Jahangirnagar University
Department of Accounting and Information Systems
Term paper
on
Financial Statement Analysis of Chartered Standard Bank PLC
Course Name: Corporate Finance
Course Code:3202
Submitted to
Dr. Sheikh Abu Taher
Professor
Department of Finance & Banking
Jahangirnagar University
Submitted by
Md.Shakil Bhuiyan
ID: 1812
11th Batch
Letter of Transmittal
March 09, 2025
Dr. Sheikh Abu Taher
Professor
Department of Finance and Banking
Jahangirnagar University
Savar, Dhaka-1342
Subject: Submission of the required report for the BBA program.
Dear Sir,
As part of Corporate Finance(3202), I am pleased to present my report on "Financial Statement
Analysis on Standard Chartered Bank PLC" which is a partial requirement for fulfilling my BBA
program. I wrote the whole report based on Standard Bank's financial statements from 2019 to
2023. It's a great pleasure to inform you that I have tried to make my paper as comprehensive as
possible. I want to thank you for taking the time to read my term paper.
I am grateful to you for giving me such an opportunity, as well as the guidelines that you have
invested in me, and I appreciate this work. I hope that you will cordially receive my report.
Kind Regards,
Md.Shakil Bhuiyan
ID: 1812
Session: 2020-21
Department of Accounting and Information Systems
Jahangirnagar University
2|Page
Table of Contents
1. Executive Summary------------------------------------------------------------------------------4
2. Introduction -------------------------------------------------------------------------------------- 5
3. Theoretical Framework ------------------------------------------------------------------------ 6
4. Financial Statement Analysis on Standard Chartered Bank PLC ---------------------8
Ratio Analysis -------------------------------------------------------------------------------------- 8
i)Liquidity Ratio
Current Ratio -----------------------------------------------------------------------------------8
Net Working Capital-------------------------------------------------------------------------- 8
Comment about the Overall Liquidity -------------------------------------------------------9
ii)Asset Management (Turnover) Ratio/Activity Ratio
Total Asset Turnover -------------------------------------------------------------------------9
Fixed Asset Turnover ------------------------------------------------------------------------ 10
Comment about the Overall Asset Utilization -------------------------------------------- 10
iii)Capital Structure Ratio
Debt to Equity Ratio ------------------------------------------------------------------------- 11
Equity Multiplier Ratio --------------------------------------------------------------------- 11
Comment about the Overall Capital Structure -------------------------------------------- 12
iv)Profitability Ratio
Net Profit Margin ------------------------------------------------------------------------------12
Return on Assets (ROA) ----------------------------------------------------------------------13
Return on Equity (ROE) ---------------------------------------------------------------------- 13
Return on Investments (ROI) -----------------------------------------------------------------14
Earnings per Share (EPS) --------------------------------------------------------------------- 14
Comment about the Overall Profitability -------------------------------------------------- 15
DuPont Analysis ------------------------------------------------------------------------------------ 15
Horizontal Analysis ---------------------------------------------------------------------------------16
5. Conclusion -------------------------------------------------------------------------------------------19
6.Appendix and References -------------------------------------------------------------------------20
3|Page
Executive Summary
The document concisely summarizes Standard Chartered Bank PLC's financial performance,
financial position, and sources and uses of cash flow from 2019 to 2023. The balance sheets and
income statements of Standard Chartered Bank PLC were used to create a horizontal analysis,
ratio analysis, and DuPont analysis. The financial statements and horizontal balance sheets are
created using a specific method.
There are five chapters in this report. The first chapter of this report has covered the
introduction. The first chapter covers the study's introduction mentioning the bank’s operation
sectors, the products and services of the bank, and its roles in Bangladesh and the international
sector specifically in Asia, Africa, and the Middle East.
Chapter three contains the study's theoretical basis. The capital adequacy, liquidity, profitability,
capital structure, asset usage, and market ratios were all assessed in the finished study. All of the
concepts pertaining to those ratios, their computation formulas, and the procedures for both
vertical and horizontal analysis were covered in this chapter. The use of financial performance,
measuring methods, and financial instruments are also disclosed here.
The term paper's fourth chapter, which includes a financial performance review, is the most
important section. Trend, common size, growth, and ratio analysis ( liquidity, asset usage,
profitability, and capital structure) are among its functions. Here, DuPont analysis is also used to
illustrate how three ratios affect return on equity (ROE).
