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ABSP - ABSA Bank Limited - Profit and dividend announcement - unaudited interim
financial results for the six months ended 30 June 2011
ABSA BANK LIMITED
Registration number: 1986/004794/06
Authorised financial services and registered credit provider (NCRCP7)
Incorporated in the Republic of South Africa
ISIN: ZAE000079810
JSE share code: ABSP
(Absa, Absa Bank, the Bank or the Company)
PROFIT AND DIVIDEND ANNOUNCEMENT - UNAUDITED INTERIM FINANCIAL RESULTS FOR THE
SIX MONTHS ENDED 30 JUNE 2011
CONSOLIDATED SALIENT FEATURES
30 June 31
December
2011 2010 Change 2010(1)
(Unaudited) (Unaudited) % (Audited)
Statement of comprehensive
income(Rm)
Headline earnings(2) 3 733 3 000 24 6 412
Profit attributable to 3 719 2 963 26 6 432
ordinary
equity holder of the Bank
Statement of financial
position
Total assets (Rm) 677 814 675 162 0 680 923
Loans and advances to 480 213 484 583 (1) 486 246
customers (Rm)
Deposits due to customers (Rm) 390 904 352 623 11 372 644
Loans-to-deposits ratio (%) 89,4 94,0 90,9
Off-statement of financial
position(Rm)
Assets under management and 34 436 29 048 19 31 534
administration(3)
Financial performance (%)
Return on average equity 15,5 13,8 14,2
Return on average assets 1,12 0,90 0,94
Return on average risk- 1,94 1,68 1,71
weighted assets(4)
Operating performance (%)
Net interest margin on average 3,72 3,66 3,69
interest-bearing assets
Impairment losses on loans and 1,17 1,47 1,15
advances as % of average loans
and
advances to customers
Non-performing advances as % of 7,7 7,5 7,6
loans and advances to
customers(4)
Non-interest income as % of 44,4 41,8 41,0
total
operating income
Cost-to-income ratio 54,8 54,0 56,7
Effective tax rate, excluding 27,1 26,2 27,1
indirect taxation
Share statistics (million)
(including "A" ordinary shares)
Number of ordinary shares in 374,1 367,7 374,1
issue
Weighted average number of 374,1 367,7 369,9
ordinary shares in issue
Weighted average diluted number 374,1 367,7 369,9
of
ordinary shares in issue
Share statistics (cents)
Headline earnings per share 997,9 815,9 22 1 733,4
Diluted headline earnings per 997,9 815,9 22 1 733,4
share
Basic earnings per share 994,1 805,8 23 1 738,8
Diluted earnings per share 994,1 805,8 23 1 738,8
Dividends per ordinary share 414,3 598,4 (31) 959,2
relating to income for the
period/year
Dividend cover (times) 2,4 1,4 1,8
Net asset value per share 13 160 12 284 7 12 955
Tangible net asset value per 12 982 12 135 7 12 781
share
Capital adequacy (%)(4)
Absa Bank 16,0 14,9 14,8
Notes
(1)Comparatives have been reclassified. These reclassifications have not
been audited. Refer to the "Reclassifications" section.
(2)After allowing for R143 million (30 June 2010: R162 million; 31
December 2010: R320 million) profit attributable to preference equity
holders of the Bank.
(3)Comparatives have been restated for the inclusion of assets managed by
Absa Capital on behalf of clients, exchange traded funds and alternative
asset management funds, in order to align assets under management and
administration to current market practice. These restatements have not
been audited.
(4)These ratios have not been audited.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 31
December
2011 2010 2010(1)
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Assets
Cash, cash balances and 18 119 6 17 343
balances with central banks 17 079
Statutory liquid asset 50 999 35 846 42 48 215
portfolio
Loans and advances to banks 29 708 36 007 (17) 26 251
Trading portfolio assets 54 162 50 731 7 57 647
Hedging portfolio assets 3 564 3 515 1 4 662
Other assets 13 236 11 910 11 9 678
Current tax assets 16 161 (90) 5
Non-current assets held for 369 - 100 -
sale 1
Loans and advances to 480 213 484 583 (1) 486 246
customers 2
Loans to Absa Group 7 385 10 327 (28) 8 071
companies
Investment securities 10 258 15 596 (34) 12 906
Investments in associates 397 (10) 406
and joint ventures 441
Goodwill and intangible 664 548 21 643
assets
Investment property 1 793 1 737 3 1 771
Property and equipment 6 859 6 582 4 6 987
Deferred tax assets 72 99 (27) 92
Total assets 677 814 675 162 0 680 923
Liabilities
Deposits from banks 23 866 43 601 (45) 21 740
Trading portfolio 27 614 37 252 (26) 43 530
liabilities
Hedging portfolio 1 351 1 286 5 1 881
liabilities
Loans from Absa Group 4 599 - 100 -
companies
Other liabilities 12 436 11 295 10 7 788
Provisions 1 099 807 36 1 533
Current tax liabilities 480 - 100 929
Deposits due to customers 390 904 352 623 11 372 644
Debt securities in issue 146 289 162 685 (10) 162 526
Borrowed funds 13 786 13 359 3 13 649
3
Deferred tax liabilities 1 382 2 319 (40) 2 073
Total liabilities 623 806 625 227 (0) 628 293
Equity
Capital and reserves
Attributable to equity
holders of the Bank:
Ordinary share capital 303 303 - 303
Ordinary share premium 11 465 10 465 10 11 465
Preference share capital 1 1 - 1
Preference share premium 4 643 4 643 - 4 643
Other reserves 2 824 3 090 (9) 3 704
Retained earnings 34 638 31 312 11 32 449
53 874 49 814 8 52 565
Non-controlling interest 134 121 11 65
Total equity 54 008 49 935 8 52 630
Total equity and liabilities 677 814 675 162 0 680 923
Note
(1)Comparatives have been reclassified. These reclassifications have not
been audited. Refer to the "Reclassifications" section.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
1. NON-CURRENT ASSETS HELD FOR SALE
The Bank has transferred certain investment securities designated at fair
value through profit or loss, held by Absa Capital, as well as investments
in associates, held by Absa Capital and Absa Business Bank, to non-current
assets held for sale. This is because the carrying values of these
investments, amounting to R369 million, will be recovered principally
through the disposal thereof. Firm agreements are in place for the
disposal of these investments at the reporting date, with it being highly
probable that the outstanding conditions of these sale agreements will be
met after the reporting date, resulting in the disposal of these
investments.
