LIBERTY HOLDINGS LIMITED - Financial Results for the six months ended 30 June 2018

Release Date: 02/08/2018 07:05
Code(s): LBH LBHP
 
Wrap Text
Financial Results for the six months ended 30 June 2018

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

Financial Results for the six months ended 30 June 2018

FINANCIAL PERFORMANCE INDICATORS
for the six months ended 30 June 2018
   
                                                                                                       12 months
                                                                      30 June     30 June        %   31 December
Rm (unless otherwise stated)                                             2018        2017   change          2017
Liberty Holdings Limited                                                                                     
Earnings                                                                                                     
Basic earnings per share (cents)                                        563,5       568,5      (1)       1 152,6
Fully diluted basic earnings per share (cents)                          547,5       553,3      (1)       1 120,7
Normalised headline earnings(1)                                         1 332       1 267       5          2 719
Normalised headline earnings per share (cents)(1)                       482,0       456,7       6          982,1
Normalised return on IFRS equity (%)(1)                                  12,1        11,7                   12,3
Group equity value                                                           
Normalised group equity value per share (R)(1)                         138,66      143,16      (3)        140,31
Normalised return on group equity value (%)(1)                            5,0         2,3     >100           1,1
Distributions per share (cents)                                             
Normal dividend                                                           276         276                    691
Interim dividend                                                          276         276                    276
Final dividend                                                            n/a         n/a                    415
Total assets under management (Rbn)                                       719         688        5           720
Long-term insurance operations                                                
Indexed new business (excluding contractual increases)                  3 773       3 930      (4)         8 018
Embedded value of new business                                            135          86      57            233
New business margin (%)                                                   0,7         0,4                    0,5
Net customer cash inflows                                                 262        (665)   >100          1 634
Capital adequacy cover of Liberty Group Limited (times covered)          2,67        2,82                   2,92
Asset management - STANLIB South Africa                                       
Assets under management (Rbn)                                             559         540        4           556
Net cash inflows including money market(2)                              8 400       5 646       49         4 731
Retail and institutional net cash inflows excluding money market(2)     8 949       5 705       57         4 815
Money market net cash outflows(2)                                        (549)        (59)   (>100)          (84)

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

Preparation and supervision:
This announcement on Liberty Holdings Limited interim financial results for the six months ended 30 June 2018 has been prepared and
supervised by M Norris (Executive: Group Finance) CA (SA) and Y Maharaj (Financial Director) CA(SA).

FINANCIAL REVIEW 
for the six months ended 30 June 2018

Results reflect a stabilising
operational performance.
Management actions
showing signs of progress.

Normalised operating earnings were 18% up on the first half of
2017 (the prior period). Weak investment markets detracted from
the Shareholder Investment Portfolio (SIP) earnings, resulting
in normalised headline earnings increasing by 5% over the
prior period.

During the first half of 2018, management efforts in restoring the
financial performance of the SA Retail insurance business, improving
the investment performance of STANLIB, simplifying the group's
overall organisational design and expanding the relationship with
the Standard Bank Group continued to gain traction. The financial
results discussed below evidence that the remedial actions are
yielding the necessary outcomes. Management's medium term
focus will remain on these initiatives.

In the SA Retail insurance business, product, service and sales
initiatives in place to improve the value of new business (VoNB),
together with strict expense discipline, contributed to continued
improvement in the VoNB. This improvement was achieved
despite new business volumes remaining under pressure in
2018 in the tough consumer environment. Weak economic growth
in South Africa coupled with increases in taxes and administered
prices suggests that consumer spending could struggle to gain
meaningful traction in 2018. The business however continued
to deliver positive operating experience variances and has been
managed to "better than model" consistently for the last five years. 

STANLIB South Africa continues to produce good fixed
interest  franchise investment returns and has made progress on
improving investment performance within the multi-asset and
equity franchises, with increased third party net customer cash
inflows into non-money market portfolios.

As part of Liberty's strategy refresh, a revised organisational
design was announced internally in mid-July with implementation
commencing in the second half of the year. The key element of the
group's new way of working is to place the customers and financial
advisers at the heart of everything we do, with a strong focus on
the South African insurance and asset management businesses. 

Collaboration with the Standard Bank Group continues to provide
opportunities to grow new business and provide joint product
offerings as evidenced in our bancassurance results.

Group financial performance
Normalised headline earnings for the six months to
30 June 2018 of R1 332 million (30 June 2017: R1 267 million) were
5% up on the prior period, with normalised operating earnings up
18% to R958 million (30 June 2017: R814 million). The normalised
operating earnings were supported by increased earnings from the
South African insurance operations and the STANLIB businesses.
SIP earnings were however 17% down on the prior period due to
weak investment market performance in the first half of 2018.
Normalised return on equity was 12,1% (30 June 2017: 11,7%). 

Group long-term insurance net customer cash inflows amounted
to R262 million in contrast to prior period outflows of R665 million,
supported by lower policy withdrawals and maturities in Individual
Arrangements and lower scheme terminations in Liberty
Corporate. STANLIB South Africa net customer cash inflows
increased to R8,4  billion from R5,6  billion in the prior period.
STANLIB Africa however experienced outflows of R7.0 billion,
mainly related to the termination of one large institutional mandate.

Long-term insurance indexed new business of R3 773  million is
4% below the prior period. The tough economic environment
has continued to place significant pressure on retail single and
recurring premium investment and risk sales volumes.

Group VoNB increased from R86 million for the first half of 2017 to
R135 million for the current period and the new business margin
improved from 0,4% to 0,7%.

Total group assets under management amounted to R719 billion
(31 December 2017: R720 billion).

The group's capital position remained strong during the period with
the capital adequacy ratio of the group's main long-term insurance
licence, Liberty Group Limited at 2,67  times the regulatory
minimum at 30  June  2018 (31  December  2017:  2,92). The group
remains well capitalised within its target range at 30 June 2018.

Group equity value per share was lower at R138,66
(31  December  2017:  R140,31). The lower group equity value per
share was attributable to lower investment returns, economic
assumption changes due to the higher interest rate environment
and the 2017 final dividend paid in April 2018.

Headline earnings for the first half of 2018 amounted to R1 521 million
compared to R1 540 million in the prior period. Liberty's headline
earnings include the positive earnings impact of R193  million
(30 June 2017: R278 million) arising from the accounting mismatch
on the consolidation of the Liberty Two Degrees listed REIT.

Earnings by business unit
                                                                                                     12 months
                                                                     30 June   30 June         %   31 December
Rm (Unaudited)                                                          2018      2017    change          2017
Insurance                                                                                                 
Individual Arrangements                                                  704       597        18         1 208
Group Arrangements                                                        25        61      (59)            16
Liberty Corporate                                                         77        80       (4)            81
Liberty Africa Insurance                                                 (5)        20    (>100)            45
Liberty Health                                                          (45)      (19)    (>100)          (54)
Business development support(1)                                          (2)      (20)        90          (56)
Balance sheet management                                                 169       168         1           376
LibFin Markets - credit portfolio                                        150       138         9           330
LibFin Markets - asset/liability matching portfolio                       19        30      (37)            46
Asset management                                                                                            
STANLIB South Africa                                                     175       115        52           252
STANLIB Africa                                                            10     (118)      >100         (204)
Central overheads and sundry income                                    (125)       (9)    (>100)         (236)
Normalised operating earnings                                            958       814        18         1 412
LibFin Investments - SIP                                                 374       453      (17)         1 307
Normalised headline earnings                                           1 332     1 267         5         2 719
BEE preference share adjustment                                          (4)       (5)        20          (10)
Reversal of accounting mismatch arising on consolidation of L2D(2)       193       278      (31)           543
Headline earnings                                                      1 521     1 540       (1)         3 252

(1) Costs associated with management support of the business development area, which includes Group Arrangements, 
    STANLIB Africa and Short-term Insurance Joint Venture. 2017 includes the costs associated with the terminated long-term 
    licence acquisition in Nigeria.
(2) Refer Explanation of terms below.

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

Individual Arrangements
Headline earnings from the group's South African retail business
of R704 million were 18% up on the prior period, assisted by
improved persistency experience and lower assumption and
modelling changes.

Indexed new business sales of R3 111 million were 3% down on
the prior period. The competitive environment coupled with
the current tough economic conditions continued to impact
sales volumes.

VoNB increased from R62 million in the prior period to R111 million,
while the margin improved from 0,5% at 31  December  2017 to
0,7%. Action taken in 2017 and the first half of 2018 to improve
the VoNB and new business margin, including product changes
and repricing, are starting to manifest in the result. This has been
further supported by an improvement in the product mix and
good expense control. Further initiatives are scheduled to be
delivered in the second half of 2018 and 2019.

Net customer cash inflows of R750  million reflect favourable
withdrawal experience, highlighting the success of ongoing
retention initiatives. This has been offset by lower single premium
business, which is the main contributor to net cash inflows being
3% below the prior period.

Group Arrangements
Liberty Corporate
Earnings of R77 million reflected an improved underwriting result
supported by stringent expense management. The income
protection plan book, which experienced high claim levels
in the second half of 2017, has reverted to an acceptable
underwriting margin.

