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Results for the year ended 31 December 2016
Barclays Africa Group Limited
Authorised financial services and registered credit provider (NCRCP7)
Registration number: 1986/003934/06
Incorporated in the Republic of South Africa
JSE share code: BGA
ISIN: ZAE000174124
Barclays Africa Group Limited Audited summary consolidated financial results
for the reporting period ended 31 December 2016
Profit and dividend announcement for the reporting period ended 31 December
Salient features
* Diluted headline earnings per share (HEPS) increased 5% to 1 769.4 cents.
* Dividends per share (DPS) at 1 030 cents.
* Headline earnings in South Africa grew by 2% to R12.2bn and Rest of Africa increased by 17% to R2.8bn.
* Return on Equity (RoE) declined to 16.6% from 17.0%.
* Pre-provision profit increased by 10% to R32.4bn.
* Revenue grew by 8% to R72.4bn, as net interest income increased by 9% and non-interest income rose 6%, while
operating expenditure grew by 6% to R40.0bn.
* Credit impairments increased by 26% to R8.8bn resulting in a 1.08% credit loss ratio from 0.92%.
* Barclays Africa Group Limited’s Common Equity Tier 1 (CET1) ratio increased to 12.1%,well above regulatory
requirements and ahead of our board target range.
Overview of results
Barclays Africa Group Limited’s headline earnings increased by 5% to R14 980m from R14 287m. Diluted HEPS also grew by
5% to 1 769.4 cents from 1 686.2 cents. The Group’s RoE decreased to 16.6% from 17.0%, due to higher credit
impairments, and its return on assets (RoA) declined to 1.34% from 1.37%. Barclays Africa Group Limited declared a 3%
higher ordinary DPS of 1 030 cents. Its Net asset value (NAV) per share increased by 4% to 10 980 cents.
Pre-provision profit increased by 10% to R32.4bn, which drove earnings growth. Non-interest income grew by 6% and net
interest income by 9%, as the Group’s net interest margin (on average interest-bearing assets) improved to 4.92% from
4.81%. Loans and advances to customers grew by 2% to R720bn, while deposits due to customers decreased by 2% to R675bn.
The Group’s cost-to-income ratio improved to 55.2% from 56.0% as operating expenses rose 6%. The weaker average rand
added 1% to the Group’s revenue, costs, and headline earnings growth. Credit impairments grew by 26%, largely due to
higher charges in Retail Banking and Corporate and Investment Bank (CIB) in South Africa and Retail and Business
Banking (RBB) Rest of Africa. Non-performing loans (NPLs) rose to 3.94% from 3.47% of gross loans and advances, while
portfolio provisions increased to 79 basis points (bps) of total gross performing loans from 65 bps.
RBB’s headline earnings decreased by 3% to R9 313m, with 7% cost growth exceeding 6% higher revenues and credit
impairments rising 21%. Retail Banking South Africa’s headline earnings declined by 4% and RBB Rest of Africa by
3%, while Business Banking South Africa increased by 1%. Wealth, Investment Management and Insurance (WIMI)’s headline
earnings decreased by 4% to R1 399m, despite 11% growth in South Africa continuing business lines, which was offset
by Rest of Africa losses. CIB grew by 27% to R5 098m, driven by Corporate which increased by 44% while the Investment
Bank rose 13%.
Revenue from the Rest of Africa grew by 16% and headline earnings rose 17% to R2 778m, to contribute 23% and 19% of
the Group’s revenue and headline earnings respectively.
Operating environment
The global economy finished 2016 on a stronger footing despite the heightened policy uncertainty in some developed
economies. Global GDP growth for 2016 is projected to be 3.2%. Fears of a significant slowdown in China’s economy
diminished following new stimulus. Into year end the US dollar strengthened, commodity prices firmed up somewhat
and global equity markets generally rallied.
South Africa’s economic growth is expected to have slowed to 0.4% in 2016, in part due to the severe drought.
Households faced a weak employment environment, higher inflation and tight credit conditions, while businesses
reduced investment spending given a more volatile policy environment and weak domestic demand. South Africa’s prime
interest rate increased 0.75% to 10.5% during the year. Although on average through the year the rand was weaker
than the Group’s Rest of Africa currencies, it appreciated noticeably during the year and closed stronger than at
the end of 2015. Consequently, it slightly enhanced the Group’s income statement growth, but reduced its balance
sheet growth.
Economic growth in the Group’s presence markets in the rest of Africa slowed to the weakest level since 2002 as
economies were impacted by tighter liquidity conditions, weak commodity prices impacted current account and fiscal
receipts, and inflationary pressures impacted households.
Group performance
Statement of financial position
Total assets decreased by 4% to R1 101bn at 31 December 2016, predominantly due to loans and advances to banks and
trading portfolio assets declining by 42% and 30% respectively. Excluding these, assets grew by 4%, with customer
loans and advances increasing by 2%. Rand appreciation against the Group’s rest of Africa (ROA) currencies reduced
assets by 2%.
Loans and advances to customers
Loans and advances to customers grew by 2% to R720bn, or by 4% excluding rand appreciation. Retail Banking South
Africa’s loans were flat at R375bn, reflecting 4% growth in Vehicle and Asset Finance (VAF) and 7% higher Personal
Loans, while Home Loans declined by 2% and Card by 4%. Business Banking South Africa’s loans rose 9% to R69bn
including solid growth in Agri loans and commercial property finance. RBB Rest of Africa’s loans declined by 11%
to R40bn, despite growing by 2% in constant currency (CCY). CIB’s loans rose 7% to R229bn, given 13% growth in
South Africa and 1% CCY growth in the rest of Africa.
Funding
Deposits due to customers declined by 2% to R675bn, which increased the loans to deposit and debt securities
ratio to 88.4%. Deposits due to customers constituted 77.8% of total funding from 78.2%. Retail Banking South
Africa grew deposits by 7% to R177bn, while Business Banking South Africa’s deposits declined by 1% to R109bn,
largely due to a sector-wide reduction in local and provincial government deposits. RBB Rest of Africa’s deposits
grew by 2% in CCY, but fell by 14% due to currency translation. CIB’s total deposits by declined 7%, with Rest
of Africa down 20% (or 7% in CCY) due to the strong rand and lower inflows. CIB’s South Africa deposits decreased
by 2%, after losing a large, low margin client. The Group’s liquidity position remains strong, with liquid assets
and other sources of liquidity growing by 20% to R239bn. Absa Bank’s 3 month average liquidity coverage ratio for
the fourth quarter of 2016 was 98%, well above the regulatory minimum hurdle of 70%. While net stable funding
ratios only become effective on 1 January 2018, the Group is expected to comply with the 100% minimum. Lastly,
long-term funding increased slightly to 21.4% of total funding.
Net asset value
The Group’s NAV rose 4% to R93bn and its NAV per share grew by 4% to 10 980 cents. During the year it generated
profits of R14.7bn, from which it paid R8.5bn in dividends. The foreign currency translation reserve reduced
by R4.1bn to R2.4bn.
Capital to risk-weighted assets
Group risk-weighted assets (RWAs) increased marginally to R704bn at 31 December 2016, slightly ahead of its 4%
lower asset growth, in part due to higher counterparty risk. The Group remains well capitalised, comfortably
above minimum regulatory requirements. Its CET1 and Tier 1 capital adequacy ratios were 12.1% and 12.6% respectively
(from 11.9% and 12.6%). The Group generated 2.1% of CET1 capital internally during the period. Its total capital
adequacy ratio was 14.8%. Declaring a 3% higher DPS of 1 030 cents on a dividend cover of 1,7 times took cognisance
of the challenging operating environment, the Group’s strong capital position, internal capital generation, strategy
and growth plans.
Statement of comprehensive income
Net interest income
Net interest income increased by 9% to R42 003m from R38 407m, with average interest-bearing assets growing by 7%.
The Group’s net interest margin improved to 4.92% from 4.81%.
Loan pricing and mix had a 3 bps impact, due to regulatory changes, higher interest suspended and lower margins in
VAF, plus the mix impact of strong CIB loan growth. These outweighed improved Home Loans and Personal Loans margins.
The deposit margin increased by 2bps, due to improved Retail Banking and Corporate pricing offsetting higher wholesale
liquidity premiums and the negative mix impact of increased wholesale funding. Higher South African interest rates
resulted in an endowment increase on deposits and equity of 10 bps. Despite releasing R268m to the income statement,
the benefit from structural hedging declined by 11 bps.
Rest of Africa’s net interest margin improved by 23 bps, which added 10 bps to our Group margin. However, the impact
of lower rates, rand strength and regulatory changes were evident in the second half. Lastly, the basis benefit of a
75 bps increase in the South African prime rate in the first half and a substantial reduction in loans to banks added
3 bps to our margin, outweighing the cost of higher borrowed funds and liquid asset holdings.
Non-interest income
Non-interest income increased by 6% to R30 391m from R28 791m accounting for 42% of total revenue. South Africa
increased by 5% to R24 969m, while Rest of Africa grew by 10% or (6% CCY) to R5 422m.Net fee and commission income
rose 3% to R20 723m, with growth in credit cards and electronic banking of 20% and 3% respectively.
RBB’s non-interest income grew by 5% to R19 134m, 63% of the Group’s total. Retail Banking South Africa increased by
4% to R12 819m largely due to card growth offsetting flat customer numbers, sub-inflation fee increases and continued
migration to bundled products and electronic channels. Card non-interest income grew by 11%, with 13% growth in merchant
acquiring volumes. Business Banking’s non-interest income rose 5% to R3 543m, largely due to 6% growth in electronic
banking and cheque account income. RBB Rest of Africa’s non-interest income grew by 6% to R2 772m from growth in
active customers, rand depreciation and a strong increase in card acquiring and bancassurance.
WIMI’s non-interest income decreased by 2% to R4 848m, as the Rest of Africa declined by 41% due to revised reserving
requirements, lower investment returns and new business strain. However, net insurance premiums income grew by 10% on
continuing lines and embedded value of new business grew 21%.
CIB’s non-interest income increased by 13% to R6 679m, largely due to improved trading. Overall Markets revenue rose
by 25% to R5 149m as rest of Africa grew by 26% and South Africa 25%, with Fixed Income and Credit up 51% and Foreign
Exchange and Commodities increasing by 21%.
Impairment losses on loans and advances
Credit impairments increased by 26% to R8 751m from R6 920m, resulting in a 1.08% credit loss ratio from 0.92%. The
Group changed its credit loss ratio disclosure to use gross customer loans and loans to banks, rather than customer
loans. On the previous basis, its credit loss ratio increased to 1.23% from 1.05%. Group NPLs increased 11% to R31.1bn,
or 3.9% of gross loans and advances from 3.5%. Total NPL coverage increased to 44.2%, due to increases across most
portfolios. Balance sheet portfolio impairments increased by 19% to R6.0bn, or 79 bps of total performing loans from
65 bps. This includes an additional R0.3bn of macroeconomic overlays to R1.4bn.
RBB’s credit impairments grew by 21% to R7.4bn, a 1.46% credit loss ratio from 1.24%. Retail Banking South Africa’s
charge increased by 14% to R5.4bn, as NPLs grew by 11% to R20.2bn. While Home Loans’ charge grew by 34% to R922m, its
credit loss ratio remains relatively low at 0.40% from 0.30%. VAF’s credit loss ratio rose to 1.14% from 0.97%, as its
NPL and performing loan coverage increased. Card credit impairments were flat at R2.4bn, a 5.41% credit loss ratio from
5.38%, despite reduced recoveries in Absa Card. Personal Loans credit impairments increased by 23%, resulting in a 5.68%
credit loss ratio from 5.16%.
Business Banking South Africa’s credit impairments grew by 7% to R581m, resulting in a 0.86% credit loss ratio from
0.85%. Its NPLs were flat at R3.3bn. RBB Rest of Africa’s credit impairments rose by 73% to R1.3bn, increasing its credit
loss ratio to 2.96% from 1.93%. However, its NPLs decreased by 12% to R3.1bn, while its performing loan cover increased
to 2.14% from 1.12%. CIB’s credit impairments increased by 77% to R1.4bn, largely due to a single name impairment in the
first half. This resulted in a 0.53% credit loss ratio from 0.37%. CIB’s unidentified impairments expense grew by 63%
to R413m.
Operating expenses
Operating expenses grew by 6% to R39 956m from R37 661m. South Africa’s 5% growth in operating expenses was below
inflation, while Rest of Africa costs rose by 11%, or 8% in CCY. Staff costs grew 6% and accounted for 55% of total
expenses. Salaries rose by 5% to R17.9bn due to higher wage increases for entry level employees, while bonuses and
deferred cash and share-based payments also grew by 5% to R2.7bn.
Structural cost programs continued to produce efficiency gains that enable investment in strategic initiatives.
Property consolidation contained the increase in property costs and operating leases to 5%, while a reduction in
sponsorships decreased marketing costs by 9%. Professional fees fell by 8%, given less reliance on external service
providers for development and testing activity. The Group continued to invest in technology, with total IT spend up
by 17% to R7.4bn, accounting for 19% of costs. Amortisation of intangibles grew by 35%, but remains relatively low.