2. NON-PERFORMING ADVANCES
30 June 2011
Expected
recoverie
s and Total
Outstandi fair Net identified
ng value of exposur impairment
balance collatera e
l
Rm Rm Rm Rm
Cheque accounts 190 69 121 121
Credit cards 1 927 491 1 436 1 436
Instalment credit agreements 3 024 1 721 1 303 1 303
Microloans 378 76 302 302
Mortgages 25 217 20 464 4 753 4 753
Personal loans 1 214 505 709 709
Retail Banking 31 950 23 326 8 624 8 624
Cheque accounts 835 462 373 373
Commercial Asset Finance 943 346 597 597
Commercial Property Finance 2 631 2 124 507 507
Term loans 673 495 178 178
Absa Business Bank 5 082 3 427 1 655 1 655
Absa Capital 722 341 381 381
Non-performing advances 37 754 27 094 10 660 10 660
Non-performing advances ratio 7,7
(%)
30 June 2010
Expected
recoverie
s and Total
Outstandi fair Net identified
ng value of exposur impairment
balance collatera e
l
Rm Rm Rm Rm
2. NON-PERFORMING ADVANCES
(continued)
Cheque accounts 172 93 79 79
Credit cards(1) 2 302 353 1 949 1 949
Instalment credit agreements(2) 2 601 1 571 1 030 1 030
Microloans(3) 341 64 277 277
Mortgages 25 665 20 822 4 843 4 843
Personal loans(4) 949 366 583 583
Retail Banking 32 030 23 269 8 761 8 761
Cheque accounts 1 022 521 501 501
Commercial Asset Finance 1 112 473 639 639
Commercial Property Finance 2 138 1 831 307 307
Term loans 744 551 193 193
Absa Business Bank(3)(5) 5 016 3 376 1 640 1 640
Absa Capital(5) 419 83 336 336
Non-performing advances 37 465 26 728 10 737 10 737
Non-performing advances ratio 7,5
(%)
Notes
Comparatives have been reclassified for the following structure changes
made during the period under review:
(1)Debit Card was moved within Retail Banking from Retail Bank to Card.
(2)Absa Technology Finance Solutions was moved from Vehicle and Asset
Finance within Retail Banking to Absa Business Bank.
(3)Absa Development Company division was moved from Absa Business Bank to
Retail Bank within Retail Banking.
(4)Personal loan centres were moved within Retail Banking from Personal
Loans to Retail Bank.
(5)The Bank`s corporate client base was transferred from Absa Business
Bank to Absa Capital following an initiative to optimise product delivery
to its corporate clients.
31 December 2010
Expected
recoverie
s and Total
Outstandi fair Net identified
ng value of exposur impairment
balance collatera e
l
Rm Rm Rm Rm
2. NON-PERFORMING ADVANCES
(continued)
Cheque accounts 220 110 110 110
Credit cards(1) 2 119 553 1 566 1 566
Instalment credit agreements(2) 3 058 1 776 1 282 1 282
Microloans(3) 445 84 361 361
Mortgages 25 569 20 678 4 891 4 891
Personal loans(4) 928 321 607 607
Retail Banking 32 339 23 522 8 817 8 817
Cheque accounts 880 448 432 432
Commercial Asset Finance 1 082 429 653 653
Commercial Property Finance 2 483 2 032 451 451
Term loans 667 484 183 183
Absa Business Bank(3)(5) 5 112 3 393 1 719 1 719
Absa Capital(5) 549 208 341 341
Non-performing advances 38 000 27 123 10 877 10 877
Non-performing advances ratio 7,6
(%)
Notes
Comparatives have been reclassified for the following structure changes
made during the period under review:
(1)Debit Card was moved within Retail Banking from Retail Bank to Card.
(2)Absa Technology Finance Solutions was moved from Vehicle and Asset
Finance within Retail Banking to Absa Business Bank.
(3) Absa Development Company division was moved from Absa Business Bank to
Retail Bank within Retail Banking.
(4)Personal loan centres were moved within Retail Banking from Personal
Loans to Retail Bank.
(5)The Bank`s corporate client base was transferred from Absa Business
Bank to Absa Capital following an initiative to optimise product delivery
to its corporate clients.
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
3. BORROWED FUNDS
Subordinated callable notes
The subordinated debt instruments listed below qualify as secondary
capital in terms of the Banks Act, No 94 of 1990 (as amended).
Interest rate Final maturity
date
8,75% 1 September 1 500 1 500 - 1 500
2017
8,80% 7 March 2019 1 725 1 725 - 1 725
8,10% 27 March 2020 2 000 2 000 - 2 000
10,28% 3 May 2022 600 600 - 600
Three-month 3 May 2022 400 - 400
JIBAR + 2,10% 400
CPI-linked notes, fixed at the
following coupon rates:
6,25% 31 March 2018 1 886 1 886 - 1 886
6,00% 20 September 3 000 3 000 - 3 000
2019
5,50% 7 December 1 500 1 500 - 1 500
2028
Accrued interest 1 007 745 35 826
Fair value adjustment 168 3 >100 212
13 786 13 359 3 13 649
Portfolio analysis
Financial liabilities 750 731 3 739
designated at fair value
through profit or loss
Financial liabilities held at 7 623 (1) 7 440
amortised cost 7 699
Amortised cost financial 5 413 10 5 470
liabilities held in a fair
value hedging relationship 4 929
13 786 13 359 3 13 649
30 June 31 December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
4. FINANCIAL GUARANTEE
CONTRACTS
Financial guarantee contracts 384 614 (37) 599
5. COMMITMENTS
Authorised capital
expenditure
Contracted but not provided 489 681 (28) 882
for(1)
Operating lease payments
due(2)
No later than one year 1 025 1 116 (8) 1 029
Later than one year and no 1 977 (7) 1 965
later than five years 2 129
Later than five years 393 352 12 386
3 395 3 597 (6) 3 380
6. CONTINGENCIES
Guarantees(3) 11 734 11 057 6 11 052
Irrevocable debt 22 942 40 461 (43) 46 348
facilities(4)
Irrevocable equity 679 821 (17) 750
facilities(4)
Letters of credit 3 764 4 951 (24) 4 653
Other 11 5 >100 43
39 130 57 295 (32) 62 846
Notes
(1)The Bank has capital commitments in respect of computer equipment and
property development. Management is confident that future net revenues and
funding will be sufficient to cover these commitments.
(2)The operating lease commitments comprise a number of separate operating
leases in relation to properties and equipment, none of which is
individually significant to the Bank. Leases are negotiated for an average
term of three to five years and rentals are renegotiated annually.
(3)Guarantees include performance and payment guarantee contracts.
(4)Irrevocable facilities are commitments to extend credit where the Bank
does not have the right to terminate the facilities by written notice.
Commitments generally have fixed expiry dates. Since commitments may
expire without being drawn upon, the total contract amounts do not
necessarily represent future cash requirements.
7. ACQUISITIONS AND DISPOSALS OF BUSINESSES
7.1 Acquisition of business during the current period under review
7.1.1 On 1 June 2011, the Bank acquired 76% of the units in Absa Property
Equity Fund (APEF) and, as a result, has taken on a majority share of the
risks and rewards of the fund. APEF operates as a special purpose entity
specifically for the investment in community upliftment projects and is
consolidated in terms of SIC 12. The fund was previously consolidated under
SIC 12 when the Bank held between 75% and 93% of the units (depending on
the total units in issue at a specific point in time).
Details of the net assets acquired and gain on bargain Bank
purchase are as follows: June 2011
Fair value
recognised
on
acquisition
Rm
Cash, cash balances and balances with central banks 0
Other assets 1
Investments 277
Other liabilities 0
Non-controlling interest (67)
Net assets acquired 211
Satisfied by:
Cash outflow on acquisition 211
Fair value of net assets acquired (211)
Gain on bargain purchase -
Net cash outflow due to acquisition 211
Total cash and cash equivalents acquired 0
7. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
7.2 Acquisitions of businesses during the previous period/year
7.2.1 On 30 June 2010, the Virgin Money South Africa Proprietary Limited
(VMSA) joint venture arrangement was terminated. This was based on a
contractually agreed arrangement whereby, depending on the financial
performance of the joint venture, its future existence will be determined.
