Standard Bank Group FINANCIAL RESULTS PRESENTATION FOR THE … FINANCIAL RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2017 Standard Bank Group. standardbank.com. Notes FINANCIAL

Notes

FINANCIAL RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2017

Standard Bank Group

standardbank.com

Notes

FINANCIAL RESULTS

STANDARD BANK GROUP

PRESENTATION 2017

STRATEGY DELIVERING

We measure our progress using five strategic value drivers

SEEimpact

Group Purposeit all starts with being more thana bank – the reason we exist

Group Visiona picture of what we wouldlike to be in five years

Africa is our home, we drive her growth

To be the leading financial services organisation in, for and across Africa, delivering exceptional client experiences and superior value

In executing our group strategy our key focus areas are

Digitisation

Universal financial services organisation

Client centricity We want to do valuablethings for clients

Via digitalplatforms

Delivering a seamless universal financial services proposition

SEE = Social, economic and environmental2

Standard Bank Group Analysis of financial results for the year ended 31 December 2017 1

Notes

West Africa: Recovery• Uneventful election in Angola and transition to new

President• Political event risk due to delayed elections in DRC• Interest rates and inflation remained at elevated levels• Foreign currency liquidity constraints eased in

Nigeria but continued in Angola• Devaluation of Nigerian naira• Strong economic growth in Ghana and Côte d’Ivoire

OPERATING CONTEXT

3

KEY EXTERNAL DRIVERS

South Africa: Low confidence and growth• Political uncertainty• Low confidence and subdued growth• Ratings downgrades• Supportive EM risk-on trade continued

– Equity market rallied and ZAR strengthened– Inflation moderated and the rate cycle turned

• Increasingly competitive banking environment

West – Angola, Cote d’Ivoire, DRC, Ghana, Nigeria South & Central – Botswana, Lesotho, Malawi, Mauritius, Mozambique,Namibia, Swaziland, Zambia, Zimbabwe

East – Ethiopia, Kenya, South Sudan, Tanzania, Uganda

East Africa: Political upheaval• Extended and disputed election process in Kenya• Continued civil war in South Sudan• Moderating inflation provided scope for rate cuts• Low credit demand in Uganda despite monetary

stimulus• Interest rate caps and floors in Kenya impacted

credit supply• Pressure on margins

• Sovereign debt concerns in Mozambique, Zambia and Zimbabwe

• Political event risk in Lesotho• Higher commodity prices, in particular coal and

copper• IMF discussions in Zambia and Mozambique• Severe cash shortages in Zimbabwe• Weaker growth and ratings downgrade in Namibia

South & Central: Sovereign debt concerns

FINANCIALOUTCOME

RESULTS PRESENTATION

2

Notes

ROBUST RESULTS

GROUP HEADLINE EARNINGS

FY17: R26 270mFY16: R23 009m

BANKING HEADLINE EARNINGS

FY17: R24 268mFY16: R22 062m

DIVIDEND PER SHARE

FY17: 910 centsFY16: 780 cents

CREDIT LOSS RATIO JAWSROE

+14% +10% +17%

86

86

2016

2017

26

104

2016

2017

15.3

17.1

2016

2017

5

% bps bps

INCOME STATEMENT

2017Rm

change%

change CCY%

2016Rm

Net interest income 60 125 6 10 56 892

Non-interest revenue 43 037 0 7 42 965

Total income 103 162 3 9 99 857

Operating expenses 57 512 2 8 56 235

Pre-provision profit 45 650 5 10 43 622

Credit impairment charges 9 410 (1) 5 9 533

Taxation 9 493 (0) 5 9 496

Attributable to minorities and other equity instrument holders 2 800 17 39 2 383

Banking activities headline earnings 24 268 10 14 22 062

Other banking interests 567 >100 >100 (8)

Liberty attributable to the group 1 435 50 50 955

SBG headline earnings 26 270 14 18 23 009

6


Notes

SEGMENTAL VIEW

2017Rm

change%

change CCY%

2016Rm

PBB 14 008 10 12 12 724

South Africa 13 176 11 11 11 824

Africa Regions 202 (41) 9 342

International 630 13 32 558

CIB 11 506 11 17 10 339

Central & other (1 246) 24 22 (1 001)

