| Thu 27 May 2010, 8:00 | | SBK - Standard Bank Group Limited - Chief executives comments at the AGM 27 |
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SBK
SBK
SBK - Standard Bank Group Limited - Chief executives comments at the AGM 27
May 2010 and 31 March 2010 capital adequacy disclosure
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")
Chief executive`s comments at the AGM 27 May 2010 and 31 March 2010 capital
adequacy disclosure
1. Chief executive`s comments at the Annual General Meeting
At the annual general meeting to be held later today, chief executive
Jacko Maree will make the following comments regarding the group`s
performance for the first four months of 2010 in comparison with the
similar period for 2009:
For the four-month period to 30 April 2010, normalised headline earnings
for the group grew by 7%. This result reflects a tough environment for
revenue growth in banking activities with both net interest income and
non-interest revenue lower than in the previous year, and a much
improved performance from our insurance subsidiary, Liberty Holdings
Limited (Liberty). Lower than expected interest rates in South Africa
have put increased pressure on interest margins but have somewhat helped
to ease
the financial stress of households. The translation effect of a
stronger rand exchange rate has had a negative impact on the group`s
earnings.
Net interest income was negatively impacted by lower margins due to the
endowment impact of lower interest rates on transactional balances and
capital, and reduced average lending balances when compared to the prior
period. Trading income within non-interest revenue has had a slow start
to the year with reduced client activity resulting in lower revenues.
Transactional banking revenues are in line with the prior year
reflecting an increase in the number of clients, particularly in the
Rest of
Africa, offsetting decreased customer activity.
Improvements in credit impairment charges were encouraging during the
first four months of the year across personal, business and corporate
lending. Despite the absence of material new impairments within
Corporate & Investment Banking in the period, corporate default risk
remains relatively high.
Operating costs continue to be tightly controlled although the
cost-to-income ratio is increasing given the pressure on revenue growth.
Shareholders are referred to the Liberty market update on 13 May 2010
wherein, referring to the first quarter of 2010, the following comments
were included: "The management of policyholder persistency in the Retail
SA business unit has been further enhanced. Experience has remained
broadly stable with that seen in the latter part of 2009, with
encouraging signs that retention strategies in the major book of risk
business are proving effective. Sales on an indexed basis are at
similar levels to 2009, with investment and credit life product sales
performing above expectations. Policyholder cash flows were marginally
positive and costs remain well controlled. At Stanlib, investment
performance improved over that in the final quarter of 2009. The capital
management strategies followed by Libfin have contributed to a good
performance of its
investment portfolio. Libfin also benefited from lower volatility
and more favourable interest rate conditions during the quarter."
As disclosed below, at 31 March 2010 the group had a total capital
adequacy ratio of 14.1% and a tier 1 capital adequacy ratio of 11.3%,
significantly exceeding minimum regulatory requirements.
2. Basel II capital adequacy disclosure as at 31 March 2010
In terms of the Basel II requirements under Regulation 43(1)(e)(ii)
of regulations relating to banks, minimum disclosure on the capital
adequacy of the group is required on a quarterly basis. This
announcement meets the ongoing reporting requirement for quarterly
disclosure in terms of Pillar 3 of the Basel II capital accord.
Standard Bank Group Limited
March December
2010 2009
Rm Rm
Ordinary share capital and premium 17 279 17 197
Ordinary shareholders` reserves 65 591 66 825
Minority interest 9 651 9 844
Regulatory deductions against primary (18 183) (16 988)
capital
Regulatory exclusions against primary (9 608) (11 805)
capital:
Preference share capital and premium 5 495 5 495
Primary capital 70 225 70 568
Subordinated debt 22 931 22 931
Secondary unimpaired reserve funds 1 018 937
Regulatory deductions against secondary (7 404) (6 657)
capital
Secondary capital 16 545 17 211
Tertiary capital - Subordinated debt 300 1 361
Total qualifying capital 87 070 89 140
Total minimum regulatory capital requirement 60 381 58 483
% %
Total capital adequacy ratio 14.1 14.9
Primary capital adequacy ratio 11.3 11.8
Note: Ordinary shareholders` reserves include unappropriated profits.
The Standard Bank of South Africa Limited
March December
2010 2009
Rm Rm
Primary capital 37 757 38 946
Secondary capital 12 361 12 607
Tertiary capital - Subordinated debt 300 300
Total qualifying capital 50 418 51 853
Total minimum regulatory capital requirement 37 737 35 878
% %
Total capital adequacy ratio 13.1 14.1
Primary capital adequacy ratio 9.8 10.6
Note: Primary capital includes unappropriated profits.
The information contained in this announcement has not been reviewed by or
reported on by the group`s external auditors.
Johannesburg
27 May 2010
Lead sponsor
Standard Bank
Independent sponsor
Deutsche Securities (SA) Proprietary Limited
Date: 27/05/2010 08:00:04 Produced by the JSE SENS Department.
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