Standard Bank Group financial results 2015 Total CAR *FY12 shown on a pro-forma Basel 3 basis Financial results presentation / page /13 Operating expenses 58.6 55.2 56.3 55.0 56.7

Standard Bank Group financial results

presentation for the year ended 31 December 2015

standardbank.com

1

Notes

Financial results presentation / page /2

Macroeconomic environment

1011121314151617

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

USDZAR exchange rate

FY15 opening = 11.57

FY15 closing = 15.50

3.0

5.0

7.0

9.0

11.0

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

%

SA inflation and interest rates

SA CPI yoy Prime overdraft rate

0

50

100

150

200

250

300

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

Commodity prices

Metals price index Fuel (energy) price index

0

5

10

15

20

25

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

%

Major African countries interest rates

Kenya Nigeria Uganda

Source: IMF data

Financial resultspresentation

Standard Bank Group 2015

RESULTS PRESENTATION

2 Standard Bank Group analysis of financial results 31 December 2015

Notes


FY15 FY14

Discontinued operation

Share of associate

TotalDiscontinued

operation

Rm Rm Rm Rm

SB Plc operating loss (378) (378) (2 121)

Write-down of aluminium asset (276) (276) (1 624)

Partial insurance recovery for aluminium 595 347 942

Separation costs incurred (45) (45)

Deferred prosecution agreement accounted in ICBCS as a 40% associate

(226) (226)

ICBCS share of eleven months performance as a 40% associate (1 294) (1 294)

Headline loss recognised in CIB (104) (1 173) (1 277) (3 745)

Insurance proceeds for aluminium paid by group entity (54) (54)

Deferred prosecution agreement amount payable to ICBC under indemnity

(336) (336)

Cash flow hedge release on disposal of SB Plc 404 404

Headline loss recognised in SBG (90) (1 173) (1 263) (3 745)

Headline earnings impact of the discontinued operation


change FY15 FY14

%

Headline earnings (Rm) 27 22 002 17 323

Headline earnings – pro-forma continuing operations* (Rm) 13 22 056 19 570

Headline EPS (HEPS) (cents) 27 1 359.3 1 070.3

DPS (cents) 13 674 598

NAV per share (cents) 9 9 395 8 625

ROE (%) 15.3 12.9

Credit loss ratio (%) 0.87 1.00

Cost-to-income ratio (%) 56.7 55.0

Tier 1 capital adequacy ratio (%) 13.3 12.9

Key metrics

* Pro-forma continuing operations includes 40% of the discontinued operation given that 40% of the operation has been held by the group

3

Notes


change FY15 FY14

% Rm Rm

PBB 15 11 232 9 797

South Africa 13 10 579 9 388

Rest of Africa 85 192 104

Outside Africa 51 461 305

CIB 59 7 923 4 980

Central and other 54 596 388

Banking activities 30 19 751 15 165

Liberty 4 2 251 2 158

Liberty operating earnings

8 1 513 1 407

LibFin Investments – SIP (2) 738 751

SBG 27 22 002 17 323

57%29%

2%12%

51%

36%

3%

10%

More even distribution of contribution from business units

PBB

CIB

Central and other

Liberty

Business unit view of headline earnings

FY14

FY15


change FY15 FY14

% Rm Rm

Net interest income 9 49 314 45 256

Non-interest revenue 8 41 801 38 813

Total income 8 91 115 84 069

Operating expenses 10 51 434 46 596

Pre-provision operating profit 6 39 681 37 473

Credit impairment charges 4 9 371 9 009

Headline earnings – Banking activities 30 19 751 15 165

Continuing operations 5 19 841 18 910

Discontinued operation 98 (90) (3 745)

