standard bank group - the vault 1 standard bank group risk and capital management report for the six...

Standard Bank Group

Risk and capital management report for the six months ended 30 June 2013

Contents

OverviewBoard responsibility 1

Risk types 1

Governance framework 1

Capital managementObjectives 5

Governance committees 5

Capital transferability 5

Basel III 5

Regulatory capital 7

Economic capital 12

Risk-adjusted performance measurement 12

Cost of equity 12

Risk reporting frameworksReporting framework differences 13

Basel approaches adopted for regulatory capital purposes 15

Integrated risk managementApproach to risk appetite 16

Approach to stress testing 17

Governance committee 17

Risk typesCredit risk 18

Definition 18

Approach to managing credit risk 18


Approved regulatory capital approaches 18

Credit portfolio characteristics and metrics in terms of the Basel reporting framework 24

Portfolio characteristics and metrics in terms of the IFRS reporting framework 37

Country risk 43

Definition 43

Approach to managing country risk 43



Country risk portfolio characteristics and metrics 43

Liquidity risk 46

Definition 46

Approach to managing liquidity risk 46



Liquidity characteristics and metrics 47

Foreign currency liquidity management 47

Funding strategy 47

Contingency liquidity risk management 48

Basel III liquidity requirements 50

Market risk 51

Definition 51



Trading book market risk 51

Interest rate risk in the banking book 54

Equity risk in the banking book 55

Foreign currency risk 56

Operational risk 57

Definition 57

Approach to managing operational risk 57



Operational risk sub-types 58

Areas of special focus 60

Business risk 61

Definition 61

Approach to managing business risk 61



Post-retirement obligation risk 62

Definition 62

Approach to managing post-retirement obligation risk 62



Restatements 63

Additional informationTerms and conditions of capital instruments issued 64

Annexure A – composition of capital – SBG 65

Annexure A – composition of capital – SBSA 68

Annexure B – main features disclosure template 72

Acronyms and abbreviations 78

Contact details ibc

1

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013

OverviewBoard responsibilityThe Standard Bank Group (the group) board of directors (board) has the ultimate responsibility for the oversight of risk and capital management. Various board and management committees, as set out on pages 2 to 3, support the board in its oversight of the risks faced by the group and the effectiveness with which the group manages both these risks and the group’s capital.

For the period under review, the board is satisfied that the group’s risk and capital management processes operated effectively, that the group’s business activities have been managed within the board-approved risk appetite, and that the group is adequately capitalised to support the execution of the group’s strategy.

Risk typesThe group’s activities give rise to various risks, the material risks being:

¢ credit risk (starting on page 18)

¢ country risk (starting on page 43)

¢ liquidity risk (starting on page 46)

¢ market risk (starting on page 51)

¢ operational risk (starting on page 57)

¢ business risk (starting on page 61)

¢ post-retirement obligation risk (starting on page 62).

Each risk is defined within the relevant section.

Governance frameworkThe group’s approach to managing risk and capital is to adopt a governance framework that enables management to identify risks and manage risk and capital within the board-approved risk appetite and risk tolerance levels. This framework has three components:

¢ governance committees at both a board and management level

¢ an organisation management structure to support the three lines of defence

¢ governance documents, including governance standards for each risk type, detailing risk principles and minimum control requirements, and policies to support these governance standards.

Governance committeesGovernance committees are in place at both a board and management level. They have clearly defined mandates and delegated authorities, which are reviewed regularly.

Board responsibility 1

Risk types 1

Governance framework 1

2

Risk governance committees

Group executive committee

Standard Bank

Group board

Management committees Board committees

Group audit committee

Group risk and capital

management committee

SBSA large exposure credit

committee1

Group model approval

committee

PBB2 model approval

committee

CIB3 modelapproval

committee

Group management committee

Group IT steering

committee

Group risk oversight

committee

1 A subcommittee of The Standard Bank of South Africa Limited (SBSA) board.2 Personal & Business Banking.3 Corporate & Investment Banking.

Board committeesThe group risk and capital management committeeThe GRCMC provides independent oversight of risk and capital management across the group by:

¢ reviewing and overseeing the adequacy and effectiveness of the group’s risk and capital management framework

¢ approving governance standards and, where required by regulation, policies

¢ approving the group’s risk appetite statements and reviewing the group’s risk profile for all risk types

¢ calling for and evaluating in depth investigations and reports based on its assessment of the risk profile and external factors

¢ monitoring and reviewing significant IT investment and expenditure.

The group audit committeeThe GAC reviews the group’s financial position and makes recommendations to the board on all financial matters, financial risks, internal financial controls, fraud and IT risks relevant to financial reporting. In relation to risk and capital management, the GAC plays a role in assessing the adequacy and operating effectiveness of the group’s internal financial controls.

Minutes of the GRCMC meetings are tabled at the GAC meetings. In order to ensure the independence of the compliance and audit functions, the chairman of the GAC meets with the group chief compliance officer (GCCO) and chief audit officer without management being present. In addition, the chief risk officer (CRO) reports on significant matters discussed at the GRCMC and group risk oversight committee (GROC) meetings.

Capital management

Risk reporting frameworks

Integrated risk management

Risk types Restatements Additionalinformation

Overview

3


SBSA large exposure credit committeeThe SBSA large exposure credit committee is designated by the SBSA board to discharge the regulatory responsibility of ensuring compliance with the South African Banks Act 94 of 1990 (Banks Act) regulations in respect of large exposures. It meets as required, at the same time complying with the mandatory South African Reserve Bank (SARB) requirements for a quorum, and reports quarterly to the SBSA board through its chairman on all large exposures as defined in the regulations.

Group model approval committeeThe group model approval committee is designated by the board to discharge the regulatory responsibility of reviewing and approving all aspects of the group’s material credit rating models. This committee is supported by the PBB and CIB model approval subcommittees, both of which review and approve non-material credit models used in their respective business lines.

Management committeesGroup risk oversight committeeExecutive management responsibility for all material risk types has been delegated by the group management committee to GROC which, in turn, assists the GRCMC in fulfilling its mandate. GROC evaluates and recommends, for approval by the relevant board committees, the following:

¢ risk appetite statements

¢ macroeconomic scenarios for stress testing, stress-testing results and scenario analyses

¢ risk governance standards for each risk type

¢ actions on the current and forward-looking risk profile

¢ risk strategy

¢ the internal capital adequacy assessment process (ICAAP) and output.

As is the case with the GRCMC, GROC calls for and evaluates in depth investigations and reports based on its assessment of the risk profile and external factors.

GROC delegates authority to various subcommittees which deal with specific risk types or oversight activities. Matters are escalated to GROC, based on materiality, through reports or feedback from the subcommittee chairman.

Group IT steering committeeThe committee is authorised to carry out any activity within its terms of reference by the group management committee. The purpose of the committee is to provide assurance to the group management committee and the board that management has implemented effective IT governance structures that support the effective management of resources, optimisation of costs and the mitigation of risk in a secure and sustainable manner.

GROC subcommittees

Credit governance committee – PBB

GROC

Credit governance committee – CIB

Group asset and liability committee Group compliance committee

Group capital management committee (subcommittee)

Group equity risk committee

Group country risk management committeeGroup internal financial control

governance committee

Group insurance risk committeeGroup regulatory and legislative

oversight committee

Group stress testing and risk appetite committee

Group sanctions review committee

Intragroup exposure committeeGroup operational risk committee

4

Three lines of defence modelThe group uses the three lines of defence governance model which promotes transparency, accountability and consistency within the risk governance and capital management process through the clear identification and segregation of roles.

First line of defence Second line of defence Third line of defence

Co

nsi

sts

of

¢ management of business lines and legal entities.

¢ finance function

¢ risk management function

¢ legal

¢ governance office

¢ compliance.

¢ internal audit (IA).

Res

po

nsi

bil

itie

s ¢ measures, assesses and controls risks through the day-to-day activities of the business within the governance framework.

¢ develops and implements the governance framework

¢ provides independent oversight of the first line of defence

¢ reports to management and board governance committees.

¢ provides independent assurance to the GAC.

Where appropriate, the second line of defence functions have

resources at the centre and embedded within the business lines.

Central resources provide a groupwide governance framework

for the specific function. The resources embedded within the

business lines support business line management in ensuring that

business line specific risks are effectively managed as close to

the source as possible. Central and embedded resources jointly

address risk and capital management at a legal entity level.

The IA and compliance functions report to and operate

under a mandate from the GAC. In terms of its mandate, the

IA function’s role is to provide independent and objective

assurance. IA has the authority to independently determine

the scope and extent of work to be performed. All IA employees

in the group report operationally to the group chief audit officer

and administratively to management of their legal entity.

The compliance function operates independently of business

in terms of its mandate, which is approved annually by the GAC

and is drawn primarily from Regulation 49 of the Banks Act.

All compliance employees in the group report, through

compliance executives, to the GCCO.

Governance documentsGovernance documents comprise governance standards and related policies.

The second line of defence functions implement governance standards for each material risk type to which the group is exposed. The standards set out the group’s approach to identifying, measuring and monitoring exposure to each material risk type. This ensures consistency in approach across the group’s business lines and legal entities. All governance standards are approved by the GRCMC. Compliance with standards is controlled through annual self-assessments by the second line of defence and reviews by IA.

Policies are governed by the group policy standard. This covers the policy lifecycle activities of development, approval, monitoring and review. Policies are approved by the relevant GROC subcommittee, GROC itself or, where regulations require board approval, by the board or relevant board committee.

Capital management




Overview

5


ObjectivesThe group’s capital management framework is designed to ensure that regulatory requirements are met at all times and that the group and its principal subsidiaries are capitalised in line with the group’s risk profile, economic capital standards and target ratios approved by the board.

The capital management functional pillar of treasury and capital management (TCM) comprises:

¢ Strategic capital management function: Key responsibilities are capital raising, advising on the dividend policy, facilitating capital allocation, measuring risk-adjusted performance measurement (RAPM), and managing the ICAAP and capital planning.

¢ Portfolio analysis and reporting function: Key responsibilities are to calculate and analyse regulatory and economic capital, and manage the capital budgeting process.

¢ CIB and PBB capital management functions: Key responsibilities are to provide support on deal pricing, key return measures and management of capital consumption against budgets.

¢ Regional capital management function: Key responsibilities are to support the group’s operations in the rest of Africa and outside Africa.

Governance committeesThe primary GROC subcommittees that oversee the risks associated with capital management are the group asset and liability committee (ALCO) and its subcommittee, the group capital management committee.

Capital transferabilitySubject to appropriate motivation to and approval by exchange control authorities, no significant restrictions exist on the transfer of funds and regulatory capital within the banking group.

Basel III The SARB adopted the Basel III: A global regulatory framework for more resilient banks and banking systems (Basel III) from 1 January 2013 and the group has been compliant with the minimum requirements from that date. The group is well positioned to comply with certain requirements that are subject to phase-in rules when they become effective. These requirements are reflected in the tables and graphs on the following page.

Capital managementObjectives 5


Capital transferability 5

Basel III 5

Regulatory capital 7

Economic capital 12

Risk-adjusted performance measurement 12

Cost of equity 12

6

Basel III implementation timeline

2015 2016 2017 2018 20192013 2014

Ris

k co

vera

ge

Leve

rage

rati

o

Capi

tal Credit

valuation adjustmentAsset value correlation

Public disclosure

Final adjustments to definition

and calibration

Formal requirement

Monitoring commences

14.0010.00 11.00 12.00 13.019.50 10.00

Tota

l min

imum

ca

pita

l rat

io

(%

)

Certain elements of the Basel III framework such as the domestic systemically important bank (D-SIB) requirements, are still being finalised by the SARB.

Basel III capital requirements Basel III aims to improve the quality of capital, increase capital levels and remove inconsistencies in the definition of capital across jurisdictions.

Increased risk coverage

¢ Credit valuation adjustment (CVA) for over-the-counter (OTC) derivatives, being the capital charge for potential mark-to-market losses associated with deterioration in counterparty credit worthiness

¢ Asset value correlation being the increased capital charge on exposures to financial institutions ¢ Strengthen standards for collateral management, margin period of risk, management of general

wrong-way risk and stress testing.

Capital conservation

buffer

¢ 2.5% capital buffer by 2019 to decrease pro-cyclicality

¢ Build up capital during favourable economic conditions that can be drawn on during times of stress.

Pillar 2a and D-SIB

buffer

¢ Up to 2% of Pillar 2a buffer prescribed by the SARB to be held against systemic risk requirements

¢ 0 – 2.5% D-SIB buffer required for banks deemed by the SARB to be systemically important

¢ The two buffers are complementary – that is, combined impact is less than or equal to 3.5% and is split over all three tiers of capital.

Countercyclicalbuffer

¢ 0 – 2.5% capital buffer deployed by national jurisdictions when system-wide risk builds up

¢ Ensures capital adequacy takes macro-financial environment into account.

Leverageratio

¢ Constrain build up of leverage in the banking sector

¢ SARB minimum of 4%.

Increased quality,quantity and

consistency of capital

¢ Increased focus on common equity tier I (CET I)

¢ Increased capital levels.

Capital management




Overview

7


The graph below reflects the minimum capital requirements and phase-in periods applicable to South Africa.

15

12

9

6

3

SARB minimum ratios (Capital as a % of risk weighted assets)1 effective 1 January each year

¢ CET I ¢ Pillar 2a and D-SIB CET I ¢ Conservation buffer CET I ¢ Pillar 2a and D-SIB tier I ¢ Additional tier I ¢ Pillar 2a and D-SIB tier II ¢ Tier II

20192013 2014 2015 2016 2017 2018

3.50

1.000.50

9.50

1.00

3.50

4.00

1.50

1.50

0.50

2.50

10.00

4.50

2.00

1.50

2.00

10.00

4.50

2.00

0.625

0.375

2.00

11.00

1.50

4.50

2.00

1.25

0.75

2.00

12.00

1.50

4.50

1.75

1.875

1.50

1.00

13.00

0.375

2.00

4.50

1.50

2.50

1.50

1.25

14.00

0.75

2.00

1 Graph excludes countercyclical buffer and bank-specific Pillar 2b capital requirement, but includes maximum potential pillar 2a and D-SIB requirements.

Regulatory capitalThe group manages its capital base to achieve a prudent balance between maintaining capital levels to support business growth, maintaining depositor and creditor confidence, and providing value to shareholders, while ensuring regulatory capital targets are maintained.

The main regulatory requirements to be complied with are those specified in the Banks Act and related regulations which are broadly consistent with Basel III.

Regulatory capital adequacy is measured through three risk-based ratios:

¢ Common equity tier I: Represents ordinary share capital, share premium and appropriated retained earnings.

¢ Tier I: Tier I capital comprises CET I and perpetual, non-cumulative instruments with principal loss absorption features issued under Basel III rules. Perpetual non-cumulative preference shares issued under Basel I and II are included in tier I capital but are subject to regulatory phase-out requirements over a 10-year period, starting on 1 January 2013.

¢ Total capital adequacy: Total capital includes other items such as the general allowance for credit impairments and subordinated debt with principal loss absorption features issued under Basel III and subordinated debt instruments issued under Basel I and II rules. The latter are subject to regulatory phase-out requirements starting on 1 January 2013.

These ratios represent a measure of the capital supply relative to the total risk-weighted assets and are measured against internal targets and regulatory minimum requirements.

16

12

8

4

2007

Capital adequacy ratios1 (%)

¢ Tier I ¢ Tier II ¢ Tier III — Total required capital

2008 2009 2010 2011 2012 20132

1 Basel II implemented 1 January 2008. Risk-weighted assets and capital adequacy for 2007 are on a Basel II pro forma basis.

Basel III implemented 1 January 2013. Risk-weighted assets and capital adequacy for 2012 are on a pro forma Basel III basis.

2008 to 2011 are on a Basel II basis. June 2013 represents 2013 Basel III SARB minimum capital requirement.

2 Relates to the six months ended 30 June 2013.

8

Risk-weighted assets take the following into consideration:

¢ Both on- and off-balance sheet exposures are included in the group’s overall credit risk-weighted assets.

¢ Risk-weighted assets for equity risk are modelled on the standardised, market-based and probability of default (PD)/loss given default (LGD) approaches.

¢ Capital requirements for market risk and operational risk are converted into risk-weighted assets for the purpose of determining total risk-weighted assets.

¢ Other assets are risk weighted in accordance with prescribed regulatory requirements.

During the period ended 30 June 2013 and the comparative year ended 31 December 2012, the group complied with all externally imposed capital requirements.

The group’s CET I capital, including unappropriated profit, was R100,2 billion as at 30 June 2013 (31 December 2012: R89,7 billion). The group’s tier I capital, including unappropriated profit, was R105,1 billion as at 30 June 2013 (31 December 2012: R94,6 billion) and total capital, including unappropriated profit was R130,8 billion as at 30 June 2013

(31 December 2012: R120,4 billion). The above comparatives

are disclosed on a Basel III pro forma basis.

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

SBG tier II instrument maturity profile (Rm)

¢ Callable date

2013 2014 2015 2016 2017 2018 2019 2020

The group has a balanced tier II subordinated debt maturity

profile.

Capital management




Overview

9


Basel III qualifying capital excluding unappropriated profits

June2013

Rm

December20121,2

Rm

Normalised ordinary shareholders’ equity 123 936 114 619 Net International Financial Reporting Standards (IFRS) adjustments (1 588) (3 534)

IFRS ordinary shareholders' equity 122 348 111 085 Qualifying non-controlling interest 3 338 2 738 Less: regulatory adjustments: (24 395) (23 108)

Goodwill (3 523) (3 092)Other intangible assets (11 887) (10 445)Shortfall of provisions relative to expected losses (2 588) (2 108)Investments in financial entities (4 525) (5 156)Other adjustments (1 872) (2 307)

Less: Regulatory exclusions (13 688) (13 085)

Unappropriated profit (12 570) (12 055)Non-qualifying reserves (1 118) (1 030)

CET I capital 87 603 77 630 Perpetual preference shares 4 945 4 945

Tier I capital 92 548 82 575

Tier II subordinated debt 24 902 25 020 General allowance for credit impairments 807 733

Tier II capital 25 709 25 753

Total regulatory capital 118 257 108 328

Total capital requirement 80 897 79 974

Total risk-weighted assets 851 545 841 835

1 Pro forma Basel III basis.2 Restated. Refer to page 63.

10

Basel III risk-weighted assets and associated capital requirements

June 2013 December 20121

Risk-weightedassets

Rm

Capitalrequirement2

Rm

Risk-weightedassets

Rm

Capital requirement2

Rm

Credit risk 628 794 59 735 622 605 59 148

Portfolios subject to the standardised approach3 184 142 17 493 166 618 15 829

Corporate 106 930 10 157 110 189 10 468 Sovereign 38 944 3 700 25 801 2 451 Banks 7 637 726 5 274 501 Retail mortgages 8 198 779 6 961 661 Retail other4 22 145 2 104 17 968 1 707 Securitisation exposure 288 27 425 41 Portfolios subject to the foundation internal ratings-based (FIRB) approach 51 409 4 884 58 569 5 564

Corporate 35 383 3 362 41 087 3 903 Sovereign 2 716 258 2 602 247 Banks 13 310 1 264 14 880 1 414 Portfolios subject to the advanced internal ratings-based (AIRB) approach 365 803 34 751 371 420 35 285

Corporate 150 893 14 335 152 943 14 530 Sovereign 9 537 906 9 430 896 Banks 28 663 2 723 36 238 3 443 Retail mortgages 82 891 7 875 77 234 7 337 Qualifying revolving retail exposure (QRRE) 46 898 4 455 52 179 4 957 Retail other4 43 647 4 146 40 490 3 847 Securitisation exposure 3 274 311 2 906 275

Other assets 27 440 2 607 25 998 2 470

Equity risk in the banking book 16 828 1 599 16 343 1 552

Portfolios subject to the standardised approach3 805 76

ListedUnlisted 805 76

Portfolios subject to the market-based approach 8 098 770 6 219 591

Listed 165 16 127 12 Unlisted 7 933 754 6 092 579

Portfolios subject to the PD/LGD approach 8 730 829 9 319 885

Market risk 73 857 7 016 69 244 6 578

Portfolios subject to the standardised approach3,5 37 084 3 523 32 293 3 068

Interest rate risk 28 471 2 705 22 979 2 183 Equity position risk 577 54 312 30 Foreign exchange risk 5 595 532 4 863 462 Commodities risk 2 441 232 4 139 393

Portfolios subject to the internal models approach 36 773 3 493 36 951 3 510

Value-at-risk (VaR) based 25 368 2 410 27 564 2 619

Interest rate risk 26 944 2 560 25 222 2 396 Equity position risk 13 098 1 244 16 704 1 587 Foreign exchange risk 7 661 728 7 566 719 Commodities risk 6 945 660 9 233 877 Diversification benefit (29 280) (2 782) (31 161) (2 960)

Non-VaR-based 11 405 1 083 9 387 891

Operational Risk 108 116 10 271 112 689 10 705

Portfolios subject to the standardised approach3 48 393 4 597 112 689 10 705 Portfolios subject to the advanced measurement approach 59 723 5 674 Risk-weighted assets for investments in financial entities 23 950 2 276 20 954 1 991

Total risk-weighted assets/capital requirement 851 545 80 897 841 835 79 974

1 Pro forma Basel III basis.2 Capital requirement at 9.5% excludes bank specific add-ons and capital floor.3 Portfolios on the standardised approach relate to the rest of Africa operations and, in addition, portfolios for which the application to adopt the internal

models approach has not yet been submitted, or for which an application has been submitted to SARB but approval has not yet been granted.4 Retail other includes retail, small and medium enterprises, vehicle and asset finance, and term lending exposures.5 Instruments on the standardised approach for general market risk relate to low-volume structured products and new products recently traded for which the

SARB approval to adopt the internal model approach has not been granted. The standardised approach for interest rate risk incorporates all specific risk.

