Interim 2013 Results - Part 2 IFRS
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Index to the financial information For the six months ended 30 June 2013 |
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Statement of directors' responsibilities in respect of the interim financial statements for the six months ended 30 June 2013
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43 |
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Interim review report to the members of Old Mutual plc for the six months ended 30 June 2013
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44 |
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Consolidated income statement
|
46 |
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Consolidated statement of comprehensive income
|
47 |
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Reconciliation of adjusted operating profit to profit after tax
|
48 |
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Consolidated statement of financial position
|
50 |
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Consolidated statement of cash flows
|
51 |
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Consolidated statement of changes in equity
|
52 |
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Notes to the consolidated financial statements
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A: Significant accounting policies
|
58 |
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B: Segment information
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62 |
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C: Other key performance information
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76 |
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D: Other income statement notes
|
81 |
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E: Financial assets and liabilities
|
83 |
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F: Other notes
|
91 |
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G: Discontinued operations and disposal groups held for sale
|
91 |
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Adjusted Group MCEV by line of business |
92 |
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Adjusted operating group MCEV statement of earnings |
93 |
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Significant corporate activities and restatement of comparative information |
94 |
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Adjusted operating Group MCEV earnings per share |
95 |
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Group market consistent embedded value statement of earnings |
96 |
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Notes to the MCEV basis supplementary information |
98 |
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A: MCEV policies |
98 |
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B: Segment information |
103 |
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C: Other key performance information |
112 |
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D: Sensitivity tests |
116 |
Statement of directors' responsibilities in respect of the interim financial statements
For the six months ended 30 June 2013
We confirm that to the best of our knowledge:
§ The Group interim financial statements contained herein are presented in accordance with the requirements of IAS 34 'Interim Financial Reporting' and are in compliance with International Financial Reporting Standards (IFRS) as adopted by the EU.
§ The MCEV supplementary information has been prepared in accordance with the Market Consistent Embedded Value Principles (Copyright © Stichting CFO Forum Foundation 2008) issued in June 2008 and updated in October 2009 by the CFO Forum ('the Principles') and the basis of preparation as set out on page 98.
§ The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
Julian Roberts Philip Broadley
Group Chief Executive Group Finance Director
7 August 2013 7 August 2013
Interim review report to the members of Old Mutual plc
For the six months ended 30 June 2013
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the six months ended 30 June 2013 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related notes, set out on pages 58 to 91, which include the Reconciliation of Adjusted Operating Profit to Profit after Tax.
We have also been engaged by the Company to review the Market Consistent Embedded Value (MCEV) basis supplementary information (the supplementary information), set out on pages 92 to 116, for the six months ended 30 June 2013.
We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements or the supplementary information.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules (the DTR) of the UK's Financial Conduct Authority (the UK FCA) and also to provide a review conclusion to the Company on the supplementary information. Our review of the condensed set of financial statements has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. Our review of the supplementary information has been undertaken so that we might state to the Company those matters we have been engaged to state in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA. The directors have accepted responsibility for preparing the supplementary information contained in the interim financial report on an MCEV basis in accordance with the CFO Forum MCEV Principles as issued in June 2008 and updated in October 2009 (the MCEV Principles).
As disclosed in note A, the Group interim financial statements contained herein are presented in accordance with the requirements of IAS 34 'Interim Financial Reporting' and are in compliance with IFRS as adopted by the EU.
The supplementary information has been prepared in accordance with the MCEV principles, using the methodology and assumptions as detailed in the basis of preparation of the supplementary information. The supplementary information should be read in conjunction with the Group's condensed set of financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements and the supplementary information in the interim financial report, based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information and supplementary information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Based on our review, nothing has come to our attention that causes us to believe that the supplementary information for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with the MCEV principles, using the methodology and assumptions as detailed in the basis of preparation of the supplementary information.
