Analysis of financial results for the six months ended 30 June 2009

Transcription

1 Analysis of financial results for the six months ended 30 June 2009 Analysis of financial results for the six months ended 30 June 2009

2 Analysis of financial results for the six months ended 30 June 2009 Table of contents Group results in brief 1 2 Financial results, ratios and statistics 4 Overview of financial results 10 Summarised group income statement 11 Headline earnings 12 Headline earnings and dividends per share 13 Diluted headline earnings per share 14 Group balance sheet 16 Statement of comprehensive income 16 Statement of changes in equity 18 Explanation of principal differences between normalised and IFRS results 20 Financial results, ratios and statistics IFRS 21 Summarised group income statement IFRS 22 Statement of comprehensive income IFRS 22 Statement of changes in equity IFRS 24 Broad-based Black Economic Empowerment 25 Business unit review 26 Segmental structure for key business units 28 Group executive committee 30 Segmental income statement 32 Segmental balance sheet 34 Personal & Business Banking 38 Corporate & Investment Banking 42 Liberty 45 Capital management 46 Return on ordinary equity 47 Cost of equity and economic returns 48 Market capitalisation and price-to-book ratio 49 Ordinary shareholders equity (net asset value) 50 Currency analysis of net asset value 51 Currency translation effects 52 Economic capital 53 Risk-weighted assets 54 Capital adequacy qualifying regulatory capital 55 Capital adequacy ratios 56 Subordinated debt 57 Income statement analysis 58 Net interest income and margin analysis 60 Non-interest revenue 62 Credit impairment charges 66 Operating expenses 68 Taxation 69 Balance sheet analysis 70 Loans and advances 71 Deposit and current accounts 72 Loans and advances performance 74 Banking activities average balance sheet 76 Liquidity management 78 Fair value hierarchy 79 The Standard Bank of South Africa Limited 80 Key financial results, ratios and statistics 82 Summarised income statement 83 Balance sheet 84 Segmental income statement 86 Segmental balance sheet 88 Credit impairment charges 92 Loans and advances performance 94 Market share analysis 95 Other information and reclassifications 96 Supplementary information on a geographic basis 98 Changes in accounting policies and reclassifications 99 Group balance sheet reclassifications 100 Business unit reclassifications 101 Financial and other definitions 103 Shareholder information 104 Analysis of shareholders 105 Credit ratings 106 Dividend payment dates and instrument codes ibc Contact details

3 Group results in brief Group results in brief All results in this booklet are presented on a normalised basis, unless otherwise indicated as being on an IFRS (International Financial Reporting Standards) basis. Results are normalised to correct the distortions caused by IFRS s treatment of the Black Economic Empowerment Ownership initiative and shares held for the benefit of Liberty policyholders, deemed to be treasury shares. Refer to page 18 for principal differences between normalised and IFRS results. Headline earnings of R5 407 million, 24% down Headline earnings per ordinary share 351,3 cents, 27% down Dividend per share 141,0 cents, 27% down Net asset value per share cents (June 2008: cents) Return on equity 12,6% (June 2008: 19,8%) Credit loss ratio 1,84% (June 2008: 1,31%) Cost-to-income ratio 49,9% (June 2008: 48,7%) Headline earnings (Rm) CAGR (HY2003 HY2009): 11% Headline earnings and dividends per share (cents) CAGR (HY2003 HY2009): Headline earnings per share 8% Dividends per share 22% HY03 HY04 HY05 HY06 HY07 HY08 HY09 0 HY03 HY04 HY05 HY06 HY07 HY08 HY09 Dividends per share Headline earnings per share Standard Bank Group analysis of financial results 30 June 2009 Page 1

4 Financial results, ratios and statistics Change June June December % Standard Bank Group Headline earnings contribution by business unit Total headline earnings Rm (24) Banking activities Rm (11) Personal & Business Banking Rm (21) Corporate & Investment Banking Rm (8) Central and other Rm Liberty Rm (>100) (647) Profit attributable to ordinary shareholders Rm (25) Other indicators Headline earnings per ordinary share (EPS) cents (27) 351,3 481,8 942,6 Diluted headline EPS cents (27) 348,7 477,7 935,6 Basic EPS cents (28) 353,4 492,3 937,0 Diluted EPS cents (28) 350,8 488,2 930,0 Dividend cover times 2,5 2,5 2,4 Dividends per share cents (27) 141,0 193,0 386,0 Net asset value per share cents Tangible net asset value per share cents (0) Ordinary shareholders equity Rm Return on equity (ROE) % 12,6 19,8 18,2 Capital adequacy % 14,4 14,2 13,3 Number of ordinary shares in issue end of period thousands weighted average thousands diluted weighted average thousands Number of employees Net asset value Opening balance Rm Transactions with ordinary shareholders Rm (706) shares issued net of buy-backs Rm dividends paid Rm (942) (3 130) (6 081) other Rm (7) Additional shareholder value Rm (381) headline earnings Rm (24) other earnings outside headline earnings Rm (79) (85) currency translation movements including hedging activities Rm (6 158) net cash flow hedges Rm (85) excess of purchase price over net asset value acquired Liberty Rm (1 790) other Rm (53) Closing balance Rm Banking activities Balance sheet Total assets Rm (1) Loans and advances (net of credit impairments) Rm (2) Other indicators ROE % 15,3 20,1 18,6 Gearing ratio times 15,8 16,0 18,3 Loan-to-deposit ratio % 92,3 96,5 93,6 Net interest margin % 3,45 3,16 3,32 Non-interest revenue to total income % 47,9 49,9 47,8 Credit impairment charges Rm Credit loss ratio % 1,84 1,31 1,55 Cost-to-income ratio % 49,9 48,7 49,2 Effective taxation rate % 25,4 26,3 26,1 Number of employees Page 2 Standard Bank Group analysis of financial results 30 June 2009

5 Group results in brief In the first six months of 2009 the group experienced: Globally Depressed global economic conditions with a contraction in GDP in major western economies. Continued lack of liquidity and low risk appetite amongst investors for debt products. Historically low interest rates in major economies. Despite some recent improvements, reduced demand for commodities affecting resource driven emerging market countries. Initially weak but subsequently buoyant equity markets. South Africa Interbank market functioning normally. Continued slowdown in economic activity and a continuing increase in unemployment rates. Increased investment in infrastructure. Significant reduction in contractual savings by individuals. Emerging stress in corporate loan portfolios. Property market down by 3,3% to June impacting collateral values and new mortgage loan business. Sharp decline of 450 basis points in the prime interest rate since the first rate cut in December Average prime rate 162 basis points lower compared to June High level of market volatility and increased client trading and hedging activity. Strengthening of the period end USD/ZAR exchange rate from December 2008 to June 2009, from 9,31 to 7,73 in contrast with a weaker average USD/ZAR exchange rate for the six months ended June 2009 of 9,20 compared to 7,65 for the corresponding period in Share price performance January 2008 January July 2009 Standard Bank JSE Banks Index MSCI Emerging Markets Index JSE All Share Index Change June June December % Other economic indicators Market indicators USD/ZAR exchange rate closing (1) 7,73 7,82 9,31 average 20 9,20 7,65 8,24 SA prime overdraft rate % 11,0 15,5 15,0 SA average prime overdraft rate % 13,2 14,8 15,1 SA average CPI % 8,1 10,8 11,5 JSE All Share Index (28) JSE Banks Index MSCI Emerging Markets Index (30) Share statistics Share price High for the period cents (10) Low for the period cents (18) Closing cents Shares traded Number of shares thousands Value of shares Rm Turnover in shares traded % 52,3 44,8 92,2 Standard Bank Group analysis of financial results 30 June 2009 Page 3

6 Overview of financial results The group s operating environment during the first six months of 2009 was challenging following the turbulence in financial markets experienced in the second half of The aftershocks of the credit and liquidity crisis continued to be felt in financial systems around the world. The impact of sharply lower demand for goods and services in the real economy dragged the global economy further into downturn. Emerging market growth has come under increasing pressures due to the reduction in global export demand, falling commodity prices and a significant decline in foreign direct investment. Africa has not been spared from these pressures. The South African banking sector has remained stable throughout the global financial crisis. Robust risk management practices, a relatively low concentration of exotic products in local banking models and a proactive regulatory framework have all contributed to the resilience of the banking system. Although South Africa has avoided the worst effects of the financial crisis, the economy is feeling the lagged effect of the cyclically higher inflation and interest rates experienced in 2008, compounded by output levels in the first quarter of 2009 contracting by an annualised 6,4%. The contraction was particularly evident in mining and manufacturing with unemployment rising in these sectors. Consumers ability to repay debt remained under strain, resulting in further growth in defaults, albeit at a slowing rate. The group has been mindful that despite extreme short-term financial pressures, defensive action taken should wherever possible avoid damaging long-term relationships with customers, or hampering economic recovery. In the context of not compromising its risk practices, the group has done everything possible to proactively assist its customers. In the past six months, personal customers have been encouraged to contact the group in advance of financial distress and various measures have been implemented to assist them. The financial position of corporate clients has been closely monitored through rigorous industry-specific analysis and review. Proactive steps have included participating in recapitalisation, funding, renegotiating lending facilities and providing bridging finance. Headline earnings (Rm) CAGR (HY2003 HY2009): 11% The group produced acceptable results in this tough operating environment. Normalised headline earnings of R5 407 million were down 24% on the previous six month period while normalised headline earnings from banking activities were 11% lower. Higher lapses of insurance policies, the marking-tomarket of portfolios exposed to market risk and foreign currency fluctuations impacted negatively on Liberty s earnings HY03 HY04 HY05 HY06 HY07 HY08 HY09 Page 4 Standard Bank Group analysis of financial results 30 June 2009

7 Group results in brief Key performance indicators On an IFRS basis, the group reported a 12,4% return on equity (ROE) (June 2008: 21,4%). Headline earnings of R5 079 million were 30% lower and headline earnings per share down 33% at 352,5 cents per share (June 2008: 529,2 cents per share). On a normalised basis, the group s ROE was 12,6% (June 2008: 19,8%), headline earnings of R5 407 million were down 24% and headline earnings per share fell 27% to 351,3 cents per share (June 2008: 481,8 cents per share). The dilution in the per share results was largely due to shares issued to the Industrial and Commercial Bank of China (ICBC) on 3 March 2008, included in full for the current reporting period. Normalised results are adjusted to account for two accounting anomalies that have distorted the group s results from an economic perspective since 2004, described fully in the normalised results section on page 18. The commentary that follows is based on the normalised results. Return on ordinary equity Rm HY09 Shareholders funds (average) Treasury shares Tutuwa impairments ROE Key factors impacting results Slowdown in economic activity The global economic downturn resulted in the continued deleveraging of company balance sheets, lower worldwide production levels, weaker international trade and a slump in demand for commodities. These economic conditions had a significant impact on emerging markets, leading to an increase in specific impairment levels in respect of the group s exposures outside South Africa % In South Africa, declining economic activity and an increase in the levels of unemployment sharply constrained consumer spending. This contributed to rising levels of corporate financial stress and an increase in loan impairments in Corporate & Investment Banking. A further consequence has been reduced consumer contractual savings through institutions, negatively impacting Liberty. Increase in non-performing loans High consumer indebtedness and the lagged effect of previously high interest rates, together with high food and fuel prices in South Africa, continued to impact on customers ability to service debt. Non-performing loans in Personal & Business Banking continued to increase, albeit at a slowing rate. Lower collateral values in weaker housing and vehicle markets exacerbated the credit losses experienced. Falling interest rates Towards the end of 2008, central banks around the world eased monetary policy aggressively in an attempt to revive weakened economies. Interest rates have remained at historically low levels in most large economies in the past six months. In South Africa, the Reserve Bank has cut lending rates by 450 basis points since December The positive impact of the interest rate cuts only became apparent towards the end of the reporting period through a reduction in early arrears. However the lower interest rates have reduced the endowment benefit which arises from transactional deposits and shareholders funds that margins previously enjoyed in the rising rate cycle. Changes in rand exchange rate The rand strengthened by 17% against the US dollar from 31 December 2008 to 30 June This affected assets and liabilities translated at closing exchange rates, dampening banking asset and loan growth by 6% and 5% respectively. The adverse foreign currency translation movement accounted for directly in reserves was R6,2 billion attributable to ordinary shareholders. A negative currency translation adjustment on Liberty s foreign investment values of R530 million was accounted for in Liberty s income statement, 53,7% of which was consolidated into group headline earnings. Ongoing investment in infrastructure, technology and operations The group continued to invest in technology and infrastructure mainly in its African operations. This is in line with the group s strategy to increase its footprint in key African countries such as Nigeria, Kenya, Ghana, Zambia and Uganda. This investment has contributed to substantial cost growth in the period whereas the benefits will only be realised over time. Standard Bank Group analysis of financial results 30 June 2009 Page 5

8 Overview of financial results continued Business units Operations were impacted by the economic conditions which dampened revenue growth, increased impairment charges and resulted in negative fair value movements on both trading and investment asset classes. Personal & Business Banking Personal & Business Banking reported headline earnings of R2 011 million, 21% lower than in the prior period, primarily due to higher credit impairments. Non-performing loans as a percentage of the advances book were 7,7% at 30 June 2009, 5,7% at 31 December 2008 and 4,0% at 30 June 2008, reflecting the strain facing consumers in South Africa. Despite the severity and duration of the economic downturn, easing interest rates have offered some relief to consumers. Early arrears have improved by 13% since June 2008 and 29% since December There are signs that the rate of increase in impaired loans is slowing, with these rising 35% from December 2008 to June 2009 compared to 49% between June 2008 and December Revenue growth held up well in Personal & Business Banking at 8%. Interest income benefited from widening lending margins, the unwinding of the IAS 39 discount on expected nonperforming loan recoveries and balance growth. The endowment impact of lower interest rates on transactional balances and capital dampened margins in the second half of the period. Continued growth in transactional volumes and the customer base supported higher fee revenue. Costs were well contained and rose only 9%, with 4% higher staff costs and a 14% increase in other operating expenses. This resulted in a cost-to-income ratio of 50,2% (June 2008: 49,7%). The business unit achieved a commendable 16,5% ROE in the circumstances. Corporate & Investment Banking Corporate & Investment Banking produced a resilient performance in a very difficult operating environment. Headline earnings of R3 391 million were down 8%. The global markets business achieved a strong performance in commodities, foreign exchange and equity trading as a result of improved liquidityrelated trading spreads and a favourable exchange rate impact. Market risk was well controlled within value-at-risk limits. The harsh macroeconomic conditions in all the countries in which the group operates resulted in corporate credit deteriorating markedly across all portfolios, and impairment charges impacted significantly on headline earnings. Early intervention in anticipation of the deteriorating credit environments mitigated some risk in the period. The strategic partnership with ICBC contributed R127 million to headline earnings in the six months to June 2009 and the partnership won significant deals across several product areas. An office has been established in Beijing to service Chinese clients interested in Africa and emerging markets. Liberty Economic activity in South Africa has slowed substantially over the past twelve months and consumers have seen a marked decline in their disposable income. This has impacted on Liberty s policyholder persistency and, together with substantial mark-tomarket adjustments to its balance sheet exposures, has had a negative result on earnings. Despite the economic challenges, Liberty remains strong operationally. New business sales and cash flows are satisfactory and management expenses have been well controlled. Liberty reported a normalised headline loss of R1 207 million, compared with a profit of R913 million in the prior period. The loss attributable to the Standard Bank Group was R647 million from a profit of R279 million, given the group s increased shareholding in Liberty compared with the corresponding period in the prior year. Banking operations Balance sheet analysis Banking assets of R1 130 billion were 1% down on June 2008 levels and 13% lower than December Excluding the impact of the strengthening rand, banking assets grew by 1% when compared to June Gross loans and advances down 1% Gross loans and advances were down 1% across the group against June 2008 and 10% lower than December The South African book was 3% lower than in December. The reduction across the rest of the group related mainly to the translation impact of the stronger rand on non-south African assets and steps taken to conserve liquidity given the global financial crisis. Personal & Business Banking gross loans and advances grew by 3% from June The June 2009 mortgage loan book was 1% higher than December 2008 and grew 8% since June A slowdown in the property market, stricter affordability and loanto-value lending criteria, and constrained consumer purchasing power were responsible for the steep decline. The impact of the slowdown was softened by a decrease in prepayment rates. The slowdown in consumer spending and lower economic activity affected instalment sale and finance leases, which were 10% lower than in June 2008 and 7% down from December This resulted in an 11% decline in the total number of instalment sale and finance lease accounts. Card debtors were 5% lower than in June 2008 and 4% down from December Page 6 Standard Bank Group analysis of financial results 30 June 2009

