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SBK - Standard Bank - Unaudited results for the six months ended 30 June 2007
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registered bank controlling company)
(Reg No 1969/017128/06)
Share code: SBK
ISIN: ZAE000057378
Unaudited results for the six months ended 30 June 2007
The group`s key financial highlights were:
Normalised IFRS
* Return on equity (ROE)(%) 24,4 26,4
* Headline earnings growth (%) 26,6 27,5
* Headline earnings per share
(cents) 451,1 482,9
* Headline earnings per share
growth (%) 25,7 25,8
* Cost-to-income ratio (%) 51,9 52,3
* Credit loss ratio (%) 0,78 0,79
Overview of financial results
In the six months under review Standard Bank Group grew its headline earnings
per share by 25,8% to 482,9 cents and achieved a return on equity of 26,4% on
an International Financial Reporting Standards (IFRS) basis. On a normalised
basis headline earnings per share grew 25,7% to 451,1 cents and the return on
equity was 24,4%. Normalised earnings, fully explained later in this
announcement, adjust the IFRS results for two accounting anomalies that have
distorted the results from an economic perspective with effect from 2004.
This commentary is based on the normalised results.
Economic growth in developing countries continues to outpace that of the
developed world. In South Africa growth remained brisk, supported by an
uplift in the supply side of the economy. Evidence of waning consumer demand
has recently become apparent, reflecting the effect of the 250 basis point
rise in the South African prime interest rate since June 2006.
Key factors impacting the results:
* Robust asset growth, particularly in Personal & Business Banking, boosted
net interest income.
* Higher average interest rates in South Africa resulted in wider margins on
transactional balances and capital. This higher rate environment has resulted
in a recent increase in default experience and when applied to a much larger
advances book resulted in a significant increase in the credit impairment
charge in Personal & Business Banking.
* Increased transactional activity from both consumers and corporates
benefited fee and commission income.
* Higher levels of global liquidity and increased client flows resulted in
strong growth in trading income, particularly in operations outside of South
Africa.
* Continued investment in staff and infrastructure had an impact on costs.
During the period under review
* The acquisition of BankBoston Argentina was finalised
The group obtained approval for its acquisition from both the South African
and Argentine regulators and took transfer of the assets and liabilities of
BankBoston Argentina with effect from 1 April 2007. The transaction was
concluded at a discount to net asset value resulting in negative goodwill and
a total gain of R390 million recognised in the income statement, but excluded
from headline earnings. Earnings from this entity had no material impact on
these results due to initial rebranding costs and other acquisition related
expenses.
* The group`s holding in Stanlib was restructured
Following an approach by Liberty Life, the group restructured its investment
in Stanlib, becoming effective on 29 January 2007. The group previously owned
48,8% of Stanlib, 37,4% directly and an effective 11,4% through its
subsidiary, Liberty Life. After obtaining approval from its minority
shareholders, Liberty Life acquired the interest in Stanlib directly owned by
Standard Bank Group as well as the 25,2% owned by a black economic
empowerment (BEE) consortium. The purchase consideration was settled by
issuing Liberty Group shares and a cash payment. The transaction had no
material impact on the group`s results.
* The National Credit Act (NCA) came into effect in South Africa
The NCA, which became effective on 1 June 2007, aims to protect customers
from over-indebtedness and create a fair and non-discriminatory market for
lending. Standard Bank is fully supportive of the Act and has implemented the
necessary policies and procedures to meet its requirements. Following the NCA
implementation, there has been a slight decrease in mortgage and instalment
finance account openings and a more significant reduction in new credit card
accounts. It is too early to establish a trend or to determine if these
changes may relate to the recent interest rate hikes.
Income statement analysis
Net interest income
The group`s net interest margin increased by 16 basis points to 2,91%. Net
interest income grew by 36% with 39% growth in Personal & Business Banking
and 34% in Corporate & Investment Banking following:
* continued strong lending growth across the banking operations;
* an increase in higher margin components of the lending book;
* a positive endowment impact as a higher funding margin was earned,
following a 201 basis point increase in the average prime rate in South
Africa to 12,56%; and
* reduced average concession rates on vehicle and asset financing as pricing
processes were refined.
