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OLD MUTUAL PLC - Old Mutual plc interim results for the half year ended 30 June 2014 - Part II

Release Date: 07/08/2014 08:01
Code(s): OML     PDF:  
Wrap Text
Old Mutual plc interim results for the half year ended 30 June 2014 - Part II

Old Mutual 
ISIN CODE: GB00B77J0862 
JSE SHARE CODE: OML 
NSX SHARE CODE: OLM 
ISSURE CODE: OLOML 
 
Index to the financial information
For the six months ended 30 June 2014
 
Statement of directors' responsibilities in respect of the interim financial statements for the six months ended 30 June 2014   40

Independent review report to the members of Old Mutual plc for the six months ended 30 June 2014                                41

Consolidated income statement                                                                                                   42

Consolidated statement of comprehensive income                                                                                  43

Reconciliation of adjusted operating profit to profit after tax                                                                 44

Consolidated statement of financial position                                                                                    46

Consolidated statement of cash flows                                                                                            47

Consolidated statement of changes in equity                                                                                     48

Notes to the consolidated financial statements

       A: Significant accounting policies                                                                                       54

       B: Segment information                                                                                                   56

       C: Other key performance information                                                                                     70

       D: Other income statement notes                                                                                          76

       E: Financial assets and liabilities                                                                                      78

       F: Other notes                                                                                                           90

       G: Discontinued operations and disposal groups held for sale                                                             91

MCEV information                                                                                                                92

Statement of directors' responsibilities in respect of the interim financial
statements
For the six months ended 30 June 2014

We confirm that to the best of our knowledge:

-    The Group interim financial statements contained herein are presented in accordance with the requirements of IAS 34 'Interim Financial
     Reporting' as adopted by the EU.

-    The interim management statement 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                                                Ingrid Johnson
Group Chief Executive                                         Group Finance Director
7 August 2014                                                 7 August 2014

Independent review report to the members of Old Mutual plc
For the six months ended 30 June 2014

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 2014 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated
Balance Sheet, the Consolidated Statement of Cash Flows and the related explanatory notes, which include the reconciliation of adjusted operating
profit to profit after tax.

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.

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 Conduct Authority (“the UK FCA”). Our review 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. 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 interim
financial report in accordance with the DTR of the UK FCA.

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.

Our responsibility

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

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 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 2014 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU
and the DTR of the UK FCA.

Philip Smart (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London E14 5GL
7 August 2014

Consolidated income statement 
For the six months ended 30 June 2014
                                                                                                                     GBPm
                                                                                    Six months   Six months          Year
                                                                                         ended        ended         ended
                                                                                       30 June      30 June   31 December
                                                                          Notes          2014          2013          2013
Revenue
Gross earned premiums                                                        B2          1,618        1,995         3,701
Outward reinsurance                                                                      (154)        (162)         (317)
Net earned premiums                                                                      1,464        1,833         3,384
Investment return (non-banking)                                                          3,529        4,489         9,986
Banking interest and similar income                                                      1,415        1,573         3,050
Banking trading, investment and similar income                                              83          110           195
Fee and commission income, and income from service activities                            1,413        1,576         3,095
Other income                                                                                54           60           100
Total revenue                                                                            7,958        9,641        19,810
Expenses
Claims and benefits (including change in insurance contract provisions)                (2,260)      (2,295)       (5,410)
Reinsurance recoveries                                                                      66          118           246
Net claims and benefits incurred                                                       (2,194)      (2,177)       (5,164)
Change in investment contract liabilities                                              (1,845)      (3,000)       (5,873)
Losses on loans and advances                                                             (130)        (234)         (368)
Finance costs                                                                             (64)         (23)          (81)
Banking interest payable and similar expenses                                            (770)        (832)       (1,616)
Fee and commission expenses, and other acquisition costs                                 (437)        (538)         (976)
Change in third-party interest in consolidated funds                                     (194)        (271)         (564)
Other operating and administrative expenses                                            (1,760)      (1,770)       (3,653)
Total expenses                                                                         (7,394)      (8,845)      (18,295)
Share of associated undertakings' and joint ventures' profit after tax                      10           10            21
Loss on disposal of subsidiaries, associated undertakings and strategic
  investments                                                             C1(c)           (10)          (1)           (4)
Profit before tax                                                                          564          805         1,532
Income tax expense                                                           D1          (218)        (250)         (552)
Profit from continuing operations after tax                                                346          555           980
Discontinued operations
(Loss)/profit from discontinued operations after tax                         G1           (10)          (8)             3
Profit after tax for the financial period                                                  336          547           983
Attributable to
Equity holders of the parent                                                               213          414           705
Non-controlling interests
 Ordinary shares                                                                           114          124           259
 Preferred securities                                                                        9            9            19
Profit after tax for the financial period                                                  336          547           983
Earnings per share
Basic earnings per share based on profit from continuing
 operations (pence)                                                                        4.7          9.1          14.9
Basic earnings per share based on profit from discontinued
 operations (pence)                                                                      (0.2)        (0.2)           0.1
Basic earnings per ordinary share (pence)                                 C2(a)            4.5          8.9          15.0
Diluted basic earnings per share based on profit from continuing
 operations (pence)                                                                        4.3          8.5          13.8
Diluted basic earnings per share based on profit from discontinued
 operations (pence)                                                                      (0.2)        (0.2)           0.1
Diluted basic earnings per ordinary share (pence)                         C2(b)            4.1          8.3          13.9
Weighted average number of ordinary shares (millions)                     C2(a)          4,462        4,436         4,442

Consolidated statement of comprehensive income 
For the six months ended 30 June 2014                                                                                          
                                                                                                                                        GBPm
                                                                                                Six months       Six months              Year
                                                                                                     ended            ended             ended
                                                                                                   30 June          30 June       31 December
                                                                                   Notes              2014             2013              2013
Profit after tax for the financial period                                                              336              547               983
Other comprehensive income for the financial period
Items that will not be reclassified subsequently to profit or loss
Fair value gains/(losses)
  Property revaluation                                                                                   6              (3)                23
Measurement gains on defined benefit plans                                                               1                2                70
Income tax on items that will not be reclassified subsequently to profit or loss   D1(c)                 3                4              (12)
                                                                                                        10                3                81
Items that may be reclassified subsequently to profit or loss
Fair value gains/(losses)
  Net investment hedge                                                                                  14                9                43
  Available-for-sale investments
   Fair value gains/(losses)                                                                            15              (7)               (5)
   Recycled to profit or loss                                                                            -              (8)               (9)
Exchange difference recycled to profit or loss on disposal of business                                 (1)                -                 -
Currency translation differences on translating foreign operations                                   (269)            (346)           (1,257)
Other movements                                                                                          2                4                 9
Income tax on items that may be reclassified subsequently to profit or loss        D1(c)               (3)                1                 2
                                                                                                     (242)            (347)           (1,217)
Total other comprehensive income for the financial period from
 continuing operations                                                                               (232)            (344)           (1,136)
Total other comprehensive income for the financial period                                            (232)            (344)           (1,136)
Total comprehensive income for the financial period                                                    104              203             (153)
Attributable to
Equity holders of the parent                                                                            39              202              (96)
Non-controlling interests
 Ordinary shares                                                                                        56              (8)              (76)
 Preferred securities                                                                                    9                9                19
Total comprehensive income for the financial period                                                    104              203             (153)

Reconciliation of adjusted operating profit to profit after tax 
For the six months ended 30 June 2014
                                                                                                                             GBPm
                                                                                            Six months   Six months          Year
                                                                                                 ended        ended         ended
                                                                                               30 June      30 June   31 December
                                                                              Notes               2014         2013          2013
Core operations
Emerging Markets                                                                 B3                291          300           594
Nedbank                                                                          B3                361          387           797
Old Mutual Wealth                                                                B3                120          108           217
Institutional Asset Management                                                   B3                 54           54           111
                                                                                                   826          849         1,719
Finance costs                                                                    B3               (41)         (46)          (92)
Long-term investment return on excess assets                                                        13           25            43
Net interest payable to non-core operations                                                        (2)          (6)          (11)
Corporate costs                                                                                   (25)         (21)          (54)
Other net (costs)/income                                                                          (10)           -              7
Adjusted operating profit before tax                                             B3                761          801         1,612
Adjusting items                                                               C1(a)              (255)         (69)         (286)
Non-core operations                                                              B3                 14            2            32
Profit before tax (net of policyholder tax)                                                        520          734         1,358
Income tax attributable to policyholder returns                               D1(d)                 44           71           174
Profit before tax                                                                                  564          805         1,532
Total tax expense                                                             D1(a)              (218)        (250)         (552)
Profit from continuing operations after tax                                                        346          555           980
(Loss)/profit from discontinued operations after tax                             G1               (10)          (8)             3
Profit after tax for the financial period                                                          336          547           983

Adjusted operating profit after tax attributable to ordinary equity holders of the parent
                                                                                                                             GBPm
                                                                                            Six months   Six months          Year
                                                                                                 ended        ended         ended
                                                                                               30 June      30 June   31 December
                                                                              Notes               2014         2013          2013
Adjusted operating profit before tax                                             B3                761          801         1,612
Tax on adjusted operating profit                                              D1(d)              (202)        (207)         (424)
Adjusted operating profit after tax                                                                559          594         1,188
Non-controlling interests - ordinary shares                                      B3              (126)        (137)         (279)
Non-controlling interests - preferred securities                                 B3                (9)          (9)          (19)
Adjusted operating profit after tax attributable to ordinary equity
 holders of the parent                                                           B3                424          448           890
Adjusted weighted average number of shares (millions)                         C2(c)              4,840        4,835         4,836
Adjusted operating earnings per share (pence)
                                                                            C2(c)                8.8          9.3          18.4
Basis of preparation of adjusted operating profit

Adjusted operating profit (AOP) reflects the directors' view of the underlying long-term performance of the Group. AOP is a measure of profitability
which adjusts the standard IFRS profit measures for the specific items detailed in note C1 and, as such, it is a non-GAAP measure. The
reconciliation set out above explains the differences between AOP and profit after tax as reported under IFRS.

For core life assurance and property and casualty businesses, AOP is based on a long-term investment return, including returns on investments
held by life funds in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For all core businesses,
AOP excludes goodwill impairment, the impact of accounting for intangibles acquired in a business combination and costs related to successful
acquisitions, revaluations of put options related to long-term incentive schemes, profit/(loss) on acquisition/disposal of subsidiaries, associated
undertakings and strategic investments, fair value profits/(losses) on certain Group debt instruments and costs related to the fundamental
restructuring of continuing businesses. AOP includes dividends declared to holders of perpetual preferred callable securities. Old Mutual Bermuda
and Nordic are treated as non-core and discontinued operations respectively in the AOP disclosure. As such they are not included in AOP. Refer to
note B1 for further information on the basis of segmentation.

Adjusted operating earnings per share is calculated on the same basis as AOP. It is stated after tax attributable to AOP 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 2014
                                                                                              GBPm
                                                                    30 June   30 June  31 December
                                                          Notes        2014      2013         2013
Assets
Goodwill and other intangible assets                                  2,500     3,056        2,835
Mandatory reserve deposits with central banks                           767       760          759
Property, plant and equipment                                           730       794          722
Investment property                                                   1,778     1,911        1,811
Deferred tax assets                                                     247       334          303
Investments in associated undertakings and joint ventures               201       130          168
Deferred acquisition costs                                              909     1,264        1,211
Reinsurers' share of policyholder liabilities                         1,987     1,629        1,875
Loans and advances                                                   33,727    37,418       33,583
Investments and securities                                           86,198    88,915       88,220
Current tax receivable                                                  101       109          128
Trade, other receivables and other assets                             2,780     2,955        2,583
Derivative financial instruments                                      1,104     1,417        1,259
Cash and cash equivalents                                             4,289     5,035        4,869
Non-current assets held for sale                             G2       4,473         5            5
Total assets                                                        141,791   145,732      140,331
Liabilities
Long-term business policyholder liabilities                          78,092    81,443       81,141
General insurance liabilities                                           319       350          332
Third-party interests in consolidated funds                           6,456     5,479        5,478
Borrowed funds                                               E2       2,752     2,563        2,629
Provisions                                                              198       207          195
Deferred revenue                                                        367       664          628
Deferred tax liabilities                                                424       435          491
Current tax payable                                                     205       250          237
Trade, other payables and other liabilities                           4,099     5,076        4,315
Amounts owed to bank depositors                                      34,540    38,009       34,370
Derivative financial instruments                                      1,174     1,623        1,478
Non-current liabilities held for sale                        G2       4,294         -            -
Total liabilities                                                   132,920   136,099      131,294
Net assets                                                            8,871     9,633        9,037
Shareholders' equity
Equity attributable to equity holders of the parent                   7,062     7,729        7,270
Non-controlling interests
Ordinary shares                                                       1,536     1,632        1,502
Preferred securities                                                    273       272          265
Total non-controlling interests                                       1,809     1,904        1,767
Total equity                                                          8,871     9,633        9,037

Consolidated statement of cash flows 
For the six months ended 30 June 2014
                                                                                                                      GBPm
                                                                             Six months       Six months              Year
                                                                                  ended            ended             ended
                                                                                30 June          30 June       31 December
                                                                                   2014             2013              2013
Cash flows from operating activities
Profit before tax                                                                   564              805             1,532
Non-cash movements in profit before tax                                             806              620             1,423
Net changes in working capital                                                    (370)              228               447
Taxation paid                                                                     (175)            (225)             (458)
Net cash inflow from operating activities                                           825            1,428             2,944
Cash flows from investing activities
Net acquisitions of financial investments                                         (824)            (590)           (1,658)
Acquisition of investment properties                                               (31)              (7)              (47)
Proceeds from disposal of investment properties                                      39                9                22
Acquisition of property, plant and equipment                                       (65)             (50)             (113)
Proceeds from disposal of property, plant and equipment                               5                6                 6
Acquisition of intangible assets                                                   (29)             (31)              (86)
Acquisition of interests in subsidiaries, associated undertakings
  joint ventures and strategic investments                                         (58)             (31)             (119)
Disposal of interests in subsidiaries, associated undertakings
  joint ventures and strategic investments                                           48               12                 8
Net cash outflow from investing activities                                        (915)            (682)           (1,987)
Cash flows from financing activities
Dividends paid to
  Ordinary equity holders of the Company                                          (279)            (238)             (336)
  Non-controlling interests and preferred security interests                       (90)             (95)             (183)
Dividends received from associated undertakings                                       4               12                13
Interest paid (excluding banking interest paid)                                    (24)             (26)              (51)
Proceeds from issue of ordinary shares (including by subsidiaries
  to non-controlling interests)                                                       9                9                11
Net disposal/(acquisition) of treasury shares                                        38             (29)                55
Issue of subordinated and other debt                                                357                -               586
Subordinated and other debt repaid                                                (196)            (262)             (578)
Net cash outflow from financing activities                                        (181)            (629)             (483)
Net (decrease)/increase in cash and cash equivalents                              (271)              117               474
Effects of exchange rate changes on cash and cash equivalents                     (234)            (304)             (828)
Cash and cash equivalents at beginning of the year                                5,628            5,982             5,982
Cash and cash equivalents at end of the period                                    5,123            5,795             5,628
Consisting of
Cash and cash equivalents                                                         4,289            5,035             4,869
Mandatory reserve deposits with central banks                                       767              760               759
Cash and cash equivalents included in assets held for sale                           67                -                 -
Total                                                                             5,123            5,795             5,628

Cash and cash equivalents in the cash flow statement above include Mandatory reserve deposits, in line with market practice in South Africa.
Except for mandatory reserve deposits with central banks of GBP767 million (30 June 2013: GBP760 million; 31 December 2013: GBP759 million)
and cash and cash equivalents subject to consolidation of funds of GBP1,733 million (30 June 2013: GBP1,757 million; 31 December 2013:
GBP1,667 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.

