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OLD MUTUAL PLC - Interim results for the six months ended 30 June 2012

Release Date: 08/08/2012 08:01
Code(s): OML     PDF:  
Wrap Text
Interim results for the six months ended 30 June 2012

OLD MUTUAL PLC
ISIN CODE: GB00B77J0862
JSE SHARE CODE: OML
NSX SHARE CODE: OLM
ISSUER CODE: OLOML

Index to the financial information 
For the six months ended 30 June 2012

 

Statement of directors' responsibilities in respect of the interim financial statements    38

Interim review report for the six months ended 30 June 2012 to Old Mutual plc              39

Consolidated income statement                                                              41

Consolidated statement of comprehensive income                                             42

Reconciliation of adjusted operating profit to profit after tax                            43

Consolidated statement of financial position                                               44

Condensed consolidated statement of cash flows                                             45

Consolidated statement of changes in equity                                                46

Notes to the consolidated financial statements

    A: Accounting policies                                                                 52

    B: Segment information                                                                 54

    C: Other key performance information                                                   68

    D: Other income statement notes                                                        74

    E: Borrowed funds                                                                      76

    F: Discontinued and held for sale operations                                           79

    G: Other notes                                                                         80

Adjusted Group MCEV by line of business                                                    82

Adjusted operating Group MCEV                                                              83

Commentary on key changes in the MCEV 30 June 2012 primary statements compared to 2011     83

Adjusted operating Group MCEV earnings per share                                           84

Group market consistent embedded value statement of earnings                               85

Notes to the MCEV basis supplementary information

    A: MCEV policies                                                                       87

    B: Segment information                                                                 95

    C: Other key performance information                                                  111

    D: Sensitivity tests                                                                  116

Statement of directors' responsibilities in respect of the interim financial
statements
For the six months ended 30 June 2012
We confirm that to the best of our knowledge:

·     the consolidated financial information has been prepared in accordance with the recognition and measurement principles of International
      Financial Reporting Standards adopted by the EU and in accordance with the requirements of IAS34 'Interim Financial Reporting'

·     the MCEV supplementary information has been prepared in accordance with the Market Consistent Embedded Value Principles (Copyright (c)
      Stichting CFO Forum Foundation 2008) issued in June 2008 and updated in October 2009 by the CFO Forum ('the Principles') and the basis
      of preparation as set out on page 87.

·     the interim management report includes a fair review of the information required by:

(a)   DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months
      of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties
      for the remaining six months of the year; and

(b)   DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the
      financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the
      related party transactions described in the last annual report that could do so.




Julian Roberts                                                   Philip Broadley
Group Chief Executive                                            Group Finance Director
8 August 2012                                                    8 August 2012

Interim review report for the six months ended 30 June 2012 to Old
Mutual plc


Introduction
We have been engaged by the company to review the condensed set of financial statements in the interim financial report for the six months ended
30 June 2012 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the
related notes, set out on pages 41 to 81, which include the Reconciliation of Adjusted Operating Profit to Profit after Tax.

We have also been engaged by the company to review the Market Consistent Embedded Value (MCEV) basis supplementary information ('the
supplementary information'), set out on pages 82 to 117, for the six months ended 30 June 2012.

We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of financial statements or the supplementary information.

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of
the Disclosure and Transparency Rules (the DTR) of the UK's Financial Services Authority (the UK FSA) and also to provide a review conclusion to
the company on the supplementary information. Our review of the condensed set of financial statements has been undertaken so that we might
state to the company those matters we are required to state to it in this report and for no other purpose. Our review of the supplementary
information has been undertaken so that we might state to the company those matters we have been engaged to state in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review
work, for this report, or for the conclusions we have reached.

Directors' responsibilities
The interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-
yearly financial report in accordance with the DTR of the UK FSA. The directors have accepted responsibility for preparing the supplementary
information contained in the interim financial report on an MCEV basis in accordance with the CFO Forum MCEV Principles as issued in June 2008
and updated in October 2009 ('the MCEV Principles').

As disclosed in note A, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed
set of financial statements included in this interim financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the EU.

The supplementary information has been prepared in accordance with the MCEV principles, using the methodology and assumptions as detailed in
the basis of preparation of the supplementary information. The supplementary information should be read in conjunction with the group's condensed
set of financial statements.


Our responsibility

Our responsibility is to express to the company a conclusion, based on our review, on the condensed set of financial statements and the
supplementary information in the interim financial report.


Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial
Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim
financial information and supplementary information consists of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim
financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU
and the DTR of the UK FSA.

Based on our review, nothing has come to our attention that causes us to believe that the supplementary information for the six months ended 30
June 2012 is not prepared, in all material respects, in accordance with the MCEV principles, using the methodology and assumptions as detailed in
the basis of preparation of the supplementary information.

Philip Smart
for and on behalf of KPMG Audit Plc
Chartered Accountants, 15 Canada Square, London, E14 5GL, 8 August 2012

Consolidated income statement 
For the six months ended 30 June 2012
                                                                                                                                                    GBPm
                                                                                                           6 months           6 months        Year ended
                                                                                                      ended 30 June      ended 30 June       31 December
                                                                                           Notes               2012             2011(1)             2011
Revenue
Gross earned premiums                                                                       B2                1,774              1,879             3,584
Outward reinsurance                                                                                            (155)              (163)             (325)
Net earned premiums                                                                                           1,619              1,716             3,259
Investment return (non-banking)                                                                               3,353              1,221              (567)
Banking interest and similar income                                                                           1,780              1,881             3,669
Banking trading, investment and similar income                                                                  107                105               217
Fee and commission income, and income from service activities                                                 1,513              1,500             3,035
Other income                                                                                                     70                 89               171
Total revenues                                                                                                8,442              6,512             9,784
Expenses
Claims and benefits (including change in insurance contract provisions)                                      (2,326)            (1,650)            (3,331)
Reinsurance recoveries                                                                                          125                104                123
Net claims and benefits incurred                                                                             (2,201)            (1,546)            (3,208)
Change in investment contract liabilities                                                                    (1,840)              (430)             1,889
Losses on loans and advances                                                                                   (216)              (251)              (458)
Finance costs                                                                                                   (90)               (85)               (58)
Banking interest payable and similar expenses                                                                  (997)            (1,093)            (2,095)
Fee and commission expenses, and other acquisition costs                                                       (494)              (468)            (1,007)
Other operating and administrative expenses                                                                  (1,837)            (1,901)            (3,852)
Goodwill impairment                                                                                               -                  -               (264)
Change in third party interest in consolidated funds                                                            (64)               (84)                 2
Total expenses                                                                                               (7,739)            (5,858)            (9,051)
Share of associated undertakings and joint ventures' profit after tax                                            10                  6                 10
Profit on acquisition/disposal of subsidiaries, associated undertakings
 and strategic investments                                                                  C1(c)                20                249                251
Profit before tax                                                                                               733                909                994
Income tax expense                                                                          D1                 (241)              (178)              (225)
Profit from continuing operations after tax                                                                     492                731                769
Discontinued operations
Profit from discontinued operations after tax                                               F1                  595                150                198
Profit after tax for the financial period                                                                     1,087                881                967
Attributable to
Equity holders of the parent                                                                                    931                738                667
Non-controlling interests
 Ordinary shares                                                                                                126                112                238
 Preferred securities                                                                                            30                 31                 62
Profit after tax for the financial period                                                                     1,087                881                967
Earnings per share
Basic earnings per share based on profit from continuing operations (pence)                                     6.7               11.7                8.9
Basic earnings per share based on profit from discontinued operations (pence)                                  12.5                3.0                4.0
Basic earnings per ordinary share (pence)                                                  C3(a)               19.2               14.7               12.9
Diluted earnings per share based on profit from continuing operations (pence)                                   6.2               10.7                8.0
Diluted earnings per share based on profit from discontinued operations
 (pence)                                                                                                       11.5                2.8                3.7
Diluted earnings per ordinary share (pence)                                                C3(a)               17.7               13.5               11.7
Weighted average number of ordinary shares - millions                                                         4,759              4,897              4,935

(1) The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core and include the African businesses not
previously consolidated (see note A2).

Consolidated statement of comprehensive income 
For the six months ended 30 June 2012                                                                                                               
                                                                                                                                                              GBPm
                                                                                                                  6 months            6 months          Year ended
                                                                                                             ended 30 June       ended 30 June         31 December
                                                                                                 Notes                2012              2011(1)               2011
Profit after tax for the financial period                                                                            1,087                 881                 967
Other comprehensive income for the financial period
Fair value gains/(losses)
 Property revaluation                                                                                                   (1)                  -                  39
 Net investment hedge                                                                                                  123                 (25)                 28
Available-for-sale investments
 Fair value gains/(losses)                                                                                              10                   3                  (1)
 Recycled to the income statement                                                                                       (6)                 (5)                 (6)
Shadow accounting                                                                                                        1                   -                 (22)
Currency translation differences/exchange differences on translating foreign
 operations                                                                                                           (203)               (358)             (1,240)
Other movements                                                                                                         (1)                (42)                (49)
Income tax relating to components of other comprehensive income                                   D1(c)                  5                   6                  12
Total other comprehensive income for the financial period from
 continuing operations                                                                                                 (72)               (421)             (1,239)
Total other comprehensive income for the financial period from discontinued
 operations                                                                                                           (348)                (78)               (161)
Total other comprehensive income for the financial period                                                             (420)               (499)             (1,400)
Total comprehensive income for the financial period                                                                    667                 382                (433)
Attributable to
Equity holders of the parent                                                                                           546                 340                (408)
Non-controlling interests
 Ordinary shares                                                                                                        91                  11                 (87)
 Preferred securities                                                                                                   30                  31                  62
Total comprehensive income for the financial period                                                                    667                 382                (433)

(1) The result for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core and include the African businesses not previously
consolidated (see note A2).

Reconciliation of adjusted operating profit to profit after tax 
For the six months ended 30 June 2012


                                                               6 months        6 months    Year ended   
                                                          ended 30 June   ended 30 June   31 December   
                                                  Notes            2012          2011(1)         2011   
Core operations                                                                                         
Long-Term Savings                                    B3             384             414           793   
Nedbank                                              B3             406             359           755   
Mutual and Federal                                   B3              34              47            89   
USAM                                                 B3              42              39            67   
                                                                    866             859         1,704   
Finance costs                                                      (75)            (60)         (128)   
Long term investment return on excess assets                         25              18            37   
Net interest payable to non-core operations                        (13)             (9)          (23)   
Corporate costs                                                    (25)            (28)          (57)   
Other net income/(expenses)                                          13               5          (18)   
Adjusted operating profit before tax                                791             785         1,515   
Adjusting items                                   C1(a)           (145)              66         (329)   
Non-core operations                                  B3              53              34         (183)   
Profit before tax (net of policyholder tax)                         699             885         1,003   
Income tax attributable to policyholder returns      B3              34              24           (9)   
Profit before tax                                                   733             909           994   
Total tax expense                                 D1(a)           (241)           (178)         (225)   
Profit from continuing operations after tax                         492             731           769   
Profit from discontinued operations after tax     F1(a)             595             150           198   
Profit after tax for the financial period                         1,087             881           967   


Adjusted operating profit after tax attributable to ordinary equity holders of the parent
                                                                                                                                                            GBPm
                                                                                                                   6 months            6 months       Year ended
                                                                                                                  ended 30 June   ended 30 June      31 December
                                                                                                      Notes                2012          2011(1)          2011(2)
Adjusted operating profit before tax                                                                                        791             785            1,515
Tax on adjusted operating profit                                                                      D1(d)                (210)           (189)            (341)
Adjusted operating profit after tax                                                                                         581             596            1,174
Non-controlling interests  ordinary shares                                                                                (135)           (120)            (257)
Non-controlling  preferred securities                                                                                      (30)            (31)             (62)
Adjusted operating profit after tax attributable to ordinary equity holders
of the parent                                                                                                               416             445              855
Adjusted weighted average number of shares (millions)                                                 C3(b)               4,806           4,722            4,756
Adjusted operating earnings per share (pence)                                                         C3(b)                 8.7             9.4             18.0

(1)  The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core, the African businesses not previously
consolidated, and the seven for eight share consolidation (see note A2).
(2)  The results for the year ended 31 December 2011 have been restated to reflect the seven for eight share consolidation (see note A2).

Basis of preparation
The reconciliation of adjusted operating profit has been prepared so as to reflect the directors' view of the underlying long-term performance of the
Group. The statement reconciles adjusted operating profit to profit after tax as reported under IFRS as adopted by the EU.

For core life assurance and general insurance businesses, adjusted operating profit is based on a long-term investment return, including investment
returns on life funds' investments in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For the
US Asset Management business it includes compensation costs in respect of certain long-term incentive schemes defined as non-controlling
interests in accordance with IFRS. For all core businesses, adjusted operating profit excludes goodwill impairment, the impact of acquisition
accounting, revaluations of put options related to long-term incentive schemes, profit/(loss) on acquisition/disposal of subsidiaries, associated
undertakings and strategic investments, and fair value profits/(losses) on certain Group debt movements but includes dividends declared to holders
of perpetual preferred callable securities. Bermuda, which is non-core, and Nordic and US Life, which are discontinued and non-core, are not
included in adjusted operating profit.

Adjusted operating earnings per share is calculated on the same basis as adjusted operating profit. It is stated after tax attributable to adjusted
operating profit and non-controlling interests. It excludes income attributable to Black Economic Empowerment trusts of listed subsidiaries. The
calculation of the adjusted weighted average number of shares includes own shares held in policyholders' funds and Black Economic
Empowerment trusts.