The group continued to rely on more expensive wholesale funding to finance
asset growth. However, this impact was to a large degree offset by the
mismatch benefit of liabilities repricing slower than assets. Other adverse
factors were competitive pressure on mortgage lending rates and increased
origination costs. Net interest income was also impacted by the delay in
increasing the Usury Act rate ceiling following several increases in the
prime rate.
Non-interest revenue
The group`s non-interest revenue grew by 31% with:
* net fee and commission revenue up 25%;
* trading revenue up 62%; and
* other revenue down 7%.
Net fee and commission revenue in Personal & Business Banking grew by 18%
with the main increases as follows:
* account transaction fees were 12% higher boosted by a 10% increase in
customers, but limited by sub-inflation price increases;
* card-based commission increased by 22% off the back of 7% more customers
and 15% growth in turnover at point of sale;
* growth of 8% in ATM transactions and 67% in internet transactions; and
* insurance fee income grew by 24% boosted by increased policy sales through
the banking network.
Corporate & Investment Banking grew net fee and commission revenue by 47% as:
* advisory fees doubled following increased local and international deal flow
including a number of large, high profile corporate and project finance,
securitisation and structured debt transactions;
* electronic banking and account transaction fee income growth of 13% and 18%
respectively, boosted by increased transaction values and volumes; and
* foreign currency service fees, which benefited from volume growth in trade
finance and foreign guarantee income, were up 24%.
Strong growth in trading income was achieved due to:
* a significant increase in credit and interest rate trading in debt capital
markets, benefiting from increased client flows and market volatility;
* growth in equity derivatives trading income following higher institutional
and retail client flows; and
* the inclusion of the Argentine trading revenue for the first time.
Other non-interest revenue declined off a high base. The comparative figures
include R157 million profit on the partial sale of the group`s interest in
MasterCard, which was excluded from headline earnings, and a gain on the
realisation of a property investment not repeated.
Credit impairment charges
Credit impairment charges for the group increased 62% and the credit loss
ratio increased from 0,70% to 0,84% for the group. After implementing IFRS 7,
which includes loans to banks in loans and advances used to calculate the
ratio, the credit loss ratio increased from 0,63% to 0,78%.
Credit losses in Personal & Business Banking increased by 80% with the credit
loss ratio rising from 0,99% to 1,32% as a result of:
* an increase in the incidence of arrears which, when applied to the larger
mortgage book following two years of strong loan growth, resulted in a
significantly higher charge. A recent increase in the number of short-payers
is being experienced and a longer time lag in the mortgage cancellation
process was experienced, given delays at the deeds office in the second
quarter of 2007. In addition, recoveries are being discounted at higher rates
given the increased interest rates. These factors combined to result in the
credit loss ratio increasing from 0,33% to 0,61% in this product;
* a 79% increase in credit loss provisions against the instalment sales and
finance leases book and the credit loss ratio increasing to 1,51% (June 2006:
1,03%). This was driven by an increase in dealer originated business which is
mostly comprised of higher risk personal business, exacerbated by declining
recovery values in the secondhand car market; and
* a 39% increase in credit losses in card debtors, but as a percentage of the
book the credit loss ratio remained unchanged.
Doubtful debt recoveries in Corporate & Investment Banking resulted in an 18%
reduction in credit impairment charges and a drop in the credit loss ratio
from 0,24% to 0,16%, despite increased portfolio provisions on the growing
performing loan book.
Non-performing loans increased by 46% for the group and as a percentage of
loans and advances increased from 1,1% to 1,3%. These non-performing loans,
before accounting for security, are covered at 39% (June 2006: 43%) by the
impairment for non-performing loans and 100% (June 2006: 100%) after
considering security.
Operating expenses
Operating expenses increased by 30%, or 25% if the Argentine acquisition is
excluded. Total income growth of 33%, including income from associates,
exceeded cost growth by 3%, resulting in a 1,4% improvement in the cost-to-
income ratio to 51,9%.