Due to the underperformance of the joint venture the arrangement was
terminated and the Bank acquired the underlying business. The termination
resulted in the Bank selling its 50% interest in VMSA for R1, while
acquiring VMSA`s credit and home loan business for R1. VMSA`s credit card
and home loan business contributed a net profit before tax of R40 million
and revenue of R57 million to the Bank for the period from 30 June 2010 to
31 December 2010. If the acquisition occurred on 1 January 2010, the Bank`s
revenue would have been R116 million higher and the net profit before tax
for the year would have been R21 million higher.
Details of the net assets acquired and gain on bargain Bank
purchase are as follows: December
2010
Fair value
recognised
on
acquisition
Rm
Intangible assets 3
Other liabilities (1)
Deferred tax liabilities (1)
Net assets acquired 1
Satisfied by:
Fair value of net assets acquired (1)
Gain on bargain purchase (1)
This bargain purchase gain arose primarily due to the underperformance of
the underlying VMSA credit card and home loan portfolio. Any transaction
costs associated with the transaction were expensed when incurred. No
contingent liabilities were recognised as a result of the acquisition and
no contingent consideration is payable. No identifiable assets were
identified of which the fair values could not be reliably measured. No
material receivables were acquired as part of the transaction.
7. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
7.2 Acquisitions of business during the previous period/year (continued)
7.2.2 Absa Bank previously had a 50% share in the preference shares of
Sanlam Home Loans Proprietary Limited (SHL), the holding company of three
securitisation vehicles. The investment in SHL had previously been equity
accounted as the Bank and Sanlam Life Insurance Limited (Sanlam) had
joint control over SHL. On 1 August 2010, the Bank acquired the remaining
50% preference shares in SHL, which resulted in the Bank controlling and
consolidating SHL. SHL contributed a net profit before tax of R39 million
and revenue of R12 million to the Bank for the period from 1 August 2010
to 31 December 2010. If the acquisition occurred on 1 January 2010, the
Bank`s revenue would have been R84 million higher and the net profit
before tax for the year would have been R70 million higher.
Details of the net assets acquired and gain on bargain Bank
purchase are as follows: December
2010
Fair value
recognised
on
acquisition
Rm
Cash, cash balances and balances with central banks 409
Other assets 11
Loans and advances to customers 4 621
Other liabilities (9)
Debt securities in issue (3 687)
Shareholders` loans (1 325)
Previously held interest (10)
Net assets acquired 10
Satisfied by:
Cash inflow on acquisition (61)
Fair value of net liabilities acquired (10)
Gain on bargain purchase (71)
7. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
7.2 Acquisitions of businesses during the previous period/year (continued)
7.2.2 (continued)
The consideration paid was less than the fair value of the assets and
liabilities acquired. No goodwill resulted from the transaction and the
excess of R71 million, together with the gain of R10 million recognised as
a result of remeasuring the previously held interest to fair value was
realised in the statement of comprehensive income in "Other operating
income". Any transaction costs associated to the acquisition have been
expensed when incurred. No contingent liabilities were recognised as a
result of the acquisition and no contingent consideration is payable. No
identifiable assets were identified of which the fair values could not be
reliably measured.
Subsequent to the acquisition the debt securities in issue were redeemed
in full.
Mortgage loans with a fair value of R4 621 million were acquired as a
result of the acquisition. The gross contractual capital amounts
receivable were R4 685 million on acquisition date and an impairment
provision of R64 million was carried against these loans on acquisition
date.
The joint venture agreement was terminated due to the underperformance of
the mortgage loan portfolio and consequently the Bank obtained full
control of SHL. The underperformance of the mortgage loan portfolio gave
rise to the gain on bargain purchase as the joint venture partner was
willing to sell its 50% stake at below fair value of the underlying assets
and liabilities.
Bank
December
2010
Rm
Net cash outflow due to acquisitions 0
Total cash and cash equivalents acquired 470
7. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
7.3 Disposal of business during the current period under review
There were no disposals during the current period under review.
7.4 Disposal of businesses during the previous period/year
7.4.1 Absa Property Equity Fund (APEF) operated as a special purpose
entity specifically for the investment in community upliftment projects.
This fund was previously consolidated in terms of SIC 12 as the Bank held
between 75% and 93% of the units (depending on the total units in issue
at a specific point in time) and was thereby exposed to the majority of
risks and rewards within the fund.
Between January 2010 and August 2010 the Bank disposed of some of the
units it owned to the extent that its effective holding decreased to
below 50% of the units in issue, at which point the fund was
deconsolidated due to the Bank not being exposed to the majority of the
risks and rewards of the fund anymore.
No gain or loss was recognised on deconsolidation of the fund due to the
underlying assets being measured at fair value.
The remainder of the investment retained after deconsolidation was
disposed of during September 2010 and October 2010.
Details of the net assets disposed of are as follows: Bank
December
2010
Fair value
on disposal
Rm
Cash, cash balances and balances with central banks 22
Other assets 0
Investment securities 136
Other liabilities 0
Net assets disposed 158
Satisfied by:
Non-controlling interest (78)
Fair value of interest retained (64)
Consideration received 16
Cash and cash equivalents disposed (22)
Net cash outflow on disposal (6)
8. ACQUISITIONS AND DISPOSALS OF INVESTMENTS IN ASSOCIATES AND JOINT
VENTURES
30 June 2011 30 June 2010 31 December 2010
(Unaudited) (Unaudited) (Audited)
Effectiv Movemen Effectiv Movemen Effectiv Movemen
e t e t e t
holding Rm holding Rm holding Rm
(%) (%) (%)
8.1 Net movement resulting from acquisitions and disposals of investments in
associates and joint ventures
Acquisitions and disposals during the current period under review:
There were no acquisitions or disposals of associates and joint ventures
during the current period under review.
Transferred to non-current assets held for sale during the current period
under review:
Sekunjalo 26,4 (42) 26,4 - 26,4 -
Investments Limited
Acquired during the previous period/year, at cost:
Pinnacle Point - - - 95 - 95
Group Limited
Disposed during the previous period/year:
Pinnacle Point - - - (95) - (95)
Group Limited
Virgin Money South - - - (0) - (0)
Africa Proprietary
Limited
Transferred to subsidiaries during the previous period/year:
Sanlam Home Loans - - 50,0 - 100,0 -
Proprietary Limited
Transferred to investment securities designated at fair value through profit
or loss during the previous period/year:
Blue Financial - - 20,2 - 6,7 (32)
Services Limited
8. ACQUISITIONS AND DISPOSALS OF INVESTMENTS IN ASSOCIATES AND JOINT
VENTURES (continued)
30 June 2011 30 June 2010 31 December
2010
(Unaudited) (Unaudited) (Audited)
Rm Rm Rm
8.2 Details of transfers and purchase consideration on net assets acquired
on the aforementioned acquisitions are as follows:
Cash paid - 95 95
Conversion of debt to equity - 0 0
- 95 95
8.3 Details of transfers and consideration received on net assets disposed
of on the aforementioned disposals are as follows:
Cash received - (95) (95)
Loss on disposal - (0) (0)
Transfer to investment - - (32)
securities
Transfer to non-current assets
held for sale (42) - -
(42) (95) (127)
9. RELATED PARTIES
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
9.1 Balances and transactions
with ultimate parent
company(1)(2)(3)
The following are balances with, and transactions entered into with the
ultimate parent company:
Balances
Loans and advances 20 473 12 704 63 15 586
Derivative assets 7 206 7 614 (5) 9 144
Nominal value of derivative 389 798 264 965 47 493 402
assets
Other assets 1 075 1 952 (45) 552
Investment securities 434 369 18 434
Deposits (5 197) (5 540) (6) (6 082)
Derivative liabilities (5 759) (10 847) (47) (9 006)
Nominal value of derivative (323 685) (323 774) (0) (375 467)
liabilities
Other liabilities (1 796) (57) >100 (267)
Transactions
Interest received (82) (35) >100 (80)
Interest paid 32 15 >100 36
Net fee and commission income (9) - 100 (15)
Gains and losses from banking and (68) 2 548 >100 1 646
trading activities
Other operating income (125) (22) >100 (42)
Operating expenditure (25) (169) (85) 27
Notes
(1)Absa Group Limited is a subsidiary of Barclays Bank PLC, which has a
majority equity interest in the Group.