Capital management




Overview

11


Capital adequacy ratios

2013 SARBBasel III

minimum regulatory

requirement%

2013 – 2015Basel III

targetratio

%

Including unappropriatedprofits

Excluding unappropriatedprofits

June2013

%

December20121,2

%

June2013

%

December20121,2

%

Total capital adequacy ratio 9.5 11.5 – 15.0 15.4 14.3 13.9 12.9Tier I capital adequacy ratio 6.0 9.5 – 12.0 12.3 11.2 10.9 9.8CET I capital adequacy ratio 4.5 8.0 – 10.5 11.8 10.7 10.3 9.2

1 Pro forma Basel III basis.2 Restated. Refer to page 63.

Capital adequacy ratios of banking subsidiaries

Host tier I regulatory

requirements%

Host total regulatory

requirements%


Tier Icapital

%

Totalcapital

%

Tier Icapital

%

Totalcapital

%

Standard Bank Group1 6.02 9.52 12.3 15.4 11.2 14.3The Standard Bank of South Africa Group1 6.02 9.52 11.3 14.2 10.5 13.7Rest of AfricaCfC Stanbic Bank (Kenya) 10.5 14.5 17.6 20.9 21.0 30.0Stanbic Bank Botswana 7.5 15.0 11.3 18.6 8.9 17.3Stanbic Bank Ghana 6.7 10.0 17.9 19.2 17.1 18.6Stanbic Bank Tanzania 10.0 12.0 13.0 15.0 13.4 15.4Stanbic Bank Uganda 8.0 12.0 19.3 23.3 15.7 20.0Stanbic Bank Zambia 5.0 10.0 16.8 19.1 18.1 20.7Stanbic Bank Zimbabwe 8.0 12.0 17.6 19.0 15.5 16.9Stanbic IBTC Bank (Nigeria) 5.0 10.0 13.1 15.4 15.7 16.7Standard Bank de Angola 5.0 10.0 11.9 17.8 15.6 15.6Standard Bank Malawi 6.0 10.0 19.1 23.2 17.2 21.9Standard Bank Mauritius 5.0 10.0 9.6 14.9 6.9 10.8Standard Bank Mozambique 4.0 8.0 12.1 13.2 16.6 17.7Standard Bank Namibia 7.0 10.0 9.8 11.8 10.2 11.8Standard Bank RDC (DR Congo) 5.0 10.0 24.4 34.6 25.4 30.7Standard Bank Swaziland 4.0 8.0 10.9 15.7 10.6 15.0Standard Lesotho Bank 4.0 8.0 12.2 13.3 9.0 10.3Standard International Holdings, consolidated3 17.2 24.2 15.1 21.7Standard Bank Isle of Man 10.0 10.3 12.3 9.6 11.8Standard Bank Jersey 10.0 10.5 15.2 11.2 15.8

Liberty Group (calculated in terms of the Long-term Insurance Act 52 of 1998 (Long-term Insurance Act)) capital adequacy requirements – times covered. 2.8 2.7

1 December 2012 presented on a pro forma Basel III basis.2 Represents 2013 SARB Basel III minimum capital requirements.3 Incorporating: – Banco Standard de Investimentos S.A. (Brazil). – Standard Bank (Asia) (Hong Kong). – Standard Bank Plc (United Kingdom).

12

Economic capitalEconomic capital is the internal basis for measuring and reporting all quantifiable risks faced by the group on a consistent risk-adjusted basis. The group assesses its economic capital adequacy by measuring its risk profile under both normal and stress conditions. Internally and externally developed models underlying the calculation of economic capital are validated by the central validation function which is independent of TCM.

Economic capital is a component of ICAAP, which is a Basel regulatory process. ICAAP considers the qualitative capital management processes within the organisation and includes the organisation’s general governance, risk management, capital management and financial planning governance.

Economic capital of R77,5 billion (31 December 2012: R70,9 billion) is the amount of permanent capital that is required to support the group’s economic risk profile. For potential losses arising from risk types that are statistically quantifiable, economic capital reflects the worst-case loss commensurate with the group’s target rating of A- translating to a confidence level of 99.92%.

Economic capital utilisation by risk type at end of the period

June2013

Rm

December 20121

Rm

Credit risk 53 023 49 102 Equity risk 5 200 4 816 Market risk 1 660 1 973 Operational risk 8 756 7 455 Business risk 5 347 5 156 Interest rate risk in the banking book 3 465 2 423

Economic capital requirement 77 451 70 925

Available financial resources 118 084 106 426

Economical capital coverage ratio (times) 1.52 1.50

1 Restated. Refer to page 63.

The available financial resources cover the minimum economic capital requirement, indicating that sufficient resources are available to cover all quantifiable risks.

Risk-adjusted performance measurementRAPM supports the maximisation of shareholder value by optimally managing financial resources within the board approved risk appetite.

Capital is centrally monitored and allocated, based on usage and performance, in a manner that enhances overall group economic profit and return on equity. Business units are held accountable to achieve their RAPM targets, ensuring that the interests of shareholders and management are aligned.

RAPM is calculated on both regulatory and economic capital measures.

Cost of equityThe group’s rand-based cost of equity (CoE) is estimated using the industry standard capital asset pricing model. CoE is recalibrated twice a year using the latest parameter estimates. The group’s CoE is 13.7% (31 December 2012: 13.7%), and is derived as follows:

CoE = Risk-free rate + (Beta x equity risk premium) 13.7% = 7.5% + (0.88 x 7%).

The group strives to add positive economic value by generating returns in excess of CoE on a consistent basis.

Capital management




Overview

13


Reporting framework differencesThere are differences in the principles underlying the IFRS and Basel reporting frameworks. These are summarised below in order to assist with the interpretation of the values reported.

Principle Basel IFRS

Categorisation of exposures

By Basel asset class which, under the IRB approach, is based on homogeneous risk characteristics and aligned to the risk mitigation factors applied in the Basel calculations.

By class of financial instrument, taking into account the nature of the information to be disclosed and the characteristics of the underlying financial instruments.

Valuation Requires that fair value gains and losses attributable to own credit risk be excluded when calculating regulatory capital.

Permits any financial asset or financial liability, on meeting specific criteria, to be designated at fair value with all changes in fair value (including fair value gains and losses attributable to own credit risk) being recognised in profit or loss.

Treatment of assets classified as available-for-sale

Requires that these fair value adjustments be reversed when determining regulatory capital as they may be transient and, therefore, not permanently available.

Measured at fair value with all fair value adjustments recognised in other comprehensive income (OCI).

Impairment of assets

Impairment is based on the concepts of expected and unexpected losses.

Expected losses are accounted for through the level of impairments held against the underlying exposure.

Unexpected losses are accounted for through holding regulatory capital in relation to the size and nature of the exposure held.

Statistical modelling of expected losses is required.

Assets are specifically impaired and the resulting losses recognised only if:

¢ there is objective evidence of impairment resulting from one or more events that have occurred after the initial recognition of the asset, and

¢ that event has an impact on the estimated future cash flows of assets that can be reliably measured.

To provide for latent losses in a portfolio of loans where the loans have not yet been individually identified as impaired, impairment for incurred but not reported losses is recognised based on historic loss patterns and estimated emergence periods.

The use of statistical models is permitted, but a trigger event must occur before an impairment loss can be recognised.

The risk and capital information disclosed in the sections that follow is in accordance with both IFRS and Basel. All quantitative information is marked as Basel or IFRS where relevant.

Risk reporting frameworksReporting framework differences 13

Basel approaches adopted for regulatory capital purposes 15

14


Default Defines default as the obligor being 90 days past due on the obligation (extended to 180 days for some products).

Defines objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the asset.

Objective evidence of impairments includes:

¢ actual breach of contract

¢ observable data indicating there is a measurable decrease in the estimated cash flows from a group of assets since their initial recognition due to:

¢ adverse changes in the payment status of the borrowers in the group, or

¢ a deterioration in national or local economic conditions that correlate with defaults on the assets in the group.

The difference between the two impairment values produces a shortfall if the expected loss amount under Basel exceeds total impairments under IFRS, or an excess if total impairments exceed the expected loss amount. Basel requires shortfall amounts, if any, to be deducted from capital in the ratio of 50% from tier I capital and 50% from tier II capital.

Basel disclosures apply at a group level only and not at an individual bank level. Banking regulations require the consolidation of group companies (subsidiaries, joint ventures and voluntarily consolidated minority-owned entities) that conduct banking, securities and financial activities. These include credit institutions, securities firms and financial entities, but no other companies.

The differences relating to consolidation methods under Basel and IFRS are explained in the table below.

Reporting framework consolidation differences


Basis for determining treatment The key basis is the nature of the underlying activity of the entity. There are different treatments for entities which conduct banking, securities or financial activities as defined, and those which do not.

All entities, regardless of the nature of their underlying activities, are either consolidated or equity accounted based on the extent of control or influence that the group has on those entities. The principles of control, significant influence and the consequential reporting requirements are respectively governed by IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures.

Subsidiaries conducting banking, securities or financial activities as defined1

Consolidated2 Consolidated

Other subsidiaries Deducted3 Consolidated

Significant influence or joint control of entities conducting banking, securities or financial activities, as defined1

Proportionally consolidated4 Equity accounted

Significant influence or joint control of entities conducting other activities

Deducted3 Equity accounted

1 Refer to the definitions shown in the table on the next page.2 Includes the full risk-weighted exposure amounts of the subsidiary in the group’s consolidated risk-weighted exposures.3 The investment in the entity is deducted from the group’s consolidated regulatory capital and reserve funds and the related assets are removed

from the consolidated balance sheet.4 Includes the pro rata portion (based on the group’s share in the entity) of the risk-weighted exposure amounts of the entity in the group’s

consolidated risk-weighted exposure.

Capital management




Overview

15


Treatment of legal entities under the Basel consolidation

Banks1

Securitiesfirms2

Financialentities3

Commercialentities4

Insuranceentities5

June 2013Consolidated6 23 5 82Proportionately consolidated7 4Threshold deduction8 1 21 104 3

Total 24 5 107 104 3

December 2012Consolidated6 23 5 83 Proportionately consolidated7 4 Deducted8 1 22 106 3

Total 24 5 109 106 3

1 Banks – public companies registered as banks in terms of the Banks Act or the relevant legislation if the entity is registered outside of the Republic of South Africa.

2 Securities firms – entities that provide securities services as envisaged in the Securities Services Act 36 of 2004 or the relevant legislation if the entity is registered outside the Republic of South Africa.

3 Financial entities – entities that conduct financial activities, for example, lending business, financial leasing, consumer credit, mortgage credit, money transmission, portfolio management or money broking.

4 Commercial entities – entities primarily involved in the production of goods or non-financial services.5 Insurance entities – entities that conduct insurance business including any entity registered as an insurer in terms of the Short-term Insurance Act

53 of 1998 or Long-term Insurance Act or the relevant legislation if the entity is registered outside the Republic of South Africa.6 Consolidated – includes the full risk-weighted exposure amounts of the subsidiary in the group’s consolidated risk-weighted exposures. 7 Proportionally consolidated – includes the pro rata portion (based on the group’s share in the entity) of the risk-weighted exposure amounts of the

entity in the group’s consolidated risk-weighted exposures. 8 Threshold deduction/deducted – the investment in the entity is deducted from the group’s consolidated regulatory capital and reserve funds and

the related assets are removed from the consolidated balance sheet.

Basel approaches adopted for regulatory capital purposesBasel provides various approaches which a regulated entity may choose from to determine the required amount of regulatory capital to be held against each risk-type. In general, there are three options per risk-type:

¢ a basic option

¢ an intermediate option

¢ an advanced option.

The regulators approve approaches on a case by case basis, both at a solo regulated entity and consolidated regulated entity level.

The group does not adopt advanced approaches for certain

portfolios, either because these approaches are not yet recognised

in a particular jurisdiction or because the group has chosen, on a

materiality basis, to adopt the intermediate or basic options. In

these cases, the group nevertheless adopts approaches similar to

the advanced approaches for its internal economic capital, risk

measurement and management purposes where it is felt that these

offer better information for managing risks.

The approaches approved by regulators are specified in the

relevant risk-type section.

16

The integrated risk management function coordinates and supports the risk appetite and stress-testing activities of the group. This is undertaken by teams at the centre, in business lines and at a legal entity level.

Approach to risk appetiteDefinitionsThe group has adopted the following definitions:

¢ Risk appetite: An expression of the amount of risk an entity is generally willing to take in pursuit of its financial and strategic objectives, reflecting its capacity to sustain losses and continue to meet its obligations as they fall due, under both normal and a range of stress conditions. Entity may refer to a business line or legal entity within the group, or the group itself.

¢ Risk tolerance: The maximum amount of risk the entity is prepared to tolerate above risk appetite.

¢ Risk capacity: The maximum amount of risk the group is able to support within its available financial resources.

¢ Risk appetite statement (RAS): The documented expression of risk appetite and risk tolerance which has been approved by the relevant governance committee of the entity.

¢ Risk profile: The amount of risk the entity holds (current risk profile) as well as a view of how the risk profile may change under both expected and stressed economic conditions (forward-looking risk profile).

ProcessThe group’s risk appetite framework provides guidance on the following:

¢ risk appetite terminology and concepts

¢ the approach to setting risk appetite

¢ responsibilities for setting risk appetite

¢ the process for taking mitigating action at a business line, legal entity and risk type level.

Executive management is responsible for the setting of risk appetite and risk tolerance, which is approved by the GRCMC on behalf of the board. In developing the risk appetite statement, executive management considers group strategy and the desired balance between risk and return. The GRCMC reviews the group’s risk profile on a quarterly basis.

Risk appetite statements at business line and legal entity level are congruent with the group risk appetite statement.

Integrated risk managementApproach to risk appetite 16

Approach to stress testing 17


Capital management




Overview

17


MetricsEach RAS is made up of RAS dimensions. RAS dimensions may be either qualitative or quantitative and include:

¢ earnings at risk

¢ liquidity

¢ regulatory capital

¢ economic capital.

These dimensions are translated into:

¢ portfolio limits, for example, concentrations, credit loss ratios and VaR

¢ operational limits, for example, facilities by borrower or counterparty.

Approach to stress testingThe group’s stress-testing framework sets out the responsibilities for and approach to stress-testing activities. Stress tests are conducted at group, business line and material legal entity level. The results inform decision-making at the appropriate management levels and the board.

Stress testing supports a number of business processes including:

¢ the strategic planning and budgeting process

¢ ICAAP, including capital planning and management

¢ the liquidity planning and management process

¢ the setting of risk appetite and risk tolerance

¢ the assessment of the impact of stress conditions on the forward-looking risk profile

¢ the development of risk mitigation or contingency plans across a range of stressed conditions.

Groupwide macroeconomic stress testing is conducted regularly across all major risk types for a range of common scenarios. This groupwide stress testing is augmented by portfolio-specific stress testing and sensitivity analyses to identify the drivers of the group’s risk profile.

The appropriateness of the macroeconomic stress scenarios and the severity of the relevant scenarios used for capital planning are approved by the GRCMC.

Governance committeeThe primary governance committee overseeing integrated risk management is the group stress-testing and risk appetite committee, which is chaired by the group CRO.

18

DefinitionCredit risk is the risk of loss arising out of failure of counterparties to meet their financial or contractual obligations when due.

Credit risk is composed of counterparty risk (including primary, pre-settlement, issuer and settlement risk) and concentration risk. Counterparty risk is the risk of loss arising from a counterparty being unwilling or unable to meet its financial or contractual obligations when due. Credit concentration risk is the risk of loss arising from an excessive concentration of exposure to a single counterparty or counterparty segment, an industry, a market, a product, a financial instrument or type of security, a country or geography, or a maturity.

Approach to managing credit riskThe group’s credit risk comprises mainly wholesale and retail loans and advances, together with the counterparty credit risk arising from derivative contracts entered into with our clients and market counterparties.

The group manages credit risk through:

¢ maintaining a strong culture of responsible lending and a robust risk policy and control framework

¢ identifying, assessing and measuring credit risk clearly and accurately across the group, from the level of individual facilities up to the total portfolio

¢ defining, implementing and continually re-evaluating our risk appetite under actual and stress conditions

¢ monitoring the group’s credit risk relative to limits

¢ ensuring that there is independent, expert scrutiny of credit risks and their mitigation.

Primary responsibility for credit risk management resides within the group’s business lines, supported by an independent group credit risk function operationally embedded in the business units. The GRCMC is the principal board committee responsible for the oversight of credit risk, with the GAC having oversight responsibility for reviewing the adequacy of the recognised credit impairments.

Governance committeesThe primary governance committees overseeing credit risk are the CIB and PBB credit governance committees, the group equity risk committee and the intragroup exposure committee.

These committees are responsible for credit risk and credit concentration risk decision-making, and delegation thereof to credit officers and committees within defined parameters. Key aspects of rating systems and credit risk models are approved by the PBB, CIB and group model approval committees. Regular model validation and reporting to these committees is undertaken by the central validation function which is independent of the credit risk function.

Credit risk

Risk types

Definition 18

Approach to managing credit risk 18



Credit portfolio characteristics and metrics in terms of the Basel reporting framework 24

Portfolio characteristics and metrics in terms of the IFRS reporting framework 37

Capital management




Overview

19

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Credit risk

Approved regulatory capital approachesThe group has approval from the SARB to adopt the AIRB approach for its credit portfolios in SBSA and the FIRB approach for Standard Bank Plc.

The group has approval from the SARB to adopt the market-based approach for certain equity portfolios in SBSA while the risk-weighted IRB approach is used for Standard Bank Plc equity portfolios.

The group has adopted the standardised approach for some of its less material subsidiaries and portfolios.

Basel: Use of internal estimatesThe group’s credit risk rating systems and processes differentiate and quantify credit risk across counterparties and products. The group uses its own estimates of risk parameters for the calculation of risk-weighted assets for SBSA (which uses both FIRB and AIRB approaches) and Standard Bank Plc (which uses the FIRB approach). Internal risk parameters are also used extensively in other risk management and business processes, including:

¢ setting risk appetite

¢ setting limits for concentration risk and counterparty limits

¢ credit approval and monitoring

¢ pricing transactions

¢ determining portfolio impairment provisions

¢ calculating economic capital.

Basel: Standardised approachThe calculation of regulatory capital is based on net counterparty exposures after recognising a limited set of qualifying collateral, and applying rules specified according to the exposures’ characteristics and external agency credit ratings. The standardised approach differentiates between unlisted and listed equities.

External credit assessment institutions

Moody’s Investor Services

Standard& Poor’s Fitch

Asset classCorporate ü üSovereign ü ü üBanks ü üSmall and medium enterprises ü ü

Basel: Exposure subject to the standardised approach per risk weighting


ExposureRm

MitigationRm

Exposureafter

mitigationRm

Exposureafter

mitigationRm

Based on risk weights0% – 35% 31 270 135 31 135 2 121 50% 46 614 912 45 702 35 977

Rated 135 135 353 Unrated 46 479 912 45 567 35 624

75% 34 010 259 33 751 18 511 100% and above 154 969 13 256 141 713 151 335

Rated 1 110 1 110 941 Unrated 153 859 13 256 140 603 150 394

Total 266 863 14 562 252 301 207 944

Basel: Internal ratings-based approachAll IRB models are managed under model development and validation policies that set out the requirements for model governance structures and processes, and the technical framework within which model performance and appropriateness is maintained. The models are developed using internal historical default and recovery data. In low default portfolios, internal data is supplemented with external benchmarks and studies. Models are assessed frequently to ensure ongoing appropriateness as business environments and strategic objectives change, and are recalibrated annually using the most recent internal data.

20

Credit risk continued

Relationship between the group master rating scale and external ratings

Group master rating scale

SARB risk bucket

Moody’s Investor Services

Standard & Poor’s Fitch Grading

Credit quality

1 – 4 AAA to AA- Aaa, Aa1, Aa2, Aa3

AAA, AA+, AA, AA-

AAA, AA+, AA, AA-

Investment grade

Normal monitoring

5 – 7 A+ to A- A1, A2, A3 A+, A, A- A+, A, A-

8 – 12 BBB+ to BBB- Baa1, Baa2, Baa3

BBB+, BBB, BBB-

BBB+, BBB, BBB-

13 – 21 BB+ to B- Ba1, Ba2, Ba3, B1, B2, B3

BB+, BB, BB-, B+, B, B-

BB+, BB, BB-, B+, B, B-

Sub-investment grade

22 – 25 Below B- Caa1, Caa2, Caa3, Ca

CCC+, CCC, CCC-

CCC+, CCC, CCC-

Close monitoring

Default Default C D D Default Default

Probability of defaultThe group uses a 25-point master rating scale to quantify the credit risk for each borrower. The mapping of the master rating scale to the SARB risk buckets and external credit assessment institutions’ alphanumerical rating scales and grading categories is shown in the table above. Ratings are mapped to probabilities of default (PDs) by means of calibration formulae that use historical default rates and other data from the applicable portfolio. The group distinguishes between through-the-cycle PDs and point-in-time PDs, and utilises both measures in decision-making and in managing credit risk exposures.

Loss given defaultLGD measures are a function of customer type, product type, seniority of loan, country of risk and level of collateralisation. LGDs are estimated based on historic recovery data per category of LGD. A downturn LGD is used in the estimation of the capital charge and reflects the anticipated recovery rates and macroeconomic factors in a downturn period.

Exposure at defaultExposure at default (EAD) captures the impact of potential draw-downs against unutilised facilities and changes in counterparty risk positions due to changes in market prices. By using historical data, it is possible to estimate the average utilisation of limits of an account when default occurs, recognising that customers may use more of their facilities as they approach default.

Model validationIRB models are validated at initial development and at least annually thereafter by the central validation function. Validation techniques test the appropriateness and effectiveness of the models, and indicate if the model is fit for purpose. In order for a model to be approved for implementation or ongoing use, model validation results are regularly presented to the model approval committees.

Capital management




Overview

21


Corporate, sovereign and bank portfoliosCorporate, sovereign and bank borrowers include South African and international companies, sovereigns, local and provincial government entities, bank financial institutions, non-bank financial institutions and public sector entities. Corporate entities include large companies as well as small and medium enterprises that are managed on a relationship basis or have a combined exposure to the group of more than R7,5 million.

Creditworthiness is assessed based on a detailed individual assessment of the financial strength of the borrower.

Specialised lending portfolioSpecialised lending includes project, object and commodity finance as well as income-producing real estate finance. Creditworthiness is assessed on a transactional level, rather than on the financial strength of the borrower, as the group relies on repayment from the cash flows generated by the underlying asset.

The slotting approach has been adopted for certain specialised lending asset classes, and slotting criteria provided by the regulator are applied. There were no specialised lending exposures under the slotting approach as at 30 June 2013 and 31 December 2012.

Project, object and commodity finance transactions are assessed using PD and LGD scorecards. The transaction LGD per facility is calculated per loan tranche, net of collateral. Since a

characteristic of specialised lending is that the financed asset (project, commodity or object) forms an essential component of the recovery calculation, a realisable value is first calculated for the underlying asset. Additional forms of loss mitigation may be taken into account.

Equity portfolioThe PD/LGD approach is used to model the credit risk and capital requirement for equities. The group’s approved credit risk grade models are used together with the regulatory prescribed LGD of 90% and maturity factor of five years. Where no suitable PD model exists for the equity investment, the simple risk-weighted approach is adopted.

