Standard Bank Group Analysis of financial results Standard Bank Group analysis of financial results...

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Standard Bank Group Analysis of financial resultsfor the six months ended 30 June 2010

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Table of contents

1 Group results in brief2 Financial results, ratios and statistics4 Overview of financial results8 Summarised group income statement9 Headline earnings

10 Headline earnings and dividends per share11 Diluted headline earnings per share12 Statement of financial position14 Statement of comprehensive income14 Statement of changes in equity16 Explanation of principal differences between

normalised and IFRS results18 Financial results, ratios and statistics – IFRS19 Summarised group income statement – IFRS20 Statement of comprehensive income – IFRS20 Statement of changes in equity – IFRS22 Broad-based black economic empowerment

Segmental reporting24 Segmental structure for key business units26 Group executive committee28 Segmental income statement30 Segmental statement of financial position32 Personal & Business Banking36 Corporate & Investment Banking40 Wealth – Liberty

Capital management44 Return on ordinary equity45 Cost of equity and economic returns46 Market capitalisation and price-to-book ratio47 Ordinary shareholders’ equity (net asset value)48 Currency analysis of net asset value49 Currency translation effects50 Economic capital51 Risk-weighted assets52 Capital adequacy – qualifying regulatory capital53 Capital adequacy ratios54 Subordinated debt

Income statement analysis56 Net interest income and margin analysis58 Non-interest revenue60 Credit impairment charges64 Operating expenses66 Taxation

Balance sheet analysis68 Loans and advances69 Deposit and current accounts70 Loans and advances performance72 Banking activities average balances and margins74 Liquidity management76 Fair value hierarchy – Standard Bank Group

The Standard Bank of South Africa Limited78 Key financial results, ratios and statistics80 Summarised income statement81 Statement of financial position82 Segmental income statement84 Segmental statement of financial position86 Credit impairment charges90 Loans and advances performance92 Capital adequacy – qualifying regulatory capital93 Risk-weighted assets and capital adequacy ratios94 Market share analysis

Other information and reclassifications96 Supplementary information on a geographic basis98 Changes in accounting policies and

reclassifications99 Group statement of financial position reclassification

100 Business unit reclassifications101 Exchange rate impact on income statement102 Financial and other definitions

Shareholder information106 Analysis of shareholders107 Credit ratings108 Dividend payment dates109 Instrument codes110 Notes

ibc Contact details

Group results in brief

1Standard Bank Group analysis of financial results for the six months ended 30 June 2010

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Credit loss ratio

1,04%1H09: 1,84%

Return on equity

13,5%1H09: 12,6%

Dividend per share

141 cents1H09: 141 cents

Cost-to-income ratio

58,1%1H09: 49,9%

All results in this booklet are presented on a normalised basis, unless otherwise indicated

as being on an International Financial Reporting Standards (IFRS) basis. Results are

normalised to correct the distortions caused by IFRS’s treatment of the group’s Black

Economic Empowerment Ownership initiative and group share exposures entered into

to facilitate client trading activities or for the benefit of Liberty policyholders that

are deemed to be treasury shares. Refer to page 16 for principal differences between

normalised and IFRS results.

Net asset value per share,

5 792 cents, up 6%

Headline earnings of

R5 989 million, up 11%

Headline earnings per ordinary share

382 cents, up 9%

1H04 1H05 1H06 1H07 1H08 1H09 1H100

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

Rm

3 343

4 126

4 869

6 165

7 104

5 407

5 989

Headline earnings CAGR (1H04 – 1H10): 10%

1H04

51

249

122

305

144

181

141 141

193

359

451

482

351

382

1H05 1H06 1H07 1H08 1H09 1H100

100

200

300

400

500

Dividends per share Headline earnings per share

Cents

Headline earnings and dividends per shareCAGR (1H04 – 1H10): Headline earnings per share: 7%

Dividends per share: 18%

1H10 refers to the first half year results for 2010.1H09 refers to the first half year results for 2009.FY09 refers to the full year results for 2009 where applicable.

2 Standard Bank Group analysis of financial results for the six months ended 30 June 2010

Financial results, ratios and statistics

Change% 1H10 1H09 FY09

Standard Bank Group (SBG)Headline earnings contribution by business unitTotal headline earnings Rm 11 5 989 5 407 11 718Banking activities Rm (10) 5 449 6 054 11 646Personal & Business Banking Rm 2 1 988 1 952 3 765Corporate & Investment Banking Rm (6) 3 237 3 451 7 570Central and other Rm (66) 224 651 311Liberty Rm >100 540 (647) 72Profit attributable to ordinary shareholders Rm 11 6 018 5 439 11 519Other indicatorsHeadline earnings per ordinary share (EPS) cents 9 381,9 351,3 756,9Diluted headline EPS cents 9 378,5 348,7 750,6Basic EPS cents 9 383,8 353,4 744,0Diluted EPS cents 8 380,3 350,8 737,8Dividend cover times 2,7 2,5 2,0Dividend per share cents 141,0 141,0 386,0Net asset value per share cents 6 5 792 5 452 5 612Tangible net asset value per share cents 6 5 156 4 851 5 008Ordinary shareholders’ equity Rm 8 91 705 84 815 87 454Return on equity (ROE) % 13,5 12,6 13,6Total capital adequacy ratio % 14,6 14,4 15,1Tier I capital adequacy ratio % 11,8 12,0 11,9Core tier I capital adequacy ratio % 11,0 11,1 11,0Number of ordinary shares in issue– end of period thousands 2 1 583 314 1 555 568 1 558 258– weighted average thousands 2 1 568 125 1 539 229 1 548 236– diluted weighted average thousands 2 1 582 301 1 550 674 1 561 165Number of employees 4 52 768 50 912 51 411

Net asset valueOpening balance Rm 2 87 454 85 902 85 902Transactions with ordinary shareholders Rm (1 200) (706) (2 572)– shares issued Rm 239 103 200– dividends paid Rm (1 633) (942) (3 137)– other Rm 194 133 365

Transactions with minority shareholders Rm (43)Additional shareholder value Rm >100 5 494 (381) 4 124– headline earnings Rm 11 5 989 5 407 11 718– other earnings outside headline earnings Rm 29 32 (199)– currency translation movements, including hedging

activities Rm (455) (6 158) (7 509)– net cash flow hedges Rm (225) 218 85– net available-for-sale movement Rm 159 96 7– other Rm (3) 24 22

Closing balance Rm 8 91 705 84 815 87 454

Banking activitiesBalance sheetTotal assets Rm 1 1 099 921 1 088 670 1 078 970Loans and advances (net of credit impairments) Rm 1 719 082 709 793 723 507Other indicators ROE % 13,2 15,3 14,5Loan-to-deposit ratio % 93,0 92,3 94,1Net interest margin % 3,02 3,45 3,21Non-interest revenue to total income % 49,9 47,9 49,8Credit impairment charges Rm (47) 3 790 7 115 12 097Credit loss ratio % 1,04 1,84 1,60Cost-to-income ratio % 58,1 49,9 52,4Effective taxation rate % 29,3 25,4 29,5Number of employees 4 47 357 45 576 45 937


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Other economic indicatorsMarket indicatorsUSD/ZAR exchange rate– closing (1) 7,65 7,73 7,37– average (18) 7,53 9,20 8,42SA prime overdraft rate % 10,0 11,0 10,5SA average prime overdraft rate % 10,2 13,2 11,9SA average CPI % 5,1 8,1 7,1JSE All Share Index 19 26 259 22 049 27 666JSE Banks Index 19 36 389 30 482 36 675MSCI Emerging Markets Index 21 918 761 989

Share statisticsShare priceHigh for the period cents 28 11 875 9 250 10 500Low for the period cents 68 9 946 5 915 5 915Closing cents 15 10 239 8 870 10 200Shares tradedNumber of shares thousands (32) 547 893 805 322 1 489 980Value of shares Rm (4) 59 741 62 013 128 351Turnover in shares traded % 34,9 52,3 96,2

In the first six months of 2010 the group

experienced:

Globally A sluggish improvement in global macroeconomic stability after

depressed economic conditions in 2009.

Persistent uncertainty following the emergence of the

European sovereign debt crisis and heightened concerns of a

‘double-dip’ recession.

Risk appetite and trade flows remain subdued.

Continued limited liquidity supply and a premium on term

funding.

Ongoing public and regulatory pressure on financial institutions.

South Africa Slow improvement in economic recovery buoyed by stronger

demand for commodities and an improvement in manufacturing

output and retail sales.

Subdued inflation.

Historically low interest rates as the average prime rate reduced

by 292 basis points from June 2009 to 10,23% in June 2010.

Strengthened average USD/ZAR exchange rate from R9,20

in June 2009 to R7,53 in June 2010, while the closing

exchange rate weakened to R7,65 in June 2010 from R7,37

in December 2009.

JSE All Share Index contracted 5% from December 2009 to

June 2010 and remained fragile since December following a

strong recovery in the second half of 2009.

Continued corporate deleveraging and low corporate activity.

Persistent high levels of unemployment.

Increased demand for motor vehicles due to re-stocking and a

slight upturn in nominal house prices.

Small improvement in consumers’ ability to service debt, but

debt-to-disposable income levels remain high.

Hesitancy of households to take up new debt.

Stabilisation of rate of individual saving.

January 2009

Standard Bank Group JSE All Share Index

JSE Banks Index MSCI Emerging Markets Index

June 201060

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120

140

160

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Share price performance


Overview of financial results

Key performance indicators Normalised headline earnings of R5 989 million, up 11% on

1H09

Normalised headline earnings per share (HEPS) of 382 cents,

up 9% on 1H09

Return on equity (ROE) of 13,5% (1H09: 12,6%)

Tier I capital adequacy ratio of 11,8% (1H09: 12,0%)

Dividend per ordinary share of 141 cents (1H09: 141 cents)

Net asset value (NAV) per share of 5 792 cents

(1H09: 5 452 cents)

Cost-to-income ratio of 58,1% (1H09: 49,9%)

Credit loss ratio of 1,04% (1H09: 1,84%)

The performance indicators above and the unaudited results

discussed in the commentary below have been prepared on

a normalised basis. On an International Financial Reporting

Standards (IFRS) basis, Standard Bank Group reported a

13,9% ROE (1H09: 12,4%). Under IFRS headline earnings

of R5 868 million were 16% higher than the same period in

the prior year and HEPS were up 12% at 396 cents per share

(1H09: 353 cents per share).

Results are normalised to reflect the legal and economic

substance of the group’s Black Ownership Initiative; and deemed

treasury shares held for the benefit of Liberty policyholders and

to facilitate client trading activities, described fully on page 16.

Global operating environmentFinancial markets are generally stabilising across the globe.

Investor appetite is gradually returning, main stock market

indices have trended towards pre-crisis highs and, after

widening significantly, credit default swaps have declined to

pre-September 2008 levels. Unprecedented government

intervention in advanced economies and some key emerging

markets has pulled the world economy out of crisis mode.

Many developed nations are being forced to implement severe

austerity measures to bring their fiscal balances to order, during

a period where the economic recovery had barely commenced.

The banking sector has not benefited from the early stages

of the global economic recovery. Liquidity concerns remain

and corporate and consumer appetite for credit has generally

remained subdued. Continued risk aversion in the aftermath

of efforts to strengthen the banking sector and the threat of

increased regulation have continued to affect banks into 2010.

The global economy is showing a two-track recovery profile:

emerging markets are growing, while mature economies slowly

regain lost ground. Led by the BRIC economies, emerging

markets are continuing to move to the centre of global economic

focus. Nearly half of the world’s GDP growth in 2010 will

come from the BRIC economies. An axis of developing nations,

including Latin America and Africa, are supporting the ongoing

structural shift to the south and east.

Africa is reaping the rewards of reform, better macroeconomic

management, investments in infrastructure and more

constructive trade partnerships. Nevertheless, from a cyclical

perspective, Africa’s economic momentum was held back in

2010 by the impact of falling commodity prices, export volumes

and external financial flows in 2009. Africa’s prospects remain

contingent on the gradual recovery of the world economy.

Domestic operating environmentReal GDP growth in South Africa of 4,6% in the first quarter of

2010 compared to a decline of 1,8% in 2009, has been driven

primarily by external demand for commodities and manufactured

products. The strong rand has led to low inflation: CPI averaged

5,1% for the first half of 2010 compared to 7,1% in 2009;

which in turn has led to the lowest interest rates in 28 years: the

prime rate averaged 10,23% for the first half of 2010 compared

to 11,88% in 2009; and should be supportive of asset growth

going forward.

Asset prices, including house prices and equities, have improved

from last year. The Johannesburg stock exchange has advanced

by 19%, while house prices, up 7,3% in July, are staging a

gradual recovery since emerging from the downswing early

this year. The year-on-year growth reported in July represents

the first reported real growth in house prices since mid-2007.

A recovery in the asset base of households should support

consumer spending in due course.

The ratio of household debt to disposable income declined

to 78,4% in the first quarter of 2010 from 79,9% in the last

quarter of 2009. However, the ratio is still historically high,

explaining the reluctance of consumers to take on more debt

and suggesting that consumers will continue to focus on paying

off existing debt.

Extensive job losses are weighing heavily on the economy

from both an economic and social perspective. With more than

one million jobs lost over the last five quarters, it is clear that

household demand will suffer and pressure on public finances

will escalate.

Overview of results

Headline earnings by business unit

%change

1H10Rm

1H09Rm

Personal & Business Banking 2 1 988 1 952

Corporate & Investment Banking (6) 3 237 3 451

Central and other (66) 224 651

Banking operations (10) 5 449 6 054

Liberty >100 540 (647)

Total 11 5 989 5 407


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Personal & Business Banking benefited from reduced credit

impairments although this was offset by lower net interest

income due to muted asset growth and low interest rates.

Excluding the impact of a stronger average rand exchange rate,

headline earnings for Corporate & Investment Banking were flat

compared to the same period the year before, with lower credit

impairment charges mitigating reduced income following lower

levels of client activity. After reporting a loss for the first six

months of last year, Liberty returned to profitability. Central and

other reported a more normal result compared to 2009 which

included a release of a R500 million portfolio provision for credit

impairments.

Headline earnings by geography

%

change

1H10

Rm

1H09

Rm

South Africa banking 8 4 739 4 405

Liberty >100 540 (647)

South Africa 40 5 279 3 758

Rest of Africa (25) 509 682

Outside Africa (64) 230 640

Central funding (>100) (29) 327

Total 11 5 989 5 407

Banking operations in South Africa showed some resilience with

revenues down only 4%. As the credit environment continued

to improve in South Africa, credit impairments reduced and

headline earnings grew by 8%. Operations across the rest of

the African continent experienced tighter interest margins,

particularly in Personal & Business Banking where total revenues

were down 5%. Corporate & Investment Banking in the rest

of Africa experienced good investment banking revenues and

total revenues were up 2%. Investments in staff and systems

continued in the rest of Africa as we extend our branch presence

to build the franchise. Operations outside Africa experienced a

sharp decline in customer activity compared with a buoyant first

half in 2009. Volatility and general customer apathy to transact

in an uncertain environment dampened revenues while costs

continued to be incurred in anticipation of increased economic

activity, particularly in emerging markets.

Balance sheet analysisBanking assets of R1 100 billion were flat on the prior period

and marginally up on December 2009.

Loans to customers declined 3% from June 2009 with the major

asset classes of mortgages up 4%, instalment sale and finance

leases down 13%, card debtors flat, overdrafts and other

demand loans down 7% and term lending, mainly to corporates,

down 7%. Overall, loans and advances grew 1% with loans to

banks increasing 26%. This reflected the excess liquidity being

placed in the interbank market as client demand for lending

products waned.

Deposit and current accounts grew 1% with pleasing growth in

current accounts of 12%, in line with our strategy of growing

transactional banking relationships. Call deposits decreased

10% as a result of lower average balances and lengthening the

term deposit book. The ratio of advances to deposits remained

conservative at 93% (1H09: 92%).

For certain derivative contracts, the associated assets and

liabilities previously accounted for separately have been

regrouped and reported on a net basis, to more appropriately

reflect the underlying substance of these positions. This resulted

in a R41 billion reduction in derivative assets and liabilities from

that previously reported. The reclassifications and restatements

section on page 98 provides more detail.

Net asset value grew 5% or R4,3 billion since December 2009

with the inclusion of earnings offset by R1,6 billion in dividends

paid.

Income statement analysisAnalysis of income statement as reported

Net interest income was 12% lower than for the first six months

of 2009. Lower net interest margins (3,02% for 1H10 versus

3,45% for 1H09) and a flat loan book were the primary reasons

for the decline. The endowment impact of a lower average

interest rate on capital and transactional balances has had a

54 basis point negative impact on margins. Deposit spreads

were again constrained due to the sustained low interest rate

environment in most markets in which the group operates and

increasing competition for savings. The benefit of continued

repricing of lending margins on new business was dampened by

muted growth in the loan book.

Non-interest revenue declined 5% in the period with net

fee and commission revenue up 4%, trading revenue down

23% and other revenue up 21%. The group’s partnership

with the Industrial and Commercial Bank of China (ICBC)

bolstered advisory fee and commission income through

increased cross border transaction deal flow. In South Africa

client activity in longer-term funding transactions remained

low. Increased customer activity in basic transactional

banking together with an annual pricing increase resulted in

7% growth in income from account transaction fees. Of

the 23% decline in trading income, 13% was due to the translation

effect of a stronger rand and 10% due to lower levels of client

activity due to general nervousness about financial markets,

especially in the second quarter as the European sovereign debt

crisis emerged. Other revenue growth was supported by gains

on listed property investments, positive valuation adjustments on

unlisted equities, improved short-term insurance income and the

solid contribution from the sale of insurance-related products to

bank customers, in partnership with Liberty.


Credit impairment charges almost halved for the period when

compared to the first half of 2009 and were 24% down on the

second half of 2009 reflecting the continued improvement in

the credit environment. Non-performing loans (NPLs) remained

high at 6,24% of the book (FY09: 6,15%), however the notable

slowing of new defaults contributed to reducing NPL impairments

from R7 billion in the first half of 2009 to R4 billion in the first

half of 2010. Corporate restructuring and the lower probability

of client defaults in Corporate & Investment Banking resulted

in names being removed from watchlists and a subsequent net

reversal of portfolio provisions previously raised. The credit loss

ratio of 1,04% is an improvement over the ratio of 1,84% for

the first half of 2009 and 1,31% for the second half of that year.

Banking activities cost growth was 7% for the period, and,

adjusted for a constant currency, cost growth was 15%. Staff

costs increased 6% with the increase primarily coming from

Personal & Business Banking on the back of annual increases and

increased headcount, particularly in Africa to support franchise

growth. Other operating costs grew 8% with higher depreciation

costs in the current period and continued investment in IT

systems and infrastructure. Given slower revenue growth, the

cost-to-income ratio increased to 58,1%.

Within banking activities, income from associates and joint

ventures more than doubled to R259 million largely due to the

first time inclusion of equity accounted earnings (USD24 million)

from our investment in Troika Dialog in Russia.

Summarised analysis of group earnings on constant

currency

The average USD/ZAR exchange rate strengthened from

9,20 in the first half of 2009 to 7,53 in the period under review.

This, together with the rand’s strength against the basket of

African currencies in which the group operates, meant foreign

earnings were dampened when translated into rands. On a

constant currency basis (which restates the prior period income

statement using the current period average exchange rate) total

income was down 3% (reported: down 9%), operating expenses

were up 15% (reported: up 7%) and normalised headline

earnings were up 16% (reported: up 11%).

Overview of business unit performancePersonal & Business Banking

Headline earnings of R1 988 million in Personal & Business

Banking were 2% up on the same period in 2009. An ROE of

16,1% was achieved. Margins continued to be impacted by low

interest rates, however, credit impairments reduced faster than

anticipated.

In mortgage lending the number of new applications for finance

was up by an encouraging 77% and the number of registrations

was 56% higher. Book growth of 4% was achieved largely

attributable to the reintroduction of the mortgage origination

channel in the third quarter of 2009 and the purchase of a

further R2,8 billion of mortgages from SA Home Loans in 2010.

Margins in mortgage lending were impacted by the relatively

higher cost of term funding as the group further lengthens its

funding profile. With more emphasis being placed on ongoing

concession management for new loans, year-to-date weighted

average new business concessions in South Africa improved

to 0,28% compared to 1,07% for the six months ended June

2009; however this was not enough to offset the increase in

funding costs.

The lag effect of the high inflation and interest rate environment

during 2008 and the impact of bottlenecks in the debt review

process introduced by the National Credit Act, remain evident

in the home loans portfolio with NPLs increasing to R27 billion

(10,4% of the book compared to 10,1% at December 2009).

We have remained steadfast in our risk-based strategy of

assisting clients to remain in their houses which has resulted in

low levels of foreclosures and evictions and hence low levels of

write-offs in the period. The slower growth rate in NPLs and an

improved outlook for consumers and house prices in South Africa

allowed the credit impairments for home loans to reduce by

9% for the period resulting in a lower yet high credit loss ratio of

1,36% (1H09: 1,55%). Recently announced improvements to

the debt review process should help alleviate the accumulation

of NPLs in this portfolio.

The instalment finance book continued to shrink as some

sectors of the business market struggle to recover from

the impact of the economic recession, although a recent

pick-up in new business volumes has been observed. NPLs are

reducing in this portfolio and the credit loss ratio improved to

2,37% (1H09: 3,60%) with further improvement expected.

Card showed healthy earnings growth for the period despite

lower revenues. Pressures on revenues continued with lower

cardholder activity and reduced outstanding average balances as

consumers reduce debt obligations. A reduced credit loss ratio

of 4,82% (1H09: 7,24%) and lower fraud losses as chip and pin

cards are rolled out contributed to growth in headline earnings

of 37%.

Transactional and lending product deposit margins remained

under pressure due to the negative endowment impact of lower

interest rates on transactional accounts. Branch strategies to

attract new deposit customers were successful with the number

of current accounts increasing 14% in South Africa. Deposits

continue to grow across the African network, particularly in

Nigeria. Credit losses in the business banking book reduced as

trading conditions improved.

Bancassurance income grew 21% as complex product sales

increased off a low base in 2009 and the simple products

benefited from improved claims ratios.

Overview of financial results continued


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Corporate & Investment Banking

Corporate & Investment Banking generated headline earnings of

R3 237 million, down 6% on the same period in 2009. An ROE of

15,1% was recorded. General nervousness in financial markets

in the second quarter resulted in much lower client activity than

anticipated. Given the dependence that this business has on

client volumes, revenues were hard hit. This was partly mitigated

by an improved credit environment, allowing a net reversal of

credit impairments.

The global markets business endured a challenging first half

of the year with income down 23% off the high base set in

2009. Global markets’ income earned outside South Africa was

particularly impacted by the translation effect of the strong

rand, and by income earned in Russia previously reflected

under trading income, now accounted on a net basis as earnings

from associates following the acquisition of Troika Dialog.

Adjusting for these two impacts, global markets income is down

5%. Most notably in the second quarter, financial markets

showed continuing signs of uncertainty as concerns of Eurozone

debt and the strength of the global recovery reduced client

risk appetite. This impacted client franchise performances

across forex, interest rate, commodities and equities. However,

improvements in credit trading were experienced in South Africa.

The global markets business in the rest of Africa showed strong

results from interest rate trading due to increased client activity.

Investment banking income was down 4% on the same period

in the prior year with advisory businesses performing well

across all regions. Term lending across Africa delivered a strong

performance on the back of improved economic conditions

across much of the continent and a solid deal pipeline, despite

margins being impacted by the negative endowment effect.

Investment banking in operations outside Africa experienced a

challenging first half characterised by a slowdown in deal flow.

Investment banking recorded a turnaround in impairments for

credit losses with some reversals of provisions previously raised

in South Africa, as clients restructured their debt during the

period.

Transactional products and services income was down 17% on

the prior period. Margins were compressed by the negative

endowment effect on transactional balances across Africa.

Underlying transactional volumes and cash management

deposits increased in South Africa with the electronic banking

business performing well.

Wealth – LibertyThe financial results reported for the wealth business unit

represent the consolidated results of the group’s 53,7%

investment in Liberty Holdings Limited (Liberty). Bancassurance

results are included under Personal & Business Banking.

Normalised headline earnings were R1 007 million for the

period compared to a R1 207 million loss reported for the same

period in 2009, a significant improvement indicating a return to

more normal levels of earnings from core insurance operations.

Of these headline earnings, R540 million was attributable to

Standard Bank Group (1H09: loss of R647 million). The progress

made in improving policyholder persistency across the risk books

has been particularly pleasing. Balance sheet management

continued as planned during the period: returns on the

shareholder investment portfolio were satisfactory given market

performance and asset/liability positions were managed within

risk limits. Despite a difficult operating environment, Stanlib and

Liberty Africa asset management operations continued to attract

net cash inflows, totalling R11,7 billion, with particular strength

in the fixed interest franchise.

Expansion into Africa is still in a build phase and good

progress has been made in Namibia and Botswana. The

acquisition of the non-banking entities of CfC Stanbic in Kenya

(CfC Insurance Holdings) has been delayed until the fourth

quarter of 2010 due to the extended regulatory process in

Kenya.

Shareholders are referred to the full Liberty Holdings interim

results announcement dated 5 August 2010.

Capital managementThe group remains well capitalised with a tier I ratio of

11,8%, well above the group’s internal targets and at levels

similar to those at December 2009.

LiquidityGrowth in term lending remained subdued throughout the

first half of 2010. Under these circumstances the group has

placed particular emphasis on cost effective refinancing and

funding in support of meeting its ongoing structural liquidity

requirements. The group increased its long-term funding ratio

to 26,3% and prudently maintains a sizeable liquidity buffer

with unencumbered marketable assets totalling R105 billion

(12,3% of funding-related liabilities) as at 30 June 2010.

We are encouraged by the recently announced revised Basel III

proposals, which are more conducive to credit growth required

to support developing economies, particularly the revisions to

liquidity requirements.