(2)All transactions entered into are on the same commercial terms and
conditions as in the normal course of business.
(3)Debit amounts are shown as positive; credit amounts are shown as
negative.
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
9. RELATED PARTIES (continued)
9.2 Balances and transactions
with parent company(1)
The following are balances with and transactions entered into with the
parent company:
Balances
Loans and advances 159 136 17 139
Other liabilities (191) (218) 12 (174)
Transactions
Dividends paid 1 350 900 50 3 100
Interest paid 4 6 (33) 10
Note
(1)Absa Bank is a wholly owned subsidiary of Absa Group Limited.
9. RELATED PARTIES (continued)
9.3 Associates, joint ventures and retirement benefit fund
The Bank provides certain banking and financial services to associates and
joint ventures. The Bank also provides a number of current and interest-
bearing cash accounts to the Absa Group Pension Fund. These transactions
are conducted on the same terms as third-party transactions and are not
individually material.
In aggregate, the amounts included in the Bank`s financial statements are
as follows:
30 June 2011
(Unaudited)
Associate Retirement Total
s benefit Rm
and joint fund
ventures Rm
Rm
Value of Absa Group Pension Fund - 7 003 7 003
investments
managed by the Bank
Value of Absa shares held by the Absa Group - 120 120
Pension Fund(1)
Value of other Absa securities held by the - 1 644 1 644
Absa Group Pension Fund
Statement of financial position
Loans and advances 7 510 - 7 510
Other assets 56 - 56
Deposits (2) (73) (75)
Other liabilities (80) - (80)
Derivative transactions 2 - 2
Statement of comprehensive income
Interest and similar income (250) - (250)
Interest expense and similar charges 68 0 68
Fees received (46) (9) (55)
Fees paid 84 - 84
Current service costs(2) - 366 366
Notes
(1)Consists of Absa Group Limited ordinary shares and Absa Bank preference
shares.
(2)Include employee contributions.
9. RELATED PARTIES (continued)
9.4 Associates, joint ventures and retirement benefit fund (continued)
30 June 2010
(Unaudited)
Associate Retirement Total
s benefit Rm
and joint fund
ventures Rm
Rm
Value of Absa Group Pension Fund - 6 716 6 716
investments
managed by the Bank
Value of Absa shares held by the Absa Group - 92 92
Pension Fund(1)
Value of other Absa securities held by the - 1 964 1 964
Absa Group Pension Fund
Statement of financial position
Loans and advances 7 394 - 7 394
Other assets 1 096 - 1 096
Deposits (345) (49) (394)
Other liabilities (50) - (50)
Statement of comprehensive income
Interest and similar income (379) - (379)
Interest expense and similar charges 2 0 2
Fees received (57) (9) (66)
Fees paid 87 - 87
Current service costs(2) - 335 335
Notes
(1)Consists of Absa Group Limited ordinary shares and Absa Bank preference
shares.
(2)Include employee contributions.
9. RELATED PARTIES (continued)
9.5 Associates, joint ventures and retirement benefit fund (continued)
31 December 2010
(Audited)
Associate Retirement Total
s benefit Rm
and joint fund
ventures Rm
Rm
Value of Absa Group Pension Fund - 7 193 7 193
investments
managed by the Bank
Value of Absa shares held by the Absa Group - 116 116
Pension Fund(1)
Value of other Absa securities held by the - 1 582 1 582
Absa Group Pension Fund
Statement of financial position
Loans and advances 7 275 - 7 275
Other assets 17 - 17
Deposits (0) (30) (30)
Other liabilities (47) - (47)
Derivative transactions 4 - 4
Statement of comprehensive income
Interest and similar income (617) - (617)
Interest expense and similar charges 8 1 9
Fees received (106) (17) (123)
Fees paid 173 - 173
Current service costs(2) - 635 635
Notes
(1)Consists of Absa Group Limited ordinary shares and Absa Bank preference
shares.
(2)Include employee contributions.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Net interest income 10 486 10 289 2 21 244
Interest and similar 23 631 26 505 (11) 52 264
income
Interest expense and (13 145) (16 216) 19 (31 020)
similar charges
Impairment losses on loans and (2 790) (3 532) 21 (5 578)
advances
Net interest income after 7 696 6 757 14 15 666
impairment losses on loans and
advances
Net fee and commission income 6 520 6 116 7 12 416
1.1
Fee and commission income 6 955 6 535 6 13 378
Fee and commission (435) (419) (4) (962)
expense
Gains and losses from banking 1 566 1 116 40 1 851
and trading activities
1.2
Gains and losses from 18 4 >100 24
investment activities
1.3
Other operating income 284 160 78 496
Operating profit before 16 084 14 153 14 30 453
operating expenditure
Operating expenditure (10 813) (9 929) (9) (21 180)
Operating expenses (10 346) (9 555) (8) (20 440)
2.1
Other impairments (37) (82) 55 (109)
2.2
Indirect taxation (430) (292) (47) (631)
Share of post-tax results of 33 15 >100 (8)
associates and joint ventures
Operating profit before income 5 304 4 239 25 9 265
tax
Taxation expense (1 440) (1 111) (30) (2 507)
Profit for the period/year 3 864 3 128 24 6 758
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
Other comprehensive income
Exchange differences on 52 (77) >100 (234)
translation of foreign
operations
Movement in cash flow hedging (855) 644 >(100) 1 153
reserve
Fair value (losses)/gains (76) 1 791 >(100) 3 422
arising during the period/year
Amount removed from other (1 111) (897) (24) (1 820)
comprehensive income and
recognised in the profit and
loss component of the
statement of comprehensive
income
Deferred tax 332 (250) >100 (449)
Movement in available-for-sale (31) (87) 64 170
reserve
Fair value (losses)/gains (62) (168) 63 150
arising during the period/year
Amortisation of 18 46 (61) 92
government bonds -release to
the profit and loss component
of the statement of
comprehensive income
Deferred tax 13 35 (63) (72)
Movement in retirement benefit 12 (4) >100 19
asset
Increase/(decrease) in 17 (6) >100 27
retirement benefit surplus
Deferred tax (5) 2 >(100) (8)
Total comprehensive income for 3 042 3 604 (16) 7 866
the period/year
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
Profit attributable to:
Ordinary equity holder of the 3 719 2 963 26 6 432
Bank
Preference equity holders of 143 162 (12) 320
the Bank
Non-controlling interest 2 3 (33) 6
3 864 3 128 24 6 758
Total comprehensive income
attributable to:
Ordinary equity holder of the 2 897 3 439 (16) 7 540
Bank
Preference equity holders of 143 162 (12) 320
the Bank
Non-controlling interest 2 3 (33) 6
3 042 3 604 (16) 7 866
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
1. NON-INTEREST INCOME
1.1 Net fee and commission
income
Fee and commission income
Asset management and other 35 (34) 102
related fees 53
Consulting and administration 70 54 30 154
fees
Credit-related fees and 6 519 6 176 6 12 393
commissions
Cheque accounts 1 613 1 592 1 3 156
Credit cards(1) 991 867 14 1 788
Electronic banking 1 963 1 847 6 3 823
Other(2) 812 682 19 1 220
Savings accounts 1 140 1 188 (4) 2 406
Insurance commission received 210 100 >100 386
Project finance fees 71 107 (34) 205
Other 34 30 13 100
Trust and other fiduciary 16 15 7 38
services(2)
Portfolio and other 11 9 22 26
management fees
Trust and estate income 5 6 (17) 12
6 955 6 535 6 13 378
Fee and commission expense
Cheque processing fees (85) (88) 3 (173)
Debt collecting fees (32) (24) (33) (105)
Other (152) (142) (7) (329)
Transaction-based legal fees (99) (87) (14) (189)
Valuation fees (67) (78) 14 (166)
(435) (419) (4) (962)
Net fee and commission income 6 520 6 116 7 12 416
Notes
(1)Includes merchant, acquiring and issuing fees.