9 Group results in brief South African market share in key segments has changed from June 2008 to May 2009 as follows: mortgage advances up to 26,4% from 26,1%; instalment finance down to 21,2% from 22,3%; card debtors down to 34,4% from 35,5%; and deposit and current accounts up to 24,6% from 23,3%. Corporate & Investment Banking gross loans and advances across all regions declined 5% from June 2008 and were 17% lower than at December Most of the decline since December occurred outside South Africa, due to both currency translation effects and deleveraging. The Corporate & Investment Banking loan book in South Africa at June 2009 was 9% lower than December Net asset value The group s net asset value reduced by 1% from December This was mainly as a result of the adverse foreign currency translation movement of R6,2 billion caused by the strong rand. Net asset value per share of cents was 3% lower than December Income statement analysis Net interest income up 15% Net interest income was up 9% in Personal & Business Banking and 29% in Corporate & Investment Banking. The group s interest margin improved by 29 basis points to 3,45% (June 2008: 3,16%) despite a reduction of 162 basis points in the average prime interest rate. The margin improvement came from a significant reduction in non-interest earning trading assets. Excluding this impact the net interest margin contracted by 14 basis points. The reduction in the prime lending rate has had a negative endowment impact of 36 basis points as less interest was earned on shareholders funds and transactional deposits. This was partially offset by an increase in the unwind of the discount on recoveries of impaired advances in terms of IAS 39 and improved lending margins due to better pricing for both liquidity and credit risk. Personal & Business Banking continued to grow its loan book, at a slower rate, and the interest margin improved to 5,10% (June 2008: 4,87%). This was as a result of the abovementioned increase in the IAS 39 discount unwind, tighter control of pricing concessions on new business and lower loan origination costs. Corporate & Investment Banking s interest margin improved by 37 basis points to 2,06% (June 2008: 1,69%). Lending margins were supported by increased term margins and from gains on the early settlement of a syndicated loan. These benefits were partly offset by a negative endowment impact and significantly higher term funding costs. Non-interest revenue up 6% Growth in non-interest revenue was constrained by recessionary pressures. The overall growth rate in non-interest revenue was reduced due to the high 2008 base which included currency hedging profits of R394 million and the sale of Visa shares for R123 million recorded in Central and other. Both Personal & Business Banking and Corporate & Investment Banking performed well, posting growth rates of 7% and 12% respectively. Net fee and commission revenue was up 5%. Personal & Business Banking achieved a 15% growth in account transaction fees due to an increased customer base, higher transaction volumes and the standardisation of pricing policies across all regions. Documentation and administration fees grew 43% due to volume growth in the rest of Africa and outside Africa. Card-based commissions were flat as annual fee escalations and revenue growth outside South Africa were offset by slower growth in customer accounts and transactional volumes in South Africa. Net fee and commission revenue in Corporate & Investment Banking contracted 3%. Knowledge-based fees and commissions were down 1%, as a result of lower brokerage and custody revenues in Nigeria as transaction volumes and client asset values declined in a weaker equity market. Lower investment banking deal flow across the group was also a further factor, while higher revenue from asset management activities outside Africa provided some relief. Trading revenue rose 11% off a relatively high base with a 37% growth in the rest of Africa supported by strong gains in securities and foreign exchange trading in Nigeria. Trading revenue outside Africa grew 23% with foreign exchange and commodity trading benefiting from higher trading volumes, market volatility and an overall increase in client business. This was partly offset by a decline in trading revenues in debt securities due to reduced liquidity. Improved trading volumes, market volatility and favourable yield curve movements resulted in 31% growth in commodities trading and 15% in foreign exchange trading revenue, while equities trading revenues were higher off a very low base. Other non-interest revenue declined 11% largely resulting from the non-recurrence of profits on the sale of Visa shares (June 2008: R123 million) and favourable fair value adjustments (June 2008: R190 million) on the group s unlisted equity portfolio. The decline was partly offset by lower fair value markdowns on the group s listed property investments and shortterm insurance investment portfolios, and a 4% increase in bancassurance profit. Standard Bank Group analysis of financial results 30 June 2009 Page 7

10 Overview of financial results continued Credit impairments up 58% Credit impairments were up 58% to R7 115 million, resulting in the group s credit loss ratio deteriorating to 1,84% from 1,31%. Compared to the second half of 2008, credit impairments were 4% higher. Credit impairment charges The credit loss ratio in Corporate & Investment Banking deteriorated to 1,15% off a low base in June 2008 of 0,31% (December 2008: 0,46%). The worsening trend was seen across all geographies. Financial stress caused by, amongst other things, reduced commodity prices and weak demand for exports, as well as the significant slowdown in consumer spending in South Africa, heightened corporate default risk. Credit impairment charges on corporate lending increased by 353% from June 2008 and nonperforming loans by 465% to R9,0 billion off a low base. Rm HY09 Credit impairment charges on NPLs Credit impairment charges on PLs Credit loss ratio % 2,0 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 Targeted strategies remain in place to contain credit losses and manage risk. Specific measures include ongoing prudent credit extension criteria, close monitoring of arrears, active management of early delinquencies, ongoing improvement in collection capabilities and targeted programmes designed to assist customers. Operating expenses up 13% Growth in operating expenses was 13%, reflecting ongoing investment in infrastructure in the rest of Africa, moderated by a continued focus on cost containment and efficiency management in South Africa. The cost-to-income ratio for the period was weaker at 49,9%, off a low base of 48,7% in June The translation of foreign expenses at weaker average rand exchange rates added 6% to cost growth. Impairment losses in Personal & Business Banking rose 35% and the credit loss ratio increased to 2,80% (June 2008: 2,18%). The lagged effects from 2008 of high household debt ratios accompanied by high interest rates, food and fuel inflation are still evident in constraining the ability of many consumers to repay debt. Some slowing of growth in non-performing loans and a reduction in early arrears may be early signs that the reduction in interest rates, 2009 wage settlements and reducing inflation are improving customers ability to service their debt. In Personal & Business Banking, the mortgage loan credit loss ratio deteriorated to 1,55% (June 2008: 1,30% and December 2008: 1,49%). Expected recovery values remained under pressure following further contractions in house prices and the increased time required to realise security. Impairment losses in instalment sale and finance leases grew 70% and the credit loss ratio worsened to 3,60% (June 2008: 2,00% and December 2008: 2,48%). Vehicle loan delinquencies rose further and motor vehicle sale recovery values remained low. Card debtors reflected an improvement of 27% in credit losses and the credit loss ratio eased to 7,24% (June 2008: 9,44%) as collections improved. Impairment losses on other loans rose 113% with the credit loss ratio worsening to 6,04% from 3,18% in June 2008 and 3,92% in December 2008 as acute economic stress across all sectors of the economy impacted loan performance in business banking. Total staff costs were up 9%. Staff costs in the rest of Africa increased significantly due to the continued expansion in, and roll-out of points of representation. A net 3% increase in staff costs was recorded in South Africa, resulting from annual salary increases of around 10% offset by reduced headcount through a recruitment freeze and natural attrition. The impact on staff costs of currency translation and a marginal increase in headcount outside Africa was partially offset by a reduction in incentive provisioning, resulting in an overall increase of 7%. Other operating expenses grew 18%, of which 5% was due to the weaker average exchange rate. South Africa accounted for 9% while the rest of Africa added 4% and outside Africa some 5% to overall expenses growth of 18%. Information technology costs were 29% higher as a result of increased systems development costs, maintenance costs and software licensing fees. Depreciation and amortisation increased due to investments in processing centres, ATMs and software development. The growth in other cost categories related mainly to the expansion in points of representation in the rest of Africa and outside Africa. Liquidity In the first six months of 2009, the ability to price for credit and related liquidity risk improved moderately. However, the availability of term liquidity remained tight compared to the period before the financial crisis. The group has therefore Page 8 Standard Bank Group analysis of financial results 30 June 2009

11 Group results in brief continued to manage its liquidity prudently in accordance with the strategy initiated in Unencumbered surplus liquidity holdings were R136 billion at 30 June 2009, while any structural liquidity mismatches and the diversification of the funding base were managed and maintained within best banking practice guidelines. Capital The group remains well capitalised with the total capital adequacy ratio rising to 14,4% from 13,3% at December 2008 and tier I capital up to 12,0% from 11,0%. Tier 1 capital of R2,0 billion was retained through a scrip dividend offer in March when 68% of shareholders elected to receive scrip instead of a cash dividend. Tier II capital was enhanced by a R1,9 billion subordinated bond issue. The capital adequacy ratio improved significantly from December 2008 due to risk-weighted assets in respect of foreign operations being consolidated at a stronger closing rand exchange rate. Liberty s capital adequacy level at June 2009 was strong at 2,5 times the required cover. Dividends The group s policy is for both interim and final dividends to be covered 2,5 times by normalised headline earnings per share. An interim dividend of 141 cents per share has accordingly been declared, 27% lower than in June Black Economic Empowerment The group continues to support the process undertaken in South Africa by the financial sector and other stakeholders to align the Financial Sector Charter (FSC) to the Codes of Good Practice for Broad-based Black Economic Empowerment legislated in Negotiations are ongoing and future targets have not been agreed. As a result the bank has reported performance for the six month period to 30 June 2009 in terms of the targets set by both the Department: Trade and Industry (DTI) and the FSC. The bank achieved a level 3 rating (above 75% compliant) in terms of the DTI scorecard. In terms of the bank s employment equity profile at June 2009, black managers comprise more than 50% of management in South Africa, of which 54% are women. Pending transaction in Russia On 6 March 2009, the group announced that it had entered into a strategic partnership with Troika Dialog Group, the largest independent investment bank in Russia. The group intends, subject to regulatory approvals, to become a 33% shareholder in Troika Dialog Group. As part of the purchase consideration, Standard Bank s existing operation in Russia, ZAO Standard Bank, will be sold to Troika Dialog Group. Both the detailed planning for the implementation of this transaction and the regulatory process are on track. Standard Bank Group analysis of financial results 30 June 2009 Page 9

12 Summarised group income statement June June December Change % Rm Rm Rm Net interest income Non-interest revenue Net fee and commission revenue Trading revenue Other revenue (11) Total income Credit impairment charges Impairments for non-performing loans Impaired loss Discounting of expected recoveries (12) Impairments for performing loans (99) Income after credit impairment charges Operating expenses Staff costs Other operating expenses Net income before goodwill (14) Goodwill impairment Net income before associates and joint ventures (14) Share of profit from associates and joint ventures (24) Net income before taxation (14) Taxation (17) Profit for the period (13) Attributable to minorities (27) Attributable to preference shareholders (2) Attributable to ordinary shareholders banking activities (13) Headline adjustable items banking activities (79) (32) (155) 85 Headline earnings banking activities (11) Headline (loss)/earnings Liberty (>100) (647) Standard Bank Group headline earnings (24) Page 10 Standard Bank Group analysis of financial results 30 June 2009

13 Headline earnings Group results in brief Headline earnings (Rm) CAGR (HY2003 HY2009): 11% HY03 HY04 HY05 HY06 HY07 HY08 HY09 Reconciliation of headline earnings June 2009 June 2008 December Minorities Minorities 2008 and and preference preference Gross Tax 1 shareholders Net Gross Tax 1 shareholders Net Net Rm Rm Rm Rm Rm Rm Rm Rm Rm Profit for the period banking activities (1 700) (573) (2 199) (696) Headline adjustable items banking activities (deducted)/added (44) 10 2 (32) (184) 29 (155) 85 Goodwill impairment IFRS Profit on sale of properties and equipment IAS 16 (18) 4 1 (13) (6) (6) (14) Impairment of properties and equipment IAS (6) Gains on the disposal of businesses and divisions IAS 27 (17) (17) (24) Impairment of associates IAS Impairment of intangible assets IAS (3) 8 95 Gains on the disposal of available-for-sale assets IAS 39 (39) 9 1 (29) (191) 35 (156) (159) Profit on sale of shares in Visa (123) 18 (105) (105) Other (39) 9 1 (29) (68) 17 (51) (54) Headline earnings banking activities (1 690) (571) (2 170) (696) Headline (loss)/earnings Liberty (1 208) (647) (605) (718) Standard Bank Group headline earnings (1 617) (83) (2 775) (1 414) Excluding indirect taxes. Standard Bank Group analysis of financial results 30 June 2009 Page 11

14 Headline earnings and dividends per share Headline earnings per share (cents) CAGR (HY2003 HY2009): 8% Dividends per share CAGR (HY2003 HY2009): 22% Cents Times covered 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Headline earnings per share first half Headline earnings per share second half Dividends per share interim Dividends per share final Dividend cover Change June June December % Headline earnings Rm (24) Headline EPS cents (27) 351,3 481,8 942,6 Basic EPS cents (28) 353,4 492,3 937,0 Dividends per share cents (27) 141,0 193,0 386,0 Distribution paid out of share premium final cents 193,0 Dividend paid out of distributable reserves interim cents 141,0 193,0 193,0 Dividend cover based on normalised headline EPS times 2,5 2,5 2,4 Movement in number of ordinary and weighted average shares issued June 2009 June 2008 December 2008 Issued Weighted Issued Weighted Issued Weighted number number number number number number of shares of shares of shares of shares of shares of shares 000 s 000 s 000 s 000 s 000 s 000 s Beginning of the period Shares issued for share option settlements Shares issued in terms of the ICBC transaction Shares issued through scrip distribution Share buy-backs (1 441) (502) (6 449) (1 708) End of the period Reconciliation to IFRS shares in issue End of the period normalised Shares held by Tutuwa SPVs (63 479) (63 479) (63 479) (67 293) (63 479) (65 376) Total number of shares held initially by Tutuwa SPVs (99 190) (99 190) (99 190) (99 190) (99 190) (99 190) Less: portion of Tutuwa shares financed by third parties Less: number of Tutuwa shares acquired by ICBC Shares held for the benefit of Liberty policyholders (deemed treasury shares) (34 258) (34 981) (38 857) (38 840) (30 911) (36 884) End of the period IFRS Page 12 Standard Bank Group analysis of financial results 30 June 2009

15 Diluted headline earnings per share Group results in brief Diluted headline earnings per share (cents) CAGR (HY2003 HY2009): 8% Diluted headline earnings per share first half Diluted headline earnings per share second half June June December Change % cents cents cents Diluted headline EPS (27) 348,7 477,7 935,6 Diluted EPS (28) 350,8 488,2 930,0 Diluted weighted average number of ordinary shares issued June June December s 000 s 000 s Weighted average shares Dilution from equity compensation plans Share option scheme Equity growth scheme Diluted weighted average shares Reconciliation to diluted weighted average IFRS shares Diluted weighted average shares normalised Shares held by Tutuwa SPVs (63 479) (67 293) (65 376) Shares held for the benefit of Liberty policyholders (34 981) (38 840) (36 884) Tutuwa transaction dilutive shares Diluted weighted average shares IFRS Standard Bank Group analysis of financial results 30 June 2009 Page 13

16 Group balance sheet Standard Bank Group June June December Change % Rm Rm Rm Assets Cash and balances with central banks (2) Derivative assets Trading assets (35) Pledged assets (43) Financial investments Loans and advances (2) Loans and advances to banks (1) Loans and advances to customers (2) Investment property Other assets Non-current assets held for sale Interest in associates and joint ventures (45) Goodwill and other intangible assets Property and equipment Total assets (2) Equity and liabilities Equity (2) Equity attributable to ordinary shareholders Preference share capital and premium Minority interest (25) Liabilities (2) Derivative liabilities (2) Trading liabilities (36) Deposit and current accounts Deposits from banks (16) Deposits from customers Other liabilities (5) Non-current liabilities held for sale Policyholders liabilities (7) Subordinated debt (3) Total equity and liabilities (2) Refer to page 99 for balance sheet reclassifications in respect of June Page 14 Standard Bank Group analysis of financial results 30 June 2009

17 Group results in brief Banking activities Liberty June June December June June December Change Change % Rm Rm Rm % Rm Rm Rm (2) (35) (72) (5) (2) (1) (2) (55) (0) (1) (6) (1) (11) (0) (12) (31) (1) (6) (3) > (36) (16) (6) (4) (7) (4) (1) (6) Standard Bank Group analysis of financial results 30 June 2009 Page 15

18 Statement of comprehensive income June 2009 Minorities and Ordinary preference Change shareholders shareholders Total % Rm Rm Rm Profit for the period (36) Other comprehensive income for the period after tax: (>100) (5 820) (1 895) (7 715) Exchange rate differences on translating foreign operations (>100) (6 254) (1 856) (8 110) Foreign currency hedge of net investment Cash flow hedges (85) Available-for-sale financial assets > Revaluation and other gains/(losses) (45) (21) Total comprehensive income for the period (>100) (381) (1 810) (2 191) Attributable to minorities (>100) (2 072) (2 072) Attributable to equity holders of the parent (>100) (381) 262 (119) Attributable to preference shareholders (2) Attributable to ordinary shareholders (>100) (381) (381) IAS 1 Presentation of Financial Statements, revised with effect from 1 January 2009, requires total comprehensive income for the period to be presented separately from the changes in equity resulting from transactions with shareholders. Total comprehensive income includes profit for the period and other transactions and events, other than those with shareholders in their capacity as owners. Statement of changes in equity Page 16 Standard Bank Group analysis of financial results 30 June 2009 Foreign Foreign currency Ordinary currency hedge of Cash flow share capital translation net investment hedging and premium reserve reserve reserve Rm Rm Rm Rm Balance at 1 January (130) Increase in statutory credit risk reserve Equity-settled share-based payment transactions Transfer of vested equity options Issue of share capital and share premium Share buy-backs (503) Net decrease in treasury shares Transactions with minority shareholders (4) Total comprehensive income for the year Dividends paid Balance at 31 December Balance at 1 January Increase in statutory credit risk reserve Equity-settled share-based payment transactions Transfer of vested equity options Issue of share capital and share premium 103 Total comprehensive income for the period (6 254) Dividends paid Balance at 30 June (966) All balances are stated net of applicable tax.

