ABSA BANK LIMITED - Profit and dividend announcement - ABSP

Release Date: 01/03/2018 07:06
Code(s): ABSP
 
Wrap Text
Profit and dividend announcement - ABSP

Absa Bank Limited
Registration number: 1986/004794/06
Incorporated in the Republic of South Africa
JSE share code: ABSP 
ISIN: ZAE000079810
(Absa, Absa Bank, the Bank or the Company)

Summary consolidated financial results for the reporting period ended 31 December 2017.

These summary consolidated financial results were prepared by Barclays Africa Group Financial Control under 
the direction and Supervision of the Barclays Africa Group Limited Financial Director, J P Quinn CA(SA). 

Profit and dividend announcement

Overview of results

Absa Bank Limited (the Bank) is a subsidiary of Barclays Africa Group Limited (the Group), which is listed on the
exchange operated by the JSE Limited. These audited summary consolidated financial results are published to provide
information to holders of the Bank’s listed non-cumulative, non-redeemable preference shares.

Commentary relating to the Bank’s summary consolidated financial results is included in the Barclays Africa Group
Limited results, as presented to shareholders on 1 March 2018.

Normalised financial results as a consequence of Barclays PLC separation 
On 1 March 2016, Barclays PLC announced its intention to sell down its 62.3% interest in the Bank’s holding company,
Barclays Africa Group Limited (BAGL/Group). A comprehensive separation programme was initiated by Barclays PLC and the
Group to determine possible interaction between the companies to ensure that the Group can operate as an independent and
sustainable group without the involvement of Barclays PLC. 

Barclays PLC currently holds 14.9% in the Group.
As part of its divestment Barclays PLC contributed £765m to the Bank, primarily in recognition of the investments
required for the Bank to separate from Barclays PLC. Investments will be made primarily in rebranding, technology and
separation related projects and it is expected that it will neutralise the capital and cash flow impact of separation
investments on the Bank over time. 

The separation process will have an impact on the Bank’s financial results for the next few years, most notably by
increasing the capital base in the near-term and generating endowment revenue thereon, with increased costs over time as
the separation investments are concluded. International Financial Reporting Standards (IFRS) require that the Barclays PLC
contribution be recognised directly in equity, while the subsequent investment expenditure (including the depreciation
or amortisation of capitalised assets), will be recognised in profit or loss. The aforementioned will result in a
disconnect between underlying business performance and the IFRS financial results during the separation period. Normalised
financial results will therefore be disclosed while the underlying business performance is materially different from the
IFRS financial results. 

The following presents the items which have been excluded from the normalised financial results:
- Barclays PLC contribution (including the endowment benefit)
- Hedging linked to separation activities
- Technology and brand separation projects
- Depreciation and amortisation on the aforementioned projects
- Transitional service payments to Barclays PLC
- Employee cost and benefits linked to separation activities
- Separation project execution and support cost

Basis of presentation
The Bank’s audited annual financial results have been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards (IFRS), interpretations issued by the IFRS Interpretations
Committee (IFRS-IC), the South African Institute of Chartered Accountants’ Financial Reporting Guides as issued by the
Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, 
the Johannesburg Stock Exchange (JSE) Listings Requirements and the requirements of the Companies Act of South Africa. 
The principal accounting policies applied are set out in the Bank’s most recent audited annual consolidated
financial statements.

The information disclosed in the SENS is derived from the information contained in the annual audited consolidated and
separate financial statements (except items not indicated as audited) and does not contain full or complete disclosure
details. Any investment decisions by shareholders should be based on consideration of the audited annual consolidated
financial statements, which is available on request. The presentation and disclosure of these summary consolidated
financial statements complies with IAS 34 Interim Financial Reporting (IAS 34).

The preparation of financial information requires the use of estimates and assumptions about future conditions. Use of
available information and application of judgement are inherent in the formation of estimates. The accounting policies
that are deemed critical to the Bank’s results and financial position, in terms of the materiality of the items to which
the policies are applied, and which involve a high degree of judgement including the use of assumptions and estimation,
are impairment of loans and advances, goodwill impairment, fair value measurements, impairment of available-for-sale
financial assets, consolidation of structured or sponsored entities, post-retirement benefits, provisions, income taxes,
share-based payments, liabilities arising from claims made under short and long-term insurance contracts, and offsetting
of financial assets and liabilities.

Accounting policies
The accounting policies applied in preparing the audited summary consolidated financial statements are the same as
those in place for the reporting period ended 31 December 2016, except for the adoption of the own credit 
exemption  of IFRS 9 Financial Instruments (IFRS 9), changes to the Bank’s operating segments and business portfolios 
changes between operating segments. Refer to note 15.

Standards issued not yet effective
IFRS 9 - Financial instruments
IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement with effect from 1
January 2018.  IFRS 9 includes revised requirements for the classification and measurement of financial assets and
liabilities, the impairment of financial assets and hedge accounting. The Bank will not restate comparatives on 
initial application of IFRS 9 on 1 January 2018 but will provide detailed transitional disclosures in accordance with 
the amended requirements of IFRS 7 Financial Instruments: Disclosures. Any change in the carrying value of financial 
instruments upon initial application of IFRS 9 will be recognised in equity. 

IFRS 9 introduces a revised impairment model which requires entities to recognise expected credit losses (ECL) based
on unbiased forward-looking information. The measurement of expected loss will involve increased complexity and 
judgment including estimation of lifetime probabilities of default, loss given default, a range of unbiased future 
economic scenarios, estimation of expected lives, estimation of exposures at default and assessing increases in 
credit risk. 

The revised impairment model is expected to have a material financial impact on the existing impairment provisions
previously recognised in terms of the requirements of IAS 39.  It is estimated that the increase on IAS 39 
impairment stock (including contractual interest suspended) will be in the region of 30%, on a pre-tax basis. Based 
on the current requirements of Basel III, the increase in the accounting impairment provisions is not expected to 
reduce the Bank’s Common Equity Tier 1 (CET1) capital ratio by more than 35bps on 1 January 2018, before taking into 
account the impact of the regulatory transitional arrangement. The Bank has elected to utilise the transition period 
of three years for phasing in the regulatory capital impact of IFRS 9. IFRS 9 has been considered in the Bank’s 
capital planning.
 
The reasons for the increase in impairment provisions are:
- The removal of the emergence period that was necessitated by the incurred loss model of IAS 39. All stage 1 assets
will carry a 12 month expected credit loss provision. This differs from IAS 39 where unidentified impairments were
typically measured with an emergence period of between three to twelve months.
- The provisioning for lifetime expected credit losses on stage 2 assets; where some of these assets would not have
attracted a lifetime expected credit loss measurement per IAS 39.
- The inclusion of forecasted macroeconomic scenarios into the expectation of credit losses;
- The inclusion of expected credit losses on items that would not have been impaired under IAS 39, such as loan
commitments and financial guarantees. 

On initial adoption the new classification and measurement requirements under IFRS 9 will have no impact on the
retained income of the Bank. The specific requirements of IFRS 9 relating to the presentation of gains and losses on 
financial liabilities designated at fair value were early adopted at the beginning of the current reporting period. 
The effects of changes in the credit risk of these liabilities’ are therefore presented in other comprehensive income 
with the remaining effect presented in profit or loss. The Bank will continue to apply the rules under IAS 39 hedge 
accounting until the project on accounting for macro hedging is completed, if not earlier.

IFRS 15 -Revenue from contracts with customers
Implementation efforts performed to date indicate that the adoption of IFRS 15 is not expected to have a significant
impact on the financial results of the Bank.

Auditors’ report
Ernst & Young Inc. and KPMG Inc., the Bank’s independent auditors, have audited the annual consolidated and separate
financial statements of the Bank from which management prepared the summary consolidated financial results. The 
auditors have expressed an unqualified audit opinion on the consolidated annual financial statements. The summary 
consolidated financial results comprise the summary consolidated statement of financial position at 31 December 2017, 
summary consolidated statement of comprehensive income, summary consolidated statement of changes in equity and 
summary consolidated statement of cash flows for the reporting period then ended and selected explanatory notes 
(on pages 2-3 and 9-38), excluding items not indicated as audited. The audit report of the consolidated annual 
financial statements is available for inspection at the Bank’s registered office.

These summary consolidated financial statements (on pages 2-3 and 9-38) for the year ended 31 December 2017 have 
been audited by Ernst and Young Inc. and KPMG Inc., who expressed an unmodified opinion thereon. A copy of the 
auditor’s report on the summary consolidated financial statements and of the auditor’s report on the annual 
consolidated financial statements are available for inspection at the company’s registered office, together with 
the financial statements identified in the respective auditor’s reports.

Events after the reporting period
The directors are not aware of any events after the reporting date of 31 December 2017 and the date of 
authorisation of these consolidated financial statements (as defined per IAS 10 Events after the Reporting 
Period).

On behalf of the Board
W E Lucas-Bull                                         M Ramos
Chairman                                               Chief Executive Officer

Johannesburg
28 February 2018

Declaration of preference share dividend number 24 
Absa Bank non-cumulative, non-redeemable preference shares (Absa Bank preference shares)
The Absa Bank preference shares have an effective coupon rate of 70% of Absa Bank’s prevailing prime overdraft 
lending rate (prime rate).

Absa Bank’s current prime rate is 10,25%.
Notice is hereby given that preference dividend number 24, equal to 70% of the average prime rate for 
1 September 2017 to 28 February 2018, per Absa Bank preference share has been declared for the period 
1 September 2017 to 28 February 2018. The dividend is payable on Monday, 16 April 2018, to shareholders of the 
Absa Bank preference shares recorded in the Register of Members of the Company at the close of business on 
Friday, 13 April 2018. The directors of Absa Bank confirm that the bank will satisfy the solvency and liquidity 
test immediately after completion of the dividend distribution.

Based on the current prime rate, the preference dividend payable for the period 1 September 2017 to 
28 February 2018 would indicatively be 3 558,01 cents per Absa Bank preference share.

The dividend will be subject to dividends withholding tax at a rate of 20%. In accordance with paragraphs 
11.17(a)(i) to (ix) and 11.17(c) of the JSE Listings Requirements, the following additional information is 
disclosed:
- The dividend has been declared out of income reserves.
- The local dividend tax rate is twenty per cent (20%).
- The gross local dividend amount is 3 558,01 cents per preference share for shareholders exempt from the 
  dividend tax.
- The net local dividend for shareholders subject to withholding tax at a rate of 20% amounts to 2 846,408 
  cents per preference share.
- Absa Bank currently has 4 944 839 preference shares in issue.
- Absa Bank’s income tax reference number is 9575117719.
In compliance with the requirements of Strate, the electronic settlement and custody system used by JSE 
Limited, the following salient dates for the payment of the dividend are applicable:
Last day to trade cum dividend                 Tuesday, 10 April 2018
Shares commence trading ex dividend            Wednesday, 11 April 2018
Record date                                    Friday, 13 April 2018
Payment date                                   Monday, 16 April 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 11 April 2018 and Friday, 
13 April 2018, both dates inclusive.

On Monday, 16 April 2018, the dividend will be electronically transferred to the bank accounts of 
certificated shareholders.
The accounts of those shareholders who have dematerialised their shares (which are held at their participant 
or broker) will also be credited on Monday, 16 April 2018.

On behalf of the board

N R Drutman
Company Secretary

Johannesburg
28 February 2018

Absa Bank Limited is a company domiciled in South Africa. Its registered office is the 7th Floor, 
Barclays Towers West, 15 Troye Street, Johannesburg, 2001.

Summary consolidated IFRS salient features
                                                                                2017         2016
Statement of comprehensive income (Rm)                                                           
Revenue                                                                       50 094       48 801
Operating expenses                                                            31 608       27 525
Profit attributable to ordinary equity holders                                 8 067        9 568
Headline earnings(1)                                                           8 548        9 778
Statement of financial position                                                                  
Loans and advances to customers (Rm)                                         660 492      630 646
Total assets (Rm)                                                            988 358      918 311
Deposits due to customers (Rm)                                               583 825      564 812
Loans-to-deposits and debt securities ratio (%)                                 91.5         89.5
Financial performance (%)                                                                        
Return on average equity                                                        11.8         16.3
Return on average assets                                                        0.91         1.06
Return on average risk-weighted assets                                          1.64         1.96
Non-performing loans (NPLs) ratio on gross loans and advances                    3.6          3.0
Operating performance (%)                                                                        
Net interest margin on average interest bearing assets(2)                       3.91         4.02
Credit loss ratio on gross loans and advances to customers and banks            0.73         0.93
Credit loss ratio on net loans and advances to customers                         0.8         1.04
Non-interest income as % of total revenue                                       41.3         41.0
Cost-to-income ratio                                                            63.1         56.4
Jaws                                                                           (12.2)        1.62
Effective tax rate, excluding indirect taxation                                 27.9         25.9
Share statistics (million)                                                                       
Number of ordinary shares in issue                                             448.3        420.1
Weighted average number of ordinary shares in issue                            440.7        417.7
Diluted weighted average number of ordinary shares in issue                    440.7        417.7
Share statistics (cents)                                                                         
Headline earnings per ordinary share                                         1 939.4      2 340.9
Diluted headline earnings per ordinary share                                 1 939.4      2 340.9
Basic earnings per ordinary share                                            1 830.3      2 290.6
Diluted basic earnings per ordinary share                                    1 830.3      2 290.6
Dividend per ordinary share relating to income for the reporting period      2 372.7      1 169.4
Dividend cover (times)                                                           0.8          2.0
Net asset value per ordinary share                                            17 998       15 386
Tangible net asset value per ordinary share                                   17 136       14 829
Capital adequacy (%)                                                                             
Absa Bank Limited                                                               16.9         15.0
Common Equity Tier 1 (%)                                                                         
Absa Bank Limited                                                               13.4         11.6

Notes
(1) After allowing for R362m (31 December 2016: R351m) profit attributable to preference equity 
    holders.
(2) The Bank changed its definition of ‘Interest-bearing assets and liabilities’ to only include 
    assets and liabilities that generate ‘Net Interest income’. This resulted in certain inter-
    group assets and liabilities being excluded from ‘Interest-bearing assets and liabilities’ 
    as these generate ‘non-interest income’. Consequently, interest-bearing assets and liabilities 
    have been restated for 31 December 2016.