Staff costs were 36% higher, driven by a 14% increase in the group`s staff
complement, resulting mainly from:
* the inclusion of 2 677 staff members from the newly acquired operations in
Argentina;
* business growth, particularly higher incentive and retention benefits in
line with business performance;
* additional capacity required to deal with a heavier regulatory workload
relating to Basel II and the National Credit Act; and
* increased security and credit collection staff.
Other operating expenses rose by 22% mainly as a result of:
* information technology spending, up 26%, resulting from increased
compliance related infrastructure software development and maintenance costs
to enhance network efficiency;
* communication costs, up 23%, as a result of increased customer interaction;
and
* professional fees, up 71%, following initiatives to enhance business
efficiency, support acquisition processes and compliance and risk management
related information technology projects.
Business units
Personal & Business Banking grew headline earnings by 27%. Key features of
this result were:
* an expanded asset base and wider margins;
* strong growth in fee income due to higher transaction volumes;
* increased credit impairment charges as higher interest rates took effect;
and
* cost increases to support business growth.
Corporate & Investment Banking grew headline earnings by 38% with growth of
65% in global markets, 44% in banking and trade finance and a 5% decline in
investment banking. These results were characterised by:
* improved trading results, particularly in debt capital markets;
* reduced net impairment charges as a result of doubtful debt recoveries in
Rest of Africa;
* significant growth in advisory business;
* lower profits recognised on property investments and infrastructure funds;
and
* cost growth above inflation levels as the business continues to invest in
people and infrastructure to meet growing business needs.
Liberty Life increased headline earnings by 56% and achieved a BEE normalised
return on embedded value of 24,7%. Key factors in this result were:
* strong investment returns; and
* indexed new business up 14% as restructuring initiatives gained traction.
Balance sheet analysis
Total loans and advances growth remained robust, increasing by 24%, with
growth of 35% in Personal & Business Banking and 16% in Corporate &
Investment Banking.
Activity in the Personal & Business Banking market segment remained buoyant
for most of the period despite higher interest rates and the implementation
of the National Credit Act in June 2007 as:
* mortgage loans grew by 36% resulting from a 24% increase in registration
values driven by a 10% increase in registration volumes and 13% growth in
average registration values;
* instalment sales and finance leases grew by 28%. The group`s strategy to
move closer to the dealer network benefited the motor book, as this book grew
25%; and
* card debtors increased by 45%, as the group continued its penetration into
the still relatively underdeveloped South African card market.
Corporate & Investment Banking grew total loans and advances by 16%, with
loans to corporate customers up 40% and loans to banks down by 17% as:
* strong growth occurred in medium-term and foreign currency lending,
overdrafts and other demand lending in the South African market as a number
of new large corporate lending transactions were concluded;
* continued strong economic growth in the commercial property market
benefited corporate property lending which grew by 25%; and
* loans to and placements with banks were lower due to reduced surplus funds
at period end and increased demand for credit from corporate customers.
Capital and Basel II
In South Africa the Basel II requirements are being incorporated into the
Banks Act and Regulations relating to Banks which becomes effective on 1
January 2008.
Standard Bank started its Basel II project in 2001 with regular board
involvement from 2003. The Basel II concepts are now well entrenched at an
operating level and the group is confident of successfully finalising its
implementation by the end of 2007.
With respect to capital management key focus areas include:
* alignment of risk and capital management practices with Basel II
definitions;
* improved and consistently applied group-wide regulatory and economic
capital calculation and regulatory reporting tools; and
* improved linkages of business strategic planning and operational processes
with economic and regulatory capital outcomes.
The group is well capitalised at a capital adequacy ratio of 13,7% (June
2006: 14,7%).
Distributions
It is currently the group`s policy to declare both interim and final
distributions using a cover ratio of 2,5 times normalised headline earnings.
This policy has not changed and an interim distribution of 181 cents per
share (2006: 144 cents) has been declared, an increase of 26%. The interim
distribution comprises a distribution out of share premium of 100 cents per
share and a dividend of 81 cents per share.
Charter progress
Standard Bank has increased its Financial Sector Charter score from 92,31
points at the end of December 2006 (audited) to 93,22 points as at 30 June
2007 (unaudited). The bank has consistently achieved scores in excess of the
charter`s requirements as a result of the strategy to embed BEE into
operations in South Africa.
