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ASA - ABSA Group Limited - Profit and dividend announcement

Release Date: 15/02/2011 08:00
Code(s): ASA
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ASA - ABSA Group Limited - Profit and dividend announcement audited annual financial results for the year ended 31 December 2010 ABSA GROUP LIMITED Authorised financial services and registered credit provider (NCRCP7) Incorporated in the Republic of South Africa Registration number: 1986/003934/06 ISIN: ZAE000067237 JSE share code: ASA Issuer code: AMAGB (Absa, Absa Group, the Group or the Company) ABSA GROUP LIMITED: PROFIT AND DIVIDEND ANNOUNCEMENT AUDITED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010 CONSOLIDATED SALIENT FEATURES 31 December 2010 2009(1) Change (Audited) (Audited) %
Statement of comprehensive income(Rm) Headline earnings(2) 8 041 7 621 6 Profit attributable to 8 118 19 ordinary 6 840 equity holders of the Group Statement of financial position Total assets(Rm) 716 470 710 796 1 Loans and advances to 498 635 506 163 (1) customers(Rm) Deposits due to customers(Rm) 378 111 356 365 6 Loans-to-deposits ratio (%) 91,9 95,9 Off-statement of financial position(Rm) Assets under management and 168 313 155 114 9 administration Financial Services(3) 163 415 145 453 12 Money market 66 256 55 320 20 Non-money market 97 159 90 133 8 Financial performance (%) Return on average equity 15,1 15,5 Return on average assets 1,12 1,02 Return on risk-weighted 1,99 1,97 assets(4) Notes 1 Comparatives have been reclassified. Refer to the "Reclassifications" section. 2 After allowing for R320 million (31 December 2009: R421 million) profit attributable to preference equity holders of the Group. 3 The segmentation of assets under management and administration is unaudited. 4 This ratio is unaudited. CONSOLIDATED SALIENT FEATURES (continued) 31 December 2010 2009(1) Change
(Audited) (Audited) % Operating performance (%) Net interest margin on average 4,01 3,74 interest-bearing assets Impairment losses on loans and 1,20 1,74 advances as % of average loans and advances to customers Non-performing advances as % 7,7 7,0 of loans and advances to customers(2) Non-interest income as % of 45,5 total 48,1 operating income Cost-to-income ratio 56,2 49,6 Effective tax rate, excluding 27,5 23,8 indirect taxation Share statistics(million) Number of ordinary shares in 718,2 718,2 issue Weighted average number of 716,3 693,2 ordinary shares in issue Weighted average diluted 720,7 711,5 number of ordinary shares in issue Share statistics(cents) Headline earnings per share 1 122,6 1 099,4 2 Diluted headline earnings per 1 115,7 1 072,0 4 share Basic earnings per share 1 133,3 986,7 15 Diluted earnings per share 1 126,4 962,2 17 Dividends per ordinary share 455 445 2 relating to income for the year Dividend cover(times) 2,5 2,5 Net asset value per share 7 838 7 038 11 Tangible net asset value per 7 588 6 865 11 share Capital adequacy(%)(2) Absa Group 15,5 15,6 Absa Bank 14,8 14,7 Notes 1 Comparatives have been reclassified. Refer to the "Reclassifications" section. 2 These ratios are unaudited. CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2010 2009(1) 2008(1)
(Audited) (Audited) Change (Audited) Rm Rm % Rm Assets Cash, cash balances and balances 24 361 18 24 828 with central banks 20 597 Statutory liquid asset portfolio 48 215 33 943 42 33 043 Loans and advances to banks 24 877 36 032 (31) 44 893 Trading portfolio assets 62 047 52 302 19 77 132 Hedging portfolio assets 4 662 2 558 82 3 139 Other assets 16 131 17 777 (9) 16 925 Current tax assets 196 234 (16) 23 Non-current assets held for sale - - - 2 495 Loans and advances to customers 498 635 506 163 (1) 532 819 1 Reinsurance assets 860 719 20 903 Investment securities 23 826 29 564 (19) 26 980 Investments in associates and 416 (15) 2 144 joint ventures 487 Goodwill and intangible assets 1 794 1 245 44 963 Investment properties 2 523 2 195 15 661 Property and equipment 7 493 6 606 13 6 127 Deferred tax assets 434 374 16 241 Total assets 716 470 710 796 1 773 316
Liabilities Deposits from banks 15 406 36 541 (58) 54 616 Trading portfolio liabilities 47 454 44 245 7 70 990 Hedging portfolio liabilities 1 881 565 >100 1 080 Other liabilities 11 239 12 212 (8) 12 618 Provisions 1 808 1 684 7 2 113 Current tax liabilities 965 59 >100 385 Non-current liabilities held for - - - 408 sale Deposits due to customers 378 111 356 365 6 383 204 Debt securities in issue 164 545 171 376 (4) 165 900 Liabilities under investment 13 964 12 446 12 10 377 contracts Policyholder liabilities under 3 001 (4) 3 076 insurance contracts 3 136 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 2010 2009(1) 2008(1) (Audited) (Audited) Change (Audited) Rm Rm % Rm
Borrowed funds 13 649 13 530 1 12 296 2 Deferred tax liabilities 2 298 2 147 7 2 960 Total liabilities 654 321 654 306 0 720 023 Equity Capital and reserves Attributable to ordinary equity holders of the Group: Share capital 1 433 1 432 0 1 354 Share premium 4 590 4 784 (4) 2 251 Other reserves 2 309 1 178 96 3 010 Retained earnings 47 958 43 153 11 40 992 56 290 50 547 11 47 607 Non-controlling interest - 1 215 1 299 (6) 1 042 ordinary shares Non-controlling interest - 4 644 4 644 - 4 644 preference shares Total equity 62 149 56 490 10 53 293 Total equity and liabilities 716 470 710 796 1 773 316 Note 1 Comparatives have been reclassified. Refer to the "Reclassifications" section. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2010 (Unaudited) Expected
recoveri es and Total Outstandi fair Net identifie ng value of exposur d
balance collater e impairmen al t Rm Rm Rm Rm 1. NON-PERFORMING ADVANCES Cheque accounts 220 110 110 110 Credit cards 2 822 797 2 025 2 025 Instalment credit agreements 3 492 2 036 1 456 1 456 Micro loans 445 84 361 361 Mortgages 25 642 20 740 4 902 4 902 Personal loans 1 413 442 971 971 Retail Banking 34 034 24 209 9 825 9 825 Corporate 950 840 110 110 Large and Medium business 2 612 1 734 878 878 Small business 468 390 78 78 Commercial Asset Finance 648 169 479 479 Other 380 276 104 104 Absa Business Bank 5 058 3 409 1 649 1 649
Absa Capital 549 208 341 341 Non-performing advances 39 641 27 826 11 815 11 815
Non-performing advances ratio 7,7 CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 2009
(Unaudited) Expected recoveri es and Total
Outstandi fair Net identifie ng value of exposur d balance collater e impairmen al t
Rm Rm Rm Rm NON-PERFORMING ADVANCES (continued)
Cheque accounts 148 96 52 52 Credit cards 2 959 672 2 287 2 287 Instalment credit agreements 2 635 1 488 1 147 1 147 Micro loans 510 207 303 303 Mortgages 23 687 19 589 4 098 4 098 Personal loans 568 194 374 374 Retail Banking(1) 30 507 22 246 8 261 8 261
Corporate 945 845 100 100 Large and Medium business 2 444 1 713 731 731 Small business 465 362 103 103 Other 923 425 498 498 Absa Business Bank(1) 4 777 3 345 1 432 1 432 Absa Capital 805 562 243 243
Non-performing advances 36 089 26 153 9 936 9 936 Non-performing advances ratio 7,0 Note 1 Comparatives have been reclassified for the move of Absa Small Business from Retail Banking to Absa Business Bank. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 2010 2009 (Audited) (Audited) Change Rm Rm % 2. 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 10,75% 26 March 2015 - 1 100 (100) 8,75% 1 September 2017 1 500 1 500 - 8,80% 7 March 2019 1 725 1 725 - 8,10% 27 March 2020 2 000 2 000 - 10,28% 3 May 2022 600 - 100 Three-month 26 March 2015 - (100) JIBAR + 0,75% 400 Three-month 3 May 2022 400 100 JIBAR + 2,10% - CPI-linked notes, fixed at the following coupon rates: 6,25% 31 March 2018 1 886 1 886 - 6,00% 20 September 2019 3 000 3 000 - 5,50% 7 December 2028 1 500 1 500 - Accrued interest 826 575 44 Fair value adjustment 212 (156) >100 13 649 13 530 1 Portfolio analysis Financial liabilities designated 739 3 at fair value through profit or 718 loss Financial liabilities held at 7 440 7 221 3 amortised cost Amortised cost financial 5 470 (2) liabilities held in a fair value hedging relationship 5 591 13 649 13 530 1 CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 2010 2009
(Audited) (Audited) Change Rm Rm % 3.FINANCIAL GUARANTEE CONTRACTS Financial guarantee contracts 599 1 007 (41) 4.CONTINGENCIES Guarantees(1) 11 051 10 484 5 Irrevocable facilities(2) 47 245 54 517 (13) Letters of credit(3) 4 979 5 007 (1) Other contingencies 44 5 >100 63 319 70 013 (10) Notes 1 Guarantees include performance guarantee contracts and payment guarantee contracts. Includes revocable facilities of R8 340 million (2009: R3 440 million). 2 Irrevocable facilities are commitments to extend credit where the Group 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. Includes equity facilities with a value of R750 million (2009: Rnil million) which are not subject to credit risk. 3 Includes revocable facilities of R3 170 million (2009: R3 188 million). 5. COMMITMENTS Authorised capital expenditure Contracted but not provided 1 061 928 14 for(1) Note 1 The Group has capital commitments in respect of construction of buildings, computer equipment and property development. Management is confident that future net revenues and funding will be sufficient to cover these commitments. Operating lease payments due(1) No later than one year 1 066 1 157 (8) Later than one year and no 2 059 (4) later than five years 2 135 Later than five years 482 307 57 3 607 3 599 0
