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LIBERTY HOLDINGS LIMITED - Financial Results for the six months ended 30 June 2017

Release Date: 04/08/2017 07:10
Code(s): LBH LBHP     PDF:  
Wrap Text
Financial Results for the six months ended 30 June 2017

Liberty Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1968/002095/06)
JSE code: LBH
ISIN code: ZAE000012714
Preference share code: LBHP
ISIN code: ZAE000004040

Financial Results for the six months ended 30 June 2017 

Financial performance indicators for the six months ended 30 June 2017

                                                                                                      12 months
                                                                     30 June    30 June         %   31 December
Rm (unless otherwise stated)                                            2017       2016    change          2016
 
Liberty Holdings Limited 
Earnings 
Basic earnings per share (cents)                                       568,5      666,9      (15)         811,7
Fully diluted basic earnings per share (cents)                         553,3      647,6      (15)         788,9
Normalised operating earnings(1)                                         814      1 100      (26)         1 740
Normalised headline earnings per share (cents)(1)                      456,7      650,0      (30)         904,5
Normalised return on IFRS equity (%)(1)                                 11,7       16,4                    11,4
Group equity value    
Normalised group equity value per share (R)(1)                        143,16     148,44       (4)        145,86
Normalised return on group equity value (%)(1)                           2,3       10,3                     5,1
Distributions per share (cents)   
Normal dividend                                                          276        276                     691
    
Interim dividend                                                         276        276                     276
Final dividend                                                           n/a        n/a                     415
    
Total assets under management (Rbn)                                      688        679         1           676
   
Long-term insurance operations   
Indexed new business (excluding contractual increases)                 3 930      3 569        10         7 892
Embedded value of new business                                            86        257      (67)           483
New business margin (%)                                                  0,4        1,4                     1,1
Net customer cash (outflows)/inflows                                   (665)      (353)      (88)         1 119
Capital adequacy cover of Liberty Group Limited (times covered)         2,82       2,95       (4)          2,95
   
Asset management   
Assets under management (Rbn)                                            593        584         2           586
Net cash inflows including money market(2)                             6 090        453      >100         5 764
   
Retail and institutional net cash inflows excluding money market(2)    5 358      3 169        69         4 488
Money market net cash inflows/(outflows)(2)                              732    (2 716)      >100         1 276

(1) Normalised: operating earnings, headline earnings per share, return on IFRS equity, group equity value per share 
    and return on group equity value 
    These measures reflect the economic reality of the consolidation of the listed REIT Liberty Two Degrees (L2D) and 
    the Black Economic Empowerment (BEE) transaction, as opposed to the required IFRS accounting treatment.

(2) Excludes intergroup life funds.

Preparation and supervision:
This announcement on Liberty Holdings Limited interim financial results for the six months ended 30 June 2017 has been prepared
and supervised by Y Maharaj (Executive: Group Finance) CA(SA) and CG Troskie (Financial Director) CA(SA).

Financial review
for the six months ended 30 June 2017

Normalised headline earnings for the six months to 30 June 2017 are lower than the prior
period but shows an improvement compared to the second half of 2016.

Liberty's results reflect growth in sales and net customer cash
inflows, underpinned by a strong capital position. Prioritised
initiatives are underway to drive short- to medium-term
performance.

Economic growth in South Africa remained weak and the economy
has officially fallen into recession, resulting in a deterioration in both
business and consumer confidence. The downgrade in the country's
sovereign credit rating, the current socio-political environment
and rising unemployment levels continued to place pressure
on consumer disposable income. Weak investment markets,
particularly in June  2017, impacted investment performance for
the period.

These difficult operating conditions and certain operational issues
resulted in a decline in headline earnings compared to the six months
to 30 June 2016 (prior period). The value of new business in the group's
retail operations in South Africa was lower in the period at a reduced
margin due to a weaker business mix. The group's asset management
operations in South Africa also experienced margin pressure due to
the subdued investment performance and product mix.

The group remained resilient during the period, as depicted by the
strong capital position of the group's main long-term insurance
licence, Liberty Group Limited, with the capital adequacy ratio
at  2,82 (31  December 2016: 2,95) times the regulatory minimum.
This remains at the upper end of the target range at 30 June 2017
and underpins our commitment to continue to fulfil our promises
to policyholders and other stakeholders. Group indexed new
business sales grew by 10% to R3,9  billion compared to the
prior period. Group  net customer cash inflows of R5,7  billion
(30  June  2016:  R0,5  billion) increased substantially compared
to the  prior period, driven by strong inflows into our non-money
market products.

Group equity value of R40 billion reduced during the period mainly
due to the final dividend paid in April  2017 exceeding SA covered
business equity value earnings and reduced earnings from the asset
management business.

The SA covered business operating experience variances were
net positive, reflecting a good outcome supporting the core
assumptions underlying the insurance book.

Headline earnings of R1 540 million were down 15% compared to
R1 813 million in the prior period. Headline earnings for the period
were favourably impacted by the accounting mismatch arising from
the consolidation of the Liberty Two Degrees listed REIT (L2D).
Normalising for the IFRS accounting treatment of L2D, normalised
headline earnings reduced to R1  267  million. The shareholder
investment portfolio (SIP) delivered returns in line with benchmark,
but lower than the prior period due to market movements.
Normalised return on equity was 11,7% (30 June 2016: 16,4%) due
to the lower earnings in the current period.

New business margins at 0,4% (30  June 2016: 1,4%) remained
under pressure due to the geared effect of increased costs and a
weaker mix of business sold. The value of new business reduced to
R86 million from R257 million at 30 June 2016. The improvement
of the value of new business and related margin is management's
number one priority in the short term.

Total assets under management increased marginally to R688 billion
(31 December 2016: R676 billion).

Normalised headline earnings

The main items contributing to the decrease in normalised headline
earnings compared to the prior period were as follows:

-  New business strain in the group's long-term insurance retail
   operations in South Africa increased by R127 million in the current
   period, driven primarily by the geared effects of increased costs
   relative to new business volumes and a weaker business mix.
   Positive variances in the period were offset by assumption and
   modelling changes to better reflect the expectation of future cash
   flows given policy terms and conditions.

-  Earnings from STANLIB South Africa were R134 million below the
   prior period. Earnings of R115 million for the period were impacted
   by margin pressure due to the weaker investment markets and
   product mix.

-  Earnings from STANLIB Rest of Africa were R136 million below the
   prior period, reflecting a loss of R118 million for the period.

-  Lower market returns resulted in the SIP earnings being
   R268 million below the prior period.

Strategic execution
Management continues to actively execute on the priorities
highlighted in the 31 December 2016 financial review and is taking
steps to revitalise the group's operations. Expense management
for the group and improving the value of new business and related
margins are priorities for the insurance operations and fund
performance for the asset management business. There are several
initiatives already in execution which are focussed on delivering an
improved short- to medium-term performance.

The group is committed to delivering on its purpose of providing
financial freedom for its customers. This includes a focus on reducing
complexity in our business and improving client service.

Earnings by business unit
                                                                                                    12 months
                                                                    30 June   30 June         %   31 December
Rm (Unaudited)                                                         2017      2016    change          2016
Insurance
Individual Arrangements                                                 597       718      (17)         1 119
Group Arrangements                                                       61        68      (10)           149
   
Liberty Corporate                                                        80        88       (9)           191
Liberty Africa Insurance                                                 20        11        82            41
Liberty Health                                                         (19)      (11)      (73)          (45)
Growth initiatives                                                     (20)      (20)                    (38)

Balance sheet management                                                168       130        29           318

LibFin Markets - credit portfolio                                       138       139       (1)           300
LibFin Markets - asset/liability management portfolio                    30       (9)      >100            18

Asset management(1)
STANLIB South Africa                                                    115       249      (54)           459
STANLIB Rest of Africa                                                (118)        18    >(100)          (97)

Central overheads and sundry income                                     (9)      (83)        89         (208)

Normalised operating earnings                                           814     1 100      (26)         1 740
LibFin Investments - SIP                                                453       721      (37)           787

Normalised headline earnings                                          1 267     1 821      (30)         2 527
BEE preference share adjustment                                         (5)       (8)        38          (16)
Reversal of accounting mismatch arising on consolidation of L2D(2)      278                             (304)

Headline earnings                                                     1 540     1 813      (15)         2 207

(1) Asset management customer facing unit includes the asset management capabilities under STANLIB South Africa and 
    STANLIB Rest of Africa business units, which are managed separately, with each business having its own accountable executive.

(2) Refer Explanation of terms.

Commentary on the earnings by business unit follows below. Additional information is contained in the summary consolidated
segment information.

