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STANDARD BANK INVESTMENT CORPORATION LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTERED BANK CONTROLLING COMPANY)
(REGISTRATION NO. 1969/017128/06)
FINANCIAL HIGHLIGHTS
ADJUSTED HEADLINE EARNINGS 40% UP
ADJUSTED HEADLINE EARNINGS PER SHARE 27% HIGHER
TOTAL DIVIDENDS OF 68 CENTS, 28% HIGHER
COST TO INCOME RATIO IMPROVED TO 61,4%
RETURN ON EQUITY 22%
COMMENTARY
EARNINGS
THE GROUP ACHIEVED EXCELLENT OVERALL RESULTS FOR THE YEAR IN A DIFFICULT
ECONOMIC ENVIRONMENT. THESE RESULTS WERE THE FIRST FOLLOWING THE ACQUISITION OF
CONTROL OF THE LIBERTY LIFE GROUP. EARNINGS ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS OF R3 090 MILLION WERE 51% UP AND ADJUSTED HEADLINE EARNINGS OF R2
892 MILLION WERE 40% HIGHER THAN THE PREVIOUS YEAR. ADJUSTED HEADLINE EARNINGS
PER SHARE OF 226 CENTS WERE 27% UP, AND RESULTED IN A FIVE-YEAR COMPOUND ANNUAL
GROWTH RATE OF 21%.
THE RETURN ON SHAREHOLDERS' FUNDS INCREASED FROM 18% IN 1998 TO 22%. THIS
IMPROVEMENT WAS DUE TO THE SHARP RISE IN EARNINGS, AND TO THE WRITE OFF OF
GOODWILL ARISING ON THE LIBERTY LIFE ACQUISITION AGAINST SHARE PREMIUM WHICH
SERVED TO OFFSET THE EFFECT OF ADDITIONAL SHARES ISSUED IN THE YEAR. FURTHER
IMPROVEMENT IN THIS FOCAL MEASURE IS ANTICIPATED IN THE YEAR AHEAD.
ATTENTION IS DRAWN TO THE NOTES ON ACCOUNTING MATTERS ACCOMPANYING THIS
COMMENTARY THAT DETAIL THE IMPORTANT ACCOUNTING ISSUES RELATED TO THE LIBERTY
ACQUISITION AND OTHER MATTERS THAT WILL ASSIST IN A FULLER UNDERSTANDING OF THE
RESULTS.
STANDARD BANK OPERATIONS (ALL OPERATIONS EXCLUDING LIBERTY LIFE)
ADJUSTED HEADLINE EARNINGS FOR BANKING OPERATIONS OF R2 420 MILLION WERE 35%
HIGHER THAN THE PREVIOUS YEAR. DOMESTIC BANKING IN TOTAL REFLECTED A MARGINAL
DECLINE IN EARNINGS FOR THE YEAR. THIS WAS MAINLY DUE TO THE HIGH LEVELS OF
DEBT PROVISIONING REQUIRED IN RETAIL AND COMMERCIAL BANKING WHICH SERVED TO
NEGATE THE SOLID GROWTH IN INTEREST AND NON-INTEREST INCOME. SCMB BY
COMPARISON, ACHIEVED RECORD EARNINGS WITH AN INCREASE IN PROFITS OF 19% AND
THIS OPERATION CONFIRMED ITS POSITION AS ONE OF THE LEADING WHOLESALE BANKS IN
THE REGION. INTERNATIONAL OPERATIONS ENJOYED STRONG TRADING CONDITIONS AND
ACHIEVED A SIGNIFICANT TURNAROUND IN PROFITABILITY AFTER THE LOSSES OF LAST
YEAR. HEADLINE EARNINGS FROM INTERNATIONAL OPERATIONS OF R455 MILLION WERE
DRIVEN BY RECORD PERFORMANCES IN MANY OF THE INTERNATIONAL BUSINESS AREAS,
PARTICULARLY RESOURCE BANKING AND CAPITAL MARKETS. EARNINGS FROM STANBIC AFRICA
WERE 43% HIGHER, WITH INTEREST INCOME BENEFITING FROM THE IMPROVEMENT IN MARGIN
AND THE EXPANSION OF OPERATIONS.