19 Group results in brief June 2008 December 2008 Minorities Minorities and and Ordinary preference Ordinary preference shareholders shareholders Total shareholders shareholders Total Rm Rm Rm Rm Rm Rm (17) (17) (181) (31) (212) 42 (61) (19) 8 (29) (21) Available- Statutory for-sale Share-based Revaluation Ordinary Preference credit risk revaluation Treasury payment and other Retained shareholders share capital Minority Total reserve reserve shares reserve reserves earnings equity and premium interest equity Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm (171) (168) (111) (503) (503) 257 (257) (86) (22) (37) (1 182) (1 331) (2 281) (3 612) (181) (6 081) (6 081) (548) (988) (7 617) (118) (126) (2) (381) 262 (2 072) (2 191) (942) (942) (262) (470) (1 674) Standard Bank Group analysis of financial results 30 June 2009 Page 17

20 Explanation of principal differences between normalised and IFRS results Description of normalised adjustments The 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 two 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; and group shares held by the insurance operation for the benefit of policyholders. A common element in these transactions relates to shares in issue deemed by IFRS to be treasury shares. Consequently, the 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 initiative The 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 broadbased 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 on the 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. As a consequence, 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; the preference dividends received from the SPVs are eliminated against the ordinary dividends paid on the SBG shares held by the SPVs; 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 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 financing external to SBG for a portion of the financing provided to the SPVs. As a result, the negative empowerment reserve has been 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) are no longer deemed to be treasury shares for accounting purposes. Graphic presentation of the Tutuwa transaction External market External financing Interest Perpetual preference shares Dividends 8,5% redeemable cumulative preference shares Dividends Standard Bank Group Standard Bank Group shares SPVs Tutuwa participants Dividends Page 18 Standard Bank Group analysis of financial results 30 June 2009

21 Group results in brief In March ,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 Group companies shares held by Liberty are invested for the risks and rewards of its policyholders, not its shareholders, and consequently the group s shareholders are exposed to an insignificant portion of the fair value changes on these shares. In terms of IAS 32 Financial Instruments: Presentation (IAS 32), SBG shares held by Liberty on behalf of policyholders are deemed to be treasury shares for accounting purposes. The weighted average number of shares in issue for per share figures is calculated by deducting the full number of group shares held (100%) and not the IFRS effective 53,7% 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 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 12. The accounting consequences in the consolidated IFRS group financial statements are: the investment in group shares is set off against equity in the group financial statements; within equity, the cost price of the group shares is eliminated against ordinary shareholders funds and minority interest; the fair value movements are eliminated from the income statement, reserves and minority interests; and dividends received on group shares are eliminated against dividends paid. Graphic presentation of shares held for the benefit of policyholders Standard Bank Group Liberty Holdings Dividends Investment in Standard Bank Group shares The corresponding movement in the policyholder liabilities is however not eliminated. No adjustment is made to policyholder liabilities in the balance sheet, or the movement in the policyholder liabilities in the income statement, that result from the changes in the fair value of the shares and dividends received on these shares that are held for the risks and rewards of the policyholders. As a result, the application of IAS 32 gives rise to a mismatch in the overall equity and income statement of the group. Policyholders Policyholder funds Policyholder benefits Liberty Adjustments to IFRS results Headline earnings Ordinary shareholders equity Banking Standard Bank Standard Bank activities Liberty Group Group Rm Rm Rm Rm IFRS June (860) Tutuwa initiative Group shares held for the benefit of Liberty policyholders Normalised June (647) IFRS June Tutuwa initiative Group shares held for the benefit of Liberty policyholders (249) (249) Normalised June IFRS December Tutuwa initiative Group shares held for the benefit of Liberty policyholders (94) (94) Normalised December Standard Bank Group analysis of financial results 30 June 2009 Page 19

22 Financial results, ratios and statistics IFRS Change June June December % Standard Bank Group Headline earnings contribution by business unit Total headline earnings Rm (30) Banking activities Rm (12) Personal & Business Banking Rm (21) Corporate & Investment Banking Rm (8) Central and other Rm Liberty Rm (>100) (860) Profit attributable to ordinary shareholders Rm (31) Other indicators Headline EPS cents (33) 352,5 529, ,0 Diluted headline EPS cents (33) 341,3 510,2 968,1 Basic EPS cents (34) 354,7 540,5 995,9 Diluted EPS cents (34) 343,5 521,2 962,2 Dividend cover times 2,5 2,7 2,6 Dividends per share cents (27) 141,0 193,0 386,0 Net asset value per share cents (1) Tangible net asset value per share cents (2) Ordinary shareholders equity Rm ROE % 12,4 21,4 19,1 Capital adequacy % 14,4 14,2 13,3 Number of ordinary shares in issue end of period thousands weighted average thousands diluted weighted average thousands Banking activities Balance sheet Total assets Rm (1) Loans and advances (net of credit impairments) Rm (2) Other indicators ROE % 15,3 20,6 19,0 Gearing ratio times 16,2 16,5 18,9 Loan-to-deposit ratio % 92,0 96,2 93,4 Net interest margin % 3,44 3,15 3,31 Non-interest revenue to total income % 48,1 50,1 48,0 Credit impairment charges Rm Credit loss ratio % 1,84 1,31 1,55 Cost-to-income ratio % 50,0 48,9 49,3 Effective taxation rate % 25,7 26,5 26,3 Page 20 Standard Bank Group analysis of financial results 30 June 2009

23 Summarised group income statement IFRS Group results in brief June June December Change % Rm Rm Rm Net interest income Non-interest revenue Net fee and commission revenue Trading revenue Other revenue (11) Total income Credit impairment charges Impairments for non-performing loans Impaired loss Discounting of expected recoveries (12) Impairments for performing loans (99) Income after credit impairment charges Operating expenses Staff costs Other operating expenses Net income before goodwill (14) Goodwill impairment Net income before associates and joint ventures (14) Share of profit from associates and joint ventures (24) Net income before taxation (14) Taxation (17) Profit for the period (13) Attributable to minorities (27) Attributable to preference shareholders Attributable to ordinary shareholders banking activities (13) Headline adjustable items banking activities (79) (32) (155) 85 Headline earnings banking activities (12) Headline (loss)/earnings Liberty (>100) (860) Standard Bank Group headline earnings (30) Standard Bank Group analysis of financial results 30 June 2009 Page 21

24 Statement of comprehensive income IFRS June 2009 Minorities and Ordinary preference Change shareholders shareholders Total % Rm Rm Rm Profit for the period (45) (72) Other comprehensive income for the period after tax: (>100) (5 821) (1 894) (7 715) Exchange rate differences on translating foreign operations (>100) (6 254) (1 856) (8 110) Foreign currency hedge of net investment Cash flow hedges (85) Available-for-sale financial assets > Revaluation and other gains/(losses) (44) (21) Total comprehensive income for the period (>100) (710) (1 966) (2 676) Attributable to minorities (>100) (2 255) (2 255) Attributable to equity holders of the parent (>100) (710) 289 (421) Attributable to preference shareholders Attributable to ordinary shareholders (>100) (710) (710) IAS 1 Presentation of Financial Statements, revised with effect from 1 January 2009, requires total comprehensive income for the period to be presented separately from the changes in equity resulting from transactions with shareholders. Total comprehensive income includes profit for the period and other transactions and events, other than those with shareholders in their capacity as owners. Statement of changes in equity IFRS Page 22 Standard Bank Group analysis of financial results 30 June 2009 Foreign Foreign currency Ordinary currency hedge of net share capital Empowerment Treasury translation investment and premium reserve shares reserve reserve Rm Rm Rm Rm Rm Balance at 1 January (3 235) (960) Increase in statutory credit risk reserve Transfer of unrealised profit on sale of subsidiary shares (118) Equity-settled share-based payment transactions Transfer of vested equity options Issue of share capital and share premium Share buy-backs (503) Net decrease in treasury shares Transactions with minority shareholders (286) (260) (4) Total comprehensive income for the year Dividends paid Balance at 31 December (2 653) (758) Balance at 1 January (2 653) (758) Increase in statutory credit risk reserve Equity-settled share-based payment transactions Transfer of vested equity options Issue of share capital and share premium 103 Net increase in treasury shares (160) Total comprehensive income for the period (6 254) 96 Dividends paid Balance at 30 June (2 653) (918) (966) 976 All balances are stated net of applicable tax.

25 Group results in brief June 2008 December 2008 Minorities Minorities and and Ordinary preference Ordinary preference shareholders shareholders Total shareholders shareholders Total Rm Rm Rm Rm Rm Rm (17) (17) (181) (31) (212) 50 (61) (11) 8 (29) (21) Available- Cash flow Statutory for-sale Share-based Revaluation Ordinary Preference hedging credit risk revaluation payment and other Retained shareholders share capital Minority Total reserve reserve reserve reserve reserves earnings equity and premium interest equity Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm (130) (168) (111) (503) (503) (22) (37) (1 589) (2 198) (982) (3 180) 932 (181) (5 778) (5 778) (529) (814) (7 121) (118) (126) (2) (73) (63) (136) (710) 289 (2 255) (2 676) (774) (774) (289) (432) (1 495) Standard Bank Group analysis of financial results 30 June 2009 Page 23

26 Broad-based Black Economic Empowerment Overall score (%) BEE transaction financing (Rm) A Rating A Rating >75 Level HY08 FSC 08 FSC HY09 DTI HY09 Score Rating BEE financing FSC target to 2008 Human resource development DTI FSC Target June Target June December % % % % % Black senior management Black women senior management Black middle management Black women middle management Black junior management Black women junior management Total black management Total black women management Procurement DTI codes June 2009 June 2008 December 2008 % of Weighted % of Weighted % of Weighted TMPS 1 Rm TMPS 1 Rm TMPS 1 Rm Supplier classification All suppliers Level 1 to Qualifying small enterprises (QSE) and exempted microenterprises (EME) Level 1 to Black owned (>50%) Black women owned (>30%) Total BEE spend Total measured procurement spend (TMPS) 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. The ministers of trade and industry and finance have not yet agreed to the publication of the Financial Sector Charter (FSC) as a sector code. Assessment of the bank is now governed by the generic codes published in terms of the Broad-based Black Economic Empowerment Act and has a 3 rating in terms of these codes. Negotiations are currently taking place to publish the Financial Sector Charter as a sector code. Page 24 Standard Bank Group analysis of financial results 30 June 2009 As a result, performance for the six month period to June 2009 is reported in terms of the Department: Trade and Industry (DTI) for the key elements, being human resource development, preferential procurement and the empowerment finance sub-element, BEE transaction financing. In terms of the DTI code, a level 3 rating is achieved by having a score of greater than 75%. By comparison, an A level rating in terms of the FSC was achieved by having a score of greater than 80%.

27 Business unit review 26 Segmental structure for key business units 28 Group executive committee 30 Segmental income statement 32 Segmental balance sheet 34 Personal & Business Banking 38 Corporate & Investment Banking 42 Liberty

28 Segmental structure for key business units Standard Bank Group Limited Personal & Business Banking Banking and other financial services to individual customers and small- to medium-sized enterprises in South Africa, rest of Africa and Argentina Corporate & Investment Banking Corporate and investment banking services to larger corporates, financial institutions and international counterparties, in South Africa and other emerging markets Liberty Investment management and life insurance activities of companies in the Liberty Holdings group Central and other Includes the impact of the Tutuwa initiative, group capital instruments and group surplus capital, together with certain group overheads not recoverable from business segments, activities and taxes not allocated to business segments, strategic acquisition costs and intersegment eliminations Mortgage lending Residential accommodation loans to individual customers Instalment sale and finance leases Instalment finance in the consumer market Finance of vehicles and equipment in the business Global markets Foreign exchange Commodities Debt securities Equities trading Transactional products and services Transactional banking Investor services Liberty Long-term investment Long-term risk life and disability Pension fund management Endowment and retirement annuities Corporate benefits Health care and health insurance market Card products Credit and debit card facilities to individuals and businesses Transactional and lending products Transactions in products associated with the various point of contact channels such as ATMs, Internet, telephone banking and Investment banking Equity investment Advisory Project finance Structured finance Structured trade finance Corporate lending Primary markets Acquisition and BEE finance Property finance Asset and wealth management Stanlib Investment related advice and solutions branches. This includes deposit taking activities, electronic banking, cheque accounts and other lending products Bancassurance Short-term and long-term insurance products Financial planning Page 26 Standard Bank Group analysis of financial results 30 June 2009

29 Business unit review Personal & Business Banking Headline earnings R2 011 million (June 2008: R2 549 million) Headline earnings decline 21% (June 2008: decline 3%) Headline earnings contribution to group 37% (June 2008: 36%) Return on equity 16,5% (June 2008: 23,9%) Cost-to-income ratio 50,2% (June 2008: 49,7%) Credit loss ratio 2,80% (June 2008: 2,18%) External net loans and advances R373 billion (June 2008: R366 billion) % of group headline earnings Personal & Business Banking 37% Corporate & Investment Banking Headline earnings R3 391 million (June 2008: R3 668 million) Headline earnings decline 8% (June 2008: growth 18%) Headline earnings contribution to group 63% (June 2008: 52%) Return on equity 16,1% (June 2008: 21,4%) Cost-to-income ratio 51,6% (June 2008: 53,4%) Credit loss ratio 1,15% (June 2008: 0,31%) External net loans and advances R335 billion (June 2008: R357 billion) % of group headline earnings 63% Corporate & Investment Banking Liberty Headline loss R647 million (June 2008: earnings R279 million) Headline earnings decline 332% (June 2008: decline 46%) Headline earnings diminution to group 12% (June 2008: contribution to group 4%) Return on equity (20,3%) (June 2008: 14,0%) Normalised embedded value R23 billion (June 2008: R27 billion) Third party funds under management R180 billion (June 2008: R186 billion) Standard Bank Group analysis of financial results 30 June 2009 Page 27

30 Group executive committee Craig Bond (48) Chief executive Standard Bank ICBC Strategic Partnership BCom, LLB, HDip Tax (Wits), SEP (Harvard) Joined the group 2000, appointed to exco 2006 Kennedy Bungane (35) Deputy chief executive Corporate & Investment Banking SBSA BCom (Natal), MBA (University of Pretoria GIBS Campus), AMP (Harvard) Joined the group 1996, appointed to exco 2008 David Duffy (47) Chief executive Corporate & Investment Banking International BBS (Hons) (Trinity College Dublin), MA (Trinity College Dublin) Joined the group 2006, appointed to exco 2008 Tina Eboka (50) Corporate Affairs BS Applied Mathematics (New York), BS Textile Engineering (Philadelphia), MBA (Philadelphia), SEP (Harvard) Joined the group 2005, appointed to exco 2005 Arnold Gain (54) Credit BCom (Hons) (Cape Town) Joined the group 1994, appointed to exco 2005 Bruce Hemphill (46) Chief executive Liberty BSoc (Cape Town), CPE (College of Law, London) Joined the group 1993, appointed to exco 2006 Ben Kruger (50) Group deputy chief executive BCom (Hons) (Pretoria), CA (SA), AMP (Harvard) Joined the group 1985, appointed to exco 2000 Rob Leith (46) Chief executive Corporate & Investment Banking BCom (Hons) (Cape Town), CA (SA) Joined the group 1991, appointed to exco 2003 Jacko Maree (53) Group chief executive BCom (Stellenbosch), MA (Oxford), PMD (Harvard) Joined the group 1980, appointed to exco 1995 David Munro (38) Chief executive Corporate & Investment Banking SBSA BCom (PGDA) (Cape Town), CA (SA), AMP (Harvard) Joined the group 1996, appointed to exco 2004 Page 28 Standard Bank Group analysis of financial results 30 June 2009

31 Business unit review Sipho Ngidi (53) Human Resources SBSA BAdmin (Zululand), BCom (Hons) (Natal) Joined the group 2001, appointed to exco 2001 Sarah-Anne Orphanides (41) Marketing and Communications BSocSci (Hons) (Cape Town), MBA (London) Joined the group 2002, appointed to exco 2006 Simon Ridley (53) Group financial director BCom (Natal), CA (SA), AMP (Oxford) Joined the group 1999, appointed to exco 2002 Peter Schlebusch (42) Chief executive Personal & Business Banking SBSA BCom (Hons) (Wits), CA (SA), HDip Tax (RAU) Joined the group 2002, appointed to exco 2008 Paul Smith (55) Chief risk officer BCom (Natal), CA (SA), AMP (Wharton) Joined the group 1997, appointed to exco 1999 Clive Tasker (53) Chief executive Standard Bank Africa BA LLB (Natal), AMP (Wharton) Joined the group 2000, appointed to exco 2008 Casper Troskie (46) Chief financial officer BCom (Hons) (Cape Town), CA (SA) Joined the group 2009, appointed to exco 2009 Sim Tshabalala (41) Group deputy chief executive and chief executive SBSA BA LLB (Rhodes), LLM (University of Notre Dame USA), HDip Tax (Wits), AMP (Harvard) Joined the group 2000, appointed to exco 2001 Elizabeth Warren (52) Human Resources BSc (Hons) (Bath), Fellow of the Chartered Institute of Personnel and Development Joined the group 2009, appointed to exco 2009 Peter Wharton-Hood (43) Group deputy chief executive BCom (Hons) (Wits), CA (SA), AMP (Harvard) Joined the group 1997, appointed to exco 1999 Standard Bank Group analysis of financial results 30 June 2009 Page 29

32 Segmental income statement Personal & Business Banking Corporate & Investment Banking Central and other June June June June June June Change Change Change % Rm Rm % Rm Rm % Rm Rm Income from banking activities (50) Net interest income Interest income (4) (5 091) (4 441) Interest expense (12) (5 793) (5 143) Non-interest revenue (>100) (200) 296 Net fee and commission revenue (3) (84) (19) (119) Fee and commission revenue (85) (18) (120) Fee and commission expense (>100) 1 (1) Trading revenue (>100) (134) 332 Other revenue (>100) (47) 83 Income from investment management and life insurance activities Net insurance premiums Investment income and gains Management and service fee income Total income (50) Credit impairment charges (501) Impairments for non-performing loans Impaired loss Discounting of expected recoveries (17) Impairments for performing loans (39) (501) Benefits due to policyholders Net insurance benefits and claims Fair value adjustment to policyholders liabilities under investment contracts Fair value adjustment on third party fund interests Income after credit impairment charges and policyholders benefits (1) Operating expenses in banking activities (84) (37) (233) Staff costs Other operating expenses (10) (436) (487) Operating expenses in investment management and life insurance activities Acquisition costs insurance and investment contracts Other operating expenses Net income/(loss) before goodwill (21) (8) (16) Goodwill impairment 2 2 Net income/(loss) before associates and joint ventures (21) (8) (16) Share of profit from associates and joint ventures (44) (17) > Net income/(loss) before indirect taxation (22) (8) (14) Indirect taxation (2) (72) Profit/(loss) before direct taxation (23) (10) (12) Direct taxation (29) (15) (28) Profit/(loss) for the period (21) (9) (9) Attributable to minorities (25) (25) (>100) (2) 12 Attributable to preference shareholders (2) Attributable to ordinary shareholders (21) (8) (9) Headline adjustable items (9) (30) (33) (69) (4) (13) (>100) 2 (109) Headline earnings/(loss) (21) (8) ROE % 16,5 23,9 16,1 21,4 Net interest margin % 5,10 4,87 2,06 1,69 Credit loss ratio % 2,80 2,18 1,15 0,31 Cost-to-income ratio % 50,2 49,7 51,6 53,4 Number of employees (1) (1) Page 30 Standard Bank Group analysis of financial results 30 June 2009