Zimbabwe
Conditions in Zimbabwe continue to deteriorate at both an economic and social
level. Stanbic Zimbabwe remains solvent and is still profitable when measured
in local currency. Political risk in this environment is high and continues
to rise. The group adopts a conservative approach in recognising earnings
from this subsidiary and no amounts have been included in these results.
Status of acquisitions
IBTC Chartered Bank Plc in Nigeria
The group previously announced that it had reached an agreement in principle
with the board of directors of the listed entity IBTC Chartered Bank Plc
(IBTC) to merge Standard Bank`s Nigerian operations, Stanbic Bank Nigeria
Limited, with those of IBTC and for Standard Bank to acquire sufficient
additional shares at an estimated total value of approximately USD400 million
in the enlarged IBTC to establish a controlling interest. The approach to
IBTC`s shareholders concludes on 20 August 2007 with the closing of a tender
offer and shareholders` meetings of IBTC and Stanbic Nigeria to approve a
Scheme of Merger.
CFC Bank in Kenya
The group recently submitted an application for regulatory approval to
acquire a 60% interest in CFC Bank Limited through a merger with Stanbic Bank
Kenya Limited and the acquisition of further shares for cash. The cash
outflow required in this transaction is approximately USD80 million. Although
this transaction is important to grow the group`s African network, it is
unlikely to have a significant impact on group results.
Prospects
Despite recent financial market volatility, economic growth in the group`s
target markets should remain reasonably strong for the remainder of the year.
In South Africa, higher interest rates are impacting on consumers but this is
likely to be moderated to some extent by increased levels of disposable
income and better employment prospects within an expanding economy.
As consumer spending eases, the supply side of the economy is gaining
momentum. Manufacturing production and infrastructure investment growth are
showing encouraging signs as the government`s Accelerated and Shared Growth
Initiative of South Africa (Asgi-SA) gains traction. Financing and
refinancing activity relating to BEE transactions should continue to present
opportunities. This environment bodes well for the group`s corporate and
structured finance businesses as well as the corporate lending business for
the rest of the year. Internationally the group will continue to utilise its
network to originate business in the still fast growing emerging markets.
Operating conditions are expected to be more challenging in the next six
months. This should result in the strong growth achieved in the first half
moderating in the second half. Despite this we expect that Standard Bank`s
diversified sources of revenue growth and focus on risk management should
enable the group to achieve a normalised return on equity of 24,0%, and
exceed its published target of normalised headline earnings per share growth
of South African inflation (CPIX) plus 10 percentage points for the full
year.
Jacko Maree Derek Cooper
Chief executive Chairman
Johannesburg
14 August 2007
Normalised results
With effect from 2004, the group has adjusted its results reported in terms
of International Financial Reporting Standards (IFRS) for two required
accounting conventions that, in the opinion of the board, do not reflect the
underlying economic substance of transactions. Consistent with prior years,
the IFRS results have been adjusted for the following items to arrive at the
normalised results:
* preference share funding for the group`s Black Economic Empowerment
Ownership initiative (Tutuwa) transaction that is deducted from equity and
reduces the number of ordinary shares in terms of IFRS; and
* group company shares held for the benefit of Liberty Life policyholders
that result in a reduction in the number of shares and the exclusion of fair
value adjustments and dividends on these shares. This IFRS treatment causes
an accounting mismatch between income from investments and changes in
policyholders` liabilities.
The result of these adjustments is as follows:
Normalised headline earnings
Weighted Growth
average on
number Headline 30 June
of shares earnings 2006
`000 Rm %
Disclosed in terms
of IFRS 1 228 666 5 933 28
Tutuwa initiative 99 190 180
Group shares held for
the benefit of Liberty
Life policyholders 38 864 52
Normalised 1 366 720 6 165 27
These adjustments are described in more detail in the group`s 2006 financial
statements which are available on the group website at
www.standardbank.co.za.