Consolidated statement of changes in equity 
For the six months ended 30 June 2014
                                                                    Millions
                                                                   Number of
                                                                      shares                                   Available-
                                                                  issued and     Share       Share    Merger     for-sale
Six months ended 30 June 2014                             Notes   fully paid   capital     premium   reserve      reserve
Shareholders' equity at beginning of the period                        4,897       560         845     1,717           52
Profit after tax for the financial period                                  -         -           -         -            -
Other comprehensive income
Items that will not be reclassified subsequently to
  profit or loss
Fair value gains
  Property revaluation                                                     -         -           -         -            -
  Measurement gains on defined benefit plans                               -         -           -         -            -
Income tax on items that will not be reclassified
  subsequently to profit or loss                          D1(c)            -         -           -         -            -
                                                                           -         -           -         -            -
Items that may be reclassified subsequently to profit
  or loss
Fair value gains/(losses)
  Net investment hedge                                                     -         -           -         -            -
  Available-for-sale investments
   Fair value gains                                                        -         -           -         -           14
Exchange differences recycled to profit or loss
   on disposal of business                                                 -         -           -         -            -
Currency translation differences on translating foreign
  operations                                                               -         -           -         -            -
Other movements                                                            -         -           -         -            -
Income tax on items that may be reclassified
  subsequently to profit or loss                          D1(c)            -         -           -         -          (3)
Total comprehensive income for the financial period                        -         -           -         -           11
Dividends for the period                                     C3            -         -           -         -            -
Equity share-based payment transactions                                    -         -           -         -            -
Other movements in share capital                                           8         1           8         -            -
Expiry of Skandia AB shareholder claims                                    -         -           -         -            -
Merger reserve released                                                    -         -           -     (116)            -
Change in participation in subsidiaries                                    -         -           -         -            -
Transactions with shareholders                                             8         1           8     (116)            -
Shareholders' equity at end of the period
                                                                     4,905       561         853     1,601           63

                                                                                                                   GBPm
                                               Foreign               Perpetual                           Total
      Property    Share-based                 currency               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
           161            316         37       (1,234)      4,290          526             7,270         1,767    9,037
             -              -          -             -        199           14               213           123      336




             6              -          -             -          -            -                 6             -        6
             -              -          -             -          1            -                 1             -        1

             -              -          -             -          -            3                 3             -        3
             6              -          -             -          1            3                10             -       10




             -              -          -            14          -            -                14             -       14

             -              -          -             -          -            -                14             1       15

             -              -          -           (1)          -            -               (1)             -      (1)

             -              -          -         (211)          -            -             (211)          (58)    (269)
             -              -          3            -           -            -                 3           (1)        2

             -              -          -             -          -            -               (3)             -      (3)
             6              -          3         (198)        200           17                39            65      104
             -              -          -             -      (279)         (17)             (296)          (73)    (369)
             -              5          -             -          1            -                 6           (3)        3
             -              -          -             -         38            -                47           (1)       46
             -              -          -             -         12            -                12             -       12
             -              -          -             -        116            -                 -             -        -
             -              -          -             -       (16)            -              (16)            54       38
             -              5          -             -      (128)         (17)             (247)          (23)    (270)
          167            321        40       (1,432)      4,362          526             7,062         1,809    8,871

                                                                    Millions
                                                                   Number of
                                                                      shares
                                                                  issued and     Share       Share    Merger   Available-for-
Six months ended 30 June 2013                             Notes   fully paid   capital     premium   reserve     sale reserve
Shareholders' equity at beginning of the period                        4,892       559         835     1,717               65
Profit after tax for the financial period                                  -         -           -         -                -
Other comprehensive income
Items that will not be reclassified subsequently to
  profit or loss
Fair value gains
  Property revaluation                                                     -         -           -         -                -
  Measurement gains on defined benefit plans                               -         -           -         -                -
Income tax on items that will not be reclassified
  subsequently to profit or loss                          D1(c)            -         -           -         -                -
                                                                           -         -           -         -                -
Items that may be reclassified subsequently to profit
  or loss
Fair value gains/(losses)
  Net investment hedge                                                     -         -           -         -                -
  Available-for-sale investments
   Fair value losses                                                       -         -           -         -              (7)
   Recycled to profit or loss                                              -         -           -         -              (8)
Currency translation differences on translating foreign
  operations                                                               -         -           -         -                -
Other movements                                                            -         -           -         -                -
Income tax on items that may be reclassified
  subsequently to profit or loss                          D1(c)            -         -           -         -                1
Total comprehensive income for the financial period                        -         -           -         -             (14)
Dividends for the period                                     C3            -         -           -         -                -
Equity share-based payment transactions                                    -         -           -         -                -
Other movements in share capital                                           4         -           8         -                -
Change in participation in subsidiaries                                    -         -           -         -                -
Transactions with shareholders                                             4         -           8         -                -
Shareholders' equity at end of the period                              4,896       559         843     1,717               51

                                                                                                                   GBPm
                                            Foreign                Perpetual                           Total
   Property     Share-based                currency                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
        144             268         33        (378)        3,891         682             7,816         1,957      9,773
          -               -          -            -          397          17               414           133        547
 



        (3)               -          -            -            -           -               (3)             -        (3)
          -               -          -            -            2           -                 2             -          2

          -               -          -            -          (1)           5                 4             -          4
        (3)               -          -            -            1           5                 3             -          3




          -               -          -            9            -           -                 9             -          9

          -               -          -            -            -           -               (7)             -        (7)
          -               -          -            -            -           -               (8)             -        (8)

          -               -          -        (221)            -           -             (221)         (125)      (346)
          -               -          1            -           10           -                11           (7)          4

          -               -          -            -            -           -                 1             -          1
        (3)               -          1        (212)          408          22               202             1        203
          -               -          -            -        (238)        (22)             (260)          (73)      (333)
          -             (8)          -            -            -           -               (8)           (2)       (10)
          -               -          -            -         (29)           -              (21)           (3)       (24)
          -               -          -            -            -           -                 -            24         24
          -             (8)          -            -        (267)        (22)             (289)          (54)      (343)
        141             260         34        (590)        4,032         682             7,729         1,904      9,633

                                                                      Millions
                                                                     Number of
                                                                        shares
                                                                    issued and     Share      Share     Merger  Available-for-
Year ended 31 December 2013                                 Notes   fully paid   capital    premium    reserve    sale reserve
Shareholders' equity at beginning of the year                            4,892       559        835      1,717              65
Profit after tax for the financial year                                      -         -          -          -               -
Other comprehensive income
Items that will not be reclassified subsequently
  to profit or loss
  Fair value gains
   Property revaluation                                                      -         -           -         -               -
   Measurement gain on defined benefit plans                                 -         -           -         -               -
Income tax on items that will not be reclassified
  subsequently to profit or loss                            D1(c)            -         -           -         -               -
                                                                             -         -           -         -               -
Items that may be reclassified subsequently
  to profit or loss
  Fair value gains/(losses)
   Net investment hedge                                                      -         -           -         -               -
  Available-for-sale investments
   Fair value gains                                                          -         -           -         -             (6)
   Recycled to profit or loss                                                -         -           -         -             (9)
  Currency translation differences on translating foreign
   operations                                                                -         -           -         -               -
  Other movements                                                            -         -           -         -               -
  Income tax on items that may be reclassified
   subsequently to profit or loss                           D1(c)            -         -          -          -               2
Total comprehensive income for the financial year                            -         -          -          -            (13)
Dividends for the year                                         C3            -         -          -          -               -
Equity share-based payment transactions                                      -         -          -          -               -
Other movements in share capital                                             5         1         10          -               -
Preferred securities purchased                                               -         -          -          -               -
Change in participation in subsidiaries                                      -         -          -          -               -
Transactions with shareholders                                               5         1         10          -               -
Shareholders' equity at end of the year
                                                                       4,897       560        845      1,717              52

                                                                                                                  GBPm
                                            Foreign                Perpetual                          Total
   Property    Share-based                 currency                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
        144            268          33        (378)        3,891         682            7,816         1,957      9,773
          -              -           -            -          668          37              705           278        983




         17               -          -            -            -           -               17             6         23
          -               -          -            -          52            -               52            18         70

          -               -          -            -         (14)          10              (4)           (8)       (12)
         17               -          -            -           38          10               65            16         81




          -               -          -           43            -           -               43             -         43

          -               -          -            -            -           -              (6)             1        (5)
          -               -          -            -            -           -              (9)             -        (9)

          -               -          -        (899)            -           -            (899)         (358)    (1,257)
          -               -          4            -          (1)           -                3             6          9

          -              -           -            -            -           -                2             -          2
         17              -           4        (856)          705          47             (96)          (57)      (153)
          -              -           -            -        (336)        (47)            (383)         (136)      (519)
          -             48           -            -           13           -               61          (17)         44
          -              -           -            -           55           -               66             3         69
          -              -           -            -         (21)       (156)            (177)             -      (177)
          -              -           -            -         (17)           -             (17)            17          -
          -             48           -            -        (306)       (203)            (450)         (133)      (583)
        161            316          37      (1,234)        4,290         526            7,270         1,767      9,037

Notes to the consolidated financial statements
For the six months ended 30 June 2014

A: Significant accounting policies
A1: Basis of preparation

The Group interim financial statements contained herein are presented in accordance with the requirements of IAS 34 'Interim Financial Reporting'
and are in compliance with International Financial Reporting Standards (IFRS) adopted by the EU. The Group's results for the six months ended 
30 June 2014 and the financial position at that date have been prepared using accounting policies consistent with those applied in the preparation of
the Group's 2013 Annual Report and Accounts.

The Group interim financial statements have been prepared on the going concern basis, which the directors believe is appropriate. Part 2 of the
Interim Management Statement provides further details on the performance of the Group and the principal risks and uncertainties.

The comparative figures for the financial year ended 31 December 2013 represent the consolidated performance of the Group. They are not the
Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the
Registrar of Companies. The report of the auditor 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.

Translation of foreign operations
The assets and liabilities of foreign operations are translated from their respective functional currencies into the Group's presentation currency using
the period end exchange rates, and their income and expenses using the average exchange rates. Other than in respect of cumulative translation
gains and losses up to 1 January 2004, cumulative unrealised gains or losses resulting from translation of functional currencies to the presentation
currency are included as a separate component of shareholders' equity. To the extent that these gains and losses are effectively hedged, the
cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders' equity. Upon the
disposal of subsidiaries the cumulative amount of exchange differences deferred in shareholders' equity, net of attributable amounts in relation to
net investments, is recognised in the income statement.

The exchange rates used to translate the operating results, assets and liabilities of key foreign business segments to pounds sterling are:

                          Six months ended                  Six months ended                          Year ended
                              30 June 2014                      30 June 2013                    31 December 2013
                              Statement of                      Statement of                        Statement of
                     Income      financial           Income        financial            Income         financial
                  statement       position        Statement         position         statement          position
             (average rate) (closing rate)   (average rate)   (closing rate)    (average rate)    (closing rate)
Rand                17.8499        18.1755          14.2269          15.0827           15.0959           17.4284
US dollars           1.6690         1.7102           1.5448           1.5185            1.5650            1.6566
Euro                 1.2174         1.2492           1.1763           1.1676            1.1782            1.2014
 
New standards, interpretations and amendments adopted by the Group affecting the financial statements for the six months ended 
30 June 2014
The new standards that were adopted in the current period were the amendments to IAS 32 'Financial Instruments: Presentation (Offsetting)' and
IFRIC 21 'Levies'. Neither standard had a material effect on the financial statements of the Group.

A2: Significant corporate activity and business changes during the period
Transactions completed during the interim reporting period

Acquisition of Faulu Kenya DTM LTD
On 1 April 2014, the Group completed the acquisition of a controlling stake in the micro-lender Faulu Kenya DTM LTD for GBP17 million, with
goodwill of GBP3 million being recognised.

Disposal of Skandia Poland
On 30 May 2014, the Group completed the disposal of Skandia Poland, part of Old Mutual Wealth. A loss on disposal of GBP15 million has been
recognised in profit of loss.

Acquisition of a significant interest in Banco Unico
On 12 June 2014, the Group announced that it had completed the acquisition of a 36.4% stake in Bank Unico for US$24 million. Bank Unico is
equity accounted as a joint venture in these financial statements.

Transactions agreed but not yet completed

Disposal of Skandia Austria and Skandia Germany
On 27 March 2014, the Group announced that terms had been agreed to sell two of its Old Mutual Wealth businesses, Skandia Austria and Skandia
Germany. This transaction is subject to regulatory approvals and consequently the assets and liabilities of these businesses have been classified as
held for sale in the statement of financial position. Refer to note G2 for further information.

Terms have been agreed to sell Skandia Liechtenstein, also part of Old Mutual Wealth. The transaction is subject to regulatory approval and the
fulfilment of certain closing conditions.

The net asset value of goodwill and intangible assets of these businesses has been written down to the net realisable value given expected losses
on disposal. As a result, an impairment loss of GBP125 million has been recognised in profit or loss.

The disposal of these businesses is expected to be completed during the second half of the year.

Acquisition of Intrinsic Financial Services Limited
On 1 July 2014, the Group announced the completion of the acquisition of Intrinsic Financial Services, one of the largest networks of financial
advisers in the UK. Additionally, the Group announced that it intends to acquire the remaining 50% stake of Cirilium, the core investment proposition
for Intrinsic's restricted financial advisers.