Note 1 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 Group. Leases are negotiated for an average term of three to five years and rentals are renegotiated annually. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) 6. ACQUISITIONS AND DISPOSALS OF BUSINESSES 6.1 Acquisitions of businesses during the current year 6.1.1 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 57 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 Group purchase are as follows: December 2010
Fair value recognised on acquisition
Rm Other assets 0 Intangible assets 3 Other liabilities (1) Deferred tax liabilities (1) Net assets acquired 1 Satisfied by: Fair value of previously held interest 0 Cash outflow on acquisition 0 Fair value of net assets acquired (1) Gain on bargain purchase (1) The consideration paid was less than the fair value of the assets and liabilities acquired. This resulted in a bargain purchase gain of R1 million which was recognised in other operating income in the statement of comprehensive income. 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. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) 6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued) 6.1 Acquisitions of businesses during the current year (continued) 6.1.1 (continued) As part of the termination of the joint venture arrangement the Bank entered into a separate agreement with Virgin Enterprise Limited to sell Virgin branded credit cards and home loans in the market on which the Bank will pay a fee for the use of the Virgin brand name. 6.1.2 Absa Bank Limited, a subsidiary of the Group, previously had a 50,0% share in the preference shares of Sanlam Home Loans (SHL), the holding company of three securitisation vehicles. The investment in SHL has 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 50,0% 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 Group for the period from 1 August 2010 to 31 December 2010. If the acquisition occurred on 1 January 2010, the Group`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 Group purchase are as follows: December 2010 Fair value recognised on
acquisition Rm Cash, cash balance 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 assets acquired (10) Gain on bargain purchase (71) CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) 6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued) 6.1 Acquisitions of businesses during the current year (continued) 6.1.2 (continued) The consideration paid was less than fair value of the asset 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 were 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 Group 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 were willing to sell its 50% stake at below fair value of the underlying assets and liabilities. Group December
2010 Rm Net cash outflow due to acquisitions 0 Total cash and cash equivalents acquired 470 CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) 6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued) 6.2 Acquisitions of businesses during the previous year 6.2.1 On 31 January 2009, the Group acquired an additional 35,2% interest in Abseq Properties (Proprietary) Limited increasing its shareholding to 85%. Abseq Properties (Proprietary) Limited was previously recognised as an associate designated as fair value through profit or loss. Abseq Properties (Proprietary) Limited contributed a net profit before tax of R10 million to the Group for the period 31 January 2009 to 31 December 2009. If the acquisitions had occurred on 1 January 2009, the Group`s revenue would have been R8 million higher and the total profit for the year would have been R1 million higher. Details of the net assets acquired and goodwill are as Group follows: December 2009 Fair value
recognised on acquisition Rm
Other assets 36 Investments in associates and joint venture 40 Investment properties 1352 Deposits from banks (8) Deferred tax liabilities (160) Other liabilities (860) Previously held interest (199) Non-controlling interest (60) Net assets acquired 141 Satisfied by: Cash outflow on acquisition 166 Fair value of net assets acquired (141) Goodwill 25 The goodwill is attributed to the synergies expected to arise after the Group`s acquisition of Abseq Properties (Proprietary) Limited. The cost of acquisition includes directly attributable costs including legal, audit and other professional fees. No contingent liabilities were recognised as a result of the acquisition and no contingent consideration is payable. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) 6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued) 6.2 Acquisitions during the previous year (continued) 6.2.2 On 1 June 2009, the Group acquired a 100% interest in Blue Age Properties 60 (Proprietary) Limited. Group
December 2009 Fair value recognised
on acquisition Rm Net assets acquired 0 Satisfied by: Cash outflow on acquisition 0 Fair value of net assets acquired 0 Goodwill 0 Net cash outflow due to acquisitions 166 6.3 Disposal of businesses during the current year 6.3.1 Absa Property Equity Fund operated as a special purpose entity catering for the investment of community upliftment projects. This fund was previously consolidated under SIC 12 as the Bank held between 93% and 75% of units (depending on the total of units in issue at a specific point in time) and were thereby exposed to the majority of risk and rewards within the fund. Between January 2010 to August 2010 the Bank disposed 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 anymore being exposed to the majority of the risks and rewards in the fund. 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 during September 2010 and October 2010. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) 6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued) 6.3 Disposal of businesses during the current year (continued) Details of net assets disposed of are as follows: Group 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 Non-controlling interest (78) Fair value of interest retained (64) Consideration received 16 Cash and cash equivalents disposed (22) Net cash outflow and disposal (6) 6.4 Disposal of businesses during the previous year There were no disposals during the previous year. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 7. ACQUISITIONS AND DISPOSALS OF INVESTMENTS IN ASSOCIATES AND JOINT VENTURES 7.1 Net movement resulting from acquisitions and disposals of investments in associates and joint ventures 2010 2009 (Audited) (Audited) Effective Movement Effective Movement
holding Rm holding Rm (%) (%) Acquired during the current year, at cost: One Commercial Investment 49,0 0 - n/a Holdings (Proprietary) Limited - Cell Captive Acquired during the previous year, at cost: Kilkishen Investments 50,0 n/a 50,0 31 (Proprietary) Limited Meadowood Investments 8 50,0 n/a 50,0 0 (Proprietary) Limited Pinnacle Point Group Limited - 95 27,5 n/a Stand 1135 Houghton 50,0 n/a 50,0 8 (Proprietary) Limited Disposed during the current year: Pinnacle Point Group Limited - (95) 27,5 n/a Virgin Money South Africa - (0) 50,0 n/a (Proprietary) Limited Disposed during the previous year: Ambit Properties Limited - n/a - (718) Banco Commercial Angolano - n/a - (63) Transferred to subsidiaries during the current year: Sanlam Home Loans (Proprietary) 100,0 - 50,0 n/a Limited Transferred (to)/from investment securities designated at fair value through profit or loss during the current year and previous year: Blue Financial Services Limited 6,7 (32) 20,2 451 (32) (291) CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 7. ACQUISITIONS AND DISPOSALS OF INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) 2010 2009 (Audited) (Audited)
Rm Rm 7.2 Details of transfers and purchase consideration on net assets acquired on the aforementioned acquisitions are as follows: Cash paid 95 61 Conversion of debt to equity 0 - Purchase as part of business combination - 39 Transfer from investment securities - 390 95 490 7.3 Details of transfers and consideration received on net assets disposed of on the aforementioned disposals are as follows: Cash received (95) (78) Consideration in shares - (660) Total consideration (95) (738) Loss on disposal (0) (43) Transfer to investment securities (32) - Transfer to subsidiaries - - (127) (781) CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 8. RELATED PARTIES The Group`s parent company is Barclays Bank PLC (incorporated in the United Kingdom), which owns 55,5%(2009: 55,5%) of the ordinary shares. The remaining 44,5% (2009: 44,5%) of the shares are widely held on the JSE. The following are defined as related parties of the Group: 1. Key management personnel. 2. The parent, Barclays Bank PLC. 3. Subsidiaries. 4. Associates, joint ventures and retirement benefit fund. 5. An entity controlled/jointly controlled or significantly influenced by any individual referred to above. 6. Post-employment benefit plans for the benefit of employees or any entity that is a related party of the Group. 7. Children and/or dependants and spouses or partners of the individual referred to above. 2010 2009 (Audited) (Audited) Change Rm Rm %
8.1. Transactions with key management personnel and entities controlled by key management(1) Loans outstanding at the end 25 19 of the 21 Year Interest income earned 2 4 (50) Deposits at the end of the 25 24 4 year Interest expense on deposits 1 2 (50) Guarantees issued by the 70 57 23 Group Other investment securities 68 (46) at the end of the year 126 Note 1 The above transactions are entered into in the normal course of business, under terms that are no more favourable than those arranged with third parties.