Normalised financial statistics
for the six months ended 30 June 2007
% June June December
change 2007 2006 2006
Standard Bank Group
Ordinary shares
in issue (000`s)
- weighted
average 1 366 720 1 356 202 1 358 415
- diluted weighted
average 1 386 926 1 379 172 1 380 416
Cents per ordinary
share
Headline earnings 26 451,1 359,0 796,4
Diluted headline
earnings 26 444,5 353,0 783,7
Distributions 26 181,0 144,0 320,0
Basic earnings 28 481,7 377,6 820,7
Diluted earnings 28 474,7 371,3 807,6
Net asset value 22 3 904 3 201 3 548
Financial
performance (%)
ROE 24,4 24,4 25,4
Net interest margin 2,91 2,75 2,79
Credit loss ratio 0,78 0,63 0,60
Cost-to-income ratio 51,9 53,3 52,6
Normalised headline earnings contribution by business unit
for the six months ended 30 June 2007
% June June December
Rm change 2007 2006 2006
Personal & Business
Banking 27 2 626 2 061 4 833
Corporate &
Investment
Banking 38 3 117 2 265 5 033
Central and other (>100) (92) 213 109
Central and other
- IFRS (>100) (258) 40 (225)
Tutuwa adjustments (4) 166 173 334
Banking activities 24 5 651 4 539 9 975
Liberty Life 56 514 330 843
Liberty Life - IFRS 56 448 287 547
Policyholders` deemed
treasury shares and
Tutuwa adjustment 53 66 43 296
Standard Bank Group 27 6 165 4 869 10 818
Unaudited results prepared in accordance with International Financial
Reporting Standards
Consolidated income statement
for the six months ended 30 June 2007
June June December
% 2007 2006 2006
Rm change Unaudited Unaudited Audited
Income from banking
activities 33 21 736 16 308 35 855
Net interest income 37 10 193 7 464 16 654
Non-interest revenue 31 11 543 8 844 19 201
Income from investment
management and life
insurance activities 13 28 086 24 749 59 344
Total income 21 49 822 41 057 95 199
Credit impairment
charges 62 2 109 1 300 2 733
Benefits due to
policyholders 13 21 795 19 265 47 896
Income after credit
impairment charges
and policyholders`
benefits 26 25 918 20 492 44 570
Operating expenses
in banking activities 30 11 464 8 835 19 141
Operating expenses in
investment management
and life insurance
activities 21 3 528 2 924 6 486
Net income before
goodwill 25 10 926 8 733 18 943
Goodwill (gain)/
impairment (>100) (390) 4 15
Net income before
associates and
joint ventures 30 11 316 8 729 18 928
Share of profit from
associates and
joint ventures >100 230 103 275
Net income before
indirect taxation 31 11 546 8 832 19 203
Indirect taxation 18 515 436 841
Profit before direct
taxation 31 11 031 8 396 18 362
Direct taxation 42 3 386 2 377 5 852
Profit for the period 27 7 645 6 019 12 510
Attributable to
minorities 7 1 074 1 002 1 723
Attributable to
preference
shareholders 96 219 112 269
Attributable to
ordinary
shareholders 30 6 352 4 905 10 518
Headline earnings
for the six months ended 30 June 2007
June June December
% 2007 2006 2006
Rm change Unaudited Unaudited Audited
Group profit
attributable to
ordinary shareholders 30 6 352 4 905 10 518
Headline earnings
adjustable items
reversed (1) (424) (532) (601)
Goodwill (gain)/
impairment (390) 4 15
Impairment of
intangibles 26 9
Profit on sale of
properties and
equipment (7) (1) (53)
Gains on disposal of
businesses and divisions (378) (374)
Recycled investment
gains on available-
for-sale assets (54) (157) (198)
Other capital losses 1
Taxation on headline
earnings adjustable items 5 21 14
Minority share of
headline earnings
adjustable items 259 257
Headline earnings 28 5 933 4 653 10 188
(1) These headline earnings adjustable items have been included in the
calculation of normalised headline earnings disclosed above.