Philip Smart (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
15 Canada Square
London E14 5GL
7 August 2013
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Consolidated income statement |
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For the six months ended 30 June 2013 |
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£m |
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Notes |
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
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Revenue |
|
|
|
|
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Gross earned premiums |
B2 |
1,995 |
1,774 |
3,725 |
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Outward reinsurance |
|
(162) |
(155) |
(322) |
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Net earned premiums |
|
1,833 |
1,619 |
3,403 |
|
Investment return (non-banking) |
|
4,489 |
3,479 |
9,880 |
|
Banking interest and similar income |
|
1,573 |
1,780 |
3,431 |
|
Banking trading, investment and similar income |
|
110 |
107 |
214 |
|
Fee and commission income, and income from service activities |
|
1,576 |
1,482 |
3,039 |
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Other income |
|
60 |
70 |
125 |
|
Total revenue |
|
9,641 |
8,537 |
20,092 |
|
Expenses |
|
|
|
|
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Claims and benefits (including change in insurance contract provisions) |
|
(2,295) |
(2,326) |
(5,612) |
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Reinsurance recoveries |
|
118 |
125 |
221 |
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Net claims and benefits incurred |
|
(2,177) |
(2,201) |
(5,391) |
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Change in investment contract liabilities |
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(3,000) |
(1,840) |
(5,361) |
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Losses on loans and advances |
|
(234) |
(216) |
(400) |
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Finance costs |
|
(23) |
(90) |
(214) |
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Banking interest payable and similar expenses |
|
(832) |
(997) |
(1,887) |
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Fee and commission expenses, and other acquisition costs |
|
(538) |
(509) |
(1,064) |
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Change in third-party interest in consolidated funds |
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(271) |
(171) |
(651) |
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Other operating and administrative expenses |
|
(1,770) |
(1,819) |
(3,715) |
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Total expenses |
|
(8,845) |
(7,843) |
(18,683) |
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Share of associated undertakings' and joint ventures' profit after tax |
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10 |
14 |
32 |
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(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
(1) |
20 |
(56) |
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Profit before tax |
|
805 |
728 |
1,385 |
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Income tax expense |
D1 |
(250) |
(241) |
(471) |
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Profit from continuing operations after tax |
|
555 |
487 |
914 |
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Discontinued operations |
|
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(Loss)/profit from discontinued operations after tax |
G1 |
(8) |
595 |
564 |
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Profit after tax for the financial period |
|
547 |
1,082 |
1,478 |
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Attributable to |
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Equity holders of the parent |
|
414 |
930 |
1,172 |
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Non-controlling interests |
|
|
|
|
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Ordinary shares |
|
124 |
122 |
256 |
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Preferred securities |
|
9 |
30 |
50 |
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Profit after tax for the financial period |
|
547 |
1,082 |
1,478 |
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Earnings per share |
|
|
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Basic earnings per share based on profit from continuing operations (pence) |
|
9.1 |
6.7 |
12.6 |
