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ASA
AMAGB
ASA - ABSA Group Limited - Profit and dividend announcement
audited annual financial results for the year ended 31 December 2010
ABSA GROUP LIMITED
Authorised financial services and registered credit provider (NCRCP7)
Incorporated in the Republic of South Africa
Registration number: 1986/003934/06
ISIN: ZAE000067237
JSE share code: ASA
Issuer code: AMAGB
(Absa, Absa Group, the Group or the Company)
ABSA GROUP LIMITED: PROFIT AND DIVIDEND ANNOUNCEMENT
AUDITED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
CONSOLIDATED SALIENT FEATURES
31 December
2010 2009(1) Change
(Audited) (Audited) %
Statement of comprehensive
income(Rm)
Headline earnings(2) 8 041 7 621 6
Profit attributable to 8 118 19
ordinary 6 840
equity holders of the Group
Statement of financial
position
Total assets(Rm) 716 470 710 796 1
Loans and advances to 498 635 506 163 (1)
customers(Rm)
Deposits due to customers(Rm) 378 111 356 365 6
Loans-to-deposits ratio (%) 91,9 95,9
Off-statement of financial
position(Rm)
Assets under management and 168 313 155 114 9
administration
Financial Services(3) 163 415 145 453 12
Money market 66 256 55 320 20
Non-money market 97 159 90 133 8
Financial performance (%)
Return on average equity 15,1 15,5
Return on average assets 1,12 1,02
Return on risk-weighted 1,99 1,97
assets(4)
Notes
1 Comparatives have been reclassified. Refer to the "Reclassifications"
section.
2 After allowing for R320 million (31 December 2009: R421 million)
profit attributable to preference equity holders of the Group.
3 The segmentation of assets under management and administration is
unaudited.
4 This ratio is unaudited.
CONSOLIDATED SALIENT FEATURES (continued)
31 December
2010 2009(1) Change
(Audited) (Audited) %
Operating performance (%)
Net interest margin on average 4,01 3,74
interest-bearing assets
Impairment losses on loans and 1,20 1,74
advances as % of average loans
and advances to customers
Non-performing advances as % 7,7 7,0
of
loans and advances to
customers(2)
Non-interest income as % of 45,5
total 48,1
operating income
Cost-to-income ratio 56,2 49,6
Effective tax rate, excluding 27,5 23,8
indirect taxation
Share statistics(million)
Number of ordinary shares in 718,2 718,2
issue
Weighted average number of 716,3 693,2
ordinary shares in issue
Weighted average diluted 720,7 711,5
number of
ordinary shares in issue
Share statistics(cents)
Headline earnings per share 1 122,6 1 099,4 2
Diluted headline earnings per 1 115,7 1 072,0 4
share
Basic earnings per share 1 133,3 986,7 15
Diluted earnings per share 1 126,4 962,2 17
Dividends per ordinary share 455 445 2
relating to income for the
year
Dividend cover(times) 2,5 2,5
Net asset value per share 7 838 7 038 11
Tangible net asset value per 7 588 6 865 11
share
Capital adequacy(%)(2)
Absa Group 15,5 15,6
Absa Bank 14,8 14,7
Notes
1 Comparatives have been reclassified. Refer to the "Reclassifications"
section.
2 These ratios are unaudited.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December
2010 2009(1) 2008(1)
(Audited) (Audited) Change (Audited)
Rm Rm % Rm
Assets
Cash, cash balances and balances 24 361 18 24 828
with central banks 20 597
Statutory liquid asset portfolio 48 215 33 943 42 33 043
Loans and advances to banks 24 877 36 032 (31) 44 893
Trading portfolio assets 62 047 52 302 19 77 132
Hedging portfolio assets 4 662 2 558 82 3 139
Other assets 16 131 17 777 (9) 16 925
Current tax assets 196 234 (16) 23
Non-current assets held for sale - - - 2 495
Loans and advances to customers 498 635 506 163 (1) 532 819
1
Reinsurance assets 860 719 20 903
Investment securities 23 826 29 564 (19) 26 980
Investments in associates and 416 (15) 2 144
joint ventures 487
Goodwill and intangible assets 1 794 1 245 44 963
Investment properties 2 523 2 195 15 661
Property and equipment 7 493 6 606 13 6 127
Deferred tax assets 434 374 16 241
Total assets 716 470 710 796 1 773 316
Liabilities
Deposits from banks 15 406 36 541 (58) 54 616
Trading portfolio liabilities 47 454 44 245 7 70 990
Hedging portfolio liabilities 1 881 565 >100 1 080
Other liabilities 11 239 12 212 (8) 12 618
Provisions 1 808 1 684 7 2 113
Current tax liabilities 965 59 >100 385
Non-current liabilities held for - - - 408
sale
Deposits due to customers 378 111 356 365 6 383 204
Debt securities in issue 164 545 171 376 (4) 165 900
Liabilities under investment 13 964 12 446 12 10 377
contracts
Policyholder liabilities under 3 001 (4) 3 076
insurance contracts 3 136
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
2010 2009(1) 2008(1)
(Audited) (Audited) Change (Audited)
Rm Rm % Rm
Borrowed funds 13 649 13 530 1 12 296
2
Deferred tax liabilities 2 298 2 147 7 2 960
Total liabilities 654 321 654 306 0 720 023
Equity
Capital and reserves
Attributable to ordinary equity
holders of the Group:
Share capital 1 433 1 432 0 1 354
Share premium 4 590 4 784 (4) 2 251
Other reserves 2 309 1 178 96 3 010
Retained earnings 47 958 43 153 11 40 992
56 290 50 547 11 47 607
Non-controlling interest - 1 215 1 299 (6) 1 042
ordinary shares
Non-controlling interest - 4 644 4 644 - 4 644
preference shares
Total equity 62 149 56 490 10 53 293
Total equity and liabilities 716 470 710 796 1 773 316
Note
1 Comparatives have been reclassified. Refer to the "Reclassifications"
section.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December
2010
(Unaudited)
Expected
recoveri
es and Total
Outstandi fair Net identifie
ng value of exposur d
balance collater e impairmen
al t
Rm Rm Rm Rm
1. NON-PERFORMING ADVANCES
Cheque accounts 220 110 110 110
Credit cards 2 822 797 2 025 2 025
Instalment credit agreements 3 492 2 036 1 456 1 456
Micro loans 445 84 361 361
Mortgages 25 642 20 740 4 902 4 902
Personal loans 1 413 442 971 971
Retail Banking 34 034 24 209 9 825 9 825
Corporate 950 840 110 110
Large and Medium business 2 612 1 734 878 878
Small business 468 390 78 78
Commercial Asset Finance 648 169 479 479
Other 380 276 104 104
Absa Business Bank 5 058 3 409 1 649 1 649
Absa Capital 549 208 341 341
Non-performing advances 39 641 27 826 11 815 11 815
Non-performing advances ratio 7,7
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
2009
(Unaudited)
Expected
recoveri
es and Total
Outstandi fair Net identifie
ng value of exposur d
balance collater e impairmen
al t
Rm Rm Rm Rm
NON-PERFORMING ADVANCES
(continued)
Cheque accounts 148 96 52 52
Credit cards 2 959 672 2 287 2 287
Instalment credit agreements 2 635 1 488 1 147 1 147
Micro loans 510 207 303 303
Mortgages 23 687 19 589 4 098 4 098
Personal loans 568 194 374 374
Retail Banking(1) 30 507 22 246 8 261 8 261
Corporate 945 845 100 100
Large and Medium business 2 444 1 713 731 731
Small business 465 362 103 103
Other 923 425 498 498
Absa Business Bank(1) 4 777 3 345 1 432 1 432
Absa Capital 805 562 243 243
Non-performing advances 36 089 26 153 9 936 9 936
Non-performing advances ratio 7,0
Note
1 Comparatives have been reclassified for the move of Absa Small
Business from Retail Banking to Absa Business Bank.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
2. BORROWED FUNDS
Subordinated callable notes
The subordinated debt instruments listed below qualify as secondary
capital in terms of the Banks Act, No 94 of 1990 (as amended).
Interest rate Final maturity date
10,75% 26 March 2015 - 1 100 (100)
8,75% 1 September 2017 1 500 1 500 -
8,80% 7 March 2019 1 725 1 725 -
8,10% 27 March 2020 2 000 2 000 -
10,28% 3 May 2022 600 - 100
Three-month 26 March 2015 - (100)
JIBAR + 0,75% 400
Three-month 3 May 2022 400 100
JIBAR + 2,10% -
CPI-linked notes, fixed at the
following coupon rates:
6,25% 31 March 2018 1 886 1 886 -
6,00% 20 September 2019 3 000 3 000 -
5,50% 7 December 2028 1 500 1 500 -
Accrued interest 826 575 44
Fair value adjustment 212 (156) >100
13 649 13 530 1
Portfolio analysis
Financial liabilities designated 739 3
at fair value through profit or 718
loss
Financial liabilities held at 7 440 7 221 3
amortised cost
Amortised cost financial 5 470 (2)
liabilities held in a fair value
hedging relationship 5 591
13 649 13 530 1
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
3.FINANCIAL GUARANTEE CONTRACTS
Financial guarantee contracts 599 1 007 (41)
4.CONTINGENCIES
Guarantees(1) 11 051 10 484 5
Irrevocable facilities(2) 47 245 54 517 (13)
Letters of credit(3) 4 979 5 007 (1)
Other contingencies 44 5 >100
63 319 70 013 (10)
Notes
1 Guarantees include performance guarantee contracts and payment
guarantee contracts. Includes revocable facilities of R8 340 million
(2009: R3 440 million).