Summarised group income statement

Change%

1H10Rm

1H09Rm

FY09 Rm

Net interest income (12) 14 541 16 610 31 493

Non-interest revenue (5) 14 475 15 282 31 217

Net fee and commission revenue 4 9 023 8 698 18 108

Trading revenue (23) 4 475 5 776 10 621

Other revenue 21 977 808 2 488

Total income (9) 29 016 31 892 62 710

Credit impairment charges (47) 3 790 7 115 12 097

Impairments for non-performing loans (42) 4 123 7 109 11 779

Impaired loss (48) 3 242 6 183 9 782

Discounting of expected recoveries (5) 881 926 1 997

Impairments for performing loans (>100) (333) 6 318

Income after credit impairment charges 2 25 226 24 777 50 613

Operating expenses 7 17 019 15 962 32 827

Staff costs 6 9 546 9 020 17 848

Other operating expenses 8 7 473 6 942 14 979

Net income before goodwill (7) 8 207 8 815 17 786

Goodwill impairment (100) 2 42

Net income before associates and joint ventures (7) 8 207 8 813 17 744

Share of profit/(loss) from associates and joint ventures >100 259 115 (34)

Net income before taxation (5) 8 466 8 928 17 710

Taxation 9 2 482 2 269 5 232

Profit for the period (10) 5 984 6 659 12 478

Attributable to minorities 0 312 311 552

Attributable to preference shareholders (26) 194 262 479

Attributable to ordinary shareholders – banking activities (10) 5 478 6 086 11 447

Headline adjustable items – banking activities 9 (29) (32) 199

Headline earnings – banking activities (10) 5 449 6 054 11 646

Headline earnings/(loss) – Liberty >100 540 (647) 72

Standard Bank Group headline earnings 11 5 989 5 407 11 718


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Reconciliation of headline earnings

1H10 1H09 FY09

GrossRm

Tax1

Rm

Minoritiesand

preferenceshare-

holdersRm

NetRm

GrossRm

Tax1

Rm

Minoritiesand

preferenceshare-

holdersRm

NetRm

NetRm

Profit for the period – banking activities 7 942 (1 958) (506) 5 478 8 359 (1 700) (573) 6 086 11 447Headline adjustable items – banking activities

(deducted)/added (63) 20 14 (29) (44) 10 2 (32) 199

Goodwill impairment – IFRS 3 2 2 42Loss on deemed disposal of associate – IFRS 3 10 10Profit on sale of property and equipment – IAS 16 (19) 3 1 (15) (18) 4 1 (13) (29)Impairment of property and equipment – IAS 16 18Realised foreign currency translation reserve on foreign operations – IAS 21 (18)Gains on the disposal of businesses and divisions – IAS 27 7Impairment of associates – IAS 28 351Impairment of intangible assets – IAS 38 11 (3) 8 70Realised gains on available- for-sale assets – IAS 39 (54) 17 13 (24) (39) 9 1 (29) (242)

Profit on sale of Visa shares (44)Other (54) 17 13 (24) (39) 9 1 (29) (198)

Headline earnings – banking activities 7 879 (1 938) (492) 5 449 8 315 (1 690) (571) 6 054 11 646Headline earnings/(loss) – Liberty 1 589 (478) (571) 540 (1 208) 73 488 (647) 72

Standard Bank Group headline earnings 9 468 (2 416) (1 063) 5 989 7 107 (1 617) (83) 5 407 11 718

1 Excluding indirect taxes.

Headline earnings

1H04 1H05 1H06 1H07 1H08 1H09 1H100

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

Rm

3 343

4 126

4 869

6 165

7 104

5 407

5 989



Headline earnings and dividends per share


Headline earnings Rm 11 5 989 5 407 11 718

Headline EPS cents 9 381,9 351,3 756,9

Basic EPS cents 9 383,8 353,4 744,0

Total distributions per share cents 141,0 141,0 386,0

Distribution paid out of share premium

– final cents 245,0

Dividend paid out of distributable reserves

– interim cents 141,0 141,0 141,0

Dividend cover – based on normalised headline EPS times 2,7 2,5 2,0

Movement in number of ordinary and weighted average shares issued

1H10 1H09 FY09

Issuednumber

of shares000’s

Weightednumber

of shares000’s

Issuednumber

of shares000’s

Weightednumber

of shares000’s

Issuednumber

of shares000’s

Weightednumber

of shares000’s

Beginning of the period 1 558 258 1 558 258 1 525 008 1 525 008 1 525 008 1 525 008

Shares issued for share option settlements 5 076 2 802 3 371 1 453 6 061 3 190

Shares issued through scrip distribution 19 980 7 065 27 189 12 768 27 189 20 038

End of the period 1 583 314 1 568 125 1 555 568 1 539 229 1 558 258 1 548 236

Reconciliation to IFRS shares in issue

End of the period – normalised 1 583 314 1 568 125 1 555 568 1 539 229 1 558 258 1 548 236

Shares held by Tutuwa SPVs (63 479) (63 479) (63 479) (63 479) (63 479) (63 479)

Total number of shares held initially by Tutuwa SPVs (99 190) (99 190) (99 190) (99 190) (99 190) (99 190)

Less: number of Tutuwa shares financed by third parties 24 691 24 691 24 691 24 691 24 691 24 691

Less: number of Tutuwa shares acquired by ICBC 11 020 11 020 11 020 11 020 11 020 11 020

Share exposures held to facilitate client trading activities 3 358 4 465 5 288 6 615

Shares held for the benefit of Liberty policyholders (deemed treasury shares) (25 170) (27 297) (34 258) (34 981) (25 723) (32 035)

End of the period – IFRS 1 498 023 1 481 814 1 457 831 1 440 769 1 474 344 1 459 337

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Dividends per share – interim Dividends per share – final

Dividend cover

0

50

100

150

200

250

300

350

400

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Cents Times covered

51

122144

181193

141 141

181

145

176

205 193 245

232

267

320

386 386 386

Dividends per shareCAGR (1H04 – 1H10): 18%

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Headline earnings per share – first half

Headline earnings per share – second half

0

200

400

600

800

1 000

Cents

249305

359

451482

351382

309

361

437

510 461

406

558

666

796

961 943

757

Headline earnings per shareCAGR (1H04 – 1H10): 7%


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Diluted headline earnings per share

Change%

1H10cents

1H09 cents

FY09 cents

Diluted headline EPS 9 378,5 348,7 750,6

Diluted EPS 8 380,3 350,8 737,8

Diluted weighted average number of ordinary shares issued

1H10000’s

1H09 000’s

FY09 000’s

Weighted average shares 1 568 125 1 539 229 1 548 236

Dilution from equity compensation plans 14 176 11 445 12 929

Share option scheme 6 410 7 601 7 049

Equity growth scheme 7 766 3 844 5 880

Diluted weighted average shares 1 582 301 1 550 674 1 561 165

Reconciliation to diluted weighted average IFRS shares

Diluted weighted average shares – normalised 1 582 301 1 550 674 1 561 165

Shares held by Tutuwa SPVs (63 479) (63 479) (63 479)

Share exposures held to facilitate client trading activities 4 465 6 615

Shares held for the benefit of Liberty policyholders (27 297) (34 981) (32 035)

Tutuwa transaction – dilutive shares 43 175 35 710 38 772

Diluted weighted average shares – IFRS 1 539 165 1 487 924 1 511 038

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Diluted headline earnings per share – first half

Diluted headline earnings per share – second half

0

200

400

600

800

1 000

Cents

248300

353

445478

349379

303

355

431

502 458

402

551

655

784

947 936

751

Diluted headline earnings per shareCAGR (1H04 – 1H10): 7%


Statement of financial position

Standard Bank Group

Change%

1H10Rm

1H091

RmFY091

Rm

Assets

Cash and balances with central banks 13 25 687 22 731 24 983

Derivative assets (11) 124 097 138 770 122 296

Trading assets 8 92 981 85 756 89 105

Pledged assets 54 8 041 5 216 5 808

Financial investments 9 273 949 250 667 264 769

Loans and advances 1 719 082 709 793 723 507

Loans and advances to banks 26 124 487 98 606 122 923

Loans and advances to customers (3) 594 595 611 187 600 584

Investment property 10 19 520 17 695 19 058

Other assets (25) 24 057 32 107 18 407

Non-current assets held for sale3 (100) 3 363

Interest in associates and joint ventures 43 9 723 6 800 9 529

Goodwill and other intangible assets 8 10 069 9 356 9 409

Property and equipment 41 13 316 9 467 12 250

Total assets 2 1 320 522 1 291 721 1 299 121

Equity and liabilities

Equity 8 109 342 101 529 104 498

Equity attributable to ordinary shareholders 8 91 705 84 815 87 454

Preference share capital and premium 5 503 5 503 5 503

Minority interest 8 12 134 11 211 11 541

Liabilities 2 1 211 180 1 190 192 1 194 623

Derivative liabilities (4) 121 426 126 461 116 554

Trading liabilities 9 52 571 48 436 51 118

Deposit and current accounts 1 773 128 769 052 768 548

Deposits from banks 11 101 345 90 906 106 018

Deposits from customers (1) 671 783 678 146 662 530

Other liabilities 4 55 735 53 749 48 203

Non-current liabilities held for sale3 (100) 2 054

Policyholders’ liabilities 8 181 593 168 733 183 544

Subordinated debt 23 26 727 21 707 26 656

Total equity and liabilities 2 1 320 522 1 291 721 1 299 121

1 Refer to page 99 for the prior period reclassification.2 Includes elimination of derivative balances between Liberty and banking activities.3 The non-current assets and liabilities held for sale relate to ZAO Standard Bank which was sold to Troika Dialog Group when Standard Bank Group became

a 36,43% shareholder in Troika Dialog Group on 25 September 2009.


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Banking activities Liberty2

Change%

1H10Rm

1H091

Rm1H091

RmChange

%1H10

Rm1H09

RmFY09

Rm

13 25 687 22 731 24 983

(10) 124 387 138 770 122 315 (100) (290) (19)

8 92 981 85 756 89 105

75 6 469 3 706 4 249 4 1 572 1 510 1 559

9 90 977 83 163 79 849 9 182 972 167 504 184 920

1 719 082 709 793 723 507

26 124 487 98 606 122 923

(3) 594 595 611 187 600 584

10 19 520 17 695 19 058

(31) 16 649 24 257 13 141 (6) 7 408 7 850 5 266

(100) 3 363

>100 4 556 2 182 4 265 12 5 167 4 618 5 264

10 8 442 7 651 7 827 (5) 1 627 1 705 1 582

46 10 691 7 298 9 729 21 2 625 2 169 2 521

1 1 099 921 1 088 670 1 078 970 9 220 601 203 051 220 151

7 95 097 88 547 90 486 10 14 245 12 982 14 012

8 85 323 79 045 81 221 11 6 382 5 770 6 233

5 503 5 503 5 503

7 4 271 3 999 3 762 9 7 863 7 212 7 779

0 1 004 824 1 000 123 988 484 9 206 356 190 069 206 139

(3) 121 708 125 754 116 748 (>100) (282) 707 (194)

9 52 571 48 436 51 118

1 773 128 769 052 768 548

11 101 345 90 906 106 018

(1) 671 783 678 146 662 530

(7) 32 744 35 174 27 468 24 22 991 18 575 20 735

(100) 2 054

8 181 593 168 733 183 544

26 24 673 19 653 24 602 2 054 2 054 2 054

1 1 099 921 1 088 670 1 078 970 9 220 601 203 051 220 151


Statement of comprehensive income

1H10

Change%

Ordinaryshareholders’

equityRm

Minorities andpreference

shareholdersRm

Totalequity

Rm

Profit for the period 28 6 018 1 077 7 095

Other comprehensive income after tax for the period 96 (524) 212 (312)

Exchange rate differences on translating equity investment in foreign operations 198 126 324

Foreign currency hedge of net investment (653) (653)

Cash flow hedges (225) (225)

Available-for-sale financial assets 159 122 281

Revaluation and other (losses)/gains (3) (36) (39)

Total comprehensive income for the period >100 5 494 1 289 6 783


Attributable to equity holders of the parent 5 494 194 5 688

Attributable to preference shareholders 194 194

Attributable to ordinary shareholders >100 5 494 5 494

Statement of changes in equity

Ordinaryshare capitaland premium

Rm

Foreigncurrency

translationreserve

Rm

Foreigncurrency

hedge of net investment

reserveRm

Cash flowhedgingreserve

Rm

Balance at 1 January 2009 16 997 5 288 880 802

Increase in statutory credit risk reserve

Equity-settled share-based payment transactions

Tax on share-based payments

Transfer of vested equity options

Issue of share capital and share premium 200

Total comprehensive income for the period (7 403) (106) 85

Dividends paid

Balance at 31 December 2009 17 197 (2 115) 774 887

Balance at 1 January 2010 17 197 (2 115) 774 887





Change in shareholding of subsidiary 4


Total comprehensive income for the period 198 (653) (225)

Dividends paid

Balance at 30 June 2010 17 436 (1 913) 121 662

All balances are stated net of applicable tax.


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1H09 FY09


equityRm


shareholdersRm

Totalequity

Rm


equityRm

Minorities and preference

shareholdersRm

Total equity

Rm

5 439 85 5 524 11 519 1 279 12 798

(5 820) (1 895) (7 715) (7 395) (2 069) (9 464)

(6 254) (1 856) (8 110) (7 403) (2 164) (9 567)

96 96 (106) (106)

218 218 85 85

96 6 102 7 33 40

24 (45) (21) 22 62 84

(381) (1 810) (2 191) 4 124 (790) 3 334

(2 072) (2 072) (1 269) (1 269)

(381) 262 (119) 4 124 479 4 603

262 262 479 479

(381) (381) 4 124 4 124

Statutorycredit risk

reserveRm

Available-for-sale

revaluationreserve

Rm

Share-basedpayment

reserveRm

Revaluationand other

reservesRm

Retained earnings

Rm

Preferenceshare capitaland premium

Rm

Totalequity

Rm

Ordinaryshare-

holders’equity

Rm

Minorityinterest

Rm

344 319 739 302 60 231 85 902 5 503 13 738 105 143

202 (202)

307 307 37 344

58 58 58

(132) 132

200 (10) 190

7 (14) 11 555 4 124 479 (1 269) 3 334

(3 137) (3 137) (479) (955) (4 571)

546 326 914 288 68 637 87 454 5 503 11 541 104 498

546 326 914 288 68 637 87 454 5 503 11 541 104 498

130 (130)

199 199 17 216

(5) (5) (5)

(56) 56

(6) (15) (26) (43) 33 (10)

239 34 273

159 9 6 006 5 494 194 1 095 6 783

(1 633) (1 633) (194) (586) (2 413)

670 470 1 057 297 72 905 91 705 5 503 12 134 109 342


Explanation of principal differences between normalised and IFRS results

Description of normalised adjustmentsThe group’s consolidated financial statements are prepared in accordance with, and comply with IFRS as issued by both the International Accounting Standards Board (IASB) and the Accounting Practices Board of South Africa. This document is prepared on a basis which normalises or adjusts the IFRS results for three specific accounting circumstances where IFRS does not reflect the underlying economic and legal substance of the following transactions (the normalised adjustments):

the group’s Black Economic Empowerment Ownership (Tutuwa) initiative;

group shares held by Liberty for the benefit of policyholders; and

group share exposures entered into to facilitate client trading activities.

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

Black Economic Empowerment Ownership (‘Tutuwa’) initiativeThe group concluded its Black Economic Empowerment Ownership initiative in October 2004 when it sold an effective 10% interest in its South African banking operations to a broad-based grouping of black entities.

The group obtained financing through the issue of perpetual preference shares. These funds were used to subscribe for 8,5% redeemable, cumulative preference shares issued by special purpose vehicles (SPVs) controlled by the Standard Bank Group (SBG). These SPVs purchased SBG shares. Subsequently, the SPVs containing these shares were sold to black participants. The capital and dividends on the redeemable preference shares issued by the SPVs are repayable from future ordinary dividends received, or the proceeds from the disposal of SBG shares held.

As a result of SBG’s right to receive its own dividends back in the form of yield and capital on the redeemable preference shares, the subsequent sale of the SPVs and consequent delivery of the SBG shares to the black participants, although legally effected, is not accounted for as a sale. Consequently, the IFRS accounting treatment followed until full redemption, or third party financing is obtained, is:

the redeemable preference shares issued by the SPVs and subscribed for by SBG are not recognised as financial assets, but eliminated against equity as a negative empowerment reserve;

the negative empowerment reserve represents SBG shares held by the SPVs that are deemed to be treasury shares in terms of accounting conventions;

to the extent that preference dividends are received from the SPVs, these are eliminated against the ordinary dividends paid on the SBG shares held by the SPVs;

preference dividends accrued but not received due to cash distributions paid to participants, increase the empowerment reserve;

for purposes of the calculation of earnings per share, the weighted average number of shares in issue is reduced by the number of shares held by those SPVs that have been sold to the black participants. The shares will be restored on full redemption of the preference shares, or to the extent that the preference share capital is financed by a third party; and

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

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

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

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

to the weighted number of shares in issue, for the purposes of calculating normalised per share ratios; and

adjusts dividends declared on perpetual preference shares to an accrual basis.

In December 2007 the group obtained external financing for a portion of the financing provided to the SPVs. As a result, the negative empowerment reserve was reduced by the value of the external financing obtained of R1 billion and a proportion of the SBG shares held by the SPVs (24,7 million shares) were no longer deemed to be treasury shares for accounting purposes.

In March 2008, 11,1% of the Tutuwa participants’ shares were sold to ICBC with the proceeds being partly utilised for the repayment of their preference share liability, thereby releasing a further 11,0 million ordinary shares previously deemed by IFRS to be ‘treasury shares’.

Group shares held for the benefit of policyholders or to facilitate client trading activitiesThe group acquires or sells short its own shares for two distinct business reasons:

group companies’ shares held by Liberty are invested for the risk and reward of its policyholders, not its shareholders, and consequently the group’s shareholders are exposed to

Tutuwa initiative

SPVs owning SBG shares

SBG

Partial external funding by the market

Tutuwa participants

Funding through 8,5% redeemable cumulative preference shares (not

recognised as an asset in SBG in terms of IFRS)

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

to participants

Investment in SBG shares (deemed by IFRS to be treasury shares in SBG)


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an insignificant portion of the fair value changes on these shares; and

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

In terms of IAS 32 Financial Instruments: Presentation (IAS 32), trades by subsidiaries in the group’s shares held on behalf of policyholders and group share exposures to facilitate client trading activities are deemed to be treasury shares for accounting purposes. The accounting consequences in the consolidated IFRS group financial statements are:

the cost price of shares purchased by subsidiaries as well as any funds received by subsidiaries from selling the group’s shares short are set off against or added to ordinary shareholders’ equity and minority interest in the group financial statements;

all the fair value movements are eliminated from the income statement, reserves and minority interests where applicable; and

dividends received on group shares are eliminated against dividends paid.

No corresponding adjustment is made to the policyholder liabilities or trading positions with customers. As a result, the application of IAS 32 gives rise to a mismatch in the overall equity and income statement of the group. The liability to policyholders and client trading position, along with the change in policyholders’ liabilities and profit or loss recognised on the client trading position is therefore not eliminated even though the corresponding interest in the group’s shares is eliminated and treated as treasury shares acquired or issued.

With regards to the group shares held for the benefit of Liberty policyholders, the weighted average number of shares in issue for per share figures is calculated by deducting the full number of group shares held (100%), not the IFRS effective 54% owned by the group, as IFRS (IAS 33 Earnings per share) does not contemplate minority portions of treasury shares. This treatment exaggerates the reduction in the weighted average number of shares used to calculate per share ratios.

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

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

SBGPolicyholders’ liabilities and client trading positions relating to SBG shares recognised in full

SBG subsidiaries

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

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

Policyholders’ benefits offered to clients

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

LibertyLiability to policyholders linked to returns on portfolios that include

SBG shares

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

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

Subsidiaries in banking operationsExposure to movements in share

price or index resulting from client trading activities

Cost of SBG shares deducted from equity in terms of IFRS. Fair value movement in SBG share price removed from the IFRS income statement

Adjustments to IFRS results Headline earnings Ordinary shareholders’

equityStandard

Bank GroupRm

Bankingactivities

RmLiberty

Rm

Standard Bank Group

Rm

IFRS – 1H10 5 403 465 5 868 88 025Tutuwa initiative 94 21 115 2 656Share exposures held to facilitate client trading activities (48) (48) (336)Group shares held for the benefit of Liberty policyholders 54 54 1 360Normalised – 1H10 5 449 540 5 989 91 705

IFRS – 1H09 5 939 (860) 5 079 80 632Tutuwa initiative 115 28 143 2 552Group shares held for the benefit of Liberty policyholders 185 185 1 631Normalised – 1H09 6 054 (647) 5 407 84 815

IFRS – FY09 11 629 (376) 11 253 84 022Tutuwa initiative 229 49 278 2 584Share exposures held to facilitate client trading activities (212) (212) (537)Group shares held for the benefit of Liberty policyholders 399 399 1 385Normalised – FY09 11 646 72 11 718 87 454


Change%

1H10Rm

1H09Rm

FY09Rm

Standard Bank Group

Headline earnings contribution by business unit

Total headline earnings Rm 16 5 868 5 079 11 253

Banking activities Rm (9) 5 403 5 939 11 629

Personal & Business Banking Rm 2 1 988 1 952 3 765

Corporate & Investment Banking Rm (6) 3 237 3 451 7 570

Central and other Rm (67) 178 536 294

Liberty Rm >100 465 (860) (376)

Profit attributable to ordinary shareholders Rm 15 5 897 5 111 11 054

Other indicators

Headline EPS cents 12 396,0 352,5 771,1

Diluted headline EPS cents 12 381,2 341,3 744,7

Basic EPS cents 12 398,0 354,7 757,5

Diluted EPS cents 12 383,1 343,5 731,6

Dividend cover times 2,8 2,5 2,0

Dividend per share cents 141,0 141,0 386,0

Net asset value per share cents 6 5 876 5 531 5 699

Tangible net asset value per share cents 6 5 204 4 889 5 061

Ordinary shareholders’ equity Rm 9 88 025 80 632 84 022

ROE % 13,9 12,4 13,7

Total capital adequacy ratio % 14,6 14,4 15,1

Tier I capital adequacy ratio % 11,8 12,0 11,9

Core tier I capital adequacy ratio % 11,0 11,1 11,0

Number of ordinary shares in issue

– end of period thousands 3 1 498 023 1 457 831 1 474 344

– weighted average thousands 3 1 481 814 1 440 769 1 459 337

– diluted weighted average thousands 3 1 539 165 1 487 924 1 511 038

Banking activities

Balance sheet

Total assets Rm 1 1 098 058 1 086 552 1 077 391

Loans and advances (net of credit impairments) Rm 1 716 875 707 675 721 389

Other indicators

ROE % 13,3 15,3 14,9

Loan-to-deposit ratio % 92,7 92,0 93,9

Net interest margin % 3,01 3,44 3,19

Non-interest revenue to total income % 50,2 48,1 50,2

Credit impairment charges Rm (47) 3 790 7 115 12 097

Credit loss ratio % 1,04 1,84 1,60

Cost-to-income ratio % 58,2 50,0 52,3

Effective taxation rate % 29,6 25,7 29,8

Financial results, ratios and statistics – IFRS


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Change%

1H10Rm

1H09Rm

FY09Rm




Trading revenue (21) 4 543 5 776 10 916


Total income (9) 28 995 31 804 62 828



Impaired loss (48) 3 242 6 183 9 782

Discounting of expected recoveries (5) 881 926 1 997

Impairments for performing loans (>100) (333) 6 318



Staff costs 6 9 546 9 020 17 848

Other operating expenses 8 7 473 6 942 14 979

Net income before goodwill (6) 8 186 8 727 17 904

Goodwill impairment (100) 2 42

Net income before associates and joint ventures (6) 8 186 8 725 17 862

Share of profit/(loss) from associates and joint ventures >100 259 115 (34)

Net income before taxation (4) 8 445 8 840 17 828

Taxation 10 2 502 2 269 5 315

Profit for the period (10) 5 943 6 571 12 513


Attributable to preference shareholders (31) 199 289 531

Attributable to ordinary shareholders – banking activities (9) 5 432 5 971 11 430

Headline adjustable items – banking activities 9 (29) (32) 199

Headline earnings – banking activities (9) 5 403 5 939 11 629

Headline earnings/(loss) – Liberty >100 465 (860) (376)

Standard Bank Group headline earnings 16 5 868 5 079 11 253

Summarised group income statement – IFRS


Statement of comprehensive income – IFRS

1H10

Change%


equityRm


shareholdersRm

Totalequity

Rm

Profit for the period 37 5 897 1 017 6 914

Other comprehensive income after tax for the period 96 (524) 212 (312)

Exchange rate differences on translating equity investment in foreign operations 198 126 324

Foreign currency hedge of net investment (653) (653)

Cash flow hedges (225) (225)

Available-for-sale financial assets 159 122 281

Revaluation and other (losses)/gains (3) (36) (39)

Total comprehensive income for the period >100 5 373 1 229 6 602


Attributable to equity holders of the parent 5 373 199 5 572

Attributable to preference shareholders 199 199

Attributable to ordinary shareholders >100 5 373 5 373

Statement of changes in equity – IFRS

Ordinaryshare

capital andpremium

Rm

Empower-ment

reserveRm

Treasuryshares

Rm

Foreigncurrency

translationreserve

Rm

Foreigncurrency

hedge of net

investmentreserve

Rm

Balance at 1 January 2009 16 997 (2 653) (758) 5 288 880






Net decrease in treasury shares 617

Total comprehensive income for the period (7 403) (106)

Dividends paid

Balance at 31 December 2009 17 197 (2 653) (141) (2 115) 774

Balance at 1 January 2010 17 197 (2 653) (141) (2 115) 774







Net increase in treasury shares (242)

Total comprehensive income for the period 198 (653)

Dividends paid (197)

Balance at 30 June 2010 17 436 (2 850) (383) (1 913) 121

All balances are stated net of applicable tax.


