Standard Bank Group financial results2015 The Standard Bank Group’s (the group) analysis of financial results for the year ended December 2015 has not been audited or independently

2015Standard Bank Group

financial resultsfor the year ended 31 December

standardbank.com

Standard Bank Group financial results

for the year ended 31 December 2015

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Standard Bank Group analysis of financial results 31 December 2015

Contents

Group results in brief

Highlights 1

Financial results, ratios and statistics 2

Overview of financial results 4

Summarised group income statement 8

Headline earnings 9

Headline earnings and dividends per share 10

Diluted headline earnings per share 11

Statement of financial position 12

Statement of comprehensive income 14

Statement of changes in equity 14

Financial results, ratios and statistics – IFRS 16

Summarised group income statement – IFRS 17

Statement of comprehensive income – IFRS 18

Statement of changes in equity – IFRS 18

Explanation of principal differences between normalised and IFRS results 20

Segmental reporting

Segmental structure for key business units 24

Segmental income statement 26

Segmental statement of financial position 28

Personal & Business Banking 30

Corporate & Investment Banking 34

Liberty 38

Income statement analysis

Net interest income and margin analysis 42

Non-interest revenue 44

Credit impairment charges 46

Operating expenses 50

Taxation 52

Balance sheet analysis

Loans and advances 54

Deposit and current accounts 55

Loans and advances performance 56

Banking activities average balance sheet 58

Liquidity management 60

Fair value hierarchy – Standard Bank Group 62

Capital management

Return on ordinary equity 64

Ordinary shareholders’ equity (net asset value) 65

Currency translation effects 66

Cost of equity, economic returns and economic capital 67

Risk-weighted assets 68

Capital adequacy 70

Subordinated debt 72

Key banking legal entity information

The Standard Bank of South Africa

Key financial results, ratios and statistics 74

Summarised income statement 76




Capital adequacy 82


Market share analysis 84

Rest of Africa legal entities


Statement of financial position and key ratios 87

Standard Bank Group

Headline earnings and net asset value reconciliation by key legal entity 88

Other information

Product information 90

Constant currency financial results 92

Changes in accounting policies 94

Financial and other definitions 95

Abbreviations and acronyms 96

Shareholder information

Analysis of shareholders 98

Credit ratings 99

Dividend payment dates 100

Instrument codes 100

Contact details ibc

Standard Bank Group is a leading African integrated financial services group offering a full range of banking and related financial services

•• operates in 20 countries in sub-Saharan Africa•• owns a controlling interest in the South African listed

insurance and wealth management group, Liberty Holdings Limited •• three business units: Personal & Business Banking, Corporate

& Investment Banking and Liberty•• 153-year history in South Africa •• listed on the Johannesburg Stock Exchange (JSE) since 1970•• started building a franchise outside Southern Africa in the

early 1990s.

The Standard Bank Group’s (the group) analysis of financial results for the year ended December 2015 has not been audited or independently reviewed. The group’s annual financial statements have been audited with an unmodified opinion.

The preparation of the financial results was supervised by the group financial director, Simon Ridley, BCom (Natal), CA(SA), AMP (Oxford).

1

GROUP RESULTS IN BRIEF

Highlights

All results in this booklet are presented on a normalised basis, unless otherwise indicated as being on an International Financial Reporting Standards (IFRS) basis. Results are normalised to reflect the group's view of the economics of its Black Economic Empowerment Ownership (Tutuwa) initiative and the group's share exposures entered into to facilitate client trading activities and for the benefit of Liberty policyholders that are deemed to be treasury shares. Refer to page 20 for principal differences between normalised and IFRS results. The normalised results reflect the basis on which management manages the group and is consistent with that reported in the group’s segment report.

Dividend per share: 12%Headline earnings per share: 14%

¢¢ Cents

HEADLINE EARNINGS AND DIVIDEND PER SHARECAGR (2010 – 2015):

■ Dividend per share 386 425 455 533 598 674

■ Headline earnings per share 716 857 935 1 065 1 070 1 359

2010 2011 2012 2013 2014 2015

300

600

900

1 200

1 500

¢ Rm

HEADLINE EARNINGSCAGR1 (2010 – 2015): 14%

11 283 13 599 14 918 17 194 17 323 22 002

2010 2011 2012 2013 2014 2015

8 000

12 000

16 000

20 000

24 000

1 Compound annual growth rate.

+27%

R22 002 millionHeadline earnings

2014: R17 323 million

+13%

674 centsDividend per share

2014: 598 cents

13.3%Tier I capital adequacy ratio

2014: 12.9%

0.87%Credit loss ratio

2014: 1.00%

+13%

R22 056 millionHeadline earnings –

pro-forma continuing operations

2014: R19 570 million

+27%

1 359 centsHeadline earnings per share

2014: 1 070 cents

15.3%Return on equity

2014: 12.9%

56.7%Cost-to-income ratio

2014: 55.0%


2 Standard Bank Group analysis of financial results 31 December 2015

Financial results, ratios and statistics

Change%

2015 2014

Standard Bank Group (SBG)Headline earnings contribution by business unitTotal headline earnings Rm 27 22 002 17 323

Banking activities Rm 30 19 751 15 165

Personal & Business Banking Rm 15 11 232 9 797Corporate & Investment Banking Rm 59 7 923 4 980Central and other Rm 54 596 388

Liberty Rm 4 2 251 2 158

Standard Bank Group – continuing operations Rm 5 22 092 21 068Standard Bank Group – pro-forma continuing operations Rm 13 22 056 19 570Ordinary shareholders’ interestProfit attributable to ordinary shareholders Rm 30 23 569 18 091Ordinary shareholders’ equity Rm 9 152 042 139 588Share statisticsHeadline earnings per ordinary share (EPS) cents 27 1 359,3 1 070,3Diluted headline EPS cents 27 1 350,1 1 059,8Basic EPS cents 30 1 456,1 1 117,7Diluted EPS cents 31 1 446,2 1 106,8Dividend per share cents 13 674,0 598,0Net asset value per share cents 9 9 395 8 625Tangible net asset value per share cents 8 7 910 7 317Dividend cover times 2.0 1.8Number of ordinary shares in issueEnd of year thousands (0) 1 618 252 1 618 361 Weighted average thousands 0 1 618 658 1 618 557 Diluted weighted average thousands (0) 1 629 691 1 634 566 Selected returns and ratiosReturn on equity (ROE) % 15.3 12.9Capital adequacyTotal capital adequacy ratio % 15.7 15.5Tier I capital adequacy ratio % 13.3 12.9Common equity tier I capital adequacy ratio % 12.9 12.4Employee statisticsNumber of employees 10 54 361 49 259

Banking activitiesBalance sheetTotal assets Rm 2 1 578 859 1 550 261Loans and advances (net of credit impairments) Rm 16 1 077 395 929 544Selected returns and ratiosROE % 14.9 12.3Return on risk-weighted assets (RWA) % 2.4 1.8Loan-to-deposit ratio % 89.7 87.4Net interest margin % 3.50 3.80Non-interest revenue to total income % 45.9 46.2Credit impairment charges Rm 4 9 371 9 009Credit loss ratio % 0.87 1.00Credit loss ratio to customers % 1.02 1.14Cost-to-income ratio % 56.7 55.0Effective direct taxation rate % 22.1 21.6Effective total taxation rate % 27.5 26.2Employee statisticsNumber of employees 12 47 958 42 642

Headline earnings of pro-forma continuing operations includes 40% of the discontinued operation’s headline earnings loss given that the group retained a 40% interest in the discontinued operation.

3

In 2015 the group experienced:Globally•• Lowest annual economic growth in China since 1990 and the

sixth consecutive annual slowdown, on the back of decreased global demand.•• A moderated pace of expansion in advanced economies due

to slower growth in the US, United Kingdom and the Eurozone.•• The commencement of monetary policy tightening by the US

Federal Reserve Bank in December 2015, the first increase in US interest rates since the 2008 financial crisis.•• A further decline in commodity prices across most asset

classes.•• Easing of monetary policies in the Eurozone and China.•• Continued volatility in equity markets.

Rest of Africa•• Generally weak currencies and illiquid currency markets,

predominately in oil producing countries.•• Increased wholesale funding rates.

South Africa•• Weak GDP growth reflecting sustained lower commodity

prices, weaker demand from China, infrastructure bottlenecks and declining levels of consumer and business confidence. •• Manufacturing and mining production remain below pre-crisis

peaks.•• A decline in agricultural output following severe drought

conditions.•• Continued high unemployment rates and a moderation in

average wage settlements.•• Tightening monetary policy with an increase in the prime

lending rate of 25bps in both July and November 2015.•• Further depreciation of the rand, partly induced by weaker

commodity prices, with the rand remaining vulnerable to global risk perceptions.•• Subdued credit extension to the household sector as

consumer confidence remained low and personal income growth constrained.

January 2015 December 2015

70

80

90

100

110

120

130

Standard Bank JSE All Share Index JSE Banks Index MSCI Emerging Markets Index

SHARE PRICE PERFORMANCE (index)

Change%

2015 2014

Rm Rm

Other economic indicatorsMarket indicatorsUSD/ZAR exchange rate– closing 34 15,50 11,57 – average 18 12,75 10,84 SA prime overdraft rate (closing) % 9.75 9.25 SA average prime overdraft rate % 9.39 9.08 SA average SARB repo rate % 5.89 5.58SA average CPI % 4.6 6.1 JSE All Share Index (closing) 2 50 694 49 771JSE Banks Index (closing) (16) 61 072 72 998

Key rest of Africa closing exchange rates in ZAR termsZAR/NGN (19) 12,81 15,80ZAR/KES (16) 6,60 7,84ZAR/GHS (11) 0,25 0,28 ZAR/TZS (7) 139,16 149,79ZAR/UGX (9) 217,22 239,77ZAR/MZN 5 3,10 2,94ZAR/AOA (2) 8,73 8,89



Overview of financial results

Group resultsGroup headline earnings and headline earnings per share (HEPS) increased by 27% to R22 002 million and 1 359 cents respectively. Net asset value per share increased by 9% and group return on equity (ROE) increased to 15.3% from 12.9% in FY14. A total dividend of 674 cents per share has been declared, a 13% increase on FY14.

During the period covered by the results, the group completed the disposal of its controlling interest in Standard Bank Plc (SB Plc) on 1 February 2015 (the disposal), which was classified as a discontinued operation up to the date of the transaction’s completion. Subsequent to the transaction, SB Plc was renamed ICBC Standard Bank Plc (ICBCS) and the group’s remaining 40% interest has been included as an associate, with equity accounted results included in the group’s continuing operations from the disposal date. As a result of the disposal, earnings attributable to ordinary shareholders include R2,8 billion of net disposal gains which have been excluded from headline earnings, primarily consisting of releases to the income statement from the group’s foreign currency translation reserve.

Headline earnings for the year reported within the group’s discontinued operation include the effects of a write-down of the residual aluminium exposure in China; a partial recovery in respect of insurance claims relating to the external fraud in the Qingdao port in China; and cash flow hedge releases relating to the disposal. The loss from the discontinued operation within headline earnings amounts to R90 million. Headline earnings from operations excluding the discontinued operation (continuing operations) increased by 5% to R22 092 million. The commentary which follows refers to the group’s continuing banking operations. Liberty Holding Limited’s (Liberty) results are discussed separately.

Operating environmentIn 2015 global economic growth remained moderate at 3.1% with growth in emerging market and developing economies expected by the International Monetary Fund to have declined for the fifth consecutive year. A modest recovery has continued in advanced economies with a gradual monetary tightening in the United States (US) as several other major advanced economy central banks continue to ease monetary policy. Market concerns about the outlook for the Chinese economy have affected other economies through commodity prices, diminishing confidence and increasing volatility in financial markets. Manufacturing activity and trade remained weak globally, not only due to developments in China, but also because of subdued global demand and investment more broadly.

Sub-Saharan Africa economic growth is estimated to have reduced sharply to 3.5% in 2015 from 5.0% in 2014 as lower commodity prices impacted net exports and placed pressure on economic activity even as lower oil prices eased energy import costs. While economic activity remains more robust than in many other developing regions of the world, the strong growth momentum evident in the region in recent years has dissipated, particularly within oil-exporting countries.

2015 economic growth forecasts for South Africa were marked down progressively during the year as the full impact of

commodity price deflation, and weakening business and consumer confidence limited demand. Although there was notable stabilisation of electricity supply in the second half of 2015, unfolding drought conditions, higher interest rates and policy uncertainty subdued investment and cyclical consumption; economic growth is expected to have been 1.3% in 2015 from 1.5% in 2014. A sharply weaker exchange rate in response to investment portfolio outflows and continued current account deficit accompanied broad acceleration in market volatility towards the end of the year, exacerbated by market concerns related to the unexpected removal of South Africa’s minister of finance in December.

Revenue Total income increased by 8% in FY15, with net interest income (NII) growing by 9% primarily due to a 17% increase in average interest-earning assets, driven mainly by growth in higher quality but lower-yielding Corporate & Investment Banking (CIB) assets. Margin compression of 30 basis points resulted mainly from significantly higher growth in CIB assets relative to Personal & Business Banking (PBB) assets. Higher funding costs and the requirement to hold higher levels of high quality liquid assets (HQLA) were largely offset by higher average South African interest rates.

Non-interest revenue (NIR) grew 8% due to good growth in trading and other income. Fees and commissions were 3% higher than in FY14 as knowledge-based fees and commissions declined by 9% due to weaker corporate activity conditions in the rest of Africa and a high base in FY14. Trading revenue increased by 20% due mainly to good growth in fixed income and currency trading which was up 15%, as well as a good performance from equities trading, up 51%.

Other revenue growth of 10% benefited from fair value gains and profit on disposal of equity investments, partly offset by the non-recurrence of gains from property disposals and lower rentals received.

Credit impairmentsTotal credit impairments were 4% higher than in FY14 and the credit loss ratio declined to 0.87% from 1.00%. Credit impairments in CIB increased to R1 279 million from R804 million in the prior period with its credit loss ratio rising to 0.24% from 0.22%.

In PBB, credit impairments were 5% lower than in the prior year and its credit loss ratio improved to 1.27% from 1.41%. Impairments in mortgage lending declined by R327 million while those in the vehicle and asset finance business were largely unchanged as lower impairments in South Africa were offset by higher provisioning required in the rest of Africa portfolio. Personal lending impairments declined by R83 million due mainly to lower charges required for access loans, while card debtors’ impairments were 23% higher reflecting a higher level of stress across the portfolio. Business lending impairments fell by R270 million due to the non-recurrence of a few larger account impairments in 2014, offset partially by higher charges required in the agriculture sector. Impairments in PBB’s rest of Africa operations increased by 22% and the credit loss ratio increased to 2.02% from 1.83% in FY14.

5

Gross loans and advances to customers

Change

%

2015 2014

Rm Rm

Personal & Business Banking 6 576 078 543 830

Mortgage loans 3 325 867 317 069 Vehicle and asset finance 11 80 278 72 483 Card debtors 4 31 174 30 029 Other loans and advances 12 138 759 124 249

Corporate & Investment Banking 29 383 432 297 846

Corporate loans 31 327 382 249 917 Commercial property finance 17 56 050 47 929

Other services 50 (4 783) (9 645)

Gross loans and advances to customers 15 954 727 832 031

Deposit and current accounts from customers

Change

%

2015 2014

Rm Rm

Personal & Business Banking 19 498 189 417 061

Retail priced deposits 20 404 341 336 927 Wholesale priced deposits 17 93 848 80 134

Corporate & Investment Banking 3 572 635 556 710 Other services 11 (6 477) (7 301)

Deposit and current accounts from customers 10 1 064 347 966 470

Comprising:

Retail priced deposit and current accounts 20 404 341 336 927

Wholesale priced deposits 5 660 006 629 543


Operating expensesOperating expenses increased by 10% over the prior year and the group’s cost-to-income ratio increased to 56.7% from 55.0%. Staff expenses increased by 12% while other operating expenses increased by 8%. Growth in staff expenses was affected by the conversion of approximately 4 400 people from temporary to permanent staff, mainly in South Africa. Other operating expenses were affected by higher IT expenses related to core banking systems taken into production, including increased amortisation of capitalised software assets.

Loans and advancesGross loans and advances to customers increased by 15% in FY15. PBB balances with customers grew by 6%, and CIB balances grew by 29% including a higher level of loans granted under resale. Residential mortgages grew by 3%, and vehicle and asset finance reached 11% growth in a softer overall market. Card debtors grew by a moderate 4% with personal loans 3% higher than FY14 reflecting tighter monetary conditions in South Africa. Business and corporate loans showed higher levels of growth at 18% and 22% respectively.

Capital, funding and liquidityThe group maintains appropriate levels of capital with tier I and total capital levels at 13.3% (FY14: 12.9%) and 15.7% (FY14: 15.5%) respectively. The group remains well placed to meet the higher regulatory requirements across markets in which the group operates.

Deposits and current accounts from customers increased by 10% with 20% growth in retail priced deposits significantly higher than the 5% growth in wholesale priced deposits from customers. Good growth in retail priced deposits in the rest of Africa and outside Africa was aided by significant rand depreciation over the year.

The group maintained its liquidity positions within the approved risk appetite and tolerance limits. The average group Basel III liquidity coverage ratio (LCR) during the final quarter of 2015 was 93.7%. The group continues to evaluate the funding impact of the Basel III net stable funding ratio (NSFR). Areas of national discretion pertaining to the NSFR are expected to be finalised by the South African Reserve Bank during the course of 2016.



Headline earnings by business unit

Change

%

2015 2014

Rm Rm

Personal & Business Banking 15 11 232 9 797Corporate & Investment Banking 59 7 923 4 980Central and other 54 596 388

Banking activities 30 19 751 15 165Liberty 4 2 251 2 158

Standard Bank Group 27 22 002 17 323

Overview of business unit performancePersonal & Business BankingPBB’s FY15 headline earnings of R11 232 million increased by 15% compared with FY14. NII grew by 11% and moderate growth of 7% in NIR resulted in total income growth of 9%. Credit impairment charges were 5% lower than in FY14 and operating expenses, which were affected by the conversion of temporary employees to permanent employees during the year, increased by 10%. PBB’s ROE was maintained at 18.1%. PBB South Africa earnings increased by 13% while PBB rest of Africa earnings improved to R192 million from R104 million in FY14. Good growth of 51% in PBB outside Africa earnings, which amounted to R461 million, was achieved and assisted further by rand depreciation during the year.

Transactional products total income increased by 11% assisted by higher average domestic interest rates and balance sheet growth driven by higher cash management, savings and investment portfolio balances, offset partially by reduced interchange rates on debit cards in South Africa. Earnings of R3 204 million were 9% higher than in the prior period.

Mortgage lending headline earnings increased by 25% to R2 450 million. Total income growth of 8% reflected the effect of higher average balances and continued improved average pricing relative to funding costs. Credit impairments fell by 13% and the credit loss ratio declined to 66bps from 79bps due to improved collection capabilities. Non-performing loans increased by 6% mainly as a result of the required regulatory change in the treatment of restructured loans.

The improvement in vehicle and asset finance profitability continued during the year as headline earnings of R306 million were 79% higher than in FY14. Total income growth of 7% in a challenging market was supplemented by an improvement in the credit loss ratio to 1.50% from 1.55%. New business quality continued to improve assisted by the positive impact of investment in online dealer origination capabilities.

Card products increased headline earnings by 9% to R1 535 million during the year. Higher domestic yields and increased activity in the rest of Africa largely offset lower average interchange fees to lift total income by 12%. Higher average interest rates and a slowing domestic economy have affected contractual repayments by customers and credit impairments grew by 23% with the credit loss ratio rising to 4.83% from 4.08% in the prior year.

Lending products improved headline earnings by 14% to R1 442 million. Total income growth of 3% benefited from good growth in business lending balances offset by lower growth in personal products lending. Credit impairments were 10% lower than in the previous year with the credit loss ratio declining to 1.68% from 2.05% in FY14.

Bancassurance and wealth increased headline earnings by 11% to R2 295 million. Total income improved by 12% due to an increase in the client asset base, good growth in assets under management in Nigeria and the Offshore group as well as a better short-term insurance underwriting performance.

Corporate & Investment BankingCIB increased headline earnings by 59% to R7 923 million resulting in a ROE of 14.3% from 10.2%.The business delivered respectable revenue growth of 7% in the context of significant market volatility. Continued investment in major online programmes resulted in costs growing by 10%. Impairments increased 59%, reflective of increased strain experienced in the oil and gas, and mining and minerals sectors. Earnings were materially impacted by the 40% associate share in the loss incurred by ICBCS for the 11 months ended December 2015, amounting to R1 173 million, which also included 40% of the fine paid in respect of a deferred prosecution agreement agreed with the Serious Fraud Office in the United Kingdom.

The headline earnings loss within the discontinued operation, being the outside Africa global markets business, amounted to R104 million from a loss of R3 745 million in FY14, mainly due to the non-recurrence of the fair value adjustment on repo positions relating to aluminium financing in China. A partial recovery in respect of insurance claims relating to this matter received during the year was largely offset by final balance sheet adjustments relating to the disposal of the discontinued operation and SB Plc’s January 2015 operating loss.

Transactional products and services grew headline earnings by 4% to R2 662 million. Total income increased by 8% on good cash management deposit growth, offset by reduced investor services demand in Nigeria as its investment environment deteriorated. Expenses were adversely affected by higher staff costs in the rest of Africa to support increased systems investment and franchise growth.

7

Headline earnings impact of the discontinued operation, including key items arising from SB Plc and ICBCS1

2015 2014

Discontinued operation

40% share of associate Total


Rm Rm Rm Rm

SB Plc operating loss up to date of disposal (378) (378) (2 121)Write-down of aluminium asset (276) (276) (1 624)Partial insurance recovery for aluminium 595 347 942Separation costs incurred (45) (45)Deferred prosecution agreement accounted in ICBCS as a 40% associate (226) (226)ICBCS share of eleven months (February to December 2015) performance (1 294) (1 294)

Headline earnings loss recognised in CIB (104) (1 173) (1 277) (3 745)Insurance proceeds for aluminium paid by group entity (54) (54)Deferred prosecution agreement amount payable to ICBC under indemnity (336) (336)Cash flow hedge release on disposal of SB Plc 404 404

Headline earnings loss as consolidated (90) (1 173) (1 263) (3 745)1 Excluded from 2015 headline earnings is net profit attributable to ordinary shareholders of R2,8 billion, consisting primarily of releases to the income statement from the group’s

foreign currency translation reserve.

Global markets recorded headline earnings growth of 19% to R3 889 million in FY15. Income growth of 12% benefited from higher client volumes in fixed income trading, good risk positioning on the back of client facilitation in equity derivatives as well as improved commodities trading. Expenses were well controlled during the year resulting in positive operational leverage.

Investment banking headline earnings increased by 1% to R2 598 million as total income increased by 6% following a good debt origination performance in 2H15. Depressed commodity prices and deteriorating economic conditions in resource-focused countries in the rest of Africa required higher impairment charges particularly related to exposures in the oil & gas and power & infrastructure sectors.

Real estate and principal investment management (PIM) recorded headline earnings of R51 million from R312 million in FY14 as property disposals and fair value gains within the property investment portfolio income did not recur. The PIM portfolio continues to be gradually wound down.

LibertyThe financial results reported are the consolidated results of the group’s 54% investment in Liberty. Bancassurance results are included in PBB. Liberty BEE normalised headline earnings of R4 128 million were 4% higher, representing 7% growth in operating earnings and a 2% decrease in earnings from the LibFin Investments – Shareholder Investment Portfolio (SIP). The growth in operating earnings was supported by strong performances from Individual Arrangements, Liberty Corporate, a division of Group Arrangements, and LibFin Markets. The SIP gross performance of 9.6% (2014: 10.3%) was substantially ahead of benchmark, supported by overweighted exposure to foreign assets. The BEE normalised return on equity at 19.5% (2014: 20.4%) reflects ongoing efficient capital management.

The life operations benefited from continued positive operating variances against modelled expectations which supported good cash generation in 2015. Net customer cash inflows were substantially higher at R15,2 billion (2014: R4,2 billion) due to significantly improved Stanlib asset management cash flows. This included external inflows of R8,4 billion (2014: outflows of R7,3 billion) into the asset management operations. Total assets under management increased to R668 billion (2014: R633 billion), reflecting net external customer inflows and relatively low incremental growth from investment market returns.



Summarised group income statement

Change

%

2015 2014

Rm Rm

Net interest income 9 49 314 45 256Non-interest revenue 8 41 801 38 813

Net fee and commission revenue 3 26 920 26 079Trading revenue 20 11 014 9 216Other revenue 10 3 867 3 518

Total income 8 91 115 84 069Credit impairment charges 4 9 371 9 009

Specific credit impairments (11) 8 098 9 056Portfolio credit impairments >100 1 273 (47)

Income after credit impairment charges 9 81 744 75 060Operating expenses 10 51 434 46 596

Staff costs 12 27 968 24 961Other operating expenses 8 23 466 21 635

Net income before non-trading and capital related items 6 30 310 28 464Non-trading and capital related items (>100) (1 402) 986

Goodwill impairment (>100) (333) (4)

Impairment of intangible assets (>100) (1 220) (257)

Gains on disposal of group entities (75) 311 1 265

Other non-trading and capital related items (>100) (160) (18)

Net income before equity accounted earnings (2) 28 908 29 450Share of profit from associates and joint ventures (>100) (340) 612

Net income before indirect taxation (5) 28 568 30 062Indirect taxation 13 1 981 1 747

Profit before direct taxation (6) 26 587 28 315Direct taxation (4) 5 870 6 122

Profit for the year from continuing operations (7) 20 717 22 193Profit/(loss) from discontinued operation >100 2 741 (4 048)

Profit for the year 29 23 458 18 145Attributable to non-controlling interests (8) 1 704 1 848Attributable to preference shareholders 6 385 364

Attributable to ordinary shareholders – banking activities 34 21 369 15 933Headline adjustable items – banking activities (>100) (1 618) (768)

Headline earnings – banking activities 30 19 751 15 165Headline earnings – Liberty 4 2 251 2 158

Standard Bank Group headline earnings 27 22 002 17 323

Standard Bank Group headline earnings – continuing operations 5 22 092 21 068

Standard Bank Group headline earnings – pro-forma continuing operations1 13 22 056 19 5701 Headline earnings from pro-forma continuing operations includes 40% of the discontinued operation’s headline earnings loss given that the group retained a 40% interest in the

discontinued operation.

