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STANDARD BANK GROUP LIMITED - Completion of disposal to ICBC and voluntary trading statement

Release Date: 02/02/2015 08:45
Code(s): SBK     PDF:  
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Completion of disposal to ICBC and  voluntary trading statement

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 COMPLETION OF THE DISPOSAL BY STANDARD BANK GROUP TO THE INDUSTRIAL
    AND COMMERCIAL BANK OF CHINA LIMITED (“ICBC”) OF A CONTROLLING INTEREST IN
    ITS OUTSIDE AFRICA GLOBAL MARKETS BUSINESS (“OA GLOBAL MARKETS BUSINESS”)
    (THE “TRANSACTION”); AND
-   VOLUNTARY TRADING STATEMENT FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2014

1. Introduction

Shareholders of Standard Bank Group (“Shareholders”) are referred to the announcement dated
29 January 2014 and the circular to Shareholders and notice of general meeting dated 24 February
2014, which set out the full terms of the Transaction (“Circular”), and the announcement dated
10 December 2014 relating to certain amendments to the Transaction agreements.

2. Completion of the Transaction

Shareholders are advised that the group has completed the disposal of a 60% controlling interest in
Standard Bank Plc to ICBC with effect from 1 February 2015 (the “Closing Date”). This is a significant
step in the ongoing development of the group’s strategic relationship with ICBC and launches a
partnership in Global Markets between China’s and Africa’s largest banks by assets. The Transaction
unlocks the potential and capacity of the group’s OA Global Markets Business by leveraging the scale
of ICBC and both shareholders’ global networks and client bases.

The disposal proceeds from the Transaction (the “Proceeds”) are expected to total approximately
USD 690 million, USD 75 million less than the illustrative amount contained in the Circular, which was
based upon Standard Bank Plc’s adjusted 30 June 2013 net asset value. The Proceeds will be
calculated from the net asset value of Standard Bank Plc at the Closing Date (the “Closing NAV”),
which remains subject to audit verification. As set out in the Circular, the Proceeds are calculated
based on 60% of the Closing NAV less a discount of USD 80 million.

The Closing NAV includes a Tier 1 equity capital injection of USD 300 million which was made by the
group during January 2015. This capital injection largely replenished the capital base of Standard
Bank Plc following losses incurred during 2014 and ensures that Standard Bank Plc has sufficient
financial resources to deliver on the agreed business plan. The 2014 losses arose from:

        -   a prudent valuation adjustment against Standard Bank Plc’s exposure to stocks of metal
            held in two ports in Shandong Province, China (“Metal Exposures”);
        -   losses from operating activities; and
        -   costs associated with the operational separation of Standard Bank Plc from the group.

As disclosed in the announcement of 10 December 2014, the group retains the right to any net
recoveries on the Metal Exposures that may result from inter alia, ongoing litigation in China and
insurance claims.

It is the group’s intention that the Proceeds will be deployed in furthering the group’s growth strategy
in South Africa, and across the African continent, subject to the requisite approvals, in particular from
the South African Reserve Bank.

Further details in relation to the Transaction and the 2014 financial results of Standard Bank Plc will
be disclosed as part of the group’s annual results to be released on 5 March 2015.

3. Voluntary trading statement for the year ended 31 December 2014

The group’s annual financial statements for the year ended 31 December 2014 have not yet been
finalised and remain subject to audit. In line with previous disclosures, the group’s results will be
categorised into Continuing Operations and Discontinued Operations. The results of the OA Global
Markets Business, of which control has now been disposed of by the group, will represent the group’s
Discontinued Operation.

At this preliminary stage, the group’s results (including the Discontinued Operation) indicate that the
earnings and headline earnings per share of the group (both on a fully diluted and undiluted basis) will
differ from those reported for the financial year ended 31 December 2013 by between -5% and +5%.
The key financial performance measures for the year ended 31 December 2014 reported on an
International Financial Reporting Standards (“IFRS”) and a normalised basis are therefore expected
to be within the following ranges:

                                                Audited year     Minimum year      Maximum year
                                                   ended 31          ended 31          ended 31
 IFRS basis                                       December          December          December
                                                        2013             2014              2014
                                                     (cents)           (cents)           (cents)
 Earnings per share (EPS)                            1,034.4            982.7           1,086.1
 Headline EPS (HEPS)                                 1,084.2           1,030.0            1,138.4
 Diluted EPS                                         1,008.6             958.2            1,059.0
 Diluted HEPS                                        1,057.1           1,004.2            1,110.0

                                                                 Minimum year      Maximum year
                                                 Year ended          ended 31          ended 31
                                               31 December          December          December
 Normalised basis                                      2013              2014              2014
                                                     (cents)           (cents)           (cents)
 Earnings per share (EPS)                           1,016.6             965.8           1,067.4
 Headline EPS (HEPS)                                 1,064.9           1,011.7            1,118.1
 Diluted EPS                                         1,006.9             956.6            1,057.2
 Diluted HEPS                                        1,054.7           1,002.0            1,107.4

The financial information on which this voluntary trading statement is based has not been reviewed by
or reported on by the group’s external auditors.


Johannesburg
2 February 2015

Lead sponsor
The Standard Bank of South Africa Limited

Independent sponsor
Deutsche Securities (SA) Proprietary Limited

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