financial results presentation 2018 - thevault.exchange roe credit loss ratio jaws 16,8 16,2 1h18...

FINANCIAL RESULTS

PRESENTATION1H19

Standard Bank Group

HIGHLIGHTS1H19

We measure our progress using five strategic value drivers

Group Purposethe reason we exist

Group Visionwhat we aspire to be

Africa is our home, we drive her growth

To be the leading financial services organisation in, for and across Africa, delivering

exceptional client experiences and superior value

In executing our group strategy our key focus areas are

Digitisation

Integration

Client centricityDeliver exceptional client

experiences

Leverage our digital platforms

Deliver Standard Bank Group

SEE = Social, economic and environmental

STRATEGIC FOCUS IS UNCHANGED

3

STANDARD BANK GROUP

ROE CREDIT LOSS RATIO JAWS

16,8

16,2

1H18

1H19

%

62

76

1H18

1H19

bps

(276)

109

1H18

1H19

bps

GROUP HEADLINE

EARNINGS

1H19: R13.4bn

1H18: R12.7bn+6%

BANKING HEADLINE

EARNINGS

1H19: R12.8bn

1H18: R11.7bn

+10%

DIVIDEND

PER SHARE

1H19: 454 cents

1H18: 430 cents+6%

4

STRONG UNDERLYING MOMENTUM IN OUR CORE OPERATIONS

OVERVIEW OF RESULTS

5

Delivering

valuable,

integrated, digital

solutions to our

clients

Shaping

a future-ready

workforce

Doing the right

business, the

right way

Achieving our

medium-term

financial targets

Driving long-term

sustainability by

delivering on the

group’s purpose

Adapting to changes in client behaviour and expectations, regulation and the broader financial services landscape,

including our existing, emerging and future competition

DELIBERATE ALLOCATION OF RESOURCES TO DELIVER A FUTURE-READY GROUP

MEASURING OUR STRATEGIC PROGRESS

FOCUSCLIENT

Shifting customer behaviour

Delivering what matters

Delivering value to

customers

Banking the client

ecosystems

Facilitating China-Africa

banking

Partnerships

7

MobyCash was

awarded Most

Innovative Cash

Management

Solution in Ghana

PBB SOUTH AFRICA INITIATIVES PBB AFRICA REGIONS INITIATIVES

FOCUS ON CUSTOMER EXPERIENCE AND DELIVERING VALUE

CLIENT FOCUS – PERSONAL, BUSINESS & COMMERCIAL

DELIVERING VALUE THROUGH INNOVATIVE PRODUCTS…

+6%

Face-to-Face Digital

OUR CUSTOMERS ARE INCREASINGLY DIGITAL…

-13%

Tier-priced mortgages Online personal unsecured

disbursements

… ENABLED THROUGH EFFICIENT DIGITAL SOLUTIONS

70% of high volume branch activities

have been digitised

Money transfer capability

… AND LEADING PARTNERSHIPS & PLATFORMS

-50%

EAP limits

queries

-66% -67% -97%

Statement

queries

Debit order reversal

queries (<R200)

>20% Number of new

home loans are

tier-priced

>20%Disbursements

are digital

>20%Savings

through digital

channels

45kVisitors per

month

33k Cards issued

in 1H19

>R1bnZAR top-ups in

1H19

LookSee platformVirtual cardShyft

99%of transaction

volumes now

through digital

channels

>1mReal time clearing

transactions

8

ATM -4%

POS +7%

BOL +2%

Mobile* +47%

Savings and investments

online origination

*Mobile banking transactional values

DIGITAL TRANSFORMATION

CLIENT FOCUS IN SA – PERSONAL, BUSINESS & COMMERCIAL

Transaction volumes, HOH % change

GROWING CUSTOMER VOLUMES… … SUPPORTED BY OUR EXPANDING CAPABILITIES

PARTNERING OUR BUSINESS CLIENTS… BANKING THEIR ECOSYSTEMS… AND FACILITATING CHINA-AFRICA BANKING

2016 2017 2018 1H19

Client ecosystems, #+70%

2016 2017 2018 1H19

New-to-bank retail customers

acquired through ecosystems, # +220%

Loans & advances Deposits

Balance sheet growth+37%

+38%

Transaction volumes, HOH % change Moby BankerInfrastructure capabilities

ATM +8%

POS +20%

BOL +43%

Mobile +57%

+36%

Active

merchants

Onboarding

time

-64%

Loan

origination time

-98%

+10%

ATMs

+22%

POS devices

92%of transaction

volumes now

through digital

channels

9

Face-to-Face Digital

+23%

-15%

FRANCHISE MOMENTUM ACCELERATING – UNDERPINNED BY DIGITAL SOLUTIONS

CLIENT FOCUS IN AR – PERSONAL, BUSINESS & COMMERCIAL

Supporting large domestic and multi-national corporate (MNC)