9

Headline earnings

Reconciliation of profit for the year to headline earnings1

2015 2014

Continuing operations

Rm


RmTotal

Rm

Continuing operations

Rm


RmTotal

Rm

Profit for the year – banking activities 18 628 2 741 21 369 19 981 (4 048) 15 933Headline adjustable items – banking activities (reversed)/added 1 213 (2 831) (1 618) (1 071) 303 (768)Realised foreign currency profit on foreign operations – IAS 21 (5) (4 054) (4 059) (1 203) (1 203)Losses/(gains) on disposal of businesses – IAS 27 (180) 1 303 1 123 (62) (62)Realised gains on net investment hedge – IAS 39 (68) (68)Loss on sale of properties and equipment – IAS 16 38 38 14 14Impairment of associate – IAS 27/IAS 36 112 112Impairment of intangible assets – IAS 36 879 879 194 150 344Goodwill impairment – IAS 36 333 333 4 4Impairment of non-current assets held for sale – IFRS 5 153 153Realised losses/(gains) on available-for- sale assets – IAS 39 36 (12) 24 (18) (18)

Headline earnings – banking activities 19 841 (90) 19 751 18 910 (3 745) 15 165Headline earnings – Liberty 2 251 2 251 2 158 2 158Profit for the year – Liberty 2 200 2 200 2 158 2 158Headline adjustable items: Impairment of intangible assets – IAS 36 51 51

Standard Bank Group headline earnings 22 092 (90) 22 002 21 068 (3 745) 17 3231 Net of tax and non-controlling interests.

¢ Rm

HEADLINE EARNINGSCAGR (2010 – 2015): 14%

11 283 13 599 14 918 17 194 17 323 22 002

2010 2011 2012 2013 2014 2015

8 000

12 000

16 000

20 000

24 000



Headline earnings and dividends per share

Movement in number of ordinary and weighted average shares issued

2015 2014

Issued number

of shares000’s

Weighted number

of shares000’s

Issued number

of shares000’s

Weighted number

of shares000’s

Beginning of the year 1 618 361 1 618 361 1 617 844 1 617 844

Shares bought back (3 923) (2 043) (4 362) (1 976)

Shares issued for share option settlements 3 814 2 340 4 879 2 689

End of the year – normalised 1 618 252 1 618 658 1 618 361 1 618 557

Reconciliation to IFRS shares in issueEnd of the year – normalised 1 618 252 1 618 658 1 618 361 1 618 557

Tutuwa structured entities (SEs) shares financed by Standard Bank (5 751) (7 599) (27 726) (27 726)

Shares held initially by Tutuwa SEs (99 190) (99 190) (99 190) (99 190)

Less: Tutuwa shares financed by third parties 44 612 48 667 60 444 60 444

Less: Tutuwa shares sold by participants 37 807 31 904

Less: Tutuwa shares acquired by ICBC in 2007 11 020 11 020 11 020 11 020

Share exposures held to facilitate client trading activities (583) (695) (563) 1 743

Shares held for the benefit of Liberty policyholders (10 501) (12 965) (12 244) (7 854)

End of the year – IFRS 1 601 417 1 597 399 1 577 828 1 584 720

¢ Cents

HEADLINE EARNINGS PER SHARECAGR (2010 – 2015): 14%

716 857 935 1 065 1 070 1 359

2010 2011 2012 2013 2014 2015

500

750

1 000

1 250

1 500

Times covered¢ Cents

DIVIDENDS PER SHARE AND DIVIDEND COVERCAGR (2010 – 2015): 12%

■ Dividend per share 386 425 455 533 598 674

Dividend cover 1.9 2.0 2.1 2.0 1.8 2.0

2010 2011 2012 2013 2014 2015

140

280

420

560

700

0.5

1.0

1.5

2.0

2.5

Change

%

2015 2014

Headline earnings Rm 27 22 002 17 323Headline earnings – pro-forma continuing operations Rm 13 22 056 19 570Headline EPS cents 27 1 359,3 1 070,3 Basic EPS cents 30 1 456,1 1 117,7 Total dividend per share cents 13 674,0 598,0

Interim cents 17 303,0 259,0 Final cents 9 371,0 339,0

Dividend cover – based on normalised headline EPS times 2.0 1.8 Dividend payout ratio – based on normalised headline EPS % 49.6 55.9

11

Diluted headline earnings per share

Change

%

2015 2014

cents cents

Diluted headline EPS 27 1 350,1 1 059,8

Diluted EPS 31 1 446,2 1 106,8

Diluted weighted average number of ordinary shares issued

2015 2014

000’s 000’s

Weighted average shares 1 618 658 1 618 557

Dilution from equity compensation plans 11 033 16 009

Group share incentive scheme 929 1 189

Equity growth scheme 2 738 8 440

Deferred bonus scheme 7 366 6 380

Diluted weighted average shares – normalised 1 629 691 1 634 566

Reconciliation to diluted weighted average IFRS shares Diluted weighted average shares – normalised 1 629 691 1 634 566

IFRS normalisation adjustments (21 259) (33 837)

Shares held by Tutuwa SEs financed by the group (7 599) (27 726)

Share exposures held to facilitate client trading activities (695) 1 743

Shares held for the benefit of Liberty policyholders (12 965) (7 854)

Tutuwa transaction – dilutive shares 3 090 16 279

Diluted weighted average shares – IFRS 1 611 522 1 617 008

¢ Cents

DILUTED HEADLINE EARNINGS PER SHARECAGR (2010 – 2015): 14%

710 852 927 1 055 1 060 1 350

2010 2011 2012 2013 2014 2015

500

750

1 000

1 250

1 500



Statement of financial position

Standard Bank Group

Change

%

2015 2014

Rm Rm

Assets

Cash and balances with central banks 17 75 112 64 302

Derivative assets 80 111 089 61 633

Trading assets 20 86 285 72 121

Pledged assets >100 34 429 14 185

Financial investments 8 488 124 453 398

Loans and advances 16 1 077 167 929 544

Loans and advances to banks 25 145 320 116 220

Loans and advances to customers 15 931 847 813 324

Other assets 18 26 967 22 904

Interest in associates and joint ventures >100 9 703 3 727

Non-current assets held for sale (100) – 219 958

Investment property 13 30 508 27 022

Property and equipment 6 17 670 16 737

Goodwill and other intangible assets 13 24 031 21 175

Goodwill 12 4 201 3 752

Other intangible assets 14 19 830 17 423

Total assets 4 1 981 085 1 906 706

Equity and liabilities

Equity 9 180 530 165 367

Equity attributable to ordinary shareholders 9 152 042 139 588

Preference share capital and premium – 5 503 5 503

Non-controlling interest 13 22 985 20 276

Liabilities 3 1 800 555 1 741 339

Derivative liabilities 85 133 958 72 281

Trading liabilities (1) 43 304 43 761

Deposit and current accounts 13 1 186 514 1 047 212

Deposits from banks 41 137 202 97 606


Other liabilities 34 111 406 82 979

Non-current liabilities held for sale (100) – 182 069

Policyholder liabilities 4 298 232 287 516

Subordinated debt 6 27 141 25 521

Total equity and liabilities 4 1 981 085 1 906 706

1 Includes elimination of balances between Liberty and banking activities.

2015 2014

13

Banking activities Liberty1

Change

%

2015 2014 Change

%

2015 2014

Rm Rm Rm Rm

17 75 112 64 302

81 102 094 56 382 71 8 995 5 251

19 84 653 70 904 34 1 632 1 217

>100 15 204 7 194 >100 19 225 6 991

6 157 855 148 225 8 330 269 305 173

16 1 077 395 929 544 (100) (228)

25 145 320 116 220

15 932 075 813 324 (100) (228)

22 18 448 15 167 10 8 519 7 737

>100 9 432 3 480 10 271 247

(100) – 219 958

13 30 508 27 022

5 14 952 14 298 11 2 718 2 439

14 23 714 20 807 (14) 317 368

12 4 152 3 711 20 49 41

14 19 562 17 096 (18) 268 327

2 1 578 859 1 550 261 13 402 226 356 445

9 154 279 140 979 8 26 251 24 388

9 140 066 128 621 9 11 976 10 967

– 5 503 5 503

27 8 710 6 855 6 14 275 13 421

1 1 424 580 1 409 282 13 375 975 332 057

82 121 649 66 860 >100 12 309 5 421

(5) 43 809 46 033 78 (505) (2 272)

13 1 201 549 1 064 076 11 (15 035) (16 864)

41 137 202 97 606

10 1 064 347 966 470 11 (15 035) (16 864)

22 33 217 27 153 40 78 189 55 826

(100) – 182 069

4 298 232 287 516

5 24 356 23 091 15 2 785 2 430

2 1 578 859 1 550 261 13 402 226 356 445

2015 2014 2015 2014



Statement of comprehensive income

Statement of changes in equity

2015

Change

%

Ordinary shareholders’

equityRm

Non-controlling interests and

preference shareholders

Rm

Total equity

Rm

Profit for the year 24 23 569 4 201 27 770

Other comprehensive income after tax for the year >100 1 752 1 254 3 006

Exchange rate differences on translating equity investment in

foreign operations 2 864 1 236 4 100

Foreign currency hedge of net investments (325) (325)

Cash flow hedges (851) (52) (903)

Available-for-sale financial assets 160 74 234

Defined benefit fund adjustment (117) (4) (121)

Revaluation and other gains/(losses) 21 21

Total comprehensive income for the year 43 25 321 5 455 30 776

Attributable to non-controlling interests 5 070 5 070

Attributable to equity holders of the parent 25 321 385 25 706

Attributable to preference shareholders 6 385 385

Attributable to ordinary shareholders 37 25 321 25 321

2015

Ordinary

share

capital and

premium

Rm

Foreign

currency

translation

reserve

Rm

Foreign

currency

hedge of net

investment

reserve

Rm

Cash flow

hedging

reserve

Rm

Statutory

credit risk

reserve

Rm

Balance at 1 January 2014 18 126 6 274 (268) 804 1 295

Increase in statutory credit risk reserve 810

Equity-settled share-based payment transactions

Deferred tax on share-based payments

Transfer of vested equity options

Transactions with non-controlling shareholders

Net repurchase of share capital and share premium

and capitalisation of reserves (59)

Unincorporated property partnerships capital reductions

and distributions

Total comprehensive income for the year 1 085 (147) (337)

Dividends paid

Balance at 31 December 2014 18 067 7 359 (415) 467 2 105

Balance at 1 January 2015 18 067 7 359 (415) 467 2 105Increase in statutory credit risk reserve 674Equity-settled share-based payment transactions



Transactions with non-controlling shareholders

Net repurchase of share capital and share premium

and capitalisation of reserves (121)Unincorporated property partnerships capital reductions

and distributions

Total comprehensive income for the year 2 864 (325) (851)Dividends paid

Balance at 31 December 2015 17 946 10 223 (740) (384) 2 779

All balances are stated net of applicable tax.

15

2014

Ordinary

shareholders’

equity

Rm

Non-controlling

interests and

preference

shareholders

Rm

Total

equity

Rm

18 091 4 390 22 481

327 (1 215) (888)

1 085 (1 090) (5)

(147) (147)

(337) (42) (379)

(134) (92) (226)

(129) 9 (120)

(11) (11)

18 418 3 175 21 593

2 811 2 811

18 418 364 18 782

364 364

18 418 18 418

2014

Available-

for-sale

revaluation

reserve

Rm

Share-based

payment

reserve

Rm

Other

reserves

Rm

Retained

earnings

Rm

Ordinary

shareholders’

equity

Rm

Preference

share capital

and premium

Rm

Non-

controlling

interest

Rm

Total

equity

Rm

196 1 233 245 102 960 130 865 5 503 19 004 155 372

(810)

580 (359) 221 48 269

150 150 150

(641) 641

(415) (415) (28) (443)

(540) (599) (599)

(79) (79)

(134) (11) 17 962 18 418 364 2 811 21 593

(9 052) (9 052) (364) (1 480) (10 896)

62 1 172 234 110 537 139 588 5 503 20 276 165 367

62 1 172 234 110 537 139 588 5 503 20 276 165 367(674)

(690) (702) (1 392) 73 (1 319)(72) (72) (72)

(771) 771(366) (366) (778) (1 144)

(520) (641) (641)

(144) (144) 160 21 23 452 25 321 385 5 070 30 776

(10 396) (10 396) (385) (1 512) (12 293)

222 (289) 255 122 030 152 042 5 503 22 985 180 530



Financial results, ratios and statistics – IFRS

Change

%

2015 2014

Rm Rm

Standard Bank GroupHeadline earnings contribution by business unitTotal headline earnings Rm 29 22 187 17 137

Banking activities Rm 31 19 754 15 123

Personal & Business Banking Rm 15 11 232 9 797Corporate & Investment Banking Rm 59 7 923 4 980Central and other Rm 73 599 346

Liberty Rm 21 2 433 2 014

Ordinary shareholders’ interestProfit attributable to ordinary shareholders Rm 33 23 754 17 905Ordinary shareholders’ equity Rm 10 151 069 136 985Share statisticsHeadline EPS cents 28 1 388,9 1 081,4Diluted headline EPS cents 30 1 376,8 1 059,8Basic EPS cents 32 1 487,0 1 129,9Diluted EPS cents 33 1 474,0 1 107,3Dividend per share cents 13 674,0 598,0Net asset value per share cents 9 9 433 8 682Tangible net asset value per share cents 8 7 933 7 340Dividend cover times 2.0 1.8Number of ordinary shares in issueEnd of year thousands 1 1 601 417 1 577 828Weighted average thousands 1 1 597 399 1 584 720Diluted weighted average thousands (0) 1 611 522 1 617 008Selected returns and ratiosROE % 15.6 13.0Capital adequacyTotal capital adequacy ratio % 15.7 15.5Tier I capital adequacy ratio % 13.3 12.9Core tier I capital adequacy ratio % 12.9 12.4

Banking activitiesBalance sheetTotal assets Rm 2 1 578 543 1 548 877Loans and advances (net of credit impairments) Rm 16 1 077 141 928 241Selected returns and ratiosROE % 14.9 12.3Loan-to-deposit ratio % 89.6 87.2Net interest margin % 3.50 3.79Non-interest revenue to total income % 45.9 46.4Credit impairment charges Rm 4 9 371 9 009Credit loss ratio % 0.87 1.00Credit loss ratio to customers % 1.02 1.14Cost-to-income ratio % 56.7 55.0Effective direct taxation rate % 22.1 21.7

17

Summarised group income statement – IFRS

Change

%

2015 2014

Rm Rm

Net interest income 9 49 310 45 152Non-interest revenue 7 41 803 38 891

Net fee and commission revenue 3 26 920 26 079Trading revenue 19 11 016 9 294Other revenue 10 3 867 3 518

Total income 8 91 113 84 043Credit impairment charges 4 9 371 9 009

Specific credit impairment (11) 8 098 9 056Portfolio credit impairments >100 1 273 (47)

Income after credit impairment charges 9 81 742 75 034Operating expenses 10 51 434 46 596

Staff costs 12 27 968 24 961Other operating expenses 8 23 466 21 635

Net income before non-trading and capital related items 7 30 308 28 438Non-trading and capital related items (>100) (1 402) 986Goodwill impairment (>100) (333) (4)

Impairment of intangible assets (>100) (1 220) (257)

Gains on disposal of group entities (75) 311 1 265

Other non-trading and capital related items (>100) (160) (18)

Net income before equity accounted earnings (2) 28 906 29 424Share of profit from associates and joint ventures (>100) (340) 612

Net income before indirect taxation (5) 28 566 30 036Indirect taxation 13 1 981 1 747

Profit before direct taxation (6) 26 585 28 289Direct taxation (4) 5 873 6 146


Profit for the year 30 23 453 18 095 Attributable to non-controlling interests (8) 1 704 1 848Attributable to preference shareholders 6 377 356

Attributable to ordinary shareholders – banking activities 34 21 372 15 891 Headline adjustable items – banking activities (>100) (1 618) (768)

Headline earnings – banking activities 31 19 754 15 123 Headline earnings – Liberty 21 2 433 2 014




Statement of comprehensive income – IFRS

2015

Change

%


equityRm

Non-controlling

interests and preference

shareholdersRm

Total equity

Rm

Profit for the year 27 23 754 4 347 28 101Other comprehensive income after tax for the year >100 1 752 1 257 3 009

Exchange rate differences on translating equity investment

in foreign operations 2 864 1 239 4 103Foreign currency hedge of net investment (325) (325)Cash flow hedges (851) (52) (903)Available-for-sale financial assets 160 74 234Defined benefit fund adjustment (117) (4) (121)Revaluation and other gains/(losses) 21 21

Total comprehensive income for the year 46 25 506 5 604 31 110

Attributable to non-controlling interests 5 227 5 227Attributable to equity holders of the parent 25 506 377 25 883

Attributable to preference shareholders 6 377 377Attributable to ordinary shareholders 40 25 506 25 506

2015

Statement of changes in equity – IFRS

Ordinary share

capital and premium

Rm

Empowerment reserve

Rm

Treasury shares

Rm

Foreign currency

translation reserve

Rm

Foreign currency

hedge of net

investment reserve

Rm

Cash flow hedging reserve

Rm

Balance at 1 January 2014 18 126 (1 846) (285) 6 274 (268) 804

Increase in statutory credit risk reserve

Transactions with non-controlling shareholders (1)

Equity-settled share-based payment transactions



Net decrease in treasury shares (350)Net repurchase of share capital and share premium and capitalisation of reserves (59)Unincorporated property partnerships capital reductions and distributions

Total comprehensive income for the year 1 085 (147) (337)

Net dividends paid (88)

Balance at 31 December 2014 18 067 (1 934) (636) 7 359 (415) 467

Balance at 1 January 2015 18 067 (1 934) (636) 7 359 (415) 467Increase in statutory credit risk reserveTransactions with non-controlling shareholders (3)Equity-settled share-based payment transactions Deferred tax on share-based paymentsTransfer of vested equity optionsNet increase in treasury shares 15Net repurchase of share capital and share premium and capitalisation of reserves (121)Unincorporated property partnerships capital reductions and distributionsRedemption of preference shares 1 317Total comprehensive income for the year 2 864 (325) (851)Net dividends received/(paid) 169

Balance at 31 December 2015 17 946 (448) (624) 10 223 (740) (384)

All balances are stated net of applicable tax.

19

2014

Ordinary

shareholders’

equity

Rm

Non-

controlling

interests and

preference

shareholders

Rm

Total

equity

Rm

17 905 4 260 22 165

327 (1 215) (888)

1 085 (1 090) (5)

(147) (147)

(337) (42) (379)

(134) (92) (226)

(129) 9 (120)

(11) (11)

18 232 3 045 21 277

2 689 2 689

18 232 356 18 588

356 356

18 232 18 232

2014

Statutory credit risk

reserveRm

Available-for-sale

revaluation reserve

Rm

Share-based payment

reserveRm

Other reserves

Rm

Retained earnings

Rm


equityRm

Preference share capital

and premiumRm

Non-controlling

interestRm

Total equity

Rm

1 295 196 1 233 245 103 162 128 936 5 503 18 209 152 648

810 (810)

(415) (416) (26) (442)

580 (359) 221 48 269

150 150 150

(641) 641

(242) (592) (304) (896)

(540) (599) (599)

(79) (79)

(134) (11) 17 776 18 232 356 2 689 21 277

(8 859) (8 947) (356) (1 391) (10 694)

2 105 62 1 172 234 110 504 136 985 5 503 19 146 161 634

2 105 62 1 172 234 110 504 136 985 5 503 19 146 161 634 674 (674)

(366) (369) (778) (1 147)(690) (702) (1 392) 73 (1 319)

(72) (72) (72)(771) 771

51 66 49 115

(520) (641) (641)

(144) (144)1 317 1 317

160 21 23 637 25 506 377 5 227 31 110(10 500) (10 331) (377) (1 237) (11 945)

2 779 222 (289) 255 122 129 151 069 5 503 22 336 178 908



Explanation of principal differences between normalised and IFRS resultsDescription of normalised adjustmentsThe group’s consolidated financial statements are prepared in accordance with IFRS, its interpretations adopted by the International Accounting Standards Board, the South African Institute of Chartered Accountants Financial Reporting Guides as issued by the Accounting Practices Committee, the Listings Requirements of the JSE, and the South African Companies Act, 71 of 2008. This document is prepared on a basis which normalises or adjusts the group’s IFRS results to reflect the group’s view of the economics and legal substance of the following deemed treasury share arrangements (the normalised adjustments): •• the group’s Tutuwa initiative•• group shares held by Liberty for the benefit of policyholders•• group share exposures entered into to facilitate client trading

activities.

Refer to Liberty’s financial report for an explanation of its normalisation adjustments.

A common element in the deemed treasury share arrangements relates to shares in issue which are deemed by IFRS to be treasury shares. Consequently, the net value of the shares is recognised in equity and the number of shares used for per share calculation purposes is materially lower than the economic substance, resulting in inflated per share ratios. With regard to segmental and product reporting, the normalised adjustments have been made within Liberty and central and other. The results of the other business units are unaffected.

The normalised results reflect the basis on which management manages the group and is consistent with that reported in the group’s segment report.

Tutuwa initiativeThe group concluded its Tutuwa initiative in October 2004 when it sold an effective 10% interest in its South African banking operations to a broad-based grouping of black entities.

The group obtained financing through the issue of perpetual preference shares. These funds were used to subscribe for 8.5% redeemable, cumulative preference shares issued by SEs controlled by SBG. These SEs then purchased SBG shares. Subsequently, the SEs containing these shares were sold to black participants. The capital and dividends on the redeemable preference shares issued by the SEs are repayable from future ordinary dividends received, or the proceeds from the disposal of SBG shares held. As a result of SBG’s contingent right to receive its own dividends back in the form of yield and capital on the redeemable preference shares, the subsequent sale of the SEs and consequent delivery of the SBG shares to the black participants, although legally effected, is not accounted for as a sale. Consequently, the IFRS accounting treatment followed until full redemption or third-party financing is obtained is as follows:•• the redeemable preference shares issued by the SEs and

subscribed for by SBG are not recognised as financial assets, but eliminated against equity as a negative empowerment reserve•• the negative empowerment reserve represents SBG shares

held by the SEs that are deemed to be treasury shares in terms of IFRS•• preference dividends accrued but not received, due to cash

distributions paid to participants, increase the empowerment reserve•• to the extent that preference dividends are received from the

SEs these are eliminated against the ordinary dividends paid on the SBG shares held by the SEs

Tutuwa initiative

3. Dividends on SBG shares are used to repay capital and interest on funding or flow through to participants

SE fundingSEs owning SBG shares

Tutuwa participants

SBG

1. Funding through 8.5% redeemable cumulative preference shares (not recognised as an asset in SBG in terms of IFRS) and third parties

2. Investments in SBG shares (deemed by IFRS to be treasury shares in SBG)23

1 3

21

•• for purposes of the calculation of EPS, the weighted average number of shares in issue is reduced by the number of shares held by those SEs that have been sold to the black participants. The shares will be restored on full redemption of the preference shares, or to the extent that the preference share capital is financed by a third party•• perpetual preference shares issued by SBG for the purposes

of financing the transaction are classified as equity. Dividends paid on the perpetual preference shares are accounted for on declaration and not on an accrual basis.

The normalised adjustment:•• recognises a loan asset by reversing the elimination of the

redeemable preference shares against equity•• accrues for preference dividends receivable on the loan asset

within interest income•• adds back the number of shares held by the black participants

to the weighted number of shares in issue, for purposes of calculating normalised per share ratios•• adjusts dividends declared on perpetual preference shares to

an accrual basis.

Between December 2007 and June 2013, transactions were concluded to refinance the group’s funding with external third-party financing and a portion of the Tutuwa participant’s shares were sold to ICBC. This resulted in the group’s empowerment reserve decreasing by R3,6 billion with 35,8 million shares no longer being deemed to be treasury shares for IFRS purposes.

The lock-in period for the exercise by the Tutuwa participants of their rights to the SBG shares expired on 31 December 2014. From 1 January 2015, 37,8 million SBG shares were exited from the Tutuwa initiative. 22 million SBG shares, previously financed by the group, were no longer deemed to be treasury shares for IFRS purposes which reduced the group’s empowerment reserve by R1,1 billion.

SBG shares held for the benefit of policyholders or to facilitate client trading activitiesThe group acquires or sells short shares in SBG for two distinct business reasons:•• SBG shares held by Liberty are invested for the risk and

reward of its policyholders, not its shareholders, and consequently the group’s shareholders are exposed to an insignificant portion of the fair value changes on these shares•• the group enters into transactions in SBG shares to facilitate

client trading activities. As part of its normal trading operations, the group offers clients trading positions over listed shares, including SBG’s own shares. In order to hedge the risk on these trades, the group buys or sells short SBG shares in the market. The group’s shareholders are therefore exposed to an insignificant portion of the fair value changes on these shares.

