STANDARD BANK GROUP LIMITED - Unaudited condensed consolidated interim results and dividend announcement for the six months ended 30 June 2018

Release Date: 16/08/2018 08:00
 
Wrap Text
Unaudited condensed consolidated interim results and dividend announcement for the six months ended 30 June 2018

Standard Bank Group Limited      
Registration number 1969/017128/06
Incorporated in the Republic of South Africa
JSE share code: SBK  ISIN: ZAE000109815
NSX share code: SNB  ISIN: ZAE000109815
JSE bond code: SBKI


Unaudited condensed consolidated interim results and dividend announcement 
for the six months ended 30 June 2018


The Standard Bank Group Limited's (the group) condensed consolidated interim results, including the statement of
financial position, income statement, statement of other comprehensive income, statement of changes in equity and 
statement of cash flows, for the six months ended 30 June 2018 (results) are prepared in accordance with the requirements 
of the JSE Limited (JSE) Listings Requirements, the requirements of International Financial Reporting Standards (IFRS) 
and its interpretations as adopted by the International Accounting Standards Board, the South African Institute of 
Chartered Accountants' (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee and Financial 
Pronouncements as issued by the Financial Reporting Standards Council, the presentation requirements of IAS 34 Interim 
Financial Reporting (IAS 34) (excluding paragraph 16 A(j) as permitted by the JSE Listing Requirements) and the 
requirements of the South African Companies Act, 71 of 2008 applicable to condensed financial statements. 

The group's results are prepared in accordance with the going concern principle under the historical cost basis as
modified by the fair value accounting of certain assets and liabilities where required or permitted by IFRS. This report 
is presented in South African rand, which is the presentation currency of the group. All amounts are stated in millions 
of rand (Rm), unless indicated otherwise. 1H18 refers to the first half year results for 2018. 1H17 refers to the first
half year results for 2017. FY17 refers to the full year results for 2017. Change % reflects 1H18 change on 1H17. All
amounts relate to the group's results, unless otherwise specified.

The 1H18 results, including comparatives for 1H17, where applicable, have not been audited or independently reviewed
by the group's external auditors. The group's FY17 financial information has been correctly extracted from the underlying
audited consolidated annual financial statements for the year ended 31 December 2017, unless otherwise specified. Refer
to the restatements section for restatements to financial information disclosed for 1H17 and FY17 as applicable. 

The accounting policies applied in the preparation of these unaudited condensed consolidated interim results are in
terms of IFRS, including IFRS 9 Financial Instruments (IFRS 9), which is effective for the group from 1 January 2018.
These accounting policies are consistent with the accounting policies applied in the preparation of the group's previous
consolidated annual financial statements with the exception of changes referred to in the accounting policy elections
section. 

The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. Therefore 
comparability will not be achieved by the fact that the comparative financial information has been prepared on an 
IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) basis. The group did however align certain
disclosures within these results to provide comparable data. The impact of adopting IFRS 9 has been applied 
retrospectively with an adjustment to the group's opening 1 January 2018 reserves. The application of IAS 39 for the 
group's 2017 financial year was unaffected by the application of IFRS 9. Refer to the IFRS 9 Financial Instruments 
section and the group's IFRS 9 transition report (transition report), available at www.standardbank.com/reporting, 
for more details on IFRS 9.

The board of directors (the board) of the group take full responsibility for the preparation of this report. 
The preparation of the group's results was supervised by the group financial director, Arno Daehnke BSc, MSc, 
PhD, MBA, AMP.

The results were made publicly available on 16 August 2018.

This report contains pro forma constant currency financial information. Refer to the pro forma constant currency
financial information section for further detail. 

In terms of the JSE's Listings Requirements, the group no longer posts a physical copy of this announcement to its
shareholders. Investors are referred to www.standardbank.com/reporting where a detailed analysis of the group's 
financial results, including an income statement and a statement of financial position for The Standard Bank of 
South Africa Limited (SBSA), can be found. 

Shareholders are reminded that should they wish to make use of the group's electronic communication notification
system to receive all shareholder entitled communication electronically as opposed to delivery through physical mail 
and have not already done so, this option can still be elected by advising the group's transfer secretaries at the 
following email address ecomms@computershare.co.za or fax to +27 11 688 5248 or contact the call centre on 
+27 861 100 933. Other related queries can be sent to electroniccommunication@standardbank.co.za.

Highlights
- Headline earnings up 5% to R12 663 million
  1H17: R12 111 million
- Headline earnings per share up 5% to 794 cents
  1H17: 756 cents
- Dividend per share up 8% to 430 cents
  1H17: 400 cents
- Return on equity (ROE) up to 16.8%
  1H17: 16.1%
- Credit loss ratio down to 0.70%
  1H17: 0.96%1
- Jaws down to (1.8%)
  1H17: 1.0%2
- Cost-to-income ratio up to 57.1%  
  1H17: 56.1%2
- Common equity tier 1 ratio3 up to 13.8%
  1H17: 13.7%
1 Based on IAS 39.
2 Refer to the restatements section for details on the restatements affecting these ratios.
3 The 1H18 ratio is reported after applying the IFRS 9 phase-in transition adjustment allowed by the South African
  Reserve Bank (the SARB). For further details regarding the ratio assuming the no phase-in provision (fully 
  loaded ratio) refer to the other reportable items section for more detail.


Overview of financial results 
Group results
For the period ended 30 June 2018 (1H18) group delivered headline earnings of R12.7 billion, up 5% on the prior period
(1H17), and return on equity improved to 16.8% from 16.1% in 1H17. The group's capital position remained strong, with a
common equity tier 1 (CET1) ratio of 13.8%. Accordingly, an interim dividend of 430 cents per share has been declared,
an increase of 8% on the prior period. 

Banking activities headline earnings grew 6% to R11.7 billion driven by strong growth in non-interest revenue (NIR)
and lower credit impairment charges, in Africa Regions in particular. Banking activities ROE improved to 17.5% from 
16.8% in 1H17. 

The stronger South African Rand, on average, adversely impacted the group's reported results. On a constant currency
basis, group headline earnings increased by 8% boosted by Africa Regions which grew earnings by 32%. Africa Regions'
contribution to banking headline earnings increased to 32% from 29% in 1H17. The top five contributors to Africa 
Regions' headline earnings were Angola, Ghana, Mozambique, Nigeria and Uganda. 

Operating environment
Global growth has been less synchronised than previously expected. Key drivers were escalating trade tensions, rising
oil prices and higher US yields. Global risk aversion led to increased volatility and emerging market (EM) currency
pressures. 

In many of the sub-Saharan African countries in which we operate, inflation continued to ease, interest rates declined
and exchange rates were relatively stable. One exception was Angola, where the managed devaluation of the currency
resulted in a 23% decline in average AOA/USD period on period. 

In South Africa (SA), on average, the Rand was stronger, rates lower and inflation surprised on the downside. Consumer
and business confidence improved but have not necessarily translated into higher spending or fixed investment. The VAT
increase, tax bracket creep and higher fuel prices have all negatively impacted discretionary spending capacity. 

IFRS 9 became effective on 1 January 2018 and the group provided a transition report with its first quarter results
for 2018. The day one impact of implementing IFRS 9's expected credit loss impairment requirements included a 31% 
increase in balance sheet impairments from R22.4 billion to R29.4 billion, a R6.6 billion decline in group reserves 
and a 70 bps decline in the group's CET1 ratio on a fully loaded basis. The CET1 impact will be phased in over 
three years.

Revenue
Banking activities achieved revenue growth of 4%, with strong NIR growth dampened by slower net interest income (NII). 

NII was broadly flat driven by low loan growth and declining net interest margin (NIM). NIM declined from 460 bps to
450 bps as the impact of declines in interest rates in SA and various African countries and pressure on pricing was
partially offset by retail deposits growing faster than wholesale, the Africa Regions' portfolio growing faster than 
SA  and lower funding costs. In addition, the impact of the earlier suspension of interest in accordance with IFRS 9 
was negative 4 bps on NIM and approximately R280 million on NII. On a like-for-like basis, adjusting for the impact 
of interest in suspense (IIS), NII would have grown 2% compared to reported growth of 1%.

NIR was up 8% on 1H17, with the largest component, net fee and commission revenue, up 6%. Trading revenue recovered to
grow at 12% and other revenue by 9%.

Growth in net fee and commission revenue was the result of volume-driven increases in card-based commissions,
electronic banking fees and foreign currency service fees. Customers are increasingly adopting and transacting on our 
digital platforms as well as our non-cash, digital products, e.g. Instant Money and SnapScan. Strong growth in revenue 
was dampened by higher card merchant fees and UCount reward programme costs. 

Reported trading revenue grew 12%, while trading revenue on a constant currency basis grew 17%. On a constant currency
basis fixed income and currency trading revenue grew 8%, driven by strong client activity. Equities revenue increased
by R475 million, of which approximately 50% was trade related and 50% relates to the elimination, in terms of IFRS, of
the impact of Standard Bank shares held by the group to facilitate client trading activities.

Credit impairment charges
Credit impairment charges were 22% lower than in the prior period, which combined with low growth in loans led to a
group credit loss ratio of 70 bps, down from 96 bps in 1H17. In Personal & Business Banking (PBB), impairment charges
declined 14% largely due to the earlier suspension of interest in accordance with IFRS 9 in SA and lower charges in
Africa Regions. In SA, excluding the impact of IFRS 9, the credit charge would have been broadly flat period on period.
Corporate & Investment Banking's (CIB) impairment charges declined 70%, driven by Africa Regions recoveries. CIB charges 
are likely to normalise in the second half of 2018 (2H18).

Operating expenses
Operating expenses grew 6% period on period. The cost-to-income ratio for the period was 57.1%, an increase on 56.1%
in the prior period.

Staff costs were up 6%, driven by annual salary increases and higher deferred incentive charges (linked to the higher
Standard Bank share price). Headcount declined overall, with decreases in PBB and CIB partially offset by additional
heads in IT, Compliance, Marketing and Risk Management functions. 

Other operating expenses increased by 5%. IT costs increased 13% on the back of higher licensing fees, infrastructure
spend and security costs. IT amortisation only grew 3% period on period; this is expected to accelerate in 2H18 as key
projects completed in 1H18 start to be amortised. Tight cost control across various operational areas, for example
premises, communication and stationary, provided the group with scope to invest in our core customer value proposition. 
During the period the group incurred additional spend in SA on professional fees related to the PBB customer journey 
project and on marketing to build on brand awareness both in SA and across Africa Regions. Both projects started in 
the second half of 2017 and therefore the impact is expected to be less marked over the full year. 

Loans and advances
Gross loans and advances to customers grew 4% period on period, of which PBB's advances to customers grew 6% and CIB's
by 1%. 

Within PBB, mortgage lending grew 3%. In SA, new applications received were down 4% reflective of the low level of
activity in the SA housing market. Despite the subdued environment, PBB SA's new business disbursements totalled 
R19.1 billion in the period. Vehicle and asset finance (VAF) lending grew 5%, driven primarily by strong new business 
volumes in SA. A 31% increase in new accounts, albeit at lower average values, led to a 22% increase in disbursements 
to R18.4 billion. The increases are a validation of the investments made in people, processes and structures to deliver 
a better customer experience. Credit card balances outstanding increased by 4% as customers utilised limits and 
transacted more. Other personal unsecured lending grew by 4%. Business lending grew by 16%, with PBB Africa Regions 
showing particularly strong growth at 21% on a constant currency basis. 

In CIB loans and advances supporting client activities showed growth in both Investment Banking of 6% and
Transactional Products and Services of 12%. The overall growth rate of customer loans is masked by reduced short-term 
lending balances in Global Markets where surplus liquidity is placed mostly with non-bank financial institutions. 
Increased client lending requirements during the period therefore led to a switch in our utilisation of liquidity 
from Global Markets placements to client lending in Investment Banking and Transactional Products and Services.

Funding and liquidity
The group's liquidity position remained strong with a second quarter average Basel III liquidity coverage ratio (LCR)
of 121.3%, exceeding the minimum phased-in Basel III LCR requirement of 90%. The group's net stable funding ratio was
123.1% in excess of the minimum Basel III requirement of 100%.

The group successfully increased its longer term funding during 1H18, raising R13.9 billion through a combination of
negotiable certificates of deposit, senior debt and syndicated loans. 

Deposits and debt funding from customers grew 4% period on period. The group's retail deposits from PBB customers
increased 9%. In South Africa, retail-priced deposits grew 9%, in Africa Regions 16% and in International 12%. 
CIB's SA deposits declined 2%, whilst in Africa Regions customer deposits grew by 5% (9% in constant currency).

Capital management
The group allocates available capital pursuant to our strategic objectives and subject to appropriate return hurdles.
In 1H18 the group completed the acquisition of an additional 11% in Stanbic IBTC Holdings in Nigeria, increasing the
group's shareholding to 64% and negatively impacting the group CET1 ratio by approximately 20 bps. In early July 2018, 
the group completed the acquisition of an additional 8% in Stanbic Holdings in Kenya, increasing the group's shareholding 
to 68%. The impact of the transaction in Kenya on group CET1 in 2H18 will be negligible. Including the impact of the
Nigeria transaction, the group maintained strong capital adequacy ratios. On an IFRS 9 phased-in basis, the CET1 ratio 
was 13.8% (1H17: 13.7%) and the total capital adequacy ratio was 16.2% (1H17: 16.2%). 

Gross loans and advances to customers1                                                                                      
                                            CCY2        Change               1H18               1H17               FY17    
                                               %             %                 Rm                 Rm                 Rm
Personal & Business Banking                    5             6            632 088            598 422            605 187    
Mortgage loans                                 3             3            353 357            342 128            346 518    
Vehicle and asset finance                      5             5             85 327             80 889             81 640    
Card debtors                                   4             4             33 336             32 119             32 268    
Other loans and advances                      11            12            160 068            143 286            144 761    
Corporate & Investment Banking                 1             1            364 148            359 486            352 025    
Global markets                               (48)          (48)            17 653             33 843             21 648    
Investment banking                             5             6            308 526            291 621            299 357    
Transactional products and services           11            12             37 955             33 840             30 859    
Real estate and PIM                          (92)          (92)                14                182                161    
Central and other                             (6)           (9)            (3 379)            (3 730)            (4 676)   
Gross loans and advances to customers          4             4            992 857            954 178            952 536   
1 The above loans and advances disclosures have been presented at a segment level for customers only, whereas the
  other loans and advances disclosures within these results are disclosed on a group consolidated view, unless stated
  otherwise.
2 Constant currency change.

