3rd May 2007 11:53
Standard Chartered PLC03 May 2007 STANDARD CHARTERED PLC ANNUAL GENERAL MEETING 3 MAY 2007 The meeting will deal with the proposed Resolutions as outlined in the Notice ofAnnual General Meeting issued to Shareholders dated 26 March 2007 and willprovide a summary of the business and final performance of the Group in 2006 andof current progress. The following statements are excerpts from the speeches to be made toshareholders by Mervyn Davies, Chairman, and Peter Sands, Group Chief Executive,at the Annual General Meeting, being held today at 12.00 noon in London. Mervyn Davies, Chairman Top-line Numbers I have been on the Board of Standard Chartered since 1997 and was ChiefExecutive for five years. Today I am privileged to be here as your Chairman.Standard Chartered's history goes back 154 years. This is a company whichrespects tradition and history and at the same time moves forward and deliversperformance. So I am very pleased to report that 2006 was another year of excellentachievement for Standard Chartered. • Income increased 26 per cent. • Profit before taxation rose 19 per cent. • Normalised earnings per share increased 11 per cent. As a result of this strong performance, the Board is recommending a full-yeardividend to shareholders of 71.04 cents a share, an increase of 11 per cent. I'm sure you will agree these results demonstrate that we have strong momentumin our businesses. We are getting the balance right, producing good financialperformance while investing for future growth and returns for shareholders. Our performance was recognised by The Banker magazine, which named StandardChartered for the first time ever as Global Bank of the Year, as well as Bank ofthe Year for Global Corporate Social Responsibility. Chairman role At this point I would like to thank Bryan Sanderson, who stepped down asChairman in November after serving for three and a half years, during which timethe Group grew strongly and prospered. The Board would like to say thank you toBryan. This is the first Annual General Meeting since I became Chairman and Peter Sandsstepped up to be Chief Executive. This will be a great opportunity for you toget to know Peter. The Bank is in great shape and he and his management team areready to seize the many opportunities in our markets. At a time of rapid growth, we have continuity of leadership. Peter and I haveworked closely in developing our strategy, and this is the evolution of apartnership which will enable us to continue the Bank's record of consistentlygood performance for shareholders. As Chairman, a key part of my role is to lead the Board. I will make sure wecontinue to have a top-quality Board in place to challenge as well as to supportthe Bank's executive management team. I also want to build on the relationships I have developed around the world overthe past 10 years as a Board member. Since becoming Chairman I have been to China, Hong Kong, Singapore, Dubai, AbuDhabi, Indonesia, Vietnam and New York and I can tell you companies, governmentsand other stakeholders in our markets increasingly see Standard Chartered as TheRight Partner. Global economy Turning to the global economy, the economic environment has been good. The worldeconomy is thriving, trade is soaring, commodity markets are healthy and Chinaand India are opening up. In Asia, new trade corridors are emerging both within the region and with otherregions, and trade volumes are rising sharply. Globally, and on the ground in many of our markets, the picture looks good. Thedynamics of the world economy are changing, as the global importance of Asia,Africa and the Middle East continues to grow. We are well placed to gain from the many changes that are under way around theglobe and will continue our focus on creating shareholder value through ourexisting businesses and emerging opportunities. Our markets are some of the most exciting in the world, but they also face someof the biggest challenges such as poverty, disease and the effects of climatechange. Sustainable business At previous Annual General Meetings we have talked about corporateresponsibility - doing business in an ethical way and supporting communities.Lots of companies are talking about corporate responsibility now, but we wereone of the first to put it at the heart of our business. In 2006 we refocused our approach and launched our "building a sustainablebusiness" strategy, based on our seven priorities. All these priorities are aligned with the Bank's business, and all ouractivities utilise our skills, employees and network. We do this because we canmake a difference, but also because it is the right thing for you, ourshareholders. Take Seeing is Believing, our programme to combat avoidable blindness. In manyof our markets, if you are blind you cannot contribute to the economy. Eradicating avoidable blindness will stimulate economic growth in these markets.And by involving employees, customers and other stakeholders in the campaign, webuild our reputation, increase employee engagement and attract talentedemployees. Each of you should have found a copy of our Sustainability Review on your chair. I hope you will take the chance to read it and find out about what we aredoing to make a difference and ensure that our growth is sustainable. And by the way, we would appreciate your feedback, as shareholders of theCompany, on the Sustainability Review and how we can conduct what we are