Acquisition of Old Mutual Finance (Pty) Ltd
Subject to regulatory approval, the Group is expected to complete the acquisition of a further stake in Old Mutual Finance (Pty) Ltd from Business
Doctors in the second half of the year. Old Mutual Finance (Pty) Ltd is currently accounted for as joint venture and will be consolidated when the
additional stake is acquired.

Financing activities
On 10 July 2014, Nedbank Group Limited announced its intention to issue new preference shares which will be utilised to raise funding for
Nedbank's business activities in general.
 
A3: Critical accounting estimates and judgements

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

Critical accounting estimates and judgements are those which involve the most complex or subjective judgements or assessments. Where
applicable, the Group applies estimation and assumption setting techniques that are aligned with relevant actuarial and accounting guidance based
on knowledge of the current situation and require assumptions and predictions of future events and actions. The principal areas where estimates
and judgement is typically required were set out in the Annual Report and Accounts on page 144 and were described in further detail in the Report
of the Chairman of the Group Audit Committee on page 97. During the period, there have been no significant changes to the areas of critical
accounting estimates and judgements that the Group applied at 31 December 2013.

The Annual Report and Accounts is available in the Investor Relations section of the Group's website at www.oldmutual.com.

B: Segment information
B1: Basis of segmentation

The Group's segmental results are analysed and reported on a basis consistent with the way that management and the Board of directors of Old Mutual
plc assesses performance of the underlying businesses and allocates resources. Information is presented to the Board on a consolidated basis in pounds
sterling (the presentation currency) and in the functional currency of each business.

Adjusted operating profit (AOP) 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. As appropriate to the business line, the Board reviews additional
measures to assess the performance of each of the segments. These typically include net client cash flows, funds under management, gross
earned premiums, underwriting results, net interest income and non-interest revenue and credit losses.

A reconciliation between segment revenues and expenses and the Group's revenues and expenses is shown in note B3. Consistent with internal
reporting, assets, liabilities, revenues and 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 trading activities between the segments.

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 and the 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.

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

Core operations
Emerging Markets - life assurance, property and casualty, asset management and banking
Nedbank - banking and asset management
Old Mutual Wealth - life assurance and asset management
Institutional Asset Management - asset management

Non-core operations
Old Mutual Bermuda - life assurance

Segment presentation
The results of the property and casualty business were previously disclosed separately. However, following changes in management oversight,
these have been included in the Emerging Markets segment with effect from 1 January 2014. This change has been applied to all periods
presented and comparative information has been re-presented accordingly.

The USAM segment has been renamed to Institutional Asset Management.

There have been no other changes to the presentation of segment information.

The Group's reported segments are now Emerging Markets, Nedbank, Old Mutual Wealth and Institutional Asset Management. The Other segment
includes Group Head Office. For all reporting periods, Old Mutual Bermuda is classified as a continuing operation in the IFRS income statement, but
as non-core in determining the Group's adjusted operating profit.

As set out in the 2013 Annual Report and Accounts, the Group continues to incur costs related to the sale of its Nordic business in 2012. These
costs largely relate to the transition of IT information and support services that were previously provided by the Nordic business to the wider Group
back to the Group. These costs are included in the expenses related to the discontinued operations in the IFRS consolidated income statement for
the six months ended 30 June 2014 and as non-core for determining the Group's AOP for the six months ended 30 June 2014. Further information
on the results of discontinued operations is provided in note G1.

All other businesses have been classified as continuing operations for all reporting periods.

B2: Gross earned premiums and deposits to investment contracts
                                                                                                          GBPm
                                                                                 Emerging  Old Mutual
Six months ended 30 June 2014                                                     Markets      Wealth    Total
Life assurance - insurance contracts                                                  678         155      833
Life assurance - investment contracts with discretionary
  participation features                                                              454           -      454
General insurance                                                                     331           -      331
Gross earned premiums                                                               1,463         155    1,618


                                                                                                           GBPm
                                                                                Emerging   Old Mutual
Six months ended 30 June 2013                                                    Markets       Wealth     Total
Life assurance - insurance contracts                                                 967          175     1,142
Life assurance - investment contracts with discretionary participation features      476            -       476
General insurance                                                                    377            -       377
Gross earned premiums                                                              1,820          175     1,995

                                                                                                           GBPm
                                                                                 Emerging   Old Mutual
Year ended 31 December 2013                                                       Markets       Wealth    Total
Life assurance - insurance contracts                                                1,616          336    1,952
Life assurance - investment contracts with discretionary
  participation features                                                            1,025            -    1,025
General insurance                                                                     724            -      724
Gross earned premiums                                                               3,365          336    3,701

B3: Adjusted operating profit statement - segment information for the six months ended 30 June 2014
                                                                                                            Emerging
                                                                                        Notes                Markets             Nedbank
Revenue
Gross earned premiums                                                                      B2                  1,463                   -
Outward reinsurance                                                                                            (111)                   -
Net earned premiums                                                                                            1,352                   -
Investment return (non-banking)                                                                                2,101                   -
Banking interest and similar income                                                                                -               1,415
Banking trading, investment and similar income                                                                     -                  83
Fee and commission income, and income from service activities                                                    243                 438
Other income                                                                                                      41                   6
Inter-segment revenues                                                                                            41                   5
Total revenue                                                                                                  3,778               1,947
Expenses
Claims and benefits (including change in insurance contract provisions)                                      (2,056)                   -
Reinsurance recoveries                                                                                            21                   -
Net claims and benefits incurred                                                                             (2,035)                   -
Change in investment contract liabilities                                                                      (766)                   -
Losses on loans and advances                                                                                       -               (130)
Finance costs (including interest and similar expenses)                                                            -                   -
Banking interest payable and similar expenses                                                                      -               (770)
Fee and commission expenses, and other acquisition costs                                                       (150)                 (4)
Change in third-party interest in consolidated funds                                                               -                   -
Other operating and administrative expenses                                                                    (501)               (660)
Income tax attributable to policyholder returns                                                                 (38)                   -
Inter-segment expenses                                                                                           (4)                (23)
Total expenses                                                                                               (3,494)             (1,587)
Share of associated undertakings' and joint ventures' profit after tax                                             7                   1
Loss on disposal of subsidiaries, associated undertakings
 and strategic investments                                                              C1(c)                      -                   -
Adjusted operating profit/(loss) before tax and non-controlling
 interests                                                                                                       291                 361
Income tax expense                                                                         D1                   (83)                (92)
Non-controlling interests                                                                                        (6)               (129)
Adjusted operating profit/(loss) after tax and non-controlling
 interests                                                                                                       202                 140
Adjusting items net of tax and non-controlling interests                                C1(a)                      2                   8
Profit/(loss) after tax from continuing operations                                                               204                 148
Loss from discontinued operations after tax                                                G1                      -                   -
Profit/(loss) after tax attributable to equity holders of the parent                                             204                 148

(1) Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the six months ended 30 June 2014 was GBP14 million. Non-core
    operations also include GBP10 million divestment costs incurred relation to the Nordic business sold in 2012. Further information on discontinued operations is
    provided in note G1.
                                                                                                      GBPm
             Institutional                             Adjusted     Adjusting    Discontinued         IFRS
Old Mutual           Asset            Consolidation   operating         items    and non-core       Income
    Wealth      Management    Other     adjustments      profit     (note C1)   operations(1)    statement

       155               -        -               -       1,618             -               -        1,618
      (43)               -        -               -       (154)             -               -        (154)
       112               -        -               -       1,464             -               -        1,464
     1,160               -       17             240       3,518          (13)              24        3,529
         -               -        -               -       1,415             -               -        1,415
         -               -        -               -          83             -               -           83
       563             193        -               4       1,441          (28)               -        1,413
         4               1        -               1          53             -               1           54
         1               -        -            (49)         (2)             -               2            -
     1,840             194       17             196       7,972          (41)              27        7,958

     (198)               -        -               -     (2,254)             -             (6)      (2,260)
        45               -        -               -          66             -               -           66
     (153)               -        -               -     (2,188)             -             (6)      (2,194)
   (1,079)               -        -               -     (1,845)             -               -      (1,845)
         -               -        -               -       (130)             -               -        (130)
         -               -     (41)               -        (41)          (23)               -         (64)
         -               -        -               -       (770)             -               -        (770)
     (270)             (2)        -            (42)       (468)            33             (2)        (437)
         -               -        -           (194)       (194)             -               -        (194)
     (192)           (140)     (39)             (9)     (1,541)         (214)             (5)      (1,760)
       (6)               -        -               -        (44)            44               -            -
      (20)               -      (2)              49           -             -               -            -
   (1,720)           (142)     (82)           (196)     (7,221)         (160)            (13)      (7,394)
         -               2        -               -          10             -               -           10

         -               -        -               -           -          (10)               -         (10)

       120              54     (65)               -         761         (211)              14          564
      (19)            (12)        4               -       (202)          (16)               -        (218)
         -               -        -               -       (135)            12               -        (123)

       101              42     (61)               -         424         (215)              14          223
     (182)             (7)     (36)               -       (215)           215               -            -
      (81)              35     (97)               -         209             -              14          223
         -               -        -               -           -             -            (10)         (10)
      (81)              35     (97)               -         209             -               4          213

B3: Adjusted operating profit statement - segment information for the six months ended 30 June 2013

                                                                                    Emerging             
                                                                            Notes    Markets   Nedbank   
Revenue                                                                                                  
Gross earned premiums                                                          B2      1,820         -   
Outward reinsurance                                                                    (119)         -   
Net earned premiums                                                                    1,701         -   
Investment return (non-banking)                                                        1,991         -   
Banking interest and similar income                                                        -     1,573   
Banking trading, investment and similar income                                             -       110   
Fee and commission income, and income from service activities                            276       537   
Other income                                                                              23        18   
Inter-segment revenues                                                                    38         7   
Total revenue                                                                          4,029     2,245   
Expenses                                                                                                 
Claims and benefits (including change in insurance contract provisions)              (2,168)         -   
Reinsurance recoveries                                                                    93         -   
Net claims and benefits incurred                                                     (2,075)         -   
Change in investment contract liabilities                                              (888)         -   
Losses on loans and advances                                                              -     (234)   
Finance costs (including interest and similar expenses)                                    -         -   
Banking interest payable and similar expenses                                              -     (832)   
Fee and commission expenses, and other acquisition costs                               (176)      (25)   
Change in third-party interest in consolidated funds                                      -         -   
Other operating and administrative expenses                                            (563)     (740)   
Income tax attributable to policyholder returns                                         (22)         -   
Inter-segment expenses                                                                  (12)      (27)   
Total expenses                                                                       (3,736)   (1,858)   
Share of associated undertakings' and joint ventures' profit after tax                     7         -   
Loss on disposal of subsidiaries, associated undertakings                                                
and strategic investments                                                   C1(c)          -         -   
Adjusted operating profit/(loss) before tax and non-controlling interests                300       387   
Income tax expense                                                             D1       (78)     (100)   
Non-controlling interests                                                               (12)     (134)   
Adjusted operating profit/(loss) after tax and non-controlling interests                 210       153   
Adjusting items net of tax and non-controlling interests                    C1(a)        (4)         4   
Profit/(loss) after tax from continuing operations                                       206       157   
Loss from discontinued operations after tax                                    G1          -         -   
Profit/(loss) after tax attributable to equity holders of the parent                     206       157   

(1) Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the six months ended 30 June 2013 was GBP2 million. Non-core
    operations also include GBP8 million divestment costs incurred relation to the Nordic business sold in 2012. Further information on discontinued operations is provided
    in note G1. 
                                                                                                 GBPm   
             Institutional                            Adjusted   Adjusting   Discontinued        IFRS   
Old Mutual           Asset           Consolidation   operating       items   and non-core      Income   
    Wealth      Management   Other     adjustments      profit   (note C1)  operations(1)   statement   
       175               -       -               -       1,995           -              -       1,995   
      (43)               -       -               -       (162)           -              -       (162)   
       132               -       -               -       1,833           -              -       1,833   
     2,195               -      34             304       4,524        (17)           (18)       4,489   
         -               -       -               -       1,573           -              -       1,573   
         -               -       -               -         110           -              -         110   
       608             185       -               4       1,610        (34)              -       1,576   
        13               2       -               -          56           -              4          60   
         -               -       5            (56)         (6)           -              6           -   
     2,948             187      39             252       9,700        (51)            (8)       9,641   
     (148)               -       -               -     (2,316)           -             21     (2,295)   
        25               -       -               -         118           -              -         118   
     (123)               -       -               -     (2,198)           -             21     (2,177)   
   (2,112)               -       -               -     (3,000)           -              -     (3,000)   
         -               -       -               -       (234)           -              -       (234)   
         -               -    (46)               -        (46)          23              -        (23)   
         -               -       -               -       (832)           -              -       (832)   
     (340)             (2)       -            (32)       (575)          40            (3)       (538)   
         -               -       -           (271)       (271)           -              -       (271)   
     (205)           (134)    (35)             (5)     (1,682)        (80)            (8)     (1,770)   
      (49)               -       -               -        (71)          71              -           -   
      (11)               -     (6)              56           -           -              -           -   
   (2,840)           (136)    (87)           (252)     (8,909)          54             10     (8,845)   
         -               3       -               -          10           -              -          10   
         -               -       -               -           -         (1)              -         (1)   
       108              54    (48)               -         801           2              2         805   
      (20)            (13)       4               -       (207)        (43)              -       (250)   
         -               -       -               -       (146)          13              -       (133)   
        88              41    (44)               -         448        (28)              2         422   
      (54)             (9)      35               -        (28)          28              -           -   
        34              32     (9)               -         420           -              2         422   
         -               -       -               -           -           -            (8)         (8)   
        34              32     (9)               -         420           -            (6)         414   

B3: Adjusted operating profit statement - segment information for the year ended 31 December 2013