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1H09 FY09


equityRm


shareholdersRm

Totalequity

Rm

Ordinarysharholders’

equityRm

Minorities and preference

shareholdersRm

Total equity

Rm

5 111 (72) 5 039 11 054 942 11 996

(5 821) (1 894) (7 715) (7 395) (2 069) (9 464)

(6 254) (1 856) (8 110) (7 403) (2 164) (9 567)

96 96 (106) (106)

218 218 85 85

96 6 102 7 33 40

23 (44) (21) 22 62 84

(710) (1 966) (2 676) 3 659 (1 127) 2 532

(2 255) (2 255) (1 658) (1 658)

(710) 289 (421) 3 659 531 4 190

289 289 531 531

(710) (710) 3 659 3 659

Cash flowhedgingreserve

Rm

Statutorycredit risk

reserveRm

Available-for-sale

revaluationreserve

Rm

Share-based

paymentreserve

Rm

Revaluationand other

reservesRm

Retained earnings

Rm

Preferenceshare

capital andpremium

Rm

Totalequity

Rm

Ordinaryshare-

holders’equity

Rm

Minorityinterest

Rm

802 344 319 739 302 59 693 81 953 5 503 12 045 99 501

202 (202)

307 307 37 344

58 58 58

(132) 132

200 (10) 190

74 691 316 1 007

85 7 (14) 11 090 3 659 531 (1 658) 2 532

(2 846) (2 846) (531) (886) (4 263)

887 546 326 914 288 67 999 84 022 5 503 9 844 99 369

887 546 326 914 288 67 999 84 022 5 503 9 844 99 369

130 (130)

199 199 17 216

(5) (5) (5)

(56) 56

(6) (15) (26) (43) 33 (10)

239 34 273

69 (173) 68 (105)

(225) 159 9 5 885 5 373 199 1 030 6 602

(1 390) (1 587) (199) (548) (2 334)

662 670 470 1 057 297 72 458 88 025 5 503 10 478 104 006


Broad-based black economic empowerment

Standard Bank’s empowerment assessment continues to be governed by the Department: Trade and Industry (dti) generic codes published in terms of the Broad-based Black Economic Empowerment Act. In terms of the dti codes the bank was rated as a level 3 BEE contributor at 30 June 2010, which is achieved by a score of more than 75%.

The bank remained committed to the Financial Sector Charter (FSC) empowerment elements that are not specified in the dti codes. The bank extended R1 461 million in loans to the affordable housing market during the six months to June 2010.

The bank invested R11 million towards consumer education with a focus on financial education to low-income communities and youth, including communities in rural areas of South Africa. The number of active Mzansi accounts grew from 913 244 in December 2009 to 999 172 accounts in June 2010.

Human resource developmentdti

target2011

%1H10

%1H09

%FY09

%

Black senior management 43 30 31 29Black women senior management 22 10 9 9Black middle management 63 48 46 47Black women middle management 32 22 20 21Black junior management 68 63 60 61Black women junior management 34 39 37 38

Total black management 54 52 52Total black women management 29 28 28

Procurement – dti codesdti

target2011 % of TMPS

1H10% of

TMPS1

1H10weighted

Rm

1H09% of

TMPS1

1H09weighted

Rm

FY09% of

TMPS1

FY09weighted

RmSupplier classification All suppliers – Level 1 to 82 50 83 6 208 48 4 880 57 7 215Qualifying small enterprises (QSE) and exempted micro-enterprises (EME) – Level 1 to 8 10 11 833 9 969 9 1 133Black owned (>50%) 9 8 559 7 666 5 653Black women owned (>30%) 6 2 184 5 460 2 243Total measured procurement spend (TMPS) 7 439 10 234 12 5591 This is BEE spend per supplier classification calculated as a percentage of TMPS. TMPS is based on actual calculated procurement spend and certain

inclusions and exclusions per dti guidelines. 2 All suppliers represent total BEE spend weighted for supplier BEE levels. The other supplier classifications ensure procurement from black small entities

and black women-owned entities.

dti generic codes scorecardTarget

%1H10

%1H09

%FY09

%

Ownership 20 13,98 11,59 11,57

Control 10 8,58 8,12 8,47

Employment equity 15 9,65 9,31 9,43

Skills development 15 7,85 8,80 8,94

Preferential procurement 20 18,33 17,95 17,15

Enterprise development 15 15,00 15,00 15,00

Socioeconomic development 5 5,00 5,00 5,00

Total score 100 78,39 75,77 75,56FY05 FY06 FY07 FY08 FY09 1H10

Black senior management Black middle management

Black junior management

0

10

20

30

40

50

60

70

%

Black management


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Segmental reporting

24 Segmental structure for key business units26 Group executive committee28 Segmental income statement30 Segmental statement of financial position32 Personal & Business Banking36 Corporate & Investment Banking40 Wealth – Liberty


Segmental structure for key business units

Personal & Business BankingBanking and other financial services to individual customers and small- to

medium-sized enterprises in South Africa, rest of Africa and Argentina

Mortgage lending Residential accommodation loans to mainly personal market customers

Instalment sale and finance leases

Instalment finance to personal market customers Finance of vehicles and equipment in the business market

Card products Credit card facilities to individuals and businesses (credit card issuing) Merchant transaction acquiring services (card acquiring)

Transactional and lending products

Transactions in products associated with the various point of contact channels such as ATMs, internet, telephone banking and branches. This includes deposit taking activities, electronic banking, cheque accounts and other lending products, coupled with debit card facilities to both personal and business market customers

Bancassurance Short-term and long-term insurance comprising:

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

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

Financial planning

Central and otherIncludes the impact of the Tutuwa

initiative, group capital instruments

and group surplus capital, together

with certain group overheads

not recoverable from business

segments, including the Global

Leadership Centre, activities and

taxes not allocated to business

segments, strategic acquisition costs

and intersegment eliminations

Corporate & Investment BankingCorporate and investment banking

services to governments, parastatals,

larger corporates, financial institutions and

international counterparties, in Southern

Africa and other emerging markets

Wealth – LibertyInvestment management and life

insurance activities of group companies

in the Liberty Holdings group

Global markets Foreign exchange

Commodities

Credit and interest rates

Equities trading

Transactional products and services

Transactional banking

Investor services

Investment banking Advisory

Project finance

Structured finance

Structured trade finance

Corporate lending

Primary markets

Acquisition and BEE finance

Property finance

Equity investment

Asset and wealth

management

Long-term investment

Long-term risk – life

and disability

Pension fund

management

Endowment and

retirement annuities

Corporate benefits

Health care and health

insurance

Investment-related

advice and solutions

Standard Bank Group Limited


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Personal & Business Banking

Headline earnings R1 988 million (1H09: R1 952 million)

Headline earnings increase 2% (1H09: decline 23%)

Headline earnings contribution 33% (1H09: 36%)

Return on equity 16,1% (1H09: 16,0%)

Cost-to-income ratio 58,1% (1H09: 50,6%)

Credit loss ratio 2,04% (1H09: 2,80%)

External net loans and advances R378 billion

(1H09: R373 billion)


Headline earnings R3 237 million (1H09: R3 451 million)

Headline earnings decline 6% (1H09: decline 6%)

Headline earnings contribution 54% (1H09: 64%)

Return on equity 15,1% (1H09: 16,3%)

Cost-to-income ratio 61,1% (1H09: 51,0%)

Credit loss ratio (0,09%) (1H09: 1,15%)

External net loans and advances R344 billion


Wealth – Liberty

Headline earnings R540 million (1H09: loss R647 million)

Headline earnings contribution 9% (1H09: diminution 12%)

Return on equity 17,7% (1H09: (20,3%))

Normalised embedded value R24 billion (1H09: R23 billion)

Third party funds under management R215 billion



54%

% of group headline earnings


33%


Wealth – Liberty

9%



Group executive committee

Craig Bond (49)Chief executiveStandard Bank – ICBC Strategic PartnershipBCom, LLB, HDip Tax (Wits), SEP (Harvard)Joined the group 2000, appointed to exco 2006

Kennedy Bungane (36)Chief executiveCorporate & Investment Banking – SBSABCom (Natal), MBA (University of Pretoria GIBSCampus), AMP (Harvard)Joined the group 1996, appointed to exco 2008

David Duffy (48)Chief executiveCorporate & Investment Banking – InternationalBBS (Hons) (Trinity College Dublin),MA (Trinity College Dublin)Joined the group 2006, appointed to exco 2008

Tina Eboka (51)Corporate AffairsBS Applied Mathematics (New York), BS TextileEngineering (Philadelphia), MBA (Philadelphia), SEP (Harvard)Joined the group 2005, appointed to exco 2005

Arnold Gain (55)CreditBCom (Hons) (Cape Town)Joined the group 1994, appointed to exco 2005

Bruce Hemphill (47)Chief executiveLibertyBSoc (Cape Town), CPE (College of Law, London)Joined the group 1993, appointed to exco 2006

Ben Kruger (51)Group deputy chief executiveBCom (Hons) (Pretoria), CA(SA), AMP (Harvard)Joined the group 1985, appointed to exco 2000

Rob Leith (47)Chief executiveCorporate & Investment BankingBCom (Hons) (Cape Town), CA(SA)Joined the group 1991, appointed to exco 2003

Jacko Maree (54)Group chief executiveBCom (Stellenbosch), MA (Oxford), PMD (Harvard)Joined the group 1980, appointed to exco 1995

David Munro (39)Global head: Investment BankingBCom (PGDA) (Cape Town), CA(SA), AMP (Harvard)Joined the group 1996, appointed to exco 2004


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Sipho Ngidi (54)Human Resources – SBSABAdmin (Zululand), BCom (Hons) (Natal)Joined the group 2001, appointed to exco 2001

Sarah-Anne Orphanides (42)Marketing and CommunicationsBSocSci (Hons) (Cape Town), MBA (London)Joined the group 2002, appointed to exco 2006

Simon Ridley (54)Group financial directorBCom (Natal), CA(SA), AMP (Oxford)Joined the group 1999, appointed to exco 2002

Peter Schlebusch (43)Chief executivePersonal & Business Banking – SBSABCom (Hons) (Wits), CA(SA), HDip Tax (RAU)Joined the group 2002, appointed to exco 2008

Paul Smith (56)Chief risk officerBCom (Natal), CA(SA), AMP (Wharton)Joined the group 1997, appointed to exco 1999

Clive Tasker (54)Chief executiveStandard Bank AfricaBA LLB (Natal), AMP (Wharton)Joined the group 2000, appointed to exco 2008

Casper Troskie (47)Chief financial officerBCom (Hons) (Cape Town), CA(SA)Joined the group 2009, appointed to exco 2009

Sim Tshabalala (42)Group deputy chief executive andchief executive SBSABA LLB (Rhodes), LLM (University of Notre DameUSA), HDip Tax (Wits), AMP (Harvard)Joined the group 2000, appointed to exco 2001

Elizabeth Warren (53)Human ResourcesBSc (Hons) (Bath), Fellow of the CharteredInstitute of Personnel and DevelopmentJoined the group 2009, appointed to exco 2009

Peter Wharton-Hood (44)Group deputy chief executiveBCom (Hons) (Wits), CA(SA), AMP (Harvard)Joined the group 1997, appointed to exco 1999


Segmental income statement


Corporate & Investment

BankingCentral and

other

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

Income from banking activities (4) 16 510 17 145 (16) 11 964 14 241 7 542 506Net interest income (11) 9 060 10 162 (14) 4 937 5 758 (21) 544 690Interest income (18) 20 342 24 877 (38) 16 312 26 313 26 (4 983) (6 751)Interest expense (23) 11 282 14 715 (45) 11 375 20 555 26 (5 527) (7 441)Non-interest revenue 7 7 450 6 983 (17) 7 027 8 483 99 (2) (184)Net fee and commission revenue 6 6 725 6 370 (2) 2 305 2 348 65 (7) (20)Fee and commission revenue 7 7 947 7 413 (6) 2 531 2 691 53 (9) (19)Fee and commission expense 17 1 222 1 043 (34) 226 343 (>100) (2) 1Trading revenue (11) 34 38 (26) 4 360 5 872 >100 81 (134)Other revenue 20 691 575 38 362 263 (>100) (76) (30)

Income from investment management and life insurance activitiesNet insurance premiumsInvestment income and gainsManagement and service fee income

Total income (4) 16 510 17 145 (16) 11 964 14 241 7 542 506Credit impairment charges (27) 3 942 5 417 (>100) (152) 2 199 100 (501)Impairments for non-performing loans (22) 4 069 5 232 (97) 55 1 877 (1)Impaired loss (27) 3 200 4 370 (98) 43 1 813 (1)Discounting of expected recoveries 1 869 862 (81) 12 64Impairments for performing loans (>100) (127) 185 (>100) (207) 322 >100 1 (501)

Benefits due to policyholdersNet insurance benefits and claimsFair value adjustment to policyholders’ liabilities under investment contractsFair value adjustment on third party fund interests

Income after credit impairment charges and policyholders’ benefits 7 12 568 11 728 1 12 116 12 042 (46) 542 1 007Operating expenses in banking activities 11 9 641 8 703 2 7 426 7 284 (92) (48) (25)Staff costs 15 4 986 4 336 (3) 4 178 4 286 (4) 382 398Other operating expenses 7 4 655 4 367 8 3 248 2 998 (2) (430) (423)Operating expenses in investment management and life insurance activitiesAcquisition costs – insurance and investment contractsOther operating expenses

Net income before goodwill (3) 2 927 3 025 (1) 4 690 4 758 (43) 590 1 032Goodwill impairment (100) 2

Net income before associates and joint ventures (3) 2 927 3 025 (1) 4 690 4 756 (43) 590 1 032Share of profit/(loss) from associates and joint ventures 32 78 59 >100 181 33 (100) 23

Net income before indirect taxation (3) 3 005 3 084 2 4 871 4 789 (44) 590 1 055Indirect taxation 10 346 314 (18) 198 241 (>100) (20) 14

Profit before direct taxation (4) 2 659 2 770 3 4 673 4 548 (41) 610 1 041Direct taxation (7) 682 736 30 1 085 832 45 191 132

Profit for the period (3) 1 977 2 034 (3) 3 588 3 716 (54) 419 909Attributable to minorities (>100) (5) 52 21 317 261 100 (2)Attributable to preference shareholders (26) 194 262

Attributable to ordinary shareholders 1 982 1 982 (5) 3 271 3 455 (65) 225 649Headline adjustable items >100 6 (30) (>100) (34) (4) (>100) (1) 2

Headline earnings 2 1 988 1 952 (6) 3 237 3 451 (66) 224 651

ROE (%) 16,1 16,0 15,1 16,3Net interest margin (%) 4,53 5,10 1,76 2,07Credit loss ratio (%) 2,04 2,80 (0,09) 1,15Cost-to-income ratio (%) 58,1 50,6 61,1 51,0Number of employees 4 36 173 34 723 3 10 077 9 823 7 1 107 1 030


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Banking activities Liberty

Normalised Standard Bank

GroupIFRS

adjustments

IFRS Standard Bank

Group

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

(9) 29 016 31 892 (9) 29 016 31 892 (21) (88) (9) 28 995 31 804(12) 14 541 16 610 (12) 14 541 16 610 (89) (88) (13) 14 452 16 522(29) 31 671 44 439 (29) 31 671 44 439 (89) (88) (29) 31 582 44 351(38) 17 130 27 829 (38) 17 130 27 829 (38) 17 130 27 829

(5) 14 475 15 282 (5) 14 475 15 282 68 (5) 14 543 15 282 4 9 023 8 698 4 9 023 8 698 4 9 023 8 698 4 10 469 10 085 4 10 469 10 085 4 10 469 10 085 4 1 446 1 387 4 1 446 1 387 4 1 446 1 387

(23) 4 475 5 776 (23) 4 475 5 776 68 (21) 4 543 5 776 21 977 808 21 977 808 21 977 808

59 15 395 9 684 59 15 395 9 684 (140) (397) 64 15 255 9 287(2) 10 657 10 924 (2) 10 657 10 924 (2) 10 657 10 924

>100 3 623 (2 223) >100 3 623 (2 223) (140) (397) >100 3 483 (2 620) 13 1 115 983 13 1 115 983 13 1 115 983

(9) 29 016 31 892 59 15 395 9 684 7 44 411 41 576 (161) (485) 8 44 250 41 091(47) 3 790 7 115 (47) 3 790 7 115 (47) 3 790 7 115(42) 4 123 7 109 (42) 4 123 7 109 (42) 4 123 7 109(48) 3 242 6 183 (48) 3 242 6 183 (48) 3 242 6 183

(5) 881 926 (5) 881 926 (5) 881 926(>100) (333) 6 (>100) (333) 6 (>100) (333) 6

42 9 389 6 634 42 9 389 6 634 42 9 389 6 634 32 8 738 6 626 32 8 738 6 626 32 8 738 6 626

(23) 555 724 (23) 555 724 (23) 555 724>100 96 (716) >100 96 (716) >100 96 (716)

2 25 226 24 777 97 6 006 3 050 12 31 232 27 827 (161) (485) 14 31 071 27 342 7 17 019 15 962 7 17 019 15 962 7 17 019 15 962 6 9 546 9 020 6 9 546 9 020 6 9 546 9 020 8 7 473 6 942 8 7 473 6 942 8 7 473 6 942

3 4 295 4 170 3 4 295 4 170 3 4 295 4 170(2) 1 374 1 409 (2) 1 374 1 409 (2) 1 374 1 409 6 2 921 2 761 6 2 921 2 761 6 2 921 2 761

(7) 8 207 8 815 >100 1 711 (1 120) 29 9 918 7 695 (161) (485) 35 9 757 7 210(100) 2 (100) 2 (100) 2

(7) 8 207 8 813 >100 1 711 (1 120) 29 9 918 7 693 (161) (485) 35 9 757 7 208>100 259 115 (55) 10 22 96 269 137 96 269 137

(5) 8 466 8 928 >100 1 721 (1 098) 30 10 187 7 830 (161) (485) 37 10 026 7 345(8) 524 569 20 132 110 (3) 656 679 (3) 656 679

(5) 7 942 8 359 >100 1 589 (1 208) 33 9 531 7 151 (161) (485) 41 9 370 6 666 15 1 958 1 700 >100 478 (73) 50 2 436 1 627 20 51 2 456 1 627

(10) 5 984 6 659 >100 1 111 (1 135) 28 7 095 5 524 (181) (485) 37 6 914 5 039 0 312 311 >100 571 (488) >100 883 (177) (65) (184) >100 818 (361)

(26) 194 262 (26) 194 262 5 27 (31) 199 289

(10) 5 478 6 086 >100 540 (647) 11 6 018 5 439 (121) (328) 15 5 897 5 1119 (29) (32) 9 (29) (32) 9 (29) (32)

(10) 5 449 6 054 >100 540 (647) 11 5 989 5 407 (121) (328) 16 5 868 5 079

13,2 15,3 17,7 (20,3) 13,5 12,6 13,9 12,43,02 3,45 3,02 3,45 3,01 3,441,04 1,84 1,04 1,84 1,04 1,8458,1 49,9 58,1 49,9 58,2 50,0

4 47 357 45 576 1 5 411 5 336 4 52 768 50 912 4 52 768 50 912


Segmental statement of financial position



BankingCentral

and other

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

AssetsCash and balances with central banks 48 8 426 5 690 1 17 261 17 033 (100) 8

Financial investments, trading and pledged assets (44) 157 279 10 188 348 170 851 29 1 922 1 495

Loans and advances 1 378 004 373 362 2 343 831 335 632 (>100) (2 753) 799

Loans and advances to banks (13) 1 535 1 758 28 123 898 96 509 (>100) (946) 339

Loans and advances to customers 1 376 469 371 604 (8) 219 933 239 123 (>100) (1 807) 460

Investment property

Derivative, non-current and other assets (29) 5 118 7 166 (15) 134 404 158 798 >100 1 514 426

Interest in associates and joint ventures (21) 1 006 1 280 >100 3 449 773 (22) 101 129

Goodwill and other intangible assets (19) 3 774 4 671 59 4 608 2 902 (23) 60 78

Property and equipment 44 6 939 4 834 8 1 843 1 711 >100 1 909 753

Total assets 2 403 424 397 282 1 693 744 687 700 (25) 2 753 3 688

Equity and liabilitiesEquity 2 27 104 26 572 12 46 914 41 752 4 21 079 20 223

Equity attributable to ordinary shareholders 2 25 953 25 418 12 44 022 39 165 6 15 348 14 462

Preference share capital and premium 5 503 5 503

Minority interest (0) 1 151 1 154 12 2 892 2 587 (12) 228 258

Liabilities 2 376 320 370 710 0 646 830 645 948 (11) (18 326) (16 535)

Deposit and current accounts 2 369 513 363 473 0 420 884 420 265 (18) (17 269) (14 686)

Deposits from banks >100 327 122 10 102 810 93 502 34 (1 792) (2 718)

Deposits from customers 2 369 186 363 351 (3) 318 074 326 763 (29) (15 477) (11 968)

Derivative, trading, non-current and other liabilities (>100) (1 547) (476) (2) 209 406 213 960 60 (836) (2 066)

Policyholders‘ liabilities

Subordinated debt 8 8 354 7 713 41 16 540 11 723 (>100) (221) 217

Total equity and liabilities 2 403 424 397 282 1 693 744 687 700 (25) 2 753 3 688

Average assets – banking activities excluding trading derivatives 402 933 401 957 566 358 561 918 1 636 7 713

Average loans and advances (gross) 390 426 389 957 347 342 386 610 (2 758) 3 789

Average ordinary shareholders‘ equity 24 825 24 544 43 119 42 599 15 080 12 868


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Banking activities Liberty

Normalised Standard Bank

GroupIFRS

adjustments

IFRS Standard Bank

Group

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

1H10Rm

1H09Rm

Change%

1H10Rm

1H09Rm

13 25 687 22 731 13 25 687 22 731 13 25 687 22 731

10 190 427 172 625 9 184 544 169 014 10 374 971 341 639 (3 271) (4 103) 10 371 700 337 536

1 719 082 709 793 1 719 082 709 793 (2 207) (2 118) 1 716 875 707 675

26 124 487 98 606 26 124 487 98 606 26 124 487 98 606

(3) 594 595 611 187 (3) 594 595 611 187 (2 207) (2 118) (3) 592 388 609 069

10 19 520 17 695 10 19 520 17 695 10 19 520 17 695

(15) 141 036 166 390 (9) 7 118 7 850 (15) 148 154 174 240 (15) 148 154 174 240

>100 4 556 2 182 12 5 167 4 618 43 9 723 6 800 43 9 723 6 800

10 8 442 7 651 (5) 1 627 1 705 8 10 069 9 356 8 10 069 9 356

46 10 691 7 298 21 2 625 2 169 41 13 316 9 467 41 13 316 9 467

1 1 099 921 1 088 670 9 220 601 203 051 2 1 320 522 1 291 721 (5 478) (6 221) 2 1 315 044 1 285 500

7 95 097 88 547 10 14 245 12 982 8 109 342 101 529 (5 336) (6 084) 9 104 006 95 445

8 85 323 79 045 11 6 382 5 770 8 91 705 84 815 (3 680) (4 183) 9 88 025 80 632

5 503 5 503 5 503 5 503 5 503 5 503

7 4 271 3 999 9 7 863 7 212 8 12 134 11 211 (1 656) (1 901) 13 10 478 9 310

0 1 004 824 1 000 123 9 206 356 190 069 2 1 211 180 1 190 192 (142) (137) 2 1 211 038 1 190 055

1 773 128 769 052 1 773 128 769 052 1 773 128 769 052

11 101 345 90 906 11 101 345 90 906 11 101 345 90 906

(1) 671 783 678 146 (1) 671 783 678 146 (1) 671 783 678 146

(2) 207 023 211 418 18 22 709 19 282 (0) 229 732 230 700 (142) (137) (0) 229 590 230 563

8 181 593 168 733 8 181 593 168 733 8 181 593 168 733

26 24 673 19 653 2 054 2 054 23 26 727 21 707 23 26 727 21 707

1 1 099 921 1 088 670 9 220 601 203 051 2 1 320 522 1 291 721 (5 478) (6 221) 2 1 315 044 1 285 500

970 927 971 588 970 927 971 588 (1 294) (1 986) 969 633 969 602

735 010 780 356 735 010 780 356 (1 599) (1 986) 733 411 778 370

83 024 80 011 6 141 6 427 89 165 86 438 (3 790) (4 110) 85 375 82 328



Change%

1H10Rm

1H09Rm

FY09Rm


Non-interest revenue 7 7 450 6 983 14 475

Total income (4) 16 510 17 145 34 099



Taxation (2) 1 028 1 050 2 110

Headline earnings 2 1 988 1 952 3 765

Headline earnings change % 2 (23) (21)

Headline earnings contribution to the group % 33 36 32

ROE % 16,1 16,0 15,5





Total assets Rm 2 403 424 397 282 391 301

External net loans and advances Rm 1 378 004 373 362 369 106

Number of employees 4 36 173 34 723 35 171

Favourable Improved customer service ratings.

Increased electronic banking fees, driven by growth in

volumes and the transactional account base.

More appropriate pricing for risk and term funding.

Reduced credit impairments aided by lower interest rates,

improved debt servicing ability and continual rehabilitation

and recoveries capability improvements.

Proactive cost containment initiatives with continued

investment in the franchise.

Improvement in bancassurance revenues from both simple

and complex insurance products.

Adverse

Decrease in net interest income due to the negative

endowment impact of lower average interest rates, more

expensive term funding and reduced instalment sale and

finance lease balances.

Continued growth in the non-performing loan portfolio,

albeit at a slower rate.

Strengthening of the rand against the dollar and several

African currencies negatively impacted the rest of Africa and

outside Africa results.

1H04 1H05 1H06 1H07 1H08 1H090

10

20

30

40

50

60

70

61,759,3

55,852,4

49,7

%

58,1

1H10

50,6


FY04

Rm

FY05 FY06 FY07 FY08 FY090

1 000

2 000

3 000

4 000

5 000

6 000

1 335

3 170

3 879

4 816

5 674

4 739

3 765

1H10

Headline earnings – first half

Headline earnings – second half

1 683

2 061

2 623 2 538

1 952

1 835

2 196

2 755

3 051

2 201

1 813

1 988



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Total income and headline earnings by product

Total income Headline earnings

Change%

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

Mortgage lending (6) 2 058 2 178 4 475 19 (181) (223) (501)

Instalment sale and finance leases (11) 1 310 1 470 2 948 85 (34) (234) (450)

Card products (4) 2 241 2 333 4 683 37 316 230 675

Transactional and lending products (4) 9 796 10 251 19 869 (19) 1 472 1 820 3 329

Bancassurance 21 1 105 913 2 124 16 415 359 712

Personal & Business Banking (4) 16 510 17 145 34 099 2 1 988 1 952 3 765

Mortgage lending Decline in net interest income due to more expensive term

funding and suspended interest on an increased portion of

the non-performing loan book, partially offset by improved

pricing on new business.