Banking activities 24 268 10 14 22 062

Other banking interests 567 >100 >100 (8)

ICBCS 152 >100 >100 (591)

ICBC Argentina 415 (29) (11) 583

Liberty attributable to the group 1 435 50 50 955

SBG headline earnings 26 270 14 18 23 009

7

GEOGRAPHIC VIEW

Strong performance*

Moderate performance *

Focus to improve*

Single representation/development phase

* Determined based on various inputs,including growth, resilience and returns

8

Headline earningsFY17

Rmchange

%

change CCY

%FY16

Rm

SBSA 16 078 10 10 14 599

Africa Regions 6 751 19 35 5 676

East 1 033 (13) 0 1 192

South & Central 3 512 21 29 2 912

West 2 206 40 76 1 572

ROEFY17

%FY16

%SBSA 16.6 15.8Africa Regions 23.8 20.6East 16.0 20.1

South & Central 26.3 20.2

West 26.0 21.5

Banking activities 18.0 16.8

Offshore financial services:• Isle of Man• Jersey• Mauritius

Presence in international markets:• Beijing• Dubai• Hong Kong

• London• New York• São Paulo


4

Notes

DRIVERS OFPERFORMANCE

DRIVING SHAREHOLDER VALUE IN 2017GROWTH

NII +6%

NIR 0%

Impairmentcharge -1%

Operatingexpenses +2%

OBI >100%

Liberty +50%

Average interestearning assets 0%

Average depositsand funding +3%

NIM +26bps

Headline earnings +14%

ROE Dividendper share17.1% +17%

RETURNS

10

`NSFR >100%LCR >100%

RESILIENCECET1 13.5% Average

equity +2%


Notes

INTEREST EARNING ASSETSGROWTH IN TARGETED SEGMENTS

0 100 200 300 400

Mortgages

VAF

Card

Overdraft

Term loans

Property

Financialinvestments

INTEREST EARNING ASSETS (AVG. BALANCES)

FY16FY17

Rbn

Average IEA growth 0%

+3%

-1%

-1%

+10%

-3%

+6%

VOLUME CHANGE YOY (AVG.BALANCES)

Approved lines and increased limits to support businesses and corporates

Retained leading market share in an increasingly

competitive market

IB loans granted were offset by early repayments in SA

+12% Placement of additional liquidity from SA and Africa

Regions

11

GROWTH

RESILIENCE RETURNS

DEPOSIT & FUNDING GROWTH FOCUSED GROWTH SUBJECT TO PRICING

0 100 200 300 400

Banks

Current

Cashman

Call

Savings

Term

NCD

DEPOSITS & FUNDING (AVG. BALANCES)

FY16FY17

Rbn

Average depositgrowth +3%

Term funding grew to support NSFR in the run

up to the regulatory compliance deadline

Successfully grew term deposits; in particular

in retail

VOLUME CHANGE YOY (AVG. BALANCES)

+4%

+9%

+1%

+4%

+17%

12

-23%

-2%

Increases in wholesale and franchise funding resulted in decreased reliance on

interbank funding

Wholesale priced call deposits in PBB grew 14%

YOY

GROWTH

RESILIENCE RETURNS


6

Notes

8%

4%

4%

15%

6%

AfricaRegions

International

GROWTH IN RETAIL PRICED DEPOSITS

GrowthGrowth CCY

426

740

92

FY17

DEPOSITS AND FUNDING, R1 258bn

Wholesale priced - banksWholesale priced - customersRetail priced

Rbn

Retail priced deposits

-23%

+4%

+6%

RETAIL DEPOSIT GROWTH GAINING MOMENTUM IN AFRICA REGIONS AND INTERNATIONAL

Wholesale priced funding growing slower than

retail, supporting NIM

13

GBP 5.1bn

R76bn

R266bn

Driven by increased number of accounts

and balances

South Africa

GROWTH

RESILIENCE RETURNS

11% growth in number of

customers in PBB Africa Regions

NET INTEREST MARGIN PRICING DOMINATING AS ENDOWMENT FADES

448 474

6 1 27 3

3

FY16 Client yield onlending book

Client yield onfunding book

Endowment Treasury Other FY17bps

• Impact moderated in 2H17• Average SA rates flat YOY• Africa Regions mixed

• In SA, better pricing on mortgages, personal unsecured and business lending

• In Africa Regions, switch to LCY lending

Higher cost associated with extending term, FCY funding and defending SA retail deposits