RBB and WIMI’s operating expenses increased by 7% and 11% respectively. Retail Banking South Africa’s operating
expenses grew by 6%, reflecting increased staff costs and investment in digital channels, and Business Banking
South Africa’s also rose by 6%. RBB Rest of Africa’s operating expenses increased by 11%, or 7% in CCY, reflecting
inflationary pressures in some countries and investment in IT. CIB’s costs grew by 2% without reducing investment in
systems and technology.
Taxation
The Group’s taxation expense increased by 1% to R5 835m, slightly less than the 2% growth in pre-tax profit due to the
recognition of deferred tax assets and an increase in non-taxable income. This resulted in a 26.9% effective tax rate
from 27.7%.
Segment performance
Retail Banking South Africa
Headline earnings declined by 4% to R6 406m, largely due to 14% higher credit impairments, since pre-provision profits
grew by 1%. Transactional and Deposits earnings increased by 1% to R2 690m, given 12% higher net interest income on 7%
deposit growth. Despite improved margins, Home Loans’ earnings decreased by 8% to R1 602m due to 15% higher costs and a
34% increase in credit impairments (off a low base). Card earnings increased by 3% to R1 671m, given 11% non-interest
income growth and flat credit impairments. VAF earnings declined by 25% to R800m, as margin pressure saw its revenue
reduce and credit impairments rose by 23%. Personal Loans earnings grew by 10% to R384m, reflecting 16% higher net
interest income. Losses in the ‘Other’ segment decreased by 1% to R741m, given lower costs. Retail Banking South
Africa accounted for 41% of total earnings, excluding the Group centre.
Business Banking South Africa
Headline earnings grew by 1% to R2 138m, given 5% higher pre-provision profits. Loan growth improved to 9%, increasing
its revenue growth to 6%, in line with the rise in costs, resulting in a flat 61% cost-to-income ratio. Deposits
declined by 1%, largely due to the reduction in public sector funds industry-wide. Credit impairments grew by 7%
although its credit loss ratio was largely unchanged at 0.86%. Business Banking South Africa generated 14% of overall
earnings excluding the Group centre.
Retail and Business Banking Rest of Africa
Headline earnings declined by 3% or 15% in CCY to R769m, despite 23% higher pre-provision profits. Revenue grew by
15%, or 9% in CCY, with net interest income rising by 19% as its net interest margin improved to 9.06%. Costs grew by
11% or 7% in CCY, so cost-to-income ratio improved to 67.9%. However, credit impairments grew by 73% due to higher
personal loan provisions and its coverage for performing loans almost doubling. Loans and deposits fell by 11% and 12%
respectively, despite both growing by 2% in CCY. RBB Rest of Africa contributed 5% of total earnings excluding
Head Office, Treasury and Other (the Group centre).
Corporate and Investment Bank
Headline earnings rose by 27% to R5 098m, as pre-provision profits increased by 34%. CIB earnings grew by 18% in South
Africa and 43% in the rest of Africa, or 35% in CCY. CIB in the rest of Africa accounted for 44% of CIB’s earnings from
29% in 2013. Revenue grew by 17%, with Rest of Africa increasing by 24% and South Africa 13%. Markets revenue rose by
25% to R5 149m, with rest of Africa up 26% and South Africa 25%, as fixed income and credit grew by 51% and foreign exchange
and commodities by 21%. Credit impairments rose by 77% due to a single name impairment in the first half and increased
portfolio provisions. Costs increased by 2%, despite continuing to invest in systems and technology. Corporate earnings
grew by 44% to R2 672m, as 18% revenue growth exceeded 6% higher costs and credit impairments declined by 8%. Investment
Bank earnings rose 13% to R2 426m, despite 16% revenue growth and 2% lower costs, as credit impairments increased by
228%. CIB’s loan growth slowed to 7%, in part due to the strong rand, although average balances were 23% higher. CIB’s
return on regulatory capital improved to 19.9% from 17.4%. It contributed 32% of total earnings excluding the group centre.
Wealth, Investment Management and Insurance
Headline earnings declined by 4% to R1 399m, with continuing business lines down by 1%. However, South African
earnings from continuing business lines grew by 11% to R1 537m, with Life Insurance up 19%, due to 10% net premium
income growth, 43% higher income from shareholder funds and recognising a R55m deferred tax asset (net impact).
Short-term Insurance in South Africa grew earnings by 17%, with a 4.3% underwriting margin and well contained costs,
while reinsurance limited the rise in claims. Wealth and Investments’ earnings grew by 5%, with assets under management
increasing by 5% to R288bn on R13bn of net inflows. Rest of Africa lost R112m from a profit of R49m, given higher
reserving, increased claims and substantially higher new business costs due to integrating First Assurance in Kenya
and investing in our expansion strategy. WIMI’s return on equity decreased slightly to 23.9% and it generated 9% of
total earnings excluding the Group centre.
Prospects
In South Africa, we expect modest economic recovery and forecast GDP growth of 1.0% for 2017. Inflation should return
to within the South African Reserve Bank’s target band in the second quarter, resulting in flat interest rates. We
expect 4.5% average GDP growth in our other presence countries in Africa. Note that the current rand strength would
be a drag on rest of Africa’s contribution this year, particularly in the first half of the year.
Against this backdrop, and barring any unforeseen regulatory and macro-economic developments, we continue to expect
low to mid-single digit loan growth, with CIB growing faster than RBB and South Africa lagging the rest of Africa’s growth
in constant currency. Our net interest margin is expected to decline slightly this year. Slower revenue growth, in part
due to regulatory changes, is likely to produce negative Jaws in the near term, despite continued cost containment. We
expect the strong rand and regulatory pressures to dampen our growth in the first half. However, our credit loss ratio
should improve in 2017, in part due to the large single name provision in the base, while last year’s reduction in our
retail early delinquencies in South Africa also bodes well. Our CET1 ratio is likely to remain above board targets and our
RoE should be broadly similar to 2016’s. While separating from Barclays PLC will impact our near-term returns, we still
believe that our stated longer-term targets currently remain appropriate for our Group including an 18% RoE and low 50s
cost to income ratio. Lastly, we continue to expect that our dividend cover is likely to increase slightly in the
medium term.
The Group will release an update on its separation from Barclays PLC later this morning.
Basis of presentation
The Group’s annual financial results have been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards (IFRS), interpretations issued by the IFRS Interpretations
Committee (IFRS-IC), the South African Institute of Chartered Accountants’ Financial Reporting Guides as issued by the
Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council,
the JSE Listings Requirements and the requirements of the Companies Act. The principal accounting policies applied are
set out in the Group’s most recent annual consolidated financial statements.
The information disclosed in the SENS is derived from the information contained in the audited annual consolidated
financial statements and does not contain full or complete disclosure details. Any investment decisions by shareholders
should be based on consideration of the audited annual consolidated financial statements, which is available on request.
The presentation and disclosure comply with International Accounting Standards IAS 34.
The preparation of financial information requires the use of estimates and assumptions about future conditions. Use of
available information and application of judgement are inherent in the formation of estimates. The accounting policies
that are deemed critical to the Group’s results and financial position, in terms of the materiality of the items to
which the policies are applied, and which involve a high degree of judgement including the use of assumptions and
estimation, are impairment of loans and advances, goodwill impairment, fair value measurements, impairment of
available-for-sale financial assets, consolidation of structured or sponsored entities, post-retirement benefits,
provisions, income taxes, share-based payments, liabilities arising from claims made under short-term and long-term
insurance contracts and offsetting of financial assets and liabilities.
Accounting policies
The accounting policies applied in preparing the summary consolidated financial statements are the same as those in
place for the reporting period ended 31 December 2015 except for Business portfolio changes between operating
segments. Refer to note 15.
Auditors’ report
PricewaterhouseCoopers Inc. and Ernst & Young Inc., Barclays Africa Group Limited’s independent auditors, have audited
the consolidated annual financial statements of Barclays Africa Group Limited from which management prepared the
summary consolidated financial results. The auditors have expressed an unqualified audit opinion on the consolidated annual
financial statements. The summary consolidated financial results comprise the summary consolidated statement of financial
position at 31 December 2016, summary consolidated statement of comprehensive income, summary consolidated statement of
changes in equity and summary consolidated statement of cash flows for the reporting period then ended and selected
explanatory notes, excluding items not indicated as audited. The audit report of the consolidated annual financial
statements is available for inspection at Barclays Africa Group Limited’s registered office.
These summary consolidated financial results for the year ended 31 December 2016 have been audited by
PricewaterhouseCoopers Inc. and Ernst and Young Inc., who expressed an unmodified opinion thereon. A copy of the auditors’
report on the summary consolidated financial statements and of the auditors’ report on the annual financial statements are
available for inspection at the Group’s registered office, together with the financial statements identified in the
respective auditor’s reports.
Events after the reporting period
The directors are not aware of any other events occurring between the reporting date of 31 December 2016 and the date
of authorisation of these summary consolidated financial results as defined in IAS 10 - Events after the Reporting
Period (IAS 10).
On behalf of the Board
W E Lucas-Bull M Ramos
Group Chairman Chief Executive Officer
Johannesburg
22 February 2017
Declaration of final ordinary dividend number 61
Shareholders are advised that an ordinary dividend of 570 cents per ordinary share was approved on 22 February 2017
and was declared today, 23 February 2017, for the period ended 31 December 2016.
The ordinary dividend is payable to shareholders recorded in the register of members of the Company at the close of
business on 7 April 2017. The directors of Barclays Africa Group Limited confirm that the Group will satisfy the solvency
and liquidity test immediately after completion of the dividend distribution.
The dividend will be subject to local dividend withholding tax at a rate of 15%. In accordance with paragraphs
11.17(a)(i) to (ix) and 11.17(c) of the JSE Listings Requirements, the following additional information is disclosed:
* The dividend has been declared out of income reserves.
* The local dividend tax rate is fifteen per cent (15%).
* The gross local dividend amount is 570 cents per ordinary share for shareholders exempt from the dividend tax.
* The net local dividend amount is 484,50 cents per ordinary share for shareholders liable to pay for the dividend tax.
This number may be revised downwards having regard to the announcement by the Minister of Finance on
dividend withholding tax on 22 February 2017.
* Barclays Africa Group Limited currently has 847 750 679 ordinary shares in issue (includes 1 075 595 treasury shares).
* Barclays Africa Group Limited’s income tax reference number is 9150116714.
In compliance with the requirements of Strate, the electronic settlement and custody system used by JSE Limited, the
following salient dates for the payment of the dividend are applicable:
Last day to trade cum dividend Tuesday, 4 April 2017
Shares commence trading ex-dividend Wednesday, 5 April 2017
Record date Friday, 7 April 2017
Payment date Monday, 10 April 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 5 April 2017 and Friday, 7 April
2017, both dates inclusive. On Monday, 10 April 2017, the dividend will be electronically transferred to the bank accounts
of certificated shareholders. The accounts of those shareholders who have dematerialised their shares (which are held at
their participant or broker) will also be credited on Monday, 10 April 2017.
On behalf of the Board
N R Drutman
Group Company Secretary
Johannesburg
23 February 2017
Barclays Africa Group Limited is a company domiciled in South Africa. Its registered office is 7th Floor, Barclays
Towers West, 15 Troye Street, Johannesburg, 2001.
Consolidated salient features
for the reporting period ended 31 December
2016 2015
Statement of comprehensive income (Rm)
Income 72 394 67 198
Operating expenses 39 956 37 661
Profit attributable to ordinary equity holders 14 708 14 331
Headline earnings (1) 14 980 14 287
Statement of financial position
Loans and advances to customers (Rm) 720 309 703 359
Total assets (Rm) 1 101 023 1 144 604
Deposits due to customers (Rm) 674 865 688 419
Loans to deposits and debt securities ratio (%) 88.4 86.1
Financial performance (%)
RoE(2) 16.6 17.0
RoA(2) 1.34 1.37
Return on risk-weighted assets (RoRWA)(2) 2.14 2.18
Non-performing loans (NPL) ratio on gross loans and advances(3) 3.94 3.47
Operating performance (%)
Net interest margin on average interest bearing assets(2) 4.92 4.81
Credit loss ratio on gross loans and advances to customers and banks(2) 1.08 0.92
Credit loss ratio on net loans and advances to customers(2) 1.23 1.05
Non-interest income as percentage of total income 42.0 42.8
Cost-to-income ratio 55.2 56.0
JAWS 1.64 1.39
Effective tax rate 26.9 27.7
Share statistics (million)
Number of ordinary shares in issue 847.8 847.8
Number of ordinary shares in issue (excluding treasury shares) 846.7 845.7
Weighted average number of ordinary shares in issue 846.5 846.8
Diluted weighted average number of ordinary shares in issue 846.6 847.3
Share statistics (cents)
Headline earnings per ordinary share 1 769.6 1 687.2
Diluted headline earnings per ordinary share 1 769.4 1 686.2
Basic earnings per ordinary share 1 737.5 1 692.4
Diluted basic earnings per ordinary share 1 737.3 1 691.4
Dividend per ordinary share relating to income for the reporting period 1 030 1 000
Dividend cover (times) 1.7 1.7
NAV per ordinary share 10 980 10 558
Tangible NAV per ordinary share 10 501 10 112
Capital adequacy (%)
Barclays Africa Group Limited(2) 14.8 14.5
Absa Bank Limited(2) 15.1 13.8
Common Equity Tier 1 (%)
Barclays Africa Group Limited(2) 12.1 11.9
Absa Bank Limited(2) 11.6 10.5
Notes
(1) After allowing for R321m (31 December 2015:R321m) profit attributable to preference equity holders.