Headline earnings – Liberty 4 2 251 2 158

SBG headline earnings 27 22 002 17 323

Summarised income statement



Notes


Deposit and current accounts from customers

change FY15 FY14

% Rbn Rbn

Retail priced 20 404 337

Wholesale priced 5 660 629

Deposit and current accounts from customers

10 1 064 966

0

50

100

150

200

250

300

350

400

450

FY11 FY12 FY13 FY14 FY15Rbn

Retail priced deposits

South Africa Rest of Africa Outside Africa

8% CAGR

28% CAGR

32% CAGR


Loans and advances

change FY15 FY14

% Rbn Rbn

PBB 6 576 544

Mortgage loans 3 326 317

Vehicle and asset finance 11 80 73

Business lending and other 18 83 70

Card debtors 4 31 30

Personal unsecured lending 3 56 54

CIB 29 383 298

Corporate loans 22 291 239

Commercial property finance 17 56 48

Loans granted under resale agreements >100 36 11

Other services 50 (4) (10)

Loans and advances to customers 15 955 832

Loans and advances to banks 25 145 116

Gross loans and advances 16 1 100 948

5

Notes


Non-interest revenue

19.8 21.7 23.2 26.1 26.9

7.96.8 7.8

9.2 11.02.0 3.9

3.3

3.53.9

0

5

10

15

20

25

30

35

40

45


Non-interest revenue

Other revenue

Trading revenue

Net fee and commission revenue

change FY15 FY14

% Rm Rm

Rates, currencies and commodities

16 9 646 8 312

Equities 51 1 368 904

Trading revenue 20 11 014 9 216

change FY15 FY14

% Rm Rm

Banking and property-related revenue

16 2 175 1 876

Insurance – bancassurance income

3 1 692 1 642

Other revenue 10 3 867 3 518


Net interest income and margin analysis

2.923.09

3.673.80

3.50

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

10

20

30

40

50

60

FY11 FY12 FY13 FY14 FY15 %Rbn

Net interest income

Net interest income Net interest margin4

69

43

8

11

13

424

1

11

11

400

410

420

430

440

450

460

470

480

490

FY14

PB

B lo

anp

rici

ng

CIB

loan

pri

cin

g

Fun

din

gco

st

Hig

her

HQ

LA

En

dow

-m

ent

Mix

Oth

er

FY15

bps

Margin analysis on interest earning assets



Notes


Credit impairment charges

0.87

1.08

1.12

1.00

0.87

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0

1

2

3

4

5

6

7

8

9

10

FY11 FY12 FY13 FY14 FY15 %RbnPortfolio credit impairments

Specific credit impairments

Credit loss ratio

FY15 FY14

% %

PBB 1.27 1.41

Mortgage loans 0.66 0.79

Vehicle and asset finance 1.50 1.55

Card debtors 4.83 4.08

Other loans and advances 1.68 2.05

CIB 0.24 0.22

Corporate loans 0.26 0.26

Commercial property finance 0.09 (0.16)

Credit loss ratio 0.87 1.00


Non-performing loans and provision adequacy

4.13.8

3.53.2

3.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

5

10

15

20

25

30

35

40

45


NPLs

NPLs NPL ratio

30

41

4744 45

0

5

10

15

20

25

30

35

40

45

50

0

2

4

6

8

10

12

14

16

18


Balance sheet impairments

Specific impairments

Performing impairments

Coverage ratio

7

Notes


Capital

1.71.9 1.8

2.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

100

200

300

400

500

600

700

800

900

1 000

FY12* FY13 FY14 FY15 %Rbn

Closing RWA Average RWA Return on RWA

10.6

12.6 12.412.911.2

13.2 12.913.3

14.3

16.215.5 15.7

5

7

9

11

13

15

17

FY12* FY13 FY14 FY15%

Common equity Tier 1 CAR

Tier 1 CAR

Total CAR

*FY12 shown on a pro-forma Basel 3 basis


Operating expenses

58.6

55.256.3

55.056.7

40

42

44

46

48

50

52

54

56

58

60

0

2

4

6

8

10

12

14

16

18

20

FY11 FY12 FY13 FY14 FY15 %%

Cost-to-income ratio

Income growth (LHS)

Cost growth (LHS)