Favourable returns on excess liquidity in Africa Regions

14

GROWTH

RESILIENCE RETURNS


Notes

• Pricing – rate increases in Mozambique vs cuts in Malawi and Zambia

• Volume – supported by liquidity in Mozambique

Africa Regions NII

-11%

15%

11%

1%

21%

47%

South &Central

West

NII MOVEMENT, % GrowthGrowth CCY

East

42

18

FY17

NET INTEREST INCOME, R60.1BN

SBSA Africa Regions Other

+7%CCY +25%

+5%

NET INTEREST INCOMEMIXTURE OF RATE & REGULATORY CHANGES

• Pricing – impact of Kenya caps and floors & lower rates in Uganda

• Volume – low demand

• Pricing – margin expansion on the back of rate increases in Nigeria and Angola

• Volume – customer gains and liquidity

15

Rbn

+6%CCY +10%

GROWTH

RESILIENCE RETURNS

GROWTH DRIVEN BY AFRICA REGIONSNON-INTEREST REVENUE

NET FEE AND COMMISSION REVENUE, R29.1BN

Account transaction

fees

Card-based commission

Electronic banking

Knowledge-based fees

Insurance feesOther

+1%

+3%

+7%

+2%

Documentation and admin fees +12%

+3%-37%

16

Driven by fixed income revenue growth in Ghana and Nigeria

Driven by fixed income revenue growth partly offset by declines in

equities and currency trading on lower

volatility

FY16 FY17

TRADING REVENUE, R10.7BN

SBSA Africa Regions Other

-6%CCY +17%

+8%

GROWTH

RESILIENCE RETURNS


8

Notes

112100

87 86 86

147141

127 125 120

41

22 2430 33

FY13 FY14 FY15 FY16 FY17bps

CREDIT LOSS RATIOS

Group PBB CIB

FLAT GROUP CLR MASKS UNDERLYING MOVEMENTSCREDIT PERFORMANCE

Through-the-cycle group CLR, 80bps – 100bps

17

20169.0 9.1 8.1 8.4 9.1

0.1

1.3 1.20.4

FY13 FY14 FY15 FY16 FY17Rbn

CREDIT IMPAIRMENT CHARGES

Specific impairments Portfolio impairments

GROWTH

RESILIENCE RETURNS

DRIVING OPERATIONAL LEVERAGECOST GROWTH

56.355.7

40

42

44

46

48

50

52

54

56

58

60

0

2

4

6

8

10

12

14

16

FY16 FY17 %%

Income growth Cost growth Cost-to-income ratio

FY17Rm

change%

CCY change

%FY16

RmStaff costs 31 672 2 8 30 976Other operating expenses 25 840 2 9 25 259

IT 6 073 3 6 5 880

Premises 3 994 3 9 3 870

Depreciation 2 471 (9) (4) 2 725

Amortisation of intangibles 2 371 18 18 2 015

Marketing 1 967 19 25 1 653

Professional fees 1 636 (1) 7 1 658

Other 7 328 (2) 9 7 458

Total operating expenses 57 512 2 8 56 235

Positive jaws, 26bps

Positive jaws, 104bps

18

GROWTH

RESILIENCE RETURNS

%


Notes

SBG PROFIT ATTRIBUTABLE IMPACTED BY IFRS ADJUSTMENTSLIBERTY PERFORMANCE

19

1 804 1 435

369

SBG share ofIFRS headline

earnings

Treasury shareadjustment

Headline earningsattributable to SBG

HEADLINE EARNINGS ATTRIBUTABLE TO SBGx 55.5%

Rm1 412 2 719 3 252

236

1 224

376

481 307

533

Insurance LibFinMarkets

STANLIB Central Normalisedoperatingearnings

SIP Normalisedheadlineearnings

IFRSadjustments

(REIT)

