Standard Bank Group Limited
Registration number 1969/017128/06
Incorporated in the Republic of South Africa
Website: www.standardbank.com/reporting

Share codes
JSE and A2X share code: SBK
ISIN: ZAE000109815
NSX share code: SNB
SBKP ZAE000038881 (First preference shares)
SBPP ZAE000056339 (Second preference shares)
(“Standard Bank Group” or “the group”)

Voluntary trading update for the ten months to 31 October 2022

Since reporting in August 2022, sustained elevated inflation globally has prompted further
monetary tightening. Between August 2022 and October 2022, interest rates increased in all
our markets of operation except Angola and Zambia. In Angola interest rates declined by 50
basis points in September 2022 and in Zambia, interest rates were flat. Ghana has
experienced some sovereign stress.

In South Africa, inflation moderated slightly from a peak of 7.8% in July 2022 to 7.6% in
October 2022. Inflation is expected to average 6.9% for 2022. Considering the global
backdrop and the inflation outlook, the South African Reserve Bank’s Monetary Policy
Committee decided at its November meeting to increase the repo rate by 75 basis points to
7.00% (31 December 2021: 3.75%). This takes the year-to-date increase to 325 basis
points. On average, over the period, the South African Rand (ZAR) has been weaker relative
to the group’s basket of currencies.

In the ten months to 31 October 2022 (10M22), relative to the ten months to 31 October
2021 (10M21), robust average balance sheet growth, combined with positive endowment
tailwinds from higher average interest rates, resulted in strong double-digit net interest
income growth period on period. Non-interest revenue growth remained robust supported by
growth in transactional activity, trading revenue and insurance earnings. Insurance earnings
growth was underpinned by higher fees mainly due to annual fee increases, continued good
funeral policy performance, and lower credit life claims compared to the prior period.

Cost growth was higher than expected, driven by both higher inflation and higher levels of
activity, particularly in Africa Regions. Despite upward pressure, cost growth was contained
to below the group’s weighted average rate of inflation (14%) and the group continued to
record strong positive jaws.

Group credit impairment charges increased period on period, influenced by the low base in
2H21. The Consumer and High Net Worth portfolio continued to benefit from better
collections and the ongoing normalisation of previous payment holiday portfolios. This was
partially offset by increased impairment charges from new business strain as well as pockets
of consumer strain. The Business and Commercial Client credit impairment charges were
largely flat, as a decline in impairment charges in South Africa were offset by increased
charges in Africa Regions. Corporate and Investment Banking charges continued to
normalise; with additional provisions raised due to portfolio growth, internal rating
downgrades and client-specific provisions. The group remains well provided and can
weather an uptick in delinquencies. For the twelve months to 31 December 2022 (FY22), the
group’s credit loss ratio is still expected to remain in the lower half of the group’s through-
the-cycle target range of 70 to 100 basis points.

Group earnings growth was boosted further by an ongoing recovery in Liberty earnings, as
the pandemic impact waned, as well as an insurance settlement received by ICBC Standard
Bank plc (ICBCS) in January 2022. ICBCS also continued to report a positive operational
performance for 10M22.

Group return on equity (ROE) remained above the group’s cost of equity (1H22 COE:
15.1%) and improved relative to the ROE reported in 1H22 (1H22 ROE: 15.3%).

The group remains well capitalised and liquid. The group’s common equity tier 1 ratio
(including unappropriated profits) was 13.2% as at 30 September 2022.

FY22 total income growth and cost growth are expected to be higher than guided in August
2022. This is driven principally by faster than expected increases in interest rates and higher
inflation. However, we do expect continued positive jaws. We will provide guidance for FY23
when we report in March 2023.

Lastly, the group continues to benefit from strong momentum across all its businesses and
geographies and is on track to deliver against the targets committed to in August 2021 by
2025, namely:
   - Compound annual revenue growth of 7% to 9%;
   - A cost-to-income ratio of approaching 50%; and
   - An ROE in our target range of 17% to 20%.

Standard Bank Group will report financial results for the twelve months to 31 December 2022
on 9 March 2023. The event details will be made available on the group’s Investor Relations
website in due course.

Investor call
Standard Bank Group will host an investor call at 17h00 (South Africa time) on 28 November
2022. To register for the call please use the link below:

SBG Pre-close call link

Alternatively, the call registration details are available on the Standard Bank Group Investor
Relations website - https://reporting.standardbank.com/

A replay will be available on the Investor Relations website shortly after the end of the call.

Shareholders are advised that the information contained in this voluntary trading update has
not been reviewed or reported on by the group’s external auditors.

Queries:
Investor Relations
Sarah Rivett-Carnac
Email: sarah.rivett-carnac@standardbank.co.za
Johannesburg
28 November 2022

JSE Sponsor
The Standard Bank of South Africa Limited

Namibian sponsor
Simonis Storm Securities (Proprietary) Limited