2 Irrevocable facilities are commitments to extend credit where the
Group does not have the right to terminate the facilities by written
notice. Commitments generally have fixed expiry dates. Since commitments
may expire without being drawn upon, the total contract amounts do not
necessarily represent future cash requirements. Includes equity
facilities with a value of R750 million (2009: Rnil million) which are not
subject to credit risk.
3 Includes revocable facilities of R3 170 million (2009: R3 188
million).
5. COMMITMENTS
Authorised capital expenditure
Contracted but not provided 1 061 928 14
for(1)
Note
1 The Group has capital commitments in respect of construction of
buildings, computer equipment and property development. Management is
confident that future net revenues and funding will be sufficient to
cover these commitments.
Operating lease payments due(1)
No later than one year 1 066 1 157 (8)
Later than one year and no 2 059 (4)
later than five years 2 135
Later than five years 482 307 57
3 607 3 599 0
Note
1 The operating lease commitments comprise a number of separate
operating leases in relation to properties and equipment, none of which is
individually significant to the Group. Leases are negotiated for an
average term of three to five years and rentals are renegotiated annually.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
6. ACQUISITIONS AND DISPOSALS OF BUSINESSES
6.1 Acquisitions of businesses during the current year
6.1.1 On 30 June 2010, the Virgin Money South Africa (Proprietary) Limited
(VMSA) joint venture arrangement was terminated. This was based on a
contractually agreed arrangement whereby, depending on the financial
performance of the joint venture, its future existence will be determined.
Due to the underperformance of the joint venture the arrangement was
terminated and the Bank acquired the underlying business. The termination
resulted in the Bank selling its 50% interest in VMSA for R1, while
acquiring VMSA`s credit and home loan business for R1, VMSA`s credit card
and home loan business contributed a net profit before tax of R40 million
and revenue of 57 million to the Bank for the period from 30 June 2010 to
31 December 2010. If the acquisition occurred on 1 January 2010, the
Bank`s revenue would have been R116 million higher and the net profit
before tax for the year would have been R21 million higher.
Details of the net assets acquired and gain on bargain Group
purchase are as follows: December
2010
Fair value
recognised
on
acquisition
Rm
Other assets 0
Intangible assets 3
Other liabilities (1)
Deferred tax liabilities (1)
Net assets acquired 1
Satisfied by:
Fair value of previously held interest 0
Cash outflow on acquisition 0
Fair value of net assets acquired (1)
Gain on bargain purchase (1)
The consideration paid was less than the fair value of the assets and
liabilities acquired. This resulted in a bargain purchase gain of R1
million which was recognised in other operating income in the statement of
comprehensive income.
This bargain purchase gain arose primarily due to the underperformance of
the underlying VMSA credit card and home loan portfolio. Any transaction
costs associated with the transaction were expensed when incurred. No
contingent liabilities were recognised as a result of the acquisition and
no contingent consideration is payable. No identifiable assets were
identified of which the fair values could not be reliably measured. No
material receivables were acquired as part of the transaction.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
6.1 Acquisitions of businesses during the current year (continued)
6.1.1 (continued)
As part of the termination of the joint venture arrangement the Bank
entered into a separate agreement with Virgin Enterprise Limited to sell
Virgin branded credit cards and home loans in the market on which the Bank
will pay a fee for the use of the Virgin brand name.
6.1.2 Absa Bank Limited, a subsidiary of the Group, previously had a 50,0%
share in the preference shares of Sanlam Home Loans (SHL), the holding
company of three securitisation vehicles. The investment in SHL has
previously been equity accounted as the Bank and Sanlam Life Insurance
Limited (Sanlam) had joint control over SHL. On 1 August 2010, the Bank
acquired the remaining 50,0% preference shares in SHL, which resulted in
the Bank controlling and consolidating SHL. SHL contributed a net profit
before tax of R39 million and revenue of R12 million to the Group for the
period from 1 August 2010 to 31 December 2010. If the acquisition occurred
on 1 January 2010, the Group`s revenue would have been R84 million higher
and the net profit before tax for the
year would have been R70 million higher.
Details of the net assets acquired and gain on bargain Group
purchase are as follows: December
2010
Fair value
recognised
on
acquisition
Rm
Cash, cash balance and balances with central banks 409
Other assets 11
Loans and advances to customers 4 621
Other liabilities (9)
Debt securities in issue (3 687)
Shareholders` loans (1 325)
Previously held interest (10)
Net assets acquired 10
Satisfied by:
Cash inflow on acquisition (61)
Fair value of net assets acquired (10)
Gain on bargain purchase (71)
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
6.1 Acquisitions of businesses during the current year (continued)
6.1.2 (continued)
The consideration paid was less than fair value of the asset and
liabilities acquired.
No goodwill resulted from the transaction and the excess of R71 million,
together with the gain of R10 million recognised as a result of
remeasuring the previously held interest to fair value was realised in the
statement of comprehensive income in other operating income. Any
transaction costs associated to the acquisition have been expensed when
incurred. No contingent liabilities were recognised as a result of the
acquisition and no contingent consideration is payable. No identifiable
assets were identified of which the fair values could not be reliably
measured.
Subsequent to the acquisition the debt securities in issue were redeemed
in full.
Mortgage loans with a fair value of R4 621 million were acquired as a
result of the acquisition. The gross contractual capital amounts
receivable were R4 685 million on acquisition date and an impairment
provision of R64 million were carried against these loans on acquisition
date.
The joint venture agreement was terminated due to the underperformance of
the mortgage loan portfolio and consequently the Group obtained full
control of SHL. The underperformance of the mortgage loan portfolio gave
rise to the gain on bargain purchase as the joint venture partner were
willing to sell its 50% stake at below fair
value of the underlying assets and liabilities.
Group
December
2010
Rm
Net cash outflow due to acquisitions 0
Total cash and cash equivalents acquired 470
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
6.2 Acquisitions of businesses during the previous year
6.2.1 On 31 January 2009, the Group acquired an additional 35,2% interest
in Abseq Properties (Proprietary) Limited increasing its shareholding to
85%. Abseq Properties (Proprietary) Limited was previously recognised as
an associate designated as fair value through profit or loss. Abseq
Properties (Proprietary) Limited contributed a net profit before tax of
R10 million to the Group for the period 31 January 2009 to 31 December
2009. If the acquisitions had occurred on 1 January 2009, the Group`s
revenue would have been R8 million higher and the total profit for the
year would have been R1 million higher.
Details of the net assets acquired and goodwill are as Group
follows: December
2009
Fair value
recognised
on
acquisition
Rm
Other assets 36
Investments in associates and joint venture 40
Investment properties 1352
Deposits from banks (8)
Deferred tax liabilities (160)
Other liabilities (860)
Previously held interest (199)
Non-controlling interest (60)
Net assets acquired 141
Satisfied by:
Cash outflow on acquisition 166
Fair value of net assets acquired (141)
Goodwill 25
The goodwill is attributed to the synergies expected to arise after the
Group`s acquisition of Abseq Properties (Proprietary) Limited. The cost of
acquisition includes directly attributable costs including legal, audit
and other professional fees. No contingent liabilities were recognised as
a result of the acquisition and no contingent consideration is payable.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
6.2 Acquisitions during the previous year (continued)
6.2.2 On 1 June 2009, the Group acquired a 100% interest in Blue Age
Properties 60 (Proprietary) Limited.
Group
December
2009
Fair value
recognised
on
acquisition
Rm
Net assets acquired 0
Satisfied by:
Cash outflow on acquisition 0
Fair value of net assets acquired 0
Goodwill 0
Net cash outflow due to acquisitions 166
6.3 Disposal of businesses during the current year
6.3.1 Absa Property Equity Fund operated as a special purpose entity
catering for the investment of community upliftment projects. This fund
was previously consolidated under SIC 12 as the Bank held between 93% and
75% of units (depending on the total of units in issue at a specific point
in time) and were thereby exposed to the majority of risk and
rewards within the fund.
Between January 2010 to August 2010 the Bank disposed some of the units it
owned to the extent that its effective holding decreased to below 50% of
the units in issue, at which point the fund was deconsolidated due to the
Bank not anymore being exposed to the majority of the risks and rewards in
the fund.
No gain or loss was recognised on deconsolidation of the fund due to the
underlying assets being measured at fair value.