INTEREST INCOME
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES OF R6 731 MILLION WAS
13% HIGHER, WITH THE NET MARGIN ON AVERAGE TOTAL ASSETS OF 3,9% MODERATELY
LOWER THAN THE 4,0% OF THE PREVIOUS YEAR. THE GROWTH IN LOANS AND ADVANCES OF
ONLY 2% REFLECTED THE UNDERLYING ECONOMIC CONDITIONS IN THE DOMESTIC MARKET AND
THE RELUCTANCE OF CONSUMERS TO INCUR DEBT.
PROVISION FOR CREDIT LOSSES
THE PROVISION FOR CREDIT LOSSES OF R1 527 MILLION WAS 15% LOWER THAN IN 1998,
BUT INCLUDED A SUBSTANTIALLY HIGHER LEVEL OF PROVISIONING IN DOMESTIC
OPERATIONS. THE RECOVERY OF THE EXPOSURES TO RUSSIAN BANKS HAS MOSTLY BEEN
COMPLETED WITH THE NET RESULT A RECOVERY OF 94% OF THE ORIGINAL PROVISION
RAISED. MANAGEMENT HAS TAKEN THE OPPORTUNITY TO PROVIDE CONSERVATIVELY AGAINST
THE INTERNATIONAL OPERATION'S BANKING AND TRADING PORTFOLIO.
THE PROVISION FOR CREDIT LOSSES AS A PERCENTAGE OF AVERAGE LOANS AND ADVANCES
REDUCED FROM 1,7% IN 1998 TO 1,4% FOR THE CURRENT YEAR. THE BALANCE SHEET
PROVISION FOR CREDIT LOSSES AS A PERCENTAGE OF AVERAGE LOANS AND ADVANCES WAS
3,1% COMPARED WITH 2,9% AT DECEMBER 1998.
NON-INTEREST INCOME
NON-INTEREST INCOME OF R6 440 MILLION WAS 22% HIGHER AND COMPRISED 49% OF TOTAL
INCOME COMPARED WITH 47% IN THE PREVIOUS YEAR. TRADING INCOME ONCE AGAIN
REFLECTED STRONG GROWTH DUE TO OUTSTANDING RESULTS IN BOTH DOMESTIC AND
INTERNATIONAL OPERATIONS. THE RETURN TO STABILITY IN EMERGING MARKETS AND THE
PROFIT OPPORTUNITIES ENGENDERED WERE MAJOR FACTORS IN THIS PERFORMANCE. TRADING
INCOME NOW COMPRISES 13% OF TOTAL INCOME COMPARED WITH 9% IN THE PREVIOUS YEAR.
FEES AND COMMISSIONS WERE 15% UP MAINLY DUE TO THE RISK BASED RE-PRICING OF
CERTAIN SERVICES. IN ADDITION, FEES FROM ADVISORY SERVICES BENEFITED FROM A
HIGHER LEVEL OF ACTIVITY. THE BALANCE OF NON-INTEREST INCOME WAS 11% LOWER, DUE
TO EXCEPTIONAL PROFITS IN 1998 FROM THE SALE OF EQUITY INVESTMENTS.
OPERATING EXPENSES
OPERATING EXPENSES FOR THE YEAR OF R8 148 MILLION WERE 16% HIGHER. THE GROUP'S
OVERALL COST TO INCOME RATIO OF 61,4% WAS 0,9 PERCENTAGE POINTS BETTER THAN THE
PREVIOUS YEAR AND REPRESENTED GOOD PROGRESS TOWARDS THE TARGET OF 60% SET FOR
THE 2000 YEAR. THE MAJOR CAUSE OF THE RELATIVELY HIGH RATE OF COST GROWTH WAS
THE CONTINUED EXPANSION OF INTERNATIONAL OPERATIONS.
AN EXCEPTIONAL LOSS OF R13 MILLION WAS INCURRED IN THE YEAR. THIS INCLUDED A
GAIN OF R194 MILLION ON THE ALIGNMENT OF REPORTING DATES THROUGHOUT THE GROUP,
AND PROFIT REALISED ON THE SALE OF PROPERTIES AND INVESTMENTS. THE BALANCE OF
EXCEPTIONAL ITEMS INCLUDED MAINLY GOODWILL WRITE-OFFS, RESTRUCTURING EXPENSES
AND COSTS INCURRED IN REJECTION OF THE TAKE-OVER BID.