Indexed new business was 8% below the prior period at
R516  million, with increased single premium new business,
attributable to improved umbrella investment sales, offset by lower
recurring premium new business. VoNB increased to R19 million
from R13 million in the prior period, reflecting an improvement in
product mix and good expense management. Net cash outflows
reduced to R0,7 billion, with increased umbrella single premium
sales partly offset by reduced scheme terminations.

Liberty Africa and Liberty Health Insurance
Liberty Africa Insurance incurred a loss of R5 million mainly as a
result of high claims in the Kenyan short-term insurance business.
Indexed new business in the long-term insurance businesses of
R146  million was 13% down on the prior period due to weaker
economic conditions and aggressive competitor activity. The value
of new business amounted to R5 million at a margin of 1,3%.
The short-term insurance businesses continued to experience
considerable pricing pressure.

The decline in risk lives serviced together with exchange rate
movements has significantly impacted Liberty Health's short-term
profitability with a loss of R45 million reported for the period ended
30 June 2018.

Management remains focused on actively realising the value of
this portfolio of businesses by pursuing various options, including
strategic partnerships.

Asset management

STANLIB South Africa
STANLIB South Africa earnings increased to R175 million from
R115 million in the prior period. Fee income was marginally
lower in the period mainly due to muted investment market
returns. The prior period earnings were impacted by operational
write-offs. Management has continued to strengthen the control
environment with a focus on improving the overall financial results.

Net customer cash inflows (excluding intergroup) grew to
R8,4 billion from R5,6 billion in the prior period. This result was
mainly attributable to improved non-money market inflows.
Intergroup cash outflows for the period amounted to R6,2 billion.

Total assets under management by STANLIB South Africa
amounted to R559 billion (31 December 2017: R556 billion).

STANLIB Africa
STANLIB Africa earnings of R10 million reflect a significant
improvement from the loss of R118 million reported in the prior
period. The remedial programme implemented in the STANLIB
East African business is in the final stages of completion, with no
further operational losses reported in the current period.

Net customer cash outflows amounted to R7 billion, mainly due
to the loss of a large institutional mandate in the Southern Africa
region. Total assets under management by STANLIB Africa
amounted to R50 billion (31 December 2017: R53 billion).

Liberty Two Degrees (L2D)
L2D's results for the six months to 30 June 2018 were released
on 23 July 2018. The operational performance of the property
portfolio remained strong notwithstanding a difficult consumer
environment. A proposed transaction to transfer the existing L2D
portfolio to a corporate REIT, in order to restore value and provide
a more compelling investment proposition, was also announced.
Further details on the results and proposed transaction are available
on the L2D website and in the L2D results announcement released
on SENS on 23 July 2018.

Bancassurance
The bancassurance agreement with Standard Bank, which is
applicable across the group's operations, continues to make a
positive contribution to new business volumes and earnings.
The total indexed new business premiums sold under the
agreement increased by 3% on the prior period in a tough
economic environment. We continue leveraging our relationship
with Standard Bank to capture appropriate opportunities.

Balance sheet management

LibFin Markets - Asset liability management and credit portfolio
Earnings from the credit portfolio increased by 9% to R150 million
as a result of growth in the credit portfolio since the first half of 2017.

The asset liability management portfolio, which consists of the
market and liquidity risk exposures arising from the guaranteed
investment product set, produced a profit of R19  million
(30 June 2017: R30 million).

LibFin Markets assets under management amounted to R61 billion
(31 December 2017: R62 billion).

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

Weak market returns experienced in the first half of 2018 resulted
in the SIP producing a gross return of 3,3%. Earnings of R374 million
were below prior period earnings of R453 million. The SIP exposure
to investment markets remains appropriate in the context of the
group's risk appetite.

Capital adequacy cover
The group's capital position remained strong during the period with
the capital adequacy ratio of the group's main long-term insurance
license, Liberty Group Limited at 2,67 times the regulatory
minimum at 30 June 2018 (31 December 2017: 2,92). The decrease
since 31  December  2017 is mainly attributable to the R1  billion
subordinated debt redemption on 3 April 2018. The group remains
well capitalised within its target range in respect of the current
capital regime and also in respect of capital requirements under
the Solvency Assessment and Management (SAM) regime which
is effective from 1 July 2018.

All other group subsidiary life licences were adequately capitalised.

Dividends
2018 interim dividend
In line with the group's interim dividend policy of paying 40% of
the prior full year dividend, the board has approved and declared a
gross interim dividend of 276 cents per ordinary share. The interim
dividend will be paid out of income reserves and is payable on
Monday, 3 September 2018 to all ordinary shareholders recorded
in the books of Liberty Holdings Limited on the record date.

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

The important dates pertaining to the dividend are as follows:

                                                         Tuesday,
Last date to trade cum dividend on the JSE         28 August 2018

                                                       Wednesday,
First trading day ex dividend on the JSE           29 August 2018

                                                          Friday,
Record date                                        31 August 2018

                                                          Monday,
Payment date                                     3 September 2018

Share certificates may not be dematerialised or rematerialised
between Wednesday, 29 August 2018 and Friday, 31 August 2018,
both days inclusive. Where applicable, in terms of instructions
received by the company from certificated shareholders,
the payment of the dividend will be made electronically to
shareholders' bank accounts on payment date.

In the absence of specific mandates, cheques will be posted to
shareholders. Shareholders who have dematerialised their shares
will have their accounts with their CSDP or broker credited on
Monday, 3 September 2018.

Prospects
The planned enhancements to Liberty's organisational design
will ensure focus on our customers and advisers.

Management's focus in the medium term will remain on restoring
the financial performance of the SA Retail insurance business,
improving the investment performance of STANLIB, simplifying
the group's overall operations and expanding our relationship with
the Standard Bank Group.

We expect that the economic and operating environment will
remain subdued for the remainder of the year, suggesting that
pressure on sales volumes could continue in the short term.

We however remain confident that the group is on track to emerge
from this period of change with significantly greater potential to
create value for all stakeholders.

David Munro                                Jacko Maree
Chief Executive                            Chairman

1 August 2018                                       

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

These results are available at http://www.libertyholdings.co.za.
Telephone +27 11 408 3911

ACCOUNTING POLICIES 

The unaudited condensed interim consolidated financial
statements of Liberty Holdings Limited for the six months ended
30 June 2018 have been prepared in accordance with and contain
information required by:

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

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

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

-  the Listings Requirements of the JSE Limited; and

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

The accounting policies applied in the preparation of these interim
financial statements are in terms of IFRS and are consistent
with those applied in the previous consolidated annual financial
statements except for the mandatory adoption of IFRS 9 Financial
Instruments and IFRS 15 Revenue from Contracts with Customers.
The group has applied both standards retrospectively without
restating comparative figures. The group has elected not to apply
the general hedge accounting principles under IFRS  9 and will
continue to apply IAS 39 hedge accounting.

Various minor annual improvements issued by the IASB were early
adopted which had no impact on the group's financial results,
disclosures or comparative information.

IFRS 15 Revenue from Contracts with Customers
The significant majority of the group's revenue is accounted for in
terms of IFRS 4 Insurance Contracts, IFRS 9 Financial Instruments
and IAS 17 Leases, which are all scoped out of IFRS 15.

There are no material changes to revenue recognition for fee
income and hotel operation sales which are recognised under
IFRS 15. Consequently there was no financial impact to the
consolidated group on 1 January 2018 upon adoption of IFRS 15.

IFRS 9 Financial Instruments

Financial assets
IFRS 9 applies two criteria to determine how financial assets should
be classified and measured, namely:

a. the entity's business model for managing the financial assets; and

b. the contractual cash flow characteristics of the financial asset.

Liberty Holdings Limited is the holding company of various
operating subsidiaries engaged in the provision of financial services
including long-term, short-term and health insurance, investment
holdings and asset management. Under IAS  39 Financial
Instruments: Recognition and Measurement, the group designated
the significant majority of financial assets at fair value through
profit or loss. The group has applied IFRS  9's classification and
measurement requirements based on the facts and circumstances
of the various business models at the date of adoption of IFRS 9 in
determining the transition adjustment.

-  The business model of Liberty Group Limited, the group's South
   African long-term insurance operations, is default fair value
   through profit or loss for all financial assets. The only exception
   being intercompany funding loans which are held to collect
   contractual cash flows and classified at amortised cost. These
   loans are eliminated on consolidation into Liberty Holdings
   Limited consolidated financial statements. Policyholder loan
   assets within Liberty Group Limited, which were previously held
   at amortised cost under IAS 39, are now default measured at fair
   value through profit or loss under IFRS 9.

-  Application of the business model approach for the various
   other operating subsidiaries (being long-term insurance in
   other Africa territories, short-term and health insurance, asset
   management and investment holding entities) results in changes
   to classification for certain components of "Prepayments and
   other receivables" and "Cash and cash equivalents". Under
   IFRS 9 they are all now classified at amortised cost. Previously
   certain components were designated at fair value through
   profit or loss under IAS 39. Due to the short-term nature of
   these financial instruments, there was no material impact on
   the change in measurement nor were there any impairment
   provisions on adoption of IFRS 9 as at 1 January 2018.