clients with expansionary funding

Partnering in the development of Oil & Gas opportunities

Tailoring investment instruments to support insurers and asset

managers

Raising hard currency funding for African governments

Leveraging our scale and expertise to provide FX liquidity and risk

management solutions

Promoting and facilitating Intra-Africa and Sino-Africa trade flows

Linking local and international investors with corporates and

governments

Improving client experience through continued digitisation of

channels and processes

10

Republic of Ghana

2019

USD 500m

Bridge to Eurobond

Joint Mandated Lead Arranger,

Underwriter and Lender

Legae Peresec

2019

Domestic Custody &

Derivatives Clearing

Standard Bank appointed for

derivatives clearing across the

client’s portfolio

Globeleq South Africa

Holdings (Pty) Ltd

2019

ZAR 1.8bn

Bridge Loan and

Pref Share Structure

Sole Mandated Underwriter and

Arranger

Prudent Energy Services

Limited

2019

USD 177 millionAcquisition of 74.02% of the shareholding in

Forte Oil PLC

Financial Adviser, Mandated Lead

Arranger and Lender

LEVERAGING OUR FRANCHISE AND CAPABILITIES TO CONNECT CLIENTS

CLIENT FOCUS – CORPORATE

… OPERATING ACROSS MULTIPLE SECTORS…

… DRIVING INCREASED REVENUE ACROSS OUR REGIONS

DIVERSIFIED CLIENT BASE…

… AND PRODUCTS…

FI Consumer P&I Industrials M&M O&G TMT S&PS Real Estate Other

1H18

1H19(1)%

CCY (3)%

+13%CCY +10%

+8%CCY +7% +3%

CCY +0% +8%CCY +4%

+16%CCY +14%

+31%CCY +26%

+54%CCY +50%

+11%CCY +8% +31%

CCY +26%

TPS

GM

IB 1H18

1H19

West Africa

+15%CCY +16%

East Africa

+42%CCY +27%

South &

Central

+4%CCY -2%

South Africa

+9%

MNC

+7%

MNC Intl.

+7%MNC AR

+20%

MNC SA

+3%

Other

Domestic

+18%

Large

Domestic

+29%

Domestic

clients

+24%

+6

CCY +5%

+10

CCY +6%

Sector revenue

Geographic revenue

11

Product revenue

Client

revenue

+12%

+11

CCY +8%

STRONG CLIENT REVENUE GROWTH, DRIVEN BY DOMESTIC CORPORATES

CLIENT FOCUS – CORPORATE

Client revenue

Leader in wealth management on

the continent

Strong growth in our international

clients’ assets

Building a future-ready insurance

business

Balancing digital platforms with

personalised client relationships

Melville Douglas delivering 1st

and 2nd quartile investment

performance and continued

growth in AUM in Nigeria

Group collaboration to ensure

end-to-end client solutions

Africa’s Best Bank

for Wealth

Management (2016,

2017, 2018 and

2019)

Melville Douglas

awarded Best

Global Equity Fund

in SA

12

WEALTH STRATEGY WEALTH DIGITAL INITIATIVES & AWARDS

A F R I C A R E G I O N S

Angola Mozambique

Botswana Namibia

Eswatini Nigeria

Ghana Tanzania

Kenya Uganda

Lesotho Zambia

Malawi Zimbabwe

I N T E R N A T I O N A L

Isle of Man

Jersey

London

Mauritius (Fiduciary)