                                                                                    Emerging             
                                                                            Notes    Markets   Nedbank   
Revenue                                                                                                  
Gross earned premiums                                                          B2      3,365         -   
Outward reinsurance                                                                    (230)         -   
Net earned premiums                                                                    3,135         -   
Investment return (non-banking)                                                        5,184         -   
Banking interest and similar income                                                        -     3,050   
Banking trading, investment and similar income                                             -       195   
Fee and commission income, and income from service activities                            552     1,048   
Other income                                                                              39        31   
Inter-segment revenues                                                                    61        11   
Total revenue                                                                          8,971     4,335   
Expenses                                                                                                 
Claims and benefits (including change in insurance contract provisions)              (5,061)         -   
Reinsurance recoveries                                                                   201         -   
Net claims and benefits incurred                                                     (4,860)         -   
Change in investment contract liabilities                                            (1,952)         -   
Losses on loans and advances                                                              -     (368)   
Finance costs (including interest and similar expenses)                                    -         -   
Banking interest payable and similar expenses                                              -   (1,616)   
Fee and commission expenses, and other acquisition costs                               (341)      (12)   
Change in third-party interest in consolidated funds                                      -         -   
Other operating and administrative expenses                                          (1,165)   (1,495)   
Income tax attributable to policyholder returns                                         (62)         -   
Inter-segment expenses                                                                  (11)      (49)   
Total expenses                                                                       (8,391)   (3,540)   
Share of associated undertakings' and joint ventures' profit after tax                    14         2   
Loss on disposal of subsidiaries, associated undertakings                                                
and strategic investments                                                   C1(c)          -         -   
Adjusted operating profit/(loss) before tax and non-controlling interests                594       797   
Income tax expense                                                             D1      (155)     (200)   
Non-controlling interests                                                               (16)     (282)   
Adjusted operating profit/(loss) after tax and non-controlling interests                 423       315   
Adjusting items net of tax and non-controlling interests                    C1(a)       (84)        12   
Profit/(loss) after tax from continuing operations                                       339       327   
Profit from discontinued operations after tax                                  G1          -         -   
Profit/(loss) after tax attributable to equity holders of the parent                     339       327   

(1) Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the year ended 31 December 2013 was GBP32 million. Non-core
    operations also include a net gain of GBP3 million divestment cost and additional proceeds received in relation to the Nordic business sold in 2012. Further information
    on discontinued operations is provided in note G1.
                                                                                                 GBPm   
             Institutional                            Adjusted   Adjusting   Discontinued        IFRS   
Old Mutual           Asset           Consolidation   operating       items   and non-core      Income   
    Wealth      Management   Other     adjustments      profit   (note C1)  operations(1)   statement   
       336               -       -               -       3,701           -              -       3,701   
      (87)               -       -               -       (317)           -              -       (317)   
       249               -       -               -       3,384           -              -       3,384   
     4,159               -      68             634      10,045        (94)             35       9,986   
         -               -       -               -       3,050           -              -       3,050   
         -               -       -               -         195           -              -         195   
     1,173             381       -               8       3,162        (67)              -       3,095   
        21               3     (2)               2          94           -              6         100   
         1               -       8            (92)        (11)           -             11           -   
     5,603             384      74             552      19,919       (161)             52      19,810   
     (347)               -       -               -     (5,408)           -            (2)     (5,410)   
        45               -       -               -         246           -              -         246   
     (302)               -       -               -     (5,162)           -            (2)     (5,164)   
   (3,921)               -       -               -     (5,873)           -              -     (5,873)   
         -               -       -               -       (368)           -              -       (368)   
         -               -    (92)               -        (92)          11              -        (81)   
         -               -       -               -     (1,616)           -              -     (1,616)   
     (622)             (4)       -            (70)     (1,049)          78            (5)       (976)   
         -               -       -           (564)       (564)           -              -       (564)   
     (408)           (274)    (78)            (10)     (3,430)       (210)           (13)     (3,653)   
     (112)               -       -               -       (174)         174              -           -   
      (21)               -    (11)              92           -           -              -           -   
   (5,386)           (278)   (181)           (552)    (18,328)          53           (20)    (18,295)   
         -               5       -               -          21           -              -          21   
         -               -       -               -           -         (4)              -         (4)   
       217             111   (107)               -       1,612       (112)             32       1,532   
      (40)            (27)     (2)               -       (424)       (128)              -       (552)   
         -               -       -               -       (298)          20              -       (278)   
       177              84   (109)               -         890       (220)             32         702   
     (139)            (30)      21               -       (220)         220              -           -   
        38              54    (88)               -         670           -             32         702   
         -               -       -               -           -           -              3           3   
        38              54    (88)               -         670           -             35         705   

B4: Statement of financial position – segment information at 30 June 2014                                
                                                                                    Emerging             
                                                                            Notes    Markets   Nedbank   
Assets                                                                                                   
Goodwill and other intangible assets                                                     134       434   
Mandatory reserve deposits with central banks                                              -       767   
Property, plant and equipment                                                            313       388   
Investment property                                                                    1,409         7   
Deferred tax assets                                                                       73        12   
Investments in associated undertakings and joint ventures                                 92        79   
Deferred acquisition costs                                                               107         -   
Reinsurers’ share of policyholder liabilities                                            128        11   
Loans and advances                                                                       339    33,212   
Investments and securities                                                            28,856     5,588   
Current tax receivable                                                                    17        13   
Trade, other receivables and other assets                                                729       709   
Derivative financial instruments                                                         266       719   
Cash and cash equivalents                                                                928       753   
Non-current assets held for sale                                               G2          -         1   
Inter-segment assets                                                                     628       269   
Total assets                                                                          34,019    42,962   
Liabilities                                                                                              
Life assurance policyholder liabilities                                               28,438       889   
General insurance liabilities                                                            319         -   
Third-party interests in consolidated funds                                                -         -   
Borrowed funds                                                                 E2        165     1,899   
Provisions                                                                               145         1   
Deferred revenue                                                                          15         -   
Deferred tax liabilities                                                                 184        35   
Current tax payable                                                                      125         6   
Trade, other payables and other liabilities                                            1,834       798   
Amounts owed to bank depositors                                                          310    34,230   
Derivative financial instruments                                                         338       798   
Non-current liabilities held for sale                                          G2          -         -   
Inter-segment liabilities                                                                347       613   
Total liabilities                                                                     32,220    39,269   
Net assets                                                                             1,799     3,693   
Equity                                                                                                   
Equity attributable to equity holders of the parent                                    1,747     1,934   
Non-controlling interests                                                                 52     1,759   
Ordinary shares                                                                           52     1,486   
Preferred securities                                                                       -       273   
Total equity                                                                           1,799     3,693   

                                                                     GBPm   
             Institutional                                                  
Old Mutual           Asset           Consolidation     Non-core             
    Wealth      Management   Other     adjustments   operations     Total   
     1,168             764       -               -            -     2,500   
         -               -       -               -            -       767   
        15              14       -               -            -       730   
         -               -       -             362            -     1,778   
         4             157       -               -            1       247   
         -              20      10               -            -       201   
       791              11       -               -            -       909   
     1,848               -       -               -            -     1,987   
       176               -       -               -            -    33,727   
    46,367              37     554           4,399          397    86,198   
        71               -       -               -            -       101   
       503             114      24             387          314     2,780   
         -               -      72              40            7     1,104   
       621              79     146           1,733           29     4,289   
     4,472               -       -               -            -     4,473   
       129              19     901         (2,212)          266         -   
    56,165           1,215   1,707           4,709        1,014   141,791   
    47,981               -       -               -          784    78,092   
         -               -       -               -            -       319   
         -               -       -           6,456            -     6,456   
         -               1     687               -            -     2,752   
        24               2      26               -            -       198   
       352               -       -               -            -       367   
       184               -      21               -            -       424   
        23               3      48               -            -       205   
       774             212      46             427            8     4,099   
         -               -       -               -            -    34,540   
         -               -       -              38            -     1,174   
     4,294               -       -               -            -     4,294   
       314             581     357         (2,212)            -         -   
    53,946             799   1,185           4,709          792   132,920   
     2,219             416     522               -          222     8,871   
     2,219             418     522               -          222     7,062   
         -             (2)       -               -            -     1,809   
         -             (2)       -               -            -     1,536   
         -               -       -               -            -       273   
     2,219             416     522               -          222     8,871   

B4: Statement of financial position – segment information at 30 June 2013                               
                                                                            Notes   Markets   Nedbank   
Assets                                                                                                  
Goodwill and other intangible assets                                                    134       494   
Mandatory reserve deposits with central banks                                             -       760   
Property, plant and equipment                                                           344       424   
Investment property                                                                   1,555        14   
Deferred tax assets                                                                      96        21   
Investments in associated undertakings and joint ventures                                65        35   
Deferred acquisition costs                                                              110         -   
Reinsurers’ share of policyholder liabilities                                           158        12   
Loans and advances                                                                      418    36,812   
Investments and securities                                                           30,412     5,839   
Current tax receivable                                                                   15        30   
Trade, other receivables and other assets                                               794       623   
Derivative financial instruments                                                        358       862   
Cash and cash equivalents                                                             1,038     1,113   
Non-current assets held for sale                                                          -         1   
Inter-segment assets                                                                    466       142   
Total assets                                                                         35,963    47,182   
Liabilities                                                                                             
Life assurance policyholder liabilities                                              29,826       906   
General insurance liabilities                                                           350         -   
Third-party interests in consolidated funds                                               -         -   
Borrowed funds                                                                 E2       199     1,726   
Provisions                                                                              125       (6)   
Deferred revenue                                                                         17         1   
Deferred tax liabilities                                                                157        28   
Current tax payable                                                                     161         8   
Trade, other payables and other liabilities                                           2,469     1,061   
Amounts owed to bank depositors                                                          83    37,926   
Derivative financial instruments                                                        401     1,112   
Non-current liabilities held for sale                                                     -         -   
Inter-segment liabilities                                                               231       451   
Total liabilities                                                                    34,019    43,213   
Net assets                                                                            1,944     3,969   
Equity                                                                                                  
Equity attributable to equity holders of the parent                                   1,892     2,140   
Non-controlling interests                                                                52     1,829   
Ordinary shares                                                                          52     1,557   
Preferred securities                                                                      -       272   
Total equity                                                                          1,944     3,969   

             Institutional                                           GBPm          
Old Mutual           Asset           Consolidation     Non-core             
    Wealth      Management   Other     adjustments   operations     Total   
     1,556             872       -               -            -     3,056   
         -               -       -               -            -       760   
        13              12       1               -            -       794   
         -               -       -             342            -     1,911   
        32             181       2               -            2       334   
         -              13      17               -            -       130   
     1,145               9       -               -            -     1,264   
     1,459               -       -               -            -     1,629   
       188               -       -               -            -    37,418   
    48,306              36     426           3,323          573    88,915   
        64               -       -               -            -       109   
       480             103      37             501          417     2,955   
         -               -      56             133            8     1,417   
       633             104     259           1,757          131     5,035   
         4               -       -               -            -         5   
        75              22   1,390         (2,759)          664         -   
    53,955           1,352   2,188           3,297        1,795   145,732   
    49,520               -       -               -        1,191    81,443   
         -               -       -               -            -       350   
         -               -       -           5,479            -     5,479   
         -              11     627               -            -     2,563   
        51               3      34               -            -       207   
       646               -       -               -            -       664   
       234               -      16               -            -       435   
        40               2      39               -            -       250   
       764             203      71             472           36     5,076   
         -               -       -               -            -    38,009   
         -               -       4             105            1     1,623   
         -               -       -               -            -         -   
       631             548     898         (2,759)            -         -   
    51,886             767   1,689           3,297        1,228   136,099   
     2,069             585     499               -          567     9,633   
     2,069             562     499               -          567     7,729   
         -              23       -               -            -     1,904   
         -              23       -               -            -     1,632   
         -               -       -               -            -       272   
     2,069             585     499               -          567     9,633   

B4: Statement of financial position – segment information at 31 December 2013                                
                                                                                        Emerging             
                                                                                Notes    Markets   Nedbank   
Assets                                                                                                       
Goodwill and other intangible assets                                                         134       446   
Mandatory reserve deposits with central banks                                                  -       759   
Property, plant and equipment                                                                303       391   
Investment property                                                                        1,443        11   
Deferred tax assets                                                                          104        11   
Investments in associated undertakings and joint ventures                                     76        63   
Deferred acquisition costs                                                                   107         -   
Reinsurers’ share of policyholder liabilities                                                174        11   
Loans and advances                                                                           255    33,145   
Investments and securities                                                                28,592     5,387   
Current tax receivable                                                                        12        32   
Trade, other receivables and other assets                                                    713       585   
Derivative financial instruments                                                             349       791   
Cash and cash equivalents                                                                    702     1,196   
Non-current assets held for sale                                                               -         -   
Inter-segment assets                                                                         635        77   
Total assets                                                                              33,599    42,905   
Liabilities                                                                                                  
Life assurance policyholder liabilities                                                   28,043       852   
General insurance liabilities                                                                332         -   
Third-party interests in consolidated funds                                                    -         -   
Borrowed funds                                                                     E2        172     1,813   
Provisions                                                                                   133       (1)   
Deferred revenue                                                                              18         -   
Deferred tax liabilities                                                                     182        34   
Current tax payable                                                                          125        17   
Trade, other payables and other liabilities                                                1,947       873   
Amounts owed to bank depositors                                                              280    34,083   
Derivative financial instruments                                                             466       974   
Non-current liabilities held for sale                                                          -         -   
Inter-segment liabilities                                                                    197       567   
Total liabilities                                                                         31,895    39,212   
Net assets                                                                                 1,704     3,693   
Equity                                                                                                       
Equity attributable to equity holders of the parent                                        1,654     1,976   
Non-controlling interests                                                                     50     1,717   
Ordinary shares                                                                               50     1,452   
Preferred securities                                                                           -       265   
Total equity                                                                               1,704     3,693   

             Institutional                                           GBPm     
Old Mutual           Asset           Consolidation     Non-core             
    Wealth      Management   Other     adjustments   operations     Total   
     1,461             794       -               -            -     2,835   
         -               -       -               -            -       759   
        12              15       1               -            -       722   
         -               -       -             357            -     1,811   
        20             167       -               -            1       303   
         -              19      10               -            -       168   
     1,094              10       -               -            -     1,211   
     1,690               -       -               -            -     1,875   
       183               -       -               -            -    33,583   
    49,868              33     378           3,502          460    88,220   
        84               -       -               -            -       128   
       426             113      43             351          352     2,583   
         -               -      62              49            8     1,259   
       687             117     457           1,667           43     4,869   
         5               -       -               -            -         5   
        93              21     976         (2,083)          281         -   
    55,623           1,289   1,927           3,843        1,145   140,331   
    51,327               -       -               -          919    81,141   
         -               -       -               -            -       332   
         -               -       -           5,478            -     5,478   
         -               2     642               -            -     2,629   
        32               2      29               -            -       195   
       610               -       -               -            -       628   
       254               -      21               -            -       491   
        52               3      40               -            -       237   
       786             248      40             412            9     4,315   
         7               -       -               -            -    34,370   
         -               -       -              36            2     1,478   
         -               -       -               -            -         -   
       312             487     520         (2,083)            -         -   
    53,380             742   1,292           3,843          930   131,294   
     2,243             547     635               -          215     9,037   
     2,243             547     635               -          215     7,270   
         -               -       -               -            -     1,767   
         -               -       -               -            -     1,502   
         -               -       -               -            -       265   
     2,243             547     635               -          215     9,037   

C: Other key performance information
C1: Operating profit adjusting items

(a) Summary of adjusting items for determination of adjusted operating profit (AOP)
In determining the AOP 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 AOP to profit before and after tax.