(2)Includes service, commission and credit-related fees on mortgage loan
and foreign exchange transactions.
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
1. NON-INTEREST INCOME
(continued)
1.1 Net fee and commission
income (continued)
Included above are net fees
and commissions linked to
financial instruments not at
fair value:
Fee and commission income
Cheque accounts 1 613 1 592 1 3 156
Credit cards 518 427 21 865
Electronic banking 1 963 1 847 6 3 823
Other 562 504 12 1 021
Savings accounts 1 140 1 188 (4) 2 406
5 796 5 558 4 11 271
Fee and commission expense (85) (88) (3) (173)
5 711 5 470 4 11 098
1.2 Gains and losses from
banking and trading activities
Associates and joint ventures - 42 (100) 87
Dividends received - - - 45
Profit realised on disposal - 42 (100) 42
Available-for-sale unwind from
reserve
Statutory liquid asset (18) (46) 61 (92)
portfolio
Financial instruments 221 (494) >100 (695)
designated at fair value
through profit or loss
Debt securities in issue 19 (10) >100 (83)
Deposits from banks and due to (229) (793) 71 (1 618)
customers
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
1. NON-INTEREST INCOME
(continued)
1.2 Gains and losses from
banking and trading activities
(continued)
Investment securities 213 (71) >100 190
Debt instruments 26 17 53 27
Listed equity instruments 157 (40) >100 81
Unlisted equity and hybrid 30 (48) >100 82
instruments
Loans and advances to banks and 222 (41) 809
customers 377
Statutory liquid asset (4) 3 >(100) 7
portfolio
Financial instruments held for
trading
Derivatives and trading 1 1 579 (14) 2 451
instruments 359
Ineffective hedges 4 35 (89) 100
Cash flow hedges 25 43 (42) 115
Fair value hedges (21) (8) >(100) (15)
1 566 1 116 40 1 851
1.3 Gains and losses from
investment activities
Available-for-sale unwind from
reserves
Investment securities
Unlisted equity and hybrid 0 - 100 -
instruments
Financial instruments
designated at fair value
through profit or loss
Investment securities 18 3 >100 23
Listed equity instruments 17 2 >100 21
Unlisted equity and hybrid 1 1 0 2
instruments
Subsidiaries
Dividends received 0 1 >(100) 1
18 4 >100 24
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
2. OPERATING EXPENDITURE
2.1 Operating expenses
Amortisation of intangible 90 47 91 101
assets
Auditors` remuneration 70 65 8 131
Cash transportation 340 283 20 625
Depreciation 561 562 (0) 1 062
Equipment costs 93 105 (11) 206
Information technology 1 040 1 007 3 1 969
Investment property charges - 0 (100) 4
Marketing costs 279 286 (2) 974
Operating lease expenses on 450 440 2 877
properties
Printing and stationery 105 116 (9) 235
Professional fees 346 423 (18) 970
Staff costs 5 723 5 071 13 10 836
Bonuses 467 345 35 951
Current service costs on post- 337 23 525
retirement benefits 274
Salaries 4 406 4 037 9 8 372
Share-based payments and 207 >100 280
incentive schemes 68
Training costs 106 121 (12) 242
Other staff costs(1) 200 226 (12) 466
Telephone and postage 340 342 (1) 680
Other operating costs(2) 909 808 13 1 770
10 346 9 555 8 20 440
Notes
(1)"Other staff costs" include recruitment costs, membership fees to
professional bodies, staff parking, redundancy fees, study assistance,
staff relocation and refreshment costs.
(2)"Other operating costs" include accommodation, travel and
entertainment costs.
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudited (Unaudite Change (Audited)
) d)
Rm Rm % Rm
2. OPERATING EXPENDITURE
(continued)
2.2 Other impairments
Financial instruments 2 21 (90) 38
Amortised cost 2 5 (60) 13
instruments
Available-for-sale - 16 (100) 25
instruments
Other 35 61 (43) 71
Computer software - (100) 4
development costs 4
Equipment 0 - 100 13
Investments in associates - (100) 29
and joint ventures 50
Repossessed properties 35 7 >100 25
37 82 (55) 109
Six months ended Year ended
30 June 31 December
2011 2010 2010
(Unaudited (Unaudited) Net (Audited)
)
Gros Net Gross Net chang Gross Net
s e
Rm Rm Rm Rm % Rm Rm
3. HEADLINE EARNINGS
Headline earnings(1) is
determined as follows:
Profit attributable to 3 26 6 432
ordinary equity holder of 719 2
the Bank 963
Adjustments for:
IFRS 3 gain on bargain - - - (72) (72)
purchase - -
IAS 16 loss/(profit) 2 1 >100 (26) (22)
on disposal of property and
equipment (5) (4)
IAS 28 and 31 headline (0) (0) 92 (1) (1)
earnings component of share
of post-tax results of
associates and joint (1) (1)
ventures
IAS 28 and 31 net - - 100 (42) (42)
profit on disposal of
investments associates and (42) (42)
joint ventures
IAS 28 and 31 - - (100) 29 21
impairment of investments
in associates and joint 50 36
ventures
IAS 36 impairment of 0 0 100 13 9
equipment and leasehold - -
improvements
IAS 38 impairment of - - (100) 4 3
intangible assets 4 3
IAS 39 release of 18 13 (61) 92 66
available-for-sale reserves 46 33
IAS 39 impairment of - - (100) 25 18
available-for-sale 16 12
instruments
IAS 40 change in fair - - - (0) (0)
value of investment - -
properties
Headline earnings 3 3 24 6 412
733 000
Note
(1)The net amount is reflected after taxation and non-controlling
interest.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 June
2011
(Unaudited)
Total equity
attributable
to equity Non-
holders of controllin
the Bank g interest Total
equity
Rm Rm Rm
Balance at the beginning of the 52 565 65 52 630
year
Other reserves (880) - (880)
Transfer from share-based payment (102) - (102)
reserve
Share-based payments for the period 10 - 10
Other comprehensive income (834) - (834)
1
Movement in associates` and joint
ventures` retained earnings reserve 33 - 33
Disposal of associates and joint
ventures - release of reserves 13 - 13