Reduced credit impairment charges as new defaults in

the first half of the year were significantly lower than that

experienced in the comparative period.

Increased new business registrations driven by re-engagement

with mortgage originators on improved terms and balance

growth through selective book acquisitions.

Improved book growth in rest of Africa due to growth in

new business in Malawi, an expanded branch network

in Mozambique and increased government and private

ownership schemes in Nigeria.

Instalment sale and finance leases Reduced net interest income due to negative balance growth

in both the personal and business asset finance markets due

to the recent economic downturn.

Increased net interest margin due to improved pricing on new

business, partially offset by more expensive term funding.

Lower credit impairments due to a contracting impaired

loans portfolio in the first half of the year compared to one

which grew significantly in the comparative period, an active

collections strategy and an improved customer risk profile.

This was offset partially by an increase in the debt review

book in the personal portfolio and the inclusion of several

large business portfolio accounts in impaired loans.

Good book growth in rest of Africa on the back of a focused

marketing effort and an improvement in deal processing.

Card products Net interest income adversely affected by lower average

cardholder balances and the negative endowment impact.

Reduced fee and commission income as a result of a decline

in the account base.

Decreased credit impairments following improved

performance of the early arrears book due to continued

collection campaigns, better limit control and improved

authorisation policies.

Lower fraud losses as a result of increased chip and pin cards

and a banking industry-wide reduction in magstripe floor

limits.

Transactional and lending products Income growth largely driven by an increase in the

transactional account base and repricing.

Deposit margins impacted by the negative endowment effect

of declining interest rates.

Improved margin on term advances to customers in both

business and personal markets.

Credit impairments lower due to the non-recurrence of

provisions in the top end of the business segment, offset

partially by an increase in customers in debt review,

particularly in the personal portfolio.

Reduced income in rest of Africa due to the negative

endowment effect.

Good growth in personal lending in Argentina.

Bancassurance Simple embedded and short-term insurance products

benefited from improved claims loss ratios and pricing.

Short-term insurance broking impacted by a decrease in the

policy base.

Increase in policy base in complex products, comprising life,

disability and investment policies.

Increased policies under management in rest of Africa.


Personal & Business Banking continued

External loans and advances by product

Annualisedchange1

%Change2

%1H10

Rm1H09

RmFY09

Rm

Loans and advances to banks 32 (13) 1 535 1 758 1 326

Call loans 34 28 987 773 844

Balances with banks 28 (44) 548 985 482

Loans and advances to customers 5 1 376 469 371 604 367 780

Gross loans and advances to customers 5 2 390 872 383 634 381 264

Mortgage loans 6 4 264 229 253 768 256 374

Instalment sale and finance leases (10) (13) 50 694 58 252 53 304

Card debtors 1 0 22 138 22 041 22 033

Overdrafts and other demand loans 19 0 21 434 21 360 19 567

Other term loans 16 15 32 003 27 877 29 697

Other loans and advances 59 11 374 336 289

Less: credit impairments for loans and advances 14 20 14 403 12 030 13 484

Credit impairments for non-performing loans 21 24 11 287 9 121 10 239

Credit impairments for performing loans (8) 7 3 116 2 909 3 245

Net loans and advances 5 1 378 004 373 362 369 106

Comprising:

Gross loans and advances 5 2 392 407 385 392 382 590

Less: credit impairments 14 20 14 403 12 030 13 484

Net loans and advances 5 1 378 004 373 362 369 106

Securitised assets consolidated above:

Mortgage loans (16) (14) 14 654 16 980 15 879

Instalment sale and finance leases (100) (100) 608 365

Securitised assets (20) (17) 14 654 17 588 16 2441 Annualised change from December 2009 to June 2010.2 Change year-on-year from June 2009 to June 2010.

Deposit and current accounts by product

Change%

1H10Rm

1H09Rm

FY09Rm

Wholesale priced deposit and current accounts (10) 55 023 61 025 55 768

Call deposits (6) 40 578 43 124 39 590

Securitisation issuances (19) 14 445 17 901 16 178

Retail priced deposit and current accounts 7 175 179 163 368 172 107

Current accounts 12 64 586 57 577 62 328

Cash management deposits 24 8 985 7 257 7 793

Call deposits 1 34 402 34 102 38 075

Savings accounts 8 23 231 21 590 22 125

Term deposits 3 38 696 37 522 36 842

Other funding (1) 5 279 5 320 4 944

Interdivisional funding 0 139 311 139 080 134 711

Total deposit and current accounts 2 369 513 363 473 362 586


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Key business statisticsChange

% 1H10 1H09 FY09

South AfricaMortgage loansNumber of loan applications received thousands 77 110 62 169Change in value of new business registered % 65 (64) (61)Average loan to value (LTV) of new business registered % 81 77 77Average balance to original value (BTV) of portfolio % 66 69 66Average instalment to income (ITI) of new business % 21 20 21Proportion of new business referred by independent mortgage originators and estate agents % 37 54 43

Instalment sale and finance leasesGrowth in value of new loans– motor % 18 (41) (34)– non-motor % (14) (45) (43)

Number of accounts at period endCredit card accounts thousands (4) 2 042 2 123 2 072Current accounts thousands 14 1 963 1 717 1 788Mzansi accounts (excluding nil balance accounts) thousands 20 999 835 913Other transaction and savings accounts (excluding nil balance accounts) thousands (3) 4 644 4 770 4 690

DistributionChange in internet users % 13 14 13Change in ATM transactions % 5 (2) 2

Points of representationBranches (1) 663 673 664ATMs 11 4 978 4 469 4 810

Rest of AfricaPoints of representationBranches 20 403 337 348ATMs 28 854 665 770 Change in ATM transactions % (0,3) 164 8

Outside Africa1

Points of representation

Branches 3 98 95 98

ATMs 19 342 287 3321 Argentina.

FY04 FY05 FY06 FY07 FY08 FY090

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

Branches

ATMs

4 578

5 1155 489

6 0196 280

7 022

3 603

4 1314 538

4 9165 174

5 912

975 984 951 1 103 1 106 1 110

6 174

1H10

1 164

7 338

Points of representation – global

Credit loss ratio

Non-performing loans (NPLs)

Roll into NPLs

% Rbn

1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10

0,0

0,5

1,0

1,5

2,0

2,5

3,0

-5

0

5

10

15

20

25

30

35

40

0,85 0,881,02 1,06

1,481,31

2,18

2,77 2,80

2,30

2,04

Half yearly credit loss ratios and impaired loans


Change%

1H10Rm

1H09Rm

FY09Rm



Total income (16) 11 964 14 241 27 681

Credit impairment charges (>100) (152) 2 199 2 709


Taxation 20 1 283 1 073 2 399

Headline earnings (6) 3 237 3 451 7 570

Headline earnings change % (6) (6) (5)

Headline earnings contribution to the group % 54 64 65

ROE % 15,1 16,3 18,4



Credit loss ratio % (0,09) 1,15 0,73


Total assets Rm 1 693 744 687 700 684 522

External net loans and advances Rm 2 343 831 335 632 356 737



1H04 1H05 1H06 1H07 1H08 1H09

0

10

20

30

40

50

60

70

50,653,8

51,7 52,4 53,4

%

1H10

51,0

61,1


Rm


1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

3 8834 185

5 033

6 706

7 9487 570

1H10

2 111

1 772

2 289

1 896

2 768

2 265

3 607

3 099

4 280

3 668

4 119

3 451



3 237

Headline earningsCAGR (1H04 – 1H10): 11%


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Favourable Credit impairment charges down across all regions as a result

of non-recurrence of large non-performing and performing

loan impairments, coupled with specific impairment releases

due to improved credit environment.

A significantly stronger rand had a positive translation impact

on operating expenses.

Fair value gains on listed property and equity investments.

Increased advisory deal flow across all regions and signs of an

improving environment for business origination.

Growth in income from associates and joint ventures following

the investment in Troika Dialog.

Strategic partnership with ICBC Directly attributable revenues for the period totalled

USD38 million (30 June 2009: USD49 million).

Cooperation on 65 projects ranging from funding, advisory,

settlement and cash management, global markets and

custody.

Formal cooperation agreement announced with China

UnionPay which allows access to the Standard Bank point-of-

sale and ATM networks for holders of China UnionPay cards.

Growth in precious metals trading.

First step completed in host-to-host connectivity project to

allow closer engagement between the banks.

Adverse Significantly stronger rand had a negative translation impact

on foreign income. Excluding the impact of translation, total

income decreased 6% versus 16% and headline earnings

were flat year-on-year.

Revenues suffered from reduced levels of client activity

across all products and geographies.

Increased competition resulted in continued margin

compression.

Higher operating expenses due to increased headcount and

marketing costs, coupled with investment in IT platforms and

premises.

Fees and other revenue

Trading revenue

Net interest income

Trading income as percentage of non-interest revenue

% %


20

40

60

80

100

0

10

20

30

40

50

60

7031

34 33 3438 34

39 37

35

31

36

31

35

28

34

26

40 39 41

22

1H10

22

Income contribution


Corporate & Investment Banking continued

Global markets Income down from record level in June 2009.

Volumes generally slowed across all global markets’

businesses as market uncertainty reduced client activity.

Africa was the exception in terms of client volumes, with

revenues benefiting from increased client activity albeit at

reduced margins.

Net interest income affected by negative endowment effect,

interest payable on tier II capital raised at the end of 2009

at higher interest rates and non-recurrence of 2009 gains on

the early settlement of a syndicated loan.

Subdued performances in energy and credit trading following

sovereign debt crisis in Europe.

Investment banking Solid investment banking performance on the back of an

improved pipeline.

Growth in South Africa and the rest of Africa franchises.

Strong performance in debt products.

Lower net interest income driven by negative endowment

effect.

Significant reduction in credit impairment charges.

Growth in net fees and commissions benefiting from higher

deal flow in advisory and project finance.

Favourable fair value gains on listed property and equity

investments.

Transactional products and services Lower net interest income with the negative endowment

effect putting downward pressure on margins.

Reduced fee income in rest of Africa with trade remaining

under pressure due to lower demand.

Investor services trending favourably supported by increased

volumes and asset valuations.

Continued investment in products and IT to enhance client

offering.

Total income and headline earnings by productTotal income Headline earnings

Change%

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

Global markets (23) 5 432 7 041 12 619 (40) 1 460 2 453 4 252

Investment banking (4) 4 097 4 278 9 287 >100 1 205 158 1 804

Transactional products and services (17) 2 435 2 922 5 775 (32) 572 840 1 514

Corporate & Investment Banking (16) 11 964 14 241 27 681 (6) 3 237 3 451 7 570


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External loans and advances by product

Annualisedchange1

%Change2

%1H10

Rm1H09

RmFY09

Rm

Loans and advances to banks 3 28 123 898 96 509 122 232

Call loans >100 52 17 335 11 383 11 010

Loans granted under resale agreements >100 >100 48 974 20 583 18 814

Balances with banks (76) (11) 57 589 64 543 92 408

Loans and advances to customers (13) (8) 219 933 239 123 234 505

Gross loans and advances to customers (13) (8) 223 708 243 985 239 404

Overdrafts and other demand loans (25) (12) 35 371 40 055 40 350

Term loans (20) (12) 118 760 134 956 131 489

Loans granted under resale agreements 60 28 19 889 15 515 15 313

Commercial property finance 2 (1) 33 883 34 330 33 613

Foreign currency loans (39) (29) 12 113 17 062 15 043

Mortgage loans 27 17 1 092 935 962

Other loans and advances (3) >100 2 600 1 132 2 634

Less: credit impairments for loans and advances (46) (22) 3 775 4 862 4 899

Credit impairments for non-performing loans (66) (31) 1 911 2 766 2 838

Credit impairments for performing loans (19) (11) 1 864 2 096 2 061

Net loans and advances (7) 2 343 831 335 632 356 737

Comprising:

Gross loans and advances (8) 2 347 606 340 494 361 636

Less: credit impairments (46) (22) 3 775 4 862 4 899

Net loans and advances (7) 2 343 831 335 632 356 7371 Annualised change from December 2009 to June 2010.2 Change year-on-year from June 2009 to June 2010.

Deposit and current accounts by product

Change%

1H10Rm

1H09Rm

FY09Rm

Wholesale priced deposit and current accounts 0 554 402 554 074 543 665



Call deposits (17) 74 545 89 520 74 543

Term deposits 6 165 735 156 958 158 427

Negotiable certificates of deposits (11) 91 624 102 747 102 045

Repurchase agreements (44) 5 320 9 417 3 882

Other funding 9 117 326 107 623 113 118

Interdivisional funding 0 (133 518) (133 809) (124 681)



Favourable Substantially improved persistency.

Improved claim ratios in corporate risk and credit life.

Positive returns on local bonds, preference shares and cash.

Positive earnings through improved credit margins and fixed

income performance on assets backing guaranteed capital

bonds and annuity products.

Adverse New business margins on insurance products still low.

Underperforming entry level market products sold through

independent call centres.

Health business taking longer than anticipated to reach

targeted capacity.

Wealth – Liberty

Change%

1H10Rm

1H09Rm

FY09Rm

Net insurance premiums1 (2) 10 657 10 924 21 998

Investment income and gains2 >100 3 623 (2 223) 20 100

Benefits due to policyholders2 42 9 389 6 634 33 915

Management and service fee income2 13 1 115 983 2 240

Operating expenses2 3 4 295 4 170 9 052

BEE normalised headline earnings1 >100 1 007 (1 207) 135

Headline earnings attributable to Standard Bank Group >100 540 (647) 72

Headline earnings contribution to the group % 9 (12) 1

Effective interest in Liberty at period end % 53,7 53,7 53,7

ROE % 17,7 (20,3) 1,2

Return on normalised embedded value1 % 7,8 (25,5) (6,5)

Indexed new business (excluding contractual increases)1 Rm 1 2 135 2 111 4 412

New business margin1 % 1,1 1,0 1,3

Net cash (outflows)/inflows in insurance operations1 Rm (>100) (265) 584 1 267

Normalised total embedded value1 Rm 7 24 199 22 650 24 118

Liberty Group Limited capital adequacy requirement (times covered) 2,79 2,48 2,811 Liberty as published.2 Includes adjustments on consolidation of Liberty Holdings into the Standard Bank Group.


5 000

10 000

15 000

20 000

25 000

30 000

Rm

17 570

20 404

23 016

27 250 27 207

24 118

1H10

24 199

Normalised embedded valueCAGR (FY04 – 1H10): 6%

FY04 FY05 FY06 FY07 FY08 FY09-800

-600

-400

-200

0

200

400

600

800

1 000

Rm

1H10

(647)

143

276330

514

279

719362

459

513

344

268

411

620

843

973

64172

540



Headline earnings/(loss) – SBG share


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BEE normalised summarised income statementChange

%1H10

Rm1H09

RmFY09

Rm

Insurance premium revenue (2) 10 991 11 226 22 630

Reinsurance premiums (11) (334) (302) (632)

Net insurance premiums (2) 10 657 10 924 21 998

Investment income and gains/(losses) >100 3 604 (2 248) 20 093

Management and service fee income 13 1 115 983 2 227

Defined benefit pension fund employer surplus 13

Total revenue 59 15 376 9 659 44 331

Benefits due to policyholders 42 9 389 6 634 33 915

Net insurance benefits and claims 32 8 738 6 626 27 131

Fair value adjustment to policyholders’ liabilities under investment contracts (23) 555 724 5 949

Fair value adjustment on third party mutual fund interests >100 96 (716) 835

Income after policyholders‘ benefits 98 5 987 3 025 10 416


Acquisition costs (2) 1 374 1 409 3 114

General marketing and administration expenses 8 2 689 2 492 5 434

Finance costs (27) 128 176 343

Preference dividend in subsidiary 25 216 173 366

Equity accounted earnings from joint ventures (26) 14 19 47

Profit/(loss) before taxation >100 1 594 (1 206) 1 206

Taxation >100 478 (73) 877

Total earnings/(loss) >100 1 116 (1 133) 329

Preference share dividend deducted (1) (1) (2)

Attributable to minorities1 48 108 73 192

BEE normalised headline earnings >100 1 007 (1 207) 1351 Minority interest within Liberty Holdings.

FY04 FY05 FY06 FY07 FY08 FY09 1H100

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

Rm

97 993

140 835

168 898

186 137

172 069

183 544 181 593

Policyholder liabilitiesCAGR (FY04 – 1H10): 12%


Wealth – Liberty continued

BEE normalised headline earnings – Liberty Holdings

Change %

1H10Rm

1H09Rm

FY09Rm

Retail insurance >100 472 (222) (82)

Liberty Corporate >100 65 25 (29)

LibFin >100 358 (1 159) (8)

Stanlib 4 164 158 360

Liberty Properties 26 43 34 80

Liberty Africa (86) 2 14 29

Liberty Health (>100) (11) (47)

Other (51) (86) (57) (168)

BEE normalised headline earnings >100 1 007 (1 207) 135

External assets under managementChange

%1H10

Rbn1H09

RbnFY09

Rbn

Asset management – assets under management 3 41 40 46

Segregated funds 38 38 43

Properties 50 3 2 3

Wealth management – funds under administration 24 174 140 154

Single manager unit trust 8 77 71 74

Institutional marketing 48 34 23 25

Linked and structured life products 20 24 20 23

Multi-manager 33 8 6 8

Rest of Africa 55 31 20 24

Total external assets under management 19 215 180 200


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Capital management

44 Return on ordinary equity45 Cost of equity and economic returns46 Market capitalisation and price-to-book ratio47 Ordinary shareholders’ equity (net asset value)48 Currency analysis of net asset value49 Currency translation effects50 Economic capital51 Risk-weighted assets52 Capital adequacy – qualifying regulatory capital53 Capital adequacy ratios54 Subordinated debt


Group ROE improved due to growth in headline earnings, offset by the higher average equity base.

Personal & Business Banking’s ROE improved as a result of earnings growth offset by a marginal increase in average equity.

Corporate & Investment Banking’s ROE reduced due to lower earnings and higher average equity.

Central and other’s average equity increased due to the higher capital held centrally by the group pursuant to the scrip distribution.

Liberty’s higher ROE was attributable to the increase in headline earnings in the first half of the year.

Return on ordinary equity

Averageequity1H10

Rm

ROE1H10

%

Averageequity1H09

Rm

ROE1H09

%

AverageequityFY09

Rm

ROEFY09

%

Personal & Business Banking 24 825 16,1 24 544 16,0 24 279 15,5

Corporate & Investment Banking 43 119 15,1 42 599 16,3 41 088 18,4

Central and other 15 080 12 868 14 717

Banking activities 83 024 13,2 80 011 15,3 80 084 14,5

Liberty 6 141 17,7 6 427 (20,3) 6 258 1,2

Standard Bank Group 89 165 13,5 86 438 12,6 86 342 13,6

Reconciliation to IFRS

Normalised average equity 89 165 86 438 86 342

Empowerment reserve impairment (Tutuwa SPVs’ preference shares and

dividends receivable) (2 089) (2 562) (2 520)

Central and other (1 599) (1 986) (1 941)

Liberty (490) (576) (579)

Deemed treasury shares (excluding Tutuwa) (1 701) (1 548) (1 534)

Standard Bank Group – IFRS 85 375 13,9 82 328 12,4 82 288 13,7

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Shareholders’ funds (average)

ROE

0

15 000

30 000

45 000

60 000

75 000

90 000

0

5

10

15

20

25

30

Rm %

89 165

30 98935 550

42 571

53 093

77 602

86 342

Return on ordinary equity


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Cost of equity and economic returns

Cost of equity estimates

Average1H10

%

Average1H09

%

Average FY09

%

Personal & Business Banking 14,7 17,7 16,6

Corporate & Investment Banking 18,0 18,4 18,8

Central and other 13,6 14,3 14,6

Banking activities 13,8 14,7 14,9

Liberty 11,4 12,0 12,1

Standard Bank Group 13,6 14,3 14,6

Economic returns

Change%

1H10 Rm

1H09 Rm

FY09Rm

Average ordinary equity 3 89 165 86 438 86 342

Headline earnings 11 5 989 5 407 11 718

Cost of equity charge 2 (6 014) (6 141) (12 597)

Economic losses on headline earnings 97 (25) (734) (879)

Other changes in net asset value 91 (543) (5 791) (7 153)

Net currency translation movement (455) (6 158) (7 509)

Cash flow hedge (losses)/gains (225) 218 85

Fair value gains on available-for-sale assets 183 125 249

Change in shareholding of subsidiary (43)

Other changes in equity (3) 24 22

Total economic returns 91 (568) (6 525) (8 032)


Market capitalisation and price-to-book ratio

Change % 1H10 1H09 FY09

Number of shares at end of the period thousands 2 1 583 314 1 555 568 1 558 258

Net asset value Rm 8 91 705 84 815 87 454

Tangible net asset value Rm 8 81 636 75 459 78 045

Net asset value per share cents 6 5 792 5 452 5 612

Tangible net asset value per share cents 6 5 156 4 851 5 008

Share price at end of the period cents 15 10 239 8 870 10 200

Market capitalisation at end of the period Rm 17 162 116 137 979 158 942

Price-to-book ratio at end of the period times 1,8 1,6 1,8

FY04 FY05 FY06 FY07 FY08 FY09 1H100

1 000

2 000

3 000

4 000

5 000

6 000

0

1

2

3

4

5

Cents Times

Net asset value per share Price-to-book

2 453

2 809

3 548

4 255

5 6335 792

5 612

Price-to-book and net asset value per share

FY04 FY05 FY06 FY07 FY08 FY09 1H100

20

40

60

80

100

120

140

160

Rbn

89

103

129137

127

159 162

Market capitalisationCAGR (FY04 – 1H10): 12%


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Net asset valueChange

%1H10

Rm1H09

RmFY09

Rm

Personal & Business Banking 2 25 953 25 418 22 617

Corporate & Investment Banking 12 44 022 39 165 42 823

Central and other 6 15 348 14 462 15 781

Banking activities 8 85 323 79 045 81 221

Liberty 11 6 382 5 770 6 233

Standard Bank Group 8 91 705 84 815 87 454

Analysis of changes in net asset value Change

%1H10

Rm1H09

RmFY09

Rm

Beginning of the period 2 87 454 85 902 85 902

Transactions with ordinary shareholders (70) (1 200) (706) (2 572)

Dividends paid (73) (1 633) (942) (3 137)

Issue of ordinary share capital and share premium >100 239 103 200

Equity-settled share-based payments 50 199 133 307

Tax on share-based payments (100) (5) 58

Transactions with minority shareholders (43)

Additional shareholder value >100 5 494 (381) 4 124

Headline earnings for the period attributable to ordinary shareholders 11 5 989 5 407 11 718

Other earnings attributable to ordinary shareholders (9) 29 32 (199)

Currency translation movements, including hedging activities 93 (455) (6 158) (7 509)

Net cash flow hedges (>100) (225) 218 85

Net available-for-sale movement 66 159 96 7

Fair value adjustments on available-for-sale instruments 46 183 125 249

Realised fair value adjustments transferred to the income statement 17 (24) (29) (242)

Other direct reserve movements (>100) (3) 24 22

End of the period 8 91 705 84 815 87 454

Ordinary shareholders’ equity (net asset value)

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Net asset value

Net asset value growth

0

15 000

30 000

45 000

60 000

75 000

90 000

Rm %

0

10

20

30

40

50

33 17237 994

48 352

58 406

85 902 87 45491 705

Analysis of net asset value (ZAR)

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Net asset value

Net asset value growth

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

USDm %

0

10

20

30

40

50

5 892 5 974

6 858

8 5779 227

11 866 11 988

Analysis of net asset value (USD)


Currency analysis of net asset value

TotalRm

RandRm

DollarRm

SterlingRm

EuroRm

ZAR linked

RmNaira

RmOther

Rm

1H10

Underlying exposures 91 705 59 166 14 870 2 389 61 1 752 4 943 8 524

Changes due to hedging strategies 827 2 401 (380) (2 848)

Actual exposures 91 705 59 166 15 697 4 790 61 1 752 4 563 5 676

1H09


Changes due to hedging strategies (2 712) (7 594) 5 765 7 415 (2 874)

Actual exposures 84 815 50 276 6 215 8 174 7 889 1 663 5 127 5 471

FY09


Changes due to hedging strategies (8 897) 2 429 9 001 (183) (2 350)

Actual exposures 87 454 55 022 4 790 5 318 9 818 1 567 4 593 6 346

Closing currency profile of NAV

Total%

Rand%

Dollar%

Sterling%

Euro%

ZARlinked

%Naira

%Other

%

1H10 before hedging 100 65 16 3 2 5 9

1H10 after hedging 100 65 17 5 2 5 6

1H09 before hedging 100 62 16 3 1 2 6 10

1H09 after hedging 100 59 7 10 9 2 6 7

FY09 before hedging 100 63 16 3 1 2 5 10

FY09 after hedging 100 63 5 6 11 2 5 8

January December

7,0

7,8

8,6

9,4

10,2

11,0

2010 2009

Closing USD/ZAR exchange rate

January December

1,3

1,5

1,7

1,9

2,1

2010 2009

Closing GBP/USD exchange rate


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Movement in group foreign currency translation and net investment hedging reserve

1H10Rm

1H09Rm

FY09Rm

Balance at beginning of the period: (debit)/credit (1 341) 6 168 6 168

Translation reserve decrease for the period (455) (6 158) (7 509)

Translation reserve increase/(decrease) 198 (6 254) (7 403)

Rest of Africa (125) (2 576) (2 600)

Outside Africa 326 (3 671) (4 791)

Liberty (3) (7) (12)

Currency hedge (losses)/gains (653)1 96 (106)


Balance at end of the period: (debit)/credit (1 792) 10 (1 341)

Exchange ratesAverage Closing



USD/ZAR (18) 7,53 9,20 8,42 (1) 7,65 7,73 7,37

ZAR/NGN 24 20,01 16,15 17,99 3 19,76 19,14 20,28

GBP/USD 3 1,53 1,49 1,55 (9) 1,50 1,64 1,61

Euro/USD 1,33 1,33 1,39 (12) 1,23 1,40 1,44

Currency translation effects

FY04

397

2 174

155

4 234

(7 509)

FY05 FY06 FY07 FY08 FY09 1H10

Translation reserve (decrease)/increase

USD/ZAR appreciation/(depreciation) – closing

USD/ZAR appreciation/(depreciation) – average

-7 500

-6 000

-4 500

-3 000

-1 500

0

1 500

3 000

4 500

6 000

7 500

-45

-30

-15

0

15

30

45

%Rm

(1 272)

397 155

(455)

Currency translation effects

1 Decrease caused by a substantial weakening of Euro and Sterling in early 2010. Evolution of currency hedging gains/(losses): FY06: R186 million, FY07: R247 million, FY08: R447 million, FY09: (R106 million), 1H10: (R653 million). Net gain to date: R121 million.


