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STANDARD BANK GROUP LIMITED - Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 30 September 2019

Release Date: 26/11/2019 08:00
Code(s): SBK     PDF:  
 
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Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 30 September 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 30 September 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


                                                                                 September 2019 (Rm)
                                                                             Transitional1 Fully loaded2


 Ordinary share capital and premium                                               17 984          17 984
 Ordinary shareholders' reserves3                                                150 295         150 295
 Qualifying Common Equity Tier I non-controlling interest                          5 928           5 928
 Regulatory deductions against Common Equity Tier I capital                      (22 223)        (25 571)
 Common Equity Tier I capital                                                   151 984          148 636
 Unappropriated profit                                                           (9 657)          (9 657)
 Common Equity Tier 1 capital excl. unappropriated profit                       142 327          138 979
 Qualifying other equity instruments                                               7 666           7 666
 Qualifying Tier I non-controlling interest                                          779             779
 Tier I capital excl. unappropriated profit                                     150 772          147 424
 Qualifying Tier II subordinated debt                                            22 026           22 026
 General allowance for credit impairments                                          3 571           5 462
 Tier II capital                                                                 25 597           27 488
 Total regulatory capital excl. unappropriated profit                           176 369          174 912
                                                                                                   September 2019 (Rm)
                                                                                             Transitional1 Fully loaded2


  Credit risk                                                                                       89 035              89 035
  Counterparty credit risk                                                                           4 204                4 204
  Equity risk in the banking book                                                                        684                684
  Market risk                                                                                        8 409                8 409
  Operational risk                                                                                  19 263              19 263
  Investments in financial entities                                                                  6 155                6 010
  Total minimum regulatory capital requirement 4                                                   127 750            127 605




                                                                                                 September 2019
                                                                                          Transitional1 Fully loaded2
Capital Adequacy Ratio (excl. unappropriated profit)
Total capital adequacy ratio (%)                                                                 15.9                    15.8
Tier I capital adequacy ratio (%)                                                                13.6                    13.3
Common Equity Tier I capital adequacy ratio (%)                                                  12.8                    12.6


Capital Adequacy Ratio (incl. unappropriated profit)
Total capital adequacy ratio (%)                                                                  16.8                   16.7
Tier I capital adequacy ratio (%)                                                                 14.5                   14.2
Common Equity Tier I capital adequacy ratio (%)                                                   13.7                   13.4


Leverage ratio
Tier I capital (excl. unappropriated profit) (Rm)                                            150 772                 147 424
Tier I capital (incl. unappropriated profit) (Rm)                                            160 429                 157 081
Total exposures (Rm)                                                                       1 969 019              1 965 651
Leverage ratio (excl. unappropriated profits, %)                                                    7.7                    7.5
Leverage ratio (incl. unappropriated profits, %)                                                    8.1                    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% 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 0.0311%).

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


                                                                 September 2019 (Rm)
                                                             Transitional1 Fully loaded2


Ordinary share capital and premium                               45 248          45 248
Ordinary shareholders' reserves3                                 51 022          51 022
Regulatory deductions against Common Equity Tier I capital      (12 214)        (13 600)
Common Equity Tier I capital                                    84 056           82 670
Unappropriated profit                                            (6 826)         (6 826)
Common Equity Tier 1 capital excl. unappropriated profit        77 230           75 844
Qualifying other equity instruments                              5 467            5 467
Tier I capital excl. unappropriated profit                      82 697           81 311
Qualifying Tier II subordinated debt                            20 600           20 600
General allowance for credit impairments                         1 482            2 785
Tier II capital                                                 22 082           23 385
Total regulatory capital excl. unappropriated profit           104 779          104 696




                                                                 September 2019 (Rm)
                                                             Transitional1 Fully loaded2


Credit risk                                                     55 111          55 111
Counterparty credit risk                                         3 249           3 249
Equity risk in the banking book                                    342             342
Market risk                                                      5 443           5 443
Operational risk                                                11 365          11 365
Investments in financial entities                                1 563           1 563
Total minimum regulatory capital requirement 4                  77 073         77 073
                                                                                                September 2019
                                                                                          Transitional1 Fully loaded2
Capital Adequacy Ratio (excl. unappropriated profit)
Total capital adequacy ratio (%)                                                                 15.7                    15.6
Tier I capital adequacy ratio (%)                                                                12.4                    12.2
Common Equity Tier I capital adequacy ratio (%)                                                  11.5                    11.3

Capital Adequacy Ratio (incl. unappropriated profit)
Total capital adequacy ratio (%)                                                                  16.7                   16.7
Tier I capital adequacy ratio (%)                                                                 13.4                   13.2
Common Equity Tier I capital adequacy ratio (%)                                                   12.6                   12.4


Leverage ratio
Tier I capital (excl. unappropriated profit) (Rm)                                               82 697                81 311
Tier I capital (incl. unappropriated profit) (Rm)                                               89 523                88 137
Total exposures (Rm)                                                                         1 617 060            1 615 658
Leverage ratio (excl. unappropriated profits, %)                                                    5.1                    5.0
Leverage ratio (incl. unappropriated profits, %)                                                    5.5                    5.4

Note:
1
  Represents IFRS 9 transition impact as allowed by the SARB.
2 Represents fully loaded ECL accounting results (full IFRS 9 impact).
3 Including unappropriated profits.
4 Measured at 11.5% 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 0.0192%).
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 Standard Bank 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.

                                                     Standard Bank Group
                                                            Consolidated                   SBSA Solo
                                                       30 September 2019            30 September 2019
                                                                     Rm                           Rm

    Total HQLA                                                       283 257                      186 558
    Net cash outflows                                                210 710                      146 204
    LCR (%)                                                            134.4                        127.6
    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 92 days of daily observations over the quarter
       ended 30 September 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 July 2019, 31 August 2019
       and 30 September 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 Standard Bank 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
                                                    30 September 2019        30 September 2019
                                                                  Rm                       Rm

Available stable funding                                     1 163 167                    826 285
Required stable funding                                        988 631                    753 087
NSFR (%)                                                         117.7                      109.7
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
26 November 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: 26-11-2019 08:00:00
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