STANDARD BANK GROUP LIMITED - Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 31 March 2018

Release Date: 23/05/2018 15:42
Code(s): SBK
 
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Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 31 March 2018

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


Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at
31 March 2018


In terms of the requirements under Regulation 43(1)(e)(iii) of the regulations relating to
banks and Directive 4/2014, Directive 11/2015 and Directive 1/2018 issued in terms of
section 6(6) of the Banks Act (Act No. 94 of 1990), minimum disclosure on the capital
adequacy of the group and its leverage ratio is required on a quarterly basis. This disclosure
is in accordance with Pillar 3 of the Basel III accord.


Standard Bank Group capital adequacy and leverage ratio

                                                                             March 2018 (Rm)
Qualifying capital                                                 Transitional(1)   Fully loaded(2)

Ordinary share capital and premium                                          18 248            18 248
Ordinary shareholders' reserves(3)                                         128 935           128 935
Qualifying Common Equity Tier I non-controlling interest                     5 334             5 334
Regulatory deductions against Common Equity Tier I capital                (23 446)          (28 469)
Common Equity Tier I capital                                               129 071           124 048
Unappropriated profit                                                      (9 178)           (9 178)
Common Equity Tier 1 capital excl. unappropriated profit                   119 893           114 870
Qualifying other equity instruments                                          5 742             5 742
Qualifying Tier I non-controlling interest                                     576               576
Tier I capital excl. unappropriated profit                                 126 211           121 188
Qualifying Tier II subordinated debt                                        16 418            16 418
General allowance for credit impairments                                     2 326             4 762
Tier II capital                                                             18 744            21 180
Total regulatory capital excl. unappropriated profit                       144 955           142 368

                                                                             March 2018 (Rm)
Minimum capital requirement                                        Transitional(1)   Fully loaded(2)

Credit risk                                                                 72 377            72 377
Counterparty credit risk                                                     3 015             3 015
Equity risk in the banking book                                                742               742
Market risk                                                                  7 186             7 186
Operational risk                                                            17 256            17 256
Investments in financial entities                                            4 795             4 668
Total minimum regulatory capital requirement(4)                            105 371           105 244

Capital Adequacy Ratio (excl. unappropriated profit)
Total capital adequacy ratio (%)                                              15.3              15.0
Tier I capital adequacy ratio (%)                                             13.3              12.8
Common Equity Tier I capital adequacy ratio (%)                               12.7              12.1

Capital Adequacy Ratio (incl. unappropriated profit)
Total capital adequacy ratio (%)                                              16.4              16.0
Tier I capital adequacy ratio (%)                                             14.3              13.8
Common Equity Tier I capital adequacy ratio (%)                               13.6              13.1

Leverage ratio
Tier I capital (excl. unappropriated profit) (Rm)                          126 211           121 188
Tier I capital (incl. unappropriated profit) (Rm)                          135 389           130 366
Total exposures (Rm)                                                     1 690 832         1 685 809
Leverage ratio (excl. unappropriated profits, %)                               7.5               7.2
Leverage ratio (incl. unappropriated profits, %)                               8.0               7.7

Note:
1 Represents International Financial Reporting Standards (IFRS) 9 transition impact as allowed by
  the South African Reserve Bank (SARB).
2 Represents fully loaded Expected Credit Loss (ECL) accounting results (full IFRS 9 impact).
3 Including unappropriated profits.
4 Measured at 11.13% in line with transitional requirements and excludes any bank-specific capital
  requirements. There is currently no requirement for the countercyclical buffer add-on in South Africa.
  The impact on the group’s countercyclical buffer requirement from other jurisdictions in which the
  group operates, is insignificant (buffer requirement of 0.0002%).


The Standard Bank of South Africa Limited (SBSA) and its subsidiaries capital adequacy and leverage ratio

                                                                             March 2018 (Rm)
Qualifying capital                                                 Transitional(1)   Fully loaded(2)
Ordinary share capital and premium                                          43 698            43 698
Ordinary shareholders' reserves(3)                                          47 056            47 056
Regulatory deductions against Common Equity Tier I capital                (13 181)          (15 259)
Common Equity Tier I capital                                                77 573            75 495
Unappropriated profit                                                      (5 837)           (5 837)
Common Equity Tier 1 capital excl. unappropriated profit                    71 736            69 658
Qualifying other equity instruments                                          3 544             3 544
Tier I capital excl. unappropriated profit                                  75 280            73 202
Qualifying Tier II subordinated debt                                        15 470            15 470
General allowance for credit impairments                                       832             2 786
Tier II capital                                                             16 302            18 256
Total regulatory capital excl. unappropriated profit                        91 582            91 458