8.2. Key management personnel compensation Directors 66 87 (24) Other key management 78 46 70 personnel CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December RELATED PARTIES (continued) 2010 2009 (Audited) (Audited) Change Rm Rm % 8.3. Transactions with parent company(1) The following are balances with, and transactions entered into with the parent company: Balances Loans and advances 15 673 10 436 50 Derivative assets 9 144 6 936 32 Nominal value of derivative 493 402 341 406 45 assets Other assets 552 196 >100 Reinsurance assets - 18 (100) Investment securities 581 509 14 Deposits (6 082) (8 246) 26 Debt securities in issue - (15) (100) Derivative liabilities (9 006) (8 450) (7) Nominal value of derivative (375 467) (318 237) >(100) liabilities Other liabilities (267) (287) 7 Transactions Dividends paid 1 774 2 213 (20) Gains and losses from banking 1 646 2 712 (39) and trading activities Interest paid 36 54 (33) Interest received (80) (215) 63 Net fee and commission income (15) - (100) Operating expenditure 27 252 (89) Other operating income (42) (37) (14) Note 1 All transactions entered into are on the same commercial terms and conditions as in the normal course of business. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December RELATED PARTIES (continued) 8.4. Associates, joint ventures and retirement benefit fund The Group provides certain banking and financial services to associates and joint ventures. The Group 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 Group`s financial statements are as follows: 2010 Associates Retirement Total
and joint benefit Rm ventures fund Rm Rm Value of Absa Group Pension - 7 193 7 193 Fund investments managed by the Group Value of Absa shares held by - 116 116 the Absa Group Pension Fund Value of other Absa securities - 1 582 1 582 held by the Absa Group Pension Fund Statement of financial position Deposits (0) (30) (30) Derivative transactions 4 - 4 Loans and advances to 7 275 - 7 275 customers Other assets 17 - 17 Other liabilities (47) - (47) Statement of comprehensive income Current service costs(1) - 1 154 1 154 Interest income and similar (617) - (617) income Interest expense and similar 8 1 9 charges Fees received (106) (17) (123) Fees paid 173 - 173 Note 1 Current service costs, which were included in fees paid in the previous year, are shown separately in the current year and consists of employee and employer contributions to the Absa Group Pension Fund. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December RELATED PARTIES (continued) 8.4. Associates, joint ventures and retirement benefit fund (continued) 2009
Associates Retirement Total and joint benefit Rm ventures fund Rm Rm
Value of Absa Group Pension - 7 047 7 047 Fund investments managed by the Group Value of Absa shares held by - 69 69 the Absa Group Pension Fund Value of other Absa securities - 1 444 1 444 held by the Absa Group Statement of financial position Deposits (177) (45) (222) Loans and advances to 8 411 - 8 411 customers Other assets 2 218 - 2 218 Other liabilities (127) - (127) Statement of comprehensive income Current service costs(1) - 1 042 1 042 Interest income and similar (1 026) - (1 026) income Interest expense and similar 41 1 42 charges Fees received (117) (17) (134) Fees paid 4 - 4
Note 1 Current service costs, which were included in fees paid in the previous year, are shown separately in the current year and consists of employee and employer contributions to the Absa Group Pension Fund. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2010 2009
(Audited) (Audited) Change Rm Rm % Net interest income 23 340 21 854 7 Interest and similar 54 241 65 247 (17) income Interest expense and (30 901) 29 similar charges (43 393) Impairment losses on loans and (6 005) (8 967) 33 advances Net interest income after 17 335 12 887 35 impairment losses on loans and advances Net fee and commission income 14 391 14 289 1 1.1 Fee and commission income 16 454 16 301 1 Fee and commission (2 063) (2 012) (3) expense Net insurance premium income 4 602 3 787 22 Net insurance claims and (2 405) (2 215) (9) benefits paid Changes in investment and (1 059) (560) (89) insurance liabilities Gains and losses from banking 2 349 (9) and trading activities 2 575 1.2 Gains and losses from 884 (40) investment activities 1 464 1.3 Other operating income 712 892 (20) Operating profit before 36 809 11 operating expenditure 33 119 Operating expenditure (24 949) (23 227) (7) Operating expenses (24 070) (20 857) (15) 2.1 Other impairments (108) (1 457) 93 2.2 Indirect taxation (771) (913) 16 Share of post-tax results of (9) 82 associates and joint ventures (50) Operating profit before income 11 851 9 842 20 tax Taxation expense (3 262) (2 340) (39) Profit for the year 8 589 7 502 14 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009 (Audited) (Audited) Change Rm Rm %
Other comprehensive income Exchange differences on (371) 44 translation of foreign (668) operations Movement in cash flow hedging 1 152 (665) >100 reserve Fair value gains/(losses) 3 421 >100 arising during the year (148) Amount removed from other (1 820) >(100) comprehensive income and recognised in the profit and loss component of the statement (776) of comprehensive income Deferred tax (449) 259 >(100) Movement in available-for-sale 166 (326) >100 reserve Fair value gains/(losses) 146 >100 arising during the year (306) Amount removed from other - 100 comprehensive income and recognised in the profit and loss component of the statement (205) of comprehensive income Amortisation of government 92 (12) bonds -release to the profit and loss component of the statement of comprehensive income 104 Deferred tax (72) 81 >(100) Movement in retirement benefit 21 (60) asset and liabilities 52 Increase in retirement benefit 27 (74) surplus 104 Decrease/(increase) in 2 >100 retirement benefit obligation (33) Deferred tax (8) (19) 58 Total comprehensive income for 9 557 5 895 62 the year CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009
(Audited) (Audited) Change Rm Rm % Profit attributable to: Ordinary equity holders of the 8 118 6 840 19 Group Non-controlling interest - 151 (37) ordinary shares 241 Non-controlling interest - 320 (24) preference shares 421 8 589 7 502 14 Total comprehensive income attributable to: Ordinary equity holders of the 9 138 5 238 74 Group Non-controlling interest - 99 (58) ordinary shares 236 Non-controlling interest - 320 (24) preference shares 421 9 557 5 895 62 CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2010 2009 (Audited) (Audited) Change Rm Rm %
1. NON-INTEREST INCOME 1.1 Net fee and commission income Fee and commission income Asset management and other 105 103 2 related fees Consulting and administration 510 428 19 fees Credit-related fees and 12 855 12 494 3 commissions Cheque accounts 3 198 3 231 (1) Credit cards(1) 1 938 1 860 4 Electronic banking 3 828 3 501 9 Savings accounts 2 417 2 301 5 Other(2) 1 474 1 601 (8) Insurance commission received 950 1 088 (13) Pension fund payment services 497 545 (9) Project finance fees 209 262 (20) Trust and other fiduciary 1 029 1 182 (13) services(3) Portfolio and other 783 947 (17) management fees Trust and estate income 246 235 5 Other fees and commissions 299 199 50 16 454 16 301 1 Fee and commission expense (2 063) (2 012) (3) Cheque processing fees (173) (193) 10 Commission paid (867) (867) 0 Debt collecting fees (85) (261) 67 Transaction-based legal (192) (148) (30) fees Valuation fees (185) (176) (5) Other (561) (367) (53) 14 391 14 289 1 Notes 1 Includes merchant, acquiring and issuing fees. 2 Includes service, commission fees and credit related fees on mortgage loans and foreign exchange. 3 The Group provides custody, trustee, corporate administration, investment management and advisory services to third parties, which involves the Group making allocation and purchase and sale decisions in relation to a wide range of financial instruments. Some of these arrangements involve the Group accepting targets for benchmark levels of returns for the assets under the Group`s care. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009 (Audited) (Audited) Change 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 3 198 3 231 (1) Credit cards 883 831 6 Electronic banking 3 828 3 501 9 Savings accounts 2 417 2 301 5 Other 1 080 1 293 (16) 11 406 11 157 2 Fee and commission expense (173) (193) 10 11 233 10 964 2
