standard chartered plc...the minimum requirement of 10% in 2019, including pillar 1 and 2a minimum...

FINANCIAL INSTITUTIONS

CREDIT OPINION26 September 2019

Update

Analyst Contacts

Srikanth Vadlamani +65.6398.8336VP-Sr Credit [email protected]

Alessandro Roccati +44.20.7772.1603Senior Vice [email protected]

Heejin Lee +65.6311.2601Associate [email protected]

Graeme Knowd [email protected]

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

Standard Chartered PLCUpdate to credit analysis

SummaryStandard Chartered PLC’s (SCPLC) senior unsecured rating of A2 incorporates two notches ofuplift from its Adjusted Baseline Credit Assessment (BCA) of baa1 because of our AdvancedLoss Given Failure (LGF) analysis. The rating does not incorporate any uplift for externalsupport from SCPLC’s notional BCA of baa1.

SCPLC's baa1 notional BCA takes into consideration the group’s stabilized asset qualityas legacy asset-quality issues are resolved, and strong capitalization that benefits fromprofit accretion and risk-weighted asset (RWA) optimization. Profitability is improving fromrenewed revenue growth as the group is focusing on its competitive advantages.

At the same time, the BCA also reflects SCPLC's strong liquidity from the group’s substantialproportion of short-term trade finance loans and holdings of investment-grade Treasury billsand debt securities, as well as good funding because of its access to customer deposits.

The ongoing restructuring changes the legal structure of the group and does not cause anymaterial changes in the underlying group operations, including how the group is managed.SCPLC's notional BCA, which is the BCA of the group evaluated as a single consolidatedentity, is, therefore, the same as the previously published baa1 BCA of Standard CharteredBank (SCB, A1/A1 stable, baa2) before restructuring.

Exhibit 1

Rating Scorecard - Key financial ratios

2.9% 16.0%0.2%

24.4% 49.7%

0%

10%

20%

30%

40%

50%

60%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Asset Risk:Problem Loans/

Gross Loans

Capital:Tangible Common

Equity/Risk-WeightedAssets

Profitability:Net Income/

Tangible Assets

Funding Structure:Market Funds/

Tangible BankingAssets

Liquid Resources:Liquid BankingAssets/TangibleBanking Assets

Solvency Factors (LHS) Liquidity Factors (RHS)

Standard Chartered PLC (BCA: baa1) Median baa1-rated banks

So

lve

ncy F

acto

rs

Liq

uid

ity F

acto

rs

Source: Moody's Financial Metrics

http://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=PBC_1190295

https://www.moodys.com/credit-ratings/Standard-Chartered-PLC-credit-rating-714350

https://www.moodys.com/credit-ratings/Standard-Chartered-Bank-credit-rating-714325

https://www.moodys.com/credit-ratings/Standard-Chartered-Bank-credit-rating-714325

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Credit strengths

» Strong capital

» Strong liquidity and deposit funding

Credit challenges

» Susceptibility of asset quality to any weakening in the operating environment of the bank's markets

» Weak profitability because of challenges in revenue generation

OutlookSCPLC's ratings carry a stable outlook, reflecting our view that the bank's credit fundamentals will remain robust over the next 12-18months.

Factors that could lead to an upgradeSCPLC's BCA could be upgraded if the bank's profitability were to significantly increase from the current levels. SCPLC's instrumentratings could be upgraded if its BCA were raised.

Factors that could lead to a downgradeSCPLC's BCA could be downgraded if the bank's asset quality were to materially deteriorate. The BCA could also be lowered if thebank's profitability were to fall to the 2016 levels, without the prospect of a swift recovery.

A downgrade of SCPLC's BCA would likely affect all the ratings assigned to the bank. In addition, SCPLC's deposit and senior debtratings could be downgraded if the volume of junior instruments outstanding were to decrease significantly, thereby reducing itsprotection from losses.

Key indicators

Exhibit 2

Standard Chartered PLC (Consolidated Financials) [1]06-192 12-182 12-172 12-162 12-152 CAGR/Avg.3

Total Assets (USD Billion) 657.7 636.9 615.0 582.4 578.0 3.84

Tangible Common Equity (USD Billion) 43.2 43.2 44.9 41.9 41.4 1.24

Problem Loans / Gross Loans (%) 2.3 2.6 3.1 3.7 4.8 3.35

Tangible Common Equity / Risk Weighted Assets (%) 16.0 16.7 16.0 15.6 13.7 15.66

Problem Loans / (Tangible Common Equity + Loan Loss Reserve) (%) 13.0 14.4 17.6 20.1 26.3 18.35