Retained earnings 2 189 - 2 189
Transfer from share-based payment 102 - 102
reserve
Transfer of profit to associates`
and joint ventures` retained (33) - (33)
earnings reserve
Disposal of associates and joint
ventures - release of reserves (13) - (13)
Contribution to equity-settled
share-based payment schemes (248) - (248)
Profit attributable to ordinary
equity holder of the Bank 3 719 - 3 719
1
Profit attributable to preference
equity holders of the Bank 143 - 143
1
Other comprehensive income -
movement in retirement benefit 12 - 12
asset 1
Ordinary dividends paid during the (1 350) - (1 350)
period
Preference dividends paid during (143) - (143)
the period
Six months ended 30 June
2011
(Unaudited)
Total equity
attributable
to equity Non-
holders of controllin
the Bank g interest Total
equity
Rm Rm Rm
Acquisition of business - 67 67
Profit attributable to non-
controlling equity holders of the - 2 2
Bank 1
Balance at the end of the period 53 874 134 54 008
Note
Total comprehensive income
Profit attributable to equity 3 862 2 3 864
holders of the Bank
Other comprehensive income (822) - (822)
3 040 2 3 042
Six months ended 30 June
2010
(Unaudited)
Total equity
attributable
to equity Non-
holders of controllin
the Bank g interest Total
equity
Rm Rm Rm
Balance at the beginning of the 47 318 100 47 418
year
Other reserves 524 - 524
Transfer from share-based payment (25) - (25)
reserve
Share-based payments for the period 8 - 8
Other comprehensive income 480 - 480
1
Movement in associates` and joint
ventures` retained earnings reserve 19 - 19
Disposal of associates and joint
ventures - release of reserves 42 - 42
Retained earnings 1 972 - 1 972
Transfer from share-based payment 25 - 25
reserve
Transfer of profit to associates`
and joint ventures` retained (19) - (19)
earnings reserve
Disposal of associates and joint
ventures - release of reserves (42) - (42)
Contribution to equity-settled
share-based payment schemes (51) - (51)
Profit attributable to ordinary
equity holder of the Bank 2 963 - 2 963
1
Profit attributable to preference
equity holders of the Bank 162 - 162
1
Other comprehensive income -
movement in retirement benefit (4) - (4)
asset 1
Ordinary dividends paid during the (900) - (900)
period
Preference dividends paid during (162) - (162)
the period
Six months ended 30 June
2010
(Unaudited)
Total equity
attributable
to equity Non-
holders of controllin
the Bank g interest Total
equity
Rm Rm Rm
Acquisition of businesses - 18 18
Profit attributable to non-
controlling equity holders of the - 3 3
Bank 1
Balance at the end of the period 49 814 121 49 935
Note
1. Total comprehensive income
Profit attributable to equity 3 125 3 3 128
holders of the Bank
Other comprehensive income 476 - 476
3 601 3 3 604
Year ended 31 December
2010
(Audited)
Total equity
attributable
to equity Non-
holder of controllin
the Bank g interest Total
equity
Rm Rm Rm
Balance at the beginning of the 47 318 100 47 418
year
Shares issued 1 000 - 1 000
Other reserves 1 138 - 1 138
Transfer from share-based payment (46) - (46)
reserve
Share-based payments for the year 43 - 43
Other comprehensive income 1 089 - 1 089
1
Movement in associates` and joint (8) - (8)
ventures` retained earnings reserve
Disposal of associates and joint 60 - 60
ventures - release of reserves
Retained earnings 3 109 - 3 109
Contribution to equity-settled (236) - (236)
share-based payment schemes
Transfer from share-based payment 46 - 46
reserve
Transfer of loss to associates` and 8 - 8
joint ventures` retained earnings
reserve
Disposal of associates and joint (60) - (60)
ventures - release of reserves
Profit attributable to ordinary 6 432 - 6 432
equity holder of the Bank
1
Other comprehensive income - 19 - 19
movement in retirement benefit
surplus 1
Ordinary dividends paid during the (3 100) - (3 100)
year
Year ended 31 December
2010
(Audited)
Total equity
attributable
to equity Non-
holder of controllin
the Bank g interest Total
equity
Rm Rm Rm
Profit attributable to non- - 6 6
controlling equity holders of the
Bank 1
Profit attributable to preference 320 - 320
equity holders of the Bank
1
Preference dividends paid during (320) - (320)
the year
Increase in non-controlling equity - 37 37
holders` interest
Disposal of businesses - (78) (78)
Balance at the end of the year 52 565 65 52 630
Note
Total comprehensive income
Profit attributable to equity 6 752 6 6 758
holders of the Bank
Other comprehensive income 1 108 - 1 108
7 860 6 7 866
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
1. DIVIDENDS PER SHARE
Dividends paid to ordinary
equity holder during the
period/year
15 February 2011 final 1 350 50 900
dividend number 49 of 360,9
cents per ordinary share
(16 February 2010: 244,8 900
cents)
4 August 2010 interim - - 1 200
dividend number 48 of 326,4
cents per ordinary share -
27 August 2010 special - - - 1 000
dividend
1 350 900 50 3 100
Dividends paid to ordinary
equity holder relating to
income for the period/year
2 August 2011 interim 1 550 1 200 29 1 200
dividend number 50 of 414,3
cents per ordinary share (4
August 2010: 326,4 cents)
27 August 2010 special - 1 000 (100) 1 000
dividend
15 February 2011 final - - 1 350
dividend number 49 of 360,9
cents per ordinary share -
1 550 2 200 (30) 3 550
Note
The Secondary Tax on Companies (STC) payable by the Bank in respect of
the dividend approved and declared subsequent to the reporting date,
amounts to R155 million (30 June 2010: R120 million; 31 December 2010:
R135 million). No provision has been made for the dividend and the
related STC at the reporting date, in accordance with IFRS.
