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SBK - Standard Bank Group - Voluntary trading update and financial information provided to Industrial and Commercial Bank of China Limited Standard Bank Group Limited (Incorporated in the Republic of South Africa) (Registration number 1969/017128/06) South African Share Code: SBK Namibian Share Code: SNB ISIN: ZAE000109815 ("Standard Bank" or "the group") Voluntary Trading Update and Financial Information Provided To Industrial and Commercial Bank of China Limited Voluntary Trading Update In the group`s interim profit and dividend announcement dated 12 August 2008, it was advised that a voluntary trading update would be issued in late October 2008, following the nine months ended 30 September 2008. The nine months ended September were characterised by increasing turbulence in global financial markets and continued pressure on consumers` disposable income in South Africa. Standard Bank nevertheless improved its cost efficiency, produced an increase in rand earnings and generated a return on equity of 18% for the year to date. Highlights for the nine months ended 30 September 2008 Normalised IFRS change change on prior on prior
year % year % ' Headline earnings (Rm) 10 057 9 9 518 10 ' Headline earnings per share (cents) 673.8 (0.2) 685.6 (2.2) ' Cost-to-income ratio (%) 48.7 48.9 ' Credit loss ratio (%) 1.42 1.42 ' Return on equity (%) 18.0 18.0 On 3 March 2008, Industrial and Commercial Bank of China Limited ("ICBC") subscribed for 152.5 million newly issued ordinary shares. This issuance, an increase of 11.1%, accounts for the difference in growth between headline earnings and headline earnings per share. Operating conditions continued to be challenging in Corporate & Investment Banking both in South Africa and internationally. Our trading and lending operations remain profitable, and exposures have been actively reduced and risks carefully managed. The credit loss ratio remains low with no major defaults having been experienced. Given current market conditions together with our reassessed risk appetite, Corporate & Investment Banking`s ability to grow revenues is naturally constrained, and likely to remain so for the rest of the financial year. In our operations elsewhere in Africa, deal flow remains positive and margins have improved. In Personal & Business Banking, asset growth continued to slow in line with macroeconomic fundamentals, and strategies implemented in 2007 have had the effect of curtailing advances growth in line with our risk appetite. In South Africa, high inflation and interest rates continue to impact consumers` ability to service debt. As anticipated, non-performing loans have continued to increase following the trend established up to June. Given this environment, these trends are likely to continue for the rest of the financial year. Liberty`s earnings remain sensitive to the performance of investment markets and are therefore subject to ongoing volatility. Against this background, it is projected that the group`s normalised headline earnings for the year is likely to be similar to or slightly higher than that for 2007. With the additional shares issued to ICBC in March 2008, normalised headline earnings per share for the year is likely to be lower than the comparative figure for 2007. The group`s capital adequacy and liquidity profile remain healthy. Liquidity management practices continue to be rigorously applied within the bank`s liquidity management framework and liquidity buffers in excess of regulatory requirements remain intact. We continue judiciously to seek growth opportunities in our chosen markets to enhance the group`s long-term prospects. Financial information provided to ICBC The transaction through which ICBC acquired a 20% shareholding in Standard Bank was implemented on 3 March 2008. ICBC`s results for the third quarter ending 30 September 2008 therefore include equity-accounted earnings from Standard Bank. The following consolidated financial information, prepared on an IFRS basis, has been disclosed to ICBC for purposes of ICBC`s equity accounting of Standard Bank`s results for the quarter ended September 2008. Statement of changes in ordinary shareholders` equity for the quarter ended 30 September 2008 Earnings Change in Other Opening attributable shareholding movements balance to ordinary of for the Rm 1 July 2008 shareholders subsidiaries period Total Ordinary share capital 153 153 Ordinary share premium 17 148 42 17 190 Foreign currency translation reserve 4 442 1 713 5 156 Foreign currency and cash flow hedging reserve 1 770 (247) 1 523 Retained earnings 57 652 2 296 *(1 999) **(2 893) 55 056 Empowerment reserve and treasury shares (3 235) (412) 62 (3 585) Other 1 991 109 (270) 1 830 Total ordinary shareholders` equity 79 921 2 296 (2 301) (2 593) 77 323 *Consists primarily of the excess of the purchase consideration over the net asset value on an additional 31.95% interest acquired in Liberty Holdings Limited in accordance with our policy to account for the acquisition of an additional interest in existing subsidiaries directly in equity. **Includes total ordinary dividends declared in August 2008 of R2 951m. The majority of the difference relates to a treasury share adjustment. The information contained in this announcement has not been reviewed by or reported on by the group`s auditors. Standard Bank`s results for the year ended 31 December 2008 will be released on or about 5 March 2009. Johannesburg 23 October 2008 Sponsor Standard Bank Date: 23/10/2008 07:06:05 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