Equity exposures under the simple risk-weighted method

June2013

Rm

December2012

Rm

Listed 146 218Unlisted 2 602 2 294

Total 2 748 2 512

22


Basel: Analysis of PDs, EADs and LGDs by risk grade under the IRB approach

Average PD

%

Corporate Sovereign Banks Retail mortgages QRRE Retail other Equity

EADRm

LGD%

Exposureweighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%Exposure

RmPD%

June 2013Non-default 300 494 91 614 116 255 289 866 76 216 92 443 3 409

1 – 4 0.02 54 45.05 15.33 20 682 40.96 7.45 9 769 39.70 14.23 223 12.57 1.23 1 138 63.04 1.46 2 433 38.41 4.05 5 – 7 0.06 24 243 42.31 22.63 5 39.85 20.60 71 738 41.12 20.61 1 382 13.14 2.37 2 973 62.87 2.86 3 368 41.68 7.09 8 – 12 0.30 111 626 34.29 42.60 67 411 17.55 11.87 28 259 43.52 44.03 101 444 12.71 8.38 9 210 62.75 10.40 9 696 40.97 21.39 1 175 0.31 13 – 21 2.38 162 403 32.55 75.19 3 469 25.63 56.32 6 479 46.87 101.86 162 120 15.36 31.92 56 621 64.74 56.45 70 932 34.40 48.03 2 234 1.34 22 – 25 29.86 2 168 35.38 167.05 47 37.10 201.68 10 46.42 259.58 24 697 17.45 99.61 6 274 64.52 179.35 6 014 43.51 103.68

Default 100.00 10 786 43.02 244.06 123 43.73 62 44.90 14 357 19.30 0.40 3 486 64.17 96.01 3 269 44.23 1.49 16

Total 311 280 34.32 91 737 23.18 116 317 41.91 304 223 14.82 79 702 64.38 95 712 36.33 3 425

December 2012Non-default 285 799 98 796 138 022 286 607 73 234 89 476 3 550

1 – 4 0.02 1 142 34.18 0.72 21 433 41.84 7.41 27 345 39.47 13.10 134 11.80 1.15 1 150 64.45 1.49 2 583 35.94 3.78 5 – 7 0.07 7 490 42.98 24.53 57 827 15.90 7.66 73 777 40.79 13.93 623 10.36 1.97 2 952 64.10 2.92 3 665 37.87 6.95 8 – 12 0.33 99 600 34.80 43.79 17 372 24.85 26.04 28 821 43.66 32.40 60 013 10.89 7.22 8 058 64.26 9.99 9 226 40.45 20.68 1 344 0.35 13 – 21 2.30 175 974 33.77 76.04 2 071 26.02 64.33 8 078 46.67 97.09 200 956 13.32 26.75 55 296 65.35 59.32 68 830 33.95 47.68 2 204 1.43 22 – 25 31.25 1 593 33.54 160.58 93 35.39 192.84 1 17.59 85.28 24 881 15.24 85.02 5 778 65.61 183.57 5 172 43.91 107.76 2 14.48

Default 100.00 8 452 41.03 174.66 109 43.52 53 45.07 15 283 17.13 0.39 3 335 64.96 256.89 2 913 42.63 2.71 20

Total 294 251 34.56 98 905 23.36 138 075 41.47 301 890 13.18 76 569 65.18 92 389 35.64 3 570

1 Exposure weighted average risk weights have been weighted by the sum of the EAD within each of the PD bands.

Retail portfolioRetail mortgage exposures relate to mortgage loans to individuals and are a combination of both drawn and undrawn EADs. QRRE relates to cheque accounts, credit cards and revolving personal loans and products, and includes both drawn and undrawn exposures. Retail other covers other branch lending and vehicle finance for retail, retail small and retail medium enterprise portfolios. Branch lending includes both drawn and undrawn exposures, while vehicle and asset finance only has drawn exposures.

Internally developed behavioural scorecards for retail accounts and loans are used to measure the anticipated performance for each account. Mapping of the behaviour score to a PD is performed for each portfolio using a statistical calibration of portfolio-specific historical default experience. The behavioural scorecard PDs are used to determine the portfolio distribution on the master rating scale. Separate LGD models are used for each product portfolio and are based on historical recovery data. EAD is measured as a percentage of the credit facility limit and is based on historical averages. EAD is estimated per portfolio and per portfolio-specific segment, using internal historical data on limit utilisation.

Capital management




Overview

23


Basel: Analysis of PDs, EADs and LGDs by risk grade under the IRB approach

Average PD

%

Corporate Sovereign Banks Retail mortgages QRRE Retail other Equity

EADRm

LGD%

Exposureweighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%EADRm

LGD%

Exposure weighted

average risk

weight1

%Exposure

RmPD%

June 2013Non-default 300 494 91 614 116 255 289 866 76 216 92 443 3 409

1 – 4 0.02 54 45.05 15.33 20 682 40.96 7.45 9 769 39.70 14.23 223 12.57 1.23 1 138 63.04 1.46 2 433 38.41 4.05 5 – 7 0.06 24 243 42.31 22.63 5 39.85 20.60 71 738 41.12 20.61 1 382 13.14 2.37 2 973 62.87 2.86 3 368 41.68 7.09 8 – 12 0.30 111 626 34.29 42.60 67 411 17.55 11.87 28 259 43.52 44.03 101 444 12.71 8.38 9 210 62.75 10.40 9 696 40.97 21.39 1 175 0.31 13 – 21 2.38 162 403 32.55 75.19 3 469 25.63 56.32 6 479 46.87 101.86 162 120 15.36 31.92 56 621 64.74 56.45 70 932 34.40 48.03 2 234 1.34 22 – 25 29.86 2 168 35.38 167.05 47 37.10 201.68 10 46.42 259.58 24 697 17.45 99.61 6 274 64.52 179.35 6 014 43.51 103.68

Default 100.00 10 786 43.02 244.06 123 43.73 62 44.90 14 357 19.30 0.40 3 486 64.17 96.01 3 269 44.23 1.49 16

Total 311 280 34.32 91 737 23.18 116 317 41.91 304 223 14.82 79 702 64.38 95 712 36.33 3 425

December 2012Non-default 285 799 98 796 138 022 286 607 73 234 89 476 3 550

1 – 4 0.02 1 142 34.18 0.72 21 433 41.84 7.41 27 345 39.47 13.10 134 11.80 1.15 1 150 64.45 1.49 2 583 35.94 3.78 5 – 7 0.07 7 490 42.98 24.53 57 827 15.90 7.66 73 777 40.79 13.93 623 10.36 1.97 2 952 64.10 2.92 3 665 37.87 6.95 8 – 12 0.33 99 600 34.80 43.79 17 372 24.85 26.04 28 821 43.66 32.40 60 013 10.89 7.22 8 058 64.26 9.99 9 226 40.45 20.68 1 344 0.35 13 – 21 2.30 175 974 33.77 76.04 2 071 26.02 64.33 8 078 46.67 97.09 200 956 13.32 26.75 55 296 65.35 59.32 68 830 33.95 47.68 2 204 1.43 22 – 25 31.25 1 593 33.54 160.58 93 35.39 192.84 1 17.59 85.28 24 881 15.24 85.02 5 778 65.61 183.57 5 172 43.91 107.76 2 14.48

Default 100.00 8 452 41.03 174.66 109 43.52 53 45.07 15 283 17.13 0.39 3 335 64.96 256.89 2 913 42.63 2.71 20

Total 294 251 34.56 98 905 23.36 138 075 41.47 301 890 13.18 76 569 65.18 92 389 35.64 3 570

1 Exposure weighted average risk weights have been weighted by the sum of the EAD within each of the PD bands.

24


Credit portfolio characteristics and metrics in terms of the Basel reporting frameworkBasel: Credit portfolio analysisThe credit portfolio is analysed in the tables that follow in terms of the Basel approach and asset class, industry, geography and residual contractual maturity.

Basel: Exposure by approach and class1

On-balance sheet Off-balance sheetReverse repurchase and

resale agreements Derivative instruments Total by approach EADGross

past duebut not

impaired exposures

Rm

Impairment of exposures

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

TotalRm

FIRBRm

AIRBRm

Gross defaulted

exposures2

RmSpecific

RmPortfolio

Rm

June 2013Corporate 71 166 13 954 204 381 22 816 4 717 107 361 3 142 30 244 32 300 1 744 16 855 16 972 98 868 65 770 361 014 525 652 36 496 274 784 728 12 458 4 155 Sovereign 40 455 17 809 70 685 659 4 268 1 183 4 570 108 324 1 140 42 405 18 133 80 663 141 201 18 774 72 963 124 87 Banks 43 722 7 261 55 534 1 145 545 9 952 193 40 641 40 850 471 41 118 55 504 45 531 89 565 161 840 296 936 28 808 87 509 62 1 Retail exposure 38 297 423 987 12 938 86 642 51 235 510 629 561 864 479 637 30 620 23 487 9 580

Retail mortgages 12 610 289 872 32 233 12 610 322 105 334 715 304 223 16 827 14 796 4 085 QRRE 4 53 703 33 967 4 87 670 87 674 79 702 4 877 3 486 2 224 Other retail 25 683 80 412 12 938 20 442 38 621 100 854 139 475 95 712 8 916 5 205 3 271

Total 193 640 39 024 754 587 37 558 5 262 208 223 4 518 70 885 77 720 2 323 58 297 73 616 238 039 173 468 1 114 146 1 525 653 84 078 914 893 31 348 36 131 13 823 5 618

December 2012Corporate 74 024 20 943 189 309 31 681 3 964 113 710 335 27 593 15 075 2 026 12 282 20 901 108 066 64 782 338 995 511 843 40 515 253 736 496 11 101 4 127 Sovereign 29 690 19 128 74 880 566 10 6 052 2 549 40 1 606 1 478 30 296 20 744 84 959 135 999 21 390 77 515 6 108 77 Banks 35 244 9 848 68 149 1 076 947 10 308 114 15 090 33 593 737 27 264 65 445 37 171 53 149 177 495 267 815 25 006 113 069 53 1 Retail exposure 31 983 409 570 10 423 88 055 42 406 497 625 540 031 470 848 29 011 23 325 8 311

Retail mortgages3 11 357 286 235 33 257 11 357 319 492 330 849 301 890 16 774 15 647 4 155 QRRE 3 47 009 34 155 3 81 164 81 167 76 569 4 175 3 335 1 507 Other retail 20 623 76 326 10 423 20 643 31 046 96 969 128 015 92 389 8 062 4 343 2 649

Total 170 941 49 919 741 908 43 746 4 921 218 125 449 42 683 51 217 2 803 41 152 87 824 217 939 138 675 1 099 074 1 455 688 86 911 915 168 29 513 34 587 12 516 5 188

1 Excludes exposure to central counterparties (CCP) as shown on page 33.2 Amount before the application of any offset, mitigation or netting.3 Restated. Refer to page 63.

Exposures to corporate, retail and bank customers grew most significantly over the period by R14 billion, R22 billion and R29 billion respectively. Exposure to derivative instruments under the AIRB approach continues on the declining trend seen during 2012, reducing by R14 billion (16%) over the past six months. Exposure to other African countries increased by R46 billion (23%).

Total credit impairment charges grew 28% on those for the six months ended 30 June 2012 and the credit loss ratio increased to 1.17% from 0.98% for the six months ended June 2012. PBB’s credit charges were 32% higher than those for the six months ended 30 June 2012. Continued deterioration in the credit quality of the inclusive personal loan portfolio and higher-than-expected losses in higher margin personal loans and small and medium enterprise lending in the rest of Africa contributed to the PBB credit loss ratio of 1.57% (30 June 2012: 1.32%).

CIB’s credit losses increased by 15% compared to those for the six months ended 30 June 2012 as its credit loss ratio increased to 0.52% from 0.46% for the six months ended June 2012. A recovery of a previously written-off exposure in CIB outside Africa was more than offset by a small number of high-value credit impairments in South Africa and the rest of Africa.

Non-performing loans in mortgages continued to decrease in line with a slowly improving residential property market in South Africa. Impairments in personal unsecured lending increased by 69% to R1 511 million from R896 million for the six months ended 30 June 2012. The majority of these impairments originate in the domestic personal term loans portfolio, known as the inclusive personal lending book, in South Africa which has been affected over the last year by higher living costs, limited growth in disposable income and reduced credit supply. The personal term loans book has reduced in size to R3,4 billion from R3,7 billion at the end of 2012, due mainly to lower levels of new business written flowing from higher scorecard thresholds.

Capital management




Overview

25


Credit portfolio characteristics and metrics in terms of the Basel reporting frameworkBasel: Credit portfolio analysisThe credit portfolio is analysed in the tables that follow in terms of the Basel approach and asset class, industry, geography and residual contractual maturity.

Basel: Exposure by approach and class1

On-balance sheet Off-balance sheetReverse repurchase and

resale agreements Derivative instruments Total by approach EADGross

past duebut not

impaired exposures

Rm

Impairment of exposures

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

StandardisedRm

FIRBRm

AIRBRm

TotalRm

FIRBRm

AIRBRm

Gross defaulted

exposures2

RmSpecific

RmPortfolio

Rm

June 2013Corporate 71 166 13 954 204 381 22 816 4 717 107 361 3 142 30 244 32 300 1 744 16 855 16 972 98 868 65 770 361 014 525 652 36 496 274 784 728 12 458 4 155 Sovereign 40 455 17 809 70 685 659 4 268 1 183 4 570 108 324 1 140 42 405 18 133 80 663 141 201 18 774 72 963 124 87 Banks 43 722 7 261 55 534 1 145 545 9 952 193 40 641 40 850 471 41 118 55 504 45 531 89 565 161 840 296 936 28 808 87 509 62 1 Retail exposure 38 297 423 987 12 938 86 642 51 235 510 629 561 864 479 637 30 620 23 487 9 580

Retail mortgages 12 610 289 872 32 233 12 610 322 105 334 715 304 223 16 827 14 796 4 085 QRRE 4 53 703 33 967 4 87 670 87 674 79 702 4 877 3 486 2 224 Other retail 25 683 80 412 12 938 20 442 38 621 100 854 139 475 95 712 8 916 5 205 3 271

Total 193 640 39 024 754 587 37 558 5 262 208 223 4 518 70 885 77 720 2 323 58 297 73 616 238 039 173 468 1 114 146 1 525 653 84 078 914 893 31 348 36 131 13 823 5 618

December 2012Corporate 74 024 20 943 189 309 31 681 3 964 113 710 335 27 593 15 075 2 026 12 282 20 901 108 066 64 782 338 995 511 843 40 515 253 736 496 11 101 4 127 Sovereign 29 690 19 128 74 880 566 10 6 052 2 549 40 1 606 1 478 30 296 20 744 84 959 135 999 21 390 77 515 6 108 77 Banks 35 244 9 848 68 149 1 076 947 10 308 114 15 090 33 593 737 27 264 65 445 37 171 53 149 177 495 267 815 25 006 113 069 53 1 Retail exposure 31 983 409 570 10 423 88 055 42 406 497 625 540 031 470 848 29 011 23 325 8 311

Retail mortgages3 11 357 286 235 33 257 11 357 319 492 330 849 301 890 16 774 15 647 4 155 QRRE 3 47 009 34 155 3 81 164 81 167 76 569 4 175 3 335 1 507 Other retail 20 623 76 326 10 423 20 643 31 046 96 969 128 015 92 389 8 062 4 343 2 649

Total 170 941 49 919 741 908 43 746 4 921 218 125 449 42 683 51 217 2 803 41 152 87 824 217 939 138 675 1 099 074 1 455 688 86 911 915 168 29 513 34 587 12 516 5 188

1 Excludes exposure to central counterparties (CCP) as shown on page 33.2 Amount before the application of any offset, mitigation or netting.3 Restated. Refer to page 63.

400

350

300

250

200

150

100

50

Basel: Exposure by approach and asset class (Rbn)

¢ Standardised June 2013 ¢ FIRB June 2013 ¢ AIRB June 2013

¢ Standardised December 2012 ¢ FIRB December 2012 ¢ AIRB December 2012

QRRECorporate BanksSovereign Retail mortgages Other retail

1 QRRE – Qualifying revolving retail exposures.

26


Basel: Exposures by type of asset and industry1

On-balance

sheetRm

Off-balance

sheetRm

Reverse repurchase and resale

agreementsRm

Derivativeinstruments

Rm

Totalgross

exposureRm

Gross defaulted

exposures2

Rm

Impairment ofexposures

SpecificRm

PortfolioRm

June 2013Agriculture 11 827 3 235 51 111 15 224 350 194 Mining 41 057 36 951 73 1 248 79 329 961 198 Manufacturing 60 631 19 157 55 3 350 83 193 3 887 712 Electricity 10 474 12 746 261 198 23 679 16 6 Construction 7 929 12 998 90 21 017 958 276 Wholesale 44 345 24 048 11 324 4 297 84 014 2 759 1 474 Transport 16 028 10 696 89 2 257 29 070 905 314 Finance, real estate and other business services 275 305 40 002 140 523 144 908 600 738 4 909 2 562

Private households 401 109 72 202 473 311 20 216 7 452 Other 118 600 19 008 747 820 139 175 1 170 635

Total 987 305 251 043 153 123 157 279 1 548 750 36 131 13 823 5 618

December 2012Agriculture 13 475 8 252 22 49 21 798 590 264 Mining 37 995 37 048 983 76 026 396 137 Manufacturing 55 000 23 899 1 074 2 475 82 448 4 430 723 Electricity 7 447 11 676 5 1 191 20 319 54 34 Construction 5 995 7 746 285 14 026 901 223 Wholesale 50 629 29 145 12 789 2 706 95 269 1 081 527 Transport 16 780 12 464 386 824 30 454 309 228 Finance, real estate and other business services 277 032 49 283 80 073 121 346 527 734 5 087 3 257

Private households 385 034 71 656 456 690 20 576 6 615 Other 113 381 15 623 1 920 130 924 1 163 508

Total 962 768 266 792 94 349 131 779 1 455 688 34 587 12 516 5 188

1 The on-balance sheet and derivative instruments exposures include exposures to CCPs. 2 Amount before the application of any offset, mitigation or netting.

Capital management




Overview

27


Basel: Total gross exposure by type of industry (%)

¢ Finance, real estate and other business services (December 2012: 36)

¢ Private households (December 2012: 31)

¢ Other (December 2012: 9)

¢ Wholesale (December 2012: 7)

¢ Agriculture, mining, manufacturing, electricity, construction and transport (December 2012: 17)

39

31

9

5

16

Basel: Total gross exposure by geographic region (%)

¢ South Africa (December 2012: 63)

¢ Rest of Africa (December 2012: 14)

¢ Outside Africa (December 2012: 23)

59

16

25

Basel: Exposures by type of asset and geographic region1

On-balance

sheetRm

Off-balance

sheetRm

Reverse repurchase and resale

agreementsRm

Derivativeinstruments

Rm

Totalgross

exposureRm

Gross defaulted

exposures2

Rm

Impairment ofexposures

SpecificRm

PortfolioRm

June 2013South Africa 675 297 187 940 26 590 25 501 915 328 23 959 8 995 Other African countries 204 135 36 150 2 508 1 587 244 380 4 967 2 158 Europe 50 475 13 436 89 396 93 803 247 110 655 175 Asia 37 169 5 601 22 574 7 447 72 791 3 601 2 060 North America 7 717 4 306 5 260 27 066 44 349 2 711 357 South America 9 688 3 033 6 748 858 20 327 114 78 Other 2 824 577 47 1 017 4 465 124

Total 987 305 251 043 153 123 157 279 1 548 750 36 131 13 823 5 618

December 2012South Africa 672 533 200 064 18 755 28 578 919 930 23 944 8 072 Other African countries 157 070 38 904 673 2 804 199 451 4 119 1 758 Europe 66 063 11 990 47 408 60 299 185 760 493 115 Asia 41 900 7 413 20 068 3 246 72 627 2 666 2 235North America 8 700 3 985 1 643 34 912 49 240 3 183 248South America 11 529 3 724 4 907 1 770 21 930 182 88 Other 4 973 712 895 170 6 750

Total 962 768 266 792 94 349 131 779 1 455 688 34 587 12 516 5 188

1 The on-balance sheet and derivative instruments exposures include exposures to CCPs. 2 Amount before the application of any offset, mitigation or netting.

28


Basel: Exposures by residual contractual maturity1

Less than1 year

Rm

1 to 5years

Rm

Greater than5 years

Rm

Total gross exposure

Rm

June 2013Corporate 262 261 230 506 32 885 525 652 Sovereign 101 483 27 723 11 995 141 201 Banks 212 732 69 737 14 467 296 936 Retail exposure 66 468 157 842 337 554 561 864

Retail mortgages 10 587 5 836 318 292 334 715 QRRE 23 315 64 359 87 674 Other retail 32 566 87 647 19 262 139 475

Total 642 944 485 808 396 901 1 525 653

December 2012Corporate 235 998 225 723 50 122 511 843Sovereign 87 050 29 549 19 400 135 999 Banks 154 545 87 647 25 623 267 815 Retail exposure 147 888 59 229 332 914 540 031

Retail mortgages 8 393 6 075 316 381 330 849 QRRE 81 167 81 167 Other retail 58 328 53 154 16 533 128 015

Total 625 481 402 148 428 059 1 455 688

1 Excludes exposures to CCPs.

Capital management




Overview

29


Basel: Loss analysisActual lossesThe table below shows the actual losses experienced in the group‘s IRB exposure classes during the six months ended 30 June 2013, compared to the comparable six months ended 30 June 2012. Actual losses comprise impairments as determined by IFRS, and exclude post write-off recoveries. The values displayed in the table exclude all standardised approach portfolios. Actual losses for 2013 have increased from the same period in 2012 due to higher specific impairment charges in personal unsecured lending and business lending portfolios due to loan book growth.

Analysis of actual losses1

June 2013Rm

June 2012Rm

IRB exposure classCorporate 575 580Sovereign 8Banks 124 Retail exposure 3 542 2 839

Retail mortgages 1 115 1 473 QRRE 1 534 662 Other retail 893 704

Total 4 241 3 427

1 Excludes post write-off recoveries and all the standardised approach portfolios.

Regulatory expected losses versus actual lossesThe table on the next page provides a comparison of actual PDs, LGDs and EADs to the estimated through-the-cycle PDs, LGDs and EADs. Note that this comparison is an approximation as the PD, LGD and EAD actual and estimated parameters are not identical. The parameters are:

¢ Estimated PDs are determined at the beginning of the 12-month period to June 2013 using calibrated regulatory models. The models are calibrated to long-run default experience to ensure stable regulatory models over an entire credit cycle and would tend to underestimate actual defaults at the top of the credit cycle and overestimate actual defaults at the bottom of the credit cycle. The actual PDs are the defaults experienced over the 12 month period.

¢ LGD estimates are determined at the beginning of the 12 month cycle using the regulatory long-run average based models that include downturn adjustments. Actual LGD values can take several years to be determined as defaulted exposures have to reach a write-off stage to allow for accurate LGD calculations. In order to determine comparable actual LGD values, all accounts that reached a write-off stage during the period 2010 to 2012 were used to determine the actual LGD values.

¢ The EAD ratio reflects estimated through-the-cycle EADs, used to derive the regulatory expected loss, as a percentage of EADs derived from the actual losses. The calculated EAD ratios are averages over the period 2010 to 2012, to enable meaningful averages to be determined.

The analysis is based only on the AIRB portfolios.

All the actual default rates are lower than the estimated default rates illustrating the general level of conservatism the group applies to its low-default portfolio models.

30


The zero or low level of bank and sovereign defaults, experienced in the AIRB portfolio during the current and previous periods under review, did not allow for meaningful calculation of an actual sovereign LGD value or meaningful calculation of sovereign or bank EAD ratios.

Basel: IRB exposure class1,2

PD LGD3 EAD

Estimated%

Actual%

Estimated%

Actual%

Estimate to actual ratio

%

June 2013Corporate 2.01 1.09 34.31 22.60 128.57Sovereign 1.79 1.64 16.62Banks 0.86 0.29 38.52 39.54Retail exposure 4.66 4.39 25.49 22.00 104.12

Retail mortgages 4.55 4.51 13.10 13.84 102.34QRRE 4.75 4.47 65.94 60.27 105.82Other retail 4.92 3.93 34.54 37.46 110.77

Total 2.86 2.34 29.21 22.68 104.16

December 2012Corporate 2.24 1.66 33.82 21.24 146.09 Sovereign 1.23 16.54 Banks 0.78 0.14 39.69 Retail exposure 4.21 4.11 24.96 22.64 103.44

Retail mortgages 4.42 4.28 12.90 16.27 102.53 QRRE 4.64 4.40 66.24 54.86 100.76 Other retail 3.23 3.32 37.33 35.54 110.60

Total 3.01 2.71 26.84 21.53 104.93

1 Excludes all the standardised approach portfolios.2 No data in the columns headed actual reflects either that no defaults occurred or, if there was a default, there was no loss incurred.3 Excludes FIRB portfolios.

