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STANDARD BANK GROUP LIMITED - Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 31 March 2019

Release Date: 28/05/2019 08:50
Code(s): SBK     PDF:  
 
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Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 31 March 2019

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


Basel III capital adequacy, leverage ratio and liquidity coverage ratio
disclosure as at 31 March 2019.


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



 Standard Bank Group capital adequacy and leverage ratio


                                                                                 March 2019 (Rm)
                                                                             Transitional1 Fully loaded2


 Ordinary share capital and premium                                              17 860          17 860
 Ordinary shareholders' reserves3                                               145 680          145 680
 Qualifying Common Equity Tier I non-controlling interest                         5 909            5 909
 Regulatory deductions against Common Equity Tier I capital                     (26 267)         (29 651)
 Common Equity Tier I capital                                                   143 182          139 798
 Unappropriated profit                                                           (9 552)          (9 552)
 Common Equity Tier 1 capital excl. unappropriated profit                       133 630          130 246
 Qualifying other equity instruments                                              7 660            7 660
 Qualifying Tier I non-controlling interest                                       1 223            1 223
 Tier I capital excl. unappropriated profit                                     142 513          139 129
 Qualifying Tier II subordinated debt                                            16 648           16 648
 General allowance for credit impairments                                         3 324            5 215
 Tier II capital                                                                 19 972           21 863
 Total regulatory capital excl. unappropriated profit                           162 485          160 992



                                                                               March 2019 (Rm)
                                                                                             Transitional1 Fully loaded2


  Credit risk                                                                                     85 612              85 612
  Counterparty credit risk                                                                          3 085               3 085
  Equity risk in the banking book                                                                     584                 584
  Market risk                                                                                       8 828               8 828
  Operational risk                                                                                19 106              19 106
  Investments in financial entities                                                                 5 796                5 657
  Total minimum regulatory capital requirement 4                                                 123 011              122 872




                                                                                                 March 2019
                                                                                          Transitional1 Fully loaded2
Capital Adequacy Ratio (excl. unappropriated profit)
Total capital adequacy ratio (%)                                                                 15.2                    15.2
Tier I capital adequacy ratio (%)                                                                13.4                    13.0
Common Equity Tier I capital adequacy ratio (%)                                                  12.5                    12.2


Capital Adequacy Ratio (incl. unappropriated profit)
Total capital adequacy ratio (%)                                                                  16.1                   16.0
Tier I capital adequacy ratio (%)                                                                 14.2                   13.9
Common Equity Tier I capital adequacy ratio (%)                                                   13.4                   13.1


Leverage ratio
Tier I capital (excl. unappropriated profit) (Rm)                                             142 513                139 129
Tier I capital (incl. unappropriated profit) (Rm)                                             152 065                148 681
Total exposures (Rm)                                                                       1 862 636              1 859 324
Leverage ratio (excl. unappropriated profits, %)                                                    7.7                    7.5
Leverage ratio (incl. unappropriated profits, %)                                                    8.2                    8.0


Note:
1 Represents IFRS 9 transition impact as allowed by the SARB.
2 Represents fully loaded Expected Credit Loss (ECL) accounting results (full IFRS 9 impact).
3 Including unappropriated profits.
4 Measured at 11.5% in line with Basel III transitional requirements and excludes any bank-specific capital requirements.

  There is currently no requirement for the countercyclical buffer add-on in South Africa. The impact on the group’s countercyclical
  buffer requirement from other jurisdictions in which the group operates is insignificant (buffer requirement of 0.0207%).
The Standard Bank of South Africa (SBSA) and its subsidiaries
capital adequacy and leverage ratio


                                                                    March 2019 (Rm)
                                                                Transitional1 Fully loaded2


Ordinary share capital and premium                                  45 248          45 248
                                    3
Ordinary shareholders' reserves                                     48 965          48 965
Regulatory deductions against Common Equity Tier I capital         (12 951)       (14 336)
Common Equity Tier I capital                                       81 262           79 877
Unappropriated profit                                              (4 923)          (4 923)
Common Equity Tier 1 capital excl. unappropriated profit           76 339           74 954
Qualifying other equity instruments                                 5 462             5 462
Tier I capital excl. unappropriated profit                         81 801           80 416
Qualifying Tier II subordinated debt                               15 365           15 365
General allowance for credit impairments                            1 378             2 681
Tier II capital                                                    16 743           18 046
Total regulatory capital excl. unappropriated profit               98 544           98 462




                                                                    March 2019 (Rm)
                                                                Transitional1 Fully loaded2