Summary consolidated normalised salient features
                                                                              2017           2016
Statement of comprehensive income (Rm)                                                           
Revenue                                                                     49 689         48 801
Operating expenses                                                          29 708         27 525
Profit attributable to ordinary equity holders                               9 550          9 568
Headline earnings                                                            9 793          9 778
Statement of financial position                                                                  
Total assets (Rm)                                                          987 548        918 311
Financial performance (%)                                                                        
Return on average equity                                                      14.8           16.3
Return on average assets                                                      1.05           1.06
Return on risk-weighted assets                                                1.88           1.96
Operating performance (%)                                                                        
Non-interest income as percentage of total revenue                            41.5           41.0
Cost-to-income ratio                                                          59.8           56.4
Jaws                                                                         (6.11)          1.62
Effective tax rate, excluding indirect taxation                               27.0           25.9
Share statistics (million)                                                                       
Number of ordinary shares in issue                                           448.3          420.1
Weighted average number of ordinary shares in issue                          440.8          417.7
Diluted weighted average number of ordinary shares in issue                  440.8          417.7
Share statistics (cents)                                                                         
Headline earnings per ordinary share                                       2 221.9        2 340.9
Diluted headline earnings per ordinary share                               2 221.9        2 340.9
Basic earnings per ordinary share                                          2 166.5        2 290.6
Diluted basic earnings per ordinary share                                  2 166.5        2 290.6
NAV per ordinary share                                                      15 599         15 386
Tangible NAV per ordinary share                                             14 913         14 829
Capital adequacy (%)                                                                             
Absa Bank Limited                                                             15.0           15.0
Common Equity Tier 1 (%)                                                                         
Absa Bank Limited                                                             11.6           11.6

Summary consolidated normalised reconciliation
                                                       Unadjusted     Adjustments      Normalised
                                                        IFRS Bank    for Barclays            Bank
                                                      Performance      separation     performance
Reconciliation of normalised to IFRS results                                                     
Statement of comprehensive income (Rm)                                                           
Net interest income                                        29 413             325         29 088 
Non-interest income                                        20 681              80         20 601 
Total income                                               50 094             405         49 689 
Impairment losses on loans and advances                    (5 113)              -         (5 113)
Operating expenses                                        (31 688)         (1 901)       (29 707)
Other expenses                                             (1 718)           (394)        (1 394)
Share of post tax results of associates and 
joint ventures                                                170               -            170
Operating profit before income tax                         11 755          (1 890)        13 645 
Tax expenses                                               (3 278)           (408)        (3 687)
Profit for the reporting period                             8 477          (1 482)         9 959 
Profit attributable to:                                                                           
Ordinary equity holders                                     8 067          (1 482)         9 549 
Preference equity holders                                     362               -            362 
Additional Tier 1 Capital                                      48               -             48 
                                                            8 477          (1 482)         9 959 
Headline earnings                                           8 548          (1 245)         9 793 
Operating performance (%)                                                                        
Net interest margin on average interest-             
bearing assets                                               3.91             n/a           3.90 
Credit loss ratio on gross loans and advances
to customers and banks                                       0.73             n/a           0.74 
Non-interest income as % of income                           41.3             n/a           41.5 
Income growth                                                 2.6             n/a            1.8 
Operating expenses growth                                    14.8             n/a            7.9 
Cost-to-income ratio                                         63.1             n/a           59.8 
Effective tax rate                                           27.9             n/a           27.0
Statement of financial position (Rm)                                                             
Loans and advances to customers                           660 492               -        660 492 
Loans and advances to banks                                43 217               -         43 217 
Investment securities                                      76 524               -         76 524 
Other assets                                              208 125            (912)       207 213 
Total assets                                              988 358            (912)       987 446 
Deposits due to customers                                 583 825               -        583 825 
Debt securities in issue                                  137 942               -        137 942 
Other liabilities(1)                                      181 262           9 840        191 102 
Total liabilities                                         903 029           9 840        912 869 
Equity                                                     85 329         (10 752)        74 577 
Total equity and liabilities                              988 358            (912)       987 446 


Key performance ratios (%)                                                                       
Return on average assets                                     0.91             n/a           1.05 
Return on average equity                                     14.3             n/a           14.8 
Capital adequacy                                             16.9             n/a           15.0 
Common Equity Tier 1                                         13.4             n/a           11.6 
Share statistics (cents)
Diluted headline earnings per ordinary share              1 939.4             n/a        2 221.9


Notes
(1) ‘Other liabilities’ of R9 840m, included in Adjustments for Barclays separation, represents 
    the contribution that was received from Barclays PLC, net of amounts already spent on 
    separation activities. The cash received is held centrally by Treasury and is presented as 
    an intersegmental asset in ‘Other liabilities’. 

Barclays separation financial results
‘Net interest income’ includes the endowment benefit received on the Barclays PLC investment, while 
foreign exchange hedging gains linked to the separation activities have been disclosed as ‘non-
interest income’. ‘Operating expenses’ includes R1.9bn professional fees, information technology 
costs, marketing, transitional service costs and salary costs incurred during the reporting period. 
‘Other expenses’ reflects the impairment of an intangible asset that was utilised during the 
current year. 

Summary consolidated statement of financial position
as at 31 December 
                                                                               2017         2016
                                                                Note             Rm           Rm
Assets                                                                                          
Cash, cash balances and balances with central banks                          28 792       28 252
Investment securities                                                        76 524       84 174
Loans and advances to banks                                        2         43 217       39 296
Trading portfolio assets                                                    104 781       74 389
Hedging portfolio assets                                                      2 667        1 734
Other assets                                                                 15 513       16 645
Current tax assets                                                               57          616
Non-current assets held for sale                                   1          1 119          367
Loans and advances to customers                                    2        660 492      630 646
Loans to Group Companies                                                     36 530       25 794
Investments in associates and joint ventures                                  1 235        1 065
Investment properties                                                             -          222
Property and equipment                                                       13 519       12 726
Goodwill and intangible assets                                                3 861        2 339
Deferred tax assets                                                              51           46
Total assets                                                                988 358      918 311
Liabilities                                                                                     
Deposits from banks                                                          74 110       60 148
Trading portfolio liabilities                                                59 834       42 503
Hedging portfolio liabilities                                                 1 117        2 054
Other liabilities                                                            27 824       21 150
Provisions                                                                    2 073        2 060
Current tax liabilities                                                          55            4
Non-current liabilities held for sale                                             -            9
Deposits due to customers                                                   583 825      564 812
Debt securities in issue                                                    137 942      139 573
Borrowed funds                                                     3         15 866       15 679
Deferred tax liabilities                                                        383        1 020
Total liabilities                                                           903 029      849 012
Equity                                                                                          
Capital and reserves                                                                            
Attributable to ordinary equity holders:                                                        
Ordinary share capital                                                          304          304
Ordinary share premium                                                       36 879       24 964
Preference share capital                                                          1            1
Preference share premium                                                      4 643        4 643
Additional Tier 1 Capital                                                     1 500            -
Retained earnings                                                            37 855       36 099
Other reserves                                                                4 145        3 262
                                                                             85 327       69 273
Non-controlling interest - ordinary shares                                        2           26
Total equity                                                                 85 329       69 299
Total equity and liabilities                                                988 358      918 311

Summary consolidated statement of comprehensive income
for the period ended 31 December 
                                                                              2017          2016 
                                                                Note            Rm            Rm 
                                                                                                 
Net interest income                                                         29 413        28 809 
Interest and similar income                                                 71 438        69 894 
Interest expense and similar charges                                       (42 025)      (41 085)
Non-interest income                                                         20 681        19 992 
Net fee and commission income                                               17 279        16 168 
Fee and commission income                                                   18 608        17 628 
Fee and commission expense                                                  (1 329)       (1 460)
Gains and losses from banking and trading activities                         2 860         2 969 
Gains and losses from investment activities                                      3             2 
Other operating income                                                         539           853 
Total Income                                                                50 094        48 801 
Impairment losses on loans and advances                                     (5 113)       (6 408)
Operating income before operating expenditure                               44 981        42 393 
Operating expenditure                                                      (31 608)      (27 525)
Other expenses                                                              (1 788)       (1 575)
Other impairments                                                  4          (512)         (577)
Indirect taxation                                                           (1 276)         (998)
Share of post-tax results of associates and joint ventures                     170           118 
Operating profit before income tax                                          11 755        13 411 
Taxation expense                                                            (3 278)       (3 477)
Profit for the reporting period                                              8 477         9 934 
Profit attributable to:                                                                          
Ordinary equity holders                                                      8 067         9 568 
Non-controlling interest                                                         -            15 
Preference equity holders                                                      362           351 
Additional Tier 1 Capital                                                       48             - 
                                                                             8 477         9 934 
Earnings per share:                                                                              
Basic earnings per share (cents per share)                                 1 830.3       2 290.6 
Diluted earnings per share (cents per share)                               1 830.3       2 290.6 

                                                                              2017          2016 
                                                                   Note         Rm            Rm 
Profit for the reporting period                                              8 477         9 934 
Other comprehensive income                                                                       
Items that will not be reclassified to profit or loss                         (154)          (12)
Fair value losses arising from changes in own credit risk                              
on liabilities designated at fair value through profit or loss                (147)            - 
Movement in retirement benefit fund assets and liabilities                      (7)          (12)
Decrease in retirement benefit surplus                                         (10)          (17)
Deferred tax                                                                     3             5 
Items that are or may be subsequently reclassified to profit                           
or loss                                                                        677           928 
Movement in foreign currency translation reserve                                55          (453)
Differences in translation of foreign operations                                 3          (133)
Release to profit or loss                                                       52          (320)
Movement in cash flow hedging reserve                                          794         1 726 
Fair value gains                                                             1 465         2 714 
Amount removed from other comprehensive income and recognised                          
in profit or loss                                                             (365)         (314)
Deferred tax                                                                  (306)         (674)
Movement in available-for-sale reserve                                        (172)         (345)
Fair value losses                                                             (307)         (475)
Release to profit or loss                                                       67            (3)
Deferred tax                                                                    68           133 
Total comprehensive income for the reporting period                          9 000        10 850 
Total comprehensive income attributable to:                                                      
Ordinary equity holders                                                      8 590        10 484 
Non-controlling interest                                                         -            15 
Preference equity holders                                                      362           351 
Additional Tier 1 Capital                                                       48             - 
                                                                             9 000        10 850 

Summary consolidated statement of changes in equity
                                                               Number of 
                                                                ordinary        Share       Share
                                                                shares(1)     capital     premium 
                                                                     ’000          Rm          Rm 
Balance at the beginning of the reporting period                  431 318         304      24 964 
Total comprehensive income for the reporting period                     -           -           - 
Profit for the reporting period                                         -           -           - 
Other comprehensive income                                              -           -           - 
Dividends paid during the reporting period                              -           -           - 
Distributions paid during the reporting period                          -           -           - 
Shares issued                                                      16 983           -       3 500 
Issuance of Additional Tier 1 Capital                                   -           -           - 
Purchase of Barclays Africa Group Limited shares in respect   
of equity-settled share-based payment arrangements                      -           -           - 
Transfer of vesting options                                             -           -           - 
Movement in share-based payment reserve                                 -           -           - 
Transfer from share-based payment reserve                               -           -           - 
Value of employee services                                              -           -           - 
Conversion from cash-settled schemes                                    -           -           - 
Deferred tax                                                            -           -           - 
Share of post-tax results of associates and joint ventures              -           -           - 
Disposal of interest in subsidiary(2)                                   -           -           - 
Barclays separation(3)                                                  -           -       8 415 
Shareholder contribution - fair value of investment(4)                  -           -           - 
Balance at the end of the reporting period                        448 301         304      36 879

Notes
All movements are reflected net of taxation.
(1) This includes ordinary shares and ‘A’ ordinary shares.
(2) The Group disposed of its controlling stake in a non-core subsidiary which was classified as 
    held for sale.
(3) As part of the Barclays PLC disinvestment, the Bank issued share capital to Barclays PLC for 
    R8,4bn and received an additional R3,7bn in cash. The resultant cash received meets the definition 
    of a transaction with a shareholder.
(4) CLS Group Holding AG shares were transferred to Barclays PLC for no consideration in 2005. During 
    the current reporting period these shares were transferred back to the Bank for a nominal 
    consideration of one British Pound Sterling (GBP). The shares have been recognised at a fair value 
    of R48m. The related credit has been recognised in equity as a shareholder contribution.

