Sustainability Report 2011 - The Vault...2011 Sustainability Report 5 About Standard Bank Group Personal & Business Banking Liberty Corporate & Investment Banking 12,0% Tier 1 capital

Sustainability Report

2011

Our strategy• WeaimtobuildtheleadingAfricanfinancialservicesorganisationusingallourcompetitiveadvantages

tothefull.

• Wewillfocusondeliveringsuperiorsustainableshareholdervaluebyservingtheneedsofourcustomers

throughfirst-class,on-the-groundoperationsinchosencountriesinAfrica.Wewillalsoconnectother

selectedemergingmarketstoAfricaandtoeachother,applyingoursectorexpertise,particularlyin

naturalresources,globally.

• Ourkeydifferentiatorispeoplewhoarepassionateaboutourstrategy,whereverintheworldthey

arebased.

Why we believe in our strategy

• Emergingmarketsaregrowingfasterthanthedevelopedworld.

• Greatscopeforexpansionofbankingservicesinsub-SaharanAfrica.

• Tradeandinvestmentflowsbetweenemergingmarketsareincreasing.

Why we are well placed to execute our strategy

• Ourlegacy,heritageandfootprintputusinaprimepositiontocapitaliseonthisopportunity.

• Weunderstandourclients’needsandourAfricanstrategyisinlinewithmanyoftheirgrowthaspirations.

• OurstrategicrelationshipwiththeIndustrialandCommercialBankofChina(ICBC)providesuswithastrong

partnershipwiththelargestbankinChina.

• Wehaveasuccessfultrackrecordinbuildingbusinessesacrosssub-SaharanAfricaandinnaturalresources.

• Wehaveexperienceintakingbankingtotheunbanked.

• Wearededicatedtooperationalexcellence.

• WeemploypeoplewhoareexcitedaboutAfricaanditsprospects.

• Wehaveaunifiedleadershipteamwithdepthofexperience,committedtoexecutingourstrategy.

Our social compactStandardBankwillcontributetothesocioeconomicdevelopmentofthecountriesinwhichweoperateinawaywhichis

consistentwiththenatureandsizeofouroperations.Wewillprovidefinancialservicesandproductsresponsibly,bearing

inmindtheneedsofsociety,ourcustomers,ourstaff,ourshareholders,theenvironmentandfuturegenerations.

Our values• Servingourcustomers.

• Growingourpeople.

• Deliveringtoourshareholders.

• Beingproactive.

• Workinginteams.

• Guardingagainstarrogance.

• Respectingeachother.

• Upholdingthehighestlevelsofintegrity.

12011 Sustainability Report

ContentsPage 2 Aboutthisreport 3 Recognition 4 AboutStandardBankGroup 6 StatementfromourGroupChairman 8 StatementfromourGroupChiefExecutive

Managing sustainable development 10 Ensuringoursustainability 18 Stakeholderengagement

Our sustainability performance

21 Socioeconomicdevelopment 41 Economicperformance 53 Valuingourpeople 65 Technologyandoperatinginfrastructure 73 Environment

87 Additionalindicators 89 Assurancestatement 91 Contactdetails

Topic indexPage 72 Accesstounderbankedareas 34 AddressingdevelopmentinAfrica 29 Affordablehousing 33 Agriculturefinancing 80 Climatefinanceandcarbontrading 84 Carbonfootprint 51 Customerexperience 64 Employeecommunityinvolvement 37 Empowermentfinancing 76 Environmentalandsocialriskmanagement 26 Inclusivefinancialservices 39 Investingincommunities 71 Operatinginfrastructure 57 Skillsdevelopment 31 Supportingsmallandmediumenterprises 37 Sustainabilityinthesupplychain 24 Transformation 23 Valueaddedstatement 50 Workinginemergingmarkets

About this report

2 2011 Sustainability Report

About this reportTheStandardBankGroup(SBG)2011Sustainability

Report(thereport)presentsasuccinctandbalanced

analysisofoursustainabilityperformanceinrelationto

issuesthatarerelevantandmaterialtothegroupand

toourstakeholders.Additionalinformationisavailable

onoursustainabilitywebsite.

Thereportsetsoutoursustainabilityperformancefor

theyearended31December2011insupplementto

thegroup’sAnnualIntegratedReport.Anymaterial

eventssubsequenttoyearendanduptoboard

approvalon7March2012havebeenincluded.

ThereportcoversSBG’sdomestic,Africanand

internationalactivities,includingsubsidiariesbut

excludingassociatesandjointventures.Unless

indicatedotherwise,factsandfiguresrefertothe

group.Asaseparatelylistedentity,Libertyprepares

itsownannualandsustainabilityreportswhichare

availableatwww.liberty.co.za.

Thereportfocusesonkeydevelopmentsduringthe

yearanddisclosesthemostpertinentindicators.We

usesurveys,benchmarksandinternationalframeworks

toinformourreporting,andhaveincludedissues

raisedbykeyinternalandexternalstakeholders.We

areguidedbytheGlobalReportingInitiative(GRI)

G3SustainabilityReportingGuidelines,supportedby

SBG’sinternallydevelopedpoliciesandprocedures,

andhavereportedagainsttheGRIFinancialServices

SectorSupplementindicators.Wehaveassessedthe

reportataB+applicationlevelintermsoftheGRI.

OurperformanceinrelationtothefullsetofGRI

indicatorsisavailableonoursustainabilitywebsite.

Wesubscribetothefivecapitalsmodel,developedby

ForumfortheFuture,asaframeworkformanaging

sustainabilityandassessingourperformance.The

fiveformsofcapital–natural,social,human,

manufactured(ormanmade)andeconomiccapital

–noneofwhicharesustainableinisolation,are

fundamentaltothelong-termviabilityofourbusiness.

KPMGServices(Pty)Ltdhaveassuredcertainkey

performanceindicators(notedinthereport),aswell

asSBG’sconformancewithAccountAbility’s1000

PrincipleStandards2008.InlinewiththeCombined

AssuranceapproachrecommendedintheKingCode

ofGovernancePrinciplesforSouthAfrica(KingCode),

GroupInternalAudit’sreviewofthereportsupports

thefindingssetoutintheassurancestatement,which

canbefoundonpage89.

Wewelcometheviewsofourstakeholdersonthis

reportandthewayweapproachoursustainability

priorities.PleasecontactKarinIreton:Director,Group

SustainabilityManagementat

[email protected],youmayusethefeedbackfacilityonour

sustainabilitywebsite.

Sustainability websitehttps://sustainability.standardbank.com/

Using this reportWehaveusedthefollowingiconsthroughoutthe

reporttoindicatewheremoreinformationcanbe

foundonoursustainabilitywebsite.

Indicatesthatmoreinformationcanbefoundunder

theAccountabilitylinkontheOur approachpage.

IndicatesthatacasestudyonourMobileMoney

Accountisavailableonthesustainabilitywebsite.

Casestudiescanbeaccessedfromthehomepage.

Key SBG reportsSBG’sAnnualIntegratedReportisavailableat

http://annualreport2011.standardbank.com/

Blackeconomicempowerment(BEE)isaregulatory

frameworkthataimstoredresspastinequalities

andrelatesonlytoouroperationsinSouthAfrica.A

consolidatedBEEReportandaconsolidatedreportof

statisticsareavailableonourwebsite.

Terms usedStandard Bank Group (SBG or the group)includesbankingoperationsandLiberty.

Standard Bank (the bank)referstoourSouthAfrican,Africanandinternationalbankingoperations.

Standard Bank South AfricareferstoourbankingoperationsinSouthAfrica.

Standard Bank AfricareferstoourbankingoperationsinAfricaexcludingSouthAfrica.

Liberty includeslifeinsurance,investmentandwealthmanagementoperationsincludingSTANLIB.

STANLIBincludesinvestmentandassetmanagement

operationsinAfricaincludingSouthAfrica.

Our approach>accountability

Case study: Mobile Money Account


Recognition

Recognition BrandFinance Banking 500 Awards

− BestBankingBrandinSouthAfrica.

− TopFinancialServicesBrandinAfrica.

− Rankedasthe73rdmostvaluableglobalbanking

brandoutofthetop500banksandforthesecond

consecutiveyear,asthemostvaluablebanking

brandinAfrica.

Ask Afrika 2011 Trust Barometer Survey − MosttrustedcompanyinSouthAfrica.

− FirstintheSustainabilityIndex.

Global Finance Magazine Awards− BestInvestmentBankinAfrica.

− BestDebtBankinAfrica.

− BestInvestmentBankinSouthAfrica.

World’s Best Emerging Markets Banks in the

Africa category

− BestBankintheDemocraticRepublicofCongo,

Namibia,SouthAfricaandUganda.

World’s Best Treasury and Cash Management Providers

category

− BestOverallBankforCashManagementinAfrica.

− BestProviderofMoneyMarketFunds.

− BestBankforPaymentsandCollections.

− BestMobileSolutionProvider-CfCStanbicBank

inKenya.

CNBC All Africa Business Leader Awards SimTshabalala,DeputyChiefExecutiveofSBGand

ChiefExecutiveofStandardBankSouthAfrica,won

theCNBCAfricaBusinessSuccessinAfricaAward.

Think Business BestInsuranceCompanyinthecustomerservice

categoryforCfCLifeinKenya.

Project Finance Magazine AfricaRenewablesDealoftheYearfortheAddax

BioEnergyprojectinSierraLeone.

Empowerdex2011TopEmpowermentCompanyinSouthAfrica.

Banker Magazine’s World’s Top 1 000 BanksAfrica’sTopBank.

Euromoney AwardsBestDebtHouseinAfrica.

African Banker AwardsAfricanBankoftheYear.

EMEA Finance Magazine Awards− BestInvestmentBankinAfrica.

− BestInvestmentBankinBotswana,Ghana,Kenya,

Malawi,Nigeria,SouthAfrica,Swazilandand

Tanzania.

− BestBankinMalawiandZimbabwe.

Banker Magazine− 2011BankoftheYearinAfrica.

− BestBankinBotswana,Lesotho,Malawiand

Zimbabwe.

Chartered Institute of Purchasing and SupplyBestPeopleDevelopmentInitiativeforour

procurementtraininginitiatives.

Newsweek Magazine’s Green RankingsRanked45thoveralland13thinthefinancialsector

categoryoutoftheGlobalTop500companies.

Financial Intermediaries Association− Long-TermInsureroftheYearintheriskproduct

categoryforLiberty.

− InvestmentProductSupplieroftheYearinthe

retailinvestmentscategoryforSTANLIB.


About Standard Bank Group

At 31 December 2011:

SBG’s total assets were

R1 497 billion

making us the largest bank in Africa.

BotswanaNamibia

Zimbabwe

Zambia

Tanzania

Uganda

Strongest growth rates in banking assets predicted in

Angola, Uganda, Ghana and Tanzania1

17countries in Africa constitute our biggest growth market in 2011

Kenya

Biggest absolute increase in banking assets predicted in

Nigeria1

Ghana

Angola

Nigeria

Democratic Republic of Congo

Lesotho

Malawi

Mozambique

Mauritius

Swaziland

South Africa

Outside Africa–Argentina–Brazil–China(includingHongKong)

–IsleofMan–Japan–Jersey

–RussianFederation–Singapore–Taiwan–Turkey–UnitedArabEmirates–UnitedKingdom–UnitedStatesofAmerica

Inadditiontoouronthegroundpresencein17

Africancountries,wehaverepresentationinthe

followingemergingmarketsandkeyfinancial

centres:

Listings HeadquarteredinJohannesburg,SBG’sprimary

listingisontheJohannesburgStockExchange

(JSE)inSouthAfrica,withasecondarylistingin

Namibia.Subsidiarybanksarelistedonexchanges

inKenya,Malawi,NigeriaandUganda.

Our major shareholdersSBGis53%SouthAfrican-owned.Ourthree

majorinstitutionalshareholdersareICBC,

PublicInvestmentCorporationandDodge&Cox,

whichhold20%,13%and3%shareholdingof

thegrouprespectively.


Our subsidiary banksOur16subsidiarybanksintherestofAfrica

facilitateouroperationsonthecontinent.

Toavoidconfusion,inAfricancountrieswhere

StandardCharteredBankalsohasapresence,we

tradeunderthebrandnameStanbicBank.

SBG’s shares were worth

R157 billion making us the largest South African bank

by market capitalisation.

1 According to the Economist Intelligence Unit Limited’s Banking in Sub-Saharan Africa to 2020: Promising Frontiers Report.



Personal & Business Banking

Liberty

Corporate & Investment Banking

12,0%

Tier 1 capital adequacy ratio.

SBG employed 52 127 people across 30 countries. Of this,

34 179 were employed in South Africa.

At 31 December 2011:

Personal&BusinessBanking

providesindividuals,businesses

andsmalltomedium-sized

enterpriseswithbasicand

complexbankingsolutions,as

wellasinvestment,insurance

andmanyotherfinancial

services.Thisincludes

innovativeproductsand

mechanismsaimedatreaching

potentialcustomersoutsidethe

economicmainstream.

Corporate&Investment

Bankingoffersacomprehensive

rangeofsolutionsto

largercorporates,financial

institutionsandinternational

counterparties.Theseinclude

projectandtradefinance,

tradingandhedging,corporate

finance,globaltransactional

bankingandequityservices

suchasacquisitionfunding,

expansioncapitaland

replacementcapital.

Ourgroupwealthbusiness,Liberty,

offerslifeinsurance,investmentand

wealthmanagementsolutionsto

individualandcorporatecustomersin

selectedAfricanmarkets.Servicesinclude

assetmanagement,fundadministration,

institutionalbanking,offshorebanking

andprivateclientservices.LibertyBlue

offerscustomersinAfricaasuiteof

employeehealthinsuranceproductswith

comprehensivebenefits.

2011 highlights• SouthAfrica’slargestmortgagelender,financing one in every

twohomespurchasedin2011.

• 12,3 millionretailandbusinessbankingcustomersinAfrica.

• Groupwidenetworkof1 222branchesandservicecentres,and7 945ATMs.

• FacilitatedR75 billionworthofnewloansinSouthAfrica.

• Achieved96,5%ATMavailabilityinSouthAfrica.

2011 highlights

• Totalassets ofoverR768 billion.

• LoansofoverR383 billiondisbursedtoclients.

• Leads the South African marketincorporatedeposits,transactionalbanking,foreignexchange,fixedincome,commodities,equitiesderivatives,structuredlendingandaccesstodebtcapitalmarkets.Most successfuldomesticbankinSouthAfricanmergersandacquisitions.

• Won 13 bidswithrenewableenergycapacityof605 megawattsintheSouthAfricanGovernment’sRenewableEnergyIndependentPowerProducerProcurement(REIPPP)Programme.Thisequatesto38%and58%ofthemegawattsavailablefromthesolarandwindprojectsacceptedinthefirstphaseoftheprogramme.

2011 highlights

• Liberty’srateswererankedinthetop threemostcompetitiveinthemarket.

• 22 861SouthAfricansreachedbyLiberty’sandSTANLIB’sconsumereducationprogrammes.

• Informationtechnology(IT)systemachieved99,7%availability.


Statement from our Group Chairman

Statement from our Group Chairman Iampleasedtoreporttostakeholdersthatin2011SBGdeliveredasoundfinancialperformanceandmadeimportantprogressinmanyothernon-financialendeavoursthatcontributemateriallytooursustainability.Thiswasachievedinspiteofunrelentingchallengeanduncertaintyinthebankingenvironmentworldwide,notleastasaresultoftheEurozonedebtcrisisandtheturmoilintheMiddleEast.

Weoperateinaworldthatisconstantlychanging.Asbankswefacegrowingcompetitioninallofourmarketsandtheregulatoryframeworksthatgovernusbecomeevermorerestrictive.Uncertaintywillalwaysbeafactorinourlives.Thechallengeistolessenitsimpactbyunderstandingandpreparingforthosethreatsthatarebeyondourinfluence,carefullymanagingthosewithinourcontrol,andalwaysseekingopportunitywhereothersseerisk.

IbelievethatSBGhasdemonstrateditsabilitytorespondeffectivelytothechallengesofourtimes.Inrecentyearsthegrouphasadapteditsstrategyinresponsetoshiftsintheglobalfinancialandeconomiclandscape,themostdefinitiveofwhichisthedynamicgrowthinemergingeconomiesrelativetothestagnationinthedevelopedworld.WehavechosenastrategythatrecognisesandparticipatesinthegreatopportunitythatisunfoldingontheAfricancontinent.Thisremainsarobustandsustainablestrategy.

Indeterminingthegroup’sstrategy,theboardconsidersthefullrangeofissuesthatinfluencethesustainabilityofourbusinessandthatofthesocial,economicandphysicalenvironmentsinwhichweoperateandwhich,inturn,haveadirectimpactonourfutureviability.Weconsideranissuetobematerialifitinfluencesourabilitytoremaincommerciallyviableandrelevanttotheenvironmentsinwhichweoperate.Afterdetailedengagementwithourinternalandexternalstakeholdersweidentifiedsixbroadmaterialissuesin2010,whichalthoughdiscussedindetailthroughoutthissustainabilityreport,Iwouldliketobrieflytouchonhere.

A positive and consistent employee experienceAnimportantfactorcontributingtothegroup’sresilienceisitspeople.Itiscriticalthatweequipourpeoplewiththecapacitytomeetthedemandsofourbusinessenvironments.Inrecentyearswehaveoptimisedourorganisationalstructurestoensurethattheysupportourpeoplebycreatingcentralisedfunctionsandeliminatingduplicationofroles.In2011,theexecutiveteamengagedwithstaffmembersacrossthebroadspectrumofourgrouptoensurethattheyunderstandourstrategy,andparticularlytheirroleinitsexecution.

Iamconfident,havingseenthisinpractice,thatevenduringthemostadverseoftimes,ourpeopledeliverwhattheysetouttoachieve.Theimprovedperformancesinallthegroup’soperationsandtheprogresswehavemadeinbuildingabankingplatformtosupportourgrowthstrategyinAfrica,beartestimonytotheirtenacityandtalent.Iextendmythankstoourpeoplefortheircommitmentandcontributiontotheperformanceandlong-termwellbeingofthegroup,indifficultconditions.

Sustainable long-term financial performanceTodeliversustainableprofitablegrowthandsuperiorshareholderreturns,weaimtobuildtheleadingAfricanfinancialservicesorganisation.Thisrequiresthatwebalanceprudentinvestmentingrowthandoperatingeffectivenesswithvigilantmanagementofcosts.Duringtheyearwesuccessfullymanagedcostswhileretainingourcustomersandbuildingnewsourcesofrevenueinafiercelycompetitivefinancialservicessector.WealsoredesignedourbusinessarchitecturetosupportourabilitytodeliverourstrategyandarerenewingourITsystemstoliftouroperatingeffectiveness.

Fred Phaswana,Group Chairman.


Theimpactofnewglobalbankingregulations,beingintroducedtosafeguardagainstarepeatoftherecentfinancialcrisis,isdifficulttoquantifybutexpectedtobeprofound,particularlyinrespectofliquidityrequirements.ThegroupremainedwellcapitalisedatDecember2011,withatotalcapitaladequacyratioof14,3%(2010:15,3%).

Governance, regulation and stakeholder engagementGoodgovernancepracticesarefundamentaltocreating,protectingandsustainingstakeholdervalue.WehaveembeddedtheprinciplesoftheKingCode,whichcameintoeffecton1March2010,inouroperations.In2011,wefinalisedacorporategovernanceframeworktoensurethatourgovernancepracticesandstandardsareadoptedbyouroperatingsubsidiaries.

Webuildandsustainstrategicrelationshipswitharangeofstakeholderstomanagesocialexpectations,minimisereputationalriskandformstrategicpartnerships.Weseektobuildpartnershipswithorganisationsthatenhanceourownsustainabilityaswellasourcontributiontosustainabledevelopment,andweparticipateinmanydifferentindustrybodiesandinstitutionsthatgiveustheopportunitytointeractwithourbroadanddiversestakeholderbase.

Sustainable and responsible financial servicesToimprovethequalityofourservicetoourcustomerswemustunderstandourcustomers’differentneedsandimplementrobustgovernanceandriskmanagementframeworksthatfacilitateresponsiblebankingandinvestmentpractices,includingtheassessmentofenvironmentalandsocialrisk.Incorporatedinthisisprovidingtransparentpricingstructuresandfairrehabilitationanddebtmanagementpolicies,aswellasemployingmechanismsthatdetectandpreventfinancialcrimeandimprovecustomerexperience.During2011,weprovidedloansamountingtoR75billiontoourSouthAfricanpersonalandsmallbusinesscustomers.Thisenabledalmost60 000peopletobuyhomes,inexcessof85 000peopletosecureadequatetransport,5000studentstofundtheirstudiesand2700smallbusinessestoeitheropentheirdoorsorcontinueoperating.

Socioeconomic developmentThemostfundamentalcontributionourgroupmakestotheeconomiesinwhichweoperateisbymaintainingarobustbusiness,whichcreateswealthacrossourstakeholderbase,andprovidingbankingservicestoourclientsandcustomers.Thetotalwealthwecreatedin2011wasR50billion,anincreaseof12%from2010.WeregardtheprovisionoffinancialservicestomarginalisedcommunitiesasavaluableopportunitytoparticipateresponsiblyinthegrowthpotentialofatransformingSouthAfricaneconomyandwerecognisethattheprivatesectorhasanadditionalresponsibilitytoassistgovernmentsinfindingsolutionstodevelopmentchallenges,particularlyinemergingmarkets.

OurtransformationprogressinSouthAfricaiscurrentlymeasuredagainsttheDepartmentofTradeandIndustry’sCodesofGoodPracticeforBroad-basedBlackEconomicEmpowerment.StandardBankandLibertyachievedverifiedoverallscoresof92,47and85,70outof107respectively.

The environmentTheimpactofclimatechangeandotherenvironmentalrisksislikelytobemostsevereinemergingmarkets,affectingtheirgrowthanddevelopment.AsanAfricanfinancialservicesproviderwehavetheabilitytopositivelyinfluenceourcustomersandpeopleinmanagingtheirenvironmentalimpacts,andwehavetheopportunitytoeffectbroaderchangethroughlendingresponsiblyandfinancingthegrowthofthe’greeneconomy’.

Duringtheyearwemadeprogressinmanagingourowndirectandindirectimpactsontheenvironment.WeimplementedanEnvironmentalandSocialAppraisalSysteminourCorporate&InvestmentBankingbusiness,launchedprogrammesenablingourcustomerstoaccesscarboncreditsandundertookanumberofenergy-savingprojectsintheSouthAfricanoperation.

AppreciationOurgratitudeisduetoourcustomers,shareholdersandotherstakeholdersfortheircontinuedsupport.Youcanbesurethatwewillcontinuetorespondtotheuncertaintyofourtimeswithdueconsiderationofyourinterestsanddedicationtoourcommonpursuitoflong-term,meaningfulvalue.

Statement from our Group Chairman

FredPhaswana,Group Chairman.


Statement from our Group Chief Executive Earlyin2011itbecameclearthattheoperating

environmentwasgoingtobeevenmorechallenging

thanwehadanticipated.Escalatingconcernsaboutthe

Eurozonedebtcrisisimpairedthealreadyfragileprospect

ofaglobalrecovery.Whilethisexacerbatedtheeconomic

andcompetitivepressuresonthefinancialservicessector,

italsoreaffirmedthestrengthofourcorebusiness,

thevalidityofourstrategyandourabilitytorespond

effectivelytochange.Costandefficiencyprogrammes

implementedin2010contributedtoastrongerfinancial

positionin2011,andweworkedexceptionallyhardto

achievegrowthinourdomesticmarketandmakesteady

progressindevelopingourbankingplatformsinother

sub-SaharanAfricancountries.

Wedeliveredastrongsetofresultsin2011.We

increasedheadlineearningstoR13,6billion,up21%

ontheprioryearandincreaseddividendspaidto

shareholders.Ourreturnonequityof14,3%wasan

improvementontheprioryearratioof12,5%.Ina

difficultoperatingenvironmentwewereabletoachieve

ourobjectiveofholdingtotaloperatingexpensesflat

yearonyear.

Inthepasttwoyears,wehaveredesignedourbusinessarchitecturetosupportourstrategicobjectives.We

havestreamlinedourinternalstructuresandrealignedourgroupenablingfunctionsacrossbusinessunitsto

eliminateduplicationandimprovecost-efficiencyandconsistency.Theseinitiativeshavealreadycontributedtoan

improvementinthefunctioningofgroupoperations.OurfocusnowisfirmlyontheITsystemsrenewalprocess.

Thiswillallowustoremaincompetitiveintherapidlychangingworldofbanking.Ourcostmanagementplanwill

continuetoplayanimportantroleinoffsettingtheimpactofhigherITcostsduringthisdevelopmentphase.

InternationalcompetitionhasintensifiedinAfricaasmajorbankinggroupsturntothegrowthpotentialinemerging

markets.Whileourinternationalcompetitorshavethebenefitofmoreefficientcapitalstructuresandlargebalance

sheets,wehavethebenefitofourAfricanheritage,on-the-groundoperationsandpeoplewhoareallpassionate

aboutAfrica.

Tailoringsolutionsfortheparticularindividualneedsofourexistingandpotentiallynewcustomersandclientshas

neverbeenmoreimportant.Personal&BusinessBankinghasmadestrongprogressindevelopingaffordablebanking

andinsurancesolutionsandmakingthemmoreaccessibletothemillionsofeconomicallyactivepeopleinSouth

Africawhofalloutsidethemainstreamfinancialservicessector.Agrowingblackmiddleclasspresentssignificant

opportunitiesforustoapplythelessonswehavelearnedfurtherafieldinAfrica.Corporate&InvestmentBankinghas

beenactiveinfinancingandadvisingagrowingnumberofrenewableenergyprojectsinSouthAfricaduringtheyear.

Togetherwithourexpertiseinusingthecarbonmarketstobringlower-carbongrowthtoAfrica,webelievewearewell

placedtoassistgovernmentsandcorporateclientsinthefightagainstclimatechange.

Duringtheyearwewereacknowledgedasanindustryleaderinnumerousawards.IntheAskAfrikaTrust

BarometerSurveywewererecognisedasthemosttrustedcompanyinSouthAfricaandnumberoneintheAsk

AfrikaSustainabilityIndex.InNewsweek’sannualGreenRankings,StandardBankwasranked13thgloballyinthe

FinancialSectorcategoryand45thoveralloutoftheGlobalTop500companies.

Strategic focus

StandardBankremainsthelargestbankinAfricabyearningsandassets,witharecognisedandtrustedbrand,and

astrongbalancesheet.Wearewellcapitalisedandthisplacesusinasolidpositiontoweatherthecurrentglobal

economicchallenges.

Statement from our Group Chief Executive

Jacko Maree,Group Chief Executive.


Statement from our Group Chief Executive

WearefocusedonsustainingthestrengthofourSouthAfricanoperation,whichisfundamentalifweareto

succeedinexecutingourstrategy.Africaremainsatthecoreofourgrowthstrategy.Wewillcontinuetoservethe

fast-growingneedsofourcustomers,bymaintainingorbuildingfirst-class,on-the-groundoperationsinchosen

countriesinsub-SaharanAfrica.ConnectingotherselectedemergingmarketstoAfricaandtoeachother,and

applyingoursectorexpertiseglobally,particularlyinnaturalresources,arekeyelementsofourstrategy.Thecapacity

andcapabilityofourpeopletoretainexistingcustomersandbuildnewrelationshipsandrevenueopportunitiesis

another.Wearefocusedonusingourcompetitiveadvantagestothefulltoachievetheseobjectives.

ThepaceofourorganicbuildstrategyinAfricahasbeenslowerthanwehadhoped.Itisarealitythatittakestime

toresolvesomeofthepracticalimpedimentsofdoingbusinessonthecontinent.However,wearesatisfiedwith

ourstrategicpositionandourprogresstodate,backedupbythelong-termgrowthpotentialofAfrica.

WecontinuetoreshapeourinternationalactivitiesinlinewithourstrategicfocusonAfrica.Wehaveannounced

thedisposalsofourstrategicstakeinTroikaDialogGroupLimitedinRussiaandourcontrollingstakein

StandardBankArgentina.TheRussiantransactionhasbeenclosedandtheArgentineantransactionremainson

trackbutsubjecttoregulatoryapprovals.

OurstrategicpartnershipwithICBCisworkingwell.Overthepastfewyears,wehavebeeninvolvedinnumerous

cooperativeprojectsinmanyemergingmarkets,andhavejointlyraisedinexcessofUSD5billion(R36,3billion)

forinfrastructureprojectstodate.WewelcomethecommitmentshownbyICBCinopeningarepresentativeoffice

inAfrica,whichwillfurtherenableustoparticipateinthegrowingtradeanddirectinvestmentbetweenChina

andAfrica.

Managing our regulatory environmentSouthAfricanfinancialinstitutionsareexpectedtocomplywith150differentstatutesandin2011therewas,

onaverage,onenewdraftpolicydocument,billorregulationissuedperweekwithpotentialimplicationsfor

banks.ThefinancialimpactofBaselIIIissignificantlyhigherthanthatofotherglobalandlocalregulations.While

theimpactisprimarilyonfinancialinstitutions’capitalandliquidityratiosinanefforttoreduceriskinthebanking

sector,itislikelytohaveunintendedconsequences.Mostconcerningisthehighercostoffinancing,whichmay

curtaileconomicdevelopmentatatimewhenthiscanleastbeaffordedandmayevenheightenriskinthe

bankingsystem.

Prospects TheEurozonedebtcrisislookssettocontinuethroughmuchof2012andcouldstillworseninspiteofinternational

effortstostabilisethesituation.Whilethecontagionrisksarebeingfeltaroundtheworld,theBRIC(Brazil,Russia,

IndiaandChina)economieswillremainattheforefrontofglobalgrowthasthelong-termstructuraldriversof

Africa’sGDPgrowthremainintact.WethereforeremainpositiveaboutAfrica’sgrowthprospectseventhoughwe

expectcyclicalheadwindsin2012.

Ourstrategyisveryclearandweknowwhatisrequiredofustofulfilouraimofbeingtheleadingfinancialservices

organisationinAfrica.WewillcontinuetofocusonmaintainingourstrongpositioninSouthAfrica,andongrowing

inourchosenmarketsinsub-SaharanAfrica.Werecognisethatoursuccessandthesocioeconomicdevelopmentof

thecountriesinwhichwehavematerialexposuresisstronglylinked,andwewillthereforecontinuetoengagewith

variouspartnerstoenhanceAfrica’sdevelopment.

JackoMaree,Group Chief Executive.


Ensuring our sustainability

Ensuring our sustainabilitySustainabilitycan’tbedeliveredbyasmallgroupofpeopleinacentralfunction.Itrequiresafarbroaderapproach.So,

GroupSustainabilityManagementcreatesabridgebetweenthedifferentdivisions,functionsandproductareaswithin

thegroup.Ourstrategicframeworkprovidestheplatformforharnessingthecreativityandinnovationofindividuals

inmanydifferentpartsofthebusiness,inpursuitofsocioeconomicdevelopmentandgrowthinAfricathatissocially,

environmentallyandeconomicallysustainable.Successindemonstratingthatourstrategyandoursustainability

programmesaremutuallyreinforcingisessentialandthisreportprovidesagrowingbodyofevidenceinthatregard.

Ourapproachistoincreasethecapabilityinthegroupforidentifyingrisksandrespondingproactivelytoopportunities.

Triplebottomlineapproachesareneededwhenrespondingtostakeholderconcernsoremergingglobaltrends

andpressuresiftheoutcomeistobegoodforshareholders,goodforcustomersandourownlong-termambitions.

Giventhegroup’srefinedstrategyoffocusingonAfrica,thecurrentsocioeconomicdevelopmentchallengesonthe

continentandfocusoncorporatecitizenship,wehaveagreedthesocialcompactstatementthatappearsontheinside

frontcoverofthisreport.Thesocialcompactdemonstratesoursocialcommitmenttovariousstakeholders.Weuse

variousexecutiveforumswithinthegrouptoraiseanddebateissues,andincreasinglyseebusinesssuccessbeingbuilt

onoursustainabilityfoundation.

Thechallengeofextendingaccesstofinancialservices,howeverinformal,isacaseinpoint.Inclusivebankingisan

opportunityforustocreatevaluewithincommunitiesandbuildnewrevenuestreamsforthebank.Persistentpoverty

isacriticalriskinAfricaanddirectlyimpactsthegroup’sabilitytogrow.Placingaccessiblebankingservicepointsin

communityretailshopsisanexampleofcreatingvaluebeyondthebank,asitgivespreviouslyunbankedcustomers

securityandconvenienceintheirfinancialtransactionsandsupportslocalbusinessesbycreatinganewrevenue

streamforshopowners.Inclusivebankinghasmovedfrombeingatthefringetobeingaviable,mainstreamfinancial

servicethathasprovenitsbusinesscase.

Relatedtotheriskofpersistentpovertyisunemployment,andgovernmentandcustomersalikehavecalledonthe

financialservicessectortostepupitscontributiontoaddressingthischallenge.Entrepreneursneedtobesupported

increatingandgrowingnewbusinesses,asignificantdriverofemployment.Inadditiontodirectfinancialsupport,our

enterprisedevelopmentmodelprovidessmallenterpriseswithnon-financialsupportfromcoachinginterventionsto

workingwithourpartnerstoincreasemarketaccessforthesebusinesses.Aswithinclusivebanking,thisshowsthat

doinggoodbusinesscanbegoodforourcustomers,societyingeneral,andthebank.

Financingthelow-carboneconomyisanotherareathatdemonstrateshowrespondingtoarisk–inthiscaseclimate

change–cangenerateopportunitiestocreatevalueformanyofourstakeholders.Carbontradingisanimportant

tooltoassistinreducingoverallcarbonemissions,withStandardBankbeingapioneerindevelopingAfricanprojects

whichmakeuseofinternationalmarket-basedmechanisms.Wehavealsobeenactiveinfinancingcommercial-scale

renewableenergyprojectsandlow-carboninnovationswhichchangethedailylivesofthepoor.Wearealsodeveloping

innovativeapproacheswhichwillreducethetransactioncostsofenergyefficiencyprogrammesforcompaniesandhave

launchedafleetmanagementproductwhichwillassistintracking,reportingandreducingcarbonemissions.

Theabilityofdifferentpartsofthebanktoworktogetheronaglobalimperativesuchasclimatechangewas

demonstratedinourapproachtothe17thConferenceofthePartiestotheUnitedNationsFrameworkConventionon

ClimateChange(COP17),hostedinDurbanduring2011.Ourpeopleparticipatedinanumberofinternationaldebates

andforumsacrossarangeofdisciplines,contributingtothebroaderdialogueandsharingintheexchangeofideas.This

notonlyenhancedourreputationasagroupthatisseriousaboutaddressingthechallengeswefaceasglobalcitizens,

butgivescredencetoourintenttopositionourselvesforthesignificantbusinessopportunitiesthispresents.

Ourparticipationinvariousforumsandworkinggroupskeepsusinformedandtogetherwithourotherengagement

processesinternallyandexternally,weareabletodevelopamorenuancedunderstandingoftheriskenvironmentand

bemoreresponsivetonewopportunities.Thisstrategicapproachtoengagingwithourstakeholderswillhelpensure

thegroup’sabilitytocreate,sustainandprotectvalue.