Credit risk                                                        54 471          54 471
Counterparty credit risk                                            2 755           2 755
Equity risk in the banking book                                       185             185
Market risk                                                         5 606           5 606
Operational risk                                                   11 241          11 241
Investments in financial entities                                   1 526           1 526
Total minimum regulatory capital requirement 4                     75 784          75 784
                                                                                                March 2019
                                                                                          Transitional1 Fully loaded2
Capital Adequacy Ratio (excl. unappropriated profit)
Total capital adequacy ratio (%)                                                                 15.0                    15.0
Tier I capital adequacy ratio (%)                                                                12.4                    12.2
Common Equity Tier I capital adequacy ratio (%)                                                  11.6                    11.4

Capital Adequacy Ratio (incl. unappropriated profit)
Total capital adequacy ratio (%)                                                                  15.7                   15.7
Tier I capital adequacy ratio (%)                                                                 13.2                   13.0
Common Equity Tier I capital adequacy ratio (%)                                                   12.4                   12.1


Leverage ratio
Tier I capital (excl. unappropriated profit) (Rm)                                              81 801                 80 416
Tier I capital (incl. unappropriated profit) (Rm)                                              86 724                 85 339
Total exposures (Rm)                                                                       1 519 572              1 518 187
Leverage ratio (excl. unappropriated profits, %)                                                    5.4                    5.3
Leverage ratio (incl. unappropriated profits, %)                                                    5.7                    5.6

Note:
1 Represents IFRS 9 transition impact as allowed by the SARB.
2 Represents fully loaded ECL accounting results (full IFRS 9 impact).
3 Excluding unappropriated profits.
4 Measured at 11.5% in line with Basel III transitional requirements and excludes any bank-specific capital requirements.

  There is currently no requirement for the countercyclical buffer add-on in South Africa. The impact on the group’s countercyclical
  buffer requirement from other jurisdictions in which the group operates is insignificant (buffer requirement of 0.0164%).
Liquidity Coverage Ratio
In terms of the Basel III requirements in Directive 11/2014 issued in terms of section 6(6) of
the Banks Act, (Act No. 94 of 1990), banks are directed to comply with the minimum
disclosure on the liquidity coverage ratio (LCR) on both a SBG group consolidated as well as
SBSA Solo entity level. This disclosure is in accordance with Pillar 3 of the Basel III liquidity
accord.

The LCR is designed to promote short-term resilience of the 30 calendar day liquidity profile,
by ensuring that banks have sufficient high quality liquid assets (HQLA) to meet potential
outflows in a stressed environment.


                                                                                   The Standard Bank of
                                                      Standard Bank Group           South Africa Limited
                                                              Consolidated                (“SBSA”) Solo
                                                             31 March 2019                31 March 2019
                                                                       Rm                            Rm

    Total HQLA                                                        272 306                       178 465
    Net cash outflows                                                 219 933                       136 790
    LCR (%)                                                             123.8                         130.5
    Minimum requirement (%)                                             100.0                         100.0

    Note:
    1. Only banking and/or deposit taking entities are included. The group data represents a
       consolidation of the relevant individual net cash outflows and the individual HQLA portfolios,
       where surplus HQLA holding in excess of the minimum requirement of 100% have been excluded
       from the aggregated HQLA number in the case of all Africa Regions entities.

    2. The above figures reflect the simple average of 90 days of daily observations over the quarter
       ended 31 March 2019 for SBSA including SBSA Isle of Man branch, Stanbic Bank Ghana,
       Stanbic Bank Uganda, Stanbic IBTC Bank Nigeria, Standard Bank Namibia, Standard Bank Isle
       of Man Limited and Standard Bank Jersey Limited. The remaining Africa Regions banking entities
       results are based on the average of the month-end data points at 31 January 2019, 28 February
       2019 and 31 March 2019. The figures are based on the regulatory submissions to the South
       African Reserve Bank.
    3. SBSA Solo disclosure excludes foreign branches.


Net Stable Funding Ratio
In terms of the Basel III requirements in Directive 8/2017 issued in terms of section 6(6) of
the Banks Act, (Act No. 94 of 1990), banks are directed to comply with the minimum
disclosure on the net stable funding ratio (NSFR) on both a SBG group consolidated as well
as SBSA Solo entity level. This disclosure is in accordance with Pillar 3 of the Basel III
liquidity accord.

The objective of the Basel III Net stable funding ratio (NSFR) is to promote funding stability
and resilience in the banking sector by requiring banks to maintain a stable funding profile in
relation to the composition of assets and off-balance sheet activities.

.
                                                  Standard Bank Group
                                                          Consolidated               SBSA Solo
                                                         31 March 2019            31 March 2019
                                                                   Rm                       Rm

Available stable funding                                     1 097 352                    784 622
Required stable funding                                        944 637                    739 388
NSFR (%)                                                         116.2                      106.1
Minimum requirement (%)                                          100.0                      100.0


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

Johannesburg
28 May 2019

Lead sponsor
The Standard Bank of South Africa Limited

Independent sponsor
J P Morgan Equities South Africa Proprietary Limited


Namibian sponsor
Simonis Storm Securities (Proprietary) Limited

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