S O U T H A F R I C A

SHORT TERM

INSURANCE APP

MY 360

APP

Aggregation tool that provides

clients with a 360-degree daily

view of their net wealth across

financial institutions and across

geographies

Makes car, home content and

structural insurance available

through a smartphone app and

telematics functionality enables

discounted premiums

DELIVERING A “BEFORE THE SUN SETS” SERVICE

CLIENT FOCUS – WEALTH CLIENTS

The Best Private Bank in

Wealth and Society –

Stanbic IBTC Asset

Management

Limited

The Best Asset/Fund

Management Company in

Wealth and Society - Stanbic

IBTC Pension Managers

Limited

SBG Securities

Top Overall Analysts

Award

for the last 4 years

ENGAGEMENTEMPLOYEE

32%Women

Men

14

WOMEN IN EXECUTIVE

POSITIONS**

DRIVING GENDER

EQUALITY

** As at 30 June 2019

HIGH ENGAGEMENT LEVELS

eNPS score (I would recommend Standard Bank as a

good place to work) increased from +14 to +23*

96% of

respondents are

willing to go the

extra mile

94% understand their

contribution to

our purpose

90% are proud

to be associated

with Standard

Bank

* Results from 2018 survey

Creating a great place to work

Equipping our workforce to meet changing customer

expectations

Building skills mastery and driving a culture to

encourage continuous learning and growth

Enabling bold and inspirational leaders

Focusing on succession planning and diversity

A reference site for nWOW and Agile

African

thematic

champion

SHAPING A FUTURE-READY WORKFORCE

EMPLOYEE ENGAGEMENT

CONDUCTRISK AND

1.81 1.74 1.61 1.60

0.62 0.44 0.43 0.42

1.36 1.27 1.16 1.13

1 Jan 18 30 Jun 18 31 Dec 18 30 Jun 19%

PBB

CIB

Group

Gross loans and advances

1 076 1 102 1 157 1 224

1-Jan-18 30 Jun 18 31 Dec 18 30 Jun 19

50 51 50 49

68 66 67

5653 54 54

51

1 Jan 18 30 Jun 18 31 Dec 18 30 Jun 19%

PBB

CIB

Group

21.0 23.6 23.8 23.3

14.1 13.4 12.9 13.2

35.1 37.0 36.7 36.5

1 Jan 18 30 Jun 18 31 Dec 18 30 Jun 19Rbn

Stage 1 & 2

Stage 3

… WHILE PROVISION LEVELS REMAIN ROBUST

… WHILE STAGE 3 DECLINED DRIVEN BY CIB

GROWING BALANCE SHEET…

STAGE 1 & 2 COVERAGE RATIO UNCHANGED…

Balance sheet provisions

Stage 1 & 2 coverage

16

Stage 3 coverage

PROVISIONS LARGELY FLAT DESPITE BALANCE SHEET GROWTH

RISK - CREDIT

1 Jan 18Rbn

SA

Africa Regions

Wealth Intl

Liberty

Other

Legacy assets

… SUPPORTING CONTINUED INVESTMENT IN AFRICA REGIONSROBUST BASEL III - COMPLIANT CAPITAL POSITION…

… AND PROVIDING RESILIENCE TO MANAGE HEADWINDS

CET 1 capital

R149bn

CET 1 ratio*

14%

Net asset value, split by legal entity

17

64%

18%2%

2016

58%

23%

4%1H19Angola

DRC

Ghana

Nigeria

Mozambique

Zambia

Zimbabwe

Countries impacted by

regulatory changes in 1H19

Countries which had elections

in 1H19

Malawi

Nigeria

South Africa

LEVERAGING OUR RESOURCES TO SUPPORT OUR AFRICAN-FOCUSED STRATEGY

RISK - CAPITAL

*SARB IFRS 9 phased-in basis

Bank 1 Bank 2 SBSA Bank 3 Bank 4

Customer cases opened, 1H19

18

TREATING CUSTOMERS FAIRLY MANAGING CONDUCT AND OPERATIONAL RISK

ALWAYS AWARE

Compliance conduct training**

96%

* Level 1 & 2 incidents in Africa Regions

** % completion rate

#3

10%

11%

19%

22%

21%

ATM money not dispensed

Fraud – Mobile bkng

Fraud – Internet bkng

Unauth. debit orders

CC merchant dispute

SBSA, % of industry disputes

ALWAYS ON

IT incidents*

8%

ALWAYS SECURE

Operational risk losses

29%

• Behaviours underpinned by group

culture, values and ethics

• Protect our reputation and the

trust our clients place in us

• Deliver fair client outcomes

• Effective, well embedded three

lines of defence model

• Manage and monitor behaviour

#3

DOING THE RIGHT BUSINESS, THE RIGHT WAY

CONDUCT

OUTCOMEFINANCIAL

change

CCY %

change

%

1H19

Rbn

1H18

Rbn

Net interest income 8 9 31.3 28.7

Non-interest revenue 3 4 23.0 22.0

Total income 6 7 54.3 50.7

Operating expenses 4 6 (30.9) (29.2)