The analysis yielded a very excellent result. also provided some conclusions from the analysis in
chapter four. Some recommendations aim to improve Standard Bank PLC's financial stability
and performance. Additionally, the final chapter contains the overall conclusions.
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Introduction
The banking industry is a vital component of every country's economy, acting as a key
enabler of financial intermediation and economic expansion. A portion of the population in
Bangladesh is looking for moral financial solutions. With its 1905 incorporation, Standard
Chartered Bank is a British multinational bank with a 170-year history in Asia, Africa, and
the Middle East, specializing in cross-border banking and offering services like corporate and
investment banking, wealth management, and retail banking.
Through creative credit and deposit programs, Standard Chartered Bank offers a wide range
of financial services, including retail banking with current and savings accounts, credit cards,
and personal loans. They also provide comprehensive wealth management solutions,
investment services, and foreign exchange transactions. For businesses, they offer corporate
and investment banking, trade finance, and treasury services, with a strong focus on
facilitating international trade and investment across Asia, Africa, and the Middle East.
Standard Chartered Bank PLC's financial performance from 2019 to 2023 is thoroughly
examined in this research, which evaluates changes in the company's balance sheet and profit
and loss accounts using horizontal. The bank's growth trajectory, operating efficiency, and
capital management techniques throughout the examined period are highlighted by the
financial measures.
By providing a critical evaluation of Standard Chartered Bank PLC's strategic efforts and
market positioning, this study seeks to provide stakeholders with a thorough knowledge of
the company's financial performance. The research carefully examines the bank's advantages
and disadvantages in negotiating a banking environment that is becoming more and more
competitive. Future initiatives to improve operational resilience, profitability, and overall
market reputation will be greatly aided by the insights gained. The research will also explore
the wider ramifications of its success in Bangladesh's Islamic banking industry, addressing
possibilities, problems, and potential paths forward.
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Theoretical Framework
Financial Statement Analysis
The process of examining a business's financial statements in order to make decisions is known
as financial statement analysis. It is used by external stakeholders to assess financial
performance, commercial value, and the general health of a firm. It is used by internal
stakeholders as a financial management monitoring tool.
Ratio Analysis:
i)Liquidity Ratio:
Current Ratio
One liquidity measurement that assesses a company's capacity to settle short-term debt or
bills that are due within a year is the current ratio. It explains to analysts and investors how a
business may pay down its existing debt and other payables by making the most of the assets
now shown on its balance sheet.
Current Ratio = Current Asset/Current Liabilities
Net Working Capital
The difference between a company's current assets and current liabilities is known as net
working capital. It is a crucial financial indicator that assesses a business's liquidity and shortterm debt-repayment capacity.
Net Working Capital = Total Current Assets - Total Current Liabilities
ii)Asset Management (Turnover) Ratio/Activity Ratio
Total Asset Turnover
One indicator of how well a business uses its owned resources to produce income is the
turnover ratio. The ratio shows how much money was made from each TK of firm assets by
comparing the gross revenue to the average total number of assets.
Total Asset Turnover = Total Operating Income / Average Total Asset
Fixed Asset Turnover
The fixed asset turnover ratio shows how well a business makes money off of its current fixed
assets. Operating income divided by the average balance of fixed assets yields the fixed asset
turnover ratio.
Fixed Asset Turnover = Total Operating Income / Average Fixed Asset
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3. Capital Structure Ratio
Debt to Equity Ratio
One important financial indicator that illustrates the proportion of a company's debt to its
assets is the debt-to-equity ratio. To put it another way, it indicates the proportion of a
company's funding that comes from borrowing (debt) as opposed to investor capital (equity).
Debt to Equity Ratio = Total Liabilities / Total stockholder's equity
Equity Multiplier Ratio
The company's total assets divided by the total equity held by its investors yields the equity
multiplier. A corporation with a smaller equity multiplier has less financial leverage.
Equity multiplier = Total assets / Total stockholder's equity
4. Profitability Ratio
The profitability ratio is a metric used to assess a company's performance in terms of
profitability. Simply said, profitability is the capacity to turn a profit, and profit is the amount
of money that remains after all expenses have been paid..
Net Profit Margin
The amount of net income or profit a business makes as a percentage of its sales is measured by
its net profit margin.
Net profit Margin = Net profit after Taxes / Total Operating Income.
Return on Asset (ROA)
The efficiency of a company's management in making money off of all the assets shown on
its balance sheet can be assessed by its return on assets. The greater the ROA percentage, the
more effectively a company's management is able to manage its balance sheet to produce
profits.