Consolidated statement of financial position 
At 30 June 2012
                                                                                                                                                              GBPm
                                                                                                                             At                   At            At
                                                                                                                        30 June              30 June   31 December
                                                                                                       Notes               2012              2011(1)          2011
Assets
Goodwill and other intangible assets                                                                                      3,252               4,833         3,358
Mandatory reserve deposits with central banks                                                                               964               1,073           951
Property, plant and equipment                                                                                               925               1,008           925
Investment property                                                                                                       2,046               2,254         2,064
Deferred tax assets                                                                                                         313                 403           339
Investments in associated undertakings and joint ventures                                                                   130                 176           111
Deferred acquisition costs                                                                                                1,324               1,565         1,351
Reinsurers' share of policyholder liabilities                                                                             1,204               1,230           989
Loans and advances                                                                                                       40,424              49,452        39,764
Investments and securities                                                                                               83,285             106,973        81,253
Current tax receivable                                                                                                      183                 151           138
Client indebtedness for acceptances                                                                                         200                 254           237
Trade, other receivables and other assets                                                                                 3,431               4,152         3,348
Derivative financial instruments  assets                                                                                 2,209               1,770         1,795
Cash and cash equivalents                                                                                                 4,088               4,544         3,624
Non-current assets held for sale                                                                        F2                1,178                   6        22,138
Total assets                                                                                                            145,156             179,844       162,385
Liabilities
Long-term business policyholder liabilities                                                                              77,583              98,020        76,350
General insurance liabilities                                                                                               343                 386           325
Third-party interests in consolidated funds                                                                               2,571               4,711         1,893
Borrowed funds                                                                                          E1                3,536               4,497         3,656
Provisions                                                                                                                  272                 233           269
Deferred revenue                                                                                                            694                 774           701
Deferred tax liabilities                                                                                                    457                 850           504
Current tax payable                                                                                                         226                 244           199
Trade, other payables and other liabilities                                                                               4,433               5,116         4,243
Liabilities under acceptances                                                                                               200                 254           237
Amounts owed to bank depositors                                                                                          41,471              51,638        40,978
Derivative financial instruments  liabilities                                                                            1,863               1,355         1,755
Non-current liabilities held for sale                                                                   F2                1,132                   -        20,417
Total liabilities                                                                                                       134,781             168,078       151,527
Net assets                                                                                                               10,375              11,766        10,858
Shareholders' equity
Equity attributable to equity holders of the parent                                                                       7,965               9,266         8,488
Non-controlling interests
Ordinary shares                                                                                                           1,692               1,783         1,652
Preferred securities                                                                                                        718                 717           718
Total non-controlling interests                                                                                           2,410               2,500         2,370
Total equity                                                                                                             10,375              11,766        10,858

(1) The results for the six months ended 30 June 2011 have been restated to reflect the consolidation of other African businesses (see note A2).

Condensed consolidated statement of cash flows 
For the six months ended 30 June 2012
                                                                                                                                                                GBPm
                                                                                                                    6 months             6 months         Year ended
                                                                                                               ended 30 June        ended 30 June        31 December
                                                                                                                        2012              2011(1)               2011
Cash flows from operating activities - continuing operations
Profit before tax                                                                                                        733                 909                 994
Non-cash movements in profit before tax                                                                                 (271)               (108)              1,372
Changes in working capital                                                                                               247                 220              (1,415)
Taxation paid                                                                                                           (269)               (180)               (402)
Net cash inflow from operating activities - continuing operations                                                        440                 841                 549
Cash flows from investing activities
Net (acquisitions)/disposals of financial investments                                                                   (563)               (966)                 43
Acquisition of investment properties                                                                                     (21)                (23)                (57)
Proceeds from disposal of investment properties                                                                           17                   2                   6
Acquisition of property, plant and equipment                                                                             (56)                (54)               (184)
Proceeds from disposal of property, plant and equipment                                                                    1                   9                  43
Acquisition of intangible assets                                                                                         (27)                (29)                (91)
Acquisition of interests in subsidiaries, associated undertakings and strategic
 investments                                                                                                              (4)                 68                 103
Disposal of interests in subsidiaries, associated undertakings and strategic
 investments                                                                                                           1,772                (353)               (329)
Net cash inflow/(outflow) from investing activities - continuing operations                                            1,119              (1,346)               (466)
Cash flows from financing activities
Dividends paid to
  Ordinary equity holders of the Company                                                                              (1,093)                (53)                (97)
  Non-controlling interests and preferred security interests                                                            (118)               (106)               (206)
Interest paid (excluding banking interest paid)                                                                          (52)                (36)                (87)
Proceeds from issue of ordinary shares (including by subsidiaries to
 non-controlling interests)                                                                                                -                   4                  10
Net acquisition of treasury shares                                                                                        (2)                (18)                (17)
Issue of subordinated and other debt                                                                                     137                 831                 890
Subordinated and other debt repaid                                                                                      (245)               (448)               (905)
Net cash (outflow)/inflow from financing activities - continuing operations                                           (1,373)                174                (412)
Net increase/(decrease) in cash and cash equivalents - continuing
 operations                                                                                                              186                (331)               (329)
Net (decrease)/increase in cash and cash equivalents - discontinued operations                                          (129)                501                 346
Effects of exchange rate changes on cash and cash equivalents                                                            (59)               (185)               (594)
Cash and cash equivalents at beginning of the period                                                                   5,055               5,632               5,632
Cash and cash equivalents at end of the period                                                                         5,053               5,617               5,055
Consisting of
Cash and cash equivalents in the statement of financial position                                                       4,088               4,544               3,624
Mandatory reserve deposits with central banks                                                                            964               1,073                 951
Cash and cash equivalents included in assets held for sale                                                                 1                   -                 480
Total                                                                                                                  5,053               5,617               5,055

(1) The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core and include the African businesses not previously
consolidated (see note A2).

 
Cash flows presented in this statement include all cash flows relating to policyholders' funds for life assurance.

Except for mandatory reserve deposits with central banks of GBP964 million (30 June 2011: GBP1,073 million; 31 December 2011: GBP951
million) and cash and cash equivalents subject to consolidation of funds of GBP575 million (30 June 2011: GBP1,028 million; 31 December 2011:
GBP756 million), management do not consider that there are any material amounts of cash and cash equivalents which are not available for use in
the Group's day-to-day operations. Mandatory reserve deposits are, however, included in cash and cash equivalents for the purposes of the cash
flow statement in line with market practice in South Africa.

Included within the above is interest income received (including banking interest) of GBP2,275 million (30 June 2011: GBP2,421 million; 31
December 2011: GBP4,936 million), dividend income received of GBP280 million (30 June 2011: GBP256 million; 31 December 2011: GBP371
million) and interest paid (including banking interest) of GBP1,195 million (30 June 2011: GBP1,199 million; 31 December 2011: GBP2,143 million).

Consolidated statement of changes in equity
For the six months ended 30 June 2012
                                                                                    Millions                                                                    GBPm
                                                                                    Number of
                                                                                       shares
                                                                                   issued and               Share             Share            Merger      Available-for-
Six months ended 30 June 2012                                         Notes        fully paid             capital           premium           reserve       sale reserve
Shareholders' equity at beginning of the period                                         5,801                 580               805             2,532                 53
Profit after tax for the financial period                                                   -                   -                 -                 -                  -
Other comprehensive income
Fair value gains/(losses)
 Property revaluation                                                                       -                   -                 -                 -                  -
    Net investment hedge(1)                                                                 -                   -                 -                 -                  -
    Available-for-sale investments
     Fair value gains                                                                       -                   -                 -                 -                 14
     Recycled to the income statement                                                       -                   -                 -                 -                 (6)
Exchange differences recycled to the income statement(1)               F1(a)                -                   -                 -                 -                  -
Shadow accounting                                                                           -                   -                 -                 -                  1
Currency translation differences/exchange differences on
 translating foreign operations                                                             -                   -                 -                 -                  -
Other movements                                                                             -                   -                 -                 -                  -
Income tax relating to components of other
 comprehensive income                                                  D1(c)                -                   -                 -                 -                 (1)
Total comprehensive income for the financial period                                         -                   -                 -                 -                  8
Dividends                                                              C4                   -                   -                 -                 -                  -
Other movements in share capital and payment reserve                                       22                   2                23                 -                  -
Cancellation of treasury shares                                                          (239)                (24)                -                 -                  -
Share consolidation                                                                      (697)                  -                 -                 -                  -
Merger reserve realised in the period                                                       -                   -                 -              (815)                 -
Change in participation in subsidiaries                                                     -                   -                 -                 -                  -
Transactions with shareholders                                                           (914)                (22)               23              (815)                 -
Shareholders' equity at end of the period                                               4,887                 558               828             1,717                 61

(1) Following the sale of the Nordic business on 21 March 2012, foreign exchange translation gains of GBP350 million relating to the Nordic operations, and foreign exchange
hedge losses of GBP102 million relating to net investment hedges in respect of the Nordic investment were recognised in the income statement. These amounts are included
in the GBP595 million profit on sale.

                                                                                                             GBPm   
                                                                 Perpetual   Attributable         Total             
   Property   Share-based                                        preferred      to equity          non-             
revaluation      payments      Other   Translation   Retained     callable    holders  of   controlling     Total   
    reserve       reserve   reserves       reserve   earnings   securities     the parent     interests    equity   
        124           230          5           301      3,170          688          8,488         2,370    10,858   
          -             -          -             -        914           17            931           156     1,087   
        (1)             -          -             -          -            -            (1)             -       (1)   
          -             -          -           123          -            -            123             -       123   
          -             -          -             -          -            -             14             -        14   
          -             -          -             -          -            -            (6)             -       (6)   
          -             -          -         (350)          -            -          (350)             -     (350)   
          -             -          -             -          -            -              1             -         1   
          -             -          -         (165)          -            -          (165)          (36)     (201)   
          1            15          -           (8)       (13)            -            (5)             1       (4)   
          -             -          -             -          -            5              4             -         4   
          -            15          -         (400)        901           22            546           121       667   
          -             -          -             -    (1,093)         (22)        (1,115)          (96)   (1,211)   
          -            23          -             -        (2)            -             46             8        54   
          -             -          -             -         24            -              -             -         -   
          -             -          -             -          -            -              -             -         -   
          -             -          -             -        815            -              -             -         -   
          -             -          -             -          -            -              -             7         7   
          -            23          -             -      (256)         (22)        (1,069)          (81)   (1,150)   
        124           268          5          (99)      3,815          688          7,965         2,410    10,375   


Consolidated statement of changes in equity
For the six months ended 30 June 2012
                                                                                         Millions                                                                 GBPm
                                                                                        Number of
                                                                                           shares
                                                                                       issued and                Share              Share          Merger Available- for-
Six months ended 30 June 2011(1)                           Notes                       fully paid              capital            premium         reserve    sale reserve
Shareholders' equity at beginning of the period                                             5,695                  570                795           2,845             225
Profit after tax for the financial period                                                       -                    -                  -               -               -
Other comprehensive income
Fair value gains/(losses)
  Net investment hedge                                                                           -                   -                  -               -               -
  Available-for-sale investments
   Fair value gains                                                                              -                   -                  -               -             53
   Recycled to the income statement                                                              -                   -                  -               -           (166)
Shadow accounting                                                                                -                   -                  -               -            (43)
Currency translation differences/exchange differences on
 translating foreign operations                                                                  -                   -                  -               -               -
Other movements                                                                                  -                   -                  -               -               -
Income tax relating to components of other
 comprehensive income                                    D1(c)                                   -                   -                  -               -               3
Total comprehensive income for the financial period                                              -                   -                  -               -            (153)
Dividends                                                 C4                                     -                   -                  -               -               -
Other movements in share capital and payment reserve                                             4                   -                  4               -               -
Change in participation in other subsidiaries                                                    -                   -                  -               -               -
Reclassification of translation differences on non
 controlling interests                                                                           -                   -                  -               -               -
Shares issued in lieu of cash dividend                                                          69                   7                  -               -               -
Transactions with shareholders                                                                  73                   7                  4               -               -
Shareholders' equity at end of the period                                                    5,768                 577                799           2,845              72

(1) The results for the six months ended 30 June 2011 have been restated to reflect the consolidation of other African businesses (see note A2).

                                                                                                                GBPm   
                                                                  Perpetual                           Total            
    Property   Share-based                                        preferred   Attributable to          non-            
 revaluation      payments      Other   Translation   Retained     callable    equity holders   controlling    Total   
     reserve       reserve   reserves       reserve   earnings   securities     of the parent     interests   equity   
         101           215          5         1,176      2,331          688             8,951         2,523   11,474   
           -             -          -             -        722           16               738           143      881   
           -             -          -          (25)          -            -              (25)             -     (25)   
           -             -          -             -          -            -                53             -       53   
           -           (1)          -            24          -            -             (143)             -    (143)   
           -             -          -             -          -            -              (43)             -     (43)   
           -             -          -         (224)          -            -             (224)          (86)    (310)   
         (1)          (41)          -             -         17            -              (25)          (15)     (40)   
           -             -          -             -          -            6                 9             -        9   
         (1)          (42)          -         (225)        739           22               340            42      382   
           -             -          -             -      (145)         (22)             (167)          (84)    (251)   
           -            21          -             -       (18)            -                 7             6       13   
           -             -          -             -          -            -                 -            50       50   
           -             -          -            43          -            -                43          (43)        -   
           -             -          -             -         85            -                92             6       98   
           -            21          -            43       (78)         (22)              (25)          (65)     (90)   
         100           194          5           994      2,992          688             9,266         2,500   11,766   


Consolidated statement of changes in equity
For the six months ended 30 June 2012
                                                                     Millions                                         GBPm
                                                                    Number of
                                                                       shares
                                                                   issued and     Share       Share    Merger Available-for-
Year ended 31 December 2011                                Notes   fully paid   capital     premium   reserve  sale reserve
Shareholders' equity at beginning of the year                           5,695       570         795     2,845           225
Profit after tax for the financial year                                     -         -           -         -             -
Other comprehensive income
Fair value gains/(losses)
 Property revaluation                                                       -         -           -         -             -
 Net investment hedge                                                       -         -           -         -             -
 Available-for-sale investments
   Fair value gains                                                         -         -           -         -            51
   Recycled to the income statement                                         -         -           -         -           (10)
   Realised on disposal                                                     -         -           -         -          (157)
Exchange differences realised on disposal                                   -         -           -         -             -
Shadow accounting                                                           -         -           -         -           (58)
Currency translation differences/exchange differences on
 translating foreign operations                                             -         -           -         -              -
Other movements                                                             -         -           -         -              -
Income tax relating to components of other
 comprehensive income                                      D1(c)            -         -           -         -              2
Total comprehensive income for the financial year                           -         -           -         -          (172)
Dividends                                                   C4              -         -           -         -             -
Other movements in share capital and payment reserve                        7         -          10         -             -
Merger reserve realised in the year                                         -         -           -      (313)            -
Change in participation in subsidiaries                                     -         -           -         -             -
Reclassification of translation differences on
 non-controlling interests                                                  -         -           -         -             -
Shares issued in lieu of cash dividend                                     99        10           -         -             -
Transactions with shareholders                                            106        10          10      (313)            -
Shareholders' equity at end of the year                                 5,801       580         805      2,532           53