Capital management




Overview

31


Basel: Credit risk mitigationCollateral, guarantees, derivatives and on- and off-balance sheet netting are widely used to mitigate credit risk. Credit risk mitigation policies and procedures ensure that credit risk mitigation techniques are acceptable, used consistently, valued appropriately and regularly, and meet the risk requirements of operational management for legal, practical and timely enforcement. Detailed processes and procedures are in place to guide each type of mitigation used.

The main types of collateral taken are:

¢ mortgage bonds over residential, commercial and industrial properties

¢ cession of book debts

¢ bonds over plant and equipment

¢ the underlying movable assets financed under leases and instalment sales.

Reverse repurchase agreements are underpinned by the assets being financed, which are mostly liquid and tradable financial instruments. Guarantees and related legal contracts are often required, particularly in support of credit extension to groups of companies and weaker counterparties. Guarantor counterparties include banks, parent companies, shareholders and associated counterparties. Creditworthiness is established for the guarantor as for other counterparty credit approvals.

For derivative transactions, the group typically uses internationally recognised and enforceable International Swaps and Derivatives Association (ISDA) agreements, with a credit support annexure, where collateral support is considered necessary. Other credit protection terms may be stipulated, such as limitations on the amount of unsecured credit exposure acceptable, collateralisation if mark-to-market credit exposure exceeds acceptable limits, and termination of the contract if certain credit events occur, for example downgrade of the counterparty’s public credit rating.

Wrong-way risk arises where there is a positive correlation between counterparty default and transaction exposure, and a negative correlation between transaction exposure and the value of collateral at the point of counterparty default.

This risk is addressed by taking into consideration the high correlation between the default event and exposure to the counterparty when calculating the potential exposure and security margin requirements on these transactions.

To manage actual or potential portfolio risk concentrations in areas of higher credit risk and credit portfolio growth, the group implements hedging and other strategies from time to time. This is done at individual counterparty, sub-portfolio and portfolio levels through the use of syndication, distribution and sale of assets, asset and portfolio limit management, credit derivatives and credit protection.

600

500

400

300

200

100

Corporate

Basel: Exposure and mitigation by asset class (Rbn)

¢ Gross exposure June 2013 ¢ Credit risk mitigation June 2013

¢ Gross exposure December 2012 ¢ Credit risk mitigation December 2012

Banks Sovereign Retail

32


Basel: Credit risk mitigation for portfolios under the IRB approach

Eligiblefinancial

collateralRm

Othereligible IRB

collateralRm

Guaranteesand credit

derivativesRm

Effects of netting

agreementsRm

Totalcredit risk

mitigationRm

Totalexposure1

Rm

June 2013Corporate 69 227 53 742 14 098 20 810 157 877 426 784Sovereign 5 620 368 670 921 7 579 98 796Banks 80 342 3 440 80 561 164 343 251 405Retail exposures 368 771 368 771 510 629

Retail mortgages 315 833 315 833 322 105QRRE 310 310 87 670Other retail 52 628 52 628 100 854

Total 155 189 422 881 18 208 102 292 698 570 1 287 614

December 2012Corporate 61 275 47 148 17 939 22 618 148 980 403 777Sovereign 4 349 491 287 985 6 112 105 703 Banks 43 635 2 212 73 477 119 324 230 644 Retail exposures 357 356 357 356 497 625

Retail mortgages 313 213 313 213 319 492 QRRE 333 333 81 164 Other retail 43 810 43 810 96 969

Total 109 259 404 995 20 438 97 080 631 772 1 237 749

1 Excludes exposure to CCPs as shown on page 33.

Basel: Credit risk mitigation for portfolios under the standardised approach

Eligible financial

collateralRm

Guaranteesand credit

derivativesRm

Effects of netting

agreementsRm

Totalcredit risk

mitigationRm

Totalexposure1

Rm

June 2013Corporate 10 109 2 023 92 12 224 98 868Sovereign 15 15 42 405Banks 772 772 45 531Retail exposure 3 681 812 4 493 51 235

Total 14 562 2 850 92 17 504 238 039

December 2012Corporate 3 331 4 206 234 7 771 108 066 Sovereign 32 32 30 296 Banks 114 236 350 37 171 Retail exposure 6 550 903 7 453 42 406

Total 9 995 5 377 234 15 606 217 939

1 Excludes exposure to CCPs as shown on page 33.

Capital management




Overview

33


Basel: Concentration riskThe group maintains a portfolio of credit risk that is adequately diversified and avoids unnecessarily excessive concentration risks. Diversification is achieved through setting maximum exposure guidelines to individual counterparties and sectors.

Basel: Counterparty credit riskCounterparty credit risk is managed according to the group credit risk governance standard, which also covers any other type of credit risk. All such credit risk limits are subject to annual review. Counterparty exposures are monitored against limits by the risk functions on a daily basis, and are included in the calculation of economic capital demand.

The group is exposed to credit risk on derivative contracts, which arises as a result of counterparty credit risk and movements in the fair value of securities financing and OTC derivative contracts. The risk amounts reflect the aggregate replacement costs that would be incurred by the group in the event of counterparties defaulting on their obligations.

The group’s exposure to counterparty risk is affected by the nature of the trades, the creditworthiness of the counterparty, and netting and collateral arrangements. Counterparty credit risk is measured in potential future exposure terms and recognised on a net basis where netting agreements are in place and are legally recognised or on a gross basis otherwise. Exposures are generally marked to market daily. Cash or near cash collateral is posted where contractually provided for.

Counterparty credit risk is subjected to explicit credit limits which are formulated and approved for each counterparty and economic group, with specific reference to its credit rating and other credit exposures.

The tables that follow detail the group’s exposure to securities financing transactions and derivatives. Securities financing transactions include reverse repurchase agreements, resale agreements, securities lending and securities borrowing agreements for all relevant Basel asset classes and collateral held.

Basel: Securities financing transactions

June2013

Rm

December2012

Rm

ExposureWith master netting agreement 68 451 36 523Without master netting agreement 84 672 57 827

Total 153 123 94 350

CollateralCash 41 351 30 764Commodities 8 924 13 852 Debt securities 98 802 35 560Equities 4 212 5 135

Total 153 289 85 311

EAD 22 174 19 021

Following the implementation of Basel III by the SARB in January 2013, the group now holds capital against exposures to CCPs as shown in the table below.

Basel: Analysis of central counterparty trade exposure

Initialmargin

Rm

Prefundeddefault fund

contributionsRm

Tradeexposure

Rm

June 2013Qualified CCP 5 505 224 23 097

34


Basel: Derivatives exposure

June 2013December

2012

Non-centrally

clearedRm

Centrally cleared1

Non-centrallycleared

Rm

On behalfof clients

Rm

Total exposure

to CCPsRm

Notional principal amountInterest rate products 5 922 229 24 583 107 318 4 823 102 Forex and gold 2 161 342 2 889 18 281 1 661 683 Equities 65 583 160 457 256 468 25 609 Precious metals 55 034 36 5 843 67 340 Other commodities 170 335 11 258 523 832 181 407 Credit derivatives 190 481 196 876

Protection bought 102 662 109 434 Protection sold 87 819 87 442

Total 8 565 004 199 223 911 742 6 956 017

Netted current credit exposure (net fair value)Gross positive fair value 133 753 483 23 043 131 779

Interest rate products 63 449 2 345 83 534 Forex and gold 55 318 1 147 34 585 Equities 2 104 421 713 2 199 Precious metals 3 503 1 250 2 926 Other commodities 6 589 59 20 588 5 589 Credit derivatives 2 790 2 946

Protection bought 1 906 1 726 Protection sold 884 1 220

Netting benefits (101 991) (307) (556) (97 315)

Total 31 762 176 22 487 34 464

EAD 65 453 2 664 83 914 68 889

CollateralCash 15 701 10 928 Gold 5 15 Debt securities 1 172 1 118

Total 16 878 12 061

1 Basel III reporting requirement applicable from 1 January 2013 only.

Capital management




Overview

35


by the use of credit derivatives and the exposures are not removed from the balance sheet of the originator.

The group uses SPEs to securitise customer loans and advances that it has originated to diversify its sources of funding for asset origination, for capital efficiency purposes and to reduce risk. In addition, the group plays a secondary role as an investor in certain securitisation notes.

Basel: Roles fulfilled in securitising assets

Securitisation transactions Originator Investor ServicerLiquidityprovider

Creditenhancement

providerSwap

counterparty

Traditional securitisationsBlue Granite 1 ü ü ü ü üBlue Granite 2 ü ü ü ü üBlue Granite 3 ü ü ü ü üBlue Granite 4 ü ü ü ü üSiyakha Fund ü ü ü ü

Asset-backed commercial paper programmeBlue Titanium Conduit ü ü ü ü

Third party transactions ü ü ü ü

Basel: Securitisation transactions

Asset typeYearinitiated

Expectedclose

Assetssecuritised

Rbn

Assetsoutstanding

Notesoutstanding1

Retainedexposure1,2

June2013

Rbn

December2012

Rbn

June2013

Rbn

December 2012

Rbn

June2013

Rbn

December 2012

Rbn

Traditional securitisations 17,9 10,4 11,1 11,6 12,2 6,1 5,5

Blue Granite 13,4 Retail mortgages 2005 2032 4,6 1,4 1,6 1,6 1,7 1,3 1,4 Blue Granite 23 Retail mortgages 2006 2041 2,8 2,1 2,1 2,3 2,3 1,2 1,2 Blue Granite 33 Retail mortgages 2006 2032 3,0 1,9 2,0 2,1 2,3 1,2 1,3Blue Granite 43 Retail mortgages 2007 2037 5,1 3,2 3,4 3,6 3,8 1,5 1,5Siyakha Fund4 Retail mortgages 2007 2043 2,4 1,8 2,0 2,0 2,1 0,9 0,1

Asset-backed commercial paper programmeBlue Titanium Conduit4 Various 2002 N/A N/A 4,5 4,4 4,5 4,5 0,6 0,3

Total 17,9 14,9 15,5 16,1 16,7 6,7 5,8

1 Capital plus accrued interest.2 Includes notes, 1st and 2nd loss subordinated loans and notes held by Blue Titanium Conduit.3 Ratings agency: Moody’s.4 Ratings agency: Fitch.

Basel: SecuritisationSecuritisation is a transaction whereby the credit risk associated with an exposure, or pool of exposures, is tranched and where payments to investors in the transaction are dependent upon the performance of the exposure or pool of exposures.

A traditional securitisation involves the transfer of the exposures being securitised to a special purpose entity (SPE) which issues securities. In a synthetic securitisation, the tranching is achieved

36


For originated and sponsored or administered securitisations consolidated under IFRS (that is, Siyakha Fund, Blue Granite and Blue Titanium Conduit) intragroup exposures to and between these securitisations have been eliminated and the underlying assets consolidated in the relevant sections (that is, primarily retail mortgages) of the risk disclosure. Only exposures to securitisations of assets originated by third parties are disclosed below and on the following page. The approach applied in the calculation of risk-weighted assets is dependent on the group’s model approval for the underlying assets and the existence of a rating from an eligible external credit assessment institution. To date, the group has applied the standardised

approach, ratings-based approach and standard formula approach, where relevant, in the calculation of risk-weighted assets. For local securitisations in South Africa, Moody’s Investor Services and/or Fitch were appointed as rating agencies. For securitisation issues outside Africa, Standard & Poor’s was appointed. No securitisation activities took place during the six months ended 30 June 2013 (31 December 2012: nil).

The transfer of assets to an SPE may give rise to the full or partial derecognition of the financial assets concerned. Only in the event that derecognition is achieved are sales and any resultant gains on sales recognised in the financial statements.

Basel: Securitised on-balance sheet exposures


Retail mortgages

Rm

Retailloans

RmTotal

RmTotal

Rm

Standardised – unrated1 200 200 250

IRB 921 677 1 598 2 979

Investment grade 921 677 1 598 2 918Sub-investment grade 61

Total 921 877 1 798 3 229

Basel: Securitised off-balance sheet exposures


Retail mortgages

Rm

Retailloans

RmTotal

RmTotal

Rm

Standardised – unrated1 300 300 250

IRB 4 090 292 4 382 3 927

Unrated1 3 700 3 700 3 196 Investment grade 390 292 682 731

Total 4 090 592 4 682 4 177

1 This includes rated securitisation exposures where ratings are not eligible for recognition from a regulatory perspective.

Capital management




Overview

37


Basel: Securitisation by approach – risk-weighted assets

June2013

Rm

December2012

Rm

IRB 565 1 000 Standardised 288 297

Total 853 1 297

Portfolio characteristics and metrics in terms of the IFRS reporting frameworkIFRS: Analysis of loans and advancesThe tables on the pages that follow analyse the credit quality of loans and advances measured in terms of IFRS. Refer to page 13 for an understanding of the differences between IFRS and Basel.

IFRS: Maximum exposure to credit riskLoans and advances are analysed and categorised based on credit quality using the following definitions.

Performing loansNeither past due nor specifically impaired loans are loans that are current and fully compliant with all contractual terms and conditions. Normal monitoring loans within this category are generally rated 1 to 21, and close monitoring loans are generally rated 22 to 25 using the group’s master rating scale.

Early arrears but not specifically impaired loans include those loans where the counterparty has failed to make contractual payments and payments are less than 90 days past due, but it is expected that the full carrying value will be recovered when considering future cash flows, including collateral. Ultimate loss is not expected but could occur if the adverse conditions persist.

Non-performing loansNon-performing loans are those loans for which:

¢ the group has identified objective evidence of default, such as a breach of a material loan covenant or condition, or

¢ instalments are due and unpaid for 90 days or more.

Non-performing but not specifically impaired loans are not specifically impaired due to the expected recoverability of the full carrying value when considering the recoverability of discontinued future cash flows, including collateral.

Non-performing specifically impaired loans are those loans that are regarded as non-performing and for which there has been a measurable decrease in estimated future cash flows. Specifically impaired loans are further analysed into the following categories:

¢ Sub-standard: Items that show underlying well-defined weaknesses and are considered to be specifically impaired.

¢ Doubtful: Items that are not yet considered final losses due to some pending factors that may strengthen the quality of the items.

¢ Loss: Items that are considered to be uncollectible in whole or in part. The group provides fully for its anticipated loss, after taking collateral into account.


Loans

Performing loans Non-performing loans

Non-performing but not specifically impaired loans (Rm)

June 2013: 1 435December 2012: 1 332

Neither past due nor specifically

impaired loans (Rm)June 2013: 865 945

December 2012: 770 2921

Early arrears but not specifically impaired loans (Rm)

June 2013: 31 348December 2012: 29 5131

Normal monitoring (Rm)

June 2013: 843 441December 2012: 749 3471

Close monitoring (Rm)

June 2013: 22 504December 2012: 20 9451

Sub-standard (Rm)

June 2013: 6 433December 2012: 9 514

Doubtful (Rm)

June 2013: 20 768 December 2012: 17 028

Loss (Rm)

June 2013: 4 993 December 2012: 3 917

Specifically impaired loans (Rm)

June 2013: 32 194December 2012: 30 459

Portfolio credit impairments Specific credit impairments

38


IFRS: Maximum exposure to credit risk by credit quality

Gross advances

totalRm


Neither past due nor specifically impaired

Not specificallyimpaired Specifically impaired loans

Total non-

performing loans

Rm

Non-performing

loans%

Normal monitoring

Rm

Close monitoring

Rm

Earlyarrears

Rm

Non-performing

Rm

Sub-standard

RmDoubtful

RmLossRm

TotalRm

Securities and

expected recoveries

on specifically

impaired loans

Rm

Net after securities

and expected

recoveries on

specifically impaired

loansRm

Balance sheet

impair-ments

for non-performing specifically

impaired loans

Rm

Gross specific

impairmentcoverage

%

June 2013Personal & Business Banking 532 717 456 124 22 127 31 120 5 626 14 164 3 556 23 346 13 529 9 817 9 817 42 23 346 4.4

Mortgage loans 306 187 261 921 12 496 16 918 3 903 10 202 747 14 852 10 739 4 113 4 113 28 14 852 4.9Instalment sale and finance leases 67 713 58 183 3 635 4 075 321 823 676 1 820 855 965 965 53 1 820 2.7Card debtors 26 322 21 248 1 789 2 152 222 331 580 1 133 398 735 735 65 1 133 4.3Other loans and advances 132 495 114 772 4 207 7 975 1 180 2 808 1 553 5 541 1 537 4 004 4 004 72 5 541 4.2

Personal unsecured lending 46 452 35 803 2 140 5 284 488 1 716 1 021 3 225 696 2 529 2 529 78 3 225 6.9Business lending and other 86 043 78 969 2 067 2 691 692 1 092 532 2 316 841 1 475 1 475 64 2 316 2.7

Corporate & Investment Banking 436 754 425 866 377 228 1 435 807 6 604 1 437 8 848 4 844 4 004 4 004 45 10 283 2.4

Corporate loans 396 775 386 832 377 146 1 264 596 6 254 1 306 8 156 4 338 3 818 3 818 47 9 420 2.4Commercial property finance 39 979 39 034 82 171 211 350 131 692 506 186 186 27 863 2.2

Central and other (38 549) (38 549) (2) 2 2

Gross loans and advances 930 922 843 441 22 504 31 348 1 435 6 433 20 768 4 993 32 194 18 371 13 823 13 823 43 33 629 3.6

Less:Impairments for loans and advances (19 441)Tutuwa1 loans and advances IFRS adjustment (1 149)

Net loans and advances 910 332

1 Tutuwa is the group’s black economic empowerment (BEE) ownership initiative.

Capital management




Overview

39


IFRS: Maximum exposure to credit risk by credit quality

Gross advances

totalRm




Total non-

performing loans

Rm

Non-performing

loans%

Normal monitoring

Rm

Close monitoring

Rm

Earlyarrears

Rm

Non-performing

Rm

Sub-standard

RmDoubtful

RmLossRm

TotalRm

Securities and

expected recoveries

on specifically

impaired loans

Rm


and expected

recoveries on


loansRm

Balance sheet

impair-ments

for non-performing specifically

impaired loans

Rm

Gross specific

impairmentcoverage

%

June 2013Personal & Business Banking 532 717 456 124 22 127 31 120 5 626 14 164 3 556 23 346 13 529 9 817 9 817 42 23 346 4.4

Mortgage loans 306 187 261 921 12 496 16 918 3 903 10 202 747 14 852 10 739 4 113 4 113 28 14 852 4.9Instalment sale and finance leases 67 713 58 183 3 635 4 075 321 823 676 1 820 855 965 965 53 1 820 2.7Card debtors 26 322 21 248 1 789 2 152 222 331 580 1 133 398 735 735 65 1 133 4.3Other loans and advances 132 495 114 772 4 207 7 975 1 180 2 808 1 553 5 541 1 537 4 004 4 004 72 5 541 4.2

Personal unsecured lending 46 452 35 803 2 140 5 284 488 1 716 1 021 3 225 696 2 529 2 529 78 3 225 6.9Business lending and other 86 043 78 969 2 067 2 691 692 1 092 532 2 316 841 1 475 1 475 64 2 316 2.7


Corporate loans 396 775 386 832 377 146 1 264 596 6 254 1 306 8 156 4 338 3 818 3 818 47 9 420 2.4Commercial property finance 39 979 39 034 82 171 211 350 131 692 506 186 186 27 863 2.2





1 Tutuwa is the group’s black economic empowerment (BEE) ownership initiative.

40

IFRS: Maximum exposure to credit risk by credit quality continued

Gross advances

totalRm




Normal monitoring

Rm

Close monitoring

Rm

Earlyarrears

Rm

Non-performing3

Rm

Sub-standard

RmDoubtful

RmLossRm

TotalRm

Securities and expected

recoveries on


loansRm


and expected recoveries

on specifically

impaired loans

Rm

Balance sheet

impairments for non-

performing specifically

impaired loans

Rm

Gross specific

impairmentcoverage

%

Total non-

performing loans

Rm

Non-performing

loans%

December 20121

Personal & Business Banking 502 168 429 868 20 341 29 483 6 276 13 245 2 955 22 476 13 862 8 614 8 614 38 22 476 4.5

Mortgage loans 299 675 255 240 11 824 16 864 4 966 10 088 693 15 747 11 581 4 166 4 166 26 15 747 5.3Instalment sale and finance leases 62 860 54 950 3 089 3 220 221 692 688 1 601 814 787 787 49 1 601 2.5Card debtors 24 052 19 371 2 009 1 780 159 233 500 892 312 580 580 65 892 3.7

Other loans and advances 115 581 100 307 3 419 7 619 930 2 232 1 074 4 236 1 155 3 081 3 081 73 4 236 3.7

Personal unsecured lending 42 653 33 761 1 438 4 908 475 1 292 779 2 546 638 1 908 1 908 75 2 546 6.0Business lending and other 72 928 66 546 1 981 2 711 455 940 295 1 690 517 1 173 1 173 69 1 690 2.3


Corporate loans 320 190 311 198 604 25 1 135 2 914 3 537 777 7 228 3 507 3 721 3 721 51 8 363 2.6

Commercial property finance 37 964 37 007 5 197 324 246 185 755 575 180 180 24 952 2.5





1 Restated. Refer to page 63.2 Tutuwa is the group’s BEE ownership initiative.3 Includes loans of R256 million that are past due but not specifically impaired.


Capital management




Overview

41


IFRS: Maximum exposure to credit risk by credit quality continued

Gross advances

totalRm




Normal monitoring

Rm

Close monitoring

Rm

Earlyarrears

Rm

Non-performing3

Rm

Sub-standard

RmDoubtful

RmLossRm

TotalRm

Securities and expected

recoveries on


loansRm


and expected recoveries

on specifically

impaired loans

Rm

Balance sheet

impairments for non-

performing specifically

impaired loans

Rm

Gross specific

impairmentcoverage

%

Total non-

performing loans

Rm

Non-performing

loans%

December 20121

Personal & Business Banking 502 168 429 868 20 341 29 483 6 276 13 245 2 955 22 476 13 862 8 614 8 614 38 22 476 4.5

Mortgage loans 299 675 255 240 11 824 16 864 4 966 10 088 693 15 747 11 581 4 166 4 166 26 15 747 5.3Instalment sale and finance leases 62 860 54 950 3 089 3 220 221 692 688 1 601 814 787 787 49 1 601 2.5Card debtors 24 052 19 371 2 009 1 780 159 233 500 892 312 580 580 65 892 3.7

Other loans and advances 115 581 100 307 3 419 7 619 930 2 232 1 074 4 236 1 155 3 081 3 081 73 4 236 3.7

Personal unsecured lending 42 653 33 761 1 438 4 908 475 1 292 779 2 546 638 1 908 1 908 75 2 546 6.0Business lending and other 72 928 66 546 1 981 2 711 455 940 295 1 690 517 1 173 1 173 69 1 690 2.3


Corporate loans 320 190 311 198 604 25 1 135 2 914 3 537 777 7 228 3 507 3 721 3 721 51 8 363 2.6

Commercial property finance 37 964 37 007 5 197 324 246 185 755 575 180 180 24 952 2.5





1 Restated. Refer to page 63.2 Tutuwa is the group’s BEE ownership initiative.3 Includes loans of R256 million that are past due but not specifically impaired.