Return on Equity (ROA) = Net profit after Taxes / Total Assets
Return on Equity (ROE)
Return on equity (ROE) is a measure of a company's financial performance. It is calculated
by dividing net income by shareholders' equity.
Return on Equity (ROE) = Net profit after Taxes / Stockholder’s Equity
Earnings per share (EPS)
An indicator of a business's performance, earnings per share (EPS) shows how much money
has been made from each outstanding share of common stock. It is computed by dividing the
net revenue of the business by the total number of shares that are in circulation.
EPS= Net Income/ Number of shares outstanding
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Financial Statement Analysis
Ratio Analysis
i)Liquidity Ratio
Current Ratio:
Current Ratio
25.00
20.00
15.00
10.00
5.00
0.00
2019
2020
2021
2022
2023
The current ratio from 2019 to 2023 shows a worrying pattern in the short-term liquidity
situation of Standard Chartered Bank PLC. The ratio started off on a downward trajectory in
2019, when it was at a robust 23.48, indicating that the bank had so many idle funds. It fell to
4.90 in 2020. The ratio was lower than the ratio in the year 2019 but it wasn’t the standard. In
the succeeding year, the ratio was between 3 and 1.99. This is a good sign for the bank. This
static ratio represents its capacity to fulfill short-term commitments. It had better maintain the
ratio in 2 to maintain operational resilience and financial stability in the face of market
swings.
Net Working Capital:
Net Working Capital
35,000
30,000
$Million
25,000
20,000
15,000
10,000
5,000
2019
2020
2021
2022
2023
The bank's operational liquidity and financial health have been depicted, as seen by the Net
Working Capital (NWC) data from 2019 to 2023. Beginning with a net worth of about 28754
million in 2019, the bank saw a fluctuation in the years that followed, reaching a sizable
lowest balance by 2022,that was also a positive balance of 16649 millon.In 2023,Net
8|Page
Working Capital was of 18285 million. This shows a tendency of upstreaming for the
following year. The balances of positive working capital mean that the bank's current assets
have greatly outpaced its current liabilities. These positive Net Working Capital(NWC)
perhaps don’t have any trouble fulfilling short-term commitments. The efficient liquidity
management of the bank should be held properly for good financial and liquidity health.
Comment about the Overall Liquidity:
The overall liquidity of Standard Chartered Bank PLC shows a mixed but generally
concerning trend. The Current Ratio, which measures short-term liquidity, has significantly
declined from 23.48 in 2019 to below 2 in recent years, indicating a reduced capacity to cover
short-term obligations with current assets. This decline suggests potential challenges in
maintaining sufficient liquid assets relative to liabilities. However, the bank's NWC tells a
somewhat different story, showing positive balances throughout the period, indicating that
current assets have consistently exceeded current liabilities. Despite fluctuations, the NWC
has shown an upward trend by 2023, reaching 18,285 million, which is a positive sign for the
bank's ability to meet short-term commitments. While the declining Current Ratio raises
concerns about immediate liquidity, the positive NWC suggests that the bank still maintains a
buffer to manage short-term liabilities. Efficient liquidity management will be crucial for the
bank to ensure financial stability and operational resilience in the face of market volatility.
ii)Asset Management (Turnover) Ratio/Activity Ratio
Total Asset Turnover :
Total Asset Turnover
0.20x
0.15x
0.10x
0.05x
0.00x
2019
2020
2021
2022
2023
For Standard Chartered Bank PLC, one of the popular banks in Bangladesh, the total asset
turnover ratio shows how well the firm used its assets to make money between 2019 and
2023. The ratio has continuously ranged between 0.16x and 0.20x, suggesting that the bank
makes a comparatively good amount of money per asset. Although it is high, this stability
raises the possibility that the bank is using a great approach to asset management or isn’t
having trouble using its assets to boost turnover. Overall, the high value of the total asset
turnover indicates that the bank used its resources well to produce income. This trend
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highlights good asset management or activity. Overall, the ratio shows the bank's dedication
to upholding a sound and legal financial structure even as it highlights possible areas for asset
usage enhancement. The ratios will lead to a good overview of activity performance for the
banks' stakeholders.
