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Financial information provided to ICBC and update on the group’s operational performance
Standard Bank Group Limited
Registration No. 1969/017128/06
Incorporated in the Republic of South Africa
JSE share code: SBK
ISIN: ZAE000109815
NSX share code: SNB
NSX share code: SNB ZAE000109815
(“Standard Bank Group” or “the group”)
Financial information provided to The Industrial and Commercial Bank of China Limited (“ICBC”) and update on
the group’s operational performance for the three months ended 31 March 2017
Financial information provided to ICBC
On a quarterly basis the Standard Bank Group discloses to ICBC sufficient information to enable ICBC to equity
account the group's results. Accordingly, the following consolidated financial information, prepared on an
International Financial Reporting Standards basis, is being provided to ICBC for the three months ended
31 March 2017.
Statement of changes in ordinary shareholders' equity for the three months ended 31 March 2017
Balance at Earnings Other Balance at
1 January 2017 attributable to movements for 31 March 2017
ordinary the period
shareholders
Rm Rm Rm Rm
Ordinary share capital 162 162
Ordinary share 17 798 139 17 937
premium
Foreign currency
translation and (2 356) (868) (3 224)
hedging reserves
Foreign currency
translation reserve (1 189) (796)[1] (1 985)
(FCTR)
Foreign currency net
investment and cash (1 167) (72) (1 239)
flow hedging reserve
Retained earnings 132 614 6 227 (7 591)[2] 131 250
Empowerment reserve (621) (275) (896)
and treasury shares
Other 3 160 281 3 441
Total ordinary 150 757 6 227 (8 314) 148 670
shareholders' equity
[1] The decrease in the FCTR is primarily as a result of the strengthening of the Rand against the US Dollar
(R13.37/USD at 31 March 2017 from R13.69/USD at 31 December 2016) and other African currencies.
[2] Primarily comprises the ordinary dividends declared in March 2017.
Update on the group’s performance for the three months ended 31 March 2017 (1Q17)
Further to requests from investors, the group has decided to provide some context to the earnings attributable to
ordinary shareholders provided in the statement of changes in equity above. In the three months ended 31 March
2017, the group’s banking operations performance was underpinned by a benign credit performance and well
managed costs resulting in low double digit earnings growth. The group’s earnings attributable to ordinary
shareholders grew 16% period-on-period. Although robust, this growth was dampened by the strength of the
Rand relative to the USD, GBP and key African currencies (namely NGN, MZN and KES) during 1Q17. During
the period the headline adjustable items were negligible and as a result the group’s headline earnings growth for
the period was in line with growth in earnings attributable to Standard Bank Group ordinary shareholders.
Balance sheet
Subdued credit demand in South Africa combined with tighter risk appetite across the Africa Regions translated
into muted year to date growth in gross loans and advances across all categories. Retail priced deposits were
broadly flat on levels recorded at 31 December 2016.
Operating performance
Net interest margin (NIM) widened slightly in 1Q17 relative to the 3.83% recorded in the 2016 year, assisted by
positive endowment in South Africa and certain African markets most notably Nigeria, Angola and Mozambique.
NIM expansion and muted loan growth supported the low single digit increase in net interest income period-on-
period.
Non-interest revenue declined year-on-year off a high base in 1Q16. 1Q16’s performance was buoyed by strong
trading revenues on the back of exceptional market volatility and currency dislocation in certain African markets.
In 1Q17 lower volatility impacted trading revenues.
Impairment charges declined year-on-year, supported by ongoing strong performance of the mortgage book as
well as a decline in Corporate and Investment Banking provisions from a high base in 1Q16, in particular in the
Africa Regions. Continued focus on costs, in particular discretionary spend, delivered positive jaws and a
moderate decline in the cost-to-income ratio relative to the 56.3% reported for the 2016 year.
Liberty is due to publish its operational update for the three months to 31 March 2017 on 19 May 2017.
Capital
The group’s common equity tier 1 capital ratio remained in excess of our internal target range of 11.0% – 12.5%.
In late March 2017 the group successfully executed its inaugural additional tier 1 capital issuance, raising
R1.7bn. The notes are Basel III compliant perpetual instruments with permanent write-off features and add
approximately 20bps to the group’s tier 1 capital ratio. The group’s 1Q17 Basel III disclosure will be released on
24 May 2017.
Downgrade
Given recent political developments in South Africa and sovereign downgrades to sub-investment grade, it is
deemed necessary to highlight that the group remains very liquid, appropriately funded and well capitalised.
Although these developments are disappointing, the group remains steadfast in its commitment to supporting our
clients and delivering value to all of our stakeholders. Importantly, this includes continuing to work with
government, business and labour in the promotion of inclusive growth in South Africa.
The information contained in this announcement and that on which the operational performance update is based
has not been reviewed and reported on by the group's external auditors.
Johannesburg
25 April 2017
Lead sponsor
The Standard Bank of South Africa Limited
Independent sponsor
Deutsche Securities (SA) Proprietary Limited
Namibian sponsor
Simonis Storm Securities (Proprietary) Limited
Date: 25/04/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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