Net Interest Margin (%) 1.5 1.5 1.4 1.4 1.6 1.55

PPI / Average RWA (%) 1.9 1.5 1.4 1.2 1.3 1.56

Net Income / Tangible Assets (%) 0.4 0.2 0.3 0.0 -0.3 0.15

Cost / Income Ratio (%) 66.8 73.0 73.0 74.6 72.9 72.15

Market Funds / Tangible Banking Assets (%) 24.9 24.4 25.2 21.0 24.0 23.95

Liquid Banking Assets / Tangible Banking Assets (%) 48.7 49.7 44.3 45.5 45.0 46.65

Gross Loans / Due to Customers (%) 66.7 66.9 77.7 69.7 75.3 71.35

[1]All figures and ratios are adjusted using Moody's standard adjustments. [2]Basel III - fully-loaded or transitional phase-in; IFRS. [3]May include rounding differences due to scaleof reported amounts. [4]Compound Annual Growth Rate (%) based on time period presented for the latest accounting regime. [5]Simple average of periods presented for the latestaccounting regime. [6]Simple average of Basel III periods presented.Source: Moody's Investors Service; Company Filings

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 26 September 2019 Standard Chartered PLC: Update to credit analysis


ProfileStandard Chartered PLC (SCPLC) is the listed entity of the Standard Chartered Group.

The group has operations spanning Asia, Africa and the Middle East, and across business lines that include corporate and institutionalbanking, retail banking, commercial banking and private banking, among others.

Corporate and institutional banking, and retail banking are the group's largest revenue drivers, contributing 47% (2018: 46%) and34% (2018: 34%) of the group's total revenue, respectively, in the six months ended 30 June 2019. In terms of geography, the largestcontributors to revenue were the Greater China and North Asia, and ASEAN and South Asia regions, with contributions of 40% (2018:41%) and 28% (2018: 27%), respectively, during the same period.

Exhibit 3

Revenue split by business segmentSix months ended 30 June 2019

Exhibit 4

Revenue split by geographySix months ended 30 June 2019

Corporate & Institutional Banking47%

Retail Banking34%

Commercial Banking9%

Private Banking4%

Central & other items6%

Source: Bank data

Greater China& North Asia40%

ASEAN & South Asia28%

Africa & Middle East17%

Europe & Americas10%

Central & other items5%

Source: Bank data

Detailed credit considerationsAsset quality has stabilizedAfter deteriorating in 2015, the group's asset quality has improved as the group proactively recognized legacy credit issues whilesignificantly de-risking its loan book over the last three years. Its nonperforming loan ratio1 steadily declined to 2.3% as of the end ofJune 2019 from 2.6% as of year-end 2018 and 3.1% as of year-end 2017.

Since 2015, the group has succeeded in significantly de-risking its loan book. The group substantially reduced its top borrowerconcentration and commodities exposure, following its tightened risk underwriting. Similarly, the share of lower-credit-grade loans inthe group's loan portfolio also declined to 26% as of the end of June 2019 from 37% in 2016. The bank plans to grow client assets by4% annually till 2021 by focusing on developing its corporate network and retail business.

As of the end of June 2019, gross customer loans and advances2 accounted for only 38% of SCPLC's tangible assets, after excludinggoodwill and intangible assets. The group has substantial exposures (mostly under one year) to financial institutions, reflecting its trade,interbank placements and large holdings of liquid assets.

The quality of SCPLC's non-loan assets is good. These assets consist mainly of cash and balances with central banks, from otherfinancial institutions and securities investments. The group's securities investments portfolio largely consists of Treasury bills andgovernment debt securities, of which 72% were either rated Aaa or were in the Aa category in 2018.

At the same time, our assessment of asset risk also factors in the risks from the material financial markets-related business of thegroup.



Capital to remain a key strengthSCPLC's reported Common Equity Tier 1 (CET1) ratio declined to 13.5% as of the end of June 2019 from 14.2% a year earlier, becausethe ongoing share buyback program, regulatory provisions and tax related to corporate restructuring largely offset profit accretion.

Despite the moderate decline, the group's CET1 ratio remains within its 13%-14% management target for 2019-21, which is well abovethe minimum requirement of 10% in 2019, including Pillar 1 and 2A minimum requirements and capital buffers.

In addition, despite SCPLC's assessment of the final Basel III reform implementation in 2022 suggesting a potential increase in RWAby 5%-10% from its 2018 level, the group is on track to maintain its CET1 ratio within its medium-term target of 13%-14% even afterfactoring in the estimated increase in RWA.