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudited Change (Audited)
d) )
Rm Rm % Rm
1. DIVIDENDS PER SHARE
(continued)
Dividends paid to preference
equity holders during the
period/year
15 February 2011 final 143 162 (12) 162
dividend number 10 of 2 887,6
cents per preference share
(16 February 2010: 3 280,3
cents)
4 August 2010 interim - - - 158
dividend number 9 of 3 197,5
cents per preference share
143 162 (12) 320
Dividends paid to preference
equity holders relating to
income for the period/year
2 August 2011 interim 141 158 (11) 158
dividend number 11 of 2 858,3
cents per preference share (4
August 2010:
3 197,5 cents)
15 February 2011 final - - - 143
dividend number 10 of 2 887,6
cents per preference share
(16 February 2010:3 280,3)
141 158 (11) 301
Note
The STC payable by the Bank in respect of the dividend approved and
declared subsequent to the reporting date amounts to R14 million (30 June
2010: R16 million; 31 December 2010: R14 million). No provision has been
made for the dividend and the related STC at the reporting date, in
accordance with IFRS.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Net cash generated from 240 2 215 (89) 1 750
operating activities
Net cash 1 826 (176) >100 775
generated/(utilised) from
investing activities
Net cash utilised in (1 741) (1 613) (8) (3 156)
financing activities
Net increase/(decrease) in 325 426 (24) (631)
cash and cash equivalents
Cash and cash equivalents 4 773 5 403 (12) 5 403
at the beginning of the
year 1
Effect of exchange rate 1 1 0 1
movements on cash and cash
equivalents
Cash and cash equivalents 5 099 5 830 (13) 4 773
at the end of the
period/year 2
NOTES
1. Cash and cash
equivalents at the
beginning of the year
Cash, cash balances and 4 431 (2) 4 543
balances 4 543
with central banks
Loans and advances to 342 860 (60) 860
banks
4 773 5 403 (12) 5 403
2. Cash and cash
equivalents at the
end of the period/year
Cash, cash balances and 4 767 16 4 431
balances 4 100
with central banks
Loans and advances to 332 1 730 (81) 342
banks
5 099 5 830 (13) 4 773
CONSOLIDATED PROFIT CONTRIBUTION BY SEGMENT
Six months ended Year ended
30 June 31
December
2011 2010 2010
(Unaudite (Unaudite Change (Audited)
d) d)
Rm Rm % Rm
Banking operations
Retail Banking 1 644 960 71 3 104
Home Loans 7 (201) >100 166
Vehicle and Asset 183 37 >100 226
Finance(1)
Card(2) 751 542 39 1 380
Personal Loans(3) 303 170 78 515
Retail Bank(4) 400 412 (3) 817
Absa Business Bank(4)(5) 1 411 1 298 9 2 815
Absa Capital(5) 711 698 2 1 439
Corporate centre 240 177 36 (414)
Capital and funding centre (144) (8) >(100) (192)
Preference equity holders of (143) 12 (320)
the Bank (162)
Profit attributable to 3 719 26 6 432
ordinary equity holder of the 2 963
Bank
Headline earnings adjustments 14 37 (62) (20)
Headline earnings 3 733 3 000 24 6 412
Notes
Comparatives have been reclassified for the following structure changes
made during the period under review:
(1)Absa Technology Finance Solutions was moved from Vehicle and Asset
Finance within Retail Banking to Absa Business Bank.
(2)Debit Card was moved within Retail Banking from Retail Bank to Card.
(3)Personal loan centres were moved within Retail Banking from Personal
Loans to Retail Bank.
(4)Absa Development Company division was moved from Absa Business Bank to
Retail Bank within Retail Banking.
(5)The Bank`s corporate client base was transferred from Absa Business
Bank to Absa Capital following an initiative to optimise product delivery
to its corporate clients.
CONSOLIDATED TOTAL REVENUE(1) CONTRIBUTION BY SEGMENT
Six months ended Year ended
30 June 31
December
2011 2010 2010
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Banking operations
Retail Banking 10 918 10 154 8 21 022
Home Loans 1 958 1 618 21 3 480
Vehicle and Asset 1 118 997 12 2 015
Finance(2)
Card(3) 1 801 1 642 10 3 470
Personal Loans(4) 1 053 921 14 1 960
Retail Bank(5) 4 988 4 976 0 10 097
Absa Business Bank(5)(6) 5 679 5 383 5 11 107
Absa Capital(6) 2 590 2 536 2 5 098
Corporate centre (325) (524) 38 (1 090)
Capital and funding 12 136 (91) (106)
centre
Total revenue 18 874 17 685 7 36 031
Notes
(1)Revenue includes net interest income and non-interest income.
Comparatives have been reclassified for the following structure changes
made during the period under review:
(2)Absa Technology Finance Solutions was moved from Vehicle and Asset
Finance within Retail Banking to Absa Business Bank.
(3)Debit Card was moved within Retail Banking from Retail Bank to Card.
(4)Personal loan centres were moved within Retail Banking from Personal
Loans to Retail Bank.
(5)Absa Development Company division was moved from Absa Business Bank to
Retail Bank within Retail Banking.
(6)The Bank`s corporate client base was transferred from Absa Business
Bank to Absa Capital following an initiative to optimise product delivery
to its corporate clients.
CONSOLIDATED INTERNAL REVENUE(1) CONTRIBUTION BY SEGMENT
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Banking operations
Retail Banking (5 272) (6 952) 24 (12 992)
Home Loans (6 423) (7 887) 19 (15 157)
Vehicle and Asset (1 214) (1 417) 14 (2 764)
Finance(2)
Card(3) (158) (212) 25 (384)
Personal Loans(4) (284) (314) 10 (611)
Retail Bank(5) 2 807 2 878 (2) 5 924
Absa Business Bank(5)(6) 1 319 643 >100 1 614
Absa Capital(6) 4 504 6 848 (34) 12 566
Corporate centre (103) (145) 29 (435)
Capital and funding centre (510) (365) (40) (820)
Internal revenue (62) 29 >(100) (67)
Notes
(1)Revenue includes net interest income and non-interest income.
Comparatives have been reclassified for the following structure changes
made during the period under review:
(2)Absa Technology Finance Solutions was moved from Vehicle and Asset
Finance within Retail Banking to Absa Business Bank.
(3)Debit Card was moved within Retail Banking from Retail Bank to Card.
(4)Personal loan centres were moved within Retail Banking from Personal
Loans to Retail Bank.
(5)Absa Development Company division was moved from Absa Business Bank
to Retail Bank within Retail Banking.
(6)The Bank`s corporate client base was transferred from Absa Business
Bank to Absa Capital following an initiative to optimise product
delivery to its corporate clients.
CONSOLIDATED TOTAL ASSETS BY SEGMENT
Six months ended Year
ended
30 June 31
December
2011 2010 2010
(Unaudited) (Unaudited) Change (Audited)
Rm Rm % Rm
Banking operations
Retail Banking 445 870 439 596 1 454 004
Home Loans 238 879 237 641 1 242 722
Vehicle and Asset 45 221 48 541 (7) 50 242
Finance(1)
Card(2) 21 942 19 500 13 21 098
Personal Loans(3) 13 582 11 507 18 12 887
Retail Bank(4) 126 246 122 407 3 127 055
Absa Business Bank(4)(5) 179 605 169 729 6 171 157
Absa Capital(5) 325 362 350 239 (7) 344 921
Corporate centre (353 508) (357 274) 1 (362 014)
Capital and funding centre 80 485 72 872 10 72 855
Total assets 677 814 675 162 0 680 923
Notes
Comparatives have been reclassified for the following structure changes
made during the period under review:
(1)Absa Technology Finance Solutions was moved from Vehicle and Asset
Finance within Retail Banking to Absa Business Bank.
(2)Debit Card was moved within Retail Banking from Retail Bank to Card.
(3)Personal loan centres were moved within Retail Banking from Personal
Loans to Retail Bank.
(4)Absa Development Company division was moved from Absa Business Bank
to Retail Bank within Retail Banking.
(5)The Bank`s corporate client base was transferred from Absa Business
Bank to Absa Capital following an initiative to optimise product
delivery to its corporate clients.
