| Thu 13 Nov 2008, 15:54 | | ASA - Absa Group - Basel II Pillar 3 Disclosure |
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ASA
AMAGB
ASA - Absa Group - Basel II Pillar 3 Disclosure
ABSA GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1986/003934/06)
ISIN: ZAE000067237
JSE share code: ASA
Issuer code: AMAGB
(Absa or Absa Group)
ABSA GROUP - BASEL II PILLAR 3 DISCLOSURE
Absa, together with all registered banks, is required to comply with the Basel
II Capital Accord (Basel II), effective 1 January 2008. Basel II is divided into
three pillars, namely Pillar 1 (minimum capital requirements); Pillar 2
(supervisory review process) and Pillar 3 (market discipline).
This announcement is made in accordance with the requirements of Pillar 3. The
purpose of Pillar 3 is to complement the minimum capital requirements and the
supervisory review process of Basel II. The minimum set of disclosure
requirements is intended to allow market participants to assess key pieces of
information on the scope of application, capital, risk exposures, risk
assessment processes, and hence the capital adequacy of the institution.
In accordance with Regulation 43(1)(e)(ii) of the regulations relating to banks,
the minimum requirements of the quantitative information to be disclosed to the
public on a quarterly basis are:
- primary capital, including the primary capital adequacy ratio;
- total capital, including the total capital adequacy ratio;
- the components of capital;
- the total required amount of capital and reserve funds; and
- any risk exposure or other item that is subject to rapid or material
change.
The disclosure required semi-annually and annually is more comprehensive than
the quarterly requirements as it encompasses both quantitative and qualitative
information.
The table below represents the consolidated regulatory capital position for the
Absa Group as at 30 September 2008 (quarter 3, 2008).
Absa Group
30 September 2008
Rm
Qualifying capital
Primary capital
Share capital and reserves (Note 2) 40 717
Minority interest 432
Less: Deductions (Note 3) (2 824)
Total primary capital 38 324
Secondary capital
Debt instruments 11 711
General allowance for credit 54
impairment, after deferred tax:
Standardised approach
Less: Deductions (Note 3) (2 681)
Total secondary capital (Note 4) 9 083
Total qualifying capital and reserve 47 407
funds
Minimum required capital and reserve 35 763
funds (Note 5)
Capital adequacy ratios (Note 2) %
Total capital adequacy ratio 12.92
Primary capital ratio 10.45
Notes:
1) The figures above have not been audited.
2) Share capital and reserves excludes unappropriated profits. The capital
adequacy ratios disclosed in the annual and interim results presentations
include unappropriated profits and are consequently higher.
3) Absa Group uses conservative assumptions in calculating the expected loss
under the requirements of Basel II. This includes the use of a downturn
loss-given default, through the cycle probability of default and undrawn
facilities in the calculation.
4) Absa Bank issued inflation-linked subordinated bonds (qualifying as
secondary capital) amounting to R360 million during the quarter.
5) The increase in the minimum required capital and reserve funds of R1.4
billion during the quarter was the result of normal business growth.
Johannesburg
13 November 2008
Enquiries:
Mr. Carel Gronum - Group Treasurer
(+2711) 350-8995
E-mail: carelg@absa.co.za
Sponsor:
Merrill Lynch South Africa (Proprietary) Limited
Date: 13/11/2008 15:54:01 Produced by the JSE SENS Department.
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