                                                              Preference    Preference     Additional
                                                                   share         share         Tier 1 
                                                                 capital       premium        Capital(5) 
                                                                      Rm            Rm             Rm 
Balance at the beginning of the reporting period                       1         4 643              - 
Total comprehensive income for the reporting period                    -             -              - 
Profit for the reporting period                                        -             -              - 
Other comprehensive income                                             -             -              - 
Dividends paid during the reporting period                             -             -              - 
Distributions paid during the reporting period                         -             -              - 
Shares issued                                                          -             -              - 
Issuance of Additional Tier 1 Capital                                  -             -          1 500 
Purchase of Barclays Africa Group Limited shares in respect                               
of equity-settled share-based payment arrangements                     -             -              - 
Transfer of vesting options                                            -             -              - 
Movement in share-based payment reserve                                -             -              - 
Transfer from share-based payment reserve                              -             -              - 
Value of employee services                                             -             -              - 
Conversion from cash-settled schemes                                   -             -              - 
Deferred tax                                                           -             -              - 
Share of post-tax results of associates and joint ventures             -             -              - 
Disposal of interest in subsidiary(2)                                  -             -              - 
Barclays separation(3)                                                 -             -              - 
Shareholder contribution - fair value of investment(4)                 -             -              - 
Balance at the end of the reporting period                             1         4 643          1 500 

                                                                                    Bank              
                                                                                                  2017
                                                                                            Available-
                                                                 Retained    Total other      for-sale 
                                                                 earnings       reserves       reserve 
                                                                       Rm             Rm            Rm 
Balance at the beginning of the reporting period                   36 099          3 262           259 
Total comprehensive income for the reporting period                 8 323            677          (172)
Profit for the reporting period                                     8 477              -             - 
Other comprehensive income                                           (154)           677          (172)
Dividends paid during the reporting period                         (9 962)             -             - 
Distributions paid during the reporting period                        (48)             -             - 
Shares issued                                                           -              -             - 
Issuance of Additional Tier 1 Capital                                   -              -             - 
Purchase of Barclays Africa Group Limited shares in respect    
of equity-settled share-based payment arrangements                   (125)             -             - 
Transfer of vesting options                                             -              -             - 
Movement in share-based payment reserve                                 -             36             - 
Transfer from share-based payment reserve                               -           (586)            - 
Value of employee services                                              -            590             - 
Conversion from cash-settled schemes                                    -              -             - 
Deferred tax                                                            -             32             - 
Share of post-tax results of associates and joint ventures           (170)           170             - 
Disposal of interest in subsidiary(2)                                   -              -             - 
Barclays separation(3)                                              3 690              -             - 
Shareholder contribution - fair value of investment(4)                 48              -             - 
Balance at the end of the reporting period                         37 855          4 145            87 

                                                                                 Foreign               
                                                                Cash flow       currency               
                                                                  hedging    translation       Capital 
                                                                  reserve        reserve       reserve 
                                                                       Rm             Rm            Rm 
Balance at the beginning of the reporting period                     (145)           (54)        1 422 
Total comprehensive income for the reporting period                   794             55             - 
Profit for the reporting period                                         -              -             - 
Other comprehensive income                                            794             55             - 
Dividends paid during the reporting period                              -              -             - 
Distributions paid during the reporting period                          -              -             - 
Shares issued                                                           -              -             - 
Issuance of Additional Tier 1 Capital                                   -              -             - 
Purchase of Barclays Africa Group Limited shares in respect                                  
of equity-settled share-based payment arrangements                      -              -             - 
Transfer of vesting options                                             -              -             - 
Movement in share-based payment reserve                                 -              -             - 
Transfer from share-based payment reserve                               -              -             - 
Value of employee services                                              -              -             - 
Conversion from cash-settled schemes                                    -              -             - 
Deferred tax                                                            -              -             - 
Share of post-tax results of associates and joint ventures              -              -             - 
Disposal of interest in subsidiary(2)                                   -              -             - 
Barclays separation(3)                                                  -              -             - 
Shareholder contribution - fair value of investment(4)                  -              -             - 
Balance at the end of the reporting period                            649              1         1 422 

                                                                             Associates’   Total equity 
                                                              Share-based     and joint    attributable 
                                                                  payment      ventures’      to equity 
                                                                  reserve       reserve         holders 
                                                                       Rm            Rm              Rm 
Balance at the beginning of the reporting period                      713         1 067          69 273 
Total comprehensive income for the reporting period                     -             -           9 000 
Profit for the reporting period                                         -             -           8 477 
Other comprehensive income                                              -             -             523 
Dividends paid during the reporting period                              -             -          (9 962)
Distributions paid during the reporting period                          -             -             (48)
Shares issued                                                           -             -           3 500 
Issuance of Additional Tier 1 Capital                                   -             -           1 500 
Purchase of Barclays Africa Group Limited shares in respect                 
of equity-settled share-based payment arrangements                      -             -            (125)
Transfer of vesting options                                             -             -               - 
Movement in share-based payment reserve                                36             -              36 
Transfer from share-based payment reserve                            (586)            -            (586)
Value of employee services                                            590             -             590 
Conversion from cash-settled schemes                                    -             -               - 
Deferred tax                                                           32             -              32 
Share of post-tax results of associates and joint ventures              -           170               - 
Disposal of interest in subsidiary(2)                                   -             -               - 
Barclays separation(3)                                                  -             -          12 105 
Shareholder contribution - fair value of investment(4)                  -             -              48 
Balance at the end of the reporting period                            749         1 237          85 327 

                                                                        Non-controlling 
                                                                               interest-
                                                                               ordinary           Total 
                                                                                 shares          equity 
                                                                                     Rm              Rm 
Balance at the beginning of the reporting period                                     26          69 299 
Total comprehensive income for the reporting period                                   -           9 000 
Profit for the reporting period                                                       -           8 477 
Other comprehensive income                                                            -             523 
Dividends paid during the reporting period                                            -          (9 962)
Distributions paid during the reporting period                                        -             (48)
Shares issued                                                                         -           3 500 
Issuance of Additional Tier 1 Capital                                                 -           1 500 
Purchase of Barclays Africa Group Limited shares in respect                                   
of equity-settled share-based payment arrangements                                    -            (125)
Transfer of vesting options                                                           -               - 
Movement in share-based payment reserve                                               -              36 
Transfer from share-based payment reserve                                             -            (586)
Value of employee services                                                            -             590 
Conversion from cash-settled schemes                                                  -               - 
Deferred tax                                                                          -              32 
Share of post-tax results of associates and joint ventures                            -               - 
Disposal of interest in subsidiary(2)                                               (24)            (24)
Barclays separation(3)                                                                -          12 105 
Shareholder contribution - fair value of investment(4)                                -              48 
Balance at the end of the reporting period                                            2          85 329 

                                                                    Number of                         
                                                                     ordinary      Share          Share 
                                                                     shares(1)   capital        premium 
                                                                         ’000         Rm             Rm 
Balance at the beginning of the reporting period                      412 798        304         21 455 
Total comprehensive income for the reporting period                         -          -              - 
Profit for the period for the reporting period                              -          -              - 
Other comprehensive income                                                  -          -              - 
Dividends paid during the reporting period                                  -          -              - 
Distributions paid during the reporting period                              -          -              - 
Shares issued                                                          18 520          -          3 500 
Issuance of Additional Tier 1 Capital                                       -          -              - 
Purchase of Barclays Africa Group Limited shares in respect of                               
equity-settled share-based payment arrangements                             -          -              - 
Transfer of vesting options                                                 -          -              9 
Movement in share-based payment reserve                                     -          -              - 
Transfer from share-based payment reserve                                   -          -              - 
Value of employee services                                                  -          -              - 
Conversion from cash-settled to equity-settled Schemes                      -          -              - 
Deferred tax                                                                -          -              - 
Share of post-tax results of associates and joint ventures                  -          -              - 
Balance at the end of the reporting period                            431 318        304         24 964 

Notes
All movements are reflected net of taxation.
(1) This includes ordinary shares and ‘A’ ordinary shares

                                                                  Preference    Preference   Additional 
                                                                       share         share       Tier 1 
                                                                     capital       premium      Capital 
                                                                          Rm            Rm           Rm 
Balance at the beginning of the reporting period                           1         4 643            - 
Total comprehensive income for the reporting period                        -             -            - 
Profit for the period for the reporting period                             -             -            - 
Other comprehensive income                                                 -             -            - 
Dividends paid during the reporting period                                 -             -            - 
Distributions paid during the reporting period                             -             -            - 
Shares issued                                                              -             -            - 
Issuance of Additional Tier 1 Capital                                      -             -            - 
Purchase of Barclays Africa Group Limited shares in respect                                        
of equity-settled share-based payment arrangements                         -             -            - 
Transfer of vesting options                                                -             -            - 
Movement in share-based payment reserve                                    -             -            - 
Transfer from share-based payment reserve                                  -             -            - 
Value of employee services                                                 -             -            - 
Conversion from cash-settled to equity-settled Schemes                     -             -            - 
Deferred tax                                                               -             -            - 
Share of post-tax results of associates and joint ventures                 -             -            - 
Balance at the end of the reporting period                                 1         4 643            - 

                                                                                 2016     
                                                                                Total       Available- 
                                                              Retained          other         for-sale 
                                                              earnings       reserves          reserve 
                                                                    Rm             Rm               Rm 
Balance at the beginning of the reporting period                32 033          2 050              604 
Total comprehensive income for the reporting period              9 907            928             (345)
Profit for the period for the reporting period                   9 919              -                - 
Other comprehensive income                                         (12)           928             (345)
Dividends paid during the reporting period                      (5 851)             -                - 
Distributions paid during the reporting period                       -              -                - 
Shares issued                                                        -              -                - 
Issuance of Additional Tier 1 Capital                                -              -                - 
Purchase of Barclays Africa Group Limited shares in respect                                     
of equity-settled share-based payment arrangements                (198)             -                - 
Transfer of vesting options                                        326              -                - 
Movement in share-based payment reserve                              -            166                - 
Transfer from share-based payment reserve                            -           (315)               - 
Value of employee services                                           -            411                - 
Conversion from cash-settled to equity-settled Schemes               -             30                - 
Deferred tax                                                         -             40                - 
Share of post-tax results of associates and joint ventures        (118)           118                - 
Balance at the end of the reporting period                      36 099          3 262              259 

                                                              Cash flow   Foreign currency              
                                                                hedging        translation      Capital 
                                                                reserve            reserve      reserve 
                                                                     Rm                 Rm           Rm 
Balance at the beginning of the reporting period                 (1 871)               399        1 422 
Total comprehensive income for the reporting period               1 726               (453)           - 
Profit for the period for the reporting period                        -                  -            - 
Other comprehensive income                                        1 726               (453)           - 
Dividends paid during the reporting period                            -                  -            - 
Distributions paid during the reporting period                        -                  -            - 
Shares issued                                                         -                  -            - 
Issuance of Additional Tier 1 Capital                                 -                  -            - 
Purchase of Barclays Africa Group Limited shares in respect                                    
of equity-settled share-based payment arrangements                    -                  -            - 
Transfer of vesting options                                           -                  -            - 
Movement in share-based payment reserve                               -                  -            - 
Transfer from share-based payment reserve                             -                  -            - 
Value of employee services                                            -                  -            - 
Conversion from cash-settled to equity-settled Schemes                -                  -            - 
Deferred tax                                                          -                  -            - 
Share of post-tax results of associates and joint ventures            -                  -            - 
Balance at the end of the reporting period                         (145)               (54)       1 422 

                                                                                                  Total 
                                                                 Share    Associates’      attributable 
                                                                 based     and Joint        to ordinary 
                                                               payment      ventures’            equity 
                                                               reserve       reserve            holders 
                                                                   Rm             Rm                 Rm 
Balance at the beginning of the reporting period                   547           949             60 486 
Total comprehensive income for the reporting period                  -             -             10 835 
Profit for the period for the reporting period                       -             -              9 919 
Other comprehensive income                                           -             -                916 
Dividends paid during the reporting period                           -             -             (5 851)
Distributions paid during the reporting period                       -             -                  - 
Shares issued                                                        -             -              3 500 
Issuance of Additional Tier 1 Capital                                -             -                  - 
Purchase of Barclays Africa Group Limited shares in respect                                    
of equity-settled share-based payment arrangements                   -             -               (198)
Transfer of vesting options                                          -             -                335 
Movement in share-based payment reserve                            166             -                166 
Transfer from share-based payment reserve                         (315)            -               (315)
Value of employee services                                         411             -                411 
Conversion from cash-settled to equity-settled Schemes              30             -                 30 
Deferred tax                                                        40             -                 40 
Share of post-tax results of associates and joint ventures           -           118                  - 
Balance at the end of the reporting period                         713         1 067             69 273 