IFRSheadlineearnings

LIBERTY

Rm

50%

GROWTH

RESILIENCE RETURNS

OTHER BANKING INTERESTSBOTH INDIVIDUALLY POSITIVE, DAMPENED BY CURRENCY

20

(235)

48

(356)

104

FY17

ICBCS (40% STAKE)

1H 2H

FY16

UK consortium tax relief, c.R100m

YOY change + R743m

Rm

358 164

225

251

FY16 FY17

ICBC ARGENTINA (20% STAKE)

1H 2H

YOY change (R132m)

Rm

-29%-11% CCY

GROWTH

RESILIENCE RETURNS


10

Notes

POSITIONED FOR DOWNGRADE RISK AND REGULATORY REFORMSBALANCE SHEET RESILIENCE

12.6 12.412.9

13.913.5

13.2 12.913.3

14.3 14.2

16.215.5 15.7

16.616.0

FY13 FY14 FY15 FY16 FY17%

CAPITAL ADEQUACY RATIOS

CET 1 Tier 1 Total

Capital• AT1 issued - R3.5bn• Estimated IFRS 9 impact

Balance sheet provisions ~ +32%Fully-loaded CET1 impact of ~ 70 bpsElected 3 year phase-in

• Finalisation of Basel III – evaluating the impact

Liquidity • LCR >100%• NSFR >100% as at 1 January 2018• Term funding raised - R57bn

CET113.5%

21

GROWTH

RESILIENCE RETURNS

CET 1 target range 11.0% - 12.5%

2.1 2.1

2.7 2.7

3.1


SBG RETURN ON RWA

17.0 17.1 22.2 23.0 26.3


HEADLINE EARNINGS

803 821 819 839 846


AVERAGE RWA

EXPANDING RETURN ON RWARETURN ON RWA

+14%

+1%

RoRWA expanded 40bps

22

GROWTH

RESILIENCE RETURNS


Notes

14.2 13.0 15.6 15.3 17.1

13.212.3

16.316.8

18.0

19.7

21.5 21.8

20.6

23.8


ROE

SBG ROE Banking activities ROE Africa Regions ROE

STRONG EARNINGS GROWTH AND CAR SUPPORTING HIGHER DIVIDEND PAYOUTSHAREHOLDER RETURNS

SBG ROE target range 15% – 18%

23

533 598 674 780 910

49.2

55.3

48.5

54.2 55.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0

200

400

600

800

1 000

1 200

FY13 FY14 FY15 FY16 FY17%cps

DIVIDEND PER SHARE AND PAYOUT RATIOS

Dividend per share Dividend payout ratio

+17%

GROWTH

RESILIENCE RETURNS

24

ROE 18% – 20%CET1 11.0% – 12.5%

Africa Regions contribution to

banking HE > 30%

Revenue growth > cost growth CLR 80bps – 100bps

LCR & NSFR >100%

IN THE MEDIUM TERM

GROWTHGrowing our client franchise

Delivering sustainable earnings growth

RESILIENCEMaintaining a resilient balance sheet

and diversified earnings streams across products and geographies

RETURNSIncreasing return on equity

LOOKING FORWARD


12

Notes

CORPORATE & INVESTMENT

BANKING

25

CIB HIGHLIGHTS

REVENUEGROWTH

CLIENT REVENUE GROWTH

HEADLINEEARNINGS GROWTH

CREDIT LOSS RATIO TO CUSTOMERS JAWS ROE

+5% +6% +11%

44

44

FY16

FY17

264

455

FY16

FY17

19.5

22.2

FY16

FY17

26

bps bps %


Notes

CIB HIGHLIGHTS

• Committed and delivering on strategy

• Sustainable growth through regional, sector, client and product diversification

