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STANDARD BANK GROUP LIMITED - Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 30 September 2020

Release Date: 30/11/2020 08:05
Code(s): SBK SBKP SBPP     PDF:  
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Basel III capital adequacy, leverage ratio and liquidity coverage ratio disclosure as at 30 September 2020

    Standard Bank Group Limited
    (Incorporated in the Republic of South Africa)
    Registration No. 1969/017128/06
    JSE and A2X share code: SBK
    NSX share code: SNB
    ISIN: ZAE000109815
    SBKP ZAE000038881 (First preference shares)
    SBPP ZAE000056339 (Second preference shares)
    (“Standard Bank Group” or “the group”)


    Basel III capital adequacy, leverage ratio and liquidity coverage ratio
    disclosure as at 30 September 2020.


    In terms of the requirements under Regulation 43(1)(e)(iii) of the regulations relating to
    banks, Directive 11/2015 and Directive 1/2018 issued in terms of section 6(6) of the Banks
    Act (Act No. 94 of 1990), minimum disclosure on the capital adequacy of the group and its
    leverage ratio is required on a quarterly basis. This disclosure is in accordance with Pillar 3
    of the Basel III accord.

Standard Bank Group capital adequacy and leverage ratio


                                                                                       September 2020 (Rm)
                                                                                  Transitional1 Fully loaded2


Ordinary share capital and premium                                                      18 015         18 015
Ordinary shareholders' reserves3                                                      162 350         162 350
Qualifying Common Equity Tier I non-controlling interest                                 7 929          7 929
Regulatory deductions against Common Equity Tier I capital                             (20 569)       (22 258)
Common Equity Tier I capital                                                          167 725         166 036
Unappropriated profit                                                                   (8 373)        (8 373)
Common Equity Tier 1 capital excl. unappropriated profit                              159 352         157 663
Qualifying other equity instruments                                                     8 056           8 056
Qualifying Tier I non-controlling interest                                              1 160           1 160
Tier I capital excl. unappropriated profit                                            168 568         166 879
Qualifying Tier II subordinated debt                                                   24 655          24 655
General allowance for credit impairments                                                5 116           6 062
Tier II capital                                                                        29 771          30 717
Total regulatory capital excl. unappropriated profit                                  198 339         197 596
                                                                                                September 2020 (Rm)
                                                                                           Transitional1 Fully loaded2


  Credit risk                                                                                  107 843             107 843
  Counterparty credit risk                                                                        5 992               5 992
  Equity risk in the banking book                                                                   901                  901
  Market risk                                                                                   10 264               10 264
  Operational risk                                                                              20 891               20 891
  Investments in financial entities                                                               6 966               6 921
  Total minimum regulatory capital requirement 4                                               152 857             152 812




                                                                                                 September 2020
                                                                                         Transitional1 Fully loaded2
  Capital Adequacy Ratio (excl. unappropriated profit)
  Total capital adequacy ratio (%)                                                              15.6                    15.5
  Tier I capital adequacy ratio (%)                                                             13.2                    13.1
  Common Equity Tier I capital adequacy ratio (%)                                               12.5                    12.4


  Capital Adequacy Ratio (incl. unappropriated profit)
  Total capital adequacy ratio (%)                                                              16.2                    16.2
  Tier I capital adequacy ratio (%)                                                             13.9                    13.8
  Common Equity Tier I capital adequacy ratio (%)                                               13.2                    13.0


  Leverage ratio
  Tier I capital (excl. unappropriated profit) (Rm)                                          168 568               166 879
  Tier I capital (incl. unappropriated profit) (Rm)                                          176 941               175 252
  Total exposures (Rm)                                                                     2 264 244             2 262 482
  Leverage ratio (excl. unappropriated profits, %)                                                 7.4                   7.4
  Leverage ratio (incl. unappropriated profits, %)                                                 7.8                   7.7


Note:
1 Represents IFRS 9 transition impact as allowed by the South African Reserve Bank (SARB).
2 Represents fully loaded Expected Credit Loss (ECL) accounting results (full IFRS 9 impact).
3 Including unappropriated profits.
4 Measured at 12.0% and excludes any confidential bank-specific capital requirements. Pillar 2A buffer requirements temporarily

removed in response to the Covid-19 pandemic. There is currently no requirement for the countercyclical buffer add-on in South
Africa or in other jurisdictions in which the group has significant exposures.
The Standard Bank of South Africa Limited (SBSA) and its
subsidiaries’ capital adequacy and leverage ratio


                                                                September 2020 (Rm)
                                                             Transitional1 Fully loaded2


Ordinary share capital and premium                               49 313          49 313
Ordinary shareholders' reserves3                                 48 947          48 947
Regulatory deductions against Common Equity Tier I capital      (11 606)        (12 298)
Common Equity Tier I capital                                     86 654          85 962
Unappropriated profit                                            (2 404)         (2 404)
Common Equity Tier 1 capital excl. unappropriated profit        84 250           83 558
Qualifying other equity instruments                              6 957            6 957
Tier I capital excl. unappropriated profit                      91 207           90 515
Qualifying Tier II subordinated debt                            22 422           22 422
General allowance for credit impairments                         2 409            3 061
Tier II capital                                                  24 831          25 483
Total regulatory capital excl. unappropriated profit            116 038         115 998




                                                               September 2020 (Rm)
                                                             Transitional1 Fully loaded2