Segment report
for the six months ended 30 June 2007
Headline earnings contribution by business unit
June June December
% 2007 2006 2006
Rm change Unaudited Unaudited Audited
Personal & Business
Banking 27 2 626 2 061 4 833
Corporate & Investment
Banking 38 3 117 2 265 5 033
Central and other (>100) (258) 40 (225)
Banking activities 26 5 485 4 366 9 641
Liberty Life 56 448 287 547
Standard Bank Group 28 5 933 4 653 10 188
Consolidated balance sheet
as at 30 June 2007
June June December
% 2007 2006 2006
Rm change Unaudited Unaudited Audited
Assets
Cash and balances
with central banks (18) 18 164 22 244 20 046
Derivative assets (16) 101 231 120 021 100 832
Trading assets 29 70 562 54 908 77 574
Pledged assets (27) 12 890 17 609 10 828
Financial
investments 24 230 082 184 966 209 238
Loans and advances 25 589 773 473 602 502 519
Investment properties 9 13 506 12 419 13 200
Other assets (3) 32 036 33 192 18 018
Interest in associates
and joint ventures 38 10 859 7 888 8 584
Goodwill and other
intangible assets 44 2 885 2 006 2 374
Property and equipment 27 5 921 4 674 5 242
Total assets 17 1 087 909 933 529 968 455
Equity and liabilities
Equity 24 59 770 48 260 54 708
Equity attributable
to ordinary shareholders 25 47 871 38 181 42 916
Preference share
capital and premium 23 5 503 4 489 5 503
Minority interest 14 6 396 5 590 6 289
Liabilities 16 1 028 139 885 269 913 747
Derivative
liabilities (15) 102 857 120 494 103 122
Trading liabilities (14) 37 562 43 538 36 790
Deposit and current
accounts 28 636 405 498 994 545 164
Other liabilities (8) 51 664 55 931 42 203
Policyholders`
liabilities 22 182 817 150 282 168 898
Subordinated debt 5 16 834 16 030 17 570
Total equity and
liabilities 17 1 087 909 933 529 968 455
Contingent liabilities and capital commitments
as at 30 June 2007
June June December
2007 2006 2006
Rm Unaudited Unaudited Audited
Contingent liabilities
Letters of credit 10 998 7 644 9 133
Guarantees 26 272 21 290 23 367
Irrevocable unutilised
facilities 53 096 37 064 51 436
90 366 65 998 83 936
Capital commitments
Contracted capital
expenditure 285 484 309
Capital expenditure
authorised but not yet
contracted 1 653 833 1 682
1 938 1 317 1 991
Statement of changes in shareholders` funds
for the six months ended 30 June 2007
Preference
Ordinary share
share capital
holders` and Minority Total
funds premium interest equity
Rm Audited Audited Audited Audited
Balance at
1 January 2006 32 931 2 991 5 770 41 692
Change in
accounting
policy (276) (126) (402)
Restated balance
at 1 January
2006 32 655 2 991 5 644 41 290
Profit for
the year 10 518 269 1 723 12 510
Net dividends
paid (3 555) (269) (1 380) (5 204)
Net translation
gain and
hedging 2 173 10 2 183
Issue of share
capital and
share premium 299 2 518 57 2 874
Share buy-backs (102) (102)
Other reserve
movements 928 (6) 235 1 157
Balance at
31 December
2006 42 916 5 503 6 289 54 708
Unaudited Unaudited Unaudited Unaudited
Balance at
1 January
2007 42 916 5 503 6 289 54 708
Profit for the
period 6 352 219 1 074 7 645
Net dividends
paid (2 198) (219) (461) (2 878)
Net translation
gain and
hedging 412 17 429
Issue of share
capital and share premium 246 6 252
Other reserve
movements 143 (529) (386)
Balance at
30 June 2007 47 871 5 503 6 396 59 770
Consolidated cash flow information
for the six months ended 30 June 2007
June June December
2007 2006 2006
Rm Unaudited Unaudited Audited
Net cash from operating
activities 16 775 10 626 23 763
Net cash used in
operating funds (8 896) (17 301) (21 199)
Net cash used in investing
activities (7 279) (2 986) (13 511)
Net cash (used in)/from
financing activities (2 616) 1 744 2 187
Financial statistics
for the six months ended 30 June 2007
June June December
% 2007 2006 2006
Change Unaudited Unaudited Audited
Standard Bank Group
Number of ordinary
shares in issue (000`s)
- weighted average 1 228 666 1 211 650 1 216 687
- diluted weighted