Financial liabilities
Financial liabilities classification and measurement under IFRS 9 has
not changed significantly from IAS 39. Financial liabilities are either
held at fair value (either required or designated) or at amortised
cost. A summary of changes from those adopted under IAS 39 are:

-  Subordinated notes and redeemable preference shares
   included in Liberty Group Limited's financial liabilities, previously
   measured at amortised cost, have been irrevocably designated
   at fair value through profit or loss on 1 January 2018. Any effects
   of changes in the liability's own credit risk will be presented in
   other comprehensive income effective from 1 January 2018.

-  The classification and measurement of subcomponents of
   "Other payables" (related to those entities outside of Liberty
   Group Limited) are classified at amortised cost under IFRS 9,
   rather than as previously designated at fair value through profit
   or loss under IAS 39.

-  Intercompany funding loans, previously designated at fair
   value through profit or loss under IAS  39, will be measured at
   amortised cost. These loans are eliminated on consolidation into
   Liberty Holdings Limited consolidated financial statements.

Impact on adoption of IFRS 9
The net financial impact of the changes in classification and
measurement after tax is a reduction of opening retained earnings
on 1  January  2018 of R121  million. Upon adoption of IFRS 9, the
group has no financial instruments that will be measured at fair
value through other comprehensive income.  Refer to "Accounting
classifications of financial instruments under IFRS  9"  for more
detail. 

New standards not yet effective
IFRS 16 Leases (effective 1  January  2019) and IFRS  17 Insurance
Contracts (effective 1  January  2021) will have significant financial
reporting impacts for the group. Management is assessing these
impacts under focused projects. Based on Liberty's current lease
obligations,  IFRS 16 is unlikely to have a material impact to profit or
loss on adoption in 2019.

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

EXPLANATION OF TERMS

Capital adequacy requirement (CAR)
The capital adequacy requirement is the minimum amount
by  which an insurer's assets  are required to exceed its liabilities.
The assets, liabilities and CAR must be calculated using a method
prescribed in terms of the Long-term Insurance Act. Capital
adequacy cover refers to the amount of capital the insurer has as a
multiple of the minimum requirement.

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

FCTR
Foreign Currency Translation Reserve.

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

Long-term insurance operations - Indexed new business
This is a measure of new business which is calculated as the
sum of 12 months' premiums on new recurring premium policies
and one tenth of single premium sales.

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

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

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

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

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

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

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

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

L2D adjustment in group equity value
In addition to the reversal of the accounting mismatch in
IFRS profit or loss described above, the group equity value adjusts
the  exposures in the shareholder investment portfolios (SIP) to
the listed unit price.

Summary of impact
Below is a summary of the L2D transaction impact on the
ordinary shareholders' equity:

                                       Group equity                  SIP equity
                                              value      IFRS net         value
Rm                                            Total   asset value    adjustment
Opening adjustment at 1 January 2018            597           340           257
IFRS profit or loss                             193           193              
Group equity value earnings                     152                         152
Transaction between owners                     (95)          (95)             
Closing adjustment at 30 June 2018              847           438           409

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2018

                                                                             Unaudited   Unaudited      Audited
                                                                               30 June     30 June  31 December
Rm                                                                                2018        2017         2017
Assets                                                                                                       
Intangible assets                                                                  430         367          231
Defined benefit pension fund employer surplus                                      151         203          171
Properties                                                                      34 723      34 182       34 768
Equipment                                                                        1 064       1 079        1 128
Interests in joint ventures                                                      1 382       1 244        1 244
Interests in associates                                                         13 862      14 054       15 197
Deferred taxation                                                                  368         264          336
Deferred acquisition costs                                                         779         741          737
Long-term policyholder assets - insurance contracts                              7 159       7 689        7 484
Reinsurance assets                                                               1 967       1 801        1 774
Long-term insurance                                                              1 532       1 390        1 481
Short-term insurance                                                               435         411          293
Financial investments                                                          334 423     326 976      338 534
Loan receivables                                                                 1 182       1 242        1 222
Assets held for trading and for hedging                                          9 757       9 459        7 871
Repurchase agreements, scrip and collateral assets                              13 075      16 886       11 900
Prepayments, insurance and other receivables                                     6 960       5 938        6 361
Cash and cash equivalents                                                        9 976       9 327       15 169
Total assets                                                                   437 258     431 452      444 127
Liabilities                                                                                                    
Long-term policyholder liabilities                                             319 280     309 200      322 918
Insurance contracts                                                            206 782     203 703      210 554
Investment contracts with discretionary participation features                  10 783      11 732       11 845
Financial liabilities under investment contracts                               101 715      93 765      100 519
Reinsurance liabilities                                                            652         543          663
Third party financial liabilities arising on consolidation of mutual funds      41 832      48 557       49 713
Provisions                                                                          76          68           76
Deferred taxation                                                                3 060       2 675        3 386
Deferred revenue                                                                   314         285          291
Deemed disposal taxation liability                                                             437          436
Short-term insurance liabilities                                                 1 089       1 016          780
Financial liabilities                                                            5 387       4 602        5 581
Liabilities held for trading and for hedging                                     8 591       7 428        6 311
Repurchase agreements, liabilities and collateral deposits payable              11 261      13 962        9 097
Employee benefits                                                                1 178       1 132        1 446
Insurance and other payables                                                    12 337      11 443       11 995
Current taxation                                                                 1 017         711        1 043
Total liabilities                                                              406 074     402 059      413 736
Equity                                                                                                         
Ordinary shareholders' equity                                                   22 767      21 778       22 444
Share capital                                                                       26          26           26
Share premium                                                                    5 154       5 243        5 157
Retained surplus                                                                18 414      17 400       18 166
Other reserves                                                                   (827)       (891)        (905)
Non-controlling interests                                                        8 417       7 615        7 947
Total equity                                                                    31 184      29 393       30 391
Total equity and liabilities                                                   437 258     431 452      444 127

CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
for the six months ended 30 June 2018

                                                                                                                           Audited
                                                                                                Unaudited   Unaudited    12 months
                                                                                                  30 June     30 June  31 December
Rm                                                                                                   2018        2017         2017
Revenue                                                                                                                           
Insurance premiums                                                                                 18 386      19 438       39 970
Reinsurance premiums                                                                              (1 019)       (969)      (1 950)
Net insurance premiums                                                                             17 367      18 469       38 020
Fee income and reinsurance commission                                                               1 803       1 812        3 683
Investment income                                                                                  10 306      11 170       21 652
Hotel operations sales                                                                                261         253          532
Investment (losses)/gains                                                                         (2 312)       4 082       18 835
Total income                                                                                       27 425      35 786       82 722
Claims and policyholder benefits under insurance contracts                                       (18 667)    (19 648)     (38 819)
Insurance claims recovered from reinsurers                                                            808         868        1 800
Change in long-term policyholder assets and liabilities                                             4 901         479      (6 829)
Liabilities under insurance contracts                                                               3 952         394      (6 504)
Policyholder assets related to insurance contracts                                                  (325)         375          170
Investment contracts with discretionary participation features                                      1 216       (341)        (521)
Applicable to reinsurers                                                                               58          51           26
Fair value adjustment to long-term policyholder liabilities under investment contracts             ( 880)     (2 861)      (9 116)
Fair value adjustment to financial liabilities                                                      (270)                        
Fair value adjustment on third party mutual fund interests                                        (2 237)     (2 578)      (4 619)
Acquisition costs                                                                                 (2 239)     (2 532)      (4 935)
General marketing and administration expenses                                                     (5 420)     (5 417)     (11 345)
Finance costs                                                                                       (408)       (652)      (1 344)
Profit share allocations under bancassurance and other agreements                                   (553)       (486)        (972)
Equity accounted earnings from joint venture                                                           20          14           25
Profit before taxation                                                                              2 480       2 973        6 568
Taxation(1)                                                                                         (780)     (1 171)      (2 864)
Total earnings                                                                                      1 700       1 802        3 704
Other comprehensive income/(loss)                                                                     251         (7)        (233)
Items that may be reclassified subsequently to profit or loss                                         153        (19)         (95)
Net change in fair value on cash flow hedges                                                         (17)          46           75
Income and capital gains tax relating to net change in fair value on cash flow hedges                   5        (15)         (21)
Foreign currency translation                                                                          165        (50)        (149)
Items that may not be reclassified subsequently to profit or loss                                      98          12        (138)
Owner-occupied properties - fair value adjustment                                                      18          18         (67)
Income and capital gains tax relating to owner-occupied properties fair value adjustment              (2)         (3)         (14)
Change in long-term policyholder insurance liabilities (application of shadow accounting)             (9)         (6)         (32)
Actuarial gains on post-retirement medical aid liability                                               39          14           45
Income tax relating to post-retirement medical aid liability                                         (11)         (4)         (13)
Net adjustments to defined benefit pension fund(2)                                                   (20)        (10)         (41)
Income tax relating to defined benefit pension fund                                                     5           3         (16)
Fair value adjustments to financial liabilities arising from own credit                               108                         
Income tax relating to fair value adjustments to financial liabilities arising from own credit       (30)                        

Total comprehensive income                                                                          1 951       1 795        3 471
Total earnings attributable to:                                                                                                    
Shareholders' equity                                                                                1 522       1 541        3 118
Non-controlling interests                                                                             178         261          586
                                                                                                    1 700       1 802        3 704
Total comprehensive income attributable to:                                                                                        
Shareholders' equity                                                                                1 725       1 549        2 932
Non-controlling interests                                                                             226         246          539
                                                                                                    1 951       1 795        3 471
Basic and fully diluted earnings per share                                                          Cents       Cents        Cents
Basic earnings per share                                                                            563,5       568,5      1 152,6
Fully diluted basic earnings per share                                                              547,5       553,3      1 120,7

(1) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the effective tax charge relative to profit before taxation.
(2) Net adjustments to defined benefit pension fund include actuarial gains or losses, return on plan assets, reduced by the interest on the net defined benefit asset and the effect of
    the application of the asset ceiling.

