I F R S t r a n s i t i o n re p o r t /

I F R S t r a n s i t i o n re p o r t 2 0 0 4 / 2 0 0 5

Table of contents Page Section 1 IFRS results Introduction 1 Overview 2 Consolidated income statements 4 Consolidated balance sheets 6 Section 2 IFRS reconciliations Special purpose audit report 7 Basis of preparation 9 Reconciliations IFRS reconciliation of assets, liabilities and equity 11 IFRS income statement impact 31 December 2004 12 IFRS income statement impact 30 June 2004 14 IFRS equity impact 16 Notes to the reconciliations 18 Section 3 IFRS accounting policies Primary differences between SA GAAP applicable at 31 December 2004 and IFRS 22 Provisional IFRS accounting policies 24 Section 4 Detailed balance sheet reconciliations Balance sheet at 1 January 2005 41 Balance sheet at 31 December 2004 43 Balance sheet at 30 June 2004 45 Balance sheet at 1 January 2004 47 Section 5 Contact details 49 The information in this announcement does not comprise statutory accounts within the meaning of Section 286 of the Companies Act 1973 (the Act ). Statutory accounts for the year ended 31 December 2004 of Standard Bank Group have been delivered to the Registrar of Companies in accordance with Section 302 of the Act. The auditors have reported on those accounts and their report was unqualified. This document is prepared on the basis of the accounting policies expected to be applied as at 31 December 2005. Further development of standards and interpretations under IFRS applicable to past, current and future periods and evolving practices with regard to the interpretation and application of standards under IFRS may change the accounting policies set out in this document.

Section 1 IFRS results Introduction Up to 31 December 2004, the Standard Bank Group (SBG or the group) prepared financial statements in accordance with South African Generally Accepted Accounting Practice (SA GAAP). In line with the listing requirements of the JSE Limited, the group is adopting International Financial Reporting Standards (IFRS) with effect from 1 January 2005. As the group publishes comparative information for one year in its financial statements, the date for transition to IFRS is effectively 1 January 2004, which represents the start of the earliest period of comparative information presented. This transition report (the report) therefore sets out the financial results of the group under IFRS from 1 January 2004. The report is prepared in accordance with the transitional provisions set out in IFRS 1, First-time Adoption of International Financial Reporting Standards, and other relevant standards and is based on the final application of IFRS expected to apply as at 31 December 2005. Comparative information for 2004 is restated to take into account the requirements of all of the standards except for IAS 32 Financial Instruments: Disclosure and Presentation, IAS 39 Financial instruments: Recognition and Measurement and IFRS 4 Insurance Contracts. These three standards are implemented with effect from 1 January 2005 and the opening balance sheet at this date is adjusted accordingly. This document also summarises the main policy differences between SA GAAP and IFRS as currently expected to apply and sets out the group s provisional accounting policies for the year ending 31 December 2005. South African accounting standards have seen a number of significant changes over the past couple of years as they were being aligned with IFRS. The most notable change was the adoption of the South African version of IAS 39 (AC 133 Financial instruments: Recognition and Measurement) in the group s 2003 results. The final move to full IFRS compliance is therefore less significant than what is currently being experienced in Europe and the United Kingdom. The most significant IFRS changes for the group originate from the implementation of IFRS 4 Insurance Contracts which results in Standard Bank Group and Liberty Holdings shares held by Liberty Life for the benefit of policyholders being deemed treasury shares for accounting purposes and eliminated on consolidation. It is however important to note that although this treasury share adjustment potentially results in greater volatility in reported earnings, there is no impact on the underlying business fundamentals, cash flows, risks, growth strategies or the group s capital management policies. There are no changes to estimates made under previous SA GAAP when applying IFRS (for example expected default or actuarial assumptions). In the light of the potential for increased earnings volatility, the group will ensure that comparable underlying business performance and trends are clearly identified on an ongoing basis. With the exception of the above-mentioned changes, the implementation of IFRS has a relatively immaterial impact on the group s financial position and earnings. This document essentially bridges prior financial statement disclosure under SA GAAP and IFRS and is designed to assist the reader in understanding the nature and quantum of differences between the two sets of accounting conventions. 1

Section 1 IFRS results Overview A high level overview of the impact of the implementation of IFRS on the results and financial position of the group is presented below. Detailed explanations for all material adjustments are included in Section 2 IFRS reconciliations. Effect of IFRS transition on the consolidated income statements R million 31 December 2004 30 June 2004 Audited Unaudited Income statement line items IFRS SA GAAP IFRS SA GAAP Group profit for the period 9 077 9 125 3 734 3 768 Attributable to minorities 1 393 1 384 393 408 Attributable to ordinary shareholders 7 684 7 741 3 341 3 360 Standard Bank Group headline earnings 7 538 7 648 3 343 3 389 Group ratios Headline earnings per share (cents) 570,3 578,7 249,0 252,5 Earnings per share (cents) 581,4 585,7 248,9 250,3 Normalised headline earnings per share (cents) (unaudited)* 558,1 566,3 Normalised earnings per share (cents) (unaudited)* 569,0 573,2 * Results were normalised at 31 December 2004 to reflect the legal substance of the group s Black Ownership Initiative, which became effective in October 2004. The reduction of R110 million in headline earnings for the year ended 31 December 2004 (June 2004 R46 million) is mainly due to accounting for the costs relating to share-based payments, including the costs relating to the manager component of the group s Black Ownership Initiative. The reduction in the group profit attributable to ordinary shareholders at 31 December 2004 of R57 million (June 2004 R19 million) is due to share-based payment costs partly offset by the removal of goodwill amortisation from the income statement. From 2005 the income statement and earnings per share will be affected by the impact from deemed treasury shares held for the benefit of policyholders in the insurance operations. Effect of IFRS transition on the consolidated balance sheets R million 1 January 2005 31 December 2004 30 June 2004 1 January 2004 Balance sheet line items IFRS restated Audited Audited Unaudited Audited IFRS previously reported IFRS SA GAAP IFRS SA GAAP IFRS SA GAAP Assets 616 325 619 370 619 370 615 596 536 257 533 119 543 202 540 566 Liabilities 581 449 580 837 580 837 577 032 499 736 496 550 508 034 505 302 2