doingmore effectively. During 2006 Standard Chartered made significant strategic progress. We have themanagement depth to execute our strategy and we are attracting talented anddiverse employees from around the world. The Bank is in excellent shape and weare optimistic about the future. Governance Now a few words on governance and the Board. As I look around the room, I see a strong Board, a really good cultural mix withgreater representation of our markets. The Board is there to support and challenge the executive management team. Inrecent years we have considerably strengthened the Board to ensure that we haverobust governance in place for our business. In August we welcomed Lord Turner of Ecchinswell to the Board. Adair Turner was Chairman of the UK's Independent Pensions Commission untilApril 2006 and from 1995 to 1999 he was Director General of the Confederation ofBritish Industry. This week we announced the further strengthening of our Board with theappointment of John Peace as Deputy Chairman and Senior Independent Director andSunil Mittal as a Non-executive Director. Both appointments are effective from1 August 2007. John is the Chairman of Experian Group and Burberry and Sunil is the founder,Chairman and Group Chief Executive of Bharti Enterprises, one of India's leadingcompanies. These appointments will strengthen our governance and add great depth anddiversity to our Board. Rudy Markham will step down as the Senior Independent Director on 1 August and Iwould like to thank him for the significant contribution he has made in thatrole. I am delighted that Rudy will be continuing as Chairman of the Audit and RiskCommittee, which plays such a critical role in the governance of the Company. At the end of the year, Hugh Norton retired from the Board as Senior IndependentDirector. We are grateful for the 11 years' service that he gave to StandardChartered as a Board member. He served on the Nomination, Remuneration and Audit and Risk Committees and wasa truly gifted Non-executive Director. He was a great source of wise counsel tome, the Board and Executives and we would like to thank him most sincerely. In closing, let me reaffirm to you that Standard Chartered is in excellent shapeand making strong progress. We have a clear strategy, a strong management team,and we are well positioned to capitalise on the many opportunities in ourmarkets Thank you, ladies and gentlemen, for your support. Peter Sands, Group Chief Executive Strategic agenda Five years ago, I joined Standard Chartered as Group Finance Director. And now Iam delighted to be standing here as Group Chief Executive, just six months intothe job. In the last five years, Standard Chartered has changed enormously. UnderMervyn's leadership as Chief Executive, we've almost tripled the number ofbranches, more than doubled the number of customers and doubled the number ofstaff. Most importantly, we grew earnings per share by a cumulative averagegrowth rate of 21 per cent, delivered consistent growth in dividends (so thatthe 2006 US dollar dividend is 69 per cent higher than the 2001 figure), anddrove total shareholder return of 118 per cent. I am proud to have played my part in this story of growth and success. And I amdelighted to take on the role of leading the Bank on the next phase of ourjourney. I'm particularly pleased that I will be doing so whilst continuing towork in partnership with Mervyn. He has been a superb Chief Executive and is andwill be a great Chairman. And as Mervyn said, the Bank is in great shape. We have a clear strategy, acommitted team and strong business momentum. Our strategy is to become the world's best international bank, leading the wayin Asia, Africa and the Middle East. We've made great progress, but there's muchmore to go for. We see huge opportunities in our markets. We see room forimprovement in almost everything we do. My job is to make this happen. And my priorities for 2007 are clear. We must accelerate organic growth. This is the core of our strategy and the keyto shareholder value creation. We stepped up investment for growth in 2006 andare doing so again in 2007. We must also continue to deliver on our acquisitions. Acquisitions do play animportant role in our strategy, but it's a supporting role. We don't buy togrow; we grow what we buy. This year our focus will be on our most recent acquisitions, in Pakistan andTaiwan. Both offer huge potential for income and earnings growth. We aredetermined to make both highly successful. A third priority is to continuously improve the way we work, to deliver betterservice to our customers, and to achieve greater cost efficiency. Many of youwill know that banks often make things too complicated. We're not immune tothis, but we are tackling it. We're redesigning processes to make them simpler,better, faster. A personal priority for me is to build more leadership capacity across the Bank.One of Standard Chartered's great strengths is the depth, diversity and talentof our people. The sheer variety of people in the Bank is one of the things thatmake it such a wonderful place to work. But if we're to achieve our ambitionswe've got to attract and grow the next generation of leaders faster than everbefore. Finally, we have to reinforce our brand. We have a great brand, a brand that'swell-known and respected across our markets. But we need to make it even biggerand make it speak with a louder voice. So these are my priorities for this year. We're making good progress on all ofthem. Now I'd like to quickly talk about some of our key markets, to give you aflavour of what we're actually doing on the ground. Tour of markets First, China. In 2006, we more than doubled our income in China, tripled profit,expanded our network to 22 locations in 14 cities, and almost doubled staffnumbers. 