KarinIretonDirector, Group Sustainability Management.



Sustainability as an integral part of our business strategy

SBGaspirestobuildtheleadingAfricanfinancial

servicesorganisation.Ourstrategicfocusonserving

theneedsofourcustomersandconnectingselected

emergingmarketstoAfricaandtoeachother,

positionsustodeliversuperiorsustainableshareholder

value.Thiswillbeunderpinnedbythegrowthand

developmentanticipatedinthemarketsinwhichwe

arefocused.

Asafinancialservicesgroupourmostimportant

contributiontosustainabledevelopmentistosupport

andfacilitategrowthanddevelopment.Byproviding

accesstocredit,savingsandinsuranceproducts,we

enableindividualstoimprovetheirqualityoflife

andenhancetheirfinancialsecurity.Byproviding

financetolargeandsmallbusinesseswefacilitate

economicgrowthandjobcreation,andbyfinancing

infrastructureandthedevelopmentofkeysectors,we

assisttosolveglobalchallengessuchasenergyand

foodsecurity,resourcedepletionandclimatechange.

Thesesocialandenvironmentalchallengespresent

risksbothtoourownsustainabilityandtothe

developmentandgrowthprospectsofeconomies,

particularlyinemergingmarkets.However,the

verynatureofourbusinesspositionsustohelp

ourcustomersandstakeholdersmanageriskand

investforthefuture,whichinturncontributes

tothesustainablegrowthoflocalmarketsand

nationaleconomies.Respondingeffectivelytothese

prevailingchallenges,therefore,providesthegroup

withopportunitiestoprotectitsexistingrevenue

streamsandgrownewrevenuestreams.

Weunderstandthatwecanonlygeneratesustainable

profitsandsuperiorshareholderreturnsifweconduct

ourbusinessinaresponsibleandinclusiveway.

Strengtheningourreputationandbuildingtrustthrough

ethicalconductandmaintaininggoodrelationshipswith

customers,employeesandotherstakeholdersenables

ustocreatevalueoverthelongterm.

Managing sustainable development Ultimateaccountabilityandresponsibilityfor

sustainabledevelopmentrestswiththeSBGBoard

ofDirectors.ThroughSBG’sgovernancestructures,

thisresponsibilityisdelegatedtoappropriateboard

andmanagementcommittees.TheGroupSocial

andEthicsCommittee,aboardcommittee,was

establishedin2011.Thecommittee’smandateisto

guideandmonitor:

• Mattersrelatingtosocialandeconomic

development.

• Transformationactivitiesandperformance

againsttargets.

• Labourandemploymentpolicies,practices

andprocedures.

• Environmentalimpacts.

• Consumerrelationships.

• Ethicalconduct.

Our approach>managing sustainable development

Standard Bank has again been identified as a best performer in the JSE SRI Index, making us one of only six companies to achieve this level of performance for five consecutive years.

BenchmarkingWeparticipateinvariousindicestobenchmarkour

economic,socialandenvironmentalperformance

againstlocalandinternationalbanks,toassistusin

identifyingareasforimprovement.

Sustainability indices

StandardBankandLibertymetthecriteriaandwere

includedintheJSE’sSociallyResponsibleInvestment

(SRI)Indexin2011.Ofthe100companiesassessed,

74wereincludedintheindexand22companieswere

identifiedasbestperformers.

Our2011scoreintheDowJonesSustainability

Indexwas69%.Whilethisscorewasabovethe

globalbankingindustryaverageof53%,wedidnot

meetthethresholdforinclusionontheindex.

Carbon Disclosure Project

SBGparticipatesintheCarbonDisclosureProject

(CDP),anindependentinitiativeencouraging

transparencyonallclimatechange-relatedissues

andemissionsperformance.Inthe2011CDP,

StandardBankandLibertyscored74%(2010:74%)

and71%(2010:76%)respectively.Both

companiesareincludedintheSouthAfrican

CDPLeadershipIndex.

In the Ask Afrika 2011 Trust Barometer Survey,

Standard Bank was ranked first in the Sustainability Index.

11


Risk management Effectiveriskmanagementisfundamentaltothesustainabilityofthegroup.Theroleoftheriskmanagement

functionistoidentify,assess,measureandmanagethoserisksthatariseinthepursuitofthegroup’sstrategic

goals.Themajorrisktypesfacingthegrouparecredit,country,liquidity,market,insuranceandoperationalrisk

(includingenvironmentalandsocialrisk).Weaimtoearnsustainableshareholderreturns.Thisrequiresthecareful

balancingofperformance,growthandriskmanagementforthelongterm.

During2011therewascontinuedeconomicvolatilityanduncertainty.AstheextentandseverityoftheEurozone

crisisbecameincreasinglyapparent,proactivemanagementwasrequired.Thegrouphasnegligibleexposuretothe

Eurozoneandperipheraltroubledcountries.Ourexposureistypicallyshort-termtradingbookexposures.Wealso

havemodestexposurestosovereignsandbanksintherestoftheEurozonearea,primarilyasaresultofthegroup

selectivelyplacingorinvestingitssurplusliquidity.OurexposuretotheEurozoneissubjecttocontinualreviewto

ensureitremainsinlinewithourriskappetiteand,wherenecessary,adjustmentsaremade.

FurtherinformationonhowwemanageourenvironmentalandsocialriskscanbefoundintheEnvironment

sectiononpage76andinSBG’s Risk and Capital Management ReportwhichcanbefoundinBook2oftheAnnual

IntegratedReport.

Our material issues Anissueismaterialwhenitimpactsourabilitytoremaincommerciallyviableandsociallyrelevanttothe

communitiesinwhichweoperate.Inparticular,materialissuesarethosethathaveastrongbearingonour

stakeholders’assessmentsanddecisionsaboutSBG’slong-termsustainabilityanditscommitmenttotheirneeds.

Oureffectivenessinmanagingtheseissuesaffectsourabilitytoachieveourstrategy.Ourmaterialissuesare

informedbytheprocessessetoutbelow.TheyarereviewedannuallyandareapprovedbytheGroupExecutive

Committee.

Ourmaterialissuesare:

• Sustainablelong-termfinancialperformance.

• Governance,regulationandstakeholderengagement.

• Sustainableandresponsiblefinancialservices.

• Socioeconomicdevelopment.

• Apositiveandconsistentemployeeexperience.

• Theenvironment.

Theopportunitiesandchallengesassociatedwithourmaterialissuesandhowwemeasureourperformancein

managingourmaterialissues,canbefoundatthebeginningofeachsectionofthisreport.

How we identify our material issues


SBG’s material issues

Ourcodeof

ethicsand

values

Internaland

external

stakeholder

engagement

Ourstrategy Dialogues

between

executive

management

Risk

management

andregulation

Global

challenges

andSouth

Africa’s

national

priorities

Sustainability

indices



Material issue How this aligns to our strategy Related SBG risk categories

Relevant board committees

Sustainablelong-termfinancialperformance.

Byusingallourcompetitiveadvantagestothefullandservingtheneedsofourcustomers,weaimtobetheleadingAfricanfinancialservicesorganisationwithfirst-class,on-the-groundoperationsinselectedmarkets.Balancingprudentinvestmentingrowthandoperatingeffectivenesswithvigilantmanagementofcosts,willenableustodeliversustainableprofitablegrowthandsuperiorshareholderreturns.

Businessrisk,creditrisk,countryrisk,insurancerisk,liquidityrisk,marketrisk,operationalrisk(includingenvironmentalandsocialrisk)andreputationalrisk.

•GroupAuditCommittee.

•GroupRiskandCapitalManagementCommittee.

.

Governance,regulationandstakeholderengagement.

Weaimtoinstilgovernanceandregulatorybestpracticestomitigateriskandcreatecompetitiveadvantageinthewaywedobusiness.Weengagetransparentlywithourstakeholderstoensurewearerespondingappropriatelytotheirneeds.

Businessrisk,operationalriskandreputationalrisk.



•GroupSocialandEthicsCommittee.

Sustainableandresponsiblefinancialservices.

Westrivetomeettheneedsofourcustomersinnewandexistingmarketsegments.Indoingsoweaimtoinnovate,whilealwaysremainingresponsibleintermsofthepotentialsocial,economicandenvironmentalimpactsofmeetingourbusinessrequirements.

Businessrisk,creditrisk,marketrisk,operationalrisk(includingenvironmentalandsocialrisk)andreputationalrisk.




Socioeconomicdevelopment.

TobuildtheleadingAfricanfinancialservicesorganisation,wemustcontributetothelong-termviabilityofcommunitiesandcountriesinwhichwechoosetooperatebyfacilitatingeconomicgrowthandsocialstability.Wecanonlydothiseffectivelyifwestayrelevanttotheneedsofthesecommunities.

Businessrisk,creditriskandreputationalrisk.


Apositiveandconsistentemployeeexperience.

Ourkeydifferentiatorinachievingourstrategyisourpeople.Weaimtoattractandretaintalentedpeoplebyapplyingaconsistentpeoplemanagementapproachacrossallouroperationsandcreatingopportunitiesforcareergrowth,aswellasbeingsociallyresponsible.

Operationalriskandreputationalrisk.

•GroupRemunerationCommittee.


Theenvironment. Climatechangeandotherenvironmentalriskswillhavetangibleimpactsonemergingmarkets,affectingtheirgrowthanddevelopment.TobetheleadingAfricanfinancialservicesorganisationwemustaddresstheseconcernsbydevelopingsolutionsthatreduceourenvironmentalfootprintandthatofourcustomers,aswellasbyfinancingthegrowthofthegreeneconomy.

Businessrisk,operationalrisk(includingenvironmentalandsocialrisk)andreputationalrisk.



How we manage our material issues



Accountability and transparencyGoodgovernancepracticesarefundamentaltocreating,

protectingandsustainingshareholdervalue.TheSBG

board’sapproachtogovernanceistokeeptrackof

developmentsnationallyandinternationally,andadopt

thosepracticesthataremostrelevanttothegroup.

Wecontinuetoimplementtherecommendations

oftheKingCode,whichcameintoeffecton

1March2010,inouroperations.Wefinaliseda

corporategovernanceframeworkforgroupoperating

subsidiariesduring2011,ensuringthataconsistent

governanceframeworkandstandardsapplytoand

areadoptedbyallouroperatingsubsidiaries.We

continuouslymonitorgovernancedevelopmentsinall

jurisdictionstoensurethatlocalrequirementsaremet.

OurCorporate Governance Statement canbefoundin

Book1oftheAnnualIntegratedReport.

Board of directors

SBGhasaunitaryboardstructurecomprising

18members,ofwhom12areindependentnon-

executivedirectors,fourarenon-executivedirectors

andtwoareexecutivedirectors.Thisensuresthat

independentperspectivesinformboarddecisions.

Thechairmanisanindependentnon-executive

directorandtherolesofchairmanandchiefexecutive

areseparate.

Ourgovernanceframeworkenablestheboardto

balanceitsroleofprovidingstrategiccounsel

andriskoversightwithensuringadherenceto

regulatoryrequirementsandrisktolerance.

Theperformanceoftheboardanditscommitteesis

assessedannuallyagainsttheirrespectivemandates,

tocontinuouslyimprovetheireffectivenessand

identifyanyareasforfurthereducationofdirectors.

In2010,externalconsultantswereengagedto

conducttheannualboardevaluationandfeedback

waspresentedtotheboardduring2011.The

evaluationconfirmedthattheSBGboardcontinuesto

operateeffectively.Keyareasforimprovementthat

havebeenorarebeingaddressedinclude:

• Strengtheningofboardexpertiseinspecified

areas.

• Boardtraining.

• Structureandlengthofboardmeetings.

• Improvedcommunicationbetweenboard

committeesandtheboard.

Ongoingboardeducationremainsafocus.Directors

arekeptabreastofallapplicablelegislationand

regulations,changestorules,standardsandcodes,

aswellasrelevantsectordevelopmentsthatcould

affectthegroupanditsoperations.During2011,the

directors’educationprogrammewassupplemented

withexternalcoursesandsitevisitstoNamibia,

NigeriaandUganda.

Ethics

Operatingethicallyearnsthetrustofour

stakeholdersandprotectsourreputation.The

StandardBankandLibertycodesofethicsgovern

ourapproachtoethicalbehaviourandfairbusiness

practice.StandardBank’scodeofethicsinterprets

anddefinesthegroup’svaluesandprovidesa

referencepointtoguidethebehaviourandactions

ofouremployeesinpursuitofourstrategyand

businessunitpriorities.Ethicstrainingisundertaken

throughoutthegroup.StandardBankandLiberty

haveconfidentialandanonymousfraudandethics

whistleblowingreportinghotlinesoperatedby

independentserviceproviders.

StandardBank’scodeofethicsappliesacrossall

countriesinwhichwehavebankingoperations.The

GroupSocialandEthicsCommitteeisresponsible

forgovernanceandoversightofthecodewhilethe

GroupChiefExecutiveandGroupEthicsOfficerare

theformalcustodians.Ethicsofficersineachbusiness

unitareresponsibleforensuringawarenessofthe

codeamongemployeesandprovidingguidanceon

individualethicalconcernsraised.

Internalandexternalawarenesscampaignsare

undertakentoclarifyourvaluesandassociated

behaviours,andtoexplainthemechanismsinplace

toenableouremployeestoadheretothecode.

During2012,wewillengagewithouremployeesto

determinethecurrentperceptionsaroundethicsat

StandardBank.

Liberty’scodeofethicsappliestoitsSouthAfrican

andotherAfricanoperations.

Human rights

StandardBankandLibertyarecommittedto

upholdingtheprinciplesoftheConstitutionofthe

RepublicofSouthAfrica,theassociatedBillofRights

andlabourlegislationinourSouthAfricanoperations.

OutsideofSouthAfrica,weoperatetosimilarlyhigh

standards.StandardBank’svaluesandthecodeof

ethicsareanextensionofthiscommitment.Weuse

twoapproachestoscreenandprocessprojectsin

termsofenvironmentalandsocialrisks,whichinclude

humanrights.TheEquatorPrinciplesareappliedto

projectfinanceloansandaninternallydeveloped



appraisalsystemhasbeenimplementedfor

financialproducttypesbeyondprojectfinance.

Political contributions

Inlinewithaboarddecisionin2010,Standard

Bankcontinuestosupportdemocraticprocesses

inSouthAfricathroughfinancialcontributions

topoliticalpartiesrepresentedintheNational

Assembly.AtotalofR13,5millionwillbe

allocatedtopoliticalpartiesoverthefive-year

electioncyclefrom2010to2014.In2011,

StandardBankdisbursedatotalofR2,1million

(2010:R2,1million).

Regulation Anefficientandeffectivesystemthatregulates

financialmarketsandinstitutions,aswellasthe

conductofbusiness,isessentialtoacountry’s

economicwellbeing.Generally,regulationaims

toachievethreeobjectives:systemicstabilityin

theeconomy,institutionalsafetyandsoundness,

andconsumerprotection.

SBGaimstoembedregulatorybestpractice

inouroperationsinawaythatbalancesthe

interestsofvariousstakeholdersandsupports

long-termstabilityandgrowthinthemarkets

wherewehaveapresence.

Ourbankingoperationsareregulatedand

supervisedineachjurisdictionofoperationby

thehomecountryregulatoryauthorities,with

consolidatedsupervisionfromSouthAfrica’s

primarybankingregulator,theBankSupervision

DepartmentoftheSouthAfricanReserveBank

(SARB).

StandardBankandLibertyworktogetheron

regulatoryissuesthatimpactbothentities.

South Africa

TheregulatoryenvironmentinSouthAfricais

constantlyevolving,withthevolumeandpace

oflegislativeandregulatorydevelopments

overthepastfiveyearsbeingsubstantial.This

hascumulativecostimplicationsforthegroup,

bothintermsofimplementationandpenalties

fornon-compliance,whichcouldbesignificant

ifnotmanagedappropriately.Ourproactive

engagementwiththeSouthAfricanGovernment

andregulatorsenablesustocontributetoshaping

ourlocalregulatoryenvironment.

Upcominglegislationthatwillmateriallyaffectour

operationsincludesthepolicyproposalsoutlinedin

government’spapertitled‘A safer financial sector

Sustainability Expo

Sustainability Expo

OurSustainabilityExpoatStandardBankCentreraisedenvironmentalawarenessamongemployeesandgavethem

anopportunitytoreducetheirenvironmentalfootprint.


to better serve South Africa’publishedinFebruary2011.Thisproposesanewmodelofregulationandsupervision

ofbanksandotherfinancialservicesfirms,inwhichtheSARBisresponsibleforallprudentialsupervisionandthe

FinancialServicesBoard(FSB)forregulatingmarketconduct.Italsoproposesthatanewmarketconductregulator

forbanksisestablishedundertheambitoftheFSB,tofocusonissuesofmarketstructureandbankcosts.Wehave

engagedwiththeauthoritieswithrespecttothebank’sviewsontheimplicationsoftheseproposals.

TheProtectionofPersonalInformationBillprovidesforconditionsofprivacyandprotectionofpersonal

information.TheBillimpactsextensivelyonthegroup,particularlyinrelationtocross-borderinformationflows.

Weareintheprocessofstrengtheningoursystemsinpreparationforthisnewlegislation,whichisexpectedto

becomelawin2012.

OthernoteworthypolicydevelopmentsaretheproposedchangestolandtenureoutlinedintheGreenPaperon

LandReform,andchangestotheregulationofthelabourmarketwithregardstoatypicalemploymentsuchas

part-timeandtemporarywork,aswellasincreasedpenaltiesfornon-compliancewithemploymentequity

legislation.Weareresearchingtheimplicationsoftheseproposedregulationsonourbusiness.

Beyond South Africa

Emergingpractices,particularlyintheUnitedStatesandtheUnitedKingdom(UK),aremonitoredandconsidered

toensurethatweareappropriatelyequippedtomeetinternationallegislativerequirements.

Keyhostcountryregulatorsofourinternationaloperationsinclude,butarenotlimitedto,theUK’sFinancial

ServicesAuthority, theCentralBankofNigeria,theCentralBankofKenya,theCentralBankofUganda,theChina

BankingRegulatoryCommission, theMonetaryAuthorityofSingapore,theHongKongMonetaryAuthorityandthe

CentralBankofArgentina.

IntheUK,reformstothewayfinancialinstitutionswillberegulatedareunderwayandareexpectedtotakeeffect

byend2012.TheseincludethedismantlingoftheFinancialServicesAuthorityandtheUK’stripartitesystemof

regulation.PrudentialsupervisionwillbetransferredtoanewPrudentialRegulationAuthorityundertheBankof

EnglandandtheremainingfunctionsoftheFinancialServicesAuthoritywillbetransferredtoanewConsumer

ProtectionandMarketsAuthority.AnewSeriousEconomicCrimeAgencywillpoliceeconomiccrime.SBGcontinues

tomonitordevelopmentsandwillensureStandardBankPlcremainscompliant.

Sanctions

SBGactivelymanagesthelegal,regulatory,reputationalandoperationalrisksassociatedwithdoingbusinessin

jurisdictionsthataresubjecttoembargoesorsanctions.AGroupSanctionsReviewCommittee,supportedbya

SanctionsDesk,isresponsibleforprovidinggroupwideadviceonallsanctions-relatedmattersinaconstantly

evolvingsanctionsenvironment,particularlyinNorthAfricaandtheMiddleEast.Wecontinuouslyenhanceour

systemstoensuredetectionofpaymentstosanctionedpersonsorentities,andourprocessesaredesignedto

protectthegroupfromparticipatingintransactionsthatcontravenethedirectivesofsanctionsenforcement

agencies.Sanctionstrainingisprovidedtorelevantbusinessareas.


Our approach>regulation

StandardBankisasupporterofthe49 million campaigntosaveelectricity.



“It’s great to see that Standard Bank is approaching

sustainability measures and informing staff about the

importance of cutting down on the use of valuable resources.”

Rushay BooysenStandard Bank employee

Embedding sustainability thinking During2011,weconductedvariousinternal

awarenesscampaignstoshowcaseStandardBank’s

sustainabilityandenvironmentalinitiatives.We

alsoeducatedemployeesonhowtheycanmake

adifferenceintheworkplace,intheirhomesand

communities.

Earth Hour

Forthethirdconsecutiveyear,weparticipatedin

EarthHourandusedthisglobalinitiativetoraise

awarenessaboutenergyconsumption.Weheldan

exhibitionoffoursolarwaterheatingtechnologies

atStandardBankCentre,ourheadofficein

Johannesburg,whereapproximately14500ofour

SouthAfricanemployeesarelocated.Staffwere

offereddiscountedpricesonthepurchaseofsolar

waterheatingsystemsfromtheparticipatingvendors.

Sustainability Expo

Toassistouremployeesinreducingtheirown

environmentalfootprint,weheldathree-day

sustainabilityexpoatStandardBankCentreinwhich

participatingexhibitorssoldordemonstratedtheir

products.Employeeslearnedhowtosaveenergy,the

importanceofwaterconservationandgeneraltips

onlivingagreenerlife.StandardBankisasupporter

ofthe49 millioncampaign,anationalinitiativethat

encouragesSouthAfricanstosaveelectricity.Aspart

oftheexhibition,employeescouldwalkthroughthe

49 millionenergyefficiencyhousetoseehowto

reducetheirenergyconsumptionathome.

The City of Johannesburg Transport Month

StandardBanksupportedtheCityofJohannesburg

TransportMonthcampaignandparticipatedinarace

acrossJohannesburgusingonlypublictransport.The

aimofthiscampaignistoencouragecityresidents

tomakegreateruseofpublictransport.Ourteam

tiedinfirstplace.Wecontinuetoengagewithlocal

authoritiestofindnewwaystoencouragegreateruse

ofpublictransportinfrastructure.Recognisingthat

smallchangescanmakeabigdifference,wehave

undertakeninitiativesthatencourageouremployees

toshareliftstowork.

Awareness presentations

Presentationsonclimatechangeandwaterwereheld

intheStandardBankCentreauditoriumandwere

opentoallinterestedemployees.

Weusedourintranettoaskemployeeswhattheythoughtsustainabilitymeant.Theresultsareshowninthegraphbelow.

What does sustainability mean to you?

Weheldtwoexhibitionsinwhichemployeescouldpurchasesolarwaterheatingsystems

atdiscountedprices.

Ihavenoidea

Longevityofaninstitutionorcommunity

Corporatesocialinvestment

Environmentalissues

15%

63%

7%

15%


Stakeholder engagement


2011 highlights• EstablishedaReputation

Management Forumtofacilitateacoordinatedapproachtostakeholderengagement.

• EstablishedaninternalGovernment Relations Committee.

• DeputyGroupChiefExecutive,SimTshabalala,participatedinseveralCOP17conferencesanddialoguesonfinancing a sustainable future.

• Pilotedemployeeengagement sessionsinourPersonal&BusinessBankingoperationinSouthAfrica.

• SponsoredthefirstGeneralAssemblyoftheWorld Farmers’ Organisation.

• FacilitatedanumberofmeetingsbetweenChina Investment Corporation,China’slargestsovereignwealthfund,andtheSouthAfricanGovernment,withtheaimofdevelopingapipelineofinvestmentforSouthAfrica.

SBG’soperationsdirectlyandindirectlyimpactonandare

impactedbysocial,political,economic,environmental,

legalandregulatoryfactors.Itisthereforeimportantthat

wedevelopsystemsandrelationshipsthathelpusdeal

proactivelywithourbroadbusinessenvironment.Toachieve

this,wemustbuildandmaintainstrategicrelationshipswitha

rangeofstakeholderstomanagesocialexpectations,minimise

reputationalriskandformstrategicpartnerships.

Ourstakeholderrelationsmanagementstrategyisto

continuouslyimprovethealignmentbetweenthegroupand

itskeystakeholders.Misalignmentsbetweenstakeholder

expectationsandthegroup’sactionsinthesocialandpolitical

environmentareidentifiedandresearched.Thisprocessinforms

discussionswithinternalstakeholderstoalertthemtoissues

raisedandtohelpdevelopandcoordinatethebank’sposition.

Detailedquarterlyreportsonstakeholderrelationshipsand

relatedissuesareprovidedtotheboard.TheSouthAfrican

Government,includingnational,provincialandlocal

government,isaprioritystakeholderandassuchwehave

introducedaGovernmentRelationsCommitteetoshare

informationandcoordinateourengagementwithgovernment

acrossallbusinessunitsandfunctions.

Stakeholder relations

SBG’s stakeholders

Our stakeholders

NationalTreasury

Regulatorsandsupervisors Shareholders

Ratingagencies

Financialanalysts

Tutuwabeneficiaries

BeneficiariesoftheStandardBank

GeneralStaffShareTrust

Customers

Suppliers

Sportingandartcommunities

Youth

Institutionsofhigherlearning

Researchorganisations

Employees

Tradeunions

Media

Socialmedia

Environmentalnon-governmentalorganisations

Governments

Civilsocietyorganisations

ProvincialmunicipalitiesinSouthAfrica

Donoragencies

Professionalorganisationsandbusinesscommunity


Issues raised Our response Page

Shareholders and investment community:

Concernsraisedregardingthegroup’srelativelylowreturnonequityandrelativelyhighcost-to-incomeratio.

•Thegroup’sreturnonequityimprovedin2011butweacknowledgethatitisstilltoolow.Wehavecommittedtomanagingtheleversofreturnonequityaggressivelytoimprovetheratio.However,wewillnotundermineourgrowthplanstoachieveshort-termreturns.Weunderstandthatstrikingtherightbalancebetweengrowthandreturnsisintegraltocreatingsustainableshareholdervalue.

•Wecommittedtokeepingcostsflatin2011whichweachievedandwhichhelpedreducethecost-to-incomeratio.Astrongfocusoncostswillbemaintainedinthegroupgoingforwardgiventhatrevenuegrowthisstillexpectedtobesomewhatsubdued.

Business community and shareholders:

Integratingfinancialandnon-financialreportingtostakeholders.

•WewererepresentedontheIntegratedReportingCommitteeWorkingGroupwhichdraftedtheSouthAfricanIntegratedReportingFrameworkreleasedin2011.

•TheDirectorofGroupSustainabilityManagementchairstheGRI’sStakeholderCouncilwhichfocusesonunderstandingstakeholdertrendsinsustainabilityreporting.

•Our2010AnnualIntegratedReportwasrankedfifthintheErnst&YoungExcellenceinCorporateReportingAwards.TheawardssurveyedSouthAfrica’stop100companies.

Customers:

OurresponsetotheincreaseinthenumberofInternetBankingphishingattacks.

InSouthAfrica,weofferfreeanti-phishingsoftwaretocustomersandweconstantlyrunawarenesscampaigns.Thepreventativemeasuresimplementedhavereducedthenumberofconfirmedphishingattemptsby62%andthefraudlossthuspreventedtotalledR81million.In2011,weworkedwiththeSouthAfricanBankingRiskInformationCentre(SABRIC)tolaunchphishingandcardskimmingmediacampaigns.

49

South African Government:

Thefinancialservicessector’scontributiontothedevelopmentofSouthAfrica’seconomyandpartnershipswithgovernmentonthesedevelopmentinitiatives.

•Weprovidegovernmentwithawiderangeofadvisoryandfinancialservices.

•Wefacilitateinfrastructuredevelopmentandbuildcapacitybysharingourknowledgeandexperience.

•Weworkwithgovernmentonareasofcommoninterest.Someoftheprojectswesponsoredorpartneredwithgovernmentinclude:theDepartmentofInternationalRelationsandCooperationHeadsofMissionConference,theCityofTshwaneInvestmentSeminar,theAfricanRenaissanceConferenceandthelaunchoftheSouthAfricanLocalGovernmentAssociationGautengInductionProgrammefornewcouncillors.

South African Government, customers and non-governmental organisations:

Climatechangeandrisinggreenhousegasemissions,aswellastheshortageofenergy.

•During2011,weparticipatedintheCOP17internationalclimatechangeconference.

•InthefirstbiddingphaseoftheREIPPPProgramme,togetherwithourclients,wewon13bidswithaninstalledrenewableenergycapacityof605megawattsandatotalfinancingrequirementofR8,2billion.Thisequatesto38%and58%ofthemegawattsavailablefromthesolarandwindprojectsacceptedinthefirstphaseoftheprogramme.

•During2011,wespentR19,1milliononenergyefficiencyprojectsinourSouthAfricanoperation,includingphotovoltaicsystemsintwoofficecomplexesandanationalrelampingproject.

•Wehavedevelopedandimplementedenvironmentalandsocialriskmanagementtoolstoensurethatthecompanieswelendtomitigatetheserisks.

•Welaunchedprogrammesenablingourcustomerstoaccesscarboncreditstoreducetheircarbonfootprints.

76,78,80,81,82




Issues raised Our response Page

Environmental groups:

Fundingcoal-firedpowerstations.

WerefutetheallegationsmadebyenvironmentalactivistsatCOP17thatwearea‘climatekiller’duetoourlendingtothecoalindustry.EnergysecurityiscriticalanditissimplynotpossibleforSouthAfricaoranyotherdevelopingcountrytostopusingcoal-firedpowergenerationatthistime.Atthesametime,wearecommittedtofinancingrenewableenergydemonstratedbytheR8,2billionlineofcreditinsupportofbidsforthefirstphaseoftheREIPPPProgrammetobuildindependentrenewableenergy-generatingcapabilityinSouthAfrica.Wehavealsobeeninvolvedinlarge-scalewindprojectsinBrazilandKenya.

81

Investment analysts, development finance institutions and other stakeholders:

StandardBank’spolicyonenvironmentalissues.

•Weactivelyparticipateinanumberofworkgroupsandforumsonsustainabilityandenvironmentalissues.

•WeareamemberoftheUnitedNationsEnvironmentProgrammeFinanceInitiative(UNEPFI),aninternationalbodywhichbringstogetherrepresentativesoffinancialinstitutionsonissuesofenvironmentalmanagement.

•Ourinternalenvironmentalandsocialpolicyaddressesenvironmentalconcerns.

•WehaveimplementednewenvironmentalandsocialriskassessmenttoolsinourCorporate&InvestmentBankingbusinessandweareasignatorytotheEquatorPrinciples.

•ThroughtheBankingAssociationofSouthAfrica,BusinessUnitySouthAfricaandtheNationalBusinessInitiativeweengagewithgovernmentonissuesofnationalenvironmentallaw,policyandstrategy.

76,77,79

Employees:

Effectivelyengagingwithouremployees.

•Followingtheretrenchmentsin2010,weanticipatedlowerlevelsofemployeemorale.WehaveimplementedstaffengagementinitiativesincertainbusinessunitsandsimilarapproachesarebeingconsideredforimplementationacrossSBG.Anumberofemployeesurveysareplannedfor2012tomeasureengagementandorganisationalculture.

•ThemostcommonissuesraisedwithIndependentCounsellingandAdvisoryServices,aconfidentialsupportservice,areincreasedstresslevels,legalandrelationshipproblems,andissuesrelatedtotheworkplace.Wehaveacomprehensiveemployeewellnessprogrammethathelpsemployeesdealwiththeseconcerns.

60

National governments and customers:

Workinginemergingmarkets.

•ThroughourpartnershipwithICBCwehavebeeninvolvedinmanycooperativeprojectsinAngola,Botswana,Brazil,Ethiopia,Ghana,Nigeria,Russia,Venezuela,Zambiaandotherselectedemergingmarkets.TodatewehavejointlyraisedinexcessofUSD5billion(R36,3billion)forinfrastructureprojectsinAfrica.

•AsamemberoftheEquatorPrinciplesSteeringCommitteeandchairoftheAfricanoutreachworkinggroup,weengagewithgovernmentandotherfinancialinstitutionsinemergingmarketsonenvironmentalandsocialriskmanagementmeasuresintheirdebtandequitybusiness.During2011,wepresentedattheNigerianSustainableFinanceweekandengagedwiththeChinaBankingRegulatoryCommission,therebycontributingtowardstherespectivedevelopmentoftheNigerianSustainableBankingPrinciplesandtheChineseGreenCreditGuidelines.

50

Customers:

Supportingsmallandmediumenterprisesandagriculture.

•Weintroducedanewcreditevaluationapproach,enablingustoincreaseourriskappetiteforprovidingfinancetosmallbusinessesacrossourAfricanoperationsincludingSouthAfrica.

•Weselected13smallblackenterprisestoparticipateintheTutuwaCommunityTrust,ourBEEownershipscheme.

•InSouthAfrica,wearethemainsponsoroftheNationalSmallBusinessChamberandtheannualBusinessOpportunitiesandFranchisingExpo.WesponsoredthefirstGeneralAssemblyoftheWorldFarmers’Organisationestablishedin2011.Thisprovidedanopportunitytoengagewithbothnationalfarmers’andagriculturalcooperativeorganisationsfromallcontinents.

25,30,31

Socioeconomic development


Soci

oec

on

om

ic

dev

elo

pm

ent

Transformation

Inclusive financial services

Enterprise development

Addressing development in Africa

Sustainability in the supply chain

Investing in communities


Norman Catherine, Requiem, 1994, oilstick on paper, 130 x 112cm.Exhibited in the Standard Bank Gallery as part of the ‘Water, the [Delicate] Thread of Life’ exhibition.

Socioeconomic development Socioeconomic development

2011 highlights• Atotalof13BSMEswereselectedtoparticipatein

theTutuwaCommunityTrust.

• Since2007,StandardBankhashelpedmore

than300 000low-incomeearningSouthAfricans

buyhomes.

• LaunchedaBusiness Response Centretoimprove

ourengagementwithsmallbusinesses.

• LaunchedSME Quick Loans,anunsecuredloan

offeringforsmallandmediumenterprises(SMEs).

• Introducedasustainability questionnaireaspartof

oursuppliertenderingprocess.

Standard Bank Group (SBG) recognises that the private sector plays a central role in the development of countries. Businesses are able to contribute to the investments required to stimulate economic development and to mitigating risks posed by global challenges.

To this end, SBG works to provide financial services to marginalised communities through innovative solutions, including financing and supporting small businesses and smallholder

farmers. The financial services we supply to businesses support their ability to operate and grow, ultimately facilitating employment. In addition, we invest in infrastructure

development, finance and advise governments, facilitate trade between markets, partner with organisations that lead global efforts to fight poverty and HIV/Aids and aid in the distribution of donor funds. Our procurement spending and corporate social investment

also encourage social development.

R75 billion in personal and small business loans provided to our customers in South Africa.

R167 million in dividends paid out to black managers and BSMEs participating in our Tutuwa trusts.

1 356 636 new customers that had previously been unbanked.

Our opportunities

Banking marginalised communities

through providing

relevant financial products.

Developing solutions that enable us to lend to small

enterprises and smallholder

farmers.

Financing the infrastructure requirements of developing

economies.

Working with strategic

partners to drive investment in

Africa.

Transforming our business to gain

a competitive edge and

increase our customer base.

Investing in communities to increase individual

welfare, and so become their

future bank of choice.

2011 Sustainability Report22

Our challenges

Duetotheeconomicdownturn,someofourTutuwaCommunityTrustblacksmallandmediumenterprises(BSME)

beneficiarieswentintoliquidation.

Ourstrategytomigratecustomerstolow-costchannelsissupportedbyconsumereducation,whichduetobudget

constraintswasreducedby30%toR14million.