(2) These ratios are unaudited.
(3) The calculation of the NPL ratio has been changed to also include loans and advances to banks. Based on the
previous methodology the NPL ratio would have been 4,20% (2015: 3,88%)
Summary consolidated statement of financial position
as at 31 December
2016 2015
Note Rm Rm
Assets
Cash, cash balances and balances with central banks 50 006 45 904
Investment securities 114 315 100 965
Loans and advances to banks 49 789 85 951
Trading portfolio assets 96 236 137 163
Hedging portfolio assets 1 745 2 232
Other assets 25 542 25 846
Current tax assets 894 833
Non-current assets held for sale 1 823 1 700
Loans and advances to customers 2 720 309 703 359
Reinsurance assets 985 581
Investments linked to investment contracts 18 816 19 517
Investments in associates and joint ventures 1 065 1 000
Investment property 478 1 264
Property and equipment 14 643 13 252
Goodwill and intangible assets 4 049 3 772
Deferred tax assets 1 328 1 265
Total assets 1 101 023 1 144 604
Liabilities
Deposits from banks 53 192 62 980
Trading portfolio liabilities 47 429 90 407
Hedging portfolio liabilities 2 064 4 531
Other liabilities 27 696 24 982
Provisions 3 005 3 236
Current tax liabilities 244 242
Non-current liabilities held for sale 1 9 233
Deposits due to customers 674 865 688 419
Debt securities in issue 139 714 128 683
Liabilities under investment contracts 29 198 24 209
Policyholder liabilities under insurance contracts 4 469 4 340
Borrowed funds 3 15 673 13 151
Deferred tax liabilities 1 185 544
Total liabilities 998 743 1 045 957
Equity
Capital and reserves
Attributable to ordinary equity holders:
Share capital 1 693 1 691
Share premium 4 467 4 250
Retained earnings 81 604 75 785
Other reserves 5 293 7 566
93 057 89 292
Non-controlling interest - ordinary shares 4 579 4 711
Non-controlling interest - preference shares 4 644 4 644
Total equity 102 280 98 647
Total liabilities and equity 1 101 023 1 144 604
Summary consolidated statement of comprehensive income
for the reporting period ended 31 December
2016 2015
Rm Rm
Net interest income 42 003 38 407
Interest and similar income 85 114 73 603
Interest expense and similar charges (43 111) (35 196)
Non-interest income 30 391 28 791
Net fee and commission income 20 723 20 155
Fee and commission income 23 972 23 152
Fee and commission expense (3 249) (2 997)
Net insurance premium income 6 986 6 303
Net claims and benefits incurred on insurance contracts (3 691) (3 145)
Changes in investment and insurance contract liabilities (493) (214)
Gains and losses from banking and trading activities 5 691 3 933
Gains and losses from investment activities 51 786
Other operating income 1 124 973
Total income 72 394 67 198
Impairment losses on loans and advances (8 751) (6 920)
Operating income before operating expenditure 63 643 60 278
Operating expenditure (39 956) (37 661)
Other expenses (2 120) (1 443)
Other impairments (690) (84)
Indirect taxation (1 430) (1 359)
Share of post-tax results of associates and joint ventures 115 129
Operating profit before income tax 21 682 21 303
Taxation expense (5 835) (5 899)
Profit for the reporting period 15 847 15 404
Profit attributable to:
Ordinary equity holders 14 708 14 331
Non-controlling interest - ordinary shares 788 752
Non-controlling interest - preference shares 351 321
15 847 15 404
Earnings per share:
Basic earnings per share (cents) 1 737.5 1 692.4
Diluted earnings per share (cents) 1 737.3 1 691.4
Summary consolidated statement of comprehensive income
for the reporting period ended 31 December
2016 2015
Rm Rm
Profit for the reporting period 15 847 15 404
Other comprehensive income
Items that will not be reclassified to the profit or loss (220) (118)
Movement in retirement benefit fund assets and liabilities (220) (118)
(Decrease)/increase in retirement benefit surplus (120) (42)
Increase in retirement benefit deficit (141) (72)
Deferred tax 41 (4)
Items that are or may be subsequently reclassified to profit or loss (2 942) 888
Movement in foreign currency translation reserve (4 529) 3 428
Differences in translation of foreign operations (4 209) 3 695
Gains released to profit or loss (320) (267)
Movement in cash flow hedging reserve 1 726 (2 223)
Fair value gains /(losses) arising during the reporting period 2 721 (2 029)
Amount removed from other comprehensive income and recognised in the profit or loss (321) (1 058)
Deferred tax (674) 864
Movement in available-for-sale reserve (139) (317)
Fair value losses during the reporting period (197) (690)
Release to the profit or loss (3) 210
Deferred tax 61 163
Total comprehensive income for the reporting period 12 685 16 174
Total comprehensive income attributable to:
Ordinary equity holders 11 931 14 649
Non-controlling interest - ordinary shares 403 1 204
Non-controlling interest - preference shares 351 321
12 685 16 174
Summary consolidated statement of changes in equity
for the reporting period ended 31 December
2016
Number of
ordinary Share Share
shares capital premium
’000 Rm Rm
Balance at the beginning of the reporting period 845 725 1 691 4 250
Total comprehensive income - - -
Profit for the period - - -
Other comprehensive income - - -
Dividends paid - - -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - - (409)
Elimination of the movement in treasury shares
held by Group entities 950 2 151
Movement in share-based payment reserve - - 409
Transfer from share-based payment reserve - - 409
Value of employee services - - -
Conversion from cash-settled schemes -
Deferred tax - - -
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - -
Share of post-tax results of associates and joint ventures - - -
Acquisition of a subsidiary(1),(2) - - 66
Balance at the end of the reporting period 846 675 1 693 4 467
Total
Retained other
earnings reserves
Rm Rm
Balance at the beginning of the reporting period 75 785 7 566
Total comprehensive income 14 496 (2 565)
Profit for the period 14 708 -
Other comprehensive income (212) (2 565)
Dividends paid (8 536) -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements (12) -
Elimination of the movement in treasury shares held
by Group entities - -
Movement in share-based payment reserve - 163
Transfer from share-based payment reserve - (409)
Value of employee services - 495
Conversion from cash-settled schemes - 37
Deferred tax - 40
Movement in general credit risk reserve (30) 30
Movement in foreign insurance subsidiary regulatory reserve 16 (16)
Share of post-tax results of associates and joint ventures (115) 115
Acquisition of a subsidiary(1),(2) - -
Balance at the end of the reporting period 81 604 5 293
General
credit Available-
risk for-sale
reserve reserve
Rm Rm
Balance at the beginning of the reporting period 727 560
Total comprehensive income - (183)
Profit for the period - -
Other comprehensive income - (183)
Dividends paid - -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - -
Elimination of the movement in treasury shares held
by Group entities - -
Movement in share-based payment reserve - -
Transfer from share-based payment reserve - -
Value of employee services - -
Conversion from cash-settled schemes
Deferred tax - -
Movement in general credit risk reserve 30 -
Movement in foreign insurance subsidiary regulatory reserve - -
Share of post-tax results of associates and joint ventures - -
Acquisition of a subsidiary(1),(2) - -
Balance at the end of the reporting period 757 377
Notes
(1) The excess of the purchase price over the Group’s share of net assets of Barclays Africa Limited, acquired on
31 July 2013, was accounted for as a deduction against share premium. The sale and purchase agreement between the
Group and Barclays Bank Plc allowed for the purchase price to be adjusted for certain items and in June 2016 an
agreement was reached on the final purchase price adjustment. As a result Barclays Bank Plc paid R66m to the Group,
which was recognised in equity, in line with the accounting of the original transaction.
(2) During the current reporting period the Group acquired a 75% controlling stake in Absa Instant Life (Pty) Ltd
which resulted in a R25m increase in non-controlling interest.
2016
Foreign
Cash Foreign insurance
flow currency subsidiary
hedging translation regulatory
reserve reserve reserve
Rm Rm Rm
Balance at the beginning of the reporting period (1 870) 6 461 22
Total comprehensive income 1 726 (4 108) -
Profit for the period - - -
Other comprehensive income 1 726 (4 108) -
Dividends paid - - -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - - -
Elimination of the movement in treasury shares held
by Group entities - - -
Movement in share-based payment reserve - - -
Transfer from share-based payment reserve - - -
Value of employee services - - -
Conversion from cash-settled schemes - - -
Deferred tax - - -
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - (16)
Share of post-tax results of associates and joint ventures - - -
Acquisition of a subsidiary(1),(2) - - -
Balance at the end of the reporting period (144) 2 353 6
Capital
and reserves
Associates’ attributable
Share-based and joint to ordinary
payment ventures’ equity
reserve reserve holders
Rm Rm Rm
Balance at the beginning of the reporting period 729 937 89 292
Total comprehensive income - - 11 931
Profit for the period - - 14 708
Other comprehensive income - - (2 777)
Dividends paid - - (8 536)
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - - (421)
Elimination of the movement in treasury shares
held by Group entities - - 153
Movement in share-based payment reserve 163 - 572
Transfer from share-based payment reserve (409) - -
Value of employee services 495 - 495
Conversion from cash-settled schemes 37 - 37
Deferred tax 40 - 40
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - -
Share of post-tax results of associates and joint ventures - 115 -
Acquisition of a subsidiary(1),(2) - - 66
Balance at the end of the reporting period 892 1 052 93 057
Non- Non-
controlling controlling
interest - interest -
ordinary preference Total
shares shares equity
Rm Rm Rm
Balance at the beginning of the reporting period 4 711 4 644 98 647
Total comprehensive income 403 351 12 685
Profit for the period 788 351 15 847
Other comprehensive income (385) - (3 162)
Dividends paid (562) (351) (9 449)
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - - (421)
Elimination of the movement in treasury shares
held by Group entities - - 153
Movement in share-based payment reserve 2 - 574
Transfer from share-based payment reserve - - -
Value of employee services 2 - 497
Conversion from cash-settled schemes - - 37
Deferred tax - - 40
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - -
Share of post-tax results of associates and joint ventures - - -
Acquisition of a subsidiary(1),(2) 25 - 91
Balance at the end of the reporting period 4 579 4 644 102 280
2015
Number of
ordinary Share Share
shares capital premium
’000 Rm Rm
Balance at the beginning of the reporting period 846 870 1 694 4 548
Total comprehensive income - - -
Profit for the period - - -
Other comprehensive income - - -
Dividends paid - - -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - - (12)
Elimination of the movement in treasury shares
held by Group entities(1) (1 145) (3) (289)
Movement in share-based payment reserve - - 3
Transfer from share-based payment reserve - - 3
Value of employee services - - -
Conversion from cash-settled to equity-settled schemes - - -
Deferred tax - - -
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - -
Share of post-tax results of associates and joint ventures - - -
Acquisition of a subsidiary(2) - - -
Disposal of interest in a subsidiary(3) - - -
Balance at the end of the reporting period 845 725 1 691 4 250
Total
Retained other
earnings reserves
Rm Rm
Balance at the beginning of the reporting period 70 237 6 211
Total comprehensive income 14 228 421
Profit for the period 14 331 -
Other comprehensive income (103) 421
Dividends paid (8 248) -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements 3 -
Elimination of the movement in treasury shares
held by Group entities(1) - -
Movement in share-based payment reserve - 673
Transfer from share-based payment reserve - (3)
Value of employee services - 283
Conversion from cash-settled to equity-settled schemes - 430
Deferred tax - (37)
Movement in general credit risk reserve (130) 130
Movement in foreign insurance subsidiary regulatory reserve (2) 2
Share of post-tax results of associates and joint ventures (129) 129
Acquisition of a subsidiary(2) - -
Disposal of interest in a subsidiary(3) (174) -
Balance at the end of the reporting period 75 785 7 566
General
credit Available-
risk for-sale
reserve reserve
Rm Rm
Balance at the beginning of the reporting period 597 912
Total comprehensive income - (352)
Profit for the period - -
Other comprehensive income - (352)
Dividends paid - -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - -
Elimination of the movement in treasury shares
held by Group entities(1) - -
Movement in share-based payment reserve - -
Transfer from share-based payment reserve - -
Value of employee services - -
Conversion from cash-settled to equity-settled schemes - -
Deferred tax - -
Movement in general credit risk reserve 130 -
Movement in foreign insurance subsidiary regulatory reserve - -
Share of post-tax results of associates and joint ventures - -
Acquisition of a subsidiary(2) - -
Disposal of interest in a subsidiary(3) - -
Balance at the end of the reporting period 727 560
Notes
(1) The movement is largely due to the elimination of treasury shares in the share incentive trust. These shares were
acquired by the trust as part of the conversion of the cash-settled share-based payment schemes to the equity-settled
share-based payment schemes.