Fixed Asset Turnover:
FIXED ASSET TURNOVER
0.30x
0.25x
0.20x
0.15x
0.10x
0.05x
0.00x
2019
2020
2021
2022
2023
From 2019 to 2023, Standard Chartered Bank PLC's fixed asset turnover ratio shows a solid
and reliable ability to use its assets to create revenue. The bank efficiently turns its fixed
holdings into income, as seen by ratios ranging from 0.24 times to 0.30 times, which show
strong operational efficiency and good management. The bank may have increased its asset
utilization over time through strategic investments and operational savings, as evidenced by
the steadily rising trend, especially the peak in 2023. This low turnover indicates a dedication
to the bank’s inability to use its assets to create revenue. All things considered, Standard
Chartered Bank PLC is so well-positioned in the competitive banking market because of its
good fixed asset turnover ratio. However, the high fixed asset turnover ratio demonstrates
how well it uses its resources to spur growth and profitability.
Comment about the Overall Asset Utilization
The overall asset utilization of Standard Chartered Bank PLC from 2019 to 2023 indicates a
mixed performance. The Fixed Asset Turnover ratio shows a gradual increase from 0.20x in
2019 to 0.30x in 2023, suggesting improved efficiency in generating revenue from fixed assets.
However, the ratios remain relatively low, indicating potential underutilization. The Total Asset
Turnover ratio, consistently ranging between 0.16x and 0.20x, reflects stable but modest revenue
generation from total assets. While the bank demonstrates a commitment to maintaining a sound
financial structure, the low turnover ratios highlight areas for improvement in asset management.
Strategic enhancements in asset utilization could further boost operational efficiency and
profitability, ensuring better performance in the competitive banking sector. Overall, the bank
shows progress but needs to optimize asset use for higher returns.
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iii)Capital Structure Ratio
Debt to Equity Ratio:
Debt to Equity Ratio
1.00
0.80
0.60
0.40
0.20
0.00
2019
2020
2021
2022
2023
According to the Debt-to-Equity Ratio from 2019 to 2023, the company's capital structure is
generally conservative. The ratio began at 0.76 in 2019 and fluctuated somewhat over the
years, reaching a peak of 0.95 in 2023. This implies that, compared to debt, the corporation
has continuously relied more on equity to finance its activities. After 2019 in 2022, the ratio
showed a minor decrease to 0.86, suggesting more slight reduction in leverage. However, by
2023, it had recovered to 0.95, indicating once more growth in debt in relation to equity. All
things considered, the consistently low debt-to-equity ratio indicates a significant reliance on
equity money, which may decrease financial risk, increase financial flexibility as well as
provide strong creditworthiness. It also provides the benefit of low interest expenses leading
to higher profitability.
Equity Multiplier Ratio:
Equity Multiplier Ratio
2.10x
2.05x
2.00x
1.95x
1.90x
1.85x
1.80x
1.75x
2019
2020
2021
2022
2023
From 2019 to 2023, the Equity Multiplier Ratio shows a pattern of rising financial leverage in
the capital structure of the business. The ratio began at 1.87x in 2019 and increased steadily
over time, reaching a peak of 2.07x in 2023. This increasing trend shows that to finance the
bank’s assets the bank has increasingly depended on debt in comparison to equity, hence
increasing its asset base per equity dollar. From 2020 onward, the ratio varied around the
2.00x threshold, indicating a steady yet high degree of leverage. The Equity Multiplier Ratio's
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steady rise indicates a calculated strategy for financing that makes the most use of debt,
which could boost returns but also raise financial risk. This steady rise leads to higher ROE in
favorable economic conditions, but also greater losses during downturns.
Comment about the Overall Capital Structure:
The overall capital structure of the company from 2019 to 2023 shows a mix of conservative and
leveraged approaches. The Debt-to-Equity Ratio remained relatively low, starting at 0.76 in
2019 and peaking at 0.95 in 2023, indicating a preference for equity over debt, which reduces
financial risk and enhances flexibility. However, the Equity Multiplier Ratio increased from
1.87x in 2019 to 2.07x in 2023, suggesting a growing reliance on debt to finance assets. This
rising trend indicates a strategic use of leverage to potentially boost returns, though it also
increases financial risk, especially during economic downturns. Overall, the company maintains
a balanced approach, leveraging debt for growth while keeping equity as a significant funding
source to ensure stability and creditworthiness. This strategy supports profitability but requires
careful risk management.
iv)Profitability Ratio
Net profit Margin:
Net profit Margin
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2019
2020
2021
2022
2023
Between 2019 and 2023, Standard Chartered Bank PLC's net profit margin showed
significant changes. The bank reached its best margin of 19.21% in 2023, demonstrating great
operational efficiency and revenue growth, after starting at a solid 17.78% in 2022. But in the
years before 2022, margins fell, reaching 5.09% in 2020, most likely as a result of the
COVID-19 pandemic and difficult economic times. The bank showed resiliency by rising to
15.73% in 2021, before the pandemic in 2019 it was 15.18%, and finally to 19.21% in 2023.