Section 1 IFRS results The aggregate differences between the SA GAAP assets as at 31 December 2004 and the IFRS assets at that date amounted to R3,8 billion and primarily results from the consolidation of mutual funds. This adjustment grossed up the assets and liabilities of the group by R3,6 billion and had an immaterial impact on equity (R3,0 billion June 2004; R2,6 billion January 2004). The remaining increase in assets of R200 million is mainly due to adding back depreciation and amortisation on properties and goodwill. Assets under IFRS as at 1 January 2005 total R616 billion, a decrease of R3 billion over those reported under IFRS as at 31 December 2004, primarily as a result of the application of IAS 32 and 39. The most significant adjustments in terms of balance sheet totals are: The elimination of deemed treasury shares held on behalf of policyholders in the insurance operations amounting to a reduction in assets of R3,7 billion; Reallocation of reinsurance balances receivable of R504 million, previously netted against policyholder liabilities, now accounted for as an asset; and A reduction of R115 million in respect of performing loan provisions now calculated on the incurred but not reported basis. Effect of IFRS transition on total equity R million 1 January 2005 31 December 2004 30 June 2004 1 January 2004 Equity line items IFRS restated Audited Audited Unaudited Audited IFRS previously reported IFRS SA GAAP IFRS SA GAAP IFRS SA GAAP Equity 34 876 38 533 38 533 32 078 36 521 30 008 35 168 28 843 Ordinary shareholders equity 28 162 29 064 29 064 29 087 29 953 30 000 28 744 28 835 Minority interest 6 486 6 561 6 421 Under IFRS principles, minority interests are classified as part of equity. All comparisons are therefore between total shareholders equity (including minority interests) and the combined shareholders equity and minority interests under SA GAAP. The impact on ordinary shareholders equity from the conversion to IFRS as at 31 December 2004, 30 June 2004, and 1 January 2004 is not material. Equity under restated IFRS is R35 billion at 1 January 2005, a reduction of R3,7 billion compared to equity under the previously reported IFRS at 31 December 2004. The reduction is primarily due to the elimination of Standard Bank Group and Liberty Holdings shares, held by the life insurance subsidiary on behalf of policyholders, which are deemed to be treasury shares for accounting purposes. This elimination reduces equity by R3 703 million in the opening 2005 balance sheet. As the effective interest held by the group in Liberty is approximately 30%, R951 million of the equity reduction is allocated to ordinary shareholders, with the remaining 70% allocated to minority interest. Group medium-term objectives The group continues to set itself the objective of normalised headline earnings per share growth of CPIX plus 10% over the medium term. The group objectives as published in the 31 December 2004 annual report all remain unchanged under IFRS. These are: Normalised return on equity of 22,5% Normalised headline earnings per share growth to exceed domestic inflation (CPIX) by 10 percentage points Cost to income ratio to be at or better than 55,5% in 2005 with a continuous improvement over the medium term Credit losses to be contained within 0,75% of average advances (2005) and to remain < 1,00% for the medium-term 3

Section 1 IFRS results Consolidated income statements Group income statement 31 Dec 04 Year ended Audited 30 Jun 04 Six months Unaudited Income from banking activities 26 536 12 540 Net interest income 11 492 5 395 Interest income 35 247 16 682 Interest expense 23 755 11 287 Non-interest revenue 15 044 7 145 Income from insurance activities 31 298 8 140 Net insurance premiums and service fees 12 115 6 115 Investment returns 19 183 2 025 Total income 57 834 20 680 Impairment charges on loans and advances 1 050 830 Benefits due to policyholders 24 586 5 475 Net insurance benefits and claims 19 365 5 006 Transfer and fair value adjustment to policyholder liabilities 4 077 137 Fair value adjustment on third party mutual fund liabilities 1 144 332 Net income after impairment charges and policyholders benefits 32 198 14 375 Operating expenses in banking operations 15 384 7 050 Staff costs 8 610 3 969 Other operating expenses 6 774 3 081 Operating expenses in insurance operations 4 120 2 010 Commissions 1 920 997 Expenses 2 200 1 013 Profit from operations 12 694 5 315 Goodwill impairment (48) (25) Income from associates and joint ventures 97 46 Profit before tax 12 743 5 336 Indirect tax expense 389 159 Profit before direct tax 12 354 5 177 Direct income tax expense 3 277 1 443 Profit for the period 9 077 3 734 Attributable to minorities 1 393 393 Attributable to ordinary shareholders 7 684 3 341 Group ratios 31 Dec 04 Year ended 30 Jun 04 Six months Headline earnings () 7 538* 3 343 Headline earnings per share (HEPS) (cents) 570,3* 249,0 Normalised headline earnings per share (cents) 558,1 249,0 Fully diluted headline earnings per share (cents) 562,9* 247,9 Normalised fully diluted headline earnings per share (cents) 553,2 247,9 * Audited. 4

Section 1 IFRS results Income statement segmented by primary operations 31 Dec 04 Year end Standard Bank operations Audited 30 Jun 04 Six months Unaudited Interest income 35 247 16 682 Interest expense 23 755 11 287 Net interest income before impairment charges on loans and advances 11 492 5 395 Impairment charges on loans and advances 1 050 830 Net interest income after impairment charges on loans and advances 10 442 4 565 Non-interest revenue 15 044 7 145 Income from operations 25 486 11 710 Operating expenses 15 384 7 050 Staff costs 8 610 3 969 Other operating expense 6 774 3 081 Profit from operations 10 102 4 660 Goodwill impairment (48) (25) Income from associates and joint ventures 97 46 Profit before tax 10 151 4 681 Indirect tax expense 389 159 Profit before direct tax 9 762 4 522 Direct income tax expense 2 484 1 261 Standard Bank operations profit for the period 7 278 3 261 Attributable to minorities 124 58 Attributable to ordinary shareholders 7 154 3 203 Liberty Life Net insurance premiums and service fees 12 115 6 115 Investment returns 19 183 2 025 Total revenue 31 298 8 140 Net insurance benefits and claims 19 365 5 006 Transfer and fair value adjustment to policyholder liabilities 4 077 137 Fair value adjustment on third party mutual fund liabilities 1 144 332 Expenses 4 120 2 010 Profit from operations 2 592 655 Goodwill impairment Profit before tax 2 592 655 Direct income tax expense 793 182 Liberty Life profit for the period 1 799 473 Attributable to minorities 1 269 335 Attributable to ordinary shareholders 530 138 Group profit for the period attributable to ordinary shareholders 7 684 3 341 5