The group paid a dividend of 21 cents per share for 2018, and announced an interim dividend of 7 cents per share in Q2 2019.Nevertheless, we expect its capital to remain a key credit strength as the group continues to manage capital through RWA optimizationinitiatives and profit accretion.

SCPLC is well positioned to meet other capital requirements. As of the end of June 2019, the group reported a 5.3% leverage ratio(2018: 5.6%), which is above the current minimum requirement of 3.7%.

Profitability, although improving, will continue to remain a key credit weaknessWe expect SCPLC's profitability to pick up from the very low levels recorded in 2015 and 2016 as the bank plans to renew revenuegrowth by focusing on its competitive advantages. SCPLC's extensive presence across key emerging markets in Asia, the MiddleEast and Africa is a unique value proposition to large multinational companies and represents a source of sustainable competitiveadvantages. Similarly, its retail operations in Hong Kong, followed by Singapore, are very well-entrenched and highly profitablefranchises.

However, the share of these businesses is not too high, with the corporate network business accounting for 27% of RWA, and thepriority and other wealth-related retail businesses accounting for another 7% of RWA. In 2018, these two businesses contributed 32%and 21%, respectively, of SCPLC's overall revenue. While the quality of revenue will benefit from this strategic focus on competitiveadvantages as the bank's corporate network income continues to grow, the overall revenue growth outlook will remain limited.

Further improvement in SCPLC's profitability will depend on the bank achieving further cost efficiencies and maintaining a verylow level of credit costs. The bank is targeting to keep the growth rate of operating costs below the inflation rate, while building asustainable level of credit costs of around 40 basis points (bps). SCPLC's annualized credit costs as a percentage of gross loans stoodat 19 bps in H1 2019 and 28 bps in 2018. Although we expect credit costs to be structurally lower compared with the levels seen over2013-16, keeping credit costs at such level may be difficult, given the bank's exposure to underlying risks from its emerging marketoperations amid worsening macroeconomic conditions.

Strong liquidity and deposit fundingThe strength of SCPLC's international network has attracted cross-border trade and enhanced the loyalty of its target customers.Because of its strong focus on trade finance, a substantial portion of the group's loans are short term and may be liquidated withinmonths. This flexibility further enhances the group's already-strong liquidity.

As of the end of June 2019, 57% of the group's total assets were due to mature within one year, out of which 73% were due to maturewithin three months.

The group holds a large amount of liquid assets in the form of investment-grade Treasury bills and debt investment securities.Moreover, its excess liquidity is mainly managed in a few key money centers, instead of emerging markets where cross-border fundtransfers may not always be reliable.

SCPLC's funding position is strong. Customer deposits are its primary source of funding, comprising 67% of its total liabilities as of theend of June 2019. As of the same date, the group's gross advances/deposits3 was 64%, and current and savings deposits constituted54% of total deposits. Such deposits are often sticky.



The group's second-largest source of funding is debt issuance, with senior and subordinated debt accounting for 11% of its totalliabilities as of the end of June 2019.

Macro Profile of Strong in line with loan distributionSCPLC's Macro Profile of Strong is based on the group's geographic loan distribution. There is a significant difference between thegeographic spread of the group's assets and the geographic spread of RWA.

A significant proportion of the assets held in geographies such as the UK and the Americas are high-quality liquid assets that carry low-risk weights. This dynamic results in a difference in the asset distribution and RWA distribution. RWA distribution is a better proxy forrisk distribution and is broadly mirrored in SCPLC’s loan distribution.

Environment, social and governance considerationsIn line with our general view for the banking sector, SCPLC has a low exposure to environmental risks. See our Environmental risk heatmap for further information. SCPLC's exposure to commodity loans4 was around 10% of its gross loans as of the end of June 2019. Tomitigate potential carbon transition risks, the group has reduced risk appetite to carbon-intensive sectors via restrictions on new coalmining clients and projects, as well as halting trading of coal-based derivative products.

We consider SCPLC to face moderate social risks. The most relevant social risks for banks arise from the way they interact with theircustomers. Social risks are particularly high in the area of data security and customer privacy which is partly mitigated by sizeabletechnology investments and banks’ long track record of handling sensitive client data. Fines and reputational damage due to productmisselling or other types of misconduct is a further social risk. Societal trends are also relevant in a number of areas, such as shiftingcustomer preferences towards digital banking services increasing information technology cost, aging population concerns in severalcountries impacting demand for financial services or socially driven policy agendas that may translate into regulation that affectsbanks’ revenue base.