(2) The Group acquired a 63% shareholding in First Assurance Holdings Limited.
(3) The Group disposed of part of its interest in National Bank of Commerce (NBC), reducing its interest from
66% to 55%.
2015
Foreign
Foreign insurance
Cash flow currency subsidiary
hedging translation regulatory
reserve reserve reserve
Rm Rm Rm
Balance at the beginning of the reporting period 353 3 465 20
Total comprehensive income (2 223) 2 996 -
Profit for the period - - -
Other comprehensive income (2 223) 2 996 -
Dividends paid - - -
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - - -
Elimination of the movement in treasury shares
held by Group entities(1) - - -
Movement in share-based payment reserve - - -
Transfer from share-based payment reserve - - -
Value of employee services - - -
Conversion from cash-settled to equity-settled schemes - - -
Deferred tax - - -
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - 2
Share of post-tax results of associates and joint ventures - - -
Acquisition of a subsidiary(2) - - -
Disposal of interest in a subsidiary(3) - - -
Balance at the end of the reporting period (1 870) 6 461 22
Capital and
reserves
Associates’ attributable
Share-based and joint to ordinary
payment ventures’ equity
reserve reserve holders
Rm Rm Rm
Balance at the beginning of the reporting period 56 808 82 690
Total comprehensive income - - 14 649
Profit for the period - - 14 331
Other comprehensive income - - 318
Dividends paid - - (8 248)
Purchase of Group shares in respect of
equity-settled share-based payment arrangements
- - (9)
Elimination of the movement in treasury shares
held by Group entities(1) - - (292)
Movement in share-based payment reserve 673 - 676
Transfer from share-based payment reserve (3) - -
Value of employee services 283 - 283
Conversion from cash-settled to equity-settled schemes 430 - 430
Deferred tax (37) - (37)
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - -
Share of post-tax results of associates and joint ventures - 129 -
Acquisition of a subsidiary(2) - - -
Disposal of interest in a subsidiary(3) - - (174)
Balance at the end of the reporting period 729 937 89 292
Non- Non-
controlling controlling
interest - interest -
ordinary preference Total
shares shares equity
Rm Rm Rm
Balance at the beginning of the reporting period 3 611 4 644 90 945
Total comprehensive income 1 204 321 16 174
Profit for the period 752 321 15 404
Other comprehensive income 452 - 770
Dividends paid (495) (321) (9 064)
Purchase of Group shares in respect of
equity-settled share-based payment arrangements - - (9)
Elimination of the movement in treasury shares
held by Group entities(1) - - (292)
Movement in share-based payment reserve 4 - 680
Transfer from share-based payment reserve - - -
Value of employee services 4 - 287
Conversion from cash-settled to equity-settled schemes - - 430
Deferred tax - - (37)
Movement in general credit risk reserve - - -
Movement in foreign insurance subsidiary regulatory reserve - - -
Share of post-tax results of associates and joint ventures - - -
Acquisition of a subsidiary(2) 209 - 209
Disposal of interest in a subsidiary(3) 178 - 4
Balance at the end of the reporting period 4 711 4 644 98 647
Summary consolidated statement of cash flows
for the reporting period ended 31 December
2016 2015
Note Rm Rm
Net cash generated from operating activities 6 962 16 357
Net cash utilised in investing activities (4 201) (4 547)
Net cash utilised in financing activities (7 509) (7 316)
Net (decrease)/increase in cash and cash equivalents (4 748) 4 494
Cash and cash equivalents at the beginning of the reporting period 1 21 366 16 626
Effect of foreign exchange rate movements on cash and cash equivalents 1 116 246
Cash and cash equivalents at the end of the reporting period 2 17 734 21 366
Notes to the summary consolidated statement of cash flows
1. Cash and cash equivalents at the beginning of the reporting period
Cash, cash balances and balances with central banks 12 899 12 903
Loans and advances to banks 8 467 3 723
21 366 16 626
2. Cash and cash equivalents at the end of the reporting period
Cash, cash balances and balances with central banks 13 141 12 899
Loans and advances to banks 4 593 8 467
17 734 21 366
Summary notes to the consolidated financial results
for the reporting period ended
1. Non-current assets and non-current liabilities held for sale
The following movements in non-current assets and non-current liabilities held for sale were effected during the
current financial reporting period:
* RBB transferred investment properties with a total carrying value of R456m and a subsidiary with total assets of
R367m and total liabilities of R9m to non-current assets and non-current liabilities held for sale. The Commercial
Property Finance (CPF) Equity division disposed of an investment security and investment property with a carrying
value of R15m and R64m respectively.
* Head Office disposed of property and equipment with a carrying value of R94m.
* WIMI transferred a consolidated structured entity with total assets of R245m and total liabilities of R233m out of
non-current assets and non-current liabilities held for sale. This was done following a reassessment by management
of the time expected to be taken to effect disposal.
* CIB transferred investment securities with a carrying value of R1 136m out of non-current assets held for sale.
This was done following a change in management intention with regards to disposal.
The following movements in non-current assets and non-current liabilities held for sale were effected during the
previous financial reporting period:
* CIB transferred investment securities with a carrying value of R 1 282m to non-current assets held for sale.
* Disposals of non-current assets held for sale occurred in RBB (including CPF) and Head Office.
2. Loans and advances to customers
2016 2015
Rm Rm
Corporate overdrafts and specialised finance loans 8 285 8 784
Credit cards 41 000 42 257
Foreign currency loans 29 478 22 964
Instalment credit agreements 76 219 74 845
Gross advances 94 488 91 931
Unearned finance charges (18 269) (17 086)
Loans to associates and joint ventures 20 183 17 079
Micro loans 4 636 3 941
Mortgages 270 876 273 078
Other advances 25 636 31 204
Overdrafts 39 920 37 007
Overnight finance 15 574 15 249
Personal and term loans 86 206 88 262
Preference shares 17 443 16 127
Reverse repurchase agreements (Carries) 16 116 20 310
Wholesale overdrafts 88 453 69 352
Gross loans and advances to customers 740 025 720 459
Impairments losses on loans and advances (19 716) (17 100)
720 309 703 359
2016
Performing
loans Coverage
Exposure Impairment ratio
Loans and advances to customers Rm Rm %
RBB 474 866 4 936 1.04
Retail Banking South Africa 366 861 3 290 0.90
Credit cards 34 802 728 2.09
Instalment credit agreements 73 530 735 1.00
Loans to associates and joint ventures 18 933 - -
Mortgages 216 955 1 213 0.56
Other loans and advances 510 - -
Overdrafts 3 923 54 1.38
Personal and term loans 18 208 560 3.08
Business Banking South Africa 68 147 794 1.17
Mortgages (including CPF) 34 547 179 0.52
Overdrafts 18 284 366 2.00
Term loans 15 316 249 1.63
RBB Rest of Africa 39 858 852 2.14
CIB 227 824 1 017 0.45
WIMI 5 615 14 0.25
Head Office, Treasury and other operations 623 4 0.64
Loans and advances to customers 708 928 5 971 0.84
Loans and advances to customers and banks 758 717 5 971 0.79
Non-
performing
loans Coverage
Exposure Impairment ratio
Loans and advances to customers Rm Rm %
RBB 26 591 11 923 44.84
Retail Banking South Africa 20 166 8 655 42.92
Credit cards 5 423 3 883 71.60
Instalment credit agreements 2 085 925 44.36
Loans to associates and joint ventures - - -
Mortgages 10 029 2 109 21.03
Other loans and advances - - -
Overdrafts 220 142 64.55
Personal and term loans 2 409 1 596 66.25
Business Banking South Africa 3 287 1 161 35.32
Mortgages (including CPF) 1 566 535 34.16
Overdrafts 929 421 45.32
Term loans 792 205 25.88
RBB Rest of Africa 3 138 2 107 67.14
CIB 4 390 1 765 40.21
WIMI 116 57 49.14
Head Office, Treasury and other operations - - -
Loans and advances to customers 31 097 13 745 44.20
Loans and advances to customers and banks 31 097 13 745 44.20
Net total exposure
Loans and advances to customers Rm
RBB 484 598
Retail Banking South Africa 375 082
Credit cards 35 614
Instalment credit agreements 73 955
Loans to associates and joint ventures 18 933
Mortgages 223 662
Other loans and advances 510
Overdrafts 3 947
Personal and term loans 18 461
Business Banking South Africa 69 479
Mortgages (including CPF) 35 399
Overdrafts 18 426
Term loans 15 654
RBB Rest of Africa 40 037
CIB 229 432
WIMI 5 660
Head Office, Treasury and other operations 619
Loans and advances to customers 720 309
Loans and advances to customers and banks 770 098
2015
Performing
loans Coverage
Exposure Impairment ratio
Loans and advances to customers Rm Rm %
RBB 473 956 4 184 0.88
Retail Banking South Africa 367 475 3 024 0.82
Credit Cards 36 390 724 1.99
Instalment credit agreements 72 426 548 0.76
Loans to associates and joint ventures 16 176 - -
Mortgages 222 315 1 243 0.56
Other loans and advances 367 - -
Overdrafts 2 781 34 1.22
Personal and term loans 17 020 475 2.79
Business Banking South Africa 62 052 661 1.07
Mortgages (including CPF) 30 016 190 0.63
Overdrafts 17 289 270 1.56
Term loans 14 747 201 1.36
RBB Rest of Africa 44 429 499 1.12
CIB 212 508 766 0.36
WIMI 5 346 32 0.60
Head Office, Treasury and other operations 669 40 5.98
Loans and advances to customers 692 479 5 022 0.73
Loans and advances to customers and banks 778 430 5 022 0.65
Non-
performing
loans Coverage
Exposure Impairment ratio
Loans and advances to customers Rm Rm %
RBB 25 077 11 094 44.24
Retail Banking South Africa 18 198 7 652 42.05
Credit Cards 5 014 3 532 70.44
Instalment credit agreements 1 602 621 38.76
Loans to associates and joint ventures - - -
Mortgages 9 341 2 064 22.10
Other loans and advances - - -
Overdrafts 172 99 57.56
Personal and term loans 2 069 1 336 64.57
Business Banking South Africa 3 306 1 152 34.85
Mortgages (including CPF) 1 620 586 36.17
Overdrafts 960 370 38.54
Term loans 726 196 27.00
RBB Rest of Africa 3 573 2 290 64.09
CIB 2 834 951 33.56
WIMI 69 33 47.83
Head Office, Treasury and other operations - - -
Loans and advances to customers 27 980 12 078 43.17
Loans and advances to customers and banks 27 980 12 078 43.17
Net total exposure
Loans and advances to customers Rm
RBB 483 755
Retail Banking South Africa 374 997
Credit Cards 37 148
Instalment credit agreements 72 859
Loans to associates and joint ventures 16 176
Mortgages 228 349
Other loans and advances 367
Overdrafts 2 820
Personal and term loans 17 278
Business Banking South Africa 63 545
Mortgages (including CPF) 30 860
Overdrafts 17 609
Term loans 15 076
RBB Rest of Africa 45 213
CIB 213 625
WIMI 5 350
Head Office, Treasury and other operations 629
Loans and advances to customers 703 359
Loans and advances to customers and banks 789 310
3. Borrowed funds
During the reporting period the significant movements in borrowed funds were as follows:
R2 381m (2015: R4 870m) of subordinated notes were issued and R178m (2015: R2 455m)
were redeemed.
4. Other impairments
2016 2015
Rm Rm
(Reversal)/impairment raised on financial instruments (4) 10
Investments in associates and joint ventures 42 -
Other 652 74
Goodwill 34 1
Intangible assets(1) 618 72
Property and equipment - 1
690 84
5. Headline earnings
2016 2015
Gross Net(2) Gross Net(2)
Rm Rm Rm Rm
Headline earnings are determined as follows:
Profit attributable to ordinary equity holders
of the Group 14 708 14 331
Total headline earnings adjustment: 272 (44)
IFRS 3 - Goodwill impairment 34 34 1 1
IFRS 5 - Gains on disposal of non-currents
assets held for sale (31) (25) (1) (1)
IAS 16 - Profit on disposal of property and
equipment (29) (21) (13) (10)
IAS 21 - Recycled foreign currency
translation reserve (320) (297) (267) (267)
IAS 28 - Impairment of investments
in associates and joint ventures 42 34 - -
IAS 36 - Impairment of property and equipment - - 1 1
IAS 36 - Impairment of intangible assets 618 610 72 51
IAS 38 - Gain on disposal of intangible assets - - (7) (5)
IAS 39 - Release of available-for-sale reserves (3) (2) 210 152
IAS 40 - Change in fair value of investment
properties (70) (61) 47 34
Headline earnings/diluted headline earnings 14 980 14 287
Headline earnings per share (cents) 1 769.6 1 687.2
Diluted headline earnings per share (cents) 1 769.4 1 686.2
Notes
(1) During the current year, two of the Group’s intangible assets were impaired. An acquired customer list was fully
impaired following an adjustment to the interest rate outlook for the related business. The second impairment relates to
the costs previously spent by the Group on the Virtual Bank initiative. In calculating the impairment to be recognised,
the Group determined the value in use based on a discounted cash flow methodology.