Section 1 IFRS results Consolidated balance sheets 1 Jan 05 Restated Audited 31 Dec 04 Restated Audited 31 Dec 04 SA GAAP Audited 1 30 Jun 04 Restated Unaudited 30 Jun 04 SA GAAP Unaudited 1 Jan 04 Restated Audited 31 Dec 03 SA GAAP Audited Assets Standard Bank operations Cash and balances with banks 37 842 37 842 31 384 40 561 35 964 25 960 22 081 Short-term negotiable securities 21 040 21 040 21 040 16 362 16 362 21 974 22 018 Derivative assets 124 227 124 236 124 235 76 199 76 199 104 723 104 723 Trading assets 32 204 32 204 32 130 31 965 31 880 33 705 33 488 Investment securities 19 705 19 705 19 640 17 314 17 251 20 095 20 057 Investments held by insurance operations 98 489 102 192 91 271 90 089 Loans and advances 257 260 257 151 257 154 231 447 231 436 220 255 220 375 Current and deferred tax assets 1 111 1 094 1 084 658 649 585 803 Other assets 19 119 18 578 15 410 25 315 21 825 20 322 16 737 Interest in associates and joint ventures 296 296 286 242 237 541 541 Goodwill and other intangible assets 918 918 498 821 546 785 508 Property and equipment 4 114 4 114 2 968 4 102 2 942 4 168 3 040 Liberty Life Other assets 4 616 3 704 3 687 Investments 104 442 93 508 91 868 Goodwill and other intangible assets 366 249 277 Equipment and furniture 343 367 363 Total assets 616 325 619 370 615 596 536 257 533 119 543 202 540 566 Equity and liabilities Equity 34 876 38 533 38 564 36 521 36 569 35 168 35 264 Equity attributable to ordinary shareholders 28 162 29 064 29 087 29 953 30 000 28 744 28 835 Ordinary share capital and premium 2 676 2 676 2 676 2 562 2 564 2 407 2 407 Reserves 25 486 26 388 26 411 27 391 27 436 26 337 26 428 Preference share capital and premium 2 991 2 991 2 991 8 8 8 8 Minority interest 3 723 6 478 6 486 6 560 6 561 6 416 6 421 Liabilities 581 449 580 837 577 032 499 736 496 550 508 034 505 302 Standard Bank operations Derivative liabilities 116 212 116 212 116 214 70 672 70 672 98 634 98 634 Trading liabilities 14 410 14 410 14 410 12 751 12 751 18 162 18 162 Deposit and current accounts 316 592 316 592 316 516 294 148 294 063 272 769 272 677 Current and deferred tax liabilities 4 213 4 176 3 407 2 745 2 281 3 920 2 827 Other liabilities and provisions 22 544 22 454 15 879 26 450 20 535 22 808 18 162 Policyholder liabilities insurance contracts 67 464 65 479 54 935 55 769 Policyholder liabilities investment contracts 30 521 32 021 29 660 27 416 Subordinated bonds 9 493 9 493 9 493 8 375 6 967 8 556 7 056 Liberty Life Other liabilities and provisions 3 064 2 676 2 444 Convertible bonds 1 408 1 500 Policyholder liabilities 98 049 85 197 83 840 Total equity and liabilities 616 325 619 370 615 596 536 257 533 119 543 202 540 566 1 Comparative numbers were adjusted for additional goodwill on aquisition of Standard Bank Mozambique in terms of IFRS 3. 6

Section 2 IFRS reconciliations Special purpose audit report Report of the independent auditors to the board of directors of the Standard Bank Group Limited We have audited the accompanying consolidated preliminary opening IFRS balance sheet and related notes as at January 1, 2004, the consolidated preliminary IFRS balance sheet and income statement and related notes as at and for the year ended December 31, 2004 and the consolidated preliminary opening IFRS balance sheet and the transitional adjustments relating to the adoption of IAS 32 Financial Instruments: Disclosure and Presentation ( IAS 32 ), IAS 39 Financial Instruments: Recognition and Measurement ( IAS 39 ) and IFRS 4 Insurance Contracts ( IFRS 4 ) at January 1, 2005, as well as the associated IFRS 1 First-time Adoption of Financial Reporting Standards ( IFRS 1 ) reconciliations (collectively hereafter referred to as IFRS financial information ) of Standard Bank Group Limited and its subsidiaries ( the Group ) as set out on pages 4 and 6 and pages 9 to 48. This IFRS financial information is the responsibility of the Group s directors. Our responsibility is to express an opinion on this IFRS financial information based on our audit. We have not audited the 30 June balance sheets, 30 June income statements and 30 June associated IFRS reconciliations. These are therefore not covered by this opinion and do not form part of the IFRS financial information defined above. The IFRS financial information has been prepared as part of the Group s transition to IFRS as described on page 9 and 10 to the IFRS financial information to establish the opening financial position of the Group and the comparative financial information expected to be included in the first complete set of consolidated IFRS financial statements of the Group for the year ended December 31, 2005. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the IFRS financial information is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the IFRS financial information. An audit also includes assessing the accounting principles used and significant estimates made by the directors. We believe that our audit provides a reasonable basis for our opinion. The scope of our audit engagement did not include the presentation and disclosure of the IFRS financial information in a set of consolidated annual financial statements. As a result, our audit opinion is limited to the recognition and measurement requirements of IFRS and the disclosures of the conversion information as required by IFRS 1 First-time Adoption of International Financial Reporting Standards. Opinion In our opinion, the accompanying consolidated preliminary opening IFRS balance sheet and related notes as at January 1, 2004, the consolidated preliminary IFRS balance sheet and income statement and related notes as at and for the year ended December 31, 2004 and the preliminary opening IFRS balance sheet and the transitional adjustments relating to the adoption of IAS 32, IAS 39 and IFRS 4 at January 1, 2005, as well as the associated IFRS 1 reconciliations have been prepared, in all material respects, in accordance with the basis set out on pages 9 and 10 and 18 to 40 to the IFRS financial information, which describes how IFRS have been applied under IFRS 1, including the assumptions the directors have made about the standards and interpretations expected to be effective, and the accounting policies expected to be adopted, when the directors prepare the first complete set of IFRS financial statements as at December 31, 2005. 7