THE DECLINE IN EARNINGS FROM ASSOCIATES WAS DUE TO THE CHANGE IN THE STATUS OF
LIBERTY LIFE, FROM AN ASSOCIATE IN THE PREVIOUS YEAR TO A SUBSIDIARY COMPANY.
THE EFFECTIVE TAX RATE FOR THE YEAR OF 29,7% WAS HIGHER THAN THE PREVIOUS
YEAR'S 27,4% AS A RESULT OF THE INCLUSION OF A R146 MILLION PRIOR YEARS' CHARGE
IN RESPECT OF STAMP DUTIES AND THE INCREASED EFFECTIVE RATE INTERNATIONALLY.
LIBERTY LIFE OPERATIONS
ATTRIBUTABLE EARNINGS FROM LIBERTY LIFE OF R472 MILLION HAVE BEEN INCLUDED IN
THE GROUP'S HEADLINE EARNINGS FOR THE YEAR. THESE EARNINGS ARE IN RESPECT OF
STANBIC'S 30% EFFECTIVE HOLDING IN LIBERTY LIFE AND COMPARE WITH EQUITY
EARNINGS FOR THE PREVIOUS YEAR OF R264 MILLION AT THE THEN EFFECTIVE HOLDING OF
15%. LIBERTY LIFE'S RESULTS HAVE BEEN ANNOUNCED AND DETAILED INFORMATION ON
PERFORMANCE FOR THE YEAR TO 31 DECEMBER 1999 IS AVAILABLE IN THE MEDIA RELEASE
AND NOTICE TO SHAREHOLDERS. A COPY OF THE LIBERTY LIFE ANNOUNCEMENT IS
AVAILABLE TO SHAREHOLDERS ON REQUEST.
DIVIDEND
A FINAL DIVIDEND OF 50 CENTS PER SHARE (1998: 37 CENTS) HAS BEEN DECLARED TO
SHAREHOLDERS, BRINGING THE TOTAL DIVIDEND FOR THE YEAR TO 68 CENTS PER SHARE
(1998: 53 CENTS). IN TERMS OF A DIRECTORS' RESOLUTION IN RESPECT OF THIS FINAL
DIVIDEND, SHAREHOLDERS WILL BE ENTITLED TO ELECT TO RECEIVE, IN RESPECT OF ALL
OR PART OF THEIR HOLDING, FULLY PAID ORDINARY SHARES AS A CAPITALISATION AWARD
OR A CASH DIVIDEND.
BALANCE SHEET
TOTAL ASSETS AT THE YEAR END OF R254 BILLION WERE SIGNIFICANTLY HIGHER THAN THE
PREVIOUS YEAR DUE TO THE INCLUSION OF ASSETS OF LIBERTY LIFE FOR THE FIRST
TIME. TOTAL ASSETS OF STANDARD BANK OPERATIONS, EXCLUDING LIBERTY LIFE, OF R184
BILLION WERE 17% HIGHER THAN AT DECEMBER 1998.
THE GROUP'S REGULATORY CAPITAL BASE AT 31 DECEMBER 1999 WAS 11,4% OF RISK
WEIGHTED ASSETS, WITH TIER ONE CAPITAL AT 9,6%. THE PROPOSED CHANGES TO THE
BANKS ACT REGULATIONS, DUE TO COME INTO EFFECT ON 1 JULY 2000, WILL, AMONGST
OTHER AMENDMENTS, REQUIRE THE IMPAIRMENT OF REGULATORY CAPITAL TO THE EXTENT OF
THE GROUP'S INVESTMENT IN LIBERTY LIFE. TAKING THIS IMPAIRMENT INTO
CONSIDERATION, THE CAPITAL ADEQUACY PERCENTAGE AT 31 DECEMBER 1999 REMAINS
ABOVE THE STIPULATED REGULATORY MINIMUM OF EIGHT PERCENT. THE NEW REGULATIONS
WILL ALSO PERMIT SURPLUS CAPITAL IN LIBERTY LIFE TO BE TAKEN INTO ACCOUNT IN
THE DETERMINATION OF THE GROUP'S CONSOLIDATED CAPITAL POSITION, THUS FURTHER
STRENGTHENING CAPITAL ADEQUACY. THE IMPAIRMENT OF THE INVESTMENT IN LIBERTY
LIFE IS OF COURSE A REGULATORY REQUIREMENT ONLY AND THIS INVESTMENT, WITH A
MARKET VALUE AT THE YEAR END OF R5,8 BILLION, REMAINS A VALUABLE AND STRATEGIC
GROUP ASSET.
