Sharenet Sites 
Sharenet Sites
Pillar 3 quarterly disclosures as at 31 March 2017
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 interest rate issuer: FRII
JSE company code debt issuer: FRD
JSE company code ETF issuer: FRLE
(FRB or the bank)
PILLAR 3 QUARTERLY DISCLOSURES AS AT 31 MARCH 2017
In accordance with Pillar 3 of the Basel Accord, Regulation 43(1)(e)
of the Regulations relating to Banks requires the group to disclose
quarterly information on its capital adequacy, leverage and
liquidity ratios. The figures below have not been reviewed or
reported on by the group’s external auditors.
CAPITAL ADEQUACY
The capital positions (excluding unappropriated profits) for the
group and bank for the quarter ended 31 March 2017 are set out below.
R million FSR FRB
Common Equity Tier 1 capital
Ordinary share capital and premium 8 009 16 808
Qualifying reserves 87 162 56 715
Non-controlling interests 997 -
Regulatory deductions (3 893) (647)
Total Common Equity Tier 1 capital 92 275 72 876
Total Additional Tier 1 capital 4 284 1 500
Total Tier 1 capital 96 559 74 376
Tier 2 capital
Tier 2 instruments 17 262 17 358
Other qualifying reserves 1 526 498
Regulatory deductions (2 642) (114)
Total Tier 2 capital 16 146 17 742
Total qualifying capital and reserves 112 705 92 118
Total minimum capital requirement per risk type:
Credit 53 717 44 845
Counterparty credit 1 973 1 871
Operational 12 302 9 623
Market 2 294 2 045
Equity investment 4 015 922
Other assets 3 601 2 736
Total minimum capital requirement 77 902 62 042
Common Equity Tier 1 capital ratio (%) 12.7% 12.6%
Tier 1 capital ratio (%) 13.3% 12.9%
Total capital ratio (%) 15.6% 16.0%
Notes:
- FRB includes foreign branches and subsidiaries.
- The disclosed minimum capital requirement excludes the bank-
specific individual capital requirement and add-on for domestic
systemically important banks, and is reported at 10.75%.
- There is currently no requirement for the countercyclical buffer
add-on in South Africa. The current countercyclical buffer
requirement from other jurisdictions that the group operates in
is immaterial.
- Equity investment risk includes investments in financial, banking
and insurance entities.
- Other assets include deferred tax assets.
LEVERAGE
The leverage ratios for the group and bank for the quarter ended 31
March 2017 and preceding three quarters are set out below.
FSR
Tier 1 Total Leverage
R million capital exposure ratio (%)
March 2017 96 559 1 277 723 7.56%
December 2016 90 034 1 252 265 7.19%
September 2016 90 951 1 212 028 7.50%
June 2016 91 641 1 219 661 7.51%
FRB
Tier 1 Total Leverage
R million capital exposure ratio (%)
March 2017 74 376 1 142 819 6.51%
December 2016 70 097 1 123 943 6.24%
September 2016 70 461 1 090 004 6.46%
June 2016 70 312 1 102 001 6.38%
Notes:
- FRB includes foreign branches and subsidiaries.
- Actual closing balances used at each reporting period.
- Ratios exclude unappropriated profits.
- The increase in the leverage ratio from the previous quarter
relates to the appropriation of profits in FSR and FRB. No further
material changes are noted.
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 that the bank has sufficient unencumbered
high quality liquid assets (HQLA) to survive the net cash outflows
expected during a significant stress scenario for 30 calendar days.
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. Regulation 43 (e), read with the
relevant directives, specify quarterly disclosure of the LCR. 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 from 1
January 2017 is 80%.
The average liquidity coverage ratios for the group and bank for the
quarter ended 31 March 2017 are set out below.
FSR FRB SA
HQLA(R million) 157 224 146 082
Net cash outflows (R million) 183 426 160 568
Required LCR (%) 80% 80%
Actual LCR (%) 86% 91%
The group seeks to exceed the minimum LCR requirement in a
sustainable manner and to hold a sufficient buffer to allow for
volatility as determined by the group’s own internal liquidity risk
appetite.
FRB has applied for the committed liquidity facility (CLF) from the
SARB for the calendar year 2017 as provided for under guidance note
5 of 2015 and 6 of 2016. The CLF for 2015 and 2016 was recognised
as qualifying collateral for LCR purposes within the bank’s HQLA and
subject to prescribed haircuts as required by the SARB. The group
manages the HQLA portfolio of level 1 and level 2 assets.
Notes:
- For LCR disclosure purposes, FRB includes only the operations in
South Africa.
- The consolidated LCR for the group (FSR) includes FRB’s operations
in South Africa and all registered banks and foreign branches
within the group.
- The surplus HQLA holdings by subsidiaries and foreign branches in
excess of the minimum required LCR of 80% have been excluded in
the calculation of the consolidated group LCR.
- The LCR is calculated on a simple average of 90 days of daily
observations over the previous quarter ended 31 March 2017 for
FirstRand Bank South Africa, London and India branches, as well
as for FNB Namibia and FNB Botswana. The remaining Africa and
emerging markets banking entities are based on the month-end
values at 31 January 2017, 28 February 2017 and 31 March 2017.
The figures are based on the regulatory submission to the South
Africa Reserve Bank.
- This announcement is also available on the group’s website:
http://www.firstrand.co.za/investorcentre/pages/sens_announcemen
ts_mvc.aspx
Sandton
31 May 2017
Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 31/05/2017 04:45:00 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.