Deposits from customers                                                                                                     
                                             CCY        Change               1H18               1H17               FY17    
                                               %             %                 Rm                 Rm                 Rm    
Personal & Business Banking                    9            11            563 592            509 276            535 461    
Retail priced deposits                         7             9            448 553            412 022            426 484    
Wholesale priced deposits                     18            18            115 039             97 254            108 977    
Corporate & Investment Banking                (1)           (1)           615 986            624 283            635 775    
Central and other                              -             -             (4 935)            (4 945)            (4 671)   
Deposits from customers                        4             4          1 174 643          1 128 614          1 166 565    
Retailed priced deposits                       7             9            448 553            412 022            426 484    
Wholesale priced deposits                      2             1            726 090            716 592            740 081    
                                                                                                                              

Headline earnings by business unit                                                                                         
                                             CCY        Change               1H18               1H17               FY17    
                                               %             %                 Rm                 Rm                 Rm    
                                                                                                                           
Personal & Business Banking                    8             8              6 641              6 133             14 058    
Corporate & Investment Banking                13             8              5 709              5 310             11 438    
Central and other                             43            59               (676)              (426)            (1 228)   
Banking activities                             9             6             11 674             11 017             24 268    
Other banking interests                      (19)          (38)               132                212                567    
Liberty                                       (3)           (3)               857                882              1 435    
Standard Bank Group                            8             5             12 663             12 111             26 270    
                                                      

Overview of business unit performance
Personal & Business Banking
PBB's headline earnings of R6.6 billion were 8% higher than the prior year, driven by customer-led growth in income,
responsible cost management and lower credit impairment charges, most notably in Africa Regions. An ROE of 19.4% was
achieved, a marked improvement on the 17.8% recorded in the prior period.

PBB SA delivered a resilient performance in a sluggish operating environment, with headline earnings of R6.0 billion
up 5%. PBB SA's focus remains on delivering a consistently excellent customer experience, seamlessly across all touch
points, with products relevant to their individual needs. This has necessitated continued investment in upskilling and
empowering our customer facing staff and radically redesigning and digitising processes. Ensuring the safety of customers'
assets in a digital era is also an integral part of the overall customer experience, and investments made in digital
fraud prevention yielded a pleasing 81% reduction in the number of digital fraud cases reported. Together, these investments
have resulted in an overall increase in customer satisfaction scores and the number of active customers was maintained
from FY17 at 8.1 million customers. This was supported by particularly pleasing growth in the larger middle market
segment. Customers continued to indicate their preference for digital, rather than physical channels, with the number 
of active mobile banking users growing by 7%, and the number of transactions performed on this channel growing strongly 
by 58%. 

Total income grew by 4%, supported by increases in target customer segments. Despite increased spending on marketing
campaigns and projects to develop solutions, which better service our customers, operating expense growth was contained
at 6%. Credit impairment charges declined by 8% leading to a lower credit loss ratio of 122 bps (1H17: 137 bps). This 
was mainly attributable to IFRS 9 as discussed previously.

PBB Africa Regions was impacted by the stronger Rand on average in 1H18 compared to 1H17. To reflect the underlying
trends in this business, the commentary that follows refers to the constant currency growth rates of PBB Africa Regions.

Headline earnings from PBB Africa Regions improved to R201 million from R91 million in the prior period. Gross
customer loans expanded 15%, particularly in personal unsecured and business lending, and deposits from customers grew 
15%, with pleasing balance growth of 18% in current and savings accounts. PBB Africa Regions' result was underpinned by 
customer acquisition in key markets, with a focus on delivering digital solutions, and strong trade-related revenue in the
Business Banking segment. In 1H18 the total number of active customers grew 4% to 5 million customers, driven by strong
growth in Kenya, Ghana, Mozambique, Nigeria, Swaziland and Zimbabwe. Mobile and internet banking are available in all 14
countries in which PBB operates in Africa Regions. The number of transactions performed by customers on digital platforms
far outstripped the number performed in physical channels. Approximately 24 million transactions were performed on mobile
banking, up from approximately 11 million in 1H17. On the other hand, transactions performed in physical channels
declined by 8%.

NII grew 9%, benefiting from balance growth and improved pricing, despite the negative endowment impact of lower
average interest rates in Nigeria, Mozambique, Malawi and Uganda. NIR grew 19%, driven by higher transactional volumes 
and the increase in the account base, coupled with strong trade-related revenue growth. PBB Africa Regions contributes
approximately 47% of the Africa Regions legal entities' total income. The credit loss ratio decreased to 145 bps from 
264 bps in the prior year, driven predominantly by lower charges in Nigeria and Malawi. Assets under management in the 
Wealth business in Nigeria grew over the period, and we continued to focus on diversifying and growing the wealth 
business in Africa Regions, specifically the short-term and long-term brokerage businesses.

Wealth International grew headline earnings by 31%. USD, GBP and EUR denominated customer deposit balances in our
operations in the Isle of Man and Jersey grew to GBP5.1 billion (1H17: GBP4.9 billion). Margins expanded following 
interest rate increases in the US and UK. 

Corporate & Investment Banking
CIB's headline earnings of R5.7 billion were up 8% on the prior period, and 13% on a constant currency basis. CIB's
strategic focus on developing proactive client partnerships that deliver relevant solutions, across sectors, regions and
products, to drive Africa's growth delivers diverse revenue streams and supports the sustainability of the franchise.
Client revenues grew 9% (14% on a constant currency basis), demonstrating a strong and diversified franchise. CIB recorded
strong performances from multinational corporates and large domestic clients in the Financial Institutions, Industrials
and Consumer sectors, with an encouraging turn around in the Power & Infrastructure, Oil & Gas and Mining & Metals
sectors. Reported revenue growth was slower at 4%, mainly as a result of the non-recurrence of trading revenues associated
with the revaluation of the Nigeria Naira in the prior year. While cost growth was relatively well contained at 5%, when
combined with low revenue growth it resulted in negative jaws of 1.5%. The credit loss ratio to customers improved
materially to 3 bps due to recoveries of previously impaired loans. CIB delivered an ROE of 20.7%, slightly lower than 
the 21.3% recorded in 1H17.

Due to the impact of currency on CIB's results, the commentary that follows refers to the constant currency growth
rates. Revenues in the CIB SA franchise grew by 8%, and in the Africa Regions franchise by 10%. The West Africa franchise
grew revenues by more than 29%, reflecting growth in client deposits and transactional accounts. South & Central Africa
continued to be a steady performer, delivering revenue growth of 9%. Following focused attention on client acquisition in
East Africa, this region delivered strong revenue growth of 17%.

Transactional Products and Services delivered a subdued set of results, with headline earnings down 2% on the prior
period. Revenue growth of 6% was muted, dampened by margin compression in Nigeria and Angola. Credit impairments 
increased significantly following the recognition of impairments in the Construction sector in South Africa, to 
take account of economic strain. 

Global Markets delivered a stronger performance compared to 1H17, growing headline earnings by 8% to R2.1 billion.
Equity and forex trading volumes in South Africa were low. However, fixed income trading improved as a result of lower
interest rates and improved market sentiment. The more flexible forex regime in Nigeria continued to assist forex flows 
in Nigeria, and the managed devaluation of the Kwanza benefited forex trading in Angola.

Investment Banking revenues were up 9%, reflecting fees earned on a number of landmark transactions and client
activity in the Energy and Infrastructure sectors. Competition for high quality clients continued to place pressure on 
pricing and led to margin compression. As a result, NII was lower than the prior period. Credit impairments improved
significantly following the recovery of previously impaired loans in the Africa Regions, despite recognising impairments 
to take account of stress in the Consumer sector in South Africa.

Central and other 
This segment includes costs associated with corporate functions, as well as the group's treasury and capital
requirements and central hedging activities. Capital not allocated to the business units is held at the centre and a 
return is generated on that capital. The day one IFRS 9 reserve adjustment resulted in a R6.6 billion decline in that 
capital and a concomitant decline in the returns earned on that capital. In 1H18, the segment recorded a loss of 
R676 million. Excluding the IFRS 9 impact, the loss would have been R516 million.

Other banking interests
Other banking interests recorded headline earnings of R132 million, lower than the R212 million recorded in 1H17. 
The decline was driven by a disappointing performance in ICBC Standard Bank Plc (ICBCS). 

ICBCS's revenue was negatively impacted by lower client flows and margins, which when combined with its fixed cost
base, resulted in a loss for the period. The group's 40% share thereof equated to a loss of R70 million. ICBCS will 
require additional capital to grow its balance sheet and become profitable on a sustainable basis. The group's 40% 
contribution will equate to approximately $84 million and is expected to be provided in late 2018 or early 2019. 

The headline earnings contribution from the group's 20% stake in ICBC Argentina grew 23% to R202 million, off a low
base in 1H17. The Peso devaluation diluted a particularly strong local currency performance. On a constant currency basis,
earnings were up 74%. 

Liberty
The financial results reported are the consolidated results of the group's 55.6% investment in Liberty, adjusted for
SBK shares held by Liberty for the benefit of Liberty policyholders which are deemed to be treasury shares in the 
group's consolidated accounts.

Liberty's normalised headline earnings for the period improved by 5% to R1.3 billion, supported by higher earnings
from SA retail insurance and asset management. Liberty's IFRS headline earnings, after the adjustments for the impact 
of the BEE preference share income and the Liberty Two Degrees listed Real Estate Investment Trust accounting mismatch,
declined 1% to R1.5 billion. Investors are referred to the full Liberty announcement dated 2 August 2018 for further 
detail. 

Headline earnings attributable to the group, adjusted up by R12 million for the impact of the deemed treasury shares,
were R857 million, 3% lower than in 1H17.

Prospects
Whilst the global growth outlook for 2018 and 2019 is unchanged at 3.9%, the underlying growth is expected to be less
even. Relative to expectations earlier in the year, the International Monetary Fund is expecting the US to grow slightly
faster and UK, Europe and EM slightly slower. The broadly supportive EM capital inflows seen in recent periods could
reverse if US monetary tightening is faster than expected. This would negatively impact EM currencies and capital markets.

Sub-Saharan Africa's recovery is expected to continue on the back of higher commodity prices. Growth is estimated to
increase from 2.8% in 2017 to 3.4% in 2018 and rise further to 3.8% in 2019. Within our portfolio, we expect the macros
in the West region to continue to improve, supported by higher average oil prices and the East region to continue to
deliver GDP growth of 5 to 6%. More specifically, Kenya's credit growth could experience a recovery if the regulatory 
caps and floors, imposed in 2016, are amended or lifted. The South & Central region performance will be impacted by 
SA growth in 2H18.

In South Africa, while consumer confidence has improved, delays in resolving key policy issues remain an obstacle to 
business confidence, fixed investment and growth. Inflation is expected to remain inside the 3% to 6% target range, 
supporting a flat interest rate outlook for the rest of the year. The group has appetite to grow lending judiciously 
in South Africa. There is no doubt competitive pressures will continue to increase, however, we will fiercely protect 
our existing customer franchise and grow by partnering with third parties to build new, innovative offerings and 
revenue streams. 

Our strategy is unchanged and actions being taken are positioning us to deliver contextually-relevant offerings to our
customers, to compete effectively against both incumbents and new entrants and to grow our franchise in partnership
with our clients, employees and business partners, in a sustainable way.

With revenue pressures expected to continue, operating expenses will be a focus area for 2H18 to ensure better full
year jaws. More broadly, we will continue to balance growth, resilience and returns to deliver on our medium-term
objectives of sustainable growth in earnings and delivering an ROE in our 18% to 20% target range. 

The 1H18 results, including comparatives for 1H17, where applicable, together with any forward looking information
have not been audited or independently reviewed by the group's external auditors.

Sim Tshabalala
Group chief executive

Thulani Gcabashe
Chairman

15 August 2018


Declaration of dividends
Shareholders of Standard Bank Group Limited (the company) are advised of the following dividend declarations out 
of income reserves in respect of ordinary shares and preference shares.

Ordinary shares
Ordinary shareholders are advised that the board has resolved to declare an interim gross cash dividend No. 98 of 
430 cents per ordinary share (the cash dividend) to ordinary shareholders recorded in the register of the company 
at the close of business on Friday, 14 September 2018. The last day to trade to participate in the dividend is 
Tuesday, 11 September 2018. Ordinary shares will commence trading ex dividend from Wednesday, 12 September 2018.   

The salient dates and times for the cash dividend are set out in the table that follows.

Ordinary share certificates may not be dematerialised or rematerialised between Wednesday, 12 September 2018, 
and Friday, 14 September 2018, both days inclusive. Ordinary shareholders who hold dematerialised shares 
will have their accounts at their Central Securities Depository Participant (CSDP) or broker credited on 
Monday, 17 September 2018.

Where applicable, dividends in respect of certificated shares will be transferred electronically to shareholders' 
bank accounts on the payment date. In the absence of specific mandates, dividend cheques will be posted to 
shareholders.

Preference shares
Preference shareholders are advised that the board has resolved to declare the following interim dividends:
- 6.5% first cumulative preference shares (first preference shares) dividend No. 98 of  3.25 cents (gross) per first
  preference share, payable on Monday, 10 September 2018, to holders of first preference shares recorded in the books 
  of the company at the close of business on the record date, Friday, 7 September 2018. The last day to trade to 
  participate in the dividend is Tuesday, 4 September 2018. First preference shares will commence trading ex 
  dividend from Wednesday, 5 September 2018.
- Non-redeemable, non-cumulative, non-participating preference shares (second preference shares) dividend No. 28 of
  386.43 cents (gross) per second preference share, payable on Monday, 10 September 2018, to holders of second 
  preference shares recorded in the books of the company at the close of business on the record date, 
  Friday, 7 September 2018. The last day to trade to participate in the dividend is Tuesday, 4 September 2018. 
  Second preference shares will commence trading ex dividend from Wednesday, 5 September 2018.

The salient dates and times for the preference share dividend are set out in the table that follows.

Preference share certificates (first and second) may not be dematerialised or rematerialised between Wednesday, 
5 September 2018, and Friday, 7 September 2018, both days inclusive. Preference shareholders (first and second) who 
hold dematerialised shares will have their accounts at their CSDP or broker credited on Monday, 10 September 2018.

Where applicable, dividends in respect of certificated shares will be transferred electronically to shareholders' bank
accounts on the payment date. In the absence of specific mandates, dividend cheques will be posted to shareholders.

The relevant dates for the payment of dividends are as follows:
                                                                                                       Non-redeemable,     
                                                                                                       non-cumulative,     
                                                                          6.5% cumulative            non-participating     
                                                     Ordinary           preference shares            preference shares     
                                                       shares   (First preference shares)   (Second preference shares)   
JSE Limited                                                                                                               
Share code                                                SBK                        SBKP                         SBPP    
ISIN                                             ZAE000109815                ZAE000038881                 ZAE000056339    
Namibian Stock Exchange (NSX)                                                                                             
Share code                                                SNB                                                             
ISIN                                             ZAE000109815                                                             
Dividend number                                            98                          98                           28    
Dividend per share (cents)                                430                        3.25                       386.43    
Last day to trade in order to be                                                            
eligible for the cash dividend                       Tuesday,                    Tuesday,                     Tuesday,     
                                            11 September 2018            4 September 2018             4 September 2018    
Shares trade ex the cash dividend                  Wednesday,                  Wednesday,                   Wednesday,     
                                            12 September 2018            5 September 2018             5 September 2018    
Record date in respect of                                                                   
the cash dividend                                     Friday,                     Friday,                      Friday,     
                                            14 September 2018            7 September 2018             7 September 2018    
Dividend cheques posted and CSDP/broker                                                     
account credited/updated (payment date)               Monday,                     Monday,                      Monday,    
                                            17 September 2018           10 September 2018            10 September 2018    
The above dates are subject to change. Any changes will be released on the Stock Exchange News Service (SENS) and
published in the South African and Namibian press.