RECLASSIFICATIONS
Some items within the statement of financial position as at 31 December 2010
were reclassified in the current period:
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2010
(Audited)
As
previously
reported Reclassifications Reclassifi
(1) ed
Rm Rm Rm
Assets
Cash, cash balances and 17 343 - 17 343
balances with central banks
Statutory liquid asset 48 215 - 48 215
portfolio
Loans and advances to banks 23 633 2 618 26 251
Trading portfolio assets 57 647 - 57 647
Hedging portfolio assets 4 662 - 4 662
Other assets 12 954 (3 276) 9 678
Current tax assets 5 - 5
Loans and advances to 485 588 658 486 246
customers
Loans to Absa Group companies 8 071 - 8 071
Investment securities 12 906 - 12 906
Investments in associates and 406 - 406
joint ventures
Goodwill and intangible assets 643 - 643
Investment properties 1 771 - 1 771
Property and equipment 6 987 - 6 987
Deferred tax assets 92 - 92
Total assets 680 923 - 680 923
Liabilities
Deposits from banks 21 740 - 21 740
Trading portfolio liabilities 43 530 - 43 530
Hedging portfolio liabilities 1 881 - 1 881
Other liabilities 7 788 - 7 788
Provisions 1 533 - 1 533
Current tax liabilities 929 - 929
Deposits due to customers 372 644 - 372 644
Debt securities in issue 162 526 - 162 526
Loans from Absa Group - - -
companies
Borrowed funds 13 649 - 13 649
Deferred tax liabilities 2 073 - 2 073
Total liabilities 628 293 - 628 293
Equity
Capital and reserves
Attributable to equity holders
of the Bank:
Ordinary share capital 303 - 303
Ordinary share premium 11 465 - 11 465
Preference share capital 1 - 1
Preference share premium 4 643 - 4 643
Other reserves 3 704 - 3 704
Retained earnings 32 449 - 32 449
52 565 - 52 565
Non-controlling interest 65 - 65
Total equity 52 630 - 52 630
Total equity and liabilities 680 923 - 680 923
Note
(1)The Group has reclassified certain collaterals within Absa Capital to
"Loans and advances to banks" and "Loans and advances to customers" to
reflect the true nature of these trades as collateralised loans. These
reclassifications have not been audited.
Profit and dividend announcement
Introduction
Absa Bank ("the Bank" or "the Company") increased attributable earnings by 26%
to R3 719 million, compared with the six months ended 30 June 2010 (June 2010:
R2 963 million). Headline earnings improved by 24% to R3 733 million (June 2010:
R3 000 million). Basic earnings per share increased by 23% to 994,1 cents per
share and headline earnings per share increased by 22% to 997,9 cents per share.
The Bank recorded a 15,5% return on average equity (June 2010: 13,8%) and return
on average assets of 1,12% (June 2010: 0,90%) for the period under review.
Commentary on the operating environment and the results of Absa Bank Limited and
its subsidiaries is set out in the Absa Group`s financial results announcement.
The Absa Group announcement was released on the JSE Limited Securities Exchange
News Service and Absa Group`s website (www.absa.co.za) on 2 August 2011 and
published in the press on 3 August 2011.
Basis of presentation and changes in accounting policies
The Bank`s results have been prepared in accordance with International Financial
Reporting Standards (IFRS). The disclosures comply with International Accounting
Standard (IAS) 34.
The accounting policies applied in preparing the financial results for the
period under review are the same as the accounting policies in place for the
year ended 31 December 2010.
Reclassifications
The Bank has reclassified certain collaterals to "Loans and advances to banks"
and "Loans and advances to customers" to reflect the true nature of these trades
as collateralised loans. This has resulted in comparatives being reclassified
for December 2010.
Declaration of dividend number 11: Absa Bank non-cumulative, non-redeemable
preference shares (Absa Bank preference shares)
The Absa Bank preference shares have an effective coupon rate of 63% of Absa
Bank`s prevailing prime overdraft lending rate (prime rate). Absa Bank`s current
prime rate is 9,0%.
Notice is hereby given that preference dividend number 11, equal to 63% of the
average prime rate for 1 March 2011 to 31 August 2011, per Absa Bank preference
share has been declared for the period 1 March 2011 to 31 August 2011. The
dividend is payable on Monday, 29 August 2011, to shareholders of the Absa Bank
preference shares recorded in the register of members of the Company at the
close of business on Friday, 26 August 2011. The directors of Absa Bank confirm
that the Bank will satisfy the solvency and liquidity test immediately after
completion of the dividend distribution.
Based on the current prime rate, the preference dividend payable for the period
1 March 2011 to 31 August 2011 would indicatively be 2 858,3 cents per Absa Bank
preference share.
In compliance with the requirements of Strate, the electronic settlement and
custody system used by the JSE Limited, the following salient dates for the
payment of the preference dividend are applicable:
Last day to trade cum dividend Friday, 19 August 2011
Shares commence trading ex dividend Monday, 22 August 2011
Record date Friday, 26 August 2011
Payment date Monday, 29 August 2011
Share certificates may not be dematerialised or rematerialised between Monday,
22 August 2011, and Friday, 26 August 2011, both dates inclusive.
On Monday, 29 August 2011, the dividend will be electronically transferred to
the bank accounts of certificated shareholders who use this facility. In respect
of those who do not, cheques dated 29 August 2011 will be posted on or about
that date. The accounts of those shareholders who have dematerialised their
shares (which are held at their participant or broker) will be credited on
Monday, 29 August 2011.
On behalf of the board
S Martin
Secretary
Johannesburg
2 August 2011
Please note that the preference dividend calculation dates are 28 (29) February
and 31 August of each year and that the payment date may not be later than 45
days after the preference dividend calculation date.
Absa Bank Limited is a company domiciled in South Africa. Its registered office
is the 7th floor, Absa Towers West, 15 Troye Street, Johannesburg, 2001.
Absa Bank Limited
Administrative information
Registration number: 1986/004794/06
Authorised financial services and
registered credit provider (NCRCP7)
Incorporated in the Republic of South Africa
ISIN: ZAE000079810
JSE share code: ABSP
Registered office
7th Floor, Absa Towers West
15 Troye Street
Johannesburg, 2001
Postal address: PO Box 7735
Johannesburg, 2000
Telephone: (+27 11) 350 4000
Telefax: (+27 11) 350 4009
Email: groupsec@absa.co.za
Board of directors
Independent non-executive directors
C Beggs, BP Connellan,
SA Fakie, G Griffin (Chairman),
MJ Husain, TM Mokgosi-Mwantembe,
EC Mondlane Jr1, TS Munday, SG Pretorius,
BJ Willemse
Non-executive directors
YZ Cuba, BCMM de Vitry d`Avaucourt2,
AP Jenkins3, R Le Blanc3
Executive directors
DWP Hodnett (Financial Director), M Ramos (Chief Executive),
LL von Zeuner (Deputy Chief Executive)
1Mozambican 2French 3British
Transfer secretary
South Africa
Computershare Investor Services
Proprietary Limited
70 Marshall Street
Johannesburg, 2001
Postal address: PO Box 61051
Marshalltown, 2107
Telephone: (+27 11) 370 5000
Telefax: (+27 11) 370 5271/2
Sponsor
J.P. Morgan Equities Limited
No 1 Fricker Road, Cnr. Hurlingham Road,
Illovo, Johannesburg, 2196
Postal address: Private Bag X9936
Sandton, 2146
Telephone: (+27 11) 507 0300
Telefax: (+27 11) 507 0503
Auditors
PricewaterhouseCoopers Inc.
Ernst & Young Inc.
Shareholder contact information
Shareholder and investment queries about the
Absa Bank should be directed to the following areas:
Group Investor Relations
AM Hartdegen (Head of Investor Relations)
Telephone: (+27 11) 350 5926
Telefax: (+27 11) 350 5924
E-mail: Investorrelations@absa.co.za
Group Secretary
S Martin
Email: sarita.martin@absa.co.za
Other Contacts
Group Media Relations
J Dludlu (Head: Group Communication)
Telephone: (+27 11) 350 3221
Group Finance
JP Quinn (Group Financial Controller)
Telephone: (+27 11) 350 7565
Website address
www.absa.co.za
Date: 02/08/2011 08:00:59 Supplied by www.sharenet.co.za
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