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Update on the rationalisation of international operations
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
South African Share Code: SBK
Namibian Share Code: SNB
ISIN: ZAE000109815
("Standard Bank Group" or "the group")
Update on the rationalisation of Standard Bank Group international operations
As indicated at the time of releasing Standard Bank Group’s interim results in August, the
group continues to right size its international operations in a responsible and deliberate
manner.
Standard Bank completes divestiture of control of Standard Bank Argentina
The group has completed the transaction through which the group divested of controlling
stakes in Standard Bank Argentina S.A. (“Standard Bank Argentina”) and its affiliated
companies (collectively “SBA”) to Industrial and Commercial Bank of China Limited (“ICBC”).
Standard Bank will retain a 20% shareholding and rights to board representation in each of
the companies comprising SBA.
Standard Bank Argentina will be rebranded as Industrial and Commercial Bank of China
(Argentina) S.A. early in 2013.
The final proceeds of and profit realised on the transaction will be determined based on the
30 November 2012 balance sheets of SBA. This information will be finalised and reviewed
according to an agreed process in the near future. It is anticipated that there will be a minor
upwards adjustment of the original expected net proceeds attributable to the group of
USD400 million as published in August 2011, as the benefit of the strong profit performance
of SBA is expected to have countervailed the effect of the devaluation of the Argentine peso
and the transaction costs. The profit realised on the transaction is expected to be
approximately R1.6 billion (USD180 million).
This profit will be recognised outside of headline earnings and will be incremental to the
group’s core equity tier 1 capital. The group’s tier 1 capital adequacy ratio of 11.2% at 30
September 2012 will, on a pro-forma basis, increase to 11.6%. It is planned that the
proceeds of this divestiture will be largely deployed in The Standard Bank of South Africa
Limited to support the group’s growth ambitions.
Other rationalisation initiatives
Conditions in our international operations remain very challenging and, as announced in a
media release on Friday 9 November, we are currently taking action in respect of all aspects
of the cost base in these operations so as to secure a sustainable reduction in costs of
approximately USD100 million per annum. This process is proceeding according to plan and
it is estimated that the once-off costs relating to this rationalisation exercise will be
approximately USD80 million. These costs include estimated retrenchment costs, office
lease termination costs and software asset write-offs and will be recognised as a
restructuring charge in 2012.
The information contained in this announcement has not been reviewed by or reported on by
the group's auditors.
Johannesburg
6 December 2012
Lead sponsor
The Standard Bank of South Africa Limited
Independent sponsor
Deutsche Securities (SA) (Proprietary) Limited
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