Tax implications
The cash dividend received under the ordinary shares and the preference shares is likely to have tax implications for
both resident and non-resident ordinary and preference shareholders. Such shareholders are therefore encouraged to
consult their professional tax advisers.

In terms of the South African Income Tax Act, 58 of 1962, the cash dividend will, unless exempt, be subject to
dividends tax that was introduced with effect from 1 April 2012. South African resident ordinary and preference 
shareholders that are not exempt from dividends tax, will be subject to dividends tax at a rate of 20% of the cash 
dividend, and this amount will be withheld from the cash dividend with the result that they will receive a net amount 
of 344 cents per ordinary share, 2.60 cents per first preference share and 309.144 cents per second preference share. 
Non-resident ordinary and preference shareholders may be subject to dividends tax at a rate of less than 20% depending 
on their country of residence and the applicability of any Double Tax Treaty between South Africa and their country 
of residence.

The issued share capital of the company, as at the date of declaration, is as follows:
- 1 618 059 594 ordinary shares
- 8 000 000 first preference shares
- 52 982 248 second preference shares.

The company's tax reference number is 9800/211/71/7 and registration number is 1969/017128/06.

Financial statistics
for the six months ended 30 June 2018 
                                                                                             1H17                 FY17    
                                                                        1H18            Unaudited              Audited    
                                                                   Unaudited             Restated             Restated    
Number of ordinary shares in issue, net                       
of deemed treasury shares (000's)                                                 
End of period                                                      1 595 280            1 602 748            1 597 371    
Weighted average                                                   1 594 993            1 603 040            1 601 855    
Diluted weighted average                                           1 615 112            1 622 574            1 621 921    
Cents per ordinary share                                                                                                  
Basic earnings                                                         796.6                769.8              1 637.8    
Diluted earnings                                                       786.7                760.5              1 617.5    
Headline earnings                                                      793.9                755.5              1 640.0    
Diluted headline earnings                                              784.0                746.4              1 619.7    
Dividend                                                                 430                  400                  910    
Net asset value                                                        9 768                9 554                9 830    
Financial performance (%)                                                                                                 
ROE                                                                     16.8                 16.1                 17.1    
Net interest margin on banking activities                               4.50                 4.60                 4.74    
Credit loss ratio on banking activities                                 0.70                 0.96                 0.86    
Cost-to-income ratio on banking activities1                             57.1                 56.1                 55.5    
Jaws on banking activities1                                             (1.8)                 1.0                  1.1    
Capital adequacy ratios (%)2                                                                                              
CET1 capital adequacy ratio                                             13.8                 13.7                 13.5    
Tier 1 capital adequacy ratio                                           14.4                 14.2                 14.2    
Total capital adequacy ratio                                            16.2                 16.2                 16.0    
1 Refer to the restatements section for details on the restatements affecting this ratio.
2 The 1H18 ratios are reported after applying the IFRS 9 phase-in transition adjustment allowed by the SARB, for
  further details regarding the ratio assuming the no phase-in provision (fully loaded ratio) please refer to the 
  other reportable items section.


Condensed consolidated statement of financial position
as at 30 June 2018 
                                                                                             1H17                         
                                                                        1H18            Unaudited                 FY17    
                                                                   Unaudited             Restated              Audited    
                                                                          Rm                   Rm                   Rm    
Assets                                                                                                                    
Cash and balances with central banks                                  72 104               70 949               75 310    
Derivative assets1                                                    71 205               51 252               75 610    
Trading assets                                                       165 230              126 565              160 894    
Pledged assets                                                        22 371               17 447               20 785    
Financial investments                                                531 883              519 084              533 314    
Current and deferred tax assets                                        4 572                2 264                2 109    
Loans and advances                                                 1 064 680            1 043 398            1 048 027    
Policyholders' assets                                                  7 159                7 689                7 484    
Other assets                                                          25 274               30 547               22 996    
Interest in associates and joint ventures                              9 961                9 712                9 665    
Investment property                                                   32 185               31 508               32 226    
Property and equipment                                                16 354               15 852               16 179    
Goodwill and other intangible assets                                  23 954               23 814               23 329    
Total assets                                                       2 046 932            1 950 081            2 027 928    
Equity and liabilities                                                                                                    
Equity                                                               189 078              183 817              190 017    
Equity attributable to ordinary shareholders                         155 834              153 132              157 020    
Equity attributable to other equity instruments holders                9 047                7 247                9 047    
Equity attributable to non-controlling interests                      24 197               23 438               23 950    
Liabilities                                                        1 857 854            1 766 264            1 837 911    
Derivative liabilities1                                               73 217               57 423               76 896    
Trading liabilities                                                   61 744               45 758               62 855    
Current and deferred tax liabilities                                   8 556                7 970                8 614    
Deposits and debt funding                                          1 266 584            1 212 115            1 243 911    
Policyholders' liabilities                                           319 280              309 200              322 918    
Subordinated debt                                                     23 187               24 954               24 289    
Provisions and other liabilities                                     105 286              108 844               98 428    
Total equity and liabilities                                       2 046 932            1 950 081            2 027 928    
1 Refer to the restatements section for details on the restatement to derivative assets and derivative liabilities. 


Condensed consolidated income statement
for the six months ended 30 June 2018                    
                                                                                             1H17                 FY17    
                                                                        1H18            Unaudited              Audited    
                                                                   Unaudited             Restated             Restated    
                                                                          Rm                   Rm                   Rm    
Income from banking activities                                        51 180               49 120              102 699    
Net interest income1                                                  29 150               28 770               60 125    
Non-interest revenue2                                                 22 030               20 350               42 574    
Income from investment management and                                                                  
life insurance activities                                             11 360               12 097               24 394    
Total income                                                          62 540               61 217              127 093    
Credit impairment charges                                             (3 999)              (5 155)              (9 410)   
Net income before operating expenses                                  58 541               56 062              117 683    
Operating expenses from banking activities2                          (29 205)             (27 553)             (57 049)   
Operating expenses from investment management                                                          
 and life insurance activities                                        (8 691)              (8 822)             (17 800)   
Net income before capital items and                                                                    
equity accounted earnings                                             20 645               19 687               42 834    
Non-trading and capital related items                                     46                  214                 (261)   
Share of post tax profit from associates                                                               
and joint ventures                                                       360                  412                1 102    
Net income before indirect taxation                                   21 051               20 313               43 675    
Indirect taxation                                                     (1 208)              (1 154)              (2 481)   
Profit before direct taxation                                         19 843               19 159               41 194    
Direct taxation                                                       (4 510)              (4 526)             (10 479)   
Profit for the period                                                 15 333               14 633               30 715    
Attributable to ordinary shareholders                                 12 706               12 340               26 235    
Attributable to other equity instrument holders                          371                  257                  594    
Attributable to non-controlling interests                              2 256                2 036                3 886    
Earnings per share (cents)                                                                                                
Basic earnings per ordinary share                                      796.6                769.8              1 637.8    
Diluted earnings per ordinary share                                    786.7                760.5              1 617.5    
1 Refer to the IFRS 9 Financial Instruments section for details for the group's IFRS 9 accounting treatment 
  of previously suspended contractual interest that was earned.
2 Refer to the restatements section for details about the restatement to non-interest revenue and operating expenses 
  from banking activities.

  
Condensed consolidated statement of other comprehensive income
for the six months ended 30 June 2018
                                                                        1H18                 1H17                 FY17          
                                                                   Unaudited            Unaudited              Audited          
                                                                          Rm                   Rm                   Rm          
Profit for the period                                                 15 333               14 633               30 715          
Other comprehensive income/(loss) after tax for the period             4 352               (2 473)              (5 940)         
Items that may be subsequently reclassified to profit and loss         4 247               (2 368)              (5 607)         
Exchange differences on translating foreign operations                 4 225               (2 697)              (6 180)         
Movement in the cash flow hedging reserve and foreign                                                    
currency hedge reserves                                                  (25)                  25                  111          
Movement in the available-for-sale revaluation reserve1                                       304                  462          
Movement in debt investments measured at fair value                                                      
through other comprehensive income (OCI)1                                 47                                                    
                                                                                                                                
Items that may not be subsequently reclassified to profit and loss       105                 (105)                (333)         
Defined benefit fund                                                      16                 (113)                (219)         
Change in own credit risk recognised on financial                                                        
liabilities designated at fair value through profit and loss1             78                                                    
Other gains/(losses)                                                      11                    8                 (114)         

Total comprehensive income for the period                             19 685               12 160               24 775          
Attributable to ordinary shareholders                                 16 354               10 547               21 514          
Attributable to other equity instrument holders                          371                  257                  594          
Attributable to non-controlling interests                              2 960                1 356                2 667          
1 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. Therefore
  comparability will not be achieved by the fact that the comparative financial information has been prepared on an 
  IAS 39 basis. Refer to the IFRS 9 Financial Instruments section for more detail on the adoption of IFRS 9.

  
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2018
                                                                                 Equity   
                                                                           attributable
                                                               Ordinary        to other            Non-
                                                          shareholders'          equity     controlling          Total
                                                                 equity         holders        interest         equity
                                                                     Rm              Rm              Rm             Rm
                                                                                                                                
Balance at 1 January 2017 (audited)                             150 757           5 503          23 099        179 359          
Total comprehensive income for the period                        10 547             257           1 356         12 160          
Transactions with owners and non-controlling                                                                
interests recorded directly in equity                            (8 172)          1 487            (905)        (7 590)         
Equity-settled share-based payment transactions1                   (348)                              7           (341)         
Deferred tax on share-based payment transactions                    (45)                                           (45)         
Transactions with non-controlling interests                          81                             (67)            14          
Net dividends paid                                               (7 100)           (257)           (814)        (8 171)         
Other equity movements                                             (760)          1 744             (31)           953          
Unincorporated property partnerships'                                                                       
capital reductions and distributions                                                               (112)          (112)         
Balance at 30 June 2017 (unaudited)                             153 132           7 247          23 438        183 817          
Balance at 1 July 2017 (unaudited)                              153 132           7 247          23 438        183 817          
Total comprehensive income for the period                        10 967             337           1 311         12 615          
Transactions with owners and non-controlling                                                                
interests recorded directly in equity                            (7 079)          1 463            (760)        (6 376)         
Equity-settled share-based payment transactions1                   (537)                             22           (515)         
Deferred tax on share-based payment transactions                    321                                            321          
Transactions with non-controlling interests                        (135)                            227             92          
Net dividends paid                                               (6 452)           (337)           (550)        (7 339)         
Other equity movements                                             (276)          1 800            (459)         1 065          
Unincorporated property partnerships' capital                                                               
reductions and distributions                                                                        (39)           (39)         
Balance at 31 December 2017 (audited)                           157 020           9 047          23 950        190 017          
Balance at 1 January 2018 (unaudited) (IFRS 9)                  150 759           9 047          23 574        183 380          
IFRS 9 transition2                                               (6 261)                           (376)        (6 637)         
Balance at 1 January 2018 (audited) (IAS 39)                    157 020           9 047          23 950        190 017          
Total comprehensive income for the period                        16 354             371           2 960         19 685          
Transactions with owners and non-controlling                                                                
interests recorded directly in equity                           (11 279)           (371)         (2 337)       (13 987)         
Equity-settled share-based payment transactions1                 (1 253)                              4         (1 249)         
Deferred tax on share-based payment transactions                     58                                             58          
Transactions with non-controlling interests3                     (1 477)                           (879)        (2 356)         
Net dividends paid                                               (8 214)           (371)         (1 029)        (9 614)         
Other equity movements                                             (393)                           (433)          (826)         
Balance at 30 June 2018 (unaudited)                             155 834           9 047          24 197        189 078          
1 Includes hedges of the group's equity settled share incentive schemes.
2 Refer to the IFRS 9 Financial Instruments section for detail on the IFRS 9 transition adjustments.
3 Refer to the other reportable items section for detail on significant transactions with non-controlling interests.


Condensed consolidated statement of cash flows
for the six months ended 30 June 2018 
                                                                        1H18                 1H17                 FY17    
                                                                   Unaudited            Unaudited              Audited    
                                                                          Rm                   Rm                   Rm    
Net cash flows from operating activities                              10 510               17 401               24 137    
Direct taxation paid                                                  (6 856)              (5 187)             (10 078)   
Other operating activities                                            17 366               22 588               34 215    
Net cash flows generated from/(used in) investing activities           2 661              (10 382)              (8 415)   
Capital expenditure                                                   (1 652)              (2 185)              (5 451)   
Other investing activities                                             4 313               (8 197)              (2 964)   
Net cash flows used in financing activities                          (12 959)              (5 944)             (12 674)   
Dividends paid1                                                       (9 676)              (8 171)             (15 574)   
Equity transactions with non-controlling interests2                   (2 356)               1 674                1 173    
Issuance of other equity instruments                                                        1 744                3 544    
Issuance of subordinated debt                                          3 100                  257                2 246    
Redemption of subordinated debt                                       (4 550)              (1 400)              (4 180)   
Other financing activities                                               523                  (48)                 117    
Effect of exchange rate changes on cash and cash equivalents          (3 418)              (7 600)              (5 212)   
Net decrease in cash and cash equivalents                             (3 206)              (6 525)              (2 164)   
Cash and cash equivalents at the beginning of the period              75 310               77 474               77 474    
Cash and cash equivalents at the end of the period                    72 104               70 949               75 310    
Cash and balances with central banks                                  72 104               70 949               75 310    
1 Refer to the other reportable items section for detail on the dividends paid to Additional Tier 1 (AT1) 
  equity holders.
2 Refer to the other reportable items section for detail on significant transactions with non-controlling 
  interests.


Notes

Financial investments
as at 30 June 2018
                                                                                                                  FY17    
                                                                                             1H18            Unaudited    
                                                                                        Unaudited            Restated1    
                                                                                               Rm                   Rm    
Corporate and sovereign                                                                   258 893              240 703    
Bank                                                                                       41 522               46 278    
Mutual funds and unit-linked investments                                                  106 329               98 169    
Listed equities                                                                           101 893              122 545    
Unlisted equities                                                                           4 065                5 554    
Interests in associates and joint ventures held at fair value                              13 862               15 197    
Other instruments                                                                           5 319                4 868    
Total financial investments                                                               531 883              533 314    
Net financial investments measured at amortised cost                                      135 213                         
Gross financial investments measured at amortised cost                                    135 415                         
Expected credit loss for financial investments measured at amortised cost2                   (202)                        
Financial investments measured at fair value through profit or loss                       363 222                         
Debt financial investments measured at fair value through OCI3                             32 224                         
Equity financial investments measured at fair value through OCI                             1 224                         
1 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. The group has
  aligned its categories for financial investments disclosed in FY17 to those disclosed for 1H18. This did not result 
  in a restatement to the group's statement of financial position as at 31 December 2017.
2 The group recognised an expected credit loss (ECL) of R97 million on debt financial investments measured at
  amortised cost upon the transition to IFRS 9 on 1 January 2018. Refer to the credit impairment charges note for the 
  1H18 credit impairment charge on financial investments.
3 The group recognised an ECL of R175 million on debt financial investments measured at fair value through OCI upon
  the transition to IFRS 9 on 1 January 2018.  At 30 June 2018, the ECL for debt financial investments measured at fair
  value through OCI was R162 million. Refer to the credit impairment charges note for the 1H18 credit 
  impairment charge on financial investments.