Group shares held for the benefit of policyholders or to facilitate client trading activities

Policyholders’ liabilities and client trading positions relating to SBG shares recognised in full with changes due to the SBG share price being recognised in the IFRS income statement

Cost of SBG shares deducted/added from/to equity in terms of IFRS. Fair value movements in the SBG share price, including dividends, are not recognised in the IFRS income statement

SBG subsidiaries

Client transactions Exposure to client transactionsOffsetting transaction resulting in position in SBG shares

Policyholders’ benefits offered to clients

LibertyLiability to policyholders linked to returns on portfolios that include SBG shares

Investment in a portfolio of shares, including SBG shares, on behalf of policyholders

Financial instruments offered to clients linked to a share price or index

Subsidiaries in banking operationsExposure to movements in share price or index resulting from client trading activities

Investment in shares that offset client trading positions, including SBG shares sold short or held long

SBG



In terms of IFRS trades by subsidiaries in SBG’s shares held on behalf of policyholders and SBG share exposures to facilitate client trading activities are deemed to be treasury shares for IFRS accounting purposes. The accounting consequences in the consolidated IFRS group financial statements are as follows:•• the cost price of shares purchased by subsidiaries as well as

any funds received by subsidiaries from selling SBG’s shares short are deducted from or added to ordinary shareholders’ equity and non-controlling interest respectively in the group’s financial statements •• dividends received on SBG shares are eliminated against

dividends paid.

No corresponding adjustment is made to the policyholders’ liabilities or trading positions with clients. As a result, the application of IFRS gives rise to a mismatch in the group’s overall equity and income statement. The liability to policyholders and client trading positions, along with the change in policyholders’ liabilities and profit or loss recognised on the client trading positions, is therefore not eliminated, even though

the corresponding interest in the group’s shares is eliminated and treated as treasury shares acquired or issued.

With regard to the SBG shares held for the benefit of Liberty policyholders, the weighted average number of shares in issue for per share purposes is calculated by deducting the full number of group shares held (100%), not the IFRS effective 54.5% owned by the group, as IFRS does not contemplate non-controlling interest portions of treasury shares. This treatment exaggerates the reduction in the weighted average number of shares used to calculate per share ratios.

For purposes of calculating the normalised results, the adjustments described above are reversed, and the SBG shares held on behalf of policyholders and to facilitate client trading activities are treated as issued to parties external to the group.

The impact of the normalised adjustments on the issued and weighted number of shares is provided in further detail on page 10.

Summary of adjustments to IFRS results for headline earnings and ordinary shareholders’ equity

Headline earnings

Banking activities

RmLiberty

Rm

Standard Bank

GroupRm

Group ordinary

shareholders’ equity

Rm

IFRS – 2015 19 754 2 433 22 187 151 069Tutuwa initiative 15 15 261Share exposures held to facilitate client trading activities 1 1 62Group shares held for the benefit of Liberty policyholders (197) (197) 654Other IFRS adjustments (reclassification of preference dividends) (4) (4) (4)

Normalised – 2015 19 751 2 251 22 002 152 042

IFRS – 2014 15 123 2 014 17 137 136 985Tutuwa initiative 96 29 125 1 584Share exposures held to facilitate client trading activities (54) (54) 70Group shares held for the benefit of Liberty policyholders 115 115 949

Normalised – 2014 15 165 2 158 17 323 139 588

Tutuwa SEs shares financed by Standard Bank1

2015 2014

Issued number

of shares 000’s

Weighted number

of shares 000’s

Issued number

of shares 000’s

Weighted number

of shares 000’s

Beginning of year 27 726 27 726 27 726 27 726

Less: sale of shares by participants (21 975) (20 127)

End of year 5 751 7 599 27 726 27 726 1 Added back to IFRS shares in issue for purposes of normalised results.

23

Segmental reporting

Segmental structure for key business units 24

Segmental income statement 26

Segmental statement of financial position 28

Personal & Business Banking 30

Corporate & Investment Banking 34

Liberty 38

SEGMENTAL REPORTING


Segmental structure for key business units

Personal & Business Banking

Banking and other financial services to individual customers and small- to medium-sized enterprises in South Africa, the rest of Africa and the Channel Islands

What we offerTransactional products

•• Comprehensive suite of transactional, saving, investment, trade, foreign exchange, payment and liquidity management solutions made accessible through a range of physical and electronic channels

Lending products

•• Lending products offered to both personal and business markets•• Business lending offerings constitute

a comprehensive suite of lending product offerings, structured working capital finance solutions and commercial property finance solutions

Mortgage lending

•• Residential accommodation loans to mainly personal market customers

Card products

•• Credit card facilities to individuals and businesses (credit card issuing)•• Merchant transaction acquiring

services (merchant solutions)Vehicle and asset finance

•• Finance of vehicles for retail market customers•• Finance of vehicles and equipment in

the business and corporate assets market•• Fleet solutions

Bancassurance and wealth

•• Short-term and long-term insurance comprising:– simple embedded products

including homeowners’ insurance, funeral cover, household contents and vehicle insurance and loan protection plans sold in conjunction with related banking products

– complex insurance products including life, disability and investment policies sold by qualified intermediaries

•• Financial planning•• Fiduciary advice, will drafting and

custody services, trust and estates administration as well as employee benefit services•• Tailored banking, wealth management,

investment and advisory services solutions for private high net worth individuals, both onshore and offshore

Standard Bank Group

Corporate & Investment Banking

Corporate and investment banking services to clients including governments, parastatals, larger corporates, financial institutions and international counterparties

What we offerClient coverage

•• Relationship management•• Sector expertise

Global markets

•• Fixed income and currencies (FIC)•• Commodities•• Equities

Transactional products and services

•• Transactional banking•• Investor services•• Trade finance

Investment banking

•• Advisory•• Debt products•• Real estate finance•• Structured finance•• Structured trade finance and

commodity finance•• Debt capital markets•• Equity capital markets

Real estate and principal investment management

Liberty

Life insurance and investment management activities of group companies in the Liberty Holdings Group

What we offerIndividual arrangements

•• Insurance and investment solutions to individual aspirational and affluent consumers, mainly in South Africa

Group arrangements•• Insurance and investment solutions

to corporate arrangements and retirement funds across sub-Saharan Africa

Asset management (Stanlib)•• Asset management capabilities to

manage asset flows, including international flows, that are invested in Africa

Central and other

•• Includes the impact of the Tutuwa initiative, group hedging activities, group capital instruments, group surplus capital and strategic acquisition costs•• Includes the results of centralised

support functions (back office), with the direct costs of support functions recharged to the business segments

25

2015 2014

Headline earnings R11 232 million R9 797 million

Headline earnings change increased 15% increased 17%

Headline earnings contribution 51% 57%

Return on equity 18.1% 18.1%

Cost-to-income ratio 60.1% 59.4%

Credit loss ratio 1.27% 1.41%

Net loans and advances R629 billion R575 billion

2015 2014

Headline earnings R7 923 million R4 980 million

Headline earnings change increased 59% decreased 23%


Headline earnings – pro-forma continuing operations R7 985 million R7 227 million


Cost-to-income ratio 57.8% 54.0%

Credit loss ratio 0.24% 0.22%

Net loans and advances R521 billion R409 billion

2015 2014

Headline earnings as reported by Liberty R4 128 million R3 968 million

Headline earnings attributable to the group R2 251 million R2 158 million



Normalised equity value R42 billion R40 billion

Third party funds under management R358 billion R334 billion


% of group headline earnings



Liberty


51%

36%

10%

SEGMENTAL REPORTING


Segmental income statement



Central and other

Change 2015 2014 Change 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm % Rm Rm

Income from banking activities 9 60 393 55 399 7 31 319 29 171 (19) (597) (501)

Net interest income 11 35 051 31 720 11 14 774 13 291 (>100) (511) 245Non-interest revenue 7 25 342 23 679 4 16 545 15 880 88 (86) (746)

Net fee and commission revenue 6 22 711 21 444 (4) 5 389 5 629 (19) (1 180) (994)Trading revenue >100 375 169 12 9 925 8 880 >100 714 167Other revenue 9 2 256 2 066 (10) 1 231 1 371 >100 380 81

Net income from investment management and life insurance activitiesIncome from investment management and life insurance activities

Net insurance premiumsInvestment income and gainsManagement and service fee income

Benefits due to policyholders

Net insurance benefits and claimsFair value adjustment to policyholders’ liabilities under investment contracts Fair value adjustment on third-party fund interests

Total income 9 60 393 55 399 7 31 319 29 171 (19) (597) (501)

Credit impairment charges (5) 7 815 8 204 59 1 279 804 >100 277 1

Specific credit impairments (8) 7 290 7 938 (28) 807 1 117 0 1 1Portfolio credit impairments 97 525 266 >100 472 (313) 100 276

Income before operating expenses 11 52 578 47 195 6 30 040 28 367 (74) (874) (502)

Operating expenses in banking activities 10 36 380 33 008 10 17 439 15 791 (8) (2 385) (2 203)

Staff costs 11 11 735 10 527 8 6 889 6 369 16 9 344 8 065Other operating expenses 10 24 645 22 481 12 10 550 9 422 (14) (11 729) (10 268)

Operating expenses in insurance activitiesAcquisition costs – insurance and investment contractsOther operating expenses

Net income before equity accounted earnings and non-trading and capital related items 14 16 198 14 187 0 12 601 12 576 (11) 1 511 1 701Non-trading and capital related items (>100) (804) (197) (>100) (261) (3) (>100) (337) 1 186Share of profit from associates and

joint ventures (2) 172 176 (>100) (1 123) 64 64 611 372

Net income before indirect taxation 10 15 566 14 166 (11) 11 217 12 637 (45) 1 785 3 259Indirect taxation 11 618 558 18 410 348 13 953 841

Profit before direct taxation 10 14 948 13 608 (12) 10 807 12 289 (66) 832 2 418Direct taxation 12 3 984 3 560 (23) 1 648 2 150 (42) 238 412

Profit for the year from continuing operations 9 10 964 10 048 (10) 9 159 10 139 (70) 594 2 006Profit/(loss) for the year from discontinued

operation 92 (316) (3 853) >100 3 057 (195)

Profit for the year 9 10 964 10 048 41 8 843 6 286 >100 3 651 1 811Attributable to non-controlling interests (14) 331 386 (5) 1 336 1 410 (29) 37 52Attributable to preference shareholders 6 385 364

Attributable to ordinary shareholders 10 10 633 9 662 54 7 507 4 876 >100 3 229 1 395Headline adjustable items >100 599 135 >100 416 104 (>100) (2 633) (1 007)

Headline earnings 15 11 232 9 797 59 7 923 4 980 54 596 388

ROE (%) 18.1 18.1 14.3 10.2Net interest margin (%) 5.45 5.31 1.85 2.12Credit loss ratio (%) 1.27 1.41 0.24 0.22Cost-to-income ratio (%) 60.1 59.4 57.8 54.0Number of employees 18 27 256 23 014 (2) 4 235 4 341 8 16 467 15 287

1 Includes adjustments on consolidation of Liberty Holdings into the group.

2015 2014 2015 2014 2015 2014

27


Normalised Standard Bank Group

IFRS adjustments

IFRS Standard Bank Group

Change 2015 2014 Change 2015 2014 Change 2015 2014 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm % Rm Rm Rm Rm % Rm Rm

8 91 115 84 069 8 91 115 84 069 (2) (26) 8 91 113 84 043

9 49 314 45 256 9 49 314 45 256 (4) (104) 9 49 310 45 152 8 41 801 38 813 8 41 801 38 813 2 78 7 41 803 38 891

3 26 920 26 079 3 26 920 26 079 3 26 920 26 079 20 11 014 9 216 20 11 014 9 216 2 78 19 11 016 9 294 10 3 867 3 518 10 3 867 3 518 10 3 867 3 518

10 23 650 21 486 10 23 650 21 486 347 (277) 13 23 997 21 209

(7) 74 016 79 744 (7) 74 016 79 744 347 (277) (6) 74 363 79 467

(8) 37 572 40 724 (8) 37 572 40 724 (8) 37 572 40 724(9) 32 604 35 782 (9) 32 604 35 782 347 (277) (7) 32 951 35 505

19 3 840 3 238 19 3 840 3 238 19 3 840 3 238

(14) 50 366 58 258 (14) 50 366 58 258 (14) 50 366 58 258

(22) 36 884 47 200 (22) 36 884 47 200 (22) 36 884 47 200

(17) 6 181 7 473 (17) 6 181 7 473 (17) 6 181 7 473

>100 7 301 3 585 >100 7 301 3 585 >100 7 301 3 585

8 91 115 84 069 10 23 650 21 486 9 114 765 105 555 345 (303) 9 115 110 105 252

4 9 371 9 009 4 9 371 9 009 4 9 371 9 009

(11) 8 098 9 056 (11) 8 098 9 056 (11) 8 098 9 056>100 1 273 (47) >100 1 273 (47) >100 1 273 (47)

9 81 744 75 060 10 23 650 21 486 9 105 394 96 546 345 (303) 10 105 739 96 243

10 51 434 46 596 10 51 434 46 596 10 51 434 46 596

12 27 968 24 961 12 27 968 24 961 12 27 968 24 961 8 23 466 21 635 8 23 466 21 635 8 23 466 21 635

11 16 184 14 546 11 16 184 14 546 11 16 184 14 546

4 4 760 4 579 4 4 760 4 579 4 4 760 4 579 15 11 424 9 967 15 11 424 9 967 15 11 424 9 967

6 30 310 28 464 8 7 466 6 940 7 37 776 35 404 345 (303) 9 38 121 35 101(>100) (1 402) 986 (100) (110) (>100) (1 512) 986 (>100) (1 512) 986

(>100) (340) 612 21 17 14 (>100) (323) 626 (>100) (323) 626

(5) 28 568 30 062 6 7 373 6 954 (3) 35 941 37 016 345 (303) (1) 36 286 36 713 13 1 981 1 747 10 758 692 12 2 739 2 439 12 2 739 2 439

(6) 26 587 28 315 6 6 615 6 262 (4) 33 202 34 577 345 (303) (2) 33 547 34 274(4) 5 870 6 122 20 2 303 1 926 2 8 173 8 048 14 13 2 8 187 8 061

(7) 20 717 22 193 (1) 4 312 4 336 (6) 25 029 26 529 331 (316) (3) 25 360 26 213

>100 2 741 (4 048) >100 2 741 (4 048) >100 2 741 (4 048)

29 23 458 18 145 (1) 4 312 4 336 24 27 770 22 481 331 (316) 27 28 101 22 165(8) 1 704 1 848 (3) 2 112 2 178 (5) 3 816 4 026 154 (122) 2 3 970 3 904 6 385 364 6 385 364 (8) (8) 6 377 356

34 21 369 15 933 2 2 200 2 158 30 23 569 18 091 185 (186) 33 23 754 17 905(>100) (1 618) (768) 100 51 (>100) (1 567) (768) (>100) (1 567) (768)

30 19 751 15 165 4 2 251 2 158 27 22 002 17 323 185 (186) 29 22 187 17 137

14.9 12.3 19.7 20.9 15.3 12.9 15.6 13.03.50 3.80 3.50 3.80 3.50 3.790.87 1.00 0.87 1.00 0.87 1.0056.7 55.0 56.7 55.0 56.7 55.0

12 47 958 42 642 (3) 6 403 6 617 10 54 361 49 259 10 54 361 49 259

2015 20142015 2014 2015 2014 2015 2014 2015 2014

SEGMENTAL REPORTING


Segmental statement of financial position



Central and other



AssetsCash and balances with central banks 41 9 394 6 656 20 54 524 45 317 (9) 11 194 12 329

Financial investments, trading and

pledged assets 40 18 452 13 136 12 241 177 215 709 24 (1 917) (2 522)

Loans and advances 9 628 844 575 313 27 520 814 408 738 (33) (72 263) (54 507)

Loans and advances to banks 51 69 397 45 981 24 142 901 114 871 (50) (66 978) (44 632)

Loans and advances to customers 6 559 447 529 332 29 377 913 293 867 46 (5 285) (9 875)

Derivative and other assets (5) 7 072 7 422 78 110 192 61 833 43 3 278 2 294

Non-current assets held for sale (100) – 219 958

Investment property

Interest in associates and joint ventures 9 945 866 >100 6 708 625 (11) 1 779 1 989

Property and equipment (13) 5 263 6 053 (69) 287 913 28 9 402 7 332

Goodwill and other intangible assets 2 12 110 11 853 >100 2 778 970 11 8 826 7 984

Total assets 10 682 080 621 299 (2) 936 480 954 063 (58) (39 701) (25 101)

Equity and liabilitiesEquity 16 67 466 58 393 20 65 053 54 004 (24) 21 760 28 582

Equity attributable to ordinary shareholders 15 64 573 56 238 19 59 285 49 941 (28) 16 208 22 442

Preference share capital and premium – 5 503 5 503

Non-controlling interest 34 2 893 2 155 42 5 768 4 063 (92) 49 637

Liabilities 9 614 614 562 906 (3) 871 427 900 059 (14) (61 461) (53 683)

Deposit and current accounts 20 500 879 418 694 8 716 778 662 249 4 (16 108) (16 867)

Deposits from banks 65 2 690 1 633 37 144 143 105 539 (1) (9 631) (9 566)

Deposits from customers 19 498 189 417 061 3 572 635 556 710 11 (6 477) (7 301)

Interdivisional funding/(lending) (23) 95 538 123 807 20 (104 361) (130 641) 29 8 823 6 834

Derivative, trading and other liabilities (24) 10 420 13 735 40 250 754 179 486 (18) (62 499) (53 175)

Non-current liabilities held for sale (100) – 182 069

Policyholder liabilities

Subordinated debt 17 7 777 6 670 20 8 256 6 896 (13) 8 323 9 525

Total equity and liabilities 10 682 080 621 299 (2) 936 480 954 063 (58) (39 701) (25 101)

Average assets – banking activities

excluding trading derivatives 643 300 596 848 800 111 626 095 (33 550) (30 588)

Average loans and advances (gross) 616 105 580 840 523 682 373 597 (58 824) (56 309)

Average ordinary shareholders’ equity 61 891 54 106 55 297 49 058 15 306 20 601

1 Includes elimination of balances between Liberty and banking activities.

2015 2014 2015 2014 2015 2014

29


NormalisedStandard Bank

GroupIFRS

adjustments

IFRS Standard Bank

Group

Change 2015 2014 Change 2015 2014 Change 2015 2014 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm % Rm Rm Rm Rm % Rm Rm

17 75 112 64 302 17 75 112 64 302 17 75 112 64 302

14 257 712 226 323 12 351 126 313 381 13 608 838 539 704 (1 486) (2 558) 13 607 352 537 146

16 1 077 395 929 544 (100) (228) 16 1 077 167 929 544 (250) (1 303) 16 1 076 917 928 241

25 145 320 116 220 25 145 320 116 220 25 145 320 116 220

15 932 075 813 324 (100) (228) 15 931 847 813 324 (250) (1 303) 15 931 597 812 021

68 120 542 71 549 35 17 514 12 988 63 138 056 84 537 63 138 056 84 537

(100) – 219 958 (100) – 219 958 (100) – 219 958

13 30 508 27 022 13 30 508 27 022 13 30 508 27 022

>100 9 432 3 480 10 271 247 >100 9 703 3 727 >100 9 703 3 727

5 14 952 14 298 11 2 718 2 439 6 17 670 16 737 6 17 670 16 737

14 23 714 20 807 (14) 317 368 13 24 031 21 175 13 24 031 21 175

2 1 578 859 1 550 261 13 402 226 356 445 4 1 981 085 1 906 706 (1 736) (3 861) 4 1 979 349 1 902 845

9 154 279 140 979 8 26 251 24 388 9 180 530 165 367 (1 622) (3 733) 11 178 908 161 634

9 140 066 128 621 9 11 976 10 967 9 152 042 139 588 (973) (2 603) 10 151 069 136 985

– 5 503 5 503 – 5 503 5 503 – 5 503 5 503

27 8 710 6 855 6 14 275 13 421 13 22 985 20 276 (649) (1 130) 17 22 336 19 146

1 1 424 580 1 409 282 13 375 975 332 057 3 1 800 555 1 741 339 (114) (128) 3 1 800 441 1 741 211

13 1 201 549 1 064 076 11 (15 035) (16 864) 13 1 186 514 1 047 212 13 1 186 514 1 047 212

41 137 202 97 606 41 137 202 97 606 41 137 202 97 606

10 1 064 347 966 470 11 (15 035) (16 864) 10 1 049 312 949 606 10 1 049 312 949 606

42 198 675 140 046 53 89 993 58 975 45 288 668 199 021 (114) (128) 45 288 554 198 893

(100) – 182 069 (100) – 182 069 (100) – 182 069

4 298 232 287 516 4 298 232 287 516 4 298 232 287 516

5 24 356 23 091 15 2 785 2 430 6 27 141 25 521 6 27 141 25 521

2 1 578 859 1 550 261 13 402 226 356 445 4 1 981 085 1 906 706 (1 736) (3 861) 4 1 979 349 1 902 845

1 409 861 1 192 355 1 409 861 1 192 355 (301) (977) 1 409 560 1 191 378

1 080 963 898 128 1 080 963 898 128 (373) (1 148) 1 080 590 896 980

132 494 123 765 11 455 10 310 143 949 134 075 (1 482) (2 005) 142 467 132 070

2015 2014 2015 2014 2015 2014 2015 20142015 2014

SEGMENTAL REPORTING



Change 2015 2014

% Rm Rm

Net interest income 11 35 051 31 720 Non-interest revenue 7 25 342 23 679 Total income 9 60 393 55 399 Credit impairment charges (5) 7 815 8 204 Operating expenses 10 36 380 33 008 Non-trading and capital related items (>100) (804) (197)Taxation 12 4 602 4 118Headline earnings 15 11 232 9 797

Headline earnings change % 15 17Headline earnings contribution to the group % 51 57 ROE % 18.1 18.1Net interest margin % 5.45 5.31 Cost-to-income ratio % 60.1 59.4Credit loss ratio % 1.27 1.41 Total assets Rm 10 682 080 621 299Net loans and advances Rm 9 628 844 575 313Average ordinary shareholders’ equity Rm 14 61 891 54 106Number of employees 18 27 256 23 014Permanent staff under previous legislation 4 23 947 23 014Temporary to permanent staff conversion under new legislation 100 3 309

¢ Rm


4 364 5 860 7 343 8 401 9 797 11 232

2010 2011 2012 2013 2014 2015

2 500

5 000

7 500

10 000

12 500

¢ %

COST-TO-INCOME RATIO

55.1 62.2 60.4 59.7 59.4 60.1

2010 2011 2012 2013 2014 2015

14

28

42

56

70

Favourable•• Net interest income assisted by continued price concession

management, sustainable risk-based pricing, the positive endowment impact of higher average interest rates and higher average balances.•• Improved non-interest revenue due to growth in transactional,

savings and investment portfolios, higher transactional volumes with marginal annual fee increases and growth in assets under management.•• Strong growth in card products in Nigeria, Uganda, Angola

and Botswana.•• Lower credit impairment charges in South Africa’s mortgage

lending, as a result of improved collection capabilities and a normalisation of loss given defaults; vehicle and asset finance on the back of improved risk of new business originated and collection strategies; as well as business lending due to lower specific impairments required.

Adverse•• Reduced interchange rates from March 2015.•• Higher credit impairment charges in Nigeria, Ghana and

Angola as well as card debtors and revolving credit plans in South Africa as a result of continued consumer strain. •• The SARB directive on restructures implemented during 2015

led to an increase in loans categorised as NPLs and early arrears, primarily in mortgage loans.•• Higher information technology, depreciation and amortisation

spend following the roll-out of core banking systems and an increased number of merchant devices.•• Ring-fenced components of predominantly the core banking

investment were identified as redundant and have been impaired. •• Continued focus on innovation, customer experience and the

building of digital and multi-channel capabilities contributed to higher operating expenses. •• Staff costs affected by the legislated conversion of temporary

staff to permanent staff and an investment in specialist capabilities.

31

Total income and headline earnings by productTotal income Headline earnings

Change 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm

Mortgage lending 8 7 554 7 000 25 2 450 1 958Vehicle and asset finance 7 3 403 3 189 79 306 171Card products 12 6 578 5 876 9 1 535 1 402Lending products 3 9 809 9 568 14 1 442 1 267Transactional products 11 25 857 23 325 9 3 204 2 929Bancassurance and wealth 12 7 192 6 441 11 2 295 2 070

Personal & Business Banking 9 60 393 55 399 15 11 232 9 797

Mortgage lending•• Net interest income growth aided by an improvement in the

portfolio yield in response to changing regulations, associated credit risk and higher funding costs, coupled with larger loan books in South Africa, Namibia, Botswana and Ghana. •• Lower credit impairment charges in South Africa and Botswana

through improved collection capabilities in late stage legal although higher NPLs attributed to the impact of the SARB directive on restructures.

Vehicle and asset finance•• Good loan book growth of 10% in South African operations.•• Increased fleet card base and associated fees due to a

government tender won in April 2014 to provide fleet management services in South Africa. •• Significant reduction in credit impairment charges in South

Africa, primarily in the personal market, as a result of risk mitigation strategies, new business operational enhancements and improved quality of new business, aided by the investment in online dealer origination capabilities. •• Higher credit impairment charges in the rest of Africa, largely

as a result of increased defaults in Nigeria’s business segment.

Card products•• Net interest income growth assisted by higher yields on the

back of an increase in the average prime lending rate in South Africa and a change in the customer mix of Usury Act and National Credit Act (NCA) priced customers.•• Non-interest revenue assisted by higher merchant solutions

turnover, structural pricing changes and increased consumer spend, partly offset by lower interchange rates in South Africa since March 2015. •• Continued strong growth in the Nigerian card business due to

fast growing e-commerce and competitive card rates, coupled with increased utilisation and pricing in Uganda.•• Higher credit impairment charges in South Africa due to

economic strain on consumers and lower post write-off recoveries. Improved risk mitigation controls in Botswana significantly reduced personal markets NPLs.