IN LINE WITH THE PRACTICE INCREASINGLY FOLLOWED BOTH LOCALLY AND
INTERNATIONALLY, THE GROUP IS REVIEWING ITS CAPITAL POSITION WITH A VIEW TO
INTRODUCING A HIGHER PROPORTION OF TAX EFFECTIVE TIER TWO CAPITAL. IT IS LIKELY
THAT DEBT ISSUES WILL BE UNDERTAKEN IN FUTURE IN ORDER TO MOVE THE PROPORTION
OF TIER TWO CAPITAL CLOSER TO THE OVERALL LONGER TERM OBJECTIVE OF BETWEEN 30%
AND 40% OF TOTAL CAPITAL.
YEAR 2000 COMPLIANCE
AS WAS ANTICIPATED, YEAR 2000 COMPLIANCE WAS ACHIEVED WITH NO MATERIALLY
ADVERSE EFFECT ON THE GROUP'S BUSINESS AND FINANCIAL RESULTS. THE COST INCURRED
OVER TIME IN ACHIEVING YEAR 2000 COMPLIANCE WAS R175 MILLION.
PROSPECTS
IN THE CONTEXT OF A HOSTILE TAKE-OVER BID, THE GROUP HAS PUBLICALLY COMMITTED
TO THE ACHIEVEMENT OF A 26% GROWTH IN HEADLINE EARNINGS PER SHARE IN 2000. THE
ATTAINMENT OF THIS RESULT WILL REQUIRE CONCERTED FOCUS ON REVENUE GROWTH
OPPORTUNITIES AND ON COST CONTAINMENT. AN ENCOURAGING START HAS BEEN MADE TO
THE YEAR AND, AT THIS EARLY STAGE, INDICATIONS ARE THAT THIS EARNINGS TARGET
SHOULD BE WITHIN OUR REACH.
SHAREHOLDERS HAVE BEEN KEPT INFORMED OF THE SITUATION REGARDING THE HOSTILE
TAKE-OVER BID LAUNCHED BY NEDCOR FOR STANBIC THROUGH LETTERS TO SHAREHOLDERS
AND THROUGH MEDIA RELEASES. THE STANBIC BOARD REMAINS UNANIMOUS IN ITS VIEW
THAT NEDCOR'S HOSTILE TAKE-OVER BID IS VALUE DESTROYING AND NOT IN THE
INTERESTS OF STANBIC SHAREHOLDERS, CUSTOMERS AND STAFF AND HAS NEGATIVE
CONSEQUENCES FOR THE FINANCIAL SERVICES INDUSTRY IN SOUTH AFRICA.
C B STRAUSS, CHAIRMAN
J H MAREE, CHIEF EXECUTIVE
CAPITALISATION SHARE AWARD AND CASH DIVIDEND
THE DIRECTORS HAVE RESOLVED TO ISSUE FULLY PAID ORDINARY SHARES IN THE COMPANY
AS A CAPITALISATION SHARE AWARD TO ORDINARY SHAREHOLDERS REGISTERED IN THE
BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS ON 31 MARCH 2000. SUCH
SHAREHOLDERS WILL BE ENTITLED IN RESPECT OF ALL OR PART OF THEIR SHAREHOLDING,
TO ELECT TO RECEIVE INSTEAD A CASH DIVIDEND OF 50 CENTS PER ORDINARY SHARE
("THE ELECTION"). NEW FULLY PAID ORDINARY SHARES IN THE COMPANY WILL BE ISSUED
ONLY TO THOSE ORDINARY SHAREHOLDERS WHO DO NOT ELECT IN RESPECT OF ALL OR PART
OF THEIR SHAREHOLDING ON OR BEFORE 28 APRIL 2000, TO RECEIVE THE AFOREMENTIONED
DIVIDEND.