Individual Arrangements
Headline earnings from the group's South African retail operations
amounted to R597  million. Positive variances in the period were
offset by assumption and modelling changes to better reflect the
expectation of future cash flows given policy terms and conditions.
Increased new business strain arising primarily from the geared
effects of increased costs relative to new business volumes and a
weaker business mix negatively impacted earnings. This was also
the main contributor to the reduction of the value of new business
to R62 million reported in the current period. The introduction of
the new tax fund and the 31 December 2016 and current period
modelling and basis changes also impacted the value of new
business. This resulted in the  new business margin declining to
0,4% from 1,6% at 30 June 2016.

Net customer cash inflows of R0,8  billion were marginally above
the prior period. Improved premium income was largely offset
by the higher value of policy surrenders and maturities experienced
in the current period.

Indexed new business grew by 4% over the prior period. Strong
demand for the Guaranteed Investment Product and the Bold
Living Annuity continued in the current period.

Group Arrangements

Liberty Corporate
Earnings of R80 million reflected a good underwriting performance,
however asset based fee income growth was muted due mainly to
lower investment market returns over the last year. Indexed new
business was 72% higher at R558 million, with recurring premium
new business up 80% due to strong risk and umbrella enhancement
sales. Net cash outflows amounted to R1,6 billion reflecting low
single premium new business and increased scheme terminations.

Liberty Africa Insurance
Earnings of R20  million were R9  million above the prior period.
This  improvement was primarily attributable to improved
performances from the Kenyan life and short-term insurance
businesses. Indexed new business in the long-term insurance
businesses grew by 11% to R167  million with the value of new
business lower at R11 million at a margin of 4,3%. Net customer cash
inflows of R298 million were well up on the R104 million inflows in
the prior period.

The agreement to acquire a life licence in Nigeria has not been
concluded due to the vendor failing to date to meet certain material
conditions precedent.

Liberty Health
The business provides health risk solutions to employers and
their employees across the African continent. Liberty Health's loss
of R19 million is higher than the prior period due to the decline in
risk lives being serviced and higher claims loss ratios particularly
in Nigeria due to sustained naira weakness.

Balance sheet management

LibFin Markets - Asset liability management and
credit portfolio
Earnings from the credit portfolio amounted to R138 million which
was flat on the prior period as a result of slower asset origination
due to lower corporate issuances in the current low growth
environment.

The asset liability management profit amounted to R30  million
due to favourable market positioning in a relatively low volatility
environment during the period.

LibFin assets under management at R58 billion were flat compared
to 31 December 2016.

LibFin Investments - Shareholder
Investment Portfolio
The SIP includes the assets backing capital in the insurance
operations as well as the group's investment market exposure to
the 90:10 book of business. This current risk profile of the SIP is
similar to a conservative balanced portfolio and is managed with a
long-term through the cycle investment horizon.

The SIP delivered returns of R453  million in line with benchmark,
but lower than the prior period of R721  million due to market
movements.

Asset management

STANLIB South Africa
STANLIB South Africa earnings were R115 million for the period
(30 June 2016: R249 million). Earnings were impacted by margin
pressure due to the weaker investment markets and product
mix. Costs associated with the termination of the institutional
administration outsourcing programme, the launch of new
franchises and further operational write offs also impacted earnings
for the period.

Total assets under management by STANLIB South Africa increased
by R5 billion to R540 billion at 30 June 2017.

Net customer cash inflows (excluding intergroup) amounted to
R5,6 billion compared to outflows of R0,9 billion in the prior period.
This result was mainly attributable to strong non-money market
inflows. Intergroup cash outflows for the period amounted to
R8,7 billion.

STANLIB Rest of Africa
STANLIB Rest of Africa incurred a loss of R118 million for the period
(30 June 2016: earnings of R18 million). The business continued to
be affected by the curtailment of guaranteed cash mandate business
and provisions raised for client and operational exposures following
efforts to improve the operational and control environment. Several
of these exposures had been provisioned from a group perspective
at 31  December 2016 and were reflected in the STANLIB Rest of
Africa results in the current period.

Total assets under management by STANLIB Rest of Africa increased
by R2 billion to R53 billion at 30 June 2017.

Net customer cash inflows (excluding intergroup) amounted to
R0,4 billion compared to R1,4 billion in the prior period. This result
was mainly attributable to non-money market outflows largely
offsetting positive money market inflows. Intergroup cash inflows
for the period amounted to R9 million.

Bancassurance
The bancassurance agreement with Standard Bank, which is
applicable across the group's asset management and insurance
operations, continues to make a positive contribution to new
business volumes and earnings. The total indexed new business
premiums sold under the agreement increased by 11% to R1,6 billion
for the period. Good progress is being made with the implementation
of the 10 point bancassurance plan and we continue leveraging
our relationship with Standard Bank to capture opportunities
where relevant.

Capital adequacy cover
The capital adequacy cover of Liberty Group Limited remained
strong at 2,82 times the statutory requirement (31 December 2016:
2,95 times). The group remains well capitalised at the upper end
of its target range in respect of the current capital regime and in
respect of capital requirements under the impending Solvency
Assessment and Management (SAM) regime. The group has slowed
down its expansion activities and reduced capital earmarked for
investment in Africa. All other group subsidiary life licences were
adequately capitalised.

Dividends

2017 interim dividend
In line with the group's interim dividend policy of paying 40% of
the prior full year dividend, the board has approved and declared a
gross interim dividend of 276 cents per ordinary share. The interim
dividend will be paid out of income reserves and is payable on
Monday,  4 September 2017 to all ordinary shareholders recorded
in the books of Liberty Holdings Limited on the record date.

The dividend of 276 cents per ordinary share will be subject to
a local dividend tax rate of 20% which will result in a net interim
dividend, to those shareholders who are not exempt from paying
dividend tax, of 220,8 cents per ordinary share. Liberty Holdings
Limited's income tax number is 9050/191/71/8. The number of
ordinary shares in issue in the company's share capital at the date of
declaration is 286 202 373.

The important dates pertaining to the dividend are as follows:

Last date to trade cum dividend on the JSE               Tuesday, 29 August 2017

First trading day ex dividend on the JSE               Wednesday, 30 August 2017

Record date                                               Friday, 1 September 2017

Payment date                                              Monday, 4 September 2017

Share certificates may not be dematerialised or rematerialised
between Wednesday, 30 August 2017 and Friday, 1 September 2017,
both days inclusive. Where applicable, in terms of instructions
received by the company from certificated shareholders, the
payment of the dividend will be made electronically to shareholders'
bank accounts on payment date.

In the absence of specific mandates, cheques will be posted to
shareholders. Shareholders who have dematerialised their shares
will have their accounts with their CSDP or broker credited on
Monday, 4 September 2017.

Prospects
We depend on our deep relationships with our customers and
advisers which are at the core of our ability to create value for
stakeholders. We will continue to respond to our customers'
changing needs in the current operating environment.

Management's short-term focus is on strategic execution of
initiatives to reduce costs, restore the value of new business
and margin, reduce complexity in the business and improve
customer experience.

David Munro                                       Jacko Maree
Chief Executive                                      Chairman

3 August 2017

These results are available at http://www.libertyholdings.co.za

Transfer Secretaries
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Rosebank Towers, 15 Biermann Avenue, Rosebank
Johannesburg 2196
Tel: +27 (11) 370 5000

Accounting policies

The unaudited condensed interim consolidated financial statements
of Liberty Holdings Limited for the six months ended 30 June 2017
have been prepared in accordance with and contains information
required by:

-  International Financial Reporting Standards (IFRS) including
   IAS  34  Interim Financial Reporting (with the exception of
   disclosures required under IAS 34 16A (j) relating to fair value
   measurement, which are not required by the JSE Listing
   Requirements);

-  the SAICA Financial Reporting Guides as issued by the Accounting
   Practices Committee;

-  Financial Reporting Pronouncements as issued by the Financial
   Reporting Standards Council;

-  the Listings Requirements of the JSE Limited; and

-  the South African Companies Act No. 71 of 2008.

The full interim report for the six months ended 30 June 2017 (which
includes IAS 34 16A (j)) is available on the Liberty Holdings Limited
website and upon request from the company's registered offices.

The accounting policies applied in the preparation of these interim
financial statements are in terms of IFRS and are consistent
with those applied in the previous consolidated annual financial
statements except for the early adoption of minor amendments to
IFRS, as set out below.

Amendments to IAS 40 Investment Property: Transfers of
Investment Property, and amendments to IFRS 2 Share-based
payments: Classification and Measurement of Share-based Payment
Transactions, effective 1 January 2018, have been early adopted
as at 1 January 2017. These amendments have not resulted in any
impact to the group's 2017 reported results, comparative periods or
interim disclosures.

For noting, the group voluntarily changed the presentation policies
for policyholder assets and liabilities and reinsurance liabilities
(statement of financial position and statement of comprehensive
income) and collateral deposits payable (statement of cash flows)
for  the year ended 31 December 2016. The 30 June 2016
comparative numbers have accordingly been restated and are
explained in the Change in presentation policies note.