                                                                                                                 GBPm   
                                                                  Perpetual                           Total             
   Property   Share-based                                       preferred A   Attributable to          non-             
revaluation      payments      Other   Translation   Retained    callable e    equity holders   controlling     Total   
    reserve       reserve   reserves       reserve   earnings    securities     of the parent     interests    equity   
        101           215          5         1,176      2,331           688             8,951         2,523    11,474   
          -             -          -             -        635            32               667           300       967   
         30             -          -             -          -             -                30             9        39   
          -             -          -            28          -             -                28             -        28   
          -             -          -             -          -             -                51           (1)        50   
          -           (1)          -             -          -             -              (11)             -      (11)   
          -             -          -             -          -             -             (157)             -     (157)   
          -             -          -            24          -             -                24             -        24   
        (7)             -          -             -          -             -              (65)             -      (65)   
          -             -          -         (970)          -             -             (970)         (313)   (1,283)   
          -          (34)          -             -         15             -              (19)          (20)      (39)   
          -             -          -             -          -            12                14             -        14   
         23          (35)          -         (918)        650            44             (408)          (25)     (433)   
          -             -          -             -      (221)          (44)             (265)         (162)     (427)   
          -            50          -             -       (17)             -                43            16        59   
          -             -          -             -        313             -                 -             -         -   
          -             -          -             -          -             -                 -            61        61   
          -             -          -            43          -             -                43          (43)         -   
          -             -          -             -        114             -               124             -       124   
          -            50          -            43        189          (44)              (55)         (128)     (183)   
        124           230          5           301      3,170           688             8,488         2,370    10,858   


Notes to the consolidated financial statements
For the six months ended 30 June 2012

A: Accounting policies
A1: Basis of preparation
The Group interim financial statements contained herein have been prepared in accordance with the recognition and measurement principles of
International Financial Reporting Standards adopted by the EU and in accordance with the requirements of IAS 34 'Interim Financial Reporting'.
The Group's results for the six months ended 30 June 2012 and the financial position at that date have been prepared using accounting policies
consistent with those applied in the preparation of the Group's 2011 Annual Report and Accounts.

The Group interim financial statements have been prepared on the going concern basis, which the directors believe appropriate. The Group
Finance Director's review includes further details about risks and uncertainties and discloses how the Group actively manages these risks, including
updates to the Group's exposure to Bermuda guarantees, the impact to the Group of regulatory changes and an overview of the Group's Capital
and liquidity position.

The comparative figures for the financial year ended 31 December 2011 are not the company's statutory accounts for that financial year. Those
accounts have been reported on by the company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report,
and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

A2: Significant corporate activity and business changes
Disposal of Nordic
As previously reported the Group had agreed at 31 December 2011 to the disposal of its life assurance operations, asset management and banking
operations in Sweden, Denmark and Norway to Skandia Liv. Following final regulatory approval on 8 March 2012 and subsequent shareholder
approval the sale was completed on 21 March 2012. The sale represented the Group's exit from the life assurance market in the Nordic region and
therefore met the criteria of a discontinued operation. The comparative information in the Income Statement, Statement of Comprehensive Income,
Statement of Cash Flows and the related notes has been restated, where applicable, to reflect this. The assets and liabilities of Nordic were
classified as non-current assets and liabilities held for sale at 31 December 2011. At 30 June 2012 following the completion of the disposal there
are no assets and liabilities of Nordic remaining in the Statement of Financial Position. The position at 30 June 2011 reported Nordic on a line by
line basis. For the purposes of adjusted operating profit, Nordic is classified as a non-core operation and the comparative information for the six
months ended 30 June 2011 has been restated. Further details of the impact of discontinued operations are provided in note F1.

Special dividend and share consolidation
On 9 March 2012, the Group declared a special dividend of 18p per 10p ordinary share to all holders of those shares on the register at 20 April
2012 and the dividend was subsequently paid on 7 June 2012. A seven-for-eight share consolidation was effected on 23 April 2012 and from that
date only new ordinary shares of 113/7 pence have been in issue. For basic and diluted earnings per share, the weighted average number of shares
is adjusted with effect from 23 April 2012. For adjusted operating earnings per share the adjustment of the weighted average number of shares has
been made effective 1 January 2012. Consequently the comparative information in the adjusted operating earnings per share note for the six
months ended 30 June 2011 and the year ended 31 December 2011 has been restated accordingly.

Disposal of Finnish branch in Wealth Management
On 21 December 2011 the Group announced that it had agreed terms to sell the Finnish branch of Wealth Management to OP-Pohjola osk. The
assets and liabilities of the Finnish branch have been classified as non-current assets and liabilities held for sale in the Statement of Financial
Position at 30 June 2012, and 31 December 2011. The 30 June 2011 position reported the Finnish branch on a line by line basis. Details of the non-
current assets and liabilities held for sale are provided in note F2.

Consolidation of other African businesses
As reported in the Group's 2011 Annual Report and Accounts the Group's operations in Zimbabwe, Kenya, Malawi, Swaziland and Nigeria ('the
other African businesses'), were consolidated effective from 1 January 2011. The net asset value of the underlying businesses on 1 January 2011
was deemed to be the fair value of these operations on that date. As a result of the consolidation of these businesses, the Group recognised a gain
on 1 January 2011, which was disclosed as a profit on acquisition of subsidiaries. The comparatives for the six months ended 30 June 2011 have
been restated to include the results of the other African businesses.

In anticipation of the indigenisation of the Zimbabwe business a non-controlling interest adjustment has been included for this operation in respect
of adjusted operating profit to reflect the agreed indigenous shareholding to be provided. At 30 June 2012 the Group had substantially completed
the transfer of the agreed indigenous shareholding to approved indigenisation and economic empowerment trusts, which are fully consolidated for
the purposes of IFRS reporting.

Reporting of Retail Europe within Wealth Management
On 24 January 2012 the Group announced that that it would combine its Wealth Management Continental Europe business (France and Italy) with
the Skandia Retail Europe business unit (Germany, Austria, Poland and Switzerland). As a result the businesses previously reported as the Retail
Europe segment are now reported within the Wealth Management segment for the six months ended 30 June 2012. The comparative information
for the six months ended 30 June 2011 and the year ended 31 December 2011 has been reclassified where applicable.

Integration of OMAM UK with Skandia Investment Group
On 26 April 2012 the Group announced the integration of Old Mutual Asset Management UK (OMAM UK) with Skandia Investment Group. OMAM
UK was previously reported within the US Asset Management segment and Skandia Investment Group is reported within the Wealth Management
segment. Consequently OMAM UK is included within the Wealth Management segment for the six months ended 30 June 2012.

Cancellation of treasury shares
On 13 January 2012 the Group announced that it had cancelled 239,434,888 Ordinary Shares of 10p each previously held in treasury.



A3: Critical accounting estimates and judgements
In the preparation of these financial statements, the Group is required to make estimates and judgements that affect items reported in the
consolidated income statement, statement of financial position, other primary statements and related supporting notes.

Critical accounting estimates and judgements are those which involve the most complex or subjective judgments or assessments, with estimates
based on knowledge of the current situation and circumstances and assumptions based on that knowledge and predictions of future events and
actions. There has been no significant change to the critical accounting estimates and judgements that the Group applied at 31 December 2011.

Notes to the consolidated financial statements
For the six months ended 30 June 2012

B: Segment information
B1: Basis of segmentation
Income statement segmentation
For all periods presented, Nordic has been classified as a discontinued operation and its results are non-core in determining the Group's adjusted
operating profits.

In all reported periods, Bermuda is disclosed as a continuing operation in the IFRS income statement, and is classified as non-core in determining
the Group's adjusted operating profit.

At 30 June 2012 all other businesses, including those held for sale are classified as continuing operations. US Life was classified as a discontinued
operation in comparative periods.

The results of OMAM UK (previously included within US Asset Management) and Retail Europe are included within the Wealth Management
segment for the six months ended 30 June 2012. Except for OMAM UK, the income statement segmental presentation for the six months ended 30
June 2011 and the year ended 31 December 2011 is consistent with the above.

Statement of financial position segmentation
At 30 June 2012 no assets and liabilities relating to Nordic remain. At 31 December 2011 the assets and liabilities of Nordic were classified as non-
current assets and liabilities held for sale. At 30 June 2011 the assets and liabilities of Nordic were disclosed on a line by line basis.

The segmental analysis of the statement of financial position at 30 June 2012, 30 June 2011 and 31 December 2011 discloses Bermuda as non-
core.

The assets and liabilities of the Finnish branch were classified as non-current assets and liabilities held for sale at 30 June 2012. At 30 June 2011
and 31 December, the assets and liabilities of the Finnish branch were reported on a line by line basis.

Segmental analysis
The Group's segmental results are analysed and reported on a basis consistent with the way that management and the Board of Directors assesses
performance and allocates resources. Information is presented to the Board on a consolidated basis in pounds sterling (the presentational currency) and
in local currency of each business.

The revenues generated in each reported segment can be seen in the analysis of profits and losses in note B3.The segmental information in notes
B3 and B4, reflects the adjusted and IFRS measures of profit and loss, assets and liabilities for each operating segment as provided to management and
the Board of Directors. There are no differences between the measurement of the assets and liabilities reflected in the primary statements and that
reported for the segments.

Adjusted operating profit is one of the key measures reported to the Group's management and Board of Directors for their consideration in the
allocation of resources to and the review of performance of the segments. The Group utilises additional measures to assess the performance of
each of the segments, in particular the level of net client cash flows and funds under management. Additional performance measures considered by
management and the Board of Directors in assessing the performance of the segments can be found in the Market Consistent Embedded Value
supplementary information.

A reconciliation between the segment revenues and expenses and the Group's revenues and expenses is shown in note B3. In line with internal
reporting, assets, liabilities, revenues or expenses that are not directly attributable to a particular segment are allocated between segments where
appropriate and where there is a reasonable basis for doing so. The Group accounts for inter-segment revenues and transfers as if the transactions
were with third parties at current market prices. Given the nature of the operations, there are no major customers within any of the segments.

There are four principal business activities from which the Group generates revenues. These are life assurance (premium income), asset
management business (fee and commission income), banking (banking interest receivable) and general insurance (premium income). The lines of
business in each operating segment derives its revenues are as follows:

Core operations
Long-Term Savings
Emerging Markets  life assurance and asset management
Wealth Management  life assurance and asset management

Other core operations
Nedbank  banking and asset management
Mutual & Federal  general insurance
US Asset Management  asset management
Other  other operating segments and business activities

Discontinued and non-core operations
Bermuda  life assurance (non-core)
Nordic  life assurance, asset management and banking (discontinued and non-core)
US Life  life assurance (discontinued and non-core)

B: Segment information continued                                                                           
B2: Gross earned premiums                                                                                  
                                                                                                    GBPm   
                                               Emerging       Wealth   Long-Term                           
Six months ended 30 June 2012                 Markets M   Management     Savings   M&F   Bermuda   Total   
Life assurance  insurance contracts                768          177         945     -         -     945   
with discretionary participation features           470            -         470     -         -     470   
General insurance                                     -            -           -   359         -     359   
Gross earned premiums                             1,238          177       1,415   359         -   1,774   
Life assurance  other investment contracts                                                                
recognised as deposits                            1,020        2,743       3,763     -         -   3,763   


                                                                                                   GBPm   
                                              Emerging       Wealth   Long-Term                           
Six months ended 30 June 2011(1)               Markets   Management     Savings   M&F   Bermuda   Total   
Life assurance  insurance contracts               819          183       1,002     -         -   1,002   
Life assurance  investment contracts                                                                     
with discretionary participation features          502            -         502     -         -     502   
General insurance                                    -            -           -   375         -     375   
Gross earned premiums                            1,321          183       1,504   375         -   1,879   
Life assurance  other investment contracts                                                               
recognised as deposits                           1,030        3,318       4,348     -         -   4,348   

(1) The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core (see note A2).



                                                                                                      GBPm   
                                                 Emerging       Wealth   Long-Term                           
Year ended 31 December 2011                   Markets   M   Management     Savings   M&F   Bermuda   Total   
Life assurance  insurance contracts                1,567          304       1,871     -         2   1,873   
Life assurance  investment contracts                                                                        
with discretionary participation features             975            -         975     -         -     975   
General insurance                                       -            -           -   736         -     736   
Gross earned premiums                               2,542          304       2,846   736         2   3,584   
Life assurance  other investment contracts                                                                  
recognised as deposits                              2,088        6,406       8,494     -         -   8,494   


Notes to the consolidated financial statements
For the six months ended 30 June 2012

B: Segment information continued
B3: Adjusted operating profit statement - segment information six months ended 30 June 2012

                                                                                                                                Long-Term Savings
                                                                                                                                                                  Total
                                                                                                                    Emerging                Wealth            Long-Term
                                                                                                 Notes               Markets            Management              Savings
Revenue
Gross earned premiums                                                                                                  1,238                   177                1,415
Outward reinsurance                                                                                                      (41)                  (43)                 (84)
Net earned premiums                                                                                                    1,197                   134                1,331
Investment return (non-banking)                                                                                        2,017                 1,246                3,263
Banking interest and similar income                                                                                        -                     -                    -
Banking trading, investment and similar income                                                                             -                     -                    -
Fee and commission income, and income from service activities                                                            201                   597                  798
Other income                                                                                                              35                    14                   49
Inter-segment revenues                                                                                                    33                     2                   35
Total revenues                                                                                                         3,483                 1,993                5,476
Expenses
Claims and benefits (including change in insurance contract provisions)                                               (1,958)                 (174)              (2,132)
Reinsurance recoveries                                                                                                    49                    34                   83
Net claims and benefits incurred                                                                                      (1,909)                 (140)              (2,049)
Change in investment contract liabilities                                                                               (663)               (1,177)              (1,840)
Losses on loans and advances                                                                                               -                     -                    -
Finance costs (including interest and similar expenses)                                                                    -                     -                    -
Banking interest payable and similar expenses                                                                              -                     -                    -
Fee and commission expenses, and other acquisition costs                                                                (111)                 (335)                (446)
Other operating and administrative expenses                                                                             (497)                 (216)                (713)
Change in third-party interest in consolidated funds                                                                        -                    -                    -
Income tax attributable to policyholder returns                                                                          (23)                  (11)                 (34)
Inter-segment expenses                                                                                                      -                  (19)                 (19)
Total expenses                                                                                                        (3,203)               (1,898)              (5,101)
Share of associated undertakings' and joint ventures' profit after tax                                                      9                    -                    9
Profit on disposal of subsidiaries, associated undertakings and strategic
 investments                                                                                                                -                    -                    -
Adjusted operating profit/(loss) before tax and non-controlling
interests                                                                                                                289                    95                  384
Income tax expense                                                                                                       (70)                  (13)                 (83)
Non-controlling interests                                                                                                 (3)                    -                   (3)
Adjusted operating profit/(loss) after tax and non-controlling interests                                                 216                    82                  298
Adjusting items net of tax and non-controlling interests                                         C1(a)                   (72)                  (54)                (126)
Profit/(loss) after tax from continuing operations                                                                       144                    28                  172
Profit from discontinued operations after tax                                                                               -                    -                    -
Profit/(loss) after tax attributable to equity holders of the parent                                                     144                    28                  172

(1) Non-core operations relates to Bermuda with the exception of GBP4 million of inter-segment revenue and the profit from discontinued operations after tax, with these
reflecting the results of Nordic which has been classified as discontinued operations as detailed in notes A2 and B1. Bermuda profit after tax for the six months ended 30
June 2012 was GBP49 million. Further details on the results of discontinued operations is provided in note F1.