                                                                      Non-controlling 
                                                                            interest-             Total 
                                                                      ordinary shares            equity 
                                                                                   Rm                Rm 
Balance at the beginning of the reporting period                                   11            60 497 
Total comprehensive income for the reporting period                                15            10 850 
Profit for the period for the reporting period                                     15             9 934 
Other comprehensive income                                                          -               916 
Dividends paid during the reporting period                                          -            (5 851)
Distributions paid during the reporting period                                      -                 - 
Shares issued                                                                       -             3 500 
Issuance of Additional Tier 1 Capital                                               -                 - 
Purchase of Barclays Africa Group Limited shares in                 
respect of equity-settled share-based payment arrangements                          -              (198)
Transfer of vesting options                                                         -               335 
Movement in share-based payment reserve                                             -               166 
Transfer from share-based payment reserve                                           -              (315)
Value of employee services                                                          -               411 
Conversion from cash-settled to equity-settled Schemes                              -                30 
Deferred tax                                                                        -                40 
Share of post-tax results of associates and joint ventures                          -                 - 
Balance at the end of the reporting period                                         26            69 299 

Summary consolidated statement of cash flows  
                                                                                      2017         2016 
                                                                         Note           Rm           Rm 
Net cash (utilised in)/generated from operating activites                           (4 478)       2 300 
Net cash utilised in investing activities                                           (3 906)      (4 090)
Net cash generated from /(utilised in) financing activities                          7 008        ( 168)
Net cash generated from Barclays separation                                         12 106            - 
Net cash utilised in other financing activities                                     (5 098)       ( 168)
Net decrease in cash and cash equivalents                                           (1 376)      (1 958)
Cash and cash equivalents at the beginning of the reporting period          1       12 416       14 374 
Cash and cash equivalents at the end of the reporting period                2       11 040       12 416 

Notes to the summary consolidated statement of cash flows                                               
1. Cash and cash equivalents at the beginning of the reporting period                                   
   Cash, cash balances and balances with central banks(1)                            9 662        8 607 
   Loans and advances to banks(2)                                                    2 754        5 767 
                                                                                    12 416       14 374 
2. Cash and cash equivalents at the end of the reporting period                                         
   Cash, cash balances and balances with central banks(1)                            9 684        9 662 
   Loans and advances to banks(2)                                                    1 356        2 754 
                                                                                    11 040       12 416 

Notes
(1) Includes coins and bank notes.
(2) Includes call advances, which are used as working capital for the Bank

Summary notes to the consolidated financial results 
1. Non-current assets and non-current liabilities held for sale
The following movements in non-current assets and non-current liabilities held for sale were effected 
during the current financial reporting period:
- Retail Banking South Africa transferred loans and advances to customers of R1 118m and property and 
  equipment of R1m to non-current assets held for sale. The Commercial Property Finance (CPF) Equity 
  division in Business Banking South Africa disposed of a subsidiary with assets of R373m and liabilities 
  of R26m out of non-current assets and non-current liabilities held for sale respectively. 
- Corporate and Investment Banking South Africa (CIB SA) transferred investment securities with a carrying 
  value of R547m to non-current assets held for sale. Prior to its disposal at a carrying value of R467m, 
  a negative fair value adjustment of R80m was applied to the investment securities.

The following movements in non-current assets held for sale were effected during the previous financial 
reporting period:
- The CPF Equity division in Business Banking South Africa transferred a subsidiary with total assets of 
  R367m and total liabilities of R9m to non-current assets and non-current liabilities held for sale. It 
  further disposed of an investment security with a carrying value of R15m.
- Head Office, Treasury and other operations in South Africa disposed of property and equipment with a 
  carrying value of R94m.

2. Loans and advances
                                                                          31 December                   
                                                                              2017                      
                                                         Performing loans                               
                                                          Exposure      Impairment       Coverage ratio 
                                                                Rm              Rm                    % 
South Africa Banking                                       644 242           3 915                 0.61 
RBB South Africa                                           425 859           3 356                 0.79 
Retail Banking South Africa                                363 074           2 583                 0.71 
Credit cards                                                26 849             578                 2.15 
Instalment credit agreements                                76 498             703                 0.92 
Loans to associates and joint ventures                      23 037               -                    - 
Mortgages                                                  213 508           1 124                 0.53 
Other loans and advances                                       726               -                    - 
Overdrafts                                                   5 349              51                 0.95 
Personal and term loans                                     17 107             127                 0.74 
Business Banking South Africa                               62 785             773                 1.23 
Mortgages (including CPF)                                   27 010             140                 0.52 
Overdrafts                                                  19 865             393                 1.98 
Term loans                                                  15 910             240                 1.51 
CIB South Africa                                           218 383             559                 0.26 
Wealth                                                       4 930              14                 0.28 
Head office, Treasury and other operations In 
South Africa                                                   987              10                 1.01 
Loans and advances to customers                            650 159           3 939                 0.61 
Loans and advances to banks                                 43 217               -                    - 
                                                           693 376           3 939                 0.57 

                                                                       Non-performing loans            
                                                           Exposure      Impairment      Coverage ratio 
                                                                 Rm              Rm                   % 
South Africa Banking                                         23 694           9 510               40.14 
RBB South Africa                                             21 675           8 678               40.04 
Retail Banking South Africa                                  18 340           7 582               41.34 
Credit cards                                                  3 622           2 626               72.50 
Instalment credit agreements                                  2 360           1 112               47.12 
Loans to associates and joint ventures                            -               -                   - 
Mortgages                                                    10 241           2 056               20.08 
Other loans and advances                                          -               -                   - 
Overdrafts                                                      384             236               61.46 
Personal and term loans                                       1 733           1 552               89.56 
Business Banking South Africa                                 3 335           1 096               32.86 
Mortgages (including CPF)                                     1 477             519               35.14 
Overdrafts                                                    1 082             375               34.66 
Term loans                                                      776             202               26.03 
CIB South Africa                                              2 019             832               41.21 
Wealth                                                          262             174               66.41 
Head office, Treasury and other operations In 
South Africa                                                      -               -                   - 
Loans and advances to customers                              23 956           9 684               40.42 
Loans and advances to banks                                       -               -                   - 
                                                             23 956           9 684               40.42 

                                                                                     Net total exposure 
                                                                                                     Rm 
South Africa Banking                                                                            654 511 
RBB South Africa                                                                                435 500 
Retail Banking South Africa                                                                     371 249 
Credit cards                                                                                     27 267 
Instalment credit agreements                                                                     77 043 
Loans to associates and joint ventures                                                           23 037 
Mortgages                                                                                       220 569 
Other loans and advances                                                                            726 
Overdrafts                                                                                        5 446 
Personal and term loans                                                                          17 161 
Business Banking South Africa                                                                    64 251 
Mortgages (including CPF)                                                                        27 828 
Overdrafts                                                                                       20 179 
Term loans                                                                                       16 244 
CIB South Africa                                                                                219 011 
Wealth                                                                                            5 004 
Head office, Treasury and other operations In 
South Africa                                                                                        977 
Loans and advances to customers                                                                 660 492 
Loans and advances to banks                                                                      43 217 
                                                                                                703 709 

                                                                          31 December                  
                                                                             2016(1)                    
                                                                         Performing loans              
                                                          Exposure      Impairment       Coverage ratio
                                                                Rm              Rm                    %
South Africa Banking                                       614 881           4 531                 0.74
RBB South Africa                                           413 325           3 887                 0.94
Retail Banking South Africa                                355 064           3 114                 0.88
Credit cards                                                27 374             596                 2.18
Instalment credit agreements                                73 530             735                 1.00
Loans to associates and joint ventures                      18 933               -                    -
Mortgages                                                  214 610           1 219                 0.57
Other loans and advances                                       492               -                    -
Overdrafts                                                   3 923              45                 1.15
Personal and term loans                                     16 202             519                 3.20
Business Banking South Africa                               58 261             773                 1.33
Mortgages (including CPF)                                   24 661             158                 0.64
Overdrafts                                                  18 284             366                 2.00
Term loans                                                  15 316             249                 1.63
CIB South Africa                                           201 556             644                 0.32
Wealth                                                       5 615              14                 0.25
Head office, Treasury and other                         
operations In South Africa                                     654               4                 0.61
Loans and advances to customers                            621 150           4 549                 0.73
Loans and advances to banks                                 39 296               -                    -
                                                           660 446           4 549                 0.69

                                                                     Non-performing loans  
                                                           Exposure      Impairment      Coverage ratio 
                                                                 Rm              Rm                   % 
South Africa Banking                                         23 590           9 604               40.71 
RBB South Africa                                             21 325           8 420               39.48 
Retail Banking South Africa                                  18 037           7 258               40.24 
Credit cards                                                  4 001           2 919               72.96 
Instalment credit agreements                                  2 085             925               44.36 
Loans to associates and joint ventures                            -               -                   - 
Mortgages                                                     9 920           2 097               21.14 
Other loans and advances                                          -               -                   - 
Overdrafts                                                      220             142               64.55 
Personal and term loans                                       1 811           1 175               64.88 
Business Banking South Africa                                 3 288           1 162               35.34 
Mortgages (including CPF)                                     1 567             536               34.21 
Overdrafts                                                      929             421               45.32 
Term loans                                                      792             205               25.88 
CIB South Africa                                              2 265           1 184               52.27 
Wealth                                                          116              57               49.14 
Head office, Treasury and other                            
operations In South Africa                                        -               -                   - 
Loans and advances to customers                              23 706           9 661               40.75 
Loans and advances to banks                                       -               -                   - 
                                                             23 706           9 661               40.75 

                                                                                     Net total exposure 
                                                                                                     Rm 
South Africa Banking                                                                            624 336 
RBB South Africa                                                                                422 343 
Retail Banking South Africa                                                                     362 729 
Credit cards                                                                                     27 860 
Instalment credit agreements                                                                     73 955 
Loans to associates and joint ventures                                                           18 933 
Mortgages                                                                                       221 214 
Other loans and advances                                                                            492 
Overdrafts                                                                                        3 956 
Personal and term loans                                                                          16 319 
Business Banking South Africa                                                                    59 614 
Mortgages (including CPF)                                                                        25 534 
Overdrafts                                                                                       18 426 
Term loans                                                                                       15 654 
CIB South Africa                                                                                201 993 
Wealth                                                                                            5 660 
Head office, Treasury and other operations In South Africa                                          650 
Loans and advances to customers                                                                 630 646 
Loans and advances to banks                                                                      39 296 
                                                                                                669 942 

Note
(1) These numbers have been restated, refer to the reporting changes overview in note 15

3. Borrowed funds
During the reporting period the significant movements in borrowed funds were as follows: R2 841m 
(31 December 2016: R2 381m) of subordinated notes were issued and R2 805m  (31 December 2016: Rnil) 
were redeemed.

4. Other impairments
                                                                                         2017      2016 
                                                                                           Rm        Rm 
Impairment raised on financial instruments                                                (30)      (13)
Other                                                                                     542       590 
Intangible assets (1)                                                                     326       590 
Property and equipment (2)                                                                216         - 
                                                                                          512       577 

5. Headline earnings
                                                                      2017               2016           
                                                                     Gross     Net(3)   Gross    Net(3) 
                                                                        Rm         Rm      Rm        Rm 
Headline earnings are determined as follows:                                                            
Profit attributable to ordinary equity                              
holders of the Bank                                                             8 067             9 568 
Total headline earnings adjustment:                                               481               210 
IFRS 5 - Loss on disposal of non-current                            
assets held for sale                                                    33         34       -         - 
IAS 16 - Profit on disposal of property                             
and equipment                                                          (18)       (13)    (22)      (16)
IAS 21 - Recycled foreign currency                                  
translation reserve                                                     52         52    (320)     (297)
IAS 36 - Impairment of property and equipment                          216        155       -         - 
IAS 36 - Impairment of intangible assets                               326        238     590       590 
IAS 39 - Release of available-for-sale                              
reserves                                                                67         49      (3)       (2)
IAS 40 - Change in fair value of investment                         
properties                                                             (37)       (29)    (84)      (65)
IAS 40 - Profit on disposal of investment property                      (5)        (5)      -         - 
Headline earnings/diluted headline earnings                                     8 548             9 778 
Headline earnings per share/diluted headline                        
earnings per share (cents)                                                    1 939.4           2 340.9 

Notes
(1) The impairment incurred during the current reporting period mainly relates to computer software, Barclays.
    Net which was fully impaired. The prior period impairments relate to an acquired customer list which was 
    fully impaired following an adjustment to the interest rate outlook for the related business and impairment 
    of costs previously spent on the Virtual Bank initiative. In calculating the impairment to be recognised, 
    the value in use was based on a discounted cash flow methodology.
(2) During the current reporting period management have decided to dispose of certain property and equipment 
    resulting in an impairment of R216m.
(3) The net amount is reflected after taxation.

