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Strictly Confidential

Strictly Confidential Indicative Balance Sheet Transaction Investor Presentation October 2011
Strictly Confidential Indicative Balance Sheet Transaction Investor Presentation October 2011

Indicative Balance Sheet Transaction Investor Presentation

October 2011

Strictly Confidential Indicative Balance Sheet Transaction Investor Presentation October 2011
Global Disclaimer Regulatory disclosure Subject companies: -- Standard Chartered Bank and/or its affiliate(s) has received

Global Disclaimer

Regulatory disclosure

Subject companies: --

Standard Chartered Bank and/or its affiliate(s) has received compensation from this company for the provision of investment banking or financial advisory services within the past year.

SCB makes no representation or warranty of any kind, express, implied or statutory regarding this document or any information contained or referred to on the document.

If you are receiving this document in any of the countries listed below, please note the following:

United Kingdom: Standard Chartered Bank (SCB) is authorised and regulated by the Financial Services Authority. This communication is not directed at Retail Clients in the European Economic Area as defined by Directive 2004/39/EC. Nothing in this document constitutes a personal recommendation or investment advice as defined by Directive 2004/39/EC.

Australia: The Australian Financial Services Licence for SCB is Licence No: 246833 with the following Australian Registered Business Number (ARBN : 097571778). Australian investors should note that this document was prepared for wholesale investors only (as defined by Australian Corporations legislation).

China: This document is being distributed in China by, and is attributable to, Standard Chartered Bank (China) Limited which is mainly regulated by China Banking Regulatory Commission (CBRC), State Administration of Foreign Exchange (SAFE), and People’s Bank of China (PBoC).

Hong Kong: This document is being distributed in Hong Kong by, and is attributable to, Standard Chartered Bank (Hong Kong) Limited which is regulated by the Hong Kong Monetary Authority.

Japan: This document is being distributed to the Specified Investors, as defined by the Financial Instruments and Exchange Law of Japan (FIEL), for information only and not for the purpose of soliciting any Financial Instruments Transactions as defined by the FIEL or any Specified Deposits, etc. as defined by the Banking Law of Japan.

Singapore: This document is being distributed in Singapore by SCB Singapore branch only to accredited investors, expert investors or institutional investors, as defined in the Securities and Futures Act, Chapter 289 of Singapore. Recipients in Singapore should contact SCB Singapore branch in relation to any matters arising from, or in connection with, this document.

South Africa: SCB is licensed as a Financial Services Provider in terms of Section 8 of the Financial Advisory and Intermediary Services Act 37 of 2002. SCB is a Registered Credit provider in terms of the National Credit Act 34 of 2005 under registration number NCRCP4. UAE (DIFC): SCB is regulated in the Dubai International Financial Centre by the Dubai Financial Services Authority. This document is intended for use only by Professional Clients and should not be relied upon by or be distributed to Retail Clients. United States: Except for any documents relating to foreign exchange, FX or global FX, Rates or Commodities, distribution of this document in the United States or to US persons is intended to be solely to major institutional investors as defined in Rule 15a-6(a)(2) under the US Securities Act of 1934. All US persons that receive this document by their acceptance thereof represent and agree that they are a major institutional investor and understand the risks involved in executing transactions in securities. Any US recipient of this document wanting additional information or to effect any transaction in any security or financial instrument mentioned herein, must do so by contacting a registered representative of Standard Chartered Securities (North America) Inc., 1095 Avenue of the Americas, New York, N.Y. 10036, US, tel + 1 212 391-9420.

Americas, New York, N.Y. 10036, US, tel + 1 212 391-9420. WE DO NOT OFFER OR

WE DO NOT OFFER OR SELL SECURITIES TO U.S. PERSONS UNLESS EITHER (A) THOSE SECURITIES ARE REGISTERED FOR SALE WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND WITH ALL APPROPRIATE U.S. STATE AUTHORITIES; OR (B) THE SECURITIES OR THE SPECIFIC TRANSACTION QUALIFY FOR AN EXEMPTION UNDER THE U.S. FEDERAL AND STATE SECURITIES LAWS NOR DO WE OFFER OR SELL SECURITIES TO U.S. PERSONS UNLESS (i) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATE PERSONNEL ARE PROPERLY REGISTERED OR LICENSED TO CONDUCT BUSINESS; OR (ii) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATE PERSONNEL QUALIFY FOR EXEMPTIONS UNDER APPLICABLE U.S. FEDERAL AND STATE LAWS. The information on this document is provided for information purposes only. It does not constitute any offer, recommendation or solicitation to any person to enter into any transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration. Users of this document should seek advice regarding the appropriateness of investing in any securities, financial instruments or investment strategies referred to on this document and should understand that statements regarding future prospects may not be realised. Opinions, projections and estimates are subject to change without notice. The value and income of any of the securities or financial instruments mentioned in this document can fall as well as rise and an investor may get back less than invested. Foreign-currency denominated securities and financial instruments are subject to fluctuation in exchange rates that could have a positive or adverse effect on the value, price or income of such securities and financial instruments. Past performance is not indicative of comparable future results and no representation or warranty is made regarding future performance. Predictions, projections or forecasts contained herein are not necessarily indicative of actual future events. While all reasonable care has been taken in preparing this communication and the information in it is believed to be reliable, it has not been independently verified by SCB. The commentary contained in this communication may not be suitable for all investors as it has not been prepared with regard to the specific investment objectives or financial situation of any particular person. SCB, therefore provides no advice and makes no recommendation (personal or otherwise) to any particular person or group with any specific objectives in mind, and SCB makes no representation or warranty (express or implied) of any nature, nor does SCB accept any responsibility or liability of any kind, with respect to the accuracy or completeness of the information in this communication or for errors of fact or opinion expressed herein. SCB is not a legal or tax adviser, and is not purporting to provide you with legal or tax advice. If you have any queries as to the legal or tax implications of any investment you should seek independent legal and/or tax advice. SCB, and/or a connected company, may have a position in any of the instruments or currencies mentioned in this document. SCB has in place policies and procedures and physical information walls between its Research Department and differing public and private business functions to help ensure confidential information, including ‘inside’ information is not publicly disclosed unless in line with its policies and procedures and the rules of its regulators. You are advised to make your own independent judgment with respect to any matter contained herein. SCB and/or any member of the SCB group of companies may at any time, to the extent permitted by applicable law and/or regulation, be long or short any securities or financial instruments referred to on the website or have a material interest in any such securities or related investment, or may be the only market maker in relation to such investments, or provide, or have provided advice, investment banking or other services, to issuers of such investments. SCB accepts no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental or consequential loss or damage) from your use of this document, howsoever arising, and including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy with this document, its contents or associated services, or due to any unavailability of the document or any part thereof or any contents or associated services.