SUMMARY CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
for the six months ended 30 June 2018

                                                                                                  Audited
                                                                       Unaudited   Unaudited    12 months
                                                                         30 June     30 June  31 December
Rm                                                                          2018        2017         2017
Balance of ordinary shareholders' equity at 1 January                     22 444      21 676       21 676
IFRS 9 transition adjustment                                               (121)                        
Ordinary dividends                                                       (1 167)     (1 167)      (1 942)
Total comprehensive income                                                 1 725       1 549        2 932
Cash flow hedge recycled through profit and loss on early settlement          12                         
Share buy-back(1)                                                           (65)       (335)        (350)
Black economic empowerment transaction                                        11          10           32
Share-based payments                                                          24          28           99
Preference dividends                                                         (1)         (1)          (2)
Transactions between owners                                                                9            9
Transactions between owners - Liberty Two Degrees                           (95)           9         (10)
Ordinary shareholders' equity                                             22 767      21 778       22 444
Balance of non-controlling interests at 1 January                          7 947       7 330        7 330
Total comprehensive income                                                   226         246          539
Acquisition of unincorporated property partnerships                                                    87
Unincorporated property partnerships net distributions                     (109)       (112)        (238)
Non-controlling interests' share of subsidiary distributions               (112)        (30)        (133)
Non-controlling interests' share of shares issued in subsidiary                            2            2
Transactions between owners                                                                9            9
Transactions between owners - Liberty Two Degrees                            465         170          351
Non-controlling interests                                                  8 417       7 615        7 947
Total equity                                                              31 184      29 393       30 391

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

SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2018

                                                                                                    Audited
                                                                         Unaudited   Unaudited    12 months
                                                                           30 June     30 June  31 December
Rm                                                                            2018        2017         2017
Cash flows from operating activities                                       (9 982)       1 854        5 121
Cash utilised by operations                                               (14 476)     (3 773)      (7 082)
Interest and dividends received                                              8 781       9 796       18 841
Distributions paid                                                         (2 182)     (2 174)      (3 075)
Taxation paid                                                              (1 557)     (1 213)      (1 946)
Other operating cash flows                                                  ( 548)      ( 782)      (1 617)
Cash flows from investing activities                                         3 011     (8 134)      (3 581)
Net disposal/(purchase) of investments                                       2 950     (9 409)      (2 906)
Net purchase of other assets                                                 (266)       (123)        (375)
Deposits received on/(repayment of) collateral deposits payable                327       1 438        (258)
Acquisition of equity accounted joint ventures                                            (40)         (42)
Cash flows from financing activities                                         1 712         659      (1 280)
Net (repayments)/advance of financial liabilities                            (461)          1           980
Net proceeds on/(repayment of) repurchase agreements liabilities             1 837         776      (2 393)
Net cash flows from equity transactions with non-controlling interests         401         217          483
Share buy-back                                                                (65)       (335)        (350)

Net (decrease)/increase in cash and cash equivalents                       (5 259)     (5 621)          260
Cash and cash equivalents at the beginning of the period                    15 169      14 994       14 994
Foreign currency translation                                                    66        (46)         (85)
Cash and cash equivalents at the end of the period                           9 976       9 327       15 169

HEADLINE EARNINGS AND EARNINGS PER SHARE
for the six months ended 30 June 2018

                                                                                                                Audited
                                                                                     Unaudited   Unaudited    12 months
                                                                                       30 June     30 June  31 December
Rm (unless otherwise stated)                                                              2018        2017         2017
Reconciliation of total earnings to headline earnings attributable to shareholders                                    
Total earnings attributable to shareholders                                              1 522       1 541        3 118
Preference share dividend                                                                  (1)         (1)          (2)
Basic earnings attributable to ordinary shareholders                                     1 521       1 540        3 116
Impairment of intangible assets                                                                                     164
Tax on headline earnings adjustable item                                                                          ( 28)
Headline earnings attributable to ordinary shareholders                                  1 521       1 540        3 252
Net income earned on BEE preference shares                                                   4           5           10
Reversal of the accounting mismatch arising on consolidation of L2D(1)                   (193)       (278)        (543)
Normalised headline earnings attributable to ordinary shareholders                       1 332       1 267        2 719
Weighted average number of shares in issue ('000)                                      269 925     270 876      270 348
Normalised weighted average number of shares in issue ('000)                           276 333     277 415      276 847
Fully diluted weighted average number of shares in issue ('000)                        277 803     278 306      278 030
Earnings per share                                                                       Cents       Cents        Cents
Total earnings attributable to ordinary shareholders                                                                   
Basic                                                                                    563,5       568,5      1 152,6
Headline                                                                                 563,5       568,5      1 202,9
Normalised headline                                                                      482,0       456,7        982,1
Fully diluted earnings attributable to ordinary shareholders                                                           
Basic                                                                                    547,5       553,3      1 120,7
Headline                                                                                 547,5       553,3      1 169,7

(1) Refer Explanation of terms on page 22.

SUMMARY CONSOLIDATED SEGMENT INFORMATION
for the six months ended 30 June 2018

The unaudited segment results for the six months ended 30 June 2018 are as follows:

                                                                                           Group Arrangements                                                                                
                                                                 Individual     Liberty  Liberty Africa                        Asset                            Reporting
Rm                                                             Arrangements   Corporate       Insurance  Liberty Health   management    Other      Total   adjustments(1)   IFRS reported
Total revenue                                                        22 971       6 229           1 181             429        1 490    1 679     33 979          (6 554)          27 425
Profit/(loss) before taxation                                           916         206              48            (64)          265    1 024      2 395               85           2 480
Taxation(2)                                                           (399)        (56)            (37)              19         (78)    (229)      (780)                            (780)
Total earnings                                                          517         150              11            (45)          187      795      1 615               85           1 700
Reconciliation of total earnings to headline earnings/(loss) 
attributable to shareholders                                                                                                                                                            
Total earnings/(loss)                                                   517         150              11            (45)          187      795      1 615               85           1 700
Attributable to non-controlling interests                                                          (17)                          (2)     (74)       (93)             (85)           (178)
Preference share dividend                                                                                                                 (1)        (1)                              (1)
Headline earnings/(loss)                                                517         150             (6)            (45)          185      720      1 521                            1 521
Net income earned on BEE preference shares                                                                                                  4          4                               4
Reversal of the accounting mismatch arising on consolidation of 
L2D                                                                                                                                     (193)      (193)                            (193)
Normalised headline earnings/(loss)                                     517         150             (6)            (45)          185      531      1 332                            1 332
Reconciliation of business unit earnings/(loss) to
segment result                                                                                                                                                                           
Individual Arrangements                                                 704                                                                          704                                  
Group Arrangements                                                                   76             (6)            (45)                               25                                  
Liberty Corporate                                                                    77                                                               77                                 
Liberty Africa Insurance                                                                            (5)                                              (5)                                
Liberty Health                                                                                                     (45)                             (45)                                
Business development support(3)                                                     (1)             (1)                                              (2)                                
LibFin (Markets and Investments)                                      (180)          74                                                   649        543                                  
LibFin Markets - credit portfolio                                        50          36                                                    64        150                                  
LibFin Markets - asset/liability matching                                12          37                                                  (30)         19                                  
LibFin Investments - SIP                                              (242)           1                                                   615        374                                  
Asset management                                                                                                                                                                         
STANLIB South Africa                                                                                                             175                 175                                  
STANLIB Africa                                                                                                                    10                  10                                  
Central overheads and sundry income                                     (7)                                                             (118)      (125)                                 
Normalised headline earnings/(loss)                                     517         150             (6)            (45)          185      531      1 332                             

(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
    insurance into defined IFRS 'investment' and 'insurance' products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the
    elimination of intergroup transactions.
(2) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the effective tax charge relative to profit before taxation.
(3) Costs associated with management support of the business development area, which includes Group Arrangements, STANLIB Africa and Short-term Insurance Joint Venture.

The customer facing units are supported by shared service functions (Group Enablement) and LibFin (incorporating LibFin Markets and
LibFin Investments), which are strategic competency units. The impact of LibFin Markets is disclosed in the relevant customer grouping.