33 Business unit review Normalised IFRS IFRS Banking activities Liberty Standard Bank Group adjustments Standard Bank Group June June June June June June June June June June Change Change Change Change % Rm Rm % Rm Rm % Rm Rm Rm Rm % Rm Rm (88) (107) (88) (107) (88) (107) (11) (11) (11) (25) (25) (397) 617 (31) (>100) (2 223) (>100) (2 223) (397) 617 (>100) (2 620) (25) (1) (485) 510 (3) (12) (12) (12) (99) (99) (99) (9) (9) (9) (2) (2) (2) > > > (>100) (716) 286 (>100) (716) 286 (>100) (716) (45) (7) (485) 510 (10) (14) (>100) (1 120) (36) (485) 510 (42) (14) (>100) (1 120) (36) (485) 510 (42) (24) (37) (27) (27) (14) (>100) (1 098) (35) (485) 510 (42) (3) (15) (>100) (1 208) (38) (485) 510 (44) (23) (>100) (73) 605 (42) (42) (13) (>100) (1 135) 997 (36) (485) 510 (45) (27) (>100) (488) 718 (>100) (177) (184) 385 (>100) (361) (2) (2) (12) (13) (>100) (647) 279 (25) (328) 137 (31) (79) (32) (155) (79) (32) (155) (79) (32) (155) (11) (>100) (647) 279 (24) (328) 137 (30) ,3 20,1 (20,3) 14,0 12,6 19,8 12,4 21,4 3,45 3,16 3,45 3,16 3,44 3,15 1,84 1,31 1,84 1,31 1,84 1,31 49,9 48,7 49,9 48,7 50,0 48, Standard Bank Group analysis of financial results 30 June 2009 Page 31

34 Segmental balance sheet Assets Personal & Business Banking Corporate & Investment Banking Central and other June June June June June June Change Change Change % Rm Rm % Rm Rm % Rm Rm Cash and balances with central banks (5) Financial investments, trading and pledged assets (57) (17) > (2 041) Loans and advances (6) (30) Loans and advances to banks (5) (936) Loans and advances to customers (7) (75) Investment property Derivative and other assets (49) (90) Non-current assets held for sale Interest in associates and joint ventures (2) (6) Goodwill and other intangible assets (9) (44) Property and equipment Total assets (2) Equity and liabilities Equity (1) (13) Equity attributable to ordinary shareholders (19) Preference share capital and premium Minority interest (30) (14) (130) Liabilities (3) (22) (16 535) (21 174) Deposit and current accounts (8) (7 705) (8 349) Deposits from banks 122 (12) (2 473) Deposits from customers (45) (5 232) (9 570) Derivative, trading and other liabilities (>100) (476) (11) (37) (9 125) (14 496) Non-current liabilities held for sale Policyholders liabilities Subordinated debt (82) Total equity and liabilities (2) Average assets - banking activities excluding trading derivatives Average loans and advances (gross) Average ordinary shareholders equity Page 32 Standard Bank Group analysis of financial results 30 June 2009

35 Business unit review Normalised IFRS IFRS Banking activities Liberty Standard Bank Group adjustments Standard Bank Group June June June June June June June June June June Change Change Change Change % Rm Rm % Rm Rm % Rm Rm Rm Rm % Rm Rm (2) (2) (2) (16) (7) (12) (4 103) (4 717) (12) (2) (2) (2 118) (2 184) (2) (1) (1) (1) (2) (2) (2 118) (2 184) (2) (55) (45) (45) (1) (6) (2) (6 221) (6 901) (2) (1) (11) (2) (6 084) (6 744) (2) (4 183) (3 355) (12) (31) (25) (1 901) (3 389) (20) (1) (6) (2) (137) (157) (2) (16) (16) (16) (12) (1) (11) (137) (157) (11) (7) (7) (7) (4) (3) (3) (1) (6) (2) (6 221) (6 901) (2) (1 986) (2 564) (1 986) (2 564) (4 110) (4 086) Standard Bank Group analysis of financial results 30 June 2009 Page 33

36 Personal & Business Banking Headline earnings (Rm) Cost-to-income ratio (%) CAGR (HY2003 HY2009): 10% ,3 61,7 59,3 55,8 52,4 49,7 50, HY03 HY04 HY05 HY06 HY07 HY08 HY09 Headline earnings first half Headline earnings second half June June December Change % Rm Rm Rm Net interest income Non-interest revenue Total income Credit impairment charges Operating expenses Taxation (23) Headline earnings (21) Headline earnings change % (21) (3) (15) Headline earnings contribution to the group % ROE % 16,5 23,9 19,9 Net interest margin % 5,10 4,87 5,15 Cost-to-income ratio % 50,2 49,7 51,3 Credit loss ratio % 2,80 2,18 2,47 Effective taxation rate % 33,8 34,3 33,6 Total assets Rm External net loans and advances Rm Number of employees (1) Favourable Subdued but positive loan balance growth, as well as the benefit of the unwinding of the discount on expected nonperforming loan recoveries, assisted net interest income. Continued growth in transactional volumes, value per transaction and customer base, particularly in account transaction fees, electronic banking and documentation and administration fees. Benefits of domestic cost containment initiatives, including headcount reduction through headcount freezes and natural attrition. Adverse High credit impairments in South Africa across all portfolios excluding card products, due to the lagged effect of the high interest rate environment in 2008, inflationary pressures and resultant continued erosion of customer affordability. Negative endowment impact of lower average interest rates. Increased cost of wholesale term funding. Higher operating expenses due to continued investment in business expansion in the rest of Africa and outside Africa, and continued investment in electronic channel systems. Page 34 Standard Bank Group analysis of financial results 30 June 2009

37 Business unit review Total income and headline earnings by product Total income Headline earnings June June December June June December Change Change % Rm Rm Rm % Rm Rm Rm Mortgage lending (208) (207) (885) Instalment sale and finance leases (>100) (253) 82 (264) Card products (3) Transactional and lending products (16) Bancassurance Personal & Business Banking (21) Mortgage lending High credit impairment charges driven by increased nonperforming loans, offset partially by a decline in the early arrears portfolio. Net interest income benefited from the unwind of the IAS 39 discount of non-performing loan recoveries, and balance growth from the sharp slowdown in the level of prepayments. New business registrations declined due to the overall slowdown in the residential property market in South Africa. Increased term funding costs, partly offset by better pricing for risk. Balance growth driven by the acquisition in Kenya and branch network expansion in the rest of Africa, supported income growth. Instalment sale and finance leases Increase in the non-performing loan book for both the business and personal portfolio, and weaker motor vehicle sale recovery values resulted in increased credit impairments. New business volumes declined due to a slowdown in both the motor and non-motor businesses. Margins remained under pressure due to the increased cost of term funding. Continued focus on better pricing for risk. Significant growth in the rest of Africa, resulting from increased volumes due to the branch network expansion and growth in client base. Card products Net interest income unfavourably affected by lower average card holder balances. Reduced fee and commission income as a result of a decline in customer spending and the customer base. Decreased credit impairments resulting from an improvement in delinquency rates and increased recoveries. Strong revenue growth in the rest of Africa resulting from increased roll-out of products. Transactional and lending products Income growth driven by an increase in deposit and loan balances and growth in the transactional account base, combined with modest price increases. Deposit margins impacted by the negative endowment effect of declining interest rates, compounded by a shift in product mix towards higher cost investment deposits. Improved margin on term advances. Increase in the non-performing loans portfolio in both the personal and business segments. Lower revenue growth in the rest of Africa due to the overall slowdown in customer activities and more stringent credit criteria. Bancassurance Simple embedded insurance product benefited from a higher policy base combined with a slightly reduced overall claims loss ratio. Short-term insurance broking income up largely due to a higher policy base and pricing adjustments. Short-term insurance profit increased as a result of improved underwriting performance due to optimisation of re-insurance programme and pricing adjustments, coupled with increased investment income from equity market performance. Significant reduction in complex product embedded value profits, due to high policy lapses and reduced new business volumes. Strong revenue growth in the rest of Africa due to the successful roll-out of products, integration of CfC Kenya and a joint initiative with Liberty in five countries. Good growth in wealth business in Nigeria driven by growth in transaction volumes and number of customers. Standard Bank Group analysis of financial results 30 June 2009 Page 35

38 Personal & Business Banking continued External loans and advances by product Annualised June June December change 1 Change % % Rm Rm Rm Loans and advances to banks Call loans 773 Balances with banks 985 Loans and advances to customers (5) Gross loans and advances to customers (3) Mortgage loans Instalment sale and finance leases (15) (10) Card debtors (8) (5) Overdrafts and other demand loans Other term loans (19) Other loans and advances (>100) (65) Credit impairments for loans and advances (12 030) (7 396) (9 750) Credit impairments for non-performing loans (9 121) (5 065) (7 035) Credit impairments for performing loans (2 909) (2 331) (2 715) Net loans and advances (4) Comprising: Gross loans and advances (2) Less: credit impairments (12 030) (7 396) (9 750) Net loans and advances (4) Securitised assets consolidated above: Mortgage loans (4) (2) Instalment sale and finance leases (96) (65) Securitised assets (10) (8) Annualised change from December 2008 to June Change year on year from June 2008 to June Deposit and current accounts by product June June December Change % Rm Rm Rm Wholesale priced deposit and current accounts Call deposits Securitised issuances consolidated (5) Retail priced deposit and current accounts Current accounts (1) Cash management deposits Call deposits (2) Savings accounts (6) Term deposits Other funding Interdivisional funding Total deposits Page 36 Standard Bank Group analysis of financial results 30 June 2009

39 Business unit review Points of representation global HY09 Branches ATMs Key business statistics Change June June December South Africa % Mortgage loans Number of loan applications thousands (67) Change in value of new business % (64) (25) (32) Average loan to value (LTV) of new business % Average balance to original value (BTV) of portfolio % Average instalment to income (ITI) of new business % Proportion of new business referred by independent mortgage originators and estate agents % Instalment sale and finance leases Growth in value of new loans written motor % (41) (23) (30) non-motor % (45) 1 (1) Number of accounts at period end Credit card accounts thousands (8) Current accounts thousands Mzansi accounts (excluding nil balance accounts) thousands Other transaction and savings accounts (excluding nil balance accounts) thousands (3) Distribution Growth in Internet users % Growth in ATM transactions % (2) (2) (4) Points of representation Branches (3) ATMs Rest of Africa Points of representation Branches ATMs Growth in ATM transactions % Outside Africa 1 Points of representation Branches ATMs Argentina. Standard Bank Group analysis of financial results 30 June 2009 Page 37

40 Corporate & Investment Banking Headline earnings (Rm) Income contribution (%) CAGR (HY2003 HY2009): 12% HY HY Headline earnings first half Headline earnings second half Fees and other revenue Trading revenue Net interest income Trading income as a percentage of non-interest revenue June June December Change % Rm Rm Rm Net interest income Non-interest revenue Total income Credit impairment charges Operating expenses Taxation (6) Headline earnings (8) Headline earnings change % (8) Headline earnings contribution to the group % ROE % 16,1 21,4 22,0 Net interest margin % 2,06 1,69 1,84 Cost-to-income ratio % 51,6 53,4 50,9 Credit loss ratio % 1,15 0,31 0,46 Effective taxation rate % 22,3 21,6 23,9 Total assets Rm (2) External net loans and advances Rm (6) Number of employees Page 38 Standard Bank Group analysis of financial results 30 June 2009

41 Business unit review Cost-to-income ratio (%) ,1 50,6 53,8 51,7 52,4 53, HY03 HY04 HY05 HY06 HY07 HY08 HY09 Favourable Higher net interest income due to growth in term and call loans and increased term margins in international markets. Strong trading performance in all regions across most desks. Lower adverse fair value adjustments on listed property investments. Lower provision for incentive remuneration. Translation benefits of foreign earnings resulting from a weaker average USD/ZAR exchange rate for the six months of R9,20 (June 2008: R7,65). Adverse Higher credit impairment charges driven by increase in nonperforming loans across all regions as default rates rose, together with additional performing portfolio provisioning. Fee income impacted by lower levels of advisory deal flow across all regions. Lower net interest income from cash management activities given reduction in overnight deposit balances as well as the negative endowment impact. Lower revenue from the distressed debt business and high yield debt portfolios due to reduced business activity. Increased IT expenditure as well as the effect of a weaker average USD/ZAR exchange rate. Non-recurrence of fair value gains on unlisted equity portfolios. ICBC co-operation partnership Headline earnings contribution to the group for the first six months R127 million (USD14 million). Significant deals won across ten different product areas which include: Morupule B power station in Botswana; Ghana Cocoa Board; and Government of Mongolia. Servicing Chinese clients interested in Africa and emerging markets as well as emerging markets clients entering China. Transactional product growth with Chinese clients in Africa now evident. Beijing office established and a team mixed with international and local resources in place, with: headcount of 38 in Beijing with 25 local employees; and headcount of 13 in Shanghai. Standard Bank Group analysis of financial results 30 June 2009 Page 39

42 Corporate & Investment Banking continued Total income and headline earnings by product Total income Headline earnings June June December June June December Change Change % Rm Rm Rm % Rm Rm Rm Global markets Investment banking (2) (85) Transactional products and services (17) Corporate & Investment Banking (8) Global markets Strong and diversified trading performance in all regions on the back of continued volatility with good performances from foreign exchange, commodities and equity derivatives. Higher customer transaction volumes in rest of Africa. Trading opportunities given strong client franchise and market dislocation. Growth ahead of expectations in Nigeria due to volatility in markets. Net interest income assisted by increased term margin as well as favourable impact of weaker USD/ZAR average exchange rate. Risk levels well contained. Strong focus on costs. Investment banking Large increase in credit impairment charges on nonperforming loans across a spectrum of loan classes and jurisdictions. Good growth in fees and interest revenue from restructuring client funding. Lower deal flow across regions following management actions to limit the pipeline of committed obligations in the context of the global crisis. Lower adverse fair value adjustments on listed property investments. Higher margins and growth in term and property loan books. Losses on high yield debt and distressed debt business portfolios as cash collections and asset sales prove difficult in the current environment. Lower custody and stock broking activity in Nigeria. Limited activity in securitisation and debt origination given market conditions. Transactional products and services Lower net interest income from cash management activities given reduction in overnight deposit balances as well as the negative endowment impact. Moderate growth in transactional banking revenues. Subdued performance from investor services businesses, with decline in custody revenue due to decrease in volumes. Growth in transaction volumes, loans and deposits in Nigeria. Positive impact of acquired operation in Kenya. Continued roll out of new online banking platform across Africa. Page 40 Standard Bank Group analysis of financial results 30 June 2009

43 Business unit review External loans and advances by product Annualised June June December change 1 Change % % Rm Rm Rm Loans and advances to banks (52) (5) Call loans (>100) (67) Loans granted under resale agreements Balances with banks (55) Loans and advances to customers (28) (7) Gross loans and advances to customers (27) (6) Overdrafts and other demand loans (14) (12) Other term loans (31) Loans granted under resale agreements (36) (62) Commercial property finance Foreign currency loans (62) Mortgage loans 8 (13) Other loans and advances >100 (32) Credit impairments for loans and advances (4 862) (2 300) (3 483) Credit impairments for non-performing loans (2 766) (892) (1 560) Credit impairments for performing loans (2 096) (1 408) (1 923) Net loans and advances (36) (6) Comprising: Gross loans and advances (35) (5) Less: credit impairments (4 862) (2 300) (3 483) Net loans and advances (36) (6) Impact of stronger period end exchange rates (9 520) (36 932) Total loans and advances excluding exchange rate impact (19) (4) Annualised change from December 2008 to June Change year on year from June 2008 to June Deposit and current accounts by product June June December Change % Rm Rm Rm Wholesale priced deposit and current accounts Current accounts (5) Cash management deposits (1) Call deposits Term deposits Negotiable certificates of deposit Repurchase agreements (45) Other funding (9) Interdivisional funding 2 ( ) ( ) ( ) Total deposits Impact of stronger period end exchange rates (15 405) (29 685) Total deposit and current accounts excluding exchange rate impact Standard Bank Group analysis of financial results 30 June 2009 Page 41

44 Liberty Headline earnings/(loss) (Rm) Normalised embedded value (Rm) CAGR (2003 HY2009): 7% (647) HY09 Headline earnings first half Headline earnings second half June June December Change % Rm Rm Rm Net insurance premiums Investment income and (losses)/gains (>100) (2 223) (1 114) Benefits due to policyholders (9) Management and service fee income Operating expenses Headline (loss)/earnings attributable to the group (>100) (647) Headline earnings change % (332) (46) (34) Headline earnings (diminution)/contribution to the group % (12) 4 5 Effective interest in Liberty Group % 53,7 33,0 53,7 ROE % (20,3) 14,0 12,8 BEE normalised headline earnings Rm (>100) (1 207) Normalised return on embedded value % (25,5) 1 4,8 1 3,7 Indexed new business (excluding contractual increases) Rm (3) New business margin % 1,0 2 1,9 2 2,6 Net cash inflows/(outflows) in insurance operations Rm > (1 486) (2 861) Normalised embedded value Rm (17) Capital adequacy requirement cover (times covered) Liberty Group % 2,48 2,49 2,66 1 Comparative numbers relating to Liberty Group. 2 Comparative numbers relating to Liberty Holdings. Favourable Satisfactory asset management earnings and other key indicators relating to the core insurance business. Asset management operations benefited from strong money market and dividend income fund flows. Good cost discipline. Indexed new business, excluding contractual increases, marginally higher. Risk claim experience remains positive and no changes to mortality assumptions were made. Capital adequacy for Liberty Group has benefited from the market risk mitigation strategies and remains strong at 2,5 times the required cover. Adverse Estimated R520 million negative impact of the timing of the group s actions to reduce equity market risk in order to protect capital. Adverse change to policyholder withdrawal, paid up and lapse assumptions on certain blocks of business following actuarial experience investigations. The combination of negative experience variances and the strengthening of actuarial assumptions resulted in a R685 million charge to income and a decrease to embedded value of R1 719 million. The strong rand at 30 June 2009 resulted in an estimated R530 million unrealised loss on the group s foreign currency investments. Page 42 Standard Bank Group analysis of financial results 30 June 2009