Copyright: Standard Chartered Bank 2011. Copyright in all materials, text, articles and information contained herein is the property of, and may only be reproduced with permission of an authorised signatory of, Standard Chartered Bank. Copyright in materials created by third parties and the rights under copyright of such parties is hereby acknowledged. Copyright in all other materials not belonging to third parties and copyright in these materials as a compilation vests and shall remain at all times copyright of Standard Chartered Bank and should not be reproduced or used except for business purposes on behalf of Standard Chartered Bank or save with the express prior written consent of an authorised signatory of Standard Chartered Bank. All rights reserved. © Standard Chartered Bank 2011. 2

Table of Contents

Table of Contents 1. Executive Summary 2. Indicative Portfolio and Transaction Structure Appendices 1. Standard Chartered

1.Executive Summary

2.Indicative Portfolio and Transaction Structure

Appendices

1.Standard Chartered Bank

2.Investment Opportunity

3.Client & Risk Management

4.Portfolio Management

Appendices 1. Standard Chartered Bank 2. Investment Opportunity 3. Client & Risk Management 4. Portfolio Management

3

1. Executive Summary

1. Executive Summary

Executive Summary

Executive Summary  Opportunity to gain exposure to Standard Chartered Bank’s (“SCB”) core markets, with its
 Opportunity to gain exposure to Standard Chartered Bank’s (“SCB”) core markets, with its focus
Opportunity to gain exposure to Standard Chartered Bank’s (“SCB”) core markets, with its focus in the fast-
growing markets in Asia and the Middle East
Investment
 SCB has been in many of these markets for over 150 years, including China, India, Hong Kong and Singapore
Opportunity
 This transaction could provide diversification away from holdings in Europe and the US
 Investors can access SCB’s extensive local market knowledge and comprehensive credit standards
 SCB’s prior transactions have experienced very low default rates to date (see following page)
Transaction
SCB is seeking to support the business growth of its core clients.
Objective
SCB is not seeking to exit existing client relationships through this transaction
Strong Alignment of Interest
Strong
Alignment of
Interest

Portfolio of loans originated by SCB in its ordinary course of business, abiding by SCB’s thorough and seasoned credit process

SCB retains the first loss ([1]%) and the senior tranche (top [92]%) of the capital structure

5

Executive Summary (cont’d)

Executive Summary (cont’d) Synthetic Balance Sheet Programme  Initial outstanding amounts under the public Start

Synthetic Balance Sheet Programme

Initial outstanding amounts under the public Start platforms comprise a notional balance of $8.85 billion

Regular public issuance and private issuance, even throughout the financial crisis, have been well received by investors

Initial Characteristics

Start VI

Start V

Start IV

Start III

Start II

Start

CLO

CLO

CLO

CLO

CLO

CLO

Issue Date

Scheduled Maturity

Legal Final Maturity

Portfolio Notional (US$B)

Reference Obligations

Reference Entities

Weighted Average Life (years)

Average Underlying Rating 1

Current Performance

Credit Events to date 2

First Loss Tranche Retained by SCB

Nov 2010 Apr 2014 Apr 2015 1.25 1099 488 1.3 BB+
Nov 2010
Apr 2014
Apr 2015
1.25
1099
488
1.3
BB+
None 1.00%
None
1.00%
Jul 2008 Jan 2012 Jan 2013 1.0 925 495 1.0 BB
Jul 2008
Jan 2012
Jan 2013
1.0
925
495
1.0
BB
0.149% 1.25%
0.149%
1.25%
Jun 2007 Matured in Dec 2010 Dec 2011 1.5 379 325 1.0 BB
Jun 2007
Matured in
Dec 2010
Dec 2011
1.5
379
325
1.0
BB
0.071% 1.25%
0.071%
1.25%
Dec 2006 Matured in Jun 2010 Jun 2011 1.5 520 428 1.0 BB-
Dec 2006
Matured in
Jun 2010
Jun 2011
1.5
520
428
1.0
BB-
0.075% 1.25%
0.075%
1.25%
Jun 2006 Matured in Jun 2011 Jun 2012 1.6 171 160 2.7 BBB-
Jun 2006
Matured in
Jun 2011
Jun 2012
1.6
171
160
2.7
BBB-
0.567% 0.00% 3
0.567%
0.00% 3
Nov 2005 Called in Feb 2008 Nov 2014 2.0 166 160 2.8 BBB+
Nov 2005
Called in
Feb 2008
Nov 2014
2.0
166
160
2.8
BBB+
None 2.10%
None
2.10%

1. Initial portfolio weighted-average rating as indicated in rating reports by S&P, if available, or the S&P equivalent rating as per rating agency mapping.