Lending products•• Growth in revolving credit plans, medium-term lending and

overdraft balances.•• Sustainable risk-based pricing and stricter price concession

management, particularly in the business segment.•• Margin compression in Nigeria, Zambia and Angola.•• Higher lending fees driven by stricter concession management

coupled with the full year benefit of having introduced unutilised facility fees in June 2014. •• Lower credit impairment charges in South Africa’s business

lending, although continued pressure in the agriculture segment, partly offset by additional impairments required in Nigeria and Ghana.

Transactional products•• Strong growth in transactional, savings and investment

portfolio balances driven by targeted sales campaigns and reduced minimum investment values. •• Positive endowment impact of higher average interest rates in

South Africa, Uganda, Nigeria and Angola.•• Fee income assisted by growth in the active customer base,

increased transactional volumes and customer behaviour-based pricing, partly offset by reduced interchange rates.

Bancassurance and wealth•• Good growth in wealth and investments client asset base.•• Increased short-term underwriting profits following a

reduction in the cost of claims.•• Strong performance from the Offshore group as a result of an

increased client base and client activity. •• Solid performance in Nigeria due to growth in pension assets

under management.•• Higher short-term brokering profits in Namibia, however

challenging conditions in Angola and Botswana resulted in muted growth overall for the brokering business in the rest of Africa.•• Investment in systems and people to position the business

ahead of significant regulatory change, increased competition and to adapt to technology advances.

Personal & Business Banking – South Africa

Change 2015 2014

% Rm Rm

Net interest income 10 27 435 24 992 Non-interest revenue 4 18 754 18 019 Total income 7 46 189 43 011 Credit impairment charges (8) 6 602 7 212 Operating expenses 10 25 111 22 893 Headline earnings 13 10 579 9 388

ROE % 22.0 21.9Cost-to-income ratio % 54.2 53.0Credit loss ratio % 1.34 1.53

SEGMENTAL REPORTING


External loans and advances by product

Change 2015 2014

% Rm Rm

Loans and advances to banks 51 69 397 45 981

Loans and advances to customers 6 559 447 529 332Gross loans and advances to customers 6 576 078 543 830

Mortgage loans 3 325 867 317 069Vehicle and asset finance 11 80 278 72 483Card debtors 4 31 174 30 029Overdrafts and other demand loans 12 48 610 43 558

Personal unsecured lending (0) 10 916 10 919Business lending 15 37 694 32 639

Other term loans 12 80 356 71 950

Inclusive lending (AccessLoans) (11) 1 820 2 050 Personal unsecured lending 5 43 458 41 393 Business lending 23 35 078 28 507 Commercial property finance 12 9 793 8 741Less: credit impairments for loans and advances 15 16 631 14 498Credit impairments for non-performing loans 15 11 765 10 247Credit impairments for performing loans 14 4 866 4 251

Net loans and advances 9 628 844 575 313

Comprising:Gross loans and advances 9 645 475 589 811 Less: credit impairments 15 16 631 14 498


Securitised assets consolidated above:Mortgage loans (13) 7 725 8 907

Deposit and current accounts by product

Change 2015 2014

% Rm Rm

Wholesale priced deposit and current accounts 18 96 538 81 767Call deposits 22 89 090 73 025Securitisation issuances (15) 7 448 8 742Retail priced deposit and current accounts 20 404 341 336 927Current accounts 13 139 398 123 470Cash management deposits 10 24 954 22 725Call deposits 29 126 520 98 112Savings accounts 14 22 967 20 224Term deposits 23 79 447 64 821Other funding 46 11 055 7 575

Total deposit and current accounts 20 500 879 418 694Wholesale priced interdivisional funding (23) 95 538 123 807

Deposits and funding 10 596 417 542 501

33

■ Branches 1 159 1 217 1 249 1 283 1 233 1 221

ATMs1 – Standard Bank owned 6 473 6 770 7 841 7 861 7 065 7 193

ATMs1 – non-Standard Bank owned 1 736 1 175 1 312 1 439 1 558 1 622

POINTS OF REPRESENTATION

1 Including auto money devices and Automatic Notes Acceptors (ANAs)

2010 2011 2012 2013 2014 2015

300

600

900

1 200

1 500

2 000

4 000

6 000

8 000

10 000

2015 2014■ Personal markets 67 68

■ Business markets 21 20

■ Bancassurance and wealth 12 1 2

TOTAL INCOME PER MARKET SEGMENT (%)

Key business statisticsChange 2015 2014

%

South AfricaMortgage loansNumber of loan applications received thousands (5) 254 268Average loan-to-value (LTV) of new business registered % 85 86Average balance-to-original-value (BTV) of portfolio % 66 66Average instalment-to-income (ITI) of new business % 18 19Proportion of new business referred by independent mortgage originators and estate agents % 53 51

Vehicle and asset financeGrowth in value of new loans– motor % 29 (17)– non-motor % 13 (8)

Number of accounts at year end1

Credit card accounts thousands (7) 1 566 1 686Total current accounts thousands 0 2 500 2 491Targeted segment current accounts thousands 10 656 597Other transactional and savings accounts thousands (1) 7 296 7 340Ucount registered users thousands 20 628 524

DistributionChange in internet users (registered) % 9 7Change in mobile banking transactions % 99 53Change in ATM transactions % 1 (2)Mobile banking transactions – SBG App3 thousands >100 344 204 70 722Mobile banking transactions (excluding SBG App) thousands (17) 146 694 176 438

Points of representationBranches (3) 647 665ATMs and ANAs 0 7 273 7 259ATMs – Standard Bank owned (6) 4 173 4 433ATMs – non-Standard Bank owned 4 1 622 1 558ANAs – Standard Bank owned 17 1 478 1 268

Rest of AfricaPoints of representationBranches2 1 574 568 ATMs 13 1 542 1 364 Change in ATM transactions % 13 8 1 Including nil balances.2 Includes service centres, customer service trade points, agencies, in-store banking and “bank at work” sites.3 Launched in 2014.

SEGMENTAL REPORTING



Change 2015 2014

% Rm Rm

Net interest income 11 14 774 13 291 Non-interest revenue 4 16 545 15 880 Net fee and commission revenue (4) 5 389 5 629 Trading revenue 12 9 925 8 880 Other revenue (10) 1 231 1 371 Total income 7 31 319 29 171 Credit impairment charges 59 1 279 804 Operating expenses 10 17 439 15 791 Share of (loss)/profit from associates (>100) (1 123) 64Taxation (18) 2 058 2 498 Headline earnings from continuing operations (8) 8 027 8 725 Headline earnings loss from discontinued operation 97 (104) (3 745)Headline earnings 59 7 923 4 980 Headline earnings – pro-forma continuing operations1 10 7 985 7 227

Headline earnings change % 59 (23)Headline earnings contribution to the group % 36 29 ROE % 14.3 10.2 Net interest margin % 1.85 2.12 Cost-to-income ratio % 57.8 54.0 Credit loss ratio % 0.24 0.22 Total assets Rm (2) 936 480 954 063 External net loans and advances Rm 27 520 814 408 738 Average ordinary shareholders’ equity Rm 13 55 297 49 058 Number of employees (2) 4 235 4 341 1 Headline earnings from pro-forma continuing operations includes 40% of the discontinued operation’s headline earnings loss, given that the group retained a 40% interest in the

discontinued operation.

¢ Rm


5 252 5 532 4 419 6 500 4 980 7 923

2010 2011 2012 2013 2014 2015

1 600

3 200

4 800

6 400

8 000

¢ %

COST-TO-INCOME RATIO

51.3 62.2 55.0 56.8 54.0 57.8

2010 2011 2012 2013 2014 2015

14

28

42

56

70

35

■ Net interest income 38 39 37 44 46 47

■ Trading revenue 36 34 36 31 30 32■ Fees and other revenue 26 27 27 25 24 21

Trading income as percentage of non- interest revenue 58.7 57.1 56.4 56.2 55.9 60.0

¢¢¢ %

INCOME CONTRIBUTION

2010 2011 2012 2013 2014 2015

20

40

60

80

100

Favourable•• Diversification of the portfolio supporting resilient growth in

the rest of Africa, despite the tough economic environment in key markets. •• Net interest income driven by sustained loan book and client

franchise lead growth, coupled with higher cash management balances. •• High origination volumes of debt products in the latter part

of 2015.•• Good FIC trading performance in South Africa and the

South and Central region mainly due to increased client transactional activity.•• Improvement in equities and commodities trading.•• Partial recovery of insurance claims relating to external fraud

on aluminium.

Adverse•• Margin compression in the rest of Africa, as a result of liquidity

constraints, higher funding costs and foreign currency shortages, as well as in South Africa from competitive pricing pressure.•• Depressed commodity prices, rising interest rates throughout

Africa and political uncertainty in key markets negatively impacted economic activity, resulting in lower revenue growth.•• Lower capital markets activity and the restriction of foreign

currency liquidity delayed client investment decisions, particularly in Nigeria. •• Large specific credit impairments required in the oil & gas,

mining & metals and power & infrastructure sectors, impacted by depressed commodity prices, most notably in Nigeria, Kenya, Angola and Ghana. •• Higher operational costs as a result of increased investment

for future growth within the transactional products and services business, coupled with increased costs associated with a heightened regulation and compliance environment.•• Equity accounted operational loss of R1 173 million from the

ICBCS associate due to challenging global trading conditions and lower than planned Chinese corporate activity.

SEGMENTAL REPORTING


Total income and headline earnings by productTotal income Headline earnings

Change 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm

Global markets 12 11 837 10 553 19 3 889 3 275Investment banking 6 7 803 7 374 1 2 598 2 585Transactional products and services 8 11 362 10 472 4 2 662 2 553Real estate and principal investment management (59) 317 772 (84) 51 312Share of loss from ICBCS associate (100) (1 173)

Continuing operations 7 31 319 29 171 (8) 8 027 8 725Discontinued operation 97 (104) (3 745)

Corporate & Investment Banking 7 31 319 29 171 59 7 923 4 980

Global markets•• Strong performance underpinned by client driven revenues in

the rest of Africa.•• Continued diversification of revenue with sustained growth in

forex, cash equities, and equity derivatives trading. •• Improved client led interest rate trading in South Africa and

increased forex volumes in the South and Central region on the back of a volatile foreign exchange environment. •• Volume and margin pressure from the disintermediation of

the forex market in Nigeria. •• Tightened credit spreads and a lack of risk appetite in the

market contributed to subdued credit trading revenue.

Investment banking•• Improved loan book quality and intensified efforts to win key

deals in high investment grade assets in South Africa assisted net interest income growth but was offset by margin compression in the rest of Africa and South Africa.•• Participation in industry leading transactions in 2015. •• Net fee and commission income negatively impacted by

delayed investment decisions and lower capital markets activity in the rest of Africa.•• Adverse economic environment in the rest of Africa impacted

oil & gas, mining & metals and power & infrastructure sectors leading to increased credit impairment charges.

Transactional products and services•• Net interest income supported by solid growth in deposit

balances and the positive endowment impact of higher interest rates. •• Resilient performance in South Africa driven by investor

services and cash management solutions with volume growth also noted in the securities lending and futures clearing business.•• Muted revenue growth in the rest of Africa following difficult

economic conditions, regulatory changes and depreciating local currencies.•• Weak investor confidence observed in the Nigerian market. •• Growth in letters of credit and guarantee exposures in Ghana,

Zambia and Nigeria.•• Continued investment spend to strengthen transactional

processing capabilities across the franchise to support revenue growth.

Real estate and principal investment management•• Profit earned on the disposal of real estate investments in the

rest of Africa. •• Continued wind-down of the principal investment management

portfolio with minimal remaining distressed debt net exposure.

Share of loss from ICBCS associate•• Challenging global trading conditions and lower than planned

Chinese corporate activity.•• Partial recovery of insurance claims relating to external fraud

on aluminium.•• Equity accounted loss of the deferred prosecution agreement

agreed with authorities in the United Kingdom.

Discontinued operation•• The group concluded the disposal of 60% of the SB Plc

business to ICBC, with 40% of the net loss being equity accounted from 1 February 2015. •• Weak trading performance in January 2015.•• Write-down of the residual aluminium exposure in SB Plc prior

to date of sale on 1 February 2015.•• Partial recovery of insurance claims relating to external fraud

on aluminium subsequent to the date of sale of SB Plc.

37

External loans and advances by product

Change

%

2015 2014

Rm Rm

Loans and advances to banks 24 142 901 114 871Call loans 31 3 449 2 630Loans granted under resale agreements (24) 47 148 62 107Other loans and advances 84 92 304 50 134Loans and advances to customers 29 377 913 293 867Gross loans and advances to customers 29 383 432 297 846Vehicle and asset finance (22) 1 797 2 310Overdraft and other demand loans 6 39 546 37 361Term loans 25 249 648 199 297Loans granted under resale agreements >100 36 391 10 949Commercial property finance 17 56 050 47 929Less: credit impairments for loans and advances 39 5 519 3 979Credit impairments for non-performing loans 30 4 095 3 143Credit impairment for performing loans 70 1 424 836


Comprising:Gross loans and advances 28 526 333 412 717Less: credit impairments 39 5 519 3 979


Net loans and advances on a constant currency basis 22 520 814 428 287

Deposit and current accounts by product

Change

%

2015 2014

Rm Rm

Wholesale priced deposit and current accounts 8 716 778 662 249 Current accounts 12 72 959 65 268Cash management deposits 2 110 536 107 971Call deposits 4 82 928 79 828Term deposits (2) 166 544 169 833Negotiable certificates of deposits 11 108 006 97 224Repurchase agreements (49) 4 960 9 677Other funding including interbank deposits 29 170 845 132 448

Total deposit and current accounts 8 716 778 662 249Wholesale priced interdivisional funding 20 (104 361) (130 641)

Deposits and funding 15 612 417 531 608

Total deposit and current accounts on a constant currency basis 10 612 417 554 531

SEGMENTAL REPORTING


Liberty

Change 2015 2014

% Rm Rm

Net insurance premiums2 Rm (8) 37 572 40 724Investment income and gains1 Rm (9) 32 604 35 782Benefits due to policyholders2 Rm (14) 50 366 58 258Management and service fee income2 Rm 19 3 840 3 238Operating expenses1 Rm 11 16 184 14 546BEE normalised headline earnings2 Rm 4 4 128 3 968Operating earnings2 Rm 7 2 772 2 586Headline earnings attributable to the group1 Rm 4 2 251 2 158

Effective interest in Liberty at year end % 54.5 54.3 ROE % 19.7 20.9 Return on Liberty group equity value2, 3 % 10.5 16.9 Indexed new business (excluding contractual increases)2 Rm (4) 7 515 7 789New business margin2 % 1.8 2.1Net cash inflows in insurance operations2 Rm (45) 5 402 9 870 Value of new business2 Rm (23) 729 941 Normalised Liberty group equity value2 Rm 4 41 635 40 024Capital adequacy requirement cover (times covered)2 3.03 3.071 Includes adjustments on consolidation of Liberty Holdings into the Standard Bank Group.2 Liberty as published.3 Return on embedded value.

¢ Rm

HEADLINE EARNINGS – SBG SHARECAGR (2010 – 2015): 10%

1 393 1 428 1 990 2 211 2 158 2 251

2010 2011 2012 2013 2014 2015

500

1 000

1 500

2 000

2 500

¢ Rm

NORMALISED EMBEDDED VALUECAGR (2010 – 2015): 10%

26 030 28 639 32 740 36 067 40 024 41 635

2010 2011 2012 2013 2014 2015

10 000

20 000

30 000

40 000

50 000

Favourable•• Good performance from individual insurance arrangements

and LibFin credit businesses.•• Strong positive net cash flows of R15,2 billion into the asset

management and insurance businesses.•• Strong capital adequacy position.

Adverse•• Reduced long-term indexed insurance new business due to

lower recurring business sales across risk products and low sales of corporate bulk annuity single premiums.•• Extreme market volatility and an industry slowdown reduced

market returns in Stanlib.

39

BEE normalised summarised income statement

Change 2015 2014

% Rm Rm

Insurance premium revenue (7) 39 245 42 139Reinsurance premiums (18) (1 673) (1 415)

Net insurance premiums (8) 37 572 40 724Investment income and gains (9) 32 583 35 743Management and service fee income 19 3 840 3 238

Total revenue (7) 73 995 79 705Benefits due to policyholders (14) 50 366 58 258Net insurance benefits and claims (22) 36 884 47 200Fair value adjustment to policyholders' liabilities under investment contracts (17) 6 181 7 473Fair value adjustment on third-party mutual fund interests >100 7 301 3 585

Income after policyholders' benefits 10 23 629 21 447Operating expenses 12 17 052 15 238Insurance, investment and asset management acquisition costs 4 4 760 4 579General marketing and administration expenses 8 10 149 9 376Finance costs >100 1 210 407Preference dividend in subsidiary 7 933 876

Income before equity accounted earnings 6 6 577 6 209Share of profit from joint ventures 100 13

Profit before taxation 6 6 590 6 209Taxation 20 2 303 1 926

Profit for the year 0 4 287 4 283BEE preference shares income (51) 26 53Attributable to non-controlling interests1 25 (276) (366)Attributable to preference shareholders 0 (2) (2)Headline adjustable item: Intangible assets impairment – IAS 38 100 93

BEE normalised headline earnings 4 4 128 3 9681 Non-controlling interest within Liberty Holdings.

¢ Rbn

POLICYHOLDER LIABILITIESCAGR (2010 – 2015): 9%

198 209 237 264 288 298

2010 2011 2012 2013 2014 2015

70

140

210

280

350

SEGMENTAL REPORTING


BEE normalised headline earnings by business segment

Change 2015 2014

% Rm Rm

Insurance 11 2 094 1 888Individual arrangements 11 1 869 1 689Group arrangements 13 225 199Liberty Corporate 29 219 170Liberty Africa Insurance (58) 25 59Liberty Health 37 (19) (30)

Balance sheet management 18 260 220LibFin Markets – credit portfolio 38 260 189LibFin Markets – asset/liability matching (100) 0 31Asset management – Stanlib (5) 629 662South Africa (6) 567 603Other Africa 5 62 59Other (15) (211) (184)

BEE normalised operating earnings 7 2 772 2 586LibFin Investments (2) 1 356 1 382

BEE normalised headline earnings 4 4 128 3 968

External assets under management

Change 2015 2014

% Rbn Rbn

Asset management – assets under management (6) 50 53Segregated funds (6) 46 49Properties 0 4 4Wealth management – funds under administration 10 308 281Single manager unit trust 5 126 120Institutional marketing 4 47 45Linked and structured life products 13 72 64Multi-manager 18 13 11Rest of Africa 22 50 41

Total external assets under management and administration 7 358 334

41

Income statement analysis

Net interest income and margin analysis 42

Non-interest revenue 44


Operating expenses 50

Taxation 52

INCOME STATEMENT ANALYSIS


Net interest income and margin analysis

Movement in average assets, net interest income and margin per business unit


Averageassets

Net interest income

Net interest margin

Rm Rm %

2014 banking activities 596 848 31 720 5.31

Net non-interest earning assets (27 145) 1 079 0.45

Interest earning assets – 2014 569 703 32 799 5.76

Impact of volume changes 43 537 2 753Impact of rate changes 710 0.13

Lending margin (130) (0.02)– Client yield1 624 0.11– Cost of funding2 (754) (0.13)Unwinding of discount on credit impairments – IAS 39 105 0.02Funding margin 46 0.01Endowment – funding 565 0.10 Endowment – capital and reserves 249 0.04 Cash and other assets held for liquidity purposes (127) (0.02)Other treasury and banking activities 2 0.00Change in composition of balance sheet (mix variance) 0.02

Interest earning assets – 2015 613 240 36 262 5.91Net non-interest earning assets 30 060 (1 211) (0.46)

2015 banking activities 643 300 35 051 5.45

Net interest income change (%) 10.5 Average assets change (%) 7.8 1 Client yield changes refer to the difference in movement between average client rates and base lending rates.2 Cost of funding changes refer to the difference in movement between base lending rates and an allocated cost of funding based on the term nature of the asset.

Net interest income 27 028 29 027 34 233 39 248 45 256 49 314

Before impairment charges 2.87 2.92 3.09 3.67 3.80 3.50

After impairment charges 2.09 2.27 2.30 2.82 3.04 2.83

NET INTEREST INCOME AND NET INTEREST MARGIN

2010 2011 2012 2013 2014 2015

10 000

20 000

30 000

40 000

50 000

CAGR (2010 – 2015): 13%

Rm %

2.0

2.5

3.0

3.5

4.0

43

Corporate & Investment Banking Banking activities

Averageassets

Net interest income

Net interest margin

Averageassets

Net interest income

Net interest margin

Rm Rm % Rm Rm %

626 095 13 291 2.12 1 192 355 45 256 3.80

(114 687) 419 0.56 (169 548) 2 739 0.89

511 408 13 710 2.68 1 022 807 47 995 4.69

137 511 2 669 178 432 4 956(949) (0.19) (322) (0.03)

(941) (0.18) (1 111) (0.11)(549) (0.11) 42 0.00(392) (0.07) (1 153) (0.11)

1 0.00 106 0.01(229) (0.04) (209) (0.02)

71 0.01 636 0.06 228 0.04 542 0.05

(140) (0.03) (267) (0.02)61 0.01 (19) (0.00)

(0.11) (0.28)

648 919 15 430 2.38 1 201 239 52 629 4.38151 192 (656) (0.53) 208 622 (3 315) (0.88)

800 111 14 774 1.85 1 409 861 49 314 3.50

11.2 9.0 27.8 18.2

Favourable• Widening of the net interest margin in PBB, particularly

South Africa.

• Positive endowment impact on capital and transactional

balances attributable to higher average interest rates in South

Africa, Uganda, Angola, Kenya and Zambia.

• Cumulative positive effect of pricing strategies on the

mortgage lending business reflecting the underlying risk and

Basel III liquidity requirements.

• Greater proportion of higher margin earning customers in the

card portfolio as the portfolio matures.

• Increased unwinding to interest income of the IAS 39 discount

on expected recoveries of non-performing loans.

Adverse• Significant margin compression in CIB South Africa largely

due to competitive pricing pressure for new high quality

investment banking clients coupled with an increased cost of

liquidity.

• Negative mix impact as a result of a 28% average growth in

low margin earning CIB assets.

• Margin compression in the rest of Africa despite good net

interest income growth.

• Dilutive impact of high quality liquid assets (HQLA) to comply

with the LCR implemented as from 1 January 2015.

• Liquidity constraints in Nigeria, Botswana and Kenya

contributed to a higher cost of funding with limitations in

passing the effect of the higher funding costs to customers.

• Regulatory changes in Nigeria resulted in reduced public

sector and foreign currency deposits, pricing limitations in the

agricultural sector and an increased cash reserving ratio.

• Competitive pressure for long-term deposits in order to meet

the NSFR as prescribed by Basel III coupled with a steepening

of the negotiable certificate of deposits (NCDs) yield curve in

response to competitive pressure and reduced appetite for

longer term deposits by asset managers.



Non-interest revenue

¢ Rm

NON-INTEREST REVENUECAGR (2010 – 2015): 8%

%

■ Non- interest revenue 28 720 29 724 32 400 34 257 38 813 41 801

Non- interest revenue to total revenue 51.5 50.6 48.7 46.6 46.2 45.9

2010 2011 2012 2013 2014 2015

10 000

20 000

30 000

40 000

50 000

12

24

36

48

60

■ Net fee and commission revenue 17 883 19 782 21 694 23 184 26 079 26 920

■ Trading revenue 8 032 7 895 6 764 7 757 9 216 11 014■ Other revenue 2 805 2 047 3 942 3 316 3 518 3 867

¢¢¢ Rm

ANALYSIS OF NON-INTEREST REVENUE

2010 2011 2012 2013 2014 2015

10 000

20 000

30 000

40 000

5 0000

Change 2015 2014

% Rm Rm

Net fee and commission revenue 3 26 920 26 079

Fee and commission revenue 3 31 397 30 399

Account transaction fees 6 10 856 10 267Electronic banking 2 2 823 2 777Knowledge-based fees and commission (9) 2 336 2 567Card-based commission 3 5 655 5 511Bancassurance 1 1 767 1 747Documentation and administration fees 3 1 693 1 639Foreign currency service fees 6 1 925 1 813Other 6 4 342 4 078

Fee and commission expense (4) (4 477) (4 320)

Trading revenue 20 11 014 9 216

Fixed income and currencies (FIC) 15 9 445 8 205Commodities 88 201 107Equities 51 1 368 904

Other revenue 10 3 867 3 518

Banking and other >100 1 804 630Property-related revenue (70) 371 1 246Insurance – bancassurance income 3 1 692 1 642

Total non-interest revenue 8 41 801 38 813

45

Favourable•• Account transaction fees assisted by:– overnight increases on cash withdrawal, debit order,

provisional statement and cheque encashment fees– a larger active account base and higher transactional

volumes in business lending– improved customer service, brand awareness and targeted

sales campaigns in Namibia and Malawi– higher transactional volumes and customer activities in

cash deposits, custodial activities and increased usage of point of sale devices in the rest of Africa, particularly in Botswana, Lesotho, Zimbabwe, Mozambique and Namibia.