                                                                                              GBPm
                                                 Adjusted    Adjusting  Discontinued          IFRS
                               Consolidation    operating        items  and non-core        Income
Nedbank    M&F     USAM    Other adjustments       profit    (note C1)   operations(1)   statement
      -    359        -       -            -       1,774            -              -        1,774
      -    (71)       -       -            -        (155)           -              -         (155)
      -    288        -       -            -        1,619           -              -        1,619
      -     23        1      53           80        3,420         (86)            19        3,353
  1,780      -        -       -            -        1,780           -              -        1,780
    107      -        -       -            -          107           -              -          107
    533     12      209       -            -        1,552         (39)             -        1,513
     13      -        -       -            -           62           -              8           70
     14      8        -       7          (81)         (17)          -             17            -
  2,447    331      210      60           (1)       8,523        (125)            44        8,442

      -    (235)      -       -            -       (2,367)          -             41       (2,326)
      -      42       -       -            -          125           -              -          125
      -    (193)      -       -            -       (2,242)          -             41       (2,201)
      -       -       -       -            -       (1,840)          -              -       (1,840)
   (216)      -       -       -            -         (216)          -              -         (216)
      -       -       -     (75)           -          (75)        (15)             -          (90)
   (997)      -       -       -            -         (997)          -              -         (997)
      -     (53)     (2)      -          (15)        (516)         45            (23)        (494)
   (800)    (41)   (167)    (36)          (1)      (1,758)        (70)            (9)      (1,837)
      -       -       -       -          (64)         (64)          -              -          (64)
      -       -       -       -            -          (34)         34              -            -
    (28)    (10)      -     (24)          81            -           -              -            -
 (2,041)   (297)   (169)   (135)           1       (7,742)          (6)            9       (7,739)
      -       -       1       -            -           10            -             -           10

      -       -       -       -            -            -          20              -           20

    406      34      42     (75)           -         791         (111)           53           733
   (113)     (9)     (6)      1            -        (210)         (31)            -          (241)
   (139)     (4)      -     (19)           -        (165)           9             -          (156)
    154      21      36     (93)           -         416         (133)           53           336
      8      (6)      5     (14)           -        (133)         133             -             -
    162      15      41    (107)           -         283            -            53           336
      -       -       -       -            -           -            -           595           595
    162      15      41    (107)           -         283            -           648           931

Notes to the consolidated financial statements
For the six months ended 30 June 2012

B: Segment information continued
B3: Adjusted operating profit statement  segment information six months ended 30 June 2011

                                                                                                                               Long-Term Savings
                                                                                                                                                                     Total
                                                                                                                     Emerging                 Wealth             Long-Term
                                                                                                  Notes               Markets(1)          Management               Savings
Revenue
Gross earned premiums                                                                                                   1,321                    183                 1,504
Outward reinsurance                                                                                                       (44)                   (44)                  (88)
Net earned premiums                                                                                                     1,277                    139                 1,416
Investment return (non-banking)                                                                                         1,006                    129                 1,135
Banking interest and similar income                                                                                         -                      -                     -
Banking trading, investment and similar income                                                                              -                      -                     -
Fee and commission income, and income from service activities                                                             198                    594                   792
Other income                                                                                                               32                      9                    41
Inter-segment revenues                                                                                                     28                      3                    31
Total revenues                                                                                                          2,541                    874                 3,415
Expenses
Claims and benefits (including change in insurance contract provisions)                                                (1,327)                  (147)               (1,474)
Reinsurance recoveries                                                                                                     47                     39                    86
Net claims and benefits incurred                                                                                       (1,280)                  (108)               (1,388)
Change in investment contract liabilities                                                                                (324)                  (106)                 (430)
Losses on loans and advances                                                                                                -                     (1)                   (1)
Finance costs (including interest and similar expenses)                                                                     -                      -                     -
Banking interest payable and similar expenses                                                                               -                      -                     -
Fee and commission expenses, and other acquisition costs                                                                 (103)                  (311)                 (414)
Other operating and administrative expenses                                                                              (508)                  (216)                 (724)
Goodwill impairment                                                                                                         -                      -                     -
Change in third-party interest in consolidated funds                                                                        -                      -                     -
Income tax attributable to policyholder returns                                                                           (28)                     4                   (24)
Inter-segment expenses                                                                                                     (1)                   (21)                  (22)
Total expenses                                                                                                         (2,244)                  (759)               (3,003)
Share of associated undertakings' and joint ventures' profit after tax                                                       2                     -                     2
Profit on disposal of subsidiaries, associated undertakings and strategic
 investments                                                                                                                 -                     -                     -
Adjusted operating profit/(loss) before tax and non-controlling interests                                                  299                   115                   414
Income tax expense                                                                                                         (65)                  (20)                  (85)
Non-controlling interests                                                                                                    -                     -                     -
Adjusted operating profit/(loss) after tax and non-controlling interests                                                   234                    95                   329
Adjusting items net of tax and non-controlling interests                                           C1(a)                   208                   (57)                  151
Profit/(loss) after tax from continuing operations                                                                         442                    38                   480
Profit from discontinued operations after tax                                                                                -                     -                     -
Profit/(loss) after tax attributable to equity holders of the parent                                                       442                    38                   480

(1) Emerging Markets has been restated to reflect the African businesses not previously consolidated (see note A2).
(2) Non-core operations relates to Bermuda with the exception of GBP11 million and GBP4 million of inter-segment revenue and expenses and the profit from discontinued
operations after tax, with these reflecting the results of Nordic and US Life both of which have been classified as discontinued operations. More detail is provided in notes
A2 and B1. Bermuda profit after tax for the six months ended 30 June 2011 was GBP25 million. Further detail on the results of discontinued operations is provided in note
F1.

                                                                                                  GBPm
                                                    Adjusted    Adjusting   Discontinued          IFRS
                                   Consolidation   operating        items   and non-core        Income
Nedbank    M&F     USAM    Other    adjustments       profit   (note C1)   operations(2)     statement

      -     375       -       -               -       1,879           -                -        1,879
      -     (75)      -       -               -        (163)          -                -         (163)
      -     300       -       -               -       1,716           -                -        1,716
      -      28       -      36             101       1,300         (86)               7        1,221
  1,881       -       -       -               -       1,881           -                -        1,881
    105       -       -       -               -         105           -                -          105
    515      16     223       -               -       1,546         (46)               -        1,500
     20       -       6       -              12          79           -               10           89
     13      10       3       7             (86)        (22)          -               22            -
  2,534     354     232      43              27       6,605        (132)              39        6,512

      -    (212)      -       -               -      (1,686)           -              36       (1,650)
      -      18       -       -               -         104            -               -          104
      -    (194)      -       -               -      (1,582)           -              36       (1,546)
      -       -       -       -               -        (430)           -               -         (430)
   (250)      -       -       -               -        (251)           -               -         (251)
      -       -       -     (60)              -         (60)         (25)              -          (85)
 (1,089)      -       -       -               -      (1,089)          (4)              -       (1,093)
     (1)    (55)     (6)      -             (17)       (493)          54             (29)        (468)
   (806)    (46)   (187)    (39)            (12)     (1,814)         (76)            (11)      (1,901)
      -       -       -       -               -           -            -               -            -
      -       -       -       -             (84)        (84)           -               -          (84)
      -       -       -       -               -         (24)          24               -            -
    (29)    (12)      -     (22)             86           1            -              (1)           -
 (2,175)   (307)   (193)   (121)            (27)     (5,826)         (27)             (5)      (5,858)
      -       -       -       4               -           6            -               -            6

      -       -       -       -               -           -          249               -          249
    359      47      39     (74)              -         785           90              34          909
    (93)    (11)     (8)      8               -        (189)          13              (2)        (178)
   (128)     (4)      -     (19)              -        (151)           8               -         (143)
    138      32      31     (85)              -         445          111              32          588
      6      (8)     (5)    (33)              -         111         (111)              -            -
    144      24      26    (118)              -         556            -              32          588
      -       -       -       -               -           -            -             150          150
    144      24      26    (118)              -         556            -             182          738

Notes to the consolidated financial statements
For the six months ended 30 June 2012

B: Segment information continued
B3: Adjusted operating profit statement  segment information year ended 31 December 2011

                                                                                                                               Long-Term Savings
                                                                                                                                                                      Total
                                                                                                                     Emerging                 Wealth              Long-Term
                                                                                                  Notes               Markets             Management                Savings
Revenue
Gross earned premiums                                                                                                   2,542                    304                  2,846
Outward reinsurance                                                                                                       (88)                   (88)                  (176)
Net earned premiums                                                                                                     2,454                    216                  2,670
Investment return (non-banking)                                                                                         2,626                 (2,878)                  (252)
Banking interest and similar income                                                                                         -                      -                      -
Banking trading, investment and similar income                                                                              -                      -                      -
Fee and commission income, and income from service activities                                                             411                  1,183                  1,594
Other income                                                                                                               68                     23                     91
Inter-segment revenues                                                                                                     66                     11                     77
Total revenues                                                                                                          5,625                 (1,445)                 4,180
Expenses
Claims and benefits (including change in insurance contract provisions)                                                (2,854)                  (102)               (2,956)
Reinsurance recoveries                                                                                                     73                      9                    82
Net claims and benefits incurred                                                                                       (2,781)                   (93)               (2,874)
Change in investment contract liabilities                                                                                (925)                 2,814                 1,889
Losses on loans and advances                                                                                                -                     (1)                   (1)
Finance costs (including interest and similar expenses)                                                                     -                      -                     -
Banking interest payable and similar expenses                                                                               -                      -                     -
Fee and commission expenses, and other acquisition costs                                                                 (223)                  (664)                 (887)
Other operating and administrative expenses                                                                            (1,076)                  (404)               (1,480)
Goodwill impairment                                                                                                         -                      -                     -
Change in third-party interest in consolidated funds                                                                        -                      -                     -
Income tax attributable to policyholder returns                                                                           (53)                    62                     9
Inter-segment expenses                                                                                                     (7)                   (46)                  (53)
Total expenses                                                                                                         (5,065)                 1,668                (3,397)
 Share of associated undertakings' and joint ventures' profit after tax                                                     10                     -                    10
 Profit on disposal of subsidiaries, associated undertakings and strategic
investments                                                                                                                  -                     -                     -
 Adjusted operating profit/(loss) before tax and non-controlling interests                                                 570                   223                   793
 Income tax expense                                                                                                       (120)                  (26)                 (146)
 Non-controlling interests                                                                                                  (3)                    -                    (3)
 Adjusted operating profit/(loss) after tax and non-controlling interests                                                  447                   197                   644
 Adjusting items net of tax and non-controlling interests                                          C1(a)                   126                   (87)                   39
 Profit/(loss) after tax from continuing operations                                                                        573                   110                   683
 Profit from discontinued operations after tax                                                                               -                     -                     -
 Profit/(loss) after tax attributable to equity holders of the parent                                                      573                   110                   683

(1) Non-core operations relates to Bermuda with the exception of GBP22 million and GBP5 million of inter-segment revenue and expenses and the profit from discontinued
operations after tax, with these reflecting the results of Nordic and US Life both of which have been classified as discontinued operations. More detail is provided in notes
A2 and B1. Bermuda loss after tax for the year ended 31 December 2011 was GBP201 million. Further detail on the results of discontinued operations is provided in note
F1.