                                                                                                                      GBPm   
                                                                                     Six months   Six months          Year   
                                                                                          ended        ended         ended   
                                                                                        30 June      30 June   31 December   
                                                                             Notes         2014         2013          2013   
(Expense)/income                                                                                                             
Goodwill impairment and impact of acquisition accounting                     C1(b)        (181)         (57)         (141)   
Loss on disposal of subsidiaries, associated undertakings and                                                                
strategic investments                                                        C1(c)         (10)          (1)           (4)   
Short-term fluctuations in investment return                                 C1(d)         (15)           16             6   
Investment return adjustment for Group equity and debt instruments held in                                                   
life funds                                                                   C1(e)            2         (33)         (100)   
Dividends declared to holders of perpetual preferred callable securities     C1(f)           16           22            42   
Institutional Asset Management equity plans                                  C1(g)          (9)         (17)          (38)   
Credit-related fair value (losses)/gains on Group debt instruments           C1(h)         (39)            1          (31)   
Restructuring costs                                                          C1(i)         (19)            -          (20)   
Total adjusting items                                                                     (255)         (69)         (286)   
Tax on adjusting items                                                       D1(d)           28           28            46   
Non-controlling interest in adjusting items                                                  12           13            20   
Total adjusting items after tax and non-controlling interests                             (215)         (28)         (220)   

(b) Goodwill impairment and impact of acquisition accounting
When applying acquisition accounting, deferred acquisition costs and deferred revenues existing at the point of acquisition are not recognised under
IFRS. These are reversed on acquisition in the 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 AOP, the Group recognises deferred revenue and acquisition costs and
deferred revenue in relation to policies sold by acquired businesses pre-acquisition. The Group excludes the impairment of goodwill and the
amortisation and impairment of acquired other intangibles and acquired PVIF and the movements in certain acquisition date provisions. Costs
incurred on successful acquisitions are also excluded from AOP. If the intangible assets recognised as a result of a business combination are
subsequently impaired, this is excluded from AOP. The effect of these adjustments to determine AOP are summarised below:

                                                                              GBPm   
                                                      Emerging   Old Mutual           
Six months ended 30 June 2014                          Markets       Wealth   Total   
Amortisation of acquired PVIF                                -         (37)    (37)   
Amortisation of acquired deferred costs and revenue          -            5       5   
Amortisation of other acquired intangible assets           (1)         (22)    (23)   
Change in acquisition date provisions                        -          (1)     (1)   
Impairment of goodwill and other intangible assets           -        (125)   (125)   
                                                           (1)        (180)   (181)   


Impairment of goodwill and other intangible assets of GBP125 million relates to the write down of goodwill and intangible assets as a result of the
prospective sales of Skandia Germany, Skandia Austria and Skandia Liechtenstein.

                                                                               GBPm   
                                                      Emerging   Old Mutual           
Six months ended 30 June 2013                          Markets       Wealth   Total   
Amortisation of acquired PVIF                                -         (38)    (38)   
Amortisation of acquired deferred costs and revenue          -            6       6   
Amortisation of other acquired intangible assets           (1)         (23)    (24)   
Impairment of goodwill and other intangible assets         (1)            -     (1)   
                                                           (2)         (55)    (57)   


                                                                               GBPm   
                                                      Emerging   Old Mutual           
Year ended 31 December 2013                            Markets       Wealth   Total   
Amortisation of acquired PVIF                                -         (76)    (76)   
Amortisation of acquired deferred costs and revenue          -           11      11   
Amortisation of other acquired intangible assets           (2)         (46)    (48)   
Impairment of goodwill and other intangible assets         (8)         (20)    (28)   
                                                          (10)        (131)   (141)   

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

                                                                                            GBPm   
                                                            Six months   Six months          Year   
                                                                 ended        ended         ended   
                                                               30 June      30 June   31 December   
                                                                  2014         2013          2013   
Emerging Markets                                                     4            -             -   
Old Mutual Wealth                                                 (15)            -             -   
Institutional Asset Management                                       1          (1)           (4)   
Loss on disposal of subsidiaries, associated undertakings                                           
and strategic investments                                         (10)          (1)           (4)   

Emerging Markets
On 30 April 2014, following the termination of the management agreement with SA Corporate Real Estate Fund, a JSE listed real estate trust, the
Group agreed to sell and transfer the business to the new manager once the transaction becomes unconditional. A profit of GBP4 million has been
recognised on this transaction.

Old Mutual Wealth
On 30 May 2014, the Group completed the disposal of Skandia Poland, part of Old Mutual Wealth. A loss on disposal of GBP15 million has been
recognised in the income statement.

Institutional Asset Management
The Group released a GBP1 million accrual relating to the disposal of Echo Point which was effective during the year ended 31 December 2013.
The Group had previously recognised a loss on disposal of GBP3 million.

On 2 January 2013, the Group completed the sale of five of its affiliates and recognised a loss of GBP1 million.

(d) Short-term fluctuations in investment return
Profit before tax, as disclosed in the consolidated IFRS income statement, includes actual investment returns earned on the shareholder assets of
the Group’s life assurance and general insurance businesses. AOP 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 is referred to as the short-term fluctuation
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 underlying rates are principally derived
with reference to 10-year government bond rates, cash and money market rates and an explicit equity risk premium for South African businesses.
The rates set out below reflect the apportionment of underlying investments in cash deposits, money market instruments and equity assets. Long-
term rates of return are reviewed frequently by the Board, usually annually, for appropriateness. The review of the long-term rates of return seeks to
ensure that the returns credited to AOP 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 Old Mutual
Wealth, the return is applied to average investible assets. 

                                                                %   
                             Six months   Six months          Year   
                                  ended        ended         ended   
                                30 June      30 June   31 December   
Long-term investment rates         2014         2013          2013   
Emerging Markets              7.4 - 8.0    7.4 - 8.0     7.4 - 8.0   
Old Mutual Wealth                   1.0          1.0           1.0   

Analysis of short-term fluctuations in investment return                                           
                                                                                            GBPm   
                                                           Emerging   Old Mutual                   
Six months ended 30 June 2014                               Markets       Wealth   Other   Total   
Actual shareholder investment return                             44            8      10      62   
Less: Long-term investment return                                61            3      13      77   
Short-term fluctuations in investment return                   (17)            5     (3)    (15)  
 
                                                                                            GBPm   
                                                           Emerging   Old Mutual                   
Six months ended 30 June 2013                               Markets       Wealth   Other   Total   
Actual shareholder investment return                            100           24      18     142   
Less: Long-term investment return                                72           29      25     126   
Short-term fluctuations in investment return                     28          (5)     (7)      16
   
                                                                                            GBPm   
                                                           Emerging   Old Mutual                   
Year ended 31 December 2013                                 Markets       Wealth   Other   Total   
Actual shareholder investment return                            160           22      34     216   
Less: Long-term investment return                               137           30      43     210   
Short-term fluctuations in investment return                     23          (8)     (9)       6   

(e) Investment return adjustment for Group equity and debt instruments held in policyholder funds
AOP 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 shares issued by Nedbank. These investment returns
are eliminated within the consolidated income statement in arriving at profit before tax in the IFRS income statement, but are included in AOP. This
ensures consistency of treatment with the measures in the related policyholder liability. During the six months ended 30 June 2014, the investment
return adjustment decreased AOP by GBP2 million (six months ended 30 June 2013: increase of GBP33 million; year ended 31 December 2013:
increase of GBP100 million).

(f) Dividends declared to holders of perpetual preferred callable securities
Dividends declared to the holders of the Group’s perpetual preferred callable securities on an AOP basis were GBP16 million for the six months
ended 30 June 2014 (six months ended 30 June 2013: GBP22 million; year ended 31 December 2013: GBP42 million). For the purpose of
determining AOP, these are recognised in finance costs on an accruals basis. In accordance with IFRS, the total cash distribution is recognised
directly in equity.

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

The Group has issued put options over the equity of certain affiliates to senior affiliate employees as part of its US affiliate incentive schemes. The
impact of revaluing these instruments is recognised in accordance with IFRS, but excluded from AOP. At 30 June 2014, these instruments were revalued,
the impact of which was a loss of GBP9 million (six months ended 30 June 2013: loss of GBP17 million; year ended 31 December 2013: loss of GBP38
million).

(h) Credit-related fair value (losses)/gains on Group debt instruments
The widening of the credit spread on the Group’s debt instruments causes the market value of these instruments to decrease, resulting in gains
being recognised in the consolidated income statement. Conversely, if the credit spread narrows the market value of debt instruments increases
causing losses to be recognised in the consolidated income statement. In the directors’ view, such movements are not reflective of the underlying
performance of the Group and will reverse over time. Therefore they have been excluded from AOP. For the six months ended 30 June 2014, due
to narrowing of credit spreads, a net loss of GBP39 million was recognised (six months ended 30 June 2013: net gain of GBP1 million; year ended
31 December 2013: net loss of GBP31 million).

(i) Old Mutual Wealth restructuring expenditure
The Old Mutual Wealth business embarked on a significant programme of operational change in 2013. This will fundamentally restructure the way
in which its UK platform business operates. Over the next two years, it will migrate certain elements of service provision to International Financial
Data Services (IFDS). Costs related to decommissioning of existing technology and service provision and the migration of service to IFDS are
excluded from AOP. These costs comprise payments to IFDS and directly attributable internal project costs and totalled GBP19 million for the six
months ended 30 June 2014 (six months ended 30 June 2013: GBPnil; year ended 31 December 2013: GBP20 million).

C2: Earnings and earnings per share

The Group calculates earnings per share (EPS) on a number of different bases as appropriate to prevailing international, UK and South African
practices and guidance. IFRS requires the calculation of basic and diluted EPS. Adjusted operating EPS reflects earnings per share that is
consistent with the Group’s alternative profit measure. JSE Limited (JSE) listing requirements also require the Group to calculate headline EPS. The
Group’s EPS on these different bases are summarised below:
                                                                                                                        Pence   
                                                                                        Six months   Six months          Year   
                                                                                             ended        ended         ended   
                                                                                           30 June      30 June   31 December   
                                                     Source of guidance         Notes         2014         2013          2013   
Basic earnings per share                             IFRS                       C2(a)          4.5          8.9          15.0   
Diluted basic earnings per share                     IFRS                       C2(b)          4.1          8.3          13.9   
Adjusted operating earnings per share                Group policy               C2(c)          8.8          9.3          18.4   
Headline earnings per share (Gross of tax)           JSE Listing Requirements   C2(d)          7.5          8.8          15.6   
Headline earnings per share (Net of tax)             JSE Listing Requirements   C2(d)          7.6          8.5          15.2   
Diluted headline earnings per share (Gross of tax)   JSE Listing Requirements   C2(d)          6.9          8.2          14.4   
Diluted headline earnings per share (Net of tax)     JSE Listing Requirements   C2(d)          7.0          7.9          14.1   

(a) Basic 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, Employee Share Ownership Plan Trusts
(ESOP), Black Economic Empowerment trusts and other related undertakings.

The table below reconciles the profit attributable to equity holders of the parent to profit attributable to ordinary equity holders:

                                                                                                                      GBPm   
                                                                                      Six months   Six months          Year   
                                                                                           ended        ended         ended   
                                                                                         30 June      30 June   31 December   
                                                                                            2014         2013          2013   
Profit for the financial period attributable to equity holders of the parent                                                  
from continuing operations                                                                   223          422           702   
(Loss)/profit for the financial period attributable to equity holders of the parent                                           
from discontinued operations                                                                (10)          (8)             3   
Profit for the financial period attributable to equity holders of the parent                 213          414           705   
Dividends paid to holders of perpetual preferred callable securities,                                                         
net of tax credits                                                                          (14)         (17)          (37)   
Profit attributable to ordinary equity holders                                               199          397           668   

Total dividends paid to holders of perpetual preferred callable securities of GBP14 million for the six months ended 30 June 2014 (six months ended
30 June 2013: GBP17 million; year ended 31 December 2013: GBP37 million) are stated net of tax credits of GBP3 million (six months ended 30
June 2013: GBP5 million; year ended 31 December 2013: GBP10 million).

The table below summarises the calculation of the weighted average number of ordinary shares for the purposes of calculating basic earnings per
share:
                                                                                                         Millions   
                                                                             Six months   Six months          Year   
                                                                                  ended        ended         ended   
                                                                                30 June      30 June   31 December   
                                                                     Notes         2014         2013          2013   
Weighted average number of ordinary shares in issue                               4,897        4,894         4,897   
Shares held in charitable foundations                                               (6)          (6)           (6)   
Shares held in ESOP trusts                                                         (51)         (53)          (55)   
Adjusted weighted average number of ordinary shares                  C2(c)        4,840        4,835         4,836   
Shares held in life funds                                                         (141)        (160)         (155)   
Shares held in Black Economic Empowerment trusts                                  (237)        (239)         (239)   
Weighted average number of ordinary shares used to calculate basic                                                   
earnings per share                                                                4,462        4,436         4,442   
Basic earnings per ordinary share (pence)                                           4.5          8.9          15.0   

(b) Diluted basic earnings per share
Diluted basic EPS recognises the dilutive impact of share options held in ESOP trusts and Black Economic Empowerment trusts, to the extent they
have value, in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period.