IFRS: Movement in group loans and advances impairment


CorporateRm

Retailsecured

Rm

Retailunsecured

RmTotal

RmTotal

Rm

Specific impairmentsBalance at beginning of the period 3 901 4 953 3 662 12 516 9 775 Net impairment raised 849 1 626 2 754 5 229 10 202 Impaired accounts written off (1 188) (1 494) (1 548) (4 230) (7 683)Discount element recognised in interest income (174) (96) (270) (733)Exchange and other movements 442 167 (31) 578 955

Balance at end of the period 4 004 5 078 4 741 13 823 12 516

Portfolio impairmentsBalance at beginning of the period 1 315 1 236 2 637 5 188 5 410 Net impairment raised/(released) 133 128 49 310 (240)Exchange and other movements 60 33 27 120 18

Balance at end of the period 1 508 1 397 2 713 5 618 5 188

Total 5 512 6 475 7 454 19 441 17 704

42

IFRS: Ageing of loans and advances past due but not specifically impaired

Less than31 days

Rm

31 to 60days

Rm

61 to 90days

Rm

91 to 180days

Rm

More than180 days

RmTotal

Rm

June 2013Personal & Business Banking 20 536 6 880 3 704 31 120

Mortgage loans 10 512 4 176 2 230 16 918 Instalment sale and finance leases 2 861 897 317 4 075 Card debtors 1 375 483 294 2 152 Other loans and advances 5 788 1 324 863 7 975

Personal unsecured lending 3 900 874 510 5 284 Business lending and other 1 888 450 353 2 691

Corporate & Investment Banking 204 21 3 228

Corporate loans 122 21 3 146 Commercial property finance 82 82

Total 20 740 6 901 3 707 31 348

December 20121

Personal & Business Banking 19 049 6 749 3 685 29 483

Mortgage loans 10 118 4 431 2 315 16 864 Instalment sale and finance leases 2 317 695 208 3 220 Card debtors 915 509 356 1 780

Other loans and advances 5 699 1 114 806 7 619

Personal unsecured lending 3 608 729 571 4 908

Business lending and other 2 091 385 235 2 711

Corporate & Investment Banking 30 12 244 286

Corporate loans 25 12 244 281

Commercial property finance 5 5

Total 19 079 6 749 3 685 12 244 29 769



Capital management




Overview

43

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Country risk

DefinitionCountry risk, also referred to as cross-border transfer risk, is the uncertainty that a client or counterparty, including the relevant sovereign, will be able to fulfil its obligations to the group due to political or economic conditions in the host country.

Approach to managing country riskAll countries to which the group is exposed are reviewed at least annually. An internal rating model is used to determine the rating of each country and sovereign to which the group has an exposure. In determining the ratings, extensive use is made of the group’s network of operations, country visits and external information sources. These ratings are also a key input into the group’s credit rating models, with credit loan conditions and covenants linked to country risk events.

The model inputs are continuously updated to reflect economic and political changes in countries. The model output is an internal risk grade which is calibrated to a country risk grade (CR) rating scale, from CR01 to CR25. Countries rated CR08 and higher, referred to as medium- and high-risk countries, are subject to increased analysis and monitoring.

Country risk is mitigated through a number of methods including:

¢ political and commercial risk insurance

¢ co-financing with multilateral institutions

¢ structures to mitigate transferability and convertibility risk such as collection, collateral and margining deposits outside the jurisdiction in question.

Governance committeesThe primary governance committee overseeing this risk type is the group country risk management committee, which is chaired by the CIB CRO.

Approved regulatory capital approachesThere are no regulatory capital requirements for country risk.

Country risk portfolio characteristics and metricsThe risk distribution of cross-border country risk exposures is weighted towards European and North American low-risk countries, as well as sub-Saharan African medium- and high-risk countries. Exposure to troubled Eurozone peripheral countries is limited and closely managed by the country risk function.

Definition 43

Approach to managing country risk 43



Country risk portfolio characteristics and metrics 43

Country risk

44

Country risk exposure by region and risk grade

Europe%

Asia%

NorthAmerica

%

Sub-Saharan

Africa%

LatinAmerica

%

Middle East and North

Africa%

Australasia%

June 2013Risk gradeCR01 – CR07 14.7 4.6 6.4 0.4 1.4CR08 – CR11 0.4 7.7 4.8 1.2 1.9CR12 – CR14 8.6 4.2 11.7 2.8 0.3CR15 – CR17 0.2 2.0 20.6 0.3CR18 – CR21 0.1 4.0 0.1CR22+ 1.5 0.1

December 2012Risk gradeCR01 – CR07 24.1 7.4 7.1 1.1 0.5 2.9 CR08 – CR11 2.6 10.3 2.7 4.3 2.6 CR12 – CR14 5.8 0.6 8.5 0.3 CR15 – CR17 0.2 2.1 13.2 0.5 0.3 CR18 – CR21 0.1 1.9 0.1 CR22+ 0.8

Total medium- and high-risk country risk exposures and total low-risk country risk exposures for the six months ended 30 June 2013 amounted to USD18 billion and USD15 billion, respectively (31 December 2012: USD21 billion and USD19 billion, respectively).1


25

20

15

10

5

CR08 – CR11

Medium- and high-risk country exposure by region (%)

¢ Europe ¢ Asia ¢ Sub-Saharan Africa ¢ Latin America ¢ Middle East and North Africa

CR12 – CR14 CR15 – CR17 CR18 – CR21 CR22+

Exposure to the top five medium- and high-risk countries is shown in the graph that follows. These exposures are in line with the group’s growth strategy focused on select emerging markets.

Country risk continued

Capital management




Overview

45

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Country risk

3 000

2 500

2 000

1 500

1 000

500

Top five medium- and high-risk country risk EAD (USDm)

¢ June 2013 ¢ December 2012

China Nigeria Brazil Ghana Turkey

20

18

16

14

12

10

8

6

4

2

Medium- and high-risk country EAD concentration by country rating (%)


CR08 CR09 CR10 CR11 CR12 CR13 CR14 CR15 CR16 CR17 CR18 CR19 CR20 CR21 CR22+

46

DefinitionLiquidity risk is the risk that the counterparties who provide the bank with short-term funding will withdraw or not roll-over that funding.

Information relating to the 30 June 2013 period is supplied on a Basel III basis, including phasing-in requirements where applicable. Comparative periods are on a Basel II basis, unless otherwise stated.

Approach to managing liquidity riskThe nature of banking and trading gives rise to continuous exposure to liquidity risk. Liquidity risk arises when the group, despite being solvent, cannot maintain or generate sufficient cash resources to meet its payment obligations as they fall due, or can only do so at materially disadvantageous terms. This type of event may arise where counterparties who provide the group with short-term funding withdraw or do not roll over that funding, or normally liquid assets becoming illiquid as a result of a generalised disruption in asset markets.

The group manages liquidity in accordance with applicable regulations and within the group’s risk appetite. The group’s liquidity risk management framework supports the measurement and management of liquidity across both the corporate and retail sectors to ensure that payment obligations can be met by the group’s legal entities, under both normal and stressed conditions. Liquidity risk management ensures that the group has the appropriate amount, diversification and tenor of funding and liquidity to support its asset base at all times.

The group’s liquidity risk management framework differentiates between:

¢ Tactical (shorter-term) risk management: Includes managing intra-day liquidity positions and daily cash flow requirements, and monitoring adherence to prudential and internal requirements and setting deposit rates in accordance with requirements.

¢ Structural (long-term) liquidity risk management: Ensures a structurally sound balance sheet, preserves a diversified funding base and informs term funding requirements.

¢ Contingent liquidity risk management: Includes monitoring and managing early warning liquidity indicators while establishing and maintaining contingency funding plans, undertaking regular liquidity stress testing and scenario analysis, and setting liquidity buffers in accordance with anticipated stress events.

In periods of stable market conditions, the group’s consolidated liquidity risk position is monitored on at least a quarterly basis by the group ALCO while the liquidity risk position within the individual legal entities of the group is monitored on a monthly basis by the relevant entity ALCO. In periods of increased volatility, the frequency of meetings is increased as required to facilitate appropriate and timely management action.

The group’s wholesale funding strategy is assessed for each legal entity and derived from projected net asset growth. Funding requirements and initiatives are assessed in accordance with ALCO requirements for diversification, tenor and currency exposure, as well as the availability and pricing of alternative liquidity sources.

Liquidity risk

Definition 46

Approach to managing liquidity risk 46



Liquidity characteristics and metrics 47

Foreign currency liquidity management 47

Funding strategy 47

Contingency liquidity risk management 48

Basel III liquidity requirements 50

Capital management




Overview

47

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Liquidity risk

Governance committeesThe primary governance committee overseeing this risk is the group ALCO, which is chaired by the group financial director.

Approved regulatory capital approachesThere are no regulatory capital requirements for liquidity risk.

Liquidity characteristics and metricsStructural liquidity mismatchWith actual cash flows typically varying significantly from the contractual position, behavioural profiling is applied to assets, liabilities and off-balance sheet commitments with an indeterminable maturity or drawdown period, as well as to certain liquid assets. Behavioural profiling assigns probable maturities based on historical customer behaviour. This is used to identify significant additional sources of structural liquidity in the form of liquid assets and core deposits, such as current and savings accounts, which exhibit stable behaviour despite being repayable on demand or at short notice.

To ensure ongoing compliance with statutory and internal risk management guidelines, certain short-term assets are profiled as long dated.

Structural liquidity mismatch analyses are performed regularly to anticipate the mismatch between payment profiles of balance sheet items, in order to highlight potential risks within the group’s defined liquidity risk thresholds.

The graph alongside shows the group’s cumulative maturity mismatch between assets and liabilities for the 0 to 12 months bucket, after applying behavioural profiling. In preparation for the proposed Basel III liquidity ratios, behavioural profiling has been adjusted, effective 1 January 2013, thus resulting in the restatement highlighted in the footnote to the graph alongside.

Limits are set internally to restrict the cumulative liquidity mismatch between expected inflows and outflows of funds in different time buckets. These mismatches are monitored on a regular basis with active management intervention if potential limit breaches are evidenced. The behaviourally adjusted cumulative liquidity mismatch remains within the group’s liquidity risk appetite.

20

15

10

5

0

(5)

(10)

(15)

(20)

(25)

Behaviourally adjusted cumulative liquidity mismatch (%)1

¢ June 2013 ¢ December 20121 Internal limit

0 – 7 days 0 – 1 month 0 – 3 months 0 – 6 months 0 – 12 months

1 December 2012 numbers have been restated with SBSA’s updated

profiling policy, effective 1 January 2013. Refer to page 63.

Foreign currency liquidity managementA number of indicators are observed to monitor changes in either market liquidity or exchange rates. Foreign currency loans and advances are restricted to the availability of foreign currency deposits.

Funding strategyFunding markets are evaluated on an ongoing basis to ensure appropriate group funding strategies are executed depending on the market, competitive and regulatory environment. The group employs a diversified funding strategy, sourcing liquidity in both domestic and offshore markets, and incorporates a coordinated approach to accessing capital and loan markets across the group.

Concentration risk limits are used within the group to ensure that funding diversification is maintained across products, sectors, geographic regions and counterparties.

Primary funding sources are in the form of deposits across a spectrum of retail and wholesale clients, as well as long-term capital and loan markets.

48

Liquidity risk continued

Funding-related liabilities composition

June2013

Rbn

December2012

Rbn

Corporate funding 246 253 Financial institutions 221 192 Retail deposits 218 204 Interbank funding 123 107 Government and parastatals 104 99Senior and subordinated debt issued 65 66 Other liabilities to the public 101 125

Total funding-related liabilities 1 078 1 046

30

25

20

15

10

5

Funding-related liabilities composition (% of total)


Corp

orat

e fu

ndin

g

Fina

ncia

l ins

titut

ions

Reta

il de

posit

s

Inte

rban

k fu

ndin

g

Gove

rnm

ent

and

para

stat

als

Seni

or a

nd su

bord

inat

edde

bt is

sued

Oth

er li

abilit

ies

to th

e pu

blic

A component of the funding strategy is to ensure that sufficient contractual term funding is raised in support of term lending and to ensure adherence to the structural mismatch limits and guidelines. The long-term funding ratio is defined as those funding-related liabilities with a remaining maturity of greater than six months as a percentage of total funding-related liabilities. This definition is derived from the SARB filings in the South African market, and is different from the net stable funding ratio (NSFR), which is greater than one year. The following graph illustrates the group’s long-term funding ratio for the period 31 December 2007 to 30 June 2013. The group’s long-term funding ratio was 22.6% at 30 June 2013 (31 December 2012: 24.3%).

30

25

20

15

10

Long-term funding ratio1 (%)

December 2007 June 2013

1 Observations are at six month intervals.

Contingency liquidity risk managementContingency funding plansContingency funding plans are designed to protect stakeholder interests and maintain market confidence to ensure a positive outcome in the event of a liquidity crisis. The plans incorporate an early warning indicator methodology supported by clear crisis response strategies. Early warning indicators cover bank-specific and systemic crises and are monitored according to assigned frequencies and tolerance levels.

Crisis response strategies are formulated for the relevant crisis management structures and address internal and external communications, liquidity generation management actions and operations, and heightened and supplementary information requirements to address the crisis event.

Liquidity stress testing and scenario analysisStress testing and scenario analysis are based on hypothetical as well as historical events. These are conducted on the group’s funding profiles and liquidity positions. The crisis impact is typically measured over a two-month period, as this is considered the most crucial time horizon for a liquidity event. This measurement period is adapted to meet different regulatory requirements.

Anticipated on- and off-balance sheet cash flows are subjected to a variety of bank-specific and systemic stresses and scenarios to evaluate the impact of unlikely but plausible events on liquidity positions. The results are assessed against the liquidity buffer and contingency funding plans to provide assurance as to the group’s ability to maintain sufficient liquidity under adverse conditions.

Capital management




Overview

49

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Liquidity risk

Liquidity bufferPortfolios of highly marketable securities over and above prudential, regulatory and internal stress-testing requirements are maintained as protection against unforeseen disruptions in cash flows. These portfolios are managed within ALCO-defined limits on the basis of diversification and liquidity.

The table below provides a breakdown of the group’s liquid marketable securities and foreign currency placements as at 30 June 2013 and 31 December 2012.

Total liquidity

June2013

Rbn

December2012

Rbn

Contingent liquidity 174,1 143,5 Prudential requirements1 59,3 42,5

Total liquidity 233,4 186,0

Contingent liquidity as a % of funding related liabilities 16% 14%

1 December 2012 is net of R11,1 billion relating to notes and coins.

Liquid assets held remain adequate to meet all internal stress tests and regulatory requirements.

The group’s credit ratingsThe group’s ability to access funding at cost-effective levels is dependent on maintaining or improving the borrowing entity’s credit rating.

The detailed table representing the major credit ratings for the group’s significant banking subsidiaries can be found on the group’s website, www.standardbank.com/reporting.

The following table provides a summary of the major credit ratings for SBSA.

Credit ratingsSBSA1

Long term Fitch

Foreign currency issuer default rating BBBRSA Sovereign ratings: foreign currency BBB

Moody’s

Foreign currency deposit rating Baa1RSA Sovereign ratings: foreign currency Baa1

1 SBSA is the largest operating entity within the group.

Credit ratings for the group are dependent on multiple factors including the sovereign rating, capital adequacy levels, quality of earnings, credit exposure, the risk management framework and funding diversification. These parameters and their possible impact on the borrowing entity’s credit rating are monitored closely and incorporated in the group’s liquidity risk management and contingency planning considerations.

A reduction in these ratings could have an adverse effect on the group’s access to liquidity sources and funding costs, may trigger collateral calls through the reduction of the threshold above which the group’s negative mark-to-market must be collateralised, or lead to activation of downgrade clauses and early termination associated with certain structured deposits.

Collateralisation or termination events linked to rating downgrades are generally conceded only to highly-rated counterparties and, almost always, on a reciprocal basis. In exceptional cases, the group might concede such rating downgrade events to unrated counterparties when their size, credit strength and business potential are deemed acceptable.

The impact on the group’s liquidity of a collateral call linked to downgrading is taken into account in model stress testing. A one notch rating downgrade will reduce thresholds above which collateral must be posted with counterparties to cover the group’s negative mark-to-market on derivative contracts by R645 million (31 December 2012: R554 million). A two and three notch rating downgrade will reduce such thresholds by a further R421 million (31 December 2012: R377 million) and R25 million (31 December 2012: R40 million), respectively.

ConduitsThe group provides standby liquidity facilities to two conduits, namely Blue Titanium Conduit and Thekwini Warehouse Conduit. These facilities, which totalled R8,2 billion as at 30 June 2013 (31 December 2012: R7,6 billion), have not been drawn on. The liquidity risk associated with these facilities is managed in accordance with the group’s overall liquidity position and represents less than 2% of SBSA’s total funding (31 December 2012: 2%). The liquidity facilities are included in both the group’s static structural liquidity mismatch as well as in dynamic liquidity risk stress testing.

50

Liquidity risk continued

Basel III liquidity requirementsFrom 2015, the group will be required to comply with the liquidity coverage ratio (LCR), a metric designed by the Basel Committee on Banking Supervision (BCBS) to measure a bank’s ability to manage a sustained outflow of customer funds in an acute stress over a 30-day period. The ratio is calculated by taking the group’s high quality liquid assets divided by net cash outflows. A bank is expected to achieve a result of 100% or more once LCR is fully implemented. In January 2013, the BCBS announced amendments to the implementation and formulation of the LCR, and a revised timetable to phase in the requirement.

The LCR will still be effective from January 2015, but the minimum requirement will begin at 60%, increasing in equal annual stages to reach 100% in January 2019.

From 2018, the group will also be required to comply with the NSFR, a metric designed to ensure that the majority of term assets are funded by stable sources, such as capital, term borrowings or funds from stable sources.

The group continues to take several steps to ensure compliance with the LCR and NSFR within the Basel III specified timelines. Liquid asset buffers have been increased and liability products developed to reduce net cash outflows, where possible, to address the LCR requirement.

The group continues to develop products and pursue initiatives that will extend the group’s funding base in anticipation of the NSFR.

Basel III implementation timeline

2015 2016 2017 2018 20192013 2014

100%60%

Minimum standard

70%Minimum standard

80%Minimum standard

90%Minimum standard

Bank disclosure

starts

Minimum standard

Bank disclosure

starts

LCR

NSF

R

Liqu

idit

y

Certain elements of the Basel III framework, such as the NSFR requirements, are still being finalised by the SARB.

Capital management




Overview

51

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Market risk

DefinitionMarket risk is the risk of a change in the market value, actual or effective earnings, or future cashflows of a portfolio of financial instruments, including commodities, caused by adverse movements in market variables such as equity, bond and commodity prices, currency exchange and interest rates, credit spreads, recovery rates, correlations and implied volatilities in all of these variables.

The group’s key market risks are:

¢ trading book market risk

¢ interest rate risk in the banking book (IRRBB)

¢ equity risk in the banking book

¢ foreign currency risk.

Governance committeesThe governance committees overseeing market risk are group ALCO, which is chaired by the group financial director, and the group equity risk committee, which is chaired by the CIB CRO.

Approved regulatory capital approachesThe group has approval from the SARB to adopt the internal models approach for most trading product groups and across most market risk types for SBSA and Standard Bank Plc.

The group has approval from the SARB to adopt the market-based approach for certain equity portfolios in SBSA while the risk-weighted IRB approach is used for Standard Bank Plc equity portfolios.

There are no regulatory capital requirements for IRRBB or foreign currency risk.

Trading book market riskDefinitionTrading book market risk is represented by financial instruments held on the trading book, arising out of normal global markets’ trading activity.

The group’s policy is that all trading activities are undertaken within the group’s trading operations.

Approach to managing market risk in the trading bookThe market risk functions are independent of trading operations and accountable to the relevant entity ALCOs. ALCOs have a reporting line into group ALCO, a subcommittee of GROC.

All VaR limits require prior approval from the respective entity ALCOs. The market risk functions also have the ability to set individual trader mandates.

Market risk teams are responsible for identifying, measuring, managing, controlling and reporting market risk as outlined in the market risk governance standard, with support from the central market risk team.

Exposures and excesses are monitored and reported daily. Where breaches in limits and triggers occur, actions are taken by market risk functions to move exposures back in line with approved market risk appetite, with such breaches being reported to management and entity ALCOs.

Market risk

Definition 51



Trading book market risk 51

Interest rate risk in the banking book 54

Equity risk in the banking book 55

Foreign currency risk 56

52

MeasurementThe techniques used to measure and control trading book market risk and trading volatility include:

¢ VaR

¢ stop-loss triggers

¢ stress tests

¢ backtesting

¢ specific business unit and product controls.

VaRThe group uses the historical VaR simulation approach to quantify market risk under normal conditions.

VaR is based on 251 days of unweighted historical data, a holding period of one day and a confidence level of 95%. The historical VaR results are calculated in four steps:

¢ Calculate 250 daily market price movements based on 251 days’ historical data.

¢ Calculate hypothetical daily profit or loss for each day using these daily market price movements.

¢ Aggregate all hypothetical profits or losses for day one across all positions, giving daily hypothetical profit or loss, and then repeat for all other days.

¢ VaR is the 95th percentile selected from the 250 days of daily hypothetical total profit or loss.

Daily losses exceeding the VaR are likely to occur, on average, 13 times in every 250 days.

Where the group has received internal model approval, VaR using a confidence level of 99% and a 10-day holding period for both recent market conditions and a stress period is used to calculate the market risk regulatory capital requirement.

Stop-loss triggersStop-loss triggers are used to protect the profitability of the global markets trading desks, and refer to cumulative or daily trading losses that prompt a review or close-out of positions. These are monitored by market risk on a daily basis.

Stress testsStress testing provides an indication of the potential losses that could occur under extreme market conditions and where longer holding periods may be required to exit positions. The stress tests carried out by the group include individual market risk factor testing, combinations of market factors per trading desk and combinations of trading desks. Stress tests include a combination of historical, hypothetical and Monte Carlo-type simulations and provide senior management with an assessment of the financial impact that such events would have on the group’s profit. The daily losses experienced during the six months ended 30 June 2013 were within the stress scenario limits.

BacktestingThe group backtests its VaR models to verify the predictive ability of the VaR calculations and ensure the appropriateness of the models within the inherent limitations of VaR. Backtesting compares the daily hypothetical profit and losses under the one-day buy and hold assumption to the prior day’s VaR. In addition, VaR is tested by changing various parameters, such as confidence intervals and observation periods used in the model. In this manner, characteristics of the VaR model are captured to ensure the accuracy of the VaR measurement and the effectiveness of hedges and risk-mitigation instruments.

Refer to the graph below for the results of the group’s backtesting during the first six months of 2013. The increased volatility in VaR in June reflects market volatility following the Federal Reserve’s announcement of an earlier than expected end to the fiscal stimulus.

Regulators categorise a VaR model as green, amber or red and assign regulatory capital multipliers based on this categorisation. A green model is consistent with a satisfactory VaR model and is achieved for models that have four or less backtesting exceptions in a 12-month period. All the group’s approved models were assigned green status for the six months ended 30 June 2013 (31 December 2012: green).

Market risk continued

100

50

0

(50)

(100)

(150)

(200)

Backtesting: Hypothetical profit/loss and VaR (Rm)

¢ Hypothetical income — 99% VaR (including diversification benefits) — 95% VaR (including diversification benefits)

January 2013 June 2013Days

Capital management




Overview

53


Specific business unit and product controlsOther market risk controls specific to individual business units

include permissible instruments, concentration of exposures, gap

limits, maximum tenor, stop loss triggers, price validation and

balance sheet substantiation. In addition, only approved

products that can be independently priced and properly

processed are permitted to be traded.