•• Card-based commissions supported by strong growth in transactional volumes in the rest of Africa, particularly Nigeria, Angola, Namibia and Ghana, coupled with an increased fleet card account base and merchant acquisitions in South Africa.•• Foreign currency service fees aided by higher forex

transactional volumes and increased telegraphic transfers in Nigeria, Angola, Ghana and Mozambique.•• Other fee and commission revenue driven by:– growth within Nigeria’s assets under management– the introduction of an unutilised facility fee in business and

commercial lending– increased securities lending fees– arrangement and structuring fees in wealth and investments– growth in guarantee fees and commissions in the rest of

Africa. •• Trading gains from group strategic hedging activities.•• Good FIC trading performance in South Africa and the South

and Central region, particularly Mozambique, driven by increased foreign market volatility leading to good client opportunities.•• Increased client trading activity in equities and commodities.•• Profit earned on the disposal of real estate investments in the

rest of Africa.

Adverse•• Interchange fee reforms introduced from March 2015

negatively impacted account transaction fees and card-based commissions.•• Lower transaction fees in Nigeria as a result of the abolishment

of ATM charges coupled with a reduction in fees charged to the customer as imposed by the Central Bank of Nigeria. •• Knowledge-based fees in CIB affected by lower capital

markets activity as the reduction and restriction of foreign currency liquidity in markets delayed client investment decisions in key markets within the rest of Africa.•• Non-recurrence of profit earned on the disposal of real estate

investments in South Africa.•• Subdued credit derivative income following tightened credit

spreads and reduced client activity.

¢¢ Number of days

DISTRIBUTION OF DAILY TRADING PROFIT OR LOSS

■ 2015 2 4 81 125 36 12

■ 2014 4 9 71 128 43 5

<(30) (30) to 0 0 to 30 30 to 60 60 to 90 >90

30

60

90

120

150

Days

1 Value of daily trading profit/loss.

Rm1



Income statement impairment charges (net of recoveries)

2015

Specifically impaired loans

Change

%

Specific impairment

Rm

IAS 39 discount1

RmTotal

Rm

Portfolio credit

impairment charges

Rm

Total impairment

chargesRm

Creditloss ratio

%

Personal & Business Banking (5) 6 541 749 7 290 525 7 815 1.27

Mortgage loans (13) 1 392 450 1 842 281 2 123 0.66Vehicle and asset finance 2 857 92 949 167 1 116 1.50Card debtors 23 1 371 (9) 1 362 74 1 436 4.83Other loans and advances (10) 2 921 216 3 137 3 3 140 1.68

Personal unsecured lending (3) 2 222 189 2 411 (50) 2 361 4.20Business lending and other (26) 699 27 726 53 779 0.59

Corporate & Investment Banking 59 770 37 807 472 1 279 0.24

Corporate loans 41 723 37 760 472 1 232 0.26Commercial property finance >100 47 47 47 0.09

Central and other >100 1 1 276 277

Total banking activities 4 7 312 786 8 098 1 273 9 371 0.871 Discounting of expected recoveries in terms of IAS 39.

2015

Credit impairment charges

Specific credit impairments 8 032 5 849 8 954 9 049 9 056 8 098

Portfolio credit impairments (638) 587 (240) 109 (47) 1 273

Credit loss ratio 1.04 0.87 1.08 1.12 1.00 0.87

Rm

CREDIT IMPAIRMENT CHARGES

2010 2011 2012 2013 2014 2015

(3 000)

0

3 000

6 000

9 000

12 000

(0.5)

0

0.5

1.0

1.5

2.0

%

NPLs 5.91 4.08 3.82 3.50 3.22 3.19

Balance sheet impairments 2.34 1.85 2.13 2.23 1.97 2.06

Credit loss ratio 1.04 0.87 1.08 1.12 1.00 0.87

CREDIT LOSS HISTORY

2010 2011 2012 2013 2014 2015

1.2

2.4

3.6

4.8

6.0

(as a percentage of gross loans and advances)

%

47

2014


Specific

impairment

Rm

IAS 39

discount1

Rm

Total

Rm

Portfolio

credit

impairment

charges

Rm

Total

impairment

charges

Rm

Credit

loss ratio

%

6 936 1 002 7 938 266 8 204 1.41

1 971 422 2 393 57 2 450 0.79

813 173 986 112 1 098 1.55

1 120 52 1 172 (9) 1 163 4.08

3 032 355 3 387 106 3 493 2.05

2 293 255 2 548 (104) 2 444 4.52

739 100 839 210 1 049 0.90

1 034 83 1 117 (313) 804 0.22

1 108 77 1 185 (313) 872 0.26

(74) 6 (68) (68) (0.16)

1 1 1

7 971 1 085 9 056 (47) 9 009 1.00

2014

Favourable• Improvements in collection strategies and new business

origination contributed to lower mortgage lending and vehicle

and asset finance credit impairment charges in South Africa.

• Reduced credit impairment charge in inclusive lending due to

a decline in book balance and intensified collection strategies.

• Lower retail credit impairment charges in Uganda, Botswana

and Malawi due to improved collections and a change in the

risk appetite on new loans originated.

• Reduction in CIB’s specific credit impairment charge despite

large specific impairments required against corporate lending

clients in Nigeria, Ghana and Kenya, particularly in oil & gas

and power & infrastructure sectors.

Adverse• Additional portfolio credit impairments required, predominantly

in CIB’s corporate lending in Nigeria and South Africa and

PBB’s mortgage lending, card debtors and inclusive banking

portfolios.

• Increased consumer strain in South Africa resulted in higher

specific credit impairment charges in card debtors and

revolving credit plans following a deterioration in the NPL mix

and early arrear exposures.

• Increased defaults in Nigeria’s business lending vehicle and

asset finance portfolio offset improvements in South Africa.

• The SARB directive on the categorisation of restructured

loans has been implemented which has led to an increase in

loans categorised as NPLs and early arrears, particularly in

mortgage loans with an associated increase of R1,4 billion and

R3,1 billion in NPLs and early arrears respectively.



Balance sheet impairment – roll forward from December 2014

2015

Opening

balance

Rm

IAS 39 discount

in openingbalance

Rm

Net provisionsraised and

released1

Rm

Specific credit impairments

Personal & Business Banking 10 247 1 232 8 317Mortgage loans 3 545 504 2 017Vehicle and asset finance 1 431 156 1 253Card debtors 1 030 66 1 523Other loans and advances 4 241 506 3 524Personal unsecured lending 2 911 301 2 689Business lending and other 1 330 205 835

Corporate & Investment Banking 3 143 190 835Corporate loans 3 006 184 788Commercial property finance 137 6 47Central and other 2 1

Total 13 392 1 422 9 153

Portfolio credit impairments

Personal & Business Banking 4 251 525Mortgage loans 804 281Vehicle and asset finance 625 167Card debtors 577 74Other loans and advances 2 245 3Personal unsecured lending 1 390 (50)Business lending and other 855 53

Corporate & Investment Banking 836 472Corporate loans 739 472Commercial property finance 97

Central and other 228 276

Total 5 315 1 273

Total impairments

Personal & Business Banking 14 498 1 232 8 842Mortgage loans 4 349 504 2 298Vehicle and asset finance 2 056 156 1 420Card debtors 1 607 66 1 597Other loans and advances 6 486 506 3 527Personal unsecured lending 4 301 301 2 639Business lending and other 2 185 205 888

Corporate & Investment Banking 3 979 190 1 307Corporate loans 3 745 184 1 260Commercial property finance 234 6 47Central and other 230 277

Total 18 707 1 422 10 426

Total balance sheet impairments as a % of gross loans and advances 1.97

1 New provisions raised less recoveries on the amounts written off in previous years equals the income statement credit impairment charge

(2015: R10 426 million – R1 055 million = R9 371 million).

49

IAS 39 discount

in new impairments

raisedRm

Impaired accounts

written offRm

IAS 39 discount

recycled to net interest

incomeRm

Currency translation

and other movements

Rm

2015 Closing balance

Rm

IAS 39 discount

in closing balance

Rm

2015Recoveries

of amounts written off

in previous years1

Rm

749 (6 182) (859) 242 11 765 1 122 1 027 450 (1 299) (400) 29 3 892 554 175

92 (1 112) (70) 59 1 561 178 304(9) (1 118) (43) 11 1 403 14 161

216 (2 653) (346) 143 4 909 376 387 189 (1 908) (253) 66 3 505 237 278

27 (745) (93) 77 1 404 139 109

37 (738) (10) 865 4 095 217 28 37 (719) (10) 865 3 930 211 28

(19) 165 6

(1) 2

786 (6 920) (869) 1 106 15 862 1 339 1 055

90 4 866 9 1 094

10 802 3 654

68 2 316 25 1 36543 951

116 1 424116 1 327

97(4) 500

202 6 790

749 (6 182) (859) 332 16 631 1 122 1 027 450 (1 299) (400) 38 4 986 554 175

92 (1 112) (70) 69 2 363 178 304(9) (1 118) (43) 14 2 057 14 161

216 (2 653) (346) 211 7 225 376 387 189 (1 908) (253) 91 4 870 237 278

27 (745) (93) 120 2 355 139 109

37 (738) (10) 981 5 519 217 28 37 (719) (10) 981 5 257 211 28

(19) 262 6

(5) 502

786 (6 920) (869) 1 308 22 652 1 339 1 055

2.06



Operating expenses

Change 2015 2014

% Rm Rm

Staff costsFixed remuneration 13 18 892 16 701Variable remuneration 12 6 119 5 456Charge for incentive payments1 15 4 910 4 259IFRS 2 charge: cash-settled share schemes1 (21) 334 421IFRS 2 charge: equity-settled share schemes 13 875 776Other staff costs 5 2 957 2 804

Total staff costs 12 27 968 24 961

Variable remuneration as a % of total staff costs 21.9 21.9

Other operating expensesInformation technology 7 5 755 5 355Amortisation of intangible assets 31 1 519 1 156Depreciation 2 2 719 2 654Premises (1) 3 561 3 589Professional fees 13 2 389 2 119Communication 3 1 173 1 141Other 13 6 350 5 621

Total other operating expenses 8 23 466 21 635

Total operating expenses 10 51 434 46 596

Total operating expenses on a constant currency basis 9 51 434 47 107

Total income including equity accounted earnings 7 90 775 84 681

Cost-to-income ratio (%) 56.7 55.01 Restated 2014 amount to reflect the correct classification between charge for incentives payment and IFRS 2 cash-settled share schemes.

Analysis of total information technology function spendChange 2015 2014

% Rm Rm

IT staff costs 15 3 172 2 757Information technology licences, maintenance and related costs 7 5 755 5 355Amortisation of intangibles 31 1 519 1 156Other 4 2 446 2 358

Total IT function spend 11 12 892 11 626

OPERATING EXPENSESCAGR (2010 – 2015): 8%

¢ Rm

34 423 34 603 37 032 41 751 46 596 51 434

2010 2011 2012 2013 2014 2015

10 000

20 000

30 000

40 000

50 000

60 000

■ Total income growth (5) 5 13 10 14 8

■ Total cost growth 12 1 7 13 12 10

Cost-to- income ratio 61.1 58.6 55.2 56.3 55.0 56.7

¢¢ %

COST AND INCOME GROWTH

2010 2011 2012 2013 2014 2015

(15)

0

15

30

45

60

75

%

(6)

0

6

12

18

24

30

51

■ Headline earnings per employee 206 265 304 355 356 412

Number of employees 48 125 45 904 42 736 42 221 42 642 47 958

¢ R’000

HEADLINE EARNINGS PER EMPLOYEE

2010 2011 2012 2013 2014 2015

100

200

300

400

500

10 000

20 000

30 000

40 000

50 000

Number of employees

Change 2015 2014

%

Headcount by business unitPersonal & Business Banking 18 27 256 23 014Permanent staff under previous legislation 4 23 947 23 014Temporary to permanent staff conversion under new legislation 100 3 309Corporate & Investment Banking (2) 4 235 4 341Central and other 8 16 467 15 287Permanent staff under previous legislation 1 15 416 15 287Temporary to permanent staff conversion under new legislation 100 1 051

Banking activities 12 47 958 42 642

Headcount by geographySouth Africa 18 33 057 27 926Permanent staff under previous legislation 3 28 697 27 926Temporary to permanent staff conversion under new legislation 100 4 360Rest of Africa 7 14 288 13 336Outside Africa – continuing operations (including PBB offshore group) 15 613 534Outside Africa – discontinued operation (100) – 846


Staff costs and headcount•• Growth in headcount attributable to changes in South African

legislation, effective 1 April 2015, resulting in the conversion of temporary staff to permanent staff. This was coupled with additional headcount in PBB to support digital banking, innovation, and wealth and investment initiatives offset by lower headcount following the disposal of the group’s controlling interest in SB Plc. •• Fixed remuneration growth linked to overnight annual

increases and additional headcount, including the effect of the temporary to permanent staff conversion.•• Charge for incentive payments increased in line with business

performance. •• Adverse translation impact of 1% on staff costs.

Other operating expenses•• IT spend impacted by:– inflationary increases and the effect of the weaker rand– new project costs, including mobile banking and merchant

solutions– new systems moving into production, specifically in relation

to core banking– partly offset by the effect of cost savings initiatives.•• Amortisation costs increased largely as a result of core

banking and cross-border payments systems going into production.•• Professional fees incurred in respect of ongoing items in

litigation, IT spend efficiency programmes, and the implementation of a Risk Data Aggregation and Risk Reporting Framework. •• Increased spend on innovation and development projects to

support digital growth in PBB.



Taxation

Direct taxation rate reconciliation

2015 2014

% %

Direct taxation – statutory rate 28.0 28.0 Prior year tax (0.2) 0.0

Direct taxation – current year – total 27.8 28.0 Adjustments 1.3 0.8 Capital gains tax 0.0 0.0 Foreign tax and withholdings tax 1.3 0.7 Change in tax rate 0.0 0.1

Direct taxation – current year – normal 29.1 28.8 Permanent differences (7.0) (7.2)Non-taxable income – capital profit (0.1) (0.1)Non-taxable income – dividends (3.8) (3.3)Non-taxable income – other (6.2) (5.4)Effect of profits taxed in different jurisdictions (1.3) (0.3)Other 4.4 1.9

Effective direct taxation rate 22.1 21.6

Favourable rate movements•• Higher non-taxable dividend income received in South Africa.•• Increased non-taxable other income recognised in the rest of

Africa due to exempt income on government issued paper. •• Prior year tax adjustments.

Unfavourable rate movements•• Increased withholdings tax.•• Non-deductible deferred prosecution fine from UK authorities.•• Derecognition of certain deferred tax assets in the rest of

Africa.

¢ Rm

DIRECT TAXATION CHARGE AND EFFECTIVE DIRECT TAXATION RATE

%

■ Direct taxation charge 3 040 4 312 4 354 4 626 6 122 5 870

E�ective direct taxation rate 22.7 25.8 24.8 19.4 21.6 22.1

2010 2011 2012 2013 2014 2015

1 750

3 500

5 250

7 000

15

20

25

30

53

Balance sheet analysis

Loans and advances 54

Deposit and current accounts 55


Banking activities average balance sheet 58

Liquidity management 60

Fair value hierarchy – Standard Bank Group 62

BALANCE SHEET ANALYSIS


Loans and advances

Composition of loans and advances

Change 2015 2014

% Rm Rm

Personal & Business Banking 6 576 078 543 830Mortgage loans 3 325 867 317 069Vehicle and asset finance 11 80 278 72 483Card debtors 4 31 174 30 029Overdraft and other demand loans 12 48 610 43 558Personal loans (0) 10 916 10 919Corporate, business and other loans 15 37 694 32 639Other term loans 12 80 356 71 950Inclusive lending (AccessLoans) (11) 1 820 2 050Personal loans 5 43 458 41 393Corporate, business and other loans 23 35 078 28 507Commercial property finance 12 9 793 8 741Corporate & Investment Banking 29 383 432 297 846Corporate loans 22 290 991 238 968Commercial property finance 17 56 050 47 929Loans granted under resale agreements >100 36 391 10 949Other services 50 (4 783) (9 645)

Gross loans and advances to customers 15 954 727 832 031Less: credit impairments for loans and advances 21 22 652 18 707Credit impairments for non-performing loans 18 15 862 13 392Credit impairments for performing loans 28 6 790 5 315

Net loans and advances to customers 15 932 075 813 324Loans and advances to banks 25 145 320 116 220

Net loans and advances 16 1 077 395 929 544

Comprising:Gross loans and advances 16 1 100 047 948 251Less: credit impairments 21 22 652 18 707

Net loans and advances 16 1 077 395 929 544

Net loans and advances on a constant currency basis 11 1 077 395 971 782

LOANS AND ADVANCESCAGR (2010 – 2015): 9%

¢ Rbn

713 804 814 841 930 1 077

2010 2011 2012 2013 2014 2015

400

600

800

1 000

1 200

2015 2014■ Mortgage loans 34 38

■ Vehicle and asset finance 9 9

■ Card debtors 3 4

■ Term loans 34 31

■ Overdrafts and other demand loans 9 10

■ Loans granted under resale agreements 4 1

■ Commercial property finance 7 7

COMPOSITION OF GROSS LOANS AND ADVANCES TO CUSTOMERS (%)

55

Deposit and current accounts

Composition of deposit and current accounts by deposit type

Change 2015 2014

% Rm Rm

Personal & Business Banking 19 498 189 417 061Retail priced deposits 20 404 341 336 927Current accounts 13 139 398 123 470Cash management deposits 10 24 954 22 725Call deposits 29 126 520 98 112Term deposits 23 79 447 64 821Other deposits 22 34 022 27 799Wholesale priced deposits 17 93 848 80 134Corporate & Investment Banking 3 572 635 556 710Cash management deposits 2 110 536 107 971Call deposits 4 82 928 79 828Term deposits (2) 166 544 169 833Negotiable certificates of deposits 11 108 006 97 224Other funding 3 104 621 101 854Other services 11 (6 477) (7 301)

Deposit and current accounts from customers 10 1 064 347 966 470Deposits from banks 41 137 202 97 606Deposits from banks and central banks 45 132 242 91 274Deposits from banks under repurchase agreements (22) 4 960 6 332

Total deposit and current accounts 13 1 201 549 1 064 076

Comprising:Retail priced deposit and current accounts 20 404 341 336 927Wholesale priced deposit and current accounts 10 797 208 727 149Wholesale priced deposits – customers 5 660 006 629 543Wholesale priced deposits – banks 41 137 202 97 606

Total deposit and current accounts 13 1 201 549 1 064 076

Total deposit and current accounts on a constant currency basis 8 1 201 549 1 113 222

DEPOSIT AND CURRENT ACCOUNTSCAGR (2010 – 2015): 9%

¢ Rbn

788 882 925 935 1 064 1 202

2010 2011 2012 2013 2014 2015

400

600

800

1 000

1 200

1 400

2015 2014■ Current accounts 20 20

■ Cash management deposits 13 14

■ Call deposits 28 26

■ Term deposits 23 24

■ Negotiable certificates of deposits 10 10

■ Other deposits 6 6

COMPOSITION OF DEPOSIT AND CURRENT ACCOUNTSFROM CUSTOMERS (%)



Loans and advances performance

Performing loans

Neither past due nor specifically impaired Not specifically impaired

Gross loans

and advances

Rm

Normalmonitoring

Rm

Close monitoring

Rm

Early arrears

Rm

Non- performing

Rm

2015Personal & Business Banking1 645 475 564 911 16 396 36 482 Mortgage loans1 325 867 280 713 8 203 22 163 Vehicle and asset finance 80 278 69 825 2 337 5 008 Card debtors 31 174 25 757 1 444 1 926 Other loans and advances 208 156 188 616 4 412 7 385 Personal unsecured lending 56 194 44 883 2 218 4 323 Business lending and other 151 962 143 733 2 194 3 062

Corporate & Investment Banking 526 333 515 112 1 681 2 100 67Corporate loans 470 283 459 349 1 681 2 100 57Commercial property finance 56 050 55 763 10Central and other (71 761) (71 763)

Gross loans and advances 1 100 047 1 008 260 18 077 38 582 67

Percentage of total book (%) 100.0 91.7 1.6 3.5 0.0

2014Personal & Business Banking 589 811 514 379 20 054 30 817

Mortgage loans 317 069 274 374 11 803 16 996

Vehicle and asset finance 72 483 63 766 1 908 4 119

Card debtors 30 029 24 723 1 910 1 898

Other loans and advances 170 230 151 516 4 433 7 804

Personal unsecured lending 54 362 43 594 1 943 4 667

Business lending and other 115 868 107 922 2 490 3 137

Corporate & Investment Banking 412 717 405 386 185 1 202 30

Corporate loans 364 788 357 757 185 1 201 28

Commercial property finance 47 929 47 629 1 2

Central and other (54 277) (54 279)

Gross loans and advances 948 251 865 486 20 239 32 019 30


1 The implementation of the SARB directive on restructures led to an increase of R3,3 billion in early arrears and R2,1 billion in NPLs, primarily in the mortgage loans portfolio, up

R3,1 billion and R1,4 billion respectively. This did not have a material impact on the credit impairment charges.

Criteria for classifications of loans and advances

Non-performing loans Those loans for which:

• the group has identified objective evidence of default, such as a breach of a material loan covenant

or condition, or

• instalments are due and unpaid for 90 days or more.

Neither past due nor specifically

impaired loans

Loans that are current and fully compliant with all contractual terms and conditions. Normal

monitoring loans within this category are generally rated 1 to 21 and close monitoring loans are

generally rated 22 to 25 using the group’s master rating scale.

Early arrears but not specifically

impaired loans

Loans where the counterparty has failed to make contractual payments and payments are less than

90 days past due, but it is expected that the full carrying value will be recovered when considering

future cash flows, including collateral. Ultimate loss is not expected but could occur if the adverse

conditions persist.

57

Non-performing loans


Sub-standard

RmDoubtful

RmLoss

RmTotal

Rm

Securities and

expected recoveries

on specifically

impaired loans

Rm

Net after securities

and expected

recoveries on

specifically impaired

loansRm

Balance sheet

impairments for non-

performing specifically

impaired loans

Rm

Specific gross

impairment coverage

%

Total non-

performing loans

Rm

Non- performing

loans%

6 735 15 890 5 061 27 686 15 921 11 765 11 765 42 27 686 4.3 4 257 10 066 465 14 788 10 896 3 892 3 892 26 14 788 4.5

557 1 437 1 114 3 108 1 547 1 561 1 561 50 3 108 3.9 596 481 970 2 047 644 1 403 1 403 69 2 047 6.6

1 325 3 906 2 512 7 743 2 834 4 909 4 909 63 7 743 3.7 441 3 381 948 4 770 1 265 3 505 3 505 73 4 770 8.5 884 525 1 564 2 973 1 569 1 404 1 404 47 2 973 2.0

1 370 4 774 1 229 7 373 3 278 4 095 4 095 56 7 440 1.4 1 310 4 570 1 216 7 096 3 166 3 930 3 930 55 7 153 1.5

60 204 13 277 112 165 165 60 287 0.5 2 2 2 2 2

8 105 20 664 6 292 35 061 19 199 15 862 15 862 45 35 128 3.2

0.7 1.9 0.6 3.2 1.8 1.4 1.4

4 865 16 163 3 533 24 561 14 314 10 247 10 247 42 24 561 4.2

3 062 10 420 414 13 896 10 351 3 545 3 545 26 13 896 4.4

285 1 399 1 006 2 690 1 259 1 431 1 431 53 2 690 3.7

391 333 774 1 498 468 1 030 1 030 69 1 498 5.0

1 127 4 011 1 339 6 477 2 236 4 241 4 241 65 6 477 3.8

454 2 885 819 4 158 1 247 2 911 2 911 70 4 158 7.6

673 1 126 520 2 319 989 1 330 1 330 57 2 319 2.0

2 357 2 708 849 5 914 2 771 3 143 3 143 53 5 944 1.4

2 192 2 610 815 5 617 2 611 3 006 3 006 54 5 645 1.5

165 98 34 297 160 137 137 46 299 0.6

2 2 2 2 2

7 222 18 871 4 384 30 477 17 085 13 392 13 392 44 30 507 3.2

0.7 2.0 0.5 3.2 1.8 1.4 1.4

Non-performing but not

specifically impaired loans

Loans where the counterparty has failed to make contractual payments and payments are 90 days or

more past due as well as those loans for which the group has identified objective evidence of default,

such as a breach of a material loan covenant or condition. These loans are not specifically impaired

due to the expected recoverability of the full carrying value when considering future cash flows,

including collateral.

Non-performing specifically

impaired loans

Loans that are regarded as non-performing and for which there has been a measurable decrease in

estimated future cash flows. Specifically impaired loans are further analysed into the following

categories:

• Sub-standard items that show underlying well defined weaknesses and are considered to be

specifically impaired.

• Doubtful items that are not yet considered final losses because of some pending factors that may

strengthen the quality of the items.

• Loss items that are considered to be uncollectible in whole or in part. The group provides fully for

its anticipated loss, after taking securities into account.