Pre-provision profit 8 9 23.4 21.5

Credit impairment charges 22 20 (4.2) (3.5)

Banking activities headline earnings 8 10 12.8 11.7

SBG headline earnings 5 6 13.4 12.7

Net interest margin, bps 440 443

Credit loss ratio, bps 76 62

Cost-to-income ratio, % 57.0 57.6

20

Strong loan growth

supported NII

Margin well managed

Costs well contained,

delivering positive jaws of

109 bps

Credit impairment charges

increased off a low base in

1H18

OPERATING LEVERAGE DRIVING STRONG PRE-PROVISION PROFIT GROWTH

INCOME STATEMENT

21

12.8 13.4

(0.6)

(0.3)

7.2

6.2

0.9

PBB CIB Central &other

Bankingactivities

OBI Liberty SBGRbn

+8%

CCY +7%

+9%

CCY +6% +10%

CCY +8%

+6%

CCY +5%+2%

21

Banking activities

contributed ~95% of group

headline earnings

PBB and CIB continue to

deliver good headline

earnings growth

Central costs well

managed

Other banking interests

small but a drag

Liberty’s earnings

attributable to the group

dampened by treasury

share adjustment

BANKING OPERATIONS SIZABLE AND DELIVERING

SEGMENTAL HEADLINE EARNINGS

120 bps

COST-TO-INCOME RATIO HEADLINE EARNINGS RETURN ON EQUITY

LOANS AND ADVANCES TO

CUSTOMERS, AVERAGE

TOTAL INCOME CREDIT LOSS RATIO

616 653

1H18 1H19

99105

1H18 1H19

90 bps

61.4 60.9

1H18 1H19

6 054 6 066

211 471

432

664

1H18 1H19

Wealth Intl

Africa Regions

SA

+6% +6%

+54%

bpsRbnRbn

%Rm

22

Loan growth and margin

expansion supported NII

Credit well managed

Positive jaws, despite

branch reconfiguration

costs

Africa Regions and Wealth

International delivered

strong results

>100% 19.9%(1H18: 19.6%)

+8%

Through-the-cycle range

GROWTH UNDERPINNED BY OPERATIONS OUTSIDE OF SA

PERSONAL AND BUSINESS BANKING

19,9 21,7

13,6 14,1

1H18 1H19

NIR

NII

19.9 21.7

13.6 14.1

1H18 1H19

19,9 21,7

13,6 14,1

1H18 1H19

NIR

NII

COST-TO-INCOME RATIO HEADLINE EARNINGS RETURN ON EQUITY

LOANS AND ADVANCES TO

CUSTOMERS, AVERAGE

TOTAL INCOME CREDIT LOSS RATIO TO

CUSTOMERS

353 404

1H18 1H19

4

40

1H18 1H19

53.1 52.3

1H18 1H19

5 676 6 169

1H18 1H19

40 bps

60 bps+14% +7%

+9%

bpsRbnRbn

% Rm

23

Strong loan growth

NII diluted by margin

compression in SA

Credit loss ratio increase

driven by stage 1 and 2

charges

Effective cost management

Positive jaws of 156 bps

Robust headline earnings

growth

ROE diluted by increased

capital utilisation

10.2

Through-the-cycle range

19.3%(1H18: 20.5%)

STRONG BALANCE SHEET GROWTH AND OPERATING LEVERAGE

CORPORATE AND INVESTMENT BANKING

9.4 10.2

8.6 8.9

1H18 1H19

24

Headline earnings

change

CCY %

change

%

1H19

Rbn

1H18

Rbn

SBSA 3 3 7.4 7.2

Africa Regions 11 15 4.3 3.8

East 36 60 0.9 0.5

South & Central 1 2 1.8 1.8

West 13 14 1.6 1.4

ROE

1H19

%

1H18

%

SBSA 15.2 15.2

Africa Regions 22.3 25.4

East 20.2 18.8

South & Central 21.7 24.7

West 24.5 30.8

In 2018, the group increased its stake in Stanbic Holdings Plc (Kenya) from 60% to 69% and in Stanbic IBTC Plc (Nigeria) from 53% to 65%