Section 2 IFRS reconciliations Emphasis of matter Without qualifying our opinion, we draw attention to page 10 to the preliminary IFRS financial information that explains why there is a possibility that the accompanying IFRS financial information may require adjustment before constituting the final opening IFRS balance sheet as at January 1, 2004, the IFRS balance sheet and income statement as at and for the year ended December 31, 2004 and the opening IFRS balance sheet as at January 1, 2005. KPMG Inc. Registered Accountants and Auditors Chartered Accountants (SA) PricewaterhouseCoopers Inc. Registered Accountants and Auditors Chartered Accountants (SA) Johannesburg August, 15 2005 8

Section 2 IFRS reconciliations Basis of preparation The group will adopt the requirements of International Financial Reporting Standards for the first time for the purpose of preparing financial statements for the year ending 31 December 2005. The standards applied will be those issued by the International Accounting Standards Board as at 31 December 2005, including the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as applicable to the group. As discussed under Further developments in IFRS reporting below, the financial information in this document has been prepared on the basis of the statements that are currently effective together with expected amendments as at 31 December 2005. As reflected in note 8 on page 19, we draw attention to the fact that the current and comparative financial information reflect the recognition of deferred tax in terms of IAS 12 Income Taxes at a normal tax rate of 30% on the revaluation surplus on investment properties recognised in terms of IAS 40 Investment Properties. As policyholders own all the investment properties, the benefit accruing to policyholders from property portfolios has been adjusted accordingly. Technical views on IAS 12 differ as to whether a normal tax rate or a capital gains tax rate should be used to account for deferred tax on these revaluation surpluses. Significant local debate on the treatment of deferred tax on investment properties is continuing, and different interpretations of the requirements of IAS 12 are applied in the local and international insurance and property investment industries. The group is of the opinion that these revaluation surpluses are based on post tax revenue streams and the recognition of deferred tax at normal tax rates on these surpluses will duplicate the tax consequence inherent in the revaluation. It is anticipated that revisions to IAS 12, of which an exposure draft is expected late in 2005, could clarify the position. Should the revised IAS 12 accord to the group s view, the IFRS adjustment processed to increase the deferred tax liability by approximately R725 million will no longer be required with a corresponding increase to policyholder liabilities. Apart from the reclassification of cash and cash equivalents held by Liberty Life policyholders, there have been no material adjustments to the cash flow statement in respect of cash utilised by operating activities before tax, cash flows from investment activities and cash flows from financing activities as a result of the adoption of IFRS. Transitional arrangements The key principle of IFRS 1 First-time Adoption of International Financial Reporting Standards is full retrospective application of IFRS. However, in addition to exempting companies from the requirement to restate comparatives under IAS 32, IAS 39 and IFRS 4, this statement provides exemptions from retrospective application in certain instances due to cost and practical considerations. The group s transitional elections are set out below: Elections applicable 1 January 2004 Business combinations: The group is electing not to retrospectively apply the requirements of IFRS 3 for business combinations that occurred prior to 1 January 2004. As a result, the carrying amount of goodwill is the depreciated amount on 31 December 2003 and previously amortised goodwill and goodwill eliminated against reserves are not re-instated. Property and equipment: A first time adopter may elect to use the fair value of individual property and equipment at transition date as the deemed cost. The group is not making use of this transitional exemption and elects to measure individual items of property and equipment at depreciated cost determined in accordance with IFRS. Employee benefits: The group is electing not to apply the exemption to account for all deferred actuarial gains or losses, including a 10% tolerance limit for differences in actuarial assumptions, in opening equity as at 1 January 2004. This exemption is not elected as the group s accounting for employee benefits under previous SA GAAP was already substantially in compliance with IAS 19 Employee Benefits. 9

Section 2 IFRS reconciliations Cumulative foreign currency translation adjustment: The cumulative foreign currency translation reserve existing on transition to IFRS has been retained and the option to reset the reserve to zero is not elected as the group s accounting for translation adjustments under previous SA GAAP was already substantially in compliance with IAS 21 The effects of changes in foreign exchange rates. Share-based payments: The group is electing not to apply the provisions of IFRS 2 Share-based payments to equity-settled awards granted on or before 7 November 2002, or to awards granted after that date but which had vested prior to 1 January 2005. Elections applicable 1 January 2005 Comparative numbers restated for financial instruments and insurance contracts: The group is electing the exemption not to restate its comparatives for IAS 32 Financial Instruments: Disclosure and Presentation, IAS 39 Financial instruments: Recognition and Measurement and IFRS 4 Insurance Contracts. SBG has therefore applied SA GAAP applicable as at 31 December 2004 to financial instruments and insurance contracts in its 2004 numbers disclosed as comparatives for the 2005 IFRS results. It is considered impractical to retrospectively adjust for changes resulting from revised impairment and insurance contract requirements. Designation of financial assets and financial liabilities in terms of IAS 39: In terms of the transitional arrangements SBG is electing the option to reclassify certain financial assets and liabilities. The reclassifications are not material. There are no changes to estimates made under previous SA GAAP for transition to IFRS (for example expected default or actuarial assumptions). Where estimates have previously been made under SA GAAP, consistent estimates (after adjustments to reflect any difference in accounting policies) have been made at the same date. Further developments in IFRS reporting The information in this document has been prepared based on the statements that are currently effective together with expected amendments that will be applicable as at 31 December 2005. Future group financial information prepared on the basis of IFRS may differ from the information contained herein for the following reasons: Further standards and interpretations may be issued that are applicable for 2005 reporting or which are applicable to later accounting periods but with an option to adopt for earlier periods; and IFRS is currently being applied in many other countries for the first time and contains many new and revised standards. Therefore different practice may develop with regard to interpretation and application of the standards. The group s first annual financial statements prepared under IFRS may, therefore, be prepared in accordance with different accounting policies to those used in the preparation of the financial information in this document. Impact from the adoption of IFRS The quantification of the IFRS adjustments is shown in the next section. A description of the adjustments and the differences between SA GAAP and adopted IFRS accounting policies is set out on pages 18 to 40. Reconciliations The pages that follow contain detailed reconciliations from SA GAAP to IFRS in accordance with IFRS 1. 10