The remainder of the investment retained after deconsolidation was
disposed during September 2010 and October 2010.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
6. ACQUISITIONS AND DISPOSALS OF BUSINESSES (continued)
6.3 Disposal of businesses during the current year (continued)
Details of net assets disposed of are as follows: Group
December
2010
Fair value
on disposal
Rm
Cash, cash balances and balances with central banks 22
Other assets 0
Investment securities 136
Other liabilities 0
Net assets disposed 158
Non-controlling interest (78)
Fair value of interest retained (64)
Consideration received 16
Cash and cash equivalents disposed (22)
Net cash outflow and disposal (6)
6.4 Disposal of businesses during the previous year
There were no disposals during the previous year.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(continued)
As at 31 December
7. ACQUISITIONS AND DISPOSALS OF INVESTMENTS IN ASSOCIATES AND JOINT
VENTURES
7.1 Net movement resulting from acquisitions and disposals of investments
in associates and joint ventures
2010 2009
(Audited) (Audited)
Effective Movement Effective Movement
holding Rm holding Rm
(%) (%)
Acquired during the current
year, at cost:
One Commercial Investment 49,0 0 - n/a
Holdings (Proprietary) Limited
- Cell Captive
Acquired during the previous
year, at cost:
Kilkishen Investments 50,0 n/a 50,0 31
(Proprietary) Limited
Meadowood Investments 8 50,0 n/a 50,0 0
(Proprietary) Limited
Pinnacle Point Group Limited - 95 27,5 n/a
Stand 1135 Houghton 50,0 n/a 50,0 8
(Proprietary) Limited
Disposed during the current
year:
Pinnacle Point Group Limited - (95) 27,5 n/a
Virgin Money South Africa - (0) 50,0 n/a
(Proprietary) Limited
Disposed during the previous
year:
Ambit Properties Limited - n/a - (718)
Banco Commercial Angolano - n/a - (63)
Transferred to subsidiaries
during the current year:
Sanlam Home Loans (Proprietary) 100,0 - 50,0 n/a
Limited
Transferred (to)/from
investment securities
designated at fair value
through profit or loss during
the current year and previous
year:
Blue Financial Services Limited 6,7 (32) 20,2 451
(32) (291)
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(continued)
As at 31 December
7. ACQUISITIONS AND DISPOSALS OF INVESTMENTS IN ASSOCIATES AND JOINT
VENTURES (continued)
2010 2009
(Audited) (Audited)
Rm Rm
7.2 Details of transfers and purchase
consideration on net assets acquired on the
aforementioned acquisitions are as follows:
Cash paid 95 61
Conversion of debt to equity 0 -
Purchase as part of business combination - 39
Transfer from investment securities - 390
95 490
7.3 Details of transfers and consideration
received on net assets disposed of on the
aforementioned disposals are as follows:
Cash received (95) (78)
Consideration in shares - (660)
Total consideration (95) (738)
Loss on disposal (0) (43)
Transfer to investment securities (32) -
Transfer to subsidiaries - -
(127) (781)
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
8. RELATED PARTIES
The Group`s parent company is Barclays Bank PLC (incorporated in the
United Kingdom), which owns 55,5%(2009: 55,5%) of the ordinary shares.
The remaining 44,5% (2009: 44,5%) of the shares are widely held on the
JSE.
The following are defined as related parties of the Group:
1. Key management personnel.
2. The parent, Barclays Bank PLC.
3. Subsidiaries.
4. Associates, joint ventures and retirement benefit fund.
5. An entity controlled/jointly controlled or significantly influenced
by any individual referred to above.
6. Post-employment benefit plans for the benefit of employees or any
entity that is a related party of the Group.
7. Children and/or dependants and spouses or partners of the individual
referred to above.
2010 2009
(Audited) (Audited) Change
Rm Rm %
8.1. Transactions with key
management personnel and
entities controlled by key
management(1)
Loans outstanding at the end 25 19
of the 21
Year
Interest income earned 2 4 (50)
Deposits at the end of the 25 24 4
year
Interest expense on deposits 1 2 (50)
Guarantees issued by the 70 57 23
Group
Other investment securities 68 (46)
at the end of the year 126
Note
1 The above transactions are entered into in the normal course of
business, under terms that are no more favourable than those arranged
with third parties.
8.2. Key management personnel
compensation
Directors 66 87 (24)
Other key management 78 46 70
personnel
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
RELATED PARTIES (continued)
2010 2009
(Audited) (Audited) Change
Rm Rm %
8.3. Transactions with parent
company(1)
The following are balances with, and transactions entered into with the
parent company:
Balances
Loans and advances 15 673 10 436 50
Derivative assets 9 144 6 936 32
Nominal value of derivative 493 402 341 406 45
assets
Other assets 552 196 >100
Reinsurance assets - 18 (100)
Investment securities 581 509 14
Deposits (6 082) (8 246) 26
Debt securities in issue - (15) (100)
Derivative liabilities (9 006) (8 450) (7)
Nominal value of derivative (375 467) (318 237) >(100)
liabilities
Other liabilities (267) (287) 7
Transactions
Dividends paid 1 774 2 213 (20)
Gains and losses from banking 1 646 2 712 (39)
and trading activities
Interest paid 36 54 (33)
Interest received (80) (215) 63
Net fee and commission income (15) - (100)
Operating expenditure 27 252 (89)
Other operating income (42) (37) (14)
Note
1 All transactions entered into are on the same commercial terms and
conditions as in the normal course of business.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
RELATED PARTIES (continued)
8.4. Associates, joint
ventures and retirement
benefit fund
The Group provides certain banking and financial services to associates
and joint ventures. The Group also provides a number of current and
interest-bearing cash accounts to the Absa Group Pension Fund. These
transactions are conducted on the same terms as third-party transactions
and are not individually material.
In aggregate, the amounts included in the Group`s financial statements
are as follows:
2010
Associates Retirement Total
and joint benefit Rm
ventures fund
Rm Rm
Value of Absa Group Pension - 7 193 7 193
Fund investments managed by
the Group
Value of Absa shares held by - 116 116
the Absa Group Pension Fund
Value of other Absa securities - 1 582 1 582
held by the Absa Group Pension
Fund
Statement of financial
position
Deposits (0) (30) (30)
Derivative transactions 4 - 4
Loans and advances to 7 275 - 7 275
customers
Other assets 17 - 17
Other liabilities (47) - (47)
Statement of comprehensive
income
Current service costs(1) - 1 154 1 154
Interest income and similar (617) - (617)
income
Interest expense and similar 8 1 9
charges
Fees received (106) (17) (123)
Fees paid 173 - 173
Note
1 Current service costs, which were included in fees paid in the
previous year, are shown separately in the current year and consists of
employee and employer contributions to the Absa Group Pension Fund.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December
RELATED PARTIES (continued)
8.4. Associates, joint
ventures and retirement
benefit fund (continued)
2009
Associates Retirement Total
and joint benefit Rm
ventures fund
Rm Rm
Value of Absa Group Pension - 7 047 7 047
Fund investments managed by
the Group
Value of Absa shares held by - 69 69
the Absa Group Pension Fund
Value of other Absa securities - 1 444 1 444
held by the Absa Group
Statement of financial
position
Deposits (177) (45) (222)
Loans and advances to 8 411 - 8 411
customers
Other assets 2 218 - 2 218
Other liabilities (127) - (127)
Statement of comprehensive
income
Current service costs(1) - 1 042 1 042
Interest income and similar (1 026) - (1 026)
income
Interest expense and similar 41 1 42
charges
Fees received (117) (17) (134)
Fees paid 4 - 4
Note
1 Current service costs, which were included in fees paid in the
previous year, are shown separately in the current year and
consists of employee and employer contributions to the Absa Group
Pension Fund.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
Net interest income 23 340 21 854 7
Interest and similar 54 241 65 247 (17)
income
Interest expense and (30 901) 29
similar charges (43 393)
Impairment losses on loans and (6 005) (8 967) 33
advances
Net interest income after 17 335 12 887 35
impairment losses on loans and
advances
Net fee and commission income 14 391 14 289 1
1.1
Fee and commission income 16 454 16 301 1
Fee and commission (2 063) (2 012) (3)
expense
Net insurance premium income 4 602 3 787 22
Net insurance claims and (2 405) (2 215) (9)
benefits paid
Changes in investment and (1 059) (560) (89)
insurance liabilities
Gains and losses from banking 2 349 (9)
and trading activities 2 575
1.2
Gains and losses from 884 (40)
investment activities 1 464
1.3
Other operating income 712 892 (20)
Operating profit before 36 809 11
operating expenditure 33 119
Operating expenditure (24 949) (23 227) (7)
Operating expenses (24 070) (20 857) (15)
2.1
Other impairments (108) (1 457) 93
2.2
Indirect taxation (771) (913) 16
Share of post-tax results of (9) 82
associates and joint ventures (50)
Operating profit before income 11 851 9 842 20
tax
Taxation expense (3 262) (2 340) (39)
Profit for the year 8 589 7 502 14
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
Other comprehensive income
Exchange differences on (371) 44
translation of foreign (668)
operations
Movement in cash flow hedging 1 152 (665) >100
reserve
Fair value gains/(losses) 3 421 >100
arising during the year (148)
Amount removed from other (1 820) >(100)
comprehensive income and
recognised in the profit and
loss component of the statement (776)
of comprehensive income
Deferred tax (449) 259 >(100)
Movement in available-for-sale 166 (326) >100
reserve
Fair value gains/(losses) 146 >100
arising during the year (306)
Amount removed from other - 100
comprehensive income and
recognised in the profit and
loss component of the statement (205)
of comprehensive income
Amortisation of government 92 (12)
bonds -release to the profit and
loss component of the statement
of comprehensive income 104
Deferred tax (72) 81 >(100)
Movement in retirement benefit 21 (60)
asset and liabilities 52
Increase in retirement benefit 27 (74)
surplus 104
Decrease/(increase) in 2 >100
retirement benefit obligation (33)
Deferred tax (8) (19) 58
Total comprehensive income for 9 557 5 895 62
the year
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
Profit attributable to:
Ordinary equity holders of the 8 118 6 840 19
Group
Non-controlling interest - 151 (37)
ordinary shares 241
Non-controlling interest - 320 (24)
preference shares 421
8 589 7 502 14
Total comprehensive income
attributable to:
Ordinary equity holders of the 9 138 5 238 74
Group
Non-controlling interest - 99 (58)
ordinary shares 236
Non-controlling interest - 320 (24)
preference shares 421
9 557 5 895 62
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
1. NON-INTEREST INCOME
1.1 Net fee and commission
income
Fee and commission income
Asset management and other 105 103 2
related fees
Consulting and administration 510 428 19
fees
Credit-related fees and 12 855 12 494 3
commissions
Cheque accounts 3 198 3 231 (1)
Credit cards(1) 1 938 1 860 4
Electronic banking 3 828 3 501 9
Savings accounts 2 417 2 301 5
Other(2) 1 474 1 601 (8)
Insurance commission received 950 1 088 (13)
Pension fund payment services 497 545 (9)
Project finance fees 209 262 (20)
Trust and other fiduciary 1 029 1 182 (13)
services(3)
Portfolio and other 783 947 (17)
management fees
Trust and estate income 246 235 5
Other fees and commissions 299 199 50
16 454 16 301 1
Fee and commission expense (2 063) (2 012) (3)
Cheque processing fees (173) (193) 10
Commission paid (867) (867) 0
Debt collecting fees (85) (261) 67
Transaction-based legal (192) (148) (30)
fees
Valuation fees (185) (176) (5)
Other (561) (367) (53)