THE NUMBER OF CAPITALISATION SHARES TO WHICH SHAREHOLDERS ARE ENTITLED WILL BE
DETERMINED IN THE RATIO THAT 50 CENTS PER ORDINARY SHARE MULTIPLIED BY 1,05
BEARS TO THE WEIGHTED AVERAGE PRICE OF STANBIC'S ORDINARY SHARES ON THE
JOHANNESBURG STOCK EXCHANGE ("THE JSE") FOR THE FOUR BUSINESS DAYS ENDING 26
APRIL 2000. WHERE ENTITLEMENTS TO NEW STANBIC ORDINARY SHARES RESULT IN
FRACTIONS OF SHARES, THESE FRACTIONS WILL RANK FOR A RESIDUAL CASH PAYMENT.
DOCUMENTATION DEALING WITH THE CAPITALISATION SHARE AWARD AND ELECTION WILL BE
POSTED TO SHAREHOLDERS ON OR ABOUT 7 APRIL 2000. IN ORDER TO BE VALID,
COMPLETED ELECTION FORMS WILL NEED TO BE RECEIVED BY STANBIC'S TRANSFER
SECRETARIES BY NO LATER THAN 12:00 ON 28 APRIL 2000. ELECTION FORMS IN
ENVELOPES POSTMARKED ON OR PRIOR TO 28 APRIL 2000 WILL BE ACCEPTED ONLY IF
RECEIVED BY NO LATER THAN 12:00 ON 3 MAY 2000.
SUBJECT TO THE APPROVAL OF THE JSE, A LISTING FOR THE NEW ORDINARY SHARES TO BE
ISSUED PURSUANT TO THE CAPITALISATION SHARE AWARD WILL COMMENCE ON 5 MAY 2000.
ON THIS DATE IT IS ALSO EXPECTED THAT:
SHARE CERTIFICATES WILL BE POSTED TO SHAREHOLDERS;
WHERE APPLICABLE, DIVIDENDS AND/OR FRACTIONAL ENTITLEMENTS WILL BE TRANSFERRED
ELECTRONICALLY TO SHAREHOLDERS' BANK ACCOUNTS. IN THE ABSENCE OF SUITABLE
MANDATES, CHEQUES WILL BE POSTED TO SHAREHOLDERS; AND
A FURTHER ANNOUNCEMENT WILL BE MADE REPORTING ON THE RESULTS OF THE ELECTION.
BY ORDER OF THE BOARD
K D CURR
GROUP SECRETARY
15 MARCH 2000
ACCOUNTING MATTERS
THE FINANCIAL RESULTS FOR THE YEAR HAVE BEEN PREPARED ON A BASIS CONSISTENT
WITH THAT OF PREVIOUS YEARS, WITH THE ONE EXCEPTION THAT LIBERTY LIFE'S
ACCOUNTING POLICY OF REFLECTING THE CARRYING VALUE OF LISTED INVESTMENTS AT
MARKET VALUE AND OF INCLUDING SURPLUSES AND DEFICITS ON THE SHAREHOLDERS'
ACCOUNT ARISING THEREFROM IN INCOME FOR THE YEAR HAS BEEN ADOPTED IN RESPECT OF
INSURANCE OPERATIONS.
OTHER ACCOUNTING MATTERS RELATED TO THE FINANCIAL STATEMENTS AT 31 DECEMBER
1999 THAT REQUIRE EXPLANATION ARE AS FOLLOWS:
1. THE RESULTS OF LIBERTY LIFE HAVE BEEN CONSOLIDATED WITH EFFECT FROM
1 JANUARY 1999.
2. GOODWILL OF R2 748 MILLION ARISING ON THE ACQUISITION OF THE 50% HOLDING IN
LIBLIFE CONTROLLING CORPORATION (PROPRIETARY) LIMITED (LCC) HAS BEEN WRITTEN
OFF AGAINST THE SHARE PREMIUM ACCOUNT.