(2) The net amount is reflected after taxation and non-controlling interest.
6. Dividends per share
2016 2015
Rm Rm
Dividends declared to ordinary equity holders
Interim dividend (29 July 2016: 460 cents) (29 July 2015: 450 cents) 3 900 3 815
Final dividend (23 February 2017: 570 cents)(1 March 2016: 550 cents) 4 832 4 663
8 732 8 478
Dividends declared to ordinary equity holders (net of treasury shares)(1)
Interim dividend (29 July 2016: 460 cents) (29 July 2015: 450 cents) 3 888 3 807
Final dividend (23 February 2017: 570 cents)(1 March 2016: 550 cents) 4 820 4 651
8 708 8 458
Dividends declared to non-controlling preference equity holders
Interim dividend (29 July 2016: 3 696,57534 cents)(29 July 2015: 3 282,8082 cents) 183 162
Final dividend (23 February 2017: 3 644,79452 cents)(1 March 2016: 3 395,47945 cents) 180 168
363 330
Dividends paid to ordinary equity holders(net of treasury shares)(1)
Final dividend net of treasury shares (1 March 2016: 550 cents)(3 March 2015: 525 cents) 4 648 4 442
Interim dividend net of treasury shares (29 July 2016: 460 cents) (29 July 2015: 450 cents) 3 888 3 806
8 536 8 248
Dividends paid to non-controlling preference equity holders
Final dividend (1 March 2016: 3 395,47945 cents)(3 March 2015: 3 210,8904 cents) 168 159
Interim dividend (29 July 2016: 3 696,57534 cents)(29 July 2015: 3 282,8082 cents) 183 162
351 321
Note
(1) The dividends paid on treasury shares are calculated on payment date.
7. Acquisitions and disposals of businesses and other similar transactions
7.1 Acquisitions of businesses during the current reporting period
In order to continue building and shaping the Group’s predictive underwriting products, expertise and technology,
the Group acquired a 75% controlling stake in Absa Instant Life Proprietary Limited, previously known as Instant Life
Proprietary Limited. The acquisition of the investment had an effective acquisition date of 31 March 2016 and is a
business combination within the scope of IFRS 3. The acquisition date fair value of the consideration transferred
amounted to R100m.
The non-controlling interest below was measured at their proportionate share of the acquiree’s identifiable net
assets. Goodwill of R20m has been recognised and includes, but is not limited to, the insurer’s workforce and the
increased market share gained.
The transaction is currently being evaluated in terms of the Purchase Price Allocation (PPA). The initial accounting
considerations include the valuation of intangible assets (identified in terms of IFRS3 - i.e. Value of business
acquired and software system) and share-based payments.
From the date of acquisition, Absa Instant Life contributed revenue of R9m to the total income earned by the Group. If
the combination had taken place at the beginning of the year, an additional R5m would have been generated by the Group,
thereby resulting in a total income of R14m. From the date of acquisition, Absa Instant Life contributed losses after
tax of R12m to total profits earned by the Group. If the combination taken place at the beginning of the year, losses
after tax of an additional R3m would have been incurred by the Group, thereby resulting in a total loss after tax
of R15m.
Instant Life
2016
Fair value
recognised on acquisition
Rm Rm
Consideration at date of acquisition:
Cash 100 100
Total consideration 100 100
Recognised amounts of identifiable assets acquired
and liabilities assumed
Loans and advances to banks 6 6
Other assets 14 14
Intangible assets 125 125
Other liabilities (5) (5)
Deferred tax liabilities (32) (32)
Provisions (1) (1)
Total identifiable net assets 107 107
Total NCI (27) (27)
Goodwill 20 20
Total 100 100
A summary of the total net cash outflow and cash and cash equivalents related to acquisitions and
disposals of businesses and other similar transactions is included below:
2016 2015
Rm Rm
Summary of net cash outflow due to acquisitions 100 384
7.1.2 Disposals of businesses during the current reporting period
There were no disposals of businesses during the current reporting period.
7.2.1 Acquisitions of businesses during the previous reporting period
The Group acquired 63% of the issued ordinary share capital of First Assurance Company Limited (FACL),
an East African insurer, with operations in both Kenya and Tanzania. The acquisition of the investment
in FACL had an effective acquisition date of 30 October 2015, and is a business combination within
the scope of IFRS 3.
The non-controlling interest below was measured at their proportionate share of the acquiree’s
identifiable net assets. Goodwill of R164m has been recognised mainly attributable to intangible assets
that do not qualify for recognition on the basis that they are not separable. The Purchase Price Allocation
(PPA) for the transaction has been finalised with no differences to the provisional amounts published in
the previous reporting period being noted. From the date of acquisition, FACL contributed R26m to the total
income of the Group in 2015. Had the acquisition taken place at the beginning of 2015, the total income for
the Group would have increased by R152m for 2015 year end reporting. From the date of acquisition, FACL
contributed R9m to profit after tax of the Group in 2015. Had the acquisition taken place at the beginning
of 2015, profit after tax for the Group would have increased by R37m for 2015 year end reporting.
The Group also purchased additional shares in a non-core joint venture which resulted in an increase in the Group’s
effective shareholding from 50% to 67% and a business combination in terms of IFRS 3. The acquisition occurred on
18 November 2015. A bargain purchase gain of R4m was recognised in the statement of comprehensive income.
First Assurance
Holdings Other Group
2015
Fair value
recognised on acquisition
Rm Rm Rm
Consideration at date of acquisition:
Cash 370 14 384
Total consideration 370 14 384
Recognised amounts of identifiable assets acquired
and liabilities assumed
Property, plant and equipment 28 - 28
Investment securities 145 - 145
Loans and advances to banks 196 - 196
Other assets 440 5 445
Investment properties 170 292 462
Current tax assets 2 - 2
Other liabilities (65) (1) (66)
Insurance liabilities (586) - (586)
Deferred tax liabilities (3) (4) (7)
Loans from Subsidiaries - (176) (176)
Loans from Absa Group Companies - (90) (90)
Total identifiable net assets 327 26 353
Total NCI (121) (8) (129)
Goodwill/(Bargain purchase) 164 (4) 160
Total 370 14 384
7.2.2 Disposals of businesses during the previous reporting period
National Bank of Commerce Limited (NBC) was recapitalised through a rights issue to all its shareholders
during 2013. As the Government of Tanzania (GoT) was unable to subscribe to their rights at the time, an
option was granted to GoT providing it with the right to purchase its pro rata portion of the shares from
the Group within a period of two years after the rights issue. The GoT exercised their option during the
previous reporting period which resulted in a decrease of the Group’s shareholding from 66% to 55%.
8. Related parties
Barclays Bank PLC sold 12,2% of its Barclays Africa Group Limited shareholding for R13,1bn on 5 May 2016
through a book build to money managers, leaving the Barclays Bank PLC shareholding at 50,1%.
9. Financial guarantee contracts
2016 2015
Rm Rm
Financial guarantee contracts 10 24
Financial guarantee contracts represent contracts where the Group undertakes to make specified payments
to a counterparty, should the counterparty suffer a loss as a result of a specified debtor failing to make
payment when due in accordance with the terms of a debt instrument. This amount represents the maximum
off-statement of financial position exposure.
10. Commitments
2016 2015
Rm Rm
Authorised capital expenditure
Contracted but not provided for(1) 521 901
The Group has capital commitments in respect of computer
equipment and property development.
Management is confident that future net revenues and funding will be
sufficient to cover these commitments.
Operating lease payments due
No later than one year 1 309 758
Later than one year and no later than five years 2 946 1 742
Later than five years 1 228 956
5 483 3 456
The operating lease commitments comprise a number of separate operating
leases in relation to property and equipment, none of which is individually
significant to the Group.
Leases are negotiated for an average term of three to five years and
rentals are renegotiated annually.
Sponsorship payments due
No later than one year 84 147
Later than one year and no later than five years 20 177
104 324
The Group has sponsorship commitments in respect of sports, arts and
culture sponsorships.
Other commitments
No later than one year - 991
The South Africa Reserve Bank (SARB) announced in August 2014 that Africa Bank Limited (a subsidiary of
Africa Bank Investments Limited) would be placed under curatorship. A consortium of six South African banks
(including Barclays Africa Group Limited) and the Public Investment Corporation (PIC) had underwritten R5bn
respectively. In the current financial reporting period, African Bank Holdings Limited (that is, the holding
company of “Good Bank”, African Bank Limited) was successfully capitalised, with BAGL subsidiary for a
portion of the issued ordinary shares. The investment is recognised within Investment Securities, and the
remaining commitment which was underwritten by Barclays Africa Group Limited, but guaranteed by the SARB,
has been extinguished during the current reporting period.
11. Contingencies
2016 2015
Rm Rm
Guarantees 38 441 37 901
Irrevocable debt facilities 135 935 152 984
Irrevocable equity facilities 141 364
Letters of credit(1) 8 481 8 207
Other 135 5 325
183 133 204 781
Guarantees include performance guarantee contracts and payment guarantee contracts.
Irrevocable facilities are commitments to extend credit where the Group does not have the right to terminate the
facilities by written notice. Commitments generally have fixed expiry dates. Since commitments may expire without being drawn
upon, the total contract amounts do not necessarily represent future cash requirements.
Note
(1) The presentation of commitments for 2015 has been revised following the reallocation of an amount of R740m from
Commitments to Letters of Credit (within Contingencies) so as to more appropriately reflect the substance of the item.
Legal proceedings
The Group has been party to proceedings against it during the reporting period, and as at the reporting date the
following material cases are disclosed:
* Pinnacle Point Holdings Proprietary Limited (PPG): New Port Finance Company and the trustees of the Winifred Trust
(“the plaintiffs”) allege a local bank conducted itself unlawfully, and that Absa Bank Limited (the Bank) was privy
to such conduct. They have instituted proceedings against the Bank for damages for an amount of R1 387m. Although
Pinnacle Point Holding’s claim has been withdrawn, the second to fifth plaintiff’s claims remain and will proceed
to trial.
* Ayanda Collective Investment Scheme (the Scheme): Absa Capital Investor Services was the trustee of Ayanda
Collective Investment Scheme, in which Corporate Money Managers (CMM) managed a portfolio of assets within the Scheme.
The joint curators of the CMM group of companies and the Altron Pension Fund (an investor in the fund) allege that the
defendants caused damages to them arising from their alleged failure to meet their obligations in the trust deed
together with their statutory obligations set out in the Collective Investment Scheme Act, in respect of which they
seek payment of R1 157m.
The Group is engaged in various other legal, competition and regulatory matters both in South Africa and a number of
other jurisdictions. It is involved in legal proceedings which arise in the ordinary course of business from time to time,
including (but not limited to) disputes in relation to contracts, securities, debt collection, consumer credit, fraud,
trusts, client assets, competition, data protection, money laundering, employment, environmental and other statutory
and common law issues.
The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal
and other proceedings by regulators, governmental and other public bodies in connection with (but not limited to) consumer
protection measures, compliance with legislation and regulation, wholesale trading activity and other areas of banking
and business activities in which the Group is or has been engaged.
At the present time, the Group does not expect the ultimate resolution of any of these other matters to have a
material adverse effect on its financial position. However, in light of the uncertainties involved in such matters and the
matters specifically described in this note, there can be no assurance that the outcome of a particular matter or matters
will not be material to the Group’s results of operations or cash flow for a particular period, depending on, amongst
other things, the amount of the loss resulting from the matter(s) and the amount of income otherwise reported for the
reporting period.
The Group has not disclosed the contingent liabilities associated with these matters either because they cannot
reasonably be estimated or because such disclosure could be prejudicial to the outcome of the matter. Provision is made for
all liabilities which are expected to materialise.
Regulatory matters
The scale of regulatory change remains challenging and the global financial crisis is resulting in a significant
tightening of regulation and changes to regulatory structures globally, especially for companies that are deemed to be of
systemic importance. Concurrently, there is continuing political and regulatory scrutiny of the operation of the banking
and consumer credit industries globally which, in some cases, is leading to increased regulation. The nature and impact of
future changes in the legal framework, policies and regulatory action cannot currently be fully predicted and are
beyond the Group’s control, but especially in the area of banking and insurance regulation, are likely to have an impact on
the Group’s businesses and earnings.
The Group is continuously evaluating its compliance programmes and controls in general. As a consequence of these
compliance programmes and controls, including monitoring and review activities, the Group has also adopted appropriate
remedial and/or mitigating steps, where necessary or advisable, and made disclosures on material findings as and when
appropriate.