2. Cumulative credit event amounts as of month end of July 2011 (or the relevant scheduled maturity date) proportional to initial portfolio notional

3. SCB retained a portion of the equity notes pari passu to the equity notes investors

to initial portfolio notional 3. SCB retained a portion of the equity notes pari passu to

6

2. Indicative Portfolio and Transaction Structure 7

2. Indicative Portfolio and Transaction Structure

2. Indicative Portfolio and Transaction Structure 7

7

START CLO Programme

START CLO Programme     [•] CLO Start VI CLO Start V CLO Start IV CLO
   

[•] CLO

Start VI CLO

Start V CLO

Start IV CLO

Start III CLO

Issue Date

 

[ • ] 2011

November 2010

July 2008

June 2007

December 2006

Total Amount

US$ [ 1,000 ] mm

US$ 1,250 mm

US$ 1,000 mm

US$ 1,500 mm

US$ 1,500 mm

Portfolio Type

Senior Unsecured Loans

Senior Unsecured Loans

Senior Unsecured Loans

Senior Unsecured Loans

Senior Unsecured Loans

Reference Obligations

 

[ 1,220 ]

1,099

925

379

520

Reference Entities

 

[

608 ]

488

495

325

428

Reference Entity Groups

 

[

491]

441

430

282

374

Weighted Average Life

[

1.0 year]

1.3 year

1.0 year

1.0 year

1.0 year

Replenishment Period

[ 3.25 years]

3.2 years

2.5 years

2.5 years

2.5 years

SCB Credit Grades (“CG”)*

[

4A – 9B ]

4A – 9B

4A - 9B

5A – 10B

4A – 10B

Average Underlying Rating

 

[BB+]

BB+

BB

BB

BB-

% Bilateral (by Notional)

 

[95.3%]

96.7%

98.7%

80.4%

94.5%

% Publicly Rated (by

 

[5.7%]

9.2%

6.8%

9.4%

1.5%

Notional)

% Listed (by Notional)

 

[23.9%]

25.4%

30.7%

29.4%

35.5%

% Asia (by Notional)

 

[72.6%]

80.7%

63.6%

70.2%

79.3%

* CGs are SCB’s internal credit grades.

Note: Figures for Start III, Start IV, Start V and Start VI CLOs are based on the initial portfolios at closing. Figures for [] CLO is based on the indicative portfolio.

VI CLOs are based on the initial portfolios at closing. Figures for [ • ] CLO

8

Indicative Capital Structure

Indicative Capital Structure Tranche Initial Principal Amount (USD mm) Width Credit Enhancement Coupon (USD

Tranche

Initial Principal Amount (USD mm)

Width

Credit Enhancement

Coupon (USD Libor + )

Placement

Senior *

[920]

[92]%

[8]%

N/A

Retained

Mezzanine

[70]

[7]%

[1]%

[ • ]%

Funded CLN

First Loss

[10]

[1]%

[0]%

N/A

Retained

Sole Arranger & Bookrunner:

Standard Chartered Bank

Account Bank:

Standard Chartered Bank

Issuer:

A Cayman Island registered Special Purpose Vehicle* *

Listing:

Irish Stock Exchange

Reference Obligations:

Senior unsecured loans

Portfolio Notional:

USD [1] billion

Governing Law:

 

English

Form:

Reg. S / 144a

Replenishment Period :

[

• 2015] ([3.25] years)

Scheduled Maturity:

[

• 2015] ([3.5] years)

Final Maturity:

[

• 2016] ([4.5 ] years)

Credit Events:

Bankruptcy, Failure to Pay and Restructuring

Options:

10% Clean-up Call, Regulatory Event Call

* Part of the senior tranche will be rated.

** Funded swaps and other structures without the need of special purpose vehicles may be considered

will be rated. ** Funded swaps and other structures without the need of special purpose vehicles
will be rated. ** Funded swaps and other structures without the need of special purpose vehicles

9

Indicative Portfolio

Indicative Portfolio Tenor Distribution (WAL: 1.0 yr) (by Notional) 35% 30% 25% 20% 15% 10% 5%

Tenor Distribution (WAL: 1.0 yr) (by Notional)

35% 30% 25% 20% 15% 10% 5% 0% < 3 mths 3 - 6 mths
35%
30%
25%
20%
15%
10%
5%
0%
< 3 mths
3 - 6 mths
6 - 12 mths 1 - 2 years
2 - 3 years
3 - 4 years

SCB Credit Grade (CG) Distribution (by Notional)

25%

20%

15%

10%

5%

0%

Weighted Average CG 6B (BB+/BB Equivalent)
Weighted Average CG
6B (BB+/BB Equivalent)

4A

4B

5A

5B

6A

6B

7A

7B

8A

8B

9A

9B

 

Portfolio Granularity

 
 

Total Initial Portfolio

 

Total for 8A or below

Reference Entity Balance

Notional (%)

Number of Entities

Notional (%)

Number of Entities

Less than $1.0 mm

10.4%

385

5.0%

226

$1.0 to $2.5 mm $2.5 to $5.0 mm $5.0 to $7.5 mm

15.1%

99

5.4%

36

17.0%

51

2.6%

7

20.7%

34

5.7%

10

$7.5 to $10.0 mm

36.9%

39

 

Total

100.0%

608

18.8%

279

Average Notional

USD 1,644,737

 

USD 672,815

39   Total 100.0% 608 18.8% 279 Average Notional USD 1,644,737   USD 672,815 10

10

Industry / Geography Composition

Industry / Geography Composition Highly diverse portfolio from both regional and industry perspective      

Highly diverse portfolio from both regional and industry perspective

                 

Grand

S&P Industry

 

Northeast Asia

 

Southeast Asia

South Asia

Middle East

UK/Europe

Americas

 

Africa

Australia

Total

     

United

         
 

Hong

South

Arab

United

South

China

Kong

Korea

Others

Singapore Indonesia

Others

India

Others

Emirates

Others

Kingdom

Others

USA

Others

Africa

Nigeria

Others

Australia

Air transport Automotive Beverage & Tobacco Building & Development Business equipment & services Chemicals & plastics Clothing/textiles Conglomerates Containers & glass products Cosmetics/toiletries Drugs

 

0.07%

0.18%

 

0.00%

         

0.25%

0.52%

0.59%

 

0.59%

0.32%

2.01%

0.16%

0.24%

0.00%

0.47%

0.23%

0.11%

0.13%

0.05%

 

0.36%

1.76%

0.97%

3.46%

0.06%

0.06%

0.04%

0.40%

0.65%

1.56%

0.02%

1.01%

 

1.07%

0.03%

0.12%

0.86%

10.32%

0.01%

1.02%

0.00%

0.05%

0.29%

0.10%

0.56%

0.01%

0.97%

0.07%

0.07%

0.15%

 

0.09%

0.02%

3.41%

1.41%

0.17%

0.88%

0.97%

2.15%

 

0.01%

0.84%

0.05%

0.08%

0.29%

1.97%

0.04%

0.75%

0.66%

10.27%

0.14%

1.47%

0.52%

0.10%

 