Trading book portfolio characteristicsVaR for the period under reviewTrading book market risk exposures arise mainly from residual exposures from client transactions with limited trading for the group’s own account. In general, the group’s trading desks have run low levels of market risk throughout the six months ended 30 June 2013.

Trading book VaR analysis by market variable

Normal VaR

Maximum1

RmMinimum1

RmAverage

RmClosing

Rm

June 2013Commodities 28,4 8,4 17,1 12,2 Forex 20,3 7,5 11,5 8,4 Equities 21,7 10,3 17,3 21,2 Debt securities 57,2 32,3 43,1 53,3 Diversification benefits2 (42,6) (33,5)

Aggregate 62,4 38,2 46,4 61,6

December 20123

Commodities 27,4 13,1 19,1 16,7 Forex 25,9 6,4 12,4 10,6 Equities 29,2 10,1 17,8 12,8 Debt securities 46,8 26,5 36,4 26,8 Diversification benefits2 (36,6) (30,3)

Aggregate 63,6 36,4 49,1 36,6

1 The maximum and minimum VaR figures reported for each market variable do not necessarily occur on the same day. As a result, the aggregate VaR will not equal the sum of the individual market VaR values, and it is inappropriate to ascribe a diversification effect to VaR when these values may occur on different dates.

2 Diversification benefit is the benefit of measuring the VaR of the trading portfolio as a whole, that is, the difference between the sum of the individual VaRs and the VaR of the whole trading portfolio.


Analysis of trading profitThe graph to the right shows the distribution of daily profit and losses for the period. It captures trading volatility and shows the number of days in which the group’s trading-related revenues fell within particular ranges. The distribution is skewed favourably to the profit side. The tail loss followed the Federal Reserve’s announcement of an earlier than expected end to the fiscal stimulus as referred to in the backtesting section.

For the six month’s ended 30 June 2013, trading profit was positive for 116 out of 128 days (30 June 2012: 122 out of 130 days).

80

70

60

50

40

30

20

10

Distribution of daily trading profit or loss

¢ June 2013 ¢ June 2012

<(30) (30) – 0 0 – 30 30 – 60 60 – 90 >90Rm

Days

54


Interest rate risk in the banking bookDefinitionThese are risks that have an impact on net interest income that arise from structural interest rate risk caused by the differing repricing characteristics of banking assets and liabilities.

IRRBB is further divided into the following sub-sub risk types:

¢ Repricing risk: Refers to the timing differences in the maturity (fixed rate) and repricing (floating rate) of assets and liabilities.

¢ Yield curve risk: Arises when shifts in the yield curve have adverse effects on the group’s income or underlying economic value.

¢ Basis risk: Is the risk of a hedge’s price not moving in line with the price of the hedged position. Examples include bonds/swap basis, futures/underlying basis and prime/JIBAR basis.

¢ Optionality risk: Arises from the options embedded in many bank asset and liability portfolios, providing the holder with the right, but not the obligation, to buy, sell, or in some manner alter the cash flow of an instrument or financial contract.

¢ Endowment risk: Refers to the interest rate risk exposure arising from the net differential between interest rate insensitive assets (such as non-earning assets), interest rate insensitive liabilities (such as non-paying liabilities) and capital.

Approach to managing IRRBBBanking book-related market risk exposure principally involves managing the potential adverse effect of interest rate movements on banking book earnings (net interest income and banking book mark-to-market profit or loss) and the economic value of equity.

The group’s approach to managing IRRBB is governed by applicable regulations, and is guided by the competitive environment in which the group operates. Banking book interest rate risk is monitored centrally by the group’s TCM team with oversight by group ALCO. Each banking entity in the group manages this risk on a stand-alone basis and calculates the required economic capital in support thereof.

MeasurementThe analytical techniques used to quantify banking book interest rate risk include both earnings- and valuation-based measures. The analysis takes cognisance of embedded optionality such as loan prepayments and accounts where the account behaviour differs from the contractual position.

The results obtained from forward-looking dynamic scenario analyses, as well as Monte Carlo simulations, assist in developing optimal hedging strategies on a risk-adjusted return basis.

Desired changes to a particular interest rate risk profile are achieved through the restructuring of on-balance sheet repricing or maturity profiles and, where appropriate, the use of derivative instruments.

LimitsInterest rate risk limits are set in relation to changes in forecast banking book earnings (net interest income and banking book mark-to-market profit or loss) and the economic value of equity. Economic value of equity sensitivity is calculated as the net present value of aggregate asset cash flows less the net present value of aggregate liability cash flows.

All assets, liabilities and derivative instruments are allocated to gap intervals based on either their repricing or maturity characteristics. Assets and liabilities for which no identifiable contractual repricing or maturity dates exist are allocated to gap intervals based on behavioural profiling.

Hedging of endowment riskInterest rate risk in the banking book is predominantly the consequence of endowment exposures, being the net effect of non-rate sensitive assets less non-rate sensitive liabilities and equity. A significant component of the group’s endowment risk is within SBSA.

The endowment risk is hedged as and when it is considered opportune, using liquid instruments in each legal entity’s market. Where possible, hedge accounting is applied to the derivative hedges. The interest rate view is formulated through each ALCO process, following meetings of the monetary policy committees, or notable market developments.

Non-endowment IRRBB (basis, repricing, optionality and yield curve) is managed within the treasury and the global markets portfolios.

Banking book interest rate exposure characteristicsThe table on the following page indicates the rand equivalent sensitivity of the group’s banking book earnings (net interest income and banking book mark-to-market profit or loss) and OCI given a parallel yield curve shock. Hedging transactions are taken into account while other variables are kept constant.

Assuming no management intervention, a downward 100 basis point parallel interest rate shock across all foreign currency yield curves and a 200 basis point parallel interest rate shock across rand yield curves, would decrease the forecast 12-month net interest income on 30 June 2013 by R2 466 million before tax (31 December 2012: R2 702 million).

Capital management




Overview

55


Interest rate sensitivity analysis1

ZAR USD GBP Euro Other Total

June 2013Increase in basis points 200 100 100 100 100Sensitivity of annual net interest income Rm 1 767 189 12 (6) 262 2 224Sensitivity of OCI Rm (173) (8) (3) (132) (316)Decrease in basis points 200 100 100 100 100Sensitivity of annual net interest income Rm (1 898) (249) (12) 6 (313) (2 466)Sensitivity of OCI Rm 170 8 3 132 313

December 2012Increase in basis points 200 100 100 100 100Sensitivity of annual net interest income Rm 2 148 152 2 (14) 99 2 387Sensitivity of OCI Rm 40 10 (2) (134) (86)Decrease in basis points 200 100 100 100 100Sensitivity of annual net interest income Rm (2 376) (174) (2) 14 (164) (2 702)Sensitivity of OCI Rm (41) (10) 2 134 85

1 Before tax.

Equity risk in the banking bookDefinitionEquity risk is the risk of loss arising from a decline in the value of any equity instrument held on the banking book, whether caused by deterioration in the performance, net asset, or enterprise value of the issuing entity, or by a decline in the market price of the instrument itself.

Approach to managing equity risk in the banking bookThe equity risk committee approves investments in listed and unlisted entities in accordance with delegated authority limits. Periodic reviews of the performance of these investments are undertaken.

Market risk on equity investments is managed in accordance with the purpose and strategic benefits of such investments, rather than purely on mark-to-market considerations.

Banking book equity portfolio characteristics

Basel II: Equity positions in the banking book1

June2013

Rm

December2012

Rm

Fair valueListed 142 488 Unlisted 3 292 3 004

Total 3 434 3 492

1 Banking book equity exposures are equity investments which comprise listed and unlisted private equity and strategic investments, and do not form part of the trading book.

Cumulative realised gains from the sale or liquidation of equity positions in the banking book were R19 million as at 30 June 2013 (30 June 2012: R417 million gain). This decrease can be attributed to the sale of a listed equity investment in the prior period which was held as an equity investment for five years prior to the sale.

No unrealised gains or losses were recognised in OCI (30 June 2012: Nil).

56


Foreign currency riskDefinitionThe group’s primary exposures to foreign currency risk arise as a result of the translation effect on the group’s net assets in foreign operations, intra-group foreign-denominated debt and foreign-denominated cash exposures and accruals.

Approach to managing foreign currency riskThe net asset value currency risk management committee manages the risk according to existing legislation, South African exchange control regulations and accounting parameters. It takes into account naturally offsetting risk positions and manages the group’s residual risk by means of forward exchange contracts, currency swaps and option contracts.

Hedging is undertaken in such a way that it does not constrain normal operational activities. In particular, cognisance is taken of the need for capital held in banking entities outside of the South African common monetary area to fluctuate in accordance with risk-weighted assets.

The repositioning of the currency profile, which is coordinated at group level, is a controlled process based on underlying economic views of the relative strength of currencies. The group does not ordinarily hold open exposures of any significance with respect to the banking book.

Gains or losses on derivatives that have been designated as either net investment or cash flow hedging relationships are reported directly in OCI, with all other gains and losses on derivatives being reported in profit or loss.

Capital management




Overview

57

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Operational risk

DefinitionOperational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

The definition of operational risk is very broad. Operational risk contains specific sub-risks that are subject to management and oversight by dedicated specialist functions. These include:

¢ model risk

¢ taxation risk

¢ legal risk

¢ compliance risk

¢ environmental risk

¢ business continuity management and resilience

¢ technology risk management

¢ information risk management

¢ financial crime control

¢ occupational health and safety.

These operational risk sub-types are dealt with in pages 58 to 60.

Approach to managing operational riskOperational risk exists in the natural course of business activity. It is not an objective to eliminate all exposure to operational risk as this would be neither commercially viable nor possible. The group’s approach to managing operational risk is to adopt fit-for-purpose operational risk practices that assist business line management in understanding their inherent risk and reducing their risk profile in line with the group’s risk tolerance, while maximising their operational performance and efficiency.

The operational risk management function is independent from business line management and is part of the second line of defence. The function is responsible for the development and maintenance of the operational risk framework, facilitating business’s adoption of the framework, oversight and reporting, as well as for challenging the risk profile. It proactively analyses root causes, trends and emerging threats, advises on potential control weaknesses and recommends best practice solutions. It is organised as follows:

¢ Individual teams are dedicated to each business line and group enabling function. These teams work alongside their business areas and facilitate the business’s adoption of the operational risk framework. As part of the second line of defence, they also monitor and challenge the business units’ and group enabling functions’ management of their operational risk profile.

¢ A central function, based at a group level, provides groupwide oversight and reporting. It is also responsible for developing and maintaining the operational risk management framework.

InsuranceThe group buys insurance to mitigate operational risk. The group insurance committee (GIC) oversees a substantial insurance programme. The GIC meets quarterly to review the programme. Forward looking perspectives include utilisation of data and scenarios from the advanced measurement approach (AMA) that would reflect changes in the business models, and are flexible enough to reflect different risk exposures within the business.

Operational risk

Definition 57

Approach to managing operational risk 57



Operational risk sub-types 58

Areas of special focus 60

58

Operational risk continued

The group crime, professional indemnity, and group directors

and officers liability insurance policies are the primary insurance

policies in place and GIC ensures that these policies are current

and applicable to the group’s operating environment. This cover

is reviewed on an annual basis.

The group does not include insurance as a mitigant in the

calculation of regulatory capital.

Governance committeesThe primary governance committees overseeing operational risk,

including the various sub-types, are:

¢ group compliance committee

¢ group internal financial control governance committee

¢ group operational risk committee

¢ group regulatory and legislative oversight committee

¢ group sanctions review committee.

Approved regulatory capital approachThe group has approval from the SARB to adopt the AMA

for SBSA and the standardised approach for all other

legal entities.

Operational risk sub-typesOperational risk sub-type: model riskDefinitionModel risk arises from potential weaknesses in a model that

is used in the measurement, pricing and management of risk.

These weaknesses include incorrect assumptions, incomplete

information, inaccurate implementation, limited model

understanding, inappropriate use, or inappropriate

methodologies leading to incorrect conclusions by the user.

Approach to managing model riskThe group’s approach to managing model risk is based on the

following principles.

Fit-for-purpose governance: ¢ three-lines-of-defence governance structure comprising

independent model development, model validation

and audit oversight functions

¢ committees with board and executive management

membership based on model materiality

¢ policies that define minimum standards, materiality, validation

criteria, approval criteria, and roles and responsibilities.

Skilled technical specialists: ¢ skilled and experienced pool of technically competent

staff is maintained in the development, validation and

audit functions.

Robust model-related processes: ¢ application of best-practice modelling methodologies

¢ periodic independent model validation

¢ adequate model documentation including the coverage of model use and limitations

¢ controlled implementation of approved models into production systems

¢ ongoing monitoring of model performance

¢ review and governance of data used as model inputs

¢ peer challenge in technical forums.

Operational risk sub-type: tax riskDefinitionTaxation risk is the possibility of suffering unexpected loss, financial or otherwise, as a result of the application of tax systems, whether in legislative systems, rulings or practices, applicable to the entire spectrum of taxes and other fiscal imposts to which the group is subject.

Approach to managing tax riskThe group fulfils its responsibilities under tax law in each jurisdiction in which it operates, both in terms of domestic and international taxes with specific reference to transfer pricing principles across jurisdictions, whether in relation to compliance, planning or client service matters. Tax law includes all responsibilities which the group may have in relation to company taxes, personal taxes, capital gains taxes, indirect taxes and tax administration.

Compliance with this policy is aimed at ensuring that the group pays neither more nor less tax than tax law requires. The group continually reviews its existing and planned operations in this regard and ensures that, where clients participate in group products, these clients are either aware of the probable tax implications or are advised to consult with independent professionals to assess these implications, or both.

Operational risk sub-type: legal riskDefinitionLegal risk is defined as the exposure to the adverse consequences, such as the risk of loss resulting from exposures to impacts such as fines, penalties, or punitive damages from supervisory actions, or to judgements or private settlements, attendant upon non-compliance with legal or statutory responsibilities and/or inaccurately drafted contracts and their execution, as well as the absence of written agreements or inadequate agreements. This includes the exposure to new laws as well as changes in interpretations of existing laws by appropriate authorities and exceeding authority as contained in the contract. This applies to the full scope of group activities and may also include others acting on behalf of the group.

Capital management




Overview

59

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Operational risk

Approach to managing legal riskThe group has processes and controls in place to manage its legal risks. Failure to manage these risks effectively could result in legal proceedings impacting the group adversely, both financially and reputationally.

Operational risk sub-type: compliance riskDefinitionThis is the risk of legal or regulatory sanctions, financial loss or loss to reputation that the group may suffer as a result of its failure to comply with laws, regulations, codes of conduct and standards of good practice applicable to its business activities.

Approach to the management of compliance riskOverarching approachThe group’s approach to managing compliance risk is proactive and premised on internationally accepted principles of compliance risk management.

Compliance risk management is a core risk management activity overseen by the GCCO. The GCCO has unrestricted access to the joint group chief executives and to the chairman of the GAC, thereby ensuring the function’s independence.

A robust risk management reporting and escalation procedure requires business unit and functional area compliance heads to report on the status of compliance risk management in the group. There is a key focus on treating customers fairly as the South African regulatory framework moves towards a twin peaks model of supervision.

Employees, including their senior management, are made aware of their statutory compliance responsibilities through ongoing training and awareness initiatives.

Approach to managing money laundering and terrorist financingLegislation pertaining to money laundering and terrorist financing control imposes significant requirements in terms of customer due diligence (customer identification and verification, know your customer and enhanced due diligence), record keeping, staff training and the obligation to detect, prevent and report suspected money laundering and terrorist financing.

Group minimum standards are implemented throughout the group, taking into account local jurisdictional requirements where these may be more stringent. The group subscribes to the principles of the Financial Action Task Force, an intergovernmental body that develops and promotes policies to combat money laundering and terrorist financing.

Approach to sanctions managementThe group actively manages the legal, regulatory, reputational and operational risks associated with doing business in jurisdictions or with clients that are subject to embargoes or sanctions imposed by competent authorities. The group sanctions review committee, supported by a sanctions desk, is responsible for providing advice on all sanctions-related matters in a fluid sanctions environment.

Approach to managing regulatory changeThe group operates in a highly regulated industry across multiple jurisdictions and is increasingly subject to international legislation with extra-territorial reach.

The group aims to embed regulatory best practice in our operations in a way that balances the interests of various stakeholders, while supporting the long-term stability and growth in the markets where we have a presence.

The group’s regulatory advocacy unit assesses the impact that emerging policy and regulation will have on the business. The group’s approach to regulatory advocacy is to engage with government policymakers, legislators and regulators in a constructive manner.

The group regulatory and legislative oversight committee enhances regulatory risk management by proactively considering the impacts of regulatory developments on the group.

Operational risk sub-type: environmental riskDefinitionEnvironmental risk is described as a measure of the potential threats to the environment. It combines the probability that events will cause or lead to the degradation of the environment and the magnitude of such degradation.

Approach to managing environmental riskEnvironmental and social risk assessment and management deals with two aspects:

¢ Risks over which the group does not have control but which have potential to impact on our operations and those of the group’s clients.

¢ Risks over which the group has direct control. These are our immediate direct impact, such as our waste management and the use of energy and water as well as our broader impact, including risks which occur as a result of our lending or financial services activities.

The group sustainability management unit develops the strategy, policy and management frameworks which enable the identification, management, monitoring and reporting of both aspects.

60

Operational risk continued

For risks related to lending, policies are in place and screening methodologies are being developed and refined.

Operational risk sub-type: business continuity management and resilienceDefinitionBusiness continuity management is defined as a holistic management process that identifies potential impacts that threaten the group, and provides a basis for planning the mitigation of these operational impacts. It further provides a framework for building resilience and the capability for an effective response that safeguards the interests of key stakeholders, reputation, brand and value-creating activities.

Approach to business continuity and resilienceThe group has business resilience and continuity capabilities and plans in place to ensure its ability to operate on an ongoing basis and limit losses in the event of severe business disruptions. Crisis management is based on a command and control process to manage the business through a crisis to full recovery.

Operational risk sub-type: technology risk managementWithin the group’s IT and operations functions, there are dedicated areas focused on the day to day management of operations control and IT risk.

Operational risk sub-type: information risk managementDefinitionInformation risk is the risk of accidental or intentional unauthorised use, modification, disclosure or destruction of information resources, which would compromise the confidentiality, integrity or availability of information.

Approach to managing information riskThe information risk management function oversees the information security management system and risk management framework, policies and practices across the group.

The execution of these policies and practices is driven through a network of information security officers embedded within the business lines. This network is functionally overseen by the group chief information security officer.

Access to informationThe Promotion of Access to Information Act 2 of 2000 gives effect to the constitutional right of access to information that is held by a private or public body.

The following information is disclosed in terms of applicable regulations:

¢ From January 2013 to June 2013, the group processed 11 (January 2012 to December 2012: 24) requests for access to information, of which two were granted, three were

denied, two were partly granted, and one was withdrawn. Two requests were returned to the requestor as improperly completed, one of which was not subsequently re-submitted and the other one was abandoned.

¢ The reasons for the denial of access were that the owners of the personal information declined to give consent for access to be given to the requestor and some requests did not comply with the requirements of the abovementioned act.

Operational risk sub-type: financial crime controlDefinitionFinancial crime control is the prevention, detection, reporting and response to all financial crime to mitigate economic loss, reputational risk and regulatory sanction within the group.

Approach to managing risks associated with financial crimeThe financial crime control (FCC) function reports to the group CRO. The head of the group FCC has independent access to executives and the GAC.

FCC leadership is both accountable for financial crime control and has strategic and operational input into business unit financial crime control resources.

FCC maintains close working relationships with other risk functions, specifically compliance, operational risk and credit risk, and with other group functions such as information security, human resources, and legal.

Operational risk sub-type: occupational health and safetyThe health and safety of all employees remains a priority. Training of health and safety officers and employee awareness is an ongoing endeavour. Group policies are being rolled out to all operations and the number of incidents being reported is reducing.

Areas of special focus ¢ A physical commodities specialist function that is based in

Johannesburg, London and Singapore has been established to manage physical commodities transactions executed within the group. The key role of the team is to focus on the risks embedded in each trade, on a pre- and post-trade basis, and to ensure they are understood, tracked, controlled and escalated if appropriate. The team works with approved third parties who play a key role in the process and the provision of related control functions such as ship brokers, insurers, warehouse providers and security companies.

¢ An internal financial controls framework has been established to ensure the robust control over balance sheet substantiation and other key financial controls.

Capital management




Overview

61

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Business risk

DefinitionBusiness risk is the risk of loss, usually from inflexible cost structures or inefficiencies, due to adverse operating conditions caused by market-driven pressures such as decreased demand, increased competition, or cost increases and by group specific causes such as a poor choice of strategy, reputational damage or the decision to absorb costs or losses to preserve reputation.

Approach to managing business riskThe group mitigates business risk in a number of ways, including:

¢ Extensive due diligence during the investment appraisal process is performed, in particular for new acquisitions.

¢ New product processes per business line, through which the risks and mitigating controls for new and amended products and services are evaluated.

¢ Stakeholder management to ensure favourable outcomes from external factors beyond the group’s control.

¢ Monitoring the profitability of product lines and customer segments.

Business risk

¢ Tight control is maintained over the group’s cost base, including the management of its cost-to-income ratio. This allows for early intervention and management action to reduce costs where necessary.

¢ Being alert and responsive to changes in market forces.

¢ There is a strong focus in the budgeting process on achieving headline earnings growth while containing cost growth. In addition, contingency plans are built into the budget that allow for costs to be significantly reduced in the event that expected revenues do not materialise.

¢ The group continually aims to increase the ratio of variable costs to fixed costs, allowing for more flexibility to reduce costs during economic downturn conditions.

Governance committeesThe primary governance committees for overseeing business risk are the group executive and group management committees, chaired by the joint group chief executives.

Approved regulatory capital approachesThere are no regulatory capital requirements for business risk.

62

DefinitionPost-retirement obligation risk is the risk to the group’s comprehensive income that arises from the requirement to contribute as an employer to an under-funded defined benefit plan. The risk arises due to either or both an increase in the estimated value of pension or medical liabilities, or/and a decline in the market value of the fund’s assets or reduction in their investment returns.

Approach to managing post-retirement obligation riskThe group operates both defined contribution plans and defined benefit plans, with the majority of its employees participating in defined contribution plans. The defined benefit pension and medical aid provider schemes for past and certain current employees, create post-retirement obligations.

Post-retirement obligation risk

The group seeks to mitigate these risks through independent asset managers and independent asset and liability management advisors for material funds. Its potential residual risks, which may impact the group, are managed within the group asset and liability management process.

Governance committeeThe primary governance committee for overseeing this risk is the group ALCO which is chaired by the group financial director.

Approved regulatory capital approachesAs post-retirement obligation risk is accounted for under IAS 19 Employee Benefits (revised 2011), the consequence of this risk is already recognised in the group’s equity. However, any surplus recognised relating to defined benefit funds is excluded from core equity for the purposes of capital adequacy.