2007 promises to be equally exciting. At the beginning of April we incorporatedour business in China. Incorporation allows us for the first time to providemortgages, credit cards and other local-currency services to Chineseindividuals. Last week we received licences to offer these services in fivecities. This is a huge opportunity, and we're accelerating investment to expand ournetwork. By the end of the year, subject to regulatory approvals, we expect tohave around 40 outlets in China. Reflecting China's importance to Standard Chartered, I've already been theretwice since becoming Group Chief Executive, and I even took my family there fora brief holiday over Easter. I'm also focusing a lot of attention on India. In 2006 we made profit of justover $400 million in India, up 69 per cent on 2005, with a particularly strongperformance in Wholesale Banking. We are growing our Wholesale Banking business right across India, and areadvising and financing major Indian companies as they expand outside India. Forexample, Tata Steel in its acquisition of Corus here in the UK. In 2007 we will continue to invest in both businesses to ensure we make the mostof the opportunities in this emerging economic giant. China and India are the two big growth stories in the world economy - and we arewell placed to capitalize on both. But we have many other exciting opportunities for growth. Even in what some would describe as more mature markets, we can achieve rapidprofit growth. In Hong Kong, our biggest market, we grew profits by 24 per cent in 2006. In Korea, our second biggest market, we grew profits by 72 per cent. And in Singapore, we grew profits by 28 per cent. Through innovative products, excellent service and reaching out to new customersegments, such as private banking and small and medium sized enterprises, we cancontinue to drive growth. And this is not just a story about Asia. In Africa and the Middle East we arealso growing strongly. In Africa, we are benefiting from the rapidly increasing flows of trade andinvestment with Asia. Our profits in Africa were up 200 per cent in 2006. Nigeria is particularly exciting. In 2006 we grew income by over 80 per cent anddoubled profits. In the Middle East, we are investing to capitalise on the extraordinary dynamismof places like Dubai, Abu Dhabi and Qatar. In 2006 we grew income in the UnitedArab Emirates by 32 per cent. And we see many new opportunities such as doingeven more in Islamic finance and realising the potential of the DubaiInternational Financial Centre. The core of our strategy is organic growth - growing our existing businesses.But acquisitions do play an important role by giving us new platforms forgrowth. Our most recent acquisitions were in Pakistan and Taiwan. In Pakistan, we bought Union Bank in September and are making rapid progress inintegration. We rebranded Union's 65 branches in early January and now have 116in total. We're in a great position in Pakistan, as the biggest internationalbank and with a strong management team drawn from both institutions. In Taiwan, we took full control of Hsinchu International Bank in December,giving us 86 branches in this dynamic North East Asian market. We're at a muchearlier stage in the integration process than in Pakistan, but we are makinggood progress and we are confident that this acquisition will give us a new,powerful engine of profit growth. I have visited both Pakistan and Taiwan since the beginning of the year. Makingsure we deliver on these two acquisitions is a top priority for me. What you should take from this quick canter around our markets is that we havegreat opportunities for growth and that we are investing to capture them. Current progress We've had an excellent start to 2007. Both businesses performed very well in thefirst quarter of the year with strong income growth, particularly in WholesaleBanking. We are seeing good double-digit income momentum across almost all ourgeographies. We have stepped up the pace of investment, particularly in Consumer Banking, aswe said we would, and we are making good progress against our milestones. As weindicated at the results presentation, for the Group as a whole, costs will growfaster than income in the first half. However, expense growth for the full yearwill be broadly in line with income growth. The credit environment has remained largely benign. The Wholesale Bankingportfolio continues to demonstrate excellent credit quality. In ConsumerBanking, as expected, the loan impairment charge reflects the improvingsituation in Taiwan as well as the inclusion of our most recent acquisitions andthe change in the mix and maturity of the portfolio. So, in summary, the Group is in great shape, we have strong momentum and awealth of opportunities. Thank you for your support. - END - For further information please contact: Sean Farrell, Head of Media Relations +44 (0) 20 7280 7163 Stephen Atkinson, Head of Investor Relations +44 (0)20 7280 7245 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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