Governance is highly relevant for SCPLC, as it is to all players in the banking industry. SCPLC has been affected by a range ofgovernance shortfalls, which revealed the lapse of anti-money laundering controls and violations of international sanctions that tookplace before 2012. These governance shortcomings led to legal investigations by the US and the UK authorities for financial crime-related activities and subsequent legal settlements amounting to $1.1 billion in Q2 2019, which impacted the bank's profitability. Thatsaid, these are largely legacy issues, and the bank has taken significant measures, including large investments in systems, to improveinternal controls over the past five years, as recognized by various regulators.

Support and structural considerationsLoss Given Failure (LGF) analysisSCPLC is subject to the European Union's directive on bank recovery and resolution, which we consider an operational resolutionregime.

We assume a residual tangible common equity of 3% and post-failure losses of 8% of tangible banking assets, a 25% runoff in juniorwholesale deposits and a 5% runoff in preferred deposits. We assign a probability of 25% to deposits in preference to senior unsecureddebt.

The balance sheet at failure, which forms the basis for our Advanced LGF analysis, includes the combined balance sheet of SCPLC andSCB. At the same time, we exclude deposits and assets owned by the group's overseas subsidiaries, given the fact that they lie outsidethe scope of the UK authorities.

SCPLC's instrument ratings are based on the group's forecast liability structure as of year-end 2021 and are consequently notched offthe group's notional BCA.

The large volume of junior debt instruments that could be bailed in during resolution to the benefit of senior creditors at SCPLC, aswell as the large volume of senior unsecured debt at SCPLC itself, reduces the expected loss for these creditors. At the same time, theA2 rating of SCPLC's senior unsecured debt assumes that a portion of the loss-absorbing debt at the holding company level could bedownstreamed to support SCB’s subsidiaries, thus reducing the buffers available to absorb the losses at SCB.


https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1135665


SCPLC's Baa2 subordinated debt rating reflects our Advanced LGF analysis, which indicates a moderate loss given failure.

SCPLC's Baa3(hyb) junior subordinated debt ratings reflect (1) our Advanced LGF analysis, which indicates a high loss given failure; and(2) an additional notching to capture the risk of differential probabilities of default across different instruments.

SCPLC's Ba1(hyb) rating for its additional Tier 1 capital securities reflects the group's high CET1/RWA of 13.5% as of the end of June2019. These instruments are now rated at the non-viability cap of SCB's Adjusted BCA minus three notches. Our rating on high-triggercapital securities is based on the likelihood of the issuer's capital ratio reaching the conversion trigger, and the probability of a bankwidefailure and loss severity.

Government support considerationsSCPLC's ratings are based solely on its notional BCA and our LGF analysis. These ratings do not include any uplift for external support.

The current policy direction in the UK clearly suggests that the Government of United Kingdom (Aa2 stable) is unlikely to provideextraordinary support to banks in times of need. Moreover, aside from its headquarters in the UK, the group does not operate amaterial retail business in the country, thereby making it even less likely that the government would extend support to the group.

Although SCPLC does operate in other jurisdictions with more supportive regulatory approaches, we would expect any supportprovided to be ring-fenced to the group's local operations in those jurisdictions. Consequently, although we include market-specificsystemic support in the ratings of a number of SCPLC's subsidiaries and affiliates, such support is not taken into account in rating theUK-incorporated SCPLC.


https://www.moodys.com/credit-ratings/United-Kingdom-Government-of-credit-rating-788250


Methodology and scorecardAbout Moody’s Bank ScorecardOur scorecard is designed to capture, express and explain in summary form our Rating Committee's judgment. When read inconjunction with our research, a fulsome presentation of our judgment is expressed. As a result, the output of our scorecardmay materially differ from that suggested by raw data alone (though it has been calibrated to avoid the frequent need for strongdivergence). The scorecard output and the individual scores are discussed in rating committees and may be adjusted up or down toreflect conditions specific to each rated entity.