0.32%

0.02%

0.21%

0.08%

2.85%

0.27%

2.87%

0.12%

0.08%

0.48%

0.05%

0.00%

0.13%

1.15%

0.22%

0.33%

0.04%

0.00%

0.04%

5.79%

0.08%

 

0.01%

0.08%

 

0.17%

0.01%

0.00%

0.03%

0.05%

0.10%

0.54%

0.97%

0.76%

 

0.15%

0.17%

0.01%

0.07%

0.09%

 

0.02%

0.01%

2.78%

Ecological services & equipment Electronics/electrical Equipment leasing Farming/agriculture Financial intermediaries Food products Food service Food/drug retailers Forest products Health care Home furnishings Industrial equipment Leisure goods/activities/movies Lodging & casinos Nonferrous metals/minerals Oil & gas Publishing Radio & Television Retailers (except food & drug) Steel Surface transport Telecommunications Utilities

 

0.15%

   

0.00%

 

0.15%

0.79%

1.10%

0.21%

1.15%

0.38%

0.07%

0.32%

0.07%

0.21%

0.03%

0.14%

0.20%

4.67%

1.48%

 

0.05%

0.46%

1.56%

0.01%

3.57%

1.50%

 

0.30%

0.07%

 

0.00%

 

0.08%

0.97%

0.97%

0.01%

0.04%

0.58%

4.52%

0.91%

0.43%

0.31%

0.42%

2.38%

2.19%

0.01%

0.30%

1.29%

0.14%

1.04%

9.41%

1.05%

0.04%

2.11%

0.13%

0.08%

0.06%

0.22%

0.01%

 

0.06%

0.97%

0.02%

0.25%

4.99%

 

0.00%

0.05%

0.06%

 

0.12%

 

0.13%

0.22%

0.35%

 

0.06%

0.07%

0.03%

0.01%

0.01%

0.18%

0.10%

0.03%

0.03%

0.16%

   

0.02%

0.02%

0.03%

1.58%
1.58%

0.05%

0.58%

0.02%

0.06%

0.01%

0.04%

0.00%

0.01%

 

0.17%

2.55%

0.05%

0.73%

0.02%

       

0.97%

 

1.76%

0.59%

 

0.59%

0.32%

0.26%

0.06%

0.84%

0.97%

0.58%

1.78%

0.01%

0.03%

0.00%

 

0.12%

4.97%

1.33%

   

0.77%

 

0.97%

0.59%

 

0.07%

 

3.73%

0.26%

0.00%

   

0.04%

     

0.03%

0.33%

 

0.01%

 

0.01%

1.14%

0.57%

 

0.58%

0.60%

0.01%

0.07%

1.48%

 

0.01%

 

0.02%

4.49%

0.23%

0.37%

0.02%

0.16%

0.23%

1.93%

 

0.10%

0.26%

0.41%

0.00%

3.70%

0.57%

1.19%
1.19%

0.25%

0.56%

0.06%

0.01%

0.11%

1.09%

0.02%

0.00%

0.36%

0.08%

4.29%

 

0.09%

0.26%

 

2.04%

0.09%

0.07%

0.30%

 

0.61%

3.46%

 

1.29%

   

0.29%

0.13%

0.58%

2.29%

Grand Total

14.34%

17.90%

3.94%

3.77%

7.72%

4.09%

5.24%

13.83%

1.77%

7.49%

1.37%

1.46%

5.61%

1.70%

1.10%

1.26%

1.01%

4.18%

2.22%

100.00%

1.46% 5.61% 1.70% 1.10% 1.26% 1.01% 4.18% 2.22% 100.00% Greater than 3% Between 1% and 3%

Greater than 3%

1.46% 5.61% 1.70% 1.10% 1.26% 1.01% 4.18% 2.22% 100.00% Greater than 3% Between 1% and 3%

Between 1% and 3%

11

Geographical Distribution

Geographical Distribution The Indicative Portfolio has been selected to be representative of SCB’s Loan portfolio as

The Indicative Portfolio has been selected to be representative of SCB’s Loan portfolio as of 30 June 2011

Country / Region

S&P FC

Moody's FC

SCB Loan Portfolio (% by Notional)

Indicative Portfolio (% by Notional)

Rating

Rating

Northeast Asia

34.01%

39.95%

Hong Kong

AAA

Aaa

13.93%

17.90%

China

AA-

Aa3

11.23%

14.34%

South Korea

A

Aa2

7.81%

3.94%

Others

1.04%

3.77% 1

Southeast Asia

13.61%

17.05%

Singapore

AAA

Aaa

5.87%

7.72%

Indonesia

BB+

Baa3

2.07%

4.09%

Vietnam

BB-

B1

1.06%

3.47%

Others

4.61%

1.77% 2

South Asia

14.33%

15.60%

India

BBB-

Baa2

11.43%

13.83%

Sri Lanka

B+

B3

0.65%

1.51%

Others

2.26%

0.26% 3

Middle East

11.79%

8.86%

United Arab Emirates

Aa2

7.31%

7.49%

Qatar

AA

Aa2

2.52%

0.56%

Others

1.96%

0.81% 4

UK/Europe

9.24%

7.07%

UK

AAA

Aaa

2.75%

1.46%

Europe

6.49%

5.61% 5

Americas

8.00%

2.80% 6

Africa

8.01%

6.46% 7

Australia

AAA

Aaa

1.01%

2.22%

6.46% 7 Australia AAA Aaa 1.01% 2.22% Reference Entity Geographical Distribution (by Notional) WB

Reference Entity Geographical Distribution (by Notional)

WB Loan Portfolio Indicative Portfolio 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
WB Loan Portfolio
Indicative Portfolio
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Notes:

1.

Refers to Taiwan and Japan

2.

Refers to Malaysia, Philippines, Thailand and Cambodia

3.

Refers to Bangladesh

4.

Refers to Jordan, Oman and Saudi Arabia

5.

Refers to Finland, Russia, Germany, Turkey, Switzerland and Netherlands

6.

Refers to United States of America, Brazil and Argentina

7.

Refers to South Africa, Nigeria, Kenya, Uganda, Botswana, Cameroon, Ghana, Mauritius and Morocco.