3. RESULTS OF CERTAIN BANKING SUBSIDIARIES AND ASSOCIATES AND OF LIBERTY LIFE
HAVE IN PAST YEARS BEEN ACCOUNTED FOR AT A PERIOD END THREE AND SIX MONTHS
RESPECTIVELY EARLIER THAN THE GROUP'S REPORTING DATE. WITH EFFECT FROM 1
JANUARY 1999, THE ACCOUNTING DATES FOR ALL SUBSIDIARIES AND ASSOCIATES HAVE
BEEN ALIGNED WITH THAT OF THE GROUP. EARNINGS FOR THE INTERVENING PERIODS HAVE
BEEN INCLUDED IN THE INCOME STATEMENT FOR THE YEAR AS EXCEPTIONAL ITEMS.
4. IN THE CALCULATION OF THE WEIGHTED AVERAGE NUMBER OF SHARES IN ISSUE USED IN
THE DETERMINATION OF EARNINGS PER SHARE:
THE EFFECTIVE HOLDING THAT THE GROUP HAS IN ITS OWN ISSUED SHARES, AS A RESULT
OF THE UNBUNDLING BY LIBERTY LIFE OF ITS SHAREHOLDERS' INTERESTS IN STANBIC,
HAS BEEN EXCLUDED IN BOTH THE CURRENT AND PREVIOUS YEAR; AND
THE ORDINARY SHARES ISSUED DIRECTLY AND INDIRECTLY IN PART SETTLEMENT OF THE
PURCHASE CONSIDERATION FOR THE 50% HOLDING IN LCC HAVE BEEN ASSUMED TO BE IN
ISSUE FOR THE FULL YEAR AND NOT ONLY FROM THE DATE OF ISSUE.
5. THE DEFINITIONS OF HEADLINE AND ADJUSTED HEADLINE EARNINGS ARE AS FOLLOWS:
HEADLINE EARNINGS - ATTRIBUTABLE EARNINGS LESS EXCEPTIONAL PROFITS AND LOSSES
OTHER THAN THOSE ARISING AS A RESULT OF ALIGNING THE REPORTING PERIODS, AND
EXCLUDING SURPLUSES AND DEFICITS ON THE VALUATION BY LIBERTY LIFE OF LISTED
INVESTMENTS IN THE SHAREHOLDERS' ACCOUNT AT MARKET VALUE;
ADJUSTED HEADLINE EARNINGS - HEADLINE EARNINGS LESS PROFITS AND LOSSES ARISING
FROM THE ALIGNMENT OF THE REPORTING PERIODS.
CONSOLIDATED BALANCE SHEET
1999 1998
RM RM
AUDITED AUDITED
ASSETS
STANDARD BANK OPERATIONS 184308 160384
CASH AND SHORT-TERM FUNDS 33925 25282
INVESTMENT AND TRADING SECURITIES 12892 6448
LOANS AND ADVANCES 112445 109790
OTHER ASSETS 21796 13117
INTEREST IN ASSOCIATED UNDERTAKINGS 65 2733
FIXED ASSETS 2756 2648
CUSTOMERS' ACCEPTANCE LIABILITIES 429 366
LIBERTY LIFE OPERATIONS 69214
CURRENT ASSETS 3908
INVESTMENTS 64990
FIXED ASSETS 316
TOTAL ASSETS 253522 160384
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
SHARE CAPITAL 136 129
SHARE PREMIUM 1000 1645
RESERVES 12808 10829
TOTAL CAPITAL AND RESERVES 13944 12603
MINORITY INTEREST 6410 59
LIABILITIES
STANDARD BANK OPERATIONS 173123 147722
DEPOSIT AND CURRENT ACCOUNTS 155536 135660
OTHER LIABILITIES AND PROVISIONS 17123 11502
DEBENTURES 35 194
ACCEPTANCES OUTSTANDING 429 366
LIBERTY LIFE OPERATIONS 60045
OTHER LIABILITIES 2295
LIFE FUNDS 56184
LONG-TERM LIABILITIES 1566
TOTAL LIABILITIES 147722
TOTAL EQUITY AND LIABILITIES 253522 160384
CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
CONTINGENT LIABILITIES
-LETTERS OF CREDIT 1830 1901
-GUARANTEES 11619 10972
CAPITAL COMMITMENTS
-CONTRACTED CAPITAL EXPENDITURE 165 107