RestatementsCapital management



Risk types Additionalinformation

Overview

63


RestatementsCapital ManagementThe adoption of the new and amended IFRS 10 Consolidated Financial Statements and IAS19 Employee Benefits (revised 2011), resulted in the restatement of the group’s previously reported financial results for 31 December 2012. Due to this restatement, certain capital management information was restated.

PGRefer to pages 9 to 11 for the restatement of capital management information.

Economic capitalThe methodology for the calculation of credit and equity risk was amended in 2013 to more accurately allocate the underlying risk. The comparative financial information was subsequently restated.

PG Refer to page 12 for the restatement of economic capital

Credit risk – IFRS and Basel: Exposure by approach and class tableRestated due to the re-categorisation between loans and advances to or from customers and banks.

An early arrears restatement in card has been performed to reflect the consistent application of the credit quality of loans and advances measured in terms of IFRS.

PGRefer to pages 24 to 25 and pages 40 to 42 for the restatement of the IFRS credit risk table.

Country risk exposure by region and gradeThe total medium- and high-risk country risk exposure and total low-risk country risk exposures were erroneously transposed. The comparative results have accordingly been restated.

PG Refer to page 44 for the restatement of country risk.

Behaviourally adjusted cumulative liquidity mismatchRestated due to change in methodology as a result of the proposed Basel III liquidity ratios.

PGRefer to page 47 for the restatement of structural liquidity mismatch graph

Trading book VaR analysis by market variableThe commodities and debt securities amounts VaR were erroneously transposed. The comparative results have accordingly been restated.

PGRefer to page 53 for the restatement of the trading book VaR analysis.

64

Terms and conditions of capital instruments issued

Share capital

June2013

Rm

December2012

Rm

Authorised 2 000 000 000 (December 2012: 2 000 000 000) ordinary shares of 10 cents each 200 2008 000 000 (December 2012: 8 000 000) 6,5% first cumulative preference shares of R1 each 8 81 000 000 000 (December 2012: 1 000 000 000) non-redeemable, non-cumulative, non-participating preference shares of 1 cent each 10 10

218 218

Issued

Ordinary share capital

1 617 918 009 (December 2012: 1 606 135 826) ordinary shares of 10 cents each 162 161

Ordinary share premiumA premium of R120 million (December 2012: R357 million) was raised on the allotment and issue during the period of 2 417 069 ordinary shares (December 2012: 5 347 398). 18 051 17 931

During 2013 and 2012 the group declared a scrip distribution with a cash alternative. The scrip distribution was made from share premium and 10 281 204 (December 2012: 12 041 298) ordinary shares were issued. R1 million (December 2012: R1,2 million) was transferred from share premium to ordinary share capital.

During 2013 there was a share buyback of 916 090 shares by the group. R91 609 was reduced from ordinary share capital and the remainder from retained earnings.

Preference share capital and premium 5 503 5 503

8 000 000 (December 2012: 8 000 000) 6,5% first cumulative preference shares of R1 each – first preference shares 8 852 982 248 (December 2012: 52 982 248) non-redeemable, non-cumulative non-participating preference shares of 1 cent each – second preference shares 1 1Preference share premium – non-redeemable, non-cumulative, non-participating preference shares – second preference shares 5 494 5 494

The non-redeemable, non-cumulative, non-participating preference shares are entitled to an annual dividend, if declared, payable in two semi-annual instalments of not less than 77% of the prime interest rate multiplied by the subscription price of R100 per share.

All classes of preference shares in issue are non-redeemable.

23 716 23 595

Additional information

Capital management




Overview

65

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Terms and conditions of capital instruments issued/Annexure A

June 2013

Basel III Rm

Amountssubject to

pre-Basel IItreatment

Rm

CET I capital 87 603

Instruments and reservesCET I capital before regulatory adjustments 111 998

Directly issued qualifying common share capital plus related stock surplus 18 213Retained earnings 84 989Accumulated other comprehensive income (and other reserves) 5 458Directly issued capital subject to phase out from CET I (only applicable to non-joint stock companies)

Public sector capital injections grandfathered until 1 January 2018Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET I) 3 338

Regulatory adjustmentsLess: total regulatory adjustments to CET I 24 395

Prudential valuation adjustmentsGoodwill (net of related tax liability) 3 523Other intangibles other than mortgage-servicing rights (net of related tax liability) 11 887Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) 179Cash-flow hedge reserve (452)Shortfall of provisions to expected losses 2 588Securitisation gain on saleGains and losses due to changes in own credit risk on fair valued liabilities 923Defined-benefit pension fund net assets 1 222Investments in own shares (if not already netted of paid-in capital on reported balance sheet)Reciprocal cross-holdings in common equityInvestments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold) 4 525Mortgage servicing rights (amount above 10% threshold)Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability)

Amount exceeding the 15% threshold, relating to:Significant investments in the common stock of financialsMortgage servicing rights

Deferred tax assets arising from temporary differences

National specific regulatory adjustmentsRegulatory adjustments applied to CET I in respect of amounts subject to pre-Basel III treatmentRegulatory adjustments applied to CET I due to insufficient additional tier I and tier II to cover deductions

1 Disclosure based on prescribed SARB template. All blank line items are not applicable as at 30 June 2013.

Annexure A – composition of capital – SBG1

66

June 2013

Basel III Rm

Amountssubject to


Rm

Additional tier I capital 4 945

InstrumentsAdditional tier I capital before regulatory adjustments 4 945

Directly issued qualifying additional tier I instruments plus related stock surplus, classified as: 4 945

Equity under applicable accounting standards 4 945Liabilities under applicable accounting standards

Directly issued capital instruments subject to phase out from additional tier I 5 495

Additional tier I instruments (and CET I instruments not included in common share capital) issued by subsidiaries and held by third parties (amount allowed in group additional tier I), including:Instruments issued by subsidiaries subject to phase out

Regulatory adjustmentsTotal regulatory adjustments to additional tier I capitalInvestments in own additional tier I instrumentsReciprocal cross-holdings in additional tier I instrumentsInvestments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold)National specific regulatory adjustments:

Regulatory adjustments applied to CET I in respect of amounts subject to pre-Basel III treatment

Regulatory adjustments applied to additional tier I due to insufficient additional tier I due to insufficient tier II to cover deductions

Tier I capital 92 548

Capital and provisionsTier II capital before regulatory adjustments 25 709

Directly issued qualifying tier II instruments plus related stock surplusDirectly issued capital instruments subject to phase out from tier IITier II instruments (and CET I and additional tier I instruments not included in common share capital and additional tier I instruments) issued by subsidiaries and held by third parties (amount allowed in group tier II), including: 24 902

Instruments issued by subsidiaries subject to phase out 28 191

Provisions 807

Regulatory adjustmentsTotal regulatory adjustments to tier II capitalInvestments in own tier II instrumentsReciprocal cross-holdings in tier II instrumentsInvestments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions)National specific regulatory adjustmentsRegulatory adjustments applied to tier II in respect of amounts subject to pre-Basel III treatment

Tier II capital 25 709

Total capital 118 257

Annexure A – composition of capital – SBG continued

Capital management




Overview

67

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Annexure A

June 2013

Basel III Rm

Amountssubject to


Rm

Total risk-weighted assets 851 545

Risk-weighted assets in respect of amounts subject to pre-Basel III treatment

Capital ratios and buffersCET I (as a percentage of risk-weighted assets) % 10.3Tier I (as a percentage of risk-weighted assets) % 10.9Total capital (as a percentage of risk-weighted assets) % 13.9Institution specific buffer requirement (minimum CET I requirement plus capital conservation buffer plus countercyclical buffer requirements plus global systemically important banks (G-SIB) buffer requirement, expressed as a percentage of risk-weighted assets) % 7.0

Capital conservation buffer requirement % 2.5Bank specific countercyclical buffer requirement %G-SIB buffer requirement %

Common equity tier I available to meet buffers (as a percentage of risk-weighted assets) % 9.4

National minima (if different from Basel III)National CET I minimum ratio (if different from Basel III minimum) – excluding individual capital requirement (ICR) and domestic systemically important banks (D-SIB) % 3.5National tier I minimum ratio (if different from Basel III minimum) – excluding ICR and D-SIB % 4.5National total capital minimum ratio (if different from Basel III minimum) – excluding ICR and D-SIB % 8.0

Amounts below the threshold for deductions (before risk weighting)Non-significant investments in the capital of other financials 849Significant investments in the common stock of financials 9 213Mortgage servicing rights (net of related tax liability)Deferred tax assets arising from temporary differences (net of related tax liability) 368

Applicable caps on the on the inclusion of provisions in tier IIProvisions eligible for inclusion in tier II in respect of exposures subject to standardised approach (prior to application of cap) 5 618Cap on inclusion of provisions in tier II under standardised approach 3 372Provisions eligible for inclusion in tier II in respect of exposures subject to internal ratings-based approach (prior to application of cap)Cap for inclusion of provisions in tier II under internal ratings-based approach 3 294

Capital instruments subject to phase-out arrangements (only applicable between 1 January 2018 and 1 January 2022)Current cap on CET I instruments subject to phase out arrangementsAmount excluded from CET I due to cap (excess over cap after redemptions and maturities)Current cap on additional tier I instruments subject to phase out arrangements 4 945Amount excluded from additional tier I due to cap (excess over cap after redemptions and maturities) 550Current cap on tier II instruments subject to phase out arrangements 25 681Amount excluded from tier II due to cap (excess over cap after redemptions and maturities) 2 147

68

Annexure A – composition of capital – SBSA1

Capital management




Overview

June 2013

Basel III Rm

Amountssubject to


Rm

CET I capital 49 710

Instruments and reservesCET I capital before regulatory adjustments 65 647

Directly issued qualifying common share capital plus related stock surplus 35 256Retained earnings 29 966Accumulated other comprehensive income (and other reserves) 425Directly issued capital subject to phase out from CET I (only applicable to non-joint stock companies)

Public sector capital injections grandfathered until 1 January 2018Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET I)

Regulatory adjustmentsLess: total regulatory adjustments to CET I 15 937

Prudential valuation adjustmentsGoodwill (net of related tax liability) 40Other intangibles other than mortgage-servicing rights (net of related tax liability) 11 303Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability)Cash-flow hedge reserve (22)Shortfall of provisions to expected losses 2 713Securitisation gain on saleGains and losses due to changes in own credit risk on fair valued liabilities 681Defined-benefit pension fund net assets 1 222Investments in own shares (if not already netted of paid-in capital on reported balance sheet)Reciprocal cross-holdings in common equityInvestments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold)Mortgage servicing rights (amount above 10% threshold)Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability)

Amount exceeding the 15% threshold, relating to:Significant investments in the common stock of financialsMortgage servicing rights

Deferred tax assets arising from temporary differences

National specific regulatory adjustmentsRegulatory adjustments applied to CET I in respect of amounts subject to pre-Basel III treatment

Regulatory adjustments applied to CET I due to insufficient additional tier I and tier II to cover deductions

1 Disclosure based on prescribed SARB template. All blank line items are not applicable as at 30 June 2013.

69


June 2013

Basel III Rm

Amountssubject to


Rm

Additional tier I capital

InstrumentsAdditional tier I capital before regulatory adjustments

Directly issued qualifying additional tier I instruments plus related stock surplus, classified as:

Equity under applicable accounting standardsLiabilities under applicable accounting standards

Directly issued capital instruments subject to phase out from additional tier I

Additional tier I instruments (and CET I instruments not included in common share capital) issued by subsidiaries and held by third parties (amount allowed in group additional tier I), including:Instruments issued by subsidiaries subject to phase out

Regulatory adjustmentsTotal regulatory adjustments to additional tier I capitalInvestments in own additional tier I instrumentsReciprocal cross-holdings in additional tier I instrumentsInvestments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold)National specific regulatory adjustments:Regulatory adjustments applied to CET I in respect of amounts subject to pre-Basel III treatment

Regulatory adjustments applied to additional tier I due to insufficient additional tier I due to insufficient tier II to cover deductions

Tier I capital 49 710

70

Annexure A – composition of capital – SBSA continued

Capital management




Overview

June 2013

Basel III Rm

Amountssubject to


Rm

Capital and provisionsTier II capital before regulatory adjustments 19 564

Directly issued qualifying tier II instruments plus related stock surplus 19 395

Directly issued capital instruments subject to phase out from tier II 20 050

Tier II instruments (and CET I and additional tier I instruments not included in common share capital and additional tier I instruments) issued by subsidiaries and held by third parties (amount allowed in group tier II), including:

Instruments issued by subsidiaries subject to phase out

Provisions 169

Regulatory adjustmentsTotal regulatory adjustments to tier II capital 4 195

Investments in own tier II instrumentsReciprocal cross-holdings in tier II instrumentsInvestments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions)National specific regulatory adjustments 4 195

Regulatory adjustments applied to tier II in respect of amounts subject to pre-Basel III treatment

Tier II capital 15 369

Total capital 65 079

Total risk-weighted assets 513 654

Risk-weighted assets in respect of amounts subject to pre-Basel III treatment

71


June 2013

Basel III Rm

Amountssubject to


Rm

Capital ratios and buffersCET I (as a percentage of risk-weighted assets) % 9.7Tier I (as a percentage of risk-weighted assets) % 9.7Total capital (as a percentage of risk-weighted assets) % 12.7Institution specific buffer requirement (minimum CET I requirement plus capital conservation buffer plus countercyclical buffer requirements plus global systemically important banks (G-SIB) buffer requirement, expressed as a percentage of risk-weighted assets) % 7.0

Capital conservation buffer requirement % 2.5Bank specific countercyclical buffer requirement %G-SIB buffer requirement %

Common equity tier I available to meet buffers (as a percentage of risk-weighted assets) % 9.9

National minima (if different from Basel III)National CET I minimum ratio (if different from Basel III minimum) – excluding individual capital requirement (ICR) and domestic systemically important banks (D-SIB) % 3.5National tier I minimum ratio (if different from Basel III minimum) – excluding ICR and D-SIB % 4.5National total capital minimum ratio (if different from Basel III minimum) – excluding ICR and D-SIB % 8.0

Amounts below the threshold for deductions (before risk weighting)Non-significant investments in the capital of other financials 196Significant investments in the common stock of financials 1 611Mortgage servicing rights (net of related tax liability)Deferred tax assets arising from temporary differences (net of related tax liability)

Applicable caps on the on the inclusion of provisions in tier IIProvisions eligible for inclusion in tier II in respect of exposures subject to standardised approach (prior to application of cap) 169Cap on inclusion of provisions in tier II under standardised approach 248Provisions eligible for inclusion in tier II in respect of exposures subject to internal ratings-based approach (prior to application of cap)Cap for inclusion of provisions in tier II under internal ratings-based approach 2 172

Capital instruments subject to phase-out arrangements (only applicable between 1 January 2018 and 1 January 2022)Current cap on CET I instruments subject to phase out arrangementsAmount excluded from CET I due to cap (excess over cap after redemptions and maturities)Current cap on additional tier I instruments subject to phase out arrangementsAmount excluded from additional tier I due to cap (excess over cap after redemptions and maturities)Current cap on tier II instruments subject to phase out arrangements 20 050Amount excluded from tier II due to cap (excess over cap after redemptions and maturities) 655

72

Annexure B – main features disclosure template

Ordinary share capital (including

share premium)Subordinatedbond – SBK7

Subordinatedbond – SBK9

Subordinatedbond – SBKi11










share premium)

Cumulative preference

share capital

June 2013Issuer SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBG SBG

Unique identifier (eg CUSIP, ISIN or Bloomberg identifier for private placement) ZAG000024894 ZAG000029687 ZAG000066382 ZAG000073388 ZAG000073396 ZAG000091018 ZAG000092339 ZAG000093741 ZAG000097619 ZAG000100827 ZAG000100835

SBKZAE 000109815

SBKP ZAE000038881

Governing law(s) of the instrument SA SA SA SA SA SA SA SA SA SA SA SA SA SA

Regulatory treatment

Transitional Basel III rules N/A Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II N/A Tier II

Post-transitional Basel III rules CET I Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II CET I Tier II

Eligible at solo/group/group & solo Solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group Group

Instrument type (types to be specified by each jurisdiction)

Ordinary Sharecapital and

premium

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Ordinary Share capital and

premium

Preference share capital and share

premium

Amount recognised in regulatory capital (currency in Rm, as of most recent reporting date) ZAR 35 256 ZAR 3 000 ZAR 1 500 ZAR 1 800 ZAR 1 600 ZAR 1 150 ZAR 1 780 ZAR 1 220 ZAR 2 000 ZAR 2 000 ZAR 3 500 ZAR 500 ZAR 18 213 ZAR 8

Par value of instrument ZAR 1 ZAR 3 000 ZAR 1 500 ZAR 1 800 ZAR 1 600 ZAR 1 150 ZAR 1 780 ZAR 1 220 ZAR 2 000 ZAR 2 000 ZAR 3 500 ZAR 500 10c ZAR 1

Accounting classification Equityattributable to

ordinaryshareholders

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Equity attributable to

ordinary shareholders


premium

Original date of issuance Ongoing 2005/05/24 2006/04/10 2009/04/09 2009/11/24 2009/11/24 2011/12/01 2012/01/23 2012/03/15 2012/07/30 2012/10/24 2012/10/24 Ongoing 1969/11/25

Perpetual or dated Perpetual Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Perpetual Perpetual

Original maturity date N/A 2020/05/24 2023/04/10 2019/04/09 2021/11/24 2021/11/24 2022/12/01 2022/01/23 2023/03/15 2024/07/30 2025/10/24 2024/10/24 N/A N/A

Issuer call subject to prior supervisory approval No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No

Optional call date, contingent call dates and redemption amount (currency in Rm)

N/A 2015/05/24 ZAR 3 000

2018/04/10 ZAR 1 500

2014/04/10 ZAR 1 800

2016/11/24 ZAR 1 600

2016/11/24 ZAR 1 150

2017/12/01 ZAR 1 780

2017/01/23 ZAR 1 220

2018/03/15 ZAR 2 000

2019/07/30 ZAR 2 000

2020/10/24 ZAR 3 500

2019/10/24 ZAR 500

N/A N/A

Subsequent call dates, if applicable N/A 2015/05/24 or any subsequent

interest payment date

2018/04/10 or any subsequent




N/A N/A 2017/12/01 or any subsequent


N/A N/A N/A N/A N/A N/A N/A

Coupons/dividends

Fixed or floating dividend/coupon N/A Fixed Fixed Floating Fixed Floating CPI indexed CPI indexed CPI indexed CPI indexed CPI indexed CPI indexed N/A Fixed

Coupon rate and any related index N/A 9.63% semi annual

8.40% semi annual

CPI indexed 10.82% semi annual

Jibar + 2.20 9.66% semi annual

Jibar + 2.00 Jibar + 2.10 Jibar + 2.20 Jibar + 2.35 Jibar + 2.20 N/A 6.50%

Existence of a dividend stopper No No No No No No No No No No No No No No

Fully discretionary, partially discretionary or mandatory

Full discretionary Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Full discretionary Full discretionary

Existence of step up or other incentive to redeem No Yes Yes Yes Yes Yes No No No No No No No No

Non-cumulative or cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Cumulative

Convertible or non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible

Write-down feature N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument)

Most subordinated Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Most subordinated

Tier II

Non-compliant transitioned features No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes

If yes, specify non-compliant features N/A Regulation 38(14)(a)(i)

Regulation 38(14)(a)(iv)(D)

Regulation 38(14)(a)(iv)(H)(ii)

Regulation 38(14)(a)(i)
























N/A No lossabsorbency

features at the point of on

non-viability

Carrying value (Rm)1

June 2013 35 256 3 032 1 528 2 290 1 618 1 159 1 794 1 236 2 005 2 025 3 551 507 18 213 8

December 2012 35 256 3 033 1 529 2 414 1 618 1 159 1 795 1 236 2 005 2 024 3 552 507 18 092 8

1 The difference between the carrying and notional value (where applicable) represents accrued interest together with the unamortised fair value adjustments relating to bonds hedged for interest rate risk.

Capital management




Overview

73

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Annexure B


share premium)Subordinatedbond – SBK7


Subordinatedbond – SBKi11










share premium)

Cumulative preference

share capital

June 2013Issuer SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBSA SBG SBG

Unique identifier (eg CUSIP, ISIN or Bloomberg identifier for private placement) ZAG000024894 ZAG000029687 ZAG000066382 ZAG000073388 ZAG000073396 ZAG000091018 ZAG000092339 ZAG000093741 ZAG000097619 ZAG000100827 ZAG000100835

SBKZAE 000109815

SBKP ZAE000038881

Governing law(s) of the instrument SA SA SA SA SA SA SA SA SA SA SA SA SA SA


Transitional Basel III rules N/A Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II N/A Tier II

Post-transitional Basel III rules CET I Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II CET I Tier II

Eligible at solo/group/group & solo Solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group Group


Ordinary Sharecapital and

premium

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Ordinary Share capital and

premium


premium

Amount recognised in regulatory capital (currency in Rm, as of most recent reporting date) ZAR 35 256 ZAR 3 000 ZAR 1 500 ZAR 1 800 ZAR 1 600 ZAR 1 150 ZAR 1 780 ZAR 1 220 ZAR 2 000 ZAR 2 000 ZAR 3 500 ZAR 500 ZAR 18 213 ZAR 8

Par value of instrument ZAR 1 ZAR 3 000 ZAR 1 500 ZAR 1 800 ZAR 1 600 ZAR 1 150 ZAR 1 780 ZAR 1 220 ZAR 2 000 ZAR 2 000 ZAR 3 500 ZAR 500 10c ZAR 1

Accounting classification Equityattributable to

ordinaryshareholders

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Equity attributable to

ordinary shareholders


premium

Original date of issuance Ongoing 2005/05/24 2006/04/10 2009/04/09 2009/11/24 2009/11/24 2011/12/01 2012/01/23 2012/03/15 2012/07/30 2012/10/24 2012/10/24 Ongoing 1969/11/25

Perpetual or dated Perpetual Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Perpetual Perpetual

Original maturity date N/A 2020/05/24 2023/04/10 2019/04/09 2021/11/24 2021/11/24 2022/12/01 2022/01/23 2023/03/15 2024/07/30 2025/10/24 2024/10/24 N/A N/A

Issuer call subject to prior supervisory approval No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No


N/A 2015/05/24 ZAR 3 000

2018/04/10 ZAR 1 500

2014/04/10 ZAR 1 800

2016/11/24 ZAR 1 600

2016/11/24 ZAR 1 150

2017/12/01 ZAR 1 780

2017/01/23 ZAR 1 220

2018/03/15 ZAR 2 000

2019/07/30 ZAR 2 000

2020/10/24 ZAR 3 500

2019/10/24 ZAR 500

N/A N/A

Subsequent call dates, if applicable N/A 2015/05/24 or any subsequent






N/A N/A 2017/12/01 or any subsequent


N/A N/A N/A N/A N/A N/A N/A

Coupons/dividends

Fixed or floating dividend/coupon N/A Fixed Fixed Floating Fixed Floating CPI indexed CPI indexed CPI indexed CPI indexed CPI indexed CPI indexed N/A Fixed

Coupon rate and any related index N/A 9.63% semi annual

8.40% semi annual

CPI indexed 10.82% semi annual

Jibar + 2.20 9.66% semi annual

Jibar + 2.00 Jibar + 2.10 Jibar + 2.20 Jibar + 2.35 Jibar + 2.20 N/A 6.50%



Full discretionary Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Full discretionary Full discretionary

Existence of step up or other incentive to redeem No Yes Yes Yes Yes Yes No No No No No No No No