• Effective use of the balance sheet to support clients

• Responsive risk management strategy to market realities

• Continued focus on cost discipline and productivity gains

• ROE of 22.2% with headline earnings of R11.5bn

27

CIB SUMMARISED INCOME STATEMENT

FY17Rm

change%

change CCY%

FY16Rm


Non-interest revenue 16 504 (1) 9 16 624

Total income 37 251 5 13 35 420

Operating expenses 19 436 1 8 19 317

Pre-provision profit 17 815 11 19 16 103

Credit impairment charges 1 625 1 28 1 603

CIB headline earnings 11 506 11 17 10 339

Jaws (bps) 455 264

Cost-to-income ratio (%) 52.2 54.5

ROE (%) 22.2 19.5

28


14

Notes

CIB CLIENT FRANCHISESUSTAINABILITY THROUGH DIVERSIFICATION

TPS

GM

IB

FI CONS IND P&I O&G M&M T&M REAL ESTATE Other

2016 2017

12%MNC AR

+30%

41%Large

Domestic+13%

Geographic

Client Revenue

+6%

Sector

Client Segment Product

62%MNC

Clients+5%

48%MNC SA

0%

South Africa+4%

S&C+6%

CCY +13%

East Africa+3%

CCY +14%

+8%CCY +18%

40%MNC Int.

+7%

59%Other

Domestic+4%

+3%CCY +6%

+4%CCY +13%

Size of the bubble is indicative of the comparative revenue

Analysis based on client revenues

Size of the bubble is indicative of the comparative revenue

+14%CCY +18%

-3%CCY +3% -5%

CCY -2% -4%CCY -2%

+16%CCY +29%

+10%CCY +22%

+6%CCY +11%

+6%CCY +9%

+18%CCY +23%

West Africa+16%

CCY + >30%

38%DomesticClients+8%

29

CIB BUSINESS UNITS

Total income Headline earnings

FY17 change changeCCY FY17 change change

CCYRbn % % Rbn % %

Transactional Products and Services 14.7 8 18 3.7 24 32

Global Markets 14.0 4 13 4.6 3 13

Investment Banking* 8.6 3 6 3.2 11 7

CIB 37.3 5 13 11.5 11 17

57% 56% 51% 51% 49%

43%45% 49%

49% 51%

FY13 FY14 FY15 FY16 FY17Rm

South Africa Africa Regions

REGIONAL REVENUE TREND

30

11%CAGR

* Includes Real Estate and PIM


Notes

PARTNERING OUR CLIENTS AS THEY GROW

Coral FLNG

2017USD 8 billion

Commercial Facility Agent and Onshore Bank

ICBC : Pathfinder Bank

(Mozambique)

Banque Ouest Africaine de Dévelopement

2017Eurobond

USD 850 million5% Bond due 2027

Joint Lead arranger Long dated currency hedge

provider

(Ivory Coast)

City Lodge

2017ZAR 800 million

BEE RefinanceSole Debt Funder

(South Africa)

AFCONS Infrastructure Ltd

2017USD 398m

Issuance of Performance Guarantee

(Ghana)

Sea Harvest Group

2017R 1.3bn IPO

Sole Advisor Sole Bookrunner

Sole Transaction Sponsor

(South Africa)

31

- 400

- 200

0

200

400

600

800

1 000

1 200

1 400

1 600

SA AR SA AR SA AR SA AR SA AR

CREDIT IMPAIRMENTS

Specific impairments Portfolio impairments

PRUDENT RISK MANAGEMENTIN A STRESSED ENVIRONMENT

32

6.0 5.9 7.4 5.6 5.6

65

5356 56

60

0

10

20

30

40

50

60

70

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

FY13 FY14 FY15 FY16 FY17 %

NPLs AND COVERAGE RATIO

NPLs Coverage ratio

%

Rm

FY13 FY14 FY15 FY16 FY17

59

32

7333

15

151

219

13

24

143

Credit loss ratio

1.7 1.4 1.4 1.1 1.2

NPL ratio


16

Notes

COST DISCIPLINE & PRODUCTIVITY GAINS

33

58.2 53.7 55.8 54.5 52.2

-1.8

3.8

-3.1

2.6

4.6

-5%

-3%

-1%

1%

3%

5%

7%

9%

48.00%

50.00%

52.00%

54.00%

56.00%

58.00%

60.00%

FY13 FY14 FY15 FY16 FY17%%

CTI Jaws

MOVING FORWARD

34

• Africa is transforming and offers great opportunities for growth

• Our strategy remains relevant and we will continue to focus on execution

• Manage costs through productivity and improved efficiencies to achieve consistently positive jaws ratio and lower cost-to-income ratio