                                                                                                      GBPm

                                                      Adjusted    Adjusting     Discontinued          IFRS
                                   Consolidation     operating        items     and non-core        Income
Nedbank     M&F     USAM    Other    adjustments        profit     (note C1)      operations(1)  statement
      -     736        -       -               -         3,582            -                2        3,584
      -    (149)       -       -               -          (325)           -                -         (325)
      -     587        -       -               -         3,257            -                2        3,259
      -      54        -      52              30          (116)        (241)            (210)        (567)
  3,669       -        -       -               -         3,669            -                -        3,669
    217       -        -       -               -           217            -                -          217
  1,051      34      447       -               -         3,126          (91)               -        3,035
     50       -       10       -               -           151            -               20          171
     27      18        1      16            (185)          (46)           -               46            -
  5,014     693      458      68            (155)       10,258         (332)            (142)       9,784


      -    (422)       -       -               -        (3,378)           -               47       (3,331)
      -      41        -       -               -           123            -                -          123
      -    (381)       -       -               -        (3,255)           -               47       (3,208)
      -       -        -       -               -         1,889            -                -        1,889
   (457)      -        -       -               -          (458)           -                -         (458)
      -       -        -    (128)              -          (128)          70                -          (58)
 (2,091)      -        -       -               -        (2,091)          (4)               -       (2,095)
     (9)   (109)     (12)      -             (24)       (1,041)         104              (70)      (1,007)
 (1,641)    (95)    (379)    (81)             (8)       (3,684)        (154)             (14)      (3,852)
      -       -        -       -               -             -         (264)               -         (264)
      -       -        -       -               2             2            -                -            2
      -       -        -       -               -             9           (9)               -            -
    (61)    (19)       -     (48)            185             4            -               (4)          -
 (4,259)   (604)    (391)   (257)            155        (8,753)        (257)             (41)      (9,051)
      -       -        -       -               -            10            -                -           10
      -       -        -       -               -             -          251                -          251
    755      89       67    (189)              -         1,515         (338)            (183)         994
   (188)    (22)      (8)     23               -          (341)         117               (1)        (225)
   (269)     (8)       -     (39)              -          (319)          19                -         (300)
    298      59       59    (205)              -           855         (202)            (184)         469
     16     (24)    (260)     27               -          (202)         202                -            -
    314      35     (201)   (178)              -           653            -             (184)         469
      -       -        -       -               -             -            -              198          198
    314      35     (201)   (178)              -           653            -               14          667

Notes to the consolidated financial statements
For the six months ended 30 June 2012

B: Segment information continued
B4: Statement of financial position  segment information at 30 June 2012

                                                                                                 GBPm   
                                                                                                Total   
                                                                    Emerging       Wealth   Long-Term   
                                                            Notes    Markets   Management     Savings   
Assets                                                                                                  
Goodwill and other intangible assets                                     105        1,673       1,778   
Mandatory reserve deposits with central banks                              -            -           -   
Property, plant and equipment                                            390           14         404   
Investment property                                                    1,599            -       1,599   
Deferred tax assets                                                       74           63         137   
Investments in associated undertakings and joint ventures                 48            -          48   
Deferred acquisition costs                                               111        1,160       1,271   
Reinsurers' share of policyholder liabilities                             52        1,028       1,080   
Loans and advances                                                       401          194         595   
Investments and securities                                            30,412       42,427      72,839   
Current tax receivable                                                    21           84         105   
Client indebtedness for acceptances                                        -            -           -   
Trade, other receivables and other assets                                751          332       1,083   
Derivative financial instruments  assets                                443            -         443   
Cash and cash equivalents                                                516          553       1,069   
Non-current assets held for sale                               F2          -        1,176       1,176   
Inter-segment assets                                                     432          116         548   
Total assets                                                          35,355       48,820      84,175   
Liabilities                                                                                             
Life assurance policyholder liabilities                               30,747       43,310      74,057   
General insurance liabilities                                              -            -           -   
Third-party interests in consolidated funds                                -            -           -   
Borrowed funds                                                 E1        234            -         234   
Provisions                                                               144           45         189   
Deferred revenue                                                          13          672         685   
Deferred tax liabilities                                                 158          195         353   
Current tax payable                                                      144           35         179   
Trade, other payables and other liabilities                            1,757          643       2,400   
Liabilities under acceptances                                              -            -           -   
Amounts owed to bank depositors                                           93            -          93   
Derivative financial instruments  liabilities                           306          (4)         302   
Non-current liabilities held for sale                          F2          -        1,132       1,132   
Inter-segment liabilities                                                 73          460         533   
Total liabilities                                                     33,669       46,488      80,157   
Net assets                                                             1,686        2,332       4,018   
Equity                                                                                                  
Equity attributable to equity holders of the parent                    1,686        2,332       4,018   
Non-controlling interests                                                  -            -           -   
Ordinary shares                                                            -            -           -   
Preferred securities                                                       -            -           -   
Total equity                                                           1,686        2,332       4,018   


                                                              GBPm
                                                 Non-core
                                Consolidation   operations
Nedbank   M&F   USAM    Other    adjustments     Bermuda       Total

    548    21    891       14              -            -      3,252
    964     -      -        -              -            -        964
    487    22     11        1              -            -        925
     48     -      -        -            399            -      2,046
     21    13    139        2              -            1        313
     51     1      3       27              -            -        130
      -    15      7        -              -           31      1,324
     16   108      -        -              -            -      1,204
 39,828     1      -        -              -            -     40,424
  6,589   429     42      430          1,543        1,413     83,285
     76     2      -        -              -            -        183
    200     -      -        -              -            -        200
    902    82    115       45            429          775      3,431
  1,137     -      -       96            403          130      2,209
    922   109    107    1,208            575           98      4,088
      2     -      -        -              -            -      1,178
    166    21     21    1,093         (2,379)         530          -
 51,957   824   1,336   2,916            970        2,978    145,156

    887     -      -        -              -        2,639     77,583
      -   343      -        -              -            -        343
      -     -      -        -          2,571            -      2,571
  2,281     -     11    1,010              -            -      3,536
      1    28      2       52              -            -        272
      1     8      -        -              -            -        694
     66    15      -       23              -            -        457
      4     -      1       42              -            -        226
  1,213   113    165       77            406           59      4,433
    200     -      -        -              -            -        200
 41,378     -      -        -              -            -     41,471
  1,189     -      -        -            372            -      1,863
      -     -      -        -              -            -      1,132
    441     2    566      836         (2,379)           1          -
 47,661   509    745    2,040            970        2,699    134,781
  4,296   315    591      876              -          279     10,375

  2,381   294    563     430               -          279      7,965
  1,915    21     28     446               -            -      2,410
  1,643    21     28       -               -            -      1,692
    272     -      -     446               -            -        718

  4,296   315    591     876               -          279     10,375

Notes to the consolidated financial statements
For the six months ended 30 June 2012

B: Segment information continued
B4: Statement of financial position  segment information at 30 June 2011

                                                                                                                                                     GBPm
                                                                                                                                                     Total
                                                                                                                      Emerging         Wealth    Long-Term
                                                                                                  Notes                Markets(1)   Management     Savings
Assets
Goodwill and other intangible assets                                                                                      125           1,942       2,067
Mandatory reserve deposits with central banks                                                                               -               -           -
Property, plant and equipment                                                                                             403              18         421
Investment property                                                                                                     1,884               -       1,884
Deferred tax assets                                                                                                        83              59         142
Investments in associated undertakings and joint ventures                                                                  24               -          24
Deferred acquisition costs                                                                                                130           1,230       1,360
Reinsurers' share of policyholder liabilities                                                                              35           1,036       1,071
Loans and advances                                                                                                        454             195         649
Investments and securities                                                                                             33,675          46,163      79,838
Current tax receivable                                                                                                     11              80          91
Client indebtedness for acceptances                                                                                         -               -           -
Trade, other receivables and other assets                                                                                 994             403       1,397
Derivative financial instruments  assets                                                                                 527               -         527
Cash and cash equivalents                                                                                                 235             543         778
Non-current assets held for sale                                                                    F2                      -               5           5
Inter-segment assets                                                                                                    1,189             322       1,511
Total assets                                                                                                           39,769          51,996      91,765
Liabilities
Life assurance policyholder liabilities                                                                                34,407          47,019      81,426
General insurance liabilities                                                                                               -               -           -
Third-party interests in consolidated funds                                                                                 -               -           -
Borrowed funds                                                                                      E1                    276               -         276
Provisions                                                                                                                160              54         214
Deferred revenue                                                                                                           19             743         762
Deferred tax liabilities                                                                                                  248             309         557
Current tax payable                                                                                                       104              60         164
Trade, other payables and other liabilities                                                                             1,913             669       2,582
Liabilities under acceptances                                                                                               -               -           -
Amounts owed to bank depositors                                                                                            74               4          78
Derivative financial instruments  liabilities                                                                            162               1         163
Non-current liabilities held for sale                                                               F2                      -               -           -
Inter-segment liabilities                                                                                                 163             471         634
Total liabilities                                                                                                      37,526          49,330      86,856
Net assets                                                                                                              2,243           2,666       4,909
Equity
Equity attributable to equity holders of the parent                                                                      2,242          2,666       4,908
Non-controlling interests                                                                                                    1              -           1
Ordinary shares                                                                                                              1              -           1
Preferred securities                                                                                                         -              -           -
Total equity                                                                                                             2,243          2,666       4,909

(1) Emerging markets has been restated to reflect the African businesses not previously consolidated (see note A2).
(2) Discontinued operations relate to Nordic and US Life (see note A2).

                                                                                  GBPm
                                                    Non-core
                                  Consolidation   operations   Discontinued
Nedbank    M&F   USAM     Other     adjustments      Bermuda      operations(2)    Total

    604     28   1,140       13               -            -            981       4,833
  1,073      -       -        -               -            -              -       1,073
    537     24      13        2               -            1             10       1,008
     19      -       -        -             351            -              -       2,254
     21     15     142        -               -            -             83         403
    108      2       8       30               -            -              4         176
      1     17      12        -               -           98             77       1,565
     29    115       -        -               -            -             15       1,230
 43,221      2       -       59               -            -          5,521      49,452
  7,180    452      43      231           3,326        2,052         13,851     106,973
     57      -       -        2               -            -              1         151
    254      -       -        -               -            -              -         254
    697     90     149       39             660          959            161       4,152
    763      -       -      138             331            -             11       1,770
  1,081    137     142      781           1,028           59            538       4,544
      1      -       -        -               -            -              -           6
    227     25       2      982          (3,558)         604            207           -
 55,873    907   1,651    2,277           2,138        3,773         21,460     179,844

    848      -      -         -               -        3,281         12,465      98,020
      -    386      -         -               -            -              -         386
      -      -      -         -           4,711            -              -       4,711
  2,511      -     10     1,698               -            -              2       4,497
     (6)    30      2        39               -            -            (46)        233
      -     10      -         -               -            -              2         774
    155     11      -        25               -            -            102         850
      5      2      4        33               -            1             35         244
  1,204    125    179       110             660           19            237       5,116
    254      -      -         -               -            -              -         254
 44,791      -      -         -               -            -          6,769      51,638
    819      -      -        38             325            1              9       1,355
      -      -      -         -               -            -              -           -
    688      2    573     1,661          (3,558)           -              -           -
 51,269    566    768     3,604           2,138        3,302         19,575     168,078
  4,604    341    883    (1,327)              -          471          1,885      11,766

  2,599    322    854    (1,773)              -         471           1,885       9,266
  2,005     19     29       446               -           -               -       2,500
  1,734     19     29         -               -           -               -       1,783
    271      -      -       446               -           -               -         717
  4,604    341    883    (1,327)              -         471           1,885      11,766

Notes to the consolidated financial statements
For the six months ended 30 June 2012

B: Segment information continued
B4: Statement of financial position  segment information at 31 December 2011

                                                                                                                 GBPm   
                                                                                                                Total   
                                                                                    Emerging       Wealth   Long-Term   
                                                                            Notes    Markets   Management     Savings   
Assets                                                                                                                  
Goodwill and other intangible assets                                                     104        1,756       1,860   
Mandatory reserve deposits with central banks                                              -            -           -   
Property, plant and equipment                                                            374           16         390   
Investment property                                                                    1,666            -       1,666   
Deferred tax assets                                                                       81           65         146   
Investments in associated undertakings and joint ventures                                 32            -          32   
Deferred acquisition costs                                                               113        1,164       1,277   
Reinsurers' share of policyholder liabilities                                             31          844         875   
Loans and advances                                                                       299          190         489   
Investments and securities                                                            30,064       41,508      71,572   
Current tax receivable                                                                    10           70          80   
Client indebtedness for acceptances                                                        -            -           -   
Trade, other receivables and other assets                                                711          310       1,021   
Derivative financial instruments  assets                                                298            -         298   
Cash and cash equivalents                                                                339          516         855   
Non-current assets held for sale                                               F2          -        1,161       1,161   
Inter-segment assets                                                                   1,025          138       1,163   
Total assets                                                                          35,147       47,738      82,885   
Liabilities                                                                                                             
Life assurance policyholder liabilities                                               30,270       42,159      72,429   
General insurance liabilities                                                              -            -           -   
Third-party interests in consolidated funds                                                -            -           -   
Borrowed funds                                                                 E1        239            -         239   
Provisions                                                                               137           64         201   
Deferred revenue                                                                          17          673         690   
Deferred tax liabilities                                                                 185          189         374   
Current tax payable                                                                      120           39         159   
Trade, other payables and other liabilities                                            1,667          673       2,340   
Liabilities under acceptances                                                              -            -           -   
Amounts owed to bank depositors                                                            -            -           -   
Derivative financial instruments  liabilities                                           230            -         230   
Non-current liabilities held for sale                                          F2          -        1,120       1,120   
Inter-segment liabilities                                                                141          462         603   
Total liabilities                                                                     33,006       45,379      78,385   
Net assets                                                                             2,141        2,359       4,500   
Equity                                                                                                                  
Equity attributable to equity holders of the parent                                    2,144        2,359       4,503   
Non-controlling interests                                                                (3)            -         (3)   
Ordinary shares                                                                          (3)            -         (3)   
Preferred securities                                                                       -            -           -   
Total equity                                                                           2,141        2,359       4,500  
 
(1) Discontinued operations relate to Nordic and US Life (see note A2).                                               


                                                                                  GBPm
                                                   Non-core
                                 Consolidation   operations    Discontinued
Nedbank   M&F   USAM     Other     adjustments      Bermuda      operations(1)   Total

    557    23    904       13                -            1              -       3,358
    951     -      -        -                -            -              -         951
    502    21     11        1                -            -              -         925
     49     -      -        -              349            -              -       2,064
     21    14    165       (8)               -            1              -         339
     49     1      2       27                -            -              -         111
      -    16      9        -                -           49              -       1,351
     16    98      -        -                -            -              -         989
 39,274     1      -        -                -            -              -      39,764
  6,403   416     41      216              874        1,731              -      81,253
     56     2      -        -                -            -              -         138
    237     -      -        -                -            -              -         237
    943    75    126       54              293          836              -       3,348
  1,022     -      -       86              388            1              -       1,795
  1,071   113    197      467              756          165              -       3,624
      1     -     16        -                -            -         20,960      22,138
    206    23     21    1,136           (3,155)         566             40           -
 51,358   803   1,492   1,992            (495)        3,350         21,000     162,385

    815     -      -        -                -        3,106              -      76,350
      -   325      -        -                -            -              -         325
      -     -      -        -            1,893            -              -       1,893
  2,273     -     11    1,133                -            -              -       3,656
      -    32      3       33                -            -              -         269
      1    10      -        -                -            -              -         701
     93    13      -       24                -            -              -         504
     10     -     (3)      32                -            1              -         199
  1,123   108    219       96              348            9              -       4,243
    237     -      -        -                -            -              -         237
 40,978     -      -        -                -            -              -      40,978
  1,103     -      -        3              419            -              -       1,755
      -     -      8        -                -            -         19,289      20,417
    501     2    598    1,451           (3,155)           -              -           -
 47,134   490    836    2,772             (495)       3,116         19,289     151,527
  4,224   313    656     (780)               -          234          1,711      10,858

  2,347   294    625   (1,226)               -         234           1,711       8,488
  1,877    19     31      446                -           -               -       2,370
  1,605    19     31        -                -           -               -       1,652
    272     -      -      446                -           -               -         718
  4,224   313    656    (780)                -         234           1,711      10,858

Notes to the consolidated financial statements
For the six months ended 30 June 2012


C: Other key performance information  
C1: Operating profit adjusting items
 
(a) Summary of adjusting items
In determining the adjusted operating profit of the Group for core operations certain adjustments are made to profit before tax to reflect the directors'
view of the underlying long-term performance of the Group. The following table shows an analysis of those adjustments from adjusted operating
profit to profit before and after tax.

