Overview of financial results - Standard Bank - Investor Relations

Standard Bank Group Analysis of financial results for the six months ended 30 June 2013
Changes in accounting policies and
restatements
Adoption of new and amended standards effective
for the current financial period
The accounting policies are consistent with those reported in the
previous year except as required in terms of the adoption of the
following new or amended IFRS:
• IFRS 7 Disclosures – Offsetting Financial Assets and Financial
Liabilities (IFRS 7R)
• IFRS 10 Consolidated Financial Statements (IFRS 10)
• IFRS 11 Joint Arrangements (IFRS 11)
• IFRS 13 Fair Value Measurement (IFRS 13)
• IAS 19 Employee Benefits (2011 revised) (IAS 19R)
• IAS 27 Separate Financial Statements (2011 revised)
(IAS 27R) and
• IAS 28 Investments in Associates and Joint Ventures
(2011 revised) (IAS 28R).
Of the above-mentioned IFRS adopted on 1 January 2013, both
IFRS 10 and IAS 19R resulted in the restatement of the group
and the SBSA’s previously reported financial results set out on
pages 94 to 96 as follows.
IFRS 10
In terms of IFRS 10, control exists only if the investor has power
over the investee; exposure, or rights to, variable returns from its
involvement with the investee; and the ability to use its power to
affect those returns. The application of control will be applied
irrespective of the nature of the investee.
Investments in mutual funds that amounted to between 20% and
50% of the total fund value or voting rights were previously
considered to be interests in associates, and those greater than
50% were previously considered to be subsidiaries. As a result of
the adoption of IFRS 10 references in the accounting policies to
specific percentage holdings have been removed.
The adoption of IFRS 10 resulted in the group consolidating
additional mutual funds, classifying additional interests in mutual
funds as associates, reclassifications of interests between these
categories and financial investments and the recognition of
additional treasury shares.
IAS 19R
The most significant change as a result of the adoption of IAS 19R
is the elimination of the ‘corridor’ method under which the
recognition of actuarial gains or losses was deferred. In terms of
IAS 19R all unrecognised actuarial gains have to be recognised in
other comprehensive income (OCI) on transition to the new
requirements.
Other restatements
The comparative statement of financial position as at 30 June
2012 and 31 December 2012 as well as the income statements
for the periods ended 30 June 2012 and 31 December 2012
have been adjusted to reflect the presentation consequences of
the following restatements:
Trading liabilities to deposits from customers – SBG
Certain customer deposits were previously classified as trading
liabilities on the basis that such deposits were used to fund
trading positions. In accordance with IFRS and group accounting
policies, such deposits should rather have been classified as part
of deposit and current accounts. The deposits have accordingly
been reclassified in previously reported financial periods from
trading liabilities to customer deposit and current accounts to
conform to the classification of such deposits in the current
financial reporting period. The restatement had no impact on the
group’s reserves or profit and loss.
Banks to customers reclassification – SBG and SBSA
Following a review and benchmarking of the group’s disclosures
of loans and advances as well as deposit and current accounts,
specifically cross-referencing these to regulatory and risk
disclosures, certain balances that had been previously disclosed in
the various categories of loans to customers or deposits from
customers, have been re-categorised as to/from banks.
The categorisation of the aforementioned asset and liability
balances is not an IFRS requirement, but rather an industry
disclosure practice. There is no change at a net loans and
advances or deposit and current account level.
Revenue sharing agreements – SBSA
During the financial year ended 31 December 2012 the SBSA
group reviewed its transfer pricing agreements in order to refine
such methodologies applied in line with the revised business
operating model, specifically as it relates to the group’s CIB
business. The transfer pricing arrangements have been presented
in the income statement on a basis that reflects the underlying
nature and substance of all cross-border related party transactions.
Such presentation has been achieved through the inclusion of a
new line in the income statement designated “Revenue sharing
agreements with group companies”, as well as presenting any
such costs paid within “other operating expenses” rather than in
specific line item expenses. The comparative results have been
restated in order to present the results of such agreements on a
consistent basis. The transfer pricing agreements fully eliminate
on consolidation into the group’s results.
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