average 1 305 874 1 279 620 1 282 478
Cents per ordinary share
Headline earnings 26 482,9 384,0 837,4
Diluted headline
earnings 25 454,3 363,6 794,4
Distributions 26 181,0 144,0 320,0
Basic earnings 28 517,0 404,8 864,5
Diluted earnings 27 486,4 383,3 820,1
Net asset value 24 3 884 3 142 3 504
Financial performance (%)
ROE 26,4 26,9 27,4
Net interest margin 2,88 2,71 2,75
Credit loss ratio 0,79 0,64 0,60
Cost-to-income ratio 52,3 53,9 53,1
Capital adequacy (%)
Capital ratio
- primary capital 10,3 10,6 10,8
- total capital 13,7 14,7 14,8
Declaration of distributions
Notice is hereby given that the following interim distributions have been
declared:
* Distribution of 181 cents per ordinary share (share codes: SBK and SNB,
ISIN: ZAE000057378), comprising 100 cents paid out of share premium and
ordinary dividend No. 76 of 81 cents paid out of distributable reserves,
payable on Monday, 17 September 2007, to ordinary shareholders recorded in
the books of the company at the close of business on the record date, Friday,
14 September 2007. The last day to trade to participate in the distribution
is Friday, 7 September 2007. Ordinary shares will commence trading ex-
distribution from Monday, 10 September 2007. In terms of the requirements of
the Companies Act, the directors confirm that after the payment of the
distribution, the company will be able to pay its debts as they become due in
the ordinary course of business and its consolidated assets, fairly valued,
will exceed its consolidated liabilities;
* 6,5% first cumulative preference shares (first preference shares) dividend
No. 76 of 3,25 cents per first preference share (share code: SBKP, ISIN:
ZAE000038881), payable on Monday, 10 September 2007, to holders of first
preference shares recorded in the books of the company at the close of
business on the record date, Friday, 7 September 2007. The last day to trade
to participate in the dividend is Friday, 31 August 2007. First preference
shares will commence trading ex-dividend from Monday, 3 September 2007; and
* Non-redeemable, non-cumulative, non-participating preference shares (second
preference shares) dividend No. 6 of 436,09 cents per second preference share
(share code: SBPP, ISIN: ZAE000056339), payable on Monday, 10 September 2007,
to holders of second preference shares recorded in the books of the company
at the close of business on the record date, Friday, 7 September 2007. The
last day to trade to participate in the dividend is Friday, 31 August 2007.
Second preference shares will commence trading ex-dividend from Monday, 3
September 2007.
The relevant dates for the payment of the distributions are as follows:
Non-redeemable,
non-cumulative,
6,5% non-
Cumulative participating
preference preference
shares shares
(First (Second
Ordinary preference preference
shares shares) shares)
JSE Limited (JSE)
Share code SBK SBKP SBPP
ISIN ZAE000057378 ZAE000038881 ZAE000056339
Namibian Stock
Exchange (NSX)
Share code SNB
ISIN ZAE000057378
Dividend number 76 76 6
Distribution per
share (cents) 181 3,25 436,09
Distribution paid
out of share
premium 100
Distribution paid
out of ditributable
reserves 81
Distribution payment
dates
Last day to trade Friday Friday Friday
"CUM" 7 September 31 August 31 August
distribution 2007 2007 2007
Shares trade Monday Monday Monday
"EX" 10 September 3 September 3 September
distribution 2007 2007 2007
Record date Friday Friday Friday
14 September 7 September 7 September
2007 2007 2007
Payment date Monday Monday Monday
17 September 10 September 10 September
2007 2007 2007
Ordinary share certificates may not be dematerialised or rematerialised
between Monday, 10 September 2007 and Friday, 14 September 2007, both days
inclusive.
Preference share certificates (first and second) may not be dematerialised or
rematerialised between Monday, 3 September 2007 and Friday, 7 September 2007,
both days inclusive.