Despiteourinitiativestomakefinancialservicesmoreinclusive,20%oftheInclusiveBankingtransactional

customeraccountsareinactive.



Measuring performance

ThemostfundamentalcontributionSBGmakestotheeconomiesinwhichweoperateisbymaintainingarobust

business.Thisallowsustopaydividendstoourshareholders,salariestoouremployeesandtaxtogovernments.As

abuyerofgoodsandservicesweplayanimportantroleinsupportinglocalbusinesses,whichprovidesemployment

anddrivessocioeconomicdevelopmentinlocalcommunities.Inaddition,ourcorporatesocialinvestment(CSI)makes

ameasurabledifferencetorecipientsandcommunitiesthatSBGdependsontoremainsustainable.Thetotalwealth

createdbythegroupin2011wasR50billion,anincreaseof12%from2010.

Group value added statement

2011 2010

Rm % Rm %

Distribution of wealth

Employees 23 109 46 21872 49

Government 7 862 16 6563 15

Ordinaryshareholders 6 035 12 5974 14

Non-controllinginterestsandpreferenceshareholders 2 558 5 2233 5

CSIspend 114 134

Retentionstosupportfuturebusinessgrowth 10 218 21 7589 17

Wealth applied 49 896 100 443651 100

1 Restated. √ Externally assured (refer to assurance statement on page 89).Note: includes discontinued operations relating to Argentina.

Key SBG indicators 2011 2010 2009

Infrastructurefinancing:sub-SaharanAfrica Rm 77 117 901

CSI spend Rm 114,3 134,01 104,41

StandardBankSouthAfrica Rm 71,6√ 99,5 69,6

StandardBank–restofworld Rm 10,2 4,0 2,0

Liberty Rm 32,5√ 30,5 32,8

Transformation

StandardBankSouthAfrica % 92,47* 92,83 77,62

Liberty % 85,70* 75,03 69,19

Key Standard Bank South Africa indicators 2011 2010 2009

Directandindirectjobssustained2 109 400 160000 105000

Transformation

NumberofInclusiveBankingcustomers 5 365 974 4808605 4801136

NumberofMobileMoneyAccounts 625 326 153398 27738

Consumereducationspend Rm 14,0 20,1 21,0

Targetedinvestment Rm 7 270* 7528 6908

Blackeconomicempowerment(BEE)transactionfinancing³

Rm 22 048* 20006 19859

Affordablehousingloans(cumulative) Rm 21 285* 17460 14480

ProcurementspendwithBEEsuppliers Rm 17,3* 15,7 7,2

¹ Restated.² Calculated using an employment multiplier of 3,2 as per Statistics South Africa.³ BEE transaction financing measures the 12-month weighted average balance outstanding on funding advanced for the period

ended 31 December 2011.√ Externally assured (refer to assurance statement on page 89).* Externally verified.



Transformation“Achieving transformation targets and driving a more inclusive philosophy around

transformation is an executive responsibility.

I am held accountable for meeting our targets. This is a responsibility I am very pleased to have and regard it as crucial to the future of Standard Bank”.

Sim TshabalalaChief Executive of Standard Bank South Africa

South AfricaTransformationisasocialandeconomicimperativefor

SouthAfrica’slong-termfuture.Theultimatepurpose

oftransformationistoaddressthesystematic

exclusionofthemajorityofSouthAfricansfromfull

participationintheeconomy,particularlyblackSouth

Africans,peoplewithdisabilitiesandwomen.

Empowermentcontributestothenationalimperative

ofcreatingjobs,whichpromotessustainablegrowth

andsocialstability.Inturn,thispositivelyaffects

SouthAfrica’screditratingandtheperceptionsof

internationalinvestors.Byprovidingaccesstocredit

andfinancialservices,bankshaveamajorimpacton

transformation.

AtStandardBank,weaimtocreateaculturethat

embracesopenness,fairnessanddiversity.We

wantthisculturetobeatangible,everydayreality

forouremployees,customers,stakeholdersand

thecommunitiesweserve.Wefirmlybelievethat

successfultransformationiscentraltoourongoing

competitiveness.

Ourtransformationprogressiscurrentlymeasured

againsttheDepartmentofTradeandIndustry’s(dti)

CodesofGoodPracticeforBroad-basedBlackEconomic

Empowerment(codes).During2011,accredited

BEEverificationagenciesconductedindependent

assessmentsofbothStandardBank’sandLiberty’sBEE

performanceagainstthedticodes.StandardBankand

Libertyqualifyfavourablyasleveltwocontributorsina

nine-levelmodel,withverifiedoverallscoresof

92,47and85,70outof107respectively.

Thedticodesexcludeuniquelyfinancialsector-specific

elements,namelyaccesstofinancialservicesand

empowermentfinancing.Giventheirimportancein

drivingeconomictransformation,wehavecontinuedto

deliverandreportonthesetwoelements.

TheGroupSocialandEthicsCommitteeprovides

board-leveloversightandmonitorsourprogressin

meetingourtransformationtargets.Italsoensures

compliancewithcurrentandevolvingBEElegislation.

Thisaccountabilityatboardlevelistranslatedinto

scorecardsforindividualbusinessunits,whichare

closelymonitoredbyexecutivemanagement.

Financial sector code

From2003totheendof2008,theframework

foradvancingtransformationandequitablegrowth

intheSouthAfricanfinancialsectorwasthe

FinancialSectorCharter(charter).Althoughwidely

endorsed,thecharterwasnotlegislated.Itwas

rewrittenasadraftfinancialsectorcode,butdue

toindustrystakeholdersbeingunabletoagreeon

therequirementsofthecode,thedticodeshave

continuedtogovernthetransformationofthe

financialsector.Theprocesstoconvertthevoluntary

statusofthechartertothatofasectorcodeinterms

oftherelevantlegislationwasconcludedinprinciple

attheendof2011,withStandardBankbeingan

activeparticipantintheprocess.TheFinancialSector

CodeofGoodPracticewasgazettedforthesecond

phaseofpublicopinioninMarch2012.

Ownership

StandardBankconcludeditsBEEownership

transaction,Tutuwa,inOctober2004,resultingin

10%directownershipofourSouthAfricanoperations

bytheTutuwaBEEconsortiumledbywell-established

BEEinvestmentcompaniesSafikaandShanduka.

TheTutuwaShareSchemeconsistsoftwoelements

namelytheTutuwaManagersTrusts,inwhichthe

beneficiariesareourownblackmanagers,andthe

TutuwaCommunityTrust,whichisfocusedonBSMEs

andcommunitydevelopment.

In2006,participationrightswereawardedto250

qualifyingBSMEsundertheTutuwaCommunityTrust.

Forvariousreasons,asmallnumberoftheseBSME

beneficiariesnolongerqualifiedintermsoftherules

andweactivelylookedtoreplacetheseBSMEs.During

2011,13additionalcandidateswereselectedto



participateinthetrust.Insixcasesthelevelofblackwomenownershipis50%orhigherwithtwobusinessesbeing

100%ownedbyblackwomen.At31December2011,eachnewbeneficiaryheld20000sharesworthapproximately

R1,1million.TheseBSMEsareincludedinourenterprisedevelopmentinitiativesandweprovidethemwithaccessto

ourprocurementprocessestoenablethem,wherefeasible,tobecomesupplierstothebank.

Currently,6185blackmanagersparticipateintheTutuwaManagersTrusts,ofwhich4677arestillemployedat

StandardBank.Thetrustsserveasaretentionmechanisminthatbeneficiariesthatleftthebank’semploypriorto

December2010retainedaportionoftheirshareholding,whilethoseleavingafterthisdateretain100%oftheir

shareholding.InMarchandAugust2011,SBGpaiddividendsofR2,45andR1,41perordinaryshare,respectively,

amountingtoatotaldividendpayoutofapproximatelyR167milliontoblackmanagersparticipatingintheTutuwa

ManagersTrustsandBSMEsparticipatingintheTutuwaCommunityTrust.

Localisation in our operations beyond South AfricaAfricancountriesareincreasinglyundertakingeconomictransformationprocesses,aspectsofwhicharesometimes

referredtoasindigenisationorlocalisation,toensuregreaterbenefittolocalpeoplefromforeigninvestmentsin

theirnationaleconomies.StandardBankengagesconstructivelyinthedebatearoundtheseinitiativesinaneffort

tobalancethelegitimateexpectationsofnationalswiththereasonablerightsofinvestors.Forexample,inNamibia

weco-authoredandareasignatorytotheNamibiaFinancialServicesCharterlaunchedin2010.Thecharter

providesaframeworktoadvancelocalisationoftheNamibianfinancialsectorandincludeselementssuchasthe

provisionofinclusivefinancialservicesandskillsdevelopment.

WithinourAfricanoperationswehirelocallyandinvestinthedevelopmentoflocaltalentatbothgrassrootsand

leadershiplevels,contributingtothedevelopmentoflocalleaders.Asamulti-nationalorganisation,weprovide

ouremployeeswiththeopportunitytoparticipateincross-borderintra-Africanassignmentsasakeydevelopment

intervention.

dti codes scorecards

Standard Bank Liberty

CategoryAvailable

points

2011 verified results

2010verifiedresults

2009verifiedresults

2011 verified results

Ownership 23 20,18 20,00 13,98 20,02

Control 11 8,46 8,25 8,30 6,04

Employmentequity 18 12,44 12,54 9,43 10,15

Skillsdevelopment 15 12,02 12,04 8,54 10,05

Preferentialprocurement 20 19,37 20,00 17,37 19,44

Enterprisedevelopment 15 15,00 15,00 15,00 15,00

Socioeconomicdevelopment 5 5,00 5,00 5,00 5,00

Total score 1071 92,47 92,83 77,62 85,70

1 Includes seven bonus points allocated over the ownership, control and employment equity pillars. Note: externally verified.



SBG’sstrategicdrivetomakefinancialservicesmore

inclusive,aimstocreatebankingandinsurance

solutionsthatareaccessibletothemillionsof

economicallyactivepeopleinAfricawhofalloutside

themainstreamfinancialsector.Toeffectivelyreach

thismarketwemustunderstandtheneedsand

requirementsofunbankedcustomers.Akey

initiativetobankthismarketprofitablyand

sustainablyisdevelopingbankingmodelsthatutilise

low-costdistributionchannelssuchasmobilebanking

andcommunityretailers(accesspoints),andoffer

productsthatareaffordable,easilyaccessibleand

simpletouse.

Asthespendingpoweroflow-incomeindividuals

increases,wewillbeabletomigratesomeofour

InclusiveBankingcustomerstomiddle-marketand

associatedproducts.

Accessible banking products

South Africa

StandardBank’sInclusiveBankingunit,established

in2010,hasmadegoodprogressindelivering

affordablebankingproductsthroughtheaccess

pointsincommunityretailshops,mobilebankingand

loancentrechannels.Thesuccessoftheselow-cost

channelsdependsoncustomers’willingnesstomove

awayfromtraditionalaccesspointssuchasbranches.

Thisrequiresthatwecontinuouslyinnovateand

developadeepunderstandingoflocaldynamics,

supportedbyongoingconsumereducation.

During2011,StandardBankacquired1356636

(2010:938052)transactionalcustomerswhoare

newtobanking,bringingthenumberofInclusive

Bankingcustomerswithatransactionalaccountto

5,4millionatDecember2011.Thisaccountsfor

59%ofthetotalPersonalBankingcustomerbase

inSouthAfrica.Some4,3millionInclusiveBanking

customersareactive.Currentlyanaverageof

4,6revenue-generatingtransactionsper

customerpermonthtakeplacethroughthese

low-costchannels.

Theaccesspointmodelallowsustoprovidebanking

atlowercosttothelow-incomemarketwhile

reducingouroperatingcosts.Theshopowners

becomecustomersofthebankandbenefitfrom

increasedcustomervisitstotheirshops.Oncean

accountisopenedatanaccesspoint,theMobile

MoneyAccountapplicationisenabledonthe

customer’scellphone.Thisallowsthemtodeposit

andwithdrawmoney,buyairtimeandelectricity,and

purchasegoodsfromtheshop.Inaddition,adebit

cardisissuedwhichcanbeusedatallATMs,withfees

chargedonaper-transactionbasis.

During2011,weofferedtheMobileMoneyAccount

inanadditional13areasacrossSouthAfricaenabling

growthofsome52000newcustomersamonth

throughournetworkof4976activeaccesspoints.

Todate,thebulkoftransactionsfacilitatedthrough

theseaccesspointshavebeenairtimeandelectricity

purchases.Around55%oftheMobileMoneyAccounts

thatwereopenedinthelastfourmonthsof2011are

active,meaningthattheaccountshavepositivebalances

andthereareatleasttwotransactionsamonth.

Lookingaheadweintendtoleverageourexisting

customerbaseofbigmanufacturingandagricultural

businesses,whichpaycashwages,toprovidetheir

workerswiththeMobileMoneyAccount.Wewillalso

looktodeployotherelectronicbankingchannelsat

ouraccesspoints,aswellasadditionallendingand

savingsproducts.

TheinitialsuccessofourPersonalTermLoan,

alendingproductforthelow-incomemarket,

waslowerthananticipated.Afterengagingwith

targetcustomerswewereabletogainabetter

understandingofunsecuredlendingtotheinformal

sector.Theproductwasrevisedandweincreased

ourmarketawarenessinitiatives.Theresulthasbeen

growthofthisproductofferingwithcurrentdaily

salesinexcessof1000.Thisimprovementisalso

Inclusive financial services“Inclusive Banking provides us with a unique opportunity to take financial services to a level where you can create value within a community. New technology has helped us to

identify opportunities much deeper into the social strata of South Africa.”

Leon BarnardHead of Inclusive Banking

Socioeconomic development>inclusive financial services>accessible transactional banking and affordable loans



attributabletotheaccessibilityofStandardBank’sloan

centresaswellasrisk-basedpricing,whichensures

thatlower-riskcustomerspayless.AtDecember2011,

StandardBankheldover306000PersonalTerm

Loanaccountsandhad105loancentresacrossSouth

Africa.Wehavesetatargettohave170loancentres

operationalattheendof2012.

Attheendof2010,weconcludedapilotofour

communityinvestmentfundsinitiative,whichoffered

unsecuredmicroloanstoinformalbusinesses.Weare

usingthelessonslearnedtocreateamicro-finance

institutionforthismarket.Weplantopartnerwith

registeredenterprisedevelopmentorganisations

inthisregard,toprovideskillsdevelopmentbefore

lendingactivitycommences.Ourintentionistobuild

thisinitiativeintoaseparatenot-for-profitinstitution,

controlledbyStandardBank,andcapitalisedby

theTutuwaCommunityTrust.Thebankwillderive

noincomefromthefundsasallreturnswillbe

reinvestedintothebusiness.

Sub-Saharan Africa excluding South Africa

Weacknowledgethat,duetotheunique

circumstancesofdifferentcommunitiesand

countries,whatissuccessfulinSouthAfricacannot

necessarilybeimporteddirectlyintootheroperations

acrossAfrica.However,successfullyimplementing

low-costbankingmodelswithinourdomestic

operationprovidesuswithagoodplatformfor

developingsimilarmodelsforlow-incomemarkets

beyondSouthAfrica.

StanbicIBTCBankinNigeriahirescommunityleaders

asbankagents,whooperateonfootinandaround

themarketsandactivecommercialareascollecting

depositsfrominformaltraders,domesticworkers,

artisansandstudents.Theagentsusehand-held

pointofsaledevicesthatusethecustomer’sbank

cardasproofofidentity.Customerscantransactat

anybranch,pointofsaleterminalorATMinNigeria.

AtDecember2011,approximately80000

(2010:38000)traderaccountshadbeenopened

sincethelaunchoftheproductin2009.

Accessible insurance productsInSouthAfrica,StandardBankisdevelopingfuneral

insuranceandcreditlifeassuranceproductstocater

forthelow-incomemarket,alignedtothemodels

implementedwithinourInclusiveBankingunit.

Number of Inclusive Banking customers(Standard Bank South Africa)

MobilebankingvansinMalawideliverconvenientbankingservicestocustomers.

R299 million paid out in funeral claims during 2011,

assisting 37 415 families.

Case study: Mobile Money Account

4,8m 4,8m

5,4m

4 400 000

4 600 000

4 800 000

5 000 000

5 200 000

5 400 000

5 600 000

2009 2010 2011

Value of Fundisa and Chuma accounts(STANLIB)

30,3

7,1

17,4

30,3

5,1 7,3

14,3

0

5

10

15

20

25

30

35

2009 2010 2011

Rm

Fundisaaccounts Chumaaccounts



OurFuneralPlanprovidescustomerswithanumber

ofaffordablecoveroptionstochoosefrom,enabling

themtoburytheirlovedoneswithdignityand

respect.Wecurrentlysellabout1800funeral

policiesaday,ofwhichapproximately400aresoldin

conjunctionwiththeMobileMoneyAccount.

During2011,wesold438887FuneralPlans

(2010:297191).

Tosupportcustomerswhohaveirregularincomesor

areseasonalworkers,our‘pay-as-you-go’Funeral

Plan,tobelaunchedin2012,willallowthese

customerstopayfor14months’worthofcoveratan

affordableannualpremium.

Ourcreditlifeofferingmakescreditmoreaccessible

tothelow-incomemarketwhileprotectingthe

dependentsoftheborrower,assistsinwealth

creationandprovidesriskmitigationforthebank.

Libertysellssimplelifecoverplans,memberand

familyfuneralplans,savingsproductsandgroup

loanprotectionproductstothelow-incomemarket.

STANLIB’sproductsinthissegmentincludeChuma,

aninvestmentvehicleforburialsocieties,taxi

federationsandothergroups;theFundisaunittrust

fundtohelpcustomerssavefortertiaryeducation,

andageneralequityfund.

ThemainchallengefacedbyLiberty’sEmerging

ConsumerMarketunitin2011wastheFinancial

AdvisoryandIntermediaryServices(FAIS)

examinationsforfinancialadvisers.Thereasons

forthelowerpassrateamongEmergingConsumer

Marketadvisersarethattheexaminationcontentis

farremovedfromtheirdailyworkexperienceand

isnotpresentedintheirhomelanguage.Thisisan

industry-widechallengeandLibertyisengagingwith

theFinancialServicesBoardtofindasolution.

ToimprovethequalityofitsEmergingConsumer

Marketbook,Libertyappliedstrictercriteriato

newbusinesstakenonduringtheyear.Although

thisresultedinadecreaseinthenumberofnew

emergingmarketpoliciessold,from120737in

2010to87021in2011,therehasbeenadecrease

inthenumberoflapsedorwithdrawnpolicies.The

largestproductcategorybyvaluewithinthismarket

segmentisfuneralplans,withthestandardfuneral

planproducthavingthebiggestexistingbooksize.

ThevalueofFundisaandChumaassetsunder

managementpostedacombinedtotalincreaseof

R20millioncomparedto2010.

Consumer educationInSouthAfrica,StandardBank’sconsumereducation

activitiesprovidegeneralfinancialeducation

particularlytopeopleintheinformaleconomy.

Ourprogrammesaredesignedtointroduceformal

financialservicestounbankedcommunitiesand

increaseunderstandingoftheterminologyand

suitabilityoffinancialproducts.In2011,Standard

BankspentR14milliononconsumereducationin

SouthAfrica,a30%reductionon2010duetoa

lowerbudgetallocation.

Weendeavourtoensurethatourfinancialliteracy

contentremainsrelevanttothetargetaudience.

However,itremainsdifficulttomeasuretheimpact

ofourinitiativesandwhethertheychangefinancial

behaviour.Wehavecontinuedourinvolvementinthe

schools-basedfinancialliteracyprogramme,Winning

Teams.During2011,weincreasedourreachto

anadditional800schoolsacrossSouthAfrica,now

reachingatotalof2500schoolsandapproximately

500000gradetenandelevenlearners.Feedback

fromeducatorsisthatthebenefitsoftheprogramme

tolearnersincludeimprovementindiscipline,listening

skillsandtheabilitytoworkindependently.

Inour2010reportwesaidwewouldrollouta

businessmanagementprogrammeforinformal

businessesinSouthAfricato12communities.Wedid

notmeetthistargetduetoaconstrainedbudget.

Liberty’sconsumereducationinitiativesaredelivered

throughworkshopsatworkplacesandwithinselected

communities.ItsponsorstheJohannesburgStock

Exchange’sInvestmentChallenge,whicheducates

secondaryschoollearnersanduniversitystudents

onhowtoinvestinthestockexchange.Inaddition,

STANLIB’sInvestmentAcademyoffersNational

QualificationsFrameworkLevel1accreditedcourses

inbudgeting,savingsandinvestmentsat

16historicallydisadvantageduniversitiesandFurther

EducationandTrainingcolleges.During2011,

Liberty’sconsumereducationspendamountedto

R4,9million.

Inpreviousyears,Libertyfocuseditsconsumer

educationinitiativesexclusivelyonthe

KwaZulu-Natalprovince.In2011,Libertyexpanded

itsregionalapproachtoincludetheEasternCape,

FreeStateandLimpopoprovinces.Thisincreasedthe

reachofitsinitiativesfrom11376in2010to

22861peoplein2011.



Affordable housing Wearecommittedtofindingsustainablesolutions

thatincreaseaccesstoaffordablehousingfinancefor

customerswithanincomelevelofbetween

R3500andR15738amonth.Inadditionto

thehousingshortageinSouthAfrica,thistarget

marketoftendoesnotmeetlendingcriteriadue

toalreadyhavinghighlevelsofindebtednessand

impairedcreditrecords.StandardBank’sstrategy

toincreasehomeownershipistoimplement

effectiveriskmitigationthroughborrowereducation,

appropriatecreditassessmentsandengagingwith

keystakeholders,specificallyourcustomers,to

understandtheirneeds.

During2011,wegrantedR3,3billioninaffordable

housingloansthroughapproximately9500home

loans.Ourtargetistodoubleouraffordablehousing

homeloanbooktoR20billionby2015.

Low-incomeearnerswhobelongtopensionand

providentfundscanenterintoagreementswith

StandardBank’sPension-backedLendingunitin

SouthAfrica,toaccessfinancetobuy,buildor

renovateahome.In2011,thisunitissuedloansto

thevalueofR382million(2010:R479million).

Wearepilotingarent-to-buyhousingmodel

designedtohelpcustomerswithimpairedcredit

recordsqualifyforhomeloansinfuture.The

initiativedefersownershipforaperiodoftime,

forexample12to18months.Duringthisperiod

thecustomerpaysrentonthehome.Thebank

approvesfinancingoncethecustomerisableto

demonstratethattheycanaffordtherent,ratesand

otherresponsibilities,andhavecompletedadebt

rehabilitationprogramme.Aportionoftherental

amountisusedtocontributetowardsthebond.Part

ofthisinitiativeistoensurethatthesecustomers

areabletoaffordtopaytheirdebtswheninterest

ratesrise.

StandardBank’sIntegratedResidentialDevelopment

unitcombinesexpertisefromacrossthebankinto

acomprehensiveapproachtofinancingquality

affordablehousingdevelopments.Weprovide

relevantfinancialproductssuchasdevelopment

loans,bridgingandtermfinance,aswellasequity

participationtoexperienceddevelopersand

publicsectorentities.Ourtargetmarketincludes

integratedresidentialdevelopments,affordable

housingdevelopmentsandinnercityrefurbishments.

Value of affordable housing loans granted(Standard Bank South Africa)

Approximately 9 500 affordable housing loans granted to

low-income earners.

Consumer education spend (Standard Bank South Africa and Liberty)

21,0 20,1

14,0

7,4 5,7

4,9

5

10

15

20

25

30

2009 2010 2011

Rm

Standard Bank Liberty

0

1,0

2,2

3,3

0,5

0,5

0,4

0,1

0,2

0,1

0

1

2

3

4

2009 2010 2011

Rbn

StandardBank

Housingfinance

Liberty

Pension-backedlending

Integratedresidentialdevelopment

AvonGardensintegratedhousingdevelopment. Case study: integrated housing developments



Environmental considerations

Wepromotetheuseofselected’green’interventionsinnewresidentialdevelopmentprojectsinwhichweare

involved.During2011,StandardBankwasinvolvedinthepublicationof‘SomeGreenBuildingGuidelinesfor

HousingDevelopments’,aguideforgreeninglow-costhousing.Theguidealsosupportsasustainablehousing

calculator,whichenablesuserstocalculatetheadditionalcostincurredbyimplementingaselectedgreen

intervention,thereductionincarbonemissionsthatcanbeachievedandhowlongitwilltakeforthehomeowner

torecovertheadditionalcostfromthesavingsachieved.

Youth marketDuring2011,Personal&BusinessBankinglaunchedtheStudentAchieverYouthPortal,afirstforSouthAfrica.This

onlinemulti-channelportalcaterstotheneedsoftheyouthmarketandoffersusers,predominantlybetweenthe

agesof16and22,relevanteasy-to-understandinformationaboutfinancialservicesandproducts.Wedeveloped

apartnershipwithe.tvyouthprogrammes,knowncollectivelyasCraz-eWorldLive,toprovideinteractivewebcasts

ofinterviewswithrelevantcelebritiesandexpertsforusersoftheportal.Thesewebcastshavethepotentialto

reachanestimatedonemillionpeoplepermonthandprovideuswithanadditionalmeanstoincreaseourfinancial

literacyreach.Wewillusethistooltoinformthecreationofnewproductsandservicesforthismarket.Over

125500YouthPortalregistrationstookplacesinceitslaunchinJuly2011.

Shari’ah BankingAnestimated29%ofpeopleinsub-SaharanAfrica,approximately240millionpeople,areIslamic.Thisprovides

asignificantopportunityforStandardBankAfricatoprovidebankingproductsandservicestothismarket.The

fundamentalprinciplesofShari’ahBankingincludetheprohibitionoftakingandpayinginterest,andinvestingin

businessesthatdonotcomplywiththerulingsoftheQuran,suchasthosethathaveanassociationwithgambling

oralcohol.WeofferShari’ah-compliantproductsinourTanzanianoperation.During2011,StandardBankreceived

approvalfromNigeria’scentralbanktoprovideIslamicBankingservices.Thispreliminarylicenseisthefirsttobe

grantedtoacommercialbankinNigeria.

Enterprise development“This mentoring has helped me to understand what sort of people I need around me in

order to win as a business, and how to fill the gaps with people who can do what I don’t. Every mentoring session I have is like free education for my team, and they love it.”

Norman HlakudiBusiness owner

GrowthoftheSMEmarketisessentialforjobcreationandsustainabledevelopment,particularlyinemergingmarkets.

StandardBank’senterprisedevelopmentmodelaimstocontributetowealthcreationbyprovidingentrepreneurs

withaccesstofinance,coupledwithnon-financialsupport,toenablethemtogrowandsustaintheirbusinesses.

Interventionsincludebusinesssupporttoolsandprovidinginformation,training,coachingandmentoring,aswell

asaccesstofundingandmarkets.Wefocusontheneedtosimplifyourbankingservices,providerelevantlypriced

productsanddevelopinnovativebankingsolutionsthatcatertothefinancingrequirementsofthismarket.

Wehaveintroducedanewcreditevaluationapproachthatconsidersanentrepreneur’sbusinessacumen,as

opposedtoonlyconsideringthehistoricalfinancialperformanceofthebusiness.Togetherwithrisk,affordability

andfraudmanagementassessments,thisnewapproachtoSMElendinghasenabledustoincreaseourriskappetite

andreduceourloandisbursementtimeframefromaroundthreeweekstothreedays,whilemakingtheapplication

processeasier.OurAfricanoperationledtheimplementationofthisapproachandduring2011,83%more

applicantswereabletoaccessloansinthisbusiness.InSouthAfrica,theinitiativewaspilotedin24branches,with

over4690loanstotallingR120millionbeinggranted.Weareworkingonabusinesscasetodeterminehowbest

totakethisproductofferingforward.

Socioeconomic development>inclusive financial services>affordable housing



EnterprisedevelopmentisacorepillarofourCSI

programmeinSouthAfrica.Ourobjectiveistoinvestin

programmesthatenablesmallemergingenterprisesto

becomesustainable,therebyprovidingthebankwitha

largercustomerbasetolendto.AtDecember2011,

34%(R24,2million)ofourCSIbudgetwasspenton

enterprisedevelopment.

Supporting small and medium enterprises

South Africa

Sincethelaunchofourenterprisedevelopmentmodel

inmid-2010,over90businesseshavebenefittedfrom

ourbusinessdevelopmentsupport.During2011,we

grewourBSMEloanbookby28%,lendinganadditional

R632millionforvehicles,overdraftsandtermloanstothis

segmentofthemarket.Inselectedinstancesweprovide

enterpriseswithnon-financialsupportbeforeandafter

fundingtomitigatemanyoftheoperationalrisksthat

theseBSMEsexperienceinthestart-upstagesoftheir

operations.

InfinancingSMEs,weworkwithkeystakeholderssuch

astheDepartmentofTradeandIndustry,development

financeinstitutions,provincialandlocalgovernmentsand

associatedagencies.Forexample,todateR83million

inbusinessdevelopmentsupporthasbeenapproved

throughtheKwaZulu-NatalDevelopmentFundandKhula

EnterpriseFinanceLimited.

StandardBank’senterprisedevelopmentsolutions

encouragecorporateprocurementdepartments,including

ourown,tofacilitateSMEaccesstosupplychains.We

collaboratewithcorporateentitiesthatarewillingtoaward

long-termcontractstoemergingSMEs,providingfinancial

andnon-financialsupporttotheSMEs.Wealsoprovide

thissupporttoSMEsthatourpublicsectorpartnersseekto

includeintheirsupplychainsandinfrastructuredevelopment

projects,whichsupportsgovernment’sstrategytobuild

cooperativesinruralareas.

WehavelaunchedaBusinessResponseCentretoimprove

ourengagementwithSMEs.Wearealsoimplementingnew

toolsforourbusinessbankersandsupplyingthemwith

relevanttrainingtoensurethatweunderstandandprovide

therightsolutionstomeettheneedsofSMEs.In2011,we

launchedBizConnect,asmallenterprisewebplatformthat

providesSMEswithanavenuetofindnewopportunities,

andenablesaccesstoregulatoryandfinancialinformation

onhowtostart,maintainandgrowabusiness.Userscan

alsointeractwithotherbusinessownersonline.

Case study: SME success stories

Standard Bank’s small enterprise content

management website won Best Corporate Website at the

S.A. Publication Awards.

OurSMEQuickLoanwaslaunchedinTanzaniafortradersoperatingininformalmarkets.

BizConnectwww.standardbank.co.za/bizconnect

™

Township micro-franchising

TogetherwiththeUniversityofCapeTown’sCentreforInnovationandEntrepreneurshipGraduateSchoolofBusiness,wefundedtheTownshipMicro-franchisingProgramme,whichaimstokick-startmicro-franchisinginSouthAfrica.Theprogrammeisdesignedtolocatethebusinessesinruralareas,informalsettlementsandtownshipsthataresuitableformicro-franchisingbyvettingthepotentialbusinessesthroughapanelofexperts.Oncethesebusinesseshavebeenidentified,theywillparticipateintradeshowsandworkshopstogetherwithfranchising,financialand

corporateexperts.

Around 750 000 small businesses in Africa (including

South Africa), bank with Standard Bank.




During2011,weprovidedfinancialservicestomore

than150000SMEsacross13countriesinAfrica,

excludingSouthAfrica.

Insub-SaharanAfrica,thelackoffinancialrecords,

creditbureaudataandcollateralarebarriersto

providingfinancetoSMEs.Backedbyournewcredit

evaluationapproach,welaunchedSMEQuickLoans

in2011.Thisunsecuredloanofferingofbetween

USD300(R2176)andUSD30000(R217584)is

availableinGhana,Kenya,NigeriaandTanzania.At

December2011,wehaddisbursedloanstotalling

morethanR320milliontoapproximately5650

businesses.Theproductisprovingsuccessfuland

actuallendinglossratesarelowerthanexpected.

TogetherwiththeNamibiaChamberofCommerce

andIndustries,wehavedevelopedandsponsored

atoolkittobeusedasanenterprisedevelopment

interventionforSMEs.OverNAD350000

(R350000)hasbeensetasideforthistraining,with

additionalfundsallocatedforaliteracyprogramme.

Theinitiativeaimstotrainaround1000SMEsinall

13regionsofNamibia.During2011,wepartnered

withtheInternationalFinanceCorporation(IFC)to

offertheBusinessEdgeTrainingProgrammeandSME

toolkittoagroupofwomenentrepreneursinNigeria.

TwentyofourNigerianwomen-ownedSMEswere

identifiedforthistraining,whichhashelpedthem

buildcapacityandgrowtheirbusiness.

Wehavealsodevelopedandimplementedavalue

propositionfortradersoperatingfrominformal

marketsinTanzania,providingthemwithaccessto

financialservicessuchastransactionalaccounts,

loans,insurance,tradefinanceandforeignexchange

solutions.Inaddition,wehavemadebankingeasier

forsmallbusinessesbysimplifyingaccountopening

formsandreducingaccountopeningturnaround

times.Throughtheseinitiatives,StanbicBankTanzania

hasacquiredmorethan1500customers,gaining

substantialmarketshareinthelocalmarketwithina

six-monthperiod.

WehavecontinuedworkingwiththePanAfrican

BusinessCoalitiononHIV/Aids(PABC)tosupport

thedeliveryoftheBizAIDStrainingprogrammefor

SMEbusinessownersandinformaltraders.BizAIDS

WewerethefirstbankinGhanatointroducecropinsuranceforsmallholdercocoafarmers.

WeenteredintoanagreementwithJohnDeere,theworld’sbiggestmanufacturerofagriculturalequipment,tofacilitateaccesstomechanisationforsmallholderfarmersinAfrica.

AttheMerinoClassic2011ShowinLesotho,StandardBanksponsoredmanyoftheprizesawardedtofarmers.

Case study: SME Quick Loans

Case study: Business Edge Training Programme



providesbusinessskillstraining,whilealsoeducating

businessownersonhealthmatterssuchasHIV/Aids,

malariaandtuberculosis.During2011,BizAIDS

reached523SMEsacrossKenya,NigeriaandZambia.

WeplantogrowourmarketshareintheSME

segmentthroughtheongoingdevelopmentofour

enterprisedevelopmentmodel.InSouthAfricawe

willprovidesimplerbankingthroughinitiativessuch

asBizConnectandtheBusinessResponseCentre.In

therestofAfrica,wewillextendtheSMEQuickLoan

solutiontoafurthereightcountries,withatargetto

growtheportfoliotoR1billioninloanstoSMEsover

thenextyear.

Agriculture financingStandardBankiscommittedtodevelopingagriculture

inemergingmarkets.Increasedagricultural

productivitymeansimprovedhouseholdfoodand

incomesecurityandcontributestoenterprise

developmentbydevelopingruralbusinessesthat

servefarmers,thusimprovingruralemployment.

AgriculturefinancingoffersStandardBankthe

opportunitytodevelopinnovativesolutionsand

offerrelevantproductstoassistcustomersworking

inthissector.

South Africa

Ourobjectivefor2015istoincreaseourSouth

Africanagriculturemarketshareto35%andto

betheleadingbankinsectoraltransformation.

Toachievethiswehaverealignedouragriculture

offeringtootherpartsofourbusinesssuchas

vehicleandassetfinanceandshort-terminsurance.