This great recovery demonstrates the bank's flexibility and ability to increase profitability. It
also points to more favorable market conditions and successful strategic actions.
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Return on Asset (ROA):
Return on Asset (ROA)
4.00%
3.00%
2.00%
1.00%
0.00%
2019
2020
2021
2022
2023
From 2019 to 2023, Standard Chartered Bank PLC's Return on Assets (ROA) shows a
roughly upward trend in the business's capacity to make money off its assets. The ROA
demonstrated Effective asset use, which rose from 3.15% in 2022 to a peak of 3..55% in
2023. It gradually decreased from the latest to the previous year, hitting a low of 0.79% in
2020. This decrease points to difficulties in efficiently using assets to create income. In the
years that followed, the ROA improved enough, reaching 3.55% by 2023, it is the highest
after its starting points. All things considered, the data shows that despite efforts to increase
asset efficiency, the business has had difficulty generating a high return on its assets over the
analyzed period.
Return on Equity (ROE):
RETURN ON EQUITY (ROE)
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2019
2020
2021
2022
2023
An upward trend in the company's profitability in relation to shareholder equity is shown in
the Return on Equity (ROE). The ROE showed very insignificant returns for investors, lowest
at 1.60% in 2020 after starting at a solid 4.98% in 2019. But the ratio started to up, hitting a
peak of 7.34% in 2023, indicating a good sign in turning a return for shareholders. ROE still
lags behind standard values(15%-20%). This pattern suggests that, despite maintaining a
certain degree of profitability, the company's potential to produce returns for equity holders
has significantly established during the course of the analysis. Moreover, this tendency
reveals the company is going to use effectively shareholder investments to generate profits.
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Return on Investments:
RETURN ON INVESTMENTS
6.00%
4.00%
2.00%
0.00%
2019
2020
2021
2022
2023
An uprising trend in the Return on Investments (ROI) indicates that the company's investment
plan has been more effective over time. The ROI, which started at 3.26% in 2019 and went
down to 1.10% in 2020, showed an unfavorable return on investments. The ratio did,
however, increase in the ensuing years, reaching a high of 5.11% in 2023, indicating good
remarks in producing investment returns. The general pattern suggests ongoing challenges in
generating substantial returns. To improve profitability and maximize asset usage, this trend
suggests that investment methods need to be maintained more properly during the running
year.
Earnings per share (EPS):
Earnings per share (cents)
120.00
100.00
80.00
60.00
40.00
20.00
0.00
2019
2020
2021
2022
2023
Standard Chartered Bank PLC's earnings per share (EPS) from 2019 to 2023 show changes in
the business's profitability on a per-share basis. Strong earnings growth was indicated by the
EPS, which rose from 56.97 cents in 2019 to 85.87 cents in 2020. But after that, it dropped to
61.29 cents in 2021 and the next year, reaching a low of 0.77 in 2021, indicating difficulties
in sustaining profitability. After that, there was a great rebound, and by 2023, EPS had
increased to 108.60 cents. Notwithstanding this improvement, the general pattern indicates
that the business has had difficulty generating steady earnings growth during the examined
time frame, pointing to the necessity of strategic changes to boost profitability and
shareholder value.
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Comment about the Overall Profitability
The overall profitability of Standard Chartered Bank PLC from 2019 to 2023 shows a mixed
performance with signs of recovery. The Net Profit Margin improved significantly, reaching
19.21% in 2023, reflecting better operational efficiency. Return on Assets (ROA) also increased,
peaking at 3.55% in 2023, indicating improved asset utilization. Return on Equity (ROE) rose to
7.34% in 2023, showing better returns for shareholders, though still below standard levels.
Return on Investments (ROI) increased to 5.11% in 2023, suggesting more effective investment
strategies. Earnings per Share (EPS) rebounded to 108.60 cents in 2023 after a dip in 2021,
indicating stronger earnings growth. Despite these improvements, the bank faced challenges in
maintaining consistent profitability, highlighting the need for strategic adjustments to enhance
financial performance and shareholder value. Overall, the bank shows resilience and potential
for growth.