6. Dividends per share 
                                                                                            2017        2016 
                                                                                              Rm          Rm 
Dividends declared to ordinary equity holders                                                                
Interim Dividend (28 July 2017: 892,25702 cents)                                           4 000           - 
Special Dividend (30 June 2017: 811,4669592) (6 December 2016:                          
476,12 cents) (10 June 2016: 363,37 cents)                                                 3 500       3 500 
Final Dividend (1 March 2018: 669,1928 cents) (23 February 2017:                        
486,88017 cents)                                                                           3 000       2 100 
                                                                                          10 500       5 600 
Dividends declared to preference equity holders                                                              
Interim dividend (28 July 2017: 3 685,06849 cents) (29 July 2016:                       
3 696,57534 cents)                                                                           182         183 
Final dividend (1 March 2018: 3 558,01 cents) (23 February 2017:                        
3 644,79452 cents)                                                                           176         180 
                                                                                             358         363 
Distributions declared to Additional Tier 1 Capital note holders                                             
Distribution (12 December 2017)                                                               48           - 
                                                                                              48           - 
Dividends paid to ordinary equity holders (1)                                                                
Final dividend (10 April 2017: 486,88017 cents)(2) (11 April 2016:                      
484,49896 cents)                                                                           2 100       2 000 
Interim dividend (11 September 2017: 892,25702 cents)                                      4 000           - 
Special dividend (30 June 2017: 811,4669592) (6 December 2016:                          
476,12 cents) (10 June 2016: 363,37 cents)                                                 3 500       3 500 
                                                                                           9 600       5 500 
Dividends paid to preference equity holders (1)                                                            
Final dividend (10 April 2017: 3 644,79452 cents)(11 April 2016:                        
3 395,47945 cents)                                                                           180         168 
Interim dividend (11 September 2017: 3 685,06849 cents)                                 
(12 September 2016: 3 696,57534 cents)                                                       182         183 
                                                                                             362         351 
Distributions paid to Additional Tier 1 Capital note holders                                                 
Distribution (12 December 2017)                                                               48           - 
                                                                                              48           - 

Notes
(1) The dividend paid dates have been corrected to reflect date of payment. Previously these 
    dates referred to date of declaration.
(2) Dividends paid has been corrected since disclosed in interim. The final dividend per share 
    paid to ordinary equity holders previously disclosed at interim was 1 249.15983 cents per 
    share (gross R5.6bn).

7. Acquisitions and disposals of businesses and other similar transactions

7.1.1 Acquisitions of businesses during the current reporting period 
There were no acquisitions of businesses during the current reporting period.

7.1.2 Disposals of businesses during the current reporting period 
Apart from the businesses classified as non-current assets/liabilities held for sale and disposed of (refer 
to note 1) there were no other disposals of businesses that were finalised during the current reporting 
period. The cash consideration received on disposals included in non-current assets/liabilities held for sale 
was R205m.

7.2 Acquisitions and disposals of businesses during the previous reporting period
There were no acquisitions or disposals of businesses during the previous reporting period.

8. Related parties
Barclays Africa Group Limited is the parent of Absa Bank Limited.

As part of the separation, Barclays PLC sold ordinary Barclays Africa Group shares representing 12.2% and 
33.7% of issued ordinary share capital in May 2016 and  June 2017 respectively. Barclays PLC currently 
holds 126.2m ordinary Barclays Africa Group shares representing 14.9% of issued ordinary shares. The 
remaining 85.1 % of the shares are widely held on the JSE.

Barclays PLC contributed £765 million to the Bank, primarily in recognition of the investments required 
for the Bank to separate from Barclays PLC. This contribution will be invested primarily in rebranding, 
technology and separation-related projects and it is expected that it will neutralise the capital and cash 
flow impact of separation investments on the Bank over time.

CLS Group Holding AG shares were transferred to Barclays PLC for no consideration in 2005. During the current 
reporting period these shares were transferred back to the Bank for a nominal consideration of one British 
Pound (GBP). The shares have been recognised at a fair value of R48m. The related credit has been recognised 
in equity as a shareholder contribution.

9. Financial guarantee contracts 
                                                                                            31 December  
                                                                                          2017      2016    
                                                                                            Rm        Rm    
Financial guarantee contracts                                                               10        10    

Financial guarantee contracts represent contracts where the Bank undertakes to make specified payments to a 
counterparty, should the counterparty suffer a loss as a result of a specified debtor failing to make payment 
when due in accordance with the terms of a debt instrument. This amount represents the maximum off-statement 
of financial position exposure. 

10. Commitments
                                                                                          2017       2016 
                                                                                            Rm         Rm 
Authorised capital expenditure                                       
Contracted but not provided for                                                            257        509 
The Bank has capital commitments in respect of                       
computer equipment, software and property development.               
Management is confident that future net revenues and                 
funding will be sufficient to cover these commitments.                
Operating lease payments due                                         
No later than one year                                                                   1 026        947
Later than one year and no later than five years                                         2 654      2 367
Later than five years                                                                      902      1 195
                                                                                         4 582      4 509
 
The operating lease commitments comprise a number of separate operating leases in relation to property and 
equipment, none of which is individually significant to the Bank. Leases are negotiated for an average term 
of three to five years and rentals are renegotiated annually.

11. Contingencies
                                                                                             31 December     
                                                                                          2017       2016 
                                                                                            Rm         Rm 
Guarantees                                                                              28 960     30 469 
Irrevocable debt facilities                                                            145 087    122 958 
Letters of credit                                                                        3 834      4 645 
Other contingencies                                                                        151        135 
                                                                                       178 032    158 207 

Guarantees include performance guarantee contracts and payment guarantee contracts.

Irrevocable facilities are commitments to extend credit where the Bank does not have the right to terminate 
the facilities by written notice. Commitments generally have fixed expiry dates. Since commitments may 
expire without being drawn upon, the total contract amounts do not necessarily represent future cash 
requirements.
 
Legal proceedings
The Bank has been party to proceedings against it during the reporting period, and as at the reporting date 
the following material cases are disclosed:
- Pinnacle Point Holdings Proprietary Limited (PPG): New Port Finance Company and the trustees of the Winifred 
  Trust (the plaintiffs) allege a local bank conducted itself unlawfully, and that Absa Bank Limited (the Bank) 
  was privy to such conduct. They have instituted proceedings against the Bank for damages for an amount of 
  R1 387m. Although Pinnacle Point Holding’s claim has been withdrawn, the second to fifth plaintiff’s claims 
  remain and will proceed to trial. 

- Ayanda Collective Investment Scheme (the Scheme): Absa Capital Investor Services was the trustee of the 
  Scheme, in which Corporate Money Managers (CMM) managed a portfolio of assets within the Scheme. The joint 
  curators of the CMM Bank of companies and the Altron Pension Fund (an investor in the fund) allege that the 
  defendants caused damages to them arising from their alleged failure to meet their obligations in the trust 
  deed together with their statutory obligations set out in the Collective Investment Scheme Act, in respect 
  of which they seek payment of R1 157m. 

- On June 19, 2017, the Public Protector released the final report of her office’s investigation into the 
  Bankorp assistance package provided by the SA Reserve Bank between 1985 and 1995, recommending certain 
  remedial action. Absa acquired Bankorp in April 1992, for fair value, and had the responsibility of carrying 
  out its existing legal obligations to the SARB, which were met in full by October 1995. In consequence, Absa, 
  together with the SARB, Minister of Finance and National Treasury, brought  an application to review and set 
  aside the remedial action recommended in the Public Protector’s report which was successful and the report 
  was thus set aside.

The Bank is engaged in various other legal, competition and regulatory matters both in South Africa and a number 
of other jurisdictions. It is involved in legal proceedings which arise in the ordinary course of business from 
time to time, including (but not limited to) disputes in relation to contracts, securities, debt collection, 
consumer credit, fraud, trusts, client assets, competition, data protection, money laundering, employment, 
environmental and other statutory and common law issues. 

The Bank is also subject to enquiries and examinations, requests for information, audits, investigations and 
legal and other proceedings by regulators, governmental and other public bodies in connection with (but not 
limited to) consumer protection measures, compliance with legislation and regulation, wholesale trading activity 
and other areas of banking and business activities in which the Bank is or has been engaged. 

At the present time, the Bank does not expect the ultimate resolution of any of these other matters to have a 
material adverse effect on its financial position. However, in light of the uncertainties involved in such 
matters and the matters specifically described in this note, there can be no assurance that the outcome of a 
particular matter or matters will not be material to the Bank’s results of operations or cash flow for a 
particular period, depending on, amongst other things, the amount of the loss resulting from the matter(s) and 
the amount of income otherwise reported for the reporting period. The Bank has not disclosed the contingent 
liabilities associated with these matters either because they cannot reasonably be estimated or because such 
disclosure could be prejudicial to the outcome of the matter. Provision is made for all liabilities which are 
expected to materialise.

Regulatory matters
The scale of regulatory change remains challenging and the global financial crisis is resulting in a significant 
tightening of regulation and changes to regulatory structures globally, especially for companies that are deemed 
to be of systemic importance. Concurrently, there is continuing political and regulatory scrutiny of the operation 
of the banking and consumer credit industries globally which, in some cases, is leading to increased regulation. 
The nature and impact of future changes in the legal framework, policies and regulatory action cannot currently 
be fully predicted and are beyond the Bank’s control, but especially in the area of banking and insurance 
regulation, are likely to have an impact on the Bank’s businesses, systems and earnings. 

The Bank is continuously evaluating its programmes and controls in general relating to compliance with regulation. 
The Bank undertakes monitoring, review and assurance activities, and the Bank has also adopted appropriate remedial 
and/or mitigating steps, where necessary or advisable, and has made disclosures on material findings as and when 
appropriate. 

Absa Bank Limited, a subsidiary of Barclays Africa Group Limited, identified potentially fraudulent activity by 
certain of its customers using advance payments for imports in 2014 and 2015 to effect foreign exchange transfers 
from South Africa to beneficiary accounts located in East Asia, UK, Europe and the US. As a result, the Bank 
conducted a review of relevant activity, processes, systems and controls. The Bank is continuing to provide information 
to relevant authorities as part of the Bank’s ongoing cooperation. It is not currently practicable to provide 
an estimate of the financial impact of the actions described on the Bank or what effect that they might have 
upon the Bank’s operating results, cash flows or financial position in any particular period, if any.

In February 2017 the South African Competition Commission (SACC) referred Barclays Bank PLC, BCI and Absa Bank 
Limited, a subsidiary of Barclays Africa Group Limited, among other banks, to the Competition Tribunal to be 
prosecuted for breaches of South African antitrust law related to Foreign Exchange trading of South African Rand. 
The SACC found from its investigation that between 2007 and 2013 the banks had engaged in various forms of 
collusive behaviour. Barclays was the first to bring the conduct to the attention of the SACC under its leniency 
programme and has cooperated with, and will continue to cooperate with, the SACC in relation to this matter. 
The SACC is therefore not seeking an order from the Tribunal to impose any fine on Barclays Bank PLC, BCI or 
Absa Bank Limited.

Income Taxes
The Bank is subject to income taxes in numerous jurisdictions and the calculation of the Bank’s tax charge 
and provisions for income taxes necessarily involves a degree of estimation and judgement. There are many 
transactions and calculations for which the ultimate tax treatment is uncertain or in respect of which the 
relevant tax authorities may have indicated disagreement with the Bank’s treatment and accordingly the final tax 
charge cannot be determined until resolution has been reached with the relevant tax authority.
 
The Bank recognises provisions for anticipated tax audit issues based on estimates of whether additional taxes 
will be due after taking into account external advice where appropriate. The carrying amount of any resulting 
provisions will be sensitive to the manner in which tax matters are expected to be resolved, and the stage of 
negotiations or discussion with the relevant tax authorities. There may be significant uncertainty around the 
final outcome of tax proceedings, which in many instances, will only be concluded after a number of years. 
Management estimates are informed by a number of factors including, inter alia, the progress made in 
discussions or negotiations with the tax authorities, the advice of expert legal counsel, precedent set by the 
outcome of any previous claims, as well as the nature of the relevant tax environment.  

Where the final tax outcome of these matters is different from the amounts that were initially recorded, such 
differences will impact the current and deferred income tax assets and liabilities in the reporting period in 
which such determination is made. These risks are managed in accordance with the Bank’s Tax Risk Framework. 

12. Segment reporting
                                                                      2017            2016(1)  
                                                                        Rm              Rm  
12.1 Headline earnings contribution by segment                                              
South Africa Banking                                                11 903          11 251  
RBB South Africa                                                     8 636           8 544  
CIB South Africa                                                     3 267           2 707  
Wealth                                                               ( 429)           (261) 
Head Office, Treasury and other operations in South Africa          (1 681)         (1 212) 
Barclays separation                                                 (1 245)              -  
Total headline earnings                                              8 548           9 778  

12.2 Total income by segment                                                                
South Africa Banking                                                50 777          49 448  
RBB South Africa                                                    40 275          39 512  
CIB South Africa                                                    10 502           9 937  
Wealth                                                                 430             448  
Head Office, Treasury and other operations in South Africa          (1 518)         (1 095) 
Barclays separation                                                    405               -  
Total income                                                        50 094          48 801  

12.3 Total internal income by segment                                                       
South Africa Banking                                               (11 324)        (15 636) 
RBB South Africa                                                    (8 346)         (8 708) 
CIB South Africa                                                    (2 978)         (6 928) 
Wealth                                                                   6              10  
Head Office, Treasury and other operations in South Africa          15 950          14 164  
Barclays separation                                                    325               -  
Total internal income                                                4 957          (1 462) 

12.4 Total assets by segment                                                                
South Africa Banking                                             1 209 227       1 144 244  
RBB South Africa                                                   741 230         716 930  
CIB South Africa                                                   467 997         427 314  
Wealth                                                               6 083           6 112  
Head Office, Treasury and other operations in South Africa        (227 864)       (232 045) 
Barclays separation                                                    912               -  
Total assets                                                       988 358         918 311  

12.5 Total liabilities by segment                                                           
South Africa Banking                                             1 194 542       1 130 979  
RBB South Africa                                                   730 984         707 223  
CIB South Africa                                                   463 558         423 756  
Wealth                                                               6 504           6 359  
Head Office, Treasury and other operations in South Africa        (288 177)       (288 326) 
Barclays separation(2)                                              (9 840)              -  
Total liabilities                                                  903 029         849 012  

Notes
(1) Operational changes, management changes and associated changes to the way in which the 
    CODM views the performance of each business segment, have resulted in the reallocation of 
    earnings, assets and liabilities between operating segments. For details on the business 
    portfolio changes refer to note 15.
(2) This represents the contribution of R12.1bn that was received from Barclays PLC, net of 
    amounts already spent on separation activities. The cash received is centrally held by 
    Treasury and is presented as an intersegmental asset in ‘Other liabilities’. 