Cost-to-income ratio (RHS)

change FY15 FY14

% Rm Rm

Staff costs 12 27 968 24 961

Other operating expenses

8 23 466 21 635

IT 7 5 755 5 355

Amortisation 31 1 519 1 156

Other 7 16 192 15 124

Total operating expenses

10 51 434 46 596

change FY15 FY14

% Rm Rm

IT and amortisation 12 7 274 6 511

IT staff costs 15 3 172 2 757

Other 4 2 446 2 358

Total IT function spend 11 12 892 11 626



Notes

Personal & Business Banking


425 455 533 598 6740.0

0.5

1.0

1.5

2.0

2.5

0

100

200

300

400

500

600

700

800

FY11 FY12 FY13 FY14 FY15 timescps

Dividend Dividend cover Dividend cover - pro-forma continuing operations*

Dividends

12% CAGR

* Pro-forma continuing operations includes 40% of the discontinued operation given that 40% of the operation has been held by the group

9

Notes


Our digital journey


• SA financial performance pleasing in a tough market with headline earnings growth of 13%

• Profitability in the Rest of Africa grew 85% despite challenging trading conditions

• Continued to solidify the turnaround in the VAF division with headline earnings growing by 79%

• Good customer growth in chosen segments

• Strong deposit growth consistent with our strategy

• Solid revenue growth relative to macro economic environment

• Improving traction in supporting clients with cross-border ambitions

• New capabilities in a digital world

PBB highlights



Notes


454m trns 1%R332bn value 8%


1.2bn trns flatR54tn value 6%

Internet banking

Higher volumes with strong growth in digital interactions



SBG app


ATMs

Card Legacy system Enquiry and Teller volumes

Electronic Physical


Fully functional core banking solution delivered, processing substantial volume

• South Africa• 570m transactions processed in 2015, increase of 27%

• Real-time transfers enabled, reflecting immediate value (legacy system up to 2 days)

• Single customer master file implemented – migrated 34m profiles and legacy customer information files decommissioned

• Radically reduced product deployment life-cycle – recent launches less than 6 weeks

• Faster regulatory implementations using improved functionality combined with enhanced customer information

• Reduced on-line and branch origination processing times

• System decommissioning journey commenced with eight systems decommissioned to date

• Rest of Africa• Operational in seven key countries

• 73% of banking customers on the new platform

• 310m transactions processed during 2015, up 24%

We remain committed to complete our core banking programmes by end 2017

Core banking journey – end is in sight

11

Notes


change FY15 FY14

% Rbn Rbn

Loans and advances to customers 6 576 544

Mortgage loans 3 326 317

Vehicle and asset finance 11 80 73

Business lending and other 18 83 70

Card debtors 4 31 30

Personal unsecured lending 3 56 54

Deposit and current accounts from customers 19 498 417

Current accounts 13 139 123

Savings and Investments 22 359 294

Reliance on wholesale priced treasury funding (23) 96 124

PBB summarised balance sheet


PBB summarised income statement

change FY15 FY14

% Rm Rm

Net interest income 11 35 051 31 720

Non-interest revenue 7 25 342 23 679

Total income 9 60 393 55 399

Credit impairment charges (5) 7 815 8 204

Income before operating expenses 11 52 578 47 195


Headline earnings 15 11 232 9 797

Net interest margin (%) 5.45 5.31



ROE (%) 18.1 18.1



Notes


• South Africa delivered respectable growth in a muted economic environment whilst absorbing investment in digital and core banking capabilities

• Rest of Africa continued to be profitable

– 13 out of 15 countries grew HE

– Despite• Declining commodity prices impacting key countries such as Nigeria, Angola and Zambia

• Regulatory impact of fee caps in various countries

• Electricity disruptions

– Excluding Nigeria, Rest of Africa improved HE by R219m in total, representing approximately 400% growth

• Outside Africa delivered strong growth as a result of increased client activity, assisted by rand weakness