AtDecember2011,ourtotalnetagriculturebook

wasR11,7billion(2010:R9,9billion),anincreaseof

18%on2010.Thenon-performingloanportionof

thebookremainssoundatlessthan2%.

Weseektopartnerwithgovernmentsandfinancial

developmentinstitutions,andinteractwith

agribusinessestofindfundingopportunities.

Ouragriculturefinancingmodelincludesdedicated

relationshipmanagersabletoaddvaluetoour

customers.Duetothenatureofthesespecialist

roles,itisincreasinglydifficulttoattractandretain

skilledindividualswithinruralareastoservethis

market;therefore,wearefocusingonimproving

employeedevelopmentinthisarea.

WehavecommittedR500milliontofinancing

BSMEfarmingenterprisesinSouthAfrica.Fundsare

distributedbetweenthelivestock,citrus,grainand

sugarindustriesoverathree-yearperiodfrom2010.

Managementsupportagenciesassistwithproduction,

businessandvaluechainmanagement.

TheStandardBankCentreforAgribusiness

LeadershipandMentorshipDevelopment,a

partnershipwiththeUniversityofStellenbosch,

assistsemergingfarmersthroughvariousinitiatives.

Thecentre’sLeadershipDevelopmentLaboratory

Programmeisaimedatcultivatinginformed

leadershipinlocalagriculture,andincludesthe

AgricLeadershipImbizoinitiative,whichcreatesa

platformforknowledge-sharingandproblem-solving.

During2011,thecentrearrangedeightbursaries

forMastersDegreesand80professionalsfrom

agri-developmentagenciesinLimpopoattended

thecentre’sfirstAgri-Mentorshipshortcourse.The

centrealsopartneredwiththeAfricanFellowship

Trust(AFT)andtheRoyalAgriculturalCollegeinthe

UnitedKingdom.Thispartnershipaimstostrengthen

theAFT’sAfricanLeadershipProgrammeandposition

thecentreinthewiderAfricanenvironment.Standard

BankisinvestingR3,2millioninthecentreoverthe

nextthreeyears.


AtDecember2011,ouragriculturebookinour

AfricanoperationsamountedtoR1,8billion.We

anticipateagriculturecommoditiesandmarketsto

remainstrong,providinguswithopportunitiesto

growouragriculturebankingfranchiseacross

sub-SaharanAfrica.

Wehavecontinuedwithourriskguarantee

partnershipwiththeAllianceforaGreenRevolution

inAfrica(AGRA)andtheOrganizationofPetroleum

ExportingCountries’FundforInternational

Development(OFID).Theobjectiveofthis

partnershipistopromoteagriculturalgrowthon

thecontinentbyprovidingfinanceandadviceto

smallholderfarmersincludingtechnicalandbusiness

support,qualitycontrolofproduceandhelpin

applyingforcredit.Thepartnershipaimstoassist

thoseinvolvedinthefoodproductionchaininGhana,

Mozambique,TanzaniaandUganda.StandardBank’s

SmallholderFarmersandAgribusinessesFunding

Schemeprovidesaccesstofinanceforsmallholder

farmersandsmallagribusinessownersinthesefour

Socioeconomic development>enterprise development>supporting SMEs

Case study: smallholder farmer enterprise development



Funds

Totalfundamount(million)

2011 capital contributions

(million)Paidtodate

(million)

Totalcommitment

(million)

SouthAfricanInfrastructureFund R722 0¹ R224,0 R224,0

AfricanInfrastructureInvestmentFund R1320 R5,7 R196,7 R250,0

EmergingAfricaInfrastructureFund USD501 USD8,8 USD82,8 USD87,5

PanAfricanInfrastructureDevelopmentFund USD630 USD1,0 USD9,0 USD15,0

SouthEastAsianStrategicAssetsFund USD147 USD5,0 USD13,0 USD17,9

1 Commitment has been reached and going forward we will no longer report on this fund.

countries.OftheUSD100million(R725million)wehavemadeavailableforlending,theschemehasadvanced

aboutUSD26million(R189million)inloanstomorethan100000smallholderfarmers.

InKenya,StandardBanklaunchedanelectronicbillboardsolutiontofacilitatetradeintheAfricanteaindustry,

whichhassubsequentlybeenadoptedacrosstheindustryinEastandCentralAfrica.Theweb-basednatureofthe

systemoffersreal-timeinformationastransactionsareprocessedandisavailabletousers24hoursaday.InGhana,

weworkedwiththeMasaraN’ArzikiAssociation(Masara),whicheducatesfarmersonthebenefitsofblockfarming,

anapproachwhereanumberoffarmersoperateasagroup.Theassociationprovidedthefarmerswithseedsand

fertiliserandaportionoftheharvestwasusedtorepaytheloan.ThesurpluswassoldtoMasara.StandardBank

advancedinexcessofUSD4million(R29million)foraperiodofsixmonthstothisblockfarminginitiative.Through

ourpartnershipwithAGRA,wefinancedtheKapchorwaCommercialFarmersAssociationfarmingschemein

Uganda.ThefundingofsomeUSD1,4million(R10,2million)isbeingusedtofacilitateawarehousereceiptsystem

toenablefarmerstostoretheirproduceuntilmarketpricesbecomemoreattractive,aswellasfortheassociation

topurchaseagriculturalmachinerytoserviceitsmembers.

Addressing development in Africa SBG’sstrategicfocusisonsub-SaharanAfrica,andassuchitisimperativeforustocontributetoimprovingthe

businessclimateinthisregion.Increasedtradeandinvestmentareimportantfactorsforeconomicgrowthand

jobcreationonthecontinent,withStandardBankbeingwellpositionedtotakeadvantageofthefinancing

opportunitiesthatstemfromthesetradeandinvestmentflows.Wealsoplayapositiverolebyfacilitating

relationshipsbetweenthepublicandprivatesectorsandinprovidingservices,capitalandadvicetogovernments.

Trade financeThroughourextensivenetworkacrossAfricaandotheremergingmarketsweareuniquelypositionedtoprovide

financialsolutionsthatfacilitatetradebetweenSouthAfrica,Africaandcountriesaroundtheworld.Thesubstantial

growthinglobaltrademeansweneedtoefficientlymanagethecomplexities,regulationsandrisksassociatedwith

cross-bordertrade.SBGhasextensiveexperienceinexecutingcross-bordertraderequirementsandinproviding

financesolutionsacrossarangeofcommodities,andwehaveinvestedintheskillsnecessarytodevelopthis

businessinAfrica.Wehavealsodevelopedinnovativeandresponsibletradesolutionstosupportsmallbusinesses

thatprocurecommoditiesonbehalfofmajorcompaniesinsectorssuchasconstructionandinfrastructure,

miningandoil.

CountriessuchasAngola,Botswana,NamibiaandNigeriathathaveoilorpreciousminerals-basedeconomiesare

subjecttovolatilecommoditypriceslinkedtofluctuationsintheglobaleconomy.Toreducetheirexposuretothis

risk,weexpectthesegovernmentstotargetdevelopmentprojectsthatwillpromotefutureexportdiversification

intosectorssuchasenergy,manufacturingandservices.Thiswillincreasethedemandfortradefinancing.We

willcontinuetoinvestinourtransactionalbankingplatformacrossthecontinenttotakeadvantageofthese

opportunitiesastheyarise.

Standard Bank’s investment in infrastructure funds

Socioeconomic development>enterprise development>agriculture financing



Infrastructure financingDevelopingpowergenerationcapacityandinfrastructureisof

keystrategicimportanceforemergingeconomies,providing

significantopportunitiesforprovidersoffinance.Atthecentre

ofAfrica’seconomicdevelopmentisaccesstoenergy,coupled

withtheneedtoconnectinlandproductionfacilitiestoports

throughtransportinfrastructure.Wedrawonourfinancing

experienceandexpertisetocaterforincreasingenergydemands.

Balancingthisneedwithprotectingtheenvironmentisan

ongoingchallenge.Ourinvolvementinprojectstoincrease

accesstorenewableenergyinsouthernAfricaisdiscussedinthe

Environment sectiononpage81.

WeareinvolvedinnumerousprojectsinsupportoftheNew

PartnershipforAfrica’sDevelopment(NEPAD),andweplaya

majorroleindrivinginfrastructuredevelopmentthroughour

involvementinfourkeyPanAfricaninfrastructurefundsand

theSouthEastAsianStrategicAssetsFundlistedinthetable

onpage34.Allprojectfinancedealsthroughwhichanassetis

beingdevelopedorsignificantlyexpandedorrenovated,are

reviewedintermsoftheEquatorPrinciplesandtheIFC’s

performancestandards.

SBGactedasthesolefinancialadvisertotheStateGrid

CorporationofChinaonitsUSD1,8billion(R13,1billion)

acquisitionofsevenpowertransmissioncompaniesinBrazil.

Thislandmarkacquisitionisoneofthelargestinvestments

madebyaChinesecompanyinBrazil.

Banking the public sector

“This transaction arranged by Stanbic Bank Tanzania is a testament of how a good partnership between the government and the private sector can benefit

the nation. With this loan we aim to invest in infrastructure development especially in the areas of

power and roads.”

Mustafa MkuloMinister for Finance (Tanzania)

Thepublicsector’sabilitytofulfilitsmandatetodeliverservices

toitselectorate,toreducepovertyandchampioneconomic

developmentreliesontheeffectivemanagementofgovernment

revenueandexpenditure.Asemergingmarketscontinuetogrow

andachievetheireconomicdevelopmentgoals,publicsector

businesswillneedtoexpand.Thiscreatesopportunitiesfor

fundinglargecapitalprojectsandpublicprivatepartnerships.

South Africa

InSouthAfrica,weprovidethepublicsectorwithacomprehensive

offeringthatincludescorporateandinvestmentbankingaswell

aspersonalandbusinessbanking.Wherefeasiblethismodelwill

bereplicatedforuseinpublicsectorsoutsideSouthAfrica.

Fromleft:MustafaMkulo,MinisterofFinanceandBashirAwale,ManagingDirectorofStanbicBankTanzania,atthesigningoftheTanzanian

Governmentloanfacilityagreement.

RepresentativesofourBeijing,JohannesburgandZambianofficesontheirthree-day

roadshowtotheCopperbelt.

Pledge Guarantee for Health

During2011,weprovidedbridge

financingfortheinauguraltransaction

ofthePledgeGuaranteeforHealth,

anewfinancialtooldevelopedby

theUnitedNationsFoundationand

fundedbytheBillandMelindaGates

Foundation.Thetoolstreamlinesthe

procurementoflife-savinghealth

supplies.TheUSD4,8million

(R34,8million)loanwasusedtofinance

thepurchaseofanti-malariabednets

for1,6millionpeopleinZambia.

35



In2011,weraisedanR850millionten-year

bondfortheCityofJohannesburgMetropolitan

MunicipalityandaR1billiontermloanwasadvanced

totheCityofTshwanetofundcapitalexpansion

projectsaimedatimprovingservicestothecity’s

residents.Wehavebeenawardedmandatesto

providetransactionalbankingservicestoEhlanzeni

DistrictMunicipality,MetsimaholoLocalMunicipality,

MogaleCity,MpumalangaProvincialGovernmentand

VictorKhanyeLocalMunicipality.Thisisinadditionto

anumberofexistingmandatesfromlocalauthorities.

Wearealsofocusingonprovidingbankingservicesto

waterauthoritiesandhaveacquiredmandatesfrom

RandWaterandUthukelaWater.

AsadealerontheDevelopmentBankofSouth

Africa’sDomesticMediumTermNoteProgramme,

weraisedapproximatelyR1,7billioninbondsforthe

developmentbank.

Webelievethateducationiskeytounlocking

theeconomicgrowthpotentialinAfrica.Through

providingsolutionstoeducationinstitutions,we

aimtoalleviatechallengesintheeducationsystem.

During2011,wewereappointedasthetransactional

bankersfortheUniversityofSouthAfricaandthe

NelsonMandelaMetropolitanUniversity.Thisisin

additiontothetransactionalbankingserviceswe

alreadyprovidetotheUniversityofKwaZulu-Natal

andStellenboschUniversity.


WearealeadingadvisertoAfricangovernments

andcorporateswantingtoaccessinternationaldebt

marketsandwearealeadingmarket-makerof

AfricanEurobondsinthesecondarymarket.Todate,

StandardBankhasservedasamainunderwriter

andleadarrangeronthreeofthesixEurobond

transactionsfromsub-SaharanAfrica,morethanany

otherbank.During2011,weservedasleadarranger

ontheRepublicofNamibia’sbenchmarksovereign

bond.Additionally,weledaconsortiumoflocaland

globalfinancierstosecureaUSD250million

(R1,8billion)seven-yearloanfacilityforthe

TanzanianGovernmenttofundinfrastructureprojects

suchasroadsandruralelectrification.

Ourobjectiveistogrowourmarketshareinpublic

sectorbankingandtoenhanceourpartnershipswith

keyindustrystakeholders.

BSME spend (Standard Bank South Africa)

316

455

774

0

200

400

600

800

2009 2010 2011

Rm

AseducationplaysacriticalroleinthefuturesustainabilityandeconomicupliftmentofSouthAfrica,alargeportionofourCSIspendisfocusedinthisarea.

Procurement spend with BEE suppliers (Standard Bank South Africa and Liberty)

7,2

15,7 17,3

2,7

1,6 3,3

0

5

10

15

20

25

2009 2010 2011

Rbn

StandardBank Liberty

R1 billion term loan advanced to the city of Tshwane

to fund capital expansion projects.



Empowerment financing

Targeted investments

TargetedinvestmentreferstofinancialinstitutionsinSouthAfricaextendingfinancingtoareaswheregapsor

backlogsineconomicdevelopmentandjobcreationhavenotbeenadequatelyaddressed.AtDecember2011,our

targetedinvestmentfinancingtotalledR7270million(2010:R7528million).

WeworkwiththeSouthAfricanGovernment,state-ownedenterprisesandprivatecompaniestofacilitateinfrastructure

projectsthatfurthertheeconomicandsocialdevelopmentofmarginalisedareasinSouthAfrica.Ouraimistoidentify

andremoveimpedimentstoprojectdevelopment.AtDecember2011,StandardBank’stotaltransformational

infrastructurelendingamountedtoR487million(2010:R1,5billion).Astheprivatesectorincreasesitsrolein

fundingthecountry’sinfrastructureneeds,ourclientbaseintargetedinvestmentlendingissettogrow.

BEE transaction financing

OurBEEtransactionfinancingcontributestotransformationandwealthcreationinSouthAfricabyproviding

capitaltoblack-ownedbusinessesandfacilitatingdirectequityownershipbypreviouslydisadvantagedindividuals.

Weprovidearangeoflending,equityfinancingandadvisoryservicessuchasthestructuringoftransactions,

negotiatingwiththepartnersinvolvedandarrangingandunderwritingfunding.Wefocusontransactionsthat

arefairlypricedandcreatetangibleeconomicvalue.AtDecember2011,theempowermentdealsfinancedby

StandardBankwereinexcessofR22billion(2010:R20billion).Ageneralincreaseincorporateactivityin2011

ledtoincreasedBEEtransactionfinancingactivity.

Strategic business alliances Webelievethatpartnershipsareaneffectivemeansofaddressingsocialchallenges.SBGworkswithdevelopment

financeinstitutionsandinternationalorganisationsdedicatedtofacilitatingtheMillenniumDevelopmentGoalsinAfrica,

includingthedistributionofdonorfunds.WehavepartnershipswiththeGlobalFundtoFightAids,Tuberculosisand

Malaria,theUnitedStatesAgencyforInternationalDevelopmentandtheInvestmentClimateFacility(ICF)forAfrica.

StandardBankactivelyencouragesprivatesectorcooperationonHIV/Aidsawarenessandmanagement,promoting

inter-businessnetworkingandcommunicationinSouthAfricaandotherAfricancountries.Weareamemberof

thePABC,theGlobalBusinessCoalitiononHIV/AidsandPrivateInvestorsforAfrica,agroupofeightinternational

companieswithinterestsinAfrica.OfourAfricanoperations,14aremembersoftheirrespectiveNationalBusiness

CoalitionagainstHIV/Aids.

Sustainability in the supply chainSBGpromotesresponsibleprocurementandencouragesitssupplierstoactethicallyandresponsibly.Aspartofour

organisationalrestructure,wehavestartedcentralisingourprocurementfunction.OurGroupVendorManagement

andProcurementunitisnowresponsibleforallprocurementspend.Wearedevelopingagroupwideprocurement

policythatexpandsourexistingpolicytoreflectthesechanges,andwillcontinuetoprovideforeffectivecost

management,riskmitigation,improvedqualityofserviceandlegislativecompliance.

InourAfricanoperations,theprocurementoptimisationinitiativeestablishesastandardprocurementgovernance

structureacrosscountrieswhiletakingintoaccountcountry-specificregulations.Thisinitiativeisinplacein16

AfricancountriesoutsideSouthAfrica.Underthenewcentralisedframework,thegovernanceofprocurementin

therestofAfricawillberealignedtothenewgroupwideprocurementpolicytoensureconsistencyacrossallour

bankingoperations.

Case study: employee participation scheme

Socioeconomic development>addressing development in Africa Case study: ICF projects



Althoughwearecentralisingourprocurementprocess,westillseektoprocuregoodsandservicesinthecountries

inwhichweoperate.WearecreatingasustainablelocalvendorbaseacrossouroperationsintherestofAfrica

andareaimingtoincreaseourprocurementspendwithlocalAfricansuppliersto85%bytheendof2012.We

achievedprocurementspendof80%withlocalsuppliersin2011andareconfidentthatwewillbeabletomeet

ourtarget.

WeencouragepartnershipsbetweenourSouthAfrican-basedvendorsandthoseinouroperationsoutside

SouthAfrica,tofacilitateskillstransferandincreasecapacity.

In2011,LibertyyieldedsavingsofR20millionthroughjointpurchasingarrangementswithStandardBank

(2010:R27million).

Preferential procurement ThepreferentialprocurementpillarofthedticodessetsspecifictargetsforprocurementfromBEEsuppliers,to

ensurethatblack-ownedbusinessesinSouthAfricahaveaccesstomarkets.Italsoseekstoprovideincentives

forpurchasingfromqualifyingsmallenterprises,exemptedmicroenterprises,black-ownedenterprisesandblack

women-ownedenterprises.WearealeveltwoBEEcontributorandclassifiedasavalue-addingsupplier,abenefit

thataccruestothosethatutilisethebankasasupplier.

During2011,StandardBank’sandLiberty’sprocurementspendfromBEEsuppliersamountedtoR17,3billionand

R3,3billionrespectively,acombinedtotalincreaseof19%comparedto2010.

StandardBank’sprovincialoperationsassistwithidentifyingproductsandservicesthatcanbepurchasedwithin

theprovinces.Thisguardsagainstanover-concentrationofspendinginoneregionandensuresthatlocalsmall

businessesandsuppliersbenefitfromthebank’sprocurementspend.Ourprocurementspendataprovinciallevel

amountedtoR853millionin2011(2010:R901million).

WearefocusedonincreasingourprocurementfromBSMEs.StandardBank’sBSME-weightedspendin2011was

R774million,a70%increaseon2010.WesupportourBSMEsuppliersthroughaperformancemeasurement

processthatassistsinidentifyingopportunitiestoimproveservicedelivery.Whereopportunitiesareidentified,we

placetheseBSMEsonourenterprisedevelopmentprogramme.Thishelpsensuretheirsustainabilityandmitigates

supplychainrisks.

Duringtheyear,LibertyhostedaWomen’sForumtoinformitsexistingblackwomen-ownedsuppliersonhowthey

contributetoLiberty’sBEEratingandtoupdatethemonupcomingregulatorychangesandimplications.Liberty

willholdregularmeetingswithitskeysupplierstofacilitaterelationshipbuildingandassistthemwiththeirBEE

compliance.Itwillalsolooktoprocurehighervalueproductsandservicesfromblackwomen-ownedbusinesses.

Supplier selectionEthical,socialandenvironmentalfactorsaretakenintoaccountinsupplierselection.Environmentallegislation,

suchastheSouthAfricanNationalEnvironmentalManagementAct,hasbeenincorporatedintoStandardBank’s

contractswithsuppliers.Inaddition,asustainabilityquestionnaireisincludedaspartofoursuppliertendering

process.

WeconductformalassessmentsofsuppliersasanintegralcomponentofsupplychainmanagementinAngola,the

DemocraticRepublicofCongo,Ghana,Lesotho,Namibia,Nigeria,TanzaniaandZambia.Wehave4082suppliers

acrossthesecountries,andin2011atotalof106(2010:84)assessmentswereundertaken.Tencontractswere

terminatedduetonon-performance.Wealsoplantoconductenvironmentalauditsonourvendorsthatsupply

batteries,oil,petrolanddieselforourfacilitiesthatoperatemostlywithback-uppowersystems.During2011,

weconductedoneaudit,missingourtargetoffouraudits.Wewillcontinuewiththeseauditsin2012.



Investing in communitiesSBGcommitsfundingandotherresourcestocreate

long-termsocialvalueforthecommunitiesinwhich

weoperate.WealsoviewCSIasanopportunityto

drivepositivechangeinmarginalisedcommunities.In

addition,weuseoursponsorshipstocomplementour

socialrelevanceandsocialinvestmentobjectives.

Corporate social investment OurCSIactivitiesarealignedwithourstrategic

businessobjectives.WeuseCSIasamechanism

throughwhichwecanapplyourresourcestoaddress

socialissuesthatcanbebarrierstodoingbusiness.We

workinpartnershipwiththecommunitiesinwhichwe

operateandprioritisecommunitiesinwhichwewant

todobusiness.Weemployaresearch-basedapproach

tounderstandthesocioeconomicneedsofthese

communitiesbyengagingwithgovernment,other

businessesandcommunityorganisations.Through

mergingbusinessandCSIgoalsweaimtocreate

meaningfulandlastingmutualbenefit.

SBG’stotalCSIspendin2011wasR114million,a

decreaseof15%asaresultofbudgetconstraints.

Our social partners

Inadditiontobaselinesocioeconomicresearch,

weconductpre-investmentduediligence.Once

wedecidetoinvest,wemanageourimpactonthe

communitybyundertakingsitevisits,engagingwith

oursocialpartnersandbeneficiaries,andenlisting

independentmonitoring.Westrategicallyselect

crediblesocialpartnersandprojectsthataligntoour

businessobjectivesandwelookforsolutionsthatare

replicablethroughoutourregionsofoperation.We

measureourperformanceaccordingtothenumber

ofbeneficiariesreached,thenumberofprogrammes

implementedandourabilitytoleveragebusiness

opportunitiesastheyarise.

Education

ResearchundertakenbyStandardBanksuggests

thatsocialissuessuchaslackofsecurityatschools,

hunger,crimeandpoorpsychologicalhealthand

wellnessamonglearnersandteachersarebarriersin

SouthAfrica’seducationsystem.Ourinterventionsare

aimedataddressingthesecriticalissues.

During2011,weinvestedR31,5million

(2010:R36,2million)ineducation,reaching

approximately120000beneficiariesinSouthAfrica.

CSI breakdown (Standard Bank South Africa)

SBG CSI spend

During2011,theStandardBankGalleryfeatured

‘Water,the[Delicate]ThreadofLife’,anexhibition

aimedatdrivingawarenessofhowwateraffects

ourlives,andhowlifeonEarthisthreatenedbythe

unsustainableuseandabuseoflimitedcleanwater

resources.Theartexhibitionreceivedaverygood

responseandattractedover4025visitors,

with1317ofthesebeingscholarsfromschools

aroundJohannesburg.

Enterprisedevelopment(33,8%)

Education(44,0%)

Healthandwellness(6,1%)

Artsandculturaldevelopment(2,5%)

StandardBankEducationalAssistanceScheme(2,3%)

Corporatephilanthropyincludingemployeematching(8,5%)

HumanitarianReliefFund(2,8%)

8,5

33,8

2,8

6,1

44,0

2,52,3

SimonMaxBannister,Return(FromtheSeriesPlastikos),2010,ReclaimedPolyethylene,187x187x10cm.

104

134

114

0

20

40

60

80

100

120

140

2009 2010 2011

Rm



AspartofourpartnershipwiththeDepartmentof

BasicEducation’sDinalediSchoolsProgramme,we

haverefinedourframeworkforinvestingin

educationbyadopting115schools,allofwhich

wereidentifiedbythedepartmentaspartofthe

NationalMathematics,ScienceandTechnology

Strategy.WeinvestedR22,3millionin2011

(2010:R20,8million)tosupporttheseschoolsin

becomingcentresofexcellenceinmathematics

andscience,andtoimprovethenumberoflearners

passingthesesubjectsinGrade12.

In2011,weestablishedtheStandardBankAdopta

SchoolScholarshipProgrammetosupportthetertiary

educationofhigh-performinglearnersinouradopted

schools.Atotalof31scholarshipsforuniversity

tuitionwereawarded.

Liberty’sCSIinitiativesfocusoneducationalsupport

andconsumereducationtoimprovefinancialliteracy.

ItworkscloselywiththeDepartmentofBasic

Educationtoensurethatitsinvestmentsareeffective

andachieveintendedresults.Some78%ofLiberty’s

CSIspendwasonMathematicsandScienceeducation,

channelledthroughitslong-termrelationshipswith

MindsetNetworkandBubblegumEducationalDesign.

In2011,Libertyconductedanimpactanalysisof

itsflagshipeducationprojects.Thestudyshowed

thatLibertyhasapositiveimpactintermsofthe

numberoflearnersreached,howevertherewas

littleconclusiveevidencetoindicatethequalitative

impactonteacherdevelopmentorimproved

learnerperformanceinassessedsubjects.Liberty

willusethesefindingstoinformthedesignand

implementationofitseducationinitiativesin2012.

Humanitarian relief

SBGsupportscommunitieswhentheyaresubjected

toeithernaturalormanmadedisasters.Our

HumanitarianReliefFundservesasamechanism

toalleviatesufferingandmaintainhumandignity.

During2011,wedonatedR2milliontosupport

SouthAfricancommunitiesexposedtofloods,to

assistJapanaftertheearthquakeandtsunami

disaster,andtosupportpeopleinSomaliasuffering

fromfamine.OurEmployeeCommunityInvolvement

Programmeprovidesanavenueforourstaffto

maketheircontributionstoreliefsupport.Additional

supportthroughstaffmatchingamounted

toR630000.

Lookingahead,wewillcontinuetosupportthe

DinalediSchoolsProgrammeanduseoureducation

interventionsasaplatformtodriveenterprise

developmentandhealthandwellnessinitiatives.

Sponsorships WeuseoursponsorshipsacrossAfricatoposition

ourselvesastheleadingAfricanbank,tocreate

meaningfulconnectionswithourstakeholdersand

supportculturalheritageandsportsdevelopment.

Duetochangingbusinesspriorities,weendedour

sponsorshipswithCricketSouthAfricaandsoccer

teamsKaizerChiefsandOrlandoPiratesinMay

2011.WeremainasponsorofAfricanfootballuntil

2016throughoursponsorshipoftheConfederation

ofAfricanFootball(CAF).Thepremiertournamentof

CAF,AFCON,willbeheldinSouthAfricain2013and

wewillusethisasaplatformtoengagewithpeople

andtheirpassionforsoccer.

StandardBankhassupportedtheartsformanyyears.

WehavesponsoredtheNationalArtsFestivalin

Grahamstownsince1984,withastrongfocusonthe

annualStandardBankYoungArtistawards.

During2011,9595people,includingscholars,

visitedtheStandardBankGallery.Eachexhibition

atthegalleryisaccompaniedbyafulleducational

supplement.Duringtheyear,thegalleryfeatured

‘Water,the[Delicate]ThreadofLife’,anexhibition

thatnavigatedacoursethroughthemanywonders

andcomplexitiesofwater.Theexhibitionreceiveda

verygoodresponseandshowcasedworksbyvarious

SouthAfricanartists.

For14years,ourbrandhasbeensynonymouswith

jazzinSouthAfrica.Wehavegrownaudiencesand

exposedthemtosomeoftheworld’sbesttalent,

givenlocalartistsaworld-classplatformtoperform

onandintroducedandeducatedyoungjazzstarsof

thefuture.Werunseveraldevelopmentworkshopsto

coincidewiththeJoyofJazzfestival.

Wehavealsobeenassociatedwiththepalaeo-

sciencesinSouthAfricaforover15years,asakey

sponsorofthePalaeontologicalScientificTrustwhich

hasmadeavaluablecontributiontotheadvancement

ofpalaeontologicalresearchandeducationinAfrica.

Recentdiscoveriesbypalaeo-scientistsinSouthern

Africaareprovidingimportantinsightsintoearly

humansandbuildingrecognitionofSouthAfrica’s

heritageandscientificcapability.

Socioeconomic development>investing in communities

Economic performance



Eco

no

mic

per

form

ance

Liquidity risk and capital management

Responsible financial services

Working in emerging markets

Customer experience


StandardBank’sfootprintandexperienceacrosssub-SaharanAfricaenablesustoconnectselectedemergingmarketstoAfricaandtoeachother.

2011 highlights• Successfullyadaptedourpricingmodelstomore

effectivelyprice for risk,particularlyinthe

homeloanmarket.

• Didnotincreaseourpricing structurewithinour

personalbankingsegmentfor2012.

• EstablishedaspecialisedGroup Financial Crime

Controlunit.

• CompletedourfirstPan-AfricanCustomer Evaluation

of Bank Service (CEBS)surveyacross13countries.

Standard Bank Group’s (SBG) customers range from individuals and small businesses to large corporates and governments. To sustain our business performance we must

remain responsive to the markets in which we operate by understanding our customers’ different needs and providing relevant products and services. To this end, we must

maintain robust governance and risk management frameworks to facilitate transparent pricing structures, responsible lending, customer service and security. With operations

across Africa and internationally, the group faces diverse challenges in terms of different cultures, regulatory requirements and available technology.

Our opportunities

50% increase in Standard Bank Africa’s loan book.

63% of violent crime attempts, including ATM attacks and bank burglaries, against Standard Bank were thwarted.

4,1 million customers in South Africa registered on the MyUpdates service, an automated customer alert system.

Managing our capital responsibly enables us

to meet potential future requirements.

Operating in emerging

markets positions us well to take advantage of growth

opportunities.

Pricing our products

appropriately increases our sales

opportunities and

competitiveness.

Lending responsibly

mitigates the risks of our customers defaulting on their

repayments.

Providing a good customer

experience enables us to retain

our current customers and

attract new customers.

Offering secure banking

structures mitigates the

risk of financial crime and

engenders trust and confidence

among our customers.



Our challenges

ThenewproposalsissuedbytheBaselCommitteeonBankSupervision(BCBS)willimpactourliquidityand

capitalmanagementpractices.

Highlevelsofdebtstresscontinuedtoimpactourcustomers.

IncreasinginformationsecuritythreatsintheformofrisingATMfraud,identitytheftandInternetBanking

phishingattacksandtheresourcesrequiredtocombatthem.

75%ofcustomercomplaintslodgedwiththeOmbudsmanforBankingServices(BankingOmbudsman)relateto

InternetBankingphishing,ATMsandcollections,particularlyinthehomeloansarea.




Financial results

Returnonequity % 14,3 12,5 13,6

Headlineearningspershareincrease % 21 (5) (20)

Distributionpershare cents 425 386 386

Totalassets Rm 1 497 430 13375211 1297788

Totalcapitaladequacyratio % 14,3 15,3 15,1

Marketcapitalisation Rm 156 889 170471 158942

Thirdpartyassetsundermanagement Rm 541 000 512000 527300

Newinsurancebusinessmargin % 1,4 1,2 1,3

Retail customer base

StandardBankSouthAfrica >9 800 000√ >9300000 >9000000

StandardBankAfrica >2 484 000 >2265000 >1880000

Liberty-creditlifepoliciesinforce million 2,0 1,52 1,62


Market share

Mortgageadvances % 28,8 27,11 26,41

Instalmentfinance % 18,3 17,71 19,61

Carddebtors % 30,6 32,1 34,4

Deposits % 24,6 24,1 24,1

Customer compliments and complaints

Numberofcompliments3 16 170√ 24064 13429

Numberofcomplaints 76 679√ 82513 72106

Ombudsman for Financial Advisory and Intermediary Services

Amountclaimedbycustomers Rm 6,4√ 15,4 17,2

Amountsettledbythebank Rm 1,3√ 1,6 1,2

1 Restated.2 Restated to include 32 policies which collectively cover 208 000 individual lives. Funeral policies are also now excluded.3 These are compliments received by the bank on the complaints handling process only.√ Externally assured (refer to assurance statement on page 89).

Measuring performanceWedeliveredastrongsetofresultsin2011.WeliftedheadlineearningstoR13,6billion,up21%ontheprior

yearandincreaseddividendspaidtoshareholders.Ourreturnonequityof14,3%wasanimprovementonthe

prioryearratioof12,5%.Inadifficultoperatingenvironmentwewereabletoachieveourobjectiveofholding

totaloperatingexpensesflatyearonyear.Thisallowedastronggrowthinearningstobegeneratedfromamuted

growthinrevenue.Thecombinationofhigherrevenuesandlowercostshadafavourableimpactonthecost-to-

incomeratio.Creditimpairmentchargeswere13%loweratR6436millionfromR7394millionin2010,reflecting

animprovedcreditenvironment.

Achieved in 2011

Normalised %

IFRS %

Returnonequity 14,3 14,6 √

Headlineearningspershareincrease 21 21 √

Cost-to-incomeratio 58,8 59,0 √

Creditlossratio 0,87 0,87 √

√ Externally assured (refer to assurance statement on page 89).Note: this table refers to continuing operations only.

Financial indicators



Liquidity risk and capital management Bankingandtradingactivitiesresultincontinuous

exposuretofinancialrisk.Financialinstitutions

mustmaintainsuitablelevelsofliquidityand

capitaltoensurethecontinuityofboththeirday

todayoperationsandtheirabilitytomeetfuture

requirements.Liquidityandcapitalismanagedby

SBG’snewlyestablishedGroupTreasuryandCapital

Managementdivision,whichaimstocontributeto

shareholdervaluebymanagingSBG’sbalancesheet

andfinancialresourcesinawaythatisoptimised,

comprehensiveandintegratedacrossallour

operations.

TheBCBShasissuednewproposals,commonly

knownasBaselIII,aimedatimprovingtheability

ofbankstoabsorblossesarisingfromfinancialand

economicstressandtherebyreducingrisktothereal

economy.Theframeworkwillfocusonimprovingthe

qualityandquantityofabank’scapitalbaseandwill

includetheintroductionofagloballiquiditystandard

thatwillrequirebankstohaveresilientliquiditybases

forboththeshortandlongterm.Thisstrengthening

oftheregulatorycapitalframeworkwillimpactour

liquidityandcapitalmanagementpractices.

Liquidity managementOurliquidityriskmanagementframeworkmeasures

andmanagesourliquiditypositionstoensurethat

fundingrequirementsandpaymentobligationscanbe

metunderbothnormalandstressedconditions.The

GroupRiskOversightCommitteeandtheSBGBoardof

Directorsreviewourliquidityriskstandardsannually.

AtDecember2011,ourliquiditybufferamountedto

R148,1billion(14,9%offunding-relatedliabilities)

andourlong-termfundingratiowasat25,3%.