12

Alignment of Interest

Alignment of Interest Amount referenced in [•] CLO Indicative Portfolio Total credit exposure in obligations
Amount referenced in [•] CLO Indicative Portfolio Total credit exposure in obligations referenced Total credit
Amount referenced in [•] CLO
Indicative Portfolio
Total credit exposure in
obligations referenced
Total credit exposure to
borrowers referenced
Total credit exposure to groups
referenced
US$ [1.0] billion
(i.e. including remaining
obligation exposures not
referenced)
(i.e. including other exposures to
the same borrowers)
(i.e. including exposures to the
other borrowers in the same client
groups)
US$ [9.2] billion
US$ [6.5] billion
US$ [21.0] billion
SCB continues to have significant credit exposure to the obligations and borrowers referenced in [•] CLO

SCB retains approximately: retains approximately:

[85%] of the remaining exposures in obligations referenced

[89%] of all exposures extended by SCB to the borrowers referenced

[95%] of all exposures extended by SCB to other borrowers under the same client groups

to the borrowers referenced  [95%] of all exposures extended by SCB to other borrowers under

13

Indicative Replenishment Conditions

Indicative Replenishment Conditions Eligibility Criteria / Replenishment Conditions Indicative Portfolio Maximum
Eligibility Criteria / Replenishment Conditions Indicative Portfolio

Eligibility Criteria / Replenishment Conditions

Indicative Portfolio

Maximum Portfolio Notional Amount:

USD [1.0] billion

USD [1.0] billion

Max Portfolio Weighted Average Life (WAL) (years):

[1.5]

[1.0]

WAL for Reference Entities rated CG 9A or lower (years):

[0.75]

[0.72]

Max Aggregate Reference Entity Exposure:

[40.0]% (CG 7A or lower)

[34.6]%

[20.0]% (CG 8A or lower)

[18.8]%

[6.0]% (CG 9A or lower)

[5.0]%

Latest Reference Obligation Due Date:

[• 2015]

[31 Dec 2014]

Max S&P Industry Groups:

[15.0]%

[10.3]% (Building & Development)

Max 3 largest S&P Industry Exposure:

[35.0]%

[30.0]%

Max Single Country Exposure (by notional)*:

[35.0]% (A+/A1 or higher)

[20.0]% (A/A2 to A-/A3)

[17.9]% (Hong Kong)

[3.9]% (South Korea)

[10.0]% (BBB+/Baa1 to BB/Ba2)

[4.1]% (Indonesia)

[5.0]% (BB-/Ba3 or lower)

[3.5]% (Vietnam)

Except for - India [15.0]%

[13.8]% (India)

Replenishment Stop Trigger

Cumulative defaulted notional amount** exceeds [5]% of the Initial Portfolio Notional Amount

For Initial Portfolio and on each Replenishment:

Concentration caps for each Reference Entity Group are placed at 1.0% of Initial Portfolio Notional Amount and 0.6% for assets rated CG8A or below

Each Reference Entity has a credit grade of [9B] or higher

No defaulted entities or entities on Early Alert are eligible for reference

Reference Obligation Due Date should not be later than the Scheduled Termination Date

Country of domicile must be a Qualifying Country which has a minimum Moody’s foreign currency rating of [B3] or a minimum S&P foreign currency Rating of [B-]

of [B3] or a minimum S&P foreign currency Rating of [B-] * Based on S&P and

* Based on S&P and Moody’s foreign currency ratings ** Including notional amounts of all Defaulted and Liquidated Reference Obligations

14

Potential Returns - 3mLibor* + [14%] Margin

Potential Returns - 3mLibor* + [14%] Margin Internal Rate of Return based on hypothetical scenario 18%

Internal Rate of Return based on hypothetical scenario

18% IRR 15.4 % 12%  Annualised Start V default rate  Assumed recovery rate
18%
IRR 15.4 %
12%
 Annualised Start V default rate
 Assumed recovery rate 40%
6%
Recovery Rate
30.00%
40.00%
50.00%
0%
0.0%
0.5%
1.0%
1.5%
2.0%
IRR

Constant Annual Default Rate (CADR)

Main Assumptions

Typical pool with average CG – [6B]

Scheduled Maturity – [3.5] years

Replenishment Stop Trigger – [5]% (Cumulative Default)

Margin – [14]% based on Outstanding Principal Balance of the Mezzanine tranche **

Attachment point – [1]%

Detachment point – [8]%

Constant Annual Default Rate (CADR)

Start Transactions Default Experience

2008 2009

2010

2011 (YTD)

Issuance Date

Maturity Date

Annualised Default Rate

Start III

0.005%

0.020%

0.050%

N/A

Dec-06

Jun-10

0.0214%

Start IV

0.000%

0.071%

0.000%

N/A

Jun-07

Dec-10

0.0203%

Start V

0.025%

0.124%

0.000%

0.000%

Jul-08

Jun-12

0.0484%

Start VI

N/A

N/A

0.000%

0.000%

Nov-10

Apr-14

0.0000%

Appendices: 1. Standard Chartered Bank 16

Appendices:

1. Standard Chartered Bank

Appendices: 1. Standard Chartered Bank 16

16

Standard Chartered Bank

Standard Chartered Bank Standard Chartered Bank – Here for Good Leading the Way in Asia, Africa

Standard Chartered Bank – Here for Good Leading the Way in Asia, Africa and the Middle East

Shanghai Shanghai Bahrain – 1920 Bahrain – 1920 – – 1858 1858 Mumbai –1858 Mumbai
Shanghai
Shanghai
Bahrain – 1920
Bahrain – 1920
– –
1858
1858
Mumbai –1858
Mumbai –1858
Hong Kong
Hong Kong
– –
1859
1859
Singapore – 1859
Singapore – 1859
South Africa – 1862
South Africa – 1862

With a banking heritage spanning more than 150 years, SCB has an extensive global reach and a well-established position in some of the world’s most dynamic markets

Over two-thirds of operating income and profits are derived from Asia, Africa and the Middle East

Over 80,000 employees representing over 125 nationalities located in more than 1,700 branches and outlets across 70 countries

Consistently ranked in the top 25 FTSE-100 companies and one of the 25 largest banks globally by market capitalisation – US$51 billion (as at 5 Sep 2011).