Section 2 IFRS reconciliations IFRS reconciliation of assets, liabilities and equity Note 2 1 Jan 05 Audited 1 Audited 3 Unaudited 3 Assets Restated/as previously reported 619 370 615 596 533 119 31 Dec 04 30 Jun 04 IFRS adjustments (3 045) 3 774 3 138 IFRS 2 Share-based payments 3 4 4 IFRS 4 Insurance classifications 13 471 IAS 12/IAS 40 Investment properties 8 IAS 16 Revaluation of residual values in property and equipment 4 45 43 IAS 17 Leases 7 5 5 IAS 18/IFRS 4 Revenue recognition 1 99 IAS 27 Consolidation of mutual funds 6 3 648 3 040 IAS 32 Elimination of treasury shares 10 (3 703) IAS 36/IFRS 3 Goodwill amortisation 2 112 57 IAS 36/IFRS 3 Goodwill impairment 2 (48) (25) IAS 39 Financial instrument reclassifications 11 (6) 10 3 IAS 39 Fair value adjustments 12 (21) IAS 39 Credit impairments 9 115 (2) 11 Restated under IFRS 616 325 619 370 536 257 Liabilities Restated/as previously reported 580 837 577 032 496 550 IFRS adjustments 612 3 805 3 186 IFRS 2 Share-based payments 3 136 130 IFRS 4 Insurance classifications 13 504 IAS 12/IAS 40 Investment properties 8 IAS 16 Revaluation of residual values in property and equipment 4 IAS 17 Leases 7 20 17 IAS 18/IFRS 4 Revenue recognition 1 70 3 (1) IAS 27 Consolidation of mutual funds 6 3 648 3 040 IAS 32 Elimination of treasury shares 10 IAS 36/IFRS 3 Goodwill amortisation 2 IAS 36/IFRS 3 Goodwill impairment 2 IAS 39 Financial instrument reclassifications 11 (2) IAS 39 Fair value adjustments 12 IAS 39 Credit impairments 9 38 Restated under IFRS 581 449 580 837 499 736 Equity Restated/as previously reported 38 533 38 564 36 569 IFRS adjustments (3 657) (31) (48) IFRS 2 Share-based payments 3 (132) (126) IFRS 4 Insurance classifications 13 (33) IAS 12/IAS 40 Investment properties 8 IAS 16 Revaluation of residual values in property and equipment 4 45 43 IAS 17 Leases 7 (15) (12) IAS 18/IFRS 4 Revenue recognition 1 29 (3) 1 IAS 27 Consolidation of mutual funds 6 IAS 32 Elimination of treasury shares 10 (3 703) IAS 36/IFRS 3 Goodwill amortisation 2 112 57 IAS 36/IFRS 3 Goodwill impairment 2 (48) (25) IAS 39 Financial instrument reclassifications 11 (6) 12 3 IAS 39 Fair value adjustments 12 (21) IAS 39 Credit impairments 9 77 (2) 11 Restated under IFRS 34 876 38 533 36 521 1 This represents the adjustments relating to prospective application of statements and uses the 31 December 2004 restated IFRS balance sheet as the base. 2 Refer to page 18 for details relating to notes. 3 Previously reported numbers were adjusted for additional goodwill on aquisition of Standard Bank Mozambique in terms of IFRS 3. 11

Section 2 IFRS reconciliations IFRS income statement impact Relevant accounting 31 December 2004 () 31 Dec 04 as previously reported Audited IFRS Audited IAS 1 adjustments reclassification IFRS 2 Note 1 3 Standard Bank operations Interest income 35 206 41 Interest expense 23 755 Net interest income before impairment charges on loans and advances 11 451 41 Impairment charges on loans and advances 1 048 2 Net interest income after impairment charges on loans and advances 10 403 39 Non-interest revenue 15 048 (4) 44 Income from operations 25 451 35 Operating expenses 15 242 142 Staff costs 8 499 111 111 Fees and commission paid 114 114 Other operating expenses 6 743 (83) (82) Profit from operations 10 209 (107) Goodwill and exceptional items (86) 86 (12) Goodwill impairment (48) Income from associates and joint ventures 97 Profit before tax 10 220 (69) Indirect tax expense 389 Profit before direct tax expense 9 831 (69) Direct income tax expense 2 489 (5) Standard Bank operations profit for the period 7 342 (64) Attributable to minorities 127 (3) Attributable to ordinary shareholders 7 215 (61) (111) Liberty Life Net insurance premiums and service fees 12 115 Investment returns 18 021 1 162 Total revenue 30 136 1 162 Net insurance benefits and claims 19 280 85 Transfer and fair value adjustment to policyholder liabilities 4 056 21 Fair value adjustments on third party mutual funds liabilities 1 144 Expenses 4 105 15 15 Profit from operations 2 695 (103) Goodwill amortisation 12 (12) Profit before tax 2 683 (91) Direct income tax expense 900 (107) Liberty Life profit for the period 1 783 16 Attributable to minorities 1 257 12 (10) Attributable to ordinary shareholders 526 4 (5) Group profit for the period 9 125 (48) (126) Attributable to minorities 1 384 9 (10) Attributable to ordinary shareholders 7 741 (57) (116) 1 Refer to page 18 for details relating to notes. 12