13. Assets and liabilities not held at fair value
The following table summarises the carrying amounts and fair value of those assets and 
liabilities not held at fair value.
                                                   2017                      2016(1)  
                                          Carrying  Fair value  Carrying value  Fair value
                                             value                                       
                                                Rm         Rm              Rm          Rm
Financial assets                                                                         
Balances with the South African         
Reserve Bank                                19 108     19 108          18 552      18 552
Coins and bank notes                         9 684      9 684           9 662       9 662
Money market assets                              -          -              38          38
Cash, cash balances and balances        
with central banks                          28 792     28 792          28 252      28 252
Loans and advances to banks                 26 020     26 020          19 439      19 439
Other assets                                13 327     13 420          14 822      14 895
South Africa Banking                       627 704    627 935         600 264     599 347
RBB South Africa                           435 500    435 731         422 238     421 321
Retail Banking South Africa                371 248    371 479         362 730     362 621
Credit cards                                27 267     27 267          27 861      27 861
Instalment credit agreements                77 044     77 275          73 955      73 650
Loans to associates and joint           
ventures                                    23 037     23 037          18 933      18 933
Mortgages                                  220 569    220 569         221 225     221 237
Other loans and advances                       726        726             492         492
Overdrafts                                   5 443      5 443           3 947       3 947
Personal and term loans                     17 162     17 162          16 317      16 501
Business Banking South Africa               64 252     64 252          59 508      58 700
Mortgages (including CPF)                   27 828     27 828          25 406      25 418
Overdrafts                                  19 199     19 199          18 448      18 448
Term loans                                  17 225     17 225          15 654      14 834
CIB South Africa                           192 204    192 204         178 026     178 026
Wealth                                       5 004      5 004           5 660       5 660
Head Office, Treasury and other         
operations in South Africa                     974        974             645         645
Loans and advances to customers -       
net of impairment losses                   633 681    633 913         606 569     605 652
Loans to Group companies                    36 530     36 530          25 794      25 794
Non-current assets held for sale             1 118      1 118               -           -
Total assets                               739 469    739 793         694 876     694 032
Financial liabilities                                                                    
Deposits from banks                         52 079     52 079          42 514      42 514
Other liabilities                           25 709     25 724          19 039      19 279
Call deposits                               62 725     62 725          62 270      62 270
Cheque account deposits                    153 539    153 539         152 474     152 474
Credit card deposits                         1 896      1 896           1 906       1 906
Fixed deposits                             131 521    131 521         116 049     116 113
Foreign currency deposits                   18 444     18 444          23 325      23 325
Notice deposits                             58 460     58 460          59 358      59 457
Other deposits                               1 414      1 414           2 059       2 059
Saving and transmission deposits           135 375    135 375         130 208     130 208
Deposits due to customers                  563 374    563 374         547 649     547 812
Debt securities in issue                   132 701    132 701         133 906     131 329
Borrowed funds                              15 866     15 866          15 679      15 900
Total liabilities                          789 729    789 744         758 787     756 834

Note
(1) These numbers have been restated, refer to Note 15.

14. Assets and liabilities held at fair value

14.1 Fair value measurement and valuation processes
Financial assets and financial liabilities

The Bank has an established control framework with respect to the measurement of fair values. 
The framework includes a Traded Risk and Valuations Committee and an Independent Valuation Control
team (IVC), which is independent from the front office.

The Traded Risk and Valuations Committee, which comprises representatives from senior management, 
will formally approve valuation policies and changes to valuation methodologies. Significant 
valuation issues are reported to the Barclays Africa Group Audit and Compliance Committee.

The Traded Risk and Valuations Committee is responsible for overseeing the valuation control process 
and will therefore consider the appropriateness of valuation techniques and inputs for fair 
value measurement.

The IVC team independently verifies the results of trading and investment operations and all 
significant fair value measurements. They source independent data from external independent 
parties, as well as internal risk areas when performing independent price verification for all 
financial instruments held at fair value. They also assess and document the inputs obtained 
from external, independent sources to measure the fair value which supports conclusions that 
valuations are performed in accordance with International Financial Reporting Standards (IFRS) 
and internal valuation policies.

Investment properties
The fair value of investment properties is determined based on the most appropriate methodology 
applicable to the specific property. Methodologies include the market comparable approach that 
reflects recent transaction prices for similar properties, discounted cash flows and income 
capitalisation methodologies. In estimating the fair value of the properties, the highest and best 
use of the properties is taken into account.

Where possible, the fair value of the Bank’s investment properties is determined through valuations 
performed by external independent valuators. When the Bank’s internal valuations are different to 
that of the external independent valuers, detailed procedures are performed to substantiate the 
differences, whereby the IVC team verifies the procedures performed by the front office and considers 
the appropriateness of any differences to external independent valuations.

14.2 Fair value measurements
Valuation inputs
IFRS 13 requires an entity to classify fair values measured and/or disclosed according to a 
hierarchy that reflects the significance of observable market inputs. The three levels of the fair 
value hierarchy are defined as follows:

Quoted market prices – Level 1
Fair values are classified as Level 1 if they have been determined using observable prices in an 
active market. Such fair values are determined with reference to unadjusted quoted prices for identical 
assets or liabilities in active markets where the quoted price is readily available, and the price 
represents actual and regularly occurring market transactions on an arm’s length basis. An active 
market is one in which transactions occur with sufficient volume and frequency to provide pricing 
information on an ongoing basis.

Valuation technique using observable inputs – Level 2
Fair values are classified as Level 2 if they have been determined using models for which inputs 
are observable in an active market.

A valuation input is considered observable if it can be directly observed from transactions in an 
active market, or if there is compelling external evidence demonstrating an executable exit price.

Valuation technique using significant unobservable inputs – Level 3
Fair values are classified as Level 3 if their determination incorporates significant inputs that 
are not based on observable market data (unobservable inputs). An input is deemed significant if it 
is shown to contribute more than 10% to the fair value of an item. Unobservable input levels are 
generally determined based on observable inputs of a similar nature, historical observations or 
other analytical techniques.

Judgemental inputs on valuation of principal instruments
The following summary sets out the principal instruments whose valuation may involve judgemental inputs:

Debt securities and treasury and other eligible bills
These instruments are valued, based on quoted market prices from an exchange, dealer, broker, 
industry group or pricing service, where available. Where unavailable, fair value is determined by 
reference to quoted market prices for similar instruments or, in the case of certain mortgage-backed 
securities, valuation techniques using inputs derived from observable market data, and, where relevant,
assumptions in respect of unobservable inputs.

Equity instruments
Equity instruments are valued, based on quoted market prices from an exchange, dealer, broker, industry 
group or pricing service, where available. Where unavailable, fair value is determined by reference to 
quoted market prices for similar instruments or by using valuation techniques using inputs derived from 
observable market data, and, where relevant, assumptions in respect of unobservable inputs.

Also included in equity instruments are non-public investments, which include investments in venture 
capital organisations. The fair value of these investments is determined using appropriate valuation 
methodologies which, dependent on the nature of the investment, may include discounted cash flow analysis, 
enterprise value comparisons with similar companies and price:earnings comparisons. For each investment, 
the relevant methodology is applied consistently over time.

Derivatives
Derivative contracts can be exchange-traded or traded over the counter (OTC). OTC derivative contracts 
include forward, swap and option contracts related to interest rates, bonds, foreign currencies, credit 
spreads, equity prices and commodity prices or indices on these instruments. Fair values of derivatives 
are obtained from quoted market prices, dealer price quotations, discounted cash flow and option 
pricing models.

Loans and advances
The disclosed fair value of loans and advances to banks and customers is determined by discounting 
contractual cash flows. Discount factors are determined using the relevant forward base rates (as at 
valuation date) plus the originally priced spread. Where a significant change in credit risk has occurred, 
an updated spread is used to reflect valuation date pricing. Behavioural cash flow profiles, instead of 
contractual cash flow profiles, are used to determine expected cash flows where contractual cash flow 
profiles would provide an inaccurate fair value.

Deposits, debt securities in issue and borrowed funds
Deposits, debt securities in issue and borrowed funds are valued using discounted cash flow models, 
applying rates currently offered for issuances with similar characteristics. Where these instruments 
include embedded derivatives, the embedded derivative component is valued using the methodology for derivatives.

The fair value of amortised cost deposits repayable on demand is considered to be equal to their carrying 
value. For other financial liabilities at amortised cost the disclosed fair value approximates the carrying 
value because the instruments are short term in nature or have interest rates that reprice frequently.

14.3 Fair value adjustments
The main valuation adjustments required to arrive at a fair value are described below:

Bid-offer valuation adjustments
For assets and liabilities where the Bank is not a market maker, mid prices are adjusted to bid and offer prices 
respectively. Bid-offer adjustments reflect expected close out strategy and, for derivatives, the fact that they 
are managed on a portfolio basis. The methodology for determining the bid-offer adjustment for a derivative 
portfolio will generally involve netting between long and short positions and the bucketing of risk by strike 
and term in accordance with hedging strategy. Bid-offer levels are derived from market sources, such as broker 
data. For those assets and liabilities where the firm is a market maker and has the ability to transact at, 
or better than, mid-price (which is the case for certain equity, bond and vanilla derivative markets), the mid-price 
is used, since the bid-offer spread does not represent a transaction cost. 

Uncollateralised derivative adjustments
A fair value adjustment is incorporated into uncollateralised derivative valuations to reflect the impact on 
fair value of counterparty credit risk, as well as the cost of funding across all asset classes.

Model valuation adjustments
Valuation models are reviewed under the Bank’s model governance framework. This process identifies the assumptions 
used and any model limitations (for example, if the model does not incorporate volatility skew). Where necessary, 
fair value adjustments will be applied to take these factors into account. Model valuation adjustments are dependent 
on the size of portfolio, complexity of the model, whether the model is market standard and to what extent it 
incorporates all known risk factors. All models and model valuation adjustments are subject to review on at least 
an annual basis. 

14.4 Fair value hierarchy
The following table shows the Bank’s assets and liabilities that are recognised and subsequently measured at 
fair value and are analysed by valuation techniques. The classification of assets and liabilities is based on the 
lowest level input that is significant to the fair value measurement in its entirety.