14 391 14 289 1
Notes
1 Includes merchant, acquiring and issuing fees.
2 Includes service, commission fees and credit related fees on mortgage
loans and foreign exchange.
3 The Group provides custody, trustee, corporate administration,
investment management and advisory services to third parties, which
involves the Group making allocation and purchase and sale decisions in
relation to a wide range of financial instruments. Some of these
arrangements involve the Group accepting targets for benchmark levels
of returns for the assets under the Group`s care.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
1. NON-INTEREST INCOME
(continued)
1.1 Net fee and commission
income (continued)
Included above are net fees
and commissions linked to
financial instruments not at
fair value
Fee and commission income
Cheque accounts 3 198 3 231 (1)
Credit cards 883 831 6
Electronic banking 3 828 3 501 9
Savings accounts 2 417 2 301 5
Other 1 080 1 293 (16)
11 406 11 157 2
Fee and commission expense (173) (193) 10
11 233 10 964 2
1.2 Gains and losses from
banking and trading activities
Associates and joint ventures 87 (13) >100
Dividends received 45 45 -
Profit/(loss)realised on 42 (58) >100
disposal
Available-for-sale unwind from (92) >(100)
reserve 115
Investment securities: - 219 (100)
unlisted equity and hybrid
instruments
Statutory liquid asset (92) (104) 12
portfolio
Financial instruments (316) >(100)
designated at fair value (63)
through profit or loss
Debt securities in issue (28) (125) 78
Deposits from banks and (1 315) >(100)
due to customers (434)
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
NON-INTEREST INCOME (continued)
1.2 Gains and losses from
banking and trading activities
(continued)
Investment securities 180 (130) >100
Debt instruments 26 (31) >100
Listed equity instruments 86 466 (82)
Unlisted equity and hybrid 68 (565) >100
instruments
Loans and advances to 840 37
banks and customers 614
Statutory liquid asset 7 12 (42)
portfolio
Financial instruments held for
trading
Derivatives and trading 2 570 2 555 1
instruments
Ineffective hedges 100 (19) >100
Cash flow hedges 115 (3) >100
Fair value hedges (15) (16) 6
2 349 2 575 (9)
1.3 Gains and losses from
investment activities
Associates and joint ventures
Profit realised on - 15 (100)
disposal
Available-for-sale unwind from
reserves
Investment securities
Unlisted equity and hybrid 0 1 (62)
investments
Financial instruments 908 (39)
designated at fair value 1 499
through profit or loss
Cash, cash balances and 217 (31)
balances with central banks 313
Investment securities 477 518 (8)
Debt instruments 125 78 60
Listed equity instruments 344 393 (12)
Unlisted equity and hybrid 8 47 (83)
instruments
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
NON-INTEREST INCOME
(continued)
1.3 Gains and losses from
investment activities
(continued)
Investments linked to 214 668 (68)
investment contracts
Cash, cash balances and (51) (50) (2)
balances with central banks
Debt instruments (24) (5) >(100)
Listed equity instruments 289 722 (60)
Unlisted equity and hybrid 0 1 (97)
instruments
Financial instruments held for (24) (41) 41
trading
Investment linked to
investment contracts
Derivative instruments (24) (41) 41
Subsidiaries
Loss realised on disposal - (10) 100
884 1 464 (40)
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
2. OPERATING EXPENDITURE
2.1 Operating expenses
Amortisation of intangible 165 116 42
assets
Auditors` remuneration 159 134 19
Audit fees 101 90 12
Audit fees - under provision 6 9 (33)
from previous periods
Other fees 52 35 49
Cash transportation 729 467 56
Depreciation 1 147 1 129 2
Equipment costs 271 278 (3)
Rentals 134 139 (4)
Maintenance 137 139 (1)
Information technology(1) 2 085 1 753 19
Investment property charges - 4 4 (0)
operating expense
Marketing costs 1 070 875 22
Operating lease expenses on 978 910 7
properties
Other operating costs(2) 2 737 2 358 16
Printing and stationery 272 283 (4)
Professional fees 1 096 897 22
Staff costs 12 537 10 816 16
Bonuses 1 101 644 71
Current service costs on post- 635 551 15
retirement benefits
Other staff costs(3) 528 331 60
Salaries 9 707 8 872 9
Share-based payments 297 223 33
Training costs 269 195 38
Telephone and postage 820 837 (2)
24 070 20 857 15
Notes
1 Included above are research and development costs of R133 million
(2009: R146million).
2 Other operating costs include accommodation costs, travel and
entertainment costs.
3 Other staff costs include recruitment costs, membership fees to
professional bodies, staff parking, redundancy fees, study assistance,
staff relocation and refreshment costs.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Change
Rm Rm %
2. OPERATING EXPENDITURE
(continued)
2.2 Other impairments
Financial instruments 37 38 (3)
Amortised cost 12 2 >100
instruments
Available-for-sale 25 36 (31)
instruments
Other 71 1 419 (95)
Computer software 4 19 (79)
development costs
Equipment 13 9 44
Goodwill(1) - 37 (100)
Investments in associates 29 (98)
and joint ventures(2) 1 328
Repossessed properties 25 26 (4)
108 1 457 (93)
Notes
1 During the previous year, the Group sold contractual rights it had
generated in Ambit Management Services (Proprietary) Limited. The
company was dormant and consequently the goodwill previously
recognised on this investment has been written off.