Acrossthegrouptherehasbeenasignificantincrease

intheunencumberedsurplusliquidityportfoliosince

2010whereourliquiditybufferamountedto

R106,8billion(12,7%offunding-relatedliabilities).

Thiswasaresultofdeploymentofgatheredliquidity

intoshort-termbankplacementsandsecuritiesover

yearend. Ourlong-termfundingratiostoodat26,6%.

During2011,wefocusedonoptimisingourliquidity

resourcesandbuffersparticularlyinrelationto

assetgrowthinthesecondhalfoftheyearand

theheightenedstressintheEurozone.Ongoing

attentionwasappliedtotheimplicationsofthelatest

BaselIIIrequirementsandnewtermlendingvolumes

werecarefullymonitoredandpricedtoensurethat

thepotentialcostsassociatedwiththeanticipated

changesarewellconsidered.

Capital managementThegroup’scapitalmanagementframeworkis

designedtoensurethatSBGanditsprincipal

subsidiariesarecapitalisedinlinewiththeriskprofile,

regulatoryrequirements,economicstandardsand

targetratiosapprovedbytheSBGboard.

Thefollowingelementsformpartofourcapital

managementprocess:

• Maintainsufficientcapitalresourcestomeetour

riskappetiteandeconomiccapitalrequirements,

aswellasregulatorycapitalrequirementssetby

localandforeignregulators.

• Responsiblyallocatecapitaltosupportour

strategicobjectivesandoptimisethereturnson

economicandregulatorycapital.

• Maintaintheadopteddividendpolicyand

dividenddeclarationsinlinewithshareholderand

regulatoryexpectations.

• Develop,reviewandapprovetheinternalcapital

adequacyassessmentprocessincludingshortto

medium-termcapitalplanningandstresstesting.

SBGremainedwellcapitalisedatDecember2011,

withatotalcapitaladequacyratioof14,3%

(2010:15,3%)andaCoreTier1capitaladequacy

ratioof11,3%(2010:12,0%).Thisexceedsthe

currentminimumBaselIIrequirementsandpositions

thegroupwelltomeetpotentialfuturerequirements

arisingfromthenewBaselIIIguidelinesexpectedto

comeintoeffectinJanuary2013.

InpreparationforBaselIII,weparticipatedintwo

quantitativemonitoringimpactassessmentsurveys

during2011undertheguidanceoftheBankof

InternationalSettlements.Theresultsconfirmedour

abilitytomeettheproposedrequirements.

AtDecember2011,availablefinancialresources

coveredthetotaleconomiccapitalrequirementby

1,5timescomparedtoourinternalminimumtarget

coverageratioof1,15.Liberty’scapitaladequacy

ratioatDecember2011was2,9(2010:2,7),

exceedingthestatutoryminimumrequirementof1,0

stipulatedbytheFinancialServicesBoard(FSB)and

inaccordancewiththeLong-termInsuranceAct.

Furtherinformationonliquidityriskandcapital

managementcanbefoundinSBG’s Risk and

Capital Management Report (Book2oftheAnnual

IntegratedReport).



Oneofourgroupvaluesis‘Servingourcustomers’,whichrequires

ustotreatourcustomersfairlyandprovideproducts,servicesand

solutionstosuitourcustomers’needsprovidedthateverythingwe

doisbasedonsoundbusinessandgovernanceprinciples.

VariouspiecesofSouthAfricanlegislationaredesignedto

ensurethatconsumers’rightsareprotectedandthatweoffer

ourcustomersresponsiblefinancialproductsandservices.These

includetheConsumerProtectionAct,theFinancialAdvisoryand

IntermediaryServices(FAIS)ActandtheNationalCreditAct.We

provideongoingconsumereducationadvisingcustomersoftheir

rights,includingtheexistenceoftheBankingOmbudsmanand

theNationalConsumerCommissioner.Overandabovethis,the

groupvoluntarilyendorsesandsubscribestoanumberofcodes

ofconductsuchastheCodeofBankingPractice,whichsets

outtheindustry’scommitmenttohighstandardsofresponsible

customerservice.

Treating customers fairly TreatingCustomersFairly(TCF)isanapproachtomarketconduct

regulationthatwillbeimplementedintheSouthAfricanfinancial

servicessectoroverthenextthreetofouryears.StandardBank

andLibertywereinvitedtoparticipateintheFSB’sTCF

self-assessmentpilotexercisein2011.Wefullysupportthe

principleofTCFandwelcomedtheopportunitytocontribute

tothedevelopmentofthisregulatoryframeworkwhile

simultaneouslybeingabletoassessourownreadiness.The

self-assessmentidentifiedcertainareaswhereweneedto

improvetomeetTCFrequirements,suchasamoreintegrated

approachtomanagingcustomerexperience.

Liberty’sTCFSteeringCommitteeisresponsibleforinitiating,

drivingandmonitoringitsTCFactivitiessupportedbysub-

committeesineachbusinessunit.Libertyisdevelopingan

introductoryTCFtrainingcourseforitsemployees,whichwillbe

launchedin2012togetherwithaninternalawarenesscampaign.

Indebtedness Makingcreditavailablethroughhomeloansandbusiness

loanscontributestojobcreationandeconomicgrowth.Our

objectiveistoalwayslendresponsibly,incompliancewith

legislationandbasedonstringentaffordabilityandcredit-

grantingcriteria.Weapplyahigh-levelcreditstandardacross

allourbankingoperationscoveringrehabilitationpolicies,debt

managementproceduresandpolicies,collectionscorecardsand

collectionstrategies.

During2011,growthinlendingwasstrong,despitereduced

consumerdemandfornewborrowing.Highlevelsofdebtstress

continuedtoimpactonarrears.

Economic performance>responsible financial services

Responsible financial services Retail customers: banking segment(Standard Bank South Africa)

Retail customers: gender composition(Standard Bank South Africa)

Retail customers: age composition(Standard Bank South Africa)

6,6 0,6

92,1

0,7

27

56

17

5050

PersonalBanking(92,1%)

PrivateBanking(0,7%)

BusinessBanking(6,6%)

Employees(0,6%)

0-28yearsold(27%)

29-55yearsold(56%)

56+yearsold(17%)

Women(50%)

Men(50%)



Duringtheyearwesuccessfullyadaptedourpricing

modelstomoreeffectivelypriceforrisk.Thishas

beenmosteffectiveinthehomeloansmarket,

resultinginStandardBankgrowingitsmarketshare

tobethelargestproviderofresidentialmortgages

intheaffordablehousingsegment,aswellasin

mainstreamresidentialproperty,inSouthAfrica.

Wereducedtheminimumrepaymentdueon

outstandingbalancesacrossallourcreditcard

accountsinSouthAfricafrom5%to3%.Our

objectivewastomakecreditmoreaccessible,

stimulateconsumerdemandandassistourcustomers

tomanagetheirmonthlyexpensesmoreefficiently.

Wehaveseenamaterialimprovementinthe

monthonmonthcreditcardportfolioperformance

sinceAugust2011,withthepercentageofnon-

performingloansdecreasingfrom7,6%in2010to

5,7%in2011.Thecreditimpairmentcharges,orbad

debtscosts,totalledR350millionwithacreditloss

ratioof1,8%,downfromR717millionandacredit

lossratioof3,6%in2010.

Westrivetoproactivelyidentifycustomersatriskof

defaultandassistthosewhoarealreadyinfinancial

distress.Weemployarobustrehabilitationpractice

whichhashelpedover41000(2010:75000)

distressedcustomers,withatotaloutstandingloan

obligationofgreaterthanR30billion,retaintheir

homesandvehicles.

IntherestofAfrica,ourincreasedriskappetite

hasincreasedourloanbookforthisbusinessby

over50%.Despitethisgrowth,ourcreditloss

ratiohasremainedstable.Thisisattributedtoour

improvedefficiencyincollectionsacrossAfrica.The

updatedrehabilitationandrecoveriesmodelthat

webeganimplementingin13Africancountries

in2010isbasedoninternationalbestpracticefor

emergingmarkets,andisnowfirmlyentrenched.Our

collectionsratehasincreasedby50%comparedto

2010,andwemetourinternalcollectionstargetfor

2011.Theimpactofthismodelhashelpedusassist

over2000personalcustomersandmorethan200

businessesduringtheyear.

Lookingforward,giventheglobalturmoiland

deterioratingeconomicoutlook,weexpect2012to

beachallengingyear.Inparticular,demandforloans

andadvancesisexpectedtobesubdued.Thegood

progressmadeinreducingimpairmentsislikelyto

benegativelyimpactedbycontinuedhighlevelsof

indebtednessandstrainedaffordability.Economic

uncertaintycoupledwiththeabsenceofgrowthin

disposableincome(andpossiblyjoblosses)means

thatrecoverywilllikelybeslow.IntherestofAfrica,

41 000 distressed customers in South Africa assisted

so that they were able to retain their homes

and vehicles.

GroupChiefExecutive,JackoMaree(middle)atourAfricaBranchConferencewhichrewardsStandardBankAfrica’s

leadingbranchmanagers.Theconferencewasattendedby40branchmanagersfromacrossourAfricannetwork.

StandardBankNamibia’sAngolanDeskatitsMaeruaMallbranchinWindhoekprovidesAngolannationalstravellingto

Namibiawithfullbankingservices.

StandardBankattheInstituteforMunicipalFinanceOfficersconference.



thefocusfor2012willbeonenhancingoursystems

andtoolsandoncollectionprocesses,withtheaimof

furtherreducingthecostofcredit.

Pricing Weareopenandtransparentintermsofourprice

adjustmentsandaimtoensurethatourcustomers

havefullknowledgeofthebankfeescharged

andthereasonbehindthesecharges.Toremain

accessibletoourcustomers,wehaveinvestedin

awideinfrastructurenetworkofbranches,ATMs,

accesspointsatcommunityretailersandloancentres.

Thismeanswehaveahighercoststructurethannew

entrantsintothebankingindustry.However,our

largerfootprintbenefitsourcustomersasitreduces

theirneedtouseourcompetitors’ATMsandincur

theassociatedhighercost.

Weencourageourcustomerstotransactmore

efficientlyandconvenientlythroughalternative

costeffectiveself-servicechannelssuchasATMs,

InternetBankingandthemobilechannel.Aswe

migratecustomerstothesechannelswearereducing

ourcoststructureandpassingthesesavingsback

toourcustomers.Thesecostsavings,aswellasthe

prevailingeconomicconditionsandconsumerand

businessconfidence,contributedtoourdecisionto

notincreaseourpricingstructurewithinourPersonal

Bankingsegmentfor2012,withmarginalincreases

beingmadeforourBusinessBankingcustomers.

Inaddition,fromJanuary2012ourcustomers

nowreceivecertainservicesforfreeincludingthe

MyUpdatesnotificationservice,InternetBankingand

mobilenetworkchargesonCellphoneBanking.

EachofouroperationsacrossAfricahasadifferent

pricingmodelandcomplieswithindividualcountry

regulatoryrequirements.

Libertyperiodicallyreviewsitspricingofmajor

productlines.Investigationsareconductedto

determinetheexpectedclaimscostspriorto

finalisingrevisedpremiumrates.Theseinvestigations

assistLibertyinensuringthatallcriteriaarepriced

accuratelyandconsistently.Formostof2011,

Liberty’srateswererankedinthetopthreemost

competitiveinthemarket.

Responsible investment Libertyaimstogiveenvironment,socialand

governance(ESG)factorsfullconsiderationinthe

investmentprocess,whileperformanceremainsa

priority.Thevotingbehaviourofassetmanagersis

activelymonitoredtoensureconsistencywithESG

principlesandcustomers’investmentobjectives.

STANLIBisasignatorytotheUnitedNations

PrinciplesforResponsibleInvestment(UNPRI)and

theCodeforResponsibleInvestingbyInstitutional

InvestorsinSouthAfrica(CRISA).Bothframeworks

encourageinstitutionalinvestorstoincorporateESG

issuesintotheirinvestmentanalysisanddecision-

makingprocesses.CRISAisaimedatassisting

institutionalinvestorsinSouthAfricawiththe

practicalimplementationoftheUNPRI.

STANLIBhasincorporatedtheUNPRIandCRISA

principlesintoitsresearchinvestmentprocess

andbyDecember2011,STANLIBhadcollected

baselinedataonapproximately50companies

thatarecurrentlyinitsinvestmentportfolio.As

STANLIB’sinvestmentsusuallyhaveafive-year

mandate,whereasESGimpactsarelongerterm

innature,strikingabalancebetweeninvestment

performanceandESGconsiderationsisachallenge

toenforcingtheUNPRI.Inaddition,STANLIB’s

internallimitsrestrictitsshareholdinginacompany

tonomorethan10%wheninvesting.Inpractice,

thisfiguretypicallyrangesbetween1%and3%,

makingitdifficultforSTANLIBtochampionESG

issueseffectively.Despitethesechallenges,STANLIB

remainscommittedtoobservingbothframeworks.

TherevisedRegulation28tothePensionFundsAct

of1956thatcameintoeffectinJanuary2012

isinfluencedbytheUNPRI.Thisregulationis

mandatoryandprovidesguidelinesontheasset

classesinwhichpensionfundscaninvest.Libertyis

identifyingthecomplianceofitscurrentinvestment

portfolios,amendingitsprocessesandsystems

andengagingwiththeFSBontheoutstanding

Regulation28implementationissues.Four

STANLIBfundsareregisteredascomplyingwith

Regulation28.STANLIBhasdevelopedanonlinetool

toassistfinancialadvisersandinvestorstodetermine

theRegulation28compliancestatusofinvestments.

New products and services Theconsumerenvironmentisdynamicandservicing

thechangingneedsofcustomersinthemost

efficientwayisalwaysachallenge.Weconstantly

lookforbetterwaystomeettheneedsofcurrent

andfuturecustomersandourapproachisoneof

promotingaccessibility,inclusivity,valueformoney

andchoicewithinthefinancialservicesmarket.

Beforelarge-scalerollout,productsarelaunchedina

pilotphasetoensurethattheymeetcustomerneeds

anddonotunfairlyimpactonthem.

Economic performance>responsible financial services



Secure banking SBGseekstocreateaproactiveenvironmentin

whichfinancialcrimeiseffectivelydetectedand

preventedassoonaspossible,andresponsibly

managedifitoccurs.During2011,weestablished

aGroupFinancialCrimeControlunitresponsiblefor

minimisingtheimpactoffinancialcrime,protecting

ourreputationandensuringthesafetyofour

peopleandassets.Theunitincludesinvestigators,

forensicaccountants,lawyersandemployeeswith

expertknowledgeofbanksystemsandprocesses.It

willensurethatwehaveacomprehensiveviewof

financialcrimetrendsacrossbusinessunits,channels

andgeographicalareas.

Weareadvancingourfinancialcrimepreventionand

detectioncapabilitiesinouroperationsoutsideSouth

Africa.In2012,wewillundertakefullriskassessments

withineachAfricanoperationandimplementbranch,

cashcentreandcountryofficeaudits.Thesewillenable

ustodetermineandimplementtherelevantsecurity

measuresrequiredineachcase.

LibertyparticipatesintheGroupFinancialCrime

Committeetoensurestandardsandpoliciesarealigned,

andknowledgeandlessonslearnedareshared.

InSouthAfrica,wesupportindustryinitiativesthat

combatcriminalactivityanddeveloppublicprivate

partnershipstoensuresuccessfulprosecutions.In

2011,weworkedwiththeSouthAfricanBankingRisk

InformationCentre(SABRIC)tolaunchphishing,card

skimmingandcarryingcashsafelymediacampaigns.

Wehavealsolaunchedonlinefingerprintverification,

abankingindustryinitiativefacilitatedthroughSABRIC

andtheDepartmentofHomeAffairs.Thisprovidesan

additionalauthenticationmechanismatvariouspoints

withinourbranchnetworkandwillreducetheuseof

fraudulentidentitydocuments.

Acrossourbankingoperations,weconduct

programmesoncustomersecurityandfraud

awareness.TheGroupFinancialCrimeControlunit

drivesfrauddetectionandpreventiontrainingfor

employeesandduring2011,over600awareness

sessionswereheldacrossthegroup.

Wehaveidentifiedourtopthreatsasbeingchannel,

employeeandprocurementfraud,andmoney

laundering,aswellasphysicalandinformation

securitythreats.Ofparticularconcernin2011was

theincreasednumberofassociatedrobberiesacross

SouthAfrica,wherecustomerswererobbedonthe

waytoorafterleavingabank.Inadditiontothe

abovementionedmediacampaignsoncarryingcash

safely,weareprovidingemployeesandsecurity

guardswithawarenesstrainingonhowtoidentifythe

perpetratorsofthistypeofcrime.Wearealsoworking

withotherindustrystakeholderstogatherintelligence

anddevelopfurtherinitiativesthatwillraisecustomer

awareness.

Combating fraud and corruption

During2011,StandardBankcontinuedtoprevent

fraudthroughproactiveinterventionsintheareas

oforigination,frauddetection,insuranceandasset

management,aswellasthroughourfraudprevention

programme,FraudStop.Some21%ofthepotential

fraudlossesagainstthebankpreventedin2011,is

attributedtotheFraudStopProgramme.

Libertyrecorded1069(2010:928)casesof

suspectedfraudduring2011.Atotalof105actions

againstoffendersoffraudandcorruptionweretaken.

During2011,78outofanindustrytotalof991

(2010:106outofanindustrytotalof989)Standard

BankemployeeswereplacedontheRegisterof

EmployeesDishonestySystem,adatafilemaintained

bytheBankingAssociationofSouthAfricathat

recordsthenamesofallemployeesinthefinancial

industrydismissedasaresultofdishonesty.Wehave

alsoimplementeda‘nameandshame’procedure

inSouthAfrica,communicatedtostaffthroughour

regularemployeecommunicationchannels.Where

astaffmemberisconvictedinacourtoflaw,their

name,offenceandsanctionarepublished.

BothStandardBankandLibertyhaveconfidential

andanonymousfraudandethicswhistleblowing

reportinghotlinesoperatedbyindependentservice

providers.Feedbackindicatesthatthereisagrowing

leveloftrustamongemployeesthatthereporting

hotlinesandresultantinvestigationsareindependent

andaction-orientated.During2011,therewere

505incidentsofallegedfraudandethicsmisconduct

reportedacrossSBG,withSouthAfricaaccountingfor

96%ofthese.Some412ofthesereportshavebeen

investigatedandclosed,withtheremainderstillunder

investigation.Themostcommonallegedviolation

concernsexternalfraudormisconduct,representing

80%ofthereportsreceived.

Physical security threats

StandardBanksitesinSouthAfricaundergo

continuoussecurityassessmentstoidentifycontrol

weaknessesinprocesses,proceduresandphysical

securitysystems.Themostsignificantphysical

securityrisksincludeassociatedrobberies,vault

attacks,breachesofcashcentresecurityand

ATMbombings.



Revisedsecuritymeasureshaveresultedina

reductioninthenumberofhigh-riskbranchesin

SouthAfricafrom115inJanuary2011tosixin

December2011.Wealsosuccessfullythwarted

63%ofviolentcrimeattemptsincludingATMattacks,

associatedbankrobberiesandbankburglaries.The

valueoflossesincurredfromincidentsofviolent

crimereducedby47%comparedwith2010.

In2011,therewere227attacksonSouthAfrican

ATMs,resultinginanindustrylossofR32million.

Ofthese,36wereStandardBankATMswith13

incurringcashlossestotallingR1,8million.Thisisa

5%decreasefromR1,9millionin2010.

Information security threats

Themostsignificantinformationsecuritychallenges

wefacearetherisingincidentsofATMfraud

(particularlycardskimming),identitytheftand

phishingattacks.

During2011,wecontinuedwiththerolloutof

MyUpdates,anautomatedcustomeralertsystem

thatalertsourcustomersbySMSoremailwhenever

thereisanyactivityontheiraccounts.ByDecember

2011,wehadregistered4,1millioncustomerson

theMyUpdatesservice.

Wearecommittedtoprotectingtheconfidentiality

ofcustomers’bankingdetailsandwetakeevery

measuretoclosedownsitesthatpurportto

representStandardBank.InSouthAfrica,we

providefreeanti-phishingsoftware,Trusteer,to

ourcustomers.Whiletheliabilityforlossesincurred

throughphishingremainswithcustomers,weare

committedtotakingwhateveractionwecanto

preservefundsonbehalfofvictims.Thepreventative

measureswehavedeployedhavereducedthe

numberofconfirmedphishingattemptsby62%and

thefraudlossthuspreventedtotalledR81million.

Money laundering control

EachbankingoperationwithinSBGhasaMoney

LaunderingReportingOfficerresponsibleforensuring

thattheoperationhasproceduresandprocessesin

placeincompliancewithlocallegislationandSBG’s

policiesandstandards.Ourpoliciesandprocedures

areconstantlyreviewedtotakeaccountofregulatory

developmentsandinternationalbestpractice.

Wherepartsofouroperationhavedemonstratedthat

thegroupminimumstandardscannotbeadopted

inapracticalmanner,particularlywheretheyare

inconsistentwithlocalregulatoryrequirements,a

dispensationprocessisfollowed.Trainingisprovided

toallouremployeestoensurethattheyunderstand

62%reduction in the number of confirmed

phishing attempts.

Breakdown of crime prevented(Standard Bank)

74

21

5

Value of losses incurred from violent crime(Standard Bank)

4,7

3,6

1,9

0

1

2

3

4

5

2009 2010 2011

Rm

Potential fraud loss prevented by FraudStop(Standard Bank)

303

353

288

0

100

200

300

400

2009 2010 2011

Rm

Crimefrustrated(74%)

FraudStopProgramme(21%)

Recoveries(5%)



whattheirobligationsareintermsofmoney

launderingandterroristfinancingcontrols,andhowto

fulfilsuchobligations,therebyprotectingthemselves

aswellasSBGfrombeingusedformoneylaundering

orterroristfinancingpurposes.

Working in emerging markets

WithSouthAfrica’sinclusionintoBRICS(Brazil,

Russia,India,ChinaandSouthAfrica),weanticipate

increasedtradeflowsandforeigndirectinvestment,

particularlybetweenChinaandemergingmarkets.

MiningopportunitiesareabundantthroughoutAfrica

andthereisincreasingdemandfromBRICcountries

forAfrica’smineralandenergyresources.Coupled

withthis,Africacanbenefitfromthedevelopment

ofpowerandotherinfrastructurerequiredtoaccess

theseresources.WithSouthAfricaasourhomebase,

ourfootprintandexperienceacrosssub-Saharan

Africaandoursectorexpertiseparticularlyinnatural

resources,wearewellpositionedtotakeadvantageof

theseopportunities.

Weplantoexpandinthehigh-growthmarkets

ofAngola,Botswana,Ghana,Kenya,Mozambique,

Nigeria,TanzaniaandZambia.Wewillcontinueto

buildfirst-class,on-the-groundbankingfranchises

inthesechosenmarkets,investinginpeople,branch

networksandsystems.Wehaveputinplacestrategies

toincreaseourmarketshareinNigeria’sbanking

sector,andincreasedourbranchnetworkbyafurther

33branchesduring2011.Wearenowrepresentedin

everystateofthecountry.WeconsiderNigeriatobe

akeymarketforthegroupandourobjectiveistobea

leadingfinancialservicesorganisationinthecountry.

OurstrategicpartnershipwithICBCisacentral

elementofSBG’sstrategytobetheleadingfinancial

servicesinstitutioninAfrica.SinceICBCacquired

a20%shareholdinginSBGin2008,wehave

formallycooperatedonnumeroustransactionsacross

multiplegeographiesandsectors.Ourpartnership

isacleardifferentiatorinrespectofouroverall

valuepropositiontoStandardBank’sCorporate&

InvestmentBankingclientsinandoutsideChina.Itis

thisuniqueaccesstoChinaandAfricathatisincreasingly

gettingtheattentionofChineseandAfricanexecutives,

governmentsandcentralbankofficials.

OuroperationinChinaisstaffedpredominantlywith

internationallyexperiencedChineseprofessionals

workingwithourin-countryteamselsewhereinthe

world.Thisprovidestherightculturalbalanceto

ensurerobustcross-borderconnectivity.Ourmodel

isspecificallydesignedandresourcedtosupport

cross-borderbusinessratherthantopursuedomestic

bankingbusinessinChina.SBGandICBCarecurrently

involvedinapproximately110projects,someof

whichincludethepre-exportfinancingofcocoafrom

Ghana,infrastructuredevelopmentinZambia,a

60000megawattpowerstationinBotswanaand

theconstructionofanexpresswayinNigeria.

During2011,wesignedanagreementinterms

ofwhichICBCwillacquire80%ofStandardBank

Argentina,withSBGmaintaininga20%shareholding.

WithChinabeingArgentina’ssecondlargesttrading

partner,theproposedtransactionwillprovideICBC

withanentrypointintoArgentinaasthefirstChinese

banktooperatethere.SBGhasbeenoperating

inArgentinaforover12yearsandtheproposed

transactionpresentsanopportunitytorealisevalue

fromthegroup’ssuccessfulinvestmentinArgentina

andtofurtherdevelopourpartnershipwithICBC.

Duringtheyear,wealsosoldourshareholdinginRussian

investmentbank,TroikaDialogGroupLimited(Troika),

toSberbank.Russiaremainsakeyfocusareafor

SBGandweareconfidentthatourstrongAfrican

presence,combinedwithSberbankandTroika’sregional

leadership,willprovideanenhancedrangeofmutual

businessopportunities.

Libertycurrentlyhasapresencein14countries

outsideSouthAfrica.Withintheseregions,growing

incomesamongconsumersareprovidingLiberty

withtheopportunitytoprovideinsuranceproducts.

Totapintothismarket,Libertywillleverageonits

bancassuranceagreementwithStandardBankand

strengthenitsdistributionchannels,particularly

throughStandardBankAfrica’sbranchnetwork.

During2011,Libertyconcludeditsacquisitionof

thenon-bankingoperationsofCfCStanbicBankin

EastAfrica,providingitwithabroadwealthbusiness

coveringKenyaandTanzania.Thenewentity,CfC

InsuranceHoldings,listedontheNairobiStock

Exchangein2011.Inaddition,inBotswana,Kenya,

NamibiaandSwaziland,LibertyacquiredStandard

Bank’sinterestsinSTANLIB.

Economic performance>secure banking



Customer experience SBGengageswithcustomerstoassesstheir

satisfactionandseekstocontinuouslyimprove

thequalityofthecustomerexperience.With

sub-SaharanAfricaatthecoreofourstrategy,the

challengeistounderstandandmeetthedifferent

needsofcustomersinthediversemarketsinwhich

weoperate.Eachemployeeisresponsibleforthe

experiencethatourcustomersreceive;therefore

weinvestinthetraininganddevelopmentofour

peopletoensureeffectivecommunicationwithour

customersandarelevant,consistentandpositive

customerexperience.

Channel experienceWehavesetatargettoachieveacustomerservice

ratingofgreaterthannineoutoftenacrossall

Personal&BusinessBankingchannelsinSouthAfrica.

AtDecember2011,twochannelsoutofatotalof

tenachievedthistarget;however,oftheremaining

eightchannels,onlyonescoredbelow8,5.These

scoresweredeterminedbysurveyingover

65800randomlyselectedStandardBankcustomers.

WhileStandardBankcommissionsthesurvey,itis

conductedbyindependentexternalserviceproviders.

Theresearchidentifiedthattherearestillareas

ofserviceinconsistency,whilekeepingcustomers

informedremainsanareaforimprovement.

Thissurveyindicatesthatourcustomerserviceis

ofahighstandard.However,wearedisappointed

thatStandardBankSouthAfricalostitsnumberone

spotasBestBankforCustomerServiceinthe2011

AskAfrikaOrangeIndexsurveywhichmeasures

customerperception.Inthebankingcategorywe

achievedfourthplace.Customerexperiencerequires

continuousfocusasourcustomers’needsareever-

changing.Weareusingthelessonsfromthesurvey

toimproveourservice.

IntherestofAfrica,wecompletedourfirst

Pan-AfricanCEBSsurvey,surveyingapproximately

17500customersacross13countries.Outofa

possibletenpoints,weobtainedscoresof8,06;8,03

and8,15withinthepersonal,businessandprivate

bankingsectorsrespectively.Wewillsetimprovement

targetsbasedontheseresultsandwillundertakethis

surveyatleasttwiceayeargoingforward.

Standard Bank Africa achievements...

500thbranch opened.

2 500 000thcustomer banked.

3 000 000thaccount opened.

Wantingtoencourageherstafftoservecustomersmorequickly,amanagerinourMalelanebranchinMpumalanga

introducedtheconceptofwearingsneakers(ortakkiesastheyareknownlocally)towork.

Thepracticebecameaculturewithinthebranchwithpositiveresultsbeingexperiencedbycustomers.

TakkieDayhassincebeenadoptedacrossPersonal&BusinessBankinginandoutsideSouthAfrica.



ThetablebelowreflectsStandardBank’ssatisfactionratingsperbusinesschannelfor2011.

In2011,wechangedoursurveymethodsintheSouthAfricanbusinessmarket.Asthebehaviouroflarger

companiesisdifferenttothatofsmallcompanies,wedecidedtodividethesamplebasedonturnover.Theresults

arereflectedinthetablebelow.

Managing complaintsInSouthAfrica,StandardBank’scustomersareabletolodgeacomplaintthroughanyPersonal&BusinessBanking

channelsuchasourwebsite,callcentres,branchesandloancentres,andexperienceaconsistentcomplaint-

handlingprocess.ComplaintsthatcannotberesolvedatthechannellevelareescalatedtoourServiceRecovery

unitandthoserequiringfurtherinvestigationareroutedtoaspecialistComplaintsResolutionCentre.Customers

whoareunhappywiththeoutcomeoftheircomplaintshavetherighttoescalatetheircomplaintstovarious

industryombudsfunctions.TheFAISOmbudandtheBankingOmbudsmanarethemostfrequentlyused.In2011,

theamountclaimedbycustomersfromtheFAISOmbudtotalledR6,4million.TheamountsettledbyStandard

BankwasR1,3million,representing20%ofclaims.Thebalanceofclaimsarestillpendingjudgement,havebeen

recalculatedbasedonthecircumstancesofthecaseorhavebeendismissedinthebank’sfavour.Duringtheyear,

R28,9millionwasclaimedbycustomersfromtheBankingOmbudsmanandtheamountsettledbythebankwas

R9,8million.Around75%oftheseclaimsrelatetoInternetBankingphishing,ATMsandcollections,particularlyin

thehomeloansarea.

Overallthenumberofcustomercomplaintsresolvedinfavourofcustomersthroughtheombudsdecreasedin

2011,indicatingthatthemeasureswehaveputinplacetoefficientlyresolvecomplaintsupfrontareworking.

OurinternalCustomerDisputeAdjudicationofficealsoassistswithcustomerdisputeresolution.Thisofficeis

independentandpositionedoutsidenormaloperationalcomplainthandlingstructures.Decisionsmadebythe

officearefinalandbindingonbehalfofthebank,andthroughthisfunctionadditionalcustomerclaimshavebeen

settledbythebank.

During2012,wewillrollouttheSAPsystem,whichwillprovideuswithaconsolidatedviewofeachcustomer’s

interactionwiththebank,enablingustoprocessqueriesmoreefficiently.Wewillalsofurtherenhanceour

customerservicelevelsaligningcustomerexperiencemeasurementsacrossallcustomerchannels,productand

supportareasinSouthAfrica.

Standard Bank’s customer satisfaction ratings (out of ten) in South Africa

Service ratings (out of ten)

Turnover R150 000 – R10 million

Turnover R10 million – R100 million

Turnover R100 million – R600 million

StandardBank 7,5√ 7,6√ 7,7√

Absa 7,3 7,3 7,4

FirstNationalBank 7,2 7,5 7,5

Nedbank 7,4 7,4 7,6

Source: Galactica and Zodiac Surveys.√ Externally assured (refer to assurance statement on page 89).

Customer satisfaction ratings

(out of ten)

Branches Private Banking suites

Business Banking Customer Contact Centres

2011 9,40√ 8,82√ 8,80√ 8,61√

2010 8,85 8,62 8,68 8,59

2009 8,74 8,44 8,63 8,34

Source: Customer Experience Measurement surveys conducted by Synovate and Plus 94. √ Externally assured (refer to assurance statement on page 89).

Economic performance>customer experience

Val

uin

g o

ur

peo

ple


Talent resourcing

Leadership capability

Maximising our human capital

Performance and reward

Sustainable employment practices

Employee community involvement

Valuing our people

EmployeesfromourKenyanoperationsattendingaPersonal&BusinessBankingawardsceremony.


2011 highlights• Heldthefirstglobal SBG graduate induction

programme.

• BecameamemberoftheInternationalLabour

Organisation’sGlobal Business and

Disability Network.

• Undertookastatistical analysistoidentify

areaswheretherearesignificantdifferences

inremuneration.

• Reporteda10%overalldropinmalariacasesacross

ouroperationsinAfrica.

• Updatedouremployment equity planforthe

nextthreeyears.

Our employees are the key differentiator in achieving our strategy. We aim to achieve superior business results through a positively contributing workforce. We seek, retain

and reward individuals who share our passion and strive to deliver superior results. Through people practices and processes that support and enable the contributions and

diversity of our people, we are delivering an improved experience to our employees in all their interactions and engagements within Standard Bank Group (SBG).

Our opportunities

87% of the participants in our 2011 graduate programmes held in South Africa, were black.

4 256 Standard Bank and Liberty employees in South Africa underwent voluntary HIV testing.

84% of appointments at junior management level were from designated groups.

Employing and developing graduates

enables us to build a strong

succession pipeline of

future leaders.

Investing in skills development programmes builds skill in the broader

economy, leading to more potential

employees and customers.

Rewarding employees fairly helps us attract

and retain individuals who deliver results that enable us to achieve our

strategy.

Building an inclusive and

engaging culture leads

to empowered, motivated and

customer-focused

employees.

Proactively managing the health of our employees

reduces costs associated with absenteeism.

Instilling sustainable and fair employment

practices strengthens our reputation and

our relationships with

governments.

Valuing our people

Our challenges

Tougheconomictimesandstringentausteritymeasureshavemeanta21%decreaseintrainingspendcompared

to2010.

Malaria,HIV/Aidsandtuberculosisdirectlyaffectourbusinessthroughthelossofskills,increasedresource

requirementsandcostofmanagingthehealthofourworkforce.

Ashortageofspecialistskillsinthefinancialsector,particularlyinourAfricanoperations.

Wehavenotmetouremploymentequitytargetsformiddleandseniormanagementlevels.

Valuing our people



Employeeheadcount 52 127√ 53351 51411

Womenemployees % 57√ 57 57

Employeeturnoverrate % 11,61√ 10,1 10,0

Attendance in leadership and graduate development programmes

Leadershipdevelopmentprogrammeparticipants 1 004 3965 3740

Graduatedevelopmentprogrammeparticipants 153 205 262

Training spend

SBG Rm 484 612 552

•Trainingspendasa%ofstaffcosts % 2,2 2,8 2,8

StandardBankSouthAfrica Rm 358√ 450 419

•Trainingspendasa%ofstaffcosts % 3,2√ 4,1 4,3

Liberty Rm 21√ 21 27

•Trainingspendasa%ofstaffcosts % 0,8√ 0,9 1,3

Number of injuries2 289 286 415

StandardBankSouthAfrica 243 257 268

StandardBankPlc 15 11 6

Liberty 31 18 141

Employeematchingschemesspend Rm 6,5 5,4 2,3


Learnership participants

Letsema(matriculants) 48 100 156

Kuyasa(graduates) 21 42 29

BankingSkillsAcademy 311 564 79

Disciplinary incidents

Totaldisciplinaryincidents 1 451 1486 2240

TotalcasesreferredtotheCommissionforConciliation,MediationandArbitration

134 119 142

1 The total turnover for 2011 is much higher than the previous year due to retrenchment exits. Voluntary turnover for total staff for the group was higher in 2011.