PBB geographic view of headline earnings

change FY15 FY14

% Rm Rm

South Africa 13 10 579 9 388

Rest of Africa 85 192 104

Outside Africa 51 461 305

PBB 15 11 232 9 797


16.9

19.2 19.418.6 18.1 18.1

0.0

5.0

10.0

15.0

20.0

25.0

0

2

4

6

8

10

12

FY10 FY11 FY12 FY13 FY14 FY15 %RbnHeadline earnings ROE

Sustained headline earnings growth

21% CAGR

13

Notes


Good ROA geographic diversification

FY15 revenue by region FY15 assets by region

East: Kenya, Uganda, Zambia, Tanzania, Malawi, South Sudan

South: Namibia, Botswana, Lesotho, Zimbabwe, Swaziland, Mozambique

West: Nigeria, Ghana, Angola, DRC


Increasing momentum in ROA

76

77

78

79

80

81

82

83

84

85

86

1 500

2 000

2 500

3 000

3 500

4 000

1Q14

2Q

14

3Q

14

4Q

14

1Q15

2Q

15

3Q

15

4Q

15 %Rm

Total income (LHS) Operating expenses (LHS) Cost to income ratio (RHS)



Notes


Total income Headline earnings

change FY15 FY14 change FY15 FY14

% Rm Rm % Rm Rm

Retail Banking 6 33 228 31 246 17 5 455 4 679

Business and Commercial Banking 11 8 989 8 063 13 3 650 3 243

Bancassurance and Wealth 7 3 972 3 702 1 1 474 1 466

PBB SA 7 46 189 43 011 13 10 579 9 388

• Retail banking benefited from balance growth, endowment and VAF turnaround

• Business and commercial banking benefited from strong NII growth mainly due to robust balance growth and endowment impact

• Agricultural exposures remain constant at 4% of total loans and advances with the NPL coverage ratio increasing from 35% to 42%

• Bancassurance impacted by slower sales of embedded credit life protection, increased investment in systems and people to position the business ahead of regulatory changes

PBB SA customer segments


PBB product reporting

28%

22%14%

13%

3%

20%

Product contribution to headline earnings

Transactional products

Mortgage lending

Card products

Lending products

Vehicle and asset finance

Bancassurance and wealth

Total income Headline earnings


% Rbn Rbn % Rbn Rbn

Transactional products

11 25.9 23.3 9 3.2 2.9

Mortgage lending 8 7.5 7.0 25 2.5 1.9

Card products 12 6.6 5.9 9 1.5 1.4

Lending products 3 9.8 9.6 14 1.4 1.3

Vehicle and asset finance

7 3.4 3.2 79 0.3 0.2

Bancassurance and wealth

12 7.2 6.4 11 2.3 2.1

PBB 9 60.4 55.4 15 11.2 9.8

FY14

FY15

15

Notes


PBB non-performing loans and provision adequacy

• Bolstered provision for performing loans by 14% (R615m) to R4.9bn

• Impact of the SARB directive contributed 31bps to the NPL increase and 51bps to the early arrears increase, with no material impact on the income statement impairment charge as this had already been envisaged in the prior years

FY15 FY14

NPL ratio % %





Personal unsecured lending 8.3 7.3

Access Loans 14.5 17.4

Business lending and other 2.0 2.0

PBB 4.3 4.2

FY15 FY14

Coverage ratio % %

Mortgage loans 26 26

Vehicle and asset finance 50 53

Card debtors 69 69

Other loans and advances 63 65

Personal unsecured lending 73 69

Access Loans 85 85

Business lending and other 47 57

PBB 42 42


PBB credit impairments

FY15 FY14

% %





Personal unsecured lending 4.07 4.20

Access Loans 8.21 11.75

Business lending and other 0.59 0.90

PBB credit loss ratio 1.27 1.41

By geography

South Africa 1.34 1.53

Rest of Africa 2.02 1.83

Outside Africa 0.01 0.01

1.24

1.39

1.471.41

1.27

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

0

1

2

3

4

5

6

7

8

9


Credit impairment charges Credit loss ratio



Notes

Corporate & Investment Banking


• We believe our PBB strategy is working and we will improve delivery on our strategy