2 During the previous year, indications existed that the carrying
amount of the investments in associates, that arose as a result of
client defaults on single stock futures within Absa Capital, would
not be recoverable. The recoverable amount is the fair value less
cost to sell and was based on the Group`s best estimate of the price
the Group would achieve in an arm`s length sale transaction of these
investments. These investments have consequently been impaired in the
current and previous years.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(continued)
Year ended 31 December
2010 2009
(Audited) (Audited) Chang
e
Gross Net Gross Net Net
Rm Rm Rm Rm %
3. HEADLINE EARNINGS
Headline earnings(1) is determined
as follows:
Profit attributable to ordinary 8 118 6 840 19
equity holders of the Group
Adjustments for:
IFRS 3 (gain on bargain purchase)and (72) (72) 37 37 >(100
goodwill impairment )
IAS 16 profit on disposal of (41) (37) (68) (58) 36
property and equipment
IAS 21 recycled foreign - - (23) (23) 100
currency translation reserve,
disposal of investments in foreign
operations
IAS 27 loss on disposal of - - 10 10 (100)
subsidiaries
IAS 28 headline earnings (1) (1) 10 11 >(100
component of share of post-tax )
results of associates and joint
ventures
IAS 28 and 31 net (profit)/loss (42) (42) 43 35 >(100
on disposal of investments in )
associates and joint ventures
IAS 28 and 31 impairment of 29 21 1 328 956 (98)
investments in associates and joint
ventures
IAS 36 impairment of equipment 13 9 9 6 50
and leasehold improvements
IAS 38 impairment and net 4 3 (46) (42) >100
profit on disposal of intangible
assets
IAS 39 release of available-for- 92 66 (105) (115) >100
sale reserves
IAS 39 impairment and net 25 18 25 16 13
profit on disposal of available-for-
sale instruments
IAS 40 change in fair value of (50) (42) (66) (52) 19
investment properties
Headline earnings 8 041 7 621 6
Note
1 The net amount is reflected after taxation and non-controlling
interest.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December
2010
Total
equity Non- Non-
attributab controlli controlli
le to ng ng
ordinary interest- interest- Total
equity ordinary preferenc equity
holders of shares e shares
the Group
(Audited) (Audited) (Audited) (Audited)
Rm Rm Rm Rm
Balance at the beginning of 50 547 1 299 4 644 56 490
the year
Transfer from share-based 59 - - 59
payment reserve
Share buy-back in respect of (234) - - (234)
Absa Group Limited Share
Incentive Trust
Elimination of the movement in (49) - - (49)
treasury shares held by Absa
Group companies
Elimination of the movement in 31 - - 31
treasury shares held by Absa
Group Limited Share Incentive
Trust
Other reserves 1 131 - - 1 131
Transfer from share-based (61) - - (61)
payment reserve
Share-based payments for the 48 - - 48
year
Other comprehensive income 999 - - 999
1
Movement in general credit 39 - - 39
risk reserve
Movement in insurance 55 - - 55
contingency reserve
Movement in associates` and (9) - - (9)
joint ventures` retained
earnings reserve
Disposal of associates and 60 - - 60
joint ventures - release of
reserves
Retained earnings 4 805 - - 4 805
Transfer from share-based 2 - - 2
payment reserve
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Year ended 31 December
2010
Total
equity Non- Non-
attributab controlli controlli
le to ng ng
ordinary interest- interest- Total
equity ordinary preferenc equity
holders of shares e shares
the Group
(Audited) (Audited) (Audited) (Audited
)
Rm Rm Rm Rm
Transfer to general credit risk (39) - - (39)
reserve
Transfer to insurance (55) - - (55)
contingency reserve
Transfer to associates` and 9 - - 9
joint ventures` retained
earnings reserve (loss)
Disposal of associates and (60) - - (60)
joint ventures - release of
reserves
Profit attributable to equity 8 118 - - 8 118
holders of the Group 1
Other comprehensive income - 21 - - 21
movement in retirement benefit
asset and liabilities 1
Ordinary dividends paid during (3 191) - - (3 191)
the year
Dilution of non-controlling 0 (0) - -
equity holders` interest
Increase in non-controlling - 37 - 37
equity holders` interest
Disposal of businesses - (78) - (78)
Profit attributable to non- - 151 - 151
controlling equity holders of
the Group 1
Other comprehensive income - - (52) - (52)
foreign currency translation
effects 1
Dividends paid during the year - (142) - (142)
Profit attributable to - - 320 320
preference equity holders of
the Group 1
Preference dividends paid - - (320) (320)
during the year
Balance at the end of the year 56 290 1 215 4 644 62 149
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Year ended 31 December
2010
Total
equity Non- Non-
attributab controlli controlli
le to ng ng
ordinary interest- interest- Total
equity ordinary preferenc equity
holders of shares e shares
the Group
(Audited) (Audited) (Audited) (Audited)
Rm Rm Rm Rm
Note
Total comprehensive income
Profit attributable to equity 8 118 151 320 8 589
holders of the Group
Other comprehensive income 1 020 (52) - 968
9 138 99 320 9 557
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Year ended 31 December
2009
Total
equity Non- Non-
attributab controlli controlli
le to ng ng
ordinary interest- interest- Total
equity ordinary preferenc equity
holders of shares e shares
the Group
(Audited) (Audited) (Audited) (Audited
)
Rm Rm Rm Rm
Balance at the beginning of 47 607 1 042 4 644 53 293
the year
Shares issued 2 571 - - 2 571
Repurchase of preference
shares held by Batho Bonke
Capital (Proprietary) Limited 3 - - 3
Costs incurred (0) - - (0)
Transfer from share-based
payment reserve 67 - - 67
Share buy-back in respect of
Absa Group Limited Share (86) - - (86)
Incentive Trust
Elimination of the movement in
gains from derivative 2 - - 2
instruments on shares
Elimination of the movement in
treasury shares held by Absa 38 - - 38
Group companies
Elimination of the movement in
treasury shares held by Absa
Group Limited Employee Share 0 - - 0
Ownership Administrative Trust
Elimination of the movement in
treasury shares held by Absa
Group Limited Share Incentive 16 - - 16
Trust
Other reserves (1 832) - - (1 832)
Transfer from share-based
payment reserve (68) - - (68)
Share-based payments for the 47 - - 47
year
Other comprehensive income (1 654) - - (1 654)
1
Movement in general credit
risk reserve (23) - - (23)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Year ended 31 December
2009
Total
equity Non- Non-
attributab controlli controlli
le to ng ng
ordinary interest- interest- Total
equity ordinary preferenc equity
holders of shares e shares
the Group
(Audited) (Audited) (Audited) (Audited
)
Rm Rm Rm Rm
Movement in insurance
contingency reserve 25 - - 25
Movement in associates` and
joint ventures retained (50) - - (50)
earnings reserve
Disposal of associates and
joint ventures - release of (109) - - (109)
reserves
Retained earnings 2 161 - - 2 161
Repurchase of preference
shares held by Batho Bonke
Capital (Proprietary) Limited (1 089) - - (1 089)
Transfer from share-based
payment reserve 1 - - 1
Transfer to general credit
risk reserve 23 - - 23
Transfer to insurance
contingency reserve (25) - - (25)
Transfer to associates` and
joint ventures retained 50 - - 50
earnings reserve (loss)
Disposal of associates and
joint ventures - release of 109 - - 109
reserves
Profit attributable to equity - 6 840
holders of the Group 6 840 -
1
Other comprehensive income -
movement in retirement benefit
asset and liabilities 52 - - 52
1
Ordinary dividends paid during (3 800) - - (3 800)
the year
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Year ended 31 December
2009
Total
equity Non- Non-
attributab controlli controlli
le to ng ng
ordinary interest- interest- Total
equity ordinary preferenc equity
holders of shares e shares
the Group
(Audited) (Audited) (Audited) (Audited
)
Rm Rm Rm Rm
Acquisition of businesses - 72 - 72
Profit attributable to non- - 241 - 241
controlling equity holders of
the Group 1
Other comprehensive income -
foreign currency translation - (5) - (5)
effects 1
Dividends paid during the year - (51) - (51)
Profit attributable to - - 421 421
preference equity holders of
the Group 1
Preference dividends paid - - (421) (421)
during the year
Balance at the end of the year 50 547 1 299 4 644 56 490
Note
Total comprehensive income
Profit attributable to equity 6 840 241 421 7 502
holders of the Group
Other comprehensive income (1 602) (5) - (1 607)
5 238 236 421 5 895
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December
DIVIDENDS PER SHARE
2010 2009
(Audited) (Audited) Change
Rm Rm %
Dividends paid to ordinary
equity holders during the year
16 February 2010 final 1 580 (30)
dividend number 47 of 220
cents per ordinary share (9 2 245
February 2009: 330 cents)
4 August 2010 interim dividend 1 616 -
number 48 of 225 cents per
ordinary share (3 August 2009: 1 616
225 cents)
Dividends paid on shares held - 100
by Batho Bonke
Capital(Proprietary) Limited
in terms of the bridging (56)
finance arrangement
Dividends paid on treasury (5) (5) -
shares held by Absa Group
companies
3 191 3 800 (16)
Dividends paid to ordinary
equity holders relating to
income for the year
4 August 2010 interim dividend 1 616 -
number 48 of 225 cents per
ordinary share (3 August 2009: 1 616
225 cents)
15 February 2011 final 1 652 5
dividend number 49 of 230
cents per ordinary share (16 1 580
February 2010: 220 cents)
Dividends paid on shares held - 100
by Batho Bonke
Capital(Proprietary) Limited
in terms of the bridging (56)
finance arrangement
Dividends paid on treasury (3) (2) (50)
shares held by Absa Group
companies
3 265 3 138 4
Note
The STC payable by the Group in respect of the dividend approved and
declared subsequent to the reporting date, amounts to R165 million
(2009: R158 million). No provision has been made for this dividend and
the related STC in the financial statements at the reporting date.
