STANDARD BANK GROUP LIMITED - Announcement relating to the disposal by Standard Bank Group to the industrial and commercial Bank Of China Limited

Announcement relating to the disposal by Standard Bank Group to the industrial and commercial Bank Of China Limited

Standard Bank Group Limited
Registration No. 1969/017128/06
Incorporated in the Republic of South Africa
JSE share code: SBK
ISIN: ZAE000109815
NSX share code: SNB
NSX share code: SNB ZAE000109815
(“Standard Bank Group” or “the group”)

ANNOUNCEMENT RELATING TO THE DISPOSAL BY STANDARD BANK GROUP TO THE
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED (“ICBC”) OF A CONTROLLING
INTEREST IN ITS LONDON-BASED GLOBAL MARKETS BUSINESS (“TRANSACTION”) AND
AMENDMENTS TO THE SALE AND PURCHASE AGREEMENT (“AGREEMENT”)

1. Introduction

    Shareholders of Standard Bank Group (“Shareholders”) are referred to the announcement dated
    29 January 2014 and the circular to Shareholders dated 24 February 2014 which set out the full terms
    of the Transaction (“Circular”). As announced on 28 March 2014, the Transaction was approved by
    the requisite majority of Shareholders at the General Meeting held on that date.

    Subsequent to this, a certain unforeseen matter has arisen which has impacted the business being
    disposed of in terms of the Agreement. More specifically, Shareholders are referred to the voluntary
    announcements dated 5 June 2014 and 10 July 2014 and the disclosures made in the interim results
    of Standard Bank Group for the six months ended 30 June 2014, announced on 14 August 2014
    relating to the stocks of metal held in two ports in Shandong Province, China.

    Standard Bank Group continues to pursue various alternatives in order to recover the client exposure
    in respect of this matter. At this time, the precise quantum and timing of recoveries remains uncertain.

    The purchase price under the Agreement is dependent on the consolidated Net Asset Value of
    Standard Bank Plc at closing; which in turn is impacted by the valuation of the client exposure. There
    is currently a high degree of uncertainty regarding the level of recoveries related to the client
    exposure, which uncertainty is unlikely to be fully resolved by the anticipated date of completion of the
    Transaction. The parties to the Transaction have therefore agreed a pragmatic and demonstrably fair
    approach which ensures that neither party benefits unduly from either (i) the uncertainty surrounding
    the client exposure or (ii) the accounting treatment of recoveries from insurance and other sources.

2. Amendments to the Agreement

    Standard Bank Group, Standard Bank London Holdings Limited and ICBC have agreed certain
    amendments to the Agreement (“Amendments”) which can be broken down into two categories:

    -   the Client Amendment, which ensures that the purchase price correctly reflects the true and
        eventual net asset impact of the aluminium exposure and that ICBC does not incur any loss or
        receive any unintended benefit as a result of the relevant client exposure; and
    -   administrative amendments which include the extension of the date by which all conditions
        precedent to the Transaction must be fulfilled by a further 90 days from 29 January 2015, a
        change to the time of completion, minor changes to descriptions of certain agreements to be
        entered into before Completion; and the granting to ICBC of the ability to waive certain of the
        conditions precedent.

    The Amendments are not material and are not in conflict with the terms of the Transaction as
    approved by Shareholders. The JSE Limited has confirmed that it has no objection to the
    Amendments not being referred back to Shareholders. Accordingly the amendments to the
    Transaction will not be referred back to Shareholders for approval.

3. Update on fulfilment of conditions precedent

   The parties continue to progress the fulfilment of the conditions precedent to the Transaction. In this
   regard, Shareholders are advised that the Transaction has been approved, inter alia, by the South
   African Reserve Bank, the China Banking Regulatory Commission and the Prudential Regulation
   Authority of the United Kingdom. Certain restructuring steps remain to be completed and conditions
   remain to be fulfilled or waived to enable completion of the Transaction in the first quarter of 2015.


Johannesburg
10 December 2014

Lead sponsor
The Standard Bank of South Africa Limited

Independent sponsor
Deutsche Securities (SA) Proprietary Limited

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