45 Business unit review Headline earnings June June December Change % Rm Rm Rm South African insurance operations (>100) (636) Individual life excluding market investment exposures (>100) (75) Corporate excluding market investment exposures (36) Market risk exposures 1 (>100) (597) 83 (522) Shareholder investment returns 1 (>100) (650) Asset management (Stanlib, Liberty Properties and Fountainhead) (21) Diversification initiatives (Liberty Africa and Liberty Health) >100 5 (15) (1) Treasury share adjustment (100) 6 2 Shareholder expenses and sundry income 13 (169) (149) (269) Attributed to minority shareholders in Liberty Group 2 (100) (421) (346) Total (loss)/earnings attributable to equity holders (>100) (1 257) Preference share dividend (1) (1) (2) Liberty Holdings headline (loss)/earnings IFRS (>100) (1 258) BEE normalised adjustments (11) Attributed to minority shareholders in Liberty Group 2 (100) Liberty Holdings adjustments (100) BEE normalised headline earnings (>100) (1 207) Managed by the LibFin business unit. 2 Prior to the group restructure on 1 December 2008, Liberty Holdings owned approximately 51% of Liberty Group. 3 Comparative numbers relating to Liberty Group. External assets under management June June December Change % Rbn Rbn Rbn Asset management assets under management Segregated funds (41) Properties (33) Total asset management assets under management (40) Wealth management funds under administration Single manager unit trust Institutional marketing > Linked and structured life products (13) Multi-manager (14) Rest of Africa Total wealth management funds under administration Total external assets under management (3) Standard Bank Group analysis of financial results 30 June 2009 Page 43

46 Liberty continued Policyholder liabilities (Rm) CAGR (2003 HY2009): 14% HY09 Summarised income statement June June December Change % Rm Rm Rm Liberty Holdings as published Insurance premium revenue Reinsurance premiums (17) (302) (362) (727) Net insurance premiums Investment income and (losses)/gains (>100) (2 299) (1 210) Management and service fee income Total revenue (25) Benefits due to policyholders (9) Net insurance benefits and claims (2) Fair value adjustment to policyholders liabilities under investment contracts > (1 025) Fair value adjustment on third party mutual fund interests (>100) (716) Income after policyholders benefits (47) Operating expenses Acquisition costs General marketing and administration expenses Finance costs Preference dividend in subsidiary Equity accounted earnings from joint ventures (Loss)/profit before taxation (>100) (1 257) Taxation (>100) (73) Total (loss)/earnings (>100) (1 184) Total (loss)/earnings attributable to: Minority interests (87) Equity holders 1 (>100) (1 257) Includes amount attributable to preference shareholders. Page 44 Standard Bank Group analysis of financial results 30 June 2009

47 Balance sheet for the six months ended 30 June 2009 Group Note Rm Rm Capital management 46 Return on ordinary equity 47 Cost of equity and economic returns 48 Market capitalisation and price-to-book ratio 49 Ordinary shareholders equity (net asset value) 50 Currency analysis of net asset value 51 Currency translation effects 52 Economic capital 53 Risk-weighted assets 54 Capital adequacy qualifying regulatory capital 55 Capital adequacy ratios 56 Subordinated debt Standard Bank Group analysis of financial results 30 June 2009 Page 45

48 Return on ordinary equity Return on ordinary equity Rm HY09 Shareholders funds (average) Treasury shares Tutuwa impairments ROE % Group ROE declined largely due to a reduction in headline earnings across all business units. Equity was marginally higher in the first half of 2009 as the group s profits earned offset the negative translation impact of the stronger rand on the group s offshore equity base. Corporate & Investment Banking s ROE lower as a result of a decline in headline earnings as well as a higher level of capital deployed in the first half of 2009 to bolster capital ratios given the global financial crisis. Liberty s negative ROE attributable to the headline loss incurred in the first half of Average Average Average equity ROE equity ROE equity ROE June June June June December December Rm % Rm % Rm % Personal & Business Banking , , ,9 Corporate & Investment Banking , , ,0 Central and other Banking activities , , ,6 Liberty (20,3) , ,8 Standard Bank Group , , ,2 Reconciliation to IFRS Normalised average equity Empowerment reserve impairment (Tutuwa SPVs preference shares and dividends receivable) (2 562) (3 122) (2 638) Central and other (1 986) (2 564) (2 309) Liberty (576) (558) (329) Market value of group company shares held in policyholders funds (1 548) (964) (1 408) IFRS average equity , , ,1 Page 46 Standard Bank Group analysis of financial results 30 June 2009

49 Cost of equity and economic returns Capital management Cost of equity estimates Average Average Average June June December % % % Personal & Business Banking 17,7 16,2 17,8 Corporate & Investment Banking 18,4 17,5 20,3 Central and other 14,3 14,5 15,2 Banking activities 14,7 15,7 16,1 Liberty 12,0 13,7 14,4 Standard Bank Group 14,3 14,5 15,2 Economic returns June June December Change % Rm Rm Rm Average ordinary equity Headline earnings (24) Cost of equity charge 18 (6 141) (5 216) (11 813) Economic (losses)/profits on headline earnings (>100) (734) Other changes in net asset value (>100) (5 791) Net currency translation (losses)/gains (>100) (6 158) Cash flow hedge gains (85) Fair value gains/(losses) on available-for-sale assets (10) (22) Transactions with minority shareholders (100) Other changes in equity > (177) (119) Total economic returns (>100) (6 525) Standard Bank Group analysis of financial results 30 June 2009 Page 47

50 Market capitalisation and price-to-book ratio Market capitalisation (Rbn) Price-to-book and net asset value per share cents times HY HY09 0 Net asset value per share Price-to-book Change June June December % Number of shares at end of the period thousands Net asset value Rm Tangible net asset value Rm Net asset value per share cents Tangible net asset value per share cents Share price at end of the period cents Market capitalisation at end of the period Rm Price-to-book ratio at end of the period times 1,6 1,4 1,5 Page 48 Standard Bank Group analysis of financial results 30 June 2009

51 Ordinary shareholders equity (net asset value) Capital management Analysis of net asset value (ZAR) Analysis of net asset value (USD) Rm % HY USDm % HY Net asset value Tutuwa impairments Policyholders deemed treasury shares NAV growth Net asset value Tutuwa impairments Policyholders deemed treasury shares NAV growth Net asset value June June December Change % Rm Rm Rm Personal & Business Banking Corporate & Investment Banking Central and other (19) Banking activities Liberty Standard Bank Group Analysis of changes in net asset value June June December Change % Rm Rm Rm Net asset value at beginning of the period Transactions with shareholders (>100) (706) Dividends paid (70) (942) (3 130) (6 081) Issue of ordinary share capital and share premium (99) Share buy-backs (128) (503) Increase in treasury shares 10 Equity-settled share-based payments Transactions with minority shareholders 232 (1 331) Excess of purchase price over net asset value Liberty (216) (1 790) Other transactions with minorities Additional shareholder value (>100) (381) Headline earnings for the period attributable to ordinary shareholders (24) Other earnings attributable to ordinary shareholders (79) (85) Currency translation movements, including hedging activities (>100) (6 158) Net cash flow hedges (85) Currency hedge gains (91) Other hedge movements > (32) (24) Net available-for-sale movement 96 (17) (181) Fair value adjustments on available-for-sale instruments (10) (22) Realised fair value adjustments transferred to the income statement (81) (29) (156) (159) Other direct movements (43) Net asset value at end of the period Standard Bank Group analysis of financial results 30 June 2009 Page 49

52 Currency analysis of net asset value Closing USD/ZAR exchange rate Closing GBP/USD exchange rate 2,2 2,1 2,0 1,9 1, ,7 1,6 1,5 5 Jan Dec 1,4 Jan Dec ZAR Total Rand Dollar Sterling Euro linked Naira Other Rm Rm Rm Rm Rm Rm Rm Rm June 2009 Underlying exposures Currency profile changes due to hedging strategies (2 712) (7 594) (2 874) Actual exposures June 2008 Underlying exposures Currency profile changes due to hedging strategies 160 (711) (2 841) Actual exposures December 2008 Underlying exposures Currency profile changes due to hedging strategies (3 786) (226) (3 975) Actual exposures Closing currency profile of NAV ZAR Total Rand Dollar Sterling Euro linked Naira Other % % % % % % % % June 2009 before hedging June 2009 after hedging June 2008 before hedging June 2008 after hedging December 2008 before hedging December 2008 after hedging Page 50 Standard Bank Group analysis of financial results 30 June 2009

53 Currency translation effects Capital management Currency translation effects % O HY09 Rm Translation reserve (decrease)/increase USD/ZAR appreciation/(depreciation) closing USD/ZAR appreciation/(depreciation) average Movement in group foreign currency translation and net investment hedging reserve June June December Rm Rm Rm Balance at beginning of the period: credit Translation reserve (decrease)/increase for the period (6 158) Translation reserve (decrease)/increase (6 254) Rest of Africa (2 576) Outside Africa (3 671) Liberty (7) 5 (30) Currency hedge gains Balance at end of the period: credit Exchange rates Average Closing Change June June December Change June June December % % USD/ZAR 20 9,20 7,65 8,24 (1) 7,73 7,82 9,31 ZAR/NGN 5 16,15 15,32 14, ,14 15,06 14,74 GBP/USD (25) 1,49 1,99 1,82 (18) 1,64 1,99 1,46 Euro/USD (14) 1,33 1,54 1,46 (11) 1,40 1,57 1,40 Standard Bank Group analysis of financial results 30 June 2009 Page 51

54 Economic capital Economic capital by risk type at end of period June June December Change % Rm Rm Rm Credit risk Market risk Operational risk Business risk Interest rate risk in the banking book Banking activities Economic capital requirement Available financial resources (AFR) (0) Capital coverage ratio (times) 1,96 2,23 1,93 Economic capital by business unit at end of period June June December Change % Rm Rm Rm Personal & Business Banking Corporate & Investment Banking Central and other (16) Banking activities Total economic capital requirement for the group reflective of the capital requirement to cover the risk profile of the group. Decline in credit risk mainly attributable to the translation impact of the stronger rand on the group s offshore risk exposures. Operational risk economic capital higher due to inclusion of 2008 audited gross income figures for the calculation of operational risk economic capital. Business risk economic capital relates to an unexpected revenue shortfall relative to the cost base due to strategic and/or reputational reasons and is higher due to a refinement in the quantification methodology. Interest rate risk in the banking book is the group s exposure to adverse movements in interest rates arising mainly due to a maturity mismatch between the bank s assets and liabilities. For the group, this effectively arises from a lowering of interest rates. AFR is the supply of economic capital and essentially comprises shareholders permanent capital that is rewarded for the economic risks taken by the group. The slight reduction in AFR is largely due to the translation impact of the stronger rand on equity invested in foreign operations, offset by profits earned for the period. AFR covers the minimum economic capital requirement by a factor of 1,96 times. Page 52 Standard Bank Group analysis of financial results 30 June 2009

55 Risk-weighted assets Capital management Risk-weighted assets (closing balances) 1 (Rbn) Capital adequacy 1 (%) ,5 0,5 0,3 0,2 3,1 3,5 3,4 3,8 10,7 11,0 10,5 10,8 0,3 2,6 8,7 0,4 1,9 11,0 0,3 2,1 12, HY HY09 Risk-weighted assets Total assets (banking activities) Primary capital Secondary capital Tertiary capital Required capital 1 Basel II implemented 1 January 2008 and comparatives for 2007 are pro-forma on the Basel I basis. All other historical comparatives are on a Basel I basis. Risk-weighted assets by business unit June June December Change % Rm Rm Rm Personal & Business Banking Credit risk (2) Operational risk Corporate & Investment Banking Credit risk Market risk (19) Operational risk Central and other (11) Credit risk (23) Operational risk Banking activities Risk-weighted assets by risk class June June December Change % Rm Rm Rm Credit risk Market risk (19) Operational risk Banking activities Standard Bank Group analysis of financial results 30 June 2009 Page 53

56 Capital adequacy qualifying regulatory capital June June December Change % Rm Rm Rm Normalised ordinary shareholders equity Net IFRS adjustments 25 (4 183) (3 355) (3 949) IFRS ordinary shareholders equity Minority interests (20) Less: regulatory deductions 22 (15 079) (12 344) (14 432) Investment in insurance entities (50%) >100 (3 851) (1 826) (3 851) Investment in financial entities (50%) (2) (971) (987) (906) Future expected losses exceeding provisions on incurred loss basis (50%) (45) (821) (1 489) (970) Loans to SPVs (first loss credit enhancement) (50%) (3) (223) (229) (231) Investment in regulated non-banking entities (5) (126) (132) (110) Investment in banks (1 436) Goodwill and other intangible assets (0) (7 651) (7 681) (8 364) Less: regulatory exclusions (49) (8 743) (17 210) (16 991) Non-qualifying entities retained earnings (30) (2 465) (3 512) (3 642) Non-qualifying foreign currency translation reserve (100) (10) (4 932) (6 168) Non-qualifying other reserves (47) (916) (1 729) (752) Non-qualifying minority interest (24) (5 352) (7 037) (6 429) Less: reserves included under tier II capital (32) (462) (676) (344) Perpetual preference shares Tier l capital Preference share capital Tier ll subordinated debt (3) Impairments for performing loans Revaluation reserve (100) Less: regulatory deductions 29 (5 866) (4 531) (5 958) Investment in insurance entities (50%) >100 (3 851) (1 826) (3 851) Investment in financial entities (50%) (2) (971) (987) (906) Future expected losses exceeding provisions on incurred loss basis (50%) (45) (821) (1 489) (970) Loans to SPVs (first loss credit enhancement) (50%) (3) (223) (229) (231) Tier ll capital (14) Tier lll capital (7) Total regulatory capital Standard Bank Group capital adequacy ratios Minimum regulatory Target June June December requirement ratios % % % % % Total capital adequacy ratio 9, ,4 14,2 13,3 Tier I capital adequacy ratio 7,0 9 12,0 11,4 11,0 Core tier I capital adequacy ratio 5,25 11,1 10,5 10,1 Perpetual preference shares as % of tier I <25,0 7,7 8,2 8,1 Tier II and III as % of tier I <100,0 19,8 24,3 20,5 Subordinated tier III debt as % of tier I <50,0 24,0 26,3 23,7 Page 54 Standard Bank Group analysis of financial results 30 June 2009

57 Capital adequacy ratios Capital management June 2009 June 2008 December 2008 Host Tier I Tier II Tier III Total Tier I Tier II Tier III Total Total regulatory capital capital capital capital capital capital capital capital capital requirement % % % % % % % % % % Standard Bank Group 12,0 2,1 0,3 14,4 11,4 2,4 0,4 14,2 13,3 9,75 The Standard Bank of South Africa (SBSA) 9,9 3,2 0,1 13,2 9,1 3,0 0,1 12,2 12,2 9,75 Rest of Africa CfC Stanbic Bank Kenya 11,2 4,3 15,5 8,6 8,6 17,2 13,0 12 Stanbic Bank Botswana 8,8 8,9 17,7 14,7 0,5 15,2 18,2 15 Stanbic Bank Congo 13,2 6,6 19,8 10,3 3,3 13,6 10,8 10 Stanbic Bank Ghana 12,7 3,2 15,9 10,6 2,8 13,4 18,4 10 Stanbic Bank Tanzania 17,3 2,0 19,3 15,1 2,0 17,1 14,0 12 Stanbic Bank Uganda 15,4 0,1 15,5 12,6 12,6 13,2 12 Stanbic Bank Zambia 12,8 4,3 17,1 15,3 3,4 18,7 15,5 10 Stanbic Bank Zimbabwe 34,2 1,2 35,4 8,4 7,5 15,9 58,5 10 Stanbic IBTC Bank Nigeria 37,9 0,5 38,4 22,8 0,2 23,0 29,9 10 Standard Bank Malawi 20,2 6,4 26,6 14,3 3,4 17,7 22,1 10 Standard Bank Mauritius 15,5 6,5 22,0 12,8 0,5 13,3 23,9 10 Standard Bank Mozambique 10,5 3,2 13,7 7,5 3,6 11,1 11,1 8 Standard Bank Namibia 14,3 3,2 17,5 11,4 3,1 14,5 14,5 10 Standard Bank Swaziland 11,8 3,6 15,4 9,4 3,5 12,9 17,5 8 Standard Lesotho Bank 13,6 1,3 14,9 16,4 0,8 17,2 8,9 8 Standard International Holdings, consolidated 1 10,1 2,1 1,1 13,3 8,0 3,2 1,4 12,6 13,7 10,6 Standard Bank Isle of Man 9,2 3,9 13,1 8,4 3,4 11,8 11,2 10 Standard Bank Jersey 9,2 2,7 11,9 8,4 3,7 12,1 11,1 10 Aggregate regulatory capital requirement for banking operations 10,1 10,1 10,4 Liberty (calculated in terms of the Long-term Insurance Act) - CAR times covered 2,5 2,5 2,7 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). Standard Bank Group analysis of financial results 30 June 2009 Page 55