Review/audit
These interim results have not been reviewed or audited by the
company's auditors PricewaterhouseCoopers Inc.

Explanation of terms

Normalised: operating earnings, headline earnings per share,
return on equity, group equity value per share and return on
group equity value

These measures reflect the economic reality of the consolidation of
the listed REIT Liberty Two Degrees (L2D) and the Black Economic
Empowerment (BEE) transaction, as opposed to the required
IFRS accounting treatment.

Reversal of accounting mismatch arising on consolidation of L2D
An accounting mismatch arises on consolidation of L2D in the
group annual financial statements, resulting from the different
measurement bases applied to L2D's assets and Liberty Group
Limited's (100% subsidiary of Liberty Holdings Limited) policyholder
liabilities. Specifically:

-  on a consolidated look through basis the investment property
   assets of L2D are included in the group annual financial
   statements at fair value; whereas

-  the corresponding linked obligations to Liberty Group Limited's
   policyholders are required under IFRS to continue to be
   measured in the group annual financial statements at the listed
   price of the L2D units.

The result of this is an accounting mismatch that represents any
difference in the profit and loss movement in the price at which
L2D's listed units trade relative to the underlying net asset value.

BEE transaction
IFRS reflects the BEE transaction as a share buy-back. Dividends
received on the group's preference shares (which are recognised
as an asset for this purpose) are included in income. Shares in issue
relating to the transaction are reinstated.

Capital adequacy requirement (CAR)
The capital adequacy requirement is the minimum amount by
which the Financial Services Board requires an insurer's assets
to exceed its liabilities. The assets, liabilities and CAR must be
calculated using a method which meets the Financial Services
Board's requirements. Capital adequacy cover refers to the amount
of capital the insurer has as a multiple of the minimum requirement.

Development costs
Represents project costs incurred on developing or enhancing
future revenue opportunities.

FCTR
Foreign Currency Translation Reserve.

"Liberty" or "group"
Represents the collective of Liberty Holdings Limited and its
subsidiaries.

Long-term insurance operations - Indexed new business
This is a measure of new business which is calculated as the sum of
twelve months' premiums on new recurring premium policies and
one tenth of single premium sales.

Long-term insurance operations - Value of new business and
margin
The present value, at point of sale, of the projected stream of after
tax profits for new business issued, net of the cost of required
capital. The present value is calculated using a risk adjusted discount
rate. Margin is calculated using the value of new business divided by
the present value of future modelled premiums.

Short-term insurance operations - Claims loss ratio
This is a measure of underwriting risk and is measured as a ratio of
claims incurred divided by the net premiums earned.

Consolidated statement of financial position
as at 30 June 2017
  
                                                                                                         Restated 
                                                                                           Unaudited    Unaudited       Audited
                                                                                             30 June      30 June   31 December
Rm                                                                                              2017         2016          2016
Assets                  
Intangible assets                                                                                367          303           390
Defined benefit pension fund employer surplus                                                    203          300           215
Properties                                                                                    34 182       33 760        33 828
Equipment                                                                                      1 079        1 178         1 105
Interests in joint ventures                                                                    1 244          889         1 229
Interests in associates                                                                       14 054       19 555        12 995
Deferred taxation                                                                                264          315           358
Deferred acquisition costs                                                                       741          706           713
Long-term policyholder assets - insurance contracts                                            7 689        7 661         7 314
Reinsurance assets                                                                             1 801        1 735         1 674
Long-term insurance                                                                            1 390        1 378         1 352
Short-term insurance                                                                             411          357           322
Financial investments                                                                        326 976      306 770       316 441
Loans and receivables                                                                          1 242        1 247         1 242
Assets held for trading and for hedging                                                        9 459        9 668         8 609
Repurchase agreements, scrip and collateral assets                                            16 886       17 482        15 483
Prepayments, insurance and other receivables                                                   5 938        7 809         5 300
Cash and cash equivalents                                                                      9 327       12 820        14 994
Total assets                                                                                 431 452      422 198       421 890
Liabilities                  
Long-term policyholder liabilities                                                           309 200      312 111       307 230
Insurance contracts                                                                          203 703      208 792       204 155
Investment contracts with discretionary participation features                                11 732       11 691        11 462
Financial liabilities under investment contracts                                              93 765       91 628        91 613
Reinsurance liabilities                                                                          543          615           555
Third party financial liabilities arising on consolidation of mutual funds                    48 557       39 147        44 046
Provisions                                                                                        68          196           191
Deferred taxation                                                                              2 675        3 222         2 586
Deferred revenue                                                                                 285          261           268
Deemed disposal taxation liability                                                               437          879           873
Short-term insurance liabilities                                                               1 016          990           925
Financial liabilities                                                                          4 602        3 916         4 601
Liabilities held for trading and for hedging                                                   7 428        7 548         6 798
Repurchase agreements, liabilities and collateral deposits payable                            13 962       14 159        11 748
Employee benefits                                                                              1 132        1 035         1 369
Insurance and other payables                                                                  11 443       11 265        11 213
Current taxation                                                                                 711          507           481
Total liabilities                                                                            402 059      395 851       392 884
Equity                  
Ordinary shareholders' equity                                                                 21 778       22 032        21 676
Share capital                                                                                     26           26            26
Share premium                                                                                  5 243        5 495         5 296
Retained surplus                                                                              17 400       17 242        16 990
Other reserves                                                                                 (891)        (731)         (636)
Non-controlling interests                                                                      7 615        4 315         7 330
Total equity                                                                                  29 393       26 347        29 006
Total equity and liabilities                                                                 431 452      422 198       421 890
  
Consolidated statement of comprehensive income
for the six months ended 30 June 2017
  
                                                                                                         Restated       Audited
                                                                                           Unaudited    Unaudited     12 months
                                                                                             30 June      30 June   31 December
Rm                                                                                              2017         2016          2016
Insurance premiums                                                                            19 438       19 535        41 288
Reinsurance premiums                                                                           (969)      (1 022)       (1 922)
Net insurance premiums                                                                        18 469       18 513        39 366
Fee income and reinsurance commission                                                          1 812        1 953         3 731
Investment income                                                                             11 170       10 122        20 885
Hotel operations sales                                                                           253          288           585
Investment gains/(losses)                                                                      4 082        6 868       (1 823)
Total revenue                                                                                 35 786       37 744        62 744
Claims and policyholder benefits under insurance contracts                                  (19 648)     (19 111)      (39 664)
Insurance claims recovered from reinsurers                                                       868          735         1 450
Change in long-term policyholder assets and liabilities                                          479      (4 031)           598
Liabilities under insurance contracts                                                            394      (3 662)         1 164
Policyholder assets related to insurance contracts                                               375           82         (265)
Investment contracts with discretionary participation features                                 (341)        (517)         (404)
Applicable to reinsurers                                                                          51           66           103
Fair value adjustment to long-term policyholder liabilities under investment contracts       (2 861)      (3 671)       (3 891)
Fair value adjustment to financial liabilities                                                               (14)          (27)
Fair value adjustment on third party mutual fund interests                                   (2 578)          250           619
Acquisition costs                                                                            (2 532)      (2 248)       (4 723)
General marketing and administration expenses                                                (5 417)      (5 208)      (10 733)
Finance costs                                                                                  (652)        (716)       (1 415)
Profit share allocations under bancassurance and other agreements                              (486)        (482)       (1 029)
Equity accounted earnings from joint ventures                                                     14           11            22
Profit before taxation                                                                         2 973        3 259         3 951
Taxation(1)                                                                                  (1 171)      (1 267)       (1 325)
Total earnings                                                                                 1 802        1 992         2 626
Other comprehensive loss                                                                         (7)         (39)         (148)
Items that may be reclassified subsequently to profit or loss                                   (19)         (35)         (101)
Net change in fair value on cash flow hedges                                                      46          117           218
Income and capital gains tax relating to net change in fair value on cash flow hedges           (15)         (29)          (56)
Foreign currency translation                                                                    (50)        (123)         (263)
Items that may not be reclassified subsequently to profit or loss                                 12          (4)          (47)
Owner-occupied properties - fair value adjustment                                                 18           18           (1)
Income and capital gains tax relating to owner-occupied properties fair value adjustment         (3)          (5)
Change in long-term policyholder insurance liabilities (application of shadow accounting)        (6)         (13)             1
Actuarial gains on post-retirement medical aid liability                                          14            4            30
Income tax relating to post-retirement medical aid liability                                     (4)          (1)           (8)
Net adjustments to defined benefit pension fund(2)                                              (10)         (10)          (96)
Income tax relating to defined benefit pension fund                                                3            3            27
    
Total comprehensive income                                                                     1 795        1 953         2 478
Total earnings attributable to:    
Shareholders                                                                                   1 541        1 814         2 209
Non-controlling interests                                                                        261          178           417
                                                                                               1 802        1 992         2 626
Total comprehensive income attributable to:    
Shareholders                                                                                   1 549        1 799         2 128
Non-controlling interests                                                                        246          154           350
                                                                                               1 795        1 953         2 478
Basic and fully diluted earnings per share                                                     Cents        Cents         Cents
Basic earnings per share                                                                       568,5        666,9         811,7
Fully diluted basic earnings per share                                                         553,3        647,6         788,9

(1) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the 
    effective tax charge relative to profit before taxation.

