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SBK - Standard Bank Group Limited - Chief executives comments at the AGM 27

Release Date: 27/05/2010 08:00
Code(s): SBK
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SBK - Standard Bank Group Limited - Chief executives comments at the AGM 27 May 2010 and 31 March 2010 capital adequacy disclosure 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") Chief executive`s comments at the AGM 27 May 2010 and 31 March 2010 capital adequacy disclosure 1. Chief executive`s comments at the Annual General Meeting At the annual general meeting to be held later today, chief executive Jacko Maree will make the following comments regarding the group`s performance for the first four months of 2010 in comparison with the similar period for 2009: For the four-month period to 30 April 2010, normalised headline earnings for the group grew by 7%. This result reflects a tough environment for revenue growth in banking activities with both net interest income and non-interest revenue lower than in the previous year, and a much improved performance from our insurance subsidiary, Liberty Holdings Limited (Liberty). Lower than expected interest rates in South Africa have put increased pressure on interest margins but have somewhat helped to ease the financial stress of households. The translation effect of a stronger rand exchange rate has had a negative impact on the group`s earnings. Net interest income was negatively impacted by lower margins due to the endowment impact of lower interest rates on transactional balances and capital, and reduced average lending balances when compared to the prior period. Trading income within non-interest revenue has had a slow start to the year with reduced client activity resulting in lower revenues. Transactional banking revenues are in line with the prior year reflecting an increase in the number of clients, particularly in the Rest of Africa, offsetting decreased customer activity. Improvements in credit impairment charges were encouraging during the first four months of the year across personal, business and corporate lending. Despite the absence of material new impairments within Corporate & Investment Banking in the period, corporate default risk remains relatively high. Operating costs continue to be tightly controlled although the cost-to-income ratio is increasing given the pressure on revenue growth. Shareholders are referred to the Liberty market update on 13 May 2010 wherein, referring to the first quarter of 2010, the following comments were included: "The management of policyholder persistency in the Retail SA business unit has been further enhanced. Experience has remained broadly stable with that seen in the latter part of 2009, with encouraging signs that retention strategies in the major book of risk business are proving effective. Sales on an indexed basis are at similar levels to 2009, with investment and credit life product sales performing above expectations. Policyholder cash flows were marginally positive and costs remain well controlled. At Stanlib, investment performance improved over that in the final quarter of 2009. The capital management strategies followed by Libfin have contributed to a good performance of its investment portfolio. Libfin also benefited from lower volatility and more favourable interest rate conditions during the quarter." As disclosed below, at 31 March 2010 the group had a total capital adequacy ratio of 14.1% and a tier 1 capital adequacy ratio of 11.3%, significantly exceeding minimum regulatory requirements. 2. Basel II capital adequacy disclosure as at 31 March 2010 In terms of the Basel II requirements under Regulation 43(1)(e)(ii) of regulations relating to banks, minimum disclosure on the capital adequacy of the group is required on a quarterly basis. This announcement meets the ongoing reporting requirement for quarterly disclosure in terms of Pillar 3 of the Basel II capital accord. Standard Bank Group Limited March December 2010 2009
Rm Rm Ordinary share capital and premium 17 279 17 197 Ordinary shareholders` reserves 65 591 66 825 Minority interest 9 651 9 844 Regulatory deductions against primary (18 183) (16 988) capital Regulatory exclusions against primary (9 608) (11 805) capital: Preference share capital and premium 5 495 5 495 Primary capital 70 225 70 568 Subordinated debt 22 931 22 931 Secondary unimpaired reserve funds 1 018 937 Regulatory deductions against secondary (7 404) (6 657) capital Secondary capital 16 545 17 211 Tertiary capital - Subordinated debt 300 1 361 Total qualifying capital 87 070 89 140 Total minimum regulatory capital requirement 60 381 58 483 % % Total capital adequacy ratio 14.1 14.9 Primary capital adequacy ratio 11.3 11.8 Note: Ordinary shareholders` reserves include unappropriated profits. The Standard Bank of South Africa Limited March December 2010 2009
Rm Rm Primary capital 37 757 38 946 Secondary capital 12 361 12 607 Tertiary capital - Subordinated debt 300 300 Total qualifying capital 50 418 51 853 Total minimum regulatory capital requirement 37 737 35 878
% % Total capital adequacy ratio 13.1 14.1 Primary capital adequacy ratio 9.8 10.6 Note: Primary capital includes unappropriated profits. The information contained in this announcement has not been reviewed by or reported on by the group`s external auditors. Johannesburg 27 May 2010 Lead sponsor Standard Bank Independent sponsor Deutsche Securities (SA) Proprietary Limited Date: 27/05/2010 08:00:04 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.

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