Absa Bank Limited, a subsidiary of Barclays Africa Group Limited, has identified potentially fraudulent activity by
certain of its customers using import advance payments for imports in 2014 and 2015 to effect foreign exchange transfers
from South Africa to beneficiary accounts located in East Asia, UK, Europe and the US. As a result, the Group has been
conducting a review of relevant activity, processes, systems and controls. The Group is keeping relevant authorities
informed as to the status of this matter and is providing information to these authorities as part of its on-going
cooperation. It is not currently possible to estimate the financial impact of the actions described on the Group, if any.
In February 2017 the South African Competition Commission (SACC) referred Absa Bank Limited, among other banks, to
the Competition Tribunal to be prosecuted for breaches of South African competition law related to Foreign Exchange
trading of South African Rand. The SACC found from its investigation that, between 2007 - 2013, the respondents had
engaged in various forms of collusive behaviour. Absa Bank Limited and its parent Barclays PLC brought the conduct to
the attention of the SACC under its leniency programme and have cooperated with, and will continue to cooperate with,
the SACC in relation to this matter. The SACC is therefore not seeking an order from the Tribunal to impose any
administrative fine on Absa Bank Limited.
Income taxes
The Group is subject to income taxes in numerous jurisdictions and the calculation of the Group’s tax charge and
worldwide provisions for income taxes necessarily involves a degree of estimation and judgement. There may be transactions
and calculations for which the ultimate tax treatment is uncertain or in respect of which the relevant tax authorities may
have indicated disagreement with the Group’s treatment and accordingly the final tax charge cannot be determined until
resolution has been reached with the relevant tax authority. The Group recognises liabilities for anticipated tax audit
issues based on estimates of whether additional taxes will be due after taking into account expert external advice where
appropriate. Where the final tax outcome of these matters is different from the amounts that were initially recorded,
such differences will impact the current and deferred income tax assets and liabilities in the reporting period in which
such determination is made. The risks are managed in accordance with the Group’s tax Risk Framework.
12. Segment reporting
2016 2015(1)
Rm Rm
12.1 Headline earnings contribution by segment
RBB 9 313 9 605
CIB 5 098 3 999
WIMI 1 399 1 452
Head Office, Treasury and other operations (830) (769)
14 980 14 287
12.2 Total income by segment
RBB 52 217 49 160
CIB 16 054 13 741
WIMI 5 223 5 235
Head Office, Treasury and other operations (1 100) (938)
72 394 67 198
12.3 Total internal income by segment
RBB (8 719) (7 613)
CIB (3 231) (844)
WIMI (378) (426)
Head Office, Treasury and other operations 12 328 8 883
- -
12.4 Total assets by segment
RBB 808 892 812 175
CIB 552 614 574 715
WIMI 51 202 43 898
Head Office, Treasury and other operations (311 685) (286 184)
1 101 023 1 144 604
12.5 Total liabilities by segment
RBB 798 258 795 837
CIB 545 668 566 089
WIMI 45 746 38 386
Head Office, Treasury and other operations (390 929) (354 355)
998 743 1 045 957
Note
(1) Operational changes, management changes and associated changes to the way in which the Chief Operating Decision
Maker (CODM) views the performance of each business segment, have resulted in the reallocation of earnings, assets and
liabilities between operating segments. Refer to note 15.
13. Assets and liabilities not held at fair value
The following table summarises the carrying amounts and fair value of those assets and liabilities not held at fair
value.
2016 2015
Carrying Carrying
value Fair value value Fair value
Rm Rm Rm Rm
Financial assets
Balances with other central banks 13 395 13 395 12 141 12 141
Balances with the SARB 18 552 18 552 17 459 17 459
Coins and bank notes 13 141 13 141 12 898 12 898
Money market assets 38 38 34 34
Cash, cash balances and balances with central banks 45 126 45 126 42 532 42 532
Loans and advances to banks 29 932 29 827 61 623 61 632
Other assets 22 120 22 188 22 875 22 875
Retail Banking South Africa 375 082 374 973 374 996 373 967
Credit cards 35 614 35 614 37 148 37 148
Instalment credit agreements 73 955 73 650 72 859 71 798
Loans to associates and joint ventures 18 933 18 933 16 175 16 175
Mortgages 223 662 223 674 228 349 228 359
Other loans and advances 510 510 367 367
Overdrafts 3 947 3 947 2 820 2 820
Personal and term loans 18 461 18 645 17 278 17 300
Business Banking South Africa 69 375 69 387 63 412 63 440
Mortgages (including CPF) 35 295 35 307 30 730 30 742
Overdrafts(1) 18 426 18 426 17 604 17 620
Term loans(1) 15 654 15 654 15 078 15 078
RBB Rest of Africa 40 037 40 027 45 212 45 212
CIB 205 464 205 464 184 342 184 344
WIMI 5 660 5 660 5 350 5 350
Head Office, Treasury and other operations 615 615 625 625
Loans and advances to customers - net of
impairment losses 696 233 696 126 673 937 672 938
Total assets 793 411 793 267 800 967 799 977
Financial liabilities
Deposits from banks 44 107 44 107 50 962 50 962
Other liabilities 23 600 23 584 21 398 21 278
Call deposits 62 426 62 426 72 172 72 172
Cheque account deposits 200 367 200 367 200 614 200 614
Credit card deposits 1 906 1 906 2 002 2 002
Fixed deposits 153 295 153 358 157 661 157 774
Foreign currency deposits 24 825 24 825 27 865 27 865
Notice deposits 59 358 59 371 48 954 48 963
Other deposits 3 189 3 189 13 791 13 791
Saving and transmission deposits 152 378 152 378 147 561 147 561
Deposits due to customers 657 744 657 820 670 620 670 742
Debt securities in issue 134 197 134 197 122 436 119 859
Borrowed funds 15 673 15 893 13 151 13 520
Total liabilities 875 321 875 601 878 567 876 361
Note
(1) Some overdrafts were reallocated to term loans to align to the way the products are utilised by the customers. The
restatement effected resulted in a decrease of R821m (2015: R555m) in “Overdrafts” with corresponding increase in “Term
loans”.
14. Assets and liabilities held at fair value
14.1 Fair value measurement and valuation processes
Financial assets and financial liabilities
The Group has an established control framework with respect to the measurement of fair values. The framework includes
a Valuation Committee and an Independent Valuation Control team (IVC), which is independent from the front office.
The Valuation Committee, which comprises representatives from senior management, will formally approve valuation
policies and any changes to valuation methodologies. Significant valuation issues are reported to the Barclays Africa Group
Audit and Compliance Committee.
The Valuation Committee is responsible for overseeing the valuation control process and will therefore consider the
appropriateness of valuation techniques and inputs for fair value measurement.
The IVC independently verifies the results of trading and investment operations and all significant fair value
measurements. They source independent data from external independent parties, as well as internal risk areas when performing
independent price verification for all financial instruments held at fair value. They also assess and document the inputs
obtained from external independent sources to measure the fair value which supports conclusions that valuations are
performed in accordance with IFRS and internal valuation policies.
Investment properties
The fair value of investment properties is determined based on the most appropriate methodology applicable to the
specific property. Methodologies include the market comparable approach that reflects recent transaction prices for similar
properties, discounted cash flows and income capitalisation methodologies. In estimating the fair value of the
properties, the highest and best use of the properties is taken into account.
Where possible the fair value of the Group’s investment properties is determined through valuations performed by
external independent valuators.
When the Group’s internal valuations are different to that of the external independent valuers, detailed procedures
are performed to substantiate the differences, whereby the IVC verifies the procedures performed by the front office and
considers the appropriateness of any differences to external independent valuations.
14.2 Fair value measurements
Valuation inputs
IFRS 13 requires an entity to classify fair values measured and/or disclosed according to a hierarchy that reflects
the significance of observable market inputs. The three levels of the fair value hierarchy are defined as follows:
Quoted market prices - Level 1
Fair values are classified as Level 1 if they have been determined using observable prices in an active market. Such
fair values are determined with reference to unadjusted quoted prices for identical assets or liabilities in active
markets where the quoted price is readily available, and the price represents actual and regularly occurring market
transactions on an arm’s length basis. An active market is one in which transactions occur with sufficient volume and
frequency to provide pricing information on an ongoing basis.
Valuation technique using observable inputs - Level 2
A Fair values classified as Level 2 have been determined using models for which inputs are observable in an active
market.
A valuation input is considered observable if it can be directly observed from transactions in an active market, or if
there is compelling external evidence demonstrating an executable exit price.
Valuation technique using significant unobservable inputs - Level 3
Fair values are classified as Level 3 if their determination incorporates significant inputs that are not based on
observable market data (unobservable inputs). An input is deemed significant if it is shown to contribute more than 10% to
the fair value of an item. Unobservable input levels are generally determined based on observable inputs of a similar
nature, historical observations or other analytical techniques.
Judgemental inputs on valuation of principal instruments
The following summary sets out the principal instruments whose valuation may involve judgemental inputs:
Debt securities and treasury and other eligible bills
These instruments are valued, based on quoted market prices from an exchange, dealer, broker, industry group or
pricing service, where available. Where unavailable, fair value is determined by reference to quoted market prices for
similar instruments or, in the case of certain mortgage-backed securities, valuation techniques using inputs derived from
observable market data, and, where relevant, assumptions in respect of unobservable inputs.
Equity instruments
Equity instruments are valued, based on quoted market prices from an exchange, dealer, broker, industry group or
pricing service, where available. Where unavailable, fair value is determined by reference to quoted market prices for
similar instruments or by using valuation techniques using inputs derived from observable market data, and, where relevant,
assumptions in respect of unobservable inputs.
Also included in equity instruments are non-public investments, which include investments in venture capital
organisations. The fair value of these investments is determined using appropriate valuation methodologies which, dependent on
the nature of the investment, may include discounted cash flow analysis, enterprise value comparisons with similar
companies and price:earnings comparisons. For each investment, the relevant methodology is applied consistently over time.
Derivatives
Derivative contracts can be exchange-traded or traded OTC. OTC derivative contracts include forward, swap and option
contracts related to interest rates, bonds, foreign currencies, credit spreads, equity prices and commodity prices or
indices on these instruments. Fair values of derivatives are obtained from quoted market prices, dealer price quotations,
discounted cash flow and option pricing models.
Loans and advances
The disclosed fair value of loans and advances to banks and customers is determined by discounting contractual cash
flows. Discount factors are determined using the relevant forward base rates (as at valuation date) plus the originally
priced spread. Where a significant change in credit risk has occurred, an updated spread is used to reflect valuation date
pricing. Behavioural cash flow profiles, instead of contractual cash flow profiles, are used to determine expected cash
flows where contractual cash flow profiles would provide an inaccurate fair value.
Deposits, debt securities in issue and borrowed funds
Deposits, debt securities in issue and borrowed funds are valued using discounted cash flow models, applying rates
currently offered for issuances with similar characteristics. Where these instruments include embedded derivatives, the
embedded derivative component is valued using the methodology for derivatives as detailed above.
The fair value of amortised cost deposits repayable on demand is considered to be equal to their carrying value. For
other financial liabilities at amortised cost the disclosed fair value approximates the carrying value because the
instruments are short term in nature or have interest rates that reprice frequently.
14.3 Fair value adjustments
The main valuation adjustments required to arrive at a fair value are described below:
Bid-offer valuation adjustments
For assets and liabilities where the Group is not a market maker, mid prices are adjusted to bid and offer prices
respectively. Bid-offer adjustments reflect expected close out strategy and, for derivatives, the fact that they are managed
on a portfolio basis. The methodology for determining the bid-offer adjustment for a derivative portfolio will
generally involve netting between long and short positions and the bucketing of risk by strike and term in accordance with
hedging strategy. Bid-offer levels are derived from market sources, such as broker data. For those assets and liabilities
where the firm is a market maker and has the ability to transact at, or better than, mid-price (which is the case for
certain equity, bond and vanilla derivative markets), the mid-price is used, since the bid-offer spread does not represent a
transaction cost.
Uncollateralised derivative adjustments
A fair value adjustment is incorporated into uncollateralised derivative valuations to reflect the impact on fair
value of counterparty credit risk, the Group’s own credit quality, as well as the cost of funding across all asset classes.
Model valuation adjustments
Valuation models are reviewed under the firm’s model governance framework. This process identifies the assumptions
used and any model limitations (for example, if the model does not incorporate volatility skew). Where necessary, fair
value adjustments will be applied to take these factors into account. Model valuation adjustments are dependent on the size
of portfolio, complexity of the model, whether the model is market standard and to what extent it incorporates all known
risk factors. All models and model valuation adjustments are subject to review on at least an annual basis.
14.4 Fair value hierarchy
The following table shows the Group’s assets and liabilities that are recognised and subsequently measured at fair
value and are analysed by valuation techniques. The classification of assets and liabilities is based on the lowest level
input that is significant to the fair value measurement in its entirety.