SCB Public Ratings

Standard & Poor’s

Moody's

Fitch

Long Term

A+

A1

AA-

Short Term

A-1

P-1

F1+

Outlook

Stable

Stable

Stable

Regulated by the Financial Services Authority (FSA) in the United Kingdom

F1+ Outlook Stable Stable Stable Regulated by the Financial Services Authority (FSA) in the United Kingdom

17

Standard Chartered Bank

Standard Chartered Bank Strong Positioning in Market Turmoil Consistent Profit Growth  9 t h consecutive

Strong Positioning in Market Turmoil Consistent Profit Growth

9 th consecutive year of record income and profits (based on H1 2011 results)

Profit before Tax (US$ million)

5,000 H1 H2 4,000 3,000 2,000 1,000 - 2003 2004 2005 2006 2007 2008 2009
5,000
H1
H2
4,000
3,000
2,000
1,000
-
2003
2004
2005
2006
2007
2008
2009
2010
2011
US$ Millions

Balance Sheet Discipline

Strong capital position and robust loan-to-deposit ratios

Reinforced a liquid and prudently managed balance sheet

Balance Sheet

       

Ratios

2008 year end

2009 year end

2010 year end

2011 half year

Tier 1 capital

9.9%

11.5%

14.0%

13.9%

Total capital

15.6%

16.5%

18.4%

17.9%

Customer LTD%

74.8%

78.6%

77.9%

78.1%

Liquid Assets%

23.1%

26.2%

26.6%

26.5%

78.1% Liquid Assets% 23.1% 26.2% 26.6% 26.5% H1 2011 Performance Highlights  Delivered strong broad

H1 2011 Performance Highlights

Delivered strong broad based performance during the first six months of

2011:

Profit before taxation was up 17% to $3.64 billion on 1H 2010;

Income increased 11% to $8.76 billion;

Normalised earnings per share were up 4.1% to 105.2 cents.

Continued low levels of impairment, driven by a disciplined and proactive approach to risk

A highly liquid and a well diversified balance sheet with limited exposure to problem asset classes and continued momentum

Capital ratios continue to position the Group well to meet evolving regulatory requirements whilst leveraging the growth opportunities in our markets

SCB vs. FTSE 350 Banks Index

30% 0% Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 -30% -60% -90% Standard
30%
0%
Aug-07
Feb-08
Aug-08
Feb-09
Aug-09
Feb-10
Aug-10
Feb-11
Aug-11
-30%
-60%
-90%
Standard Chartered London Share Price
FTSE 350 Bank Index
Share Price change from Aug 2007 to Aug 2011

18

Appendices: 2. Investment Opportunity 19

Appendices:

2. Investment Opportunity

Appendices: 2. Investment Opportunity 19

19

Investment Opportunity

Investment Opportunity Transaction Objectives  Risk sharing on a loan portfolio from SCB’s balance sheet 

Transaction Objectives

Risk sharing on a loan portfolio from SCB’s balance sheet

Assist in providing capacity to facilitate SCB’s client-focused growth strategy globally, with focus on Asia

Meet regulatory conditions applied under Basel II regime (e.g. Significant Risk Transfer)

Typical Transaction Structureunder Basel II regime (e.g. Significant Risk Transfer) Reference Portfolio Standard Chartered Bank Synthetic

Reference Portfolio Standard Chartered Bank
Reference
Portfolio
Standard
Chartered
Bank

Synthetic Swap

Credit Protection

Standard Chartered Bank Synthetic Swap Credit Protection Fixed Rate Payment Special Purpose Vehicle* Proceeds
Standard Chartered Bank Synthetic Swap Credit Protection Fixed Rate Payment Special Purpose Vehicle* Proceeds

Fixed Rate Payment

Special Purpose Vehicle*

Proceeds

Fixed Rate Payment Special Purpose Vehicle* Proceeds Interest Collateral Account (SCB) * Funded swaps and other

Interest

Collateral Account (SCB)

* Funded swaps and other structures without the need of special purpose vehicles may be considered

the need of special purpose vehicles may be considered Retained Senior Issuance Tranche ([92]%) Proceeds
Retained Senior Issuance Tranche ([92]%) Proceeds Notes Coupon
Retained
Senior
Issuance
Tranche
([92]%)
Proceeds
Notes
Coupon

Retained

1st Loss

Tranche

([1]%)

Investor ([1% – 8%])

20

Investment Opportunity (cont’d)

Investment Opportunity (cont’d) Overview of Key Structural Features Features  S y n t h e

Overview of Key Structural Features

Features

Synthetic risk transfer

 S y n t h e t i c r i s k t r

Diversified portfolio of senior obligations originated by SCB

 

Loans and obligations are not originated for inclusion

No bonds, subordinated debt, CDS or short positions

 No bonds, subordinated debt, CDS or short positions

Replenishable portfolio

 Replenishable portfolio

Loss allocation is based on actual loss / recovery

 Loss allocation is based on actual loss / recovery

3 Credit Events: Bankruptcy, Failure to Pay and Restructuring

 3 Credit Events: Bankruptcy, Failure to Pay and Restructuring

Replenishment Stop Trigger forces early amortisation on reference portfolio if loss/default level is breached

 Replenishment Stop Trigger forces early amortisation on reference portfolio if loss/default level is breached

Periodical FX resets for non-US$ obligations

 Periodical FX resets for non-US$ obligations
 Periodical FX resets for non-US$ obligations Rationale  Underlying assets retained by SCB to bypass

Rationale

Underlying assets retained by SCB to bypass issues caused by multiple legal

jurisdictions and currency denominations

Transactions not meant for revenue generation or arbitrage

Transactions not meant for revenue generation or arbitrage  Short tenor of underlying assets necessitates

Short tenor of underlying assets necessitates replenishment within strict, agreed criteria

necessitates replenishment within strict, agreed criteria  Actual losses determined after completion of workout
necessitates replenishment within strict, agreed criteria  Actual losses determined after completion of workout

Actual losses determined after completion of workout process and loss calculations are verified externally