Rating methodology and scorecard factors

Exhibit 5

Standard Chartered PLCMacro FactorsWeighted Macro Profile Strong 100%

Factor HistoricRatio

InitialScore

ExpectedTrend

Assigned Score Key driver #1 Key driver #2

SolvencyAsset RiskProblem Loans / Gross Loans 2.9% a3 ←→ baa2 Long-run loss

performanceMarket risk

CapitalTangible Common Equity / Risk Weighted Assets(Basel III - fully loaded)

16.0% a1 ←→ aa3 Capital retention Expected trend

ProfitabilityNet Income / Tangible Assets 0.2% b1 ↑ ba1 Expected trend Return on assets

Combined Solvency Score baa1 baa1LiquidityFunding StructureMarket Funds / Tangible Banking Assets 24.4% baa2 ←→ baa3 Deposit quality Term structure

Liquid ResourcesLiquid Banking Assets / Tangible Banking Assets 49.7% a1 ←→ a1 Stock of liquid assets Quality of liquid assets

Combined Liquidity Score a3 baa1Financial Profile baa1Qualitative Adjustments Adjustment

Business Diversification 0Opacity and Complexity 0Corporate Behavior 0

Total Qualitative Adjustments 0Sovereign or Affiliate constraint Aa2Scorecard Calculated BCA range a3 - baa2Assigned BCA baa1Affiliate Support notching 0Adjusted BCA baa1

Balance Sheet in-scope(USD Million)

% in-scope at-failure(USD Million)

% at-failure

- - - -- - - -- - - -- - - -- - - -- - - -

Total Tangible Banking Assets - - - -



De Jure waterfall De Facto waterfall NotchingDebt ClassInstrumentvolume +

subordination

Sub-ordination

Instrumentvolume +

subordination

Sub-ordination

De Jure De FactoLGF

NotchingGuidance

vs.Adjusted

BCA

AssignedLGF

notching

AdditionalNotching

PreliminaryRating

Assessment

Senior unsecured holding company debt - - - - - - - 2 0 a2Dated subordinated holding companydebt

- - - - - - - -1 0 baa2

Junior subordinated holding companydebt

- - - - - - - -1 -1 baa3

Holding company non-cumulativepreference shares

- - - - - - - -1 -2 ba1

Instrument Class Loss GivenFailure notching

Additionalnotching

Preliminary RatingAssessment

GovernmentSupport notching

Local CurrencyRating

ForeignCurrency

RatingSenior unsecured holding company debt 2 0 a2 0 A2 A2Dated subordinated holding companydebt

-1 0 baa2 0 Baa2 Baa2

Junior subordinated holding companydebt

-1 -1 baa3 0 Baa3 (hyb) Baa3 (hyb)

Holding company non-cumulativepreference shares

-1 -2 ba1 0 Ba1 (hyb) Ba1 (hyb)

[1]Where dashes are shown for a particular factor (or sub-factor), the score is based on non-public information.Source: Moody’s Investors Service



Ratings

Exhibit 6Category Moody's RatingSTANDARD CHARTERED PLC

Outlook StableBaseline Credit Assessment baa1Adjusted Baseline Credit Assessment baa1Senior Unsecured A2Subordinate Baa2Jr Subordinate Baa3 (hyb)Pref. Stock Non-cumulative Ba1 (hyb)

STANDARD CHARTERED BANK

Outlook StableCounterparty Risk Rating A1/P-1Bank Deposits A1/P-1Baseline Credit Assessment baa2Adjusted Baseline Credit Assessment baa1Counterparty Risk Assessment A1(cr)/P-1(cr)Senior Unsecured A1Subordinate Baa2Jr Subordinate -Dom Curr Baa3 (hyb)Other Short Term (P)P-1

STANDARD CHARTERED BANK (SINGAPORE)LIMITED

Outlook StableCounterparty Risk Rating Aa3/P-1Bank Deposits A1/P-1Baseline Credit Assessment a3Adjusted Baseline Credit Assessment a3Counterparty Risk Assessment Aa3(cr)/P-1(cr)Issuer Rating A1Commercial Paper P-1

Source: Moody's Investors Service

Endnotes1 Gross loans include reverse repurchase agreements with customers

2 Gross customer loans and advances include reverse repurchase agreements

3 Deposits exclude repurchase agreements and other similar secured borrowing

4 Commodity loans consist of exposures to energy and mining and quarrying sectors, as disclosed in its half year 2019 results presentation (page 54)



© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDITRISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THERELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITYMAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEEMOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’SRATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDITRATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAYALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDITRATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONSARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONSCOMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONSWITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDERCONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FORRETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACTYOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW,AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTEDOR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANYPERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSESAND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as wellas other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information ituses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However,MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for anyindirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use anysuch information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses ordamages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of aparticular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatorylosses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for theavoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents,representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDITRATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually atwww.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s InvestorsService Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intendedto be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly orindirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as tothe creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it feesranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1190295


http://www.moodys.com

standard chartered plc...the minimum requirement of 10% in 2019, including pillar 1 and 2a minimum...

Documents