2 No serious injuries leading to permanent disability.√ Externally assured (refer to assurance statement on page 89).

Measuring performanceTheturnovertablebelowprovidesabreakdowninthemovementofouremployeenumbersovertheyear.

EmployeesworkingintheArgentineanoperationhavebeenincluded.Recruitmentreferstothenumberofnewly

appointedstafffromoutsidetheorganisation.Underexits,thevoluntaryexitsshowemployeesthathaveleftour

employduringtheyear,whiletheinvoluntaryexitsincludesretrenchments,retirementsanddisciplinaryactions.

2011 2010 2009

Permanent employees at the beginning of the year 53 351 51411 50321

Add:Recruitment 4 494 6766 5455

Acquisitions 471 379 449

Less:Exits (6 189) (5205) (4814)

Voluntary (4 351) (3638) (3284)

Involuntary (1 838) (1567) (1530)

Permanent employees at the end of the year 52 127 53351 51411

Valuing our people


Ourstrategicimperativesinmanagingourpeopleareto:

• Ensuretherighttalentsupplyfortheright

positions.

• Developleadershipcapabilityasakey

differentiator.

• Maximisetheabilityofouremployeestocontribute

tobusinessperformancethroughpersonal

developmentandlearning.

• Createanengagedenvironmentwherehigh

performanceisdemandedandrewarded.

• Upholdsustainableemploymentpracticesand

positivelyimpactthemarketsinwhichweoperate

asacommittedandresponsibleemployer.

Talent resourcing Ourrecruitmentpolicyistoensuretheplacementof

appropriatetalent,attheappropriatetimeandcost,

inthecorrectposition,whilemaintainingadiverse

andinclusiveworkforce.Theshortageofspecialist

skillsinthefinancialsector,particularlyinourAfrican

operations,isamajorchallengeforthegroupand

wecompetewithotherfinancialinstitutionsand

companiesinothersectorsforskilledpeople.

Weseektoredeployanddeveloptalentinternally,

aswebelievethatmovingpeoplewithinthegroup

providesouremployeeswiththeskillsandexperience

neededtooperateinamulti-national,multi-cultural

environment.Whensourcingpeoplefromoutside

StandardBank,weseektoreflectthemarketsin

whichweoperatebyhiringlocallywhereverpossible.

Whereskillsshortagesexistorweneedtoincrease

skilledcapacity,wewillhireexternally.Currently

105ofourSouthAfricanemployeeshavebeen

deployedintopositionswithinourAfricanoperations,

theremainderofourstaffcomplementinthese

operationshasbeenhiredlocally.Inaddition,weare

establishinginitiativestoattracttalentedAfricans

livingabroadbacktotheircountriesoforiginto

furtherstrengthenlocalhiring.Thiswillprovidea

pipelineoflocaltalentforfutureappointmentsinto

seniormanagementpositionsandwillprovidelocal

employeeswithmentorswhocanassistthemtobe

successfulintheirroles.

Graduate programmesOurapproachistoemploytopcalibregraduatesto

becomepartofourtalentpipeline.Withgraduates

startingtheircareerswithus,wecontributetoshaping

thefutureleadersofthegroupwhilebringinginnew

talentthatcanhelpourbusinessadjusttothechallenges

ofthefast-paced,ever-changingenvironmentsin

whichweoperate.In2011,153(2010:205)people

fromAfrica,Asia,EuropeandNorthandSouthAmerica

participatedinourgraduateprogrammes.Some44%of

thesegraduateswerewomen,andofourSouthAfrican

complement,87%wereblack.

In2011,weheldthefirstglobalSBGgraduate

inductionprogrammetointroduceourgraduatesto

thegroup’sexecutives,provideanoverviewofSBG’s

strategyandbusinessunitoperations,andfacilitate

globalnetworking.InSouthAfrica,weheldthefirst

winterschoolforgraduates.Thisinitiativeexposed

prospectiveapplicantstothefinancialservices

industryandtoStandardBank,aswellasprovidedthe

bankwiththeopportunitytoobservetheuniversity

studentsforfuturehiringpurposes.

Lookingforward,wewillextendourgraduate

programmesintoEastandWestAfricaandwewill

hosteducationalsessionsacrosscampusestoassist

studentsinmakinginformeddecisionsregarding

careersinbankingandinformationtechnology.

Leadership capabilitySBGacceleratesthedevelopmentofindividuals

andteamsofpeoplewhoarevitaltoachievingour

strategy.Wetakeaglobalapproachtoleadership

development,withtailoredimplementationdepending

onbusinessareaandregion.

TheGlobalLeadershipCentreisaninnovative,high

qualityandcomprehensivelearningfacilitythat

providesourmanagerswithleadershipdevelopment

opportunities.Tougheconomictimesandstringent

austeritymeasureswithinSBGhasmeantthatfewer

leadersparticipatedinformaltrainingprogrammes,from

3965in2010to1004in2011.During2011,over

50%oftheleadersthatparticipatedinformaltraining

programmesinSouthAfricawereblackemployees.

Wehavereviewedandenhancedourleadership

programmestoensurecustomercentricity,thatweare

capableofcompetinginourchosenmarketsandhave

theabilitytoleadandexecutechange.Theserevised

programmeswillbeimplementedin2012.

InNigeriaandGhanawepilotedaStrategic

LeadershipProgramme,whichexposesemployees

totheglobalenvironmentandfacilitatesexecutive

networks.Theprogrammewillberolledouttoother

Africancountriesofoperationin2012.Wehave

alsosuccessfullyimplementedamoreconsolidated

learningapproachbycombiningtraditionalclassroom-

basedtrainingwithpracticallearning,bothatthe

centreandinourcountryoperations.

Valuing our people


Wearecommittedtoidentifying,attracting,retaining

anddevelopinginspiredandself-motivatedpeopleto

ensurethatwehavethebesttalentwiththerightskills,

deployedintherightplaceattherighttimetodeliver

businessresults.Inherentinourapproachistoensure

wehavethetalentandskillsnecessarytoeffectively

integrateSBG’sstrategicprioritiesandchangingbusiness

conditionswiththelonger-termdemandsofthegroup.

Talent management Ourkeyfocusin2011wasonestablishingaclearview

ofthestrengthandcapabilitiesofourtalentacrossthe

group,particularlyincriticalroles.Wehavefocused

onbuildingrobustsuccessionplansandensuringthe

appropriatequalityoftalentinkeymanagementroles.

Scorecardsarebeingintroducedforeachbusinessarea

toholdlinemanagersaccountableforthequalityof

talentofthepeopletheymanage.

Skills development Akeyinitiativein2011wastoensurethatourlearning

anddevelopmentinterventionsarerelevanttoour

businessneedsanddelivertherequiredoutcomes.We

adoptaglobalapproachtoskillsdevelopment,buttailor

ourimplementationtomeetthediverseneedsofour

businessareas,geographies,servicesandcustomers.

In2011,SBG’strainingspendamountedtoR484million,

2,2%(2010:2,8%)oftotalstaffcosts.Thisdecrease

inspendisduetocostsavingmeasuresimplemented.

WithinourSouthAfricanoperationwepromoteskills

developmenttoensureanadequatesupplyofskilled

individualswithinthebroadereconomy.In2011,Standard

BankspentatotalofR358million(2010:R450million)

onskillsdevelopmentinSouthAfrica,withR242million

(2010:R250million)spentonblackemployees,inline

withempowermentobjectives.Liberty’strainingspend

amountedtoR21million(2010:R21million)with72%

(2010:68%)ofthisamountspentonblackemployees.

Wehavecontinuedtoinvestinlearnershipsfor

unemployedmatriculantsandgraduatesinSouthAfrica.

TheBankingSectorEducationandTrainingAuthority

(BANKSETA)managesskillsdevelopmentprogrammes

andemployerssuchasStandardBankandLibertyhost

learnersandprovidecoaching,mentoringandtraining.In

2011,StandardBankhosted69(2010:142)learners

onprogrammesthattargetblackschoolleaversand

unemployedgraduates.Fromthe2010intakeoflearners,

thebankemployed43oftheselearnersandgraduates

subsequenttothemcompletingtheprogramme.Atotalof

120learnerscommencedLiberty’slearnershipprogramme

3 759employees in customer-facing positions

across 16 countries outside South Africa received customer service training.

Maximising our human capital

SBG employee breakdown per geography

4

66

24

6

SouthAfrica(66%) RestofAfrica(24%)

OutsideAfrica(4%) Discontinuedoperations(6%)

SBG training spend

552 612

484

0

100

200

300

400

500

600

700

2009 2010 2011

Rm

Number of Banking Skills Academy learners (Standard Bank South Africa)

79

564

311

0

100

200

300

400

500

600

2009 2010 2011

Valuing our people


ofwhich64%werewomenand16%weredisabled.Ofthis

intake,104learnersgraduatedattheendof2011.

OurBankingSkillsAcademyoffersa12-monthprogramme

thattrainsparticipantsforvariousentry-levelpositions

inthebank.Inadditiontoon-the-jobtraining,students

receivecoaching,classroomsessionsande-learning.

SuccessfulgraduatesobtainarecognisedNational

CertificateinBanking.Sinceinceptionin2008,1067

learnershavecompletedthelearnershipwithanoverall

passrateof99%.Therearecurrently276learners,from

aninitialintakeof311,participatingintheprogramme.

Lookingforwardwewillimplementamoreconsistent,flexible

andscalablelearningmodelacrossourglobaloperationsto

assistusinmeetingthechangingneedsofourbusiness.Our

traininginterventionswillfocusonareassuchascustomer

service,productknowledgeandleadershipdevelopment.

Wewillalsofocusonmigratingourlearnersfromclassroom-

basedtoelectronic-basedplatformstoreducecosts.

Diversity and inclusion Beingabletoserviceadiversecustomerbasecontributes

significantlytoourcontinuedsuccess.Ouremployees

mustbeabletounderstandandreflectthediverse

requirementsofourcustomersandthesocietiesinwhich

weoperate.Inaddition,asanorganisationwemust

beabletounderstandandvaluethediversityofour

employees.

Employment equity in South Africa

TheDepartmentofTradeandIndustry’s(dti)Codes

ofGoodPracticeforBroad-basedBlackEconomic

Empowerment(codes)requirethatinstitutionshave

initiativesinplacetoincreasetherepresentationofblack

people,withaspecificfocusonblackwomenandblack

peoplewithdisabilities,inmanagement.

Tothisend,wehavealignedourtransformationtargets

tothedticodes.Ourabilitytoachievetheseemployment

equitytargetsisimpactedbyprevailingeconomic

conditions.Forthisreasonwehaveimplementedalonger-

termviewofthiskeybusinessimperativeandhaveputin

placeactionplanstoaddressidentifiedchallenges.

Personal&BusinessBankingandCorporate&Investment

Bankinghaveclearlydefinedrecruitmentandpromotion

principles.Theseprinciplesaimtoensurethat80%ofall

newrecruitsareblackandthat50%ofallnewrecruits

andcandidatespromotedarewomen.

Weidentifyblacktalentwiththepotentialtomoveinto

junior,middleorseniormanagementpositionswithin

a12-monthtothree-yearperiod.Theseindividuals

PeterSchlebusch,ChiefExecutiveofPersonal&BusinessBankingSouthAfrica,participatinginadisabilityawarenessactivityaspartofInternationalDayforPersonswithDisabilities.

EmployeesfromStandardBankNamibiarecognisedfortheirexcellentcustomerservice.

StandardBankAsiaenteredateamintheMTRHongKongRaceWalkingCompetition,whichraisesfundsfortheHospitalAuthorityCharitableFoundation.

Valuing our people>maximising our human capital

Valuing our people


areprovidedwithinterventionssuchasleadershipand

personaldevelopmentprogrammes,aswellasmentorship

andcoachingtoassistwiththeircareergrowth.Injunior

management,ourpipelineoffutureleaders,wehave

exceededthedtiemploymentequitytarget.During2011,

84%ofappointmentsatjuniormanagementlevelwere

fromdesignatedgroups,with62%and37%atmiddle

andseniormanagementlevelsrespectively.Whileweare

closetomeetingthemiddlemanagementtarget,westill

havealotofworktodotomeettheseniormanagement

employmentequitytarget.

OfLiberty’sstaffappointedin2011,almost90%were

blackand54%werewomen,with48%beingblackwomen.

Ourcommitmenttotransformingourworkplaceissetout

inouremploymentequityplan,whichhasbeenupdated

forthenextthreeyears.Theplanwasinformedbyaudits

ofourhumanresourcepoliciesandpractices,theequity

profileoftheworkforce,areviewofourtransformation

forumsandanemploymentequitysurvey.Wehave

implementedanemploymentequityreportingsystemthat

willassistusinmonitoringourperformanceandmeeting

ourdtitargets.

Theemploymentequitysurveywasmadeavailabletoall

ourSouthAfricanemployeesin2011,withaparticipation

rateofapproximately10%.Thesurveycentredonour

employmentpracticesandpoliciesandtheresultshave

assistedusinidentifyingchallengestoachievingour

targets,particularlyatmanagementlevels.Thevisibility

ofsomeemployeeforums,communicationofour

employmentequitypoliciesandprogresstowardsour

targetsareamongtheareashighlightedforimprovement.

Disability

Weareworkingtowardsbecominga‘disabilitypositive’

organisation.Thismeansbuildinganinclusiveand

enablingworkenvironmentthatsupportsemployees

withdisabilities,sothattheyareabletoreachtheir

fullprofessionalpotential.Toachievethis,weneedto

beconfidentinhowwerecruit,manageanddevelop

employeeswithdisabilities.Inaddition,wemusthave

theabilitytopositivelyengagewithourcustomerswith

disabilities,toensurethattheyhavefullaccesstoour

rangeofproductsandservices.ByDecember2011,1,3%

(2010:1,2%)ofourgroupworkforcehaddeclaredthat

theyhaddisabilities.

Disabledpeopleareamongthebeneficiariesofour

affirmativeactionprogrammeinSouthAfrica.Oureffort

toacceleratetherecruitmentofpeoplewithdisabilities

isacontinuingchallenge.Our2016targetistohave

3%ofourworkforceinSouthAfricacomprisedofblack

employeeswithdisabilities.

Employee: age profile

Employee: length of service

10

27

14

3

46

25

20

27

28

<26yearsold(10%)

26-35yearsold(46%)

36-45yearsold(27%)

46-55yearsold(14%)

>55yearsold(3%)

<3years(25%)

3-5years(28%)

6-10years(20%)

>10years(27%)

59

Employment equity performance(Standard Bank South Africa)

2,8

3,8

0

1

2

3

4

5

Senior management Middle management Junior management

Score

2,8 2,8

3,8 4,0

3,8 4,0

3,7 3,7 4,0

2009 2010 2011

Target=5,0

Target=4,0 Target=4,0

Valuing our people


AtDecember2011,1,0%(2010:0,8%)ofStandardBank’sSouthAfricanworkforcewereblackemployees

withdisabilities.

InSouthAfrica,wesupportouremployeesandcustomerswithdisabilitiesbywayofanonlinedisabilityawareness

tool,adisabilitywebsiteandadisabilityhelplineinpartnershipwithIndependentCounsellingandAdvisoryServices

(ICAS).Alloftheseinitiativesareaimedatimprovingaccessandprovidingasupportiveenvironment.

WehavejoinedtheInternationalLabourOrganisation’sGlobalBusinessandDisabilityNetwork.Thiswillhelpus

learnfrombestpracticeandshareourownsuccesseswithanetworkoforganisations.

Gender awareness

Creatingamoreinclusiveenvironmentforwomenhasbeenanessentialfocusacrossthegroup.Ourmemberships

includeWomeninBankingandFinance,WomeninFinanceandtheAfricanWomenCharteredAccountantsForum.

Thesenetworksprovideprofessionalsupportforwomenintheindustry.

Werunanumberofdevelopmentprogrammesforwomen.Forexample,BlueHeels,our11-monthdevelopment

programme,aimstocontributetoincreasingtherepresentationofwomeninmanagerialpositions.During2011,

therewere60participantsandin2012,theprogrammewillberolledoutto120delegatesfromacrossall

provincesinSouthAfrica.Libertywilllaunchayear-longprogrammeforapproximately15womenintopandsenior

managementpositionsin2012.

Sexual orientation

StandardBankwonan‘AllyAward’atthefirstAfricanLesbian,Gay,Bisexual,TransgenderandIntersexBusiness

andHumanRightsForum.Wereceivedthisawardforourworkandcollaborationwithbusinessesandnon-

governmentalorganisationsonunderstandinghowtomanagesexualorientationinabusinesscontext.TheSexual

OrientationForuminourSouthAfricanCorporate&InvestmentBankwillbereinstatedin2012,tobuildabroader

businesscaseforsexualorientationinclusionandenablementbothwithouremployeesandourcustomers.

Performance and rewardWebelievethatdefinedresponsibilities,clearaccountabilityandeffectiveperformancemanagementhelpseach

individualaddvalue.Ourperformancemanagementprocessencouragesmanagersandemployeestoagreeclear

performanceobjectivesfortheyear,providingframeworkstohelpemployeesunderstandhowtheycontributeto

theobjectivesoftheirbusinessareaandtheoverallsuccessofthegroup.Thisevaluationofcontributionallowsusto

rewardourpeopleforsuperiorperformanceandtoidentifyandaddressdevelopmentneeds.

Remuneration

During2011,internationalregulatoryfocusonthestructureandregulationofremunerationpracticesintensified.

TheGroupRemunerationCommitteeandSBGworktoensurethatourremunerationphilosophyandpracticesmeet

developingrequirements,whilemaintainingmarketcompetitivenessandguardingagainstrisk-takingbeyondthe

group’sstatedappetite.WecontinuetoreviewourcurrentremunerationstructureagainsttheFinancialStability

Board’sprinciples.Rewardisclearlylinkedtoperformancemanagement.

Webelieveinmerit-basedremunerationanddonotdiscriminateagainstemployeesbasedondiversityorphysical

difference.InourSouthAfricanbusiness,wehaveundertakenastatisticalanalysistoidentifyareaswherethere

aresignificantdifferencesinremuneration.Factorssuchasrace,gender,age,lengthofservice,performancescore,

divisionandlevelweretakenintoaccount.Thestatisticaltechniqueusedwasrigorouswitha95%confidence

level.Theanalysisindicatedthatperformancerankingisbyfarthemostimportantfactorinmostcases,together

withthelengthofserviceandage.Inmostcasesraceandgenderwerenotsignificantfactorsforexplaining

theremunerationvariance.Fromthiswewereabletoascertainthatinmostcasesofvariance,lowerlevelsof

remunerationcanberectifiedthroughtrainingspecificallyaimedatincreasingtheabilitytoperform,whichwill

ultimatelydirectlyreflectinhigherremuneration.

MoreinformationonourremunerationphilosophycanbefoundintheAnnualIntegratedReportonpage90.

Valuing our people>diversity and inclusion

Valuing our people


Sustainable employment practices Employee wellness

During2011,were-evaluatedourwellnessactivities

toidentifystrengthsandweaknesses,withthe

objectiveofimprovingourprocesses,programmesand

monitoringsystems.Wehopetheseimprovementswill

enableamoreproductiveenvironment.SBG’swellness

initiativesareatamorematurestageinourSouth

Africanbusiness,where66%ofourworkforceisbased.

ImplementationwithinourotherAfricanoperations

varies,duetothegenerallackofavailablehealthand

wellnessresourcesanddifferingbusinessrequirements

andstaffneeds.OurGroupMedicalAdviser,basedin

SouthAfrica,ismandatedtoprovideexecutiveinput,

guidanceandadviceonallissuesofamedicalorhealth-

relatednatureasrequiredbyourriskandgovernance

structures.Theadviseralsodirectsandoverseesour

fouroccupationalhealthclinicsinSouthAfrica.These

clinicsareresponsibleforhealthandwellnessinitiatives

andprovideouremployeeswithaccesstovarious

healthcareservices.Wealsohaveawell-established

emergencyservicebasedatStandardBankCentre,our

headofficecomplexinJohannesburg,where42%of

ourSouthAfricanemployeesarelocated.

Weregularlyanalyseourabsenteeismdata,identifying

employeeswhosesickleaverecordsindicatepotential

healthandwellnessissuesthatmightrequiresupport

andassistance.Medicalstaffperiodicallyfollowup

withtheseemployees,someofwhomareeventually

referredtothebank’stotalandtemporaryincapacity

process.InSouthAfrica,ourabsenteeismratesfor

2011were2,0%(2010:1,9%)and1,4%

(2010:1,2%)forStandardBankandLibertyrespectively.

StandardBank’semployeewellnesschampionsacross

Africaaretaskedwithincreasingouremployees’

awarenessregardingwellnesssupportstructuresand

benefitsavailabletothem.Inaddition,employee

wellnesschampionsprovideHIV/Aidsandgeneral

wellnesseducationandsupporttothebank’s

customersandthebroadercommunity.StandardBank

hasover750trainedemployeewellnesschampions

acrossAfrica,includingSouthAfrica.In2012,apeer

educatorprogrammewillbeintroducedtotrainLiberty

employeestobecomewellnesschampions.

WeuseICAStoprovideafree,confidentialsupport

servicetoallStandardBankandLibertyemployees,

theirpartnersandimmediatefamiliesacrossAfrica.The

servicehasbeenmodifiedwherenecessarytomake

itmoresuitableforthespecificrequirementsofeach

WeworkwithZambia’sNationalMalariaControlCentrethatofferscommunitymembersfreemalariatesting.

InpartnershipwiththeUnitedNations,HIV/AidstestingandeducationtookplaceinGhana,Nigeria,SouthAfricaandUganda.

Employee: gender profile

57

43

Women(57%)

Men(43%)

Women’s Empowerment Principles

TheChiefExecutiveofStandardBankSouthAfricahassignedastatementofsupportfortheWomen’sEmpowermentPrinciplesassetoutbytheUnitedNationsDevelopmentFundforWomenandtheGlobalCompact.

61

Valuing our people


localoperationandanICASaccountmanagerisnow

availableinmostAfricancountriestodriveutilisation

andmanageanycounsellingservicerequirements.

ThetopthreeareasofconcernreportedtoICAS

during2011includedrelationshipissues,stressand

legalissues.

Malaria,HIV/Aidsandtuberculosisarethreeofthe

mostdevastatingglobalhealthproblemsofthe21st

century,whichtogethercausemorethanfourmillion

deathsayear.Thesediseaseshavedevastating

consequencesforpoverty-strickenareasparticularly

givenratesofcoinfection.Thishasmajorpublichealth

implicationsandsub-SaharanAfricaremainsthe

regionmostheavilyaffectedbyallthreediseases.

Besidesthebroaderimpactongrowthand

development,thesediseasesaffectourbusiness

directlythroughlossofskills,increasedresource

requirementsandcostofmanagingthehealthof

ourworkforce,andlossofbusinessduetocustomer

mortalityordestitution.

HIV/Aids

Wefocusonadata-drivenapproachtounderstanding

thepotentialriskandimpactonourworkforceand

revenuesthatHIV/Aidscouldhaveifitisnotproperly

managedorinterventionsarenotsuitablyresourced.

InSouthAfrica,weregularlyundertakeHIVtesting

andcounsellingdrives.Alldataiscollatedand

reportedtogovernmentthroughourassociationwith

theSouthAfricanBusinessCoalitionagainstHIV/Aids.

AspartofWorldAidsDay2011,werananeducation

andtestingcampaigninpartnershipwiththeUnited

Nations’programmeonHIV/Aids.Informative

materialwasdistributedtoallemployeesacrossthe

groupandfocusedemployeeandcommunitytesting

andeducationtookplaceinGhana,Nigeria,South

AfricaandUganda.InSouthAfrica,3103Standard

Bankand1153Libertyemployeesunderwent

voluntaryHIVtesting.

Malaria

TheWorldHealthOrganisationestimatesthatsome

300to500millioncasesofmalariaoccurannually,

resultinginthedeathsofmorethanonemillion

people.Some91%oftheworld’smalariadeathsoccur

inAfrica,thecoreofSBG’soperations.TheAfrican

continent’sfuturesuccessislinkedtoaddressingthe

impactofmalaria.WecollaboratewithUnitedAgainst

Malaria,anorganisationthatworkstowardsmeeting

theUnitedNations’targetofuniversalaccessto

malariamedicineandmosquitonetsinAfrica.Through

UnitedAgainstMalaria,togetherwithtwoother

partners,wedonatedUSD200000(R1,45million)to

theGlobalFundtoFightMalariain2011.

Asaresultofour2010campaigntoraiseawareness

aboutmalariaandprovidingdouble-sizedinsect-

repellentbednetstoallemployeesin15countries,

wehaveseenanoveralldropinmalariacasesacross

theseoperationsofapproximately10%.InNigeria,

thedrophasbeenmorethan30%.Althoughitis

tooearlytotellifthisdropissustainableoverthe

longterm,wearemotivatedtocontinuethisfight

andduring2011weonceagaincampaignedtoraise

awareness.

Creating a safe place to work Weaimtopromoteapositivehealthandsafety

culturethroughimplementingappropriatesystems

andprocedurestopreventsafetyhazards,illhealth

andoccupationaldiseasesandincidents.Ultimately

beingproactiveonthisissuehelpsustoreducethe

costassociatedwithabsenteeismandcontributes

towardscultivatingahighperformanceculture.

Ofthe243incidentsreportedinSouthAfricain

2011,14resultedin666dayslostaccountingforthe

78%increaseinnumberofdayslost.

OurOccupationalHealthandSafetyProgrammecovers

allStandardBankbuildingsthroughoutAfrica.InSouth

Africa,StandardBankspentR1,8milliontraining

1912occupationalhealthandsafetyofficialsin2011.

Inaddition,wehaveane-learningprogrammethatis

tailoredtoourspecificoccupationalhealthandsafety

requirementsandisavailabletoourhealthandsafety

officialsinSouthAfrica.Atotalof8906(2010:8850)

healthandsafetyofficialsreceivedtrainingthroughthis

channelduringtheyear.Atotalof237Libertyand

35StandardBankPlcemployeesparticipatedinhealth

andsafetytrainingprogrammes.

Throughourinternalcommunicationchannels,we

publishinformationonhealthandsafetytopicsevery

threeweeks.

TheEnvironmentalManagementSystem,

implementedin2010,hasbeenexpandedtoinclude

thereportingofoccupationalhealthandsafety

incidents.ThiswillberolledoutacrosstheSouth

Africanbusinessoverthenextyearandpresentsa

majorimprovementonexistingmanualsystems.

Valuing our people>sustainable employment practices

Valuing our people


Employee relationsWeunderstandthatrelationsbetweenemployeesand

managementmustbeeffectivelymanagedtoachieve

mutualbenefits.Wesubscribetotheprincipleof

freedomofassociationinlinewiththeInternational

LabourOrganisation’sConventions.Accordingly,we

recognisetherightsofemployeestojointradeunions

andwebelieveinbuildingrespectfulandmutually

beneficialrelationshipswithworkerrepresentative

organisations.InSouthAfrica,50,8%(2010:50,2%)

ofStandardBank’semployeesbelongtoSASBO,

TheFinanceUnion.

Wherelabourorganisationsarepresentinother

countriesofoperation,weworktobuildstrong

relationshipsandagreeonoutcomesthatbenefit

allstakeholders.InAfrica,collectiveagreements

existwiththeappropriateunions,inlinewithlocal

legislation.Recognitionagreementsexistwith

labourunionsinBotswana,Ghana,Kenya,Lesotho,

Malawi,Mozambique,Namibia,Swaziland,Zambia

andZimbabwe.InmostcountriesbeyondAfricathere

arenocollectiveagreementscoveringemployment

relationships.However,employeesarefreetojoin

unionsandintheUnitedKingdom(UK)weconsultwith

employeerepresentatives,whererequired,incollective

retrenchmentsituations.

Post retrenchment

Theglobalretrenchmentprocessundertakenin

2010wasinaccordancewiththelawsgoverning

retrenchments,aswellascollectiveagreementswith

labourorganisations.Aspecialdisputereviewcommittee

wassetuptodealwithdisputesarisingfromthe

retrenchmentprocess.

Aftertheretrenchmentprocess,weintroduceda

workforcedeploymentstrategy.Thisisaimedatretaining

surplusemployeesintheorganisationforaperiod

longerthanthelawmayrequire,whileweseektofind

reasonablealternativeoffersofemploymentforthem.

Thishasbeenlargelysuccessful,withsomeemployees

undergoingup-skillingandreskillingprogrammesto

improvetheirsuitabilityforredeployment.

Dispute resolution

Ourpolicies,grievancehandling,disciplinaryprocedures

anddisputeresolutionprocessesaredesignedto

ensurethateventhemostcomplexmattersaredealt

withinafairandjustmannerforboththebankandour

employees,eitherindividuallyorcollectively.InSouth

Africa,employeescanberepresentedbytheunion

(iftheyaremembers)orcolleaguesduringinternal

disciplinaryhearings.IntherestofAfrica,disciplinary

50,8%of Standard Bank’s employees in South Africa

belong to SASBO, The Finance Union.

Total disciplinary procedures(Standard Bank South Africa and Liberty)

2 240

1 486 1 451

44

63 35

500

1 000

1 500

2 000

2 500

2009 2010 2011

0


1 958 2 004

1 912

1 600

1 700

1 800

1 900

2 000

2 100

2009 2010 2011

Number of health and safety officials trained (Standard Bank South Africa)

Injury reporting(Standard Bank South Africa)

268 257 243

711 640

1 140

200

400

600

800

1 000

1 200

2009 2010 2011

0

Numberofinjuries Numberofdayslost

Valuing our people


hearingsareheldinlinewithrelevantpolicy,andbeyond

Africaeachcaseissettledonanindividualbasis.

Insomecountries,includingintheUK,employees

canchoosetobeaccompaniedbytradeunion

representativesatdisciplinary,grievanceandappeal

hearings.

Employee community involvement

Wesupportthepersonalphilanthropyofouremployees

andencouragethemtobecomeinvolvedintheir

communitiesandbepartofcreatingrealchangeinthe

livesofthepeopletheyserve.Whererelevant,wematch

theirdonationsandduring2011,atotalofR6,5million

wasdonatedtovariousbeneficiariesthroughthegroup’s

employeematchingschemes.

TheEmployeeCommunityInvolvementProgramme

inSouthAfricaformalisesthenumerouscommunity

upliftmentinitiativesouremployeesareinvolvedin.

Theprogrammeallowsforstructuredopportunitiessuch

asteambuildingeventsandastaffmatchingfacility,

whereindividualdonationsarematchedbythebank

randforranduptoR5000andgroupdonationsupto

R100000.During2011,approximately2000employees

participatedinthisprogramme.

Inourinternationaloperation,wesupportour

employeesintheircharityfund-raisingefforts.Inour

‘PoundforPound’matchingscheme,employeescan

havetheircharitabledonationsmatchedbyupto

GBP500.Charitiesofchoiceinthisoperationinclude

children’scharities,healthorganisationsandyouth

developmentworkshops.

Lookingforward,wewillcontinuetoenhanceand

increasetheuptakeofstaffvolunteeringthroughthe

developmentofanelectronicsystemthatwillenable

stafftologtheirpledges.

R6,5 milliondonated to various beneficiaries through

our employee matching schemes.

2 000employees in South Africa participated

in the Employee Community Involvement Programme.

StandardBankemployeessupporttheMellonHousingInitiative,anon-profitorganisationinSouthAfricaworkingwithgovernmenttocreate

sustainablehumansettlements.

FollowingthedevastatingearthquakeandtsunamithathitJapan,StandardBanksupportedRescueSAandemployeesmadefurtherdonationsthroughthe

employeematchingprogramme.

Tech

no

log

y an

d

infr

astr

uct

ure

Information technology

Operating infrastructure

Insteadofprintingbrochures,weusedelectronicdevicesattheStandardBankCOP17standtocommunicateourclimatefinanceandcarbontradinginitiatives.

Technology and operating infrastructure



2011 highlights• CreatedanEnterprise Portfolio Management Office

thatoverseestheentireITprojectportfolio.

• AppointedaRegional Information OfficerforAfrica.

• AppointedaChief Information Security Officerand

establishedaGroup Information Security Committee.

• Initiatedafour-yearprojecttorefreshsome1600

ATMswithnew technology.

Standard Bank Group’s (SBG) information technology (IT) systems and operations infrastructure enable the organisation to be more effective and efficient.

Our investment in these business enablers is a significant part of our expense base and they are critical to improving productivity and maintaining our competitive edge.

Our opportunities

44,6 millionCellphone Banking transactions processed in South Africa, transferring value of R2,8 billion.

96,5%ATM availability achieved in South Africa.

Investing in IT improves our

customer service and enables

us to take new products to

market faster.

Ensuring our IT systems are secure enables

us to meet regulatory

requirements, enhances our

reputation and builds customer

trust.

Migrating customers

onto virtual channels reduces

our operating expenses,

enabling lower transaction costs

for customers.

Building our operating

infrastructure across Africa establishes our brand

and reaches more potential

customers.

Taking our physical

presence into marginalised communities

increases our potential

customer base.

Designing and operating our buildings in an

environmentally sustainable way reduces our impact and is more

operationally efficient.

Our challenges

Replacinglegacysystemswithanewercorebankingsystemrequiresaninterimphaseofrunningbotholdand

newsystemssimultaneouslywhilethemigrationisundertaken.

Theconstantneedtoinvestinourdistributionnetworkinfrastructuretoprovidecustomerswithaconsistent

experienceandtoensureaccessibility,securityandavailability,whileatthesametimeprovidinglowerpricing

toourcustomers.

EnergysecurityisamajorconcernacrossouroperationsinSouthAfricaandAfrica,requiringinvestmentin

alternativeenergysupplysources.



ITspend Rbn 12,9 13,1 9,5

Branch and service centre network 1 222 1159 1012

StandardBankSouthAfrica 7031 705 664

StandardBankAfrica 519 454 348

ATM network 7 945 8209 6864

StandardBankSouthAfrica 5 831 5565 4810

SolutionATMs2inSouthAfrica 1 175 1736 1284

StandardBankAfrica 939 908 770


InternetBankingsubscribers3 1 092 389 9017074 814458

CellphoneBankingcustomers5 1 306 679 218846 162171

Branches and services centres per province

EasternCape 90 88 86

FreeStateandNorthernCape 84 81 78

Gauteng 173 179 169

KwaZulu-Natal 107 107 99

Limpopo 44 41 38

Mpumalanga 52 53 50

NorthWest 34 34 31

WesternCape 119 122 113

1 Includes loan centres.2 ATMs operated by an independent service operator. During 2011 we removed all underperforming Solution ATMs.3 Active registered users.4 Restated.5 Includes Mobile Money Accounts.