Investors benefit from SCB’s workout group’s experience

Investors benefit from SCB’s workout group’s experience  Required for Basel II compliance  To protect
Investors benefit from SCB’s workout group’s experience  Required for Basel II compliance  To protect

Required for Basel II compliance

To protect the investor by preventing the addition of new exposures if

losses/defaults exceed trigger threshold

FX risk not transferred to investors; retained by SCB

21

Appendices: 3. Client & Risk Management 22

Appendices:

3. Client & Risk Management

Appendices: 3. Client & Risk Management 22

22

Client & Risk Management

Client & Risk Management Wholesale Banking Client-Centric Strategy Levels of Client Needs Strategic Corp. finance

Wholesale Banking Client-Centric Strategy

Levels of Client Needs

Strategic

Corp. finance & advisory

Value Added

Capital markets FX & rates

Transactional

Trade finance & transaction banking

Basic Lending

Term loans, overdrafts & revolving facilities

Lending Term loans, overdrafts & revolving facilities Deepening Relationship with Clients  Deep ‘core

Deepening Relationship with Clients

Deep ‘core bank’ client relationships Provide value-added and strategic products to our key clients

Local scale and cross-border capabilities Have superior international product capability seamlessly delivered to our clients across our network Have superior international product capability seamlessly delivered to our clients across our network

Balance sheet management Remain open for business, support our clients and seize business opportunities Remain open for business, support our clients and seize business opportunities

23

Client & Risk Management

Client & Risk Management Strong Risk Management with Local Presence Relationship Management (RM)  Client facing

Strong Risk Management with Local Presence

Relationship Management (RM)

Client facing function for information collection by RMs

Multiple relationship touch-points across different products and geography

Early identification and proactive handling of deteriorating credits

Credit Management (Credit)

Credit approval authorities are determined by borrower credit grade (CG) and maximum exposure 2 contemplated

Robust credit culture supported by specialist Credit Analysts

All customers and facilities are reviewed annually at a minimum

In-Country Headcount¹ NE Asia Europe RM 937 Americas RM 135 Credit 183 RM 98 Credit
In-Country Headcount¹
NE Asia
Europe
RM
937
Americas
RM
135
Credit
183
RM
98
Credit
38
Credit
40
GSAM
45
GSAM
23
GSAM
2
Middle East
SE Asia
RM
326
RM
485
Credit
42
Credit
180
GSAM
21
GSAM
16
Global
Africa
South Asia
RM
2,583
RM
257
RM
345
Credit
676
Credit
39
Credit
154
GSAM
136
GSAM
17
GSAM
12
676 Credit 39 Credit 154 GSAM 136 GSAM 17 GSAM 12 Group Special Asset Management (GSAM)

Group Special Asset Management (GSAM)

GSAM manages and works out non-performing accounts (see page 27 for details)

works out non-performing accounts (see page 27 for details) 1. Approximate Jan 2011 headcount numbers 2.

1. Approximate Jan 2011 headcount numbers

2. Exposure is calculated based on potential Exposure at Default (EaD) x Loss Given Default (LGD) (see page 25)

24

Client & Risk Management

Client & Risk Management Credit Decision Making  Credit Grade (CG) is used by SCB as

Credit Decision Making

Credit Grade (CG) is used by SCB as a primary tool, in conjunction with the judgment of independent risk officer, for evaluating the credit risk of counterparties

Each customer is assigned a CG (mapped to a default probability) using a scorecard developed for the respective segment which takes into consideration company specific characteristics such as:

Quantitative / financial factors (e.g. financial ratios, profitability)

Qualitative factors (e.g. management, industry, country risks)

Transaction specific factors such as amount, structuring, risk mitigants are evaluated in the deal pricing calculator to determine the Dollar Loss Given Default ($LGD) for each facility

the Dollar Loss Given Default ($LGD) for each facility Credit Approval Process Business Proposition  Business

Credit Approval Process

Business Proposition

Business team submits business proposal with key credit evaluation related information

Credit Grading and Appropriateness Scorecards

Know Your Customer

and Appropriateness Scorecards  Know Your Customer Credit Approval and Oversight  Credit Approval by Credit

Credit Approval and Oversight

Credit Approval by Credit Officers based on authority levels of $LGD, which is calculated based on exposure at default and loss given default rates

Stringent oversight process on the credit approval quality

Layered Approval Authorities

Senior Credit Officer

Regional Credit Officer

Senior Regional Credit Officer

WB Chief Risk Officer (WBCRO)

Senior Group Sanction

Group Credit Committee if the $LGD is over US$2 billion

25

Client & Risk Management

Client & Risk Management Early Alert Reporting (EA)  Process to proactively detect and solve any

Early Alert Reporting (EA)

Process to proactively detect and solve any issues at a nascent stage to prevent or minimise losses



Policy in place to trigger early identification and reporting of accounts with warning signs including:

Business risk arising from industry, supplier, buyer or competition changes

Ownership of management changes

Rapidly deteriorating financial performance including liquidity strain

Delayed submission of financials or sudden/repeated changes in auditor or banks

Poor account conduct – delayed interest servicing or overdue principal repayment



Identification, reporting and proactive management of EA Accounts are prime responsibilities of all Relationship Managers and are undertaken on a continuous basis.



Effective oversight on EA Accounts is carried out by Early Alert Committee comprising

Origination & Client Coverage

Credit penultimate line

Group Special Assets Management (GSAM)

comprising  Origination & Client Coverage  Credit penultimate line  Group Special Assets Management (GSAM)
 Origination & Client Coverage  Credit penultimate line  Group Special Assets Management (GSAM) 26

26

Client & Risk Management

Client & Risk Management Group Special Assets Management Historical Default and Loss Rates  Group Special

Group Special Assets Management

Historical Default and Loss Rates

Group Special Assets Management (GSAM) manages non-performing accounts

Independent division with separate reporting lines into Group Risk without influence from origination or credit risk department

Shadows accounts with early warning signs of deterioration

Objectives of rehabilitating clients and minimising losses by:

restructure and return the management of assets to RM and CRM if rehabilitated

orderly exit which may include sale in secondary market

debt/equity swap

realisation of collateral

receivership and/or liquidation

litigation

Historical default and published loss rates demonstrate strength in our risk management