1.2 Gains and losses from banking and trading activities Associates and joint ventures 87 (13) >100 Dividends received 45 45 - Profit/(loss)realised on 42 (58) >100 disposal Available-for-sale unwind from (92) >(100) reserve 115 Investment securities: - 219 (100) unlisted equity and hybrid instruments Statutory liquid asset (92) (104) 12 portfolio Financial instruments (316) >(100) designated at fair value (63) through profit or loss Debt securities in issue (28) (125) 78 Deposits from banks and (1 315) >(100) due to customers (434) CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009 (Audited) (Audited) Change
Rm Rm % NON-INTEREST INCOME (continued) 1.2 Gains and losses from banking and trading activities (continued) Investment securities 180 (130) >100 Debt instruments 26 (31) >100 Listed equity instruments 86 466 (82) Unlisted equity and hybrid 68 (565) >100 instruments Loans and advances to 840 37 banks and customers 614 Statutory liquid asset 7 12 (42) portfolio Financial instruments held for trading Derivatives and trading 2 570 2 555 1 instruments Ineffective hedges 100 (19) >100 Cash flow hedges 115 (3) >100 Fair value hedges (15) (16) 6 2 349 2 575 (9)
1.3 Gains and losses from investment activities Associates and joint ventures Profit realised on - 15 (100) disposal Available-for-sale unwind from reserves Investment securities Unlisted equity and hybrid 0 1 (62) investments Financial instruments 908 (39) designated at fair value 1 499 through profit or loss Cash, cash balances and 217 (31) balances with central banks 313 Investment securities 477 518 (8) Debt instruments 125 78 60 Listed equity instruments 344 393 (12) Unlisted equity and hybrid 8 47 (83) instruments CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009
(Audited) (Audited) Change Rm Rm % NON-INTEREST INCOME (continued) 1.3 Gains and losses from investment activities (continued) Investments linked to 214 668 (68) investment contracts Cash, cash balances and (51) (50) (2) balances with central banks Debt instruments (24) (5) >(100) Listed equity instruments 289 722 (60) Unlisted equity and hybrid 0 1 (97) instruments Financial instruments held for (24) (41) 41 trading Investment linked to investment contracts Derivative instruments (24) (41) 41 Subsidiaries Loss realised on disposal - (10) 100 884 1 464 (40)
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009
(Audited) (Audited) Change Rm Rm % 2. OPERATING EXPENDITURE 2.1 Operating expenses Amortisation of intangible 165 116 42 assets Auditors` remuneration 159 134 19 Audit fees 101 90 12 Audit fees - under provision 6 9 (33) from previous periods Other fees 52 35 49 Cash transportation 729 467 56 Depreciation 1 147 1 129 2 Equipment costs 271 278 (3) Rentals 134 139 (4) Maintenance 137 139 (1) Information technology(1) 2 085 1 753 19 Investment property charges - 4 4 (0) operating expense Marketing costs 1 070 875 22 Operating lease expenses on 978 910 7 properties Other operating costs(2) 2 737 2 358 16 Printing and stationery 272 283 (4) Professional fees 1 096 897 22 Staff costs 12 537 10 816 16 Bonuses 1 101 644 71 Current service costs on post- 635 551 15 retirement benefits Other staff costs(3) 528 331 60 Salaries 9 707 8 872 9 Share-based payments 297 223 33 Training costs 269 195 38 Telephone and postage 820 837 (2) 24 070 20 857 15 Notes 1 Included above are research and development costs of R133 million (2009: R146million). 2 Other operating costs include accommodation costs, travel and entertainment costs. 3 Other staff costs include recruitment costs, membership fees to professional bodies, staff parking, redundancy fees, study assistance, staff relocation and refreshment costs. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009 (Audited) (Audited) Change
Rm Rm % 2. OPERATING EXPENDITURE (continued)
2.2 Other impairments Financial instruments 37 38 (3) Amortised cost 12 2 >100 instruments Available-for-sale 25 36 (31) instruments Other 71 1 419 (95) Computer software 4 19 (79) development costs Equipment 13 9 44 Goodwill(1) - 37 (100) Investments in associates 29 (98) and joint ventures(2) 1 328 Repossessed properties 25 26 (4) 108 1 457 (93) Notes 1 During the previous year, the Group sold contractual rights it had generated in Ambit Management Services (Proprietary) Limited. The company was dormant and consequently the goodwill previously recognised on this investment has been written off. 2 During the previous year, indications existed that the carrying amount of the investments in associates, that arose as a result of client defaults on single stock futures within Absa Capital, would not be recoverable. The recoverable amount is the fair value less cost to sell and was based on the Group`s best estimate of the price the Group would achieve in an arm`s length sale transaction of these investments. These investments have consequently been impaired in the current and previous years. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued) Year ended 31 December 2010 2009
(Audited) (Audited) Chang e Gross Net Gross Net Net Rm Rm Rm Rm %
3. HEADLINE EARNINGS Headline earnings(1) is determined as follows: Profit attributable to ordinary 8 118 6 840 19 equity holders of the Group Adjustments for: IFRS 3 (gain on bargain purchase)and (72) (72) 37 37 >(100 goodwill impairment ) IAS 16 profit on disposal of (41) (37) (68) (58) 36 property and equipment IAS 21 recycled foreign - - (23) (23) 100 currency translation reserve, disposal of investments in foreign operations IAS 27 loss on disposal of - - 10 10 (100) subsidiaries IAS 28 headline earnings (1) (1) 10 11 >(100 component of share of post-tax ) results of associates and joint ventures IAS 28 and 31 net (profit)/loss (42) (42) 43 35 >(100 on disposal of investments in ) associates and joint ventures IAS 28 and 31 impairment of 29 21 1 328 956 (98) investments in associates and joint ventures IAS 36 impairment of equipment 13 9 9 6 50 and leasehold improvements IAS 38 impairment and net 4 3 (46) (42) >100 profit on disposal of intangible assets IAS 39 release of available-for- 92 66 (105) (115) >100 sale reserves IAS 39 impairment and net 25 18 25 16 13 profit on disposal of available-for- sale instruments IAS 40 change in fair value of (50) (42) (66) (52) 19 investment properties Headline earnings 8 041 7 621 6 Note 1 The net amount is reflected after taxation and non-controlling interest. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2010 Total equity Non- Non-
attributab controlli controlli le to ng ng ordinary interest- interest- Total equity ordinary preferenc equity
holders of shares e shares the Group (Audited) (Audited) (Audited) (Audited) Rm Rm Rm Rm
Balance at the beginning of 50 547 1 299 4 644 56 490 the year Transfer from share-based 59 - - 59 payment reserve Share buy-back in respect of (234) - - (234) Absa Group Limited Share Incentive Trust Elimination of the movement in (49) - - (49) treasury shares held by Absa Group companies Elimination of the movement in 31 - - 31 treasury shares held by Absa Group Limited Share Incentive Trust Other reserves 1 131 - - 1 131 Transfer from share-based (61) - - (61) payment reserve Share-based payments for the 48 - - 48 year Other comprehensive income 999 - - 999 1 Movement in general credit 39 - - 39 risk reserve Movement in insurance 55 - - 55 contingency reserve Movement in associates` and (9) - - (9) joint ventures` retained earnings reserve Disposal of associates and 60 - - 60 joint ventures - release of reserves Retained earnings 4 805 - - 4 805 Transfer from share-based 2 - - 2 payment reserve CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December 2010 Total equity Non- Non- attributab controlli controlli
le to ng ng ordinary interest- interest- Total equity ordinary preferenc equity holders of shares e shares
the Group (Audited) (Audited) (Audited) (Audited ) Rm Rm Rm Rm
Transfer to general credit risk (39) - - (39) reserve Transfer to insurance (55) - - (55) contingency reserve Transfer to associates` and 9 - - 9 joint ventures` retained earnings reserve (loss) Disposal of associates and (60) - - (60) joint ventures - release of reserves Profit attributable to equity 8 118 - - 8 118 holders of the Group 1 Other comprehensive income - 21 - - 21 movement in retirement benefit asset and liabilities 1 Ordinary dividends paid during (3 191) - - (3 191) the year Dilution of non-controlling 0 (0) - - equity holders` interest Increase in non-controlling - 37 - 37 equity holders` interest Disposal of businesses - (78) - (78) Profit attributable to non- - 151 - 151 controlling equity holders of the Group 1 Other comprehensive income - - (52) - (52) foreign currency translation effects 1 Dividends paid during the year - (142) - (142) Profit attributable to - - 320 320 preference equity holders of the Group 1 Preference dividends paid - - (320) (320) during the year Balance at the end of the year 56 290 1 215 4 644 62 149 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December 2010 Total equity Non- Non-