2016
Level 1 Level 2 Level 3 Total
Rm Rm Rm Rm
Financial Assets
Cash, cash balances and balances with central banks 2 388 2 492 - 4 880
Investment Securities 60 051 50 906 3 358 114 315
Loans and advances to banks - 19 286 571 19 857
Trading and hedging portfolio assets 33 572 61 419 1 505 96 496
Debt instruments 15 689 6 740 1 324 23 753
Derivative assets - 46 717 181 46 898
Commodity derivatives - 797 - 797
Credit derivatives - 70 114 184
Equity derivatives - 1 540 67 1 607
Foreign exchange derivatives - 15 221 - 15 221
Interest rate derivatives - 29 089 - 29 089
Equity instruments 17 883 - - 17 883
Money market assets - 7 962 - 7 962
Other assets - 4 5 9
Loans and advances to customers - 19 186 4 890 24 076
Investments linked to investment contracts 16 335 2 481 - 18 816
Total financial assets 112 346 155 774 10 329 278 449
Financial liabilities
Deposits from banks - 9 085 - 9 085
Trading and hedging portfolio liabilities 6 508 42 677 308 49 493
Derivative liabilities - 42 677 308 42 985
Commodity derivatives - 875 - 875
Credit derivatives - 137 101 238
Equity derivatives - 1 306 60 1 366
Foreign exchange derivatives - 14 173 - 14 173
Interest rate derivatives - 26 186 147 26 333
Short positions 6 508 - - 6 508
Other liabilities - 4 41 45
Deposits due to customers 154 15 828 1 139 17 121
Debt securities in issue 261 4 652 604 5 517
Liabilities under investment contracts - 29 055 - 29 055
Total financial liabilities 6 923 101 301 2 092 110 316
Non-financial assets
Commodity 1 485 - - 1 485
Investment Properties - - 478 478
Non-recurring fair value measurements - - - -
Non-current assets held for sale(1) - - 823 823
Non-current liabilities held for sale(1) - - 9 9
2015
Level 1 Level 2 Level 3 Total
Rm Rm Rm Rm
Financial Assets
Cash, cash balances and balances with central banks 2 114 1 258 - 3 372
Investment Securities 64 458 32 541 3 966 100 965
Loans and advances to banks - 22 219 2 109 24 328
Trading and hedging portfolio assets 37 037 98 935 1 418 137 390
Debt instruments 18 891 9 430 897 29 218
Derivative assets 51 79 938 521 80 510
Commodity derivatives - 212 - 212
Credit derivatives - 889 23 912
Equity derivatives 6 2 134 43 2 183
Foreign exchange derivatives 45 27 696 3 27 744
Interest rate derivatives - 49 007 452 49 459
Equity instruments 17 321 - - 17 321
Money market assets 774 9 567 - 10 341
Other assets - 1 25 26
Loans and advances to customers 3 21 908 7 511 29 422
Investments linked to investment contracts 16 885 2 632 - 19 517
Total financial assets 120 497 179 494 15 029 315 020
Financial liabilities
Deposits from banks - 12 011 7 12 018
Trading and hedging portfolio liabilities 3 712 91 009 217 94 938
Derivative liabilities - 91 009 217 91 226
Commodity derivatives - 429 - 429
Credit derivatives - 879 14 893
Equity derivatives - 3 768 58 3 826
Foreign exchange derivatives - 28 576 - 28 576
Interest rate derivatives - 57 357 145 57 502
Short positions 3 712 - - 3 712
Other liabilities - 7 5 12
Deposits due to customers 111 15 131 2 557 17 799
Debt securities in issue 202 5 421 624 6 247
Liabilities under investment contracts - 24 209 - 24 209
Total financial liabilities 4 025 147 788 3 410 155 223
Non-financial assets
Commodity 2 005 - - 2 005
Investment Properties - - 1 264 1 264
Non-recurring fair value measurements - - - -
Non-current assets held for sale(1) - - 1 700 1 700
Non-current liabilities held for sale(1) - - 233 233
Note
(1) Includes certain items classified in terms of the requirements of IFRS 5 which are measured in terms of their
respective standards.
14.5 Measurement of assets and liabilities categorised at Level 2
The following table presents information about the valuation techniques and significant observable inputs used in
measuring assets and liabilities categorised as Level 2 in the fair value hierarchy:
Category of asset/liability Valuation techniques applied
Cash, cash balances and balances
with central banks Discounted cash flow models
Loans and advances to banks Discounted cash flow models
Trading and hedging portfolio
assets and liabilities
Debt Instruments Discount cash flow models
Derivatives
Commodity derivatives Discounted cash flow model, option pricing, futures pricing and/or Exchange
Traded Fund (ETF) models
Credit derivatives Discounted cash flow and/or option pricing models
Equity derivatives Discounted cash flow model, option pricing and/or pricing models
Foreign exchange derivatives Discounted cash flow and/or option pricing models
Interest rate derivatives Discounted cash flow and/or option pricing models
Money market assets Discounted cash flow models
Loans and advances to customers Discounted cash flow models
Investment securities and Listed equity: bid price.
investments linked to Other items: discounted
investment contracts cash flow models
Deposits from banks Discounted cash flow models
Deposits due to customers Discounted cash flow models
Debt securities in issue Discounted cash flow models
and other liabilities
Category of asset/liability Significant observable inputs
Cash, cash balances Underlying price of market
and balances with traded instruments and/or
central banks interest rates
Loans and advances to banks Interest rate and/or money
market curves
Trading and hedging portfolio
assets and Liabilities
Debt Instruments Underlying price of market
traded instruments and
interest rates
Derivatives
Commodity Derivatives Spot price of physical or
futures, interest rates and/
or volatility
Credit Derivatives Interest rate, recovery rate,
credit spread and/or quanto ratio
Equity derivatives Spot price, interest rate,
credit spread, and/or quanto
ratios
Foreign exchange Spot price, interest rate
derivatives and/or volatility
Interest rate Interest rate curves, repurchase
derivatives agreement curves, money market
curves and/or volatility
Money market assets Money market rates and/or
interest rates
Loans and advances Interest rate and/or money
to customers market curves
Investment securities and Underlying price of the
investments linked to market traded instrument
investment contracts
Deposits from banks Interest rate curves and/or
money market curves
Deposits due to Interest rate curves and/or
customers money market curves
Debt securities in Underlying price of the market
issue and other traded instrument and/or
liabilities interest rate curves
14.6 Reconciliation of Level 3 assets and liabilities
A reconciliation of the opening balances to closing balances for all movements on Level 3 assets and liabilities is
set out below:
2016
Trading and
hedging Loans and
portfolio Other advances to
assets assets customers
Rm Rm Rm
Opening balance at the beginning of the reporting period 1 418 25 7 511
Net interest income - - 297
Other income - - -
Gains and losses from banking and trading activities 112 - -
Gains and losses from investment activities - - -
Purchases 1 308 (3) -
Sales (1 333) (17) (1 956)
Movement in other comprehensive income - - -
Issues - - -
Settlements - - -
Transferred to/(from) assets/liabilities - - -
Movement in/(out) of Level 3 - - (962)
Closing balance at the end of the reporting period 1 505 5 4 890
Loans and
advances Investment Investment
to banks securities properties
Rm Rm Rm
Opening balance at the beginning of the reporting period 2 109 3 966 1 264
Net interest income - 56 -
Other income - - 17
Gains and losses from banking and trading activities (140) (1 079) -
Gains and losses from investment activities - 106 -
Purchases 70 543 28
Sales (1 468) (233) (83)
Movement in other comprehensive income - (80) -
Issues - - -
Settlements - - -
Transferred to/(from) assets/liabilities - 1 136 (748)
Movement in/(out) of Level 3 - (1 057) -
Closing balance at the end of the reporting period 571 3 358 478
Investments Total
linked to assets at
Investment fair
contracts value
Rm Rm
Opening balance at the beginning of the reporting period - 16 293
Net interest income - 353
Other income - 17
Gains and losses from banking and trading activities - (1 107)
Gains and losses from investment activities - 106
Purchases - 1 946
Sales - (5 090)
Movement in other comprehensive income - (80)
Issues - -
Settlements - -
Transferred to/(from) assets/liabilities - 388
Movement in/(out) of Level 3 - (2 019)
Closing balance at the end of the reporting period - 10 807
Trading and
Deposits hedging
from portfolio
banks liabilities
Rm Rm
Opening balance at the beginning of the reporting period 7 217
Net interest income - -
Other income - -
Gains and losses from banking and trading activities - 91
Gains and losses from investment activities - -
Purchases - -
Sales - -
Movement in other comprehensive income - -
Issues - -
Settlements (7) -
Transferred to/(from) assets/liabilities - -
Movement in/(out) of Level 3 - -
Closing balance at the end of the reporting period - 308
2016
Deposits Debt
Other due to securities
liabilities customers in issue
Rm Rm Rm
Opening balance at the beginning of the reporting period 5 2 557 624
Net interest income - - -
Other income - - -
Gains and losses from banking and trading activities - - -
Gains and losses from investment activities - 139 (9)
Purchases - - -
Sales - - -
Movement in other comprehensive income - - -
Issues 36 1 953 -
Settlements - (3 510) (11)
Transferred to/(from) assets/liabilities - - -
Movement in/(out) of Level 3 - - -
Closing balance at the end of the reporting period 41 1 139 604
Liabilities Total
under liabilities
investment at fair
contracts value
Rm Rm
Opening balance at the beginning of the reporting period - 3 410
Net interest income - -
Other income - -
Gains and losses from banking and trading activities - 91
Gains and losses from investment activities - 130
Purchases - -
Sales - -
Movement in other comprehensive income - -
Issues - 1 989
Settlements - (3 528)
Transferred to/(from) assets/liabilities - -
Movement in/(out) of Level 3 - -
Closing balance at the end of the reporting period - 2 092
2015
Trading and
hedging Loans and
portfolio Other advances to
assets assets customers
Rm Rm Rm
Opening balance at the beginning of the reporting period 1 162 17 4 731
Net interest income - - 488
Other income - - -
Gains and losses from banking and trading activities 323 - -
Gains and losses from investment activities - - -
Purchases 16 8 5 108
Sales (83) - (2 816)
Movement in other comprehensive income - - -
Issues - - -
Settlements - - -
Transferred to/(from) assets/liabilities - - -
Movement in/(out) of Level 3 - - -
Closing balance at the end of the reporting period 1 418 25 7 511
Loans and
advances Investment Investment
to banks securities properties
Rm Rm Rm
Opening balance at the beginning of the reporting period - 6 467 727
Net interest income - 85 -
Other income - - -
Gains and losses from banking and trading activities - - -
Gains and losses from investment activities (18) 50 60
Purchases 2 127 47 478
Sales - (2 718) (1)
Movement in other comprehensive income - 35 -
Issues - - -
Settlements - - -
Transferred to/(from) assets/liabilities - - -
Movement in/(out) of Level 3 - - -
Closing balance at the end of the reporting period 2 109 3 966 1 264
Investments Total
linked to assets at
Investment fair
contracts value
Rm Rm
Opening balance at the beginning of the reporting period 1 13 105
Net interest income - 573
Other income - -
Gains and losses from banking and trading activities - 323
Gains and losses from investment activities - 92
Purchases - 7 784
Sales (1) (5 619)
Movement in other comprehensive income - 35
Issues - -
Settlements - -
Transferred to/(from) assets/liabilities - -
Movement in/(out) of Level 3 - -
Closing balance at the end of the reporting period - 16 293
Trading and
Deposits hedging
from portfolio
banks liabilities
Rm Rm
Opening balance at the beginning of the reporting period - 320
Net interest income - -
Other income - -
Gains and losses from banking and trading activities - (21)
Gains and losses from investment activities - -
Purchases - -
Sales - -
Movement in other comprehensive income - -
Issues 7 1
Settlements - (83)
Transferred to/(from) assets/liabilities - -
Movement in/(out) of Level 3 - -
Closing balance at the end of the reporting period 7 217
2015
Deposits Debt
Other due to securities
liabilities customers in issue
Rm Rm Rm
Opening balance at the beginning of the reporting period 28 5 530 42
Net interest income - - -
Other income - - -
Gains and losses from banking and trading activities - - -
Gains and losses from investment activities (23) 132 172
Purchases - - -
Sales - - -
Movement in other comprehensive income - - -
Issues - 3 112 410
Settlements - (3 265) -
Transferred to/(from) assets/liabilities - - -
Movement in/(out) of Level 3 - (2 952) -
Closing balance at the end of the reporting period 5 2 557 624
Liabilities Total
under liabilities
investment at fair
contracts value
Rm Rm
Opening balance at the beginning of the reporting period 3 022 8 942
Net interest income - -
Other income - -
Gains and losses from banking and trading activities - (21)
Gains and losses from investment activities (479) (198)
Purchases - -
Sales - -
Movement in other comprehensive income - -
Issues - 3 530
Settlements - (3 348)
Transferred to/(from) assets/liabilities - -
Movement in/(out) of Level 3 (2 543) (5 495)
Closing balance at the end of the reporting period - 3 410
14.6.1 Significant transfers between levels
During the 2016 and 2015 reporting periods, transfers between levels occurred because of changes in the
observability of valuation inputs, in some instances owing to changes in the level of market activity.