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Basic earnings per share based on (loss)/profit from discontinued operations (pence) |
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(0.2) |
12.5 |
12.3 |
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Basic earnings per ordinary share (pence) |
C2(a) |
8.9 |
19.2 |
24.9 |
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Diluted earnings per share based on profit from continuing operations (pence) |
|
8.5 |
6.2 |
11.6 |
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Diluted earnings per share based on (loss)/profit from discontinued operations (pence) |
|
(0.2) |
11.5 |
11.5 |
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Diluted earnings per ordinary share (pence) |
C2(a) |
8.3 |
17.7 |
23.1 |
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Weighted average number of ordinary shares (millions) |
C2(a) |
4,436 |
4,759 |
4,587 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
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Consolidated statement of comprehensive income |
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For the six months ended 30 June 2013 |
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£m |
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Notes |
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
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Profit after tax for the financial period |
|
547 |
1,082 |
1,478 |
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Other comprehensive income for the financial period |
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Items that will not be reclassified subsequently to profit or loss |
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Fair value gains/(losses) |
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Property revaluation |
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(3) |
(1) |
20 |
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Actuarial gains on defined benefit plans |
|
2 |
4 |
8 |
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Income tax on items that will not be reclassified subsequently to profit or loss |
D1(c) |
4 |
3 |
6 |
|
|
|
3 |
6 |
34 |
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Items that may be reclassified subsequently to profit and loss |
|
|
|
|
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Fair value gains |
|
|
|
|
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Net investment hedge |
|
9 |
123 |
160 |
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Available-for-sale investments |
|
|
|
|
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Fair value (losses)/gains |
|
(7) |
10 |
30 |
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Recycled to the income statement |
|
(8) |
(6) |
(21) |
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Shadow accounting |
|
- |
1 |
6 |
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Currency translation differences on translating foreign operations |
|
(346) |
(203) |
(641) |
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Other movements |
|
(8) |
(1) |
(46) |
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Income tax on items that may be reclassified subsequently to profit and loss |
D1(c) |
1 |
- |
(5) |
|
|
|
(359) |
(76) |
(517) |
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Total other comprehensive income for the financial period from continuing operations |
|
(356) |
(70) |
(483) |
|
Total other comprehensive income for the financial period from discontinued operations² |
|
- |
(348) |
(348) |
|
Total other comprehensive income for the financial period |
|
(356) |
(418) |
(831) |
|
Total comprehensive income for the financial period |
|
191 |
664 |
647 |
|
Attributable to |
|
|
|
|
|
Equity holders of the parent |
|
192 |
543 |
471 |
|
Non-controlling interests |
|
|
|
|
|
Ordinary shares |
|
(10) |
91 |
126 |
|
Preferred securities |
|
9 |
30 |
50 |
|
Total comprehensive income for the financial period |
|
191 |
664 |
647 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
2 Total other comprehensive income for the financial period from discontinued operations for the six months ended 30 June 2012 and the year ended 31 December 2012 includes £350 million cumulative foreign exchange translation gains, previously included in foreign currency translation reserves, that were realised on the disposal of Nordic.
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Reconciliation of adjusted operating profit to profit after tax |
||||
|
For the six months ended 30 June 2013 |