The tables below reconcile the profit attributable to ordinary equity holders to diluted profit attributable to ordinary equity holders and summarises
the calculation of weighted average number of shares for the purpose of calculating diluted basic earnings per share:

                                                                                            Six months   Six months          Year   
                                                                                                 ended        ended         ended   
                                                                                               30 June      30 June   31 December   
                                                                                    Notes         2014         2013          2013   
Profit attributable to ordinary equity holders (GBPm)                                              199          397           668   
Dilution effect on profit relating to share options issued by subsidiaries (GBPm)                  (4)          (4)          (10)   
Diluted profit attributable to ordinary equity holders (GBPm)                                      195          393           658   
Weighted average number of ordinary shares (millions)                               C2(a)        4,462        4,436         4,442   
Adjustments for share options held by ESOP trusts (millions)                                        59           46            45   
Adjustments for shares held in Black Economic Empowerment trusts (millions)                        237          239           239   
Weighted average number of ordinary shares used to calculate                                                                        
diluted basic earnings per share (millions)                                                      4,758        4,721         4,726   
Diluted basic earnings per ordinary share (pence)                                                  4.1          8.3          13.9   

(c) Adjusted operating earnings per share
The following table presents a reconciliation of profit for the financial year to adjusted operating profit after tax attributable to ordinary equity holders
and summarises the calculation of adjusted operating earnings per share:
                                                                                       Six months   Six months          Year   
                                                                                            ended        ended         ended   
                                                                                          30 June      30 June   31 December   
                                                                               Notes         2014         2013          2013   
Profit for the financial period attributable to equity holders of the parent                  213          414           705   
Adjusting items                                                                               255           69           286   
Tax on adjusting items                                                                       (28)         (28)          (46)   
Non-core operations                                                                          (14)          (2)          (32)   
Profit from discontinued operations                                                            10            8           (3)   
Non-controlling interest on adjusting items                                                  (12)         (13)          (20)   
Adjusted operating profit after tax attributable to ordinary equity                                                            
holders (GBPm)                                                                                424          448           890   
Adjusted weighted average number of ordinary shares used to                                                                    
calculate adjusted operating earnings per share (millions)                     C2(a)        4,840        4,835         4,836   
Adjusted operating earnings per share (pence)                                                 8.8          9.3          18.4   

(d) Headline earnings per share
The Group is required to calculate headline earnings per share (HEPS) in accordance with the JSE Limited (JSE) Listing Requirements, determined
by reference to the South African Institute of Chartered Accountants' circular 02/2013 (Revised) 'Headline Earnings'. The table below sets out a
reconciliation of basic EPS and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used
measure of earnings in South Africa. The table below reconciles the profit for the financial year attributable to equity holders of the parent to
headline earnings and summarises the calculation of basic HEPS:
                                                                                                             GBPm
                                                              Six months ended  Six months ended        Year ended
                                                                  30 June 2014     30 June 2013   31 December 2013

                                                            Notes   Gross     Net   Gross     Net    Gross     Net   
Profit for the financial period attributable to equity                                                              
holders of the parent                                                 213     213     414     414      705     705   
Dividends paid to holders of perpetual preferred callable                                                           
securities                                                           (14)    (14)    (17)    (17)     (37)    (37)   
Profit attributable to ordinary equity holders                        199     199     397     397      668     668   
Adjustments:                                                                                                        
Impairments of goodwill and intangible assets                         125     125       1       1       28      28   
Loss/(profit) on disposal of subsidiaries, associated                                                               
undertakings and strategic investments                                 10      15       1    (14)        4    (12)   
Realised gains (net of impairments) on available-for-sale                                                           
financial assets                                                        -       -     (8)     (8)      (8)     (8)   
Headline earnings                                                     334     339     391     376      692     676   
Dilution effect on earnings relating to share options                                                               
issued by subsidiaries (GBPm)                                         (4)     (4)     (4)     (4)     (10)    (10)   
Diluted headline earnings                                             330     335     387     372      682     666   
Weighted average number of ordinary                                                                                 
shares (millions)                                           C2(a)   4,462   4,462   4,436   4,436    4,442   4,442   
Diluted weighted average number of ordinary                                                                          
shares (millions)                                           C2(b)   4,758   4,758   4,721   4,721    4,726   4,726   
Headline earnings per share (pence)                                   7.5     7.6     8.8     8.5     15.6    15.2   
Diluted headline earnings per share (pence)                           6.9     7.0     8.2     7.9     14.4    14.1   

C3: Dividends                                                                                                  
                                                                                                        GBPm   
                                                                       Six months   Six months          Year   
                                                                            ended        ended         ended   
                                                                          30 June      30 June   31 December   
                                                                             2014         2013          2013   
2012 Final dividend paid – 5.25p per 11 3/7p share                              -          238           238   
2013 Interim dividend paid – 2.10p per 11 3/7p share                            -            -            98   
2013 Final dividend paid – 6.00p per 11 3/7p share                            279            -             -   
Dividends to ordinary equity holders                                          279          238           336   
Dividends paid to holders of perpetual preferred callable securities           17           22            47   
Dividend payments for the period                                              296          260           383   

Final and interim dividends paid to ordinary equity holders are calculated using the number of shares in issue at the record date less own shares
held in ESOP trusts, life funds of Group entities, 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.

An interim dividend of 2.45 pence (or its equivalent in other applicable currencies) per ordinary share in the Company has been recommended by
the directors in relation to the year ending 31 December 2014. The interim dividend will be paid on 31 October 2014 to shareholders on the register
at the close of business on 17 September 2014 for the Malawi register, 18 September 2014 for the South African register, 19 September for the
Zimbabwe and Namibian registers and 23 September 2014 for the UK register. The Company is not offering a scrip dividend alternative.

In March 2014, GBP17 million was declared and paid to holders of perpetual preferred callable securities (March 2013: GBP22 million, November
2013: GBP25 million). 

D: Other income statement notes
D1: Income tax expense

(a) Analysis of total income tax expense                                                        
                                                                                         GBPm   
                                                        Six months   Six months          Year   
                                                             ended        ended         ended   
                                                           30 June      30 June   31 December   
                                                              2014         2013          2013   
Current tax                                                                                     
United Kingdom                                                   7            9           (3)   
Overseas tax                                                                                    
- Africa                                                       180          198           407   
- Europe                                                         4           10            19   
- Rest of the world                                              -            -             7   
Withholding taxes                                                4            -            16   
Adjustments to current tax in respect of prior years             4         (19)          (25)   
Total current tax                                              199          198           421   
Deferred tax                                                                                    
Origination and reversal of temporary differences               17           40           142   
Effect on deferred tax of changes in tax rates                   -            -          (15)   
Recognition of deferred tax assets                               -            -             1   
Adjustments to deferred tax in respect of prior years            2           12             3   
Total deferred tax                                              19           52           131   
Total income tax expense                                       218          250           552   

(b) Reconciliation of total income tax expense                                               
                                                                                      GBPm   
                                                     Six months   Six months          Year   
                                                          ended        ended         ended   
                                                        30 June      30 June   31 December   
                                                           2014         2013          2013   
Profit before tax                                           564          805         1,532   
Tax at UK standard rate of 21.5% (2013: 23.25%)             121          187           356   
Different tax rate or basis on overseas operations           41           33            57   
Untaxed and low taxed income                               (29)         (31)          (76)   
Disallowable expenses                                        38          (4)            35   
Net movement on deferred tax assets not recognised           13           13            31   
Effect on deferred tax of changes in tax rates                -            -          (15)   
Withholding taxes                                             2            -            10   
Income tax attributable to policyholder returns              35           49           133   
Tax on Group equity held in life funds                        -            -            21   
Other                                                       (3)            3             -   
Total income tax expense                                    218          250           552   

(c) Income tax relating to components of other comprehensive income                                                        
                                                                                                                    GBPm   
                                                                                   Six months   Six months          Year   
                                                                                        ended        ended         ended   
                                                                                      30 June      30 June   31 December   
                                                                                         2014         2013          2013   
Preferred perpetual callable securities                                                   (3)          (5)          (10)   
Measurement gains on defined benefit plans                                                  -            1            22   
Income tax on items that will not be reclassified subsequently to profit or loss          (3)          (4)            12   
Income tax on items that may be reclassified subsequently to profit or loss                 3          (1)           (2)   
Income tax (credit)/expense – continuing operations                                         -          (5)            10   
Income tax (credit)/expense relating to components of other comprehensive                                                  
income                                                                                      -          (5)            10   

(d) Reconciliation of income tax expense in the IFRS income statement to income tax on adjusted operating profit 

                                                                                                                   GBPm   
                                                                                  Six months   Six months          Year   
                                                                                       ended        ended         ended   
                                                                                     30 June      30 June   31 December   
                                                                                        2014         2013          2013   
Income tax expense                                                                       218          250           552   
Tax on adjusting items                                                                                                    
Goodwill impairment and impact of acquisition accounting                                  26            6            26   
(Loss)/profit on disposal of subsidiaries, associates and strategic investments          (5)           15            16   
Short-term fluctuations in investment return                                               2            3           (2)   
Tax on dividends declared to holders of perpetual preferred callable securities                                           
recognised in equity                                                                     (3)          (5)          (10)   
Institutional Asset Management equity plans                                                3            9            11   
Restructuring costs                                                                        5            -             5   
Total tax on adjusting items                                                              28           28            46   
Income tax attributable to policyholders returns                                        (44)         (71)         (174)   
Income tax on adjusted operating profit                                                  202          207           424   

E: Financial assets and liabilities
E1: Group statement of financial position

The Group is exposed to financial risk through its financial assets (investments and loans), financial liabilities (investment contracts, customer
deposits and borrowings), reinsurance assets and insurance liabilities. The key focus of financial risk management for the Group is ensuring that
the proceeds from its financial assets are sufficient to fund the obligations arising from its insurance and banking operations. The most important
components of financial risk are credit risk, market risk (arising from changes in equity, and bond prices, interest and foreign exchange rates), and
liquidity risk.

(a) Categories of financial instruments
The analysis of assets and liabilities into their categories as defined in IAS 39 'Financial Instruments: Recognition and Measurement’ is set out in
the following table. Assets and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of
IAS 39, are reflected in the non-financial assets and liabilities category.

30 June 2014                                                                                                                        GBPm
Measurement basis                                        Fair value                           Amortised cost
                                                                                                                                    Non-   
                                                                      Available-                                 Financial     financial   
                                                                        for-sale      Held-to-                 liabilities        assets   
                                             Held-for-                 financial      maturity     Loans and     amortised           and   
                                     Total     trading   Designated       assets   investments   receivables          cost   liabilities   
Assets                                                                                                                                     
Mandatory reserve deposits with                                                                                                            
central banks                          767           -            -            -             -           767             -             -   
liabilities                          1,987           -        1,765            -             -            17             -           205   
Loans and advances                  33,727       2,476        3,377            3             -        27,871             -             -   
Investments and securities          86,198         996       83,318          678         1,116            90             -             -   
other assets                         2,780         129          325            -             -         1,753             -           573   
Derivative financial instruments     1,104       1,104            -            -             -             -             -             -   
Cash and cash equivalents            4,289           -            -            -             -         4,289             -             -   
instruments                        130,852       4,705       88,785          681         1,116        34,787             -           778   
Total non-financial assets          10,939           -            -            -             -             -             -        10,939   
Total assets                       141,791       4,705       88,785          681         1,116        34,787             -        11,717   
Liabilities                                                                                                                                
liabilities                         78,092           -       60,412            -             -             -             -        17,680   
consolidation of funds               6,456           -        6,456            -             -             -             -             -   
Borrowed funds                       2,752           -          686            -             -             -         2,066             -   
other liabilities                    4,099         199          272            -             -             -         2,566         1,062   
Amounts owed to bank depositors     34,540       3,724        3,463            -             -             -        27,353             -   
Derivative financial instruments     1,174       1,174            -            -             -             -             -             -   
financial instruments              127,113       5,097       71,289            -             -             -        31,985        18,742   
Total non-financial liabilities      5,807           -            -            -             -             -             -         5,807   
Total liabilities                  132,920       5,097       71,289            -             -             -        31,985        24,549   

30 June 2013                                                                                                                           GBPm
Measurement basis                                           Fair value                           Amortised cost

                                                                         Available-                                 Financial          Non-   
                                                                           for-sale      Held-to-                 liabilities     financial   
                                                Held-for-                 financial      maturity     Loans and     amortised    assets and   
                                        Total     trading   Designated       assets   investments   receivables          cost   liabilities   
Assets                                                                                                                                        
Mandatory reserve deposits with                                                                                                               
central banks                             760           -            -            -             -           760             -             -   
Reinsurers’ share of policyholder                                                                                                             
liabilities                             1,629           -        1,386            -             -            19             -           224   
Loans and advances                     37,418       2,467        3,778            2             -        31,171             -             -   
Investments and securities             88,915       1,237       84,937          811         1,550           380             -             -   
Trade, other receivables and                                                                                                                  
other assets                            2,955         176          393            -             -         1,882             -           504   
Derivative financial instruments        1,417       1,417            -            -             -             -             -             -   
Cash and cash equivalents               5,035           -            -            -             -         5,035             -             -   
Total assets that include financial                                                                                                           
instruments                           138,129       5,297       90,494          813         1,550        39,247             -           728   
Total non-financial assets              7,603           -            -            -             -             -             -         7,603   
Total assets                          145,732       5,297       90,494          813         1,550        39,247             -         8,331   
Liabilities                                                                                                                                   
Life assurance policyholder                                                                                                                   
liabilities                            81,443           -       61,876            -             -           209             -        19,358   
Third-party interest in                                                                                                                       
consolidation of funds                  5,479           -        5,479            -             -             -             -             -   
Borrowed funds                          2,563           -          880            -             -             -         1,683             -   
Trade, other payables and                                                                                                                     
other liabilities                       5,076         416          472            -             -           211         2,778         1,199   
Amounts owed to bank depositors        38,009       3,661        5,032            -             -             -        29,316             -   
Derivative financial instruments        1,623       1,623            -            -             -             -             -             -   
financial instruments                 134,193       5,700       73,739            -             -           420        33,777        20,557   
Total non-financial liabilities         1,906           -            -            -             -             -             -         1,906   
Total liabilities                     136,099       5,700       73,739            -             -           420        33,777        22,463   

31 December 2013                                                                                                                       GBPm
Measurement basis                                           Fair value                           Amortised cost

                                                                         Available-                                 Financial          Non-   
                                                                           for-sale      Held-to-                 liabilities     financial   
                                                Held-for-                 financial      maturity     Loans and     amortised    assets and   
                                        Total     trading   Designated       assets   investments   receivables          cost   liabilities   
Assets                                                                                                                                        
Mandatory reserve deposits with                                                                                                               
central banks                             759           -            -            -             -           759             -             -   
Reinsurers’ share of policyholder                                                                                                             
liabilities                             1,875           -        1,624            -             -            16             -           235   
Loans and advances                     33,583       2,147        3,668            4             -        27,764             -             -   
Investments and securities             88,220         971       84,873          807         1,461           108             -             -   
Trade, other receivables and                                                                                                                  
other assets                            2,583         193          347            -             -         1,447             -           596   
Derivative financial instruments        1,259       1,259            -            -             -             -             -             -   
Cash and cash equivalents               4,869           -            -            -             -         4,869             -             -   
Total assets that include financial                                                                                                           
instruments                           133,148       4,570       90,512          811         1,461        34,963             -           831   
Total non-financial assets              7,183           -            -            -             -             -             -         7,183   
Total assets                          140,331       4,570       90,512          811         1,461        34,963             -         8,014   
Liabilities                                                                                                                                   
Life assurance policyholder                                                                                                                   
liabilities                            81,141           -       63,187            -             -             -             -        17,954   
Third-party interest in                                                                                                                       
consolidation of funds                  5,478           -        5,478            -             -             -             -             -   
Borrowed funds                          2,629           -          747            -             -             -         1,882             -   
Trade, other payables and                                                                                                                     
other liabilities                       4,315         263          294            -             -             -         2,413         1,345   
Amounts owed to bank depositors        34,370       3,303        5,179            -             -             -        25,888             -   
Derivative financial instruments        1,478       1,478            -            -             -             -             -             -   
financial instruments                 129,411       5,044       74,885            -             -             -        30,183        19,299   
Total non-financial liabilities         1,883           -            -            -             -             -             -         1,883   
Total liabilities                     131,294       5,044       74,885            -             -             -        30,183        21,182   

(b) Fair value hierarchy
The table below presents the Group’s financial assets and liabilities that are measured at fair value in the consolidated statement of financial
position according to their IAS 39 classification, as set out in note E1(a), and in terms of the fair value hierarchy as required by IFRS 7 'Financial
Instruments: Disclosures’.