Loans and advances
as at 30 June 2018
                                                                                                                  FY17   
                                                                                             1H18            Unaudited   
                                                                                        Unaudited            Restated1   
                                                                                               Rm                   Rm   
Loans and advances measured at fair value through profit or loss                            1 834                  110   
Net loans and advances measured at amortised cost                                       1 062 846            1 047 917   
Gross loans and advances measured at amortised cost                                     1 099 896            1 070 361   
Mortgage loans                                                                            353 357              346 508   
Vehicle and asset finance                                                                  86 522               83 136   
Card debtors                                                                               33 336               32 253   
Corporate and sovereign                                                                   362 314              352 025   
Bank                                                                                      108 873              117 935   
Other loans and advances                                                                  155 494              138 504   
Interest in suspense2                                                                      (6 128)                       
Credit impairments for loans and advances (IAS 39)                                                             (22 444)  
Expected credit loss for loans and advances measured at amortised cost (IFRS 9)           (30 922)                       
Total loans and advances                                                                1 064 680            1 048 027   
1 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. Therefore
  comparability will not be achieved by the fact that the comparative financial information has been prepared on an 
  IAS 39 basis. The group has, however, aligned its categories for loans and advances disclosed in FY17 to those 
  disclosed for 1H18. This did not result in a restatement to the group's statement of financial position as at 
  31 December 2017.
2 For details on the group's accounting policy on interest in suspense, refer to the IFRS 9 Financial Instruments section.

Reconciliation of expected credit loss for loans and advances at amortised cost (unaudited)
                                                  Total             Net                                        Closing     
                             Opening ECL      transfers     impairments         Impaired        Exchange           ECL     
                               1 January        between         raised/         accounts       and other       30 June     
                                   20181         stages     (released)2      written-off       movements          2018    
                                      Rm             Rm              Rm               Rm              Rm            Rm    
Mortgage loans                     7 619                            961             (438)             33         8 175    
Stage 1                            1 126            179            (225)                              (6)        1 074    
Stage 2                            2 014            (10)            208                               13         2 225    
Stage 3                            4 479           (169)            978             (438)             26         4 876    
Vehicle and asset finance          3 021                            591             (369)             59         3 302    
Stage 1                              766            157            (248)                               6           681    
Stage 2                              994           (291)            310                               15         1 028    
Stage 3                            1 261            134             529             (369)             38         1 593    
Card debtors                       2 955                            654             (585)             (2)        3 022    
Stage 1                              698            137            (130)                                           705    
Stage 2                              821           (173)            259                                            907    
Stage 3                            1 436             36             525             (585)             (2)        1 410    
Other loans and advances           9 661                          1 823           (1 356)            268        10 396    
Stage 1                            2 289             44            (148)                             157         2 342    
Stage 2                            2 454           (502)            398                              (24)        2 326    
Stage 3                            4 918            458           1 573           (1 356)            135         5 728    
Corporate &                                                
Investment Banking                 6 115                            102             (494)            304         6 027    
Stage 1                              910            132            (144)                              65           963    
Stage 2                            1 992           (600)           (309)                              85         1 168    
Stage 3                            3 213            468             555             (494)            154         3 896    
                                                                                                                          
Total                             29 371                          4 131           (3 242)            662        30 922    
Stage 1                            5 789            649            (895)                             222         5 765    
Stage 2                            8 275         (1 576)            866                               89         7 654    
Stage 3                           15 307            927           4 160           (3 242)            351        17 503    
1 IFRS 9 resulted in a transitional increase in ECL of R2 563 million for mortgage loans; R1 001 million for vehicles
  and asset finance; R694 million for card debtors; R561 million for Corporate & Investment Banking; and R2 108 million 
  for other loans and advances. The opening ECL as at 1 January 2018 incorporates these IFRS 9 transition adjustments. 
  Refer to the IFRS 9 Financial Instruments section for more details on IFRS 9.
2 Net impairments raised/(released) less recoveries of amounts written off in previous years equals income statement
  impairment charge (refer to credit impairment charges note). 

Reconciliation of credit impairments for loans and advances (IAS 39)

                                                   Vehicle and                                                              
                                       Mortgage          asset         Card       Other loans    Corporate    
                                          loans        finance      debtors      and advances      lending       Total         
                                             Rm             Rm           Rm                Rm           Rm          Rm
FY17 (restated)1                                                                                                          
Specific impairments                                                                                                      
Balance at beginning of the year          3 640          1 410        1 598             5 121        2 890      14 659    
Net impairments raised/(released)2        1 826          1 261        1 415             4 371        1 024       9 897    
Impaired accounts written off            (1 159)        (1 146)      (1 383)           (3 861)        (245)     (7 794)   
Discount element recognised in                                                                                
interest income                            (317)          (120)         (26)             (345)        (102)       (910)   
Exchange and other movements                (11)           (38)          (8)             (283)        (242)       (582)   
Balance at end of the year                3 979          1 367        1 596             5 003        3 325      15 270    
Portfolio impairments                                                                                                     
Balance at beginning of the year          1 137            801          651             2 749        1 796       7 134    
Net impairments raised/(released)2          (55)          (141)          61              (159)         649         355    
Exchange and other movements                 (5)            (7)         (47)              (40)        (216)       (315)   
Balance at end of the year                1 077            653          665             2 550        2 229       7 174    
Total specific and portfolio                                                                                  
impairments                               5 056          2 020        2 261             7 553        5 554      22 444    
1 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. The group 
  has aligned its categories for loans and advances disclosed in FY17 to those disclosed for 1H18. This did not 
  result in a restatement to the group's statement of financial position as at 31 December 2017.
2 Net impairments raised/(released) less recoveries of amounts written off in previous years, as well as credit 
  recovery on off-balance sheet exposure, equals income statement impairment charges.


Loans and advances at amortised cost performance 
                                                             Performing loans                                 
                                                                                                              
                                                                                                              
                                                                                                              
                                           Gross loans                                Total            Total     
                                                   and                           performing   non-performing  
                                              advances     Stage 1    Stage 2         loans            loans  
                                                    Rm          Rm         Rm            Rm               Rm  
1H18 (unaudited)1                                                                                             
Personal & Business Banking                    683 361     588 072     60 087       648 159           35 202  
Mortgage loans                                 353 357     301 615     33 452       335 067           18 290  
Vehicle and asset finance                       85 327      73 760      7 938        81 698            3 629  
Card debtors                                    33 336      27 111      4 156        31 267            2 069  
Other loans and advances                       211 341     185 586     14 541       200 127           11 214  
                                                                                                              
Corporate & Investment Banking                 469 039     435 953     24 459       460 412            8 627  
Corporate and sovereign                        363 126     330 040     24 459       354 499            8 627  
Bank                                           105 913     105 913                  105 913                   
Central and other                              (52 504)    (52 504)                 (52 504)                  
Gross loans and advances at                
amortised cost2                              1 099 896     971 521     84 546     1 056 067           43 829  
Percentage of total book (%)                     100.0        88.3        7.7          96.0              4.0  
1 The loans and advances performance disclosures have been presented at a segment level, where as the other loans and 
  advances disclosures within these results are disclosed on group consolidated view, unless stated otherwise.
2 The above table includes loans and advances within the scope of the impairment requirements in IFRS 9.

Loans and advances at amortised cost performance (continued) 
                                               Non-performing loans
                                                      Stage 3
                                 Securities and                                                                   
                                       expected                                          Non-                      
                                     recoveries                   Balance sheet    performing                      
                                        on non-                 impairments for         loans           Non-          
                                     performing      Interest    non-performing    impairment     performing      
                                          loans   in suspense             loans      coverage          loans     
                                             Rm            Rm                Rm             %              %          
1H18 (unaudited)1                                                                                                     
Personal & Business Banking              17 274         4 321            13 607            51            5.2          
Mortgage loans                           11 544         1 870             4 876            37            5.2          
Vehicle and asset finance                 1 818           218             1 593            50            4.3          
Card debtors                                461           198             1 410            78            6.2          
Other loans and advances                  3 451         2 035             5 728            69            5.3          
                                                                                                                      
Corporate & Investment Banking            2 924         1 807             3 896            66            1.8          
Corporate and sovereign                   2 924         1 807             3 896            66            2.4          
Bank                                                                                                                  
Central and other                                                                                                     
Gross loans and advances at    
amortised cost2                          20 198         6 128            17 503            54            4.0          
Percentage of total book (%)                1.8           0.6               1.6                                       
1 The loans and advances performance disclosures have been presented at a segment level, where as the other loans and 
  advances disclosures within these results are disclosed on group consolidated view, unless stated otherwise.
2 The above table includes loans and advances within the scope of the impairment requirements in IFRS 9.


Loans and advances performance                       
                                                                Total                              Net after
                                                         specifically      Securities and     securities and   
                                                             impaired            expected           expected   
                                    Gross                        non-       recoveries on      recoveries on     
                                loans and    Performing    performing        specifically       specifically   
                                 advances         loans         loans      impaired loans     impaired loans            
                                       Rm            Rm            Rm                  Rm                 Rm     
FY17 (restated)1,2                                                                                               
Personal & Business Banking       645 868       616 949        28 919              16 976             11 943     
Mortgage loans                    346 518       331 014        15 504              11 525              3 979     
Vehicle and asset finance          81 640        78 514         3 126               1 759              1 367     
Card debtors                       32 268        30 148         2 120                 524              1 596     
Other loans and advances          185 442       177 273         8 169               3 168              5 001     
Personal unsecured lending         52 016        47 827         4 189               1 002              3 187     
Business lending and other        133 426       129 446         3 980               2 166              1 814     
Corporate & Investment Banking    472 437       466 862         5 575               2 250              3 325     
Central and other                 (47 834)      (47 836)            2                                      2     
Gross loans and advances        1 070 471     1 035 975        34 496              19 226             15 270     
Percentage of total book (%)        100.0          96.8           3.2                 1.8                1.4     
1 The loans and advances performance disclosures have been presented at a segment level, where as the other loans and 
  advances disclosures within these results are disclosed on group consolidated view, unless stated otherwise.
2 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. The group has 
  aligned its performance for loans and advances disclosed in FY17 to those disclosed for 1H18. This did not result 
  in a restatement to the group's statement of financial position as at 31 December 2017.  

Loans and advances performance (continued)                       
                                                 Balance sheet
                                               impairments for                           Total                  
                                                non-performing    Specific gross          non-          Non-          
                                                  specifically        impairment    performing    performing        
                                                impaired loans          coverage         loans         loans
                                                            Rm                 %            Rm             %          
                                                                                                                      
FY17 (restated)1,2                                                                                                    
Personal & Business Banking                             11 943                41        28 919           4.5          
Mortgage loans                                           3 979                26        15 504           4.5          
Vehicle and asset finance                                1 367                44         3 126           3.8          
Card debtors                                             1 596                75         2 120           6.6          
Other loans and advances                                 5 001                61         8 169           4.4          
Personal unsecured lending                               3 187                76         4 189           8.1          
Business lending and other                               1 814                46         3 980           3.0          
Corporate & Investment Banking                           3 325                60         5 600           1.2          
Central and other                                            2                               2                        
Gross loans and advances                                15 270                44        34 521           3.2          
Percentage of total book (%)                               1.4                                                        
1 The loans and advances performance disclosures have been presented at a segment level, where as the other loans and 
  advances disclosures within these results are disclosed on group consolidated view, unless stated otherwise.
2 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. The group has 
  aligned its performance for loans and advances disclosed in FY17 to those disclosed for 1H18. This did not result 
  in a restatement to the group's statement of financial position as at 31 December 2017.     


Contingent liabilities and commitments
as at 30 June 2018 
                                                                                     1H18               FY17    
                                                                                Unaudited            Audited    
                                                                                       Rm                 Rm    
Letters of credit and bankers' acceptances                                         13 798             13 413    
Guarantees                                                                         78 505             63 761    
Contingent liabilities                                                             92 303             77 174    
Investment property                                                                   540                385    
Property and equipment                                                                566                 94    
Other intangible assets                                                               265                299    
Commitments                                                                         1 371                778    

Loan commitments of R68 384 million (FY17: R62 347 million) are either irrevocable over the life of the facility or
revocable only in response to material adverse changes.


Day one profit or loss
The table below sets out the aggregate net day one profit or loss yet to be recognised in profit or loss at the
beginning and end of the period with a reconciliation of changes in the balances during the period.

                                                                Derivative          Trading                 
                                                               instruments           assets            Total    
                                                                        Rm               Rm               Rm    
Balance at 1 January 2017 (audited)                                    161              588              749    
Additional net profit on new transactions during the year              544              162              706    
Recognised in trading revenue during the year                         (508)            (108)            (616)   
Exchange differences                                                   (37)                              (37)   
Balance at 31 December 2017 (audited)                                  160              642              802    
Balance at 1 January 2018 (audited)                                    160              642              802    
Additional net profit on new transactions during the period            132                               132    
Recognised in trading revenue during the period                       (195)            (261)            (456)   
Balance at 30 June 2018 (unaudited)                                     97              381              478    


Headline earnings
for the six months ended 30 June 2018 
                                                                      1H18             1H17             FY17    
                                                                 Unaudited        Unaudited          Audited    
                                                                        Rm               Rm               Rm    
Profit for the period                                               12 706           12 340           26 235    
Headline adjustable items (reversed)/added                             (46)            (230)             187    
IAS 16 - (Gain)/loss on sale of property and equipment                 (11)             (18)              10    
IAS 21 - Realised foreign currency profit on foreign operations                        (214)            (214)   
IAS 27/IAS 28 - (Gains)/losses on disposal of businesses               (35)              18               18    
IAS 36 - Impairment of intangible assets                                                                 447    
IAS 39 - Realised gains on available-for-sale assets1                                   (16)             (74)   
Taxation on headline earnings adjustable items                           1               (1)             (94)   
Non-controlling interests' share of headline                                                    
earnings adjustable items                                                2                2              (58)   
Standard Bank Group headline earnings                               12 663           12 111           26 270    
Headline earnings per ordinary share (cents)                                                                    
Headline earnings per ordinary share                                 793.9            755.5          1 640.0    
Diluted headline earnings per ordinary share                         784.0            746.4          1 619.7    
1 Headline Earnings Circular 4/2018 specifies that realised gains or losses on debt instruments measured at fair 
  value through OCI, in terms of IFRS 9, are not excluded from headline earnings, therefore, from 1 January 2018 
  IAS 39 realised gains or losses on available-for-sale assets is not applicable.