-AUTHORISED BUT NOT YET CONTRACTED 4 10
ORDINARY SHAREHOLDERS' FUNDS
ADJUSTED FOR THE INCREASE IN MARKET VALUE
OVER THE CARRYING VALUE OF SUBSIDIARIES AND
ASSOCIATES AND OVER THE BOOK VALUE OF
INVESTMENTS AND PROPERTY 17431 14056
CONSOLIDATED INCOME STATEMENT
1999 1998 %
RM RM CHANGE
AUDITED AUDITED
STANDARD BANK OPERATIONS
INTEREST INCOME 21255 21888
INTEREST EXPENSE 14524 15916
NET INTEREST INCOME BEFORE
PROVISION FOR CREDIT LOSSES 6731 5972 13
PROVISION FOR CREDIT LOSSES 1527 1804 (15)
NET INTEREST INCOME 5204 4168 25
NON-INTEREST INCOME 6440 5297 22
TOTAL INCOME 11644 9465 23
EMPLOYEE COMPENSATION AND
BENEFITS 4329 3575 21
OTHER OPERATING EXPENSES 3819 3443 11
OPERATING EXPENSES 8148 7018 16
OPERATING PROFIT 3496 2447 43
INCOME FROM ASSOCIATED UNDERTAKINGS 10 295
EXCEPTIONAL ITEMS (13) (17)
INCOME BEFORE TAXATION 3493 2725 28
TAXATION 1035 665 56
INCOME AFTER TAXATION 2458 2060 19
ATTRIBUTABLE TO OUTSIDE AND
PREFERENCE SHAREHOLDERS 13 8
STANDARD BANK INCOME ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 2445 2052 19
LIBERTY LIFE OPERATIONS
INCOME BEFORE TAXATION 2471
TAXATION 863
INCOME AFTER TAXATION 1608
ATTRIBUTABLE TO OUTSIDE AND PREFERENCE
SHAREHOLDERS 1136
NET INCOME BEFORE INVESTMENT SURPLUS 472
INVESTMENT SURPLUS 173
LIBERTY LIFE INCOME ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 645
GROUP INCOME ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS 3090 2052 51
HEADLINE EARNINGS
GROUP INCOME ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS 3090 2052
INVESTMENT SURPLUS (173)
ADJUSTED FOR: 207 17
-RESTRUCTURING COSTS 138 29
-NET SURPLUS ON THE SALE OF SUBSIDIARY
UNDERTAKINGS, LONG-TERM INVESTMENTS,
INVESTMENT SECURITIES AND PREMISES (52) (48)
-GOODWILL ON ACQUISITION OF
SUBSIDIARIES WRITTEN OFF 67 36
-COSTS ASSOCIATED WITH THE TAKE-OVER
PROPOSAL 54
LESS: TAXATION ON THE ABOVE ITEMS (38) (10)
HEADLINE EARNINGS 3086 2059 50
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS
ON ADOPTION OF COTERMINOUS REPORTING (194)
ADJUSTED HEADLINE EARNINGS 2892 2059 40
1999 1998 %
RM RM CHANGE
AUDITED AUDITED
FINANCIAL STATISTICS
STANBIC GROUP
SHARES IN ISSUE (MILLIONS)
NUMBER OF ORDINARY SHARES IN ISSUE
BEFORE DEDUCTION OF CROSS-HOLDING:
- END OF PERIOD 1375 1207
- WEIGHTED AVERAGE 1373 1206
AFTER DEDUCTION OF CROSS-HOLDING:
- END OF PERIOD 1279 1159
- WEIGHTED AVERAGE 1277 1158
EARNINGS (CENTS)
EARNINGS PER ORDINARY SHARE 242,0 177,2 37
HEADLINE EARNINGS PER
ORDINARY SHARE 241,7 177,8 36
ADJUSTED HEADLINE EARNINGS PER
ORDINARY SHARE 226,5 177,8 27
DIVIDENDS PER ORDINARY SHARE 68,0 53,0 28
NET ASSET VALUE PER SHARE 1089,3 1087,0
ADJUSTED NET ASSET VALUE PER SHARE 1362,5 1213,1 12
FINANCIAL PERFORMANCE (%)