                                                                                       2017                                          
Recurring fair value                                             Level 1      Level 2      Level 3        Total
measurements                                                          Rm           Rm           Rm           Rm
Financial Assets                                                                                               
Investment securities                                             37 737       32 841        5 946       76 524
Loans and advances to banks                                            -       16 713          484       17 197
Trading and hedging portfolio                                
assets                                                            31 379       72 194        1 824      105 397
Debt instruments                                                  29 185        2 410          177       31 772
Derivative assets                                                      -       58 594          546       59 140
Commodity derivatives                                                  -          973          124        1 097
Credit derivatives                                                     -            -          165          165
Equity derivatives                                                     -        2 356          173        2 529
Foreign exchange derivatives                                           -       15 548            8       15 556
Interest rate derivatives                                              -       39 717           76       39 793
Equity instruments                                                   567            -            -          567
Money market assets                                                1 627       11 190        1 101       13 918
Loans and advances to customers                                        -       22 070        4 741       26 811
Total financial assets                                            69 116      143 818       12 995      225 929
Financial liabilities                                                                                          
Deposits from banks                                                    -       22 031            -       22 031
Trading and hedging portfolio                                
liabilities                                                        8 141       51 866          944       60 951
Derivative liabilities                                                 -       51 866          944       52 810
Commodity derivatives                                                  -        1 164          121        1 285
Credit derivatives                                                     -            -          148          148
Equity derivatives                                                     -        1 965          423        2 388
Foreign exchange derivatives                                           -       14 500            4       14 504
Interest rate derivatives                                              -       34 237          248       34 485
Short positions                                                    8 141            -            -        8 141
Deposits due to customers                                            203       18 676        1 572       20 451
Debt securities in issue                                             399        4 354          488        5 241
Total financial liabilities                                        8 743       96 927        3 004      108 674
Non-financial assets                                                                                           
Commodities                                                        2 051            -            -        2 051
Investment properties                                                  -            -            -            -
Non-recurring fair value                                     
measurements                                                                              
Non-current assets held                                      
for sale(1)                                                            -            -            -            - 
Non-current liabilities                                      
held for sale(1)                                                       -            -            -            - 
                                                          
                                                                                      2016                                          
Recurring fair value                                             Level 1      Level 2      Level 3        Total
measurements                                                          Rm           Rm           Rm           Rm
Financial Assets                                                                                               
Investment securities                                             50 909       32 203        1 062       84 174
Loans and advances to banks                                            -       19 286          571       19 857
Trading and hedging portfolio                                
assets                                                            16 360       56 773        1 505       74 638
Debt instruments                                                  15 417        2 573        1 324       19 314
Derivative assets                                                      -       46 570          181       46 751
Commodity derivatives                                                  -          794            -          794
Credit derivatives                                                     -           70          114          184
Equity derivatives                                                     -        1 526           67        1 593
Foreign exchange derivatives                                           -       15 121            -       15 121
Interest rate derivatives                                              -       29 059            -       29 059
Equity instruments                                                   943            -            -          943
Money market assets                                                    -        7 630            -        7 630
Loans and advances to customers                                        -       19 187        4 890       24 077
Total financial assets                                            67 269      127 449        8 028      202 746
Financial liabilities                                                                                          
Deposits from banks                                                    -       17 634            -       17 634
Trading and hedging portfolio                                
liabilities                                                        1 786       42 464          307       44 557
Derivative liabilities                                                 -       42 464          307       42 771
Commodity derivatives                                                  -          872            -          872
Credit derivatives                                                     -          135          101          236
Equity derivatives                                                     -        1 306           59        1 365
Foreign exchange derivatives                                           -       13 996            -       13 996
Interest rate derivatives                                              -       26 155          147       26 302
Short positions                                                    1 786            -            -        1 786
Deposits due to customers                                            154       15 870        1 139       17 163
Debt securities in issue                                             412        4 651          604        5 667
Total financial liabilities                                        2 352       80 619        2 050       85 021
Non-financial assets                                                                                           
Commodities                                                        1 485            -            -        1 485
Investment properties                                                  -            -          222          222
Non-recurring fair value                                     
measurements                                                                              
Non-current assets held                                      
for sale(1)                                                            -            -          367          367
Non-current liabilities held                                 
for sale(1)                                                            -            -            9            9
                                                          
Note
(1) Includes certain items classified in terms of the requirements of IFRS 5 which are 
    measured in terms of their respective standards. 

14.5 Measurement of assets and liabilities categorised at Level 2
The following table presents information about the valuation techniques and significant 
observable inputs used in measuring assets and liabilities categorised as Level 2 in the 
fair value hierarchy:

Category of asset/liability                               Valuation techniques applied      Significant observable inputs    
                                                                                                                             
Loans and advances to                                     Discounted cash flow              Interest rate and/or             
banks                                                     models                            money market curves              
Trading and hedging portfolio assets and liabilities                                                                         
Debt instruments                                          Discounted cash flow              Underlying price of              
                                                          models                            market traded                    
                                                                                            instruments and                  
                                                                                            interest rates                   
Derivatives                                                                                                                  
Commodity derivatives                                     Discounted cash                   Spot price of                    
                                                          flow and/or option                physical or futures,             
                                                          pricing, futures                  interest rates                   
                                                          pricing and/or exchange           and/or volatility                
                                                          traded fund (ETF) models                                           
                                                                                                                             
Credit derivatives                                        Discounted cash flow              Interest rate,                   
                                                          and/or credit default             recovery rate,                   
                                                          swap models                       credit spread and/or             
                                                                                            quanto ratio                     
                                                                                                                             
Equity derivatives                                        Discounted                        Spot price,                      
                                                          cash flow,                        interest rate,                   
                                                          option pricing                    volatility and/or                
                                                          and/or futures                    dividend stream                  
                                                          pricing models                                                     
                                                                                                                             
Foreign exchange                                          Discounted cash                   Spot price,                      
derivatives                                               flow and/or option                interest rate                    
                                                          pricing models                    and/or volatility                
                                                                                                                             
Interest rate                                             Discounted cash                   Interest rate                    
derivatives                                               flow and/or option                curves, repurchase               
                                                          pricing models                    agreement curves,                
                                                                                            money market curves              
                                                                                            and/or volatility                
                                                                                                                             
Money market assets                                       Discounted cash                   Money market                     
                                                          flow models                       rates and/or                     
                                                                                            interest rates                   
                                                                                                                             
Loans and advances                                        Discounted cash                   Interest                         
to customers                                              flow models                       rate curves                      
                                                                                            and/or money                     
                                                                                            market curves                    
                                                                                                                             
Investment securities                                     Listed equity:                    Underlying price                 
                                                          market bid price.                 of the market                    
                                                          Other items:                      traded instruments               
                                                          discounted cash                   and/or interest                  
                                                          flow models                       rate curves                      
                                                                                                                             
Deposits                                                  Discounted cash                   Interest rate curves             
from banks                                                flow models                       and/or money                     
                                                                                            market curves                    
                                                                                                                             
Deposits due                                              Discounted cash                   Interest                         
to customers                                              flow models                       rate curves                      
                                                                                            and/or money                     
                                                                                            market curves                    
                                                                                                                             
Debt securities in                                        Discounted cash                   Underlying price                 
issue and other                                           flow models                       of the market                    
liabilities                                                                                 traded instrument                
                                                                                            and/or interest                  
                                                                                            rate curves                      

14.6 Reconciliation of Level 3 assets and liabilities
A reconciliation of the opening balances to closing balances for all movements on Level 3 
assets and liabilities is set out below:

                                                                     2017                 
                                                          Trading                         
                                                              and                         
                                                          hedging               Loans and 
                                                        portfolio    Other       advances 
                                                           assets   assets   to customers 
                                                               Rm       Rm             Rm 
                                                                                          
                                                                                          
Opening balance at the beginning of the reporting       
period                                                      1 505        -          4 890 
Net interest income                                             -        -             12 
Other income                                                    -        -              - 
Gains and losses from banking and trading activities         (635)       -             29 
Gains and losses from investment activities                     -        -              - 
Purchases                                                   1 101        -          1 020 
Sales                                                        (147)       -         (1 112)
Movement in other comprehensive income                          -        -              - 
Transfer in/(out) of Level 3                                    -        -            (98)
Closing balance at the end of the reporting period          1 824        -          4 741 

                                                                Loans and 
                                                                 advances      Investment 
                                                                 to banks      securities 
                                                                       Rm              Rm 
Opening balance at the beginning of the reporting            
period                                                                571           1 062 
Net interest income                                                     -              62 
Other income                                                            -               - 
Gains and losses from banking and trading activities                    -               - 
Gains and losses from investment activities                             -               2 
Purchases                                                              88           4 789 
Sales                                                                (175)              - 
Movement in other comprehensive income                                  -              31 
Transfer in/(out) of Level 3                                            -               - 
Closing balance at the end of the reporting period                    484           5 946 

                                                                                    Total 
                                                                Investment      assets at 
                                                                properties     fair value 
                                                                        Rm             Rm 
Opening balance at the beginning of the reporting period               222          8 250 
Net interest income                                                      -             74 
Other income                                                            37             37 
Gains and losses from banking and trading activities                     -           (606)
Gains and losses from investment activities                              -              2 
Purchases                                                                -          6 998 
Sales                                                                 (259)        (1 693)
Movement in other comprehensive income                                   -             31 
Transfer in/(out) of Level 3                                             -            (98)
Closing balance at the end of the reporting period                       -         12 995 

                                                                        2016               
                                                             Trading                       
                                                         and hedging             Loans and 
                                                           portfolio    Other  advances to 
                                                              assets   assets    customers(1) 
                                                                  Rm       Rm           Rm 
Opening balance at the beginning of the reporting period       1 415       17        7 511 
Net interest income                                                -        -          232 
Gains and losses from banking and trading activities             116        -           65 
Purchases                                                      1 308        -            - 
Sales                                                         (1 334)     (17)      (1 956)
Movement in other comprehensive income                             -        -            - 
Transferred to/(from) assets                                       -        -            - 
Transfer out of Level 3                                            -        -         (962)
Closing balance at the end of the reporting period             1 505        -        4 890 

                                                                Loans and 
                                                              advances to       Investment 
                                                                    banks       securities 
                                                                       Rm               Rm 
Opening balance at the beginning of the reporting period            2 109            1 285 
Net interest income                                                     -               56 
Gains and losses from banking and trading activities                 (139)              16 
Purchases                                                              70                2 
Sales                                                              (1 469)            (147)
Movement in other comprehensive income                                  -                4 
Transferred to/(from) assets                                            -                - 
Transfer out of Level 3                                                 -             (154)
Closing balance at the end of the reporting period                    571            1 062 
                                                                                           

                                                              Investment       Total assets
                                                              properties      at fair value 
                                                                      Rm                 Rm 
Opening balance at the beginning of the reporting period             518             12 855 
Net interest income                                                   61                349 
Gains and losses from banking and trading activities                   -                 58
Purchases                                                              -              1 380 
Sales                                                                (65)            (4 988)
Movement in other comprehensive income                                 -                  4 
Transferred to/(from) assets                                        (292)              (292)
Transfer out of Level 3                                                -             (1 116)
Closing balance at the end of the reporting period                   222              8 250 

                                                                        2017                
                                                                                            
                                                                     Trading and            
                                                         Deposits        hedging   Deposits 
                                                             from      portfolio     due to 
                                                             banks   liabilities  customers 
                                                                Rm            Rm         Rm 
Opening balance at the beginning of the reporting period         -           307      1 139 
Net interest income                                              -             -          7 
Gains and losses from banking and trading activities             -           585          - 
Issues                                                           -            52      1 685 
Settlements                                                      -             -     (1 144)
Transfer in/(out) of Level 3                                     -             -       (115)
Closing balance at the end of the reporting period               -           944      1 572 

                                                                   Debt               Total 
                                                             securities         liabilities 
                                                               in issue       at fair value 
                                                                     Rm                  Rm 
Opening balance at the beginning of the reporting period            604               2 050 
Net interest income                                                   -                   7 
Gains and losses from banking and trading activities                  -                 585 
Issues                                                               30               1 767 
Settlements                                                         (68)             (1 212)
Transfer in/(out) of Level 3                                        (78)               (193)
Closing balance at the end of the reporting period                  488               3 004 

                                                               2016   
                                                                    Trading and             
                                                                        hedging    Deposits 
                                                         Deposits     portfolio      due to 
                                                       from banks   liabilities   customers 
                                                               Rm            Rm          Rm 
Opening balance at the beginning of the reporting 
period                                                          7           216       2 557 
Gains and losses from banking and trading activities            -            91           - 
Gains and losses from investment activities                     -             -         139 
Issues                                                          -             -       1 953 
Settlements                                                    (7)            -      (3 510)
Closing balance at the end of the reporting period              -           307       1 139 

                                                                  Debt                Total 
                                                            securities       liabilities at 
                                                              in issue           fair value 
                                                                    Rm                   Rm 
Opening balance at the beginning of the reporting period           624                3 404 
Gains and losses from banking and trading activities                 -                   91 
Gains and losses from investment activities                         (9)                 130 
Issues                                                               -                1 953 
Settlements                                                        (11)              (3 528)
Closing balance at the end of the reporting period                 604                2 050 

14.6.1 Significant transfers between levels
During the 2017 and 2016 reporting periods, transfers between levels occurred because of 
changes in the observability of valuation inputs, in some instances owing to changes in the 
level of market activity.

Transfers have been reflected as if they had taken place at the beginning of the year.  

14.7 Unrealised gains and losses on Level 3 assets and liabilities
The total unrealised gains and losses for the reporting period on Level 3 positions held at 
the reporting date are set out below:
                                                                2017                       
                                               Trading and                                 
                                                   hedging       Loans and                 
                                                 portfolio     advances to      Investment 
                                                    assets       customers      securities 
                                                        Rm              Rm              Rm  
Gains and losses from banking and           
trading activities                                     142             761              48  
                                            
                                                     Total     Trading and              
                                                    assets         hedging           Total 
                                                   at fair       portfolio     liabilities 
                                                     value     liabilities   at fair value  
                                                        Rm              Rm              Rm 
Gains and losses from banking and           
trading activities                                     951            (284)           (284)

                                                                    2016              
                                               Trading and         Trading            
                                                   hedging     and hedging       
                                                 portfolio       portfolio       Investment
                                                    assets     liabilities       securities 
                                                        Rm              Rm               Rm 
Gains and losses from banking and 
trading activities                                     (22)            731                9 

                                                     Total         Trading            Total 
                                                    assets     and hedging      liabilities
                                                   at fair       portfolio          at fair 
                                                     value     liabilities            value 
                                                        Rm              Rm               Rm 
Gains and losses from banking and 
trading activities                                     718            (104)            (104)



14.8 Sensitivity analysis of valuations using unobservable inputs
As part of the Bank’s risk management processes, stress tests are applied on the significant 
unobservable parameters to generate a range of potentially possible alternative valuations. 
The assets and liabilities that most impact this sensitivity analysis are those with the more 
illiquid and/or structured portfolios. The stresses are applied independently and do not take 
account of any cross correlation between separate asset classes that would reduce the overall 
effect on the valuations.