Economic capital

Economic capital by risk type at the end of the period

Change%

1H10Rm

1H09Rm

FY09Rm

Credit risk (1) 28 597 28 751 31 336

Equity risk 65 1 865 1 128 1 293

Market risk 23 1 768 1 433 1 747

Operational risk 31 6 814 5 219 6 965

Business risk 4 1 817 1 742 1 504

Interest rate risk in the banking book (49) 1 620 3 173 1 917

Banking activities – economic capital requirement 2 42 481 41 446 44 762

Available financial resources (AFR) 7 86 830 81 113 81 503

Capital coverage ratio (times) 2,04 1,96 1,82

Economic capital by business unit at end of the period

Change%

1H10Rm

1H09Rm

FY09Rm

Personal & Business Banking (13) 14 085 16 154 15 517


Central and other (10) 364 403 376


Economic capital is the amount of permanent capital

that is required to support the economic risk profile. For

potential losses arising from risk types that are statistically

quantifiable, economic capital reflects the worst case

loss commensurate with confidence levels implied by the

group’s target credit rating.

Equity risk capital increased primarily due to the first time

inclusion of the group’s investment in Troika Dialog.

Market risk economic capital was higher following growth in

commodities and credit derivative trading activities.

Operational risk economic capital has increased due to the

roll-off of 2007 gross income and the inclusion of 2010

gross income, in calculating the average gross income for

determining operational risk capital.

Capital in respect of interest rate risk in the banking book

reduced due to a decline in the prime interest rate.

AFR is the capital supply as defined on an economic basis

which essentially comprises permanent capital and is broadly

equivalent to equity capital. AFR of R86,8 billion covers the

minimum economic capital requirement of R42,5 billion by

a factor of 2,04 times, indicating substantially higher capital

position relative to the risk assumed in banking activities.


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Risk-weighted assets

Risk-weighted assets by business unit

Change%

1H10Rm

1H09Rm

FY09Rm


Credit risk 2 187 328 183 647 173 299


Equity risk in the banking book >100 240 73 74


Credit risk 1 262 244 259 511 256 732

Market risk 28 48 707 37 907 48 059


Equity risk in the banking book (6) 13 953 14 911 14 560

Central and other (5) 7 440 7 803 7 211

Credit risk (23) 2 788 3 601 2 400




Risk-weighted assets by risk class

Change%

1H10Rm

1H09Rm

FY09Rm

Credit risk 1 452 360 446 759 432 431

Market risk 28 48 707 37 907 48 059




1 Basel II implemented 1 January 2008. Risk-weighted assets and capital adequacy for 2007 are on a Basel II pro forma basis. 2008 to 2010 are on a Basel II basis. All other historical comparatives are on a Basel I basis.

0

250

500

750

1 000

1 250

1 500

Total assets (banking activities) Risk-weighted assets

FY04

Rbn

FY05 FY06 FY07 FY08 FY09 1H10

Risk-weighted assets (closing balances)1

FY04 FY05 FY06 FY07 FY08 FY09 1HY10

Tier I capital Tier II capital Tier III capital

Required capital

0

2

4

6

8

10

12

14

16

%

0,50,3

0,2

0,3

0,2

3,53,4

3,8

2,6

2,8 3,02,7

11,010,5 10,8

8,7

11,8 11,9 11,8

0,20,1

Capital adequacy1


Capital adequacy – qualifying regulatory capital

Qualifying regulatory capital (excluding unappropriated profit)

Change%

1H10Rm

1H09Rm

FY091

Rm

Normalised ordinary shareholders’ equity 8 91 705 84 815 87 454

Net IFRS adjustments 12 (3 680) (4 183) (3 432)

IFRS ordinary shareholders’ equity 9 88 025 80 632 84 022

Minority interest 13 10 478 9 310 9 844

Less: regulatory deductions (25) (18 792) (15 079) (16 202)

Investment in insurance entities (50%) (5) (4 054) (3 851) (3 880)

Investment in financial entities (50%) 14 (834) (971) (786)

Future expected losses exceeding provisions on incurred loss basis (50%) (>100) (1 816) (821) (921)

Loans to SPVs (first loss credit enhancement) (50%) (48) (329) (223) (284)

Investment in regulated non-banking entities (10) (139) (126) (135)

Investment in banks (>100) (3 178) (1 436) (2 369)

Goodwill and other intangible assets (10) (8 442) (7 651) (7 827)

Less: regulatory exclusions (13) (22 762) (20 084) (22 289)

Non-qualifying entities’ retained earnings (73) (4 254) (2 465) (3 631)

Non-qualifying other reserves 39 (567) (926) (1 503)

Unappropriated profit (3) (11 693) (11 341) (11 030)

Non-qualifying minority interest (17) (6 248) (5 352) (6 125)

Less: reserves included under tier II capital (43) (662) (462) (546)

Perpetual preference shares 5 495 5 495 5 495

Tier l capital 3 61 782 59 812 60 324

Preference share capital 8 8 8

Tier ll subordinated debt 37 23 395 17 059 22 931

Impairments for performing loans 34 1 114 832 929


Investment in insurance entities (50%) (5) (4 054) (3 851) (3 880)

Investment in financial entities (50%) 14 (834) (971) (786)

Future expected losses exceeding provisions on incurred loss basis (50%) (>100) (1 816) (821) (921)


Investment in banks (100) (530)

Tier ll capital 41 16 954 12 033 17 997

Tier lll capital (76) 491 2 040 1 361

Total regulatory capital 7 79 227 73 885 79 682

Standard Bank Group capital adequacy ratios (including unappropriated profit)

Minimumregulatory

requirement%

Targetratios

%1H10

Rm1H09

RmFY091

Rm

Total capital adequacy ratio 9,75 11 – 12 14,6 14,4 15,1

Tier I capital adequacy ratio 7,0 9 11,8 12,0 11,9

Core tier I capital adequacy ratio 5,25 11,0 11,1 11,0

Perpetual preference shares as % of tier I <25,0 7,5 7,7 7,7

Tier II and III as % of tier I <100,0 23,7 19,8 27,1

Subordinated tier II debt as % of tier I <50,0 31,8 24,0 32,11 Restated, refer to page 98.


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Capital adequacy ratios

1H10 1H09 FY09Host

regulatoryTier I

capital%

Totalcapital

%

Tier Icapital

%

Totalcapital

%

Tier Icapital

%

Totalcapital

%

require-ment

%

Standard Bank Group 11,8 14,6 12,0 14,4 11,9 15,1 9,75

The Standard Bank of South Africa (SBSA) 10,2 13,5 9,8 13,1 10,6 14,1 9,75

Rest of Africa

CfC Stanbic Bank Kenya 10,8 17,0 11,2 15,5 10,6 16,4 12

Stanbic Bank Botswana 8,9 15,4 8,8 17,7 10,8 18,6 15

Stanbic Bank Ghana 21,2 26,0 12,7 15,9 19,4 22,5 10

Stanbic Bank Tanzania 16,2 17,5 17,3 19,3 17,4 18,9 12

Stanbic Bank Uganda 13,6 16,4 15,4 15,5 13,1 16,3 12

Stanbic Bank Zambia 11,7 15,7 12,8 17,1 14,1 18,0 10

Stanbic Bank Zimbabwe 14,2 15,5 34,2 35,4 17,5 18,8 10

Stanbic IBTC Bank Nigeria 29,0 29,6 37,9 38,4 27,6 28,1 10

Standard Bank Malawi 23,7 29,2 20,2 26,6 19,8 25,7 10

Standard Bank Mauritius 11,8 17,4 15,5 22,0 12,0 18,1 10

Standard Bank Mozambique 15,7 18,0 10,5 13,7 12,0 14,7 8

Standard Bank Namibia 11,2 13,7 14,3 17,5 11,2 14,1 10

Standard Bank RDC 18,7 23,2 13,2 19,8 10,1 16,2 10

Standard Bank Swaziland 12,5 17,8 11,8 15,4 12,0 17,9 8

Standard Lesotho Bank 15,7 17,1 13,6 14,9 9,1 10,6 8

Standard International Holdings, consolidated1 10,6 17,0 10,1 13,3 9,9 16,5 10,482

Standard Bank Isle of Man 9,3 12,9 9,2 13,1 8,8 12,5 10

Standard Bank Jersey 10,6 15,8 9,2 11,9 10,0 13,0 10

Aggregate regulatory capital requirement for banking operations 10,1 10,1 10,1

Liberty Group (calculated in terms of the Long-term Insurance Act)

CAR – times covered 2,8 2,5 2,8

1 Incorporating:– Banco Standard de Investimentos (Brazil);– Standard Bank Argentina;– Standard Bank Asia (Hong Kong);– Standard Bank Plc (United Kingdom);– Standard Merchant Bank (Asia) (Singapore); and– ZAO Standard Bank (Russia), deconsolidated from the group in 2009.2 Plus an additional USD100 million.


Subordinated debt

Redeemable/repayable

dateCallable

date

Notionalvalue1

LC m

Carryingvalue1

1H10Rm

Notionalvalue1

1H10Rm

Carryingvalue1

1H09Rm

Notionalvalue1

1H09Rm

Carryingvalue1

FY09Rm

Notionalvalue1

FY09Rm

Subordinated bonds2 – banking activities

SBSA 15 976 15 398 13 101 12 648 15 814 15 398

SBK 10 (Tier III) 19 Nov 2012 ZAR 300 303 300 303 300 303 300

SBK 5 17 Nov 2016 17 Nov 2011 ZAR 2 000 2 040 2 000 2 052 2 000 2 046 2 000

31 Jul 2017 31 Jul 2012 USD 355 2 763 2 548 2 793 2 548 2 663 2 548

SBK 8 10 Apr 2018 10 Apr 2013 ZAR 1 500 1 528 1 500 1 529 1 500 1 528 1 500

SBK 11 9 Apr 2019 10 Apr 2014 ZAR 1 800 2 000 1 800 1 858 1 800 1 930 1 800

SBK 7 24 May 2020 24 May 2015 ZAR 3 000 3 035 3 000 3 036 3 000 3 036 3 000

SBK 12 24 Nov 2021 24 Nov 2016 ZAR 1 600 1 618 1 600 1 618 1 600

SBK 13 24 Nov 2021 24 Nov 2016 ZAR 1 150 1 160 1 150 1 161 1 150

SBK 9 10 Apr 2023 10 Apr 2018 ZAR 1 500 1 529 1 500 1 530 1 500 1 529 1 500

Standard Bank Swaziland 2015 – 2019 2010 – 2014 E 80 81 81 51 50 81 80

Standard Bank Namibia 20 Nov 2016 19 Nov 2011 NAD 150 151 151 151 150 151 150

Stanbic Botswana 2016 – 2018 2011 – 2013 BWP 200 216 216 228 228 224 224

Standard Bank Mozambique 29 Jun 2017 29 Jun 2012 MT 260 58 58 75 75 67 67

CfC Stanbic Bank Kenya 2012 – 2016 KES 3 050 285 285 60 60 296 296

Stanbic Bank Uganda 10 Aug 2016 10 Aug 2014 USHS 30 000 102 102 123 116

Standard International Holdings 7 342 7 133 5 559 5 462 7 439 7 557

Tier III 13 Dec 2009 USD 50 387 386

Tier III 27 Dec 2009 USD 35 271 271

Tier III 28 Dec 2012 29 Dec 2009 EUR 100 1 083 1 083 1 062 1 061

14 Jul 2014 15 Jul 2009 USD 100 778 773

7 Oct 2015 8 Oct 2010 USD 240 1 835 1 837 1 863 1 853 1 772 1 767

27 Jul 2016 27 Jul 2016 USD 142 1 165 1 087 1 177 1 096 1 080 1 044

2 Dec 2019 USD 500 3 957 3 827 3 525 3 685

3 Dec 2019 USD 25 193 191

Tier III 3 Dec 2011 USD 25 192 191

Total subordinated bonds – banking activities 24 211 23 424 19 225 18 673 24 195 23 888

Total subordinated loans – banking activities3 462 462 428 426 407 404

Total subordinated debt – banking activities 24 673 23 886 19 653 19 099 24 602 24 292

Liberty (qualifying as regulatory insurance capital) 12 Sep 2017 12 Sep 2012 ZAR 2 000 2 054 2 000 2 054 2 000 2 054 2 000

Total subordinated debt 26 727 25 886 21 707 21 099 26 656 26 292

1 The difference between the carrying and notional value represents accrued interest together with the unamortised fair value adjustments relating to bonds hedged for interest rate risk.

2 Tier II, unless otherwise stated.3 Subordinated loans have been issued in Ghana, Tanzania, Zambia, Mauritius, RDC, and Kenya.


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Income statement analysis

56 Net interest income and margin analysis58 Non-interest revenue60 Credit impairment charges64 Operating expenses66 Taxation


Net interest income and margin analysis

10

11

12

13

14

15

16

17

January December

1H10 FY09

%

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


Averageassets

Rm

Net interest income

Rm

Net interest margin

%

1H09 as reported 401 911 10 171 5,10

Reclassifications 46 (9)

1H09 restated 401 957 10 162 5,10

Net non-interest earning assets (21 402) 702 0,66

Interest earning assets – 1H09 380 555 10 864 5,76

Impact of volume changes (2 078) 133

Impact of rate changes (1 393) (0,74)

Lending margin (320) (0,17)

– Client yield1 254 0,13

– Cost of funding2 (574) (0,30)

Unwinding of discount on credit impairments – IAS 39 94 0,05

Funding margin (37) (0,02)

Endowment – funding (703) (0,37)

Endowment – capital and reserves (338) (0,18)

Assets held for liquidity purposes 152 0,08

Other treasury and banking activities (241) (0,13)

Change in composition of balance sheet 0,10

Interest earning assets – 1H10 378 477 9 604 5,12

Net non-interest earning assets 24 456 (544) (0,59)

1H10 402 933 9 060 4,53

Net interest income change % (10,9)

Average assets change % 0,31 Client yield changes refer to the difference in movement between average client rates and base lending rates.2 Cost of funding changes refer to the difference in movement between base lending rates and an allocated cost of funding based on the term nature

of the asset.

South African prime interest rate

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Net interest income – first half

Net interest income – second half

After impairment charges

Before impairment charges

0

6 000

12 000

18 000

24 000

30 000

36 000

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

Rm %

11 61913 357

17 001

22 896

32 117 31 493

7 6366 192

14 49716 610

14 88317 620

12 530

6 197

5 422

10 366

9 365

7 16514 541

Net interest income and net interest marginCAGR (1H04 – 1H10): 18%


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Corporate & Investment Banking Banking activities

Averageassets

Rm

Net interest income

Rm

Net interest margin

%

Averageassets

Rm

Net interest income

Rm

Net interest margin

%

562 017 5 737 2,06 969 664 16 610 3,45

(99) 21 0,01 1 924

561 918 5 758 2,07 971 588 16 610 3,45

(178 098) 259 1,09 (203 790) 1 299 1,25

383 820 6 017 3,16 767 798 17 909 4,70

17 059 (252) 8 194 (144)

(456) (0,24) (2 034) (0,53)

(2) (110) (0,03)

173 0,09 652 0,17

(175) (0,09) (762) (0,20)

(27) (0,01) 67 0,02

(47) (0,02) (173) (0,05)

(77) (0,04) (784) (0,21)

(299) (0,16) (916) (0,24)

182 0,10 308 0,08

(186) (0,11) (426) (0,10)

(0,25) (0,08)

400 879 5 309 2,67 775 992 15 731 4,09

165 479 (372) (0,91) 194 935 (1 190) (1,07)

566 358 4 937 1,76 970 927 14 541 3,02

(13,9) (12,5)

0,8 0,1

Favourable

Continued repricing of mortgage loans and instalment sale

and finance leases to better reflect risk and liquidity cost.

Increased unwinding of the IAS 39 discount on expected

recoveries of non-performing loans to interest income.

Further reductions in the effective cost of central banks’

reserving requirements as interest rates reduced.

Retail transactional deposits increased as a greater

proportion of total book.

Adverse

Negative endowment impact from lower interest rates on

capital and reserves, R916 million, (24 basis points) and

transactional balances, R784 million, (21 basis points)

primarily resulting from a decline in the average South

African prime rate of 292 basis points.

Tier II capital issued in the last quarter of 2009 at higher

interest rates.

Term funding more expensive.

Changed composition of the balance sheet, with a reduction

in higher margin earning balances in respect of card and

instalment sale and finance leases.


Non-interest revenue

Change%

1H10Rm

1H09Rm

FY09Rm


Fee and commission revenue 4 10 469 10 085 20 840

Account transaction fees 7 4 085 3 827 7 967

Electronic banking 4 853 821 1 657

Knowledge-based fees and commission (10) 1 382 1 533 2 666

Card-based commission 4 1 756 1 684 3 488

Bancassurance 8 686 638 1 451

Documentation and administration fees (7) 509 549 1 124

Foreign currency service fees 5 477 454 1 003

Other 25 721 579 1 484

Fee and commission expense (4) (1 446) (1 387) (2 732)

Trading revenue (23) 4 475 5 776 10 621

Commodities (40) 720 1 209 1 936

Forex (20) 1 818 2 260 4 461

Credit (11) 410 461 1 341

Interest rates (9) 1 287 1 412 1 991

Equities (40) 199 330 686

Other (61) 41 104 206


Banking and other 19 132 111 986

Banking and other (excluding Visa profit) 19 132 111 935

Realised Visa profit (excluded from headline earnings) 51

Property-related revenue 30 221 170 481

Insurance – bancassurance income 18 624 527 1 021

Total non-interest revenue (5) 14 475 15 282 31 217

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Non-interest revenue – first half

Non-interest revenue – second half

Non-interest revenue to total income

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40

50

60

70

80

90

100

Rm %

6 727

7 369

7 391 8 844

11 502

14 426 15 2828 225

10 321

13 245

15 02215 935

14 47514 096

15 616

19 165

24 747

29 44831 217

Rm

Net fee and commission revenue

Trading revenue

Other revenue

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2 378

3 020

2 488

1 7881 433

2 488

9 463

7 216

4 852

3 7213 750

10 621

17 607

14 511

11 82510 107

8 913

18 108

9774 475

9 023

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Analysis of non-interest revenueNon-interest revenueCAGR (1H04 – 1H10): 14%


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Favourable growth

Increased electronic banking revenue due to increased

availability of new ATMs and utilisation of Standard Bank

devices, coupled with growth in the electronic transactional

account base.

Growth in net fees and commissions benefiting from higher

deal flow in advisory and project finance.

Higher restructuring fees received and an increase in facility

fees within South Africa.

Favourable fair value adjustments on listed equity and

property portfolios.

Higher bancassurance income resulting from improved claims

loss ratios and pricing in short-term insurance products,

coupled with growth in earnings recognised from long-term

insurance products due to an improvement in volumes.

Higher card fees in Argentina.

Adverse

Translation effect of the stronger average rand exchange

rate.

Revenues suffered from reduced level of client activity across

all products and geographies due to market uncertainty.

Subdued performance in energy and credit trading following

sovereign debt crisis in Europe.

1H09 1H10

Frequency of trading days

Daily trading revenue (Rm)

0

10

20

30

40

50

60

<-30 -30 to 0 0 to 30 30 to 60 60 to 90 >90

21

10

6

3638

55

45

2124

3

14

Distribution of daily trading units


Credit impairment charges

Income statement impairment charges (net of recoveries)

1H10

Non-performing loans Per-

Change%

Impaired lossRm

IAS 39 discount1

RmTotal

Rm

forming loans

impair-ment

chargesRm

Total impair-

ment charges

Rm

Credit loss ratio

%

Personal & Business Banking (27) 3 200 869 4 069 (127) 3 942 2,04

Mortgage loans (9) 1 117 701 1 818 (55) 1 763 1,36

Instalment sale and finance leases (44) 627 52 679 (38) 641 2,37

Card debtors (35) 569 45 614 (90) 524 4,82

Other loans and advances (33) 887 71 958 56 1 014 3,88

Corporate & Investment Banking (>100) 43 12 55 (207) (152) (0,09)

Corporate loans (>100) (18) 12 (6) (207) (213) (0,14)

Commercial property finance (70) 61 61 61 0,36

Central and other 100 (1) (1) 1

Total banking activities (47) 3 242 881 4 123 (333) 3 790 1,041 Discounting of expected recoveries in terms of IAS 39.

FY04 FY05 FY06 FY07 FY08 FY09 1H10

NPLs Balance sheet impairments Credit loss ratio

0

1

2

3

4

5

6

7

%

FY04

Rm

FY05 FY06 FY07 FY08 FY09 1H10-400

1 150

2 700

4 250

5 800

7 350

8 900

10 450

12 000

9 201

711

1 996

318

1 041 1 006

2 022

3 7644 123

11 779

0.0

0.5

1.0

1.5

2.0

%

Credit impairment charges on NPLs

Credit impairment charges on PLs

Credit loss ratio

Total impairment charges for 1H09

(333)

826

9 346

Credit impairment charges Credit loss history as a percentage of gross loans and advances


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Favourable

Lower impairment requirement across all portfolios within

Personal & Business Banking due to lower interest rates

and improved debt servicing ability, resulting in substantially

lower new defaults.

Improvement in rehabilitation and recoveries capability,

including risk-based collection strategies.

Specific impairment releases in Corporate & Investment

Banking due to improved credit environment.

Lower performing loan impairment in mortgage loans, card

and instalment sale and finance leases due to a reduction in

risk profile.

Adverse

Increased non-performing loan portfolio, particularly

in mortgage lending, due to the lagged effect of the

challenging economic environment in recent years.

Increased debt review book which peaked in April 2010.

Continued pressure on recovery values of distressed assets.

1H09 FY09

Non-performing loans Per- Non-performing loans Per-

Impaired lossRm

IAS 39 discount1

RmTotal

Rm

forming loans

impair-ment

chargesRm

Total impair-

ment charges

Rm

Credit loss ratio

%

Impaired lossRm

IAS 39 discount1

RmTotal

Rm

forming loans

impair-ment

chargesRm

Total impair-

ment charges

Rm

Credit loss

ratio%

4 370 862 5 232 185 5 417 2,80 7 443 1 924 9 367 523 9 890 2,56

1 431 651 2 082 (136) 1 946 1,55 2 403 1 361 3 764 255 4 019 1,59

1 049 88 1 137 (1) 1 136 3,60 1 664 143 1 807 266 2 073 3,49

825 825 (14) 811 7,24 1 199 220 1 419 (180) 1 239 5,53

1 065 123 1 188 336 1 524 6,04 2 177 200 2 377 182 2 559 5,07

1 813 64 1 877 322 2 199 1,15 2 339 73 2 412 297 2 709 0,73

1 607 64 1 671 322 1 993 1,14 2 063 73 2 136 297 2 433 0,72

206 206 206 1,21 276 276 276 0,82

(501) (501) (502) (502)

6 183 926 7 109 6 7 115 1,84 9 782 1 997 11 779 318 12 097 1,60


Credit impairment charges continued

Balance sheet impairment – roll forward from December 2009

1H10Opening balance

Rm

IAS 39 discount

in opening balance

Rm

Impairments of non-performing loans

Personal & Business Banking 10 239 1 644

Mortgage loans 4 699 1 220

Instalment sale and finance leases 1 799 56

Card debtors 1 338 177

Other loans and advances 2 403 191

Corporate & Investment Banking 2 838 7

Corporate loans 2 476 7

Commercial property finance 362

Central and other 1

13 078 1 651

Impairments of performing loans

Personal & Business Banking 3 245

Mortgage loans 1 036

Instalment sale and finance leases 769

Card debtors 660

Other loans and advances 780




Central and other 282

5 588 20

Total impairments

Personal & Business Banking 13 484 1 644








Central and other 283

18 666 1 671

Total balance sheet impairments as a % of gross loans and advances 2,521 New provisions raised less recoveries of amounts written off in previous periods equals income statement credit impairment charge

(1H10: R4 107 million – R317 million = R3 790 million).