During the Asian Financial Crisis, SCB's loan portfolio (despite its Asian focus) continued to perform reasonably well

its Asian focus) continued to perform reasonably well Wholesale Banking Loan Impairment % (Net Charge* /

Wholesale Banking Loan Impairment %

(Net Charge* / Loans and advances to customers)

Year

 

%

1997

 

0.35%

1998

 

2.16%

1999

 

2.81%

2000

 

1.06%

2001

 

1.54%

2002

 

0.39%

2003

 

0.20%

2004

(

0.08%)

2005

(

0.24%)

2006

(

0.15%)

2007

 

0.03%

2008

 

0.39%

2009

 

0.88%

2010

 

0.23%

0.39% 2009   0.88% 2010   0.23% Note: Please refer to graphic on page 24 for

Note: Please refer to graphic on page 24 for GSAM headcounts * Net Charge is equivalent to the sum of ‘Specific Impairment Provisions’, ‘Recoveries’ and ‘Portfolio Impairment Provisions’

27

Default Experience

Default Experience SCB Wholesale Banking Default Experience   13-year            

SCB Wholesale Banking Default Experience

 

13-year

                         

2011

CG

Average 1

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

(H1) 2

 

1 0.07%

0.54%

0.39%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

 

2 0.05%

0.30%

0.00%

0.00%

0.00%

0.00%

0.00%

0.30%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

 

3 0.20%

0.00%

0.09%

0.08%

0.00%

0.11%

0.00%

0.00%

0.00%

0.00%

0.00%

2.05%

0.00%

0.28%

0.13%

 

4 0.15%

1.33%

0.13%

0.10%

0.05%

0.13%

0.00%

0.11%

0.00%

0.00%

0.00%

0.00%

0.00%

0.14%

0.00%

 

5 0.36%

0.48%

1.73%

1.48%

0.30%

0.00%

0.19%

0.15%

0.00%

0.00%

0.00%

0.06%

0.27%

0.04%

0.00%

 

6 0.39%

0.98%

1.56%

0.68%

0.31%

0.17%

0.15%

0.00%

0.00%

0.15%

0.45%

0.13%

0.24%

0.28%

0.00%

 

7 0.71%

1.45%

2.28%

0.34%

1.92%

0.34%

1.39%

0.18%

0.41%

0.00%

0.00%

0.32%

0.31%

0.25%

0.18%

 

8 0.68%

2.33%

1.45%

0.15%

1.16%

0.52%

0.60%

0.06%

0.45%

0.23%

0.15%

0.71%

0.60%

0.43%

0.17%

 

9 2.01%

4.21%

2.66%

4.67%

2.75%

1.03%

1.97%

0.80%

0.63%

0.99%

1.03%

1.42%

2.27%

1.66%

0.81%

 

10 2.46%

5.07%

4.71%

3.77%

4.97%

1.40%

0.82%

0.96%

0.92%

2.09%

1.34%

2.50%

2.80%

0.61%

0.40%

 

11 2.98%

5.60%

9.30%

3.83%

6.04%

2.38%

1.31%

0.91%

2.42%

2.43%

1.24%

0.91%

1.76%

0.63%

0.39%

 

12 26.59%

46.05%

57.84%

38.27%

40.48%

27.31%

16.95%

13.91%

18.42%

18.50%

11.27%

17.44%

20.55%

18.69%

8.76%

CGs are set on an entity basis as a probability of default and do not discriminate by product

Global Corporate Default Summary 3 – S&P Non-Investment Grade (Non IG)

S&P

13-year

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Average 1

Non IG

4.65%

3.72%

5.48%

6.08%

9.65%

9.27%

4.95%

2.04%

1.43%

1.12%

0.89%

3.54%

9.45%

2.80%

2.04% 1.43% 1.12% 0.89% 3.54% 9.45% 2.80% 1. Average is a simple average over the previous

1. Average is a simple average over the previous 13 years from 1998 to 2010

2. SCB wholesale Banking default experience for the first half of 2011.

3. Source: S&P 2010 Annual Global Corporate Default Study and Rating Transitions, 30 March 2011

Notes: SCB default data is based on % of individual borrowers in each CG grouping (e.g. 3 borrowers in the same reference entity group would constitute 3 defaults) and are unaudited

28

Recovery Experience

Recovery Experience Wholesale Banking Recovery Experience Recovery History by Region Total Defaulted Amount US$ million

Wholesale Banking Recovery Experience

Recovery History by Region

Total Defaulted Amount US$ million

Default Weighted Average Recovery Rate

Country / Region

Period of Default

Hong Kong

1995 – 2008

895.3

59%

China

1995 – 2008

195.7

55%

India

1995 – 2008

109.1

55%

UAE

1995 – 2008

86.7

44%

Singapore

1995 – 2008

396.6

62%

Thailand

1995 – 2008

313.1

61%

Malaysia

1995 – 2008

390.4

64%

Indonesia

1995 – 2008

261.0

52%

UK / Europe

1995 – 2008

664.6

71%

US / Americas

1995 – 2008

382.5

77%

SCB’s recovery history shows a weighted average time to recovery of 3.5 years and a median time to recovery of 3.0 years

Recovery includes all exposures of different products from Wholesale Banking clientele

of different products from Wholesale Banking clientele Note: Figures include resolved defaults only and have not

Note: Figures include resolved defaults only and have not been audited

29

CG – Rating Agency Equivalent Mapping

CG – Rating Agency Equivalent Mapping I n t e r n a l C G

Internal CG

SCB Idealised

S&P Equivalent

PD

Rating

1A

0.01%

AAA

1B

0.02%

AA+

2A

0.03%

AA

2B

0.04%

AA-

3A

0.05%

A+

3B

0.07%

A

4A

0.09%

A-

4B

0.13%

BBB+

5A

0.22%

BBB

5B

0.39%

BBB-

6A

0.51%

BB+

6B

0.67%

BB+

7A

0.89%

BB

7B

1.17%

BB

8A

1.54%

BB-

8B

2.03%

BB-

9A

2.67%

B+

9B

3.51%

B+

10A

4.62%

B

10B

6.08%

B

11A

8.01%