CONDENSED NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Year ended 31 December
DIVIDENDS PER SHARE (continued)
2010 2009
(Audited) (Audited) Change
Rm Rm %
Dividends paid to non-
controlling preference equity
holders during the year
16 February 2010 final 162 (31)
dividend number 8 of 3 280,3
cents per preference share (9
February 2009: 4 734,5 cents) 234
4 August 2010 interim dividend 158 (16)
number 9 of 3 197,5 cents per
preference share (3 August 187
2009: 3 799,3 cents)
320 421 (24)
Dividends paid to non-
controlling preference equity
holders relating to income for
the year
4 August 2010 interim dividend 158 (16)
number 9 of 3 197,5 cents per
preference share (3 August
2009: 3 799,3 cents) 187
15 February 2011 final 143 (12)
dividend number 10 of 2 887,6
cents per preference share (16 162
February 2010: 3 280,3 cents)
301 349 (14)
Note
The STC payable by the Group in respect of the dividend approved and
declared subsequent to the reporting date amounts to R14 million (2009:
R16 million). No provision has been made for this dividend and the
related STC in the financial statements at the reporting date.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December
2010 2009(1)
(Audited) (Audited) Change
Rm Rm %
Net cash generated from 2 202 4 822 (54)
operating activities
Net cash 1 500 (2 029) >100
generated/(utilised)from
investing activities
Net cash utilised from (4 263) >(100)
financing activities (1 419)
Net (decrease)/increase in (561) >(100)
cash and cash equivalents 1 374
Cash and cash equivalents at 6 976 25
the 5 600
beginning of the year
1
Effect of exchange rate 2 -
movements on cash and cash 2
equivalents
Cash and cash equivalents at 6 417 6 976 (8)
the end of the year
2
NOTES
1. Cash and cash equivalents
at the beginning of the year
Cash, cash balances and 5 175 10
balances 4 726
with central banks
Loans and advances to banks 1 801 874 >100
6 976 5 600 25
2. Cash and cash equivalents
at the end of the year
Cash, cash balances and 4 939 (5)
balances 5 175
with central banks
Loans and advances to banks 1 478 1 801 (18)
6 417 6 976 (8)
Note
1 Comparatives have been reclassified. Refer to the
"Reclassifications" section.
CONSOLIDATED PROFIT CONTRIBUTION BY BUSINESS AREA
Year ended 31 December
2010 2009(1)
(Audited) (Audited) Change
Rm Rm %
Banking operations
Retail Banking 3 353 1 945 72
Home Loans 196 (1 299) >100
Vehicle and Asset Finance 280 265 6
Card 1 346 811 66
Personal Loans(2) 515 20 >100
Retail Bank(2) 1 016 2 148 (53)
Absa Business Bank 2 903 3 235 (10)
Absa Capital 1 480 288 >100
Underlying performance 1 518 1 275 19
Single stock futures (38) (987) 96
impairments
Corporate centre (396) 544 >(100)
Capital and funding centre (192) (35) >(100)
Non-controlling interest - (320) (421) 24
preference shares
Total banking 6 828 5 556 23
Financial Services 1 290 1 284 0
Profit attributable to 8 118 19
ordinary equity holders of the 6 840
Group
Headline earnings adjustments (77) 781 >(100)
Headline earnings 8 041 7 621 6
Notes
1 Comparatives have been reclassified for the move of Absa Small
Business from Retail Banking to Absa Business Bank.
2 Personal Loans were previously disclosed as part of Retail Bank.
CONSOLIDATED TOTAL REVENUE(1)CONTRIBUTION BY BUSINESS AREA
Year ended 31 December
2010 2009(2)
(Audited) (Audited) Change
Rm Rm %
Banking operations
Retail Banking 23 291 22 976 1
Home Loans 3 531 3 133 13
Vehicle and Asset Finance 2 193 2 279 (4)
Card 4 355 4 261 2
Personal Loans(3) 1 936 1 753 10
Retail Bank(3) 11 276 11 550 (2)
Absa Business Bank 11 626 11 498 1
Absa Capital 5 226 4 446 18
Corporate centre (827) (527) (57)
Capital and funding centre (106) 300 >(100)
Total banking 39 210 38 693 1
Financial Services 3 604 3 393 6
Total revenue 42 814 42 086 2
Notes
1 Revenue includes net interest income and non-interest income.
2 Comparatives have been reclassified for the move of Absa Small
Business from Retail Banking to Absa Business Bank.
3 Personal Loans were previously disclosed as part of Retail Bank.
CONSOLIDATED INTERNAL REVENUE(1)CONTRIBUTION BY BUSINESS AREA
Year ended 31 December
2010 2009(2)
(Audited) (Audited) Change
Rm Rm %
Banking operations
Retail Banking (13 467) (19 218) 30
Home Loans (15 119) (19 737) 23
Vehicle and Asset Finance (2 918) (3 878) 25
Card (815) (1 204) 32
Personal Loans(3) (611) (786) 22
Retail Bank(3) 5 996 6 387 (6)
Absa Business Bank 1 880 629 >100
Absa Capital 12 320 20 498 (40)
Corporate centre (423) (790) 46
Capital and funding centre (820) (847) 3
Total banking (510) 272 (88)
Financial Services 510 (272) 88
Internal revenue - - -
Notes
1 Revenue includes net interest income and non-interest income.
2 Comparatives have been reclassified for the move of Absa Small
Business from Retail Banking to Absa Business Bank.
3 Personal Loans were previously disclosed as part of Retail Bank.
CONSOLIDATED TOTAL ASSETS BY BUSINESS AREA
Year ended 31 December
2010 2009(1)
(Audited) (Audited) Change
Rm Rm %
Banking operations
Retail Banking 469 043 449 781 4
Home Loans 247 881 241 457 3
Vehicle and Asset Finance 51 020 50 543 1
Card 26 609 24 146 10
Personal Loans(2) 12 887 9 488 36
Retail Bank(2) 130 646 124 147 5
Absa Business Bank 166 838 164 210 2
Absa Capital 365 308 365 579 (0)
Corporate centre (380 521) (369 492) (3)
Capital and funding centre 72 855 66 765 9
Total banking 693 523 676 843 2
Financial Services 22 947 33 953 (32)
Total assets 716 470 710 796 1
Notes
1 Comparatives have been reclassified for the move of Absa Small
Business from Retail Banking to Absa Business Bank.
2 Personal Loans were previously disclosed as part of Retail Bank.
RECLASSIFICATIONS
Some items within the statement of financial position as at 31 December 2009 and
the statement of financial position for the year ended 31 December 2008 were
reclassified:
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2009
(Audited) (Audited) (Audited)
As
previously
reported Reclassificatio Reclassifi
ns1 ed
Rm Rm Rm
Assets
Cash, cash balances and 20 597 -
balances 20 597
with central banks
Statutory liquid asset 33 943 - 33 943
portfolio
Loans and advances to banks 36 032 - 36 032
Trading portfolio assets 61 779 (9 477) 52 302
Hedging portfolio assets 2 558 - 2 558
Other assets 17 777 - 17 777
Current tax assets 234 - 234
Loans and advances to customers 503 630 2 533 506 163
Reinsurance assets 719 - 719
Investment securities 29 564 - 29 564
Investments in associates and -
joint ventures 487 487
Goodwill and intangible assets 1 245 - 1 245
Investment properties 2 195 - 2 195
Property and equipment 6 606 - 6 606
Deferred tax assets 374 - 374
Total assets 717 740 (6 944) 710 796
Liabilities
Deposits from banks 39 616 (3 075) 36 541
Trading portfolio liabilities 53 722 (9 477) 44 245
Hedging portfolio liabilities 565 - 565
Other liabilities 12 212 - 12 212
Provisions 1 684 - 1 684
Current tax liabilities 59 - 59
Deposits due to customers 350 757 5 608 356 365
Debt securities in issue 171 376 - 171 376
Liabilities under investment
Contracts 12 446 - 12 446
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December 2009
(Audited) (Audited) (Audited)
As
previously
reported Reclassifications Reclassifi
(1) ed
Rm Rm Rm
Policyholder liabilities under
insurance contracts 3 136 - 3 136
Borrowed funds 13 530 - 13 530
Deferred tax liabilities 2 147 - 2 147
Total liabilities 661 250 (6 944) 654 306
Equity
Capital and reserves
Attributable to ordinary
equity
holders of the Group:
Share capital 1 432 - 1 432
Share premium 4 784 - 4 784
Other reserves 1 178 - 1 178
Retained earnings 43 153 - 43 153
50 547 - 50 547
Non-controlling interest - 1 299 1 299
ordinary shares -
Non-controlling interest - 4 644 4 644
preference shares -
Total equity 56 490 - 56 490
Total equity and liabilities 717 740 (6 944) 710 796
Note
1 The Group has reassessed its counterparty risk for certain scrip
lending and other trading activities. This was done due to a change in
interpretation of customer agreements as well as a reconsideration of the
risk inherent in some of its trading portfolios. This resulted in the
Group revisiting the principles of netting down or grossing up some
transactions to be in line with the risks inherent to the transactions.
It was concluded that the reclassification would better reflect the risk
that the Group has to manage on the different statement of financial
position lines and that this disclosure would enhance disclosure and
provide users of the financial statements with more relevant information.