Annually, we process more than

819 millionInternet transactions.

446 millionATM transactions.

63 millionteller transactions.

0

0,8m 0,9m

1,1m

200 000

400 000

600 000

800 000

1 000 000

1 200 000

2009 2010 2011 2015

Internet Banking customers (Standard Bank South Africa)

2015target=3millioncustomers

0 0,1m

0,2m

1,3m

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

2009 2010 2011 2015

Cellphone Banking customers (Standard Bank South Africa)

2015target=9millioncustomers

2011 Sustainability Report 67



ITisastrategicassetthatimprovesourability

tomeetevolvingbusinessneedsanddeliveron

customerserviceexpectationsandefficiency

demands.Italsoplaysapivotalroleinensuring

thatourbusinessisbetterabletomeetregulatory

compliancerequirements.Tothisendwecontinueto

makesignificantinvestmentsinIT,spendingatotal

ofR12,9billionacrossthegroupin2011,28,6%

(2010:29,6%)oftotaloperatingcosts.

Weensuretheeffectiveandefficientoperation,

managementandgovernanceofourITsystems

andweareworkingtoalignoursystemstoSBG’s

businessstrategy.

Strategy for ITWeaimtomakeITanefficientassetthatsupports,

sustainsandenablesSBG’sgrowthandoperational

excellence.WehavedevelopedastrategyforITthat

seekstoincreaseproductivityoverthenext30months

throughtheconsolidationandstandardisationofour

ITinfrastructureacrossthegroup.Theconsolidation

ofourtechnologiesisunderwayandakeymeasureof

successwillbethereductionofSBG’stotalITcosts.

Inaddition,wehaveestablishedprocessestoensure

thatarobustbusinesscaseexistsforalltechnology

investmentsandwehavecreatedanEnterprise

PortfolioManagementOfficethatoverseesthe

entireITprojectportfolio.

Governance OurITgovernancepracticesareintendedto:

• Promotebetterdecision-making.

• Increasetransparencyandaccountability.

• EnsurethatITactivitiesyieldanadequatereturn

oninvestmentandaddtoshareholdervalue.

• Improvetheoverallperformance,efficiencyand

servicedeliveryofourbusiness.

In2010,wesaidthatwewoulddevelopaformalIT

GovernanceImprovementProgrammetooptimise

existingpracticesacrossourITfunctions.Partofthe

programmehasbeendelayedduetootherconflicting

organisationalneeds,howeverwedidundertake

severalITgovernance-relatedactivitiesduring

2011.InadditiontodevelopinganITstrategy,our

corporategovernancestructureswererealignedto

ensureboardresponsibilityforITgovernance.We

haveestablishedacentralITfunctionacrossthe

groupthatincludesdedicatedITfunctionsforeach

businessareaandacrossgeographiesthatrespondto

andserviceindividualbusinessneeds.Wehavealso

appointedaRegionalInformationOfficerforAfrica

andcarriedoutindependentreviewsandauditsof

keyprogrammeswhichhavehighlightedareasof

concernandopportunitiesforimprovement.

Liberty’sITgovernancecharterandframeworkwas

developedandimplementedin2011.Biannual

assessmentsareconductedtoevaluatethe

governanceandmanagementoftheITpractices

undertakenbyeachbusinessunitwithinLiberty.

Tobolsterourapplicationoftheprinciplesand

recommendedpracticesintheKingReporton

GovernanceforSouthAfrica(KingCode),weintend

tocreateanITgovernancecapabilitythatleverages

internationalbestpracticeandisflexibleinitsability

tomeetbusinesslinerequirements.Itwillalsopromote

continuousimprovement.Weareconfidentthatthiswill

meettherecommendationsoftheKingCode.

Group information securityInformationsecurityremainsacentralfocusacrossthe

group,withspecificprojectstoimproveinformation

securitycontrolsandinformationsecuritygovernance.

During2011,weundertookagroupwideinformation

securityassessmentandimplementedfurther

initiativesthatfocusonriskandfraudreduction

measures.WehavealsoappointedaChiefInformation

SecurityOfficerandareestablishingadedicatedand

adequatelyresourcedinformationsecurityteam.

WehavealsoputinplaceaGroupInformation

SecurityCommitteethatwillgovernanddrivethe

informationsecurityprogramme.

Information technology “The extensive systems renewal currently underway will allow for flexibility and scalability

as we grow, meaning that we build it once and use it many times.”

Peter Wharton-HoodDeputy Chief Executive, Standard Bank Group



Energy consumption In2012,wewillembarkonaprojecttoobtainabetter

understandingoftheenergycostsassociatedwithour

ITinfrastructure.TheconsolidationoftheSamrandData

Centrewascompletedduring2011,whichwillreduce

overallelectricityconsumption.Wemanagetheelectricity

consumptionatourtworemainingdatacentresin

SouthAfricaonanongoingbasisbyreducingtheoverall

infrastructurefootprintandutilisingexistinginfrastructure

moreefficiently.Inaddition,wearereviewing

contemporarydatacentrecoolingpracticeswiththeview

toimplementingnewtechnologyandtechniquesthatwill

reducecarbonemissionsandsaveassociatedcosts.While

datacentresinouroperationsoutsideofSouthAfricaareof

amuchsmallerscale,theprinciplesandpracticesemployed

inSouthAfricacanbeappliedacrosstheboard.

InSouthAfrica,weareconsideringenergy-savingsoftware

thatmanagesthepowerofdesktopcomputers.Weplan

toupgrade17000desktopsbytheendof2012,this

isapproximately50%oftheinstalleddesktopcomputer

baseinSouthAfrica.

IT operations

Corporate & Investment Banking

Corporate&InvestmentBankingcontinuestomake

systemchangestoenhanceitsservicestointernaland

externalstakeholders.Wehaveimplementedanactive

recruitmentprogrammetomitigatethelevelofIT

staffattritionbeingexperienced,whichwillultimately

contributetoimprovingsystemstability.

InGlobalMarkets,wecontinuedwiththerolloutofthe

MurexplatformfortheRatesandForeignExchange

businessesandimplementedapriceaggregatorforthe

latterbusiness.WealsoimplementedthenewBusiness

Onlineplatform,whichallowsourLondon-basedcustomers

toelectronicallyaccessandtransactontheiraccountsheld

withinourAfricanoperations.Inaddition,weintroduceda

newcapabilitythatprovidesourIndustrialandCommercial

BankofChina(ICBC)customerslocatedinAfrica,the

abilitytotransactontheirICBCaccountsovertheStandard

Banknetworkandsystems.Anewbillingsolutionhas

beenimplementedinthreebusinessareaswhichhasled

toimprovedfeecollection,aconsistentpricingandbilling

process,andimprovedmanagementofconcessions.We

havestartedreplacingourlegacysystemsintheGlobal

Marketsareaswithanadvancedtradingplatform.

Wealsolaunchedaresearchportaltoprovideourcustomers

withimmediateaccesstocurrentandhistoricalresearch.

Theportalraisesthebenchmarkintermsofcustomer

interactionwiththebank.Goingforwardwewillprovideour

customerswithrelatedapplicationsfortheirmobiledevices.

SBG IT spend

69

Ourfourstrategicthemestoachieveour

ITstrategy

Value across IT

• StandardiseandconsolidateITinfrastructure.

• ReduceITcosts.

• Optimallyallocatehumanresources.

Enable business growth

AlignallITsystemsacrossallouroperationsto:

• Supportbusinessgrowth.

• Supportbusinessinnovation.

Operational excellence

• Improveprojectdelivery.

• Delivertherightservicesatacompetitivecost.

• Optimiseriskmanagement.

People and culture

• Developahighperformanceculture.

• Attractandretainspecialisedskill.

• Improveleadershipandcapability.

9,5

13,1 12,9

0

2

4

6

8

10

12

14

2009 2010 2011

Rbn

17 000 desktops in South Africa to be upgraded

with energy-saving software by the end

of 2012.



Personal & Business Banking

Personal&BusinessBankingcontinueswithitsfive

toseven-yearprojecttoreplacelegacysystemswith

astandardisedSAPsysteminSouthAfrica.Thiscore

bankingsystemisexpectedtosupportgreaterrevenue

growththroughimprovedbusinessflexibility,faster

developmentandlaunchofnewproducts,andbetter

processingturnaroundtimesthatwillsupportimproved

customerservice.Thesebenefitswillservetoreduce

operationalcosts,includingproductdevelopmentcosts,

andfacilitatecustomerretentionandacquisition.In

addition,theimprovedsystemcontrolsandstabilitywill

mitigateriskandassistwithregulatorycompliance.Akey

challengeismanagingandrunningbotholdandnew

systemssimultaneouslywhileweundertakethemigration.

During2011,wecompletedseveralprojectsinourcore

bankingtransformation,includingprojectstoreduce

ourITcarbonfootprintandtomovetowardsapaperless

environment.Projectshavebeeninitiatedtodecommission

approximately208legacyapplications,whichwill

contributetoareductionincostsandsystemcomplexity.

Thenewcorebankingsystemwillenableustocreatea

singleviewofacustomer’sinteractionwithusandassistus

indeterminingtheirexactneeds.Thiswillnotonlyimprove

ourcustomerservicebutwillalsoincreasestaffproductivity

andenablecross-sellingopportunities.Thefocus

throughouttherestofAfricaistoimplementasinglecore

bankingsolution,Finacle,acrossallcountriesofoperation

thatwillhavespecificcomponentsaddedtoaddresseach

country’soperationalneeds.Thecorebankingsystemwas

successfullydeployedinNigeriain2011,andisscheduled

togoliveinNamibiaandUgandaduring2012.

Liberty

Liberty’sITavailability(uptime)was99,7%in2011

(2010:99,8%),exceedingitstargetof99,5%.Liberty

introducedanumberofapplicationimprovements

during2011,withparticularattentionpaidtothe

Frank.netplatform,anonlinelifeinsuranceprovider.

Theseimprovementshaveresultedingreatersystem

efficienciesandenhancedcustomerservicecapabilities.

Liberty’sInfrastructureRenewalProgrammeaddressesthe

renewalofend-of-lifehardware.Ofthe51activeprojects

underthisprogramme,Libertycompleted24in2011

andtheremainderwillbecarriedoverto2012.Liberty’s

programmetoreduceitsITfootprintandimproveenergy

efficiencyisontrackandwillbecompletedbytheendof

2012.Aspartoftheconsolidationthatwascompletedin

2011,Liberty’sdisasterrecoverysitewasmovedtothe

SamrandDataCentre.Followingtherelocation,Liberty’s

systemsweretestedandtheresultsconfirmedthatit

isabletorecoveritscoresystemswithintherequired

timeframesintheeventofadisaster.

IncollaborationwiththeInternationalEmissionsTradingAssociationwehostedaweek-longprogrammeofCOP17sideeventsatourregionalofficeinKingsmead.

OurnewofficeblockbuildingunderdevelopmentinRosebank,Johannesburg.

StandardBankheadofficeinGabarone,Botswana.



Distribution network

South Africa

Ourinvestmentinourdistributionnetwork

infrastructureisfocusedonprovidingcustomerswith

aconsistentexperienceandensuringaccessibility,

convenience,securityandavailability.Toprovide

lowerpricing,weneedtoreduceouroverallcash

managementcosts.Tothisendwewillfocuson

‘tellerless’branchessuchasouraccesspointsin

communityretailshopsandloancentres,and

encouragethemigrationofourcustomerstocheaper

self-servicechannelssuchasCellphoneBankingand

InternetBanking.Our2015targetsaretoreduce

serviceandbasictransactionsinbranchesfrom

80%to20%andtohavethreemillionandnine

millionactiveInternetBankingandCellphoneBanking

usersrespectively.

During2011,weembarkedonafour-yearprojectto

upgradesome1600ATMswiththelatesttechnology.

AtDecember2011,wehadupgraded382ATMs.

Wehavealsomadeprogressinofferinginnovative

paymentservicessuchasautomatednoteaccepting

onourATMs.Thisserviceremovestheneedtouse

envelopestodepositmoneythroughanATM.

OuraverageATMavailability(uptime)was96,5%

(2010:96,5%)againstatargetof97%.


In2011,weincreasedthenumberofbranchesand

servicecentresthroughoutourAfricanoperationsby

14%to519.

Wehavetakensignificantstepstoaddresstheway

weserviceourcustomersacrossAfrica,particularly

throughself-servicechannels.Wehavedeployedover

939ATMstofacilitateaccesstocash,andourInternet

Banking,mobilebankingandcontactcentresfurther

enhanceourservicetocustomers.

WeareupgradingourmobileandInternetchannelsto

increaseourcustomerreach.Theseenhancementswill

belaunchedin2012.Weuseourmobilechannelto

communicatewithourcustomersthroughmessaging

andalerts,whichassistthemtomanagetheirbank

accountsmosteffectivelyandalertingthemto

potentialrisks.AtDecember2011,StandardBank

Africahadover107800(2010:123810)Internet

andmobilebankingcustomers.Wehaveconcentrated

onclearingdormantaccounts,whichexplainsthe

decreaseincustomersusingthesechannels.However,

thenumberoftransactionsthroughthesechannels

Branches and service centres(Standard Bank)

Operating infrastructure

664 705 703

348

454 519

0

200

400

600

800

2009 2010 2011

South Africa Rest of Africa SouthAfrica RestofAfrica

6 094 7 301 7 006

770

908 939

2 000

4 000

6 000

8 000

10 000

2009 2010 2011

South Africa Rest of Africa

0

ATMs(Standard Bank)

SouthAfrica RestofAfrica

Business Online

StandardBank’sBusinessOnlinechannel

providesbusinesseswithafullsuiteof

productsandservices.BusinessOnline

currentlyhasmorethan50000business

usersandprocessesmorethan20million

paymentspermonth.

9 716access points in community retail shops,

of which 4 976 are active.

105 loan centres.

71



hasincreasedfromlessthanonepercustomertoclose

tothreepercustomer.

Physical access in underbanked areas EnsuringthatallSouthAfricanshaveconvenient

accesstobankingservicesisakeyfactorin

determiningwhereweplacenewbranchesand

servicecentres.During2011,sevennewStandard

Bankbranches,servicecentresorloancentres

wereopenedinunderbankedareas.Inaddition,

26branchesorservicecentresintheseareaswere

revampedorupgraded.

Ouraccesspointsandloancentresalsoprovide

increasedaccesstohistoricallymarginalised

communities.Customerscanmakeenquiries,deposit

andwithdrawcash,sendandreceivemoneyand

buyprepaidairtimeandelectricityataccesspoints.

AtDecember2011,wehadalow-costdistribution

networkof4976activeaccesspointsand105loan

centres.

OfourtotalATMnetworkinSouthAfrica,35%are

situatedinareaswherepeoplegenerallyearnlessthan

R4165permonth,classifiedasLSM1-5areas.

Libertyprovidesitsproductsandservicestothis

marketsegmentthroughindependentbrokers,

StandardBank’sbranchesandcallcentres,aswellas

itsEmergingConsumerMarketsalesanddistribution

channels.Libertyhas57dedicatedEmerging

ConsumerMarketteamslocatedinallnineprovinces

inSouthAfrica.

Energy securityEnergysecurityisamajorconcerninmitigating

operationalrisk.InSouthAfrica,ourbranch

networkissupportedby245generators,providing

areliableelectricitysupplytoapproximately56%

oflocalcustomertransactions.No-breakrotary

uninterruptiblepowersupply(UPS)generatorsat

ourheadofficeinJohannesburgsupportthebank’s

operationalandITrequirements.

Standbypowerstabilisersandgeneratorsareinstalled

inourheadofficebuildings,cashcentres,various

branchesandservicecentresandallnewbranches

acrossourAfricanoperations.Wehaveinstalled

66generatorsetsand51UPSunits,covering

approximately74%ofourcustomers’transactions

acrossthisbusiness.

Libertyhasinstalled57dieselpoweredback-up

generatorsand13UPSsystemsatLiberty-owned

shoppingcentresandcriticalofficelocations.

Green buildingsStandardBankandLibertyPropertiesaremembers

oftheGreenBuildingCouncilofSouthAfrica.This

helpsensurethatallournewbuildingsaredesigned,

builtandoperatedinanenvironmentallysustainable

way.Whendesigningnewbuildings,weconsiderthe

GreenStarSAbuildingratingsystemthatassesses

theenvironmentalimpactofbuildings.Thissystem

takesintoaccounttheindoorenvironmentalquality,

thebuilding’senergyandwaterconsumption,

materialsusedandsiteemissions.

Ournewofficeblockbuildingunderdevelopment

inRosebank,Johannesburg,isbeingdesignedto

achieveaminimum4-StarGreenStarSAratingfrom

theGreenBuildingCouncilofSouthAfrica.

Thebuildingwillbeprovidedwith150%morefresh

airthanrequiredbynationalbuildingregulations,

andapproximately60%oftheofficeareawillhave

ahighlevelofnaturaldaylightandadirectlineof

sighttotheoutdoorsorintoasun-litatrium.Energy

efficientlightingsystemsandwaterefficientfittings

andfixtureswillbeinstalled,andtheconsumption

ofbothresourceswillbeeffectivelymanagedand

monitoredwithmeteringandsub-meteringsystems.

Parkingbaysaretobededicatedtoalternativefuel

vehicles,motorbikesandscooters,andfacilitiessuch

asshowers,lockersandsecurestoragewillbeprovided

foremployeeswhousebicyclestocommute.The

buildingislocatedincloseproximitytopublictransport

facilitiesincludingtheRosebankGautrainstation.

Thebuildingwillhavededicatedstorageareasfor

theseparationandcollectionofpaper,glass,plastics

andmetalstofacilitaterecycling.Thebuilding

materialsbeingusedaresourcedwithenvironmental

aspectsinmindandproductsaresourcedlocally

whereavailable.Duringconstruction,ongoingwaste

managementpracticesareadheredtowiththeaimof

reusingorrecycling85%ofwastegeneratedonsite.

Wewillformallyapplyforadesignratingonour

Rosebankbuildingin2012.

Liberty’sflagshipproject,completedduring2011,

addedanew30778m2wingtotheSandtonCity

shoppingcentre,bringingthetotalretailfloorspace

ofthecomplextoaround144000m2.Despite

theextension,itisanticipatedthatSandtonCity’s

electricityconsumptionwillnotsignificantlychange

duetotheinstallationofnewefficientelectrical

equipmentandintelligentlightingsystems,a

reductionintheair-conditioningloadandanincrease

innaturallightavailableinthecomplex.

En

viro

nm

ent

Environmental and social risk management

Climate finance and carbon trading

Our direct impact

StandardBanklaunchedacarboncalculatorforvehiclefleetsin2012.http://eco2fleet.standardbank.co.za/

Environment


Environment

2011 highlights• LaunchedtheEnvironmental and Social Appraisal

Systeminourcorporatelendingbusiness.

• EstablishedanumberofProgrammatic Clean

Development Mechanism(CDM)projects,anewtype

ofCDMregistrationthatismoreaccessible.

• Won13bidswithaninstalledrenewableenergy

capacityof605 megawattsandatotalfinancing

requirementofR8,2billion.

• Installedphotovoltaic plants atStandardBank

CentreandourregionalofficeinDurbanwithpeak

powerproductionof105kilowattsand45kilowatts

respectively.

Standard Bank Group (SBG) has an obligation to manage the environmental and social aspects and impacts that our activities, products and services have on society, and to respond strategically to the risks that global environmental and social pressures place

on our ability to create sustainable value for our stakeholders.

Our opportunities

Involved in 50 CDM projects under development.

R19,1 millionspent on projects to increase the energy efficiency of our South African operations.

60 teachers from Tshwane South District in Gauteng, South Africa, attended environmental awareness training at our Mogale’s Gate conservation centre.

Implementing sound

environmental and social risk

assessment tools for projects we

finance mitigates associated risks.

Lending responsibly protects our reputation and assists

our customers to meet their

social and environmental

obligations.

Investing in carbon finance

and trading reduces carbon dioxide (CO

2)

emissions while generating revenue.

Supporting and developing carbon markets

enables us to grow our business and

customer base in this area.

Through financing

innovation we can turn climate

challenges into market

opportunities.

Reducing our resource consumption

alleviates environmental

impact and reduces

operational costs.

Our challenges

PotentiallendingriskfacedunderthenewNationalEnvironmentalWasteManagementActwherelandheldas

securityisfoundtobecontaminated.

Africa,thecontinentonwhichthemajorityofouroperationsarebased,isveryvulnerabletotheeffectsof

climatechange.

AsAfricaisstilladevelopingcontinentitsfutureenergymixislikelytostillincludecoal-firedpowerstationsas

thefinancingofrenewableenergyprojectsiscomplexandexpensive.

Managingandmeasuringourowncarbonfootprintisachallengerequiringinvestmentintechnologyandresources.

Environment



Carbon equivalent

StandardBankSouthAfrica metrictons 180 403√ 177289 154538

StandardBankAfrica metrictons 23 246 3887 793

StandardBankArgentina1 metrictons 3 680 4038 2919

StandardBankPlc metrictons 17 079 N/A2 N/A2

Liberty metrictons 50 479√ 46525 47373

Equator Principles

Numberofprojectsfinanced 9√ 11 5

Numberofadvisoryservicesonprojectfinancedeals 20√ 10 20

Energy

StandardBankSouthAfrica

•Fuel3 litres 3 868 631 4701699 N/A2

•Electricitypurchased4kilowatthours 152 561 8165 145015178 132361054

•Renewableenergysourcedkilowatthours 521 246 N/A2 N/A2

StandardBankAfrica

•Electricitypurchased6kilowatthours 19 960 128 N/A2 N/A2

Water

StandardBankSouthAfrica7 kilolitres 295 807 340889 336986

StandardBankAfrica8 kilolitres 173 849 N/A2 N/A2


Paper9 tons 3 337 2755 1217

Wastegenerated tons 1 196√ 473 677

1 From 2012 we will be a minority shareholder in our Argentinean operations, and will not report this carbon footprint.2 Not available.3 Fuel consumption includes Standard Bank Centre, branches, data centres and fuel used in vehicles throughout South Africa.4 Electricity consumption covers approximately 63% of Standard Bank’s sites.5 This figure excludes the branch network but has increased due to a new data centre.6 Data has been collected for eight African countries of operation.7 Water consumption covers approximately nine head office and regional buildings.8 Data has been collected for seven African countries of operation.9 Paper consumption includes head offices, branches, data and cash centres.√ Externally assured (refer to assurance statement on page 89).Note: the increase in Standard Bank Africa’s carbon footprint, as well as electricity, paper and waste for South Africa in 2011 is mostly due to an increased scope.

Targets against 2009 baseline Progress 2011 2009

Energyconsumed:15%reductionby2015 Ontrack kilowatthours 125422308 132361054

Waterconsumed:20%reductionby2015 Ontrack kilolitres 295808 336986

Generalwasteproduced:20%reductionby2015 Ontrack tons 513 678

Paperconsumed:10%reductionby2015 Furtherworkrequired

tons 1491 1217

Paperrecycled:5%increaseby2012 - tons 516 N/A1

1 Not available.


Our targets

ThefollowingenvironmentaltargetshavebeensetforStandardBankSouthAfricausing2009asabaseyear.Incalculating

the2011progressagainsttargetswehaveusedthesamescopeaswasusedin2009.Thereforetheconsumptionfigures

inthistablearenotcomparabletothoseabove.

Environment


Issuessuchasglobalclimatechange,lossofbiodiversityandresilienceinthenaturalenvironmentdirectlyimpact

onourcustomers’qualityoflifeandtheirabilitytoprospereconomically.Whatimpactsourcustomers,ultimately

impactsus.AsanemergingmarketorganisationthataspirestobetheleadingAfricanfinancialinstitution,we

recognisethatAfrica’sindustries,exportsandGDParelargelybasedonnaturalresources.Withfewexceptions,the

topthreeexportsbymostAfricancountriesareallnaturalresources.Ourcustomerbaseincludesthecompanies

thatworkwiththeseresources,aswellastheindividualswhodependonthemforeconomicsurvival.

Asafinancialservicesgroup,wehavebothdirectandindirectimpactsonsocietyandtheenvironment.Ourindirect

impactsariseoutoftheprojectsandcompanieswefinance,aswellastheproductsandservicesweprovide.Our

directimpactsariseoutofourdailybusinessactivitiesinwhichweconsumenaturalresourcesandgeneratewaste.

Ourgreatestopportunitytomeaningfullyimpactonenvironmentalconcernsliesinourindirectimpact.Wehave

theabilitytofinanceinnovationandturntheclimatechallengeintomarketopportunities,wecanresponsiblylend

tocompaniesensuringthatsocialandenvironmentalrisksaremitigatedandwecanfinanceproductsthatassistour

customerstoreducetheirowncarbonfootprint.

During2011,wemadeprogressinmanagingbothimpacts.Wedevelopedandimplementedenvironmentaland

socialriskmanagementtoolsinourCorporate&InvestmentBankingbusiness,launchedprogrammesenablingour

customerstoaccesscarboncredits,installedenergyefficientlightingsystemsthroughoutourheadofficecomplex

inJohannesburg,installedphotovoltaicsystemsintwoofficecomplexes,andweworkedtoraisesustainability

awarenessamongouremployeesandcommunities.

Environmental and social risk management TheenvironmentalandsocialrisksassociatedwithSBG’sbusinessoperationsandlendingactivitiesincludethe

threatofadverseeffectsonthenaturalenvironment,aswellasriskstothelivelihoods,health,rights,and

culturalheritageofcommunities.Inaddition,climatechangeposesarisktothedevelopmentandgrowthof

emergingmarketeconomies,canincreasethecostsofcomplyingwithregulatoryrequirementsandcausedamage

toassetsasaconsequenceofextremeweatherevents.Weareproactiveinourmanagementofenvironmental

andsocialrisk,goingbeyondtheminimumrequirementofcompliancewithlegislationbyworkingtowardsbest

practiceperformance.

Environmental and social risk assessment Environmentalandsocialriskscreeningevaluatesatransaction’spotentialenvironmentalandsocialrisks,and

itsimpactsinitsareaofinfluence.InAfrica,differinglegislationandlackofenvironmentalspecialisationpose

challengesforbusinessesoperatingonthecontinent.SBGusestwoapproachestoscreenandprocessprojects,

namelytheEquatorPrinciplesforprojectfinanceloansandaninternallydevelopedappraisalsystemforother

financialproducttypes.

Key steps across the transaction process

“Nature is this continent’s GDP, and there is no sense in undermining this”.

Karin IretonDirector, Group Sustainability Management

Environmental and social riskassessment tools

Know your customer

onboardingCredit MonitoringLegal

documentationPre-creditcommittee

Environmental and social risk consideration

Environmental and social covenanting (as appropriate)

Monitoring ofcompliance

Environment


Appraisal system

OurEnvironmentalandSocialAppraisalSystemprovides

ariskmanagementmeasuretoprotectagainstpossible

financial,credit,reputational,regulatoryandoperational

riskandlinksdirectlywithlenderliabilityassociatedwith

environmentalandsocialmismanagement.Thesystem

isdesignedtoidentifytherisksassociatedwithaclient’s

abilitytomanageenvironmentalandsocialissues,aswellas

therisksassociatedwiththetransactionitselfsuchasthe

natureandvalueoftheloan,aswellastheindustrysector

involved.Theenvironmentalandsocialriskassessmenttobe

undertakenisbasedontheresponsestothesepreliminary

screeningprocessesandusedasinputintothecredit

grantingprocess.Whereaborrowerisnotincompliance

withtheenvironmentalandsocialrequirements,wewill

encourageandworkwiththemtoachievethenecessary

standards.Projectsaremonitoredtoensurethatsocialand

environmentalcommitmentsareadheredto.

Equator Principles

WehavefullyintegratedtheEquatorPrinciples

performanceassessmenttoolintothecreditapproval

processandtransactionlifecycleofourprojectfinancing

deals.Theyapplytoallnewprojectfinanceloansof

USD10millionormore.AllcategoryA(highrisk)and,

whererelevant,CategoryB(mediumrisk)projects

financedaremonitoredtoensurethattheproject-specific

conditionssetaspartoftheloanagreementareadhered

to.During2011,wefinancednineEquatorPrinciple

projectsandplayedanadvisoryroleinafurther

20projects.

WecurrentlyleadtheEquatorPrinciplesAfricanand

MiddleEastoutreachworkinggroupandparticipatein

thegeneralBiodiversityandEcosystems,ClimateChange

andScopeReviewworkinggroups.During2011,a

projecttostrategicallyreviewtheEquatorPrincipleswas

initiated.StandardBankco-leadstheTieringTaskForce

andparticipatedintheClimateChangeandScopeTask

Forces,bothinitiativesdevelopedspecificallytoassistin

theoverallEquatorPrinciplesreviewprocess.

Training

During2011,approximately245employeesacrossthe

groupweretrainedontheuseandapplicationofthe

newEnvironmentalandSocialAppraisalSystem.Relevant

employeesinKenya,Mauritius,TanzaniaandZambia

havealsoreceivedtrainingandpolicyguidancehasbeen

madeavailabletocreditriskofficersacrossthebank.

Furthertrainingisscheduledfor2012.Wehavealsoheld

Case study: Equator Principles deal

2

1 1

4

1 0

1

2

3

4

5

6

7

South Africa Africa Europe Asia

Equator Principle: deals financed

Equator Principle: advisory

CategoryA CategoryB CategoryC

1 1

14

1

2 0

2

4

6

8

10

12

14

16

South Africa Africa Asia Americas

1

CategoryA CategoryB CategoryC

In the Project Finance Magazine’s 2011

Deal of the Year Awards, Standard Bank won the

Africa Renewables Deal of the Year for the

Addax BioEnergy project in Sierra Leone.

Environment


awareness-raisingpresentationsforlegalandcomplianceofficersfromacrossAfrica.Inaddition,11graduates

rotatingthroughtheProjectFinancedivisionparticipatedinstrategicEquatorPrinciplesbriefingsandwere

introducedtotheEnvironmentalandSocialAppraisalSystem.

Climate change

Africaishighlyvulnerabletotheeffectsofclimatechange.Asthemajorityofouroperationsarebasedinsub-

SaharanAfrica,weneedtoidentifytheimpactsofthisglobalchallengeanddevelopactionplanstoreduceourown

impact,aswellasassistourcustomerstoreducetheirimpactandadapttoachangingworld.

Sustainabilityandclimatechangeareincreasinglybecomingcoreareasinwhichourcustomersrequirefinancial

services.Ourapproachtoaddressingthesechallengesistodevelopandimplementinnovativebusinesssolutions

thatarebothcommerciallyattractiveandmakeabroadercontributiontoactiononclimatechange.

Wearedevelopingproductsandservicesthatenableourcustomerstolowertheirfootprintwithoutcreating

financialburdens,suchastherolloutofsolarwaterheatingsystemstolow-incomecommunities,andweareusing

ourpositionasaleaderincarbontradingtoprovideaccesstocarboncreditsforsmallercompaniesthatwould

otherwisenotbeabletodoso.

Equator Principles

Category A (high risk)

Category B (medium risk)

Category C (low risk)

Total

2011 2010 2011 2010 2011 2010 2011 2010

Project finance lending

Oilandgas 0 3 0 1 0 0 0 4

Mining 4 2 1 0 0 0 5 2

Power 0 0 1 0 0 0 1 0

Infrastructure 0 1 0 4 1 0 1 5

Industry 0 0 2 0 0 0 2 0

Total 4 6 4 5 1 0 9 11

Advisory

Oilandgas 1 0 1 0 0 0 2 0

Mining 1 2 1 0 0 0 2 2

Power 0 1 14 5 0 0 14 6


Industry 0 0 1 0 0 0 1 0

Other 0 0 0 2 0 0 0 2

Total 2 3 18 7 0 0 20 10

√ Externally assured (refer to assurance statement on page 89).

Category A (high risk)

Category B (medium risk)

Category C (low risk)

Total

2011 2010 2011 2010 2011 2010 2011 2010

Oilandgas 2 0 0 3 0 0 2 3

Mining 3 1 1 1 0 1 4 3


Industry 0 0 1 0 0 0 1 0

Total 5 2 2 4 0 1 7 7

Note: the above table does not include all corporate and bridge finance transactions but only those incorporated in the pilot implementation of the Equator Principles Guidance Notes.

Development finance: bridge loans and corporate finance with known use of proceeds

Environment


Thelackofcertaintyaroundaglobalapproachtothefuture

managementofclimatechangeisaconcern.Standard

Bankactivelyparticipatedinthepolicydiscussions,events

andexhibitionassociatedwiththe17thmeetingofthe

signatoriestotheUnitedNationsFrameworkConvention

onClimateChange(UNFCCC-COP17),heldinDurbanat

theendof2011.Weweredelightedthatthenegotiators

atCOP17agreedtoasecondcommitmentperiodunderthe

KyotoProtocolandtomaintainingflexiblemechanismssuch

astheCDM.UseoftheCDMisgainingmomentuminAfrica

ascapacitytouseitsmethodologiesisgrowing.Webelieve

ittobeanimportantvehicleforassistinginswitching

emergingmarketstolowercarbongrowthtrajectories.The

potentialforanewlegalinstrument,whichwillincludeall

partiesinthedifficulttaskofsettingandachievingtargets

forreducinganthropogenicimpactsontheclimate,areto

bewelcomed.

Wehostedanumberoftechnicalsideeventsduring

COP17,enablinggovernmentnegotiatorsandtechnical

specialiststoengagearoundtopicalissues,suchasfunding

lower-carbongrowthinAfrica,advancedmechanisms

tocombatDeforestationandDegradation(REDD+)

andtheAfricanCarbonAssetDevelopment(ACAD)

facility.Wealsohostedaseriesofeventsorganisedby

theInternationalEmissionsTradingAssociation(IETA),

includingtheirdailyDurbanupdatewhichprovidedanalysis

oftheprogressofthenegotiations.

Environmental policy development Wemonitorevolvingenvironmentalregulationsand

putinplacethenecessarymeasurestocomply.We

activelyengagewithgovernmentandcontributetoward

developingenvironmentalandsocialcodesofindustry

bestpractice,toensureaneffectivebalancebetween

addressingclimatechangeandtheimpactsonthe

economyandbusiness.

Wealsocontributetothedevelopmentofinternational

climatechangepolicy.KeyrelationshipsforStandardBank

inthisregardincludetheUnitedNationsagencies,CDM

ExecutiveBoard,AfricangovernmentsandkeyEuropean

governmentagencies.Weareamemberofandholda

boardseatontheCarbonMarketsandInvestorsAssociation.

WearealsoamemberoftheIETAandUnitedNations

EnvironmentProgrammeFinanceInitiative(UNEPFI).

PhotovoltaicplantinstalledatourregionalofficeinDurbanwithpeakpowerproductionof45kilowatts.

DeputyChiefExecutiveofStandardBankGroup,SimTshabalala,participatedinvariousdialoguesand

conferencesatCOP17.

Environment>environmental and social risk management

Development finance: bridge loans and corporate finance with known use of proceeds

A member of Standard Bank Group

A member of Standard Bank Group

Environment


Climate finance and carbon trading We have been pioneering climate finance and carbon

trading since 2002, three years prior to the start

of the first carbon trading scheme in the European

Union. Our business has a broad set of capabilities

across the range of climate finance and carbon

trading disciplines.