The unaudited segment results for the six months ended 30 June 2017 are as follows:

    

                                                                                               Group Arrangements                                                                                    
                                                                 Individual     Liberty  Liberty Africa                        Asset                            Reporting
Rm                                                             Arrangements   Corporate       Insurance  Liberty Health   management    Other      Total   adjustments(1)   IFRS reported
Total revenue                                                        28 847       7 329           1 260             495        1 514    1 709     41 154          (5 368)          35 786
Profit/(loss) before taxation                                         1 149         210              54            (26)          138    1 307      2 832              141           2 973
Taxation(2)                                                           (576)        (58)            (33)               9        (140)    (373)    (1 171)                          (1 171)
Total earnings                                                          573         152              21            (17)          (2)      934      1 661              141           1 802
Reconciliation of total earnings/(loss) to headline earnings
attributable to shareholders                                                                                                                                                           
Total earnings/(loss)                                                   573         152              21            (17)          (2)      934      1 661              141           1 802
Attributable to non-controlling interests                                                          (21)             (2)          (1)     (96)      (120)            (141)           (261)
Preference share dividend                                                                                                                 (1)        (1)                              (1)
Headline earnings/(loss)                                                573         152                            (19)          (3)      837      1 540                            1 540
Net income earned on BEE preference shares                                                                                                  5          5                                5
Reversal of the accounting mismatch arising on consolidation of 
L2D                                                                                                                                     (278)      (278)                            (278)
Normalised headline earnings/(loss)                                     573         152                            (19)          (3)      564      1 267                            1 267
Reconciliation of business unit earnings/(loss) to
segment result                                                                                                                                                                          
Individual Arrangements                                                 597                                                                          597                                  
Group Arrangements                                                                   80                            (19)                               61                                  
Liberty Corporate                                                                    80                                                               80                                 
Liberty Africa Insurance                                                                             20                                               20                                 
Liberty Health                                                                                                     (19)                             (19)                                
Business development support(3)                                                                    (20)                                             (20)                                
LibFin (Markets and Investments)                                      (118)          72                                                   667        621                                  
LibFin Markets - credit portfolio                                        87          51                                                              138                                  
LibFin Markets - asset/liability matching                                24          15                                                   (9)         30                                  
LibFin Investments - SIP                                              (229)           6                                                   676        453                                  
Asset management                                                                                                                                                                        
STANLIB South Africa                                                                                                             115                 115                                  
STANLIB Africa                                                                                                                 (118)               (118)                                 
Central overheads and sundry income                                      94                                                             (103)        (9)                                 
Normalised headline earnings/(loss)                                     573         152                            (19)          (3)      564      1 267   


(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
    insurance into defined IFRS 'investment' and 'insurance' products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the
    elimination of intergroup transactions.
(2) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the effective tax charge relative to profit before taxation.
(3) Costs associated with management support of the business development area, which includes Group Arrangements, STANLIB Africa and Short-term Insurance Joint Venture.
    2017 includes the costs associated with the terminated long-term licence acquisition in Nigeria.

for the six months ended 30 June 2018

The audited segment results for the year ended 31 December 2017 are as follows:

                                                                                               Group Arrangements                                                                                
                                                                 Individual        Liberty  Liberty Africa                         Asset                          Reporting
Rm (Audited)                                                   Arrangements      Corporate       Insurance   Liberty Health   management    Other     Total  adjustments(1)   IFRS reported
Total revenue                                                        68 161         15 676           2 420              929        3 085    4 625    94 896        (12 174)          82 722
Profit/(loss) before taxation                                         2 957            223             121            (134)          263    2 793     6 223             345           6 568
Taxation(2)                                                         (1 819)           (62)            (74)               28        (212)    (725)   (2 864)                         (2 864)
Total earnings/(loss)                                                 1 138            161              47            (106)           51    2 068     3 359             345           3 704
Reconciliation of total earnings/(loss) to headline earnings  
attributable to shareholders                                                                                                                                                              
Total earnings/(loss)                                                 1 138            161              47            (106)           51    2 068     3 359             345           3 704
Attributable to non-controlling interests                               (1)                           (58)                           (3)    (179)     (241)           (345)           (586)
Preference share dividend                                                                                                                     (2)       (2)                             (2)
Impairment of intangible assets                                          13             71                               52                             136                             136
Headline earnings/(loss)                                              1 150            232            (11)             (54)           48    1 887     3 252                           3 252
Net income earned on BEE preference shares                                                                                                     10        10                              10
Reversal of the accounting mismatch arising on consolidation of    
L2D                                                                                                                                         (543)     (543)                           (543)
Normalised headline earnings/(loss)                                   1 150            232            (11)             (54)           48    1 354     2 719                           2 719
Reconciliation of business unit earnings(loss) to    
segment result                                                                                                                                                                              
Individual Arrangements                                               1 208                                                                           1 208                                 
Group Arrangements                                                                      81            (11)             (54)                              16                                 
Liberty Corporate                                                                       81                                                               81                                 
Liberty Africa Insurance                                                                                45                                               45                                 
Liberty Health                                                                                                         (54)                            (54)                                
Business development support(3)                                                                       (56)                                             (56)                                
LibFin (Markets and Investments)                                      (138)            151                                                  1 670     1 683                                 
LibFin Markets - credit portfolio                                       192            138                                                              330                                 
LibFin Markets - asset/liability matching                                35              1                                                     10        46                                 
LibFin Investments - SIP                                              (365)             12                                                  1 660     1 307                                 
Asset management                                                                                                                                                                           
STANLIB South Africa                                                                                                                 252                252                                 
STANLIB Africa                                                                                                                     (204)              (204)                                
Central overheads and sundry income                                      80                                                                 (316)     (236)                                
Normalised headline earnings/(loss)                                   1 150            232            (11)             (54)           48    1 354     2 719        

(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
    insurance into defined IFRS 'investment' and 'insurance' products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the
    elimination of intergroup transactions.
(2) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the effective tax charge relative to profit before taxation.
(3) Costs associated with management support of the business development area, which includes Group Arrangements, STANLIB Africa and Short-term Insurance Joint Venture. 2017
    includes the costs associated with the terminated long-term licence acquisition in Nigeria.

GROUP EQUITY VALUE REPORT
for the six months ended 30 June 2018

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

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

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

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

2.2 Other businesses:

STANLIB South Africa       Valued using a 10 times (31 December 2017 and 30 June 2017: 10 times) multiple of estimated sustainable
                           earnings.
STANLIB Africa             Valued using a 10 times (31 December 2017 and 30 June 2017: 10 times) multiple of estimated sustainable
                           earnings.
Liberty Health             As Liberty Health has yet to establish a history to support a sustainable earnings calculation, an adjusted IFRS
                           net asset value is applied.
Liberty Africa Insurance   Liberty Africa Insurance is an emerging cluster of both long- and short-term insurance businesses located
                           in various African countries outside of South Africa. A combination of valuation techniques including
                           embedded value, discounted cash flow and earnings multiples have been applied to value these businesses.
                           The combined value of this cluster is not material relative to the other components of group equity value
                           and therefore a detailed analysis of this valuation has not been presented. At 30 June 2018 the combined
                           valuations approximated the group's IFRS net asset value. Therefore the IFRS net asset value was used.
Liberty Holdings           The net market value of assets and liabilities held by the Liberty Holdings Limited company excluding
                           investments in any subsidiaries which are valued separately.

2.3  Liberty Two Degrees (L2D) normalisation adjustment:
This represents the difference between Liberty's share of the net asset value of L2D as at the reporting date and the listed price of L2D
units multiplied by the number of units in issue to Liberty at the reporting date. Adjusting the valuation from net asset value to share price is
required to ensure consistency between policyholder liabilities and their backing assets, and to provide a market consistent valuation of the
L2D shares held within the shareholder investment portfolio.

2.4  Other adjustments:
These comprise the fair value of share rights allocated to staff not employed by the South African covered businesses, adjusting certain
deferred tax assets to current values and allowance for certain shareholder recurring expenses incurred in Liberty Holdings Limited
capitalised at a multiple of 9 times (31 December 2017 and 30 June 2017: 9 times).

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

                                                                                 Unaudited
                                                                              30 June 2018           
                                                               SA covered            Other
Rm                                                               business       businesses         Total
Liberty Group Limited                                              18 068                         18 068
STANLIB South Africa(2)                                                                809           809
STANLIB Africa(2)                                                                      187           187
Liberty Health (including Total Health Trust)                                          251           251
Liberty Africa Insurance                                                               921           921
Liberty Holdings                                                                     1 684         1 684
Liberty Two Degrees adjustment to net asset value                                      847           847
Shareholders' equity reported under IFRS                           18 068            4 699        22 767
Difference between statutory and published valuation methods      (7 119)                        (7 119)
Negative rand reserves                                            (6 663)                        (6 663)
Deferred acquisition costs                                          (753)                          (753)
Deferred revenue liability                                            297                            297
Subordinated notes                                                  4 576                          4 576
CAR of subsidiaries                                                  (10)                           (10)
Reverse value of in-force acquired                                    (9)                            (9)
Inadmissible assets                                               (1 242)                        (1 242)
Statutory excess assets over liabilities(1)                        14 264            4 699        18 963
Reverse CAR of subsidiaries                                            10                             10
Reverse subordinated notes                                        (4 576)                        (4 576)
Reverse inadmissible assets                                         1 242                          1 242
Frank Financial Services allowance for future expenses              (100)                          (100)
Impact of discounting on deferred tax asset                                          (100)         (100)
BEE preference funding                                                117                            117
Liberty Two Degrees normalisation adjustment(3)                                      (847)         (847)
Allowance for employee share rights                                  (62)             (47)         (109)
Normalised net worth                                               10 895            3 705        14 600
Value of in-force - Individual Arrangements                        21 698                         21 698
Value of in-force - Group Arrangements: Liberty Corporate           2 927                          2 927
Cost of required capital                                          (1 657)                        (1 657)
Fair value adjustment - STANLIB South Africa(2)                                      3 691         3 691
Fair value adjustment - STANLIB Africa(2)                                               13            13
Allowance for future shareholder expenses                                          (2 296)       (2 296)
Normalised equity value                                            33 863            5 113        38 976

(1) The adjustments between the IFRS and statutory net asset values for the Liberty Africa subsidiaries 
    have not been included. This is because the group equity value for these entities is set to their IFRS net 
    asset value and so these adjustments do not affect group equity value.