standards audited IAS 27 IAS 12/ IAS 40 IAS 16 IAS 17 IAS 18 consolidation of mutual funds IAS 36 IAS 39 impairment IAS 39 reclassification 8 4 & 5 7 1 6 2 9 11 31 Dec 04 restated Audited 41 35 247 23 755 11 492 2 1 050 10 442 (46) (2) 15 044 25 486 15 384 8 610 114 (6) 5 6 660 10 102 98 (48) (48) 97 10 151 389 9 762 (5) 2 484 7 278 (3) 124 6 (5) 3 50 (2) (2) 7 154 12 115 18 1 144 19 183 31 298 85 19 365 21 4 077 1 144 1 144 4 120 2 592 (12) 2 592 (106) (1) 793 1 799 13 9 1 269 6 3 530 25 (5) 62 (2) (2) 9 077 13 (3) 9 1 393 12 (5) 3 53 (2) (2) 7 684 13

Section 2 IFRS reconciliations IFRS income statement impact Relevant accounting 30 June 2004 () Jun 04 as previously reported Unaudited IFRS Unaudited IAS 1 adjustments reclassiification IFRS 2 Note 1 3 Standard Bank operations Interest income 16 664 18 Interest expense 11 287 Net interest income before impairment charges on loans and advances 5 377 18 Impairment charges on loans and advances 829 1 Net interest income after impairment charges on loans and advances 4 548 17 Non-interest revenue 7 139 6 17 Income from operations 11 687 23 Operating expenses 6 996 54 Staff costs 3 924 45 45 Fees and commission paid 40 40 Other operating expenses 3 072 (31) (30) Profit from operations 4 691 (31) Goodwill and exceptional items (44) 44 (7) Goodwill impairment (25) Income from associates and joint ventures 46 Profit before tax 4 693 (12) Indirect tax expense 159 Profit before direct tax expense 4 534 (12) Direct income tax expense 1 259 2 Standard Bank operations profit for the period 3 275 (14) Attributable to minorities 59 (1) Attributable to ordinary shareholders 3 216 (13) (45) Liberty Life Net insurance premiums and service fees 6 115 Investment returns 1 716 309 Total revenue 7 831 309 Net insurance benefits and claims 5 006 Transfer and fair value adjustment to policyholder liabilities 84 53 Fair value adjustments on third party mutual fund liabilities 332 Expenses 2 006 4 4 Profit from operations 735 (80) Goodwill amortisation 6 (6) Profit before tax 729 (74) Direct income tax expense 236 (54) Liberty Life profit for the period 493 (20) Attributable to minorities 349 (14) (3) Attributable to ordinary shareholders 144 (6) (1) Group profit for the period 3 768 (34) (49) Attributable to minorities 408 (15) (3) Attributable to ordinary shareholders 3 360 (19) (46) 1 Refer to page 18 for details relating to notes. 14

standards unaudited IAS 27 IAS 12/ IAS 40 IAS 16 IAS 17 IAS 18 consolidation of mutual funds IAS 36 IAS 39 impairment IAS 39 reclassification 8 4 & 5 7 1 6 2 9 11 30 Jun 04 restated Unaudited 18 16 682 11 287 5 395 1 830 4 565 (13) 2 7 145 11 710 7 050 3 969 40 (3) 2 3 041 4 660 51 (25) (25) 46 4 681 159 4 522 2 1 261 3 261 (1) 58 3 (1) 3 26 (1) 2 3 203 6 115 (23) 332 2 025 (23) 332 8 140 5 006 53 137 332 332 2 010 655 (6) 655 (53) (1) 182 473 (15) 4 335 (7) 2 138 (19) (2) 3 32 (1) 2 3 734 (15) (1) 4 393 (4) (1) 3 28 (1) 2 3 341 15

Section 2 IFRS reconciliations IFRS equity impact Dec 04 Note 1 Audited Unaudited Opening equity previously reported at 1 January 2004 28 843 28 843 Jun 04 Minority interest at 1 January 2004 6 421 6 421 Opening adjustments at 1 January 2004 on statements applied retrospectively (96) (96) Standard Bank operations (96) (96) Retained earnings: (115) (115) IFRS 2: Share based payments 3 (139) (139) IAS 16: Revaluation of residual values in property and equipment 4 40 40 IAS 17: Leases 7 (7) (7) IAS 18: Revenue recognition 1 (11) (11) IAS 39: Financial instrument reclassification 11 (3) (3) IAS 39: Credit impairments 9 5 5 IAS 39: Transfer to statutory credit risk reserves 9 (2) (2) Tax impact 2 2 Share-based payment reserve: IFRS 2: Share-based payments 3 22 22 Statutory credit risk reserve: IAS 39: Transfer to statutory credit risk reserves 9 2 2 Minority interest (5) (5) Liberty Life Retained earnings: (133) (133) IFRS 2: Share based payments 3 (1) (1) IFRS 16: Reclassification of properties revaluations 5 (132) (132) Tax impact Share-based payment reserve: IFRS 2: Share-based payments 3 1 1 Other reserves: IAS 16: Reclassification of property revaluations 5 132 132 Restated opening equity at 1 January 2004 35 168 35 168 Income statement adjustments (57) (19) Standard Bank operations (61) (13) IFRS 2: Share-based payments 3 (111) (45) IAS 16: Revaluation of residual values in property and equipment 4 6 3 IAS 17: Leases 7 (5) (2) IAS 18: Revenue recognition (interest income) 1 41 18 IAS 18: Revenue recognition (fees and commission revenue) 1 (46) (13) IAS 36/IFRS 3: Goodwill amortisation 2 98 51 IAS 36/IFRS 3: Goodwill impairment 2 (48) (25) IAS 39: Credit impairments 9 (2) (1) IAS 39: Financial instrument reclassifications 11 (2) 2 Consolidation of mutual funds 6 Tax impact 5 (2) Minority interest 3 1 Liberty Life 4 (6) IFRS 2: Share-based payments 3 (15) (4) IAS 12/IAS 40: Deferred tax on investment properties 8 (106) (53) IAS 16: Reclassification of property revaluations 5 18 (23) IAS 36: Goodwill amortisation 2 12 6 Tax impact 107 54 Minority interest (12) 14 1 Refer to page 18 for details relating to notes. 16