• Create an environment that encourages innovation and rewarding careers for our staff

• Maintain our commitment to partner our existing and new clients as they grow

• Strive to continuously improve client experience and relevance


Notes

PERSONAL & BUSINESS

BANKING

PBB HIGHLIGHTSSTRONG PORTFOLIO PERFORMANCE WITH HEADLINE EARNINGS OF R14bn, UP 10%

SOUTH AFRICAHEADLINE EARNINGS

FY17: R13 176mFY16: R11 824m

AFRICA REGIONSHEADLINE EARNINGS

FY17: R202mFY16: R342m

WEALTH INTLHEADLINE EARNINGS

FY17: R630mFY16: R558m

ROE

+11% +9% CCY

+32%CCY

18.8

20.0

FY16

FY17

36

CREDIT LOSS RATIO

125

120

FY16

FY17

bps

NIM

627

633

FY16

FY17

bps %


18

Notes

3.9 4.4 5.9 7.3 8.4 9.8 11.3 12.7 14.0

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17Rbn

SUSTAINED GROWTH IN HEADLINE EARNINGSOFF A HIGH BASE, WHILE INVESTING FOR THE FUTURE

Includes R1.7bn amortisation charge for IT

assets

37

CAGR 17%

PBB SUMMARISED INCOME STATEMENT

FY17Rm

change%

change CCY%

FY16Rm


Non-interest revenue 28 094 2 8 27 568

Total income 69 526 3 7 67 635Operating expenses 41 926 3 8 40 616

Pre-provision profit 27 600 2 6 27 019Credit impairment charges 7 785 (3) (0) 8 030

Net income after credit impairments 19 815 4 8 18 989Share of profit from associates and joint ventures 241 43 43 169

Attributable to non-controlling interest 153 (74) (61) 586

PBB headline earnings 14 008 10 12 12 724Jaws (bps) (43) 51

Cost-to-income ratio (%) 60.3 60.1

ROE (%) 20.0 18.8

38


Notes

PBB SUMMARISED BALANCE SHEET

FY17Rbn

change%

change CCY

%FY16

RmLoans and advances to customers 605 3 4 588

Mortgage loans 347 3 3 336

Vehicle and asset finance 82 1 2 81

Card debtors 32 3 3 31

Other loans and advances 144 4 6 140

FY17Rm

change%

change CCY

%FY16

Rm

Deposits and current accounts from customers 535 8 10 498

Current accounts 146 7 9 137

Savings and investments 389 8 10 361Retail priced deposits up 6% to R427bn, with

Africa Regions, up 15% (CCY)