(2)                                                                                           30 June
    STANLIB valuation (Rm)                                                                       2018
                                                               
    STANLIB South Africa                                                                        4 500
    STANLIB Africa                                                                                200
                                                                
    Total                                                                                       4 700

(3) This represents the difference between Liberty's share of the net asset value of L2D as at the reporting date 
    and the listed price of L2D units multiplied by the number of units in issue to Liberty at the reporting date. 
    Adjusting the valuation from net asset value to share price is required to ensure consistency between policyholder 
    liabilities and their backing assets, and to provide a market consistent valuation of the L2D shares held within the 
    shareholder investment portfolio.

3   Normalised group equity value (continued)
3.1 Analysis of normalised group equity value (continued)

                                                                                                       Audited
                                                                                                     12 months
                                                                Unaudited                          31 December
                                                             30 June 2017                                 2017             
                                                 SA covered         Other              SA covered        Other
Rm                                                 business    businesses      Total     business   businesses      Total
Liberty Group Limited                                18 369                   18 369       18 412                  18 412
STANLIB South Africa(2)                                               809        809                       795        795
STANLIB Africa(2)                                                    (19)       (19)                       100        100
Liberty Health (including Total Health Trust)                         373        373                       299        299
Liberty Africa Insurance                                              815        815                       813        813
Liberty Holdings                                                    1 273      1 273                     1 428      1 428
Liberty Two Degrees adjustment to net asset 
value                                                                 158        158                       597        597
Shareholders' equity reported under IFRS             18 369         3 409     21 778       18 412        4 032     22 444
Difference between statutory and published
valuation methods                                   (7 175)                  (7 175)      (7 253)                  (7 253)
Negative rand reserves                              (6 723)                  (6 723)      (6 806)                  (6 806)
Deferred acquisition costs                            (725)                    (725)        (730)                    (730)
Deferred revenue liability                              273                      273          283                      283
Subordinated notes                                    4 602                    4 602        5 581                    5 581
CAR of subsidiaries                                    (10)                     (10)         (10)                     (10)
Reverse value of in-force acquired                     (14)                     (14)         (12)                     (12)
Inadmissible assets                                   (922)                    (922)      (1 018)                  (1 018)
Statutory excess assets over liabilities(1)          14 850         3 409     18 259       15 700        4 032      19 732
Reverse CAR of subsidiaries                              10                       10           10                       10
Reverse subordinated notes                          (4 602)                  (4 602)      (5 581)                  (5 581)
Reverse inadmissible assets                             922                      922        1 018                    1 018
Frank Financial Services allowance for future
expenses                                              (100)                    (100)        (100)                    (100)
Impact of discounting on deferred tax asset                         (100)      (100)                     (100)       (100)
BEE preference funding                                  142                      142          123                      123
Liberty Two Degrees normalisation adjustment(3)                     (158)      (158)                     (597)       (597)
Allowance for employee share rights                    (33)          (38)       (71)         (36)         (36)        (72)
Normalised net worth                                 11 189         3 113     14 302       11 134        3 299      14 433
Value of in-force - Individual Arrangements          21 840                   21 840       22 088                   22 088
Value of in-force - Group Arrangements: Liberty 
Corporate                                             2 838                    2 838        3 049                    3 049
Cost of required capital                            (1 640)                  (1 640)      (1 690)                  (1 690)
Fair value adjustment - STANLIB South Africa(2)                     4 491      4 491                     3 655       3 655
Fair value adjustment - STANLIB Africa(2)                             319        319                        50          50
Allowance for future shareholder expenses                         (1 960)    (1 960)                   (2 217)     (2 217)
Normalised equity value                              34 227         5 963     40 190       34 581        4 787      39 368

(1) The adjustments between the IFRS and statutory net asset values for the Liberty Africa subsidiaries have not been included. 
    This is because the group equity value for these entities is set to their IFRS net asset value and so these adjustments do 
    not affect group equity value.

(2)                                                                          30 June                           31 December
    STANLIB valuation (Rm)                                                      2017                                  2017
                                                   
    STANLIB South Africa                                                       5 300                                 4 450
    STANLIB Africa                                                               300                                   150
                                                    
    Total                                                                      5 600                                 4 600

(3) This represents the difference between Liberty's share of the net asset value of L2D as at the reporting date and the listed 
    price of L2D units multiplied by the number of units in issue to Liberty at the reporting date. Adjusting the valuation from 
    net asset value to share price is required to ensure consistency between policyholder liabilities and their backing
    assets, and to provide a market consistent valuation of the L2D shares held within the shareholder investment portfolio.

3.2  Normalised group equity value earnings and value per share

                                                                                                                             Audited
                                                                                                                           12 months
                                                           Unaudited                            Unaudited                31 December
                                                          30 June 2018                         30 June 2017                     2017
                                                     SA                                    SA
                                                covered         Other                 covered         Other
Rm                                             business    businesses        Total   business    businesses       Total        Total
Normalised equity value at the end of
the period                                       33 863         5 113       38 976     34 227         5 963      40 190       39 368
Equity value at the end of the period            33 746         5 960       39 706     34 085         6 121      40 206       39 842
Liberty Two Degrees normalisation   
adjustment(1)                                                   (847)        (847)                    (158)       (158)        (597)
BEE preference shares                               117                        117        142                       142          123
Net share buy-backs                                                65           65                      335         335          350
Funding of restricited share plan                   108         (108)                     112         (112)                        
Intragroup dividends(2)                           1 350       (1 350)                   1 400       (1 400)                        
Dividends paid                                                  1 168        1 168                    1 168       1 168        1 944
Normalised equity value at the beginning 
of the period                                  (34 460)       (4 787)     (39 247)   (34 470)       (6 751)    (41 221)     (41 221)
Equity value at the beginning of the  
period                                         (34 458)       (5 384)     (39 842)   (34 322)       (6 421)    (40 743)     (40 743)
IFRS 9 transition adjustment                        121                        121                                                
Liberty Two Degrees normalisation
adjustment(1)                                                     597          597                    (330)       (330)        (330)
BEE preference shares                             (123)                      (123)      (148)                     (148)        (148)
 
Normalised equity value earnings                    861           101          962      1 269         (797)         472          441
Normalised return on group equity   
value (%)                                           5,1           4,2          5,0        7,5        (22,9)         2,3          1,1
Normalised number of shares ('000)                                         281 081                              280 734      280 573
Number of shares in issue ('000)                                           269 699                              269 541      270 120
Shares held for the employee restricted   
share scheme ('000)                                                          5 050                                4 713        4 014
Adjustment for BEE shares ('000)                                             6 332                                6 480        6 439
Normalised group equity value per   
share (R)                                                                   138,66                               143,16       140,31

(1)  This represents the difference between Liberty's share of the net asset value of L2D as at the reporting date and the listed price 
     of L2D units multiplied by the number of units in issue to Liberty at the reporting date. Adjusting the valuation from net asset 
     value to share price is required to ensure consistency between policyholder liabilities and their backing assets, and to provide a 
     market consistent valuation of the L2D shares held within the shareholder investment portfolio.

(2)  Dividends paid by Liberty Group Limited to Liberty Holdings Limited.