Du Pont Analysis
Du Pont Analysis
Net profit Margin
Total Asset Turnover
Equity Multiplier Ratio
2023
19.21%
0.18x
2.07x
2022
17.78%
0.18x
2.01x
2021
15.73%
0.15x
2.04x
2020
5.09%
0.16x
2.01x
2019
15.18%
0.18x
1.87x
Important information about Standard Chartered Bank PLC's financial performance
throughout time can be found in the Du Pont analysis. Significant swings occurred in the net
profit margin, which was in 2019 at 15.18% and then declined in the next year(COVID-19
year), hitting a low of 5.09%. From the next year, the ratio gradually increased and reached a
peak of 19.21% in 2023. Higher margins imply efficient cost control and pricing tactics
during prosperous years, and this variability shows the bank's capacity to control expenses
and turn a profit from its revenues. The recent 2023 rebound raises the possibility of either
improved operational effectiveness or advantageous market circumstances.
On the other hand, the total asset turnover stayed good, averaging between 0.15 times and
0.18 times throughout the course of the time, suggesting that the bank is making a sizable
profit from its assets. The equity multiplier ratio, which varied between 1.87x and 2.07x,
indicates a significant reliance on equity financing, which is supported by this high turnover.
The bank's use of equity to finance its assets is reflected in a lower equity multiplier, which
decreases financial risk. Overall, the Du Pont research shows that even though Standard
Chartered Bank PLC has lately been able to increase its net profit margin, the company's low
leverage and high asset turnover suggest that it is dependent on equity money, overscoring
the need for methods to preserve profitability and improve asset efficiency.
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Horizontal Analysis
This is also referred to as trend analysis, and it is essentially used to assess organizational
patterns. The oldest year is used as the basis year for analysis in this study. Since I used data
spanning 5 years, from 2019 to 2023, 2019 serves as the base year in my analysis.
1. Balance Sheet
Standard Chartered Bank PLC
Horizontal Analysis
Particulars
2019
2020
2021
Percentage Percentage Percentage
2022
2023
Percentage Percentage
Non-current assets
Investments in subsidiary undertakings
100.00%
98.91%
104.12%
105.06%
104.75%
100.00%
424.02%
139.74%
26.64%
34.93%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
283.94%
81.57%
347.56%
68.96%
97.54%
0.00%
122.29%
110.32%
341.14%
61.64%
63.82%
0.00%
104.08%
104.73%
431.47%
50.82%
88.57%
0.00%
122.34%
110.75%
100.00%
100.00%
48.78%
815.38%
45.93%
181.98%
7.69%
149.59%
100.00%
100.00%
100.00%
5850.00% 10539.29% 11466.07% 14914.29%
115.38%
114.64%
104.96%
161.29%
593.35%
985.54% 1142.30% 1443.16%
100.00%
105.01%
85.27%
70.47%
86.96%
100.00%
100.00%
100.00%
101.34%
103.45%
121.06%
94.80%
89.32%
121.54%
77.04%
73.26%
111.69%
63.39%
76.94%
126.05%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
99.72%
100.01%
100.23%
100.07%
81.92%
98.16%
107.41%
99.21%
100.25%
103.06%
101.45%
113.40%
102.71%
110.32%
97.91%
100.55%
95.90%
97.90%
117.94%
100.01%
104.73%
96.28%
101.35%
101.01%
100.42%
99.95%
100.37%
110.75%
Current assets
Derivative financial instruments
Financial assets held at fair value through
profit or loss
Investment securities
Amounts owed by subsidiary undertakings
Taxation
Total current assets
Total Assets
0%
60.00%
123.84%
107.41%
Current liabilities
Derivative financial instruments
Amounts owed to subsidiary undertakings
Financial liabilities held at fair value through
profit or loss
Other creditors
Total current liabilities
Non-current liabilities
Debt securities in issue
Subordinated liabilities and other borrowed
funds
Total non-current liabilities
Total Liabilities
Equity
Share capital and share premium account
Other reserves
Retained earnings
Total shareholders’ equity
Other equity instruments
Total equity
Total Liabilities and Equity
Table 1: Horizontal analysis of Standard Chartered Bank PLC's Balance Sheet
The horizontal analysis of Standard Chartered Bank PLC's balance sheet from 2019 to 2023
reveals significant fluctuations in various asset and liability categories. Non-current assets,
particularly investments in subsidiary undertakings, remained relatively stable, with a slight
increase over the years, indicating consistent long-term investment strategies. Investment
securities, on the other hand, experienced a consistent decline, reflecting a possible shift in
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investment focus or market conditions. Total current assets increased overall, suggesting growth
in the bank's short-term asset base, which could enhance liquidity.
