STANDARD BANK GROUP LIMITED - Financial information provided to ICBC and operational performance update for the three months ended 31 March 2020

Financial information provided to ICBC and operational  performance update for the three months ended 31 March 2020

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
SBKP ZAE000038881 (First preference shares)
SBPP ZAE000056339 (Second preference shares)
(“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 three months ended 31 March 2020

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 three months ended
31 March 2020.

Statement of changes in ordinary shareholders' equity for the three months ended 31 March 2020


                                 Balance as at 1           Earnings      Other movements     Balance as at 31
                                  January 2020        attributable to       for the period       March 2020
                                                            ordinary
                                                       shareholders

                                            Rm                   Rm                   Rm                 Rm

   Ordinary share
   capital                                  162                                                          162
   Ordinary share
   premium                              17 822                                                       17 822
   Foreign currency
   translation and
   hedging reserve                      (8 570)                                   12 197               3 627
   Foreign currency
   translation reserve
   (FCTR)                               (7 583)                                  12 7401               5 157
   Foreign currency
   net investment and
   cash flow hedging
   reserve                                (987)                                     (543)            (1 530)
   Retained earnings                   159 063                4 818              (8 629)2           155 252
   Empowerment
   reserve and
   treasury shares                      (2 728)                                   (1 702)            (4 430)
   Other                                  5 480                                      881               6 361
   Ordinary
   shareholders’ equity                171 229                4 818                2 747            178 794


1 The movement in the FCTR was primarily as a result of the depreciation of the Rand against the USD, GBP and
 certain African currencies.
2 Primarily   comprises the ordinary dividends declared in March 2020.
Update on the group’s operational performance for the three months ended 31 March 2020


In the three months to 31 March 2020 (“1Q20”), the operating environment in South Africa deteriorated and
consumer and business confidence declined further. In Africa Regions, lower oil prices threatened oil exporters
and declines in global demand, in particular from China, negatively impacted export-reliant economies. The
Covid-19 crisis escalated quickly in March 2020. By 31 March 2020, global asset values had declined materially,
emerging markets had seen large risk-off outflows and there were partial or full lockdowns across almost all of
the markets in which we operate.

The group quickly and successfully instituted its business continuity management plans, with a focus on ensuring
the safety of our employees and the continued service to our clients. These are now well embedded, and the
focus has turned to supporting those clients who are experiencing financial strain in these difficult times.
Accordingly, we support actions taken by the South African Reserve Bank, and others, to mitigate the economic
impact, reduce stress in the system and release capital to facilitate support to individuals and businesses.

Turning to the group’s banking performance in 1Q20. Net interest income growth was slow as fairly robust year-
on-year loan growth was offset by negative endowment and margin pressure. Non-interest revenue growth was
supported by an increase in trading revenue. In South Africa, sales activity and ATM, card and branch volumes
declined in late March as lockdowns and other restrictions were implemented. Operating expenses were well
managed and jaws were positive. Credit impairment charges for the period were significantly higher than in the
prior year. The increase was driven by deterioration in both the portfolio performance and the forward-looking
assumptions used in the modelling of expected credit losses.

IFRS 9 requires the group to consider forward-looking information in the calculation of expected credit losses.
Accordingly, the group has estimated an increase in economic stress caused by the crisis and, where
appropriate, incorporated that in the calculation of the group’s expected credit losses. It is worth noting that, by 31
March 2020, the Covid-19 related stress on individuals and businesses had, to a large extent, not emerged yet
and the provisions raised were based on our best estimate at the time.

Liberty Holdings Limited’s (“Liberty”) performance for the period was impacted by market movements, in
particular the Shareholder Investment Portfolio. Please refer to Liberty’s SENS announcement dated 21 April
2020. 1Q19 headline earnings included earnings from the group’s 20% stake in ICBC Argentina (“ICBCA”). The
group ceased equity accounting ICBCA earnings in September 2019 post the decision to sell the stake. The
group recorded a small loss associated with its 40% stake in ICBC Standard Bank PLC.

In 1Q20 earnings attributable to ordinary shareholders were 27% lower than in the comparative period. During
the period the headline earnings adjustable items were not material.

The group remains well capitalised and liquid. The group’s Basel III disclosure as at 31 March 2020 will be
released in May 2020.

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 April 2020


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: 22-04-2020 07:45:00
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