Where applicable, distributions in respect of certificated shares will be
transferred electronically to shareholders` bank accounts on payment date. In
the absence of specific mandates, distribution cheques will be posted to
shareholders. Preference shareholders who have dematerialised their share
certificates will have their accounts at their CSDP or broker credited on
Monday, 10 September 2007. Ordinary shareholders who have dematerialised
their share certificates will have their accounts at their CSDP or broker
credited on Monday, 17 September 2007.
On behalf of the board
Loren Wulfsohn
Group secretary
Accounting policies
Basis of preparation
The consolidated financial statements are prepared in accordance with, and
comply with International Financial Reporting Standards (IFRS) and the South
African Companies Act of 1973. The consolidated financial statements are
prepared in accordance with the going concern principle under the historical
cost basis as modified by the revaluation of assets and liabilities where
required in terms of IFRS. The interim results are prepared in accordance
with IAS 34 - Interim Financial Reporting and have not been audited.
Changes in accounting policies
The accounting policies are consistent with those adopted in the previous
year except for:
* the adoption of IFRS 7 - Financial Instruments: Disclosures. This new
standard has not changed the recognition or measurement of financial
instruments but has resulted in the reclassification of certain financial
assets and fee expenses;
* the adoption of other accounting standards and interpretations issued with
an effective date of
1 January 2007. The adoption of these standards and interpretations has not
had a material effect on the results, nor has it required any restatement of
the results; and
* the group changing its accounting policy relating to transactions with
minority shareholders. These transactions relate specifically to transactions
where the group purchased an additional interest in a subsidiary from
minority shareholders or sold a portion of its interest in a subsidiary to
minority shareholders, while the group controlled the entities both before
and after the transactions. Previously, the excess of the purchase
consideration over the group`s proportionate share of the additional net
asset value of a subsidiary acquired was accounted for as goodwill (or
negative goodwill). In terms of the group`s new policy this excess will be
accounted for directly in equity. Any profit or loss on the partial disposal
of the group`s interest in a subsidiary was previously accounted for in the
income statement and will now be accounted for directly in equity. Any such
goodwill or profit or loss accounted for directly in equity is ultimately
accounted for in profit or loss on disposal of the subsidiary that results in
the loss of control over the subsidiary. The change in accounting policy is
considered appropriate as the group regards transactions that do not result
in the change of control as transactions with minority shareholders (viewed
as equity participants of the group) that should not result in the creation
of goodwill assets or profit in the income statement but should rather be
accounted for as equity transactions. These principles are in accordance with
the exposure draft of proposed amendments to IAS 27 - Consolidated and
Separate Financial Statements issued in June 2005. The change in accounting
policy did not result in any income statement restatement to the prior
periods, but the balance sheet impact was a reduction in goodwill of R531
million and R536 million at 30 June 2006 and 31 December 2006 respectively
and a reduction in ordinary shareholders` funds of R412 million and R410
million at the respective dates after considering minorities.
The group has reclassified and restated its comparative results for the
changes described above.
Standard Bank Group Limited
Registration No. 1969/017128/06 Incorporated in the Republic of South Africa
Directors
D E Cooper (Chairman), J H Maree* (Chief executive), D D B Band, E Bradley, T
S Gcabashe, D A Hawton, S E Jonah KBE##, Sir Paul Judge#, S J Macozoma, R P
Menell, Adv K D Moroka, A C Nissen, M C Ramaphosa, M J D Ruck, M J Shaw, Sir
Robert Smith#, E M Woods
*Executive Director
#British
##Ghanaian
Group secretary
L Wulfsohn
Registered office
9th floor, Standard Bank Centre, 5 Simmonds Street, Johannesburg 2001
PO Box 7725, Johannesburg 2000
Share transfer secretaries in:
South Africa
Computershare Investor Services 2004 (Proprietary) Limited
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown, 2107
Namibia
Transfer Secretaries (Proprietary) Limited
Shop 8, Kaiserkrone Centre, Post Street Mall, Windhoek
PO Box 2401, Windhoek
Sponsor
Standard Bank
Date: 15/08/2007 08:00:01 Supplied by www.sharenet.co.za
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