Standard bank AIR2017 annual integrated report

1 Standard Bank Group annual integrated . report 2017. Our reporting suite 2. About this report 4. CONTENTS. OUR BUSINESS. Who we are 8. 6. Our approach to value creation 10. Our group strategy 12. Our shared value model 14. Managing our risks 16. Measuring our strategic progress 18. Why invest in us? 30. OUR PERFORMANCE. Chairman's statement 34. 32. Group chief executive's review 36. Group financial review 40. Personal & Business Banking 54. Corporate & Investment Banking 62. Wealth 70. Human capital report 78. Information technology report 86. Risk report 92. 98. OUR ACCOUNTABILITY. Corporate governance overview 100. remuneration overview 110. ADDITIONAL INFORMATION. Pro forma financial information 122. Standard Bank Group Limited credit ratings Contact and other details 123.

2 Ibc 120. OUR PURPOSE Africa is our home, the reason we exist we drive her growth. To be the leading financial services organisation in, for OUR VISION and across Africa, delivering what we aspire to be exceptional client experiences and superior value. ASSETS. GROUP. R2 028 billion (2016: R1 952 billion). HEADLINE EARNINGS RETURN ON EQUITY. GROUP GROUP. R26 270 million (2016: R23 009 million) (2016: ). COMMON EQUITY TIER 1 COST-TO-INCOME RATIO B-BBEE1. GROUP BANKING ACTIVITIES SOUTH AFRICAN BANKING. OPERATIONS. Level 1 STATUS. (2016: ) (2016: ). (2016: Level 2). 1 Broad-based black economic empowerment. Standard Bank Group annual integrated report 2017 1. OUR REPORTING SUITE. We produce a full suite of reports to cater for the diverse needs of our stakeholders.

3 References These icons refer readers to information elsewhere in this report or in our other reports, which are available online. This report annual integrated report Provides a holistic assessment Frameworks* applied Assurance of the group's ability to create value. JSE Listings Certain information in this Standard Bank Group annual integrated . report 2017. It considers the issues that are material Requirements report has been extracted to our commercial viability and social King Code from the group's audited relevance, which are required to achieve <IR> Framework of the annual financial our strategy in the medium to long term. International integrated statements. These include the macroeconomic and Reporting Council socio-political conditions in which we operate.

4 Where applicable, AIR pg information in this report has been extracted from other publications in our reporting suite. Intended readers: primarily our providers of financial capital, being our shareholders, depositors and bondholders, but information relevant to our other stakeholders is also included. report to society An account of the group's social, Frameworks* applied Assurance economic and environmental impacts King Code KPMG Inc. has provided and how these contribute to the FTSE/JSE Responsible assurance over selected group's sustainability and its ability Investment Index Series information in the report Standard Bank's report TO SOCIETY 2017. to achieve its purpose. and Dow Jones/ to society. Moving Forward, Together RobecoSAM.

5 Our supplementary environmental, Sustainalytics social and governance report , and Carbon Disclosure RTS. our transformation report to society Project are available online. United Nations Sustainable Development Goals Intended readers: the group's broad base of Equator Principles stakeholders, particularly clients, employees, business partners, regulators, government and civil Global society organisations. Reporting Initiative (as a guide). *Definitions: Banks Act South African Banks Act 94 of 1990 The invitation to the annual general Companies Act South African Companies Act 71 of 2008 meeting and the notice of the FTSE Financial Times Stock Exchange resolutions to be tabled at the meeting IFRS International Financial Reporting Standards will be sent separately to shareholders JSE Johannesburg Stock Exchange and is also available on our website at: King Code King report on Corporate Governance, also known as King IV The group Standard Bank Group 2.

6 Intended readers of the reports below: shareholders, debt providers and regulators. Governance and remuneration report A detailed review of the group's Frameworks* applied Assurance governance and remuneration Companies Act Certain information in the practices, including the group's Banks Act governance and GOV. remuneration policy and JSE Listings remuneration report has REM. Standard Bank Group GOVERNANCE AND. remuneration . report 2017. remuneration implementation Requirements been extracted from the report . group's audited annual King Code financial statements. Basel III. annual financial statements Sets out the group's full audited Frameworks* applied Assurance annual financial statements, IFRS Unmodified audit Standard Bank Group annual FINANCIAL.

7 STATEMENTS 2017. including the report of the group Companies Act opinion expressed audit committee. by KPMG Inc. and AFS. Banks Act PricewaterhouseCoopers Inc. JSE Listings Requirements King Code Risk and capital management report A detailed view of the Frameworks* applied management of risks relating Various regulations, Standard Bank Group RISK AND CAPITAL. MANAGEMENT report . 2017. to the group's operations. including Basel III. Banks Act RCM. IFRS. JSE Listings Requirements King Code The Standard Bank of South Africa Limited (SBSA) annual report As the group's largest banking Frameworks* applied Assurance subsidiary, SBSA produces its own Various regulations, Unmodified audit The Standard Bank of South Africa annual report .

8 2017. annual report and audited annual including Basel III opinion expressed financial statements. IFRS by KPMG Inc. and Companies Act PricewaterhouseCoopers Inc. Banks Act JSE Listings Requirements King Code Liberty Holdings Limited (Liberty). As a separate listed entity, Liberty prepares its own integrated report and audited annual financial statements. These reports are available at Other subsidiaries and operations To assist in the reduction of the group's carbon footprint we urge our stakeholders to make use of our reporting site to view our reporting suite at Our other subsidiaries, including our operations in the Africa Regions, or scan the produce their own annual reports and audited annual financial above code to be taken there directly.

9 Statements, which are available on their respective websites, where applicable. Standard Bank Group annual integrated report 2017 3. ABOUT THIS report . As our primary report , the annual integrated report considers the issues that are material to achieving the group's strategy in the medium to long term. This report covers the period 1 January 2017 to 31 December 2017 strategic value drivers. The six capitals are implicit in the value and includes material issues up to the board approval of this report drivers that underpin our strategy, and in our material issues. on 7 March 2018. The boundary of this report extends, therefore, to our relationships outside the organisation that affect our ability to create value This report explains our dependence and impact on the forms over time.

10 Of capital that are fundamental to achieving our performance expectations in the short term and our vision in the medium term, Financial information has been prepared on an IFRS basis, unless within the context of our multi-generational purpose. In this regard, otherwise specified. Material non-financial information is we use terms that stay true to the articulation of the group included, where relevant. Any restatements of comparable strategy and definition of value, which is described as the information have been noted. outcomes we aim for what success looks like in each of our Reporting scope and boundary This report primarily discusses the group's banking activities More detail on our relationship with Liberty, the associated risks which includes the group's wealth businesses (such as short and and opportunities and its impact on our ability to create value as long term insurance products, asset management and pension a group, is included in the Wealth review on page 70.)