                                                                                                                   GBPm   
                                                                                   Emerging       Wealth    Total Long-   
Six months ended 30 June 2012                                              Notes    Markets   Management   Term Savings   
Income/(expense)                                                                                                          
Goodwill impairment and impact of acquisition accounting                   C1(b)        (1)         (62)           (63)   
strategic investments                                                      C1(c)          -            -              -   
Short-term fluctuations in investment return                               C1(d)       (44)            1           (43)   
funds                                                                      C1(e)       (37)            -           (37)   
Dividends declared to holders of perpetual preferred callable securities   C1(f)          -            -              -   
Credit-related fair value losses on Group debt instruments                 C1(h)          -            -              -   
Total adjusting items                                                                  (82)         (61)          (143)   
Tax on adjusting items                                                     D1(d)          6            7             13   
Non-controlling interest in adjusting items                                               4            -              4   
Total adjusting items after tax and non-controlling interests                          (72)         (54)          (126)   


                                                                                                                                                                GBPm
                                                                                                                    Emerging              Wealth          Total Long-
Six months ended 30 June 2011¹                                                                    Notes              Markets          Management         Term Savings
Income/(expense)
Goodwill impairment and impact of acquisition accounting                                          C1(b)                   (1)                (63)                (64)
Profit on acquisition/disposal of subsidiaries, associated undertakings and
 strategic investments                                                                            C1(c)                  249                    -                 249
Short-term fluctuations in investment return                                                      C1(d)                  (23)                 (14)                (37)
Investment return adjustment for Group equity and debt instruments held in life
 funds                                                                                            C1(e)                  (31)                   -                 (31)
Dividends declared to holders of perpetual preferred callable securities                          C1(f)                    -                    -                   -
Credit-related fair value gains/(losses) on Group debt instruments                                C1(h)                    -                    -                   -
Total adjusting items                                                                                                    194                  (77)                117
Tax on adjusting items                                                                            D1(d)                   14                   20                  34
Non-controlling interest in adjusting items                                                                                -                    -                   -
Total adjusting items after tax and non-controlling interests                                                            208                  (57)                151

(1) The results for the six months ended 30 June 2012 have been restated to reflect Nordic as discontinued and non-core and the African businesses not previously
consolidated (see note A2).

                                                                                                                        GBPm
                                                                                          Emerging       Wealth     Total Long-
Year ended 31 December 2011                                                       Notes    Markets   Management   Term Savings
Income/(expense)
Goodwill impairment and impact of acquisition accounting                          C1(b)        (2)        (127)           (129)
Profit on acquisition/disposal of subsidiaries, associated undertakings and
 strategic investments                                                            C1(c)       249            -             249
Short-term fluctuations in investment return                                      C1(d)       (98)         (14)           (112)
Investment return adjustment for Group equity and debt instruments held in life
 funds                                                                            C1(e)       (71)           -             (71)
Dividends declared to holders of perpetual preferred callable securities          C1(f)         -            -               -
US Asset Management equity plans and non-controlling interests                    C1(g)         -            -               -
Credit-related fair value gains/(losses) on Group debt instruments                C1(h)         -            -               -
Total adjusting items                                                                          78         (141)            (63)
Tax on adjusting items                                                            D1(d)        43           54              97
Non-controlling interest in adjusting items                                                     5            -               5
Total adjusting items after tax and non-controlling interests                                 126          (87)             39

                                  GBPm   
Nedbank    M&F    USAM   Other   Total   
      -      -     (1)       -    (64)   
      -      -      20       -      20   
      -    (6)       -       -    (49)   
      -      -       -       -    (37)   
      -      -       -      22      22   
      -      -       -    (37)    (37)   
      -    (6)      19    (15)   (145)   
      -    (1)    (10)       1       3   
      8      1     (4)       -       9   
      8    (6)       5    (14)   (133)   

                                  GBPm   
Nedbank    M&F    USAM   Other   Total   
    (3)      -     (2)       -    (69)   
      -      -       -       -     249   
      -   (11)       -     (6)    (54)   
      -      -       -       -    (31)   
      -      -       -      22      22   
    (4)      -       -    (47)    (51)   
    (7)   (11)     (2)    (31)      66   
      2      2       1     (2)      37   
     11      1     (4)       -       8   
      6    (8)     (5)    (33)     111   

                                  GBPm   
Nedbank    M&F    USAM   Other   Total   
      -      -   (272)       -   (401)   
      -      -       2       -     251   
      -   (28)       -    (31)   (171)   
      -      -       -       -    (71)   
      -      -       -      44      44   
      -      -     (4)       -     (4)   
    (4)      -       -      27      23   
    (4)   (28)   (274)      40   (329)   
      1      3      20    (13)     108   
     19      1     (6)       -      19   
     16   (24)   (260)      27   (202)   


Notes to the consolidated financial statements
For the six months ended 30 June 2012

C: Other key performance information continued
C1: Operating profit adjusting items continued
(b) Goodwill impairment and impact of acquisition accounting
Acquisition date deferred acquisition costs and deferred revenues are not recognised. These are reversed in the acquisition statement of financial
position and replaced by goodwill, other intangible assets and the value of the acquired present value of in-force business ('acquired PVIF'). In
determining its adjusted operating profit the Group recognises deferred revenue and acquisition costs in relation to policies sold by acquired
businesses pre-acquisition, and excludes the impairment of goodwill and the amortisation of acquired other intangibles and acquired PVIF and the
movements in certain acquisition date provisions. Goodwill impairment and acquisition accounting adjustments to adjusted operating profit are
summarised below:

                                                         Emerging       Wealth                            
Six months ended 30 June 2012                             Markets   Management   Nedbank   USAM   Total   
Amortisation of acquired PVIF                                   -         (43)         -      -    (43)   
Amortisation of acquired deferred costs and revenue             -            6         -      -       6   
Amortisation of other acquired intangible assets              (1)         (25)         -    (1)    (27)   
                                                              (1)         (62)         -    (1)    (64)   
                                                                                                   GBPm   
                                                         Emerging       Wealth                            
Six months ended 30 June 2011(1)                          Markets   Management   Nedbank   USAM   Total   
Amortisation of acquired PVIF                                   -         (46)         -      -    (46)   
Amortisation of acquired deferred costs and revenue             -            8         -      -       8   
Amortisation of other acquired intangible assets              (1)         (25)       (3)    (2)    (31)   
                                                              (1)         (63)       (3)    (2)    (69)   

(1) The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core (see note A2).



                                                      Emerging       Wealth                             
Year ended 31 December 2011                            Markets   Management   Nedbank    USAM   Total   
Amortisation of acquired PVIF                                -         (90)         -       -    (90)   
Amortisation of acquired deferred costs and revenue          -           13         -       -      13   
Amortisation of other acquired intangible assets           (2)         (50)         -     (8)    (60)   
Goodwill impairment                                          -            -         -   (264)   (264)   
                                                           (2)        (127)         -   (272)   (401)   


(c) Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments
Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments is analysed below:

                                                                                                                  GBPm   
                                                                               6 months        6 months     Year ended   
                                                                          ended 30 June   ended 30 June    31 December   
                                                                                   2012          2011(1)          2011   
Emerging Markets                                                                      -             249            249   
Long-Term Savings                                                                     -             249            249   
USAM                                                                                 20               -              2   
Profit on acquisition/disposal of subsidiaries, associated undertakings                                                 
and strategic investments                                                            20             249            251   

(1) The results for the six months ended 30 June 2011 have been restated to reflect the African businesses not previously consolidated (see note A2).
 
On 13 April 2012 USAM disposed of Old Mutual Capital, Inc, a subsidiary, at a profit of GBP12 million. On 15 May 2012 USAM disposed of Dwight
Asset Management Company LLC, a fixed income affiliate, at a profit of GBP8 million.

In preparing the consolidated financial statements for the six months ended 30 June 2011 the Emerging Markets segment included the South
African and Namibian businesses but excluded all other African businesses. This was consistent with prior periods. Following a period of greater
political and currency stability in Zimbabwe and an expectation that the Group would be able to extract benefits from its Zimbabwean business it
was consolidated for the first time for the year ended 31 December 2011 together with operations in Kenya, Malawi, Swaziland and Nigeria. Further
detail has been provided in note A2. 

 
d) Short-term fluctuations in investment return 

Profit before tax includes actual investment returns earned on the shareholder assets of the Group's life assurance and general insurance
businesses. Adjusted operating profit is stated after recalculating shareholder asset investment returns based on a long-term investment return rate.
The difference between the actual and the long-term investment returns are short-term fluctuations in investment return.

Long-term rates of return are based on achieved rates of return appropriate to the underlying asset base, adjusted for current inflation expectations,
default assumptions, costs of investment management and consensus economic investment forecasts. The long-term rates of return are reviewed
frequently, usually annually, for appropriateness. These rates of return have been selected with a view to ensuring that returns credited to adjusted
operating profit are consistent with the actual returns expected to be earned over the long-term.

For Emerging Markets, the return is applied to an average value of investible shareholders' assets, adjusted for net fund flows. For Wealth
Management, the return is applied to average investible assets. For M&F general insurance business, the return is an average value of investible
assets supporting shareholders' funds and insurance liabilities, adjusted for net fund flows.

                                                                       %   
                                  6 months        6 months    Year ended   
                             ended 30 June   ended 30 June   31 December   
Long-term investment rates            2012            2011          2011   
Emerging Markets                       9.0             9.0           9.0   
Wealth Management                  1.5-2.1         2.0-2.1       2.0-2.1   
M&F                                    8.6             9.0           9.0   


Analysis of short-term fluctuations in investment return
                                                                                                                                                GBPm
                                                             Emerging         Wealth        Total Long-
Six months ended 30 June 2012                                 Markets     Management       Term Savings             M&F         Other          Total
Actual shareholder investment return                               19             19                 38              18            25             81
Less: Long-term investment return                                  63             18                 81              24            25            130
Short-term fluctuations in investment return                      (44)             1                (43)            (6)            -            (49)

                                                                                                                                                GBPm
                                                             Emerging         Wealth         Total Long-
Six months ended 30 June 2011(1)                              Markets     Management        Term Savings            M&F          Other         Total
Actual shareholder investment return                               29             22                  51             17             12            80
Less: Long-term investment return                                  52             36                  88             28             18           134
Short-term fluctuations in investment return                      (23)           (14)                (37)          (11)            (6)           (54)

                                                                                                                                                GBPm
                                                             Emerging          Wealth        Total Long-
Year ended 31 December 2011                                   Markets      Management       Term Savings            M&F          Other         Total
Actual shareholder investment return                               14              66                 80             26              6           112
Less: Long-term investment return                                 112              80                192             54             37           283
Short-term fluctuations in investment return                      (98)            (14)              (112)           (28)           (31)         (171)

(1) The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core (see note A2).
(2) Wealth Management long term investment return includes GBP14 million (six months ended 30 June 2011 GBP28 million; year ended 31 December 2011 GBP65
million) in respect of income tax attributable to policyholder returns.

(e) Investment return adjustment for Group equity and debt instruments held in life funds
Adjusted operating profit includes investment returns on policyholder investments in Group equity and debt instruments held by the Group's life
funds. These include investments in the Company's ordinary shares, and the subordinated liabilities and ordinary securities of Nedbank. These
investment returns are eliminated within the consolidated income statement in arriving at profit before tax, but are included in adjusted operating
profit. In the six months ended 30 June 2012 the investment return adjustment increased adjusted operating profit by GBP37 million (six months
ended 30 June 2011: increase of GBP31 million; year ended 31 December 2011: increase GBP71 million).

(f) Dividends declared to holders of perpetual preferred callable securities
Dividends declared to the holders of the Group's perpetual preferred callable securities were GBP22 million for the six months ended 30 June 2012
(six months ended 30 June 2011: GBP22 million year ended 31 December 2011: GBP44 million). These are recognised in finance costs on an
accruals basis for the purpose of determining adjusted operating profit. In the IFRS financial statements this cost is recognised in equity.

(g) US Asset Management equity plans and non-controlling interests
US Asset Management has a number of long-term incentive arrangements with senior employees in its asset management affiliates.

In accordance with IFRS requirements the cost of these schemes is disclosed as being attributable to non-controlling interests. However, this is
treated as a compensation expense in determining adjusted operating profit. The loss recognised in the six months ended 30 June 2012 was GBP4
million (six months ended 30 June 2011: GBPnil; year ended 31 December 2011: loss GBP6 million).

The Group has issued put options in equities in the affiliates to senior employees as part of its US affiliate incentive schemes. The impact of
revaluing these instruments is recognised in accordance with IFRS, but excluded from adjusted operating profit. At 30 June 2012 these instruments were
revalued, the impact of which was a profit of GBP4 million (six months ended 30 June 2011: GBPnil; year ended 31 December 2011: profit GBP10
million).



Notes to the consolidated financial statements 
For the six months ended 30 June 2012

C: Other key performance information continued
C1: Operating profit adjusting items continued
(h) Credit-related fair value gains and losses on Group debt instruments
The widening of credit spread of the Group's debt instruments in the market price has resulted in losses in the six months ended 30 June 2012 of
GBP37 million in Other operating segments and GBPnil in Nedbank (six months ended 30 June 2011: losses of GBP47 million and GBP4 million
respectively; year ended 31 December 2011: gains of GBP27 million and losses of GBP4 million respectively) being recorded in the Group's income
statement for those instruments that are recorded at fair value.
In the directors' view, such movements are not reflective of the underlying performance of the Group and will reverse over time. They have
therefore been excluded from adjusted operating profit.