Credit risk                                                     65 535          65 535
Counterparty credit risk                                         4 410           4 410
Equity risk in the banking book                                    467             467
Market risk                                                      6 050           6 050
Operational risk                                                12 428          12 428
Investments in financial entities                                1 732           1 732
Total minimum regulatory capital requirement 4                  90 622          90 622
                                                                                              September 2020 (Rm)
                                                                                         Transitional1 Fully loaded2
  Capital Adequacy Ratio (excl. unappropriated profit)
  Total capital adequacy ratio (%)                                                               16.0                   16.0
  Tier I capital adequacy ratio (%)                                                              12.6                   12.5
  Common Equity Tier I capital adequacy ratio (%)                                                11.6                   11.5

  Capital Adequacy Ratio (incl. unappropriated profit)
  Total capital adequacy ratio (%)                                                               16.3                   16.3
  Tier I capital adequacy ratio (%)                                                              12.9                   12.8
  Common Equity Tier I capital adequacy ratio (%)                                                12.0                   11.9


  Leverage ratio
  Tier I capital (excl. unappropriated profit) (Rm)                                            91 207                90 515
  Tier I capital (incl. unappropriated profit) (Rm)                                            93 611                92 919
  Total exposures (Rm)                                                                      1 744 725            1 744 031
  Leverage ratio (excl. unappropriated profits, %)                                                 5.2                   5.2
  Leverage ratio (incl. unappropriated profits, %)                                                 5.4                   5.3

Note:
1 Represents IFRS 9 transition impact as allowed by the SARB.
2 Represents fully loaded ECL accounting results (full IFRS 9 impact).
3 Including unappropriated profits.
4 Measured at 12.5% and excludes any confidential bank-specific capital requirements. Pillar 2A buffer requirements temporarily

removed in response to the Covid-19 pandemic. There is currently no requirement for the countercyclical buffer add-on in South
Africa or in other jurisdictions in which the group has significant exposures.
Liquidity Coverage Ratio (LCR)
In terms of the Basel III requirements in Directive 11/2014 issued in terms of section 6(6) of
the Banks Act, (Act No. 94 of 1990), banks are directed to comply with the minimum
disclosure on the liquidity coverage ratio (LCR) on both a Standard Bank Group consolidated
as well as SBSA Solo entity level. This disclosure is in accordance with Pillar 3 of the Basel
III liquidity accord.

The LCR is designed to promote short-term resilience of the 30-calendar day liquidity profile,
by ensuring that banks have sufficient high quality liquid assets (HQLA) to meet potential
outflows in a stressed environment.

In light of the effects of Covid-19 on the South African market, the SARB has amended the
minimum requirements relating to the liquidity coverage ratio (LCR) from 100% to 80%
(effective 1 April 2020) to provide temporary liquidity relief to banks, in line with the intention
of the Basel III LCR framework, and to promote continued provision of credit by banks. No
temporary relief has been applied to the net stable funding ratio (NSFR).




                                                       Standard Bank Group
                                                              Consolidated                     SBSA Solo
                                                         30 September 2020              30 September 2020
                                                                       Rm                             Rm

 Total HQLA                                                            343 507                        230 410
 Net cash outflows                                                     234 733                        182 317
 LCR (%)                                                                 146.3                          126.4
 Minimum requirement (%)                                                  80.0                           80.0

 Note:
 1. Only banking and/or deposit taking entities are included. The group data represents a
    consolidation of the relevant individual net cash outflows and the individual HQLA portfolios,
    where surplus HQLA holdings in excess of the minimum requirement of 80% have been excluded
    from the aggregated HQLA figure in the case of all Africa Regions entities.

 2. The above figures reflect the simple average of 92 days of daily observations over the quarter
    ended 30 September 2020 for SBSA including SBSA Isle of Man branch, Stanbic Bank Ghana,
    Stanbic Bank Uganda, Stanbic IBTC Bank Nigeria, Standard Bank Namibia, Standard Bank Isle
    of Man Limited and Standard Bank Jersey Limited. The remaining Africa Regions banking entities
    results are based on the average of the month-end data points as at 31 July 2020, 31 August
    2020 and 30 September 2020. The figures are based on the regulatory submissions to the SARB.
 3. The SBSA Solo disclosure excludes foreign branches.


Net Stable Funding Ratio
In terms of the Basel III requirements in Directive 8/2017 issued in terms of section 6(6) of
the Banks Act, (Act No. 94 of 1990), banks are directed to comply with the minimum
disclosure on the net stable funding ratio (NSFR) on both a Standard Bank Group
consolidated as well as SBSA Solo entity level. This disclosure is in accordance with Pillar 3
of the Basel III liquidity accord.

The objective of the Basel III Net stable funding ratio (NSFR) is to promote funding stability
and resilience in the banking sector by requiring banks to maintain a stable funding profile in
relation to the composition of assets and off-balance sheet activities.

.




                                                     Standard Bank Group
                                                            Consolidated                   SBSA Solo
                                                       30 September 2020            30 September 2020
                                                                     Rm                           Rm

    Available stable funding                                       1 330 483                      896 389
    Required stable funding                                        1 069 378                      795 488
    NSFR (%)                                                           124.4                        112.7
    Minimum requirement (%)                                            100.0                        100.0


The information contained in this announcement has not been reviewed and reported on by
the group's external auditors.

Johannesburg
30 November 2020

Lead sponsor
The Standard Bank of South Africa Limited

Independent sponsor
JP Morgan Equities South Africa Proprietary Limited

Namibian sponsor
Simonis Storm Securities (Proprietary) Limited

Date: 30-11-2020 08:05:00
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