Section 2 IFRS reconciliations IFRS equity impact continued Dec 04 Note 1 Audited Unaudited Minority interest 9 (15) Equity adjustments 113 82 Standard Bank operations 115 55 Share-based payment reserve: IFRS 2: Share-based payments 3 66 22 Statutory credit risk reserve: IAS 39: Transfer to statutory credit risk reserves 9 1 Retained earnings: IAS 39: Financial instrument reclassifications 11 24 21 IAS 39: Transfer to statutory credit risk reserve 9 (1) Impact of IFRS restatements on translation reserve 36 13 Minority interest (11) (1) Jun 04 Liberty Life (2) 27 Share-based payment reserve: IFRS 2: Share-based payments 3 4 1 Revaluation reserve: IAS 16: Reclassification of property revaluations 5 (5) 6 Minority interest (1) 20 Changes in shareholders funds as previously reported 3 235 1 165 Minority interest reclassification 65 140 Restated closing equity at 30 June or 31 December 2004 38 533 36 521 Opening adjustments at 1 January 2005 on statements applied prospectively (3 657) Standard Bank operations Retained earnings: 50 IAS 39: Credit impairments 9 109 IAS 39: Financial instrument reclassifications 11 (9) IAS 39: Fair value adjustments for day one profits 12 (29) Tax impact (21) Liberty Life Retained earnings: (198) IFRS 4: Insurance classifications 13 (13) IAS 39: Financial instrument reclassifications 11 399 IAS 32: Treasury shares (cumulative fair value adjustments) 10 (597) IAS 18/IFRS 4: Revenue recognition 1 11 Tax impact 2 Available-for-sale reserve: IAS 39: Financial instrument reclassifications 11 (399) Treasury shares reserve: IAS 32: Treasury shares (original costs) 10 (354) Minority interest (2 756) Restated opening equity balance as at 1 January 2005 34 876 1 Refer to page 18 for details relating to notes. 17

Section 2 IFRS reconciliations Notes to the reconciliations Adjustments implemented with effect from 1 January 2004 Note 1: IAS 18 Revenue recognition and deferred acquisition costs (excluding insurance contracts accounted for in terms of IFRS 4) The previous South Africa version of IAS 39 (AC 133 Financial instruments: Recognition and Measurement) required that fees which form an integral part of the effective interest rate, including transaction costs, be taken into account in calculating the original effective yield. Initial fees that relate to the origination of loans are therefore deferred and amortised as an adjustment to the effective interest rate. The same accounting principle was carried forward in the revised IAS 18 Revenue with fees relating to the future provision of services, deferred and amortised over the anticipated period in which the services will be provided. This adjustment effectively results in the reversal of fees and commission and a corresponding increase in interest income during these periods. A small adjustment was required to align the previous deferral methodologies with the revised IAS 18, primarily for instalment finance on moveable assets. Note 2: IAS 36/IFRS 3 Goodwill Previously, the group recognised acquired goodwill at cost and amortised it on a straight-line basis over its expected useful life. Goodwill was subject to regular review for indications of impairment and any impairment charges were recognised in the income statement. In terms of IFRS 3 Business Combinations, goodwill is not amortised but is subject to impairment reviews, both annually and where there are indications that the carrying value may not be recoverable. The 2004 goodwill amortisation previously recognised in the income statement has been reversed, resulting in a corresponding increase in equity. All goodwill has accordingly been tested for impairment at 1 January 2004, 30 June 2004, and 31 December 2004. One instance of a goodwill impairment for 2004 arose following the application of the new accounting rules and this relates to the group s international operations. Note 3: IFRS 2 Share-based Payments The group grants share options to employees under employee share incentive schemes. Other than costs incurred in administering the schemes, which were expensed as incurred, the schemes did not result in any expense in the income statement, but rather a dilution in earnings per share when the shares were issued. In accordance with the requirements of IFRS 2, the group now recognises an expense in the income statement, with a corresponding credit to equity, representing the fair value of employee share options granted, recognised on a straight-line basis over the vesting period of the options. In anticipation of a final international interpretation (D16) on IFRS 2, the group is extending the scope of IFRS 2 to include the group s Black Ownership Initiative. The statement is applicable to share appreciation rights that have not vested by 31 December 2004 and, as a result, the ownership of shares allocated to black managers that vests over a period ending on 31 December 2010 is accounted for in terms of this statement. The shares owned by community participants and strategic partners have vested and no expense is therefore required. The treatment in the group s annual results of 2005 will however be based on the final interpretation as issued by the International Financial Reporting Interpretations Committee (IFRIC). Note 4: IAS 16 Revaluation of residual values in property and equipment In calculating its depreciation charge, an entity reduces the depreciable amount of an asset by its residual value. Previously under SA GAAP, the estimated residual value was fixed on recognition of the asset and was not subject to reassessment. IAS 16 revised requires that the residual value of the assets should be reassessed at each balance sheet date. Annual increases in asset values result in annual upward adjustments of residual values. The continuous reassessment of residual values typically leads to a reduction in depreciation charges and depreciation charges cease when the carrying value of an asset equals the residual value. With respect to the buildings carrying values that were previously fully depreciated, they are now re-instated to reflect the applicable residual value. Where buildings are not fully depreciated, there has generally been a reduction in depreciation as residual values are reassessed. The depreciation previously recognised in the income statement has accordingly been reversed or reduced, resulting in a corresponding increase in equity. 18