(2) Net adjustments to defined benefit pension fund include actuarial gains or losses, return on plan assets, reduced by the 
    interest on the net defined benefit asset and the effect of the application of the asset ceiling.

Summary consolidated statement of changes
in shareholders' equity
for the six months ended 30 June 2017
                       
                                                                                                                   Audited
                                                                                     Unaudited     Unaudited     12 months
                                                                                       30 June       30 June   31 December
Rm                                                                                        2017          2016          2016
                       
Balance of ordinary shareholders' equity at 1 January                                   21 676        21 739        21 739
Ordinary dividends                                                                     (1 167)       (1 241)       (2 022)
Total comprehensive income                                                               1 549         1 799         2 128
Share buy-backs(1)                                                                       (335)         (460)         (477)
Black Economic Empowerment transaction                                                      10           129           195
Share-based payments                                                                        28            67           132
Transaction costs of issuing units in Liberty Two Degrees                                                             (78)
Preference dividends                                                                       (1)           (1)           (2)
Transactions between owners                                                                  9                        (40)
Transactions between owners - Liberty Two Degrees                                            9                         101
                       
Ordinary shareholders' equity                                                           21 778        22 032        21 676
                       
Balance of non-controlling interests at 1 January                                        7 330         4 254         4 254
Total comprehensive income                                                                 246           154           350
Acquisition of Liberty Two Degrees                                                                                   3 000
Transactions between owners - Liberty Two Degrees                                          170                       (101)
Acquisition of unincorporated property partnerships                                                                     98
Acquisition of subsidiaries                                                                               28            33
Unincorporated property partnerships net distributions                                   (112)         (108)         (219)
Non-controlling interests' share of subsidiary dividend                                   (30)          (13)          (21)
Non-controlling interests' share of shares issued in subsidiary                              2                           3
Transaction costs of issuing units in Liberty Two Degrees                                                             (38)
Transactions between owners                                                                  9                        (29)
                       
Non-controlling interests                                                                7 615         4 315         7 330
                        
Total equity                                                                            29 393        26 347        29 006

(1) Share buy-backs are purchases from the market to meet employee share-based payment obligations.

Summary consolidated statement of cash flows
for the six months ended 30 June 2017
            
                                                                                                    Restated       Audited
                                                                                     Unaudited     Unaudited     12 months
                                                                                       30 June       30 June   31 December
Rm                                                                                        2017          2016          2016
              
Cash flows from operating activities                                                     1 854       (8 860)         2 443
               
Cash utilised by operations                                                            (3 773)      (13 339)       (9 157)
Interest and dividends received                                                          9 796         8 739        18 242
Dividends paid                                                                         (2 174)       (1 978)       (2 717)
Taxation paid                                                                          (1 213)       (1 444)       (2 260)
Other operating cash flows                                                               (782)         (838)       (1 665)
                
Cash flows from investing activities                                                   (8 134)         3 122       (6 607)
                
Net (purchase)/disposal of investments                                                 (9 409)         5 121       (4 937)
Net purchase of other assets                                                             (123)         (138)         (288)
Net advances/(repayments) on collateral deposits payable                                 1 438       (1 770)       (1 236)
Acquisition of subsidiaries                                                                             (91)         (146)
Acquisition of equity accounted joint ventures                                            (40)   
               
Cash flows from financing activities                                                       659         (674)          (18)
               
Net advance of financial liabilities                                                         1             2           687
Net advances/(repayments) on repurchase agreements liabilities                             776         (230)       (3 175)
Net cash flows from equity transactions with non-controlling interests                     217            14         3 063
Transaction costs of issuing units in Liberty Two Degrees                                                            (116)
Share buy-backs                                                                          (335)         (460)         (477)
               
Net decrease in cash and cash equivalents                                              (5 621)       (6 412)       (4 182)
Cash and cash equivalents at the beginning of the period                                14 994        19 305        19 305
Cash and cash equivalents acquired through business acquisitions                                           6            61
Foreign currency translation                                                              (46)          (79)         (190)
               
Cash and cash equivalents at the end of the period                                       9 327        12 820        14 994

Headline earnings and earnings per share
for the six months ended 30 June 2017
  
                                                                                                                   Audited
                                                                                     Unaudited     Unaudited     12 months
                                                                                       30 June       30 June   31 December
Rm (unless otherwise stated)                                                              2017          2016          2016
  
Reconciliation of total earnings to headline earnings attributable to shareholders  
Total earnings attributable to shareholders                                              1 541         1 814         2 209
Preference share dividend                                                                  (1)           (1)           (2)
   
Basic and headline earnings attributable to ordinary shareholders                        1 540         1 813         2 207
Net income earned on BEE preference shares                                                   5             8            16
Reversal of the accounting mismatch arising on consolidation of L2D(1)                   (278)                        304
   
Normalised headline earnings attributable to ordinary shareholders                       1 267         1 821         2 527
   
Weighted average number of shares in issue ('000)                                      270 876       271 873       271 883
Normalised weighted average number of shares in issue ('000)                           277 415       280 149       279 373
Fully diluted weighted average number of shares in issue ('000)                        278 306       279 957       279 760
   
Earnings per share                                                                       Cents         Cents         Cents
   
Total earnings attributable to ordinary shareholders   
Basic                                                                                    568,5        666,9          811,7
Headline                                                                                 568,5        666,9          811,7
Normalised headline                                                                      456,7        650,0          904,5
   
Fully diluted earnings attributable to ordinary shareholders   
Basic                                                                                    553,3        647,6          788,9
Headline                                                                                 553,3        647,6          788,9

(1) Refer Explanation of terms.

Summary consolidated segment information
for the six months ended 30 June 2017

                                            Individual      Group        Asset                        Reporting 
30 June 2017                                  Arrange-   Arrange-      manage-                          adjust-       IFRS
Rm (Unaudited)                                   ments      ments      ment(2)     Other      Total    ments(1)   reported
  
Total revenue                                   28 847      9 084        1 514     1 709     41 154     (5 368)     35 786
   
Profit before taxation                           1 149        238          138     1 307      2 832         141      2 973
Taxation                                         (576)       (82)        (140)     (373)    (1 171)                (1 171)
   
Total earnings                                     573        156          (2)       934      1 661         141      1 802
Other comprehensive income/(loss)                   40       (43)                    (4)        (7)                    (7)
   
Total comprehensive income                         613        113          (2)       930      1 654         141      1 795
Attributable to:   
   
Ordinary shareholders                              613        105          (3)       834      1 549                  1 549
Non-controlling interests                                       8            1        96        105         141        246
   
Reconciliation of total earnings to   
headline earnings attributable   
to shareholders   
Total earnings                                     573        156          (2)       934      1 661         141      1 802
Attributable to non-controlling interests                    (23)          (1)      (96)      (120)       (141)      (261)
Preference share dividend                                                            (1)        (1)                    (1)
  
Headline earnings                                  573        133          (3)       837      1 540                  1 540
Net income earned on BEE preference  
shares                                                                                 5          5                      5
Reversal of the accounting mismatch arising  
on consolidation of L2D                                                            (278)      (278)                  (278)
  
Normalised headline earnings                       573        133          (3)       564      1 267                  1 267

(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party 
    mutual fund liabilities, the classification of long-term insurance into defined IFRS 'investment' and 'insurance' products, 
    the application of shadow accounting for the change in long-term policyholder insurance liabilities and the elimination of 
    intergroup transactions.

(2) Asset management customer facing unit includes the asset management capabilities under STANLIB South Africa and STANLIB Rest of 
    Africa business units, which are managed separately, with each business having its own accountable executive.

The customer facing units are supported by shared service functions (Group Enablement) and LibFin (incorporating LibFin Markets and
LibFin Investments), which are strategic competency units. The impact of LibFin Markets is disclosed in the relevant customer grouping.
Refer to supplementary information included in the full results announcement available on the Liberty website for the reconciliation of
business unit earnings to segment result.