58 Subordinated debt Carrying Notional Carrying Notional Carrying Notional value 1 value 1 value 1 value 1 value 1 value 1 Redeemable/ Notional June June June June December December repayable Callable value date date LCm Rm Rm Rm Rm Rm Rm Subordinated bonds 2 SBSA SBK 10 (Tier III) 19 Nov 2012 ZAR SBK 3 31 Oct Oct 2008 ZAR SBK 5 17 Nov Nov 2011 ZAR July July 2012 USD SBK 8 10 April April 2013 ZAR SBK 7 24 May May 2015 ZAR SBK 9 10 April April 2018 ZAR SBK 11 9 April April 2014 ZAR Standard Bank Swaziland 15 Sept Sept 2010 E Standard Bank Namibia 20 Nov Nov 2011 NAD Stanbic Botswana Dec Dec 2008 BWP June May 2011 BWP June June 2013 BWP Aug Aug 2013 BWP Dec Dec 2013 BWP Standard Bank Mozambique 29 June 2017 MT CfC Stanbic Bank Kenya 31 Oct 2012 KES Standard International Holdings Tier III 13 Dec 2009 USD Tier III 27 Dec 2009 USD Tier III 29 Dec 2009 EUR July July 2009 USD Oct Oct 2010 USD July July 2016 USD Total bonds qualifying as regulatory banking capital Liberty (qualifying as regulatory insurance capital) Sept 2012 ZAR Total subordinated bonds Subordinated loans 2 Stanbic Bank Ghana 30 Sept Sept 2011 USD Stanbic Bank Tanzania 15 Sept Jan 2012 USD Stanbic Bank Zambia 15 Sept Sept 2016 USD Standard Bank Mauritius 15 Sept Sept 2013 USD Stanbic Bank Congo 15 Sept Sept 2013 USD CfC Stanbic Bank Kenya 30 June June 2014 USD Total subordinated loans Total subordinated debt Total subordinated debt banking activities Total subordinated bonds banking activities Total subordinated loans banking activities 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. Page 56 Standard Bank Group analysis of financial results 30 June 2009

59 Income statement analysis 58 Net interest income and margin analysis 60 Non-interest revenue 62 Credit impairment charges 66 Operating expenses 68 Taxation

60 Net interest income and margin analysis Net interest income and net interest margin CAGR (HY2003 HY2009): 19% Rm % , , Net interest income first half Net interest income second half After impairment charges Before impairment charges ,0 2,5 2,0 1,5 1,0 0,5 0,0 Prime interest rate (%) Jan Dec Movement in average assets, net interest income and margin per business unit Personal & Business Banking Average Net interest Net interest assets income margin Rm Rm % June 2008 as reported ,87 Reclassifications June 2008 restated ,87 Net non-interest earning assets (18 898) ,81 Interest earning assets June ,68 Impact of volume changes Impact of calendar variance (61) Impact of rate changes 165 0,09 Lending margin (132) (0,07) Client yield ,10 Cost of funding 2 (307) (0,17) Unwinding of discount on credit impairments IAS ,20 Funding margin (19) (0,01) Endowment funding (236) (0,13) Endowment capital and reserves (181) (0,10) Assets held for liquidity purposes 90 0,05 Other treasury and banking activities 286 0,15 Change in composition of balance sheet 0,02 Interest earning assets June ,79 Net non-interest earning assets (776) (0,69) June ,10 Net interest income change % 9 Average assets change % 4 1 Client yield changes refer to the difference in movement between average client rates and base lending rates. 2 Cost of funding changes refer to the difference in movement between base lending rates and an allocated cost of funding based on the term nature of the asset. Page 58 Standard Bank Group analysis of financial results 30 June 2009

61 Income statement analysis Favourable Lower trading assets and other non-interest earning assets, reducing the dilutive impact on margin. High net interest income growth due to growth in term and call loans and increased term margins. Increase in the unwinding of the IAS 39 discount on expected recoveries of non-performing loans to interest income. Continued focus on better pricing for risk for new mortgage loans and instalment sale and finance leases. Lower effective cost of central bank reserving requirements as interest rates reduced. Adverse Negative endowment impact from lower interest rates (average SA prime interest rate June 2009: 13,15%; June 2008: 14,77%). Significantly higher term funding costs. Corporate & Investment Banking Banking activities Average Net interest Net interest Average Net interest Net interest assets income margin assets income margin Rm Rm % Rm Rm % , ,16 (2 607) 2 0, , ,16 ( ) 462 1,50 ( ) , , , (24) (90) (236) (0,15) (288) (0,09) 381 0, , , ,23 (184) (0,12) (491) (0,14) 43 0, ,12 (128) (0,08) (128) (0,04) (217) (0,14) (480) (0,14) (308) (0,20) (736) (0,22) (27) (0,02) 63 0, , ,08 (0,05) (0,05) , , (0,93) (986) (1,17) , , Standard Bank Group analysis of financial results 30 June 2009 Page 59

62 Non-interest revenue Non-interest revenue CAGR (HY2003 HY2009): 18% Analysis of non-interest revenue (Rm) Rm % HY09 Non-interest revenue first half Non-interest revenue second half Non-interest revenue to total income Fee and commission revenue Trading revenue Other revenue June June December Change % Rm Rm Rm Net fee and commission revenue Fee and commission revenue Account transaction fees Electronic banking Knowledge-based fees and commission (3) Card-based commission Insurance fees and commission Bancassurance (9) Documentation and administration fees Foreign currency service fees (11) Other Fee and commission expense 22 (1 387) (1 137) (2 845) Trading revenue Commodities Forex Debt securities (14) Equities > (21) Other Other revenue (11) Banking and other (77) Banking and other (excluding Visa profit) (68) Realised Visa profit (excluded from headline earnings) (100) Property-related revenue > (45) 230 Insurance underwriting profit Insurance bancassurance profit Total non-interest revenue Page 60 Standard Bank Group analysis of financial results 30 June 2009

63 Income statement analysis Distribution of daily profit and loss Frequency of trading days June 2008 June 2009 Rm Favourable Good growth in account transaction fees resulting from growth in transaction account base and price increases. Translation benefit of the weaker average USD/ZAR exchange rate. Higher documentation and administration fees following a combination of standardisation of pricing, increased branch network in the rest of Africa and expanded customer base outside Africa. Lower adverse fair value adjustments on listed property portfolio. Growth in transaction volumes in Nigeria benefiting fee revenue. Trading operations in Nigeria benefited from volatility in markets. Strong trading performance in commodities, forex and equities. Adverse Higher commission paid on increased transaction volumes. Losses on high yield debt and distressed debt business portfolios as cash collections and asset sales prove difficult in the current environment. Non-recurrence of 2008 gains from disposal of Visa shares (excluded from headline earnings) and currency hedging gains in the prior year. Lower knowledge-based fees and commissions due to lower investment banking deal flow and brokerage transaction volumes, mainly in Nigeria. Standard Bank Group analysis of financial results 30 June 2009 Page 61

64 Credit impairment charges Credit impairment charges Credit loss history as a percentage of gross loans and advances (%) Rm HY09 Credit impairment charges on NPLs Credit impairment charges on PLs Credit loss ratio % 2,0 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0, HY09 NPLs Balance sheet impairments Credit loss ratio Income statement impairment charges (net of recoveries) June 2009 Performing Total Non-performing loans loans impair- Credit Impaired IAS 39 impair- ment loss Change loss discount 1 Total ment charges ratio % Rm Rm Rm Rm Rm % Personal & Business Banking ,80 Mortgage loans (136) ,55 Instalment sale and finance leases (1) ,60 Card debtors (27) (14) 811 7,24 Other loans and advances ,04 Corporate & Investment Banking ,15 Corporate loans ,14 Commercial property finance ,21 Central and other (501) 2 (501) Total banking activities ,84 1 Discounting of expected recoveries in terms of IAS Incurred but not reported (IBNR) provision reversed from Central and other as lagged impairments evident in business units in the current period, mainly Corporate & Investment Banking. Page 62 Standard Bank Group analysis of financial results 30 June 2009

65 Income statement analysis Adverse Higher non-performing loan provisioning in Personal & Business Banking portfolios due to the lagged effect of high interest rates and inflation impacting consumer ability to service debt. Contraction in house prices and increase in time to realise security. Increased stress in the small business market due to the tough economic environment. Increased corporate and business loan provisioning, mostly outside South Africa, off a low base, as increased global financial stress becomes evident in corporate customer portfolios, combined with weaker collateral values. Increased non-performing loan impairments in Nigeria and Ghana following the alignment of impairment models and the worsening global economic conditions. Favourable Targeted strategies to improve risk management. Proactive measures taken to restructure mortgage loans where customers meet strict criteria. Continued improvement in collections capability. June 2008 December 2008 Per- Performing Total forming Total Non-performing loans loans impair- Credit Non-performing loans loans impair- Credit Impaired IAS 39 impair- ment loss Impaired IAS 39 impair- ment loss loss discount 1 Total ment charges ratio loss discount 1 Total ment charges ratio Rm Rm Rm Rm Rm % Rm Rm Rm Rm Rm % , , , , , (17) , , , , , , , , ,50 (1) (1) ,08 (3) (3) , ,55 Standard Bank Group analysis of financial results 30 June 2009 Page 63

66 Credit impairment charges continued Balance sheet impairment roll forward from December 2008 January IAS discount Opening in opening balance balance Rm Rm Impairments of non-performing loans Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors 732 Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance 37 Central and other Impairments of performing loans Personal & Business Banking Mortgage loans 776 Instalment sale and finance leases 507 Card debtors 852 Other loans and advances 580 Corporate & Investment Banking Corporate loans Commercial property finance 183 Central and other Total impairments Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance 220 Central and other Total balance sheet impairments as a % of gross loans and advances 1,74 1 New provisions raised less recoveries of amounts written off in previous years equals income statement credit impairment charge (June 2009: R7 399 million R284 million = R7 115 million). Page 64 Standard Bank Group analysis of financial results 30 June 2009

67 Income statement analysis June 2009 IAS 39 IAS 39 Recoveries New discount discount Currency IAS 39 of amounts impairments in new Impaired recycled to translation June 2009 discount written off raised/ impairments accounts net interest and other Closing in closing in previous (released) 1 raised written off income movements balance balance years 1 Rm Rm Rm Rm Rm Rm Rm Rm (2 513) (810) (82) (342) (653) (8) (470) (82) (17) (1 051) (9) (650) (75) (48) (101) (39) (556) (101) (39) (555) (1) (2 614) (849) (638) (3) (136) (1) (5) 501 (14) (13) (3) (4) (145) (4) (145) (501) (3) (4) (132) (2 516) (810) (70) (342) (653) (1) (470) (82) (22) (1 051) (22) (653) (75) (25) (101) (43) (701) (101) (43) (700) (1) 425 (501) (2 617) (853) (770) ,36 Standard Bank Group analysis of financial results 30 June 2009 Page 65

68 Operating expenses Operating expenses (Rm) Cost and income growth (%) CAGR (HY2003 HY2009): 16% Growth 35 Ratio HY Operating expenses first half Operating expenses second half Operating expenses Total income growth Total cost growth Cost-to-income ratio June June December Change % Rm Rm Rm Staff costs Fixed remuneration Variable remuneration (21) Other staff costs Total staff costs Variable remuneration as a % of fixed remuneration 20,6 30,3 28,0 Variable remuneration as a % of total staff costs 15,4 21,2 19,5 Other operating expenses Information technology Depreciation, amortisation and impairments Communication Premises Other Total other operating expenses Total operating expenses Cost-to-income ratio 49,9 48,7 49,2 Analysis of total information technology function spend June June December Change % Rm Rm Rm IT staff costs Information technology Depreciation and amortisation Other > Total Page 66 Standard Bank Group analysis of financial results 30 June 2009

69 Income statement analysis Headline earnings per employee (banking activities) R 000 Number of employees HY03 HY04 HY05 HY06 HY07 HY08 HY Headline earnings per employee Number of employees Change June June December % Headcount Personal & Business Banking (1) Corporate & Investment Banking Central and other (1) Banking activities (0) Staff costs and headcount Unfavourable translation impact of weaker average USD/ZAR exchange rate increased fixed remuneration by 6%. New branches and other points of representation requiring additional client facing and support staff resulting in a 33% increase in staff costs in the rest of Africa. Higher permanent headcount requirements mainly in credit debt management as a result of higher collection volumes. Partly offset by: Decrease in direct cost due to headcount freeze in South Africa. Decrease in bonus and incentive provisions across most areas of the group. Other operating expenses Substantially higher IT and depreciation costs attributable to increased investment in the group s global trading platform and core banking system in South Africa. Enhancements to the overall network to increase capacity and meet business requirements, including customer focused channel improvements, enhancements to the regulatory and risk systems and improved workflow and imaging. Increased credit collection activities driving administrative and communication costs. Amortisation of intangible assets relating to operations acquired in Kenya. Premises cost growth resulting from roll out of branches in the rest of Africa, rental escalations and relocation costs outside Africa. Impact of the weaker average USD/ZAR exchange rate. Other costs impacted by: Increased professional fees due to utilisation of consultants on various projects, due diligence assessments, legal fees, post acquisition integration costs and relocations. Increase in security services cost within the rest of Africa. Standard Bank Group analysis of financial results 30 June 2009 Page 67

70 Taxation Taxation charge and effective taxation rate Rm % HY09 0 Total taxation charge Effective taxation rate Taxation rate reconciliation June June December % % % Effective taxation rate 25,4 26,3 26,1 Indirect taxation (6,4) (5,2) (5,7) Direct taxation current and prior years 19,0 21,1 20,4 Prior year tax 0,7 (0,1) Direct taxation current year 19,7 21,0 20,4 Adjustments to direct taxation 1,9 (0,5) (0,8) Capital gains tax (0,2) (0,1) Foreign tax (0,2) (0,2) (0,5) Secondary tax benefit/(cost) on companies 2,1 (1,0) (0,7) Deferred tax release rate adjustment 0,9 0,5 Direct taxation current year normal 21,6 20,5 19,6 Permanent differences 6,4 7,5 8,4 Non-taxable income 5,3 6,4 7,7 Deductible indirect tax 1,8 1,5 1,6 Other (0,7) (0,4) (0,9) Direct taxation statutory rate 28,0 28,0 28,0 Favourable Significant decrease in secondary tax on companies (STC), due to the declaration of a scrip distribution which does not attract STC, coupled with an increase in STC credits received. Prior year tax adjustment in the current year mainly in outside Africa. Increase in non-taxable dividends received, mainly in South Africa. Increase in deductible indirect taxes, mainly outside Africa. Adverse Decrease in other non-taxable income in South Africa, Nigeria and Mozambique. Lower proportion of income subject to capital gains tax. Page 68 Standard Bank Group analysis of financial results 30 June 2009

71 Balance sheet analysis 70 Loans and advances 71 Deposit and current accounts 72 Loans and advances performance 74 Banking activities average balance sheet 76 Liquidity management 78 Fair value hierarchy

72 Loans and advances Loans and advances (Rbn) Composition of gross loans and advances CAGR (2003 HY2009): 23% 16% % 35% % % 3% 9% HY09 Mortgage loans 35% (June 2008: 32%) Instalment sale and finance leases 9% (June 2008: 9%) Card debtors 3% (June 2008: 3%) Other term loans 22% (June 2008: 21%) Overdrafts and other demand loans 10% (June 2008: 14%) Loans granted under resale agreements 5% (June 2008: 8%) Other loans and advances 16% (June 2008: 13%) By advance type June June December Change % Rm Rm Rm Loans and advances to banks (1) Call loans (62) Loans granted under resale agreements Balances with banks Loans and advances to customers (2) Gross loans and advances to customers (1) Mortgage loans Instalment sale and finance leases (10) Card debtors (5) Overdrafts and other demand loans (7) Other term loans Loans granted under resale agreements (62) Commercial property finance Foreign currency loans Other loans and advances (46) Credit impairments for loans and advances 72 (17 177) (9 983) (14 018) Credit impairments for non-performing loans 99 (11 888) (5 960) (8 596) Credit impairments for performing loans 31 (5 289) (4 023) (5 422) Net loans and advances (2) Comprising: Gross loans and advances (1) Less: credit impairments 72 (17 177) (9 983) (14 018) Net loans and advances (2) Impact of stronger period end exchange rates (14 396) (41 660) Total loans and advances excluding exchange rate impact (0) Securitised assets consolidated above: Mortgage loans (2) Instalment sale and finance leases (65) Securitised assets (8) Page 70 Standard Bank Group analysis of financial results 30 June 2009

73 Deposit and current accounts Balance sheet analysis Deposit and current accounts (Rbn) CAGR (HY2003 HY2009): 20% Composition of deposit and current accounts 10% 18% 9% % % 22% % HY09 Current accounts: 10% (June 2008: 11%) Cash management deposits: 9% (June 2008: 10%) Call deposits: 22% (June 2008: 21%) Term deposits: 26% (June 2008: 25%) Negotiable certificates of deposit: 13% (June 2008: 11%) Securitised issuances: 2% (June 2008: 2%) Other 18% (June 2008: 20%) By deposit type June June December Change % Rm Rm Rm Deposits from banks (16) Deposits from banks and central banks (6) Deposits from banks under repurchase agreements (74) Deposits from customers Current accounts (3) Cash management deposits Call deposits Savings accounts Term deposits Negotiable certificates of deposit Repurchase agreements > Securitised issuances (6) Other funding (26) Banking activities Comprising: Retail priced deposit and current accounts (0) Wholesale priced deposit and current accounts Total deposits Impact of stronger period end exchange rates (21 465) (36 925) Total deposit and current accounts excluding exchange rate impact Standard Bank Group analysis of financial results 30 June 2009 Page 71

74 Loans and advances performance Gross advances Performing loans Early Total Current arrears Total Rm Rm Rm Rm June 2009 Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Central and other Gross loans and advances Credit risk inherent in off-balance sheet exposures and other asset classes Banking activities Percentage of total book (%) 100,0 93,3 1,4 94,7 June 2008 Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Central and other Gross loans and advances Staff home loan fair value adjustment in terms of IAS 39 1 Credit risk inherent in off-balance sheet exposures and other asset classes Banking activities Percentage of total book (%) 100,0 96,3 1,5 97,8 December 2008 Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Central and other Banking activities Percentage of total book (%) 100,0 95,0 1,6 96,6 1 Deducted against gross loans and advances in December 2008 as an initial fair value adjustment. 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. Page 72 Standard Bank Group analysis of financial results 30 June 2009

75 Balance sheet analysis Impaired loans Net after Balance sheet Securities and securities and impairments Gross Sub- expected expected for non- impairment standard Doubtful Loss Total recoveries recoveries performing loans coverage Rm Rm Rm Rm Rm Rm Rm % ,9 1,8 0,6 5,3 3,7 1,6 1, ,3 0,6 0,3 2,2 1,4 0,8 0, ,2 0,8 0,4 3,4 2,3 1,1 1,1 Doubtful Loss 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. Items which are considered to be uncollectable and where the realisation of collateral and institution of legal proceedings have been unsuccessful. These items are considered of such little value that they should no longer be included in the net assets of the group. Standard Bank Group analysis of financial results 30 June 2009 Page 73