Banking activities average balance sheet

2015

Trading book

Rm

Non-interest earning

Rm

Interest earning

Rm

Assets Cash and balances with central banks2 425 23 873 30 741Trading assets 75 399 19 432Financial investments 126 668Net loans and advances 16 224 1 043 830

Loans and advances to banks 3 739 159 883Loans and advances to customers 12 485 904 856Mortgage loans 323 930Vehicle and asset finance 76 789Card debtors 30 774Overdrafts and other demand loans 12 485 71 599Term loans 342 921Commercial property finance 58 843

Gross loans and advances 16 224 1 064 739Credit impairments for loans and advances (20 909)

Other assets 13 912 14 559Interest in associates and joint ventures 9 791Goodwill and other intangible assets 20 154Property and equipment 14 853

Total average assets and interest excluding trading derivative assets 105 960 102 662 1 201 239Trading derivative assets 69 849

Total average assets and interest 175 809 102 662 1 201 239

Equity and liabilitiesEquity 3 535 128 959Liabilities 92 683 37 802 1 132 663

Trading liabilities 56 385Deposit and current accounts 29 079 1 110 651

Deposits from banks 1 946 125 743Deposits from customers 27 133 984 908Current accounts 193 049Cash management deposits 122 394Call deposits 27 133 258 106Savings accounts 23 617Term deposits 278 148Negotiable certificates of deposit 109 594

Other liabilities 6 104 37 802Subordinated bonds 1 115 22 012

Total average equity, liabilities and interest excluding trading derivative liabilities 96 218 166 761 1 132 663Trading derivative liabilities 84 068

Total average equity, liabilities and interest 180 286 166 761 1 132 663

Margin on total average assets excluding trading derivatives 105 960 102 662 1 201 239Margin on total average loans and advances 16 224 1 043 830Margin on average interest-earning assets 1 201 2391 Interest received and paid on trading derivative instruments has been netted with interest received on derivative asset instruments used for hedging purposes allocated to the

instrument being hedged thus the interest split between assets and liabilities will not equate to interest income and interest expense as per the income statement.2 Included within interest-earning cash and balances with central banks is the SARB interest-free deposit and other prudential assets. This is utilised to meet liquidity requirements

and is reflected in the margin as part of interest earning assets to reflect the cost of liquidity.

2015

59

2014

Total average balance

RmInterest1

Rm

Average rate

%

Trading

book

Rm

Non-

interest

earning

Rm

Interest

earning

Rm

Total

average

balance

Rm

Interest1

Rm

Average

rate

%

55 039 396 14 400 33 879 48 675

94 831 46 322 21 351 67 673

126 668 8 393 6.63 124 184 124 184 8 556 6.89

1 060 054 88 506 8.35 13 272 864 744 878 016 74 174 8.45

163 622 2 724 1.66 3 410 106 500 109 910 2 760 2.51

917 341 85 782 9.35 9 862 778 356 788 218 71 414 9.06

323 930 29 057 8.97 310 955 310 955 26 534 8.53

76 789 8 007 10.43 73 556 73 556 7 401 10.06

30 774 4 513 14.66 29 562 29 562 4 133 13.98

84 084 9 333 11.10 9 862 68 957 78 819 8 429 10.69

342 921 29 877 8.71 246 332 246 332 20 816 8.45

58 843 4 995 8.49 48 994 48 994 4 101 8.37

1 080 963 88 506 8.19 13 272 884 856 898 128 74 174 8.26

(20 909) (20 112) (20 112)

28 471 17 042 17 755 34 797

9 791 5 536 5 536

20 154 18 049 18 049

14 853 15 425 15 425

1 409 861 96 899 6.87 77 032 92 516 1 022 807 1 192 355 82 730 6.94

69 849 63 995 63 995

1 479 710 96 899 6.55 141 027 92 516 1 022 807 1 256 350 82 730 6.58

132 494 1 817 121 948 123 765

1 263 148 47 585 3.77 81 435 37 892 943 790 1 063 117 37 474 3.52

56 385 44 527 44 527

1 139 730 45 511 3.99 29 338 923 248 952 586 35 623 3.74

127 689 2 140 1.68 721 78 441 79 162 1 372 1.73

1 012 041 43 371 4.29 28 617 844 807 873 424 34 251 3.92

193 049 444 0.23 174 639 174 639 455 0.26

122 394 5 626 4.60 108 568 108 568 4 677 4.31

285 239 12 109 4.25 28 617 185 622 214 239 8 588 4.01

23 617 446 1.89 19 125 19 125 322 1.68

278 148 16 877 6.07 255 131 255 131 13 590 5.33

109 594 7 869 7.18 101 722 101 722 6 619 6.51

43 906 6 743 37 892 44 635

23 127 2 074 8.97 827 20 542 21 369 1 851 8.66

1 395 642 47 585 3.41 83 252 159 840 943 790 1 186 882 37 474 3.16

84 068 69 468 69 468

1 479 710 47 585 3.22 152 720 159 840 943 790 1 256 350 37 474 2.98

1 409 861 49 314 3.50 77 032 92 516 1 022 807 1 192 355 45 256 3.80

1 060 054 49 314 4.65 13 272 864 744 878 016 45 256 5.15

1 201 239 52 629 4.38 1 022 807 1 022 807 47 995 4.69

2014



Liquidity management

Liquidity market overview•• The group maintained its liquidity position within an approved

risk appetite and tolerance limits.•• Appropriate liquidity buffers were held in line with regulatory,

prudential and internal stress testing requirements, taking into account the global risk profile and market conditions.•• During 2015 the group maintained a LCR in excess of the 60%

minimum regulatory requirement.•• The group continued to advance its asset-liability management

capabilities and its approach to liquidity and interest rate risk management.•• The group successfully accessed loan and capital markets

to meet term funding and capital requirements, raising R32,1 billion in the form of senior and subordinated debt and syndicated loans. SBSA issued R3,6 billion of Basel III compliant tier II subordinated debt.•• For the period under review, increased volatility was noted in

liquidity spreads across both short and long-term funding tenors. Market demand for term liquidity, impacted by changes in bank liquidity regulation and market risk sentiment, was a key driver of liquidity spreads.

Total contingent liquidity•• Total contingent liquidity amounted to R300,8 billion as at

31 December 2015 (2014: R287,9 billion) and remains adequate to meet internal stress testing, prudential and regulatory requirements.•• As a percentage of funding-related liabilities, contingent

liquidity amounts to 24.5% (2014: 24.8%).•• Eligible Basel III LCR HQLA are defined according to the Basel

Committee on Banking Supervision LCR and liquidity risk monitoring tools framework.•• Managed liquidity represents unencumbered marketable

securities other than eligible Basel III LCR HQLA (excluding trading assets) which would be able to provide significant sources of liquidity in a stress scenario.

Total contingent liquidity

2015 2014

Rbn Rbn

Eligible Basel III LCR HQLA comprising: 158,2 174,2 Notes and coins 19,7 19,0 Cash and deposits with central banks 33,1 45,7 Government bonds and bills 99,7 97,7 Other eligible assets 5,7 11,8 Managed liquidity 142,6 113,7

Total contingent liquidity 300,8 287,9

Total contingent liquidity as a % of funding related liabilities 24.5 24.8

Liquidity coverage ratio•• The Basel III LCR promotes short-term resilience of the

group’s one month liquidity risk profile by ensuring it has sufficient HQLA to meet potential outflows in a stressed environment.•• At a group level the Basel III LCR includes banking and/or

deposit taking entities and represents an aggregation of the relevant individual net cash outflows and HQLA portfolios. These results reflect the simple average of the month-end values at 31 October 2015, 30 November 2015 and 31 December 2015, based on the regulatory submissions to the SARB.

Liquidity coverage ratio (average)

2015

Rbn

Total HQLA 160,5Net cash outflows 171,2

LCR (%) 93.7

Minimum regulatory requirement (%) 60.0

Structural liquidity requirements•• Behavioural profiling is applied to assets, liabilities and off-

balance sheet commitments as well as to certain liquid assets across the group. •• Risk tolerance limits and appetite triggers are set by the

group’s board to restrict the cumulative liquidity mismatch between expected inflows and outflows of funds in different time buckets based on contractual and behavioural analysis. The group’s behaviourally adjusted liquidity mismatch remains within risk appetite. •• The group continues to evaluate the funding impact relating to

the Basel III NSFR. In November 2015, the SARB issued a draft directive whereby it is suggested that the funding received from financial corporates maturing within six months receive an available stable funding factor of 35%. This proposal together with further areas of national discretion pertaining to the NSFR is expected to be finalised during the course of 2016.

¢¢ %

BEHAVIOURALLY ADJUSTED CUMULATIVE LIQUIDITY MISMATCH

■ 2015 7.9 3.9 (1.6) (3.5) (7.0)

■ 2014 8.1 3.3 (1.5) (5.9) (9.6)

Internal limit 0 (5) (10) (15) (20)

0 – 7 days 0 – 1 month 0 – 3 months 0 – 6 months 0 – 12 months(25)

(20)

(15)

(10)

(5)

5

10

61

Diversified funding base•• Funding markets are evaluated on an ongoing basis to ensure

appropriate group funding strategies are executed depending on the market, competitive and regulatory environment. The group continued to focus on building its deposit base as a key component of the funding mix. Deposits sourced from South Africa and other major jurisdictions in the rest of Africa, Isle of Man and Jersey provide a diversity of stable sources of funding for the group.•• Primary funding sources are in the form of deposits across a

spectrum of retail and wholesale clients, as well as loan and debt capital markets. Total funding-related liabilities grew from R1 161 billion as at 31 December 2014 to R1 226 billion as at 31 December 2015.

Funding-related liabilities composition1

2015 2014

Rbn Rbn

Corporate funding 401 351Retail deposits2 330 268Institutional funding 208 233Interbank deposits 95 71Term loan funding 42 27Government and parastatals 71 69Senior and subordinated debt issued 73 65Non-current funding related liabilities held for sale 74Other liabilities to the public 6 3

Total group funding-related liabilities 1 226 1 161 1 Composition aligned to Basel III liquidity classification.2 Comprises individual and small business customers.

Funding costs•• The market cost of liquidity is measured as the spread paid on

NCDs relative to the prevailing swap curve for that tenor. The liquidity spread is based on actively-issued money market instruments by banks, namely 12 and 60-month NCDs.•• For the period under review, increased volatility was noted in

liquidity spreads across both short and long-term funding tenors. Market demand for term liquidity, impacted by changes in bank liquidity regulation and market risk sentiment, was a key driver of liquidity spreads.

12 AND 60-MONTH LIQUIDITY SPREAD

30

60

90

120

150

bps

12-month NCD

60-month NCD

December 2010 December 2015



Fair value hierarchy – Standard Bank Group

Composition Assets Composition Liabilities% Rm % Rm

2015Level 1 42 263 644 6 21 407Level 2 54 338 181 89 292 447Level 3 4 21 412 5 17 125

Financial instruments at fair value 100 623 237 100 330 979

Reconciled as follows:Held for trading 205 528 177 262Designated at fair value 372 941 153 717Available-for-sale 44 768

Financial instruments at fair value 623 237 330 979

20141

Level 1 42 239 101 8 20 906Level 2 56 315 281 89 227 403Level 3 2 11 207 3 7 880

Financial instruments at fair value 100 565 589 100 256 189

Reconciled as follows:Held for trading 138 890 116 042Designated at fair value 384 330 140 147Available-for-sale 42 369

Financial instruments at fair value 565 589 256 1891 Excluding the discontinued operation’s assets and liabilities that were separately classified within non-current assets/liabilities held for sale in 2014.

•• In accordance with the group’s accounting policies, certain financial assets and liabilities are measured at fair value using either quoted market prices or valuation techniques.•• Financial assets and liabilities that are measured at fair value

have been categorised into the following levels:• Level 1: Financial instruments for which fair value is

determined using quoted market prices (unadjusted) in active markets for identical instruments.

• Level 2: Financial instruments for which fair value is determined using valuation techniques based on observable inputs, either directly, as prices or indirectly, derived from prices.

• Level 3: Financial instruments for which fair value is determined using valuation techniques based on significant unobservable inputs.

63

Capital management

Return on ordinary equity 64

Ordinary shareholders’ equity (net asset value) 65

Currency translation effects 66

Cost of equity, economic returns and economic capital 67


Capital adequacy 70

Subordinated debt 72

CAPITAL MANAGEMENT


Return on ordinary equity

2015 2014

Average equity

RmROE

%

Average equity

RmROE

%

Personal & Business Banking 61 891 18.1 54 106 18.1 Corporate & Investment Banking 55 297 14.3 49 058 10.2 Central and other 15 306 3.9 20 601 1.8

Banking activities 132 494 14.9 123 765 12.3 Liberty 11 455 19.7 10 310 20.9

Standard Bank Group 143 949 15.3 134 075 12.9

Reconciliation to IFRSNormalised average equity 143 949 134 075 Empowerment reserve impairment (Tutuwa SEs’ preference shares and dividends receivable) (559) (1 581)Central and other (380) (1 166)Liberty (179) (415)Deemed treasury shares (excluding Tutuwa) (923) (424)

Standard Bank Group – IFRS 142 467 15.6 132 070 13.0

■ Average equity 90 019 95 156 106 291 122 227 134 075 143 949

ROE 12.5 14.3 14.0 14.1 12.9 15.3

¢ Rm

RETURN ON ORDINARY EQUITY – GROUP

2010 2011 2012 2013 2014 2015

30 000

60 000

90 000

120 000

150 000

%

4

8

12

16

20

65

Ordinary shareholders’ equity (net asset value)

Net asset value

Change 2015 2014

% Rm Rm

Personal & Business Banking 15 64 573 56 238Corporate & Investment Banking 19 59 285 49 941Central and other (28) 16 208 22 442



Analysis of changes in net asset value

Change 2015 2014

% Rm Rm

Beginning of the year 7 139 588 130 865Additional shareholder value 37 25 321 18 418Headline earnings for the year attributable to ordinary shareholders 22 002 17 323Other earnings attributable to ordinary shareholders 1 567 768Currency translation movements, including hedging activities 2 539 938Translation movement for the year 6 666 2 141Movement due to disposal and liquidation of entities (4 127) (1 203)Net cash flow hedges (851) (337)Net available-for-sale movement 160 (134)Fair value adjustments on available-for-sale instruments 124 (152)Realised fair value adjustments transferred to the income statement 36 18Defined benefit fund adjustment and other direct reserve movements (96) (140)Transactions with ordinary shareholders (35) (12 501) (9 280)Dividends paid (10 396) (9 052)Equity-settled share-based payments (1 392) 221Net repurchase of share capital and premium and capitalisation of reserves (641) (599)Deferred tax on share-based payments (72) 150Transactions with non-controlling shareholders 12 (366) (415)

End of the year 9 152 042 139 588

■ Net asset value 91 103 115 131 140 152

NAV growth 4 13 11 14 7 9

¢ Rbn

ANALYSIS OF NET ASSET VALUE

2010 2011 2012 2013 2014 2015

40

80

120

160

200

%

4

8

12

16

20

CAPITAL MANAGEMENT


Currency translation effects

Movement in group foreign currency translation and net investment hedging reserve

2015 2014

Rm Rm

Balance at beginning of the year: credit 6 944 6 006Translation reserve increase for the year 6 666 2 141Translation reserve increase 6 991 2 288Rest of Africa 2 068 (496)Outside Africa 4 850 2 767Liberty 73 17Currency hedge losses (325) (147)Movement due to disposal and liquidation of entities (4 127) (1 203)Foreign currency translation reserve (4 059) (1 203)Net investment hedge reserve (68)

Balance at end of the year: credit 9 483 6 944

Exchange ratesAverage Closing

Change%

2015 2014 Change%

2015 2014

USD/ZAR 18 12,75 10,84 34 15,50 11,57GBP/ZAR 9 19,49 17,85 27 22,93 18,02ARS/ZAR 3 1,38 1,34 (12) 1,20 1,37USD/NGN 19 196,19 165,18 9 198,48 182,73ZAR/NGN 1 15,38 15,22 (19) 12,81 15,80ZAR/GHS 7 0,30 0,28 (11) 0,25 0,28ZAR/KES (5) 7,70 8,08 (16) 6,60 7,84ZAR/ZMW 16 0,66 0,57 29 0,71 0,55ZAR/MZN 8 3,12 2,90 5 3,10 2,94

■ Translation reserve (debit)/ credit (4 325) 4 335 1 215 6 107 2 141 6 666

USD/ZAR appreciation/ (depreciation) – closing 10 (22) (5) (24) (10) (34)

USD/ZAR appreciation/ (depreciation) – average 13 1 (13) (17) (19) (18)

¢ Rm

CURRENCY TRANSLATION EFFECTS

2010 2011 2012 2013 2014 2015

(8 000)

(6 000)

(4 000)

(2 000)

0

2 000

4 000

6 000

8 000

%

(40)

(30)

(20)

(10)

0

10

20

30

40

67

Cost of equity, economic returns and economic capitalCost of equity estimates

Average Average

2015 2014

% %

Standard Bank Group 13.3 13.2 Banking activities 13.5 13.3 Liberty 12.0 11.9

Economic returns

Change 2015 2014

% Rm Rm

Average ordinary shareholders’ equity 7 143 949 134 075

Headline earnings 27 22 002 17 323Cost of equity charge (8) (19 145) (17 698)

Economic profit/(loss) on headline earnings >100 2 857 (375)

Economic capital utilisation by risk type

Change 2015 2014

% Rm Rm

Credit risk 9 68 733 62 780Equity risk 57 8 300 5 286Market risk 15 1 584 1 373Operational risk 16 11 062 9 520Business risk (34) 3 847 5 844Interest rate risk in the banking book 35 4 486 3 324

Banking activities – economic capital requirement 11 98 012 88 127

Available financial resources 10 143 832 131 257Economic capital coverage ratio (times) 1.47 1.49

Economic capital utilisation by business

Change 2015 2014

% Rm Rm

Personal & Business Banking 6 26 915 25 493Corporate & Investment Banking 12 62 314 55 871Central and other 30 8 783 6 763


CAPITAL MANAGEMENT


Risk-weighted assets

Risk-weighted assets (RWA) by business unit and risk type

Change 2015 2014

% Rm Rm

Personal & Business Banking 6 390 671 367 462Credit risk 4 307 503 294 570Operational risk 15 82 471 71 796Equity risk in the banking book (36) 697 1 096Corporate & Investment Banking (1) 475 124 479 225Credit risk 17 339 891 289 789Counterparty credit risk (52) 22 769 47 026Market risk (34) 46 745 71 153Operational risk (5) 55 489 58 402Equity risk in the banking book (20) 10 230 12 855Central and other 14 78 244 68 526Credit risk (1) 39 306 39 572Operational risk 75 2 203 1 261Equity risk in the banking book (76) 125 518RWA for investments in financial entities 35 36 610 27 175


RWA by risk type

Change 2015 2014

% Rm Rm

Credit risk 10 686 700 623 931Counterparty credit risk (52) 22 769 47 026Market risk (34) 46 745 71 153Operational risk 7 140 163 131 459Equity risk in the banking book (24) 11 052 14 469RWA for investments in financial entities 35 36 610 27 175


■ Tier I capital 12.9 12.0 11.2 13.2 12.9 13.3

■ Tier II capital 2.3 3.1 3.1 3.0 2.6 2.4■ Tier III capital 0.1 – – – – –

¢¢¢ %

CAPITAL ADEQUACY1

2010 2011 2012 2013 2014 2015

4

8

12

16

20

1 Basel III implemented 1 January 2013. Capital adequacy for 2012 is on a pro-forma Basel III basis. 2010 to 2011 is on a Basel II basis.

Total assets 1 109 1 257 1 274 1 358 1 550 1 579

Risk-weighted asstes 620 711 842 841 915 944

RISK-WEIGHTED ASSETS (CLOSING BALANCES)1

2010 2011 2012 2013 2014 2015

Rbn

400

800

1 200

1 600

2 000

1 Basel III implemented 1 January 2013. Risk-weighted assets and capital adequacy for 2012 are on a proforma Basel III basis. 2010 to 2011 are on a Basel II basis.

1 Basel III implemented 1 January 2013. Risk-weighted assets for 2012 is on a pro-forma Basel III basis. 2010 to 2011 is on a Basel II basis.

69

■ Average RWA2 230 239 266 298 330 352

Return on average RWA 1.9 2.5 2.8 2.8 3.0 3.2

¢ Rbn

PBB RETURN ON AVERAGE RWA1

2010 2011 2012 2013 2014 2015

80

160

240

320

400

%

0.7

1.4

2.1

2.8

3.5


2 Average RWA calculated net of non-controlling interests.

■ Credit risk2 429 439 553 591 601 617

■ Market risk2 50 55 63 68 69 43■ Operational risk2 100 103 107 104 112 117 ■ Equity risk2 16 18 19 16 16 12■ Other risk2 – – 10 23 26 30


¢¢¢¢¢ Rbn

SBG RETURN ON BANKING ACTIVITIES AVERAGE RWA1

%

2010 2011 2012 2013 2014 2015

190

380

570

760

950

0.7

1.4

2.1

2.8

3.5



■ Average RWA2 353 375 435 450 431 397


¢ Rbn

CIB RETURN ON AVERAGE RWA1

2010 2011 2012 2013 2014 2015

100

200

300

400

500

%

0.5

1.0

1.5

2.0

2.5



CAPITAL MANAGEMENT


Capital adequacy

Qualifying regulatory capital excluding unappropriated profit

Change 2015 2014

% Rm Rm

Normalised ordinary shareholders’ equity 9 152 042 139 588Net IFRS adjustments 63 (973) (2 603)

IFRS ordinary shareholders’ equity 10 151 069 136 985Qualifying non-controlling interest 42 5 896 4 159Less: regulatory adjustments (28) (35 394) (27 689)Goodwill (12) (4 152) (3 711)Other intangible assets (12) (17 773) (15 850)Shortfall of credit provisions to expected future losses (7) (2 186) (2 054)Investments in financial entities (>100) (10 358) (4 074)Other adjustments 54 (925) (2 000)Less: unappropriated profit 28 (9 472) (13 049)

Common equity tier I capital 12 112 099 100 406Qualifying perpetual preference shares (13) 3 846 4 396Qualifying non-controlling interest >100 293 119

Tier l capital 11 116 238 104 921

Qualifying tier II subordinated debt (11) 20 118 22 727General allowance for credit impairments 71 2 170 1 266

Tier ll capital (7) 22 288 23 993

Total regulatory capital 7 138 526 128 914

Capital adequacy ratios

Internal target ratios

%

2015 SARB minimum

regulatory requirement

%

2015

%

2014

%

2015

%

2014

%

Total capital adequacy ratio 14.0 – 15.0 10.0 15.7 15.5 14.7 14.1Tier I capital adequacy ratio 11.0 – 12.0 8.0 13.3 12.9 12.3 11.5Common equity tier I capital adequacy ratio 10.0 – 11.0 6.5 12.9 12.4 11.9 11.0

Including unappropriated profits

Excluding unappropriated profits

71


2015 2014

Tier 1 host regulatory

requirement%

Total host regulatory

requirement%

Tier I capital

%

Total capital

%

Tier Icapital

%

Total capital

%

Standard Bank Group 8.0 10.0 13.3 15.7 12.9 15.5 The Standard Bank of South Africa Group (SBSA Group) 8.0 10.0 12.1 15.3 12.3 15.8

Rest of Africa CfC Stanbic Bank Kenya 10.5 14.5 15.4 18.1 16.9 20.5 Stanbic Bank Botswana 7.5 15.0 14.0 24.2 11.7 20.0 Stanbic Bank Ghana 6.7 10.0 11.8 13.7 13.1 14.0 Stanbic Bank Tanzania 12.5 14.5 17.2 19.2 17.4 19.4 Stanbic Bank Uganda 8.0 12.0 15.2 16.9 18.1 19.8 Stanbic Bank Zambia 5.0 10.0 11.2 13.9 20.0 23.5 Stanbic Bank Zimbabwe 8.0 12.0 19.8 22.8 20.6 23.7 Stanbic IBTC Bank Nigeria 5.0 10.0 12.6 16.5 10.9 14.4 Standard Bank de Angola 5.0 10.0 15.3 20.1 12.8 18.1 Standard Bank Malawi 10.0 15.0 15.9 18.2 17.5 20.3 Standard Bank Mauritius 7.5 10.0 29.5 39.0 12.9 18.5 Standard Bank Mozambique 4.0 8.0 12.5 15.3 9.3 9.7 Standard Bank Namibia 7.0 10.0 11.3 13.6 10.9 13.0 Standard Bank RDC (DRC Congo) 5.0 10.0 15.9 24.6 16.9 24.8 Standard Bank Swaziland 4.0 8.0 12.3 14.9 11.9 16.5 Standard Lesotho Bank 4.0 8.0 11.6 13.3 10.1 10.9

Outside AfricaStandard Bank Isle of Man 10.0 12.3 14.2 10.6 12.5 Standard Bank Jersey 11.0 9.2 13.1 9.7 14.0

Liberty Group (calculated in terms of the Long-term Insurance Act) Capital adequacy requirement – times covered 3.0 3.1

CAPITAL MANAGEMENT


Subordinated debt

Carrying Notional Carrying Notional

Redeemable/ Notional value1 value1 value1 value1

repayable Callable value1 2015 2015 2014 2014

date date LCm Rm Rm Rm Rm

Subordinated bonds – banking activitiesSBSA 21 309 21 130 20 735 20 500SBK 72 24 May 2020 24 May 2015 ZAR 3 000 – – 3 030 3 000SBK 12 24 Nov 2021 24 Nov 2016 ZAR 1 600 1 618 1 600 1 618 1 600SBK 13 24 Nov 2021 24 Nov 2016 ZAR 1 150 1 160 1 150 1 160 1 150SBK 15 23 Jan 2022 23 Jan 2017 ZAR 1 220 1 239 1 220 1 239 1 220SBK 14 1 Dec 2022 1 Dec 2017 ZAR 1 780 1 795 1 780 1 795 1 780SBK 16 15 Mar 2023 15 Mar 2018 ZAR 2 000 2 008 2 000 2 008 2 000SBK 9 10 Apr 2023 10 Apr 2018 ZAR 1 500 1 529 1 500 1 529 1 500SBK 17 30 Jul 2024 30 Jul 2019 ZAR 2 000 2 029 2 000 2 029 2 000SBK 19 24 Oct 2024 24 Oct 2019 ZAR 500 508 500 508 500SBK 203 2 Dec 2024 2 Dec 2019 ZAR 2 250 2 269 2 250 2 261 2 250SBK 213 28 Jan 2025 28 Jan 2020 ZAR 750 763 750 SBK 223 28 May 2025 28 May 2020 ZAR 1 000 1 009 1 000 SBK 24 19 Oct 2025 19 Oct 2020 ZAR 880 897 880 SBK 18 24 Oct 2025 24 Oct 2020 ZAR 3 500 3 557 3 500 3 558 3 500SBK 233 28 May 2027 28 May 2022 ZAR 1 000 928 1 000Standard Bank Swaziland 2020 – 2024 2015 – 2019 E 100 50 50 100 100Stanbic Botswana 2021 – 2022 2016 – 2017 BWP 130 179 179 158 158Standard Bank Mozambique 2017 – 2025 2020 MT 1 261 418 418 88 88CfC Stanbic Bank (Kenya) 2016 – 2021 2020 KES 6 500 981 981 832 830Stanbic Bank Ghana 23 Jan 2022 23 Jan 2017 GHS 7 34 34 25 25Stanbic IBTC Bank (Nigeria) 30 Sep 2024 1 Oct 2019 NGN 15 440 1 226 1 226 991 977Standard Bank Namibia 23 Oct 2024 23 Oct 2019 NAD 100 102 102 100 100Stanbic Bank Zambia 31 Oct 2024 1 Nov 2019 ZMW 37 57 57Subordinated bonds issued to group companies (789) (885) (1 140) (1 114)

Total subordinated bonds – banking activities 23 567 23 292 21 889 21 664Total subordinated loans – banking activities2 – – 62 58

Total subordinated debt – banking activities 23 567 23 292 21 951 21 722Liberty (qualifying as regulatory insurance capital) 2017 – 2018 ZAR 3 500 3 574 3 500 3 570 3 500

Total subordinated debt 27 141 26 792 25 521 25 2221 The difference between the carrying and notional value represents accrued interest together, where applicable, with the unamortised fair value adjustments relating to

bonds hedged for interest rate risk.2 Redeemed during 2015. 3 Basel III compliant tier II instrument which contains a write-off feature in the event that SBSA is deemed non-viable.