This disclosure is now also aligned with industry practice.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2008
(Audited) (Audited) (Audited)
As
previously
reported Reclassificatio Reclassifi
ns1 ed
Rm Rm Rm
Assets
Cash, cash balances and 24 828 - 24 828
balances
with central banks
Statutory liquid asset 33 043 - 33 043
portfolio
Loans and advances to banks 44 662 231 44 893
Trading portfolio assets 78 879 (1 747) 77 132
Hedging portfolio assets 3 139 - 3 139
Other assets 16 925 - 16 925
Current tax assets 23 - 23
Non-current assets held for 2 495 - 2 495
sale
Loans and advances to customers 532 144 675 532 819
Reinsurance assets 903 - 903
Investment securities 26 980 - 26 980
Investments in associates and 2 144 - 2 144
joint ventures
Goodwill and intangible assets 963 - 963
Investment properties 661 - 661
Property and equipment 6 127 - 6 127
Deferred tax assets 241 - 241
Total assets 774 157 (841) 773 316
Liabilities
Deposits from banks 54 633 (17) 54 616
Trading portfolio liabilities 72 737 (1 747) 70 990
Hedging portfolio liabilities 1 080 - 1 080
Other liabilities 12 618 - 12 618
Provisions 2 113 - 2 113
Current tax liabilities 385 - 385
Non-current liabilities held- 408 - 408
for-sale
Deposits due to customers 382 281 923 383 204
Debt securities in issue 165 900 165 900
Liabilities under investment 10 377 - 10 377
contracts
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 December 2008
(Audited) (Audited) (Audited)
As
previously
reported Reclassifications Reclassifi
(1) ed
Rm Rm Rm
Policyholder liabilities 3 076 - 3 076
under
insurance contracts
Borrowed funds 12 296 - 12 296
Deferred tax liabilities 2 960 - 2 960
Total liabilities 720 864 (841) 720 023
Equity
Capital and reserves
Attributable to ordinary
equity
holders of the Group:
Share capital 1 354 - 1 354
Share premium 2 251 - 2 251
Other reserves 3 010 - 3 010
Retained earnings 40 992 - 40 992
47 607 - 47 607
Non-controlling interest - 1 042 - 1 042
ordinary shares
Non-controlling interest - 4 644 - 4 644
preference shares
Total equity 53 293 53 293
Total equity and liabilities 774 157 (841) 773 316
Note
1 The Group has reassessed its counterparty risk for certain scrip
lending and other trading activities. This was done due to a change in
interpretation of customer agreements as well as a reconsideration of
the risk inherent in some of its trading portfolios. This resulted in the
Group revisiting the principles of netting down or grossing up some
transactions to be in line with the risks inherent to the transactions.
It was concluded that the reclassification would better reflect the risk
that the Group has to manage on the different statement of financial
position lines and that this disclosure would enhance disclosure and
provide users of the financial statements with more relevant information.
This disclosure is now also aligned with industry practice.
PROFIT AND DIVIDEND ANNOUNCEMENT
Salient features
Headline earnings per share (HEPS) increased by 2% to 1 122,6 cents.
Diluted HEPS increased by 4% to 1 115,7 cents.
Final dividend of 230 cents per share, up 5% year-on-year.
Net interest margin on average interest-bearing assets improved to 4,01% from
3,74%.
Credit impairments fell 33% to R6 005 million, resulting in a 1,20% credit loss
ratio.
Cost-to-income ratio increased to 56,2%.
Return on average equity (RoE) of 15,1%.
Return on risk-weighted assets of 1,99%.
Net asset value (NAV) per share grew by 11% to 7 838 cents.
Core tier I capital adequacy ratio for the Group of 11,7%, well above regulatory
requirements.
Overview
In a challenging operating environment, the Group`s headline earnings increased
by 6% to R8 041 million (31 December 2009: R7 621 million). HEPS grew by 2% to 1
122,6 cents (31 December 2009: 1 099,4 cents) and fully diluted HEPS increased
by 4% to 1 115,7 cents (31 December 2009: 1 072,0 cents). The Group`s RoE of
15,1% remained above its cost of equity.
Lower credit impairments, particularly in Retail Banking, and a wider net
interest margin on average interest-bearing assets, were the primary reasons for
the Group`s higher headline earnings. These outweighed muted loan and
transaction volume growth, a higher effective tax rate and a 15% rise in
operating expenses.
Retail Banking and Absa Capital grew their headline earnings by 85% and 20%
respectively, whereas Absa Business Bank`s headline earnings fell by 11% and
those of Financial Services declined marginally.
Operating environment
The global economy grew around 5% in 2010, a better performance after the acute
global economic stress of the two previous years. Emerging markets led the way
out of recession, although the USA and Germany also experienced stronger-than-
expected growth. However, some European economies experienced difficulties,
particularly in their financial sectors. South Africa also recovered in 2010,
buoyed by stronger external demand, interest rates at 36-year lows and a
recovery in business confidence in most consumer facing sectors. Despite
improved growth, business confidence remains generally restrained and many
industries continued to shed labour in 2010. Subdued confidence, along with high
levels of household indebtedness, has been an important moderating factor in
private sector credit growth.
Group performance
Statement of financial position
The Group`s total assets of R716,5 billion as at 31 December 2010 increased 1%
from 31 December 2009, but declined marginally from 30 June 2010. Substantial
growth of 42% in Absa`s statutory liquid asset portfolio, to strengthen its
liquidity, offset lower investment securities and loans and advances to banks.
Loans and advances to customers
Absa`s loans and advances declined by 1% from 31 December 2009 to R498,6
billion, but were flat from 30 June 2010. Retail Banking`s loans and advances
increased 1%, given lower customer demand and a sustained focus on risk appetite
and pricing. Mortgages, which constituted 60% of total gross Group loans and
advances, grew by 1% year-on-year as two small books were acquired. However,
growth in credit cards and instalment credit agreements improved in the second
half of 2010 and personal and term loans grew 31% year-on-year.
Deposits due to customers
Deposits due to customers increased by 6% to R378,1 billion from 31 December
2009, with solid growth in targeted areas. Retail Banking achieved 4% growth,
spread across most of its products, which further entrenched its leading market
share in retail deposits. ABB`s deposits grew by 7% from 31 December 2009, with
cheque accounts performing well. ABB`s strategy to lengthen its funding saw it
increase fixed deposits by 6%. Consequently, Absa`s overall loans-to-deposits
ratio declined to 91,9% from the 95,9% of the previous year.
Net asset value
Net asset value (NAV) grew by 11% to R56,3 billion during the year. Retained
earnings of R4,9 billion was generated from net profits after paying ordinary
dividends. Cash flow hedging increased other reserves by 96% to R2,3 billion.
Absa`s NAV per share rose 11% year-on-year to 7 838 cents (31 December 2009: 7
038 cents) and has grown by 15% compound over the past five years.
Capital to risk-weighted assets
Despite a 9% growth in risk-weighted assets due to recalibrating credit models
to reflect the recent downturn, Absa maintained its healthy capital levels,
which remain well above regulatory requirements. As at 31 December 2010, Absa
Group`s core tier l and tier l capital adequacy ratios were 11,7% (31 December
2009: 11,5%) and 12,8% (31 December 2009: 12,7%) respectively. The Group`s total
capital ratio declined slightly to 15,5% (31 December 2009: 15,6%). Absa Bank`s
tier l ratio improved marginally to 11,9% (31 December 2009: 11,6%) and its
total ratio was 14,8% (31 December 2009: 14,7%).
Net interest income
Net interest income increased 7% to R23 340 million (31 December 2009: R21 854
million) despite negative loan growth and 1,02% lower average prime interest
rates during the year. This increase is largely attributable to Absa`s effective
hedging strategy, but also reflects better new business pricing for credit risk
and a change in the loan mix towards higher margin products. These outweighed
the material negative endowment effect and funding pressure on wholesale
deposits. The Group`s net interest margin on average interest-bearing assets
improved noticeably to 4,01% from 3,74%.
Credit impairments
After almost quadrupling between 2007 and 2009, Absa`s credit impairments
improved 33% to R6 005 million (31 December 2009: R8 967 million). Retail
Banking, where credit impairments fell 36% to R4 820 million from R7 547
million, was responsible for most of the reduction. Early cycle delinquencies
improved as lower rates helped consumers to recover and the benefits of
effective collections management and sound credit policy became evident. ABB`s
credit impairments declined by 3% to R1 075 million.
The Group`s credit impairments ratio improved by more than expected to 1,20%
from the 1,74% recorded for 2009 and the 1,50% for the six months ended 30 June
2010. This is well below the peak of 1,86% recorded 18 months ago. Despite far
smaller inflows, non-performing loans remain elevated. Non-performing loans as a
percentage of average loans and advances were 7,7% for the year ended 31
December 2010 and remained in line with the 7,6% recorded for the six months
ended 30 June 2010 and increased from the 7,0% recorded for the year ended 31
December 2009. Absa`s loans subject to debt counselling declined to R7 billion
from R9,6 billion at 30 June 2010, owing to strong collection efforts. The
Group`s non-performing loan coverage ratio improved from 2009.
Non-interest income
Absa`s non-interest income declined by 4% to R19 474 million (31 December 2009:
R20 232 million), largely because of a revaluation loss of R128 million on its
Visa stake (31 December 2009: R272 million profit) and non-recurrence of gains
from selling holdings in MasterCard and NuPay (31 December 2009: R271 million).
Net fee and commission income grew a modest 1% to R14 391 million (31 December
2009: R14 289 million), because of sluggish transaction volumes and the absence
of a price increase in Retail Banking. Electronic banking fees and ABB`s fee and
commission income increased 9% and 7% respectively. Absa Capital`s Markets
revenue fell by 7%, which is considered a solid performance in a difficult
operating environment with reduced client activity. Revaluations in Private
Equity resulted in a R48 million profit (31 December 2009: R623 million loss).