                                            Individual      Group        Asset                        Reporting
                                              Arrange-   Arrange-      manage-                          adjust-       IFRS
                                                 ments      ments     ment (2)     Other      Total    ments(1)   reported
  
30 June 2016 (Unaudited)  
Total revenue                                   31 992     10 275        1 755     1 139     45 161     (7 417)     37 744
Profit before taxation                           1 619        235          359       900      3 113         146      3 259
Taxation                                         (865)      (111)         (88)     (203)    (1 267)                (1 267)
Total earnings                                     754        124          271       697      1 846         146      1 992
Other comprehensive income/(loss)                   89       (20)         (19)      (89)       (39)                   (39)
Total comprehensive income                         843        104          252       608      1 807         146      1 953
Attributable to:    
Ordinary shareholders                              843        100          248       608      1 799                  1 799
Non-controlling interests                                       4            4                    8         146        154
  
Reconciliation of total earnings to headline  
earnings attributable to shareholders  
Total earnings                                     754        124          271       697      1 846         146      1 992
Attributable to non-controlling interests                    (28)          (4)                 (32)       (146)      (178)
Preference share dividend                                                            (1)        (1)                    (1)
Headline earnings                                  754         96          267       696      1 813                  1 813
Net income earned on BEE preference shares                                             8          8                      8
Normalised headline earnings                       754         96          267       704      1 821                  1 821
31 December 2016 (Audited)    
Total revenue                                   56 583     18 050        3 384     1 097     79 114    (16 370)     62 744
Profit before taxation                           2 018        446          517       653      3 634         317      3 951
Taxation                                         (950)      (162)        (148)      (65)    (1 325)                (1 325)
Total earnings                                   1 068        284          369       588      2 309         317      2 626
Other comprehensive income/(loss)                  181      (131)         (31)     (167)      (148)                  (148)
Total comprehensive income                       1 249        153          338       421      2 161         317      2 478
Attributable to:    
Ordinary shareholders                            1 249        158          331       390      2 128                  2 128
Non-controlling interests                                     (5)            7        31         33         317        350

Reconciliation of total earnings to headline
earnings attributable to shareholders
Total earnings                                   1 068        284          369       588      2 309         317      2 626
Attributable to non-controlling interests                    (62)          (7)      (31)      (100)       (317)      (417)
Preference share dividend                                                            (2)        (2)                    (2)
Headline earnings                                1 068        222          362       555      2 207                  2 207
Net income earned on BEE preference shares                                            16         16                     16
Reversal of the accounting mismatch arising  
on consolidation of L2D                                                              304        304                    304
Normalised headline earnings                     1 068        222          362       875      2 527                  2 527

(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party 
    mutual fund liabilities, the classification of long-term insurance into defined IFRS 'investment' and 'insurance' products, 
    the application of shadow accounting for the change in long-term policyholder insurance liabilities and the elimination of 
    intergroup transactions.

(2) Asset management customer facing unit includes the asset management capabilities under STANLIB South Africa and STANLIB Rest of 
    Africa business units, which are managed separately, with each business having its own accountable executive.

Group equity value report
for the six months ended 30 June 2017

1  Introduction
Liberty presents a "group equity value" report to reflect the combined value of the various components of Liberty's businesses.

Section 2 below describes the valuation bases used for each reported component. It should be noted that the group equity value is presented
to provide additional information to shareholders to assess performance of the group. The total equity value is not intended to be a fair value
calculation of the group but should provide indicative information of the inherent value of the component parts.

2  Component parts of the group equity value and valuation techniques used
Group equity value has been calculated as the sum of the following component parts:

2.1 South African (SA) covered business:
The wholly owned subsidiary, Liberty Group Limited, comprises the South African long-term insurance entities and related asset holding
entities. The embedded value methodology in terms of Advisory Practice Note 107 issued by the Actuarial Society of South Africa continues
to be used to derive the value of this business cluster described as "South African covered business". The embedded value report of
the South African covered business has been reviewed by the group's statutory actuary. The full embedded value report is included in
the supplementary information section.

2.2 Other businesses:

STANLIB              Valued using a 10 times (31 December 2016 and 30 June 2016: 10 times) multiple of estimated sustainable earnings.
South Africa  
  
STANLIB              Valued using a 10 times (31 December 2016 and 30 June 2016: 10 times) multiple of estimated sustainable earnings.
Rest of Africa  
  
Liberty Health       As Liberty Health has yet to establish a history to support a sustainable earnings calculation, an adjusted IFRS net asset
                     value is applied.
  
Liberty Africa       Liberty Africa Insurance is an emerging cluster of both long and short-term insurance businesses located in various
Insurance            African countries outside of South Africa. A combination of valuation techniques including embedded value, discounted
                     cash flow and earnings multiples have been applied to value these businesses. The combined value of this cluster is not
                     material relative to the other components of group equity value and therefore a detailed analysis of this valuation has
                     not been presented. At 30 June 2017, 31 December 2016 and 30 June 2016 the combined valuations approximated the
                     group's IFRS net asset value. Therefore the IFRS net asset value was used.
  
Liberty Holdings     The net market value of assets and liabilities held by the Liberty Holdings Limited company excluding investments in
                     any subsidiaries which are valued separately.

2.3 Other adjustments:
These comprise the fair value of share rights allocated to staff not employed by the South African covered businesses, adjusting certain
deferred tax assets to current values and allowance for certain shareholder recurring expenses incurred in Liberty Holdings Limited capitalised
at a multiple of 9 times (31 December 2016 and 30 June 2016: 9 times).

3  Normalised group equity value
3.1 Analysis of normalised group equity value

                                                                 Unaudited                             Unaudited
                                                              30 June 2017                          30 June 2016
                                                   SA covered        Other              SA covered         Other
Rm                                                   business   businesses       Total    business    businesses        Total
Liberty Group Limited                                  18 369                   18 369      19 096                     19 096
STANLIB South Africa(2)                                                809         809                       762          762
STANLIB Rest of Africa(2)                                             (19)        (19)                       256          256
Liberty Health (including Total Health Trust)                          373         373                       330          330
Liberty Africa Insurance                                               815         815                       772          772
Liberty Holdings                                                     1 273       1 273                       816          816
Liberty Two Degrees consolidation adjustment(1)                        158         158 
Shareholders' equity reported under IFRS               18 369        3 409      21 778      19 096         2 936       22 032
Difference between statutory and published
valuation methods                                     (7 175)                  (7 175)     (6 867)                    (6 867)
Negative rand reserves                                (6 723)                  (6 723)     (6 429)                    (6 429)
Deferred acquisition costs                              (725)                    (725)       (682)                      (682)
Deferred revenue liability                                273                      273         244                        244
Other(3)
Subordinated notes (including accrued interest)         4 602                    4 602       3 580                      3 580
CAR of subsidiaries                                      (10)                     (10)        (10)                       (10)
Reverse value of in-force acquired                       (14)                     (14)        (20)                       (20)
Inadmissible assets(3)                                  (922)                    (922)       (603)                      (603)
Statutory excess assets over liabilities               14 850        3 409      18 259      15 176         2 936       18 112
Reverse difference between statutory and
published valuation methods(3)
Reverse CAR of subsidiaries                                10                       10          10                         10
Reverse subordinated notes (including accrued
interest)                                             (4 602)                  (4 602)     (3 580)                    (3 580)
Reverse inadmissible assets(3)                            922                      922         603                        603
Frank Financial Services allowance for future
expenses                                                (100)                    (100)       (100)                      (100)
Impact of discounting on deferred tax asset                          (100)       (100)                     (100)        (100)
BEE preference funding                                    142                      142         204                        204
Liberty Two Degrees normalisation adjustment(1)                      (158)       (158) 
Allowance for employee share rights                      (33)         (38)        (71)        (50)          (44)         (94)
Normalised net worth                                   11 189        3 113      14 302      12 263         2 792       15 055
Value of in-force - Individual Arrangements            21 840                   21 840      22 144                     22 144
Value of in-force - Group Arrangements: Liberty 
Corporate                                               2 838                    2 838       2 659                      2 659
Cost of required capital                              (1 640)                  (1 640)     (1 601)                    (1 601)
Fair value adjustment - STANLIB South Africa(2)                      4 491       4 491                     5 238        5 238
Fair value adjustment - STANLIB Rest of Africa(2)                      319         319                       344          344
Allowance for future shareholder expenses                          (1 960)     (1 960)                   (1 845)      (1 845)
Normalised equity value                                34 227        5 963      40 190      35 465         6 529       41 994

(1) This represents the difference between Liberty's share of the net asset value of L2D as at the reporting date and the listed 
    price of L2D units multiplied by the number of units in issue to Liberty at the reporting date.

                                                      30 June      30 June
(2) STANLIB valuations: (Rm)                             2017         2016
    STANLIB South Africa                                5 300        6 000
    STANLIB Rest of Africa                                300          600

(3) The adjustments between the IFRS and statutory net asset values for the Liberty Africa subsidiaries are not available for interim 
    reporting. However, as the group equity value for these entities is set to their IFRS net asset value, these adjustments do not 
    affect group equity value. The adjustments will be included for full year reporting.