Headline earnings is calculated in accordance with the circular titled Headline Earnings issued by SAICA, as amended
from time to time.

Private equity associates and joint ventures
as at 30 June 2018
The following table provides disclosure of those private equity associates and joint ventures that are equity
accounted in terms of IAS 28 Investments in Associates and Joint Ventures and have been ring-fenced in terms of the 
requirements of the circular titled Headline Earnings issued by SAICA, and amended from time to time. On the disposal 
of these associates and joint ventures held by the group's private equity division, the gain or loss on the disposal 
will be included in headline earnings.
                                                                                       1H18             FY17    
                                                                                  Unaudited          Audited    
                                                                                         Rm               Rm    
Cost                                                                                     48               48    
Carrying value                                                                          593              546    
Fair value                                                                              593              546    
Attributable income before impairment                                                    47              159    


Non-interest revenue
for the six months ended 30 June 2018
                                                                                       1H17             FY17          
                                                                      1H18        Unaudited          Audited          
                                                                 Unaudited         Restated         Restated          
                                                                        Rm               Rm               Rm          
Net fee and commission revenue1                                     14 813           13 969           28 670          
Fee and commission revenue                                          17 763           16 661           34 290          
Accounting transaction fees                                          5 599            5 604           11 488          
Card-based commission                                                3 263            3 086            6 535          
Documentation and administration fees                                1 097            1 090            2 197          
Electronic banking                                                   1 848            1 676            3 446          
Foreign currency service fees                                        1 036              903            1 879          
Insurance - fees and commission                                        964              919            1 945          
Knowledge-based fees and commission                                  1 236            1 140            2 278          
Other                                                                2 720            2 243            4 522          
Fee and commission expense1                                         (2 950)          (2 692)          (5 620)         
Trading revenue                                                      5 570            4 953           10 731          
Other revenue and gains and losses on financial instruments2         1 647            1 428            3 173          
Total non-interest revenue                                          22 030           20 350           42 574          
1 Refer to the restatements section for details about the restatement to net fee and commission revenue.            
2 Refer to the IFRS 9 Financial Instruments section for detail on the group's accounting policy on presentation 
  of gains and losses on financial instruments changes due to the adoption of IFRS 9.
3 For more detail on the split of each non-interest revenue category per key business unit, please refer to the 
  group's analysis of financial results available at www.standardbank.com/reporting.

  
Credit impairment charges
for the six months ended 30 June 2018 
                                                                      1H18             1H17             FY17    
                                                                 Unaudited        Unaudited          Audited    
                                                                        Rm               Rm               Rm    
Credit impairments (IAS 39)1                                                          5 556           10 252    
Portfolio impairments                                                                   378              355    
Specific impairments                                                                  5 178            9 897    
Expected credit loss (IFRS 9)1                                       4 316                                      
Financial investments2                                                  72                                      
Loans and advances                                                   4 131                                      
Letters of credit and guarantees                                       113                                      
Recoveries on loans and advances previously written off               (317)            (401)            (842)   
Total credit impairment charge                                       3 999            5 155            9 410    
1 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. Therefore
  comparability will not be achieved by the fact that the comparative financial information has been prepared 
  on an IAS 39 basis.
2 Included in the ECL for financial investments is a R85 million charge relating to financial investments measured 
  at amortised cost and a R13 million release from financial investments measured at fair value through OCI. 

  
Related party balances and transactions
Tutuwa related parties
Tutuwa participants were allowed to access their underlying equity value post the expiry of the lock-in period on 
31 December 2014. The number of shares in issue that is financed by the group as at 30 June 2018 is 4 133 979 
(FY17: 5 750 291). The weighted number of these shares for the period ended 30 June 2018 equated to 4 877 391 
(FY17: 5 750 291).

Post-employment benefit plans
The group manages R11 149 million (FY17: R11 864 million) of the group's post-employment benefit plans' assets. 
Other significant balances between the group and the group's post-employment benefit plans are listed below:
                                                                                                         FY17    
                                                                                       1H18           Audited    
                                                                                  Unaudited          Restated    
                                                                                         Rm                Rm    
Investments held in bonds and money market instruments                                1 012             1 089    
Value of ordinary group shares held1                                                    709               749    
1 The comparative disclosure for the value of ordinary group shares held by the group's post-employment benefit 
  plans has been restated as it was erroneously disclosed as R2 157 million in FY17. The restatement has no impact 
  on the income statement and statement of financial position. 

Balances and transactions with ICBCS
The following significant balances and transactions were entered into between the group and ICBCS, an associate 
of the group. 
                                                                                       1H18              FY17    
                                                                                  Unaudited           Audited    
Amounts included in the group's statement of financial position                          Rm                Rm   
Derivative assets                                                                     2 432             2 227    
Trading assets                                                                            7                 7    
Loans and advances                                                                   28 658            31 413    
Other assets                                                                            830               590    
Derivative liabilities                                                               (2 532)           (2 340)   
Deposits and debt funding                                                              (831)           (1 050)   
Provisions and other liabilities                                                       (755)             (759)   
                                                                                 
Services
The group entered into certain transitional service level arrangements with ICBCS in order to manage the orderly
separation of ICBCS from the group post the sale of 60% of Standard Bank Plc (SB Plc). In terms of these arrangements,
services are delivered to and received from ICBCS for the account of each respective party. As at 30 June 2018 the 
expense recognised in respect of these arrangements amounted to R229 million (FY17: R277 million).

Balances and transactions with the Industrial and Commercial Bank of China Limited (ICBC)
The group, in the ordinary course of business, receives term funding from, and provides loans and advances to, 
ICBC for strategic purposes. These monies are renegotiated and settled on an ongoing basis on market-related terms. 
The following balances and transactions were entered into between the group and ICBC, a 20.1% shareholder of the 
group, excluding those with ICBCS.
                                                                                       1H18              FY17    
                                                                                  Unaudited           Audited    
Amounts included in the group's statement of financial position                          Rm                Rm    
Loans and advances                                                                    8 218             2 939    
Other assets                                                                            690               611    
Deposits and debt funding                                                            (4 374)              (91)   


The group recognised losses in respect of certain commodity reverse repurchase agreements with third parties prior 
to the date of conclusion of the disposal of a controlling interest in SB Plc to ICBC. As a consequence of the 
disposal of SB Plc, the group has a right, by means of a post-disposal adjustment, to 60% of insurance and other 
recoveries, net of costs, relating to claims by SB Plc for those recognised losses prior to the date of conclusion 
of the transaction. Settlement of these amounts will occur based on audited information on pre-agreed anniversaries 
of the completion of the transaction and the full and final settlement of all claims in respect of losses incurred. 
As at 30 June 2018, a balance of USD50 million (R690 million) (FY17: USD50 million; R611 million) is receivable from 
ICBC in respect of this arrangement. 

Mutual funds
The group invests in various mutual funds that are managed by Liberty. Where the group has assessed that it has
control (as defined by IFRS) over these mutual funds, it accounts for these mutual funds as subsidiaries. Where the 
group has assessed that it does not have control over these mutual funds, but has significant influence, it accounts 
for them as associates. 

The following significant balances and transactions were entered into between the group and the mutual funds which the
group does not control:
                                                                                       1H18              FY17    
Amounts included in the group's statement of financial position                   Unaudited           Audited    
and income statement                                                                     Rm                Rm    
Trading liabilities                                                                    (262)             (275)   
Deposits and debt funding                                                           (18 658)          (15 706)   
Trading losses                                                                           (9)             (101)   
Interest expense                                                                       (502)             (695)   


Change in group directorate
The following changes in directorate took place during the six months ended 30 June 2018: 

Retirements
RMW Dunne                                                         As non-executive director       30 May 2018    


Condensed segment report
for the six months ended 30 June 2018 
The group's primary segments comprise the group's banking activities (comprising PBB, CIB and central and other), 
the group's other banking interests (comprising the group's interest in ICBC Argentina and ICBCS) and Liberty 
(comprising the group's investment management and life insurance activities). 
                                                                     1H18              1H17              FY17    
                                                                Unaudited        Unaudited1          Audited1    
                                                                       Rm                Rm                Rm    
Net interest income contribution by business unit                                                                
Personal & Business Banking                                        20 379            19 706            40 963    
Corporate & Investment Banking                                      9 402             9 451            20 434    
Central and other                                                    (631)             (387)           (1 272)   
Standard Bank Group                                                29 150            28 770            60 125    
Non-interest revenue and income from investment management                                      
and life insurance activities contribution by business unit                                     
Personal & Business Banking2                                       13 636            12 823            26 745    
Corporate & Investment Banking                                      8 559             7 833            16 335    
Central and other                                                    (165)             (306)             (506)   
Banking activities2                                                22 030            20 350            42 574    
Liberty                                                            11 360            12 097            24 394    
Standard Bank Group2                                               33 390            32 447            66 968    
Revenue contribution by business unit                                                                            
Personal & Business Banking2                                       34 015            32 529            67 708    
Corporate & Investment Banking                                     17 961            17 284            36 769    
Central and other                                                    (796)             (693)           (1 778)   
Banking activities2                                                51 180            49 120           102 699    
Liberty                                                            11 360            12 097            24 394    
Standard Bank Group2                                               62 540            61 217           127 093    
Profit or loss attributable to ordinary shareholders                                                             
Personal & Business Banking                                         6 680             6 148            13 978    
Corporate & Investment Banking                                      5 709             5 289            11 409    
Central and other                                                    (672)             (219)           (1 113)   
Banking activities                                                 11 717            11 218            24 274    
Other banking interests                                               132               240               600    
Liberty                                                               857               882             1 361    
Standard Bank Group                                                12 706            12 340            26 235    
Total assets by business unit                                                                                    
Personal & Business Banking                                       739 433           696 189           705 232    
Corporate & Investment Banking                                    912 934           858 127           905 138    
Central and other                                                 (34 798)          (22 312)          (12 402)   
Banking activities                                              1 617 569         1 532 004         1 597 968    
Other banking interests                                             7 598             7 811             7 493    
Liberty2                                                          421 765           410 266           422 467    
Standard Bank Group2                                            2 046 932         1 950 081         2 027 928    
Total liabilities by business unit                                                                               
Personal & Business Banking                                       663 011           622 077           630 796    
Corporate & Investment Banking                                    854 934           800 774           841 785    
Central and other                                                 (54 492)          (38 852)          (29 846)   
Banking activities                                              1 463 453         1 383 999         1 442 735    
Liberty2                                                          394 401           382 265           395 176    
Standard Bank Group2                                            1 857 854         1 766 264         1 837 911    
1 Where responsibility for individual cost centres and divisions within business units change, the comparative 
  figures have been reclassified accordingly.
2 Refer to the restatements section for restatements that affected these disclosures.


Other reportable items 
Additional Tier 1 capital
The group did not issue Basel III compliant AT1 capital bonds that qualify as Tier 1 capital during the period 
(FY17: R3.5 billion nominal value). During the period, coupons to the value of R222 million (FY17: R229 million) 
were paid to AT1 capital bond holders. Current tax of R62 million (FY17: R64 million) relating to the AT1 capital 
bonds was recognised directly in equity resulting in an aggregate net equity impact of R160 million 
(FY17: R165 million). The AT1 capital bonds have been recognised within other equity instruments in the 
statement of financial position.

Capital management
The group manages its capital levels to support business, growth, maintain depositor and creditors' confidence, create
value for its shareholders and ensure regulatory compliance. The main regulatory requirements to be complied with are
those specified in the Banks Act No.94 of 1990 and related regulations, which are aligned with Basel III. Regulatory
capital adequacy is measured through the CET1, Tier 1 and total capital adequacy.

The group has elected the three year phase-in as outlined in the SARB's Directive 5/2017. This phase-in results in the
IFRS 9 impact being amortised on a straight-line basis, from 25% in 2018 to reach 100% by 2021. The group's capital
adequacy ratios based on a phased-in and fully loaded basis are shown in the table below:

                                               Phased-in (IFRS 9)                     Fully loaded (IFRS 9)
                                             1H18      1 January 2018                1H18      1 January 2018    
                                        Unaudited           Unaudited           Unaudited           Unaudited    
Capital ratio                                   %                   %                   %                   %    
CET1                                         13.8                13.3                13.3                12.8    
Tier 1                                       14.4                13.9                13.9                13.4    
Total capital adequacy                       16.2                15.9                16.0                15.7    


Equity securities
During the period, the group allotted 1 124 399 shares (FY17: 2 877 827 shares) in terms of the group's share
incentive schemes and repurchased 2 332 974 shares (FY17: 2 030 824 shares).

The total equity securities held as treasury shares at the end of the period was 18 646 358 shares (FY17: 16 213 766
shares). These treasury shares exclude group shares that are held by certain structured entities (SEs) relating to 
the group's Tutuwa initiative (refer to the related party balances and transactions note for more detail) since 
those SEs hold the voting rights on such shares and are accordingly not treasury shares as defined by the JSE 
Listings Requirements.

Legal proceedings 
In the ordinary course of business, the group is involved as a defendant in litigation, lawsuits and other
proceedings. Management recognises the inherent difficulty of predicting the outcome of defended legal proceedings. 
Nevertheless, based on management's knowledge from investigation, analysis and after consulting with legal counsel, 
management believes that there are no individual legal proceedings that are currently assessed as being 'likely to 
succeed and material' or 'unlikely to succeed but material should they succeed'. The group is also the defendant in 
some legal cases for which the group is fully indemnified by external third parties, none of which are individually 
material. Management is accordingly satisfied that the legal proceedings currently pending against the group should 
not have a material adverse effect on the group's consolidated financial position and the directors are satisfied 
that the group has adequate insurance programmes and, where required in terms of IFRS for claims that are probable, 
provisions in place to meet claims that may succeed.

Competition Commission - trading of foreign currency 
On 15 February 2017 South Africa's Competition Commission lodged five complaints with the Competition Tribunal against
18 institutions, including one against SBSA and two against a former subsidiary of the group, Standard New York
Securities Inc. (SNYS), in which it alleges unlawful collusion between those institutions in the trading of USD/ZAR. 
The group has, with the help of external counsel, conducted its own internal investigations and found no evidence 
that supports the complaints. Both SBSA and SNYS have, together with 12 of the other respondents, applied to the 
Competition Tribunal for dismissal of the complaint referral on various legal grounds. Judgement in these 
applications has been reserved. In separate proceedings SBSA has applied to the Competition Appeal Court for an 
order that the Competition Commission's decision to lodge its complaint against SBSA be reviewed and set aside 
on the conditional ground that it was irrational. The allegations against SBSA are confined to USD/ZAR trading 
activities within SBSA and do not relate to the conduct of the group more broadly.