The table below analyses the financial assets and liabilities according to fair value hierarchy:

                                                                                                  GBPm   
30 June 2014                                                       Total   Level 1   Level 2   Level 3   
Financial assets measured at fair value                                                                  
Held-for-trading (fair value through profit or loss)               4,705       329     4,368         8   
Loans and advances                                                 2,476         -     2,476         -   
Investments and securities                                           996       196       799         1   
Other financial assets                                               129       129         -         -   
Derivative financial instruments – assets                          1,104         4     1,093         7   
Designated (fair value through profit or loss)                    88,785    74,992    12,174     1,619   
Reinsurers’ share of policyholder liabilities                      1,765     1,765         -         -   
Loans and advances                                                 3,377         1     3,374         2   
Investments and securities                                        83,318    72,901     8,800     1,617   
Other financial assets                                               325       325         -         -   
Available-for-sale financial assets (fair value through equity)      681       195       485         1   
Loans and advances                                                     3         3         -         -   
Investments and securities                                           678       192       485         1   
Total assets measured at fair value                               94,171    75,516    17,027     1,628   
Financial liabilities measured at fair value                                                             
Held-for-trading (fair value through profit or loss)               5,097       196     4,901         -   
Other liabilities                                                    199       190         9         -   
Amounts owed to bank depositors                                    3,724         -     3,724         -   
Derivative financial instruments – liabilities                     1,174         6     1,168         -   
Designated (fair value through profit or loss)                    71,289    46,733    23,752       804   
Life assurance policyholder liabilities                           60,412    46,079    13,529       804   
Third-party interests in consolidated funds                        6,456         -     6,456         -   
Borrowed funds                                                       686       606        80         -   
Other liabilities                                                    272        48       224         -   
Amounts owed to bank depositors                                    3,463         -     3,463         -   
Total liabilities measured at fair value                          76,386    46,929    28,653       804   

                                                                                                  GBPm   
30 June 2013                                                       Total   Level 1   Level 2   Level 3   
Financial assets measured at fair value                                                                  
Held-for-trading (fair value through profit or loss)               5,297       474     4,811        12   
Loans and advances                                                 2,467         -     2,467         -   
Investments and securities                                         1,237       294       936         7   
Other financial assets                                               176       176         -         -   
Derivative financial instruments – assets                          1,417         4     1,408         5   
Designated (fair value through profit or loss)                    90,494    72,482    16,788     1,224   
Reinsurers’ share of policyholder liabilities                      1,386     1,386         -         -   
Loans and advances                                                 3,778         2     3,772         4   
Investments and securities                                        84,937    70,703    13,014     1,220   
Other financial assets                                               393       391         2         -   
Available-for-sale financial assets (fair value through equity)      813       371       439         3   
Loans and advances                                                     2         2         -         -   
Investments and securities                                           811       369       439         3   
Total assets measured at fair value                               96,604    73,327    22,038     1,239   
Financial liabilities measured at fair value                                                             
Held-for-trading (fair value through profit or loss)               5,700       412     5,288         -   
Other liabilities                                                    416       408         8         -   
Amounts owed to bank depositors                                    3,661         -     3,661         -   
Derivative financial instruments – liabilities                     1,623         4     1,619         -   
Designated (fair value through profit or loss)                    73,739    44,675    28,529       535   
Life assurance policyholder liabilities                           61,876    43,806    17,535       535   
Third-party interests in consolidated funds                        5,479         -     5,479         -   
Borrowed funds                                                       880       865        15         -   
Other liabilities                                                    472         4       468         -   
Amounts owed to bank depositors                                    5,032         -     5,032         -   
Total liabilities measured at fair value                          79,439    45,087    33,817       535   

                                                                                                 GBPm   
31 December 2013                                                   Total   Level 1   Level 2   Level 3   
Financial assets measured at fair value                                                                  
Held-for-trading (fair value through profit or loss)               4,570       493     4,066        11   
Loans and advances                                                 2,147         -     2,147         -   
Investments and securities                                           971       295       673         3   
Other financial assets                                               193       193         -         -   
Derivative financial instruments – assets                          1,259         5     1,246         8   
Designated (fair value through profit or loss)                    90,512    76,822    11,980     1,710   
Reinsurers’ share of policyholder liabilities                      1,624     1,624         -         -   
Loans and advances                                                 3,668         1     3,665         2   
Investments and securities                                        84,873    74,850     8,315     1,708   
Other financial assets                                               347       347         -         -   
Available-for-sale financial assets (fair value through equity)      811       348       461         2   
Loans and advances                                                     4         4         -         -   
Investments and securities                                           807       344       461         2   
Total assets measured at fair value                               95,893    77,663    16,507     1,723   
Financial liabilities measured at fair value                                                             
Held-for-trading (fair value through profit or loss)               5,044       265     4,779         -   
Other liabilities                                                    263       256         7         -   
Amounts owed to bank depositors                                    3,303         -     3,303         -   
Derivative financial instruments – liabilities                     1,478         9     1,469         -   
Designated (fair value through profit or loss)                    74,885    48,237    25,716       932   
Life assurance policyholder liabilities                           63,187    47,538    14,717       932   
Third-party interests in consolidated funds                        5,478         -     5,478         -   
Borrowed funds                                                       747       663        84         -   
Other liabilities                                                    294        36       258         -   
Amounts owed to bank depositors                                    5,179         -     5,179         -   
Total liabilities measured at fair value                          79,929    48,502    30,495       932   

(c) Determination of fair value
The best evidence of fair value is a quoted price in an active market. In the event that the market for a financial asset or liability is not active, or
quoted prices cannot be obtained without undue effort, another valuation technique is used.

The judgement as to whether a market is active may include, for example, consideration of factors such as the magnitude and frequency of trading
activity, the availability of prices and the size of bid/offer spreads. In inactive markets, obtaining assurance that the transaction price provides
evidence of fair value or determining the adjustments to transaction prices that are necessary to measure the fair value of the asset or liability
requires additional work during the valuation process.

The majority of valuation techniques employ only observable data and so the reliability of the fair value measurement is high. However, certain
financial assets and liabilities are valued on the basis of valuation techniques that feature one or more significant inputs that are unobservable and,
for them, the derivation of fair value is more judgemental. A financial asset or liability in its entirety is classified as valued using significant
unobservable inputs if a significant proportion of that asset or liability’s carrying amount is driven by unobservable inputs.

In this context, 'unobservable’ means that there is little or no current market data available for which to determine the price at which an arm’s length
transaction would be likely to occur. It generally does not mean that there is no market data available at all upon which to base a determination of
fair value. Furthermore, in some cases the majority of the fair value derived from a valuation technique with significant unobservable data may be
attributable to observable inputs. Consequently, the effect of uncertainty in determining unobservable inputs will generally be restricted to
uncertainty about the overall fair value of the asset or liability being measured. Details of the Group’s valuation techniques can be found in note
E1(q) (iii) of the 2013 Annual Report. There have been no significant changes to the valuation techniques applied.
                                         

(d) Movements in financial instruments measured at Level 3 in terms of the hierarchy
The fair values of Level 3 financial instruments are based on valuation techniques that rely largely on unobservable market inputs and require a
significant level of judgement. As such, the fair values of Level 3 financial instruments are often less reliable than Level 1 and Level 2 financial
instruments. Movements in the fair values of Level 3 instruments are generally due to movements in key assumptions and macroeconomic factors.

The tables below reconcile the opening balances of financial assets and liabilities measured in terms of Level 3 fair value to closing balances at the
end of the period:
                                                                                                                        GBPm   
                                                                         Designated       Designated                            
                                                                         fair value       fair value                            
                                         Held-for-                   through profit   through profit   Available-for-           
                                         trading -           Held-       or loss  -       or loss  -           sale -           
                                       Investments   for-trading -        Loans and      Investments      Investments           
Six months ended 30 June 2014       and securities     Derivatives         advances   and securities   and securities   Total   
Level 3 financial assets                                                                                                        
At beginning of the year                         3               8                2            1,708                2   1,723   
the profit or loss for the period              (1)             (1)                -               20                -      18   
Purchases and issues                             -               -                -               73                -      73   
Sales and settlements                            -               -                -            (188)              (1)   (189)   
Transfers in                                     -               -                -               57                -      57   
Transfers out                                    -               -                -             (16)                -    (16)   
Foreign exchange and other                     (1)               -                -             (37)                -    (38)   
Total level 3 financial assets                   1               7                2            1,617                1   1,628   
30 June 2014 recognised in:                                                                                                     
- profit or loss                                 -               -                -                9                -       9   

                                                                                   GBPm   
                                                                Designated fair           
                                                                  value through           
                                                              profit  or loss -           
                                                                 Life assurance           
                                                                   policyholder           
                                                                    liabilities           
                                                                    (investment           
Six months ended 30 June 2014                                        contracts)   Total   
Level 3 financial liabilities                                                             
At beginning of the year                                                    932     932   
Total net gains recognised in profit or loss for the period                (49)    (49)   
Purchases and issues                                                          1       1   
Sales and settlements                                                     (126)   (126)   
Transfers in                                                                 50      50   
Transfers out                                                                 -       -   
Foreign exchange and other                                                  (4)     (4)   
Total level 3 financial liabilities                                         804     804   
- profit or loss                                                           (49)    (49)   

                                                                                                                                     GBPm   
                                                                              Designated fair     Designated fair                            
                                                                                value through       value through   Available-for-           
                                         Held-for-trading           Held-   profit or loss  -   profit or loss  -           sale -           
                                            - Investments   for-trading -           Loans and         Investments      Investments           
Six months ended 30 June 2013              and securities     Derivatives            advances      and securities   and securities   Total   
Level 3 financial assets                                                                                                                     
At beginning of the year                                4               -                   9               1,051                2   1,066   
Total net gains/(losses) recognised in                                                                                                       
the profit or loss for the period                       4               -                 (5)                  54                -      53   
Total gains recognised in other                                                                                                              
comprehensive income                                    -               -                   -                   1                -       1   
Purchases and issues                                    -               5                   -                  24                -      29   
Sales and settlements                                 (1)               -                   -                (21)                -    (22)   
Transfers in                                            -               -                   -                 151                1     152   
Transfers out                                           -               -                   -                   -                -       -   
Foreign exchange and other                              -               -                   -                (40)                -    (40)   
Total level 3 financial assets                          7               5                   4               1,220                3   1,239   
Gains relating to assets held at                                                                                                             
30 June 2013 recognised in:                                                                                                                  
- profit or loss                                        -               -                   -                  52                -      52   

                                                                                   GBPm   
                                                                 Designated fair           
                                                                   value through           
                                                               profit  or loss -           
                                                                  Life assurance           
                                                                    policyholder           
                                                                     liabilities           
                                                                     (investment           
Six months ended 30 June 2013                                         contracts)   Total   
Level 3 financial liabilities                                                              
At beginning of the year                                                     480     480   
Total net losses recognised in profit or loss for the period                  72      72   
Purchases and issues                                                           1       1   
Sales and settlements                                                      (104)   (104)   
Transfers in                                                                  77      77   
Foreign exchange and other                                                     9       9   
Total level 3 financial liabilities                                          535     535   
Losses relating to liabilities held at                                                     
30 June 2013 recognised in:                                                                
- profit or loss                                                              74      74   

                                                                                                                                     GBPm   
                                                                              Designated fair     Designated fair                            
                                                                                value through       value through   Available-for-           
                                         Held-for-trading           Held-   profit or loss  -   profit or loss  -           sale -           
                                            - Investments   for-trading -           Loans and         Investments      Investments           
Year ended 31 December 2013                and securities     Derivatives            advances      and securities   and securities   Total   
Level 3 financial assets                                                                                                                     
At beginning of the year                                4               -                   9               1,122                2   1,137   
Total net gains/(losses) recognised in                                                                                                       
the profit or loss for the period                       1               -                   -                  65                -      66   
Purchases and issues                                    -               9                   -                 290                -     299   
Sales and settlements                                 (1)               -                 (6)                (77)                -    (84)   
Transfers in                                            -               -                   -                 464                -     464   
Transfers out                                           -               -                   -                (21)                -    (21)   
Foreign exchange and other                            (1)             (1)                 (1)               (135)                -   (138)   
Total level 3 financial assets                          3               8                   2               1,708                2   1,723   
Gains relating to assets held at                                                                                                             
31 December 2013 recognised in:                                                                                                              
- profit or loss                                        -               -                   -                  55                -      55   
                                                                                  GBPm   
                                                                Designated fair           
                                                                  value through           
                                                              profit  or loss -           
                                                                 Life assurance           
                                                                   policyholder           
                                                                    liabilities           
                                                                    (investment           
Year ended 31 December 2013                                          contracts)   Total   
Level 3 financial liabilities                                                             
At beginning of the year                                                    480     480   
Total net gains recognised in profit or loss for the period                 (8)     (8)   
Purchases and issues                                                        106     106   
Sales and settlements                                                     (114)   (114)   
Transfers in                                                                464     464   
Transfers out                                                                 -       -   
Foreign exchange and other                                                    4       4   
Total level 3 financial liabilities                                         932     932   
Losses relating to liabilities held at                                                    
30 June 2013 recognised in:                                                               
- profit or loss                                                           (12)    (12)   

(e) Effect of changes in significant unobservable assumptions to reasonable possible alternatives
Favourable and unfavourable changes are determined on the basis of changes in the value of the financial asset or liability as a result of varying the
levels of the unobservable parameter using statistical techniques. When parameters are not amenable to statistical analysis, quantification of
uncertainty is judgemental.

When the fair value of a financial asset or liability is affected by more than one unobservable assumption, the figures shown reflect the most
favourable or most unfavourable change from varying the assumptions individually.

In respect of private equity investments which are included as investment securities, the valuations are assessed on an asset-by-asset basis using
a valuation methodology appropriate to the specific investment, in line with industry guidelines. In many of the methodologies, the principal
assumption is the valuation multiple to be applied to the main financial indicators including, for example, multiples for comparable listed companies
and discounts for marketability.