attributab controlli controlli le to ng ng ordinary interest- interest- Total equity ordinary preferenc equity
holders of shares e shares the Group (Audited) (Audited) (Audited) (Audited) Rm Rm Rm Rm
Note Total comprehensive income Profit attributable to equity 8 118 151 320 8 589 holders of the Group Other comprehensive income 1 020 (52) - 968 9 138 99 320 9 557 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December 2009 Total equity Non- Non- attributab controlli controlli
le to ng ng ordinary interest- interest- Total equity ordinary preferenc equity holders of shares e shares
the Group (Audited) (Audited) (Audited) (Audited ) Rm Rm Rm Rm
Balance at the beginning of 47 607 1 042 4 644 53 293 the year Shares issued 2 571 - - 2 571 Repurchase of preference shares held by Batho Bonke Capital (Proprietary) Limited 3 - - 3 Costs incurred (0) - - (0) Transfer from share-based payment reserve 67 - - 67 Share buy-back in respect of Absa Group Limited Share (86) - - (86) Incentive Trust Elimination of the movement in gains from derivative 2 - - 2 instruments on shares Elimination of the movement in treasury shares held by Absa 38 - - 38 Group companies Elimination of the movement in treasury shares held by Absa Group Limited Employee Share 0 - - 0 Ownership Administrative Trust Elimination of the movement in treasury shares held by Absa Group Limited Share Incentive 16 - - 16 Trust Other reserves (1 832) - - (1 832) Transfer from share-based payment reserve (68) - - (68) Share-based payments for the 47 - - 47 year Other comprehensive income (1 654) - - (1 654) 1 Movement in general credit risk reserve (23) - - (23) CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December 2009 Total equity Non- Non-
attributab controlli controlli le to ng ng ordinary interest- interest- Total equity ordinary preferenc equity
holders of shares e shares the Group (Audited) (Audited) (Audited) (Audited )
Rm Rm Rm Rm Movement in insurance contingency reserve 25 - - 25 Movement in associates` and joint ventures retained (50) - - (50) earnings reserve Disposal of associates and joint ventures - release of (109) - - (109) reserves Retained earnings 2 161 - - 2 161 Repurchase of preference shares held by Batho Bonke Capital (Proprietary) Limited (1 089) - - (1 089) Transfer from share-based payment reserve 1 - - 1 Transfer to general credit risk reserve 23 - - 23 Transfer to insurance contingency reserve (25) - - (25) Transfer to associates` and joint ventures retained 50 - - 50 earnings reserve (loss) Disposal of associates and joint ventures - release of 109 - - 109 reserves Profit attributable to equity - 6 840 holders of the Group 6 840 - 1 Other comprehensive income - movement in retirement benefit asset and liabilities 52 - - 52 1 Ordinary dividends paid during (3 800) - - (3 800) the year CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December 2009 Total equity Non- Non- attributab controlli controlli
le to ng ng ordinary interest- interest- Total equity ordinary preferenc equity holders of shares e shares
the Group (Audited) (Audited) (Audited) (Audited ) Rm Rm Rm Rm
Acquisition of businesses - 72 - 72 Profit attributable to non- - 241 - 241 controlling equity holders of the Group 1 Other comprehensive income - foreign currency translation - (5) - (5) effects 1 Dividends paid during the year - (51) - (51) Profit attributable to - - 421 421 preference equity holders of the Group 1 Preference dividends paid - - (421) (421) during the year Balance at the end of the year 50 547 1 299 4 644 56 490 Note Total comprehensive income Profit attributable to equity 6 840 241 421 7 502 holders of the Group Other comprehensive income (1 602) (5) - (1 607) 5 238 236 421 5 895 CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 December DIVIDENDS PER SHARE 2010 2009 (Audited) (Audited) Change Rm Rm % Dividends paid to ordinary equity holders during the year 16 February 2010 final 1 580 (30) dividend number 47 of 220 cents per ordinary share (9 2 245 February 2009: 330 cents) 4 August 2010 interim dividend 1 616 - number 48 of 225 cents per ordinary share (3 August 2009: 1 616 225 cents) Dividends paid on shares held - 100 by Batho Bonke Capital(Proprietary) Limited in terms of the bridging (56) finance arrangement Dividends paid on treasury (5) (5) - shares held by Absa Group companies 3 191 3 800 (16) Dividends paid to ordinary equity holders relating to income for the year 4 August 2010 interim dividend 1 616 - number 48 of 225 cents per ordinary share (3 August 2009: 1 616 225 cents) 15 February 2011 final 1 652 5 dividend number 49 of 230 cents per ordinary share (16 1 580 February 2010: 220 cents) Dividends paid on shares held - 100 by Batho Bonke Capital(Proprietary) Limited in terms of the bridging (56) finance arrangement Dividends paid on treasury (3) (2) (50) shares held by Absa Group companies 3 265 3 138 4 Note The STC payable by the Group in respect of the dividend approved and declared subsequent to the reporting date, amounts to R165 million (2009: R158 million). No provision has been made for this dividend and the related STC in the financial statements at the reporting date. CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December DIVIDENDS PER SHARE (continued) 2010 2009 (Audited) (Audited) Change
Rm Rm % Dividends paid to non- controlling preference equity holders during the year 16 February 2010 final 162 (31) dividend number 8 of 3 280,3 cents per preference share (9 February 2009: 4 734,5 cents) 234 4 August 2010 interim dividend 158 (16) number 9 of 3 197,5 cents per preference share (3 August 187 2009: 3 799,3 cents) 320 421 (24) Dividends paid to non- controlling preference equity holders relating to income for the year 4 August 2010 interim dividend 158 (16) number 9 of 3 197,5 cents per preference share (3 August 2009: 3 799,3 cents) 187 15 February 2011 final 143 (12) dividend number 10 of 2 887,6 cents per preference share (16 162 February 2010: 3 280,3 cents) 301 349 (14) Note The STC payable by the Group in respect of the dividend approved and declared subsequent to the reporting date amounts to R14 million (2009: R16 million). No provision has been made for this dividend and the related STC in the financial statements at the reporting date. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2010 2009(1) (Audited) (Audited) Change Rm Rm %
Net cash generated from 2 202 4 822 (54) operating activities Net cash 1 500 (2 029) >100 generated/(utilised)from investing activities Net cash utilised from (4 263) >(100) financing activities (1 419) Net (decrease)/increase in (561) >(100) cash and cash equivalents 1 374 Cash and cash equivalents at 6 976 25 the 5 600 beginning of the year 1 Effect of exchange rate 2 - movements on cash and cash 2 equivalents Cash and cash equivalents at 6 417 6 976 (8) the end of the year 2
NOTES 1. Cash and cash equivalents at the beginning of the year Cash, cash balances and 5 175 10 balances 4 726 with central banks Loans and advances to banks 1 801 874 >100 6 976 5 600 25
2. Cash and cash equivalents at the end of the year Cash, cash balances and 4 939 (5) balances 5 175 with central banks Loans and advances to banks 1 478 1 801 (18) 6 417 6 976 (8) Note 1 Comparatives have been reclassified. Refer to the "Reclassifications" section. CONSOLIDATED PROFIT CONTRIBUTION BY BUSINESS AREA Year ended 31 December 2010 2009(1) (Audited) (Audited) Change Rm Rm % Banking operations Retail Banking 3 353 1 945 72 Home Loans 196 (1 299) >100 Vehicle and Asset Finance 280 265 6 Card 1 346 811 66 Personal Loans(2) 515 20 >100 Retail Bank(2) 1 016 2 148 (53) Absa Business Bank 2 903 3 235 (10) Absa Capital 1 480 288 >100 Underlying performance 1 518 1 275 19 Single stock futures (38) (987) 96 impairments Corporate centre (396) 544 >(100) Capital and funding centre (192) (35) >(100) Non-controlling interest - (320) (421) 24 preference shares Total banking 6 828 5 556 23 Financial Services 1 290 1 284 0 Profit attributable to 8 118 19 ordinary equity holders of the 6 840 Group Headline earnings adjustments (77) 781 >(100) Headline earnings 8 041 7 621 6 Notes 1 Comparatives have been reclassified for the move of Absa Small Business from Retail Banking to Absa Business Bank. 2 Personal Loans were previously disclosed as part of Retail Bank. CONSOLIDATED TOTAL REVENUE(1)CONTRIBUTION BY BUSINESS AREA Year ended 31 December 2010 2009(2) (Audited) (Audited) Change Rm Rm % Banking operations Retail Banking 23 291 22 976 1 Home Loans 3 531 3 133 13 Vehicle and Asset Finance 2 193 2 279 (4) Card 4 355 4 261 2 Personal Loans(3) 1 936 1 753 10 Retail Bank(3) 11 276 11 550 (2) Absa Business Bank 11 626 11 498 1 Absa Capital 5 226 4 446 18 Corporate centre (827) (527) (57) Capital and funding centre (106) 300 >(100) Total banking 39 210 38 693 1 Financial Services 3 604 3 393 6 Total revenue 42 814 42 086 2 Notes 1 Revenue includes net interest income and non-interest income. 