Indemnities granted following disposal of Standard Bank Plc 
Under the terms of the disposal of SB Plc on 1 February 2015, the group provided ICBC with certain indemnities to be
paid in cash to ICBC or, at ICBC's direction, to any SB Plc (now ICBCS) group company, a sum equal to the amount of
losses suffered or incurred by ICBC arising from certain circumstances. Where an indemnity payment is required to be 
made by the group to the ICBCS group, such payment would be grossed up from ICBC's shareholding at the time in ICBCS 
to 100%. These payments may, inter alia, arise as a result of an enforcement action, the cause of which occurred 
prior to the date of disposal. Enforcement actions include actions taken by regulatory or governmental authorities 
to enforce the relevant laws in any jurisdiction. While there have been no material claims relating to these 
indemnification provisions, the indemnities provided are uncapped and of unlimited duration as they reflect that 
the pre-completion regulatory risks attaching to the disposed-of business remain with the group post completion. 
The indemnification provisions covered the Deferred Prosecution Agreement (DPA) that ICBCS entered into with the 
United Kingdom Serious Fraud Office (SFO) (as more fully set out in the announcement made to shareholders via the 
JSE's SENS on 30 November 2015). In terms of the DPA, prosecution has been suspended and will be withdrawn in 
November 2018 provided that ICBCS has complied with its obligations under the DPA. Any claims that may arise 
for SNYS with respect to the Competition Commission matter are also likely to fall within the scope of this 
indemnity as the alleged conduct, which is the subject of the referral, is alleged to have taken place prior 
to the disposal of SB Plc.

Subordinated debt
During the period, the group issued R3.0 billion (FY17: Rnil) Basel lll compliant bonds that qualified as Tier 2
capital.The capital notes are perpetual, non-cumulative with an issuer call option after a minimum period of five 
years and one day, and on every coupon payment date thereafter. The payment dates are quarterly with the first call 
date being 13 February 2023.

R3.5 billion (FY17: R3.0 billion) Basel III compliant Tier 2 subordinated debt instruments were redeemed during the
year. 

R0.1 billion (FY17: R0.3 billion) of Basel II compliant Tier 2 subordinated debt instruments were issued during the
year and R0.1 billion (FY17: R0.2 billion) was redeemed in jurisdictions that have not yet adopted the Basel III
framework. 

The terms of the Basel III compliant Tier 2 capital bonds include a regulatory requirement which provides for the
write-off, in whole or in part, on the earlier of a decision by the relevant regulator (the SARB) that a write-off 
without which the issuer would have become non-viable is necessary, or a decision to make a public sector injection 
of capital or equivalent support, without which the issuer would have become non-viable. 

During the period, the group did not issue subordinated debt that qualifies as regulatory insurance capital 
(FY17: R2.0 billion) and R1.0 billion (FY17: R1.0 billion) was redeemed.


Transactions with non-controlling interests
Change in shareholding of subsidiaries
                                                                                                          1H18    
                                                                                                     Unaudited    
                                                                                                            Rm    
Net carrying amount of non-controlling interests acquired                                                  879    
Net consideration paid to non-controlling interests                                                     (2 356)   
Net decrease in equity attributable to ordinary shareholders                                            (1 477)   


Stanbic Africa Holdings Limited 
In June 2018, Stanbic Africa Holdings Limited (SAHL), a wholly-owned subsidiary of SBG, increased its shareholdings in
its listed Nigerian and Kenyan subsidiaries through acquisitions of additional shares from non-controlling interests
(NCI). Increases in the group's interest in a subsidiary, when the group already has control, are accounted for as
transactions with equity holders of the group. The difference between the purchase consideration and the group's 
proportionate share of the subsidiary's additional net asset value acquired is accounted for directly in equity.

Nigeria
In Nigeria, SAHL's shareholding in Stanbic IBTC Holdings PLC (SIBTC) increased by 11.3% from 53.1% to 64.4% through 
an announced off market trade on the Nigerian Stock Exchange for a total consideration of R2 354 million. The group
recognised a decrease in NCI of R902 million and a decrease in retained earnings and equity attributable to ordinary
shareholders of R1 452 million because of changes in the group's ownership interest in SIBTC.

Kenya
In Kenya, SAHL's shareholding in Stanbic Holdings Plc (SH Plc) increased by 5.9% from 60.0% to 65.9% for a total
consideration of R307 million following the first close of a two-stage tender offer. The group recognised a decrease 
in NCI of R348 million and an increase in retained earnings and equity attributable to ordinary shareholders of 
R40 million because of changes in the group's ownership interest in SH Plc.

In July 2018, the second and final close of the tender offer saw a further increase in SAHL's shareholding in SH Plc
by 2.1% to 68.0%. The second close does not impact the group results for the period ended 30 June 2018 as it occurred
after that date.

Liberty Group Limited
During the period, Liberty Group Limited's (Liberty) shareholding in Liberty Two Degrees (L2D) decreased by
5.2% from 63.1% to 57.9% for a total consideration of R370 million. Liberty recognised an increase in NCI of 
R465 million and a decrease in retained earnings and equity attributable to ordinary shareholders of R95 million 
because of changes in Liberty's ownership interest in L2D. 

Accounting policy elections
Adoption of new and amended standards effective for the current financial period 
The accounting policies are consistent with those reported in the previous year except for the adoption of the
following standards and amendments effective for the current period:
- IFRS 4 Insurance Contracts (amendment) (IFRS 4), the amendment to applying IFRS 9 Financial Instruments with 
  IFRS 4 introduced two approaches: an overlay approach and a deferral approach. The amended standard will provide 
  all companies that issue insurance contracts the option to recognise in other comprehensive income, rather than 
  profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard 
  is issued; and provide companies whose activities are predominantly connected with insurance an optional temporary 
  exemption from applying IFRS 9 until 2021. The entities that defer the application of IFRS 9 will continue to apply 
  the existing financial instruments standard IAS 39. The amendments to IFRS 4 supplement existing options in the 
  standard that can already be used to address the temporary volatility.
- IFRS 15 Revenue from Contracts with Customers (IFRS 15), with effect from 1 January 2018, replaces the existing 
  revenue standards and the related interpretations. The standard sets out the requirements for recognising revenue 
  that applies to all contracts with customers (except for contracts that are within the scope of the standards on 
  leases, insurance contracts or financial instruments). The core principle of the standard is that revenue recognised 
  reflects the consideration to which the company expects to be entitled in exchange for the transfer of promised goods 
  or services to the customer. The standard incorporates a five step analysis to determine the amount and timing of 
  revenue recognition. The group adopted IFRS 15 on 1 January 2018 and, as permitted by IFRS 15, did not restate its 
  comparative financial results. The standard does not apply to revenue associated with financial instruments, and 
  therefore does not impact the majority of the group's revenue. 
- IFRIC 22 Foreign Currency Transactions and Advance Consideration provides guidance on how to determine the date of 
  the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, 
  expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability arising 
  from the payment or receipt of advance consideration in a foreign currency. 

The above mentioned standards and interpretation to the IFRS standards, adopted on 1 January 2018, did not effect the 
group's previously reported financial results or disclosures and did not impact the group's results upon transition 
or the group's accounting policies.
- IFRS 9 Financial Instruments with effect from 1 January 2018, replaced IAS 39. IFRS 9 introduced new requirements 
  which included an ECL impairment model and new requirements for the classification and measurement of financial 
  assets, refer to the IFRS 9 Financial Instruments section for more detail.

IFRS 9, adopted on 1 January 2018, impacted the group's results upon transition and materially impacted the group's
accounting policies, refer to the IFRS 9 Financial Instruments section for more detail.


IFRS 9 Financial Instruments
Background
With effect from 1 January 2018, IFRS 9 replaced IAS 39. IFRS 9 introduced new requirements which included an ECL
impairment model and new requirements for the classification and measurement of financial assets as follows:  

ECL impairment          IFRS 9's ECL impairment model's requirements represented the most material IFRS 9 
requirements            transition impact for the group.
                        The ECL model applies to financial assets measured at either amortised cost or at 
                        fair value through other comprehensive income (FVOCI), loan commitments when there 
                        is a present commitment to extend credit (unless these are measured at fair value 
                        through profit or loss (FVTPL)) and financial guarantees.
                        ECL is, at a minimum, required to be measured through a loss allowance at an amount equal 
                        to the lower of 12-month or full lifetime ECL (where the lifetime is less than 12 months) 
                        of the financial asset. A loss allowance for full lifetime ECL is required for a financial 
                        asset if the credit risk of that financial instrument has increased significantly since 
                        initial recognition.    
                        
Classification          IFRS 9 requires all financial assets to be classified and measured on the basis of the 
and measurement         entity's business model for managing the financial assets and the contractual cash flow 
                        characteristics of the financial assets.
                        The accounting for financial assets differs in various other areas to existing requirements 
                        such as embedded derivatives and the recognition of fair value adjustments in OCI.
                        All changes in the fair value of financial liabilities that are designated at FVTPL due to 
                        changes in own credit risk are required to be recognised within OCI.

Adoption of IFRS 9
The group retrospectively adopted IFRS 9 on 1 January 2018 with an adjustment to the group's opening 1 January 2018
reserves and, as permitted by IFRS 9, did not restate its comparative financial results. Accordingly, the group's
previously reported financial results up to 31 December 2017 are presented in accordance with the requirements of 
IAS 39 and for 2018, and future reporting periods, are presented in terms of IFRS 9. However, the group has elected 
to continue to apply the hedge accounting requirements of IAS 39. The group prepared a IFRS 9 transition report on 
which a reasonable assurance audit opinion, included in the report, was provided by the group's external auditors 
that outlined the impact of the transition to IFRS 9. For further information, regarding the transition impact, 
refer to the transition report, available at www.standardbank.com/reporting.

IFRS 9's ECL requirements 
The most material IFRS 9 transition impact for the group is that of IFRS 9's new ECL requirements which results in the
earlier recognition of credit impairment provisions primarily as a result of the drivers outlined below. This impact 
was solely as a result of the adoption of IFRS 9 and is not as a result of changes in the credit quality of the 
group's loan exposures.

12-month ECL for        IFRS 9 contains a minimum 12-month ECL for exposures for which there has not been a 
performing loans        significant increase in credit risk (SICR), whereas IAS 39 required credit impairments to 
(stage 1)               be recognised only following the identification of objective evidence of impairment.    

Significant increase    A lifetime ECL is recognised for all exposures for which there has been a SICR, being a material 
in credit risk (SICR)   change in the probability of default, since origination.
(stage 2)

Off-balance sheet       IFRS 9's scope includes off-balance sheet exposures, such as unutilised loan commitments, 
exposures               guarantees and letters of credit.

Lifetime model          In terms of determining ECL for stage 1 and 2 exposures where there is a probability of 
work out requirement    default, the potential loss from a lifetime perspective is considered, which would include 
                        the probability of recovery post default and subsequent re-default.                
                        For stage 3 exposures, being exposures that are either in default or where default is imminent, 
                        this would include consideration of cures and subsequent re-default.

Forward looking         IFRS 9 requires an adjustment for forward looking economic expectations in the determination 
economic expectations   of SICR and in the measurement of the ECL.

IFRS 9 key financial impacts
Table 1: Impact on the group's summarised statement of financial position on 1 January 2018
                                                               IFRS 9 transition adjustment at
                                                                      1 January 2018
                                             Group IAS 39                      IFRS 9              Group IFRS 9
                                                       at              classification                        at  
                                              31 December                         and                 1 January     
                                                     2017  IFRS 9 ECL    measurements      Total           2018    
                                                       Rm          Rm              Rm         Rm             Rm
Assets                                                                                                             
Financial investments                             533 314        (272)             32       (240)       533 074    
Loans and advances                              1 048 027      (7 839)            (83)    (7 922)     1 040 105    
Interest in associates and joint ventures           9 665         (53)             (3)       (56)         9 609    
Other financial and non-financial assets1         436 922       2 234              94      2 328        439 250    
Total assets                                    2 027 928      (5 930)             40     (5 890)     2 022 038    
Equity and liabilities                                                                                             
Equity                                            190 017      (6 276)           (361)    (6 637)       183 380    
Equity attributable to 
ordinary shareholders                             157 020      (5 930)           (331)    (6 261)       150 759    
Equity attributable to other 
equity holders                                      9 047                                                 9 047    
Equity attributable to non-controlling 
interests                                          23 950        (346)            (30)      (376)        23 574    
Liabilities2                                    1 837 911         346             401        747      1 838 658    
Total equity and liabilities                    2 027 928      (5 930)             40     (5 890)     2 022 038    
1 Materially relates to the recognition of additional deferred tax assets following the recognition of the 
  IFRS 9 ECL transition adjustment.
2 Materially relates to the recognition of ECL on off-balance sheet letters of credit, bankers acceptances and
  guarantees.
  
Table 2: Impact on the group's summarised statement of changes in equity on 1 January 2018
                                                                             IFRS 9                 
                                             Group IAS 39                transition             Group IFRS 9      
                                                       at             adjustment at                       at    
                                              31 December                 1 January                1 January    
                                                     2017                      2018                     2018
                                                       Rm                        Rm                       Rm
Ordinary share capital and share premium           18 063                                             18 063    
Retained earnings1                                144 539                    (5 302)                 139 237    
Statutory credit risk reserve2                      3 089                      (948)                   2 141    
Other3                                             (8 671)                      (11)                  (8 682)   
Total ordinary shareholder's equity               157 020                    (6 261)                 150 759    
Other equity instruments                            9 047                                              9 047    
Non-controlling interests4                         23 950                      (376)                  23 574    
Total equity and liabilities                      190 017                    (6 637)                 183 380    
1 The change in the retained earnings relates to IFRS 9's classification and measurement and ECL changes and 
  the reversal of the statutory credit risk reserve (SCRR) as explained further below.
2 In addition to the R6 637 million impact on the group's reserves, as a result of the adoption of IFRS 9, 
  a debit of R948 million to the group's SCRR and a corresponding credit to the group's retained earnings has 
  been recognised. The SCRR has historically been maintained by means of an appropriation of retained earnings 
  to a non-distributable reserve, being the SCRR, by the group's operations in the Africa Regions as a result 
  of country regulators requiring a higher credit impairment provision than that as determined in accordance 
  with IAS 39. Given that IFRS 9 typically results in an impairment provision that is equivalent to or greater 
  than that as required by the Africa Regions' regulators, a transfer from the SCRR back to retained earnings 
  is required on transition to IFRS 9. The transfer has only been reflected with respect to those countries 
  whose regulators that, at the date of this transition report, had approved such releases. This transfer has 
  no impact on the group's net asset value, total reserves or capital ratios.
3 Of the R593 million in the group's available-for-sale reserve as at 31 December 2017, R582 million has been
  reclassified on the adoption of IFRS 9 to the FVOCI category and R11 million relates to gains and losses on 
  instruments that were classified as available-for-sale and are now classified as either FVTPL or at amortised 
  cost.
4 The change relates to the non-controlling interests' share of the IFRS 9 impact post tax relating to IFRS 9's
  classification and measurement and ECL changes.