~70% of mortgages in SA written post 2008

39

Dealer sales up 24% despite the market in

South Africa only growing 2%

#1 MARKET SHARE IN RETAIL DEPOSITS, MORTGAGE LOANS AND CARD DEBTORS IN SOUTH AFRICA

DEPOSIT-LED STRATEGY CONTINUES TO SHOW HEALTHY RESULTSPBB SA FRANCHISE

40

100

150

200

250

300

350

400

450

500

550

FY13 FY14 FY15 FY16 FY17

Loans to customers Deposits from customers

Reduced expensive treasury funding by R50bn

from FY13 to FY17

Rbn

Loans to customers CAGR 4%Deposits from customers CAGR 9%


20

Notes

247 255 266 276 289

3.43.7

4.0

4.34.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

220

230

240

250

260

270

280

290

300

FY13 FY14 FY15 FY16 FY17 %Rbn

RETURN ON RWA

Average RWA PBB SA return on RWA

23.0 22.0 22.1 22.8 24.4 19

20

21

22

23

24

25


ROE

41

IMPROVEMENT DESPITE INCREASE IN INTANGIBLE ASSETSPBB SA RETURNS

Return on tangible equity

33.1%

PBB AFRICA REGIONSENCOURAGING MOMENTUM CONTINUES

53.4 58.7

FY16 CCY FY17Rbn

GROSS LOANS AND ADVANCES TO CUSTOMERS

66.1 76.2

FY16 CCY FY17Rbn

DEPOSITS AND CURRENT ACCOUNTS FROM CUSTOMERS

42

10% CCY growth

15% CCY growth


Notes

PBB AFRICA REGIONSROBUST OPERATIONAL IMPROVEMENTS

157

225

245487

342 202

FY16 Strong ZAR Operationalimprovements

Regulatory impacts Credit FY17Rm

43

Accelerated write-offs in Nigeria and a

single name impairment in Malawi

Includes impact of caps and floors in

Kenya and high cash reserving costs in

Nigeria

PBB income comprises 47% of

total Africa Regions legal entity income

PBB PRODUCTS

Total income Headline earnings

FY17Rbn

change%

change CCY

%

FY17Rbn

change%

change CCY

%

Transactional products 30.4 4 8 4.1 15 22

Mortgage lending 8.4 2 3 3.3 11 11

Card products 6.9 (1) 3 1.5 (3) 3

Lending products 12.2 7 11 2.0 24 5

Vehicle and asset finance 3.9 3 5 0.5 11 11

Wealth (including bancassurance) 7.7 (4) 8 2.5 1 10

PBB 69.5 3 7 14.0 10 12

CONTRIBUTION TO HEADLINE EARNINGS BY PRODUCT

Transactional products Mortgage lendingCard products Lending productsVehicle and asset finance Wealth (including bancassurance)