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|
|
|
|
|
|
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|
£m |
|
|
Notes |
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Core operations |
|
|
|
|
|
Emerging Markets |
B3 |
290 |
292 |
611 |
|
Old Mutual Wealth |
B3 |
108 |
95 |
195 |
|
Property & Casualty |
B3 |
10 |
31 |
37 |
|
Nedbank |
B3 |
387 |
405 |
825 |
|
USAM |
B3 |
54 |
42 |
91 |
|
|
|
849 |
865 |
1,759 |
|
Finance costs |
|
(46) |
(75) |
(130) |
|
Long-term investment return on excess assets |
|
25 |
25 |
54 |
|
Net interest payable to non-core operations |
|
(6) |
(13) |
(18) |
|
Corporate costs |
|
(21) |
(25) |
(53) |
|
Other net expenses |
|
- |
13 |
- |
|
Adjusted operating profit before tax |
|
801 |
790 |
1,612 |
|
Adjusting items |
C1(a) |
(69) |
(149) |
(467) |
|
Non-core operations |
B3 |
2 |
53 |
165 |
|
Profit before tax (net of policyholder tax) |
|
734 |
694 |
1,310 |
|
Income tax attributable to policyholder returns |
B3 |
71 |
34 |
75 |
|
Profit before tax |
|
805 |
728 |
1,385 |
|
Total tax expense |
D1(a) |
(250) |
(241) |
(471) |
|
Profit from continuing operations after tax |
|
555 |
487 |
914 |
|
(Loss)/profit from discontinued operations after tax |
G1(a) |
(8) |
595 |
564 |
|
Profit after tax for the financial period |
|
547 |
1,082 |
1,478 |
|
|
|
|
|
|
|
Adjusted operating profit after tax attributable to ordinary equity holders of the parent |
||||
|
|
|
|
|
£m |
|
|
Notes |
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Adjusted operating profit before tax |
|
801 |
790 |
1,612 |
|
Tax on adjusted operating profit |
D1(d) |
(207) |
(210) |
(440) |
|
Adjusted operating profit after tax |
|
594 |
580 |
1,172 |
|
Non-controlling interests - ordinary shares |
|
(137) |
(135) |
(281) |
|
Non-controlling interests - preferred securities |
|
(9) |
(30) |
(50) |
|
Adjusted operating profit after tax attributable to ordinary equity holders of the parent |
|
448 |
415 |
841 |
|
Adjusted weighted average number of shares (millions) |
C2(b) |
4,835 |
4,806 |
4,818 |
|
Adjusted operating earnings per share (pence) |
C2(b) |
9.3 |
8.6 |
17.5 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
Basis of preparation of adjusted operating profit
Adjusted operating profit (AOP) reflects the directors' view of the underlying long-term performance of the Group. AOP is a measure of profitability which adjusts the standard IFRS profit measures for the specific items detailed in note C1 and, as such, it is a non-GAAP measure. This reconciliation explains the differences between adjusted operating profit and profit after tax as reported under IFRS.
For core life assurance and general insurance businesses, AOP is based on a long-term investment return, including investment returns on life funds' investments in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For all core businesses, AOP excludes goodwill impairment, the impact of acquisition accounting, revaluations of put options related to long-term incentive schemes, profit/(loss) on acquisition/disposal of subsidiaries, associated undertakings and strategic investments and fair value profits/(losses) on certain Group debt movements but includes dividends declared to holders of perpetual preferred callable securities. Old Mutual Bermuda and Nordic are treated as non-core operations in the AOP disclosure. Non-core operations are not included in AOP. Nordic is also disclosed as discontinued operations for IFRS reporting. Refer to note B1 for further information on the basis of segmentation.
Adjusted operating earnings per share is calculated on the same basis as AOP. It is stated after tax attributable to AOP and non-controlling interests. It excludes income attributable to Black Economic Empowerment trusts of listed subsidiaries. The calculation of the adjusted weighted average number of shares includes own shares held in policyholders' funds and Black Economic Empowerment trusts.
For the six months ended 30 June 2012 and the year ended 31 December 2012, the weighted average number of shares used in the calculation of basic and diluted earnings per share was adjusted for the seven-for-eight share consolidation that was affected on 23 April 2012. For adjusted operating earnings per share, the adjustment of the weighted average number of shares has been made effective from 1 January 2012. This adjustment had the effect of presenting adjusted earnings per share on a more consistent basis, but resulted in a difference between the adjusted weighted average number of shares for IFRS and AOP for the comparative periods.