2 Comparatives have been reclassified for the move of Absa Small Business from Retail Banking to Absa Business Bank. 3 Personal Loans were previously disclosed as part of Retail Bank. CONSOLIDATED INTERNAL REVENUE(1)CONTRIBUTION BY BUSINESS AREA Year ended 31 December 2010 2009(2) (Audited) (Audited) Change Rm Rm % Banking operations Retail Banking (13 467) (19 218) 30 Home Loans (15 119) (19 737) 23 Vehicle and Asset Finance (2 918) (3 878) 25 Card (815) (1 204) 32 Personal Loans(3) (611) (786) 22 Retail Bank(3) 5 996 6 387 (6) Absa Business Bank 1 880 629 >100 Absa Capital 12 320 20 498 (40) Corporate centre (423) (790) 46 Capital and funding centre (820) (847) 3 Total banking (510) 272 (88) Financial Services 510 (272) 88 Internal revenue - - - Notes 1 Revenue includes net interest income and non-interest income. 2 Comparatives have been reclassified for the move of Absa Small Business from Retail Banking to Absa Business Bank. 3 Personal Loans were previously disclosed as part of Retail Bank. CONSOLIDATED TOTAL ASSETS BY BUSINESS AREA Year ended 31 December 2010 2009(1) (Audited) (Audited) Change Rm Rm % Banking operations Retail Banking 469 043 449 781 4 Home Loans 247 881 241 457 3 Vehicle and Asset Finance 51 020 50 543 1 Card 26 609 24 146 10 Personal Loans(2) 12 887 9 488 36 Retail Bank(2) 130 646 124 147 5 Absa Business Bank 166 838 164 210 2 Absa Capital 365 308 365 579 (0) Corporate centre (380 521) (369 492) (3) Capital and funding centre 72 855 66 765 9 Total banking 693 523 676 843 2 Financial Services 22 947 33 953 (32) Total assets 716 470 710 796 1 Notes 1 Comparatives have been reclassified for the move of Absa Small Business from Retail Banking to Absa Business Bank. 2 Personal Loans were previously disclosed as part of Retail Bank. RECLASSIFICATIONS Some items within the statement of financial position as at 31 December 2009 and the statement of financial position for the year ended 31 December 2008 were reclassified: CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2009 (Audited) (Audited) (Audited)
As previously reported Reclassificatio Reclassifi ns1 ed
Rm Rm Rm Assets Cash, cash balances and 20 597 - balances 20 597 with central banks Statutory liquid asset 33 943 - 33 943 portfolio Loans and advances to banks 36 032 - 36 032 Trading portfolio assets 61 779 (9 477) 52 302 Hedging portfolio assets 2 558 - 2 558 Other assets 17 777 - 17 777 Current tax assets 234 - 234 Loans and advances to customers 503 630 2 533 506 163 Reinsurance assets 719 - 719 Investment securities 29 564 - 29 564 Investments in associates and - joint ventures 487 487 Goodwill and intangible assets 1 245 - 1 245 Investment properties 2 195 - 2 195 Property and equipment 6 606 - 6 606 Deferred tax assets 374 - 374 Total assets 717 740 (6 944) 710 796 Liabilities Deposits from banks 39 616 (3 075) 36 541 Trading portfolio liabilities 53 722 (9 477) 44 245 Hedging portfolio liabilities 565 - 565 Other liabilities 12 212 - 12 212 Provisions 1 684 - 1 684 Current tax liabilities 59 - 59 Deposits due to customers 350 757 5 608 356 365 Debt securities in issue 171 376 - 171 376 Liabilities under investment Contracts 12 446 - 12 446 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 2009 (Audited) (Audited) (Audited) As previously reported Reclassifications Reclassifi
(1) ed Rm Rm Rm Policyholder liabilities under insurance contracts 3 136 - 3 136 Borrowed funds 13 530 - 13 530 Deferred tax liabilities 2 147 - 2 147 Total liabilities 661 250 (6 944) 654 306
Equity Capital and reserves Attributable to ordinary equity holders of the Group: Share capital 1 432 - 1 432 Share premium 4 784 - 4 784 Other reserves 1 178 - 1 178 Retained earnings 43 153 - 43 153 50 547 - 50 547 Non-controlling interest - 1 299 1 299 ordinary shares - Non-controlling interest - 4 644 4 644 preference shares - Total equity 56 490 - 56 490 Total equity and liabilities 717 740 (6 944) 710 796 Note 1 The Group has reassessed its counterparty risk for certain scrip lending and other trading activities. This was done due to a change in interpretation of customer agreements as well as a reconsideration of the risk inherent in some of its trading portfolios. This resulted in the Group revisiting the principles of netting down or grossing up some transactions to be in line with the risks inherent to the transactions. It was concluded that the reclassification would better reflect the risk that the Group has to manage on the different statement of financial position lines and that this disclosure would enhance disclosure and provide users of the financial statements with more relevant information. This disclosure is now also aligned with industry practice. CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2008 (Audited) (Audited) (Audited) As
previously reported Reclassificatio Reclassifi ns1 ed Rm Rm Rm
Assets Cash, cash balances and 24 828 - 24 828 balances with central banks Statutory liquid asset 33 043 - 33 043 portfolio Loans and advances to banks 44 662 231 44 893 Trading portfolio assets 78 879 (1 747) 77 132 Hedging portfolio assets 3 139 - 3 139 Other assets 16 925 - 16 925 Current tax assets 23 - 23 Non-current assets held for 2 495 - 2 495 sale Loans and advances to customers 532 144 675 532 819 Reinsurance assets 903 - 903 Investment securities 26 980 - 26 980 Investments in associates and 2 144 - 2 144 joint ventures Goodwill and intangible assets 963 - 963 Investment properties 661 - 661 Property and equipment 6 127 - 6 127 Deferred tax assets 241 - 241 Total assets 774 157 (841) 773 316
Liabilities Deposits from banks 54 633 (17) 54 616 Trading portfolio liabilities 72 737 (1 747) 70 990 Hedging portfolio liabilities 1 080 - 1 080 Other liabilities 12 618 - 12 618 Provisions 2 113 - 2 113 Current tax liabilities 385 - 385 Non-current liabilities held- 408 - 408 for-sale Deposits due to customers 382 281 923 383 204 Debt securities in issue 165 900 165 900 Liabilities under investment 10 377 - 10 377 contracts CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As at 31 December 2008 (Audited) (Audited) (Audited)
As previously reported Reclassifications Reclassifi (1) ed
Rm Rm Rm Policyholder liabilities 3 076 - 3 076 under insurance contracts Borrowed funds 12 296 - 12 296 Deferred tax liabilities 2 960 - 2 960 Total liabilities 720 864 (841) 720 023
Equity Capital and reserves Attributable to ordinary equity holders of the Group: Share capital 1 354 - 1 354 Share premium 2 251 - 2 251 Other reserves 3 010 - 3 010 Retained earnings 40 992 - 40 992 47 607 - 47 607 Non-controlling interest - 1 042 - 1 042 ordinary shares Non-controlling interest - 4 644 - 4 644 preference shares Total equity 53 293 53 293 Total equity and liabilities 774 157 (841) 773 316 Note 1 The Group has reassessed its counterparty risk for certain scrip lending and other trading activities. This was done due to a change in interpretation of customer agreements as well as a reconsideration of the risk inherent in some of its trading portfolios. This resulted in the Group revisiting the principles of netting down or grossing up some transactions to be in line with the risks inherent to the transactions. It was concluded that the reclassification would better reflect the risk that the Group has to manage on the different statement of financial position lines and that this disclosure would enhance disclosure and provide users of the financial statements with more relevant information. This disclosure is now also aligned with industry practice. PROFIT AND DIVIDEND ANNOUNCEMENT Salient features Headline earnings per share (HEPS) increased by 2% to 1 122,6 cents. Diluted HEPS increased by 4% to 1 115,7 cents. Final dividend of 230 cents per share, up 5% year-on-year. Net interest margin on average interest-bearing assets improved to 4,01% from 3,74%. Credit impairments fell 33% to R6 005 million, resulting in a 1,20% credit loss ratio. Cost-to-income ratio increased to 56,2%. Return on average equity (RoE) of 15,1%. Return on risk-weighted assets of 1,99%. Net asset value (NAV) per share grew by 11% to 7 838 cents. Core tier I capital adequacy ratio for the Group of 11,7%, well above regulatory requirements. Overview In a challenging operating environment, the Group`s headline earnings increased by 6% to R8 041 million (31 December 2009: R7 621 million). HEPS grew by 2% to 1 122,6 cents (31 December 2009: 1 099,4 cents) and fully diluted HEPS increased by 4% to 1 115,7 cents (31 December 2009: 1 072,0 cents). The Group`s RoE of 15,1% remained above its cost of equity. Lower credit impairments, particularly in Retail Banking, and a wider net interest margin on average interest-bearing assets, were the primary reasons for the Group`s higher headline earnings. These outweighed muted loan and transaction volume growth, a higher effective tax rate and a 15% rise in operating expenses. Retail Banking and Absa Capital grew their headline earnings by 85% and 20% respectively, whereas Absa Business Bank`s headline earnings fell by 11% and those of Financial Services declined marginally. Operating environment The global economy grew around 5% in 2010, a better performance after the acute global economic stress of the two previous years. Emerging markets led the way out of recession, although the USA and Germany also experienced stronger-than- expected growth. However, some European economies experienced difficulties, particularly in their financial sectors. South Africa also recovered in 2010, buoyed by stronger external demand, interest rates at 36-year lows and a recovery in business confidence in most consumer facing sectors. Despite improved growth, business confidence remains generally restrained and many industries continued to shed labour in 2010. Subdued confidence, along with high levels of household indebtedness, has been an important moderating factor in private sector credit growth. Group performance Statement of financial position The Group`s total assets of R716,5 billion as at 31 December 2010 increased 1% from 31 December 2009, but declined marginally from 30 June 2010. Substantial growth of 42% in Absa`s statutory liquid asset portfolio, to strengthen its liquidity, offset lower investment securities and loans and advances to banks. Loans and advances to customers Absa`s loans and advances declined by 1% from 31 December 2009 to R498,6 billion, but were flat from 30 June 2010. Retail Banking`s loans and advances increased 1%, given lower customer demand and a sustained focus on risk appetite and pricing. Mortgages, which constituted 60% of total gross Group loans and advances, grew by 1% year-on-year as two small books were acquired. However, growth in credit cards and instalment credit agreements improved in the second half of 2010 and personal and term loans grew 31% year-on-year. Deposits due to customers Deposits due to customers increased by 6% to R378,1 billion from 31 December 2009, with solid growth in targeted areas. Retail Banking achieved 4% growth, spread across most of its products, which further entrenched its leading market share in retail deposits. ABB`s deposits grew by 7% from 31 December 2009, with cheque accounts performing well. ABB`s strategy to lengthen its funding saw it increase fixed deposits by 6%. Consequently, Absa`s overall loans-to-deposits ratio declined to 91,9% from the 95,9% of the previous year. Net asset value Net asset value (NAV) grew by 11% to R56,3 billion during the year. Retained earnings of R4,9 billion was generated from net profits after paying ordinary dividends. Cash flow hedging increased other reserves by 96% to R2,3 billion. Absa`s NAV per share rose 11% year-on-year to 7 838 cents (31 December 2009: 7 038 cents) and has grown by 15% compound over the past five years. Capital to risk-weighted assets Despite a 9% growth in risk-weighted assets due to recalibrating credit models to reflect the recent downturn, Absa maintained its healthy capital levels, which remain well above regulatory requirements. As at 31 December 2010, Absa Group`s core tier l and tier l capital adequacy ratios were 11,7% (31 December 2009: 11,5%) and 12,8% (31 December 2009: 12,7%) respectively. The Group`s total capital ratio declined slightly to 15,5% (31 December 2009: 15,6%). Absa Bank`s tier l ratio improved marginally to 11,9% (31 December 2009: 11,6%) and its total ratio was 14,8% (31 December 2009: 14,7%). Net interest income Net interest income increased 7% to R23 340 million (31 December 2009: R21 854 million) despite negative loan growth and 1,02% lower average prime interest rates during the year. This increase is largely attributable to Absa`s effective hedging strategy, but also reflects better new business pricing for credit risk and a change in the loan mix towards higher margin products. These outweighed the material negative endowment effect and funding pressure on wholesale deposits. The Group`s net interest margin on average interest-bearing assets improved noticeably to 4,01% from 3,74%. Credit impairments After almost quadrupling between 2007 and 2009, Absa`s credit impairments improved 33% to R6 005 million (31 December 2009: R8 967 million). Retail Banking, where credit impairments fell 36% to R4 820 million from R7 547 million, was responsible for most of the reduction. Early cycle delinquencies improved as lower rates helped consumers to recover and the benefits of effective collections management and sound credit policy became evident. ABB`s credit impairments declined by 3% to R1 075 million. The Group`s credit impairments ratio improved by more than expected to 1,20% from the 1,74% recorded for 2009 and the 1,50% for the six months ended 30 June 2010. This is well below the peak of 1,86% recorded 18 months ago. Despite far smaller inflows, non-performing loans remain elevated. Non-performing loans as a percentage of average loans and advances were 7,7% for the year ended 31 December 2010 and remained in line with the 7,6% recorded for the six months ended 30 June 2010 and increased from the 7,0% recorded for the year ended 31 December 2009. Absa`s loans subject to debt counselling declined to R7 billion from R9,6 billion at 30 June 2010, owing to strong collection efforts. The Group`s non-performing loan coverage ratio improved from 2009. Non-interest income Absa`s non-interest income declined by 4% to R19 474 million (31 December 2009: R20 232 million), largely because of a revaluation loss of R128 million on its Visa stake (31 December 2009: R272 million profit) and non-recurrence of gains from selling holdings in MasterCard and NuPay (31 December 2009: R271 million). Net fee and commission income grew a modest 1% to R14 391 million (31 December 2009: R14 289 million), because of sluggish transaction volumes and the absence of a price increase in Retail Banking. Electronic banking fees and ABB`s fee and commission income increased 9% and 7% respectively. Absa Capital`s Markets revenue fell by 7%, which is considered a solid performance in a difficult operating environment with reduced client activity. Revaluations in Private Equity resulted in a R48 million profit (31 December 2009: R623 million loss). Income due to realisations of R40 million (31 December 2009: nil) is also included in non-interest income. Operating expenses Absa`s operating expenses grew by 15% to R24 070 million (31 December 2009: R20 857 million) as the Group continued to invest for future growth. This included 19% growth in information technology costs from the previous year. Staff costs, the largest component, increased by 16% to R12 537 million (31 December 2009: R10 816 million), reflecting wage settlements and higher incentives. The compound annual growth rate in costs over five years was well controlled at 11%. As expected given modest revenue growth, the Group`s cost-to-income ratio rose to 56,2% (31 December 2009: 49,6%). Taxation The Group`s taxation increased 39% to R3 262 million from R2 340 million for 2009, as its effective tax rate increased to 27,5% from 23,8%. The higher rate was mainly due to a lower proportion of exempt income. Segmental performance Retail Banking Headline earnings increased 85% to R3 232 million (31 December 2009: R1 749 million), largely because of lower credit impairments. Attributable earnings grew by 72% to R3 353 million (31 December 2009: R1 945 million). Retail Banking`s credit loss ratio fell to 1,49% from 2,30%, due to improving early stage delinquencies and a successful collections strategy. Revenue grew by 1%, reflecting limited transactional volume and loan growth, plus funding margin pressure. Operating expenses grew by 9%, resulting in a higher cost-to-income