3.3  Sources of normalised group equity value earnings    
    
                                                                                                                             Audited
                                                                                                                           12 months
                                                            Unaudited                              Unaudited             31 December
                                                           30 June 2018                           30 June 2017                  2017
                                                     SA                                    SA 
                                                covered         Other                 covered         Other 
Rm                                             business    businesses        Total   business    businesses       Total        Total
Value of new business written in the               
period                                              130             5          135         75            11          86          233
Expected return on value of in-force               
business                                          1 460                      1 460      1 446                     1 446        2 926
Variances/changes in operating               
assumptions                                         246                        246         21                        21          109
Operating experience variances                      277                        277        174                       174          330
Operating assumption changes                       (20)                       (20)        (7)                       (7)           30
Changes in modelling methodology                   (11)                       (11)      (146)                     (146)        (251)
Development costs                                                (31)         (31)       (30)          (52)        (82)        (221)
Liberty Holdings shareholder              
expenses(1)                                                     (200)        (200)                    (156)       (156)        (584)
Headline earnings of other businesses/              
intragroup transfers                                              135          135         46            59         105          146
Operational equity value profits                  1 836          (91)        1 745      1 558         (138)       1 420        2 609
Economic adjustments                              (949)           209        (740)      (289)         (178)       (467)        (571)
Return on net worth and other              
adjustments(2)                                    (113)           209          96          94         (178)        (84)        (153)
Investment variances(2)                           (470)                      (470)      (479)                     (479)        (594)
Change in economic assumptions                    (366)                      (366)         96                        96          176
Change in fair value adjustments on              
value of other businesses                                         (6)          (6)                    (470)       (470)      (1 585)
Change in allowance for share rights               (26)          (11)         (37)                     (11)        (11)         (12)
Group equity value earnings                         861           101          962      1 269         (797)         472          441

(1)   This includes the actual shareholder expenses incurred by Liberty Holdings of R121 million (31 December 2017: R259 million, 
      30 June 2017: R88 million) plus the change in the allowance for future shareholder expenses over the period.
(2)   The return on net worth includes an amount of R12 million (31 December 2017: negative R7 million, 30 June 2017: negative R17 million) 
      in respect of the change in the fair value of cash flow hedges supporting LGL subordinated notes. With the change in classification of 
      the LGL subordinated notes to fair value on the adoption of IFRS 9, the cash flow hedges on these bonds were recycled to IFRS earnings. 
      The investment variances also include an amount of negative R12 million (31 December 2017: R61 million, 30 June 2017: R48 million) in 
      respect of the change in the fair value of cash flow hedges supporting LibFin Credit.

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

                                                                                                                      Audited
                                                                                          Unaudited   Unaudited     12 months
                                                                                            30 June     30 June   31 December
Rm                                                                                             2018        2017          2017
South African covered business:                                                                                            
Individual Arrangements                                                                         737         667         1 445
Traditional Life                                                                                567         528         1 159
Direct Channel                                                                                   33          30            67
Credit Life                                                                                      45          43            83
LibFin Credit uplift to Individual Arrangements                                                  92          66           136
Group Arrangements: Liberty Corporate                                                            66          66           162
Traditional Business                                                                             54          56           137
LibFin Credit uplift to Group Arrangements: Liberty Corporate                                    12          10            25

Gross value of new business                                                                     803         733         1 607
Overhead acquisition (including underwriting) costs impact on value of new business           (627)       (615)       (1 305)
Cost of required capital                                                                       (46)        (43)          (90)
Net value of South African covered business                                                     130          75           212
Present value of future expected premiums                                                    20 045      20 628        42 782
Margin (%)                                                                                      0,6         0,4           0,5
Group Arrangements: Liberty Africa Insurance                                                                                
Net value of new business                                                                         5          11            21
Present value of future expected premiums                                                       405         266           528
Margin (%)                                                                                      1,3         4,3           3,9
Total group net value of new business                                                           135          86           233
Total group margin (%)                                                                          0,7         0,4           0,5

LONG-TERM INSURANCE NEW BUSINESS
for the six months ended 30 June 2018
 
                                                                                                                    12 months
                                                                                            30 June     30 June   31 December
Rm (Unaudited)                                                                                 2018        2017          2017
Sources of insurance operations total new business by product type                                                        
Retail                                                                                       12 280      13 177        27 132
Single                                                                                       10 080      10 973        22 660
Recurring                                                                                     2 200       2 204         4 472
Institutional                                                                                 1 045         915         2 034
Single                                                                                          533         319           838
Recurring                                                                                       512         596         1 196
                           
Total new business                                                                           13 325      14 092        29 166
Single                                                                                       10 613      11 292        23 498
Recurring                                                                                     2 712       2 800         5 668
                           
Insurance indexed new business                                                                3 773       3 930         8 018
Sources of insurance indexed new business                                                                                    
Individual Arrangements                                                                       3 111       3 205         6 570
Group Arrangements:                                                                             662         725         1 448
Liberty Corporate                                                                               516         558         1 171
Liberty Africa Insurance(1)                                                                     146         167           277

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

The difference between the single premiums reported under total long-term insurance premiums and single premiums reported under
long-term insurance new business by distribution channel arises mainly from different treatment for extensions of matured policies,
reinvestment of fund withdrawals, conversions of standalone funds to umbrella funds and fund member movements within Liberty
administered funds.

LONG-TERM INSURANCE NET CUSTOMER CASH FLOWS             
for the six months ended 30 June 2018             
              
                                                                                                                     Audited
                                                                                          Unaudited   Unaudited    12 months
                                                                                            30 June     30 June  31 December
Rm                                                                                             2018        2017         2017
Net premiums by product type                                                                                              
Retail                                                                                       20 609      21 282       43 467
Single                                                                                        9 857      10 720       22 191
Recurring                                                                                    10 752      10 562       21 276
Institutional                                                                                 5 454       5 187       10 673
Single                                                                                          799         588        1 416
Recurring                                                                                     4 655       4 599        9 257
              
Net premium income from insurance contracts and inflows from investment              
contracts                                                                                    26 063      26 469       54 140
                
Single                                                                                       10 656      11 308       23 607
Recurring                                                                                    15 407      15 161       30 533
Net claims and policyholders benefits by product type                                                                     
Retail                                                                                     (19 747)    (20 390)     (40 436)
Death and disability claims                                                                 (3 596)     (3 117)      (6 567)
Policy surrender and maturity claims                                                       (12 991)    (14 392)     (27 984)
Annuity payments                                                                            (3 160)     (2 881)      (5 885)
Institutional                                                                               (6 054)     (6 744)     (12 070)
Death and disability claims                                                                 (1 098)     (1 082)      (2 118)
Scheme terminations and member withdrawals                                                  (4 565)     (5 244)      (9 139)
Annuity payments                                                                              (391)       (418)        (813)
              
Net claims and policyholders benefits                                                      (25 801)    (27 134)     (52 506)
Long-term insurance net customer cash flows(1)                                                  262       (665)        1 634
Rm (Unaudited)                                                                                                             
Sources of insurance operations net cash flows:                                                                            
Individual Arrangements                                                                         750         774        2 846
Group Arrangements:                                                                           (488)     (1 439)      (1 212)
Liberty Corporate                                                                             (689)     (1 609)      (1 536)
Liberty Africa Insurance(2)                                                                     201         170          324

(1) This excludes net cash inflows attributed to the off balance sheet GateWay LISP of R242 million (31 December 2017: R350 million, 30 June 2017: R122 million).
(2) Liberty owns less than 100% of certain entities that make up Liberty Africa. The information is recorded at 100% and is not adjusted for proportional legal ownership.

ASSETS UNDER MANAGEMENT(1)
as at 30 June 2018
                                                    
                                                                                            30 June     30 June  31 December
Rbn (Unaudited)                                                                                2018        2017         2017
Managed by group business units                                                                 684         662          684
STANLIB South Africa                                                                            559         540          556
STANLIB Africa(2)                                                                                50          53           53
LibFin Markets                                                                                   61          58           62
Other internal managers                                                                          14          11           13
Externally managed                                                                               35          26           36
Total assets under management(3)                                                                719         688          720

(1) Includes funds under adminstration.
(2) Liberty owns less than 100% of certain of the entities that make up STANLIB Africa. The information is recorded at 100% and is not adjusted for proportional legal ownership.
(3) Included in total assets under management are the following LISP (June 2018) amounts:

                               STANLIB     Other
 
    Unit trusts listed (Rbn)   managed   managed   Total

    STANLIB                         41        80     121
    Gateway                          3         5       8

ASSET MANAGEMENT NET CASH FLOWS(1)
for the six months ended 30 June 2018  
                                                                                                  12 months
                                                                          30 June     30 June   31 December
Rm (Unaudited)                                                               2018        2017          2017
STANLIB South Africa                                                                                     
Non-money market                                                            8 949       5 705         4 815
Retail                                                                      5 479       3 345         8 249
Institutional                                                               3 470       2 360       (3 434)
Money market                                                                (549)        (59)          (84)
Retail                                                                      (352)     (1 461)       (1 400)
Institutional                                                               (197)       1 402         1 316
  
Net South Africa cash inflows                                               8 400       5 646         4 731
STANLIB Africa                                                                                           
Non-money market                                                          (6 164)       (347)       (1 156)
Retail                                                                        285         437           738
Institutional                                                             (6 449)       (784)       (1 894)
Money market                                                                (830)         791           676
Net Africa cash (outflows)/inflows                                        (6 994)         444         (480)
Net cash inflows from asset management                                      1 406       6 090         4 251

(1) Cash flows exclude intergroup segregated life funds mandates.