Section 2 IFRS reconciliations Note 5: IAS 16 Reclassification of property revaluations This adjustment is to account for property revaluation surpluses directly in reserves. This has no impact on total equity. Note 6: IAS 27 Consolidation of mutual funds IFRS requires the consolidation of certain mutual funds where Liberty Life and International are considered to have control of such funds through the size of their investment, voting control and related management contracts. The consolidation of these mutual funds has an immaterial effect on net equity. The consolidation of such funds is still subject to international industry debate, and progress in this regard will be monitored. Note 7: IAS 17 Leases IAS 17 requires operating lease costs and income to be accounted for on a straight-line basis. Future lease increases in terms of the lease contract is estimated and the average lease expense is then recognised in equal amounts over the lease period. In general, this leads to earlier recognition of lease income and lease expense compared with the pattern of recognition in terms of previous industry practice in South Africa where income and expenses were recognised at a constant real rate of return on the net cash investment in the lease. This would, in most cases, result in higher lease costs for previously reported periods with a reduction in the 2004 opening equity and an increase in the 2004 lease costs. IAS 40 Investment Property states that the fair value of investment property should exclude prepaid or accrued operating lease income if this would otherwise result in double counting. Therefore Liberty Life will offset any resulting adjustment against the fair value of investment properties. The impact of accounting on the basis of straight-line compared to the economic benefit basis currently employed at Liberty Life will require some time to determine accurately. Any adjustment will, in all probability, be netted off the respective investment property s fair value adjustments resulting in little or no change to reported earnings. Further analysis of any interpretations issued by standard setters will take place in order to process any required adjustments for the full year results ending 31 December 2005. As this treatment potentially departs from economic reality, it will be monitored and representations may be made to accounting standard setters. Note 8: IAS 12/IAS 40 Deferred tax applicable to fair value adjustments on investment properties IAS 12 Income Taxes defines the difference between the carrying amount of a revalued depreciable asset and its tax base as a temporary difference and therefore gives rise to a deferred tax liability or asset. The carrying amount of a portion of investment property portfolios is considered to be recovered through future net rental income with the remaining portion recovered through disposals. In terms of IAS 12, deferred tax is provided on fair value adjustments on the future net rental portion at the use tax rate (income tax rate). Liberty Life already provides for deferred tax on fair value adjustments in investment properties at the applicable capital gains tax rate (CGT rate). It is believed that the fair (open market) value already discounts the average tax consequences of market participants in respect of rental income. A process is underway to engage the IASB to revise IAS 12 to result in the recognition of deferred tax assets and liabilities that are more reflective of economic reality. The resulting additional deferred tax charge has been debited to policyholder liabilities to the extent that the applicable investment property return impacts the determination of the policyholder liability. This has resulted in a restatement decreasing policyholder liabilities by R655 million with a corresponding increase in the deferred tax liability at 1 January 2004. The net movement at 31 December 2004 is a decrease of R106 million (30 June 2004: R53 million) to R549 million (30 June 2004: R602 million). 19

Section 2 IFRS reconciliations Adjustments implemented with effect from 1 January 2005 Note 9: IAS 39 Credit impairments Previously the group raised an impairment for credit losses on performing loans as the shortfall between the carrying value of a loan and the present value of expected future cash flows discounted at the original effective interest rate of loans, taking changes in expected cash flows and the average maturity of loans into account. Under IFRS an impairment loss can only be accounted for if there is objective evidence that a loss event has occurred after the initial recognition of the financial asset but before the balance sheet date. IFRS also allows for the creation of a credit impairment for incurred but not reported losses in order to provide for latent losses in a portfolio of loans that have not yet been individually identified as impaired. This change results in a net release of credit impairments and a consequent increase in the opening 2005 equity. For certain African entities, already reporting under IFRS, the impairment for credit losses is lower than the level required by their respective regulatory authorities. As a result, a portion of their impairment for credit losses is released to equity on a retrospective basis. It has been agreed with these regulatory authorities that any shortfall on impairment for credit losses will be set aside in a statutory credit risk reserve within total equity. Note 10: IAS 32 Elimination of treasury shares Shares in group companies held on behalf of policyholders in the insurance operation were previously not classified as treasury shares in terms of industry practice. The risks and rewards arising from these shares are for the benefit of the policyholders. As a result of the issue of IFRS 4, insurance contracts, the SA GAAP statement dealing with the insurance industry (AC 121: Disclosure in the financial statements of long-term insurers) was revoked. Assets are now subject to IAS 39 Financial instruments: Recognition and Measurement and IAS 32 Financial Instruments: Disclosure and Presentation. As a result, shares held by policyholders in group companies are accounted for as equity instruments. In terms of IAS 32 the cost price of any SBG and Liberty Holdings shares held by policyholders within Liberty Life is now eliminated against equity and any changes in fair value are eliminated from the income statement. In terms of actuarial principles, the insurance operation maintains a matching position to ensure the risk profile of liabilities to policyholders is matched by the underlying shares. The classification of policyholders investments in group company shares as treasury shares for accounting purposes does not consider the relationship between the policyholder liabilities and shares held to meet these liabilities and consequently the corresponding policyholder liability is not similarly adjusted. This introduces a mismatch between assets and liabilities which is charged against equity. Application of IAS 32 to these shares reduces equity and investments by R3 703 million in the opening 2005 balance sheet. As the effective interest held by the group in Liberty Life is 30%, R951 million of the equity reduction is allocated to ordinary shareholders, with the remaining 70% allocated against minority interests. The statement on earnings per share, IAS 33, requires that the weighted number of shares should be calculated after deducting the total number of deemed treasury shares. The result of the above is that 30% of the value of these treasury shares is eliminated against ordinary shareholders equity, 30% of the fair value adjustments are eliminated against earnings attributable to ordinary shareholders with the remaining 70% eliminated against earnings attributable to minorities. In contrast, 100% of the weighted number of treasury shares are eliminated for purposes of per share calculations. The group started to publish normalised headline earnings at 31 December 2004 to allow for instances where the accounting treatment of transactions departs from their legal and economic substance. At 31 December 2004, the only adjustments falling within this category related to the group s Black Ownership Initiative. As the above accounting treatment departs from the legal and economic substance of returns on these assets accruing to policyholders, a further adjustment is now made. The headline earnings per share and earnings per share number has consequently been normalised to reflect the earnings and equity after re-instating the shares as investments and adding back the reversal of fair value movements on these shares accounted for in the income statement. Normalised earnings and headline earnings per share are calculated based on the total number of shares in issue per the JSE Limited. 20