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Net provisions raised and

released1

Rm

IAS 39 discount

in new impairments

raisedRm

Impaired accounts

written offRm

IAS 39 discount

recycled to net interest

incomeRm

Currency translation

and other movements

Rm

1H10 Closing balance

Rm

IAS 39 discount

in closing balance

Rm

1H10Recoveries

of amounts written off in previous

periods1

Rm

4 384 869 (2 470) (904) 38 11 287 1 609 315

1 840 701 (619) (708) 2 5 214 1 213 22

732 52 (579) (52) 5 1 905 56 53

804 45 (615) (72) (3) 1 452 150 190

1 008 71 (657) (72) 34 2 716 190 50

57 12 (992) (16) 24 1 911 3 2

(4) 12 (724) (16) 24 1 756 3 2

61 (268) 155

(1)

4 440 881 (3 462) (920) 62 13 198 1 612 317

(127) (2) 3 116

(55) (1) 980

(38) (2) 729

(90) 570

56 1 837

(207) 10 1 864 20

(207) 182 1 853 20

(172) 11

1 3 286

(333) 11 5 266 20

4 257 869 (2 470) (904) 36 14 403 1 609 315

1 785 701 (619) (708) 1 6 194 1 213 22

694 52 (579) (52) 3 2 634 56 53

714 45 (615) (72) (3) 2 022 150 190

1 064 71 (657) (72) 35 3 553 190 50

(150) 12 (992) (16) 34 3 775 23 2

(211) 12 (724) (16) 206 3 609 23 2

61 (268) (172) 166

3 286

4 107 881 (3 462) (920) 73 18 464 1 632 317

2,50


Operating expenses

FY04

Rm

FY05 FY06 FY07 FY08 FY09 1H100

5 000

10 000

15 000

20 000

25 000

30 000

35 000

16 865

16 223

13 283

10 270

8 5147 781

Operating expenses – first half

Operating expenses – second half

15 96214 167

11 423

8 8357 5776 913

14 69416 091

19 105

24 706

30 390

32 827

17 019

FY04 FY05 FY06 FY07 FY08 FY09 1H10-10

-5

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

Growth Ratio

Total income growth

Total cost growth


8

1113

10

25

19

32

29 29

23

8

1

7

(9)

Operating expenses

Change%

1H10Rm

1H09Rm

FY09Rm

Staff costs

Fixed remuneration 5 7 065 6 703 12 181

Variable remuneration 23 1 584 1 283 3 400

Other staff costs (13) 897 1 034 2 267

Total staff costs 6 9 546 9 020 17 848

Variable remuneration as a % of total staff costs 16,6 14,2 19,0

Other operating expenses

Information technology 4 1 625 1 560 3 146

Depreciation, amortisation and impairments 17 1 125 958 2 101

Communication (9) 574 630 1 183

Premises 4 1 276 1 232 2 575

Other 12 2 873 2 562 5 974

Total other operating expenses 8 7 473 6 942 14 979

Total operating expenses 7 17 019 15 962 32 827

Cost-to-income ratio 58,1 49,9 52,4

Analysis of total information technology function spend

Change%

1H10Rm

1H09Rm

FY09Rm

IT staff costs 14 1 068 933 1 648

Information technology 6 1 770 1 672 2 342

Depreciation and amortisation 14 555 485 1 001

Other 9 300 275 1 164

Total 10 3 693 3 365 6 155

Cost and income growth (%)Operating expensesCAGR (1H04 – 1H10): 16%


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Staff costs and headcountIncreased headcount due to growth in credit staff in South

Africa, new branches in the rest of Africa and conversion of staff

contracted to provide outsourced services to permanent staff in

Argentina, to drive new sales initiatives.

Annual salary increases and growth in incentive provisions in

Personal & Business Banking in South Africa.

Partly offset by:

• favourable translation impact of stronger average rand

exchange rate; and

• lower incentive provisions outside Africa.

Other operating expenses Higher IT and depreciation costs attributable to the group’s

global trading and offshore banking platform, branch

refurbishment and increased ATMs.

Enhancements to the overall network to increase capacity

and meet business requirements, including customer-

focused channel improvements, enhancements to regulatory

and risk systems and improved workflow and imaging.

Growth in premises costs resulting from roll out of branches

in the rest of Africa, rental escalations and relocation costs

outside Africa.

Favourable translation impact of stronger average rand

exchange rate.

Other costs impacted by:

• increased professional fees across a range of projects; and

• increased marketing and advertising costs relating to

global branding initiatives and 2010 FIFA World Cup™

hospitality costs.

1H04 1H05 1H06 1H07 1H08 1H09 1H100

25

50

75

100

125

150

175

200

0

10 000

20 000

30 000

40 000

50 000

R’000 Number of employees

Headline earnings per employee

Number of employees

92

107

124135

151

133

115


Headcount by business unit



Central and other 7 1 107 1 030 1 053


Headcount by geography

South Africa 2 29 644 29 064 29 387

Rest of Africa 7 12 232 11 401 11 490

Outside Africa 7 5 481 5 111 5 060


Headline earnings per employee (banking activities)


Taxation

Taxation rate reconciliation

1H10%

1H09%

FY09%

Effective taxation rate 29,3 25,4 29,5

Indirect taxation (6,2) (6,4) (8,3)

Direct taxation – current and prior periods 23,1 19,0 21,2

Prior period tax 0,3 0,7 0,4

Direct taxation – current period 23,4 19,7 21,6

Adjustments to direct taxation (0,5) 1,9 0,3

Capital gains tax (0,1) (0,2)

Foreign tax (0,8) (0,2) (0,4)

Secondary tax benefit on companies 0,4 2,1 0,9

Direct taxation – current period – normal 22,9 21,6 21,9

Permanent differences 5,1 6,4 6,1

Non-taxable income 5,8 5,3 6,6

Deductible indirect tax 1,9 1,8 1,8

Other (2,6) (0,7) (2,3)

Direct taxation – statutory rate 28,0 28,0 28,0

FY04

2 7763 098

Rm %

FY05 FY06 FY07 FY08 FY09 1H10

Total taxation charge

Effective taxation rate

0

1 500

3 000

4 500

6 000

0

10

20

30

40

3 980

5 0815 229 5 232

2 482

Favourable Growth in non-taxable income, predominantly from outside

Africa.

Adverse Lower residual secondary tax on companies (STC) credit,

mainly due to a lower scrip dividend election by shareholders.

Increase in other permanent differences, mainly due to non-

deductible expenses.

Higher irrecoverable withholding taxes.

Non-recurrence of a favourable prior year tax adjustment

relating to research and development.

Lower non-taxable dividends received.

Taxation charge and effective taxation rate


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Balance sheet analysis

68 Loans and advances69 Deposit and current accounts70 Loans and advances performance72 Banking activities average balances and margins74 Liquidity management76 Fair value hierarchy – Standard Bank Group


Loans and advances

FY04

Rbn

FY05 FY06 FY07 FY08 FY09 1H100

200

400

600

800

278

384

502

638

790

724 719

Mortgage loans (1H09: 35%)

Instalment sale and finance leases (1H09: 9%)

Card debtors (1H09: 3%)

Term loans (1H09: 22%)

Overdrafts and other demand loans (1H09: 10%)

Loans granted under resale agreements (1H09: 5%)

Other term loans (1H09: 16%)

36%

20% 3%

7%

15%

10%

9%

By advance type

Change%

1H10Rm

1H09Rm

FY09Rm

Loans and advances to banks 26 124 487 98 606 122 923

Call loans 36 17 516 12 840 11 264

Loans granted under resale agreements >100 48 974 20 584 18 808

Balances with banks (11) 57 997 65 182 92 851

Loans and advances to customers (3) 594 595 611 187 600 584

Gross loans and advances to customers (2) 613 059 628 364 619 250

Mortgage loans 4 265 332 254 703 257 336

Instalment sale and finance leases (13) 53 896 61 827 55 966

Card debtors 0 22 151 22 052 22 045

Overdrafts and other demand loans (7) 56 996 61 559 60 129

Other term loans (7) 147 882 159 800 158 845

Loans granted under resale agreements 28 19 889 15 515 15 313

Commercial property finance (1) 33 970 34 334 33 617

Foreign currency loans (29) 12 188 17 059 15 124

Other loans and advances (50) 755 1 515 875

Less: Credit impairments for loans and advances 7 18 464 17 177 18 666

Credit impairments for non-performing loans 11 13 198 11 888 13 078

Credit impairments for performing loans (0) 5 266 5 289 5 588

Net loans and advances 1 719 082 709 793 723 507

Comprising:

Gross loans and advances 1 737 546 726 970 742 173

Less: credit impairments 7 18 464 17 177 18 666

Net loans and advances 1 719 082 709 793 723 507

Securitised assets consolidated above:

Mortgage loans (14) 14 654 16 980 15 879

Instalment sale and finance leases (100) 608 365

Securitised assets (17) 14 654 17 588 16 244

Loans and advancesCAGR (FY04 – 1H10): 19%

Composition of gross loans and advances


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Deposit and current accounts

FY04

Rbn

FY05 FY06 FY07 FY08 FY09 1H100

200

400

600

800

1000

320

404

532

680

844

769 773

Current accounts (1H09: 10%)

Cash management deposits (1H09: 9%)

Call deposits (1H09: 22%)

Term deposits (1H09: 26%)

Negotiable certificates of deposit (1H09: 13%)

Securitised issuances (1H09: 2%)

Other deposits (1H09: 18%)

12%

26%

19%

11%

18%

12%

2%

By deposit type

Change%

1H10Rm

1H09Rm

FY09Rm

Deposits from banks 11 101 345 90 906 106 018

Deposits from banks and central banks 11 96 742 87 012 102 789

Deposits from banks under repurchase agreements 18 4 603 3 894 3 229

Deposits from customers (1) 671 783 678 146 662 530



Call deposits (10) 149 359 165 745 152 249

Savings accounts 9 25 533 23 407 24 169

Term deposits 4 204 252 196 759 195 418

Negotiable certificates of deposit (11) 91 624 102 747 102 045

Repurchase agreements (87) 718 5 523 653

Securitised issuances (21) 12 396 15 789 13 960

Other funding (4) 16 002 16 643 13 570


Comprising:

Retail priced deposit and current accounts 7 175 179 163 368 172 107

Wholesale priced deposit and current accounts (1) 597 949 605 684 596 441


Composition of deposit and current accountsDeposit and current accountsCAGR (FY04 – 1H10): 17%


Loans and advances performance

Gross advances Performing loans

TotalRm

CurrentRm

Early arrears

RmTotal

Rm

1H10

Personal & Business Banking 392 407 347 166 8 515 355 681

Mortgage loans 264 229 230 873 5 987 236 860Instalment sale and finance leases 50 694 45 968 1 338 47 306Card debtors 22 138 19 840 404 20 244Other loans and advances 55 346 50 485 786 51 271

Corporate & Investment Banking 347 606 337 203 1 085 338 288

Corporate loans 313 037 304 070 598 304 668Commercial property finance 34 569 33 133 487 33 620



Credit risk inherent in off-balance sheet exposures and other asset classes

Banking activities 737 546 681 901 9 600 691 501

Percentage of total book (%) 100,0% 92,5% 1,3% 93,8%

1H09


Mortgage loans 253 768 226 389 5 013 231 402Instalment sale and finance leases 58 252 52 535 2 130 54 665Card debtors 22 041 20 523 623 21 146Other loans and advances 51 331 47 198 1 130 48 328


Corporate loans 305 094 295 959 1 205 297 164Commercial property finance 35 400 34 278 20 34 298

Central and other 1 084 1 083 1 083





FY09


Mortgage loans 256 374 225 750 4 655 230 405 Instalment sale and finance leases 53 304 48 455 1 421 49 876Card debtors 22 033 19 778 460 20 238 Other loans and advances 50 879 46 259 861 47 120


Corporate loans 327 033 314 693 3 028 317 721Commercial property finance 34 603 33 017 223 33 240




Criteria for classification of loans and advancesCurrent Items that are current and the full repayment of the contractual principal and interest amounts are expected.Early arrears Items where the loan is performing but evidence exists that the borrower is experiencing difficulties. Ultimate loss is

not expected but could occur if adverse conditions persist.Sub-standard Items that show underlying well-defined weaknesses that could lead to probable loss if not corrected. The risk that

these items may be impaired is probable and the group relies to a large extent on any available security.


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Impaired loans

Sub-standardRm

DoubtfulRm

LossRm

TotalRm

Impairedloans

%

Securities and

expected recoveries

Rm

Net after securities

and expected

recoveriesRm

Balance sheet

impair-ments

for non-performing

loansRm

Gross impairment

coverage%

14 510 17 231 4 985 36 726 9,4 25 439 11 287 11 287 31

13 204 12 981 1 184 27 369 10,4 22 155 5 214 5 214 19 461 1 017 1 910 3 388 6,7 1 483 1 905 1 905 56 210 355 1 329 1 894 8,6 442 1 452 1 452 77 635 2 878 562 4 075 7,4 1 359 2 716 2 716 67

5 644 3 026 648 9 318 2,7 7 408 1 910 1 910 20

5 400 2 321 648 8 369 2,7 6 614 1 755 1 755 21 244 705 949 2,7 794 155 155 16

1 1 1

20 154 20 258 5 633 46 045 6,2 32 848 13 197 13 197 29

1

20 154 20 258 5 633 46 045 6,2 32 848 13 197 13 198 29

2,7% 2,7% 0,8% 6,2% 4,4% 1,8% 1,8%

16 099 10 800 2 952 29 851 7,7 20 730 9 121 9 121 31

14 590 7 160 616 22 366 8,8 18 066 4 300 4 300 19 737 1 118 1 732 3 587 6,2 1 448 2 139 2 139 60 296 414 185 895 4,1 224 671 671 75 476 2 108 419 3 003 5,9 992 2 011 2 011 67

5 260 2 513 1 259 9 032 2,7 6 295 2 737 2 737 30

4 789 1 882 1 259 7 930 2,6 5 489 2 441 2 441 31 471 631 1 102 3,1 806 296 296 27

1 1 1 1

21 359 13 314 4 211 38 884 5,3 27 025 11 859 11 859 30

29

21 359 13 314 4 211 38 884 5,3 27 025 11 859 11 888 31

2,9% 1,8% 0,6% 5,3% 3,7% 1,6% 1,6%

16 029 14 542 4 380 34 951 9,1 24 712 10 239 10 239 29

14 639 10 389 941 25 969 10,1 21 270 4 699 4 699 18 430 1 144 1 854 3 428 6,4 1 629 1 799 1 799 52 273 437 1 085 1 795 8,1 457 1 338 1 338 75 687 2 572 500 3 759 7,4 1 356 2 403 2 403 64

5 414 4 497 764 10 675 3,0 7 837 2 838 2 838 27

5 152 3 396 764 9 312 2,8 6 836 2 476 2 476 27 262 1 101 1 363 3,9 1 001 362 362 27

1 1 1 1

21 443 19 040 5 144 45 627 6,2 32 549 13 078 13 078 29

2,9% 2,6% 0,7% 6,2% 4,4% 1,8% 1,8%

Doubtful Items which are considered to be impaired, but are not yet considered final losses because of some pending factors which may strengthen the quality of the items.

Loss Items which are considered to be uncollectable. The group provides fully for its anticipated loss, after taking securities into account.


Banking activities average balances and margins

1H10Trading

bookRm

Non-interest earning

Rm

Interest earning

Rm

Total average balance

Rm

Assets Cash and balances with central banks2 1 104 9 788 10 059 20 951Trading assets 86 599 12 647 99 246Financial investments 1 983 80 835 82 818Net loans and advances 30 586 685 098 715 684Loans and advances to banks 18 965 108 570 127 535Loans and advances to customers 11 621 595 854 607 475Mortgage loans 262 570 262 570Instalment sale and finance leases 59 081 59 081Card debtors 21 722 21 722Overdrafts and other demand loans 161 71 419 71 580Other term loans 11 438 121 298 132 736Loans granted under resale agreements 1 631 1 631Commercial property finance 33 416 33 416Foreign currency loans 22 24 158 24 180Other loans and advances 559 559

Gross loans and advances 30 586 704 424 735 010Credit impairments for loans and advances (19 326) (19 326)Other assets 9 806 15 207 25 013Interest in associates and joint ventures 5 543 5 543Goodwill and other intangible assets 11 093 11 093Property and equipment 2 015 8 564 10 579Total average assets and interest excluding trading derivative assets 132 093 62 842 775 992 970 927Trading derivative assets 120 383 120 383Total average assets and interest 252 476 62 842 775 992 1 091 310

Equity and liabilitiesEquity 2 511 91 832 94 343Liabilities 115 868 37 410 716 981 870 259Trading liabilities 41 360 10 064 51 424Deposit and current accounts 61 949 694 372 756 321Deposits from banks 57 165 43 924 101 089Deposits from customers 4 784 650 448 655 232Current accounts 94 186 94 186Cash management deposits 68 877 68 877Call deposits 143 614 143 614Savings accounts 20 356 20 356Term deposits 4 783 188 041 192 824Negotiable certificates of deposit 99 751 99 751Securitised issuances 11 311 11 311Other funding 1 24 312 24 313

Other liabilities 10 812 27 346 38 158Subordinated debt 1 747 22 609 24 356Total average equity, liabilities and interest excluding trading derivative liabilities 118 379 129 242 716 981 964 602Trading derivative liabilities 126 708 126 708Total average equity, liabilities and interest 245 087 129 242 716 981 1 091 310Margin on total average assets excluding trading derivatives 132 093 62 842 775 992 970 927Margin on total average loans and advances 30 586 685 098 715 684Margin on average interest earning assets 775 992 775 9921 Interest received and paid on trading derivative financial instruments has been netted with interest received on derivative asset instruments used for

hedging purposes. The interest split between assets and liabilities will therefore not equate to interest income and interest expense as per the income statement.

2 Included within interest-earning cash and balances with central banks is the SARB interest-free deposit. This is utilised to meet liquidity requirements and is reflected in the margin as part of interest earning assets to reflect the cost of liquidity.


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1H09

Interest1

RmAverage rate

%Trading book

Rm

Non-interest earning

Rm

Interest earning

Rm

Total average balance

RmInterest1

RmAverage rate

%

1 582 9 418 8 826 19 82680 113 17 205 97 318

3 059 7,45 3 549 37 243 40 792 2 135 10,5529 887 8,42 41 913 721 729 763 642 40 586 10,72

2 298 3,63 17 152 129 455 146 607 4 103 5,6427 589 9,16 24 761 608 988 633 749 36 483 11,6111 740 9,02 253 694 253 694 14 652 11,65

3 199 10,92 66 679 66 679 4 428 13,391 692 15,71 22 350 22 350 2 106 19,003 776 10,64 922 69 517 70 439 4 511 12,915 086 7,73 23 732 130 855 154 587 7 804 10,18

85 10,51 1 811 1 811 117 13,031 596 9,63 34 258 34 258 2 104 12,39

392 3,27 107 29 464 29 571 743 5,0723 8,30 360 360 18 10,08

29 887 8,20 41 913 738 443 780 356 40 586 10,49(16 714) (16 714)

9 534 18 848 28 38263 4 395 4 458

8 292 8 2921 662 7 216 8 878

32 946 6,84 138 416 65 374 767 798 971 588 42 721 8,87159 780 159 780

32 946 6,09 298 196 65 374 767 798 1 131 368 42 721 7,61

2 410 92 901 95 31118 405 4,26 93 101 43 285 749 084 885 470 26 111 5,95

33 409 14 010 47 41917 361 4,63 49 234 730 509 779 743 25 456 6,58

856 1,71 44 925 45 410 90 335 1 317 2,9416 505 5,08 4 309 685 099 689 408 24 139 7,06

702 1,50 98 570 98 570 1 145 2,341 834 5,37 62 935 62 935 2 494 7,993 274 4,60 163 029 163 029 5 586 6,91

116 1,15 18 909 18 909 210 2,246 033 6,31 4 265 191 620 195 885 8 684 8,943 331 6,73 106 296 106 296 4 299 8,16

511 9,11 18 309 18 309 925 10,19704 5,84 44 25 431 25 475 796 6,30

8 924 29 275 38 1991 044 8,64 1 534 18 575 20 109 655 6,57

18 405 3,85 95 511 136 186 749 084 980 781 26 111 5,37150 587 150 587

18 405 3,40 246 098 136 186 749 084 1 131 368 26 111 4,65

14 541 3,02 138 416 65 374 767 798 971 588 16 610 3,4514 541 4,10 41 913 721 729 763 642 16 610 4,3915 731 4,09 767 798 767 798 17 909 4,70


Liquidity management

0-7 days

0-1 month

0-3 months

0-6 months

0-12 months

1H09 1H10 Internal limit

-20

-15

-10

-5

0

5

10

15

%

December 2008

%

June 201020

22

24

26

28

30

Liquidity buffer

Portfolios of highly marketable securities, over and above

prudential requirements, are maintained as protection

against unexpected disruptions in cash flows. These

portfolios are managed on the basis of diversification,

liquidity and yield.

In addition to minimum requirements, surplus liquidity

holdings are informed by the results from liquidity stress

testing as per Basel principles and in certain instances,

in-country regulations. Group unencumbered surplus

liquidity decreased to R105,0 billion at 30 June 2010

(30 June 2009: R120,2 billion), reflecting the group’s

proactive liquidity management approach as informed

by stress testing requirements and prevailing market

conditions. Contingency liquidity remains well in excess of

minimum requirements.

Group unencumbered surplus liquidity

1H10Rbn

1H09Rbn

FY09Rbn

Marketable assets 72,8 72,7 65,4

Short-term foreign currency placements 27,4 35,5 47,0

Total unencumbered marketable assets 100,2 108,2 112,4

Other readily accessible liquidity 4,8 12,0 6,2

Total unencumbered surplus liquidity 105,0 120,2 118,6

Structural liquidity requirements

Behavioural profiling is applied to assets, liabilities and off-

balance sheet commitments with an indeterminable maturity

or drawdown period, as well as to certain liquid assets to

identify and manage liquidity mismatches.

Behavioural profiling assigns probable maturities based on

actual customer behaviour. This process is used to identify

significant additional sources of structural liquidity in the

form of liquid assets and core deposits, such as current and

savings accounts that, although repayable on demand or at

short notice, exhibit stable behaviour.

Limits are set internally to restrict the cumulative liquidity

mismatch between expected inflows and outflows of

funds in different time buckets. One of the mechanisms

employed to ensure adherence to these limits is the active

management of the long-term funding ratio. The ratio is

defined as those funding-related liabilities with a remaining

maturity of greater than six months as a percentage of total

funding-related liabilities.

The increase in the ratio is attributed to the increased

percentage of term funding required to support term

lending.

At 30 June 2010 the long-term funding ratio was 26,3%

(30 June 2009: 23,8%).

Long-term funding ratio – Standard Bank GroupGroup behaviourally adjusted cumulative liquidity mismatch


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Diversified funding base

The group’s wholesale funding strategy is derived from the

projected balance sheet growth which includes consideration

of Personal & Business Banking and Corporate & Investment

Banking asset classes, capital requirements, maturity profiles

of existing wholesale funding and anticipated changes in the

retail deposit base. Funding requirements and initiatives are

assessed in accordance with the asset and liability committee

requirements for diversification, tenor and currency exposure

as well as the availability and pricing of alternative liquidity

sources. An active presence is maintained in professional

markets, supported by relationship management efforts

among corporate and institutional clients.

Concentration risk limits are used within the group to ensure

that funding diversification is maintained across products,

sectors, geographic regions and counterparties. In terms

of the latter, limits are internally set to restrict single and

top-ten depositor exposures within the sight to three-month

tenors.

Primary sources of funding are in the form of deposits across

a spectrum of retail and wholesale clients, as well as long-

term capital market funding.

Liquidity stress testing and scenario analysis

Anticipated on- and off-balance sheet cash flows are

subjected to a variety of bank-specific, systemic and

combination stresses and scenarios in order to evaluate the

impact of unlikely but plausible events on liquidity positions.

Contingency funding plans

Contingency funding plans incorporate an extensive early

warning indicator methodology supported by clear and

decisive crisis response strategies.

Crisis response strategies are formulated around the relevant

crisis management structures and address internal and

external communications, liquidity generation, operations,

as well as heightened and supplementary information

requirements.

1H09 1H10

Rbn

0

45

90

135

180

Fore

ign

curr

ency

fund

ing

Oth

er li

abili

ties

to t

he p

ublic

Cor

pora

tefu

ndin

g

Fina

ncia

lin

stit

utio

ns

Gov

ernm

ent

and

para

stat

als

Inte

rban

kfu

ndin

g

Ret

ail

Oth

er r

and

and

fore

ign

curr

ency

dep

osit

s

Seni

or a

ndsu

bord

inat

ed d

ebt

Funding-related liabilities composition – SBSA


Fair value hierarchy – Standard Bank Group

Financial assets and liabilities that are measured at fair value

have been categorised into the following levels:

Level 1: Financial instruments for which fair value is

determined using quoted market prices (unadjusted) in

active markets for identical instruments.


determined using valuation techniques based on observable

inputs, either directly, as prices, or indirectly, derived from

prices.


determined using valuation techniques based on significant

unobservable inputs.

Composition%

AssetsRm

Composition%

LiabilitiesRm

1H10

Level 1 31 155 486 9 27 191

Level 2 66 332 884 89 264 748

Level 3 3 15 454 2 6 255

Financial instruments at fair value 100 503 824 100 298 194

Reconciled as follows:

Held for trading 234 707 172 104

Designated at fair value 259 962 126 090

Available-for-sale 9 155

Financial instruments at fair value 503 824 298 194

1H09

Level 1 35 190 625 6 18 745

Level 2 62 337 702 93 311 492

Level 3 3 12 444 1 3 435







FY09

Level 1 34 165 432 12 34 211

Level 2 63 301 207 87 255 325

Level 3 3 13 002 1 3 534








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The Standard Bank of South Africa Limited

78 Key financial results, ratios and statistics80 Summarised income statement81 Statement of financial position82 Segmental income statement84 Segmental statement of financial position86 Credit impairment charges90 Loans and advances performance92 Capital adequacy – qualifying regulatory capital93 Risk-weighted assets and capital adequacy ratios94 Market share analysis


Key financial results, ratios and statistics The Standard Bank of South Africa


SBSA groupIncome statement

Headline earnings Rm (1) 4 056 4 094 8 441

Profit attributable to the ordinary shareholder Rm (1) 4 058 4 109 8 180

Balance sheet

Ordinary shareholder’s equity Rm 10 45 197 41 075 44 159

Total assets Rm (1) 801 986 808 126 791 254

Loans and advances Rm 1 512 377 508 502 525 700

Financial performance

ROE % 18,3 20,6 20,3

Non-interest revenue to total income % 46,3 42,3 45,1

Loan-to-deposit ratio % 86,6 88,3 91,0





SBSA companyHeadline earnings Rm (1) 3 840 3 888 8 121

Total assets Rm 0 785 660 783 879 773 284

ROE % 17,8 20,0 19,9

Capital adequacy

Total risk-weighted assets Rm 4 380 799 366 374 367 839

Tier I capital adequacy ratio % 10,2 9,8 10,6

Total capital adequacy ratio % 13,5 13,1 14,1

FY04

%

FY05 FY06 FY07 FY08 FY09 1H100

2

4

6

8

10

12

14 13,513,4

12,5 12,311,7

12,2

14,1

1 Basel II implemented 1 January 2008 and 2007 is on a Basel II pro forma basis. 2008 to 2010 are on a Basel II basis. All other historical comparatives are on a Basel I basis.

FY04

Rbn

FY05 FY06 FY07 FY08 FY09 1H100

100

200

300

400

500

600

700

202

294

370

446

527 526 512

Loans and advances – SBSA group Total capital to risk-weighted assets – SBSA company1


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Personal & Business BankingFavourable

Improved customer service ratings.

Reduced credit impairments aided by lower interest rates,

improved debt servicing ability and continual rehabilitation

and recoveries capability improvements.

