite such a big top-line growth, it was certainly mismatch in the period at all with an 8% increase.

So, that in fact I think is sort of how I would see the overall NIM sort of balance sheet, its relationship. The 5% to 7% because we gave that out as sort of multiyear guide, our sense was it was sort of through the cycle currency similar type number.

And therefore, implicitly more sort of constantly reported currency and on the average over the period of time, our hope would be that we can be in that 5% to 7% range on a constant currency basis. I think with the strong print in the third quarter that, that should be certainly be the case and I certainly spoke that it’s strong, it should have a reasonable chance to be the case for the current year and as I say to the extent that we can drive that on the average over that three-year period.

That is what we are very focused on trying to do.

Does that mean, you think you can into next year despite interest rate headwinds or...?

I'm saying on the average over the three--year period that we will absolutely be setting our goal out to be within that range. It may bobble about from time to time but that is what we're trying to do on the average over that period.

Hi, Andy. Good morning.

Two or three questions. The first one following on Manus’ question on deposits.

Is there any geographical bias to deposit reduction? Second point is -- second question is on LCR.

So LCR is still well above 100% at 133%, where it's come down from 154% at the end of last year. So is there a number below which you would not want to go, because I'm assuming it will be well above 100% which will be a bottom-line?

And the third question is on margins, on a Q-o-Q basis, margins came down by about 6 basis points despite stable Hong Kong. Is any one-off in margins there?

Thanks.

Yes, I mean, the deposit side has moved around a little bit. We've got more time deposits in Europe.

But other than that, there's nothing I’d particularly call out on the deposits. The LCR at sort of 130%, 140% is comfortably ahead of what we absolutely need to have from regulatory point of view, so it’s something sort of in that corridor or thereabout is something we're happy to live with.

And the margin coming down, it’s of course compared to immediate preceding period -- quarter. And I don't know if you recall but we said in the preceding period that actually we had got some of the accounting sort of was essentially sitting in the non-interest income area.

And actually you needed to look at the two together to actually get to the full story. So I would quietly look through the last quarter and actually say that what we got this quarter and the quarters around it is actually more typical.

I got one question on leverage please. Your UK leverage ratio came in at 5.17% in Q3, which continues the downwards trend that we've seen so far this year.

I'm not calling out the absolute level of the ratio. So I appreciate you're still operating a significant buffer to your minimum requirements.

But the scale of the relative move in a pretty short period of time, so down 70 bps in 12 months, seems quite large for a leverage ratio. I was wondering if you could talk through the drivers behind this move as that does seems to be quite bit of growth in the repo book?

I know UK leverage exposure is about 10% so far this year. And if you do continue to chase volume growth and will continue to see the pace of erosion, just how low would you be prepared to take the leverage ratio, particularly in Q4 and the UK spot leverage ratio as a starting point for the year, if you can address that?

Thank you.

Repos certainly are a part of the leverage story. Do recall leverage is sort of not a primary constraint for us in running this business.

That does not mean to say we're going to run it to whatever level but it is not the primary constraint in running this business. So decisions or repo decisions are based upon returns that we can get.

And if we're comfortable with those, those are going to be additive to the overall economics of the business. We will do that.

As I say we're not running up against sort of those hard boundaries on the leverage side. And therefore we can judge based on economics rather than purely on leverage ratios.

Okay. But is there a level at which you would kind of pause on the growth or are you happy for that to continue falling at this kind of pace?

I'm not saying that we would let it fall at this kind of pace. But I'm just saying that it's something which we don't have a stated target specifically on.

We'll judge it more on the economics and it is not the critical sort of governing feature for our balance sheet.

Hi, good morning, Andy. Thanks for the questions.

Just a couple. The first one is you mentioned the early warning alerts in Hong Kong, still they’re up 10% Q-on-Q.

Could you just give bit of color as to where you are seeing it? Was that entirely in Hong Kong or was that anywhere else across the region?

And also can we get an update on the Permata stakes there as well? There’s been a few rumors in the press over the last few weeks, just where you are in that process and whether you think it’s going to happen over the next couple of quarters or it could be a longer process than that?

Thank you.

Yes, so early alerts, let me address this at sort of group level. And then the Hong Kong level, actually it’s not a particularly dissimilar story.

So we’ve got slightly higher early alert at the end of the third quarter than we had at the end of the second quarter group-wise and that is also mirrored in Hong Kong. So group stage 3 is actually flat period-on-period and in Hong Kong actually stage 3s are slightly down.

So for the group, it sort of microscopic movements, there is nothing particular that one would call out. In some senses slightly higher early alert, not a total surprise if you think about what’s sort of going on in the world around those.

Hong Kong is to say early alert a little bit higher, again, what you would expect given the economic environment there albeit the stage 3 is down. The accounts that we’re sort of focused on which are the non-payers, the stage 3s, stage 2s et cetera, overall the quality of those in the Hong Kong book is good.

