Sharenet Sites 
Sharenet Sites
Pillar 3 quarterly disclosures as at 30 September 2015
FirstRand Limited
(incorporated in the Republic of South Africa)
(registration number 1966/010753/06)
JSE ordinary share code: FSR
Ordinary share ISIN: ZAE000066304
JSE B preference share code: FSRP
B preference share ISIN: ZAE000060141
NSX ordinary share code: FST
(FSR or the group)
FirstRand Bank Limited
(incorporated in the Republic of South Africa)
(registration number 1929/001225/06)
JSE company code: BIFR1
(FRB or the bank)
PILLAR 3 QUARTERLY DISCLOSURES AS AT 30 SEPTEMBER 2015
In accordance with Pillar 3 of the Basel Accord, Regulation
43(1)(e) of the Regulations relating to Banks requires the group
to disclose quantitative information on its capital adequacy and
liquidity ratios. Leverage is a supplementary measure to risk-
based capital requirements and directive 4 of 2014 requires
quarterly disclosure of the leverage position. The figures below
have not been reviewed and reported on by the group’s external
auditors.
CAPITAL ADEQUACY
The capital positions (excluding unappropriated profits) for the
group and bank at 30 September 2015 are set out below.
R million FSR FRB
Common Equity Tier 1 capital
Ordinary share capital and premium 8 053 16 808
Qualifying reserves 76 900 49 889
Non-controlling interests 751 -
Regulatory deductions (2 445) (661)
Total Common Equity Tier 1 capital 83 259 66 036
Total Additional Tier 1 capital 5 105 2 100
Total Tier 1 capital 88 364 68 136
Tier 2 capital
Tier 2 instruments 13 463 14 079
Other qualifying reserves 807 270
Regulatory deductions - (165)
Total Tier 2 capital 14 270 14 184
Total qualifying capital and reserves 102 634 82 320
Total minimum capital requirement per risk type:
Credit risk 44 434 37 789
Counterparty credit risk 1 850 1 702
Operational risk 10 033 7 730
Market risk 1 475 1 178
Equity investment risk 3 356 597
Other assets 3 848 2 322
Total minimum capital requirement 64 996 51 318
Common Equity Tier 1 capital ratio (%) 12.8 12.9
Tier 1 capital ratio (%) 13.6 13.3
Total capital ratio (%) 15.8 16.0
Notes:
- FRB includes foreign branches and subsidiaries.
- The minimum capital requirement excludes any bank-specific
individual capital requirement and is reported at 10%.
LEVERAGE
The leverage ratios for the group and bank at 30 September 2015
are set out below.
FSR FRB FRB
R million consolidated solo
Tier 1 capital measure 88 364 68 136 64 264
Total exposure measure 1 177 801 1 057 953 1 022 396
Leverage ratio (%) 7.5 6.4 6.3
Notes:
- In terms of directive 4/2014 ratios for FRB solo (excluding
foreign branches) and FRB consolidated (including foreign
branches and subsidiaries) are required to be disclosed.
LIQUIDITY
The liquidity coverage ratio (LCR) is the first minimum standard
for funding and liquidity under the Basel III regime. The
objective of the LCR is to promote short-term resilience of a
bank’s liquidity risk profile by ensuring it has sufficient high
quality liquid assets (HQLA) to survive a significant stress
scenario for one month. Regulation 26(12)(a)(vi) requires banks to
continuously meet their liquidity needs by calculating the LCR
from 1 January 2015 on both a solo and consolidated basis; and
directives 6 and 11 of 2014 require quarterly disclosure of the
LCR. The LCR compliance is on a phased in basis, beginning with a
60% minimum requirement from 1 January 2015 with 10% incremental
increases each year to 100% on 1 January 2019. The requirement
effective 1 January 2016 will be 70%.
The average liquidity coverage ratios for the group and bank for
the quarter ended 30 September 2015 are set out below.
FSR FRB
HQLA(R million) 137 238 124 707
Net cash outflows (R million) 180 829 153 658
Required LCR (%) 60 60
Actual LCR (%) 76 81
FRB successfully applied for a committed liquidity facility (CLF)
from the SARB as provided for under guidance note 8 of 2014 and 5
of 2015. The CLF was recognised as qualifying collateral for LCR
purposes within our HQLA as required by the SARB.
The group manages the HQLA portfolio of level 1 and level 2
assets, together with the CLF and considers volatility in funding
flows as determined by internal risk appetite. As a result, the
group targets a buffer in excess of the regulatory minimum.
The group has in place strategies to reach the end-state LCR
requirements in a sustainable manner.
Notes:
- FRB includes its operations in South Africa.
- The consolidated LCR for the group (FSR) includes FRB’s
operations in South Africa and all registered banks within the
group.
- The surplus HQLA holdings by subsidiaries and foreign branches
in excess of the minimum required LCR of 60% have been excluded
in the calculation of the consolidated group LCR.
- Directive 11 of 2014 requires the LCR to be calculated on a
simple average of the three month end data points for the past
quarter and disclosure at a bank solo and consolidated level for
bank and/or deposit-taking entities.
- Further details on the liquidity coverage ratio can be found
under the group analysis of financial results under the funding
and liquidity section on the group’s website,
http://www.firstrand.co.za/investorcentre/pages/financial-
results.aspx
- This announcement is also available on the group’s website:
http://www.firstrand.co.za/investorcentre/pages/sens_announcemen
ts_mvc.aspx
Sandton
18 November 2015
Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 18/11/2015 09:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