The following table reflects how the unobservable parameters were changed in order to evaluate 
the sensitivities of Level 3 financial assets and liabilities:

Significant unobservable parameter                             Positive/(negative) variance 
                                                                      applied to parameters 
Credit spreads                                                                100/(100) bps 
Volatilities                                                                       10/(10)% 
Basis curves                                                                  100/(100) bps 
Yield curves and repo curves                                                  100/(100) bps 
Future earnings and marketability discounts                                        15/(15)% 
Funding spreads                                                               100/(100) bps 

A significant parameter has been deemed to be one which may result in a charge to profit or 
loss, or a change in the fair value asset or liability by more than 10% of the underlying value 
of the affected item. This is demonstrated by the following sensitivity analysis which includes 
a reasonable range of possible outcomes:

                                                                          2017                  
                                                        Potential effect        Potential effect    
                                                             recorded in       recorded directly    
                                                          profit or loss               in equity    
                           Significant                       Favourable/             Favourable/    
                           unobservable                    (Unfavourable)          (Unfavourable)   
                           parameters                                 Rm                      Rm    
                                                                                                    
Loans and                  BAGL/Absa                                                                
advances to bank           funding spread                        17/(17)                     -/-    
                                                                                                    
Deposits due               BAGL/Absa                                                                
to customers               funding spread                        13/(12)                     -/-    
                                                                                                    
Investment securities      Risk adjustment yield curves,                                            
                           future earnings and                                                      
                           marketability discount                59/(59)               253/(240)    
                                                                                                    
Loans and                                                                                           
advances                                                                                            
to customers               Credit spreads                        60/(69)                     -/-    
                                                                                                    
Other assets               Credit spreads                            -/-                     -/-    
                                                                                                    
Trading and                Volatility,                                                              
hedging                    credit spreads,                                                          
portfolio                  basis curves,                                                            
assets                     yield curves,                                                            
                           repo curves,                                                             
                           funding spreads                       33/(33)                     -/-    
                                                                                                    
Trading and                Volatility,                                                              
hedging                    credit spreads,                                                          
portfolio                  basis curves,                                                            
liabilities                yield curves,                                                            
                           repo curves,                                                             
                           funding spreads                       17/(17)                     -/-    
                                                                                                    
Other                      Volatility,                                                              
liabilities                credit spreads                            -/-                     -/-    
                                                               199/(207)               253/(240)    
 
                                                                          2016                    
                                                        Potential effect        Potential effect    
                                                             recorded in       recorded directly    
                                                          profit or loss               in equity    
                           Significant                       Favourable/             Favourable/    
                           unobservable                    (Unfavourable)          (Unfavourable)   
                           parameters                                 Rm                      Rm    
                                                                                                    
Deposits due               BAGL/Absa                                                                
to customers               funding spread                            -/-                     -/-    
                                                                                                    
Investment                 Risk adjustment                                                          
securities                 yield curves,                                                            
                           future earnings                                                          
                           and marketability                                                        
                           discount                              13/(14)                 31/(33)    
                                                                                                    
Loans and                                                                                           
advances                                                                                            
to customers               Credit spreads                        72/(71)                     -/-    
                                                                                                    
Other assets               Credit spreads                            -/-                     -/-    
                                                                                                    
Trading and                Volatility,                                                              
hedging                    credit spreads,                                                          
portfolio                  basis curves,                                                            
assets                     yield curves,                                                            
                           repo curves,                                                             
                           funding spreads                     175/(175)                     -/-    
                                                                                                    
Trading and                Volatility,                                                              
hedging                    credit spreads,                                                          
portfolio                  basis curves,                                                            
liabilities                yield curves,                                                            
                           repo curves,                                                             
                           funding spreads                       36/(36)                     -/-    
                                                                                                    
Other                      Volatility,                                                              
liabilities                credit spreads                            -/-                     -/-    
                                                               296/(296)                 31/(33)    

14.9 Measurement of assets and liabilities at Level 3
The following table presents information about the valuation techniques and significant unobservable 
inputs used in measuring assets and liabilities categorised as Level 3 in the fair value hierarchy:
                                                                                           
Category of                Valuation techniques        Significant                         
asset/ liability           applied                     unobservable inputs                 
                                                                                           
Loans and                  Discounted                  Credit                              
advances                   cash flow                   spreads                             
to banks and               and/or                                                          
customers                  dividend                                                        
                           yield models                                                    
                                                                                           
Investment                 Discounted                  Risk adjusted                       
securities                 cash flow                   yield curves,                       
                           models,                     future                              
                           third-party                 earnings                            
                           valuations,                 marketability                       
                           earnings                    discounts                           
                           multiples                   and/or                              
                           and/or income               comparator                          
                           capitalisation              multiples                           
                           valuations                                                      
                                                                                           
Trading and hedging                                                                        
portfolio assets and                                                                       
liabilities                                                                                
                                                                                           
Debt                       Discounted cash             Credit                              
instruments                flow models                 spreads                             
                                                                                           
Derivative                                                                                 
assets                                                                                     
Credit derivatives         Discounted cash flow        Credit spreads,                     
                           and/or credit               recovery rates                      
                           default swap                and/or quanto                       
                           (hazard rate) models        ratio                               
                                                                                           
Equity derivatives         Discounted cash flow,       Volatility and/or                   
                           option pricing and/or       dividend streams                    
                           futures pricing models      (greater than 3 years)              
                                                                                           
Foreign exchange           Discounted cash flow        African basis curves                
derivatives                and/or option pricing       (greater than 1 year)               
                           models                                                          
Interest rate              Discounted cash             Real yield curves                   
derivatives                flow and/or                 (less than 1 year),                
                           option pricing models       repurchase agreement                   
                                                       curves (less than 1 year),
                                                       funding spreads                             
                                                                                           
Deposits due               Discounted cash             BAGL’s funding                      
to customers               flow models                 spreads (greater                    
                                                       than 5 years)                       
                                                                                           
Debt securities            Discounted cash             Funding curves                      
in issue                   flow models                 (greater than                       
                                                       5 years)                            
                                                                                           
Investment Properties      Discounted cash flow        Estimates of periods                
                           models                      in which rental units               
                                                       will be disposed of                 
                                                       Annual selling price escalations    
                                                       Annual rental escalations           
                                                       Expense ratios                      
                                                       Vacancy rates                       
                                                       Income capitalisation rates         
                                                       Risk adjusted discount rates        

                                                       2017                  2016    
Category of                                            Range of estimates utilised                          
asset/liability                                        for the unobservable inputs                          
                                                                                     
Loans and advances                                                                   
to banks and customers                         0,3% to 2,3%            0,5% to 5%    
                                                                                     
Investment securities                         Discount rate         Discount rate    
                                              of 7% and 9%,               of 13%,    
                                                 comparator            comparator    
                                                  multiples             multiples    
                                                  between 5               between    
                                                   and 10,5            5 and 10,5    
Trading and hedging                                                                  
portfolio assets and                                                                 
liabilities                                                                          
Debt instruments                                  3% to 15%         1,2% to 11,2%    
Derivative assets                                                                    
Credit derivatives                                0% to 90%             0% to 40%    
Equity derivatives                                15,09% to             17,82% to    
                                                     64,67%                67,71%    
Foreign exchange derivatives                 (28%) to 29,5%      (16,6%) to 13,1%    
Interest rate derivatives                   0,25% to 10,69%        0,31% to 3,38%    
Deposits due to customers                      0,2% to 1,9%      (0,27%) to 2,13%    
Debt securities in issue                       0,2% to 1,9%      (0,27%) to 2,13%    
                                               1 to 6 years         1 to 10 years    
                                                         6%              1% to 7%    
                                                         6%              1% to 7%    
                                                        n/a            25% to 50%    
                                                        n/a              1% to 7%    
                                                7,75% to 8%            10% to 11%    
Investment Properties                            11% to 15%                   14%    

For assets or liabilities held at amortised cost and disclosed in levels 2 or 3 
of the fair value hierarchy, the discounted cash flow valuation technique is used. 
Interest rates and money market curves are considered unobservable inputs for items 
which mature after 5 years. However, if the items mature in less than 5 years, 
these inputs are considered observable.

For debt securities in issue held at amortised cost, a further significant input 
would be the underlying price of the market traded instrument.

The sensitivity of the fair value measure is dependent on the unobservable inputs. 
Significant changes to the unobservable inputs in isolation will have either a 
positive or negative impact on fair values.

14.10 Unrecognised gains/(losses) as a result of the use of valuation models using 
unobservable inputs
The amount that has yet to be recognised in the statement of comprehensive income 
that relates to the difference between the transaction price and the amount that 
would have arisen had valuation models using unobservable inputs been used on initial 
recognition, less amounts subsequently recognised, is as follows:

                                                                            2017       2016 
                                                                              Rm         Rm 
Opening balance at the beginning of the reporting period                    (139)      (105)
New transactions                                                             (27)       (64)
Amounts recognised in profit or loss during the reporting period              32         30 
Closing balance at the end of the reporting period                          (134)      (139)

14.11 Third-party credit enhancements
There were no significant liabilities measured at fair value and issued with inseparable 
third-party credit enhancements during the current and previous reporting period.

15. Reporting changes overview
15.1 Accounting policy changes
The Bank made the following accounting policy changes as a result of new and amended standards 
of IFRS, which had no impact on the previously reported earnings of the Bank:

-  The requirements of IFRS 9 relating to the presentation of gains and losses on financial 
   liabilities designated at fair value were adopted during the current reporting period. As a 
   result, the effects of changes in those liabilities’ credit risk are presented in other 
   comprehensive income with the remaining effect presented in profit or loss. In accordance with 
   the transitional requirements of IFRS 9, comparatives have not been restated.

-  All other amendments to IFRS, and new interpretations, effective for the current reporting 
   period had no significant impact on the Bank’s reported results.

15.2 Changes in reportable segments
The following business portfolio changes have impacted the financial results for the comparative 
period ended 31 December 2016. 

-  Barclays PLC disposed of 12,2% and 33,7% of the Group’s shares in May 2016 and June 2017, 
   respectively. As part of its divestment Barclays PLC contributed R12.1 billion to the Bank in 
   June 2017, primarily in recognition of the investments required for the Bank to separate 
   from Barclays PLC. This contribution will be invested primarily in rebranding, technology and 
   separation-related projects and it is expected that it will neutralise the capital and cash flow 
   impact of separation investments on the Bank over time. The separation process will increase the 
   capital base of the Bank in the near-term and generate endowment revenue thereon, with 
   increased costs over time as the separation investments are concluded. The Bank has therefore 
   included an additional reportable segment, ‘Barclays separation’ in its segment results.

-  The Bank refined its cost allocation methodology, resulting in the restatement of operating 
   expenses between and within segments resulting in the restatement of operating expenses from RBB 
   South Africa (R615m) to CIB SA R221m, Head Office, Treasury and other operations R199m and 
   Wealth R195m.

-  CPF customers with loan balances exceeding R40m of R10.9bn were moved from RBB SA to CIB SA 
   to reflect the Bank’s customer segmentation and coverage model.

-  The Bank revised its operating model with ‘geography’ and ‘customer’ as primary dimensions, 
   creating a platform for increased focus and dedicated management capacity: South Africa Banking, 
   Rest of Africa Banking and Wealth (historically reporting was by customer only i.e. RBB, CIB and Wealth). 

-  The Bank further enhanced segmental disclosures in the second half of 2017 to provide granularity 
   to the South Africa Banking segment (which now expands to RBB SA and CIB SA levels). 

Administration and contact details

Absa Bank Limited                                     
Incorporated in the Republic of South Africa
Registration number: 1986/004794/06
Authorised financial services and registered credit provider (NCRCP7)
JSE share code: ABSP
ISIN: ZAE000079810
 
Registered office
7th Floor, Barclays Towers West
15 Troye Street, Johannesburg, 2001
PO Box 7735, Johannesburg, 2000

Switchboard: +27 11 350 4000 
barclaysafrica.com

Head Investor Relations
Alan Hartdegen
Telephone: +27 11 350 2598

Company Secretary
Nadine Drutman
Telephone: +27 11 350 5347

Head of Financial Control
John Annandale
Telephone: +27 11 350 3496

Transfer secretary  
Computershare Investor Services (Pty) Ltd 
Telephone: +27 11 370 5000 
computershare.com/za/

Auditors
Ernst & Young Inc. 
Telephone: +27 11 772 3000 
ey.com/ZA/en/Home

KPMG Inc
Telephone: +27 11 647 7111 
kpmg.com/ZA/en/Home
 
Queries
Please direct investors relations queries to
IR@barclaysafrica.com

Please direct media queries to groupmedia@barclaysafrica.com

Please direct queries relating to your Barclays Africa Group shares to 
questions@computershare.co.za

Please direct other queries regarding the Bank to 
absa@absa.co.za

Sponsors
Absa Bank Limited (Corporate and Investment Bank) 
Telephone: +27 11 895 6843 
equitysponsor@absacapital.com
 
Date of release: 1 March 2018

 





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