Income due to realisations of R40 million (31 December 2009: nil) is also
included in non-interest income.
Operating expenses
Absa`s operating expenses grew by 15% to R24 070 million (31 December 2009: R20
857 million) as the Group continued to invest for future growth. This included
19% growth in information technology costs from the previous year. Staff costs,
the largest component, increased by 16% to R12 537 million (31 December 2009:
R10 816 million), reflecting wage settlements and higher incentives. The
compound annual growth rate in costs over five years was well controlled at 11%.
As expected given modest revenue growth, the Group`s cost-to-income ratio rose
to 56,2% (31 December 2009: 49,6%).
Taxation
The Group`s taxation increased 39% to R3 262 million from R2 340 million for
2009, as its effective tax rate increased to 27,5% from 23,8%. The higher rate
was mainly due to a lower proportion of exempt income.
Segmental performance
Retail Banking
Headline earnings increased 85% to R3 232 million (31 December 2009: R1 749
million), largely because of lower credit impairments. Attributable earnings
grew by 72% to R3 353 million (31 December 2009: R1 945 million). Retail
Banking`s credit loss ratio fell to 1,49% from 2,30%, due to improving early
stage delinquencies and a successful collections strategy. Revenue grew by 1%,
reflecting limited transactional volume and loan growth, plus funding margin
pressure. Operating expenses grew by 9%, resulting in a higher cost-to-income
ratio of 57,1% (31 December 2009: 53,2%). Headline earnings from Card, Home
Loans and Personal Loans improved significantly, while Retail Bank declined 50%
due to higher impairments. Retail Banking`s return on regulatory capital
improved to 20,7%.
Absa Business Bank
Headline earnings dropped by 11% to R2 848 million (31 December 2009: R3 206
million), as loans and advances declined by 1% and commercial property finance
equity portfolio values fell. ABB experienced a 3% decrease in credit
impairments. Net interest income rose 2%, reflecting solid deposit growth, which
partially offset lower customer advances and pressure on deposit margins from
lower interest rates. Fee income increased 7% driven by ABB`s enhanced
transactional capabilities. Operating expenses grew by 14% to R6 397 million
(December 2009: R5 624 million), as the business continues to invest in growth
initiatives. Nonetheless, ABB`s return on regulatory capital remained a credible
22,8%.
Absa Capital
Headline earnings increased by 20% to R1 527 million (31 December 2009: R1 272
million) and attributable earnings increased to R1 480 million (31 December
2009: R288 million). The large growth in attributable earnings is due to single
stock futures impairments from the previous year. Private Equity revenue rose
significantly from the prior year as a result of an improved performance in the
investment portfolio and reduced funding costs. Markets revenue held up
relatively well, considering the reduced client flows. With client activity
levels below 2009, Investment banking revenue declined by 22%. Absa Wealth`s net
revenue grew by 12% owing to improved banking and credit margins. Absa Capital
continued to expand into Africa and attributable income from the rest of Africa
grew by 14% to R219 million. Further investment in systems, infrastructure and
talent contributed to the 23% rise in operating expenses and a 54,3% cost-to-
income ratio. Absa Capital`s return on regulatory capital was 16,0%.
Financial Services
Headline earnings declined marginally to R1 291 million (31 December 2009: R1
300 million), in a tough operating environment. Financial Services` attributable
earnings remained relatively unchanged at R1 290 million (31 December 2009: R1
284 million). Nonetheless, it achieved a 34,8% RoE (31 December 2009: 37,9%).The
life and short-term insurance companies delivered strong premium growth of 25%
and 12% respectively. Absa Life`s embedded value of new business grew by 58%
year-on-year to R465 million and its return on embedded value was 39,8%. Assets
under management increased by 12% to R163 billion. Short-term insurance claims
remained high relative to historical trends, at 68,5%, although they were
slightly below 2009`s 69,9%. Investments in distribution channels and
technology, as well as increased business volumes and new mandates secured,
increased operating costs by 16% year-on-year.
Prospects
Global growth is expected to slow to 4% in 2011, as emerging markets and the US
sustain momentum. Although slightly slower, global economic growth is likely to
maintain upward pressure on commodity prices, which would be generally positive
for South Africa. We expect GDP growth to continue improving as the economy
responds to lower interest rates.
Executing its One Absa strategy positions the Group to capture future growth as
the economy improves. Nonetheless, revenue growth is likely to remain subdued in
2011, particularly as moderate advances growth is anticipated. However, stronger
non-interest revenue growth is expected this year, particularly in key target
areas. Credit impairments should improve, albeit at a slower pace than for 2010.
Management is committed to containing cost growth, maintaining strong capital
levels and improving liquidity further.
Basis of presentation and changes in accounting policies
Absa Group Limited is a company domiciled in South Africa. Its registered office
is the 3rd floor, Absa Towers East, 170 Main Street Johannesburg, 2001.
The Group`s condensed results have been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and contain the information
required by International Accounting Standard (IAS) 34.
The accounting policies applied in preparing the financial results for the year
ended 31 December 2010 are the same as the accounting policies in place for the
year ended 31 December 2009 with the exceptions mentioned below.
Revised IFRS 3 - Business Combinations affects acquisitions that are achieved in
stages and acquisitions where less than 100% of the equity is acquired. In
addition, all acquisition-related costs are expensed. The revised IFRS 3 has
been applied prospectively to all business combinations from 1 January 2010. The
impact of this amendment on the Group was not significant during the year under
review.
Revised IAS 27 - Consolidated and Separate Financial Statements specifies that
changes in a parent`s ownership interest in a subsidiary that does not result in
the loss of control must be accounted for as equity transactions. The
requirements of IAS 27 have been applied prospectively to transactions with non-
controlling interests from 1 January 2010. The impact of this amendment on the
Group was not significant during the year under review.
Reclassifications
The Group has reassessed its counterparty risk for certain scrip lending and
other trading activities. This was done due to a change in interpretation of
customer agreements as well as a reconsideration of the risk inherent in some of
its trading portfolios. This resulted in the Group revisiting the principles of
netting down or grossing up some transactions to be in line with the risks
inherent to the transactions. It was concluded that the reclassification would
better reflect the risk that the Group has to manage on the different statement
of financial position lines and that this disclosure would enhance disclosure
and provide users of the financial statements with more relevant information.
This disclosure is now also aligned to industry practice. This has resulted in
comparatives being reclassified for December 2009 and December 2008.
Auditors` report
Ernst & Young Inc. and PricewaterhouseCoopers Inc., Absa Group Limited`s
independent auditors, have audited the consolidated annual financial statements
of Absa Group Limited from which the condensed consolidated financial results
have been derived. The auditors have expressed an unqualified audit opinion on
the consolidated annual financial statements. The condensed consolidated
financial results comprise the condensed consolidated statement of financial
position at 31 December 2010, condensed consolidated statement of comprehensive
income, condensed consolidated statement of changes in equity and condensed
consolidated statement of cash flows for the year then ended, and selected
explanatory notes. The audit report of the consolidated annual financial
statements is available for inspection at Absa Group Limited`s registered
office.
On behalf of the board
M Ramos
Group Chief Executive
G Griffin
Group Chairman
Johannesburg
15 February 2011
Declaration of final ordinary dividend number 49
Shareholders are advised that a final ordinary dividend of 230 cents per
ordinary share was announced today, Tuesday, 15 February 2011, for the six month
period ending 31 December 2010, bringing the total dividend for the year to 455
cents per ordinary share. The final ordinary dividend is payable to shareholders
recorded in the register of members of the Group at the close of business on
Friday, 11 March 2011.
In compliance with the requirements of Strate, the electronic settlement and
custody system used by the JSE Limited, the following salient dates for the
payment of the dividend are applicable:
Last day to trade cum dividend Friday, 4 March 2011
Shares commence trading ex dividend Monday, 7 March 2011
Record date Friday, 11 March 2011
Payment date Monday, 14 March 2011
Share certificates may not be dematerialised or rematerialised between Monday, 7
March 2011, and Friday, 11 March 2011, both dates inclusive.
On Monday, 14 March 2011, the dividend will be electronically transferred to the
bank accounts of certificated shareholders who use this facility. In respect of
those who do not, cheques dated 14 March 2011 will be posted on or about that
date. The accounts of those shareholders who have dematerialised their shares
(which are held at their participant or broker) will be credited on Monday, 14
March 2011.
On behalf of the board
S Martin
Group Secretary
Johannesburg
15 February 2011
Enquiries
Jason Quinn
Group Financial Controller
Absa Group Limited
4th Floor, Absa Towers East, 170 Main Street, Johannesburg
Tel: +2711 350 7565, Fax: +2711 350 6487
E-mail: jason.quinn@absa.co.za
Alan Hartdegen
Head: Investor Relations
Absa Group Limited
3rd Floor, Absa Towers East, 170 Main Street, Johannesburg
Tel: +2711 350 2598, Fax: +2711 350 5924
E-mail: Alan.Hartdegen@absa.co.za
Sponsor
J.P. Morgan Equities Limited
Date: 15/02/2011 08:00:02 Produced by the JSE SENS Department.
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