Table 3: Impact on financial instrument classification (excluding impact of IFRS 9 ECL)
                                Group      IFRS 9 transition adjustment at 1 January 2018            Group      
                            IAS 39 at             Designated                         Fair value  IFRS 9 at
                          31 December  Held-for-     at fair  Fair value  Amortised     through  1 January  Transitional
                                 2017    trading       value     default       cost         OCI       2018    adjustment
                                   Rm         Rm          Rm          Rm         Rm          Rm         Rm            Rm
Financial assets                                                                                                            
Held-for-trading              241 482    241 482                                                   241 482                  
Designated at fair value      409 456                368 326       2 191     38 126                408 643          (813)   
Held-to-maturity               81 607                              3 261     79 187                 82 448           841    
Loans and receivables       1 142 431                    596      66 312  1 075 492          26  1 142 426            (5)   
Available-for-sale             45 149                     52         371     10 041      34 537     45 001          (148)   
                            1 920 125    241 482     368 974      72 135  1 202 846      34 563  1 920 000          (125)   
Financial liabilities                                                                                                       
Held-for-trading              139 751    139 751                                                   139 751                  
Designated at fair value      173 176                165 559                  7 813                173 372           196    
Other amortised cost        1 284 837                  9 311              1 275 731              1 285 042           205    
                            1 597 764    139 751     174 870              1 283 544              1 598 165           401    

IFRS 9 accounting policies
Financial instruments
Initial measurement - financial instruments
All financial instruments are measured initially at fair value plus directly attributable transaction 
costs and fees, except for those financial instruments that are subsequently measured at fair value through 
profit or loss where such transaction costs and fees are immediately recognised in profit or loss. Financial 
instruments are recognised (derecognised) on the date the group commits to purchase (sell) the instruments 
(trade date accounting).

Financial assets
Nature
Amortised cost             A debt instrument that meets both of the following conditions (other than those 
                           designated at fair value through profit or loss):
                           - Held within a business model whose objective is to hold the debt instrument 
                             (financial asset) in order to collect contractual cash flows; and
                           - The contractual terms of the financial asset give rise on specified dates to 
                             cash flows that are solely payments of principal and interest on the principal 
                             amount outstanding.  
 
                           This assessment includes determining the objective of holding the asset and whether 
                           the contractual cash flows are consistent with a basic lending arrangement. Where the 
                           contractual terms introduce exposure to risk or volatility that are not considered 
                           de minimis and are inconsistent with a basic lending arrangement, the financial asset 
                           is classified as fair value through profit or loss - default.      
Fair value                 Includes:
through OCI                - A debt instrument that meets both of the following conditions (other than those 
                             designated at fair value through profit or loss):
                             - Held within a business model in which the debt instrument (financial asset) is 
                               managed to both collect contractual cash flows and sell financial assets; and
                             - The contractual terms of the financial asset give rise on specified dates to 
                               cash flows that are solely payments of principal and interest on the principal 
                               amount outstanding.
                             This assessment includes determining the objective of holding the asset and whether 
                             the contractual cash flows are consistent with a basic lending arrangement. Where the 
                             contractual terms introduce exposure to risk or volatility that are not considered 
                             de minimis and are inconsistent with a basic lending arrangement, the financial asset 
                             is classified as fair value through profit or loss - default.     
                           - Equity financial assets which are not held for trading and are irrevocably elected 
                             (on an instrument-by-instrument basis) to be presented at fair value through OCI.
Held for trading           Those financial assets acquired principally for the purpose of selling in the near term 
                           (including all derivative financial assets) and those that form part of a portfolio of 
                           identified financial instruments that are managed together and for which there is 
                           evidence of a recent actual pattern of short-term profit taking.
                           Included are commodities that are acquired principally for the purpose of selling in 
                           the near future or generating a profit from fluctuations in price or broker-trader margin.
Designated at fair value   Financial assets are designated to be measured at fair value to eliminate or significantly
through profit or loss     reduce an accounting mismatch that would otherwise arise.
Fair value through profit  Financial assets that are not classified into one of the above mentioned financial asset
or loss - default          categories.

Subsequent measurement
Subsequent to initial measurement, financial assets are classified in their respective categories and measured at
either amortised cost or fair value as follows:
Amortised cost             Amortised cost using the effective interest method with interest recognised in interest 
                           income, less any expected credit impairment losses which are recognised as part of 
                           credit impairment charges.
                           Directly attributable transaction costs and fees received are capitalised and amortised 
                           through interest income as part of the effective interest rate.
Fair value through         Debt instrument: Fair value, with gains and losses recognised directly in the fair value 
OCI                        through OCI reserve. When a debt financial asset is disposed of, the cumulative fair value 
                           adjustments, previously recognised in OCI, are reclassified to the other gains and losses 
                           on financial instruments within non-interest revenue. 
  
                           Interest income on a debt financial asset is recognised in interest income in terms of the 
                           effective interest rate method. Dividends received are recognised in interest income 
                           within profit or loss.
                           
                           Equity instrument: Fair value, with gains and losses recognised directly in the fair value 
                           through OCI reserve. When equity financial assets are disposed of, the cumulative fair value 
                           adjustments in OCI are reclassified within reserves to retained income. 
                           
                           Dividends received on equity instruments are recognised in other revenue within non-interest 
                           income.
Held for trading           Fair value, with gains and losses arising from changes in fair value (including interest 
                           and dividends) recognised in trading revenue.
Designated at fair         Fair value gains and losses (including interest and dividends) on the financial asset are 
value through profit       recognised in the income statement as part of other gains and losses on financial instruments 
or loss                    within non-interest revenue.
Fair value through         Fair value gains and losses (including interest and dividends) on the financial asset are
profit or loss             recognised in the income statement as part of other gains and losses on financial instruments   
- default                  within non-interest revenue.

Impairment
ECL is recognised on debt financial assets classified as at either amortised cost or fair value through OCI, financial
guarantee contracts that are not designated at fair value through profit or loss as well as loan commitments that are
neither measured at fair value through profit or loss nor are used to provide a loan at a below market interest rate.

The measurement basis of the ECL of a financial asset includes assessing whether there has been a SICR at the
reporting date which includes forward-looking information that is available without undue cost or effort at the reporting 
date about past events, current conditions and forecasts of future economic conditions. The measurement basis of the ECL,
which is set out in the table that follows, is measured as the unbiased and probability-weighted amount that is determined
by evaluating a range of possible outcomes, the time value of money and forward-looking information.
Stage 1                    A 12-month ECL is calculated for financial assets which are neither credit-impaired on
                           origination nor for which there has been a SICR.                          
Stage 2                    A lifetime ECL allowance is calculated for financial assets that are assessed to
                           have displayed a SICR since origination and are not considered low credit risk. 
Stage 3 (credit            A lifetime ECL is calculated for financial assets that are assessed to be credit impaired.     
impaired assets)           The following criteria are used in determining whether the financial asset is impaired: 
                           - default
                           - significant financial difficulty of borrower and/or modification
                           - probability of bankruptcy or financial reorganisation
                           - disappearance of an active market due to financial difficulties.

The key components of the impairment methodology are described as follows:
Significant increase       At each reporting date the group assesses whether the credit risk of its exposures
in credit risk             has increased significantly since initial recognition by considering the change in 
                           the risk of default occurring over the expected life of the financial asset.
                           Credit risk of exposures which are overdue for more than 30 days are also considered 
                           to have increased significantly.
Low credit risk            Exposures are generally considered to have a low credit risk where there is a low risk 
                           of default, the exposure has a strong capacity to meet its contractual cash flow 
                           obligations and adverse changes in economic and business conditions may not necessarily 
                           reduce the exposure's ability to fulfil its contractual obligations.
Default                    The group's definition of default has been aligned to its internal credit risk 
                           management definitions and approaches. A financial asset is considered to be in 
                           default when there is objective evidence of impairment. The following criteria are 
                           used in determining whether there is objective evidence of impairment for financial 
                           assets or groups of financial assets:                                                      
                           - significant financial difficulty of borrower and/or modification (i.e. known cash 
                             flow difficulties experienced by the borrower)
                           - a breach of contract, such as default or delinquency in interest and/or principal 
                             payments
                           - disappearance of active market due to financial difficulties
                           - it becomes probable that the borrower will enter bankruptcy or other financial 
                             reorganisation
                           - where the group, for economic or legal reasons relating to the borrower's financial 
                             difficulty, grants the borrower a concession that the group would not otherwise 
                             consider.   

                           Exposures which are overdue for more than 90 days are also considered to be in default.

Forward-looking            Forward-looking information is incorporated into the group's impairment methodology    
information                calculations and in the group's assessment of SICR. The group includes all forward 
                           looking information which is reasonable and available without undue cost or effort. 
                           The information will typically include expected macro-economic conditions and factors 
                           that are expected to impact portfolios or individual counterparty exposures. 
Write-off                  Financial assets are written off when there is no reasonable expectation of recovery. 
                           Financial assets which are written off may still be subject to enforcement activities.

ECLs are recognised within the statement of financial position as follows:
Financial assets           Recognised as a deduction from the gross carrying amount of the asset (group of assets).    
measured at amortised      Where the impairment allowance exceeds the gross carrying amount of the asset (group 
cost (including loan       of assets), the excess is recognised as a provision within other liabilities.
commitments)
Off-balance sheet          Recognised as a provision within other liabilities.
exposures (excluding 
loan commitments)
Financial assets           Recognised in the fair value reserve within equity. The carrying value of the financial
measured at fair           asset is recognised in the statement of financial position at fair value.
value through OCI

Financial liabilities
Nature
Held-for-trading           Those financial liabilities incurred principally for the purpose of repurchasing in 
                           the near term (including all derivative financial liabilities) and those that form part 
                           of a portfolio of identified financial instruments that are managed together and for 
                           which there is evidence of a recent actual pattern of short-term profit taking.    
Designated at              Financial liabilities are designated to be measured at fair value in the following
fair value through         instances:
profit or loss             - to eliminate or significantly reduce an accounting mismatch that would otherwise 
                             arise where the financial liabilities are managed and their performance evaluated 
                             and reported on a fair value basis
                           - where the financial liability contains one or more embedded derivatives that 
                             significantly modify the financial liability's cash flows.
Amortised cost             All other financial liabilities not included in the above categories.

Subsequent measurement
Subsequent to initial measurement, financial liabilities are classified in their respective categories and 
measured at either amortised cost or fair value as follows:
Held-for-trading           Fair value, with gains and losses arising from changes in fair value (including 
                           interest and dividends) recognised in trading revenue.
Designated at              Fair value, with gains and losses arising from changes in fair value (including 
fair value through         interest and dividends but excluding fair value gains and losses attributable to 
profit or loss             own credit risk) are recognised in the other gains and losses on financial 
                           instruments as part of non-interest revenue.    
                           Fair value gains and losses attributable to changes in own credit risk are 
                           recognised within OCI, unless this would create or enlarge an accounting mismatch 
                           in which case the own credit risk changes are recognised within trading revenue.
Amortised cost             Amortised cost using the effective interest method recognised in interest expense.

Derecognition and modification of financial assets and liabilities
Financial assets and liabilities are derecognised in the following instances:
                           DERECOGNITION                                  MODIFICATION
Financial assets           Financial assets are derecognised when         Where an existing financial asset or 
                           the contractual rights to receive cash         liability is replaced by another with 
                           flows from the financial assets have           the same counterparty on substantially 
                           expired, or where the group has                different terms, or the terms of an 
                           transferred its contractual rights to          existing financial asset or liability 
                           receive cash flows on the financial            are substantially modified, such an 
                           asset such that it has transferred             exchange or modification is treated 
                           substantially all the risks and                as a derecognition of the original 
                           rewards of ownership of the financial          asset or liability and the recognition 
                           asset. Any interest in the transferred         of a new asset or liability at fair value, 
                           financial assets that is created or            including calculating a new effective 
                           retained by the group is recognised            interest rate, with the difference in 
                           as a separate asset or liability.              the respective carrying amounts being 
                                                                          recognised in other gains and losses 
                           The group enters into transactions             on financial instruments within 
                           whereby it transfers assets,                   non-interest revenue. The date of 
                           recognised in its statement of                 recognition of a new asset is 
                           financial position, but retains                consequently considered to be the 
                           either all or a portion of the risks           date of initial recognition for 
                           or rewards of the transferred assets.          impairment calculation purposes. 
                           If all or substantially all risks             
                           and rewards are retained, then the             If the terms are not substantially 
                           transferred assets are not derecognised.       different for financial assets or 
                           Transfers of assets with the retention         financial liabilities, the group 
                           of all or substantially all risks and          recalculates the new gross carrying 
                           rewards include securities lending             amount by discounting the modified 
                           and repurchase agreements.                     cash flows of the financial asset 
                                                                          or financial liability using the 
                           When assets are sold to a third party          original effective interest rate. 
                           with a concurrent total rate of return         The difference between the new 
                           swap on the transferred assets, the            gross carrying amount and the
                           transaction is accounted for as a              original gross carrying amount 
                           secured financing transaction, similar         is recognised as a modification gain 
                           to repurchase transactions. In                 or loss within credit impairments 
                           transactions where the group neither           (for distressed financial asset 
                           retains nor transfers substantially all        modifications) or in other gains and 
                           the risks and rewards of ownership of a        losses on financial instruments within 
                           financial asset, the asset is derecognised     non-interest revenue (for all other 
                           if control over the asset is lost. The         modifications).   
                           rights and obligations retained in the 
                           transfer are recognised separately as 
                           assets and liabilities as appropriate. 
                           
                           In transfers where control over the 
                           asset is retained, the group continues 
                           to recognise the asset to the extent of 
                           its continuing involvement, determined 
                           by the extent to which it is exposed to 
                           changes in the value of the transferred 
                           asset.
Financial liabilities      Financial liabilities are derecognised 
                           when the financial liabilities' obligation 
                           is extinguished, that is, when the 
                           obligation is discharged, cancelled or 
                           expires. 

Financial guarantee contracts
A financial guarantee contract is a contract that requires the group (issuer) to make specified 
payments to reimburse the holder for a loss it incurs because a specified debtor fails to make 
payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts are initially recognised at fair value, which is generally equal to 
the premium received, and then amortised over the life of the financial guarantee. Financial guarantee 
contracts (that are not designated at fair value through profit or loss) are subsequently measured at 
the higher of the:
- ECL calculated for the financial guarantee
- unamortised premium.

Presentation of gains and losses on financial instruments 
DESCRIPTION                RECOGNITION AND MEASUREMENT
Net interest income        Interest income and expense (with the exception of borrowing costs that are 
                           capitalised on qualifying assets, that is assets that necessarily take a substantial 
                           period of time to get ready for their intended use or sale and which are not measured 
                           at fair value) are recognised in net interest income using the effective interest 
                           method for all interest-bearing financial instruments. In terms of the effective interest 
                           method, interest is recognised at a rate that exactly discounts estimated future cash 
                           payments or receipts through the expected life of the financial instrument or, where 
                           appropriate, a shorter period, to the net carrying amount of the financial asset or 
                           financial liability. Direct incremental transaction costs incurred and origination fees 
                           received, including loan commitment fees, as a result of bringing margin-yielding assets 
                           or liabilities into the statement of financial position, are capitalised to the carrying 
                           amount of financial instruments that are not at fair value through profit or loss and 
                           amortised as interest income or expense over the life of the asset or liability as part 
                           of the effective interest rate.  
                           