On the liabilities side, current liabilities saw a dramatic rise, particularly in financial liabilities
held at fair value through profit or loss, which increased exponentially from 2019 to 2023. This
indicates a significant growth in short-term obligations, potentially impacting the bank's liquidity
and financial stability. Non-current liabilities, including subordinated liabilities and other
borrowed funds, showed a declining trend, suggesting a reduction in long-term debt. Total
equity remained relatively stable, with minor fluctuations in retained earnings and other
reserves, indicating consistent shareholder equity. Overall, the data suggests that while the bank
has managed to grow its asset base, the substantial increase in current liabilities poses a
challenge to maintaining financial stability and liquidity
2. Profit and Loss Account
Standard Chartered Bank PLC
Horizontal Analysis
Particulars
Interest income
Interest expense
Net interest income
Fees and commission income
Fees and commission expense
Net fee and commission income
Net trading income
Other operating income
Operating income
Staff costs
Premises costs
General administrative expenses
Depreciation and amortization
Operating expenses
Operating profit before impairment losses
and taxation
Credit impairment
Goodwill, property, plant and equipment, and
other impairment
Profit from associates and joint ventures
Profit before taxation
Taxation
Profit for the year
2019
2020
2021
2022
2023
Percentage Percentage Percentage Percentage Percentage
100.00%
74.28%
61.91%
92.16%
164.52%
100.00%
61.25%
38.82%
86.23%
219.07%
100.00%
89.37%
88.67%
99.03%
101.33%
100.00%
94.02%
108.44%
96.62%
98.93%
100.00%
119.69%
124.96%
145.84%
138.37%
100.00%
89.72%
105.68%
88.39%
92.33%
100.00%
109.61%
102.42%
158.51%
187.82%
100.00%
121.87%
85.42%
34.40%
80.41%
100.00%
95.70%
95.36%
105.84%
116.88%
100.00%
96.69%
107.67%
106.96%
115.92%
100.00%
98.10%
92.14%
95.48%
100.48%
100.00%
82.81%
76.35%
77.25%
81.50%
100.00%
106.02%
100.08%
100.51%
90.76%
100.00%
94.94%
99.92%
99.82%
105.65%
100.00%
100.00%
97.55%
256.06%
84.23%
27.97%
120.54%
92.07%
144.25%
55.95%
100.00%
100.00%
100.00%
100.00%
100.00%
360.12%
50.33%
43.44%
0.00%
32.09%
228.22%
65.33%
90.14%
0.00%
98.85%
269.33%
52.00%
115.43%
0.00%
124.02%
618.40%
47.00%
137.17%
0.00%
147.95%
Table 2: Horizontal analysis of Standard Chartered Bank PLC's Profit and Loss Account
The horizontal analysis of Standard Chartered Bank PLC's profit and loss account from 2019 to
2023 highlights significant trends in the bank's financial performance. Interest income and
interest expense both experienced substantial fluctuations, with interest income increasing
dramatically to 164.52% by 2023, while interest expense surged to 219.07% in the same year.
This indicates a significant rise in both the bank's earning assets and its cost of funds.
17 | P a g e
Operating income demonstrated a positive trend, reaching 116.88% in 2023, driven by strong
performance in net trading income, which saw a significant rise to 187.82% in the same year.
However, other operating income was more volatile, with a notable decline in 2022 before
recovering slightly in 2023. Operating expenses increased steadily, reaching 105.65% in 2023,
indicating rising costs in staff, premises, and general administrative expenses. Overall, the data
indicates a resilient performance with notable growth in key income categories, despite rising
costs and variability in impairment charges.
18 | P a g e
Conclusion
This analysis of Standard Chartered Bank PLC's financial statements from 2019 to 2023 reveals
a complex picture of its financial health and performance. While the bank demonstrates
resilience and recovery in profitability metrics like Net Profit Margin, ROA, ROE, ROI, and
EPS, it faces challenges in maintaining consistent liquidity and optimizing asset utilization.
The declining Current Ratio raises concerns about short-term liquidity, even though the positive
Net Working Capital suggests a buffer for short-term liabilities. Asset turnover ratios indicate
room for improvement in efficiency. The bank's capital structure shows a conservative approach
with a preference for equity, minimizing financial risk, but the rising Equity Multiplier suggests
increasing leverage.