* Determined based on various inputs,

including growth, resilience and returns

Strong performance*

Moderate performance*

Focus to improve*

Single representation/development

phase

SUPPORTED BY STRONG RECOVERY IN THE EAST REGION

REGIONAL PERFORMANCE

25

change

%

1H19

Rm

1H18

Rm

South African Insurance Operations 7 1 012 950

STANLIB South Africa 19 209 175

Africa regions >100 31 8

Other (8) (161) (175)

Normalised operating earnings 14 1 091 958

LibFin investments - SIP >100 922 374

Normalised headline earnings 51 2 013 1 332

IFRS adjustments (>100) (17) 189

IFRS headline earnings 31 1 996 1 521

SBG share of IFRS headline earnings 33 1 123 845

Treasury share adjustment (>100) (248) 12

Headline earnings attributable to SBG 2 875 857

Normalised operating

earnings improved

LibFin SIP supported by

better market conditions

New business margin

improved

Return metrics entered

their respective target

bands

Capital levels remained

robust

Headline earnings

attributable to SBG

negatively impacted by

treasury share adjustment

MAKING STEADY PROGRESS AGAINST STATED STRATEGY

LIBERTY

202 432

1H18 1H19Rm

>100%

26

ICBC STANDARD BANK PLC

(40% STAKE)ICBC ARGENTINA

(20% STAKE)

(70)(111)

(641)

1H18 1H19

Related to

single event

in June

(752)

ICBC Argentina performed

well, driven by margins and

boosted by a profit on sale

of an investment

ICBCS delivered a

disappointing result

− Operational performance

impacted by difficult

markets

− Single-client event which

resulted in a USD110m

provision

MINORITY STAKES - OFF STRATEGY

OTHER BANKING INTERESTS

27

ROE

15.1

14.4

16.1

16.816.2

15.3 15.2

16.8

17.5 17.5

1H15 1H16 1H17 1H18 1H19%

SBG Banking activities

MOVEMENT IN ROE

16,8 16,2

(0.3) (0.6)0.0

0.2 0.1

1H18 PBB CIB Centre OBI Liberty 1H19%

ICBCS PERFORMANCE A DRAG ON ROE

RETURN ON EQUITY

303 340 400 430 454

4750

53 54 54

0

10

20

30

40

50

60

0

50

100

150

200

250

300

350

400

450

500

1H15 1H16 1H17 1H18 1H19 %cps

Dividend Payout ratio

28

DIVIDENDS +6%CAPITAL RATIOS

CAGR

+11%13.1 13.2

13.7 13.8 14.0

13.6 13.614.2 14.4

14.8

16.0 15.916.2 16.2

17.3

1H15 1H16 1H17 1H18* 1H19*%

CET 1 Tier 1 Total Capital

* 1H18 and 1H19 capital adequacy ratios based on the SARB IFRS 9 phased-in approach

ROBUST CAPITAL LEVELS SUPPORTED DIVIDEND

CAPITAL AND DIVIDENDS

MEDIUM TERM TARGETS 1H19 1H18

GROWTH

Group HE growth Sustainable growth +6% +5%

Cost-to-income ratio Approaching 50% 57.0% 57.6%

Credit loss ratio* 70 - 100 bps 76 bps 62 bps

Africa Regions contribution** >30% 34% 32%

RESILIENCELCR and NSFR >100% >100% >100%

CET 1 ratio*** 11.0 - 12.5% 14.0% 13.8%

RETURNSROE 18.0 - 20.0% 16.2% 16.8%

Dividend Sustainable growth +6% +8%

* Revised through-the-cycle credit loss ratio range of 70 – 100 bps

** Contribution to banking headline earnings

*** Capital adequacy ratios based on the SARB IFRS 9 phased-in approach

29

ON TRACK TO DELIVER ON COMMITMENTS

MEASURING OUR FINANCIAL PROGRESS

IMPACTSEE

MEMBER SUSTAINABILITY

INDICES

Emerging Markets ESG Index

ESG RATINGS

FINANCIAL

INCLUSION

JOB CREATION

& ENTERPRISE

DEVELOPMENT

INFRASTRUCTURE AFRICA TRADE

& INVESTMENT

EDUCATION &

SKILLS

DEVELOPMENT

CLIMATE CHANGE

& ENVIRONMENTAL

SUSTAINABILITY

HEALTH

OUR SEE IMPACT AREAS*… … RELEVANT SDG’S**… … AND INDICES

31

DELIVERING SHARED VALUE WILL ENSURE OUR LONG TERM SUSTAINABILITY

SEE – UNDERPINNED BY OUR PURPOSE

* SEE impact areas have been refined since our year-end reporting * Sustainable Development Goals