RETURN ON AVERAGE ORDINARY
SHAREHOLDERS' FUNDS 21,8 18,1
STANDARD BANK OPERATIONS
FINANCIAL PERFORMANCE (%)
RETURN ON AVERAGE ORDINARY
SHAREHOLDERS' FUNDS* 21,4 19,3
RETURN ON AVERAGE TOTAL
ASSETS* 1,5 1,2
OPERATING COSTS TO TOTAL
INCOME* 61,4 62,3
EFFECTIVE TAXATION RATE 29,7 27,4
CAPITAL ADEQUACY (%)
CAPITAL RATIO
-PRIMARY CAPITAL 9,6 10,1
-TOTAL CAPITAL 11,4 11,2
*CALCULATION EXCLUDES DEBT FUNDING COST OF THE LIBERTY ACQUISITION
STATEMENT OF CHANGES IN SHAREHOLDERS' FUNDS
1999 1998
RM RM
AUDITED AUDITED
SHARHOLDERS' FUNDS AT BEGINNING
OF THE YEAR 12603 10177
MOVEMENTS IN SHARE CAPITAL AND
SHARE PREMIUM (638) 16
SHARE CAPITAL AND SHARE PREMIUM RECEIVED
ON ALLOTMENT AND ISSUE OF SHARES 3035 16
WRITE OFF OF GOODWILL (2748)
ADDITIONAL CROSS-HOLDING ELIMINATION (925)
MOVEMENTS IN NON-DISTRIBUTABLE RESERVES (209) 968
TRANSALTION OF FINANCIAL STATEMENTS OF
FOREIGN ENTITIES (242) 487
SUBSIDIARIES AND EQUITY ACCOUNTED UNDERTAKINGS (315) 432
LIBERTY LIFE SURPLUS FROM DISTRIBUTABLE
RESERVES 173
SOFT CURRENCIES 123 37
CAPITAL SURPLUSES 52 12
MOVEMENTS IN DISTRIBUTABLE RESERVES 2188 1442
RETAINED EARNINGS 1769 1252
GROUP INCOME ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS 3090 2052
ORDINARY DIVIDENDS (870) (640)
SOFT CURRENCY TO NON-DISTRIBUTABLE
RESERVES (123) (37)
EQUITY ACCOUNTED EARNINGS (10) (123)
COTERMINOUS EARNINGS (145)
LIBERTY LIFE SURPLUS TO
NON-DISTRIBUTABLE RESERVES (173)
TRANSLATION OF FINANCIAL STATEMENTS OF
FOREIGN ENTITIES (29) 150
CONSOLIDATION OF SUBSIDIARIES 444
OTHER 4 40
SHAREHOLDERS' FUNDS AT END OF THE YEAR 13944 12603
CONSOLIDATED CASH FLOW INFORMATION
1999 1998
RM RM
AUDITED AUDITED
NET CASH INFLOW FROM OPERATING ACTIVITIES 18125 7614
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (9579) (367)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (415) (837)
BOARD OF DIRECTORS
C B STRAUSS (CHAIRMAN),
D E COOPER (JOINT DEPUTY CHAIRMAN),
S J MACOZOMA (JOINT DEPUTY CHAIRMAN),
J H MAREE* (CHIEF EXECUTIVE),
R C ANDERSEN*, D D B BAND, E BRADLEY,
A R EVANS, R M GODSELL, D A HAWTON,
R J KHOZA, W S MACFARLANE, E A G MACKAY,
B J M MASEKELA, R P MENELL, R A PLUMBRIDGE,
P C PRINSLOO*, M RAPP#, A ROMANIS#,
C J SAUNDERS, C L STALS, E P THERON.
*EXECUTIVE DIRECTOR #BRITISH
GROUP SECRETARY
K D CURR
REGISTERED OFFICE
9TH FLOOR, STANDARD BANK CENTRE
5 SIMMONDS STREET, JOHANNESBURG, 2001
P O BOX 7725, JOHANNESBURG, 2000
SHARE TRANSFER SECRETARIES
MERCANTILE REGISTRARS LIMITED
7TH FLOOR, 11 DIAGONAL STREET, JOHANNESBURG, 2001
P O BOX 1053, JOHANNESBURG, 2000
THIS ANNOUNCEMENT, TOGETHER WITH A FINANCIAL PRESENTATION, IS AVAILABLE ON THE
STANDARD BANK WEBSITE AT: HTTP://WWW.STANDARDBANK.CO.ZA
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