The Du Pont analysis highlights the bank's ability to recover and improve its net profit margin,
but also emphasizes the need for strategies to enhance asset efficiency and manage leverage
effectively Standard Chartered Bank PLC has demonstrated a capacity for recovery and growth,
particularly in profitability. However, careful attention to liquidity management, asset
utilization, and capital structure optimization is crucial for ensuring sustained financial stability
and maximizing shareholder value in the face of market volatility. The bank should focus on
strategic initiatives to enhance asset efficiency, maintain adequate liquidity, and balance its
capital structure to support long-term growth and profitability.
19 | P a g e
**Appendix**
Ratio Analysis Calculation
Particulars
Balance Sheet
Current Assets
Non-current Assets
Total Assets
Current Liabilities
Total Liabilities
Total Shareholders’ Equity
Investments
31-Dec-23
31-Dec-22
Amount in
$Million
Amount in
$Million
31-Dec21
Amount
in
$Million
31-Dec-20
Amount
in
$Million
31-Dec19
Amount
in
$Million
36,743
60,791
97,534
18,458
44,848
47,176
67,735
31,259
60,975
92,234
14,610
39,740
45,992
69,398
36,727
60,429
97,156
12,605
43,244
47,660
69,853
37,192
57,407
94,599
7,589
43,073
47,010
68,553
30,033
58,037
88,070
1,279
35,580
46,977
71,702
141
156
196
151
300
8,563
7,795
6,976
7,575
10,479
27,227
15,252
10,246
12,292
16,549
18,019
5,093
16,318
4,286
14,701
3,347
14,754
1,613
15,417
3,713
3,462
2,902
2,313
751
2,340
3,017
2,778
2,547
2,966
1,905
3,108
329
3,160
1,855
3,256
108.6
85.9
61.3
10.4
57.0
1.99
2.14
2.91
4.90
23.48
18,285
16,649
0.18x
0.30x
0.18x
0.27x
0.15x
0.24x
0.16x
0.26x
0.18x
0.27x
0.95
2.07x
0.86
2.01x
0.91
2.04x
0.92
2.01x
0.76
1.87x
Income Statement
Profit on Investment
Profit paid on Deposits &
Placement/Interest Expense
Net Profit on Investments/Net
Interest Income
Total Operating Income
EBIT
Net Profit / (Loss) after
Taxation :
Share Information
Profit Attributable to
Shareholders
Number of shares
Basic earnings per ordinary
share(cents)
Ratio Calculation:
Liquidity Ratio
Current Ratio
Net Working Capital
24,122
29,603
28,754
Asset
Management
(Turnover)
Ratio/Activity Ratio
Total Asset Turnover
Fixed Asset Turnover
Capital Structure
Ratio
Debt to Equity Ratio
Equity Multiplier Ratio
Profitability Ratio
20 | P a g e
Net profit Margin
Return on Asset (ROA)
Return on Equity (ROE)
Return on Investments
Earnings per share (cents)
19.21%
3.55%
7.34%
5.11%
108.60
17.78%
3.15%
6.31%
4.18%
85.87
15.73%
2.38%
4.85%
3.31%
61.29
5.09%
0.79%
1.60%
1.10%
10.41
15.18%
2.66%
4.98%
3.26%
56.97
19.21%
0.18x
2.07x
7.34%
17.78%
0.18x
2.01x
6.31%
15.73%
0.15x
2.04x
4.85%
5.09%
0.16x
2.01x
1.60%
15.18%
0.18x
1.87x
4.98%
Du Pont Analysis
Net profit Margin
Total Asset Turnover
Equity Multiplier Ratio
Return on Equity (ROE)
References
Standard Chartered Bank PLC. (2014–2023) Annual reports.
Retrieved
https://www.sc.com/en/investors/financial-results/annual-report-2023/
from
https://www.sc.com/en/investors/financial-results/annual-report-2022/
https://www.sc.com/en/investors/financial-results/annual-report-2021/
https://www.sc.com/en/investors/financial-results/annual-report-2020/
Iqbal, M., & Mirakhor, A. (2007). An introduction to Islamic finance: Theory and practice.
Wiley. https://doi.org/10.1002/9780470680144
Liu, Z., Wang, T., & Liu, J. (2018). A review of the financial performance analysis of banks:
A systematic literature review. International Review of Financial Analysis, 57, 123-135.
https://doi.org/10.1016/j.irfa.2017.12.004
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