OUTLOOKPROGRESS &

GROWTH OUTCOMES AND FORECASTS TO 2024

-

1,0

2,0

3,0

4,0

5,0

6,0

2017

2018

2019

2020

2021

2022

2023

2024

Real GDP Growth

SBG Africa Regions World SA

%

33

Source: EIU & IMF; SBG Africa Regions represents GDP growth outlook for

countries in which Standard Bank operates weighted by capital allocated as at

30 June 2019

Flagging global growth and the US-China trade war

remain key risks

Sub-Saharan Africa is expected to sustain its

recovery

− East Africa should continue to see robust growth

− West Africa is expected to experience a sustained

pick up, driven by a recovery in Angola and Nigeria

and continued strong growth in Ghana

South Africa

− Fiscal metrics have deteriorated

− Business and consumer confidence, consumption

and investment are likely to remain subdued in

2019

− 2019 outlook poor; some recovery in second half

− Better medium-term prospects on reform trajectory

ECONOMIC OUTLOOK

34

Continue to make progress against our medium-term financial targets

Continue to reduce cost growth and increase efficiency; permanently reshape the group’s cost structure

Continue to accelerate digitisation to meet our clients’ needs and enhance competitiveness and efficiency;

reconfigure our distribution capabilities

Continue to improve client experience

Pursue growth opportunities, including

− PBB: VAF, client journeys, ecosystems

− CIB: good AR opportunities, SA gradual recovery

Continue to support Liberty’s recovery and expand our relationship

Find lasting solutions for Other Banking Interests

ON TRACK TO DELIVER ON 2019 PRIORITIES

PROGRESS

35

Growing competitiveness in CIB, PBB, Wealth and

Liberty

− Delivering consistently excellent, secure and stable

service

− Delivering complete solutions to meet our clients’

needs

Digitisation

− New partnerships

− New products and services

Growing in Africa

TO BE THE LEADING FINANCIAL SERVICES ORGANISATION IN, FOR AND ACROSS

AFRICA, DELIVERING EXCEPTIONAL CLIENT EXPERIENCES AND SUPERIOR VALUE

ACHIEVING OUR VISION

36

Our business is sustainable economic

development

− We are here for our fellow Africans

and for the generations of Africans to

come

Seven impact areas for delivering SEE

SEE will remain integrated into our

businesses and measured by our SEE

value driver

Inclusion in sustainability indices

AFRICA IS OUR HOME, WE DRIVE HER GROWTH

LIVING OUR PURPOSE

FINANCIAL

INCLUSION

JOB CREATION

& ENTERPRISE

DEVELOPMENT

INFRASTRUCTURE AFRICA TRADE

& INVESTMENT

EDUCATION &

SKILLS

DEVELOPMENT

CLIMATE CHANGE

& ENVIRONMENTAL

SUSTAINABILITY

HEALTH

OUR SEE IMPACT AREAS

MEMBER SUSTAINABILITY

INDICES

Emerging Markets ESG Index

ESG RATINGS

INDICES

WHERE WE ARE HEADED

37

DIGITAL STANDARD BANK GROUP

• Serving clients predominantly online

• Processing in the cloud

• Right mix of skills and attitudes

• Embracing open innovation

• Underpinned by data and insights

HUMAN STANDARD BANK GROUP

• Providing the services, solutions and opportunities

that our clients and employees need to achieve

prosperity and fulfilment

FINANCIAL TARGETS FULLY MET

PERFORMANCEDRIVERS OF

APPENDIX I:

39

`CET1 14.0 %

GROWTH

NII + 9%Impairment

charge+20%

Operating

expenses+ 6%

OBI (>100%)