                                                                                     Audited
31 December 2016                                                      SA covered       Other
Rm                                                                      business  businesses      Total

Liberty Group Limited                                                     18 505                 18 505
STANLIB South Africa(2)                                                                  777        777
STANLIB Rest of Africa(2)                                                                104        104
Liberty Health (including Total Health Trust)                                            404        404
Liberty Africa Insurance                                                                 808        808
Liberty Holdings                                                                       1 408      1 408
Liberty Two Degrees consolidation adjustment(1)                                        (330)      (330)

Shareholders' equity reported under IFRS                                  18 505       3 171     21 676
Difference between statutory and published valuation methods             (6 786)        (58)    (6 844)

Negative rand reserves                                                   (6 344)                (6 344)
Deferred acquisition costs                                                 (698)                  (698)
Deferred revenue liability                                                   256                    256
Other                                                                                   (58)       (58)

Subordinated notes (including accrued interest)                            4 601                  4 601
CAR of subsidiaries                                                         (10)                   (10)
Reverse value of in-force acquired                                          (17)                   (17)
Inadmissible assets                                                        (807)        (85)      (892)

Statutory excess assets over liabilities                                  15 486       3 028     18 514
Reverse difference between statutory and published valuation methods                      58         58
Reverse CAR of subsidiaries                                                   10                     10
Reverse subordinated notes (including accrued interest)                  (4 601)                (4 601)
Reverse inadmissible assets                                                  807          85        892
Frank Financial Services allowance for future expenses                     (100)                  (100)
Impact of discounting on deferred tax asset                                            (100)      (100)
BEE preference funding                                                       148                    148
Liberty Two Degrees normalisation adjustment(1)                                          330        330
Allowance for employee share rights                                         (33)        (27)       (60)

Normalised net worth                                                      11 717       3 374     15 091
Value of in-force - Individual Arrangements                               21 635                 21 635
Value of in-force - Group Arrangements: Liberty Corporate                  2 759                  2 759
Cost of required capital                                                 (1 641)                (1 641)
Fair value adjustment - STANLIB South Africa(2)                                        5 013      5 013
Fair value adjustment - STANLIB Rest of Africa(2)                                        256        256
Allowance for future shareholder expenses                                            (1 892)    (1 892)

Normalised equity value                                                   34 470       6 751     41 221

(1) This represents the difference between Liberty's share of the net asset value of L2D as at the reporting date and the 
    listed price of L2D units multiplied by the number of units in issue to Liberty at the reporting date.

                                                  31 December
(2) STANLIB valuations: (Rm)                             2016
    STANLIB South Africa                                5 790
    STANLIB Rest of Africa                                360

3.2 Normalised group equity value earnings and value per share
 
                                                                                                                  Audited
                                                  Unaudited                           Unaudited                 12 months
                                                    30 June                             30 June               31 December
                                                       2017                                2016                      2016

                                            SA                                  SA
                                       covered        Other                covered        Other
Rm                                    business   businesses       Total   business   businesses       Total         Total

Normalised equity value at the end
of the period                           34 227        5 963      40 190     35 465        6 529      41 994        41 221
  
Equity value at the end of the period   34 085        6 121      40 206     35 261        6 529      41 790        40 743
Liberty Two Degrees normalisation  
adjustment(1)                                         (158)       (158)                                               330
BEE preference shares                      142                      142        204                      204           148
   
Net share buy-backs                                     335         335                     460         460           477
Funding of restricted share plan           112        (112)                    136        (136) 
Intragroup dividends                     1 400      (1 400)                  2 000      (2 000) 
Dividends paid                                        1 168       1 168                   1 242       1 242         2 024
Normalised equity value at the
beginning of the period               (34 470)      (6 751)    (41 221)   (35 268)      (6 367)    (41 635)      (41 635)
    
Equity value at the beginning of the    
period                                (34 322)      (6 421)    (40 743)   (34 946)      (6 367)    (41 313)      (41 313)
Liberty Two Degrees normalisation
adjustment(1)                                         (330)       (330)
BEE preference shares                    (148)                    (148)      (322)                    (322)         (322)
 
Normalised equity value earnings         1 269        (797)         472      2 333        (272)       2 061         2 087
Normalised return on   
group equity value (%)                     7,5       (22,9)         2,3       13,7        (8,8)        10,3           5,1
Normalised number of shares                                     280 734                             282 905       282 615
  
Number of shares in issue ('000)                                269 541                             271 517       272 247
Shares held for the employee  
restricted share scheme ('000)                                    4 713                               4 578         3 794
Adjustment for BEE shares ('000)                                  6 480                               6 810         6 574
  
Normalised group equity  
value per share (R)                                              143,16                              148,44        145,86

(1) This represents the difference between Liberty's share of the net asset value of L2D as at the reporting date and the 
    listed price of L2D units multiplied by the number of units in issue to Liberty at the reporting date.

3.3 Sources of normalised group equity value earnings

                                                                                                                  Audited
                                                  Unaudited                           Unaudited                 12 months
                                                    30 June                             30 June               31 December
                                                       2017                                2016                      2016

                                            SA                                  SA
                                       covered        Other                covered        Other
Rm                                    business   businesses       Total   business   businesses       Total         Total

Value of new business written in the
period                                      75           11          86        241           16         257           483
Expected return on value of in-force  
business                                 1 446                    1 446      1 483                    1 483         2 997
Variances/changes in operating
assumptions                                 21                       21        213                      213           283
       
Operating experience variances             174                      174        277                      277           477
Property portfolio liquidity fee/      
STANLIB REIT Fund Managers(1)                                                  (1)                      (1)            73
Operating assumption changes               (7)                      (7)       (30)                     (30)         (295)
Changes in modelling methodology         (146)                    (146)       (33)                     (33)            28
      
Development costs                         (30)         (52)        (82)                    (43)        (43)         (107)
Liberty Holdings shareholder      
expenses(3)                                           (156)       (156)                   (123)       (123)         (228)
Headline earnings of other   
businesses/intragroup transfers             46           59         105                     247         247           185
   
Operational equity value profits         1 558        (138)       1 420      1 937           97       2 034         3 613
Economic adjustments                     (289)        (178)       (467)        385        (114)         271         (750)
  
Investment return on net worth(2)           94        (178)        (84)        357        (114)         243            86
Investment variances(2)                  (479)                    (479)      (277)                    (277)         (963)
Change in economic assumptions              96                       96        305                      305           127

Change in fair value adjustments on
value of other businesses                             (470)       (470)                   (259)       (259)         (825)
Change in allowance for share rights                   (11)        (11)         11            4          15            49
      
Group equity value earnings              1 269        (797)         472      2 333        (272)       2 061         2 087

(1) Following the listing of Liberty Two Degrees in December 2016, STANLIB REIT Fund Managers (RF) Proprietary Limited (the Manager), 
    a 100% held subsidiary of Liberty Holdings Limited (LHL), was appointed as the Manager of L2D. The property portfolio liquidity fee 
    which was previously earned in Liberty Group Limited (LGL) will be used to fund the asset management fee paid to STANLIB REIT Fund Managers. 
    STANLIB REIT Fund Managers has been valued using a 10 times multiple of the estimated sustainable earnings.

(2) The investment return on net worth includes an amount of negative R17 million (31 December 2016: negative R16 million, 30 June 2016: negative R18 million) 
    in respect of the change in the fair value of cash-flow hedges supporting LGL subordinated notes. Similarly, the investment variances include an amount of
    R48 million (31 December 2016: R178 million, 30 June 2016: R106 million) in respect of the change in the fair value of cash-flow hedges supporting LibFin Credit.

(3) This includes the actual shareholder expenses incurred by Liberty Holdings of R88 million (31 December 2016: R122 million, 30 June 2016: R64 million) plus
    the change in the allowance for future shareholder expenses over the period.

3.4 Analysis of value of long-term insurance new business and margins

                                                                                                              Audited
                                                                                  Unaudited   Unaudited     12 months
                                                                                    30 June     30 June   31 December
Rm (unless otherwise stated)                                                           2017        2016          2016

South African covered business:
Individual Arrangements                                                                 667         786         1 652
 
Traditional Life(1)                                                                     528         632         1 306
Direct Channel                                                                           30          37            96
Credit Life                                                                              43          42            86
LibFin Credit uplift to Individual Arrangements                                          66          75           164
 
Group Arrangements: Liberty Corporate                                                    66          43           131

Traditional Business                                                                     56          39           113
LibFin Credit uplift to Group Arrangements: Liberty Corporate                            10           4            18

Gross value of new business                                                             733         829         1 783
Overhead acquisition costs (including underwriting costs) impact on value of new 
business(1)                                                                           (615)       (540)       (1 243)
Cost of required capital                                                               (43)        (48)          (86)

Net value of South African covered new business                                          75         241           454
Present value of future expected premiums                                            20 628      18 226        42 370
Margin (%)                                                                              0,4         1,3           1,1
  
Group Arrangements: Liberty Africa Insurance  
Net value of new business                                                                11          16            29
Present value of future expected premiums                                               266         225           519
Margin (%)                                                                              4,3         7,0           5,6
  
Total group net value of new business                                                    86         257           483
Total group margin (%)                                                                  0,4         1,4           1,1

(1) Underwriting costs previously included in Traditional Life business at 30 June 2016 have been reallocated to overhead acquisition costs.