SHORT-TERM INSURANCE INDICATORS
for the six months ended 30 June 2018    
    
                                                                                                    Audited
                                                                        Unaudited   Unaudited     12 months
                                                                          30 June     30 June   31 December
Rm                                                                           2018        2017          2017
Net premiums                                                                  634         675         1 297
Liberty Health - medical risk                                                 387         420           777
Liberty Africa Insurance - motor, property, medical and other                 247         255           520
Net claims                                                                  (447)       (426)         (886)
Liberty Health - medical risk                                               (307)       (299)         (637)
Liberty Africa Insurance - motor, property, medical and other               (140)       (127)         (249)
    
Net cash inflows from short-term insurance                                    187        249            411
Unaudited                                                                                                 
Claims loss ratio (%)                                                                                     
Liberty Health                                                                 79          71            82
Liberty Africa Insurance                                                       57          50            48
Combined loss ratio (%)                                                                                   
Liberty Health                                                                112         101           102
Liberty Africa Insurance                                                      111          98            99

CAPITAL COMMITMENTS
as at 30 June 2018
                
                                                                                                    Audited
                                                                        Unaudited   Unaudited     12 months
                                                                          30 June     30 June   31 December
Rm                                                                           2018        2017          2017
Equipment                                                                     471         658           741
Investment and owner-occupied property                                      1 418       1 237         1 432
Committed capital(1)                                                        1 382       1 168         1 071
Total capital commitments                                                   3 271       3 063         3 244
Under contracts                                                               617         546           430
Authorised by the directors but not contracted                              2 654       2 517         2 814

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

The above 2018 capital commitments will be financed by available bank facilities, existing cash resources, internally generated funds and
R442 million (31 December 2017: R452 million, 30 June 2017: R296 million) from non-controlling interests in respect of investment properties.

RETIREMENT BENEFIT OBLIGATIONS
as at 30 June 2018

Unaudited
Post-retirement medical benefit
The group operates an unfunded post-retirement medical aid benefit for permanent employees who joined the group prior to
1 February 1999 and agency staff who joined prior to 1 March 2005. As at 30 June 2018, the Liberty post-retirement medical aid benefit
liability was R480 million (31 December 2017: R495 million).

Defined benefit retirement fund
The group operates a defined benefit pension scheme on behalf of employees. The fund is closed to new membership and is well funded.

RELATED PARTIES
for the six months ended 30 June 2018

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

The following selected significant related party transactions have
occurred in the 30 June 2018 financial period:


1.  Summary of movement in investment in
    ordinary shares held by the group in the
    group's holding company is as follows:

                                           Number       Fair value       Ownership
                                             '000               Rm               %
Standard Bank Group Limited                                                    
Balance at 1 January 2018                  16 180            3 166            1,02
Purchases                                   8 589            1 768                
Sales                                      (4 586)           (952)               
Fair value adjustments                                       (109)               
Balance at 30 June 2018                    20 183            3 873            1,27

1.2 Bancassurance
The bancassurance business agreements with the Standard
Bank  group caters for the manufacture, sale and promotion
of insurance,  investment and health products through the
Standard Bank's  African distribution capability. New business
premium income  in respect of this business in 2018 amounted
to R3 948  million  (2017 full year: R9 129 million). In terms of the
agreements, Liberty's group  subsidiaries pay profit shares to
various Standard Bank operations.  The amounts to be paid
are in most cases dependent on source  and type of business
and are paid along geographical lines. The  total combined
net profit share amounts accrued as payable  to the Standard
Bank group for the six months to 30 June 2018 is  R534 million
(2017 full year: R948 million).

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

1.3 Purchases and sales of financial instruments
As per Liberty's 2017 group annual financial statements, in
the normal course of conducting business, Liberty deposits cash
with  Standard Bank, purchases and sells financial instruments
issued by  Standard Bank and enters into sale and repurchase
agreements and derivative transactions with Standard Bank. These
transactions are at arm's length and are primarily used to support
investment portfolios for policyholders and shareholders' capital.

2. Other related party transaction - Liberty Two Degrees (L2D)
In terms of a proposed transaction between L2D and Liberty
Holdings Limited (LHL), LHL has agreed to sell all of the shares in
STANLIB REIT Fund Managers (RF) (Pty) Ltd to New L2D. In addition
Liberty Group Limited will dispose of R1,2 billion of the property
portfolio to New L2D and the existing put option will be cancelled
for no value. These transactions remain subject to regulatory
approval with the L2D unitholder vote scheduled for 28 August
2018. More detail is available at http://www.liberty2degrees.co.za.

OFFSETTING, ENFORCEABLE MASTER NETTING
ARRANGEMENTS OR SIMILAR AGREEMENTS
as at 30 June 2018
 
The group does not have any financial assets or financial liabilities that are currently subject to offsetting in accordance with IAS 32 Financial
Instruments: Presentation. The table below sets out the nature of agreements and the types of rights relating to items which do not qualify
for offset but that are subject to a master netting arrangement (MNA) or similar agreement.

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

                                                         Not subject         Subject
                                                              to MNA          to MNA
                                                          or similar      or similar       Financial
Rm (Unaudited)                                   Total    agreements      agreements   collateral(1)        Net
30 June 2018                                                                                                 
Assets                                                                                                       
Assets held for trading and for hedging         9 757        (1 727)           8 030         (7 751)        279
Total assets                                    9 757        (1 727)           8 030         (7 751)        279
Liabilities                                                                                                   
Liabilities held for trading and for hedging    8 591          (147)           8 444         (7 751)        693
Repurchase agreements liabilities               6 404                          6 404         (6 404)          
Collateral deposits payable                     4 857                          4 857         (4 857)          
Total liabilities                              19 852          (147)          19 705        (19 012)        693

                                                         Not subject         Subject
                                                              to MNA          to MNA
                                                          or similar      or similar       Financial
Rm (Unaudited)                                   Total    agreements      agreements   collateral(1)        Net
30 June 2017                                                                                                  
Assets                                                                                                        
Assets held for trading and for hedging         9 459          (934)          8 525          (6 970)      1 555
Total assets                                    9 459          (934)          8 525          (6 970)      1 555
Liabilities                                                                                                   
Liabilities held for trading and for hedging    7 428           (26)          7 402          (6 970)        432
Repurchase agreements liabilities               7 840                         7 840          (7 840)          
Collateral deposits payable                     6 122                         6 122          (6 122)          
Total liabilities                              21 390           (26)         21 364         (20 932)        432

                                                         Not subject        Subject
                                                              to MNA         to MNA
                                                          or similar     or similar        Financial
Rm (Audited)                                     Total    agreements     agreements    collateral(1)        Net
31 December 2017                                                                                             
Assets                                                                                                       
Assets held for trading and for hedging         7 871        (1 356)          6 515          (6 016)        499
Total assets                                    7 871        (1 356)          6 515          (6 016)        499
Liabilities                                                                                                   
Liabilities held for trading and for hedging    6 311           (56)          6 255          (6 016)        239
Repurchase agreements liabilities               4 671                         4 671          (4 671)          
Collateral deposits payable                     4 426                         4 426          (4 426)          
Total liabilities                              15 408           (56)         15 352         (15 113)        239

(1) Financial collateral relates to these instruments that are subject to MNA or similar agreements.

ACCOUNTING CLASSIFICATIONS OF FINANCIAL
INSTRUMENTS UNDER IFRS 9
as at 30 June 2018
Opening transition adjustment as at 1 January 2018

                                                                                        As previously                       As classified
                                                                                             reported                        under IFRS 9
                                                                                         under IAS 39                       at fair value
                                                                                         at amortised        Transition    through profit
Rm (Unaudited)                                                                                   cost        adjustment           or loss
Loan receivables                                                                                  894              (63)               831
Financial liabilities                                                                         (5 581)             (105)           (5 686)
Gross transition adjustment                                                                                       (168)                 
Taxation                                                                                                             47                  
Net transition adjustment                                                                                         (121)                 


as at 30 June 2018              Fair value through profit or loss
                                                             Fair value                                                         Total per
                                                                through                                           Other         statement
                               Held for     Designated   profit or loss     Total fair      Amortised       measurement      of financial
Rm (Unaudited)                  trading  at fair value        (default)          value           cost             basis          position
Financial assets                                                                                                                         
Interests in joint     
ventures                                                          1 316          1 316                               66             1 382
Interests in associates                                          13 862         13 862                                             13 862
Financial investments                            2 646          331 777        334 423                                            334 423
Loan receivables                                                    803            803            379                               1 182
Assets held for hedging     
and for trading                   9 757                                          9 757                                              9 757
Repurchase    
agreements, scrip and       
collateral assets                                               13 075          13 075                                             13 075
Prepayments, insurance       
and other receivables                                             4 914          4 914            244             1 802             6 960
Cash and cash       
equivalents                                                       6 396          6 396          3 580                               9 976
Total financial assets            9 757          2 646          372 143        384 546          4 203             1 868           390 617
Financial liabilities                                                                                                                   
Financial liabilities under      
investment contracts                           101 715                         101 715                                            101 715
Third-party financial        
liabilities arising on        
consolidation of mutual        
funds                                           41 832                          41 832                                             41 832
Financial liabilities                            5 387                           5 387                                              5 387
Liabilities held for trading       
and for hedging                   8 591                                          8 591                                              8 591
Repurchase agreements       
liabilities and collateral       
deposits payable                                11 261                          11 261                                             11 261
Insurance and other      
payables                                         4 644                           4 644            634             7 059            12 337
Total financial      
liabilities                       8 591        164 839                         173 430            634             7 059           181 123
   
The table above reflects the classification of the group's financial assets and financial liabilities as at 30 June 2018 split into the
IFRS 9 measurement categories. The financial assets categories have been determined based on the contractual cash flow characteristics
and business model of the entity.

Sponsor:
Merrill Lynch South Africa (Pty) Limited

Date: 02/08/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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