• We seek to radically redefine customer experience by

– Further turning the entire organisation towards our customers

– Using new system and insight capabilities to deliver what matters to customers

• Accelerate our digital journey by leveraging new systems and processing capabilities

• Address increasing regulatory challenges across geographies

• Given the macroeconomic outlook, non-performing loans and early arrears are expected to remain under

pressure

• Even stronger focus on risk management

• Invest for growth, whilst maintaining proactive cost management discipline

• Continue to improve customers’ lives and fulfill aspirations, even in uncertain times

Moving fast forward

17

Notes


• Robust client revenue performance from South African franchise

• Strong client revenue growth from South and Central, West Africa and East Africa, offset by muted performance

in Nigeria

• Footprint on the continent remains a competitive advantage with a diversification impact

• Played pivotal roles in transformative, landmark deals

– Mandate to provide a full range of solutions for the South African Government Employees Pension Fund

– Sole bookrunner, underwriter and transaction sponsor for the Oceana rights offer and financial advisor for their

acquisition of Daybrook Fisheries

– Financial advisor and transaction sponsor to AB InBev on the R3.1 trillion secondary inward listing on the JSE

– Sole corporate finance advisor for Brait’s R12.2 billion acquisition of Virgin Active and joint-lead bank and

funder for its GBP780 million acquisition of New Look

• Supporting our clients throughout the economic cycle

Growth across the continent


• Sustained growth in a volatile market, compounded by ongoing regulatory change

• Strong headline earnings growth of 59% to R7.9bn, with an ROE of 14.3% (FY14: 10.2%)

• Rationalisation of operations outside Africa

• Expanded footprint in Africa to support our clients’ growth journeys

• Partnering our clients as they grow their businesses

CIB highlights



Notes


• Progress in investment in key strategic systems

– New Business Online

– eMarket Trader

– International Trade and Payments Solution

• Significant strides made to improve and simplify core processes

• Continued focus on through the cycle risk management processes

• Living a culture of compliance by doing the right business the right way

Efficient business operations


Awards

emeafinanceAfrican Banking 2015

• Best investment bank in Africa Standard Bank

emeafinanceTreasury Service 2015

• Best FX services in Africa• Best transactional bank for financial institutions in Africa

EuromoneyAwards of Excellence 2015

• Best bank in Africa• Best risk advisor in Africa

Global Finance World’s Best Emerging Markets Banks 2015

• Best bank in Africa

Global Finance Worlds Best Investment Banks 2016

• Best investment bank in Africa• Best M&A bank in Africa

Global Finance World’s Best Treasury & Cash Management Providers2016

• Best overall bank for cash management in Africa• Best bank for financial risk management in Africa

The Banker InvestmentBanking Awards 2015

• Most innovative investment bank from Africa

19

Notes


CIB business units

Total income Headlineearnings


% Rbn Rbn % Rbn Rbn

Transactional Products and Services

8 11.4 10.5 4 2.7 2.5

Global Markets 12 11.8 10.5 19 3.9 3.3

Investment Banking 6 7.8 7.4 1 2.6 2.6

Real estate and PIM (59) 0.3 0.8 (84) 0.0 0.3

Share of loss from ICBCS associate

(1.2)

Discontinued operation 97 (0.1) (3.7)

CIB 7 31.3 29.2 59 7.9 5.0

TPS SA

17%

TPS ROA 19%

GM SA 16%

GM ROA 22%

IB 25%

Other 1%

Business unit contribution to total income

FY 14

FY 15


CIB summarised income statement

change FY15 FY14

% Rm Rm

Total Income 7 31 319 29 171


Pre-provision operating profit 4 13 880 13 380

Credit impairment charges 59 1 279 804

Income from operations 0 12 601 12 576

Share of (loss)/profit from associates (>100) (1 123) 64

Discontinued operation 97 (104) (3 745)