We have got a high proportion of our business there which is in mortgages and that has got extremely good rent values et cetera. So I would say it’s sort of something we're obviously keeping a close eye on.

We're not seeing big movements at this point in time, although when you see sort of the hotel occupancy rates and things like that being clearly quite a notch down where it has been before, it is something that we need to keep close to. But in the big corporates book, things are behaving well.

We'll keep an eye on the sort of smaller corporates, the mortgage book goods, as I say, and keep an eye on the unsecured portfolio there as well. So that’s a broad shape of it, nothing huge to call out, but obviously something that we did need to monitor very closely and we're doing that.

Permata, obviously being listed business, there is sort of a limit to what we can say. We said it while ago it was non-core.

There’s been a lot of press speculation that maybe there is more activity than that. And I won’t comment specifically on that.

I will just make the observation: One, that it clearly does tie up a fair amount of risk-weighted assets for the Group. And secondly, as and when there is any different use then you will be the first to hear about it.

Just on the equity Tier 1 ratio, the RWAs came in a bit lower. I know earnings are obviously clearly better than consensus today.

So we might have expected a slightly stronger equity Tier 1 ratio. And I understand there's an FX issue.

I also understand that there's an issue around the accrual for the foreseeable dividend. I just wondered if you could explain those two drivers in a bit more detail for us, please.

Yes. So that’s a good question.

So first observation, that 13.5%, it rounded 13.5% by a silver and it was actually quite close to being 13.6%, so just a simple math, although actually has it slightly tipped it to the wrong side of that line. And secondly, there is a bit of FX.

But the foreseeable dividend is the other one. So, essentially, the half year, we have accrued the actual dividend, a third of the full year dividend.

And therefore, in the second half there’s sort of catch up to get that throughout the full year dividend which actually we may look at for next year to see whether that's the best way to do. But that's just why there is slightly more drag from foreseeable dividend in the third quarter than it was in the first two.

So going forward, we might -- the policy might change to sort of smooth the accrual more across the areas? Do I understand that correctly?

Yes. We certainly are going to have a look at it.

I mean we need to prove regulators et cetera but we are certainly going to have a look at it, I’d prefer it to be more aligned with the profit generation and the fact that we do a sort of one-third, two-thirds but it’s something that aside is going to be looking at we need to get regulators onboard with.

Okay. And there's no other impact, there's no other third item beyond the FX.

No, no. Not at all.

Hello. Good morning.

My question really relates to some of the other questions from Manus and Jenny really. Looking at Page 8 of the balance sheet, we got this massive growth within other assets and other liabilities that's taking place.

And I’m really just -- I am old enough to remember Peter Sands when he was CFO standing up and saying “Standard Chartered should move away from wholesale banking towards retail banking.” So, it feels like everything is more and more towards the balance sheet being more of a trading book than everything else.

Just wonder whether Q3 is a bit of an aberration, whether you expect sort of the size of the other assets and other liabilities to shrink back down again in Q4? Is there any sort of limits on how far you are going to push the trading book size?

Well, two or three things. One, unfortunately I haven't got to be longer background history that you have got to recall the conversation with Peter, so I'm a little unsighted on that.

Secondly, I would not regard our balance sheet as largely being a trading book. It is got an element that is traded but it’s just not a huge element and it is more governed by economics and returns that we can make and what we need from regulatory point of view, to be holding centrally or with central banks.

And thirdly, just to one aspect of your question, I probably look back thematically over the last four or five years and actually say what we could have done is used the steady predictability of the retail bank over the three or four years period to actually with Simon Cooper and the team to sort of build back the quality of the corporate bank. And therefore now that we all think the corporate CIB business and sort of actually now the commercial business sort of hitting their stride but I think we have now got much more balance in the Group overall between corporate and retail and that we have gone through a period of sort of the rebuild of the other -- the one funded by the other.

But we would not regard it as sort of being trading balance sheet. We like most banks have got to hold a fair amount sort of in central high quality liquid assets for regulatory purposes.

But nothing else that I would particularly call out or be concerned by in the mix of the balance sheet.

If I look at the liabilities, I mean we’ve got the deposits reduction coming through that you’ve referenced earlier. But then going the other way, you've added kind of $34 billion of liabilities in the quarter, it’s grown 15% in the quarter alone.

Yes. I mean, we’ll move around quarter-by-quarter, as I say it's nothing that’s particularly of concern for us.

Could I just ask you back again, I guess, on revenue? I mean I was just looking at growth expectations for Asia.

And at the start of this year, Hong Kong growth expectations were up for about 2.5%. I think Singapore was about the same.

We're now running at somewhere around 50 bps. So that's like a 2% loss of economic growth at two of your biggest markets.

And yet your revenue is still 8% growth. So I guess my question is when you look what you were thinking when you set the plan relative to what's being delivered now, when you actually in your mind think you're going to deliver like 14% or 15% revenue growth, and actually you've come in at 8%, which you had like a nice big buffer?