Liberty + 2%Average interest-

bearing liabilities+ 10%

NIM - 3 bps

Headline earnings

Dividend

per share+ 6%

RETURNS

NSFR 119%

LCR 124%

RESILIENCE

+ 6%

NIR + 4%

Average interest-

earning assets+ 10%

÷ ROE 16.2%Average

equity+ 9 %

DRIVING SHAREHOLDER VALUE

0

2

4

6

8

10

12

Jan 18 Apr 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19

% Kenya Uganda

0

5

10

15

20

25


% Ghana Nigeria Angola

0

5

10

15

20

25


% Botswana Mauritius Mozambique Namibia Zambia

0

2

4

6

8

10

12


% South Africa US

40

SOUTH AND CENTRAL

WEST AFRICA

SOUTH AFRICA AND INTERNATIONAL

EAST AFRICA

AVERAGE RATES FLAT IN SA BUT TRENDED DOWN IN AFRICA REGIONS

INTEREST RATES

101,0 87,9

100,7

101,6

130,3 165,8

60

80

100

120

140

160

180


% ZAR/NGN ZAR/GHS ZAR/AOA

104,0

94,298,8

123,1

60

80

100

120

140


% ZAR/MZN ZAR/ZMW

99,0

85,8

102,3

89,5

70

80

90

100

110


% ZAR/KES ZAR/UGX

99,3 114,1

80

90

100

110

120

130


% USD/ZAR

41

SOUTH AND CENTRAL

WEST AFRICA

SOUTH AFRICA

EAST AFRICA

Rates have been re-based to reflect movement since 1 January 2018, straight lines represent the average rebased rates for the respective six month periods

ZAR, AOA AND ZMW WERE WEAKER WHILE KES, UGX AND NGN WERE STRONGER

FOREX RATES

42

AVERAGE GROSS LOANS TO

CUSTOMERS BY BUSINESS UNIT*

+6%

+14%

+7%

+12%

* Average gross loans and advances by Business Unit exclude Centre

AVERAGE DEPOSITS FROM

CUSTOMERS BY BUSINESS UNIT

540 625580 698

PBB CIBRbn

1H18 1H19

616 353653 404

PBB CIBRbn

1H18 1H19

PBB growth driven by

− Unsecured lending outpacing

secured lending

− Africa Regions outpacing SA

CIB growth underpinned by

− SA clients expanding into Africa

− Clients in East and West Africa

STRONG ASSET AND DEPOSIT GROWTH

BALANCE SHEET

43

NET INTEREST MARGIN -3 BPS

* Restated by R470m relating to interest in suspense cures

NII growth was supported by strong loan and deposit

growth across the portfolio

NIM movement

− Supported by stronger growth in higher margin

unsecured lending, Africa Regions growing loans

and advances faster than SA and effective margin

management in our offshore operations

− Negative impact of lower average rates in various

Africa Regions countries, higher cash reserving

costs in Nigeria and a competitive South African

loan pricing environment

443 440

(35)

(1)

28

1 4

1H18* Client yieldon lending

book

Client yieldon funding

book

Endow-ment

Treasury Mixand

other

1H19bps

MARGIN EXPANSION FROM AFRICA REGIONS OFFSET BY SA PRICING

NET INTEREST INCOME

44

NON-INTEREST REVENUE +4%

1H18 1H19Rbn

Other gains and losses on financial instruments

Other revenue

Trading revenue

Net fee and commission revenue

Net fee and commission revenue

− Supported by new loan originations and electronic

banking, card and FX transactions

− As clients continued to shift their transactional

banking from traditional to digital platforms, growth

in electronic banking fees continued to outpace

account transaction fees

− CIB balance sheet growth supported IB-related

asset-based fees, whilst knowledge-based fee

growth was muted

Trading revenue

− Growth remained subdued, particularly in SA,

constrained by low levels of market activity

+2%

+6%

+8%

GROWTH DRIVEN BY STRONG UNDERLYING VOLUMES

NON-INTEREST REVENUE

>100%

3 529 4 247

(59)

(1 007)