18%

29%

24%11%

14%

4%

FY16

FY17

44

ALL DELIVERED GROWTH IN CCY

VAF SA pretax profit

> R900m


22

Notes

FY17%

FY16%

Mortgage loans 0.46 0.58

Vehicle and asset finance 1.09 1.24

Card debtors 4.33 4.70

Other loans and advances 2.01 1.84

Personal unsecured lending 4.10 4.39

Access loans 8.86 9.98

Business lending and other 1.15 0.77

PBB credit loss ratio 1.20 1.25

By geography

South Africa 1.19 1.29

Africa Regions 2.53 2.28

PBB credit loss ratio 1.20 1.25

PBB GROUP STRONG CREDIT PERFORMANCE

7.8 8.2 7.8 8.0 7.8

1.47 1.41

1.27 1.25 1.20

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

4

5

6

7

8

9

10

FY13 FY 14 FY 15 FY 16 FY 17Rbn

CREDIT PERFORMANCE

Credit impairment charges Credit loss ratio

45

bps

PBB GROUP NPLs INCREASED SLIGHTLY, COVERAGE RATIOS MAINTAINED

Non-performing loans ratio FY17%

FY16%

Mortgage loans 4.5 4.3

Vehicle and asset finance 3.8 3.8

Card debtors 6.6 7.1

Other loans and advances 4.4 4.1

Personal unsecured lending 7.8 9.0

Access loans 13.5 12.5

Business lending and other 3.0 2.2

PBB 4.5 4.3

By geography

South Africa 4.7 4.7

Africa Regions 6.7 5.9

PBB 4.5 4.3

Coverage ratio FY17%

FY16%

Mortgage loans 26 25

Vehicle and asset finance 44 46

Card debtors 75 72

Other loans and advances 61 64

Personal unsecured lending 75 73

Access loans 89 84

Business lending and other 46 49

PBB 41 42

By geography

South Africa 41 42

Africa Regions 42 47

PBB 41 42

46Early arrears reduced by R1.8bn to 4.7% of advances


Notes

PBB FRANCHISE

47

MOBILE TRANSACTION

VOLUMES

South Africa +32%Africa Regions >150%

CUSTOMER ACCOUNTS

South Africa +2%*Africa Regions +24%

INSTANT MONEYTRANSACTION

VOLUMES

South Africa > +50%

HEALTHY AND GROWING

CUSTOMERSERVICE

South Africa – highest NPS since 2014

Africa Regions – highest in most markets

* Targeted current accounts

41 35 30

1 3121 438

1 580

FY15 FY16 FY17millions

PBB SA

Face to Face Digital*

40 42 39

113

145

209

FY15 FY16 FY17millions

PBB AFRICA REGIONS

Face to Face Digital*

10% YoY44% YoY

* Digital includes ATM 48

PBB TRANSACTION VOLUMESDIGITAL CHANNELS DOMINATING

Mobile volumes up 32%


24

Notes

CORE BANKING COMPLETED AS A FORMAL PROGRAM, BUSINESS AS USUAL

Migration of remaining 700k personal

transactional accounts

Core Banking journey

93% of transactional accounts on new SA core banking platform

Migration of Commercial Banking

and CIB accounts

BENEFITS INCLUDE

Total capital consumed peaked in

2017

March 2018 2018 - 2019

Product rationalisation

Improved customer

experience

Improved staff experience

Account origination time

decreased

New products time to market

reduced

Improved credit management

Automation of income recovery

49

Africa Regions completed

IMPROVING OUTLOOK

50

• Momentum in customer franchise and improved service levels

• Confidence in the team

• Core banking largely complete• Improved capabilities• Accelerating digital journey• Real focus on value extraction

on new platforms

• Renewed sense of optimism in economic outlook


Notes

LOOKINGFORWARD

STRATEGY UNCHANGED

We measure our progress using five strategic value drivers

SEEimpact

Group Purposeit all starts with being more thana bank – the reason we exist

Group Visiona picture of what we wouldlike to be in five years

Africa is our home, we drive her growth

To be the leading financial services organisation in, for and across Africa, delivering exceptional client experiences and superior value

In executing our group strategy our key focus areas are

Digitisation

Universal financial services organisation

Client centricity We want to do valuablethings for clients

Via digitalplatforms

Delivering a seamless universal financial services proposition

SEE = Social, economic and environmental52


26

Notes

128.7 11.7

9.4

36.6

39.0

13.0 3.9

15.1

Clients Cost of risk Employees Suppliers Taxes Minorities Distributions ReinvestedRbn

DISTRIBUTION OF VALUEOUR KEY STAKEHOLDERS

Reinvested for growth

Client focus Employee engagement

Risk & conduct SEE impact

Reward for capital

providers

Used to support broader society

Supporting the economy

Recognising and rewarding employees for

their role

Losses absorbed by the business

Value provided for customers

53

LOOKING FORWARDSUPPORTIVE BACKDROP

• Global macros point to synchronised growth

• Commodities on a firmer footing, supported by China demand

• Sub-Saharan Africa recovery accelerating

Oil-reliant West

Commodity-reliant South & Central

Trade-driven East

• Sentiment-driven momentum in South Africa underpinned by

Political change that has created the prospect of policy progress

An opportunity for real wage growth as inflation subsides

Expected uptick in household consumption and private investment supported by pent up demand, a decade of deleveraging and policy easing

Outlook moderated by endowment headwinds in SA and Africa Regions, IFRS 9 impact and ongoing regulatory changes

3.7

2.7

1.3

0.9

3.9

3.3

1.5

2.1

3.9

3.5

2.1

2.5

Global

SSA

SA

Nigeria

REAL GDP GROWTH

FY17FY18FY19

Source: IMF, SBG Research54


Notes

55

LOOKING FORWARD

SOUTH AFRICA• Grow in our targeted segments• Keep our promises to our clients• Leverage our brand, skills, data and IT capabilities to remain

relevant and competitive

AFRICA REGIONS• Leverage our deep local understanding and unrivalled network • Grow our customer base – retail, business and corporate

To deliver on our new medium term ROE target range of 18% – 20% we will look to

Never compromise on risk or conduct – we will always do the right business the right way

Support faster, more inclusive and more sustainable economic growth and human development in South Africa and throughout the continent we are proud to call our home

INTERNATIONAL• Leverage our network to drive global connections• Collaborate with ICBC in Africa and across our networks

STANDARD BANK – DRIVING SUSTAINABLE VALUE CREATION

56

LOOKING FORWARDOUR TOP PRIORITIES FOR 2018

CLIENT DIGITAL UNIVERSAL FINANCIAL SERVICES ORGANISATION

• Continue to improve client experience

• Develop and deliver relevant, reliable, safe products and services

• Continue to accelerate the digitisation of the group for the benefit of clients and employees

• Explore new technologies

• Clarify and simplify the group’s architecture

• Deepen and extend our collaboration with Liberty


28

Documents

Standard Bank Group FINANCIAL RESULTS PRESENTATION FOR THE … FINANCIAL RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2017 Standard Bank Group. standardbank.com. Notes FINANCIAL