73

Key banking legal entity information


Key financial results, ratios and statistics 74





Capital adequacy 82


Market share analysis 84



Statement of financial position and key ratios 87

Standard Bank Group

Headline earnings and net asset value reconciliation by key legal entity 88

KEY BANKING LEGAL ENTITY INFORMATION



Key financial results, ratios and statistics

Change%

2015 2014

SBSA groupIncome statementHeadline earnings Rm 11 13 376 12 024Headline earnings as consolidated into SBG1 Rm 5 13 047 12 397Profit attributable to the ordinary shareholder Rm 7 12 478 11 674Statement of financial positionOrdinary shareholders’ equity Rm 10 90 714 82 412Total assets Rm 13 1 276 953 1 131 150Loans and advances Rm 14 897 344 785 483Financial performanceROE % 15.5 15.1Non-interest revenue to total income % 43.0 43.2Loan-to-deposit ratio % 102.6 98.2Credit loss ratio % 0.84 1.04Credit loss ratio to customers % 0.92 1.17Cost-to-income ratio % 57.6 56.2Effective total taxation rate % 26.3 27.1Effective direct taxation rate % 18.9 20.1Number of employees 19 32 442 27 154Permanent staff under previous legislation 3 28 082 27 154Temporary to permanent staff conversion under new legislation 100 4 360Capital adequacyTotal risk-weighted assets Rm 13 580 944 513 856Tier I capital adequacy ratio2 % 12.1 12.3Total capital adequacy ratio2 % 15.3 15.8

SBSA company Headline earnings Rm 8 12 721 11 738Headline earnings as consolidated into SBG1 Rm 2 12 392 12 111Total assets Rm 13 1 269 154 1 122 695ROE % 15.0 15.11 At an SBSA level, the share-based payment schemes are accounted for on a cash-settled basis, but at a consolidated SBG level they are accounted for on an equity-settled

basis. Consistent with previous years, it is considered appropriate to also reflect SBSA’s headline earnings as consolidated into SBG.2 Including unappropriated profits.

75

¢ Rm

HEADLINE EARNINGS – SBSA GROUPCAGR (2010 – 2015): 11%

7 954 9 530 11 461 10 709 12 024 13 376

2010 2011 2012 2013 2014 2015

3 000

6 000

9 000

12 000

15 000

¢ Rbn

LOANS AND ADVANCES – SBSA GROUPCAGR (2010 – 2015): 11%

536 611 660 705 785 897

2010 2011 2012 2013 2014 2015

200

400

600

800

1 000

Key items•• SBSA’s balance sheet remains the principal booking entity for

the group. As a result, SBSA cannot be viewed as representative of a purely South African operation.•• Net interest income benefited from the positive endowment

effect of higher average interest rates, continued pricing concession management, sustainable risk-based pricing in business lending portfolios and growth in average asset balances. This was partly offset by competitive pricing in CIB, higher funding costs and the effect of additional low margin HQLA held to meet Basel III liquidity requirements.•• Muted net fee and commission growth was noted due to a

reduction in interchange rates from 1 March 2015 and lower advisory, commitment, upfront and guarantee fees recognised in CIB, offset by increased account transaction fees and card based commissions. •• Strong trading revenue in the equities and commodities

trading businesses, assisted by client transactional activity.•• Other revenue benefited from fair value gains as well as

increased insurance premium income on a higher active policy base and an improved claims loss ratio.•• Lower credit impairment charges were driven by an improved

risk profile in mortgage lending, vehicle and asset finance and business lending. This was coupled with lower corporate lending provisions. The credit loss ratio improved to 0.84% (2014: 1.04%) and NPLs as a percentage of total loans reduced to 3.1% (2014: 3.3%).

•• Staff costs increased due to overnight increases, the impact of converting temporary staff to permanent staff (linked to changes in labour legislation effective 1 April 2015), higher headcount in the innovation and digital banking specialist areas and slightly higher variable remuneration in line with business performance. •• Other operating expenses increased largely as a result of

higher IT spend, increased amortisation due to core banking and cross-border payments systems going live, as well as additional professional fees linked to work on various regulatory projects and outstanding legal matters. •• Impairment of intangible assets required, linked to select

components of the core banking and cross-border payments systems, as well as some redundancy in sub-ledger rules engines as part of a process of standardisation.•• Improvement in SBSA group’s ROE from 15.1% to 15.5%.•• SBSA’s tier I and total capital adequacy ratios of 12.1% and

15.3% respectively are above regulatory requirements and internal targets.




Summarised income statement

Group Company

Change 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm

Net interest income 8 34 958 32 492 7 34 212 32 097Non-interest revenue 7 26 347 24 725 7 25 485 23 907Net fee and commission revenue 1 19 094 18 815 2 18 120 17 823Trading revenue 21 4 188 3 453 22 4 216 3 467Other revenue 25 3 065 2 457 20 3 149 2 617

Total income 7 61 305 57 217 7 59 697 56 004Credit impairment charges (6) 7 385 7 876 (6) 7 282 7 757Specific credit impairments (18) 6 475 7 907 (18) 6 379 7 813Portfolio credit impairments >100 910 (31) >100 903 (56)

Income after credit impairment charges 9 53 920 49 341 9 52 415 48 247Revenue sharing agreements with group companies 36 (1 125) (1 759) 36 (1 125) (1 759)

Income after revenue sharing agreements 11 52 795 47 582 10 51 290 46 488Operating expenses 11 34 693 31 211 12 33 959 30 446Staff costs 11 17 795 16 039 11 17 401 15 712Other operating expenses 11 16 898 15 172 12 16 558 14 734

Net income before non-trading and capital related items 11 18 102 16 371 8 17 331 16 042Non-trading and capital related items (>100) (1 234) (475) (>100) (1 110) (14)Impairment of intangible assets (>100) (1 220) (445) (>100) (1 220) (445)Other non-trading and capital items 53 (14) (30) (74) 110 431

Net income before equity accounted earnings 6 16 868 15 896 1 16 221 16 028Share of profit from associates and joint ventures (46) 65 121

Net income before indirect taxation 6 16 933 16 017 1 16 221 16 028Indirect taxation 11 1 550 1 398 11 1 543 1 396

Profit before direct taxation 5 15 383 14 619 0 14 678 14 632Direct taxation (1) 2 904 2 942 (2) 2 731 2 783

Profit for the year 7 12 479 11 677 1 11 947 11 849Attributable to non-controlling interests (67) 1 3

Attributable to the ordinary shareholder 7 12 478 11 674 1 11 947 11 849Headline adjustable items >100 898 350 >100 774 (111)

Headline earnings 11 13 376 12 024 8 12 721 11 738

IFRS 2 adjustment1

Staff costs net of taxation (>100) (329) 373 (>100) (329) 373

Headline earnings as consolidated into SBG 5 13 047 12 397 2 12 392 12 1111 At an SBSA level, the share-based payment schemes are accounted for on a cash-settled basis, but at a consolidated SBG level they are accounted for on an equity-settled basis.

Consistent with previous years, it is considered appropriate to also reflect SBSA’s headline earnings as consolidated into SBG.

77


Statement of financial position

Group Company

Change 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm

Assets Cash and balances with the central bank (6) 30 252 32 218 (6) 30 253 32 202Derivative and other assets 77 109 659 61 885 78 109 406 61 555Trading assets 23 63 282 51 436 23 63 280 51 436Pledged assets 49 7 879 5 281 49 7 879 5 281Financial investments (3) 98 944 101 856 (2) 97 993 100 445Loans and advances 14 897 344 785 483 15 882 278 769 402Loans and advances to banks 13 113 600 100 152 13 112 944 99 896Loans and advances to customers 14 783 744 685 331 15 769 334 669 506Interest in associates and joint ventures (38) 41 347 66 907 (35) 49 935 76 394Property and equipment (2) 8 931 9 085 (2) 8 868 9 028Goodwill and other intangible assets 14 19 315 16 999 14 19 262 16 952

Total assets 13 1 276 953 1 131 150 13 1 269 154 1 122 695

Equity and liabilitiesEquity 10 90 714 82 418 10 88 766 80 959

Equity attributable to the ordinary shareholder 10 90 714 82 412 10 88 766 80 959Ordinary share capital – 60 60 – 60 60Ordinary share premium 11 40 138 36 296 11 40 138 36 296Reserves 10 50 516 46 056 9 48 568 44 603Non-controlling interest (100) 6

Liabilities 13 1 186 239 1 048 732 13 1 180 388 1 041 736

Derivative liabilities 82 120 857 66 298 82 120 857 66 298Trading liabilities 8 24 625 22 709 8 24 625 22 709Deposit and current accounts 9 874 372 799 936 10 867 358 790 995Deposits from banks 30 118 324 91 357 30 118 556 91 353Deposit and current accounts from customers 7 756 048 708 579 7 748 802 699 642Other liabilities 17 17 891 15 261 17 17 571 14 966Subordinated debt 3 21 309 20 734 3 21 309 20 734Liabilities to group companies 3 127 185 123 794 2 128 668 126 034

Total equity and liabilities 13 1 276 953 1 131 150 13 1 269 154 1 122 695




Credit impairment charges

Income statement impairment charges (net of recoveries)

2015


Change

%

Specific impairment

Rm

IAS 39 discount1

RmTotal

Rm

Portfolio credit

impairment charges

Rm

Totalimpairment

chargesRm

Credit loss ratio

%

Personal & Business Banking (8) 5 436 673 6 109 494 6 603 1.35Mortgage loans (14) 1 332 439 1 771 283 2 054 0.67Vehicle and asset finance (21) 625 38 663 131 794 1.20Card debtors 29 1 359 (9) 1 350 72 1 422 4.67Other loans and advances (13) 2 120 205 2 325 8 2 333 2.69Inclusive lending (AccessLoans) (43) 166 4 170 (13) 157 8.19Personal unsecured lending 0 1 569 181 1 750 (50) 1 700 4.68Business lending and other (34) 385 20 405 71 476 0.98

Corporate & Investment Banking (28) 357 9 366 142 508 0.13Corporate loans (40) 311 9 320 142 462 0.14Commercial property finance >100 46 46 46 0.09Other services 274 274

Total SBSA group (6) 5 793 682 6 475 910 7 385 0.841 Discounting of expected recoveries in terms of IAS 39.

2015

Specific credit impairments 7 065 4 223 6 005 7 845 7 907 6 475

Portfolio credit impairments (713) 400 (220) (30) (31) 910

Rm

CREDIT IMPAIRMENT CHARGES

2010 2011 2012 2013 2014 2015

0

2 000

(2 000)

4 000

6 000

8 000

10 000

79

2014


Specific

impairment

Rm

IAS 39

discount1

Rm

Total

Rm

Portfolio

credit

impairment

charges

Rm

Total

impairment

charges

Rm

Credit loss

ratio

%

5 950 949 6 899 273 7 172 1.52

1 929 407 2 336 45 2 381 0.79

728 143 871 130 1 001 1.58

1 062 51 1 113 (10) 1 103 3.82

2 231 348 2 579 108 2 687 3.33

372 (1) 371 (96) 275 11.75

1 393 298 1 691 5 1 696 4.97

466 51 517 199 716 1.62

931 77 1 008 (304) 704 0.24

1 004 72 1 076 (304) 772 0.32

(73) 5 (68) (68) (0.15)

6 881 1 026 7 907 (31) 7 876 1.04

2014

Total NPLs 35 193 25 798 24 550 25 168 26 182 28 205

NPL ratio 6.40 4.14 3.65 3.50 3.27 3.05

Rm

NON-PERFORMING LOANS

2010 2011 2012 2013 2014 2015

8 000

16 000

24 000

32 000

40 000

%

1.6

3.2

4.8

6.4

8.0




Loans and advances performance

Performing loans

Neither past due nor specifically impaired Not specifically impaired

Gross loans

and advances

Rm

Normalmonitoring

Rm

Close monitoring

Rm

Early arrears

Rm

Non- performing

Rm

2015

Personal & Business Banking1 498 482 434 587 12 493 27 647 Mortgage loans1 310 330 269 198 7 319 19 915 Vehicle and asset finance 69 574 62 789 1 202 3 261 Card debtors 30 389 25 070 1 444 1 870 Other loans and advances 88 189 77 530 2 528 2 601 Inclusive lending (AccessLoans) 1 820 813 476 268 Personal unsecured lending 35 921 29 732 1 216 1 437 Business lending and other 50 448 46 985 836 896

Corporate & Investment Banking 402 608 397 869 291 10Corporate loans 346 772 342 320 291 Commercial property finance 55 836 55 549 10Central and other 14 117 14 115



2014Personal & Business Banking 477 399 414 959 17 627 22 924

Mortgage loans 302 847 263 317 11 429 14 856

Vehicle and asset finance 63 299 57 130 1 412 2 581

Card debtors 29 496 24 287 1 910 1 829

Other loans and advances 81 757 70 225 2 876 3 658

Inclusive lending (AccessLoans) 2 050 989 446 259

Personal unsecured lending 33 929 28 153 1 110 1 564

Business lending and other 45 778 41 083 1 320 1 835

Corporate & Investment Banking 320 465 315 584 588 6

Corporate loans 272 782 268 201 587 4

Commercial property finance 47 683 47 383 1 2

Central and other 2 982 2 982



1 The implementation of the SARB directive on restructures led to an increase of R3,3 billion in early arrears and R2,1 billion in NPLs, primarily in the mortgage loans portfolio, up

R3,1 billion and R1,4 billion respectively. This did not have a material impact on the credit impairment charges.

Criteria for classifications of loans and advances

Non-performing loans Those loans for which:

• the group has identified objective evidence of default, such as a breach of a material loan covenant

or condition, or

• instalments are due and unpaid for 90 days or more.

Neither past due nor specifically

impaired loans

Loans that are current and fully compliant with all contractual terms and conditions. Normal

monitoring loans within this category are generally rated 1 to 21 and close monitoring loans are

generally rated 22 to 25 using the group’s master rating scale.

Early arrears but not specifically

impaired loans

Loans where the counterparty has failed to make contractual payments and payments are less than

90 days past due, but it is expected that the full carrying value will be recovered when considering

future cash flows, including collateral. Ultimate loss is not expected but could occur if the adverse

conditions persist.

81

Non-performing loans


Sub-standard

RmDoubtful

RmLoss

RmTotal

Rm

Securities and

expected recoveries

on specifically

impaired loans

Rm

Net after securities

and expected

recoveries on

specifically impaired

loansRm

Balance sheet

impairments for non-

performing specifically

impaired loans

Rm

Grossspecific

impairment coverage

%

Total non-

performing loans

Rm

Non- performing

loans%

5 548 14 680 3 527 23 755 13 952 9 803 9 803 41 23 755 4.8 3 942 9 893 63 13 898 10 198 3 700 3 700 27 13 898 4.5

314 1 037 971 2 322 1 255 1 067 1 067 46 2 322 3.3 588 466 951 2 005 641 1 364 1 364 68 2 005 6.6 704 3 284 1 542 5 530 1 858 3 672 3 672 66 5 530 6.3

26 50 187 263 40 223 223 85 263 14.5 232 3 100 204 3 536 1 108 2 428 2 428 69 3 536 9.8 446 134 1 151 1 731 710 1 021 1 021 59 1 731 3.4

885 3 058 495 4 438 1 505 2 933 2 933 66 4 448 1.1 825 2 854 482 4 161 1 386 2 775 2 775 67 4 161 1.2

60 204 13 277 119 158 158 57 287 0.5 2 2 2 2 2

6 435 17 738 4 022 28 195 15 457 12 738 12 738 45 28 205 3.1

0.7 2.0 0.4 3.1 1.7 1.4 1.4

3 879 15 391 2 619 21 889 12 960 8 929 8 929 41 21 889 4.6

2 822 10 237 186 13 245 9 806 3 439 3 439 26 13 245 4.4

126 1 189 861 2 176 1 049 1 127 1 127 52 2 176 3.4

384 324 762 1 470 468 1 002 1 002 68 1 470 5.0

547 3 641 810 4 998 1 637 3 361 3 361 67 4 998 6.1

34 68 254 356 54 302 302 85 356 17.4

229 2 713 160 3 102 1 099 2 003 2 003 65 3 102 9.1

284 860 396 1 540 484 1 056 1 056 69 1 540 3.4

2 048 2 198 41 4 287 2 070 2 217 2 217 52 4 293 1.3

1 883 2 100 7 3 990 1 908 2 082 2 082 52 3 994 1.5

165 98 34 297 162 135 135 45 299 0.6

(2) 2 2

5 927 17 589 2 660 26 176 15 028 11 148 11 148 43 26 182 3.3

0.8 2.2 0.3 3.3 1.9 1.4 1.4

Non-performing but not

specifically impaired loans

Loans where the counterparty has failed to make contractual payments and payments are 90 days or

more past due as well as those loans for which the group has identified objective evidence of default,

such as a breach of a material loan covenant or condition. These loans are not specifically impaired

due to the expected recoverability of the full carrying value when considering future cash flows,

including collateral.

Non-performing specifically

impaired loans

Loans that are regarded as non-performing and for which there has been a measurable decrease in

estimated future cash flows. Specifically impaired loans are further analysed into the following

categories:

• Sub-standard items that show underlying well defined weaknesses and are considered to be

specifically impaired.

• Doubtful items that are not yet considered final losses because of some pending factors that may

strengthen the quality of the items.

• Loss items that are considered to be uncollectible in whole or in part. The group provides fully for

its anticipated loss, after taking securities into account.




Capital adequacy

SBSA group qualifying regulatory capital (excluding unappropriated profit)

Change 2015 2014

% Rm Rm

Share capital and premium 11 40 198 36 356 Retained earnings 9 49 304 45 367 Other reserves 76 1 212 689 Less: regulatory adjustments (6) (20 164) (19 100)Goodwill – (36) (36)Other intangible assets (13) (17 494) (15 486)Deferred tax assets 98 (4) (183)Shortfall of provisions to expected losses 20 (2 188) (2 750)Other adjustments 31 (442) (645)Less: unappropriated profits 38 (3 833) (6 156)

Tier l capital 17 66 717 57 156

Qualifying tier ll subordinated debt 8 20 965 19 490 General allowance for credit impairments 86 351 189 Less: regulatory adjustments – investment in tier II instruments in other banks (49) (2 923) (1 964)

Tier ll capital 4 18 393 17 715

Total qualifying regulatory capital 14 85 110 74 871


Internal target ratios

%

2015 SARB minimum

regulatory requirement

%

2015

%

2014

%

2015

%

2014

%

Total capital adequacy ratio 14.0 – 15.0 10.0 15.3 15.8 14.7 14.6Tier I capital adequacy ratio 11.0 – 12.0 8.0 12.1 12.3 11.5 11.1Common equity tier I capital adequacy ratio 10.0 – 11.0 6.5 12.1 12.3 11.5 11.1

Including unappropriated profits

Excluding unappropriated profits

83


Risk-weighted assets

SBSA group risk-weighted assets

Change 2015 2014

% Rm Rm

Credit risk 11 439 131 396 231 Counterparty credit risk 80 19 682 10 930 Market risk 47 27 724 18 912 Operational risk 6 79 908 75 359 Equity risk in the banking book (20) 9 687 12 135 RWA for investments in financial entities >100 4 812 289

Total risk-weighted assets 13 580 944 513 856

■ Tier I capital 11.6 10.7 10.5 12.8 12.3 12.1

■ Tier II capital 2.8 2.2 3.2 3.7 3.5 3.2■ Tier III capital 0.5 0.5 – – – –

¢¢¢¢ %

CAPITAL ADEQUACY – SBSA GROUP1

2010 2011 2012 2013 2014 2015

4

8

12

16

20

1 Basel III implemented 1 January 2013. Risk-weighted assets and capital adequacy for 2012 are on a proforma Basel III basis. 2010 to 2011 are on a Basel II basis.

1 Basel III implemented 1 January 2013. Capital adequacy for 2012 is on a pro-forma Basel III basis. 2010 to 2011 is on a Basel II basis.




Market share analysis

2015 2014■ SBSA 29.9 30.3

■ Barclays Africa Group 22.1 23.0

■ Nedbank 21.4 21.4

■ FirstRand 16.4 16.4

■ Other 10.2 8.9

MORTGAGE LOANS (%)

Source: SARB BA 900

2015 2014■ SBSA 18.7 17.7


■ Nedbank 26.5 26.0


■ Other 2.1 1.9

VEHICLE AND ASSET FINANCE (%)

Source: SARB BA 900

2015 2014■ SBSA 26.9 27.4


■ Nedbank 12.9 12.9


■ Other 9.7 10.2

CARD DEBTORS (%)

Source: SARB BA 900

2015 2014■ SBSA 23.5 25.0


■ Nedbank 14.7 14.4


■ Other 24.4 22.8

OTHER LOANS AND ADVANCES (%)

Source: SARB BA 900

85

SBSA 24.8 24.9 24.9 24.8 23.8 23.2

Barclays Africa Group 26.1 25.2 23.6 23.3 22.2 21.9

Nedbank 21.5 21.0 20.5 19.5 18.9 18.3FirstRand 20.0 20.5 21.2 21.3 21.1 21.5Other 7.6 8.4 9.8 11.1 14.0 15.1

RETAIL PRICED DEPOSITS(denominated in rands)

2010 2011 2012 2013 2014 2015

7

14

21

28

35

%

Source: SARB BA 900Source: SARB BA 900

SBSA 25.0 25.2 25.3 24.6 25.3 24.3

Barclays Africa Group 20.7 18.8 19.3 18.8 18.4 18.7

Nedbank 18.8 17.9 18.3 18.7 18.4 18.1FirstRand 17.7 18.5 19.2 19.3 19.6 19.0Other 17.8 19.6 17.9 18.6 18.3 19.9

CORPORATE PRICED DEPOSITS(denominated in rands)

2010 2011 2012 2013 2014 2015

8

16

24

32

40

%


2015 2014■ SBSA 23.4 24.2


■ Nedbank 18.4 18.7


■ Other 17.3 16.0

DEPOSITS (%)


Mortgage loans 27.1 28.8 29.5 30.1 30.3 29.9

Vehicle and asset finance 17.7 18.4 19.1 18.8 17.7 18.7

Card debtors 32.1 30.6 27.5 27.7 27.4 26.9

Other loans and advances 23.6 24.7 24.5 24.2 25.0 23.5

Deposits 24.1 24.6 24.3 24.1 24.2 23.4

SBSA’s MARKET SHARE MOVEMENT

2010 2011 2012 2013 2014 2015

8

16

24

32

40

%

Source: SARB BA 900




Summarised income statement

Change 2015 2014

% Rm Rm

Net interest income 12 13 704 12 262 Non-interest revenue 10 13 111 11 909 Net fee and commission revenue 9 7 165 6 597 Trading revenue 10 5 549 5 025 Other revenue 38 397 287

Total income 11 26 815 24 171 Credit impairment charges 71 1 937 1 136

Income after credit impairment charges 8 24 878 23 035 Operating expenses 8 14 792 13 678 Staff costs 8 7 150 6 614 Other operating expenses 8 7 642 7 064

Net income before taxation 8 10 086 9 357 Taxation 10 2 859 2 606

Profit for the year 7 7 227 6 751 Attributable to non-controlling interest (6) 1 716 1 822

Headline earnings 12 5 511 4 929

Headline adjusted items:Goodwill impairment (100) (333) Other headline adjusted items (>100) (51) 44

Earnings attributable to ordinary shareholders 3 5 127 4 973

Key features•• Aggregate headline earnings for legal entities in the rest of

Africa up 12%, and 13% on a constant currency basis.•• Oil export dependent markets were significantly impacted by

lower oil prices in 2015, as the adverse effects started to filter through to the real side of these economies. This gave rise to a reduction, and in some cases a restriction, of foreign currency liquidity in key markets, delaying investment decisions by clients, and accelerated capital flight into developed markets. •• Nigeria was further impacted by tighter monetary policy and

acute fuel shortages.•• The current account deficit in Kenya led to the steep

depreciation of the Kenyan shilling against the USD and necessitated an increase in interest rates, a common occurrence across East Africa. •• Botswana delivered a resilient performance with strong

annual earnings growth despite the continued effects of liquidity pressures, regulatory changes in fees and commission, lower average interest rates and a weaker diamond mining industry.•• A decline in headline earnings was noted in Nigeria, Ghana and

Tanzania. The largest growth in headline earnings was generated by Mozambique, Namibia, Angola and Mauritius.

