Annual integrated report 2016

1 Annual integrated report 2016 . Standard Bank Group AFRICA IS. All our reports are available online at OUR HOME. Financial and other we drive her growth de nitions, as well as a list of acronyms and abbreviations used in this and our other reports are also available online. About Standard Bank Group (the group). For the latest nancial information, including the latest nancial results Our vision is to be the leading financial services presentations, booklets, SENS and organisation in, for and across Africa, delivering results announcements, refer to our investor relations page at exceptional client experiences and superior value. or This sets the primary goals and standard of excellence scan the QR code to be taken there directly. we intend to achieve in the medium term.

2 With a heritage of over 150 years, we have an on-the- We welcome the views of our stakeholders on our reports. Please email your feedback to ground presence in 20 countries in sub-Saharan Africa, fit-for-purpose representation outside Africa, and a strategic partnership with the Industrial and Commercial Bank of China (ICBC). For important information on forward-looking statements in this report , refer to the In line with the realities of risk, regulation, technology inside back cover. and competition that characterise our operating context, we continue to invest significantly in our diversified operations, our people and culture, our systems and infrastructure, and our brand. We understand that our commercial success and social relevance over the long term depends on placing our clients at the centre of everything we do, and ensuring that the outcomes of our activities are a catalyst for growth on this continent we call home.

3 CONTENTS. 2 Our reports 52 Wealth 58 Human capital report OUR BUSINESS 66 Information technology report 6 Our value creation story 70 Risk report 8 What we do 74 Group financial review 10 Our strategy 12 Measuring our strategic progress OUR ACCOUNTABILITY. 16 In, for and across Africa 96 Corporate governance overview 18 Our material issues 106 Remuneration overview 20 Responding to our stakeholders ADDITIONAL INFORMATION. OUR PERFORMANCE 128 Pro forma financial 26 Chairman's statement information 28 Group chief executives' report 128 Standard Bank Group 34 Personal & Business Banking Limited credit ratings 44 Corporate & Investment Banking ibc Contact details About our 2016 Annual term, and our vision in the medium term, within the context of our multi-generational purpose to drive Africa's growth.

4 The boundary of integrated report the report extends, therefore, to our relationships with entities outside This report covers the period the organisation that underpin our ability to create value over time. 1 January 2016 to 31 December 2016 , and includes material issues up to board approval of the report on 1 March 2017. Management of the group's business units and corporate The report discusses our banking functions have approved the relevant content in the Annual operations both throughout Africa and integrated report , and the group audit committee reviewed outside Africa. Financial information has and recommended the report to the group's board of been prepared on an International directors (board) for approval. Financial Reporting Standards (IFRS). basis. Material non-financial information Statement of the board of Standard Bank Group Limited has also, where relevant, been included.

5 The board acknowledges its responsibility to ensure the Any restatements of comparable integrity of the Annual integrated report and is of the opinion information have been noted as such. that the report addresses all material issues that it believes to have a bearing on the group's capacity to create value The six capitals categorisation of the over the short, medium and long term. International <IR> Framework are implicit in the value drivers on page 12 that The report was unanimously approved by the board on underpin our strategy, and in our material 1 March 2017 and is signed on its behalf by: issues on page 18 that affect our commercial and social relevance. These are comprehensively discussed in the report , explaining our dependence and Thulani Gcabashe Sim Tshabalala Ben Kruger impact on the forms of capital that are Chairman Group chief executive Group chief executive fundamental to our ability to achieve our performance expectations in the short Standard Bank Group Annual integrated report 2016 1.

6 Our OUR REPORTING. BOUNDARY. OUR REPORTS These icons refer readers to information reports Annual integrated report elsewhere in this report or in other reports that form part of the group's Banking activities Frameworks applied Assurance As the group's primary report , our Annual integrated report suite of reporting International <IR> Framework of the While the Annual integrated report is not We produce a provides a holistic assessment of the group's ability to create International integrated Reporting Council audited, it contains certain information publications: THIS report . value over time. It considers the issues that are material to South African Companies Act 71 of 2008 that has been extracted from the audited full suite of reports maintaining the commercial viability and social relevance (Companies Act) consolidated Annual financial statements, PERSONAL required to achieve our strategy in the medium to long term, on which an unmodified audit opinion has to cater for the including the macroeconomic and socio-political conditions Annual integrated report 2016 .

7 Standard Bank Group JSE Limited (JSE) Listings Requirements King report on Corporate Governance been expressed, and from the group's & BUSINESS report to society on which assurance has diverse needs of BANKING within which we operate. Where applicable, information has (King Code). South African Banks Act 94 of 1990. been provided on selected information. AIR (This report ). been extracted from the reports listed below. our stakeholders. (PBB) (Banks Act). Intended readers: principally providers of financial capital but also considered to be of interest to our other stakeholders. WEALTH. The reporting boundary for our reports covers the group's banking activities, Governance and remuneration report CORPORATE Frameworks applied Assurance which includes our banking Provides a detailed review of the group's governance Companies Act Certain information in the governance operations and subsidiaries.

8 & INVESTMENT and remuneration practices, including the group's JSE Listings Requirements and remuneration report has been It also covers our Wealth BANKING remuneration policy. The report also provides shareholders Governance and remuneration King Code extracted from the group's audited (CIB) with the notice of the group's Annual general meeting, report 2016 . Standard Bank Group Banks Act Annual financial statements. strategy, which connects together with the associated proxy forms. GOV/REM. to our broader financial services offering and Intended readers: providers of financial capital and pertains to the businesses regulators. within PBB, CIB and Liberty. Unless indicated otherwise, all data has been reported Risk and capital management report and Annual according to this boundary.

9 CENTRAL financial statements Frameworks applied Assurance Various regulations relating to financial KPMG Inc. and PricewaterhouseCoopers Liberty, a subsidiary, and AND OTHER Provides a detailed discussion of the management of services, including Basel III Inc. have audited selected information in strategic risks related to the group's banking and insurance IFRS the risk and capital management report ICBC Standard Bank Plc and have audited the Annual financial operations, and sets out the group's full audited Annual Companies Act Risk and capital management report and and ICBC Argentina, as Annual nancial statements 2016 . statements for the year ended financial statements, including the report of the group audit JSE Listings Requirements Standard Bank Group associates, are included King Code 31 December 2016 , on which they have RCM/AFS.

10 Committee. expressed an unmodified audit opinion. in the report where they Banks Act pertain to the group's Intended readers: providers of financial capital and regulators. strategic value drivers, OUTSIDE THE METRICS. but are not included in BOUNDARY FOR OUR. the metrics that relate BANKING ACTIVITIES. to our banking activities. report to society Indices and frameworks applied Assurance Provides an analysis of the issues material to the group's JSE Listings Requirements KPMG Inc. has provided assurance Group data that includes sustainability and to its stakeholders. King Code over selected information in the report Liberty is indicated using FTSE/JSE Responsible Investment Index to society. Intended readers: the group's broad base of stakeholders, Standard Bank's Series and Dow Jones Sustainability Index the following icon report to Society ICBC ARGENTINA.