The CDM is one of the biggest markets for carbon

credits and is overseen by the United Nations. The

CDM allows industrialised countries to reduce global

emissions by investing in sustainable development

projects that reduce greenhouse gas emissions in

developing countries.

In 2011, we were involved in approximately 50

(2010: 30) CDM projects under development,

of which around 20 were in Africa.

We apply a range of quality criteria to the emissions-

reduction projects we finance or purchase carbon

credits from, to ensure they deliver real and

permanent emissions reductions.

Programmatic CDMCDM projects are particularly suited to the African

continent and during 2011 we made progress in the

development of a wide range of Programmatic CDM

activities.

Programmatic CDM is a new type of CDM

registration under the UNFCCC. This carbon

trading mechanism is particularly suited to Africa

as it opens up access to carbon credit revenues for

governments and project developers. Traditionally,

smaller, low-cost carbon emissions-reducing projects

would not have been able to access carbon credit

revenue due to high transaction costs. In addition,

the CDM Executive Board only issues carbon credits

once a carbon-reducing activity is completed. The

Programmatic CDM allows for the registration of a

programme of activities, which works as a collective

mechanism for a range of individual projects. For

example, an organisation can join Standard Bank’s

Programmatic CDM rather than incurring the cost of

individually registering an energy efficiency project.

It will also start to generate carbon credits much

sooner. Ultimately this mechanism eliminates the

cost and risk to an organisation of becoming energy

efficient. Some of the programmes of activities that

we established during 2011 include:

CarbonSoft Corporation

We funded CarbonSoft Corporation, a company

that will establish open access Programmatic CDMs

for solar-powered lamps in sub-Saharan Africa and

internationally. Not only does the replacement

of kerosene lanterns with solar lamps reduce

greenhouse gas emissions, but it also positively

impacts low-income household finances, increases

respiratory health and reduces the probability of

fire. Standard Bank will provide access to the carbon

markets and CarbonSoft will provide the distributors

of solar lamps with non-discriminatory access to

carbon credits.

Cool nrg

We have continued our strategic partnership with

Cool nrg, a world leader in mass energy efficiency

programmes and the only company to have issued

carbon credits under Programmatic CDM on a global

scale. We helped Cool nrg distribute 26 million

compact fluorescent lamps in Mexico and financed

the establishment of a Cool nrg business in Nairobi.

Case study: energy efficient lighting Programmatic CDM

Climate finance and carbon trading disciplines

Bank footprint

Improving sustainability of our own operations.

Carbon trading

One of top banks in global CDM

market.

Climate finance

Pioneering climate finance instruments and

transactions.

Energy efficiency

New energy efficiency

incentives and financing.

Clean energy

Large African financing and arrangement commitment.

Market development

Actively contributing

to policy and market

development.

Advisory

Advice on environmental

risk management.

Environment


Solar water heaters in South Africa

TheSouthAfricanGovernmenthascommittedto

installingonemillionsolarwaterheatersinmostly

low-incomeresidentialdevelopmentsbytheendof

2014.Wehavecontributedtoreachingthistarget

byfacilitatingtheinstallationofapproximately

70000solarwaterheatersinlow-incomehousing

underourCDMprogrammes.Wehavealsomade

availablesomeR22millionforusebylocalservice

providersandmanufacturersofsolarwaterheating

systemstoassistwiththerolloutoftheproject.This

isthelargestrolloutofsolarwaterheatersinSouth

Africa.Wehavealsoenteredintoapilotprogramme

withoneoftheworld’slargestconsumergoods

companiestogeneratecommercialcontributionsto

thecostofsolarwaterheaterinstallation.

Other

Wehaveestablishedthefollowingtypesof

programmesofactivityinEastandSouthernAfrica:

• Efficientcorporatelightingandrefrigeration

activities:thefirstrolloutsundertheseprogrammes

arebyamajorSouthAfricanretailchain,whichis

retrofittingitsentirestorenetwork.

• Efficienthouseholdlighting,incooperationwith

KenyaPower.

• Renewablepowergeneration.

Climate finance transactionsOtherclimatefinancetransactionsundertakenduring

2011include:

• ThefirstCDMprojectinZimbabweforSable

Chemicals,afertilisermanufacturer.The

developmentusesacatalyticconverterthatallows

nitrousoxide,aharmfulgreenhousegasand

byproductfromtheplant,tobeconvertedinto

harmlessgases.Wearethefulloff-takerofthe

carboncreditsgeneratedandareprovidingfinancing.

• Thesubmissionofdocumentationforthe

registrationofthefirstCDMprojectinGhanaforthe

AccraCompostandRecyclingPlant.Overaneight-

hourshift,theplantwillbeabletoprocess300

tonsofwastetoproduceorganicfertiliserthatwill

beusedforagriculturalandhorticulturalpurposes.

Theplantwillalsorecovermetalsandplasticsfor

recycling.

Clean energy and energy efficiencyBalancingtheneedforsignificantincreasesinbase

loadenergywithprotectingtheenvironmentisan

ongoingchallenge.Theneedforenergysecurity

meansthatAfrica’sfutureenergymixislikelyto

includecoal-firedpowerstationsforsometime,

howeverSouthAfricahasahighlevelofrenewable

energypotentialandgovernment’sRenewable

EnergyIndependentPowerProducerProcurement

(REIPPP)Programmeisamechanismtopromote

thedeploymentofrenewableenergysources.South

Africaaimstosecureatotalof17800megawattsof

renewableenergyby2030.

StandardBankiscommittedtotheestablishmentof

arenewableenergysectorinSouthAfrica.Weare

activeinadvising,arrangingfinanceforandfunding

renewableenergyprojectsinSouthAfricaunderthe

REIPPPProgrammeandwearedealingwithalarge

numberofprojectdeveloperstothisend.

ForthefirstREIPPPProgrammebiddate,we

supported22bidsfor850megawattsofplanned

renewableenergycapacityinwindandsolarenergy

generation.Ofthese,togetherwithourclients,we

won13bidswithaninstalledrenewableenergy

capacityof605megawatts.Thisrepresentsatotal

financingrequirementofR8,2billion.Theseprojects

willproduceapproximately1450gigawatthoursof

renewableenergyayear.

WeareengagingwiththeindustryandtheSouth

AfricanGovernmentinaddressingissuestoensure

thatprojectsaresuccessfulandaffordable.Wehave

securedanumberoffurthermandatestofunda

varietyofdevelopersthroughthesecondbid.

Wehavealsodevelopedanew‘pay-as-you-

save’energyefficiencyfinanceproductlinkedto

ProgrammaticCDMs.Theproductallowsclientsto

obtainfinanceforanenergyefficiencyprojectwithout

upfrontcashbudgets.Oncetheprojecthasbeen

implemented,thescheduledrepaymentsontheloan

arebasedonthecostsavingsgainedasaresultofthe

client’sreducedenergyconsumption.

Wehavefinancedfourrenewableenergyprojects

includingwindenergygenerationandminihydro

projectsinAfrica.Wehavealsosignedlettersof

intentonthreedealsinEastAfricaincludingthe

300megawattLakeTurkanawindfarmandthe

60megawattKinangopwindparkprojectsinKenya.

Wearealsothesoleleadarrangerona60000m³

seawaterdesalinationplantinGhanawhichwillsupply

potablewatertoAccra.

Inaddition,theFrenchdevelopmentagency,AFB,

awardedStandardBankaUSD13million(R94million)

wholesalelendingline.Thecreditlinewasavailedfor

onwardlendingtosmallrenewableenergyprojectsto

easetheongoingpowercrisisinKenya.

Environment


Carbon market developmentInlinewithourfocusoncommercialsolutions

toclimatechange,weactivelycontributetothe

developmentandgrowthofcarbonmarketsand

climatefinanceinAfrica.Keyinitiativesincludeour

contributiontotheACADfacility,thecommissioning

ofascopingreportoncross-borderemissionsissues

andtheprovisionofcarbonexpertstogivetrainingin

carbonandclimatefinanceatanumberofcapacity-

buildingworkshops.

TheACADfacilityprovidesfinancialandtechnical

assistancetolow-carbondevelopmentprojectsin

sub-SaharanAfrica.In2010,itselected14projects

fortargetedgrants,withacombinedtotalof

USD850000(R6,2million).Currentlythereare

some72projectsintheapplicationpipeline.

AdvisoryWeprovideadvisoryservicesonthepotential

eligibilityoffinancingforcertainprojectssuchas

biofuels,dustabatementunitsanddesalination

plants.Aspectsconsideredincludetheimpactsof

climatechangeoncertainprojectsandtheinclusion

ofclimatechangeadaptationstrategies.Weare

developingrelationshipswithdevelopmentfinance

institutionsanddonoragenciesthataidthefinancial

structuringofpotentialgreenprojects.

Environmental products

Financing solar water heaters

In2011,StandardBankfinancedoneineverytwo

newhomesinSouthAfrica,meaningwearein

apositiontopositivelyinfluencetheinstallation

ofsolarwaterheatersintheresidentialproperty

market.Asthehighcostofsolarwaterheatersisa

barrierforthemajorityofhomeowners,weassist

customersmaketheswitchtosolarwaterheaters

throughequityfinanceontheirhomeloanfacilities.

Thechallengeisthatcurrenteconomicconditionsare

suchthatconsumersarereluctanttotakeonshort-

termdebt.

Insuring solar water heaters

Wehavealsoassessedandacceptedthecredentials

ofapanelofsupplierswhomeetourrisk

managementcriteria(includingwarrantyperiods)and

areregisteredmembersoftheSustainableEnergy

SocietyofSouthernAfrica’sSolarWaterHeating

Division.Duetotheproductquality,warrantyand

installationprocessprovidedbythesesuppliers,we

areabletoofferourcustomersmorecomprehensive

insurancecoverontheirinvestment.

WeareworkingwiththeSouthAfricanInsurance

Associationtointroduceareplacementprogramme

fortheshort-terminsuranceindustry,aimed

atovercomingthecostbarriersthathinderthe

conversionfromelectricgeyserstosolarwater

heaters.During2011,wefocusedonraising

customerawarenessthroughvariouschannels.We

heldtwointernalexhibitionsforouremployees

whereapanelofsuppliersdisplayedtheirproducts

andofferedanegotiatedstaffdiscount.In2012,we

willcontinuewithourawarenessdriveandinclude

ourpanelofsuppliersinourCardValueChoices

newsletterwithdiscountedpricesandlimitedoffers

toextendourreachtoourcreditcardcustomers.

Vehicle fleet

Inearly2012,welaunchedacarboncalculatorfor

ourcustomersthatoperatevehiclefleets.Inaddition,

ourFleetManagementunitprovidesconsulting

servicestohelpthesecustomersmanagetheirfleets

moreefficiently,andtherebyreducetheircarbon

emissionsandcostsassociatedwiththerunningof

theirfleets.

Our direct impactEnergy

Managingandreducingourenergyconsumptionis

keybothaspartofourclimatechangemitigation

effortsandinresponsetorisingelectricitycostsand

energysupplyconcernsacrossAfrica.During2011,

StandardBankspentR19,1million(2010:R9,3million)

onenergyefficiencyprojectsinitsSouthAfrican

operations.

Numerousenergyefficiencyprojectshavebeen

implementedatStandardBankCentre,our

headofficecomplexinJohannesburg,inwhich

approximately42%ofourSouthAfricanemployees

aresituated.Theseprojectshaveamountedto

areductioninconsumptionof900kilowattsof

electricity,contributingtothe5%reductionin

electricityreflectedinthetableonpage75.

Environment>climate finance and carbon trading

Case study: solar water heating systems

Environment


154 538

177 289 180 403

47 373 46 525 50 479 40 000

80 000

120 000

160 000

200 000

2009 2010 2011

metric tons

0

During2011,weinstalledelectricitymeteringsystems

inover150ofoursitesnationally,aswellasatall

ourregionalbuildings.Thismeansthatweareableto

accuratelymeasureandmonitorapproximately70%of

ourenergyconsumptioninSouthAfrica,enablingusto

verifyutilitybillsandidentifywherethereispotential

tofurtherreduceourconsumption.Wewillundertake

afurtherrolloutofthesesystemsin2012tocoverour

nationalfootprint.

Wealsoinstalledalternativepowerphotovoltaicplantsat

StandardBankCentreandourregionalofficeinDurban

withpeakpowerproductionof105kilowattsand45

kilowattsrespectively.Photovoltaictechnologytakeslight

energyfromthesunandconvertsittoelectricalenergy.

Waterheating,lightingandair-conditioningareourthree

biggestenergyconsumers.

Water heating

AtStandardBankCentre,weuseahybridthermalsolar

waterheatingsystemtosupplementthemaingeyser

systemofoneofthebuildingsinthecomplex.This

buildinghousesthestaffgymnasiumandsinceNovember

2010,thesystemhasrealisedverifiedsavingsof

approximately433000kilowatthours,nearlyR530000

inenergycostsandacertifiedemissionsreductionof

429tonsofCO2ayear.

Lighting

OurlightinginitiativesinSouthAfricaaretargetedto

decreaseourdemandbyatotalof1700kilowatts.

During2011,weembarkedonanationalrelamping

projecttoreplaceapproximately20650lampswith

energyefficientlight-emittingdiodes(LEDs).Thesenew

lampsprovidean86%energysavingperlampfitting.In

StandardBankCentrewereplacedover3000lamps

whichwillprovideanannualenergyreductionof

2800000kilowatthoursofelectricity.Thisisthefirst

projectunderourProgrammaticCDMCarbonFunding

Project,whichultimatelyaimstoreplaceupto40million

lightsincommercialbuildingsacrossSouthAfrica.In

ourbranchnetworkinSouthAfrica,wehaveinstalled

newenergyefficientlightingsystemsandhaveaddeda

combinationofLEDlightswherefeasible.

Itisexpectedthatduring2012thenationalelectricity

supplygridwillbeundertremendousstrain.SBGwill

continuetoimplementenergyefficiencyprojectsto

decreaseourusagesothatwecomplywiththeSouth

AfricanGovernment’sPowerConservationProgrammewhen

itisimplemented.Theprogrammeisdesignedtoprovidea

demand-sidesolutiontotheenergychallengesfacingSouth

Africabyintroducingexcesstariffsshouldacompanyuse

morethanitsallocatedmonthlyenergyallowance.

CO2 emissions

(Standard Bank South Africa and Liberty)

InourMelvillebranchinJohannesburg,thelightswereredesignedtodeliversignificantlyimprovedlightlevels

witha90%reductioninenergyconsumption.



Electricity consumption(Standard Bank South Africa and Liberty)

Hybrid solar water heating system

Ourhybridsolarwaterheatingsystemsaved

429tonsofCO2sinceitsinstallationin

November2010.Thisistheequivalentof

planting2143treesorremoving113cars

fromourStandardBankvehiclefleet.

83

145gw 153gw

41gw 40gw 42gw 40 000 000

80 000 000

120 000 000

160 000 000

200 000 000

2009 2010 2011

kilowatt hours

Standard Bank South Africa Liberty

0

132gw

Environment


Carbon footprint

“We all need to leave as small a carbon footprint as possible given the increasing scarcity of resources on our planet. Sustainability is an issue that we as a bank will be focusing on

a great deal more going forward.”

Sim TshabalalaDeputy Chief Executive, Standard Bank Group

StandardBank’sSouthAfricanCO2equivalentfor2011was180403metrictons,a2%increaseon2010.Our

consumptionfigurescoverabout63%ofourSouthAfricansites.Wehavestartedinstallingelectricitymetering

systemsacrossournationalfootprint.Thiswillenableustocalculatethecarbonfootprintofourbranchnetwork

in2012.

InrelationtoStandardBankSouthAfrica’stotalincomeofR39,8billionin2011(2010:R38,5billion),theCO2

perrandoftotalincomegeneratedequatesto4,5grams(2010:4,6grams).Thecarbonemissionperemployee

equatestoapproximately6,2tons(2010:5,8tons).

During2011,werolledoutourenvironmentalandsocialpolicyinouroperationsinAfricabeyondSouthAfrica.

Aspartofthis,wehaveexpandedourcarbonfootprintmeasureforthisbusinesstoincludetheelectricity

purchasedforeightoutof16Africanoperations.ArgentinaandLondon’selectricitypurchasedisalsoincluded.

OurCO2equivalentforouroperationsbeyondSouthAfricawas44005metrictonsin2011.

Standard Bank South Africa’s carbon footprint

Scope per GHG¹ protocol 2011 2010 2009

Scope 1: Direct GHG¹ emissions from: metrictons 9 154 11 195 10284

Equipmentownedorcontrolled(dieselgenerators)2 metrictons 344 503 556

Vehicles metrictons 8 810 10692 9728

Scope 2: Indirect GHG¹ emissions from: metrictons 151 0363 149366 136332

Purchasedelectricity4 metrictons 151 036 149366 136332

Scope 3: Other indirect emissions from: metrictons 20 213 16728 7922

Businesstravel(byaironly) metrictons 9 815 7336 3567

Paperconsumption metrictons 10 398 9392 4355

Total CO2 equivalent emissions metrictons 180 403√ 177289 154538

¹ Greenhouse gas.2 Diesel consumption includes Standard Bank Centre, branches and data centres.3 Eskom 2011 factor of 0,99 kilograms per kilowatt hours used (2010: 1,03).4 Electricity consumption covers approximately 63% of Standard Bank’s sites. √ Externally assured (refer to assurance statement on page 89).Note: the remaining line items cover our entire South African operation.

In Newsweek Magazine’s Green Rankings, Standard Bank was ranked 45th overall and

13th in the financial sector category out of the Global Top 500 companies.

Environment


Liberty’sCO2equivalentfor2011was50479metric

tons(2010:46525).WhileLiberty’stotalmeasured

carbonemissionshasincreased,thecarbonemissions

perfull-timeemployeedeclinedfrom8,86in2010

to6,20in2011.Theincreaseincarbonfootprint

isattributedtoanimprovementindatacollection

andmeasurementprocesses,andmostsignificantly

theinclusionofelectricityconsumptioninLiberty’s

leasedbranches.

Water Waterscarcityanddecliningwaterqualityare

globalchallengesthatimpactdirectlyonhealthand

sanitation,agricultureandindustry,aswellasthe

preservationofecosystems.Theworld’savailable

freshwaterislimitedandaccountsforlessthan

1%ofwaterontheplanet.

Weaimtoputmeasuresinplacetoallowusto

establishawaterbaselineandsubsequentlymeasure

thewaterwerecycleanddischarge,aswellas

establishthequalityofthewaterdischarged.We

arelookingatwaystoreduceouroperationalwater

footprint.

Wateraccountsarecheckedanddiscrepancies

managedonanongoingbasis.Waterefficiencywill

beakeyfactorwhenconsideringtechnologiesand

equipmentinfuture.During2011,weinstalled

watermetersatStandardBankCentrethathave

enhancedourabilitytounderstandourwaterusage

trendsandtofindwaystoreducetheamountof

waterconsumed.Thishasassistedustodealwiththe

recentunintendedwatercutsbythelocalcouncil,

aswewereabletomoreeffectivelymanagewater

usageduringtheseperiods.

InStandardBankCentre,thehumidificationwater

fromourair-conditioningsystemisreusedtoflush

toiletsandduring2011,weinstalledwater

efficientshowerheadsinallshowerfacilities.

Wehavealsostartedconvertingourbasintaps

inStandardBankCentretoaeratortaps,which

areanticipatedtosave80%ofwaterconsumed

comparedtotheprevioussystem.Theseinitiatives

havehelpedusachievea12%reductioninwater

usedbasedonour2009baselinemeasure.

Waste Wevalueprocurementthatminimisesenvironmental

impacts,forexamplethroughproperwastedisposal

andeffectiverecyclinginitiatives.InSouthAfrica,our

wasteisdisposedofinaresponsiblemannerandour

wastemanagementforummeetsquarterlytoidentify

wastehandlingissues.

Paper consumption(Standard Bank South Africa)

Water consumption(Standard Bank South Africa and Liberty)


336 986 340 889

295 807

104 756 133 631

190 329

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

2009 2010 2011

kilolitres

0

1 217

2 755

3 337

1 000

2 000

3 000

4 000

2009 2010 2011

tons

0

Waste generated(Standard Bank South Africa)

44,7

41,3

14,0

Recycables:plastic,paper,glass,tincansandaluminium(44,7%)

Generalwaste(41,3%)

Hazardous:fluorescenttubesandEwaste(14,0%)

Environment


Paper consumption

“I would just like to thank you for making Standard Bank employees aware of recycling and its benefits. It’s something that’s close to my heart! I hope to see more information

about how we, as Standard Bank employees, can help improve our environment.”

Sharon CaoStandard Bank employee

During2011,ourpaperconsumptionwas3337tons.Asnotedinthetableonpage75wehaveincreasedour

paperconsumptionby23%onourbaselinemeasureaswehavereplacedourbrandedpaper,usedforspecific

transactionsinbranches(whichwasnotoriginallymeasured),withplainwhitepaper.Usingplainwhitepapermeans

wecanprintonlywhennecessary.Wewillmaintainourtargettoreducepaperusageby10%by2015withinour

SouthAfricanoperation,whichatcurrentcostswouldrealiseanannualsavingofaroundR2million.Weranapaper

savingcampaignduringtheyeartoraiseawarenessamongourstaffandtoencouragetherecyclingofusedpaper.

Biodiversity

“They see the animals in their beautiful natural environment as it should be and perceive it in a new way, they never experienced before. Our learners live in shacks, with no

running water and electricity, the family sleep in one room. They are underprivileged, but want to succeed in life. You help with this dream, with your sustainable education. Thank

you for being my partner in education.

Without the education at Mogale’s Gate, the learners would not have a hands-on experience of sustainability…this field trip means everything to them.”

Ida Potgieter Tourism educator

StandardBank’sMogale’sGateconservationcentreintheCradleofHumankindisanareaofhighbiodiversity

value.Since1997,38926learners(approximately2600childrenayear)haveparticipatedinthecentre’s

environmentalawarenessprogrammesand1700primaryschoolsinGautengreceiveourquarterlyenvironmental

newsletters.During2011,weheldateachertrainingsessionattendedby60teachersfromTshwaneSouth

DistrictinGauteng.

StandardBankisapatronandcorporatefunderofLeadershipforConservationinAfrica(LCA),anon-profit

organisationthatestablisheslinksbetweenthebusinesscommunity,governmentsandconservationinstitutions.

During2011,LCAannouncedaplantodevelop20millionhectaresofconservationlandinAfricaby2020.

Thisincludestherestorationanddevelopmentoflandunderconservationtothebenefitoftheenvironment,

localcommunitiesandhostgovernments.Sinceitsinceptionin2006,theLCAhasbeenactivelyinvolvedin

19Africancountries.

TheLCAhassuccessfullyfacilitatedtheinvolvementofvariousstakeholdersovera30yearpartnershiptoensure

theprotectionoftheOdzalaKokouaNationalParkintheDemocraticRepublicofCongo.This1354600ha2

rainforesthoststheplanetslargestpopulationofendangeredlowlandgorillas,10000forestelephantsand

430birdspecies,aswellasover100otherrareandendangeredmammals.

Additional indicators


Additional indicatorsStandard Bank Group indicators

2011 2010 2009

Employee headcount per business segment 52 127 53351 51411

Personal&BusinessBanking 23 019 24134¹ 35088

Corporate&InvestmentBanking 6 690 6593¹ 9796

GroupEnablingFunctions2 13 247 14077¹ 1053

Liberty 5 752 5226 5474

Discontinuedoperations 3 419 3321 N/A3

Women

Womenemployees % 57√ 57 57

Womenmanagers % 46 45 45

Womenexecutives % 21 19 19

Occupational health and safety

Employeestrained4 % 2 184 2359 N/A3

¹ Restated: the 2010 employee numbers have been restated to reflect the new organisational structure, while the 2009 numbers have not.2 The role of Group Enabling Functions is to extract efficiencies and scale solutions across operating entities.3 Not available.4 Includes Standard Bank South Africa, Standard Bank Plc and Liberty.√ Externally assured (refer to assurance statement on page 89).

2011 2010 2009

% of customer base per banking segment

PersonalBanking % 92,11√ 92,63 92,51

PrivateBanking % 0,66√ 0,60 0,56

BusinessBanking % 6,61√ 6,10 6,25

Employees % 0,62√ 0,67 0,68

Race composition

African % 69 68 68

Coloured % 9 9 9

Indian % 5 5 5

White % 17 18 18

Gender composition

Women % 50√ 50 49

Men % 50√ 50 51

√ Externally assured (refer to assurance statement on page 89).

Standard Bank South Africa indicators

Additional indicators


2011 2010 2009

Proportion of transactions

ATMcashwithdrawals % 26√ 24 24

Magtapetransactions % 26√ 28 27

Creditcardtransactions % 13√ 12 13

Chequesprocessed % 7√ 6 6

Debitcardtransactions % 8√ 8 7

Branchdeposits % 3√ 4 5

Other % 17√ 18 18

Inclusive banking products

NumberofMzansiBlueaccounts¹ 1 373 964* 1046200¹ 863494¹

NumberofEPlanaccounts 3 275 521 3602099¹ 3909904¹

NumberofMobileMoneyAccounts 625 326 153398 27738

Numberofsocietyschemes 49 702 53412 48950

Numberoffuneralplanpolicies 1 106 498 1044119¹ 1025616¹

Numberofdebtprotectionplanpolicies 308 685 142571 68365

Numberofpersonalloans 306 107 74825 65544

Numberofaffordablehousingaccounts 76 176 72994 63081

Numberofpension-backedlendingaccounts 13 907 15823 14798

Corporate social investment spend breakdown Rm 71,6√ 99,5 69,6

Enterprisedevelopment Rm 24,2 35,3 35,2

Education Rm 31,5 36,2 15,6

Healthandwellness Rm 4,4 4,0 7,4

Sportdevelopment Rm 02 11,9 6,2

Artsandculturedevelopment Rm 1,8 1,6 1,3

StandardBankEducationalAssistanceScheme Rm 1,6 1,9 1,9

Corporatephilanthropyincludingemployeematching

Rm 6,1 4,7 1,8

HumanitarianReliefFund Rm 2,0 3,9 0,2

Occupational health and safety

Employeestrained 1 912√ 2004 1958

Totaltrainingspend R 1 799 881√ 1153506 1233230

NumberofreportableinjuriespertheOHSAct 28√ 51 11

Skills development

Trainingspend Rm 358√ 450 419

Trainingspendonblackemployees Rm 242* 250 234

Totalnumberofemployeestrained 30 546 32756 34180

Averagenumberoftrainingdaysperemployee days 4 3 4

¹ Restated.² Due to our decision to end our South African cricket and soccer sponsorships, there was no sport development spend in 2011.√ Externally assured (refer to assurance statement on page 89).* Externally verified.Note: all Inclusive Banking products include zero balances.

Standard Bank South Africa indicators continued


Assurance statement

Assurance statement Independent Assurance Report on Selected

Sustainability Information to the Directors of Standard

Bank Group Limited

Wehaveundertakenanassuranceengagementonselected

sustainabilityinformation,aspresentedinthe2011

StandardBankGroupSustainabilityReport(theReport)of

StandardBankGroupLimited(SBG)fortheyearended

31December2011.

Subject matter and related assurance

Ourassuranceengagementwasonselectedsustainability

informationfortheyearended31December2011.

Thesubjectmatterofourengagementandrelated

assurancewearerequiredtoprovideisasfollows:

1.LimitedassuranceonSBG’sassertionsrelatingtotheir

alignmentwiththeAA1000APS(2008)principles

(inclusivity,materialityandresponsiveness)asdescribed

onpage2oftheReport.

2(a). Reasonableassuranceonthekeyperformance

indicators,markedwithan‘√’ontherelevant

pagesoftheReportasindicatedbelow.

2(b). Limitedassuranceonthekeyperformance

indicators,markedwithan‘√’ontherelevant

pagesoftheReportasindicatedbelow.

Key performance indicators Boundary Assurance level

Financialindicators(pg43)

Returnonequity,headlineearningspershareincrease,creditlossratioandcost-to-incomeratio.

SBG Reasonable

EquatorPrinciples(pg75,78)

NumberofprojectsfinancedandnumberofprojectswhereStandardBankplayedanadvisoryrole.

SBG Reasonable

Valueaddedstatement(pg23)

SBG Reasonable

CSIspend(pg23,88)

SBSAandLiberty Reasonable

Employeestatistics(pg55,59)

Headcount,aswellasgender,ageandlengthofservicebreakdownandemployeeturnoverrate.

SBG Reasonable

Carbonfootprint(pg75,84)

Totaltonsofcarbondioxideequivalent. SBSAandLiberty Reasonable

Wastegenerated(pg75)

Totaltonsproduced. SBSA Reasonable

FAISOmbudsman(pg43)

Amountclaimedbycustomersandamountsettledbythebank.

SBSA Limited

Customerstatistics(pg43,45,87,88)

Customerbase,aswellassegmentandgenderbreakdownandproportionoftransactions.

SBSA Limited

Customersatisfactionandcomplaintsmanagement(pg43,52)

ResultsofGalactica,ZodiacandCustomerExperienceMeasurementsurveys,andnumberofcomplaintsandcompliments.

SBSA Limited

Trainingspend(pg55,88)

Randvalueandpercentageofstaffcosts. SBSAandLiberty Limited

Occupationalhealthandsafety(pg88)

Numberofemployeestrained,trainingspendandreportableinjuries(pertheOHSActsection24).

SBSA Limited

SBSA: Standard Bank South Africa.

Directors responsibilities

TheDirectorsofSBGareresponsiblefortheselection,preparationandpresentationofthesustainabilityinformation,the

identificationofstakeholdersandstakeholderreportingrequirements,materialissues,forcommitmentswithrespecttosustainability

performance,establishingandmaintainingappropriateperformancemanagementandforsuchinternalcontrolsastheDirectors

determineisnecessaryforSBG’spreparationoftheReport,andtheselectionoftheperformanceinformationfromwhichthe

reportedinformationisderived.TheDirectorsarealsoresponsiblefortheselectionandapplicationofthecriteriadetailedbelow:

• TheAA1000APS(2008)forthethreeprinciplesofinclusivity,materialityandresponsiveness(theAA1000APS(2008)

principles);and

• TheGlobalReportingInitiative(GRI)G3Guidelines.


Independence and expertise

Wecomplywiththeappropriaterequirementsofthe

InternationalFederationofAccountants(IFAC)CodeofEthics

forProfessionalAccountantswhichincludescomprehensive

independenceandotherrequirementsfoundedon

fundamentalprinciplesofintegrity,objectivity,professional

competenceandduecare,confidentialityandprofessional

behaviour.Ourworkwascarriedoutbyamulti-disciplinary

teamofhealth,safety,social,environmental,governance,

economicandassurancespecialistswithextensiveexperience

insustainabilityreportinginassurance.

Our responsibility

Ourresponsibilityistoexpressassuranceconclusions

ontheselectedsustainabilityinformationbasedonour

workperformed.Wehaveconductedourengagementin

accordancewiththeInternationalStandardonAssurance

Information(ISAE3000),Assuranceengagementsotherthan

theAuditsorReviewsofHistoricalFinancialInformation.

Areasonableassuranceengagementinvolvesperforming

procedurestoobtainevidenceaboutidentifiedsubject

matter.Ourproceduresselecteddependonourjudgment

includingtherisksofmaterialmisstatementoftheselected

sustainabilityinformationintheReport,whetherdueto

fraudorerror.Inmakingourriskassessments,weconsidered

internalcontrolrelevanttoSBG’spreparationoftheReport.

Webelievetheevidencewehaveobtainedissufficientand

appropriatetoprovideabasisforourreasonableassurance

conclusion.Inalimitedassuranceengagement,theevidence

gatheringproceduresarelessthanwherereasonable

assuranceisexpressed.

Summary of work performed

Ourworkincludedthefollowingevidence-gatheringprocedures:

• Interviewswithmanagementandseniorexecutivesat

corporateleveltoevaluatetheapplicationofAA1000APS

(2008)principlesandtoobtainanunderstandingofthe

controlenvironmentrelatedtosustainabilityreporting.

• Testingtheprocessesandsystemsatgrouplevel

whichgenerate,collate,aggregate,monitorandreport

selectedsustainabilityinformationandinspectingrelated

documentation,morespecifically:

− Interviewsanddiscussionswithrelevantmanagement,

keypersonneland/orstakeholdersofSBGtoconfirm

definitionsandboundariesforselectedperformance

information,andtogatherinformationonthedata

collectionandreportpreparationprocesses.

− Evaluationofinternaldatamanagementcontrolsbased

onsystemwalkthroughs.

− Inspectionofselectedinternallyandexternally

generateddocumentsandrecordsandcomprehensive

dataanalyses.

− Re-calculationofthekeyperformanceindicators.

• Evaluatingwhethertheinformationpresentedin

theReportisconsistentwithouroverallknowledge

andexperienceofsustainabilitymanagementand

performanceatSBGandisnotmateriallyinconsistentwith

informationcontainedintheIntegratedReport.

Conclusions

1. On the AA1000APS (2008) principles of Inclusiveness,

Materiality and Responsiveness on which we are

required to express limited assurance

Basedonourworkperformed,nothinghascometo

ourattentionthatcausesustobelievethatSBG’s

assertionsrelatingtotheiralignmentwiththe

AA1000APS(2008)principlesofinclusivity,materiality

andresponsiveness,describedonpage2,isnot

fairlystated.

2(a). On the selected key performance indictors on which we

are required to express reasonable assurance

Inouropinion,theselectedkeyperformanceindicators

identifiedin2(a)onpage89fortheyearended

31December2011arefairlystated,inallmaterial

respects,inaccordancewiththeGRIG3Guidelines.

2(b). On the selected key performance indicators on which we

are required to express limited assurance

Basedonourworkperformed,nothinghascometoour

attentionthatcausesustobelievethattheselected

keyperformanceindicatorsidentifiedin2(b)onpage89

fortheyearended31December2011arenotfairly

stated,inallmaterialrespects,inaccordancewiththe

GRIG3Guidelines.

Limitation of liability

Ourworkhasbeenundertakentoenableustoexpressthe

conclusionscontainedinthisreportsolelytotheaddressee

inaccordancewiththetermsofourengagement,andforno

otherpurpose.Wedonotacceptorassumeliabilitytoany

partyotherthantheDirectorsofSBG,forourwork,forthis

report,orfortheconclusionswehavereached.

KPMGServices(Pty)Limited

PerNeilMorris

Director

Johannesburg

7March2012

Assurance statement


Contact details

Contact details

Registered address9thfloor

StandardBankCentre

5SimmondsStreet

Johannesburg2001

POBox7725

Johannesburg,2000

Contact detailsTel:+27116369111

Fax:+27116364207

email:shareholderqueries:

[email protected]

email:customerqueries:

[email protected]

Director, Investor RelationsLinda DodgenTel:+27116365039email:[email protected]

Group SecretaryLoren WulfsohnTel:+27116365119

email:

[email protected]

Director, Corporate Social InvestmentDr. Nomsa MasukuTel:+27116363606

email:

[email protected]

Director, Group Sustainability ManagementKarin IretonTel:+27 11 631 4586email:

[email protected]

www.standardbank.com

This report is printed on environmentally friendly paper.

Authorised financial services and registered credit provider (NCRCP15)The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). SBSA 99111

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