•• Despite headwinds in Nigeria, good revenue growth was noted throughout the rest of Africa from an increased customer base, a conducive trading environment in the South and Central region, particularly Mozambique, and the positive endowment impact of higher average interest rates. •• Continued focus on deposit gathering and lending to affluent

sectors.•• Strong growth in PBB deposits from customers, up 34%, and

loans to customers, up 14%.•• Cost containment remained a focus, within the context of

investing for growth, particularly in Nigeria, and assisted in keeping cost growth at 8%. •• Higher credit impairment charges predominately in Nigeria,

Angola, Ghana and Kenya.•• Credit loss ratio to customers normalised at 1.67%

(2015: 1.09%).•• Profit attributable to non-controlling interests was down 8%

due to Nigeria, where there is a relatively large minority interest.

87


Statement of financial position and key ratiosStatement of financial position

Change 2015 2014

% Rm Rm

AssetsCash and balances with central banks 40 44 713 31 936Derivative and other assets 23 9 284 7 531Trading assets (24) 15 294 20 035Pledged assets >100 7 324 1 913Financial investments 10 41 051 37 305Loans and advances 15 189 568 165 085Loans and advances to banks 16 66 183 57 224Loans and advances to PBB customers 14 62 671 54 916Loans and advances to CIB customers 15 60 714 52 945Property and equipment 18 5 490 4 661Goodwill and other intangible assets 14 4 286 3 771Goodwill 12 4 078 3 638Other intangible assets 56 208 133

Total assets 16 317 010 272 237

Equity and liabilitiesEquity 27 38 845 30 571

Equity attributable to ordinary shareholders 25 30 143 24 031Non-controlling interest 33 8 702 6 540

Liabilities 15 278 165 241 666

Trading liabilities (48) 3 421 6 547Deposit and current accounts 15 251 316 217 626Deposits from banks 40 31 722 22 697Deposit and current accounts from PBB customers 34 82 083 61 126Deposit and current accounts from CIB customers 3 137 511 133 803Derivative and other liabilities 33 17 672 13 248Subordinated debt 36 5 756 4 245

Total equity and liabilities 16 317 010 272 237

Key ratios

2015 2014

% %

ROE – on invested equity 20.9 21.5 ROE – using equity calculated on SARB rules 19.5 21.7 Credit loss ratio 1.09 0.76 Credit loss ratio on loans to customers 1.67 1.09 Cost-to-income ratio 55.3 56.4



Normalised headline earnings reconciliationChange 2015 2014

% Rm Rm

SBSA group as consolidated into SBG 5 13 047 12 397Rest of Africa legal entities 12 5 511 4 929Standard Bank Offshore group 51 461 305Standard Bank Plc (up to 31 January 2015) 83 (654) (3 756)Part recovery of aluminium loss-insurance proceeds (60%) 100 541Deferred prosecution agreement amount payable to ICBC under indemnity (100) (336)SBG and other group entities (8) 1 181 1 290ICBC Argentina (20% shareholding) 69 604 357ICBC Standard Bank Plc (40% associate from 1 February 2015) (100) (1 173) Standard Advisory London >100 105 (20)Stanbic Insurance 23 447 362Cash flow hedge release on disposal of controlling interest in SB Plc and Brazil 100 515 Other 16 683 591



Normalised net asset value reconciliation

Change 2015 2014

% Rm Rm

SBSA group 10 90 714 82 412Rest of Africa legal entities 25 30 143 24 031Standard Bank Offshore group 55 3 953 2 545Standard Bank Plc (100) – 11 006SBG and other group entities 77 15 256 8 627ICBC Argentina (20% shareholding) 22 2 097 1 716ICBC Standard Bank Plc (40% associate) 100 5 836Standard Advisory London 53 787 516Stanbic Insurance 9 1 322 1 209Standard Bank Properties (48) 324 625Other 7 4 890 4 561



Standard Bank Group

Headline earnings and net asset valuereconciliation by key legal entity

89

Other information

Product information 90

Constant currency financial results 92

Changes in accounting policies 94

Financial and other definitions 95

Abbreviations and acronyms 96

OTHER INFORMATION


Product information


Mortgage lending

Vehicle and asset finance

Card products



Net interest income 8 7 300 6 749 3 2 860 2 780 10 3 015 2 749

Non-interest revenue 1 254 251 33 543 409 14 3 563 3 127

Total income 8 7 554 7 000 7 3 403 3 189 12 6 578 5 876

Credit impairment charges (13) 2 123 2 450 2 1 116 1 098 23 1 436 1 163

Operating expenses 11 2 162 1 946 10 2 005 1 830 6 2 843 2 687

Headline earnings 25 2 450 1 958 79 306 171 9 1 535 1 402


Global markets

Investment banking

Transactional products and

services



Net interest income 13 2 670 2 357 11 4 974 4 465 11 7 296 6 602

Non-interest revenue 12 9 167 8 196 (3) 2 829 2 909 5 4 066 3 870

Total income 12 11 837 10 553 6 7 803 7 374 8 11 362 10 472

Credit impairment charges 13 18 16 >100 1 085 387 (66) 115 334

Operating expenses 7 5 466 5 120 7 4 850 4 546 18 6 837 5 776

Headline earnings 19 3 889 3 275 1 2 598 2 585 4 2 662 2 553

2015 2014 2015 2014 2015 2014

2015 2014 2015 2014 2015 2014

2015 2014

Mortgage lending 13 13

Vehicle and asset finance 6 6

Card products 11 11

Lending products 16 17

Transactional products 42 41

Bancassurance and wealth 12 12

PBB COMPOSITION OF TOTAL INCOME BY PRODUCT (%)

2015 2014

Mortgage lending 22 20

Vehicle and asset finance 3 2

Card products 14 14

Lending products 13 13

Transactional products 28 30

Bancassurance and wealth 20 21

PBB COMPOSITION OF HEADLINE EARNINGS BY PRODUCT (%)

91

Lending products

Transactional products

Bancassurance and wealth


Change 2015 2014 Change 2015 2014 Change 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm % Rm Rm % Rm Rm

2 7 750 7 617 19 13 057 10 954 23 1 069 871 11 35 051 31 720

6 2 059 1 951 3 12 800 12 371 10 6 123 5 570 7 25 342 23 679

3 9 809 9 568 11 25 857 23 325 12 7 192 6 441 9 60 393 55 399

(10) 3 141 3 477 (>100) (2) 6 (90) 1 10 (5) 7 815 8 204

12 4 804 4 308 10 20 788 18 913 14 3 778 3 324 10 36 380 33 008

14 1 442 1 267 9 3 204 2 929 11 2 295 2 070 15 11 232 9 797

Real estate and principal

investmentmanagement

Share of loss from ICBCS

associateDiscontinued

operationCorporate &

Investment Banking

Change 2015 2014 Change 2015 2014 Change 2015 2014 Change 2015 2014

% Rm Rm % Rm Rm % Rm Rm % Rm Rm

(25) (166) (133) 11 14 774 13 291

(47) 483 905 4 16 545 15 880

(59) 317 772 7 31 319 29 171

(9) 61 67 59 1 279 804

(18) 286 349 10 17 439 15 791

(84) 51 312 (100) (1 173) 97 (104) (3 745) 59 7 923 4 980

2015 20142015 2014 2015 2014 2015 2014

2015 2014 2015 20142015 2014 2015 2014

2015 2014

Global markets 38 36

Investment banking 25 25

Transactional products and services 36 36

Real estate and principal investment management 1 3

CIB COMPOSITION OF TOTAL INCOME BY PRODUCT (%)

2015 2014

Global markets 48 38

Investment banking 32 29

Transactional products and services 33 29

Real estate and principal investment management 1 4

Share of loss from ICBCS associate (14)

CIB COMPOSITION OF HEADLINE EARNINGS BY PRODUCT – CONTINUING OPERATIONS (%)

OTHER INFORMATION


Constant currency financial results

Constant currency normalised income statement

Change 2015 2014

% Rm Rm

Net interest income 9 49 314 45 154Non-interest revenue 7 41 801 38 940Net fee and commission revenue 3 26 920 26 204Trading revenue 19 11 014 9 225Other revenue 10 3 867 3 511

Total income 8 91 115 84 094Credit impairment charges 4 9 371 8 998Specific credit impairments (10) 8 098 9 047Portfolio credit impairments >100 1 273 (49)

Income after credit impairment charges 9 81 744 75 096Operating expenses 9 51 434 47 107Staff costs 11 27 968 25 308Other operating expenses 8 23 466 21 799

Net income before non-trading and capital related items 8 30 310 27 989Non-trading and capital related items (>100) (1 402) 990

Net income before equity accounted earnings (0) 28 908 28 979Share of (loss)/profit from associates and joint ventures (>100) (340) 678

Net income before taxation (4) 28 568 29 657Taxation 0 7 851 7 839


Profit for the year 37 23 458 17 124Attributable to non-controlling interests (8) 1 704 1 843Attributable to preference shareholders 6 385 364

Attributable to ordinary shareholders – banking activities 43 21 369 14 917Headline adjustable items – banking activities (>100) (1 618) (772)

Headline earnings – banking activities 40 19 751 14 145Headline earnings – Liberty 4 2 251 2 158


93

Constant currency summarised banking activities statement of financial position

Change 2015 2014

% Rm Rm

Assets Cash and balances with central banks 14 75 112 66 177Trading and pledged assets 23 99 857 81 505Financial investments 1 157 855 156 155Loans and advances 11 1 077 395 971 782Loans and advances to banks 1 145 320 143 805Loans and advances to customers 13 932 075 827 977Derivative and other assets 48 144 926 98 127Goodwill and other intangible assets 10 23 714 21 630Non-current assets held for sale (100) 294 642

Total assets (7) 1 578 859 1 690 018

Equity and liabilities Equity 0 154 279 154 158

Liabilities (7) 1 424 580 1 535 860

Derivative, trading and other liabilities 25 223 031 178 750Deposit and current accounts 8 1 201 549 1 113 222Deposits from banks 36 137 202 100 970Deposits from customers 5 1 064 347 1 012 252Non-current liabilities held for sale (100) 243 888

Total equity and liabilities (7) 1 578 859 1 690 018

OTHER INFORMATION


Changes in accounting policies

Adoption of amended standards The accounting policies are consistent with those reported in the previous year except as required in terms of the adoption of the following amendment effective for the current period:

•• IAS 19 Employee benefits: Amendment to employee contributions for defined benefit plans (IAS 19)

Early adoption of revised standards:•• Annual improvements 2010 – 2012, 2011 – 2013 and

2012 – 2014 cycle: the IASB issued various amendments and clarifications to existing IFRS, none of which had a significant impact on the group’s financial results. •• Amendment to IAS 1 Presentation of Financial Statements

(IAS 1): the group early adopted the amendment which clarified that materiality applies to the whole set of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. As a consequence of early adopting the amendment, the group undertook a project to assess the effectiveness of disclosures in the group’s financial statements and, where necessary, remove immaterial and unnecessary information. The following key changes resulted in more streamlined and concise financial reporting in the group’s annual financial statements:– The development of a revised income statement format – Changes to the ordering of line items in the financial

statements, notably in the statement of financial position to better reflect the liquidity of the underlying assets and liabilities

– Consideration of regulatory disclosure and reporting requirements to identify information that was not required to be disclosed

– The application of materiality to items resulting in aggregation or deletion of immaterial items.

The abovementioned amendments to IFRS, adopted on 1 January 2015, did not have any effect on the group’s previously reported financial results or disclosures and had no material impact on the group’s accounting policies.

95

Financial and other definitions

Standard Bank GroupBasic earnings per share (EPS) (cents) Earnings attributable to ordinary shareholders divided by the weighted average

number of ordinary shares in issue.

Behaviourally adjusted cumulative liquidity mismatch Analysis performed to anticipate any mismatch between payment profiles of balance sheet items, in order to highlight potential risks within the group’s defined liquidity risk thresholds.

Common equity tier l capital adequacy ratio (%) Common equity tier I regulatory capital, including unappropriated profit, as a percentage of total risk-weighted assets.

Constant currency Comparative financial results adjusted for the difference between the current and prior periods cumulative average exchange rates.

Consumer price index (CPI) A South African index of prices used to measure the change in the cost of basic goods and services.

Diluted headline earnings per share (cents) Headline earnings divided by the weighted average number of shares, adjusted for potential dilutive ordinary shares.

Dividend cover (times) Headline earnings per share divided by dividend per share.

Dividend payout ratio (%) Dividend per share divided by headline earnings per share.

Dividend per share (cents) Total dividends to ordinary shareholders declared in respect of the current period.

Headline earnings (Rm) Determined by excluding from reported earnings specific separately identifiable remeasurements net of related tax and non-controlling interests.

Headline earnings per ordinary share (cents) Headline earnings divided by the weighted average number of ordinary shares in issue.

Net asset value (NAV) (Rm) Equity attributable to ordinary shareholders.

Normalised results The financial results and ratios stated on an economic substance basis as explained on page 20.

Liberty Investment management and life insurance activities of companies in the Liberty Holdings Group.

Net asset value per share (cents) Net asset value divided by the number of ordinary shares in issue at the end of the period.

Profit attributable to ordinary shareholders (Rm) Profit for the year less dividends on non-redeemable, non-cumulative, non-participating preference shares declared before period end, less non-controlling interests.

Profit for the year (Rm) Income statement profit for the year attributable to ordinary shareholders, before non-controlling interests and preference shareholders.

Return on equity (ROE) (%) Headline earnings as a percentage of monthly average ordinary shareholders’ equity.

Shares in issue (number) Number of ordinary shares in issue as listed on the exchange operated by the JSE.

Structured entity (SE) Entities where each is created to accomplish a narrow and well-defined objective.

Tangible net asset value (Rm) Equity attributable to ordinary shareholders, excluding goodwill and other intangible assets.

Tangible net asset value per share (cents) Tangible net asset value divided by the number of ordinary shares in issue at the end of the period.

Tier I capital adequacy ratio (%) Tier I regulatory capital, including unappropriated profit, as a percentage of total risk-weighted assets.

Total capital adequacy ratio (%) Total regulatory capital, including unappropriated profit, as a percentage of total risk-weighted assets.

Tutuwa Tutuwa is the group’s black economic empowerment ownership initiative entered into in terms of the Financial Sector Charter.

Weighted average number of shares (number) The weighted average number of ordinary shares in issue during the period as listed on the JSE.

OTHER INFORMATION


Abbreviations and acronyms

Banking activitiesAvailable financial resources (Rm) The amount of permanent capital that is available to the group to absorb potential

losses.Cost-to-income ratio (%) Operating expenses as a percentage of total income after revenue sharing

agreements with group companies but before credit impairments, share of profit/(loss) from associates and joint ventures.

Credit loss ratio (%) Total impairment charges on loans and advances, per the income statement, as a percentage of average daily and monthly gross loans and advances.

Economic capital coverage ratio (times) Available financial resources divided by minimum economic capital requirements.Effective direct taxation rate (%) Direct taxation as a percentage of net income before direct taxation.Effective total taxation rate (%) Direct and indirect taxation as a percentage of net income before taxation.Gross specific impairment coverage (%) Balance sheet impairments for non-performing specifically impaired loans as a

percentage of specifically impaired loans.JAWs (%) Measure of the extent to which total income growth rate differs from the operating

expenses growth rate.Loan-to-deposit ratio (%) Net loans and advances as a percentage of deposit and current accounts.Net interest margin (%) Net interest income as a percentage of average total assets, excluding trading

derivative assets.Non-interest earning assets (Rm) Includes total trading book assets and rate-insensitive banking book assets, such

as cash and cash equivalents, fixed assets, goodwill and other intangible assets, investment property, current and deferred tax assets, and other assets. Cash balances with central banks are specifically excluded as they are utilised to meet liquidity requirements and are reflected as part of the interest-earning assets to reflect the cost of liquidity. Derivative assets are also excluded.

Non-interest revenue to total income (%) Non-interest revenue as a percentage of total income.Portfolio credit impairments (Rm) Impairment for latent losses inherent in groups of loans and advances that have

not yet been specifically impaired.Risk-weighted assets (RWA) (Rm) Determined by applying prescribed risk weightings to on-balance sheet and off-

balance sheet exposures according to the relative risk of the counterparty.Specific credit impairments (Rm) Impairment for loans and advances that have been classified as non-performing

and specifically impaired, net of the present value of estimated recoveries.

CAGR Compound annual growth rateCIB Corporate & Investment BankingEPS Earnings per shareFIC Fixed income and currenciesHEPS Headline earnings per shareHQLA High quality liquid assetsICBC Industrial and Commercial Bank of China LimitedICBCS ICBC Standard Bank PlcIFRS International Financial Reporting StandardsJSE Johannesburg Stock ExchangeLCR Liquidity coverage ratioMSCI Morgan Stanley Capital International Emerging Markets IndexNCA National Credit ActNII Net interest incomeNIR Non-interest revenueNPLs Non-performing loansNSFR Net stable funding ratioPBB Personal & Business BankingPIM Principal investment managementROE Return on equityRWA Risk weighted assetsSARB South African Reserve BankSB Plc Standard Bank PlcSBG Standard Bank Group LimitedSBSA The Standard Bank of South Africa LimitedThe group The Standard Bank GroupUS United States

97

Shareholder information

Analysis of shareholders 98

Credit ratings 99

Dividend payment dates 100

Instrument codes 100

Contact details ibc

SHAREHOLDER INFORMATION


Analysis of shareholders

Ten major shareholders1

2015 2014

Number of shares

(million)%

holding

Number of shares

(million)%

holding

Industrial and Commercial Bank of China 325,0 20.1 325,0 20.1Government Employees Pension Fund (PIC) 202,0 12.5 212,6 13.1Allan Gray Balanced Fund 38,4 2.4 31,8 2.0Investment Solutions 30,5 1.9 33,5 2.1GIC Asset Management 26,2 1.6 21,7 1.3Allan Gray Equity Fund 19,6 1.2 24,5 1.5Vanguard Emerging Markets Fund 19,2 1.2 22,6 1.4Dimensional Emerging Markets Value Fund 16,6 1.0 19,3 1.2Stewart Investors GEM Leaders Fund (formerly First State GEM Fund) 15,9 1.0 14,2 0.9Old Mutual Life Assurance 15,0 0.9 18,5 1.1

708,4 43.8 723,7 44.71 Beneficial holdings determined from the share register and investigations conducted on our behalf in terms of section 56 of the Companies Act.

Geographic spread of shareholders

2015 2014

Number of shares

(million)%

holding

Number of shares

(million)%

holding

South Africa 829,0 51.2 831,3 51.4Foreign shareholders 789,3 48.8 787,1 48.6

China 326,3 20.2 327,7 20.2United States of America 206,4 12.8 222,5 13.7United Kingdom 64,5 4.0 68,5 4.2Singapore 30,4 1.9 25,9 1.6Namibia 21,9 1.4 12,6 0.8Australia 14,9 0.9 15,7 1.0Netherlands 14,2 0.9 10,7 0.7Japan 12,6 0.8 9,8 0.6United Arab Emirates 12,3 0.8 5,8 0.4Ireland 11,6 0.7 15,5 1.0Saudi Arabia 8,4 0.5 10,7 0.7Luxembourg 8,1 0.5 6,4 0.4Other 57,7 3.4 55,3 3.3

1 618,3 100.0 1 618,4 100.0

99

Credit ratings

Ratings as at 2 March 2016 for entities within Standard Bank Group are detailed below:

Short term Long term Outlook

Fitch RatingsStandard Bank Group LimitedForeign currency issuer default rating F3 BBB- StableLocal currency issuer default rating BBB- StableNational rating F1 + (ZAF) AA (ZAF) StableThe Standard Bank of South AfricaForeign currency issuer default rating F3 BBB- StableLocal currency issuer default rating BBB- StableNational rating F1+ (ZAF) AA (ZAF) StableRSA SovereignForeign currency issuer default rating F3 BBB- StableLocal currency issuer default rating BBB StableStanbic IBTC Bank Plc (Nigeria)National rating F1+ (NGA) AAA (NGA)CfC Stanbic Bank (Kenya)Issuer default rating B BB- StableNational rating F1+ (KEN) AAA (KEN) StableLiberty GroupNational rating AA- (ZAF) StableNational insurer financial strength AA (ZAF) Stable

Moody’s Investor ServicesStandard Bank Group LimitedIssuer rating Baa3 NegativeThe Standard Bank of South AfricaForeign currency deposit rating P-2 Baa2 NegativeLocal currency deposit rating P-2 Baa2 Negative

National rating P-1.za A1.zaRSA SovereignForeign currency P-2 Baa2 NegativeLocal currency Baa2 Negative

Standard & Poor’sThe Standard Bank of South AfricaUnsolicited issuer rating A-3 BBB- NegativeRSA SovereignForeign currency rating A-3 BBB- NegativeLocal currency rating A-2 BBB+ NegativeStanbic IBTC Bank Plc (Nigeria)Foreign and local currency B B+ StableNational rating ngA-1 ngALiberty GroupNational rating ZaA-1 ZaAAA

SHAREHOLDER INFORMATION


Dividend payment dates

Instrument codes

JSE LimitedSubordinated debt Senior debtSBK 9: ZAG000029687 SBS 3: ZAG000030586 SBS 28: ZAG000115189SBK 12: ZAG000073388 SBS 4: ZAG000035049 SBS 29: ZAG000116617SBK 13: ZAG000073396 SBS 9: ZAG000069329 SBS 30: ZAG000116625SBK 14: ZAG000091018 SBSI 11: ZAG000075789 SBS 31: ZAG000116633SBK 15: ZAG000092339 SBSI 12: ZAG000080847 SBS 32: ZAG000229413SBK 16: ZAG000093741 SBS 13: ZAG000080839 SBS 33: ZAG000119421SBK 17: ZAG000097619 SBS 15: ZAG000085556 SBS 34: ZAG000119439SBK 18: ZAG000100827 SBS 16: ZAG000086729 SBS 35: ZAG000123266SBK 19: ZAG000100835 SBS 18: ZAG000086745 SBS 36: ZAG000123274SBK 20: ZAG000121781 SBS 19: ZAG000086752 SBS 37: ZAG000123282SBK 21: ZAG000123258 SBS 20: ZAG000095365 SBS 38: ZAG000123290SBK 22: ZAG000126442 SBS 21: ZAG000095373 SBS 39: ZAG000123308SBK 23: ZAG000126434 SBS 23: ZAG000095522 SBS 40: ZAG000131186SBK 24: ZAG000130584 SBS 24: ZAG000095530 SBS 41: ZAG000131202

SBS 25: ZAG000095548 SBS 42: ZAG000131210SBS 27: ZAG000112772 SBS 43: ZAG000131244

The relevant dates for the payment of dividends are as follows:

Ordinaryshares

6.5%cumulative

preference shares (First preference shares)

Non-redeemable, non-cumulative,

non-participating preference shares

(Second preference shares)

JSE Limited (JSE)Share code SBK SBKP SBPPISIN ZAE000109815 ZAE000038881 ZAE000056339

Namibian Stock Exchange (NSX)Share code SNBISIN ZAE000109815

Dividend number 93 93 23Gross distribution/dividend per share (cents) 371.00 3,25 369,76

Last day to trade in order to be eligible for the cash dividend Friday, 15 April 2016 Friday, 8 April 2016 Friday, 8 April 2016

Share trade ex the cash dividend Monday, 18 April 2016 Monday, 11 April 2016 Monday, 11 April 2016

Record date in respect of the cash dividend Friday, 22 April 2016 Friday, 15 April 2016 Friday, 15 April 2016

Dividend cheques posted and CSDP/ broker accounts credited/updated (payment date) Monday, 25 April 2016 Monday, 18 April 2016 Monday, 18 April 2016

Ordinary share certificates may not be dematerialised or rematerialised between Monday, 18 April 2016, and Friday, 22 April 2016, both days inclusive.

Preference share certificates (first and second) may not be dematerialised or rematerialised between Monday, 11 April 2016 and Friday, 15 April 2016, both days inclusive.

Standard Bank Group LimitedRegistration No. 1969/017128/06Incorporated in the Republic of South AfricaWebsite: www.standardbank.com

Investor relationsDavid KinseyTel: +27 11 631 3931

Group secretaryZola StephenTel: +27 11 631 9106

Group financial directorSimon RidleyTel: +27 11 636 3756

Group financial director designateArno DaehnkeTel: +27 11 415 4184

Registered address9th FloorStandard Bank Centre5 Simmonds StreetJohannesburg, 2001PO Box 7725Johannesburg, 2000

Head office switchboardTel: +27 11 636 9111

Transfer secretaries in South AfricaComputershare Investor Services Proprietary LimitedGround floor, 70 Marshall StreetJohannesburg, 2001PO Box 61051Marshalltown, 2107

Transfer secretaries in NamibiaTransfer Secretaries (Proprietary) Limited4 Robert Mugabe Avenue(Entrance in Burg Street)WindhoekPO Box 2401Windhoek

Please direct all customer queries and comments to:[email protected]

Please direct all shareholder queries and comments to:[email protected]

SHAREHOLDERS’ INFORMATION

Contact details

standardbank.com

Documents

Standard Bank Group financial results2015 The Standard Bank Group’s (the group) analysis of financial results for the year ended December 2015 has not been audited or independently