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Financial information provided to ICBC and update on the group’s operational performance
Standard Bank Group Limited
Registration number 1969/017128/06
Incorporated in the Republic of South Africa
Website: www.standardbank.com/reporting
Share codes
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 2022
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 2022 (1Q22).
Statement of changes in ordinary shareholders' equity for the three months ended 31 March
2022
Balance as at 1 Earnings Other movements Balance as at 31
January 2022 attributable to for the period March 2022
ordinary
shareholders
Rm Rm Rm Rm
Ordinary share capital^ 162 6 168
Ordinary share
premium^ 17 859 9 424 27 283
Foreign currency
translation and hedging
reserve (2 687) (7 964) (10 651)
Foreign currency
translation reserve
(FCTR) (1 603) (7 875) (9 478)
Foreign currency net
investment and cash
flow hedging reserve (1 084) (89) (1 173)
Retained earnings* 178 771 7 402 (12 444) 173 729
Empowerment reserve
and treasury shares (3 260) (733) (3 993)
Other 7 987 914 8 901
Ordinary shareholders’
equity 198 832 7 402 (10 797) 195 437
^ Other movements for the period in ordinary share capital and share premium relate to the issuance
of 58 million Standard Bank Group shares in terms of the Liberty minority buyout.
* Other movements for the period in retained earnings primarily comprises the R8.3 billion ordinary
dividends declared in March 2022 and with the majority of the balance relating to goodwill
associated with the Liberty minority buyout.
Update on the group’s operational performance for the three months ended 31 March 2022
The group’s earnings attributable to ordinary shareholders were 28% higher in 1Q22 than in the three
months to 31 March 2021 (“1Q21” or “the comparative period”). The group’s performance was supported
by continued core franchise and balance sheet momentum as well as a strong performance from ICBC
Standard Bank Plc (ICBCS) following an insurance recovery.
Standard Bank activities
Period on period interest rates were higher in Angola, Ghana, Mauritius, Mozambique, Namibia, South
Africa, and Zambia as well as United States and United Kingdom. In 1Q22, South Africa saw two 25 basis
point repo rate increases; one in January and one in March 2022. Higher average interest rates and a
larger average balance sheet supported the group’s net interest margin and net interest income growth
period on period. Higher transactional activity underpinned by a larger client base and less restrictions
supported fee growth. Global market volatility and higher commodity prices drove client activity and
trading revenue. 1Q22 trading revenue was sightly ahead of the comparative period.
Operating expenses increased period on period driven by annual salary increases, higher performance-
linked incentives, annual contract increases, and the normalisation of certain costs as activities returned
to pre-pandemic levels e.g. communication, travel and marketing.
Credit performance in 1Q22 was largely in line with expectations. Credit impairment charges were lower
than in the comparative period, driven principally by lower charges in the Consumer and High Net Worth
and Business and Commercial Client segments. The Corporate and Investment Banking Client segment
credit charges reverted from a net recovery in 1Q21 to a net charge in 1Q22 driven primarily by loan book
growth. The group’s credit loss ratio for 1Q22 was at the lower end of the group’s through-the-cycle target
range of 70 to 100 basis points.
Liberty Holdings Limited
Liberty Holdings Limited (Liberty) recorded a small profit in 1Q22. Liberty was 100% consolidated from 1
February 2022. Liberty’s contribution was impacted by consolidation entries related to the treasury shares
(SBG shares held by Liberty entities). The SBG share price was higher as at 31 March 2022 than at 31
December 2021 which results in a negative adjustment. Post the treasury share adjustments, the
contribution from Liberty was negative.
ICBC Standard Bank Plc
As noted in previous announcements on 11 March 2022 and 31 March 2022, ICBCS, as an emerging
markets and commodities business, had exposure to certain entities which were impacted, directly and
indirectly, by the developments in Ukraine and Russia. By 31 March 2022, ICBCS had effectively reduced
the impacted counterparty positions and significantly reduced the related market risk.
As reported on 11 March 2022, ICBCS recorded a post-tax insurance recovery of USD200 million in
January 2022. In addition, ICBCS generated a small operating profit in 1Q22, excluding the insurance
recovery referred to previously. The group has a 40% stake in ICBCS.
A strong 1Q22 performance by ICBCS more than offset the negative contribution from Liberty (post
the treasury share adjustments), boosting group headline earnings growth period on period. Headline
earnings adjustable items were not material in 1Q22.
The group remains well capitalised and liquid.
Outlook
In relation to the pandemic in Africa, while weekly Covid-19 cases have fallen in recent weeks, the risk of
further Covid-19 waves persists. Vaccination rollouts continue. In South Africa, 44% of the adult
population has been fully vaccinated.
In recent weeks, war-induced commodity price increases and broader price pressures have driven
inflation higher, the global economic growth outlook has been downgraded and uncertainty has
increased. The impact thereof is expected to differ across the countries in which we operate in sub-
Saharan Africa. Across the group’s footprint dependence on imports from Russia and Ukraine is relatively
limited. Higher food and fuel prices do pose a risk. Commodity exporters should benefit from a trade
perspective. In light of the inflationary pressures, monetary tightening is expected to be faster than
previously forecast.
Taking into account the group’s footprint and diverse client base as well as the relatively low interest
rates, the group’s risk appetite and credit outlook is unchanged at this stage. Despite increased
uncertainty, we remain committed to delivering positive jaws and an improving return on equity in 2022.
In April 2022, KwaZulu Natal, a coastal province in South Africa, recorded widespread flooding and
damage to homes and infrastructure and a loss of over 400 lives. We are actively reaching out to our
customers to provide support during this difficult time. We have boosted capabilities on the ground and
are focused on processing insurance claims.
Broad-Based Black Economic Empowerment Act: Annual Compliance Report
In accordance with paragraph 16.20(g) and Appendix 1 to Section 11 of the JSE Listings
Requirements, notice is hereby given that the Standard Bank Group´s annual compliance report in
terms of section 13G(2) of the Broad-Based Black Economic Empowerment Act has been published
and is available on the group´s website at
https://www.standardbank.co.za/southafrica/personal/about-us.
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
25 April 2022
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
Date: 25-04-2022 08:04:00
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