76 Banking activities average balance sheet June 2009 Total Trading Non-interest Interest average book earning earning balance Rm Rm Rm Rm Assets Cash and balances with central banks Trading assets Financial investments Net loans and advances Loans and advances to banks Loans and advances to customers Mortgage loans Instalment sale and finance leases Card debtors Overdrafts and other demand loans Other term loans Loans granted under resale agreements Commercial property finance Foreign currency loans Other loans and advances Gross loans and advances Credit impairments (16 724) (16 724) Other assets Interest in associates and joint ventures Goodwill and other intangible assets Property and equipment Total average assets and interest excluding trading derivative assets Trading derivative assets Total average assets and interest Equity and liabilities Equity Liabilities Trading liabilities Deposit and current accounts Deposits from banks Deposits from customers Current accounts Cash management deposits Call deposits Savings accounts Term deposits Negotiable certificates of deposit Repurchase agreements Other funding Other liabilities Subordinated debt Total average equity, liabilities and interest excluding trading derivative liabilities Trading derivative liabilities Total average equity, liabilities and interest Margin on total average assets excluding trading derivatives Margin on total average loans and advances Margin on average interest earning assets Interest received and paid on trading derivative financial instruments has been netted with interest received and paid 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 South African Reserve Bank 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. Page 74 Standard Bank Group analysis of financial results 30 June 2009

77 Balance sheet analysis June 2008 Total Non-interest Interest average Interest 1 Average rate Trading book earning earning balance Interest 1 Average rate Rm % Rm Rm Rm Rm Rm % , , , , , , , , , , , , , , , , , , , , , , , , , , , ,30 (8 483) (8 483) , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,76 Standard Bank Group analysis of financial results 30 June 2009 Page 75

78 Liquidity management Group behaviourally adjusted cumulative liquidity mismatch (%) Long-term funding ratio SBSA (%) % of funding related liabilities to 7 days 0 to 1 month 0 to 3 months 0 to 6 months 0 to 12 months 10 June 2008 June 2009 June 2008 June 2009 Internal limit 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 within limits. Given the continuing volatility in financial markets and prudent liquidity management practices followed, the group increased its liquidity buffer during the six month period. These liquidity levels are expected to gradually reduce as conditions normalise. Group unencumbered surplus liquidity June June December Rbn Rbn Rbn Marketable assets 88,7 45,2 53,2 Short-term foreign currency placements 35,5 26,0 30,2 Total unencumbered marketable assets 124,2 71,2 83,4 Other readily accessible liquidity 12,0 14,9 13,4 Total unencumbered surplus liquidity 136,2 86,1 96,8 Structural requirements Behavioural profiling is applied to assets, liabilities and offbalance 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. The long-term funding ratio is actively monitored to ensure adherence to these limits. 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 June 2009, the long-term funding ratio was 26,0% (June 2008: 23,4%) for SBSA and 23,8% (June 2008: 21,5%) for the group. Other readily accessible liquidity includes access to USD600 million committed liquidity facility maturing in October Page 76 Standard Bank Group analysis of financial results 30 June 2009

79 Balance sheet analysis Funding related liabilities composition SBSA (Rbn) Liquidity stress testing and scenario analysis Anticipated on- and off-balance sheet cash flows are subjected to a variety of bank-specific and systemic stresses and scenarios in order to evaluate the impact of unlikely but plausible events on liquidity positions. Increased frequency of scenario analysis and stress testing Corporate funding Financial institutions Government and parastatals Interbank funding Retail Other rand and foreign currency deposits Senior and subordinated debt Foreign currency funding Other liabilities to the public 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. June 2008 June 2009 Diversified funding base 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 3-month tenors to below 10% and 20% of total funding related liabilities respectively. Depositor concentration SBSA June June December % % % Single depositor 1,5 2,2 2,4 Top ten depositors 8,4 10,4 12,9 Funding-related liabilities for SBSA were R606 billion as at June 2009 compared with R577 billion at June 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. Standard Bank Group analysis of financial results 30 June 2009 Page 77

80 Fair value hierarchy Composition Assets Composition Liabilities % Rm % Rm June 2009 Level Level Level Financial instruments at fair value Reconciled as follows: Held for trading Designated at fair value Available-for-sale Financial instruments at fair value June 2008 Level Level Level Financial instruments at fair value Reconciled as follows: Held for trading Designated at fair value Available-for-sale Financial instruments at fair value December 2008 Level Level Level Financial instruments at fair value Reconciled as follows: Held for trading Designated at fair value Available-for-sale Financial instruments at fair value In accordance with the group s accounting policies, certain financial assets and liabilities are measured at fair value using either quoted market prices or valuation techniques. Financial assets and liabilities that are measured at fair value have been categorised into the following levels: Level 1: Financial instruments for which fair value is determined using quoted market prices in active markets for identical assets or liabilities Level 2: Financial instruments for which fair value is determined using inputs other than quoted prices, that are observable for the asset or liability, either directly, as prices, or indirectly, derived from prices. Level 3: Financial instruments for which fair value is determined using inputs for the asset or liability that are not based on observable market data. Page 78 Standard Bank Group analysis of financial results 30 June 2009

81 The Standard Bank of South Africa Limited 80 Key financial results, ratios and statistics 82 Summarised income statement 83 Balance sheet 84 Segmental income statement 86 Segmental balance sheet 88 Credit impairment charges 92 Loans and advances performance 94 Market share analysis Standard Bank Group analysis of financial results 30 June 2009 Page 79

82 Key financial results, ratios and statistics The Standard Bank of South Africa Loans and advances (Rbn) - SBSA Group Total capital to risk-weighted assets (%) - SBSA Company , , , , , , , HY HY09 1 Basel II implemented 1 January 2008 and comparatives for 2007 are pro-forma on the Basel I basis. All other historical comparatives are on a Basel I basis. Change June June December % SBSA Group Income statement Headline earnings Rm (6) Profit attributable to the ordinary shareholder Rm (8) Balance sheet Ordinary shareholder s equity Rm Total assets Rm Loans and advances Rm Financial performance ROE % 20,6 25,3 24,4 Non-interest revenue to total income % 42,3 43,6 43,0 Gearing ratio times 22,0 22,7 24,5 Loan-to-deposit ratio % 88,3 92,7 87,0 Credit loss ratio % 2,03 1,74 2,02 Cost-to-income ratio % 44,5 44,8 44,5 Effective taxation rate % 25,3 25,1 22,8 Number of employees (5) SBSA Company Headline earnings Rm (8) Total assets Rm ROE % 20,0 25,1 24,7 Capital adequacy Total risk-weighted assets Rm Tier I capital Rm Total capital Rm Tier I capital adequacy ratio % 9,9 9,1 9,3 Capital adequacy ratio % 13,2 12,2 12,2 Page 80 Standard Bank Group analysis of financial results 30 June 2009

83 The Standard Bank of South Africa Personal & Business Banking High credit impairments across all portfolios excluding card products, due to the lagged effect of the high interest rate environment in 2008, weaker recovery values, inflationary pressures and resultant continued erosion of customer affordability. Decreased credit impairments for card products, resulting from an improvement in delinquency rates and increased recoveries. Loans and advances growth of 3% despite a weaker property market and a severe drop in vehicle sales. Net interest income growth benefited from widening of the lending margins and the unwinding of the discount on expected non-performing loan recoveries. Negative endowment impact of lower average interest rates. Continued focus on better pricing for risk. Increased term funding costs for mortgage lending. Reduced fee and commission income for card products as a result of a decline in customer spending. Continued growth in transactional volumes, value per transaction and customer base, particularly in account transaction fees, electronic banking and documentation and administration fees. Cost containment initiatives, including headcount reduction through headcount freezes and natural attrition. Continued investments in the electronic channel systems. Corporate & Investment Banking Higher credit impairment charges driven by increase in non-performing loans as default rates rose, together with additional performing portfolio provisioning. Net interest income growth due to growth in property and term loans. Lower net interest income from cash management activities given reduction in overnight deposit balances as well as the negative endowment impact. Strong and diversified trading performance on the back of continued volatility with notable performances from equity derivatives and the interest rate trading desk. Limited activity in securitisation and debt origination given market conditions. Decreased fee income due to lower levels of advisory deal flow. Subdued performance from investor services businesses, with decline in custody revenue due to decrease in volumes. Lower incentive-based remuneration. Increased other operating expenditure due to continued investment in IT. Heightened risk focus on custody clearing and settlement. Global markets risk levels well contained. Other services Benefited from the release of December 2008 impairment provision created centrally for credit losses in the group s credit portfolios that have now become evident in the impairments raised in the underlying business units, mainly Corporate & Investment Banking. Standard Bank Group analysis of financial results 30 June 2009 Page 81

84 Summarised income statement The Standard Bank of South Africa Group Company June June December June June December Change Change % Rm Rm Rm % Rm Rm Rm Net interest income Non-interest revenue Net fee and commission revenue Trading revenue Other revenue Total income Credit impairment charges Impairments for non-performing loans Impaired loss Discounting of expected recoveries (18) (18) Impairments for performing loans (>100) (149) (>100) (135) Income after credit impairment charges Operating expenses Staff costs Other operating expenses Net income before associates and joint ventures (8) (10) Share of profit from associates and joint ventures Net income before indirect taxation (8) (10) Indirect taxation (15) (15) Profit before direct taxation (8) (10) Direct taxation (5) (8) Attributable to the ordinary shareholder (8) (10) Headline adjustable items (85) (15) (102) 9 (86) (14) (102) (44) Headline earnings (6) (8) Page 82 Standard Bank Group analysis of financial results 30 June 2009

85 Balance sheet The Standard Bank of South Africa The Standard Bank of South Africa Group Company June June December June June December Change Change % Rm Rm Rm % Rm Rm Rm Assets Cash and balances with the central bank Derivative assets Trading assets (11) Pledged assets (34) (34) Financial investments Loans and advances Loans and advances to banks (18) (19) Loans and advances to customers Other assets Interest in group companies (3) (4) Interest in associates and joint ventures (2) Intangible assets Property and equipment Total assets Equity and liabilities Equity Equity attributable to the ordinary shareholder Ordinary share capital Ordinary share premium Reserves Liabilities Derivative liabilities Trading liabilities (37) (27) Deposit and current accounts Deposits from banks (19) (15) Deposits from customers Other liabilities (13) (16) Subordinated debt (2) (2) Liabilities to group companies Total equity and liabilities Standard Bank Group analysis of financial results 30 June 2009 Page 83

86 Segmental income statement The Standard Bank of South Africa Personal & Business Banking June June December Change % Rm Rm Rm Net interest income Interest income (3) Interest expense (6) Non-interest revenue Net fee and commission revenue Fee and commission revenue Fee and commission expense Trading revenue Other revenue Total income Credit impairment charges Impairments for non-performing loans Impairments for performing loans (47) Income after credit impairment charges (6) Operating expenses Staff costs Other operating expenses Net income before associates and joint ventures (28) Share of profit from associates and joint ventures Net income before indirect taxation (27) Indirect taxation (7) Profit before direct taxation (29) Direct taxation (36) Attributable to the ordinary shareholder (26) Headline adjustable items (>100) (10) SBSA Group headline earnings (27) ROE % 17,3 23,6 21,2 Credit loss ratio % 2,85 2,31 2,50 Cost-to-income ratio % 44,8 44,2 45,4 Effective taxation rate % 33,3 34,6 34,9 Number of employees (7) Page 84 Standard Bank Group analysis of financial results

87 The Standard Bank of South Africa Corporate & Investment Banking Other services The Standard Bank of South Africa Group June June December June June December June June December Change Change Change % Rm Rm Rm % Rm Rm Rm % Rm Rm Rm > (5 125) (4 099) (6 143) (5 434) (4 208) (6 598) (4) (29) (4) (91) (7) (77) (86) (4) (86) (10) (70) (93) (2) (>100) (3) 7 (7) (95) > (2) 357 (33) > (>100) (501) > (6) (36) (50) 2 4 (1) > (>100) (503) (>100) (149) > (4) >100 (165) (82) (22) (8) > (26) (456) (8) (16) (8) > (26) (456) (8) (67) (15) (8) > (77) (527) (8) (12) > (99) (517) (5) (7) > (10) (8) (6) >100 1 (107) (116) (85) (15) (102) 9 (8) > (85) (126) (6) ,0 40,4 46,1 20,6 25,3 24,4 0,85 0,13 0,70 2,03 1,74 2,02 41,2 42,3 38,3 44,5 44,8 44,5 14,0 14,4 16,9 25,3 25,1 22, (6) (5) Standard Bank Group analysis of financial results 30 June 2009 Page 85

88 Segmental balance sheet The Standard Bank of South Africa Personal & Business Banking June June December Change % Rm Rm Rm Assets Cash and balances with the central bank Financial investments, trading and pledged assets (58) Loans and advances Loans and advances to banks Loans and advances to customers Derivative and other assets (4) Interest in group companies Interest in associates and joint ventures (2) Intangible assets Property and equipment SBSA Group total assets Equity and liabilities Equity Equity attributable to the ordinary shareholder Ordinary share capital Ordinary share premium Reserves Liabilities Deposit and current accounts Deposits from banks (315) Deposits from customers Derivative, trading and other liabilities (56) Subordinated debt Liabilities to group companies > SBSA Group total equity and liabilities Page 86 Standard Bank Group analysis of financial results 30 June 2009

89 The Standard Bank of South Africa Corporate & Investment Banking Other services The Standard Bank of South Africa Group June June December June June December June June December Change Change Change % Rm Rm Rm % Rm Rm Rm % Rm Rm Rm > (2 469) (3 208) (2) >100 (2 491) (737) (1 268) (20) (227) (180) (576) (18) >100 (2 264) (557) (692) > (9 198) (98) (139) (3) > (157) (2 818) (8) (16 030) (17 439) (13 360) (12) (4 822) (5 483) (12 223) (25) (8 535) (11 408) (9 962) (16) >100 (2 150) (552) 142 (19) (41) (6 385) (10 856) (10 104) (1) (2 681) (87) (2) (45) (79) > (157) (2 818) Standard Bank Group analysis of financial results 30 June 2009 Page 87

90 Credit impairment charges The Standard Bank of South Africa Credit impairment charges (Rm) (149) HY09 Credit impairment charges on NPLs Credit impairment charges on PLs Income statement impairment charges (net of recoveries) June 2009 Non-performing loans Performing Total Impaired IAS 39 loans impairment Credit Change loss discount 1 Total impairment charges loss ratio % Rm Rm Rm Rm Rm % Personal & Business Banking ,85 Mortgage loans (135) ,58 Instalment sale and finance leases (4) ,03 Card debtors (32) (39) 745 7,10 Other loans and advances > ,66 Corporate & Investment Banking > ,85 Corporate loans > ,74 Property finance ,36 Other services (>100) 2 2 (503) (501) Total SBSA Group (149) ,03 1 Discounting of expected recoveries in terms of IAS 39. Page 88 Standard Bank Group analysis of financial results 30 June 2009

91 The Standard Bank of South Africa Unfavourable Higher non-performing loan provisioning in Personal & Business Banking portfolios due to the lagged effect of high interest rates impacting consumer ability to service debt. Contraction in house prices and increase in time to realise security. Increased stress in the small business market due to the tough economic environment. Increased corporate and business loan provisioning, off a low base, as increased financial stress becomes evident in corporate customer portfolios, combined with the weaker collateral values. Favourable Targeted strategies to improve risk management. Proactive measures taken to restructure mortgage loans where customers meet strict criteria. Continued improvement in collections capability. Improved performance in card due to focus on early delinquencies and restructures. June 2008 December 2008 Non-performing loans Performing Total Credit Non-performing loans Performing Total Credit Impaired IAS 39 loans impairment loss Impaired IAS 39 loans impairment loss loss discount 1 Total impairment charges ratio loss discount 1 Total impairment charges ratio Rm Rm Rm Rm Rm % Rm Rm Rm Rm Rm % , , , , , (19) , , , , ,41 (6) (6) ,13 (36) (36) ,70 (6) (6) ,17 (36) (36) , , , ,02 Standard Bank Group analysis of financial results 30 June 2009 Page 89

92 Credit impairment charges continued The Standard Bank of South Africa Balance sheet impairment roll forward from December 2008 January IAS 39 New 2009 discount impairments Opening in opening raised/ balance balance (released) 1 Rm Rm Rm Impairments of non-performing loans Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Other services (9) Impairments of performing loans Personal & Business Banking Mortgage loans 776 (135) Instalment sale and finance leases 479 (4) Card debtors 816 (39) Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Other services 785 (503) (149) Total impairments Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Other services 776 (501) Total SBSA Group balance sheet impairments as a % of gross loans and advances 2,11 1 New provisions raised less recoveries of amounts written off in previous years equals income statement credit impairment charge (June 2009: R5 547 million R232 million = R5 315 million). Page 90 Standard Bank Group analysis of financial results 30 June 2009

93 The Standard Bank of South Africa June 2009 IAS 39 IAS 39 Recoveries discount discount Currency IAS 39 of amounts in new Impaired recycled to translation June 2009 discount written off impairments accounts net interest and other Closing in closing in previous raised written off income movements balance balance years 1 Rm Rm Rm Rm Rm Rm Rm 826 (2 337) (775) (1) (341) (650) (1) (435) (71) (1 035) (526) (54) (5) (3) (2) (2 337) (775) (5) (2) (5) (5) (2) (5) 282 (5) (2) (5) 826 (2 337) (775) (1) (341) (650) (1) (435) (71) (1 035) (526) (54) (5) (7) (4) (5) (5) (4) (2) (2 337) (780) ,64 Standard Bank Group analysis of financial results 30 June 2009 Page 91

