| Thu 23 Oct 2008, 7:06 | | SBK - Standard Bank Group - Voluntary trading update and financial information |
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SBK
SBK
SBK - Standard Bank Group - Voluntary trading update and financial information
provided to Industrial and Commercial Bank of China Limited
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
South African Share Code: SBK
Namibian Share Code: SNB
ISIN: ZAE000109815
("Standard Bank" or "the group")
Voluntary Trading Update and Financial Information Provided To Industrial and
Commercial Bank of China Limited
Voluntary Trading Update
In the group`s interim profit and dividend announcement dated 12 August 2008, it
was advised that a voluntary trading update would be issued in late October
2008, following the nine months ended 30 September 2008.
The nine months ended September were characterised by increasing turbulence in
global financial markets and continued pressure on consumers` disposable income
in South Africa. Standard Bank nevertheless improved its cost efficiency,
produced an increase in rand earnings and generated a return on equity of 18%
for the year to date.
Highlights for the nine months ended 30 September 2008
Normalised IFRS
change change
on prior on prior
year % year %
? Headline earnings (Rm) 10 057 9 9 518 10
? Headline earnings per share (cents) 673.8 (0.2) 685.6 (2.2)
? Cost-to-income ratio (%) 48.7 48.9
? Credit loss ratio (%) 1.42 1.42
? Return on equity (%) 18.0 18.0
On 3 March 2008, Industrial and Commercial Bank of China Limited ("ICBC")
subscribed for 152.5 million newly issued ordinary shares. This issuance, an
increase of 11.1%, accounts for the difference in growth between headline
earnings and headline earnings per share.
Operating conditions continued to be challenging in Corporate & Investment
Banking both in South Africa and internationally. Our trading and lending
operations remain profitable, and exposures have been actively reduced and risks
carefully managed. The credit loss ratio remains low with no major defaults
having been experienced. Given current market conditions together with our
reassessed risk appetite, Corporate & Investment Banking`s ability to grow
revenues is naturally constrained, and likely to remain so for the rest of the
financial year. In our operations elsewhere in Africa, deal flow remains
positive and margins have improved.
In Personal & Business Banking, asset growth continued to slow in line with
macroeconomic fundamentals, and strategies implemented in 2007 have had the
effect of curtailing advances growth in line with our risk appetite. In South
Africa, high inflation and interest rates continue to impact consumers` ability
to service debt. As anticipated, non-performing loans have continued to increase
following the trend established up to June. Given this environment, these trends
are likely to continue for the rest of the financial year.
Liberty`s earnings remain sensitive to the performance of investment markets and
are therefore subject to ongoing volatility.
Against this background, it is projected that the group`s normalised headline
earnings for the year is likely to be similar to or slightly higher than that
for 2007. With the additional shares issued to ICBC in March 2008, normalised
headline earnings per share for the year is likely to be lower than the
comparative figure for 2007.
The group`s capital adequacy and liquidity profile remain healthy. Liquidity
management practices continue to be rigorously applied within the bank`s
liquidity management framework and liquidity buffers in excess of regulatory
requirements remain intact.
We continue judiciously to seek growth opportunities in our chosen markets to
enhance the group`s long-term prospects.
Financial information provided to ICBC
The transaction through which ICBC acquired a 20% shareholding in Standard Bank
was implemented on 3 March 2008. ICBC`s results for the third quarter ending 30
September 2008 therefore include equity-accounted earnings from Standard Bank.
The following consolidated financial information, prepared on an IFRS basis, has
been disclosed to ICBC for purposes of ICBC`s equity accounting of Standard
Bank`s results for the quarter ended September 2008.
Statement of changes in ordinary shareholders` equity for the quarter ended 30
September 2008
Earnings Change in Other
Opening attributable shareholding movements
balance to ordinary of for the
Rm 1 July 2008 shareholders subsidiaries period Total
Ordinary
share capital 153 153
Ordinary
share premium 17 148 42 17 190
Foreign
currency
translation
reserve 4 442 1 713 5 156
Foreign
currency
and cash flow
hedging
reserve 1 770 (247) 1 523
Retained
earnings 57 652 2 296 *(1 999) **(2 893) 55 056
Empowerment
reserve and
treasury
shares (3 235) (412) 62 (3 585)
Other 1 991 109 (270) 1 830
Total ordinary
shareholders`
equity 79 921 2 296 (2 301) (2 593) 77 323
*Consists primarily of the excess of the purchase consideration over the net
asset value on an additional 31.95% interest acquired in Liberty Holdings
Limited in accordance with our policy to account for the acquisition of an
additional interest in existing subsidiaries directly in equity.
**Includes total ordinary dividends declared in August 2008 of R2 951m. The
majority of the difference relates to a treasury share adjustment.
The information contained in this announcement has not been reviewed by or
reported on by the group`s auditors. Standard Bank`s results for the year ended
31 December 2008 will be released on or about 5 March 2009.
Johannesburg
23 October 2008
Sponsor
Standard Bank
Date: 23/10/2008 07:06:05 Produced by the JSE SENS Department.
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