Long-term insurance new business
for the six months ended 30 June 2017 
                                                                                                            12 months
                                                                                    30 June     30 June   31 December
Rm (Unaudited)                                                                         2017        2016          2016
              
Sources of insurance operations total new business by customer segment              
Retail                                                                               13 177      12 097        27 435
                
Single                                                                               10 973       9 911        22 916
Recurring                                                                             2 204       2 186         4 519
              
Institutional                                                                           915         665         2 296
               
Single                                                                                  319         304         1 350
Recurring                                                                               596         361           946
              
Total new business                                                                   14 092      12 762        29 731
                
Single                                                                               11 292      10 215        24 266
Recurring                                                                             2 800       2 547         5 465
                
Insurance indexed new business                                                        3 930       3 569         7 892
Sources of insurance indexed new business:               
               
Individual Arrangements                                                               3 205       3 094         6 639
Group Arrangements:                                                                     725         475         1 253
               
Liberty Corporate                                                                       558         324           842
Liberty Africa Insurance(1)                                                             167         151           411
 
(1) Liberty owns less than 100% of certain entities that make up Liberty Africa. The information is recorded at 100% and is not adjusted 
    for proportional legal ownership.

Long-term insurance net cash flows
for the six months ended 30 June 2017
                      
                                                                                                              Audited
                                                                                  Unaudited   Unaudited     12 months
                                                                                    30 June     30 June   31 December
Rm                                                                                     2017        2016          2016
                      
Net premiums by customer segment                      
Retail                                                                               21 282      20 005        43 150
                         
Single                                                                               10 720       9 775        22 522
Recurring                                                                            10 562      10 230        20 628
                        
Institutional                                                                         5 187       5 668        11 889
                        
Single                                                                                  588       1 367         3 170
Recurring                                                                             4 599       4 301         8 719
                        
Net premium income from insurance contracts                        
and inflows from investment contracts                                                26 469      25 673        55 039
                         
Single                                                                               11 308      11 142        25 692
Recurring                                                                            15 161      14 531        29 347
                        
Net claims and policyholders benefits by customer segment                        
Retail                                                                             (20 390)    (19 254)      (40 924)
                         
Death and disability claims                                                         (3 117)     (3 249)       (6 570)
Policy surrender and maturity claims                                               (14 392)    (13 388)      (28 870)
Annuity payments                                                                    (2 881)     (2 617)       (5 484)
                        
Institutional                                                                       (6 744)     (6 772)      (12 996)
                         
Death and disability claims                                                         (1 082)     (1 186)       (1 912)
Scheme terminations and member withdrawals                                          (5 244)     (5 211)      (10 280)
Annuity payments                                                                      (418)       (375)         (804)
                        
Net claims and policyholders benefits                                              (27 134)    (26 026)      (53 920)
                        
Long-term insurance net cash flows(2)                                                 (665)       (353)         1 119
                       
Rm (Unaudited)                       
Sources of insurance operations net cash flows:                       
Individual Arrangements                                                                 774         597         1 948
Group Arrangements:                                                                 (1 439)       (955)         (268)
                      
Liberty Corporate                                                                   (1 609)       (905)         (751)
Liberty Africa Insurance(1)                                                             170        (50)           483
                      
Asset management:                      
STANLIB Multi-manager(3)                                                                             5          (561)

(1) Liberty owns less than 100% of certain of the entities that make up Liberty Africa. The information is recorded at 100% and 
    is not adjusted for proportional legal ownership.

(2) This excludes net cash inflows attributed to the off balance sheet GateWay LISP of R122 million (31 December 2016: R557 million, 
    30 June 2016: R129 million).

(3) The arrangement whereby funds were placed with external asset managers via STANLIB Multi-manager was terminated in 2016 and 
    accordingly there are no flows in 2017 and going forward.

Assets under management(1)
as at 30 June 2017

                                                                                    30 June     30 June  31 December
Rbn (Unaudited)                                                                        2017        2016         2016
                                                    
Managed by group business units                                                         662         648          653
                                                     
STANLIB South Africa                                                                    540         531          535
STANLIB Rest of Africa(2)                                                                53          53           51
LibFin Markets                                                                           58          53           58
Other internal managers                                                                  11          11            9
                                                     
Externally managed                                                                       26          31           23
                                                     
Total assets under management(3)                                                        688         679          676

(1) Includes funds under administration.

(2) Liberty owns less than 100% of certain of the entities that make up STANLIB Rest of Africa. The information is recorded 
    at 100% and is not adjusted for proportional legal ownership.

(3) Included in total assets under management are the following LISP 30 June 2017 amounts:

                                                      Unit trusts listed (Rbn)
                                            STANLIB         Other
                                            managed       managed       Total
STANLIB South Africa                             38            74         112
Gateway                                           3             4           7

Asset management net cash flows(1)
for the six months ended 30 June 2017
                                             
                                                                                                           12 months
                                                                                    30 June     30 June  31 December
Rm (Unaudited)                                                                         2017        2016         2016
                                             
STANLIB South Africa                                             
Non-money market                                                                      5 705       1 189          764
Retail                                                                                3 345         202      (2 327)
Institutional                                                                         2 360         987        3 091
                                             
Money market                                                                           (59)     (2 136)        2 037
Retail                                                                              (1 461)       (202)        1 007
Institutional                                                                         1 402     (1 934)        1 030
                                               
Net STANLIB South Africa cash inflows(3)                                              5 646       (947)        2 801
                                             
STANLIB Rest of Africa(2)                                             
Non-money market                                                                      (347)       1 980        3 724
                                             
Retail                                                                                  437         (6)        (422)
Institutional                                                                         (784)       1 986        4 146
                                             
Money market                                                                            791       (580)        (761)
                                             
Net STANLIB Rest of Africa cash inflows                                                 444       1 400        2 963
                                              
Net cash inflows from asset management                                                6 090         453        5 764

(1) Cash flows exclude intergroup segregated life fund mandates. Cash flows also exclude the Delta LISP with effect from June 2016.

(2) Liberty owns less than 100% of certain of the entities that make up STANLIB Rest of Africa. The information is recorded at 100% 
    and is not adjusted for proportional legal ownership.

(3) In terms of the first clause of the Agri-Vie Fund II in January 2017, Liberty has committed capital of R673 million, which has not 
    been included in the above STANLIB South Africa flows.

Short-term insurance indicators
for the six months ended 30 June 2017
                    
                                                                                                             Audited
                                                                                  Unaudited   Unaudited    12 months
                                                                                    30 June     30 June  31 December
Rm                                                                                     2017        2016         2016
                    
Net premiums                                                                            675         805        1 484
                    
Liberty Health - medical risk                                                           420         508          919
Liberty Africa Insurance - motor, property, medical and other                           255         297          565
                     
Net claims                                                                            (426)       (496)        (994)
                     
Liberty Health - medical risk                                                         (299)       (353)        (743)
Liberty Africa Insurance - motor, property, medical and other                         (127)       (143)        (251)
                    
Net cash inflows from short-term insurance                                              249         309          490
                    
Unaudited                    
Claims loss ratio (%)                    
Liberty Health                                                                           71          70           77
Liberty Africa Insurance                                                                 50          48           44
                    
Combined loss ratio (%)                    
Liberty Health                                                                          101          99          104
Liberty Africa Insurance                                                                 98          91           94

Capital commitments
as at 30 June 2017

                                                                                  Unaudited   Unaudited      Audited
                                                                                    30 June     30 June  31 December
Rm                                                                                     2017        2016         2016
                                  
Equipment                                                                               658         366          823
Investment and owner-occupied properties                                              1 237       1 760        1 485
Committed capital(1)                                                                  1 168         751          636
                                  
Total capital commitments                                                             3 063       2 877        2 944
                                  
Under contracts                                                                         546         714          657
Authorised by the directors but not contracted                                        2 517       2 163        2 287

(1) Liberty has committed capital to certain infrastructure and development funds. The committed funds are only drawn down when required.