Headline earnings 59 7 923 4 980

Headline earnings – pro-forma continuing operations 10 7 985 7 227

ROE (%) 14.3 10.2



Jaws (%) (3.1) 4.0



Notes


31

63

41

22 24

0

10

20

30

40

50

60

70

0

100

200

300

400

500

600

FY11 FY12 FY13 FY14 FY15 bpsRbn

Gross loans Credit loss ratio

CIB credit performance


0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

FY11 FY12 FY13 FY14 FY15Rm

CIB revenue trend

13% CAGR

21

Notes

Conclusion


• Global economic outlook remains weak

• Focus on growth sectors on the continent, whilst remaining cautious on those sectors under pressure

• Continue to put our clients at the heart of everything we do

• Maintain cost management discipline

• Resolute on our African strategy

Moving forward



Notes


SBSA delivering growth

8.0 9.5 11.5 10.7 12.0 13.4

17.1

18.4 18.3

14.415.1

15.5

0

2

4

6

8

10

12

14

16

18

20

0

2

4

6

8

10

12

14

16

FY10 FY11 FY12 FY13 FY14 FY15 %Rbn

Headline earnings ROE

SBSA a key contributor to group headline earnings

SBSA

11% CAGR


• These results are a testament to our balanced portfolio of businesses

• Good performance from PBB SA

– Impact on revenue of interchange regulations

– Increase in costs from conversion of temporary employees to permanent

– Continued IT investment and delivered a number of successes during the year

• Made progress in PBB in the Rest of Africa

• CIB’s underlying earnings grew off a high base

– Business units connected to underlying economic fundamentals slower

– Balance sheet expanded to high quality corporate names

– Completion of the sale of a controlling interest in SB Plc to ICBC

• Wealth’s customer-focused strategy to capture market share in SA and the significant growth potential in the

Rest of Africa nearing completion

Reflecting on the results

23

Notes


• We are a customer-centric universal financial services group focused on Africa

• Strategy and commitment to Africa unchanged

– Africa is our home, we drive her growth

– Partnering with ICBC to connect China to Africa

• Robust balance sheet has been reinforced over the year

– Strong capital adequacy ratios, high levels of available liquidity, higher portfolio provisioning

• Disciplined credit, risk and cost management in response to weaker macroeconomic environment

• Creating consistently excellent customer experiences

– Major investment in core banking transformation on track for completion in 2017

• Well-positioned portfolio of businesses across sub-Saharan Africa, including SA

– Measured growth expected from portfolio

– Careful management of resource exposures

– Work still to be done to improve competitiveness in the Rest of Africa, including growth where appropriate

Moving upwards through the ROE range: what we can control


ROA trend over 5 years

0

5

10

15

20

25

30


Revenue

South and central East West

15.616.6

19.7

21.520.9

5

7

9

11

13

15

17

19

21

23

0

1

2

3

4

5

6


Headline earnings

South and central East West ROE

26% CAGR

25% CAGR

53% CAGR

24% CAGR



Notes


14.3 14.0 14.1

12.9

15.3

0

2

4

6

8

10

12

14

16

18

FY11 FY12 FY13 FY14 FY15%

Medium term ROE target range 15 – 18%

• We remain committed to making progress in lifting

ROE further into the target range over the medium

term

• Further progress dependent on stable economic

environment, particularly in South Africa


• We need to respond appropriately to macroeconomic developments

– China’s economic growth and rebalancing

– Growth in sub-Saharan Africa expected to pick up slightly to 4.2% but risks are tilted to the downside

– Continued low commodity prices

– Global interest rate cycle

• 2016 likely to be a more difficult year for consumers and businesses in SA

• Manage SA country risk by active engagement with ‘SA Inc’

– We are working hard with the authorities and others to promote a stable, growth-friendly environment

– Early indications are promising

– Risk of lower than expected growth and SA sovereign being downgraded to sub-investment grade

Moving upwards through the ROE range: what we can respond to

Documents

Standard Bank Group financial results 2015 Total CAR *FY12 shown on a pro-forma Basel 3 basis Financial results presentation / page /13 Operating expenses 58.6 55.2 56.3 55.0 56.7