94 Loans and advances performance The Standard Bank of South Africa Gross advances Performing loans Early Total Current arrears Total Rm Rm Rm Rm June 2009 Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Other services (2 203) (2 203) (2 203) Gross loans and advances Credit risk inherent in off-balance sheet exposures and other asset classes Total SBSA Group Percentage of total book (%) 100,0 92,5 1,6 94,1 June 2008 Personal & Business Banking Mortgage loans Instalment sale and finance leases Card debtors Other loans and advances Corporate & Investment Banking Corporate loans Commercial property finance Other services (463) (463) (463) Gross loans and advances Staff home loan fair value adjustment in terms of IAS 39 1 Credit risk inherent in off-balance sheet exposures and other asset classes Total SBSA Group Percentage of total book (%) 100,0 95,4 1,9 97,3 1 Deducted against gross loans and advances in June 2009 as an initial fair value adjustment. 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. Page 92 Standard Bank Group analysis of financial results 30 June 2009

95 The Standard Bank of South Africa Impaired loans Net after Balance sheet Securities and securities and impairments Gross Sub- expected expected for non-per- impairment standard Doubtful Loss Total recoveries recoveries forming loans coverage Rm Rm Rm Rm Rm Rm Rm % (6) ,2 2,2 0,5 5,9 4,1 1,8 1, (15) (15) ,7 0,8 0,2 2,7 1,9 0,8 0,9 Doubtful Loss 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. Items which are considered to be uncollectable and where the realisation of collateral and institution of legal proceedings have been unsuccessful. These items are considered of such little value that they should no longer be included in the net assets of the group. Standard Bank Group analysis of financial results 30 June 2009 Page 93

96 Market share analysis South African market share analysis (%) Standard Bank s market share movement (%) Mortgage loans Instalment finance Card debtors Other loans and advances Deposits 17 Jun 06 Jun 07 Jun 08 May 09 SBSA Absa FirstRand Nedbank Other Mortgage loans Instalment finance Card debtors Other loans and advances Deposits Source BA 900 May 2009 Retail based deposits (denominated in rands) (%) Corporate based deposits (denominated in rands) (%) Market share Dec 06 Dec 07 Dec 08 May 09 SBSA Absa Nedbank FirstRand Market share Dec 06 Dec 07 Dec 08 May 09 SBSA Absa Nedbank FirstRand Page 94 Standard Bank Group analysis of financial results 30 June 2009

97 Other information and reclassifications 96 Supplementary information on a geographic basis 98 Changes in accounting policies and reclassifications 99 Group balance sheet reclassifications 100 Business unit reclassifications 101 Financial and other definitions Standard Bank Group analysis of financial results 30 June 2009 Page 95

98 Supplementary information on a geographic basis South Africa Personal & Business Banking Corporate & Investment Banking Change June June December Change June June December % % Total income Rm Headline earnings/(loss) Rm (22) (2) Loans and advances Rm (2) Total assets Rm Average ordinary shareholders equity Rm ROE % 17,0 24,6 21,0 36,2 38,7 43,5 Number of employees (7) Rest of Africa Personal & Business Banking Corporate & Investment Banking Change June June December Change June June December % % Total income Rm Headline earnings Rm (16) (14) Loans and advances Rm (3) (30) Total assets Rm (21) (10) Average ordinary shareholders equity Rm ROE % 18,0 29,6 20,0 9,1 12,6 14,6 Number of employees Outside Africa Personal & Business Banking Corporate & Investment Banking Change June June December Change June June December % % Total income Rm Headline (loss)/earnings Rm (85) (4) (27) (52) (20) Loans and advances Rm (30) (6) Total assets Rm (26) (10) Average ordinary shareholders equity Rm ROE % (0,9) (7,7) (6,1) 6,6 11,7 9,2 Number of employees (7) Results disclosed by recent acquisitions June June December Change % Rm Rm Rm Nigeria Stanbic IBTC Bank 1 Total income (3) Profit attributable to ordinary shareholders (36) Total assets (35) Percentage holding % 50,8 50,8 50,8 Argentina Standard Bank Argentina 1 Total income Profit attributable to ordinary shareholders Total assets (3) Percentage holding % 75,0 76,7 75,0 1 Results as published, total income and profit converted at average exchange rate and total assets at closing exchange rate. Page 96 Standard Bank Group analysis of financial results 30 June 2009

99 Other information and reclassifications Other domestic operations Liberty Total South Africa Change June June December Change June June December Change June June December % % % (25) (5) (>100) (647) (27) (30) (6) ,9 8,5 13,4 (20,3) 14,0 12,8 15,6 25,5 25,2 (1) (1) Total Rest of Africa Change June June December % (15) (20) (13) ,9 15,5 16, Total Outside Africa Central funding and eliminations Standard Bank Group Change June June December June June December Change June June December % % (1) (17) (6) (24) (7) (2) (10) ( ) (94 552) ( ) (2) ,3 10,7 8,4 14,5 11,2 (0,1) 12,6 19,8 18, Standard Bank Group analysis of financial results 30 June 2009 Page 97

100 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 standards became effective on 1 January 2009: IFRS 2 Share-based Payment Vesting Conditions and Cancellations; IFRS 7 Financial Instruments: Disclosures Improving Disclosures about Financial Instruments; IAS 1 Presentation of Financial Statements (revised); IAS 28 Investments in Associates (2008 Improvements to IFRS); and IAS 40 Investment Property (2008 Improvements to IFRS). The following new interpretations became effective on 1 January 2009: IFRIC 13 Customer Loyalty Programmes; IFRIC 15 Agreements for the Construction of Real Estate; IFRIC 16 Hedges of a Net Investment in a Foreign Operation; and AC 503 Accounting for Black Economic Empowerment (BEE) Transactions. financial instruments previously classified as other assets were moved to appropriate financial instrument classifications; and the analysis of balances between banks and non-banks was reviewed and refined. The allocation of goodwill and intangible assets on the acquisition of IBTC Chartered Bank Plc, previously determined provisionally, was finalised in the second half of The June 2008 comparatives have been restated as if the initial accounting had been completed at the acquisition date as required by IFRS 3 Business Combinations. The finalisation of the purchase price allocation resulted in a decrease in intangible assets for the 2008 interim results, of R185 million and a resulting increase in goodwill of R65 million, after accounting for minority interest and taxation. Comparative numbers relating to segmental results have been reclassified for restructuring of divisional responsibilities between business units. The reclassifications and restatements did not impact equity attributable to ordinary shareholders or profit for the period attributable to ordinary shareholders. 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 No reclassifications or restatements were made to results disclosed in respect of December The June 2008 balance sheet has been restated for reclassifications and restatements made in the second half of These reclassifications include: all items which are of a trading nature were moved into the trading assets or liabilities classification. These included collateral and repurchase agreements held for trading purposes; Page 98 Standard Bank Group analysis of financial results 30 June 2009

101 Group balance sheet reclassifications Other information and reclassifications June 2008 Normalised IFRS 3 as previously Alignment restate- Normalised reported project ment restated Rm Rm Rm Rm Assets Cash and balances with central banks Derivative assets Trading assets Pledged assets Financial investments (9 876) Loans and advances (13 393) Loans and advances to banks (7 121) Loans and advances to customers (6 272) Investment property Other assets (6 517) Interest in associates and joint ventures Goodwill and other intangible assets (120) Property and equipment Total assets (120) Equity and liabilities Equity (64) Equity attributable to ordinary shareholders Preference share capital and premium Minority interest (64) Liabilities (56) Derivative liabilities Trading liabilities Deposit and current accounts (29 097) Deposits from banks Deposits from customers (49 656) Other liabilities (1 175) (56) Policyholders liabilities Subordinated debt Total equity and liabilities (120) Refer to page 98 for explanations of reclassifications. Standard Bank Group analysis of financial results 30 June 2009 Page 99

102 Business unit reclassifications December 2008 Personal & Corporate & Standard Business Investment Central Bank Banking Banking and other Liberty Group Rm Rm Rm Rm Rm Income statement reclassifications Normalised headline earnings as reported Net interest income 8 7 (15) Operating expenses in banking activities (123) Staff costs (7) (16) 23 Other operating expenses (146) Indirect taxation (13) (1) 14 Direct taxation 6 (35) 29 Normalised headline earnings restated 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. Page 100 Standard Bank Group analysis of financial results 30 June 2009

103 Financial and other definitions Other information and reclassifications Standard Bank Group Basic earnings per share (EPS) (cents) CAGR (%) Capital adequacy ratio (%) Diluted headline earnings per share (cents) Dividend cover (times) Dividends per share (cents) Headline earnings (Rm) Headline earnings per share (HEPS) (cents) Net asset value (Rm) Net asset value per share (cents) Price-to-book (times) Profit attributable to ordinary shareholders (Rm) Profit for the period (Rm) Return on equity (ROE) (%) Shares in issue (number) Tangible net asset value (Rm) Tangible net asset value per share (cents) Turnover in shares traded (%) Weighted average number of shares (number) Banking activities Available financial resources (AFR) (Rm) Capital cover ratio (times) Cost-to-income ratio (%) Credit loss ratio (%) Effective taxation rate (%) Gearing ratio (times) Gross impairment coverage (%) Earnings attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue. Compound annual growth rate. Regulatory capital divided by risk-weighted assets. Diluted headline earnings divided by the weighted average number of shares, adjusted for potential dilutive ordinary shares resulting from share-based payments. Headline earnings per share divided by dividends per share. Total dividends to ordinary shareholders including dividends and scrip distributions declared per share in respect of the period. 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 divided by the weighted average number of ordinary shares in issue. Equity attributable to ordinary shareholders. Net asset value divided by the number of ordinary shares in issue at the end of the period. Market capitalisation divided by net asset value. 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. Income statement profit attributable to ordinary shareholders, minorities and preference shareholders for the period. Headline earnings as a percentage of monthly average ordinary shareholders funds. Number of ordinary shares in issue as listed on the JSE Limited (JSE). Equity attributable to ordinary shareholders excluding goodwill and other intangible assets. Tangible net asset value divided by the number of ordinary shares in issue at period end. Number of shares traded during the period as a percentage of the weighted average number of shares. The weighted average number of ordinary shares in issue during the period as recorded on the JSE. The amount of permanent capital that is available to the group to absorb potential losses. Available financial resources divided by minimum economic capital requirements. Operating expenses as a percentage of total income including share of profit from associates and joint ventures. Total impairment charges on loans and advances per the income statement as a percentage of average daily and monthly gross loans and advances. Direct and indirect taxation as a percentage of income before taxation. Total assets divided by tangible net asset value. Non-performing loan impairments as a percentage of gross non-performing loans. Standard Bank Group analysis of financial results 30 June 2009 Page 101

104 Financial and other definitions continued Impairment of non-performing loans (Rm) Impairment of performing loans (Rm) Net interest margin (%) Non-interest earning assets (Rm) Non-interest revenue to total income (%) Return on equity (ROE) (%) Impairment for specific identified credit losses, net of the present value of estimated recoveries. Impairment for incurred credit losses inherent in the performing loan book. Net interest income as a percentage of daily and monthly average total assets, excluding trading derivative assets. 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 is specifically excluded as it is utilised to meet liquidity requirements and is reflected as part of the interest earning assets to reflect the cost of liquidity. Derivative assets are also excluded. Non-interest revenue as a percentage of total income. Headline earnings, excluding Liberty, as a percentage of monthly average ordinary shareholders funds, after deducting capital relating to Liberty. Other definitions Black Black small and medium enterprise (BSME) African, Coloured and Indian South African citizens. These are enterprises that are classified as either black empowered or black owned enterprises whose annual revenue is between R and R20 million. 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. 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 International Financial Reporting Standards issued by the International Accounting (IFRS) Standards Board (IASB). Junior management Employees whose salaries are in excess of R but less than or equal to R 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 R but less than or equal to R per annum (increasing each year by CPI). Normalised results The financial results and ratios restated on an economic substance basis as explained on page 18. SBSA The Standard Bank of South Africa Limited. Senior management Employees whose salaries are in excess of R per annum (increasing each year by CPI). 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. Page 102 Standard Bank Group analysis of financial results 30 June 2009

105 Shareholder information 104 Analysis of shareholders 105 Credit ratings 106 Dividend payment dates and instrument codes ibc Contact details

106 Ten major shareholders 1 June 2009 June 2008 December 2008 Analysis of shareholders Number of Number of Number of shares % shares % shares % (million) holding (million) holding (million) holding Industrial and Commercial Bank of China 313,0 20,1 305,0 20,0 305,0 20,0 Public Investment Corporation 188,3 12,1 184,8 12,1 190,4 12,5 Tutuwa participants 91,0 5,9 91,0 5,9 91,0 6,0 Staff 37,3 2,4 37,3 2,4 37,3 2,4 Strategic partners 35,8 2,3 35,8 2,3 35,8 2,4 Communities and regional businesses 17,9 1,2 17,9 1,2 17,9 1,2 Liberty Group 2 34,3 2,2 38,9 2,5 30,9 2,0 Dodge & Cox 67,8 4,4 59,2 3,9 69,7 4,6 Old Mutual Group 56,5 3,6 61,9 4,0 57,8 3,8 Investment Solutions 35,2 2,3 37,7 2,5 29,8 1,9 Sanlam Group 30,2 1,9 31,5 2,1 31,5 2,1 Ishares MSCI Emerging Markets Index Fund 14,2 0,9 10,9 0,7 13,6 0,9 Government Singapore Investment Corporation 11,3 0,7 7,5 0,5 11,4 0,7 841,8 54,1 828,4 54,2 831,1 54,5 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 June 2009 June 2008 December 2008 Number of Number of Number of shares % shares % shares % (million) holding (million) holding (million) holding South Africa 880,5 56,6 914,7 59,9 875,7 57,4 Foreign shareholders 675,1 43,4 613,1 40,1 649,3 42,6 China 313,0 20,1 305,0 20,0 305,0 20,0 United States of America 202,7 13,0 187,6 12,3 197,0 12,9 United Kingdom 39,1 2,5 31,8 2,1 35,1 2,3 Netherlands 16,9 1,1 13,5 0,9 16,4 1,1 Singapore 16,9 1,1 8,1 0,5 17,0 1,1 Luxembourg 15,7 1,0 11,5 0,7 15,0 1,0 Namibia 13,7 0,9 13,7 0,9 14,2 0,9 United Arab Emirates 10,3 0,7 10,6 0,7 9,3 0,6 Norway 9,4 0,6 3,7 0,2 7,2 0,5 Other 37,4 2,4 27,6 1,8 33,1 2, ,6 100, ,8 100, ,0 100,0 Page 104 Standard Bank Group analysis of financial results 30 June 2009

107 Credit ratings Shareholder information Ratings as at 12 August 2009 for entities within Standard Bank Group are detailed below: Short-term Long-term Outlook Fitch Ratings The Standard Bank of South Africa Issuer default rating F2 BBB+ Stable Local currency issuer default rating BBB+ Stable National rating F1+ (ZAF) AA (ZAF) Stable RSA Sovereign ratings: Foreign currency BBB+ Negative RSA Sovereign ratings: Local currency A Standard International Holdings Issuer default rating F2 BBB+ Stable Standard Bank Plc Issuer default rating F2 BBB+ Stable Banco Standard de Investimentos SA (Brazil) National rating F1+ (BRA) AA+ (BRA) Stable ZAO Standard Bank (Russia) Issuer default rating F3 BBB Negative watch National rating AA+ (RUS) Negative watch Standard Bank Argentina SA National rating AA (ARG) 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 Short-term Long-term Outlook Moody s Investor Services The Standard Bank of South Africa Foreign currency deposit rating P-2 A3 Stable Local currency deposit rating P-1 AA3 RUR 1 RSA Sovereign ratings: Foreign currency A3 Stable RSA Sovereign ratings: Local currency A3 Stable Standard International Holdings Issuer rating Baa1 RUR 1 Standard Bank Plc Foreign and local currency deposit rating P-2 A3 RUR 1 Standard Bank Argentina SA Foreign currency deposit rating NP Caa1 Stable Local currency deposit rating NP Ba1 Stable 1 Rating under review for potential downgrade. Long-term Outlook Standard & Poor s The Standard Bank of South Africa Local currency BBBpi RSA Sovereign ratings: Foreign currency BBB+ Negative RSA Sovereign ratings: Local currency A+ Negative Standard Bank Group analysis of financial results 30 June 2009 Page 105

108 Dividend payment dates and instrument codes The relevant dates for the payment of dividends are as follows: Non-redeemable, non- 6,5% cumulative, noncumulative preference participating preference Ordinary shares (First shares (Second shares preference shares) preference shares) JSE Limited (JSE) Share code SBK SBKP SBPP ISIN ZAE ZAE ZAE Namibian Stock Exchange (NSX) Share code SNB ISIN ZAE Dividend number Dividend per share (cents) 141,0 3,25 456,62 Dividend payment dates Last day to trade CUM dividend Friday Friday Friday 11 September September September 2009 Shares trade EX dividend Monday Monday Monday 14 September September September 2009 Record date Friday Friday Friday 18 September September September 2009 Payment date Monday Monday Monday 21 September September September 2009 Ordinary share certificates may not be dematerialised or rematerialised between Monday, 14 September 2009, and Friday, 18 September 2009, both days inclusive. Preference share certificates (first and second) may not be dematerialised or rematerialised between Monday, 7 September 2009, and Friday, 11 September 2009, both days inclusive. Instrument codes JSE Limited Deposit notes SBR002: ZAE SBR003: ZAE Bond Exchange of South Africa Subordinated debt SBK 5: ZAG SBK 7: ZAG SBK 8: ZAG SBK 9: ZAG SBK 10: ZAG SBK 11: ZAG SBS 1: ZAG SBS 2: ZAG SBS 3: ZAG SBS 4: ZAG SBS 5: ZAG SBS 9: ZAG SBSI 10: ZAG Page 106 Standard Bank Group analysis of financial results 30 June 2009

109 Contact details Chief financial officer Casper Troskie Tel: Director, investor relations Linda Dodgen Tel: Group secretary Loren Wulfsohn Tel: Group financial director Simon Ridley Tel: Registered address 9th Floor Standard Bank Centre 5 Simmonds Street Johannesburg 2001 PO Box 7725 Johannesburg 2000 Contact details Tel: Fax: shareholder queries: InvestorRelations@standardbank.co.za customer queries: information@standardbank.co.za

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