C2: Foreign currencies                                                                                              
                                         6 months ended               6 months ended                   Year ended   
                                           30 June 2012                 30 June 2011             31 December 2011   
                            Income         Statement of      Income     Statement of      Income     Statement of   
                         Statement            financial   Statement        financial   Statement        financial   
                          (average             position    (average         position    (average         position   
                             rate)       (closing rate)       rate)   (closing rate)       rate)   (closing rate)   
Rand                       12.5247              12.8401     11.1428          10.8616     11.6445          12.5643   
US dollars                  1.5769               1.5682      1.6165           1.6067      1.6037           1.5553   
Swedish kronor             10.8030              10.8604     10.3023          10.1564     10.4144          10.6801   
Euro                        1.2154               1.2396      1.1513           1.1073      1.1519           1.1970   


C3: Earnings and earnings per share
(a) Basic and diluted earnings per share
Basic earnings per share is calculated by dividing the profit for the financial period attributable to ordinary equity shareholders by the weighted
average number of ordinary shares in issue during the year excluding own shares held in policyholder funds, ESOP trusts, Black Economic Empowerment
trusts and other related undertakings.

                                                                                                                                             GBPm
                                                                                                     6 months          6 months        Year ended
                                                                                                ended 30 June     ended 30 June        1 December
                                                                                                         2012     2011 restated              2011
Profit for the financial period attributable to equity holders of the parent from continuing
 operations                                                                                               336               588               469
Profit for the financial period attributable to equity holders of the parent from
 discontinued operations                                                                                  595               150               198
Profit for the financial period attributable to equity holders of the parent                              931               738               667
Dividends declared to holders of perpetual preferred callable securities                                  (17)              (16)              (32)
Profit attributable to ordinary equity holders                                                            914               722               635

Total dividends declared to holders of perpetual preferred callable securities of GBP17 million in 2012 (30 June 2011: GBP16 million; 31 December
2011: GBP32 million) are stated net of tax credits of GBP5 million (30 June 2011: GBP6 million; 31 December 2011: GBP12 million).

                                                                                         Millions   
                                                           6 months        6 months    Year ended   
                                                      ended 30 June   ended 30 June   31 December   
                                                               2012   2011 restated          2011   
Weighted average number of ordinary shares in issue           5,303           5,470         5,502   
Shares held in charitable foundations                           (6)             (7)           (6)   
Shares held in ESOP trusts                                     (66)            (66)          (61)   
Adjusted weighted average number of ordinary shares           5,231           5,397         5,435   
Shares held in life funds                                     (193)           (201)         (201)   
Shares held in Black Economic Empowerment trusts              (279)           (299)         (299)   
Weighted average number of ordinary shares                    4,759           4,897         4,935   
Basic earnings per ordinary share (pence)                      19.2            14.7          12.9   


 
Diluted earnings per share recognises the dilutive impact of share options held in ESOP trusts and Black Economic Empowerment trusts which are
currently in the money in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period.

 
                                                                                        6 months      6 months       Year ended
                                                                                    ended 30 June ended 30 June     31 December
                                                                                             2012 2011 restated            2011
Profit attributable to ordinary equity holders (GBPm)                                         914           722             635
Dilution effect on profit relating to share options issued by subsidiaries (GBPm)              (2)           (3)            (8)
Diluted profit attributable to ordinary equity holders (GBPm)                                 912           719             627
Weighted average number of ordinary shares (millions)                                       4,759         4,897           4,935
Adjustments for share options held by ESOP trusts (millions)                                  106           149             133
Adjustments for shares held in Black Economic Empowerment trusts (millions)                   279           299             299
                                                                                            5,144         5,345           5,367
Diluted earnings per ordinary share (pence)                                                  17.7          13.5            11.7

(b) Adjusted operating earnings per ordinary share 
The reconciliation of profit/(loss) for the financial period to adjusted operating profit after tax attributable to ordinary equity holders is as follows:

                                                                                                                        GBPm
                                                                                   6 months        6 months       Year ended
                                                                               ended 30 June  ended 30 June      31 December
                                                                                        2012  2011 restated    2011 restated
Profit for the financial period attributable to equity holders of the parent             931            738              667
Adjusting items                                                                          145            (66)             329
Tax on adjusting items                                                                    (3)           (37)            (108)
Non-core operations                                                                      (53)           (32)             184
Profit from discontinued operations                                                     (595)          (150)            (198)
Non-controlling interest on adjusting items                                               (9)            (8)             (19)
Adjusted operating profit after tax attributable to ordinary equity holders              416            445              855
Adjusted weighted average number of ordinary shares (millions)                         4,806          4,722            4,756
Adjusted operating earnings per ordinary share (pence)                                   8.7            9.4             18.0

(c) Headline earnings per share
In accordance with the JSE Limited (JSE) listing requirements, the Group is required to calculate a 'headline earnings per share' (HEPS),
determined by reference to the South African Institute of Chartered Accountants' circular 3/2009 'Headline Earnings'. The table below sets out a
reconciliation of basic earnings per ordinary share and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS.

                                                                                                                 GBPm

                                                             6 months ended          6 months ended          Year ended
                                                                30 June 2012   30 June 2011 restated   31 December 2011
                                                            Gross         Net      Gross           Net   Gross        Net
Profit for the financial period attributable to
 equity holders of the parent                                 931         931        738          738      667        667
Dividends declared to holders of perpetual preferred
 callable securities                                          (17)        (17)       (16)         (16)     (32)       (32)
Profit attributable to ordinary equity holders                914         914        722          722      635        635
Adjustments: 
Impairments of goodwill and intangible assets                  -            -          -            -      264        264
(Profit)/loss on acquisition/disposal of subsidiaries,
 associated undertakings and strategic investments          (262)        (256)        29           29     (222)      (228)
Realised gains (including impairments) on available-for-
 sale financial assets                                        (6)          (6)      (167)        (167)    (144)      (144)
Exchange differences realised on disposal                   (350)        (350)        24           24        -          -
Headline earnings                                            296          302        608          608      533        527
Weighted average number of ordinary shares                 4,759        4,759      4,897        4,897    4,935      4,935
Diluted weighted average number of ordinary
 shares                                                    5,144        5,144      5,345        5,345    5,367      5,367
Headline earnings per share (pence)                          6.2          6.3       12.4         12.4     10.8       10.7
Diluted headline earnings per share (pence)                  5.7          5.8       11.3         11.3      9.8        9.7
  
Notes to the consolidated financial statements 
For the six months ended 30 June 2012

C: Other key performance information continued
C4: Dividends

                                                                                                                  GBPm   
                                                                                6 months        6 months    Year ended   
                                                                           ended 30 June   ended 30 June   31 December   
                                                                                    2012            2011          2011   
2010 Final dividend paid  2.9p per 10p share                                          -             145           145   
2011 Interim dividend paid  1.5p per 10p share                                        -               -            76   
2011 Final dividend paid - 3.5p per 10p share                                        178               -             -   
Special dividend - 18.0p per 10p share                                               915               -             -   
Dividends to ordinary equity holders                                               1,093             145           221   
Dividends declared to holders of perpetual preferred callable securities              22              22            44   
Dividend payments for the period                                                   1,115             167           265   


 
Dividends paid to ordinary equity holders, as above, are calculated using the number of shares in issue at the record date, less treasury shares held
in ESOP trusts, life funds of Group companies, Black Economic Empowerment trusts and related undertakings.

As a consequence of the exchange control arrangements in place in certain African territories, dividends to ordinary equity holders on the branch
registers of those countries (or, in the case of Namibia, the Namibian section of the principal register) are settled through Dividend Access Trusts
established for that purpose.

In March 2012 GBP22 million was declared and paid to holders of perpetual preferred callable securities (March 2011: GBP22 million; November
2011: GBP22 million).

Following the disposal of Nordic a special dividend of 18.0 pence per 10p share was recommended by the directors and a seven for eight share
consolidation proposed, with the consolidation approved at the Company's general meeting on 14 March 2012. The special dividend was paid on 7
June 2012. Further details of the disposal of the Nordic business unit have been provided in notes A2 and F1.

An interim dividend of 1.75 pence (or its equivalent in other applicable currencies) per ordinary share in the Company has been recommended by
the directors. This interim dividend will be paid on 30 November 2012 to shareholders on the register at the close of business on 26 October 2012.
The dividend will absorb an estimated GBP77 million of shareholders' funds. The Company is not planning to offer a scrip dividend alternative. 

D: Other income statement notes 
D1: Income tax expense

(a) Analysis of total income tax expense

                                                                                           GBPm   
                                                         6 months        6 months    Year ended   
                                                    ended 30 June   ended 30 June   31 December   
                                                             2012   2011 restated          2011   
Current tax                                                                                       
United Kingdom tax                                              6              17            22   
Overseas tax                                                                                      
South Africa                                                  208             155           390   
United States                                                   -               2           (2)   
Europe                                                          8              12            20   
Secondary Tax on Companies (STC)                               20               9            14   
Prior year adjustments                                          2            (26)           (7)   
Total current tax                                             244             169           437   
Deferred tax                                                                                      
Origination and reversal of temporary differences             (3)              13         (204)   
Changes in tax rates/bases                                      -             (5)           (8)   
Recognition of deferred tax assets                              -               1             -   
Total deferred tax                                            (3)               9         (212)   
Total income tax expense                                      241             178           225   


(b) Reconciliation of total income tax expense
                                                                                                                              GBPm
                                                                                            6 months       6 months     Year ended
                                                                                        ended 30 June ended 30 June    31 December
                                                                                                 2012 2011 restated           2011
Profit before tax                                                                                733            909            994
Tax at standard rate of 24.5% (2011: 26.5%)                                                      180            242            263
Different tax rate or basis on overseas operations                                                27              3             57
Untaxed and low taxed income                                                                     (47)           (98)          (166)
Disallowable expenses                                                                             11              6             93
Net movement on deferred tax assets not recognised                                                22             21              5
Effect on deferred tax of changes in tax rates                                                     2             (3)            (8)
STC                                                                                               18             14             19
Income tax attributable to policyholder returns                                                   28             17            (28)
Other                                                                                              -             (3)           (10)
Prior period adjustments                                                                           -            (21)             -
Total income tax expense                                                                         241            178            225



(c) Income tax relating to components of other comprehensive income
                                                                                                                              GBPm
                                                                                             6 months      6 months     Year ended
                                                                                        ended 30 June ended 30 June    31 December
                                                                                                 2012          2011           2011
Preferred perpetual callable securities                                                            (5)           (6)           (12)
Income tax credit  continuing operations                                                          (5)           (6)           (12)
Fair value gains                                                                                    1             1              2
Shadow accounting                                                                                   -            (4)            (4)
Income tax expense/(credit)  discontinued operations                                               1            (3)            (2)
Income tax credit relating to components of other comprehensive
 income                                                                                            (4)           (9)           (14)



(d) Income tax on adjusted operating profit
                                                                                                                              GBPm
                                                                                            6 months       6 months     Year ended
                                                                                       ended 30 June  ended 30 June    31 December
                                                                                                2012  2011 restated           2011
Income tax expense                                                                               241            178            225
Tax on adjusting items 
Goodwill impairment and impact of acquisition accounting                                          13             17             35
Profit on disposal of subsidiaries, associated undertakings and strategic investments             (8)             -              6
Short-term fluctuations in investment return                                                       7             25             75
Income tax attributable to policyholders returns                                                 (34)           (24)             9
Tax on dividends declared to holders of perpetual preferred callable securities
 recognised in equity                                                                             (5)            (6)           (12)
Fair value gains and losses on Group debt instruments                                              -              1              2
US Asset Management equity plans                                                                  (2)             -              2
Tax on dividends received in trusts                                                               (2)             -              -
Tax on non-core operations                                                                         -             (2)            (1)
Income tax on adjusted operating profit                                                          210             189            341

Notes to the consolidated financial statements 
For the six months ended 30 June 2012


E: Borrowed funds
E1: Borrowed funds

                                                                                                               GBPm
                                                                                 At                              At
                                                          Group             30 June       Group             30 June
                                                      Excluding                2012   Excluding                2011
                                                        Nedbank    Nedbank    Group     Nedbank    Nedbank    Group
Senior debt securities and term loans                       507      1,427    1,934         539      1,464    2,003
 Floating Rate Notes                                          -        926      926          31        873      904
 Fixed Rate Notes                                           507        501    1,008         506        591    1,097
 Term loan and other loans                                    -          -        -           2         -         2
Mortgage Backed Securities                                    -        70        70           -         97       97

Subordinated debt securities (net of Group holdings)        747        785    1,532       1,447        950    2,397
Borrowed funds                                            1,254      2,282    3,536       1,986      2,511    4,497
Other issues treated as equity for accounting
 purposes
US$750 million cumulative preference securities             458                             458
EUR500 million perpetual preferred callable securities      338                             338
GBP350 million perpetual preferred callable
securities                                                  350                             350
Total: Book value                                         2,400                           3,132
Nominal value of the above                                2,476                           3,277

                                                                                 GBPm   
                                                                                   At   
                                                                                   31   
                                                           Group             December   
                                                       Excluding                 2011   
                                                         Nedbank   Nedbank      Group   
Senior debt securities and term loans                        507     1,355      1,862   
Floating Rate Notes                                            -       844        844   
Fixed Rate Notes                                             507       511      1,018   
Mortgage Backed Securities                                     -        77         77   
Subordinated debt securities (net of Group holdings)         876       841      1,717   
Borrowed funds                                             1,383     2,273      3,656   
Other issues treated as equity for accounting                                           
purposes                                                                                
US$750 million cumulative preference securities              458                        
EUR500 million perpetual preferred callable securities       338                        
GBP350 million perpetual preferred callable                                             
securities                                                   350                        
Total: Book value                                          2,529                        
Nominal value of the above                                 2,666                        


Senior notes
(a) Floating Rate Notes
                                                                                                                      GBPm
                                                                               At        At            At
                                                                          30 June   30 June   31 December
                                                                             2012      2011          2011    Maturity date
Nedbank
R1,690 million unsecured senior debt at 3 month JIBAR + 1.5%                  81       147           119    September 2012
R1,044 million unsecured senior debt at JIBAR + 2.20%                         82        97            84    September 2015
R1,750 million unsecured senior debt at inflation linked
 (3.9% real yield)                                                           158       176           158        March 2013
R98 million unsecured senior debt at inflation linked (3.8% real yield)        9        10             9        March 2013
R1,552 million unsecured senior debt at JIBAR + 1.48%                        123       145           125        April 2013
R1,027 million unsecured senior debt at JIBAR + 1.75%                         81        96            83        April 2015
R80 million unsecured senior debt at JIBAR + 2.15%                             6         7             6        April 2020
R988 million unsecured senior debt at JIBAR + 1.05%                           75        86            79        March 2014
R677 million unsecured senior debt at JIBAR + 1.25%                           53        62            54        March 2016
R500 million unsecured senior debt at JIBAR + 1%                              39        47            40        April 2014
R1,075 million unsecured senior debt at JIBAR + 0.94%                         85         -            87      October 2014
R1,297 million unsecured senior debt at JIBAR + 1%                           102         -             -     February 2015
R405 million unsecured senior debt at JIBAR + 1.3%                            32         -             -     February 2017
                                                                             926       873           844
Group excluding Nedbank
US$50 million at 3 month LIBOR plus 0.5%                                       -        31             -            Repaid
                                                                               -        31             -
Total floating rate notes                                                    926       904           844

All floating rate notes are non-qualifying for the purposes of regulatory tiers of capital.