More appropriate pricing for risk and term funding.

Higher restructuring fees received and an increase in facility

fees.

Growth in electronic banking revenue due to increased

availability of new ATMs and utilisation of Standard Bank

devices, coupled with growth in the electronic transactional

account base.

Proactive cost containment initiatives with continued

investment in the franchise.

Improvement in bancassurance revenues from both short-

and long-term insurance products.

Adverse

Decrease in net interest income due to the negative

endowment impact of lower average interest rates, more

expensive term funding and reduced instalment sale and

finance lease balances.

Continued growth in the non-performing loan portfolio,

albeit at a slower rate.

Corporate & Investment BankingFavourable

Credit impairment charges down as a result of non-recurrence

of large non-performing and performing loan impairments,

coupled with specific impairment releases due to improved

credit environment.

Fair value gains on listed property and equity investments.

Increased advisory deal flow.

Adverse

Net interest income down due to interest payable on tier II

capital raised at the end of 2009 at higher interest rates and

negative endowment effect.

Higher operating expenses due to increased headcount and

marketing costs, coupled with investment in IT platforms and

premises.

Client trading volumes slowed following market uncertainty.

Increased effective tax rate mainly due to a decrease in non-

taxable dividends received, an increase in non-deductible

interest expense and a significant decrease in STC credits

received.


Summarised income statementThe Standard Bank of South Africa

Group Company

Change %

1H10Rm

1H09Rm

FY09Rm

Change %

1H10Rm

1H09Rm

FY09Rm

Net interest income (9) 10 156 11 200 21 500 (9) 10 103 11 099 21 257

Non-interest revenue 7 8 747 8 200 17 627 6 8 248 7 793 17 112

Net fee and commission revenue 6 6 738 6 351 13 280 6 6 231 5 878 12 541

Trading revenue (5) 1 306 1 382 2 961 (6) 1 315 1 393 2 982

Other revenue 51 703 467 1 386 34 702 522 1 589

Total income (3) 18 903 19 400 39 127 (3) 18 351 18 892 38 369

Credit impairment charges (38) 3 278 5 315 9 831 (38) 3 241 5 253 9 744

Impairments for non-performing loans (31) 3 796 5 464 9 672 (30) 3 755 5 388 9 573

Impaired loss (37) 2 945 4 638 7 804 (36) 2 904 4 562 8 026

Discounting of expected recoveries 3 851 826 1 868 3 851 826 1 547

Impairments for performing loans (>100) (518) (149) 159 (>100) (514) (135) 171

Income after credit impairment charges 11 15 625 14 085 29 296 11 15 110 13 639 28 625

Operating expenses 12 9 725 8 662 18 286 12 9 465 8 422 18 006

Staff costs 11 5 354 4 804 9 674 12 5 253 4 711 9 485

Other operating expenses 13 4 371 3 858 8 612 14 4 212 3 711 8 521

Net income before associates and joint ventures 9 5 900 5 423 11 010 8 5 645 5 217 10 619

Share of profit/(loss) from associates and joint ventures (62) 30 78 (104)

Net income before indirect taxation 8 5 930 5 501 10 906 8 5 645 5 217 10 619

Indirect taxation 11 297 267 582 12 297 266 581

Profit before direct taxation 8 5 633 5 234 10 324 8 5 348 4 951 10 038

Direct taxation 40 1 575 1 125 2 144 43 1 497 1 049 2 011

Attributable to the ordinary shareholder (1) 4 058 4 109 8 180 (1) 3 851 3 902 8 027

Headline adjustable items 87 (2) (15) 261 21 (11) (14) 94

Headline earnings (1) 4 056 4 094 8 441 (1) 3 840 3 888 8 121


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Statement of financial positionThe Standard Bank of South Africa

Group Company

Change %

1H10Rm

1H091

RmFY091

RmChange

% 1H10

Rm1H091

RmFY091

Rm

Assets Cash and balances with the central bank 20 15 900 13 266 14 470 20 15 900 13 266 14 470

Derivative assets (17) 78 986 95 499 76 501 (17) 78 930 95 406 76 449

Trading assets (13) 24 547 28 182 22 644 (6) 24 116 25 682 22 219

Pledged assets (52) 586 1 225 1 057 (52) 586 1 225 1 057

Financial investments 13 74 199 65 408 62 008 18 74 046 62 932 61 623

Loans and advances 1 512 377 508 502 525 700 1 493 540 486 311 505 006

Loans and advances to banks 15 45 224 39 383 59 472 15 45 177 39 175 59 276

Loans and advances to customers (0) 467 153 469 119 466 228 0 448 363 447 136 445 730

Other assets 12 5 905 5 285 4 718 13 5 822 5 166 4 634

Interest in group companies, associates and joint ventures (5) 79 822 83 737 76 099 (4) 83 118 86 891 79 791

Intangible assets 35 3 444 2 555 2 913 33 3 405 2 555 2 913

Property and equipment 39 6 220 4 467 5 144 39 6 197 4 445 5 122

Total assets (1) 801 986 808 126 791 254 0 785 660 783 879 773 284

Equity and liabilitiesEquity 10 45 201 41 075 44 159 10 44 010 40 159 43 207

Equity attributable to the ordinary shareholder 10 45 197 41 075 44 159 10 44 010 40 159 43 207

Ordinary share capital 60 60 60 60 60 60

Ordinary share premium 4 25 230 24 230 24 230 4 25 230 24 230 24 230

Reserves 19 19 907 16 785 19 869 18 18 720 15 869 18 917

Minority interest 100 4

Liabilities (1) 756 785 767 051 747 095 (0) 741 650 743 720 730 077

Derivative liabilities (13) 79 839 91 798 75 196 (13) 79 840 91 754 75 196

Trading liabilities (14) 17 102 19 876 16 707 (10) 16 197 17 913 15 744

Deposit and current accounts 3 591 733 575 932 577 860 4 575 723 554 557 559 904

Deposits from banks 38 60 122 43 725 57 833 32 60 172 45 699 57 857

Deposits from customers (0) 531 611 532 207 520 027 1 515 551 508 858 502 047

Other liabilities (30) 11 471 16 375 11 080 (20) 11 125 13 939 10 759

Subordinated debt 22 15 976 13 101 15 814 22 15 976 13 101 15 814

Liabilities to group companies (19) 40 664 49 969 50 438 (18) 42 789 52 456 52 660

Total equity and liabilities (1) 801 986 808 126 791 254 0 785 660 783 879 773 284

1 Refer to page 98 for the prior period reclassification.


Segmental income statementThe Standard Bank of South Africa


Change %

1H10Rm

1H09Rm

FY09Rm


Interest income (22) 18 026 23 167 42 049

Interest expense (28) 10 753 14 995 26 188

Non-interest revenue 7 5 859 5 497 11 476


Fee and commission revenue 8 6 681 6 180 12 995

Fee and commission expense 21 1 094 906 1 925

Trading revenue

Other revenue 22 272 223 406

Total income (4) 13 132 13 669 27 337



Impairments for performing loans1 (>100) (157) 154 486



Net income before associates and joint ventures 15 2 674 2 331 4 585

Share of profit/(loss) from associates and joint ventures (24) 39 51 (256)

Net income before indirect taxation 14 2 713 2 382 4 329

Indirect taxation 7 228 214 454

Profit before direct taxation 15 2 485 2 168 3 875

Direct taxation 15 672 585 1 199

Attributable to the ordinary shareholder 15 1 813 1 583 2 676

Headline adjustable items >100 2 (10) 382

SBSA group headline earnings 15 1 815 1 573 3 058

ROE % 18,9 16,7 17,0



1 Release in 1H09 of central portfolio credit provision created in 2008, as impairment became evident in underlying business units.


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Corporate & Investment Banking Other services SBSA group

Change %

1H10Rm

1H09Rm

FY09Rm

Change %

1H10Rm

1H091

RmFY09

RmChange

% 1H10

Rm1H09

RmFY09

Rm

(5) 2 591 2 735 5 097 (0) 292 293 542 (9) 10 156 11 200 21 500

(33) 11 718 17 405 30 663 29 (3 649) (5 125) (5 259) (26) 26 095 35 447 67 453

(38) 9 127 14 670 25 566 27 (3 941) (5 418) (5 801) (34) 15 939 24 247 45 953

1 2 556 2 525 5 773 87 332 178 378 7 8 747 8 200 17 627

5 1 138 1 082 2 322 >100 13 (5) (112) 6 6 738 6 351 13 280

4 1 185 1 134 2 441 >100 12 (8) (118) 8 7 878 7 306 15 318

(10) 47 52 119 67 (1) (3) (6) 19 1 140 955 2 038

(12) 1 207 1 379 2 905 >100 99 3 56 (5) 1 306 1 382 2 961

>100 211 64 546 22 220 180 434 51 703 467 1 386

(2) 5 147 5 260 10 870 32 624 471 920 (3) 18 903 19 400 39 127

(>100) (409) 693 906 100 (501) (493) (38) 3 278 5 315 9 831

(>100) (48) 493 733 (100) 2 7 (31) 3 796 5 464 9 672

(>100) (361) 200 173 100 (503)1 (500) (>100) (518) (149) 159

22 5 556 4 567 9 964 (36) 624 972 1 413 11 15 625 14 085 29 296

17 2 460 2 098 4 448 42 494 349 504 12 9 725 8 662 18 286

25 3 096 2 469 5 516 (79) 130 623 909 9 5 900 5 423 11 010

(>100) (9) 27 151 1 (62) 30 78 (104)

24 3 087 2 496 5 667 (79) 130 623 910 8 5 930 5 501 10 906

26 44 35 77 39 25 18 51 11 297 267 582

24 3 043 2 461 5 590 (83) 105 605 859 8 5 633 5 234 10 324

>100 692 328 758 (0) 211 212 187 40 1 575 1 125 2 144

10 2 351 2 133 4 832 (>100) (106) 393 672 (1) 4 058 4 109 8 180

50 (3) (6) (77) (>100) (1) 1 (44) 87 (2) (15) 261

10 2 348 2 127 4 755 (>100) (107) 394 628 (1) 4 056 4 094 8 441

33,9 34,9 37,8 18,3 20,6 20,3

(0,49) 0,85 0,54 1,25 2,03 1,87

47,9 39,7 40,4 79,2 74,1 54,7 51,4 44,5 46,9


Segmental statement of financial positionThe Standard Bank of South Africa


Change %

1H10Rm

1H09Rm

FY09Rm

AssetsCash and balances with the central bank 27 4 188 3 289 4 400

Financial investments, trading and pledged assets (13) 13 15 15

Loans and advances 0 351 018 350 169 344 650

Loans and advances to banks (27) 716 987 410

Loans and advances to customers 0 350 302 349 182 344 240

Derivative and other assets 21 2 752 2 274 2 471

Interest in group companies, associates and joint ventures (50) 543 1 082 411

Intangible assets 40 2 302 1 650 1 889

Property and equipment 50 5 054 3 375 4 015

SBSA group total assets 1 365 870 361 854 357 851

Equity and liabilitiesEquity 5 20 856 19 776 17 817

Equity attributable to the ordinary shareholder 5 20 852 19 776 17 817

Ordinary share capital

Ordinary share premium 4 4 4

Reserves 5 20 848 19 772 17 813

Minority interest 100 4

Liabilities 1 345 014 342 078 340 034

Deposit and current accounts 1 335 100 332 476 330 706

Deposits from banks

Deposits from customers 1 335 100 332 476 330 706

Derivative, trading and other liabilities 27 1 776 1 394 2 332

Subordinated debt 8 8 067 7 466 7 171

Liabilities to group companies (90) 71 742 (175)

SBSA group total equity and liabilities 1 365 870 361 854 357 851


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Corporate & Investment Banking Other services SBSA group

Change %

1H10Rm

1H09Rm

FY09Rm

Change %

1H10Rm

1H09Rm

FY09Rm

Change %

1H10Rm

1H09Rm

FY09Rm

17 11 712 9 977 10 070 20 15 900 13 266 14 470

7 97 368 90 744 83 794 (52) 1 951 4 056 1 900 5 99 332 94 815 85 709

2 163 666 160 824 183 239 7 (2 307) (2 491) (2 189) 1 512 377 508 502 525 700

16 44 724 38 623 59 059 5 (216) (227) 3 15 45 224 39 383 59 472

(3) 118 942 122 201 124 180 8 (2 091) (2 264) (2 192) (0) 467 153 469 119 466 228

(17) 81 342 97 704 78 029 (1) 797 806 719 (16) 84 891 100 784 81 219

(7) 76 639 82 466 73 116 >100 2 640 189 2 572 (5) 79 822 83 737 76 099

21 982 810 879 68 160 95 145 35 3 444 2 555 2 913

13 377 334 380 4 789 758 749 39 6 220 4 467 5 144

(2) 432 086 442 859 429 507 18 4 030 3 413 3 896 (1) 801 986 808 126 791 254

9 14 303 13 064 13 658 22 10 042 8 235 12 684 10 45 201 41 075 44 159

9 14 303 13 064 13 658 22 10 042 8 235 12 684 10 45 197 41 075 44 159

21 21 21 39 39 39 60 60 60

4 25 226 24 226 24 226 4 25 230 24 230 24 230

9 14 282 13 043 13 637 5 (15 223) (16 030) (11 581) 19 19 907 16 785 19 869

100 4

(3) 417 783 429 795 415 849 (25) (6 012) (4 822) (8 788) (1) 756 785 767 051 747 095

5 264 605 251 991 259 203 7 (7 972) (8 535) (12 049) 3 591 733 575 932 577 860

31 60 172 45 875 57 785 98 (50) (2 150) 48 38 60 122 43 725 57 833

(1) 204 433 206 116 201 418 (24) (7 922) (6 385) (12 097) (0) 531 611 532 207 520 027

(14) 106 768 124 069 100 698 (>100) (132) 2 586 (47) (15) 108 412 128 049 102 983

7 5 810 5 410 5 470 >100 2 099 225 3 173 22 15 976 13 101 15 814

(16) 40 600 48 325 50 478 (>100) (7) 902 135 (19) 40 664 49 969 50 438

(2) 432 086 442 859 429 507 18 4 030 3 413 3 896 (1) 801 986 808 126 791 254


Credit impairment charges The Standard Bank of South Africa

Income statement impairment charges (net of recoveries)

1H10

Non-performing loans Per-

Change%

ImpairedlossRm

IAS 39discount1

RmTotal

Rm

formingloans

impair-ment

charges Rm

Totalimpair-

ment charges

Rm

Creditloss

ratio%

Personal & Business Banking (28) 2 993 851 3 844 (157) 3 687 2,05

Mortgage loans (9) 1 110 697 1 807 (52) 1 755 1,39

Instalment sale and finance leases (47) 567 50 617 (46) 571 2,53

Card debtors (37) 531 45 576 (106) 470 4,66

Other loans and advances (35) 785 59 844 47 891 4,23

Corporate & Investment Banking (>100) (48) (48) (361) (409) (0,49)

Corporate loans (>100) (109) (109) (361) (470) (0,70)

Commercial property finance (71) 61 61 61 0,40

Other services 100

Total SBSA group (38) 2 945 851 3 796 (518) 3 278 1,25

1 Discounting of expected recoveries in terms of IAS 39.

Rm

FY04 FY05 FY06 FY07 FY08 FY09 1H10-600

1 200

3 000

4 800

6 600

8 400

10 200

12 000

Credit impairment charges on NPLs

Credit impairment charges on PLs

Total impairment charges for 1H09

178230

661

743

1 700159

681 1 0261 753

3 453

9 672

(518)

3 796

8 315

Credit impairment charges


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1H09 FY09

Non-performing loans Per- Non-performing loans Per-

ImpairedlossRm

IAS 39discount1

RmTotal

Rm

formingloans

impair-ment

charges Rm

Totalimpair-

ment charges

Rm

Creditloss

ratio%

ImpairedlossRm

IAS 39discount1

RmTotal

Rm

formingloans

impair-ment

charges Rm

Totalimpair-

ment charges

Rm

Creditloss

ratio%

4 143 826 4 969 154 5 123 2,85 7 064 1 868 8 932 486 9 418 2,61

1 416 647 2 063 (135) 1 928 1,58 2 380 1 358 3 738 247 3 985 1,61

1 006 78 1 084 (4) 1 080 4,03 1 580 133 1 713 261 1 974 3,80

784 784 (39) 745 7,10 1 125 218 1 343 (199) 1 144 5,49

937 101 1 038 332 1 370 6,66 1 979 159 2 138 177 2 315 5,63

493 493 200 693 0,85 733 733 173 906 0,54

286 286 200 486 0,74 394 394 173 567 0,41

207 207 207 1,36 339 339 339 1,12

2 2 (503) (501) 7 7 (500) (493)

4 638 826 5 464 (149) 5 315 2,03 7 804 1 868 9 672 159 9 831 1,87

Favourable Lower impairment requirement across all portfolios within

Personal & Business Banking due to lower interest rates

and improved debt servicing ability, resulting in substantially

lower new defaults.

Improvement in rehabilitation and recoveries capability,

including risk-based collection strategies.

Specific impairment releases in Corporate & Investment

Banking due to improved credit environment.

Lower performing loan impairments in mortgage loans, card

and instalment finance due to a reduction in risk profile.

Adverse Increased non-performing loan portfolio, particularly in

mortgage lending, due to the lagged effect of the challenging

economic environment in recent years.

Increased debt review book which peaked in April 2010.

Continued pressure on recovery values of distressed assets.


Credit impairment charges continuedThe Standard Bank of South Africa

Balance sheet impairment – roll forward from December 2009

1H10Opening balance

Rm

IAS 39 discount

in opening balance

Rm

Impairments of non-performing loansPersonal & Business Banking 9 857 1 576





Corporate & Investment Banking 782

Corporate loans 417 1

Commercial property finance 365 (1)

Other services

10 639 1 576

Impairments of performing loansPersonal & Business Banking 3 028

Mortgage loans 1 022

Instalment sale and finance leases 740

Card debtors 618

Other loans and advances 648

Corporate & Investment Banking 1 499

Corporate loans 1 326


Other services 284

4 811

Total impairmentsPersonal & Business Banking 12 885 1 576





Corporate & Investment Banking 2 281


Commercial property finance 538 (1)

Other services 284

15 450 1 576

Total SBSA group balance sheet impairments as a % of gross loans and advances 2,861 New provisions raised less recoveries of amounts written off in previous periods equals income statement credit impairment charge

(1H10: R3 564 million – R286 million = R3 278 million).


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Netprovisionsraised and

released1

Rm

IAS 39 discount

in new impairments

raisedRm

Impaired accounts

written offRm

IAS 39 discount

recycled to net interest

incomeRm

Currencytranslation

and othermovements

Rm

1H10 Closing balance

Rm

IAS 39 discount in

closing balance

Rm

1H10Recoveries

of amounts written

off inpreviousperiods1

Rm

4 129 851 (2 244) (894) 10 848 1 533 285

1 829 697 (607) (706) 5 155 1 186 22

666 50 (532) (51) 1 780 51 49

765 45 (601) (72) 1 367 148 189

869 59 (504) (65) 2 546 148 25

(47) (309) 426 1

(108) (38) 271 1 1

61 (271) 155 (1)

4 082 851 (2 553) (894) 11 274 1 533 286

(157) (1) 2 870

(52) (1) 969

(46) 694

(106) 512

47 695

(361) 1 138

(361) 173 1 138

(173)

284

(518) (1) 4 292

3 972 851 (2 244) (894) (1) 13 718 1 533 285

1 777 697 (607) (706) (1) 6 124 1 186 22

620 50 (532) (51) 2 474 51 49

659 45 (601) (72) 1 879 148 189

916 59 (504) (65) 3 241 148 25

(408) (309) 1 564 1

(469) (38) 173 1 409 1 1

61 (271) (173) 155 (1)

284

3 564 851 (2 553) (894) (1) 15 566 1 533 286

2,95


Loans and advances performanceThe Standard Bank of South Africa

Gross advances Performing loans

TotalRm

CurrentRm

Early arrears

RmTotal

Rm

1H10


Mortgage loans 257 194 224 214 5 847 230 061

Instalment sale and finance leases 44 505 40 333 1 045 41 378

Card debtors 20 096 17 924 372 18 296

Other loans and advances 42 941 38 806 528 39 334


Corporate loans 134 239 133 337 133 337

Commercial property finance 30 991 29 555 487 30 042

Other services (2 023) (2 024) (2 024)



1H09


Mortgage loans 246 897 219 948 4 824 224 772


Card debtors 20 517 19 081 605 19 686



Corporate loans 131 193 130 105 380 130 485


Other services (2 203) (2 203) (2 203)



Total SBSA group 522 273 483 069 8 452 491 521


FY09


Mortgage loans 249 520 219 340 4 454 223 794


Card debtors 20 316 18 156 442 18 598



Corporate loans 155 685 154 912 154 912


Other services (1 905) (1 905) (1 905)



Criteria for classification of loans and advances

Current Items that are current and the full repayment of the contractual principal and interest amounts is expected.

Early arrears Items where the loan is performing but evidence exists that the borrower is experiencing difficulties. Ultimate loss is not expected but could occur if adverse conditions persist.

Sub-standard Items that show underlying well defined weaknesses that could lead to probable loss if not corrected. The risk that these items may be impaired is probable and the group relies to a large extent on any available security.


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Impaired loans

Sub-standard

RmDoubtful

RmLossRm

TotalRm

Impairedloans

%

Securitiesand

expectedrecoveries

Rm

Net aftersecurities

andexpected

recoveries Rm

Balance sheet

impairmentsfor non-

performingloans

Rm

Gross impairment

coverage%

14 126 16 897 4 644 35 667 9,8 24 819 10 848 10 848 30

13 123 12 940 1 070 27 133 10,5 21 978 5 155 5 155 19

370 905 1 852 3 127 7,0 1 347 1 780 1 780 57

189 331 1 280 1 800 9,0 433 1 367 1 367 76

444 2 721 442 3 607 8,4 1 061 2 546 2 546 71

467 1 327 57 1 851 1,1 1 425 426 426 23

223 622 57 902 0,7 631 271 271 30

244 705 949 3,1 794 155 155 16

1 1 1

14 593 18 225 4 701 37 519 7,1 26 245 11 274 11 274 30

2,8% 3,4% 0,9% 7,1% 5,0% 2,1% 2,1%

15 780 10 726 2 436 28 942 8,0 20 279 8 663 8 663 30

14 559 7 115 451 22 125 9,0 17 899 4 226 4 226 19

650 1 007 1 698 3 355 6,4 1 329 2 026 2 026 60

258 396 177 831 4,1 201 630 630 76

313 2 208 110 2 631 6,3 850 1 781 1 781 68

886 868 56 1 810 1,1 1 215 595 595 33

415 237 56 708 0,5 409 299 299 42

471 631 1 102 3,5 806 296 296 27

(6) 6 6

16 666 11 594 2 492 30 752 5,9 21 488 9 264 9 264 30

3

16 666 11 594 2 492 30 752 5,9 21 488 9 264 9 267 30

3,2% 2,2% 0,5% 5,9% 4,1% 1,8% 1,8%

15 598 14 160 4 143 33 901 9,5 24 044 9 857 9 857 29

14 577 10 328 821 25 726 10,3 21 087 4 639 4 639 18

324 1 036 1 820 3 180 6,7 1 483 1 697 1 697 53

244 409 1 065 1 718 8,5 443 1 275 1 275 74

453 2 387 437 3 277 8,1 1 031 2 246 2 246 69

431 1 605 100 2 136 1,2 1 354 782 782 37

169 504 100 773 0,5 356 417 417 54

262 1 101 1 363 4,6 998 365 365 27

16 029 15 765 4 243 36 037 6,7 25 398 10 639 10 639 30

3,0% 2,9% 0,8% 6,7% 4,7% 2,0% 2,0%

Doubtful Items which are considered to be impaired, but are not yet considered final losses because of some pending factors which may strengthen the quality of the items.

Loss Items which are considered to be uncollectable. The group provides fully for its anticipated loss, after taking securities into account.


Capital adequacy - qualifying regulatory capitalThe Standard Bank of South Africa

SBSA company qualifying regulatory capital (excluding unappropriated profit)

Change%

1H10Rm

1H091

RmFY09

Rm

Ordinary shareholders’ equity 10 44 010 40 159 43 207


Expected losses exceeding eligible provisions (50%) 15 (586) (693) (212)


Investment in regulated non-banking entities (99) (99) (99)

Intangible assets (33) (3 405) (2 555) (2 913)

Less: regulatory exclusions 2 (4 228) (4 318) (6 565)

Non-qualifying foreign currency translation reserve 5 (41) (43) (37)

Non-qualifying other reserves 4 (629) (657) (716)

Unappropriated profit 2 (3 558) (3 618) (5 812)

Tier l capital 10 35 363 32 271 33 134

Tier ll subordinated debt 22 15 098 12 348 15 098

Impairments for performing loans 24 257 208 223

Less: regulatory deductions (>100) (3 217) (916) (2 714)

Expected losses exceeding eligible provisions (50%) 15 (586) (693) (212)


Investment in tier II instruments in banks (100) (2 302) (2 218)

Tier ll capital 4 12 138 11 640 12 607

Tier lll capital 300 300 300

Total qualifying regulatory capital 8 47 801 44 211 46 0411 Restated, refer to page 98.

FY04 FY05 FY06 FY07 FY08 FY09 1H10

Tier I capital Tier II capital Tier III capital Required capital

0

2

4

6

8

10

12

14

16

%

0,50,3 0,2

0,1

0,1

3,83,6 3,8

3,1

3,5

3,4

9,18,6 8,4 8,5

9,3 10,6

0,1

3,2

10,2

0,1

1 Basel II implemented 1 January 2008 and 2007 is on a Basel II pro forma basis. 2008 to 2010 are on a Basel II basis. All other historical comparatives are on a Basel I basis.

