STANDARD BANK GROUP LIMITED - Financial information provided to ICBC and update on operational performance

Financial information provided to ICBC and update on operational performance

Standard Bank Group Limited
Registration No. 1969/017128/06
Incorporated in the Republic of South Africa
JSE and A2X share code: SBK
ISIN: ZAE000109815
NSX share code: SNB
(“Standard Bank Group” or “the group”)

Financial information provided to the Industrial and Commercial Bank of China Limited (“ICBC”) and
update on the group’s operational performance for the nine months ended 30 September 2019

Financial information provided to ICBC

On a quarterly basis the Standard Bank Group discloses to ICBC sufficient information to enable ICBC to equity
account the group's results. Accordingly, the following consolidated financial information, prepared on an
International Financial Reporting Standards (“IFRS”) basis, is being provided to ICBC for the nine months ended
30 September 2019.

Statement of changes in ordinary shareholders' equity for the nine months ended 30 September 2019

                           Balance as at            Earnings     Other movements     Balance as at
                               1 January       attributable to      for the period   30 September
                                   2019              ordinary                                2019
                                               shareholders

                                     Rm                   Rm                  Rm              Rm

   Ordinary share
   capital                          162                                                       162
   Ordinary share
   premium                       17 698                                      124           17 822
   Foreign currency
   translation and
   hedging reserve               (2 977)                                  (1 165)         (4 142)
   Foreign currency
   translation reserve
   (FCTR)                        (1 800)                                 (1 045)1         (2 845)
   Foreign currency
   net investment and
   cash flow hedging
   reserve                       (1 177)                                    (120)         (1 297)
   Retained earnings            149 308               17 973           (16 428)2         150 853
   Empowerment
   reserve and
   treasury shares               (2 358)                                   1 170          (1 188)
   Other                          3 418                                    1 316            4 734
   Ordinary
   shareholders’ equity         165 251               17 973            (14 983)         168 241


1 The   movement in the FCTR was mainly due to the introduction of the RTGS dollar in Zimbabwe.
2 Primarily comprises the ordinary dividends declared in March and August 2019 and transactions with
 non-controlling shareholders.

Update on the group’s performance for the nine months ended 30 September 2019

For the nine months to 30 September 2019, net interest income grew faster than non-interest revenue. Net
interest income was supported by higher average loan and deposit balances relative to the nine months to
30 September 2018. Income growth remained above operating expense growth resulting in positive jaws. Credit
impairment charges increased period on period on the back of loan book growth and charges in East Africa and
South Africa.

Banking activities headline earnings growth continues to outpace the group’s headline earnings growth.

The major business lines of ICBC Standard Bank Plc (‘ICBCS’) continue to be negatively impacted by
deteriorating market conditions and lower than anticipated client flows. These factors have impacted the
business’ ability to deliver appropriate returns on a standalone basis. The group has accordingly reviewed and
impaired the value of its 40% associate investment in ICBCS from USD383 million to USD220 million as at 30
September 2019. The impairment of R2.4 billion has been recognised in earnings attributable to ordinary
shareholders. As at 30 September 2019 ICBCS had sufficient capital to meet its regulatory requirements.
Standard Bank Group is engaging with ICBC and ICBCS to determine the best way forward for the business.

In the nine months to 30 September 2019, headline adjustable items, other than the ICBCS impairment, were not
significant. Adjusting for the ICBCS impairment, earnings attributable to ordinary shareholders were 2% higher
than recorded in the nine months to 30 September 2018.

The group’s Basel III disclosure as at 30 September 2019 will be released in November 2019.

The information contained in this announcement and that on which the operational performance update is based
has not been reviewed and reported on by the group's external auditors.

Johannesburg
22 October 2019

Lead sponsor
The Standard Bank of South Africa Limited

Independent sponsor
JP Morgan Equities South Africa Proprietary Limited

Namibian sponsor
Simonis Storm Securities (Proprietary) Limited

Date: 22/10/2019 08:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.