ratio of 57,1% (31 December 2009: 53,2%). Headline earnings from Card, Home Loans and Personal Loans improved significantly, while Retail Bank declined 50% due to higher impairments. Retail Banking`s return on regulatory capital improved to 20,7%. Absa Business Bank Headline earnings dropped by 11% to R2 848 million (31 December 2009: R3 206 million), as loans and advances declined by 1% and commercial property finance equity portfolio values fell. ABB experienced a 3% decrease in credit impairments. Net interest income rose 2%, reflecting solid deposit growth, which partially offset lower customer advances and pressure on deposit margins from lower interest rates. Fee income increased 7% driven by ABB`s enhanced transactional capabilities. Operating expenses grew by 14% to R6 397 million (December 2009: R5 624 million), as the business continues to invest in growth initiatives. Nonetheless, ABB`s return on regulatory capital remained a credible 22,8%. Absa Capital Headline earnings increased by 20% to R1 527 million (31 December 2009: R1 272 million) and attributable earnings increased to R1 480 million (31 December 2009: R288 million). The large growth in attributable earnings is due to single stock futures impairments from the previous year. Private Equity revenue rose significantly from the prior year as a result of an improved performance in the investment portfolio and reduced funding costs. Markets revenue held up relatively well, considering the reduced client flows. With client activity levels below 2009, Investment banking revenue declined by 22%. Absa Wealth`s net revenue grew by 12% owing to improved banking and credit margins. Absa Capital continued to expand into Africa and attributable income from the rest of Africa grew by 14% to R219 million. Further investment in systems, infrastructure and talent contributed to the 23% rise in operating expenses and a 54,3% cost-to- income ratio. Absa Capital`s return on regulatory capital was 16,0%. Financial Services Headline earnings declined marginally to R1 291 million (31 December 2009: R1 300 million), in a tough operating environment. Financial Services` attributable earnings remained relatively unchanged at R1 290 million (31 December 2009: R1 284 million). Nonetheless, it achieved a 34,8% RoE (31 December 2009: 37,9%).The life and short-term insurance companies delivered strong premium growth of 25% and 12% respectively. Absa Life`s embedded value of new business grew by 58% year-on-year to R465 million and its return on embedded value was 39,8%. Assets under management increased by 12% to R163 billion. Short-term insurance claims remained high relative to historical trends, at 68,5%, although they were slightly below 2009`s 69,9%. Investments in distribution channels and technology, as well as increased business volumes and new mandates secured, increased operating costs by 16% year-on-year. Prospects Global growth is expected to slow to 4% in 2011, as emerging markets and the US sustain momentum. Although slightly slower, global economic growth is likely to maintain upward pressure on commodity prices, which would be generally positive for South Africa. We expect GDP growth to continue improving as the economy responds to lower interest rates. Executing its One Absa strategy positions the Group to capture future growth as the economy improves. Nonetheless, revenue growth is likely to remain subdued in 2011, particularly as moderate advances growth is anticipated. However, stronger non-interest revenue growth is expected this year, particularly in key target areas. Credit impairments should improve, albeit at a slower pace than for 2010. Management is committed to containing cost growth, maintaining strong capital levels and improving liquidity further. Basis of presentation and changes in accounting policies Absa Group Limited is a company domiciled in South Africa. Its registered office is the 3rd floor, Absa Towers East, 170 Main Street Johannesburg, 2001. The Group`s condensed results have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and contain the information required by International Accounting Standard (IAS) 34. The accounting policies applied in preparing the financial results for the year ended 31 December 2010 are the same as the accounting policies in place for the year ended 31 December 2009 with the exceptions mentioned below. Revised IFRS 3 - Business Combinations affects acquisitions that are achieved in stages and acquisitions where less than 100% of the equity is acquired. In addition, all acquisition-related costs are expensed. The revised IFRS 3 has been applied prospectively to all business combinations from 1 January 2010. The impact of this amendment on the Group was not significant during the year under review. Revised IAS 27 - Consolidated and Separate Financial Statements specifies that changes in a parent`s ownership interest in a subsidiary that does not result in the loss of control must be accounted for as equity transactions. The requirements of IAS 27 have been applied prospectively to transactions with non- controlling interests from 1 January 2010. The impact of this amendment on the Group was not significant during the year under review. Reclassifications The Group has reassessed its counterparty risk for certain scrip lending and other trading activities. This was done due to a change in interpretation of customer agreements as well as a reconsideration of the risk inherent in some of its trading portfolios. This resulted in the Group revisiting the principles of netting down or grossing up some transactions to be in line with the risks inherent to the transactions. It was concluded that the reclassification would better reflect the risk that the Group has to manage on the different statement of financial position lines and that this disclosure would enhance disclosure and provide users of the financial statements with more relevant information. This disclosure is now also aligned to industry practice. This has resulted in comparatives being reclassified for December 2009 and December 2008. Auditors` report Ernst & Young Inc. and PricewaterhouseCoopers Inc., Absa Group Limited`s independent auditors, have audited the consolidated annual financial statements of Absa Group Limited from which the condensed consolidated financial results have been derived. The auditors have expressed an unqualified audit opinion on the consolidated annual financial statements. The condensed consolidated financial results comprise the condensed consolidated statement of financial position at 31 December 2010, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the year then ended, and selected explanatory notes. The audit report of the consolidated annual financial statements is available for inspection at Absa Group Limited`s registered office. On behalf of the board M Ramos Group Chief Executive G Griffin Group Chairman Johannesburg 15 February 2011 Declaration of final ordinary dividend number 49 Shareholders are advised that a final ordinary dividend of 230 cents per ordinary share was announced today, Tuesday, 15 February 2011, for the six month period ending 31 December 2010, bringing the total dividend for the year to 455 cents per ordinary share. The final ordinary dividend is payable to shareholders recorded in the register of members of the Group at the close of business on Friday, 11 March 2011. 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 dividend are applicable: Last day to trade cum dividend Friday, 4 March 2011 Shares commence trading ex dividend Monday, 7 March 2011 Record date Friday, 11 March 2011 Payment date Monday, 14 March 2011 Share certificates may not be dematerialised or rematerialised between Monday, 7 March 2011, and Friday, 11 March 2011, both dates inclusive. On Monday, 14 March 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 14 March 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, 14 March 2011. On behalf of the board S Martin Group Secretary Johannesburg 15 February 2011 Enquiries Jason Quinn Group Financial Controller Absa Group Limited 4th Floor, Absa Towers East, 170 Main Street, Johannesburg Tel: +2711 350 7565, Fax: +2711 350 6487 E-mail: jason.quinn@absa.co.za Alan Hartdegen Head: Investor Relations Absa Group Limited 3rd Floor, Absa Towers East, 170 Main Street, Johannesburg Tel: +2711 350 2598, Fax: +2711 350 5924 E-mail: Alan.Hartdegen@absa.co.za Sponsor J.P. Morgan Equities Limited Date: 15/02/2011 08:00:02 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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