The above 2017 capital commitments will be financed by available bank facilities, existing cash resources, internally generated funds,
R55  million (31 December 2016: R60  million, 30 June 2016: R135 million) from non-controlling interests in unincorporated property
partnerships in respect of investment properties and R241 million (31 December 2016: R300 million, 30 June 2016: Rnil million) from
non-controlling interests in Liberty Two Degrees.

Retirement benefit obligations
as at 30 June 2017

Unaudited
Post-retirement medical benefit
The group operates an unfunded post-retirement medical aid
benefit for permanent employees who joined the group prior to
1 February 1999 and agency staff who joined prior to 1 March 2005.

As at 30 June 2017, the Liberty post-retirement medical aid benefit
liability was R482 million (31 December 2016: R493 million).

Defined benefit retirement funds
The group operates a number of defined benefit pension schemes
on behalf of employees. All these funds are closed to new
membership and are well funded with no deficits reported.

Related parties
for the six months ended 30 June 2017

Unaudited
Standard Bank Group Limited and any subsidiary (excluding Liberty) is referred to as Standard Bank in the context of this section.

The following selected significant related party transactions have occurred or have been contracted in the 30 June 2017 financial period:


1.  Summary of related party transactions with Standard Bank
1.1 Summary of movement in investment in ordinary shares held by the group in the group's holding company is as follows:
    
                                      Number   Fair value    Ownership
                                        '000           Rm            %
        
Standard Bank Group Limited        
Balance at 1 January 2017              9 572        1 454         0,60
Purchases                              2 393          335
Sales                                (2 009)        (255)
Fair value adjustments                              (100)
        
Balance at 30 June 2017                9 956        1 434         0,63

1.2 Bancassurance
The bancassurance business agreements with the Standard Bank
group caters for the manufacture, sale and promotion of insurance,
investment and health products through the Standard Bank's
African distribution capability. New business premium income
in respect of this business in 2017 amounted to R3  982 million
(2016 full year: R7 973 million). In terms of the agreements, Liberty's
group subsidiaries pay profit shares to various Standard Bank
operations. The amounts to be paid are in most cases dependent on
source and type of business and are paid along geographical lines.
The total combined net profit share amounts accrued as payable
to the Standard Bank group for the six months to 30 June 2017 is
R477 million (2016 full year: R1 005 million).

The bancassurance business agreements are evergreen
agreements with a 24-month notice period for termination - as at
the date of the approval of these financial statements, neither party
had given notice.

A binder agreement was entered into with Standard Bank effective
from 31 December 2012. The binder agreement is associated
with the administration of policies sold under the bancassurance
business agreement, and shall remain in force for an indefinite
period with a 90-day notice period for termination. Fees accrued
for the six months to 30 June 2017 is R66 million (2016 full year:
R150 million).

1.3 Purchases and sales of financial instruments
As per Liberty's 2016 group annual financial statements, in the
normal course of conducting business, Liberty deposits cash with
Standard Bank, purchases and sells financial instruments issued by
Standard Bank and enters into sale and repurchase agreements
and derivative transactions with Standard Bank. These transactions
are at arm's length and are primarily used to support investment
portfolios for policyholders and shareholders' capital.

2. Other related party transactions - Liberty Two Degrees (L2D)
In terms of the co-owners agreement concluded at the time of the listing of L2D in December 2016, L2D granted Liberty Group Limited a
continuing put option to sell further portions of its undivided shares in the existing properties (and letting businesses carried on thereon) to
L2D from time to time.

Post the interim reporting date, Liberty Group Limited exercised the put option and finalised the disposal of a further proportional share in
the co-owned property portfolio to the value of R2,5 billion to L2D.

Offsetting, enforceable master netting arrangements
or similar agreements
as at 30 June 2017

The group does not have any financial assets or financial liabilities that are currently subject to offsetting in accordance with IAS 32 Financial
Instruments: Presentation. The table below sets out the nature of agreements and the types of rights relating to items which do not qualify
for offset but that are subject to a master netting arrangement (MNA) or similar agreement.

                                      NATURE OF AGREEMENT                                      RELATED RIGHTS
Derivative assets and liabilities     International swaps and derivatives associations
                                                                                               The agreement allows for offset
Repurchase agreements                 Global master repurchase agreements
                                                                                               in the event of default
Collateral deposits payable           Global master securities lending arrangements

                                                         Not subject        Subject
                                                              to MNA         to MNA
                                                          or similar     or similar      Financial
Rm                                              Total     agreements     agreements  collateral(1)          Net

Unaudited
30 June 2017
Assets
Assets held for trading and for hedging         9 459          (934)          8 525        (6 970)        1 555
  
Total assets                                    9 459          (934)          8 525        (6 970)        1 555
  
Liabilities  
Liabilities held for trading and for hedging    7 428           (26)          7 402        (6 970)          432
Repurchase agreements liabilities               7 840                         7 840        (7 840)
Collateral deposits payable                     6 122                         6 122        (6 122)
  
Total liabilities                              21 390           (26)         21 364       (20 932)          432
  
Unaudited  
30 June 2016  
Assets  
Assets held for trading and for hedging         9 668          (621)          9 047        (7 525)        1 522
  
Total assets                                    9 668          (621)          9 047        (7 525)        1 522
 
Liabilities 
Liabilities held for trading and for hedging    7 548           (23)          7 525        (7 525)
Repurchase agreements liabilities              10 009                        10 009       (10 009)
Collateral deposits payable                     4 150                         4 150        (4 150)
 
Total liabilities                              21 707           (23)         21 684       (21 684)
 
Audited 
31 December 2016 
Assets 
Assets held for trading and for hedging         8 609          (595)          8 014        (6 532)        1 482
 
Total assets                                    8 609          (595)          8 014        (6 532)        1 482
 
Liabilities 
Liabilities held for trading and for hedging    6 798           (49)          6 749        (6 532)          217
Repurchase agreements liabilities               7 064                         7 064        (7 064)
Collateral deposits payable                     4 684                         4 684        (4 684)
  
Total liabilities                              18 546           (49)         18 497       (18 280)          217
 
(1) Financial collateral relates to these instruments that are subject to MNA or similar agreements.

Change in presentation policies
for the six months ended 30 June 2017

1  Change in presentation for policyholder assets and liabilities and for reinsurance liabilities
For the year ended 31 December 2016, a change in presentation was adopted to disclose portfolio level negative policyholder liabilities as
policyholder assets.

In addition, to provide more relevant and useful information to the user, reinsurance liabilities were disclosed separately on the face of
the statement of financial position, as this class of liabilities represents the effect of management's risk mitigation action on policyholder
contracts.

The disclosure impact of this change is:

                                                        30 June 2017                             30 June 2016

                                            Prior to
                                         adoption of      Impact of  Including the                  Impact of the
                                           change in      change in      change in                      change in
                                        presentation   presentation   presentation   As previously   presentation
Rm (Unaudited)                                policy         policy         policy        reported         policy     Restated

Statement of financial position
line item(1)
Assets
Long-term policyholder assets -
insurance contracts                                           7 689          7 689                          7 661        7 661
Liabilities  
Long-term policyholder liabilities -  
insurance contracts                        (196 557)        (7 146)      (203 703)       (201 746)        (7 046)    (208 792)
Reinsurance liabilities                                       (543)          (543)                          (615)        (615)
   
(1) Brackets denote credit balances.  
   
Statement of comprehensive   
income line item   
Change in long-term policyholder   
assets and liabilities                            479                          479         (4 031)                     (4 031)
Liabilities under insurance     
contracts                                         781         (387)            394         (3 578)           (84)      (3 662)
Policyholder assets related to      
insurance contracts                                             375            375                             82           82
Investment contracts with    
discretionary participation features            (341)                        (341)           (517)                       (517)
Applicable to reinsurers                           39            12             51              64              2           66

The impact is a presentation change only and there was no resultant change to the group's total earnings, comprehensive income,
shareholders' equity or net asset value.

2  Change in presentation policy regarding collateral deposits payable
Upon review of the financing activities presented in the statement of cash flows, management concluded that collateral deposits payable
(not related to repurchase agreements) included in 'Net proceeds on repurchase agreements liabilities and collateral deposits payable' would
be more accurately presented as part of investing activities. The statement of cash flows has been voluntarily restated to reflect this change
for 30 June 2016.

The disclosure change in the statement of cash flows is as follows:

                                                                         Reclassification
                                                                                   of net
                                                                                 proceeds
                                                                            on collateral
30 June 2016                                              As previously          deposits
Rm (Unaudited)                                                 reported           payable    As restated
                   
Cash flows from investing activities                              4 892           (1 770)          3 122
Cash flows from financing activities                            (2 444)             1 770          (674)

For more details regarding the restatements, refer to note 47 in the 31 December 2016 Liberty Holdings Limited annual financial statements.

Sponsor:
Merrill Lynch South Africa (Pty) Limited

Date: 04/08/2017 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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