468

1 244

1 071

1H18 Stage 1 Stage 2 Stage 3* Stage 1 Stage 2 Stage 3* 1H19Rm

PBB CIB

45

45

PBB charges increased 12%

− New disbursements drove

stage 1 charges

− Model improvements offset

delayed legal processes

CIB charges increased >100%

− Growth in term lending

contributed to higher stage 1

impairment charges

− Increased stage 2 provisioning

following deterioration of credit

quality in South and East Africa

− Stage 3 charges decreased

due to lower defaults and post

write off recoveries

PBB R410m

CIB R308m

CLR

PBB – 99 bps

CIB – 3 bps

CLR

PBB – 105 bps

CIB – 30 bps

*Includes credit impairment charges related to off-balance sheet exposures

CIB CHARGES UP FROM LOW BASE IN 1H18

CREDIT IMPAIRMENT CHARGES

46

Staff costs

− Lower headcount due to natural attrition and

branch reconfiguration

− Staff costs well contained

Other operating expenses

− Increased IT spend due to increased software

licences, consultants and IT infrastructure and

lower capitalisation as capital programmes wind

down

− The adoption of IFRS 16 contributed to a higher

depreciation charge and lower premises costs

compared to the prior period

change

CCY

%

change

%

1H19

Rbn

Staff costs 3 5 17.4

Other operating expenses 6 8 13.5

IT 11 12 3.5

Depreciation 85 87 2.3

Premises (37) (36) 1.2

Amortisation of intangibles 2 2 1.2

Marketing (10) (10) 0.9

Professional fees 5 7 0.9

Other 3 7 3.5

Total operating expenses 4 6 30.9

WELL CONTAINED ACROSS THE BUSINESS

OPERATING EXPENSES

AND PARTNERSHIPSPRODUCT INNOVATIONS

APPENDIX II:

MyMo

MyMo is a transactional account for R4.95 per

month, that can be opened on our Banking App

within minutes. Customers receive a gold card with

data/airtime rewards (on Standard Bank Mobile)

when they open the account and swipe their card.

No documents are required to open the account,

customers can simply scan their ID, take a selfie

and get an account number immediately.

MVNO (Standard Bank Mobile)

MVNO allows customers to receive their monthly

bank account fees back in airtime and/or data when

swiping their bank card. This unique offering

provides complete flexibility to choose a Data and

Voice Plan.

Online home loans

With Online home loans, customers are able to

obtain an approved and guaranteed home loan.

Customers will receive a guaranteed loan offer that

allows them to shop with certainty for properties

within the guaranteed loan amount.

Virtual card

Virtual card is a prepaid card that can be used to

shop online. It allows for online payments and

purchases without credit or debit card details, but

provides the required security, control and simplicity.

Bizflex

Bizflex is a convenient working capital loan, with

flexible repayments based on a percentage of future

revenue. It is a digitally-enabled solution that

provides funds within 48 hours from application.

Customers receive simple, personalised and

transparent banking, with zero fees.

SimplyBlu

SimplyBlu is an all-in-one payment solution that

allows businesses to build and manage an online

business, all from a single secure platform. It’s a “e-

commerce in a box” solution.

LookSee

LookSee is a free property guide which enables

home buyers to fast-track their search for a new

home.

Noknok partnership

This partnership allows for better authentication to

secure customer transactions.

APPENDIX IIPBB SOUTH AFRICA INITIATIVES

48

Slydepay

Slydepay is a single payments platform which offers

a digital payment wallet and a merchant collections

solution, allowing for transaction convenience and

security. Several services are grouped into one,

such as bank account and linked mobile wallet

transfers. It provides the ability to link any bank card,

send and receive money from linked mobile money

users, purchasing of airtime, bill payments and QR

code / USSD retail payments.

Paperless loan

Instant paperless loans can be done in under

1 minute. A customer can log onto their internet

banking or Smart App to establish if they have

been pre-approved for a loan. If pre-approved a

branch visit is not required and money will appear

in the customer’s account instantly.

Motive partners

Motive partners is a founder of fintechs in the

financial services sector. They provide design

solutions and innovation. This partnership will

allow Standard Bank to utilise the platforms that

the fintechs develop.

Founders Factory Africa

Founders Factory Africa is a South African company

operating across Africa delivering a corporate-

backed accelerator and incubator with fintech as its

strategic sector. Its target is to build and scale 140

tech-based start ups across four sectors over the

next five years. In October 2018, Standard Bank

was the first investor into Founders Factory Africa.

Network International

Network International is a 3rd party payment

environment that offers Standard Bank an array of

services, from transaction switching and

authorisation services, technical support and fraud

management services.

APPENDIX IIPBB AFRICA REGIONS INITIATIVES

49

FINANCIAL RESULTS

PRESENTATION1H19

Standard Bank Group

financial results presentation 2018 - thevault.exchange roe credit loss ratio jaws 16,8 16,2 1h18...

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