Or have you found that certain core parts of the business are disappointing and you've been able to make that up elsewhere? Could you give us some sort of flavor of what that makeup is and how that's changed?

Because it seems difficult to believe you would've seen that sort of slowdown in expectations for economic growth and it to have had no impact on your business at all.

Yes, good question, Ed. Sadly, we weren’t sitting with the 14%, 15% growth expectation at any time.

That would have been nice. But it wasn’t actually where our plan was.

Now what I’d tell you is this, you're absolutely right that where Hong Kong growth is now and to a lesser extent, but still to some extent where Singaporean growth is weaker, particularly Hong Kong than where we would have envisaged it, if you go back sort of nine months or so. That's clearly the case.

I think what is good in these numbers is that actually and remember we’re operating in 60 markets around the world, that what we have seen is compensating improvements elsewhere. And particularly the ASEAN region has had a very strong three months and third quarter.

And we have actually seen good growth in Singapore. We’ve seen good growth in India et cetera.

And therefore to a reasonable extent, those -- not because they are directly associated, there is a degree of association but small. And those have actually been performing really, really well.

And there’s sort of portfolio effect of, okay, fortunately those have been performing well. The Hong Kong ones were a little bit more depressed than it might otherwise have been.

And then Singapore is sort of interesting because actually the economy there growing as you say more slowly than we would otherwise envisage. But actually our business grew not far off double-digit.

And so I think as you look at this sort maybe from a different angle and say, the focus we’ve had upon network activity, make sure that the cross-border, which is where we create the greatest value is really still firing very, very strongly, has actually been a very strong counter to the areas that have been a little bit weaker. And hence you come to the 7% to 8% print that we’ve got.

And actually, if we sort of roll out over the next two -- couple of years, I mean is that the source of your sort of very lightweight warning over the 10%, that’s just a question of whether that mix change is sustainable? Is that where your uncertainty comes from?

I think what is a fair way to look at this is that most of the things that we do control are actually performing really, really well, and the push on net worth, the push on affluent, the costs et cetera, obviously those are going as well as we would have hoped for. What is outside of our control and you will understand it’s interest rates in particular for any bank are clearly quite confidential is outside of our control and the fact that we are now eight, nine months on from February the world outside the moment is definitely looking more gloomy on interest rate.

We're just saying if we have had the macro backdrop that we had in February still continuing now with the business momentum we’ve got, we think this is a really, really good place to be. We're going to have to work a bit harder given that some of the macro is tougher to make this happen.

It doesn’t mean to say we're not going achieve it, it’s just that we're going to have to work harder to make it happen. Some of the geopolitical, Hong Kong and the U.S.-China situation, we still got another plenty 22 months or whatever is between now and the end of the 2021 period, who knows just how those will evolve and how quickly they may settle or not is maybe the case.

And we're just saying look we will do our best to get there. There are factors outside that are on the average makes it a little more difficult now than is the case before.

It doesn’t change out intent. It doesn’t change the focus we’ve got.

We're not going to do stupid things in the near-term just to make it happen and then rue the day later on. But we are just putting down the markers.

I think most banks have done anyway, just to say that the world outside is a bit tougher than it was when we sat down earlier in the year.

Good morning, Andy. Thank you for taking question.

I just want to come back to Pillar 2A if I can. Apologies if I've missed it.

But can I check what the precise gross move was rather than net of the countercyclical? I presume it was around 30 basis points on a CET1 basis or 50 basis points of the total capital base, so just wanted to check.

And I appreciate you can't be too specific in terms of exactly what’s driving that and kind of what sort of regulatory allowances are. But if you can give us any color that would be right helpful.

And then just finally on the Pillar 2A, I know you earlier commented it can be absorbed in the current CET1 target, given the flexibility you have there. But from a MREL purposes perspective, should we think about that as adding 50 basis points to total Pillar 2A to around 1% of RWAs from $2.5 billion extra issuance?

Or was this already within your thinking when you thought about MREL issuance requirements? Thanks.

Yes, okay. So the net number is roughly 27, I think to the Pillar 2A less 6% of countercyclical offset or something like that.

I think you can work that from some of our other disclosures. So I will go straight to it for you.

You are right, it is a difficult for us to talk to because we are not allowed to talk to it. And there is nothing in there that I would particularly call out.

It’s just slight change in the shape of the book in some areas but it’s not something that I will be troubled by. And as you have reiterated and as I said earlier that it does not impact the 13% to 14% guidance range.

And MREL we have taken a view over a period of time that there will be some humps and bumps in the road and we're generally actually in very good shape already on the MREL front and it does not change our otherwise plans for MREL and MREL issuance.

Good, okay. Well, thank you for your questions.

And just before we call off, just one mention that we're doing a update on the Africa Middle East franchise which is a little casual review of that region we will be doing 27th November. And you are all welcome to join that and hopefully that will shine a light upon another fascinating part of our business.

And so, with that, I think we will call it and thank you for your time.