Capital adequacy – SBSA company1

(including unappropriated profit)


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Risk-weighted assets and capital adequacy ratiosThe Standard Bank of South Africa

SBSA company risk-weighted assets

Change%

1H10Rm

1H09Rm

FY09Rm

Credit risk 3 298 078 289 357 283 653

Market risk 14 6 431 5 617 5 745



Total risk-weighted assets 4 380 799 366 374 367 839

SBSA company capital adequacy ratios (including unappropriated profit)

Minimum regulatory

requirement %

Target ratios

%1H10

%1H091

%FY09

%

Total capital adequacy ratio 9,75 11 – 12 13,5 13,1 14,1

Tier I capital adequacy ratio 7,0 9,0 10,2 9,8 10,6

Core tier I capital adequacy ratio 5,25 10,2 9,8 10,6

Tier II and III as % of tier I <100,0 32,0 33,3 33,1

Subordinated tier II debt as % of tier I <50,0 38,8 34,4 38,81 Restated, refer to page 98.


Market share analysisThe Standard Bank of South Africa

SBSA Absa FirstRand Nedbank Other

Mortgageloans

Instalmentfinance

Card debtors

DepositsOther loans and advances

%

0

5

10

15

20

25

30

35

FY07FY06 FY08 FY09 May 20100

5

10

15

20

25

30

SBSA Absa

Nedbank FirstRand

Other

%

Card debtors Mortgage loans Deposits

Other loans and advances Instalment finance

FY06 FY07 FY08 May 2010FY09

%

15

20

25

30

35

40

%

15

17

19

21

23

25

FY07FY06 FY08 FY09 May 2010

SBSA Absa

Nedbank FirstRand

Other

South African market share analysis

Retail-based deposits (denominated in rand) Corporate-based deposits (denominated in rand)

SBSA’s market share movement

Source: BA 900 May 2010


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Other information and reclassifications

96 Supplementary information on a geographic basis 98 Changes in accounting policies and reclassifications 99 Group statement of financial position reclassification100 Business unit reclassifications101 Exchange rate impact on income statement102 Financial and other definitions


Supplementary information on a geographic basis

South AfricaPersonal & Business Banking Corporate & Investment Banking

Change%

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

Total income Rm (4) 13 495 14 026 28 054 (2) 5 402 5 520 11 548

Headline earnings Rm 15 1 988 1 736 3 420 7 2 498 2 345 5 234

Loans and advances Rm 0 352 117 351 209 345 842 (0) 173 813 174 647 195 293

Total assets Rm 1 367 845 363 249 359 760 (2) 430 903 440 671 427 206

Average ordinary shareholders’ equity Rm 1 21 422 21 211 20 941 9 13 948 12 743 12 963

ROE % 18,7 16,5 16,3 36,1 37,1 40,4

Number of employees 2 24 612 24 150 24 451 1 3 925 3 884 3 883

Liberty Total South Africa

Change%

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

Total income Rm 59 15 395 9 684 44 338 17 34 576 29 571 84 545

Headline earnings/(loss) Rm >100 540 (647) 72 40 5 279 3 758 9 399

Loans and advances Rm (1) 523 177 526 655 538 799

Total assets Rm 9 220 601 203 051 220 151 2 1 027 357 1 011 937 1 014 955

Average ordinary shareholders’ equity Rm (4) 6 141 6 427 6 258 9 53 221 48 701 49 831

ROE % 17,7 (20,3) 1,2 20,0 15,6 18,9


Rest of AfricaPersonal & Business Banking Corporate & Investment Banking

Change%

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

Total income Rm (5) 2 048 2 157 4 225 2 2 844 2 790 5 379

Headline earnings Rm (86) 31 220 350 3 478 462 852

Loans and advances Rm 17 18 816 16 142 17 101 20 25 224 21 103 25 060

Total assets Rm (1) 25 296 25 507 22 906 13 79 412 70 348 79 114

Average ordinary shareholders’ equity Rm 3 2 563 2 481 2 530 (11) 9 080 10 168 9 486

ROE % 2,4 17,9 13,8 10,6 9,2 9,0


Outside AfricaPersonal & Business Banking Corporate & Investment Banking

Change%

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

Total income Rm 1 967 962 1 820 (37) 3 719 5 940 10 754

Headline (loss)/earnings Rm (>100) (31) (4) (5) (59) 261 644 1 484

Loans and advances Rm 18 7 071 6 011 6 163 4 144 794 139 882 136 384

Total assets Rm 21 10 283 8 526 8 635 2 284 406 279 292 267 075

Average ordinary shareholders’ equity Rm (1) 840 852 808 2 20 091 19 688 18 639

ROE % (7,4) (0,9) (0,6) 2,6 6,6 8,0



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Other domestic operations Banking operations

Change%

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

(17) 284 341 605 (4) 19 181 19 887 40 207

(22) 253 324 673 8 4 739 4 405 9 327

(>100) (2 753) 799 (2 336) (1) 523 177 526 655 538 799

61 8 008 4 966 7 838 (0) 806 756 808 886 794 804

41 11 710 8 320 9 669 11 47 080 42 274 43 573

4,4 7,9 7,0 20,3 21,0 21,4

7 1 107 1 030 1 053 2 29 644 29 064 29 387

Total rest of Africa

Change%

1H10Rm

1H09Rm

FY09Rm

(1) 4 892 4 947 9 604

(25) 509 682 1 202

18 44 040 37 245 42 161

9 104 708 95 855 102 020

(8) 11 643 12 649 12 016

8,8 10,9 10,0

7 12 232 11 401 11 490

Total outside Africa Central funding and eliminations Standard Bank Group

Change%

1H10Rm

1H09Rm

FY09Rm

1H10Rm

1H09Rm

FY09Rm

Change%

1H10Rm

1H09Rm

FY09Rm

(32) 4 686 6 902 12 574 257 156 325 7 44 411 41 576 107 048

(64) 230 640 1 479 (29) 327 (362) 11 5 989 5 407 11 718

4 151 865 145 893 142 547 1 719 082 709 793 723 507

2 294 689 287 818 275 710 (106 232) (103 889) (93 564) 2 1 320 522 1 291 721 1 299 121

2 20 931 20 540 19 447 3 370 4 548 5 048 3 89 165 86 438 86 342

2,2 6,3 7,6 13,5 12,6 13,6

7 5 481 5 111 5 060 4 52 768 50 912 51 411


Changes in accounting policies and reclassifications

Changes in accounting policies

The accounting policies are consistent with those adopted in the

previous year except for the standards and interpretations noted

below.

The following revised and amended standards became effective

on 1 January 2010:

IFRS 1 First-time Adoption of International Financial Reporting

Standards (2010 Improvements to IFRS);

IFRS 2 Share-based Payment (2009 Improvements to IFRS);

IFRS 3 Business Combinations (revised 2008);

IFRS 3 Business Combinations (revised 2008) (2010

Improvements to IFRS);

IFRS 5 Non-current Assets Held for Sale and Discontinued

Operations (2008 Improvements to IFRS);

IAS 1 Presentation of Financial Statements (2010

Improvements to IFRS);

IAS 17 Leases (2009 Improvements to IFRS);

IAS 27 Consolidated and Separate Financial Statements

(revised 2008);

IAS 27 Consolidated and Separate Financial Statements

(revised 2008) (2010 Improvements to IFRS);

IAS 38 Intangible Assets (2009 Improvements to IFRS);

IAS 39 Financial Instruments: Recognition and Measurement

(2009 Improvements to IFRS);

IFRIC 9 Reassessment of Embedded Derivatives (2009

Improvements to IFRS); and

IFRIC 13 Customer Loyalty Programmes (2010 Improvements

to IFRS).

The following new interpretation became effective on

1 January 2010:

IFRIC 17 Distributions of Non-cash Assets to Owners.

The adoption of these standards and interpretations has

had no material effect on the results, nor has it required any

restatements of the results.

Reclassifications and restatements

Derivative contracts

A review of the group’s derivative positions was undertaken

during the course of the year to determine whether the

presentation applied was in accordance with international best

practice.

The group’s cross currency interest rate swap contracts

incorporate, as standard market practice, reset dates on which

cash flows are exchanged to manage the credit risk on the

contracts’ notional amounts. These have historically been

presented as derivative assets and liabilities, separately from the

underlying derivative contract.

Following the review it was decided to present the cash flows,

together with the underlying derivative contract, as a single

contractual relationship with the group’s counterparty.

The group believes that this treatment better reflects the

nature of the underlying transactions and the credit risk of its

relationship with its counterparty.

The comparative statements of financial position of SBG

and SBSA have been adjusted to reflect the presentation

consequences of the reclassification. The reclassification has

not affected the group or SBSA’s published financial ratios, risk

profile, income statement or its statement of comprehensive

income. The adjustment for SBSA is equal to the group’s

adjustment presented on page 99.

Capital adequacy

Standard Bank Group

Tier I and tier II capital was increased for the December 2009

period to correctly reflect the group’s investment in financial

entities, in terms of the Regulations relating to Banks.

The Standard Bank of South Africa

Tier I capital was restated for June 2009 for the inclusion of

the appropriate intangible asset deduction, in terms of the

Regulations relating to Banks.


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Group statement of financial position reclassification

1H09 FY09Normalised

as previouslyreported

Rm


Rm

Normalisedrestated

Rm

Normalisedas previously

reportedRm


Rm

Normalisedrestated

Rm

Assets

Cash and balances with central banks 22 731 22 731 24 983 24 983

Derivative assets 179 916 (41 146) 138 770 168 257 (45 961) 122 296

Trading assets 85 756 85 756 89 105 89 105

Pledged assets 5 216 5 216 5 808 5 808

Financial investments 250 667 250 667 264 769 264 769

Loans and advances 709 793 709 793 723 507 723 507

Loans and advances to banks 98 606 98 606 122 923 122 923

Loans and advances to customers 611 187 611 187 600 584 600 584

Current and deferred taxation 1 123 1 123 1 481 1 481

Investment property 17 695 17 695 19 058 19 058

Other assets 30 984 30 984 16 926 16 926

Non-current assets held for sale 3 363 3 363

Interest in associates and joint ventures 6 800 6 800 9 529 9 529

Goodwill and other intangible assets 9 356 9 356 9 409 9 409

Property and equipment 9 467 9 467 12 250 12 250

Total assets 1 332 867 (41 146) 1 291 721 1 345 082 (45 961) 1 299 121

Equity and liabilities

Equity 101 529 101 529 104 498 104 498

Equity attributable to ordinary

shareholders 84 815 84 815 87 454 87 454

Ordinary share capital 156 156 156 156

Ordinary share premium 16 945 16 945 17 042 17 042

Reserves 67 714 67 714 70 256 70 256

Preference share capital and premium 5 503 5 503 5 503 5 503

Minority interest 11 211 11 211 11 541 11 541

Liabilities 1 231 338 (41 146) 1 190 192 1 240 584 (45 961) 1 194 623

Derivative liabilities 167 607 (41 146) 126 461 162 515 (45 961) 116 554

Trading liabilities 48 436 48 436 51 118 51 118

Deposit and current accounts 769 052 769 052 768 548 768 548

Deposits from banks 90 906 90 906 106 018 106 018

Deposits from customers 678 146 678 146 662 530 662 530

Current and deferred taxation 7 452 7 452 7 690 7 690

Other liabilities 46 297 46 297 40 513 40 513

Non-current liabilities held for sale 2 054 2 054

Policyholders’ liabilities 168 733 168 733 183 544 183 544

Subordinated debt 21 707 21 707 26 656 26 656

Total equity and liabilities 1 332 867 (41 146) 1 291 721 1 345 082 (45 961) 1 299 121

Refer to page 98 for an explanation of the reclassification.


Business unit reclassifications

FY09


Rm


BankingRm

Central and other

RmLiberty

Rm

Standard Bank

GroupRm

Income statement reclassifications

Normalised headline earnings as reported 3 835 7 507 304 72 11 718

Net interest income (15) 34 (19)

Non-interest revenue 12 (54) 42

Operating expenses in banking activities 86 (102) 16

Staff costs 32 (32)

Other operating expenses 54 (70) 16

Share of profit from associates and joint ventures 1 (1)

Indirect taxation 7 (6) (1)

Direct taxation (26) 26

Normalised headline earnings restated 3 765 7 570 311 72 11 718

Where reporting responsibility for individual cost centres and divisions within business units changes, the segmental comparatives are

reclassified accordingly. Costs relating to marketing and leadership development have been allocated to the respective business units

and premises costs relating to support functions have been allocated to the central and other unit. The individual segmental income

statement line items have increased or (reduced) as stated in the table above.


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Exchange rate impact on income statement

As reported Pro forma

1H10Rm

Change%

1H09Rm

Exchange rate impact1

Rm1H09

RmChange

%

Net interest income 14 541 (12) 16 610 ( 794) 15 816 (8)

Non-interest revenue 14 475 (5) 15 282 (1 183) 14 099 3

Net fee and commission revenue 9 023 4 8 698 (367) 8 331 8

Trading revenue 4 475 (23) 5 776 (796) 4 980 (10)

Other revenue 977 21 808 (20) 788 24

Total income 29 016 (9) 31 892 (1 977) 29 915 (3)

Credit impairment charges 3 790 (47) 7 115 (328) 6 787 (44)

Income after credit impairment charges 25 226 2 24 777 (1 649) 23 128 9

Operating expenses 17 019 7 15 962 (1 216) 14 746 15

Staff costs 9 546 6 9 020 (701) 8 319 15

Other operating expenses 7 473 8 6 942 (515) 6 427 16

Net income before goodwill 8 207 (7) 8 815 (433) 8 382 (2)

Goodwill impairment (100) 2 2 (100)

Net income before associates and joint ventures 8 207 (7) 8 813 (433) 8 380 (2)

Share of profit from associates and joint ventures 259 >100 115 (1) 114 >100

Net income before taxation 8 466 (5) 8 928 (434) 8 494 (0)

Taxation 2 482 9 2 269 (146) 2 123 17

Profit for the period 5 984 (10) 6 659 (288) 6 371 (6)

Attributable to minorities 312 0 311 (55) 256 22

Attributable to preference shareholders 194 (26) 262 262 (26)

Attributable to ordinary shareholders – banking activities 5 478 (10) 6 086 (233) 5 853 (6)

Headline adjustable items – banking activities (29) 9 (32) (1) (33) 12

Headline earnings – banking activities 5 449 (10) 6 054 (234) 5 820 ( 6)

Headline earnings/(loss) – Liberty 540 >100 (647) (647) >100

Standard Bank Group headline earnings 5 989 11 5 407 (234) 5 173 16

Comprising:

Outside Africa (116)

Rest of Africa (118)

Total (234)1 Exchange rate impact is calculated as the change in the June 2009 foreign earnings based on the movement in the weighted average exchange rates applied in converting the results of the two periods.


Financial and other definitions

Standard Bank Group

Basic earnings per ordinary share (EPS) (cents)

Earnings attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue.

CAGR (%) Compound annual growth rate.

Diluted headline earnings per ordinary share (cents)

Headline earnings divided by the weighted average number of shares, adjusted for potential dilutive ordinary shares resulting from share-based payments.

Dividend cover (times) Headline earnings per share divided by dividend per share.

Dividend per share (cents) Total dividends to ordinary shareholders including dividends and scrip distributions declared per share in respect of the period.

Headline earnings (Rm) Earnings attributable to ordinary shareholders excluding goodwill gain or impairment, capital profits and losses, and realised profits or losses on available-for-sale financial instruments.

Headline earnings per ordinary share (HEPS) (cents)

Headline earnings divided by the weighted average number of ordinary shares in issue.

Net asset value (Rm) Equity attributable to ordinary shareholders.

Net asset value per share (cents) Net asset value divided by the number of ordinary shares in issue at the end of the period.

Price-to-book ratio (times) Market capitalisation divided by net asset value.

Profit attributable to ordinary shareholders Profit for the period attributable to ordinary shareholders, calculated as profit for the period less dividends on non-redeemable, non-cumulative, non-participating preference shares declared before period end, less minority interests.

Profit for the period (Rm) Income statement profit attributable to ordinary shareholders, minorities and preference shareholders for the period.

Return on equity (ROE) (%) Headline earnings as a percentage of monthly average ordinary shareholders’ funds.

Shares in issue (number) Number of ordinary shares in issue as listed on the JSE Limited (JSE).

Tangible net asset value (Rm) Equity attributable to ordinary shareholders excluding goodwill and other intangible assets.

Tangible net asset value per share (cents) Tangible net asset value divided by the number of ordinary shares in issue at period end.

Total capital adequacy ratio (%) Regulatory capital divided by risk-weighted assets.

Turnover in shares traded (%) Number of shares traded during the period as a percentage of the weighted average number of shares.

Weighted average number of shares (number)

The weighted average number of ordinary shares in issue during the period as recorded on the JSE.


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Banking activities

Available financial resources (AFR) (Rm) The amount of permanent capital that is available to the group to absorb potential losses.

Capital coverage ratio (times) Available financial resources divided by minimum economic capital requirements.

Cost-to-income ratio (%) Operating expenses as a percentage of total income including share of profit from associates and joint ventures.

Credit loss ratio (%) Total impairment charges on loans and advances per the income statement as a percentage of average daily and monthly gross loans and advances.

Effective taxation rate (%) Direct and indirect taxation as a percentage of income before taxation.

Gross impairment coverage (%) Non-performing loan impairments as a percentage of gross non-performing loans.

Impaired loans ratio (%) Total impaired loans as a percentage of gross advances.

Impairments of non-performing loans (Rm) Impairment for specific identified credit losses, net of the present value of estimated recoveries.

Impairments of performing loans (Rm) Impairment for incurred credit losses inherent in the performing loan book.

Net interest margin (%) Net interest income as a percentage of daily and monthly average total assets, excluding trading derivative assets.

Non-interest earning assets (Rm) Includes total trading book assets and rate insensitive banking book assets, such as cash and cash equivalents, fixed assets, goodwill and other intangible assets, investment property, other assets, and current and deferred taxes. Cash balances with central banks are specifically excluded as they are utilised to meet liquidity requirements and are reflected as part of the interest earning assets to reflect the cost of liquidity. Derivative assets are also excluded.

Non-interest revenue to total income (%) Non-interest revenue as a percentage of total income.

Return on equity (ROE) (%) Headline earnings, excluding Liberty, as a percentage of monthly average ordinary shareholders’ funds, after deducting capital relating to Liberty.


Other definitions

Black African, Coloured and Indian South African citizens.

Broad-based black economic empowerment Socio-economic term concerning formalised initiatives and programmes to enable historically disadvantaged black individuals and groups to participate gainfully and equitably in the mainstream economy.

Complex insurance products Life, disability and investment policies sold by qualified intermediaries.

CPI A South African index of prices used to measure the change in the cost of basic goods and services.

dti Department: Trade and Industry.

International Financial Reporting Standards (IFRS)

International Financial Reporting Standards issued by the International Accounting Standards Board (IASB).

Junior management Employees whose salaries are in excess of R230 617 but less than or equal to R384 359 per annum (increasing each year by CPI).

Liberty Investment management and life insurance activities of companies in the Liberty Holdings group.

Middle management Employees whose salaries are in excess of R384 360 but less than or equal to R691 849 per annum (increasing each year by CPI).

Normalised results The financial results and ratios restated on an economic substance basis as explained on page 16.

SBG Standard Bank Group.

SBSA The Standard Bank of South Africa Limited.

Senior management Employees whose salaries are in excess of R691 850 per annum (increasing each year by CPI).

Simple embedded insurance products Homeowners’ insurance, funeral cover, household and vehicle insurance and loan protection plans sold in conjunction with related banking products.

Special Purpose Vehicle (SPV) An entity created to accomplish a narrow and well-defined objective.

Tutuwa Tutuwa is the group’s black economic empowerment ownership initiative entered into in terms of the Financial Sector Charter.

Financial and other definitions


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Shareholder information

106 Analysis of shareholders107 Credit ratings108 Dividend payment dates109 Instrument codes110 Notes

ibc Contact details


Analysis of shareholders

Ten major shareholders1

1H10 1H09 FY09

Numberof shares

(million)%

holding

Number ofshares

(million)%

holding

Number ofshares

(million)%

holding

Industrial and Commercial Bank of China 317,4 20,0 313,0 20,1 313,0 20,1

Public Investment Corporation 207,9 13,1 188,3 12,1 189,7 12,2

Tutuwa participants 88,8 5,6 91,0 5,9 89,7 5,7

– Staff 35,1 2,2 37,3 2,4 36,0 2,3

– Strategic partners 35,8 2,3 35,8 2,3 35,8 2,3

– Communities and regional businesses 17,9 1,1 17,9 1,2 17,9 1,1

Old Mutual Group 46,2 2,9 56,5 3,6 52,3 3,4

Dodge & Cox 44,9 2,8 67,8 4,4 46,9 3,0

Investment Solutions 29,6 1,9 35,2 2,3 31,0 2,0

Liberty Group2 25,2 1,6 34,3 2,2 25,7 1,6

Sanlam Group 24,5 1,6 30,2 1,9 26,0 1,7

Lazard Emerging Markets Fund 17,1 1,1 0,0 0,0 15,1 1,0

MIBFA EIPF Equities account 13,8 0,9 4,7 0,3 3,7 0,2

815,4 51,5 821,0 52,8 793,1 50,9

1 Beneficial holdings determined from the share register and investigations conducted on our behalf in terms of S140A of the Companies Act.2 Policyholders’ funds.

Geographic spread of shareholders

1H10 1H09 FY09

Numberof shares

(million)%

holding

Number ofshares

(million)%

holding

Number ofshares

(million)%

holding

South Africa 848,7 53,6 880,5 56,6 844,9 54,2

Foreign shareholders 734,6 46,4 675,1 43,4 713,4 45,8

China 317,4 20,0 313,0 20,1 313,0 20,1

United States of America 217,3 13,7 202,7 13,0 234,8 15,1

United Kingdom 61,6 3,9 39,1 2,5 39,7 2,6

Namibia 18,4 1,2 13,7 0,9 16,9 1,1

Luxembourg 17,5 1,1 15,7 1,0 14,4 0,9

Netherlands 12,7 0,8 16,9 1,1 12,9 0,8

Singapore 12,3 0,8 16,9 1,1 12,7 0,8

United Arab Emirates 12,0 0,8 10,3 0,7 11,0 0,7

Norway 9,5 0,6 9,4 0,6 9,9 0,6

Other 55,9 3,5 37,4 2,4 48,1 3,1

1 583,3 100,0 1 555,6 100,0 1 558,3 100,0


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Credit ratings

Ratings as at 11 August 2010 for entities within Standard Bank Group are detailed below:

Short-term Long-term Outlook

Fitch Ratings


Issuer default rating F2 BBB+ Stable

Local currency issuer default rating BBB+ Stable

National rating F1+ (ZAF) AA (ZAF) Stable

RSA Sovereign rating

Foreign currency issuer default rating BBB+ Negative

Local currency issuer default rating A Negative

Standard Bank Plc

Issuer default rating F2 BBB+ Stable

Banco Standard de Investimentos SA (Brazil)

National rating F1+ (BRA) AA+ (BRA) Stable

Standard Bank Argentina SA

National rating AA (ARG) Stable

Stanbic IBTC Bank Plc (Nigeria)

National rating F1+ (NGA) AAA (NGA)

CfC Stanbic Bank (Kenya)

Issuer default rating B BB- Stable

Liberty Group

National rating AA- (ZAF) Negative

National Insurer Financial Strength AA (ZAF) Negative

Moody’s Investor Sevices


Foreign currency deposit rating P-2 A3 Stable

Local currency deposit rating P-1 A1 Stable


Foreign currency A3 Stable

Local currency A3 Stable

Standard Bank Plc

Foreign and local currency deposit rating P-2 Baa2 Negative

Standard Bank Argentina SA

Foreign currency deposit rating Caa1 Stable

Local currency deposit rating Ba1 Stable

Standard & Poor’s


Local currency BBBpi


Foreign currency A-2 BBB+ Negative

Local currency A-1 A+ Negative


Dividend payment dates

The relevant dates for the payment of dividends are as follows:

Ordinary shares

6,5% cumulative

preference shares (First preference shares)

Non-redeemable, non-cumulative,

non-participating preference shares

(Second preference shares)

JSE Limited (JSE)

Share code SBK SBKP SBPP

ISIN ZAE000109815 ZAE000038881 ZAE000056339

Namibian Stock Exchange (NSX)

Share code SNB

ISIN ZAE000109815

Dividend number 82 82 12

Dividend per share (cents) 141 3,25 355,16

Dividend payment dates

Last day to trade in order to be eligible for the dividend (‘CUM’ dividend)

Friday, 3 September 2010

Friday, 27 August 2010

Friday, 27 August 2010

Shares trade ‘EX’ the dividendMonday,

6 September 2010Monday,

30 August 2010Monday,

30 August 2010

Record date in respect of the dividendFriday,

10 September 2010Friday,

3 September 2010Friday,

3 September 2010

Payment dateMonday,



6 September 2010

Ordinary share certificates may not be dematerialised or rematerialised between Monday, 6 September 2010, and Friday, 10 September

2010, both days inclusive.

Preference share certificates (first and second) may not be dematerialised or rematerialised between Monday, 30 August 2010 and

Friday, 3 September 2010, both days inclusive.


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Instrument codes

JSE Limited Bond Exchange of South Africa

Deposit notes Subordinated debt

SBR002: ZAE000083853 SBK 5: ZAG000023078

SBR003: ZAE000128195 SBK 7: ZAG000024894

SBK 8: ZAG000029679

SBK 9: ZAG000029687

SBK 10: ZAG000046640

SBK 11: ZAG000066382

SBK 12: ZAG000073388

SBK 13: ZAG000073396

SBS 3: ZAG000030586

SBS 4: ZAG000035049

SBS 5: ZAG000035650

SBS 6: ZAG000051475

SBS 7: ZAG000051483

SBS 8: ZAG000051491

SBS 9: ZAG000069329

SBSI 10: ZAG000069063

SBSI 11: ZAG000075789


Notes

Group secretary

Loren WulfsohnTel: +27 11 636 5119e-mail: [email protected]

Registered address9th FloorStandard Bank Centre5 Simmonds StreetJohannesburg 2001PO Box 7725Johannesburg 2000

Chief financial officer

Casper TroskieTel: +27 11 636 3790e-mail: [email protected]

Group financial director

Simon RidleyTel: +27 11 636 3756e-mail: [email protected]

Contact detailsTel: +27 11 636 9111Fax: +27 11 636 4207e-mail: shareholder queries:[email protected]: customer queries:[email protected]

Director, investor relations

Linda DodgenTel: +27 11 636 5039e-mail: [email protected]

BASTION GRAPHICS

Contact details

www.standardbank.com

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