For asset-backed securities whose prices are unobservable, models are used to generate the expected value of the asset, incorporating benchmark
information on factors such as prepayment patterns, default rates, loss severities and the historical performance of the underlying assets. The
models used are calibrated by using securities for which external market information is available.

For structured notes and other derivatives, principal assumptions concern the future volatility of asset values and the future correlation between
asset values. These principle assumptions include credit volatilities and correlations used in the valuation of the structured credit derivatives. For
such unobservable assumptions, estimates are based on available market data, which may include the use of a proxy method to derive a volatility
or correlation from comparable assets for which market data is more readily available, and examination of historical levels.

(f) Alternative assumptions
Accounting standards require consideration of the effect of reasonable possible alternative assumptions on the fair value of Level 3 financial assets
and liabilities.

Alternative assumptions are assessed in terms of possible favourable and unfavourable changes in the key market inputs for the major types of
Level 3 financial assets and liabilities, ranging from, for example, a 10% change in the price earnings multiple for equity securities, to a 25% change
in the discount rates applied to debt securities and volatility assumptions in derivative contracts. Changes in business risk inputs such as lapses and
non-performance risk were also considered.

The table below shows the income statement effect of reasonable possible alternative assumptions on the fair value of Level 3 financial assets and
liabilities: 
                                                                                                                           GBPm
                                                    30 June 2014               30 June 2013              31 December 2013
                                                Favourable  Unfavourable   Favourable   Unfavourable   Favourable   Unfavourable
Reflected in profit or loss                        changes       changes      changes        changes      changes        changes

Level 3 financial assets
Designated (fair value through profit or loss)        210            199          123            120          218            198
 Loans and advances                                     -              -            1              1            -              -
 Investments and securities                           203            199          122            119          212            198
 Derivative financial instruments                       7              -            -              -            6              -

Total Level 3 financial assets                        210            199          123            120          218            198
Level 3 financial liabilities
Designated (fair value through profit or loss)         70             84           20             48           85             74
 Life assurance policyholder liabilities
   (investment contracts)                              70             84           20             48           85             74

Total Level 3 financial liabilities                    70             84           20             48           85             74

The impact of reasonable possible alternative assumptions on other comprehensive income was GBPnil in all periods.

E2: Borrowed funds                                                                                              
                                                                                                         GBPm   
                                                    Group             30 June       Group             30 June   
                                                excluding                2014   excluding                2013   
                                        Notes     Nedbank   Nedbank     Group     Nedbank   Nedbank     Group   
Senior debt securities and term loans                 113     1,240     1,353         123       994     1,117   
Floating rate notes                     E2(a)           -       708       708           -       525       525   
Fixed rate notes                        E2(b)         113       532       645         123       469       592   
Mortgage-backed securities              E2(d)           -        57        57           -       114       114   
Subordinated debt securities            E2(e)         740       602     1,342         714       618     1,332   
Borrowed funds                                        853     1,899     2,752         837     1,726     2,563   
Other instruments treated as equity                                                                             
for accounting purposes                                                                                         
€374 million perpetual preferred                                                                                
callable securities at 5.00%                          253                             334                       
GBP273 million perpetual preferred                                                                              
callable securities as 6.40%                          273                             348                       
Total: Book value                                   1,379                           1,519                       
Nominal value of the above                          1,350                           1,594                       

                                                                             GBPm   
                                                    Group             31 December   
                                                excluding                    2013   
                                                  Nedbank   Nedbank         Group   
Senior debt securities and term loans                 113     1,151         1,264   
Floating rate notes                     E2(a)           -       673           673   
Fixed rate notes                        E2(b)         113       478           591   
Mortgage-backed securities              E2(d)           -        65            65   
Subordinated debt securities            E2(e)         703       597         1,300   
Borrowed funds                                        816     1,813         2,629   
Other Group instruments treated as                                                  
equity for accounting purposes                                                      
€374 million perpetual preferred                                                    
callable securities at 5.00%                          253                           
GBP273 million perpetual preferred                                                  
callable securities as 6.40%                          273                           
Total: Book value                                   1,342                           
Nominal value of the above                          1,370                           

Senior debt securities and term loans                                                              
(a) Floating rate notes                                                                            
                                                                                            GBPm   
                                                                 30 June   30 June   31 December   
                                                 Maturity date      2014      2013          2013   
Nedbank - Floating rate unsecured senior debt                                                      
R988 million at JIBAR + 1.05%                           Repaid         -        64            50   
R500 million at JIBAR + 1.00%                           Repaid         -        30            26   
R1,075 million at JIBAR + 0.94%                   October 2014        60        72            62   
R1,297 million at JIBAR + 1.00%                  February 2015        73        87            75   
R1,027 million at JIBAR + 1.75%                     April 2015        57        69            60   
R250 million at JIBAR + 1.00%                      August 2015        14        17            14   
R1,044 million at JIBAR + 2.20%                 September 2015        58        70            61   
R677 million at JIBAR + 1.25%                       March 2016        37        45            39   
R3,056 million at JIBAR + 0.8%                       July 2016       170         -           176   
R694 million at JIBAR + 0.75%                    November 2016        38         -            40   
R405 million at JIBAR + 1.30%                    February 2017        22        27            23   
R1,035 million at JIBAR + 0.85%                     March 2017        57         -             -   
R786 million at JIBAR + 1.30%                      August 2017        38        39            42   
R806 million at JIBAR + 0.9%                         June 2017        44         -             -   
R80 million at JIBAR + 2.15%                        April 2020         4         5             5   
R650 million at JIBAR + 1.3%                         June 2021        36         -             -   
Total floating rate notes                                            708       525           673   

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

(b) Fixed rate notes (net of Group holdings)                                                                          
                                                                                                               GBPm   
                                                                                    30 June   30 June   31 December   
                                                                    Maturity date      2014      2013          2013   
Nedbank - Fixed rate unsecured senior debt                                                                            
R450 million at 8.39%                                                      Repaid         -        30            26   
R478 million at 9.68%                                                  April 2015        27        32            28   
R3,244 million at 10.55%                                           September 2015       184       222           192   
R1,137 million at 9.36%                                                March 2016        64        77            67   
R151 million at 6.91%                                                   July 2016         9         -             9   
R1,273 million at 11.39%                                           September 2019        77        93            80   
R1,888 million at 8.92%                                             November 2020       105         -           109   
R855 million at 9.38%                                                  March 2021        48         -             -   
R500 million at 9.29%                                                   June 2021        28         -             -   
R391 million at 9.73%                                                  March 2024        22         -             -   
R660 million at zero coupon                                          October 2024        13        15            14   
                                                                                        577       469           525   
Less: Fixed rate notes held by other Group companies                                   (45)         -          (47)   
Banking fixed rate unsecured senior debt (net of Group holdings)                        532       469           478   
Group excluding Nedbank                                                                                               
$2 million secured senior debt at 5.23%                                 July 2014         1        11             1   
GBP112 million eurobond at 7.125%                                    October 2016       112       112           112   
                                                                                        113       123           113   
Total fixed rate notes                                                                  645       592           591   

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

(c) Revolving credit facilities and irrevocable letters of credit
The Group has access to a GBP800 million (June 2013: GBP1,200 million, December 2013: GBP800 million) five-year multi-currency revolving
credit facility which matures in April 2016. At 30 June 2014, 31 December 2013 and 30 June 2013, none of this facility was drawn and there were
no irrevocable letters of credit in issue against this facility.

(d) Mortgage-backed securities (net of Group holdings)

                                                                                                                      GBPm
                                                                                           30 June   30 June   31 December
                                                                  Tier      Maturity date     2014      2013          2013
Nedbank
R480 million (class A1) at JIBAR + 1.10%                         Tier 2   25 October 2039        7        24            13
R336 million (class A2) at JIBAR + 1.25%                         Tier 2   25 October 2039       19        23            20
R900 million (class A3) at JIBAR + 1.54%                         Tier 2   25 October 2039       50        60            52
R110 million (class B) at JIBAR + 1.90%                          Tier 2   25 October 2039        6         7             6
                                                                                                82       114            91
Less: Mortgage backed securities held by other Group companies                                (25)         -          (26)
Total mortgage-backed securities                                                                57       114            65

(e) Subordinated debt securities (net of Group holdings)
                                                                                                                                   GBPm
                                                                      First call           Maturity    30 June    30 June   31 December
                                                         Tier               date               date       2014       2013          2013
Nedbank
R300 million at JIBAR + 2.50%                          Tier 2             Repaid             Repaid          -         10             -
R1,800 million at 9.84%                                Tier 2             Repaid             Repaid          -        124             -
R1,700 million at 8.90%                                Tier 2             Repaid             Repaid          -        118           101
R1,265 million at JIBAR + 4.75%               Non-core Tier 1      November 2018      November 2018         70         85            74
R487 million at 15.05%                        Non-core Tier 1      November 2018      November 2018         32         37            32
R1,000 million at 10.54%                               Tier 2     September 2015     September 2020         58         72            62
$100 million at 3 month USD LIBOR            Tier 2 Secondary         March 2017         March 2022         59         66            60
R2,000 million at JIBAR + 0.47%                        Tier 2          July 2017          July 2022        112        134           116
R1,800 million at JIBAR + 2.75%                        Tier 2          July 2018          July 2023        101          -           105
R1,200 million at JIBAR + 2.55%                        Tier 2      November 2018      November 2023         67          -            69
R450 million at 10.49%                                 Tier 2         April 2019         April 2024         25          -             -
R1,737 million at 3 month JIBAR + 2.55%                Tier 2         April 2019         April 2024         97          -             -
                                                                                                           621        646           619
Less: Banking subordinated debt securities held by other Group companies                                  (19)       (28)          (22)
Banking subordinated securities (net of Group holdings)                                                    602        618           597

Group excluding Nedbank
R3,000 million at 8.92% until October
 2015 and 3 month JIBAR + 1.59%
 thereafter                                     Lower Tier 2        October 2015       October 2020        165        199           172
GBP500 million at 8.00%                         Lower Tier 2                   -          June 2021        575        515           531
                                                                                                           740        714           703
Total subordinated debt securities                                                                       1,342      1,332         1,300

F: Other notes
F1: Related parties

The nature of the related party transactions of the Group has not changed from those referred to in the 2013 Annual Report and Accounts.

There were no transactions with related parties during the six months ended 30 June 2014, that had a material effect on the results or the financial
position of the Group.

F2: Events after the reporting date

On 1 July 2014, the Group announced the completion of the acquisition of Intrinsic Financial Services, one of the largest networks of financial
advisers in the UK. The acquisition was announced on 28 February 2014 and is part of Old Mutual Wealth's strategy of building an integrated
customer proposition comprising financial advice, asset management and tax efficient products. Additionally, the Group announced that it intends to
acquire the remaining 50% stake of Cirilium, the core investment proposition for Intrinsic’s restricted financial advisers.

On 4 July 2014, Old Mutual Bermuda received formal written approval from the Bermuda Monitory Authority (BMA) to repatriate $160 million via
cancellation of OM Group (UK) Limited loan notes.

On 10 July 2014, Nedbank Group Limited announced its intention to issue new preference shares. These preference shares will be utilised to raise
funding for Nedbank’s’ business activities in general.

Terms have been agreed to sell Skandia Liechtenstein, part of Old Mutual Wealth. The transaction is subject to regulatory approval and the
fulfilment of certain closing conditions and is expected to complete during the second half of the year.
F3: Contingent liabilities

Contingent liabilities - tax
The Group is regularly in discussion with the respective tax authorities in each of the jurisdictions where the Group is active. The Group applies its
judgement to determine if a provision for future tax uncertainties should be recognised based on detailed reviews of any potential exposure to tax
authorities and the assessment of the most probable outcome of the tax uncertainty. As these provisions are based on estimates and rely on
judgements made by the Group, the actual amount of future taxes paid by the Group could be different to the amounts provided.

G: Discontinued operations and disposal groups held for sale
G1: Discontinued operations

Amounts disclosed in relation to discontinued operations relate to the sale, in 2012, of the Group’s Swedish, Danish and Norwegian life businesses,
collectively Nordic. The disposal of Nordic was completed on 21 March 2012 following shareholder and regulatory approval, and the Nordic
business was consolidated and reported up until that date. The Group continues to incur costs that are directly related to the sale of Nordic. These
costs relate to the transition of IT and other services, previously provided by Nordic to the wider Group, back to the Group.

Income statement from discontinued operations (Nordic)                                                      
                                                                                                     GBPm   
                                                                    Six months   Six months          Year   
                                                                         ended        ended         ended   
                                                                       30 June      30 June   31 December   
                                                                          2014         2013          2013   
Revenue                                                                      -            -             -   
Expenses                                                                  (11)          (9)          (26)   
Loss before tax from discontinued operations - trading activities         (11)          (9)          (26)   
Profit on disposal                                                           -            -            27   
(Loss)/profit before tax from discontinued operations                     (11)          (9)             1   
Income tax credit                                                            1            1             2   
(Loss)/profit after tax from discontinued operations                      (10)          (8)             3   

G2: Disposal groups held for sale

On 27 March 2014, the Group announced that terms had been agreed to sell two of its Old Mutual Wealth businesses, Skandia Austria and Skandia
Germany. This transaction is subject to regulatory approvals and consequently the assets and liabilities of these businesses have been classified as
held for sale in the statement of financial position. At 30 June 2014, the total value of the assets and liabilities reclassified as held for sale in the
statement of financial position were GBP4,468 million and GBP4,294 million respectively. The disposal of these businesses is expected to be
completed during the second half of the year.

The Group had additional non-current assets held for sale of GBP5 million (30 June 2013: GBP5 million; 31 December 2013: GBP5 million).

G3: Contingent liabilities in respect of the disposal of US Life

Following its disposal in April 2011 of US Life to the Harbinger Group (Harbinger), the Group has retained certain residual commitments and
contingent liabilities relating to that business. These arise from sale warranties and indemnities that are typical in transactions of this nature,
including in respect of certain litigation (including class actions) and regulatory enforcement actions arising from events that occurred before
completion of the sale. The residual commitments are in effect for varying periods of time.

The sale agreement contemplated that Harbinger would establish certain internal reinsurance arrangements after completion, which were subject to
regulatory approval. If such regulatory approval was not forthcoming, there was potential for a reduction in the purchase price of US Life of up to a
maximum of $50 million. In July 2012, Harbinger filed a lawsuit against the Group, claiming payment of a purchase price adjustment of $50
million. The Group has filed its defence and is vigorously defending this claim. In view of the ongoing uncertainty and the Group’s current
assessment of this claim, the Group has not raised a provision against this exposure.

Sponsor
Merrill Lynch South Africa (Pty) Ltd
Date: 07/08/2014 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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