(b) Fixed Rate Notes                                                                                    
                                                                                                 GBPm   
                                                           At        At            At                   
                                                      30 June   30 June   31 December                   
                                                         2012      2011          2011   Maturity date   
Nedbank                                                                                                 
R660 million unsecured senior debt at zero coupon          15        15            14    October 2024   
R3,244 million unsecured senior debt at 10.55%            260       308        265 Se   eptember 2015   
R762 million unsecured senior debt at 11.39%               61        73         63 Se   eptember 2019   
R478 million unsecured senior debt at R157 + 1.75%         38        45            39      April 2015   
R450 million unsecured senior debt at R206 + 1.28%         36        42            37      March 2014   
R1,137 million unsecured senior debt at R157 + 1.5%        91       108            93      March 2016   
                                                          501       591           511                   
Group excluding Nedbank                                                                                 
GBP500 million euro bond at 7.125%                        496       496           496    October 2016   
US$16.5 million secured senior debt at 5.23%               11        10            11     August 2014   
                                                          507       506           507                   
Total fixed rate notes                                  1,008     1,097         1,018                   

All fixed rate notes are non-qualifying for the purposes of regulatory tiers of capital.



(c) Revolving credit facilities and irrevocable letters of credit
The Group has access to a GBP1,200 million five-year multi-currency revolving credit facility (agreed in April 2011). At 30 June 2012 GBPnil (30
June 2011: GBPnil, 31 December 2011: GBPnil) of this facility was utilised in the form of drawn debt and there is GBP168 million (30 June 2011:
GBP174 million, 31 December 2011: GBP160 million) in the form of an undrawn irrevocable letter of credit. 

 
Notes to the consolidated financial statements 
For the six months ended 30 June 2012

E: Borrowed funds
E1: Borrowed funds continued

(d) Mortgage backed securities - Nedbank                                                              
                                                                                               GBPm   
                                                At        At            At                            
                                           30 June   30 June   31 December                            
                                              2012      2011          2011     Tier   Maturity date   
Nedbank                                                                                               
R1.4 billion (class A2A) at 11.817%             60        85            67   Tier 2   November 2039   
R98 million (class B note) at 12.067%            6         7             6   Tier 2   November 2039   
R76 million (class 3 note) at 13.317%            4         5             4   Tier 2   November 2039   
Total mortgage backed securities                70        97            77                            


 
(e) Subordinated debt securities (net of Group holdings) 
                                                                                                                                                          GBPm
                                                           At              At          At
                                                      30 June         30 June 31 December
                                                         2012            2011        2011                       Tier      First call date         Maturity date
Nedbank
R1.8 billion (9.84%)                                      150             175              153                Tier 2       September 2013        September 2018
R650 million (9.03%)                                         -             63               54                Tier 2                    -                Repaid
R1.7 billion (8.9%)                                       143             165              144                Tier 2        February 2014         February 2019
R2.0 billion (3 month JIBAR plus 0.47%)                   157             187              161                Tier 2            July 2017             July 2022
R500 million (3 month JIBAR plus 0.45%)                    39              46               40                Tier 2          August 2012           August 2012
R1.0 billion (10.54%)                                      86              98               87                Tier 2       September 2015        September 2020
R500 million (3 month JIBAR plus 0.70%)                    39              46               40                Tier 2        December 2012         December 2017
R120 million (10.38%)                                      10              11               10                Tier 2        December 2012         December 2017
R487 million (15.05%)                                      43              48               42                Tier 2        November 2018         November 2018
R1,265 million (JIBAR plus 4.75%)                         100             118              102       Non-core Tier 1        November 2018         November 2018
R300 million (JIBAR + 2.5%)                                12              14               12       Non-core Tier 1        December 2013         December 2013
                                                                                                              Tier 2
US$100 million (3 month USD LIBOR)                         64              63               65             Secondary           March 2017            March 2022
                                                          843           1,034              910
Less: banking subordinated debt
 securities held by other Group
companies                                                 (58)            (84)             (69)
Banking subordinated debt securities
(net of Group holdings)                                   785             950              841
Group excluding Nedbank
R3.0 billion (8.9% to October 2015, 3
month JIBAR plus 1.59% thereafter)                        234             276              239          Lower Tier 2         October 2015          October 2020
EUR200 million (2010: EUR750 million) (4.5% to
January 2012 and 6 month EURIBOR plus
0.96 thereafter)(1)                                         -            671              166           Lower Tier 2                    -               Repaid
GBP500 million (8.0%)(2)                                  513             500             471           Lower Tier 2                    -            June 2021
                                                          747           1,447             876
Total subordinated debt securities                      1,532           2,397           1,717

(1) The principal and coupon on the bond were swapped at issue equally into Sterling and US dollars with coupons of 6 month GBP LIBOR plus 0.34% and 6 month USD
LIBOR plus 0.31% respectively. During 2011 a EUR550 million partial repayment, together with settlements of associated currency swaps, was made. On 18 January 2012
the remaining EUR200 million was repaid on the first call date.
(2) The principal and coupon on the bond were initially swapped into floating rate Swedish Kroner, at 3 month STIBOR plus 5.46%. Following the Nordic sale, GBP375
million of the coupon is now swapped into floating rate sterling at 6 month GBP LIBOR plus 4.15% and GBP125 million of principal and coupon is swapped into US
dollars at 6 month USD LIBOR plus 5.49%.

F: Discontinued operations and disposal groups held for sale  
F1: Discontinued operations

The results of the Group's Swedish, Danish and Norwegian life businesses, collectively Nordic, and United States life business, US Life, are shown
as discontinued operations in these financial statements. The disposal of Nordic was completed on 21 March 2012 following shareholder and
regulatory approval, and has been reported up until that date. The disposal of US Life was completed on 7 April 2011 following regulatory approval,
and has been reported up until that date. Further detail is provided in note A2.

(a) Income statement from discontinued operations 
                                                                                                                                                            GBPm
                                                                      6 months ended                        6 months ended                               Year ended
                                                                         30 June 2012                         30 June 2011                          31 December 2011
                                                                             US                                                                        US
                                                           Nordic          Life      Total       Nordic      US Life       Total       Nordic        Life       Total
Revenue                                                       842            -         842          (57)         342         285         (421)        342          (79)
Expenses                                                     (831)           -       (831)          104         (330)       (226)         541        (330)         211
Profit before tax from discontinued
 operations                                                    11            -          11           47           12          59          120          12          132
Profit/(loss) on disposal(1)                                  242            -         242            -          (29)        (29)           -         (29)         (29)
Realised available-for-sale investment gains and
 exchange differences on disposal(1)                          350            -         350            -          133         133            -         133          133
Profit before tax                                             603            -         603           47          116         163          120         116          236
Income tax (charge)/credit                                     (8)          -           (8)        (27)           14         (13)         (52)         14          (38)
Profit from discontinued operations after tax                 595            -         595           20          130         150           68         130          198
1
 Cumulative foreign exchange translation gains of GBP350 million previously included in equity translation reserves are realised on the disposal of the Nordic
business. Net investment currency hedge losses of GBP102 million also previously included in equity translation reserves have been included in the profit on disposal.

(b) Statement of comprehensive income from discontinued operations
                                                                                                                            GBPm
                                                            6 months ended            6 months ended                   Year ended
                                                             30 June 2012               30 June 2011             31 December 2011
                                                              US                                                     US
                                                Nordic      Life    Total   Nordic   US Life   Total   Nordic      Life     Total
Profit from discontinued operations after tax      595        -       595       20      130     150        68       130       198
Other comprehensive income for the
 financial period
Fair value gains/(losses)
  Available-for-sale investments
   Fair value gains                                  4        -         4        2        48      50        3         48      51
   Recycled to the income statement                  -        -         -        -        (5)     (5)       -         (5)      (5)
   Realised on disposal                              -        -         -        -      (157)   (157)       -       (157)   (157)
Exchange differences realised on disposal         (350)       -      (350)       -        24      24        -         24      24
Shadow accounting                                    -        -         -        -       (43)    (43)       -        (43)     (43)
Currency translation differences/exchange
 differences on translating foreign operations       2        -         2       49         -      49      (43)         -      (43)
Other movements                                     (3)       -        (3)       1         -       1       10          -      10
Aggregate tax on transfers from equity              (1)       -        (1)       -         3       3       (1)         3        2
Total other comprehensive (loss)/income
 from discontinued operations                     (348)       -      (348)      52      (130)    (78)     (31)      (130)   (161)
Total comprehensive income for the financial
 period from discontinued operations               247        -      247        72         -      72       37          -      37
Attributable to
Equity holders of the parent                       247        -      247        72         -      72       37          -      37

Notes to the consolidated financial statements
For the six months ended 30 June 2012

(c) Net cash flows from discontinued operations

                                                                                                               GBPm
                                             6 months ended             6 months ended                     Year ended
                                                30 June 2012              30 June 2011               31 December 2011
                                                    US                                                      US
                                   Nordic      Life   Total   Nordic   US Life    Total   Nordic       Life      Total
Operating activities                   (8)        -      (8)   1,229        2     1,231     1,609         2      1,611
Investing activities                 (121)        -    (121)    (876)     146      (730)   (1,411)      146     (1,265)
Net cash flows from discontinuing
 operations                          (129)        -    (129)     353      148       501       198       148        346

F2: Disposal group held for sale                        
                                                 GBPm   
                                              Finnish   
At 30 June 2012                                Branch   
Assets                                                  
Goodwill and other intangible assets               67   
Deferred acquisition costs                         43   
Investments and securities                      1,058   
Other assets                                        3   
Cash and balances with central banks                1   
Total assets                                    1,172   
Liabilities                                             
Long-term business policyholder liabilities     1,057   
Provisions                                          3   
Deferred revenue                                   54   
Deferred tax liabilities                           15   
Other liabilities                                   3   
Total liabilities                               1,132   


In addition to the disposal groups held for sale, the Group had additional non-current assets held for sale of GBP6 million (June 2011: GBP6 million;
December 2011: GBP22 million) and non-current liabilities of GBPnil (June 2011: GBPnil; December 2011 GBP9 million)

(b) Equity attributable to equity holders of the parent directly associated with disposal group held for sale

                       GBPm   
                    Finnish   
At 30 June 2012      Branch   
Retained earnings        40   
                         40   


At 31 December 2011 the assets and liabilities of the Group's Nordic business were shown as held for sale in the financial statements, being
GBP20,960 million and GBP19,289 million respectively. At 31 December 2011 the assets and liabilities of the Group's Finnish branch were also
shown as held for sale in the financial statements, being GBP1,156 million and GBP1,119 million respectively.


G: Other notes
G1: Contingent liabilities in respect of the disposal of US Life

Following completion of the disposal of US Life to the Harbinger group ('Harbinger') on 7 April 2011, the Group has retained certain residual
commitments and contingent liabilities. These relate to sale warranties and indemnities that are typical in transactions of this nature including in
respect of litigation (including class actions) and regulatory enforcement actions arising from events occurring before completion. The specific
conditions are in effect for varying periods of time, the longest dated of these will expire on 31 December 2015. The main elements are summarised
below:

*    Harbinger intended to establish certain internal reinsurance arrangements, which were subject to regulatory approval. In the event that
     regulatory approval is not forth coming, there is potential for a reduction to the purchase price, of up to a maximum of US$50 million. On 9 July
     2012, Harbinger formally filed a legal claim against the Group for the payment of a purchase price adjustment of US$50 million. In view of the
     ongoing uncertainty and the current assessment of this matter, the Group has not raised a provision against this exposure.

*    On 3 August 2012, the Group received formal notification of a number of claims from Harbinger under the warranty terms included in the sale
     agreement. This notification is consistent with the final date for submission of such claims of 6 August 2012. The Group has purchased
     insurance protection in respect of such warranty claims and is in the process of assessing the merit of each claim.


*    US statutory regulations require reserving on a worst case scenario basis for deferred annuity policies that permit free partial withdrawals
     ('CARVM Reserves'). As such there is redundancy when comparing the worst case scenario and the economic scenarios. These CARVM
     redundant reserves are currently reinsured from US Life to Old Mutual Reassurance until no later than the end of 2015. Old Mutual plc
     provides a $265 million letter of credit to back these redundant reserves. In the event that this letter of credit is drawn upon, Harbinger is
     obligated to fully reimburse Old Mutual plc.
 
G2: Events after the reporting date
The Group routinely reviews events occurring after the reporting date but prior to the announcement date. Since 30 June 2012, the following events
have occurred:

    (a) Debt repurchase

Following a tender issued by the Group on 19 July 2012, GBP388 million of the GBP500 million Senior Eurobond (7.125%) fixed rate note was
repurchased on 1 August 2012. The cost of the repurchase was GBP459 million.

    (b) Recapitalisation of OM Bermuda
New Bermudan regulatory requirements were issued late in 2011, to be enacted for the 31 December 2011 filing. Following discussions with the
Bermudan monetary authority, the Group has clarified how the requirements are to be applied in order to implement these in the local filing which
was submitted on 31 July 2012. In order to address these, the Group allocated US$571 million of capital to its Bermuda business. Further details of
the impact of the regulatory changes and the capital allocated are included in the Finance Director's review.


Sponsor: Merrill Lynch South Africa Proprietary Limited
Date: 08/08/2012 08:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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