                                                                             March 2018 (Rm)
Minimum capital requirement                                        Transitional(1)   Fully loaded(2)

Credit risk                                                                 48 842            48 842
Counterparty credit risk                                                     2 766             2 766
Equity risk in the banking book                                                445               445
Market risk                                                                  4 919             4 919
Operational risk                                                            10 371            10 371
Investments in financial entities                                            1 022             1 022
Total minimum regulatory capital requirement(4)                             68 365            68 365

Capital Adequacy Ratio (excl. unappropriated profit)
Total capital adequacy ratio (%)                                              14.9              14.9
Tier I capital adequacy ratio (%)                                             12.3              11.9
Common Equity Tier I capital adequacy ratio (%)                               11.7              11.3

Capital Adequacy Ratio (incl. unappropriated profit)
Total capital adequacy ratio (%)                                              15.9              15.8
Tier I capital adequacy ratio (%)                                             13.2              12.9
Common Equity Tier I capital adequacy ratio (%)                               12.6              12.3

Leverage ratio
Tier I capital (excl. unappropriated profit) (Rm)                           75 280            73 202
Tier I capital (incl. unappropriated profit) (Rm)                           81 117            79 039
Total exposures (Rm)                                                     1 409 358         1 407 280
Leverage ratio (excl. unappropriated profits, %)                               5.3               5.2
Leverage ratio (incl. unappropriated profits, %)                               5.8               5.6

Note:
1 Represents IFRS 9 transition impact as allowed by the SARB.
2 Represents fully loaded ECL accounting results (full IFRS 9 impact).
3 Excluding unappropriated profits.
4 Measured at 11.13% in line with transitional requirements and excludes any bank-specific capital
  requirements. There is currently no requirement for the countercyclical buffer add-on in South Africa.
  The impact on the group’s countercyclical buffer requirement from other jurisdictions in which the
  group operates, is insignificant (buffer requirement of 0.0002%).


Liquidity coverage ratio disclosure

In terms of the Basel III requirements in Directive 11/2014 issued in terms of section 6(6) of
the Banks Act, (Act No. 94 of 1990), banks are directed to comply with the minimum
disclosure on the liquidity coverage ratio (LCR) of the group and SBSA Solo entity on a
quarterly basis. This disclosure is in accordance with Pillar 3 of the Basel III liquidity accord.

The LCR is designed to promote short-term resilience of the 1-month liquidity profile, by
ensuring that banks have sufficient high quality liquid assets (HQLA) to meet potential
outflows in a stressed environment. The minimum regulatory requirement for 2018 is 90%
and will increase by a further 10% on 1 January 2019 to reach the full 100% requirement.

                                                                     Standard Bank
                                                                Group Consolidated         SBSA Solo
                                                                     31 March 2018     31 March 2018
                                                                                Rm                Rm
Total high quality liquid assets                                           247 835           172 089
Net cash outflows                                                          195 600           158 982
LCR (%)                                                                      126.7             108.2
Minimum requirement (%)                                                       90.0              90.0

Note:
1. Only banking and/or deposit taking entities are included. The group data represent consolidation
   of the relevant individual net cash outflows and the individual HQLA portfolios, where surplus
   HQLA holding in excess of the minimum requirement of 90% have been excluded from the
   aggregated HQLA number in the case of all Africa Regions entities.

2. The above figures reflect the simple average of 90 days of daily observations over the previous
   quarter ended 31 March 2018 for SBSA including SBSA Isle of Man branch, Stanbic Bank
   Ghana, Stanbic Bank Uganda, Stanbic IBTC Bank Nigeria, Standard Bank Namibia, Standard
   Bank Isle of Man Limited and Standard Bank Jersey Limited. The remaining Africa Regions
   banking entities results are based on the average of the month-end data points at 31 January
   2018, 28 February 2018 and 31 March 2018. The figures are based on the regulatory
   submissions to the South African Reserve Bank.

The information contained in this announcement has not been reviewed and reported on by the group's 
external auditors.


Johannesburg
23 May 2018

Lead sponsor
The Standard Bank of South Africa Limited

Independent sponsor
Deutsche Securities (SA) Proprietary Limited

Namibian sponsor
Simonis Storm Securities (Proprietary) Limited

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