Transfers have been reflected as if they had taken place at the beginning of the year.
14.7 Unrealised gains and losses on Level 3 assets and liabilities
The total unrealised gains and losses for the reporting period on Level 3 positions held at the reporting date are set
out below:
2016
Trading and hedging Other Loans and advances
portfolio assets assets to customers
Rm Rm Rm
Gains and losses from banking and trading activities 3 - 35
Investment Investment Investments linked to
securities properties investment contracts
Rm Rm Rm
Gains and losses from banking and trading activities 29 - -
Non-current assets Total assets
held for sale at fair value
Rm Rm
Gains and losses from banking and trading activities - 67
2015
Trading and hedging Other Loans and advances
portfolio assets assets to customers
Rm Rm Rm
Gains and losses from banking and trading activities 96 - (28)
Investment Investment Investments linked to
securities properties investment contracts
Rm Rm Rm
Gains and losses from banking and trading activities 48 - -
Non-current assets Total assets
held for sale at fair value
Rm Rm
Gains and losses from banking and trading activities - 116
2016
Trading and hedging Other Deposits due
portfolio liabilities liabilities to customers
Rm Rm Rm
Gains and losses from banking and trading activities 86 - -
Liabilities under Total liabilities
investment contracts at fair value
Rm Rm
Gains and losses from banking and trading activities - 86
2015
Trading and hedging Other Deposits due
portfolio liabilities liabilities to customers
Rm Rm Rm
Gains and losses from banking and trading activities 79 - -
Liabilities under Total liabilities
investment contracts at fair value
Rm Rm
Gains and losses from banking and trading activities - 79
14.8 Sensitivity analysis of valuations using unobservable inputs
As part of the Group’s risk management processes, stress tests are applied on the significant unobservable parameters
to generate a range of possible alternative valuations. The assets and liabilities that most impact this sensitivity
analysis are those with the more illiquid and/or structured portfolios. The stresses are applied independently and do
not take account of any cross correlation between separate asset classes that would reduce the overall effect on the
valuations.
The following table reflects how the unobservable parameters were changed in order to evaluate the sensitivities of
Level 3 financial assets and liabilities:
Positive/(negative) variance applied to parameters
Significant unobservable parameter
Credit spreads 100/(100) bps
Volatilities 10/(10)%
Basis curves 100/(100) bps
Yield curves and repo curves 100/(100) bps
Future earnings and marketability discounts 15/(15)%
Funding spreads 100/(100) bps
A significant parameter has been deemed to be one which may result in a charge to profit or loss, or a change in the
fair value asset or liability by more than 10% or the underlying value of the affected item. This is demonstrated by the
following sensitivity analysis which includes reasonable range of possible outcomes:
2016
Potential effect recorded Potential effect recorded
Significant in profit and loss directly in equity
unobservable Favourable/ Favourable/
parameters (Unfavourable) (Unfavourable)
Rm Rm
Deposits due BAGL/Absa
to customers funding spread -/- -/-
Investment Risk adjustment
securities and yield curves,
investments linked future earnings
to investment and marketability
contracts discount 34/36 94/100
Loans and advances
to customers Credit spreads 72/71 -/-
Other assets Credit spreads -/- -/-
Trading Volatility,
and hedging credit spreads,
portfolio basis curves,
assets yield curves,
repo curves,
funding spreads 175/175 -/-
Trading and Volatility,
hedging portfolio credit spreads,
liabilities basis curves,
yield curves,
repo curves,
funding spreads 20/20 -/-
Other Volatility,
liabilities credit spreads -/- -/-
301/302 94/100
2015
Potential effect recorded Potential effect recorded
Significant in profit and loss directly in equity
unobservable Favourable/ Favourable/
parameters (Unfavourable) (Unfavourable)
Rm Rm
Deposits due BAGL/Absa
to customers funding spread -/- -/-
Investment Risk adjustment
securities and yield curves,
investments future earnings
linked to and marketability
investment discount -/- -/-
contracts
Loans and
advances to
customers Credit spreads 235/246 -/-
Other assets Volatility,
credit spreads -/- -/-
Trading and Volatility,
hedging credit spreads,
portfolio assets basis curves,
yield curves,
repo curves,
funding spreads 107/107 -/-
Trading and Volatility,
hedging credit spreads,
portfolio basis curves,
liabilities yield curves,
repo curves,
funding spreads 15/15 -/-
Other Volatility,
liabilities credit spreads -/- -/-
357/368 -/-
14.9 Measurement of assets and liabilities at Level 3
The following table presents information about the valuation techniques and significant unobservable inputs used in
measuring assets and liabilities categorised as Level 3 in the fair value hierarchy:
Category of asset/liability Valuation techniques applied
Loans and advances to Discounted cash flow and/
customers or dividend yield models
Investment securities Discounted cash flow models,
and investments linked third-party valuations,
to investment contracts earnings multiples and/or
income capitalisation
valuations
Trading and hedging portfolio
assets and liabilities
Debt instruments Discounted cash flow models
Derivative assets
Credit derivatives Discounted cash flow and/or
credit default swap
(hazard rate) models
Equity derivatives Discounted cash flow, option
pricing and/or futures
pricing models
Foreign exchange derivatives Discounted cash flow and/
or option pricing models
Interest rate derivatives Discounted cash flow and/
or option pricing models
Deposits due to customers Discounted cash flow models
Debt securities in issue Discounted cash flow models
Investment Properties Discounted cash flow models
2016 2015
Significant unobservable Range of estimates utilised
inputs for the unobservable inputs
Credit spreads 0,5% to 5% 0,96% to 3,99%
Risk adjusted yield curves, Discount rates
future earnings, marketability Discount rate between 8%
discounts and/or comparator of 13%, and 11,5%,
multiples comparator comparator
multiples multiples
between between
5 and 10,5 5 and 10,5
Credit spreads 1,2% to 11,16% 0,9% to 3,5%
Credit spreads, recovery rates
and/or quanto ratio 0,0% to 40% 0,0% to 23,64%
Volatility and/or dividend 17,82% to 67,71% 17,82% to 67,71%
streams (greater than 3 years)
African basis curves (greater
than 1 year) (16,6)% to 13,1% (10,00)% to 10,50%
Real yield curves (greater
than 1 year), repurchase
agreement curves (greater
than 1 year), funding spreads 0,31% to 3,38% 0,58% to 4,24%
Barclays Africa Group Limited’s
funding spreads (greater
than 5 years) (0,27)% to 2,13% 1,52% to 2,15%
Funding curves (greater than
5 years) (0,27)% to 2,13% (0,20%) to 3,35%
Estimates of periods in
which rental units will
be disposed of Annual 1 to 10 years 1 to 7 years
selling price escalations 1% to 7% 0% to 6%
Annual rental escalations 1% to 7% 0% to 10%
Expense ratios 25% to 50% 26% to 51%
Vacancy rates 1% to 7% 1% to 18%
Income capitalisation rates 10% to 11% 8% to 12%
Risk adjusted discount rates 14% 13% to 14%
For assets or liabilities held at amortised cost and disclosed in levels 2 or 3 of the fair value hierarchy,
the discounted cash flow valuation technique is used. Interest rates and money market curves are considered
unobservable inputs for items which mature after five years. However, if the items mature in less than five
years, these inputs are considered observable.
For debt securities in issue held at amortised cost, a further significant input would be the underlying price
of the market traded instrument.
The sensitivity of the fair value measure is dependent on the unobservable inputs. Significant changes to the
unobservable inputs in isolation will have either a positive or negative impact on fair values.
14.10 Unrecognised (losses)/gains as a result of the use of valuation models using unobservable inputs
The amount that has yet to be recognised in the statement of comprehensive income that relates to the
difference between the transaction price and the amount that would have arisen had valuation models using
unobservable inputs been used on initial recognition, less amounts subsequently recognised, is as follows:
2016 2015
Rm Rm
Opening balance at the beginning of the reporting period (105) (52)
New transactions (64) (91)
Amounts recognised in profit or loss during the reporting period 30 38
Closing balance at the end of the reporting period (139) (105)
14.11 Third party credit enhancements
There were no significant liabilities measured at fair value and issued with inseparable third-party credit
enhancements.
15. Reporting changes overview
The following business portfolio changes have impacted the financial results for the comparative period ended 31
December 2015. None of the restatements have impacted the overall financial position or net earnings of the Group.
* Statutory liquid assets allocations in loan portfolios that were moved from WIMI to Retail and RBB in previous
reporting periods were reassessed and resulted in a restatement of Interest and similar charges of R6m between
WIMI and RBB.
* The Group refined its transfer pricing and allocation of endowment methodologies, resulting in a restatement
of Net interest income of R53m from CIB to RBB (R31m) and WIMI (R22m).
* The Group reassessed its cost allocation methodology, resulting in the restatements of operating expenses of
R328m from RBB to CIB (R38m) and Head Office, Treasury and other operations (R290m).
* Interest rates on internal cash balances were aligned to market-related rates, resulting in a restatement of
Net interest income of R41m from Head Office, Treasury and other operations to CIB.
* Certain shared services operations that were previously conducted by RBB were transferred to Head office,
Treasury and other operations, resulting in a restatement of net interest expense of R7m and operating expenses
of R311m.
* Africa Corporate Development (previously reported in CIB Private Equity) was moved from CIB to Head Office,
Treasury and other operations to better align the management thereof. This resulted in a restatement of operating
expenses of R4m between these segments.
* Cheque income and the associated costs were moved from CIB to RBB to better align the ownership of the product
and the management thereof. This resulted in a restatement between CIB and RBB of Fee and commission income of
R36m as well as Operating expenses of R21m.
* Integrated Processing Solutions was moved from RBB to Head office, Treasury and other operations to better
align the ownership of the investment and the management thereof and resulted in a restatement of Investments in
associates and joint ventures of R32m between these segments.
* The Rest of Africa treasury function (previously reported in RBB and CIB) was moved to Head Office, Treasury
and other operations resulting in a restatement of Net interest income of R53m between RBB, CIB and Head Office,
Treasury and other operations.
Barclays Africa Group Limited
Incorporated in the Republic of South Africa
Registration number: 1986/003934/06
Authorised financial services and registered credit provider (NCRCP7)
JSE share code: BGA
ISIN: ZAE000174124
Registered office
7th Floor, Barclays Towers West
15 Troye Street, Johannesburg, 2001
PO Box 7735, Johannesburg, 2000
Switchboard: +27 11 350 4000
barclaysafrica.com
Head Investor Relations
Alan Hartdegen
Telephone: +27 11 350 2598
Group Company Secretary
Nadine Drutman
Telephone: +27 11 350 5347
Head of Financial Control
John Annandale
Telephone: +27 11 350 3496
Queries
Please direct investor relations and annual report queries to groupinvestorrelations@barclaysafrica.com
Please direct media queries to groupmedia@barclaysafrica.com
For all customer and client queries, please go to the relevant country website (see details below) for the
local customer contact information
Please direct queries relating to your Barclays Africa Group shares to questions@computershare.co.za
Please direct other queries regarding the Group to groupsec@barclaysafrica.com
Transfer secretary
Computershare Investor Services (Pty) Ltd
Telephone: +27 11 370 5000
computershare.com/za/
ADR depositary
BNY Mellon
Telephone: +1 212 815 2248
bnymellon.com
Auditors
Ernst & Young Inc.
Telephone: +27 11 772 3000
ey.com/ZA/en/Home
PricewaterhouseCoopers Inc.
Telephone: +27 11 797 4000
pwc.co.za
KPMG Inc(1)
Telephone: +27 11 647 7111
kpmg.com/ZA/en/Home
Sponsors
Lead independent sponsor
J.P. Morgan Equities South Africa (Pty) Ltd
Telephone: +27 11 507 0300
jpmorgan.com/pages/jpmorgan/emea/local/za
Joint sponsor
Absa Bank Limited (Corporate and Investment Bank)
Telephone: +27 11 895 6843
equitysponsor@absacapital.com
Significant banking subsidiaries
Information on the entity and the products and services provided (including banking, insurance and investments) can be
found at:
Absa Bank Limited absa.co.za
Barclays Bank of Botswana Limited barclays.co.bw
Barclays Bank of Ghana Limited gh.barclays.com/
Barclays Bank of Kenya Limited barclays.co.ke
Barclays Bank Mauritius Limited barclays.mu
Barclays Bank Mozambique SA barclays.co.mz/eng
Barclays Bank Seychelles Limited barclays.sc
Barclays Bank Tanzania Limited barclays.co.tz
Barclays Bank of Uganda Limited barclays.co.ug
Barclays Bank Zambia Plc zm.barclays.com/
National Bank of Commerce Limited nbctz.com
Representative offices
Absa Namibia Pty Limited absanamibia.com.na
Absa Capital Representative Office Nigeria Limited cib.absa.co.za
Note
(1)KPMG Inc will be replacing PricewaterhouseCoopers Inc. as auditors for the reporting period starting
1 January 2017.
Date: 23/02/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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