Non-cumulative or cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Cumulative




Most subordinated Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Most subordinated

Tier II

Non-compliant transitioned features No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes

If yes, specify non-compliant features N/A Regulation 38(14)(a)(i)



























N/A No lossabsorbency


non-viability


June 2013 35 256 3 032 1 528 2 290 1 618 1 159 1 794 1 236 2 005 2 025 3 551 507 18 213 8

December 2012 35 256 3 033 1 529 2 414 1 618 1 159 1 795 1 236 2 005 2 024 3 552 507 18 092 8


74

Non-cumulative preference

share capital

Subordinated bond – Standard

Bank Swaziland 1


Bank Swaziland 2

Subordinated bond – Stanbic

Bank Botswana 1


Bank Botswana 2


Bank Botswana 3


Bank Botswana 4


Bank Botswana 5


Bank Mozambique

Subordinated bond – CfC

Stanbic Bank Kenya 2






Bank Uganda

Subordinated bond – Stanbic Bank Ghana 1

June 2013Issuer SBG Standard Bank

Swaziland LimitedStandard Bank

Swaziland LimitedStanbic Bank

Botswana LimitedStanbic Bank




Botswana LimitedStandard Bank

MozambiqueCFC Stanbic Bank

LimitedCFC Stanbic Bank


LimitedStanbic Bank

UgandaStanbic Bank

Ghana Limited

Unique identifier (eg CUSIP, ISIN or Bloomberg identifier for private placement)

SBPP ZAE000056339 SZD000551242 SZD000551242 BW0000001031 SBBL046 SBBL049 SBBL052 SBBL057 SBM-2007 KE2000002143 KE1000001684 KE1000001672 UG0000000661 IFC

Governing law(s) of the instrument SA Swaziland Swaziland Botswana Botswana Botswana Botswana Botswana Mozambique Kenya Kenya Kenya Uganda Ghana


Transitional Basel III rules Additional tier I Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Post-transitional Basel III rules Additional tier I Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Eligible at solo/group/group & solo Group Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo



premium

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Amount recognised in regulatory capital (currency in Rm, as of most recent reporting date)

ZAR 5 495

ZAR 30E 30

ZAR 50E 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 93BWP 80

ZAR 87MT 260

ZAR 290KES 2 500

ZAR 279KES 2 402

ZAR 11KES 98

ZAR 116UGX 30 000

ZAR 34GHS 7

Par value of instrument 1 c ZAR 30E 30

ZAR 50E 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 93BWP 80

ZAR 87MT 260

ZAR 290KES 2 500

ZAR 279KES 2 402

ZAR 11KES 98

ZAR 116UGX 30 000

ZAR 34GHS 7

Accounting classification Preference share capital and share

premium

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Original date of issuance 2004/07/07,2006/05/23,2006/08/12

2009/12/14 2010/10/14 2011/06/13 2008/06/11 2008/08/13 2008/12/17 2012/05/23 2007/06/29 2010/12/24 2009/07/07 2009/07/07 2009/08/10 2012/01/23

Perpetual or dated Perpetual Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated

Original maturity date N/A 2019/12/14 2020/10/14 2021/06/13 2018/06/11 2018/08/13 2018/12/17 2022/05/23 2017/06/29 2014/12/22 2016/07/07 2016/07/07 2016/08/10 2022/01/23

Issuer call subject to prior supervisory approval No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes


N/A 2014/12/14ZAR 30

2015/10/14ZAR 50

2016/06/13ZAR 58

2013/06/11ZAR 58

2013/08/13ZAR 58

2013/12/17ZAR 58

2017/05/23ZAR 93

2012/06/29ZAR 87

N/AZAR 290

2014/07/07ZAR 279

2014/07/07ZAR 11

N/AZAR 116

2017/01/23ZAR 34

Subsequent call dates, if applicable N/A On or after 14 December 2014

On or after 14 October 2015

On or after 13 June 2016


On or after 13 August 2013

On or after 17 December 2013

On or after 23 May 2017

N/A N/A 2014/07/08 2014/07/08 2014/08/11 23 January 2017 or any interest payment date

thereafter

Coupons/dividends .

Fixed or floating dividend/coupon Floating Fixed Fixed Fixed margin linked to a

floating base rate

Fixed margin linked to a

floating base rate


floating base rate


floating base rate


floating base rate


floating base rate

Fixed Fixed Fixed margin linked to a

floating base rate


floating base rate

Fixed

Coupon rate and any related index 77% of prime interest rate

8.7% 8.1% 91 Day BoBC +130bps

BoBC +20bps BoBC +50bps BoBC +60bps 91 Day BoBC +150bps

WA +50bps 7.25% 12.5% 182 day T-bill +175bps

14.5% and T-bill +150bps

11.25%



Full discretionary Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory

Existence of step up or other incentive to redeem No Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes No Yes

Non-cumulative or cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative Non-cumulative




Tier II Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors

Non-compliant transitioned features Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

If yes, specify non-compliant features No loss absorbency


non-viability







































June 2013 5 494 30 50 58 58 58 58 93 87 290 279 11 116 34

December 2012 5 494 30 50 55 55 55 55 86 74 246 237 9 95 34


Annexure B – main features disclosure template continued

Capital management




Overview

75


Non-cumulative preference

share capital


Bank Swaziland 1


Bank Swaziland 2


Bank Botswana 1


Bank Botswana 2


Bank Botswana 3


Bank Botswana 4


Bank Botswana 5


Bank Mozambique








Bank Uganda

Subordinated bond – Stanbic Bank Ghana 1

June 2013Issuer SBG Standard Bank

Swaziland LimitedStandard Bank

Swaziland LimitedStanbic Bank





Botswana LimitedStandard Bank

MozambiqueCFC Stanbic Bank



LimitedStanbic Bank

UgandaStanbic Bank

Ghana Limited


SBPP ZAE000056339 SZD000551242 SZD000551242 BW0000001031 SBBL046 SBBL049 SBBL052 SBBL057 SBM-2007 KE2000002143 KE1000001684 KE1000001672 UG0000000661 IFC

Governing law(s) of the instrument SA Swaziland Swaziland Botswana Botswana Botswana Botswana Botswana Mozambique Kenya Kenya Kenya Uganda Ghana


Transitional Basel III rules Additional tier I Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Post-transitional Basel III rules Additional tier I Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Eligible at solo/group/group & solo Group Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo Group & solo



premium

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt


ZAR 5 495

ZAR 30E 30

ZAR 50E 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 93BWP 80

ZAR 87MT 260

ZAR 290KES 2 500

ZAR 279KES 2 402

ZAR 11KES 98

ZAR 116UGX 30 000

ZAR 34GHS 7

Par value of instrument 1 c ZAR 30E 30

ZAR 50E 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 58BWP 50

ZAR 93BWP 80

ZAR 87MT 260

ZAR 290KES 2 500

ZAR 279KES 2 402

ZAR 11KES 98

ZAR 116UGX 30 000

ZAR 34GHS 7

Accounting classification Preference share capital and share

premium

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinateddebt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Original date of issuance 2004/07/07,2006/05/23,2006/08/12

2009/12/14 2010/10/14 2011/06/13 2008/06/11 2008/08/13 2008/12/17 2012/05/23 2007/06/29 2010/12/24 2009/07/07 2009/07/07 2009/08/10 2012/01/23

Perpetual or dated Perpetual Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated

Original maturity date N/A 2019/12/14 2020/10/14 2021/06/13 2018/06/11 2018/08/13 2018/12/17 2022/05/23 2017/06/29 2014/12/22 2016/07/07 2016/07/07 2016/08/10 2022/01/23

Issuer call subject to prior supervisory approval No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes


N/A 2014/12/14ZAR 30

2015/10/14ZAR 50

2016/06/13ZAR 58

2013/06/11ZAR 58

2013/08/13ZAR 58

2013/12/17ZAR 58

2017/05/23ZAR 93

2012/06/29ZAR 87

N/AZAR 290

2014/07/07ZAR 279

2014/07/07ZAR 11

N/AZAR 116

2017/01/23ZAR 34

Subsequent call dates, if applicable N/A On or after 14 December 2014

On or after 14 October 2015



On or after 13 August 2013

On or after 17 December 2013

On or after 23 May 2017

N/A N/A 2014/07/08 2014/07/08 2014/08/11 23 January 2017 or any interest payment date

thereafter

Coupons/dividends .

Fixed or floating dividend/coupon Floating Fixed Fixed Fixed margin linked to a

floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate

Fixed Fixed Fixed margin linked to a

floating base rate


floating base rate

Fixed

Coupon rate and any related index 77% of prime interest rate

8.7% 8.1% 91 Day BoBC +130bps

BoBC +20bps BoBC +50bps BoBC +60bps 91 Day BoBC +150bps

WA +50bps 7.25% 12.5% 182 day T-bill +175bps

14.5% and T-bill +150bps

11.25%



Full discretionary Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory

Existence of step up or other incentive to redeem No Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes No Yes





Tier II Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors Depositors


If yes, specify non-compliant features No loss absorbency


non-viability







































June 2013 5 494 30 50 58 58 58 58 93 87 290 279 11 116 34

December 2012 5 494 30 50 55 55 55 55 86 74 246 237 9 95 34


76

Subordinated loan – Stanbic Bank

Ghana 2


DRC

Subordinated loan – Standard Bank

Mauritius


Mauritius


Tanzania

Subordinated loan – Stanbic Bank Uganda

Subordinated loan – Standard

Bank Angola

Subordinated loan – Stanbic

Bank IBTC

Subordinated loan – CFC

Stanbic Bank Kenya


Bank Zambia


BankPlc 1


BankPlc 2


BankPlc 3


BankPlc 4

June 2013Issuer Stanbic Bank

Ghana LimitedStanbic Bank DRC Standard Bank

MauritiusStandard Bank


TanzaniaStanbic Bank

UgandaStandard Bank

AngolaStanbic Bank

IBTCCFC Stanbic Bank

LimitedStandard Bank

ZambiaSB Plc SB Plc SB Plc SB Plc


IFC IFC IFC Standard Bank South Africa

Standard Bank South Africa

SAHL Standard Bank South Africa


IFC Standard Bank South Africa

BXS0262708554 BXS0470473231 BXS0471463561 BXS0471654409

Governing law(s) of the instrument Ghana DRC Mauritius Mauritius Tanzania Uganda Angola Nigeria Kenya Zambia UK UK UK UK


Transitional Basel III rules Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Post-transitional Basel III rules Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Eligible at solo/group/group & solo Group & solo Group & solo Group & solo Solo Solo Solo Solo Solo Group & solo Solo Group & solo Group & solo Solo Group & solo


Subordinatedloan

Subordinatedloan

Subordinatedloan

Subordinatedloan

Subordinatedloan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt


ZAR 50USD 5

ZAR 30USD 3

ZAR 199USD 20

ZAR 249USD 25

ZAR 50TZS 8 233

ZAR 70UGX 18 263

ZAR 298AOA 2 890

ZAR 397NGN 6 482

ZAR 99USD 10

ZAR 151ZMW 83

ZAR 1 409USD 142

ZAR 4 970USD 500

ZAR 2 982USD 300

ZAR 249USD 25

Par value of instrument ZAR 50USD 5

ZAR 30USD 3

ZAR 199USD 20

ZAR 249USD 25

ZAR 50TZS 8 233

ZAR 70UGX 18 263

ZAR 298AOA 2 890

ZAR 397NGN 6 482

ZAR 99USD 10

ZAR 151ZMW 83

ZAR 1 409USD 142

ZAR 4 970USD 500

ZAR 2 982USD 300

ZAR 249USD 25

Accounting classification Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Original date of issuance 2010/03/29 2008/12/15 2008/11/17 2012/12/03 2011/12/15 2011/10/31 2013/05/23 2013/04/30 2009/06/19 2011/12/13 2006/07/27 2009/12/02 2009/12/02 2009/12/03

Perpetual or dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Perpetual Dated Dated Dated

Original maturity date 2018/03/29 2018/12/15 2018/09/17 2022/12/04 2021/12/15 2021/10/31 2023/04/23 2025/10/31 2019/06/15 2021/12/13 N/A 2019/12/02 2019/12/02 2019/12/03

Issuer call subject to prior supervisory approval Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes N/A Yes Yes


2015/03/29ZAR 50

2013/12/15ZAR 30

2013/09/17ZAR 199

2017/12/04ZAR 249

2016/12/15ZAR 50

2016/10/31ZAR 70

2018/04/23ZAR 298

2020/05/31ZAR 397

2014/06/15ZAR 99

2016/12/13ZAR 151

2016/07/27ZAR 1 409

N/A 2016/12/02ZAR 2 982

2014/12/03ZAR 249

Subsequent call dates, if applicable 29 March 2015 or any interest date

thereafter

15 December 2013 or any interest date

thereafter

17 September 2013 or any interest date

thereafter

5 December 2017 or any interest date thereafter


thereafter

1 November 2016 or any interest date

thereafter

24 April 2018 or any interest date

thereafter


thereafter

16 June 2014 or any interest date

thereafter


thereafter

any interest payment date

after 27/07/2016

N/A any interest payment date

after 02/12/2014


after 03/12/2014

Coupons/dividends

Fixed or floating dividend/coupon Fixed margin linked to a

floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate

Fixed until 27/07/2016 then floating

Fixed Floating Fixed

Coupon rate and any related index LIBOR + 325bps LIBOR + 375bps LIBOR + 175bps LIBOR + 300bps LIBOR + 395bps LIBOR + 376bps LIBOR + 360bps LIBOR + 360bps LIBOR + 400bps LIBOR + 385bps 8.012% per annum until

27/07/2016 then 3 month Libor +3.25%

8.125% per annum

3mth Libor + 4% per annum until

02/12/2014 then 3 month

Libor +4.5%

8% per annum until 3/12/2014

then 8.5% until maturity



Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory

Existence of step up or other incentive to redeem Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes





Depositors Depositors Depositors Senior debt Senior debt Senior debt Senior debt Senior debt Depositors Senior debt Depositors Depositors Depositors Depositors


If yes, specify non-compliant features Regulation 38(14)(a)(i)






























Recital 27 of the Capital

Requirements Regulation (CRR)

Recital 27of the CRR




June 2013 50 30 199 249 50 70 298 397 99 151 1 511 5 408 2 982 249

December 2012 45 26 170 212 43 60 85 128 1 246 4 849 2 544 212


Annexure B – main features disclosure template continued

Capital management




Overview

77



Ghana 2


DRC


Mauritius


Mauritius


Tanzania

Subordinated loan – Stanbic Bank Uganda


Bank Angola

Subordinated loan – Stanbic

Bank IBTC

Subordinated loan – CFC

Stanbic Bank Kenya


Bank Zambia


BankPlc 1


BankPlc 2


BankPlc 3


BankPlc 4

June 2013Issuer Stanbic Bank

Ghana LimitedStanbic Bank DRC Standard Bank



TanzaniaStanbic Bank

UgandaStandard Bank

AngolaStanbic Bank

IBTCCFC Stanbic Bank

LimitedStandard Bank

ZambiaSB Plc SB Plc SB Plc SB Plc


IFC IFC IFC Standard Bank South Africa


SAHL Standard Bank South Africa


IFC Standard Bank South Africa

BXS0262708554 BXS0470473231 BXS0471463561 BXS0471654409

Governing law(s) of the instrument Ghana DRC Mauritius Mauritius Tanzania Uganda Angola Nigeria Kenya Zambia UK UK UK UK


Transitional Basel III rules Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Post-transitional Basel III rules Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II Tier II

Eligible at solo/group/group & solo Group & solo Group & solo Group & solo Solo Solo Solo Solo Solo Group & solo Solo Group & solo Group & solo Solo Group & solo


Subordinatedloan

Subordinatedloan

Subordinatedloan

Subordinatedloan

Subordinatedloan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt


ZAR 50USD 5

ZAR 30USD 3

ZAR 199USD 20

ZAR 249USD 25

ZAR 50TZS 8 233

ZAR 70UGX 18 263

ZAR 298AOA 2 890

ZAR 397NGN 6 482

ZAR 99USD 10

ZAR 151ZMW 83

ZAR 1 409USD 142

ZAR 4 970USD 500

ZAR 2 982USD 300

ZAR 249USD 25

Par value of instrument ZAR 50USD 5

ZAR 30USD 3

ZAR 199USD 20

ZAR 249USD 25

ZAR 50TZS 8 233

ZAR 70UGX 18 263

ZAR 298AOA 2 890

ZAR 397NGN 6 482

ZAR 99USD 10

ZAR 151ZMW 83

ZAR 1 409USD 142

ZAR 4 970USD 500

ZAR 2 982USD 300

ZAR 249USD 25

Accounting classification Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated loan

Subordinated debt

Subordinated debt

Subordinated debt

Subordinated debt

Original date of issuance 2010/03/29 2008/12/15 2008/11/17 2012/12/03 2011/12/15 2011/10/31 2013/05/23 2013/04/30 2009/06/19 2011/12/13 2006/07/27 2009/12/02 2009/12/02 2009/12/03

Perpetual or dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Dated Perpetual Dated Dated Dated

Original maturity date 2018/03/29 2018/12/15 2018/09/17 2022/12/04 2021/12/15 2021/10/31 2023/04/23 2025/10/31 2019/06/15 2021/12/13 N/A 2019/12/02 2019/12/02 2019/12/03

Issuer call subject to prior supervisory approval Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes N/A Yes Yes


2015/03/29ZAR 50

2013/12/15ZAR 30

2013/09/17ZAR 199

2017/12/04ZAR 249

2016/12/15ZAR 50

2016/10/31ZAR 70

2018/04/23ZAR 298

2020/05/31ZAR 397

2014/06/15ZAR 99

2016/12/13ZAR 151

2016/07/27ZAR 1 409

N/A 2016/12/02ZAR 2 982

2014/12/03ZAR 249

Subsequent call dates, if applicable 29 March 2015 or any interest date

thereafter


thereafter

17 September 2013 or any interest date

thereafter

5 December 2017 or any interest date thereafter


thereafter


thereafter

24 April 2018 or any interest date

thereafter


thereafter

16 June 2014 or any interest date

thereafter


thereafter


after 27/07/2016

N/A any interest payment date

after 02/12/2014


after 03/12/2014

Coupons/dividends

Fixed or floating dividend/coupon Fixed margin linked to a

floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate


floating base rate

Fixed until 27/07/2016 then floating

Fixed Floating Fixed

Coupon rate and any related index LIBOR + 325bps LIBOR + 375bps LIBOR + 175bps LIBOR + 300bps LIBOR + 395bps LIBOR + 376bps LIBOR + 360bps LIBOR + 360bps LIBOR + 400bps LIBOR + 385bps 8.012% per annum until

27/07/2016 then 3 month Libor +3.25%

8.125% per annum

3mth Libor + 4% per annum until

02/12/2014 then 3 month

Libor +4.5%

8% per annum until 3/12/2014

then 8.5% until maturity



Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory

Existence of step up or other incentive to redeem Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes





Depositors Depositors Depositors Senior debt Senior debt Senior debt Senior debt Senior debt Depositors Senior debt Depositors Depositors Depositors Depositors


If yes, specify non-compliant features Regulation 38(14)(a)(i)






























Recital 27 of the Capital

Requirements Regulation (CRR)





June 2013 50 30 199 249 50 70 298 397 99 151 1 511 5 408 2 982 249

December 2012 45 26 170 212 43 60 85 128 1 246 4 849 2 544 212


78

Acronyms and abbreviations

A

AIRB Advanced internal ratings-basedALCO Asset and liability committeeAMA Advanced measurement approachAOA Angolan kwanza

B

Banks Act South African Banks Act 94 of 1990Basel Basel Capital AccordBasel III Basel III: A global regulatory framework for

more resilient banks and banking systemsBCBS Basel Committee on Banking SupervisionBEE Black economic empowermentBoard Standard Bank Group Board of Directorsbps Basis pointsBWP Botswana pula

C

CCP Central counterpartyCET I Common equity tier ICIB Corporate & Investment BankingCoE Cost of equityCPI Consumer price indexCR Country risk gradeCRO Chief risk officer

D

D-SIB Domestic systemically important bank

E

E Swazi emalangeniEAD Exposure at default

F

FCC Financial crime controlFIRB Foundation internal ratings-based

G

GAC Group audit committeeGBP British pound sterlingGCCO Group chief compliance officerGHS Ghana cediGIC Group insurance committeeGRCMC Group risk and capital management

committeeGROC Group risk oversight committeeG-SIB Global systemically important bank

I

IA Internal auditICAAP Internal capital adequacy assessment processICR Individual capital requirementIFRS International Financial Reporting StandardsIRB Internal ratings-basedIRRBB Interest rate risk in the banking bookISDA International Swaps and Derivatives AssociationIT Information technology

J

JIBAR Johannesburg Interbank Agreed Rate

K

KES Kenyan shilling

L

LCm Millions of local currencyLCR Liquidity coverage ratioLGD Loss given defaultLiberty Group Liberty Holdings Limited and its subsidiariesLIBOR London Interbank Offered RateLong-Term Insurance Act

South African Long-term Insurance Act 52 of 1998

M

MT Mozambican metical

N

NGN Nigerian nairaNSFR Net stable funding ratio

O

OCI Other comprehensive incomeOTC Over-the-counter

P

PBB Personal & Business BankingPD Probability of default

Q

QRRE Qualifying revolving retail exposures

R

R South African randRAPM Risk-adjusted performance measurementRAS Risk appetite statementRbn Billions of randRm Millions of randROE Return on equity

Capital management




Overview

79

Standard Bank Group Risk and capital management report for the six months ended 30 June 2013 > Acronyms and abbreviations

S

SAM Solvency assessment and managementSARB South African Reserve BankSBG Standard Bank GroupSBSA The Standard Bank of South Africa LimitedSPE Special purpose entity

T

T-bill Treasury billTCM Treasury and capital managementThe group Standard Bank GroupTier I Primary capitalTier II Secondary capitalTier III Tertiary capitalTutuwa Black economic empowerment ownership

initiativeTZS Tanzanian shilling

U

UK United KingdomUSD United States dollarUGX Ugandan shilling

V

VaR Value-at-risk

Z

ZAR South African randZMW Zambian kwacha

80

Capital management




Overview

Contact details

Standard Bank Group LimitedRegistration No. 1969/017128/06

Incorporated in the Republic of South Africa

Website: www.standardbank.com

Head: Investor relationsDavid KinseyTel: +27 11 631 3931

Group financial directorSimon RidleyTel: +27 11 636 3756

Group chief risk officerPaul SmithTel: +27 11 636 1904

Group secretaryZola StephenTel: +27 11 631 9106

Registered address9th FloorStandard Bank Centre5 Simmonds StreetJohannesburg 2001PO Box 7725Johannesburg 2000

Head office switch boardTel: +27 11 636 9111

Transfer secretaries in South AfricaComputershare Investor Services (Pty) LimitedGround floor, 70 Marshall StreetJohannesburg 2001PO Box 61051Marshalltown, 2107

Transfer secretaries in NamibiaTransfer Secretaries (Pty) Limited4 Robert Mugabe Avenue,(Entrance in Burg Street),WindhoekPO Box 2401Windhoek

Website: www.standardbank.com

Please direct all customer related queries and comments to:[email protected]

Please direct all shareholder queries and comments to:[email protected]

www.standardbank.com

standard bank group - the vault 1 standard bank group risk and capital management report for the six...

Documents