                           Where the estimates of payments or receipts on financial assets or financial liabilities 
                           are subsequently revised, the carrying amount of the financial asset or financial liability 
                           is adjusted to reflect actual and revised estimated cash flows. The carrying amount is 
                           calculated by computing the present value of the adjusted cash flows at the financial asset 
                           or financial liability's original effective interest rate. Any adjustment to the carrying 
                           value is recognised in net interest income.     
                           
                           When a financial asset is classified as specifically impaired (before 1 January 2018) or 
                           as Stage 3 impaired (after 1 January 2018), interest income is calculated on the impaired 
                           value (gross carrying amount less specific impairment) based on the original effective 
                           interest rate. The contractual interest income on the gross exposure is suspended and is 
                           only recognised in interest income when the financial asset is no longer specifically 
                           impaired (before 1 January 2018) or is reclassified out of Stage 3 (after 1 January 2018).  
                           
                           Before the adoption of IFRS 9 on 1 January 2018, the following additional amounts were 
                           recognised in net interest income:
                           - Fair value gains and losses on debt financial assets that were designated at fair 
                             value through profit or loss
                           - The gain or loss on the derecognition of a financial asset classified as 
                             available-for-sale
                           - Gains and losses arising from the derecognition of financial assets and financial 
                             liabilities classified as at amortised cost
                           - Fair value gains and losses on financial liabilities (including changes as a result 
                             of own credit risk) that were designated at fair value through profit or loss.
Net fee and                Fee and commission revenue, including transactional fees, account servicing fees,
commission revenue         investment management fees, sales commissions and placement fees are recognised as 
                           the related services are performed. Loan commitment fees for loans that are not expected 
                           to be drawn down are recognised on a straight-line basis over the commitment period.
                           
                           Loan syndication fees, where the group does not participate in the syndication or 
                           participates at the same effective interest rate for comparable risk as other 
                           participants, are recognised as revenue when the syndication has been completed. 
                           Syndication fees that do not meet these criteria are capitalised as origination fees 
                           and amortised to the income statement as interest income. The fair value of issued 
                           financial guarantee contracts on initial recognition is amortised as income over the 
                           term of the contract.
                           
                           Fee and commission expenses, included in net fee and commission revenue, are mainly 
                           transaction and service fees relating to financial instruments, which are expensed as 
                           the services are received. Expenditure is presented as fee and commission expenses 
                           where the expenditure is linked to the production of fee and commission revenue.
Trading revenue            Trading revenue comprises all gains and losses from changes in the fair value of 
                           trading assets and liabilities, together with related interest income, expense and 
                           dividends.
Customer loyalty           The group's banking activities operate a customer loyalty programme in terms of    
programmes                 which it undertakes to provide goods and services to certain customers. The reward 
                           credits are accounted for as a separately identifiable component of the fee and 
                           commission income transactions of which they form a part. The consideration allocated 
                           to the reward credits is measured at the fair value of the reward credit and is 
                           recognised over the period in which the customer utilises the reward credits. Expenses 
                           relating to the provision of the reward credits are recognised in fee and commission 
                           expenses as and when they are incurred. 
Dividend income            Dividends are recognised in interest income (other revenue) for debt (equity instruments) 
                           when the right to receipt is established. Scrip dividends are recognised as dividends 
                           received where the dividend declaration allows for a cash alternative.
Insurance premium          Insurance premium revenue includes life insurance premiums, health insurance premiums
revenue                    and short-term insurance premiums.
Investment income          Investment income for investment management and life insurance activities comprises
                           mainly rental income from properties, interest, hotel operations' sales and dividends. 
                           Dividends are recognised when the right to receive payment is established and interest 
                           income is recognised using the effective interest method.
                           
                           Hotel operation sales comprise the fair value of the sale of accommodation, food and 
                           beverage, other guest facilities and rentals received. Revenue is shown net of VAT, 
                           returns, rebates and discounts.
Management fees            Fee income includes management fees on assets under management and administration fees.
on assets under            Management fees on assets under management are recognised over the period for which the
management                 services are rendered, in accordance with the substance of the relevant agreements.

                           Administration fees received for the administration of medical schemes are recognised 
                           when the services are rendered.
   
Other gains/losses         After 1 January 2018, includes:
on financial               - Fair value gains and losses on debt financial assets that are at fair value through
instruments                  profit or loss
                           - The gain or loss on the derecognition of a debt financial asset classified as at 
                             fair value through OCI
                           - Gains and losses arising from the derecognition of financial assets and financial 
                             liabilities classified as at amortised cost
                           - Gains and losses arising from the reclassification of a financial asset from amortised 
                             cost to fair value
                           - Gains and losses arising from the modification of a financial asset (which is not 
                             distressed) and financial liability as at amortised cost.
Other revenue              Other revenue includes dividends on equity financial assets, underwriting profit from 
                           the group's short-term insurance operations and related insurance activities and 
                           re-measurement gains and losses from contingent consideration on disposals and purchases.
                           
                           Before 1 January 2018, gains and losses on equity instruments designated at fair value 
                           through profit or loss are recognised within other revenue. Gains and losses on equity 
                           instruments classified as available-for-sale financial assets are reclassified from OCI 
                           to other revenue on derecognition or impairment.
Short-term insurance       Includes premium income, commission and policy fees earned, as well as net incurred 
income                     claim losses and broker commission paid. Annual business income is accounted for on the 
                           accrual basis and comprises the cash value of commission and fees earned when premiums 
                           or fees are payable directly to the group and comprises the cash value of commission 
                           earned when premiums are payable directly to the underwriters.

Offsetting
Income and expenses are presented on a net basis only when permitted by IFRS, or for gains and losses arising from 
a group of similar transactions.

Interest in suspense
In addition to the above identified changes between IAS 39 and IFRS 9, interest in suspense (refers to 
contractual interest which accrues on financial assets which are classified as non-performing) is presented 
as follows:

IAS 39 accounting treatment
Up to 31 December 2017, IAS 18 Revenue required interest income to be recognised only when it was probable 
that the economic benefits associated with a transaction would flow to the entity. The group, in line with these 
requirements, suspended the recognition of contractual interest income on all exposures where it was determined 
that future economic benefits were not probable. The accounting presentation policy for this suspended contractual 
interest was to present the balance sheet interest in suspense account as part of the gross carrying amount of 
the financial asset (i.e. gross carrying amount net of interest in suspense). In addition, upon the curing of the 
non-performing financial asset, the group elected an accounting presentation policy to recognise this suspended 
contractual interest (previously unrecognised interest) within net interest income line within the income statement. 
This policy was elected on the basis that the presentation best represented the nature of the amount in terms of 
IAS 1 Presentation of Financial Statements (IAS 1).

IFRS 9 accounting treatment
IFRS 9 requires that interest income for financial assets classified as Stage 3 be calculated on the net carrying
amount (after deducting credit impairments), which will result in a portion of contractual interest being suspended. 
IFRS 9 requires that this suspended contractual interest be presented as part of the financial assets' gross 
carrying amount. The group has applied this requirement by presenting balance sheet suspended contractual interest 
as a separate reconciling item when calculating the financial assets' net carrying amount. Hence suspended 
contractual interest does not impact the net carrying amount of the financial asset as presented on the statement 
of financial position. However, this change in presentation has resulted in an increased gross carrying amount 
of financial assets when compared to IAS 39. 

The group has elected to present previously unrecognised interest earned on curing of a financial asset out of 
Stage 3 within net interest income. This presentation is consistent with the group's treatment under IAS 39 and 
was elected on the basis that the presentation best represented the nature of the amount in terms of IAS 1. 
During the six months ended 30 June 2018, R545 million of unrecognised interest earned was recognised within 
net interest income.

Restatements

All restatements noted below are unaudited. 

Correction of prior period error
Consistent with the restatement to the group's statement of financial position at 31 December 2016 as 
reported in the group's annual financial statements for the year ended 31 December 2017, the group determined 
that certain derivative intercompany positions held between the group's banking activities and the group's 
investment management and life insurance activities were erroneously eliminated on a net basis as opposed to 
a Ogross basis. The group has restated its previously reported condensed consolidated statement of financial 
position to incorporate the correct elimination of these intercompany derivative positions.

The restatement did not impact the group's net exposure on derivatives, nor did it affect the group's 
reserves. The change to the group's condensed consolidated statement of financial position is reflected in 
the table that follows:
                                                           1H17
                                   As previously                           Restated     
                                       presented                           position     
                                          Asset/                             Asset/    
                                     (liability)       Restatement      (liability)   
                                              Rm                Rm               Rm
Derivative assets                         53 690            (2 438)          51 252    
Derivative liabilities                   (59 861)            2 438          (57 423)   

The following condensed primary financial statement and notes have been impacted by this restatement:
- condensed consolidated statement of financial position 
- condensed segment report
- accounting classifications and fair values of assets and liabilities
- financial assets and liabilities measured at fair value.

Change in accounting policy
Expenses incurred with respect to the group's customer loyalty programme (Ucount) have historically 
been recorded as part of operating expenses in the income statement. During the year, the group amended 
its accounting policy for these expenses to rather be presented as part of net fee and commission revenue 
(within non-interest revenue). This policy aligns with the group's policy for other expenses that are 
presented within net fee and commission revenue. The impact of the change in the accounting policy on the 
group's financial results is as follows:
                                           1H17                                       FY17
                        As previously                             As previously                     
                            presented                  Restated       presented                  Restated    
                              Income/                   Income/         Income/                   Income/   
                            (expense)   Restatement   (expense)       (expense)   Restatement   (expense)   
                                   Rm            Rm          Rm              Rm            Rm          Rm
Non-interest revenue           20 566          (216)     20 350          43 037          (463)     42 574    
Operating expenses in                                                            
banking activities            (27 769)          216     (27 553)        (57 512)          463     (57 049)   

The following condensed primary financial statement and notes have been impacted by this restatement:
- condensed consolidated income statement 
- non-interest revenue
- condensed segment report.

The above restatement had the following effect on key financial statistics:
                                           1H17                                       FY17
                        As previously                             As previously        
                             reported   Restatement    Restated        reported   Restatement    Restated
JAWs                             1.0%          0.0%        1.0%            1.0%          0.1%        1.1%    
Cost-to-income                  56.3%         (0.2%)      56.1%           55.7%         (0.2%)      55.5%    


Other information

Pro forma constant currency financial information
The pro forma constant currency information disclosed in these results is the responsibility of the group's directors.
The pro forma constant currency information has been presented to illustrate the impact of changes in currency rates on
the group's results and may not fairly present the group's results of operations. In determining the change in constant
currency terms, the comparative financial reporting period's results have been adjusted for the difference between the
current and prior period's average exchange rates (determined as the average of the daily exchange rates). The
measurement has been performed for each of the group's material currencies. The pro forma constant currency financial 
information contained in this announcement has not been reviewed and reported on by the group's external auditors. 

The following average exchange rates were used in the determination of the pro forma constant currency information 
and were calculated using the average of the average monthly exchange rates (determined on the last day of each of 
the six months in the period).
                                                                         1H18 average             1H17 average     
                                                                        exchange rate            exchange rate    
US dollar                                                                       12.30                    13.20    
Pound sterling                                                                  16.92                    16.62    
Argentinian peso                                                                 0.58                     0.84    
Nigerian naira                                                                   0.03                     0.04    
Kenyan shilling                                                                  0.12                     0.13    
Zambian kwacha                                                                   1.25                     1.39    
Mozambique metical                                                               0.20                     0.20    

16 August 2018

Administrative and contact details

Standard Bank Group Limited
Registration number 1969/017128/06
Incorporated in the Republic of South Africa
Website: (www.standardbank.com)

Registered office
9th Floor, Standard Bank Centre
5 Simmonds Street, Johannesburg, 2001
PO Box 7725, Johannesburg, 2000

Group secretary
Zola Stephen
Tel: +27 11 631 9106
Email: Zola.Stephen@standardbank.co.za 

Head: Investor relations
Sarah Rivett-Carnac
Tel: +27 11 631 6897
Email: Sarah.Rivett-Carnac@standardbank.co.za

Group financial director
Arno Daehnke
Tel: +27 11 636 3756
Email: Arno.Daehnke@standardbank.co.za

Head office switchboard
Tel: +27 11 636 9111 

Directors
TS Gcabashe (chairman), H Hu1 (deputy chairman), JH Maree (deputy chairman), A Daehnke*, 
GJ Fraser-Moleketi, GMB Kennealy, BJ Kruger*, NNA Matyumza, KD Moroka, ML Oduor-Otieno2, 
AC Parker, ANA Peterside con3, MJD Ruck, PD Sullivan4, SK Tshabalala* (chief executive), 
JM Vice, L Wang1

*Executive Director  1 Chinese  2 Kenyan  3 Nigerian  4 Australian 

All nationalities are South African, unless otherwise specified above.

Share transfer secretaries in South Africa
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 
Johannesburg, 2196
PO Box 61051, Marshalltown, 2107

Share transfer secretaries in Namibia
Transfer Secretaries (Proprietary) Limited
4 Robert Mugabe Avenue
(entrance in Burg Street), Windhoek
PO Box 2401, Windhoek

JSE independent sponsor
Deutsche Securities (SA) Proprietary Limited

Namibian sponsor
Simonis Storm Securities (Proprietary) Limited

JSE joint sponsor
The Standard Bank of South Africa Limited

Share codes
JSE share code: SBK ISIN: ZAE000109815
NSX share code: SNB ISIN: ZAE000109815
SBKP ZAE000038881 (First preference shares) 
SBPP ZAE000056339 (Second preference shares) 

Please direct all customer queries and comments to: 
Information@standardbank.co.za

Please direct all shareholder queries and comments to: 
InvestorRelations@standardbank.co.za

Refer to www.standardbank.com/reporting for a list of definitions, 
acronyms and abbreviations

www.standardbank.com

Disclaimer
This document contains certain statements that are "forward-looking" with respect to certain of the group's plans,
goals and expectations relating to its future performance, results, strategies and objectives. Words such as "may", 
"could", "will", "expect", "intend", "estimate", "anticipate", "aim", "outlook", "believe", "plan", "seek", "predict" or
similar expressions typically identify forward-looking statements. These forward-looking statements are not statements 
of fact or guarantees of future performance, results, strategies and objectives, and by their nature, involve risk and
uncertainty because they relate to future events and circumstances which are difficult to predict and are beyond the 
group's control, including but not limited to, domestic and global economic business conditions, market-related risks 
such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities (including 
changes related to capital and solvency requirements), the impact of competition, inflation, deflation, the timing impact 
and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of 
changes in domestic and global legislation and regulations in the jurisdictions in which the group and its affiliates
operate. The group's actual future performance, results, strategies and objectives may differ materially from the plans, 
goals and expectations expressed or implied in the forward-looking statements. The group makes no representations or 
warranty, express or implied, that these forward-looking statements will be achieved and undue reliance should not be 
placed on such statements. The group undertakes no obligation to update the historical information or forward-looking 
statements in this document and does not assume responsibility for any loss or damage arising as a result of the 
reliance by any party thereon.
Date: 16/08/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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