|
Consolidated statement of financial position |
||||
|
At 30 June 2013 |
|
|
|
|
|
|
|
|
|
£m |
|
|
Notes |
At 30 June 2013 |
At 30 June 2012 Restated¹ |
At 31 December 2012 Restated¹ |
|
Assets |
|
|
|
|
|
Goodwill and other intangible assets |
|
3,056 |
3,252 |
3,056 |
|
Mandatory reserve deposits with central banks |
|
760 |
964 |
921 |
|
Property, plant and equipment |
|
794 |
924 |
847 |
|
Investment property |
|
1,911 |
2,049 |
1,947 |
|
Deferred tax assets |
|
334 |
317 |
345 |
|
Investments in associated undertakings and joint ventures |
|
130 |
142 |
152 |
|
Deferred acquisition costs |
|
1,264 |
1,324 |
1,288 |
|
Reinsurers' share of policyholder liabilities |
|
1,629 |
1,204 |
1,406 |
|
Loans and advances |
|
37,240 |
40,624 |
38,495 |
|
Investments and securities |
|
89,093 |
84,833 |
88,513 |
|
Current tax receivable |
|
109 |
183 |
103 |
|
Trade, other receivables and other assets |
|
2,955 |
3,552 |
2,930 |
|
Derivative financial instruments |
|
1,417 |
2,210 |
1,780 |
|
Cash and cash equivalents |
|
5,035 |
5,282 |
5,061 |
|
Non-current assets held for sale |
|
5 |
1,178 |
42 |
|
Total assets |
|
145,732 |
148,038 |
146,886 |
|
Liabilities |
|
|
|
|
|
Long-term business policyholder liabilities |
|
81,443 |
77,583 |
80,188 |
|
General insurance liabilities |
|
350 |
343 |
346 |
|
Third-party interests in consolidated funds |
|
5,479 |
5,390 |
6,116 |
|
Borrowed funds |
E2 |
2,563 |
3,536 |
3,050 |
|
Provisions |
|
252 |
294 |
281 |
|
Deferred revenue |
|
664 |
694 |
689 |
|
Deferred tax liabilities |
|
435 |
457 |
404 |
|
Current tax payable |
|
250 |
226 |
287 |
|
Trade, other payables and other liabilities |
|
5,031 |
4,496 |
4,848 |
|
Amounts owed to bank depositors |
|
38,009 |
41,671 |
39,499 |
|
Derivative financial instruments |
|
1,623 |
1,863 |
1,402 |
|
Non-current liabilities held for sale |
|
- |
1,132 |
3 |
|
Total liabilities |
|
136,099 |
137,685 |
137,113 |
|
Net assets |
|
9,633 |
10,353 |
9,773 |
|
Shareholders' equity |
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
7,729 |
7,947 |
7,816 |
|
Non-controlling interests |
|
|
|
|
|
Ordinary shares |
|
1,632 |
1,688 |
1,684 |
|
Preferred securities |
|
272 |
718 |
273 |
|
Total non-controlling interests |
|
1,904 |
2,406 |
1,957 |
|
Total equity |
|
9,633 |
10,353 |
9,773 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
Consolidated statement of cash flows |
|
|||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
£m |
|
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Cash flows from operating activities |
|
|
|
|
|
Profit before tax |
|
805 |
728 |
1,385 |
|
Non-cash movements in profit before tax |
|
620 |
(271) |
249 |
|
Changes in working capital |
|
228 |
254 |
1,046 |
|
Taxation paid |
|
(225) |
(269) |
(295) |
|
Net cash inflow from operating activities |
|
1,428 |
442 |
2,385 |
|
Cash flows from investing activities |
|
|
|
|
|
Net acquisitions of financial investments |
|
(590) |
(574) |
(1,449) |
|
Acquisition of investment properties |
|
(7) |
(21) |
(55) |
|
Proceeds from disposal of investment properties |
|
9 |
17 |
67 |
|
Acquisition of property, plant and equipment |
|
(50) |
(56) |
(120) |
|
Proceeds from disposal of property, plant and equipment |
|
6 |
1 |
7 |
|
Acquisition of intangible assets |
|
(31) |
(27) |
(72) |
|
Acquisition of interests in subsidiaries, associated undertakings and strategic investments |
|
(31) |
(4) |
(23) |
|
Disposal of interests in subsidiaries, associated undertakings and strategic investments |
|
12 |
1,772 |
1,883 |
|
Net cash (outflow)/inflow from investing activities |
|
(682) |
1,108 |
238 |
|
Cash flows from financing activities |
|
|
|
|
|
Dividends paid to |
|
|
|
|
|
Ordinary equity holders of the Company |
|
(238) |
(1,093) |
(1,172) |
|
Non-controlling interests and preferred security interests |
|
(95) |
(118) |
(211) |
|
Dividends received from associated undertakings |
|
12 |
- |
- |
|
Interest paid (excluding banking interest paid) |
|
(26) |
(52) |
(85) |
|
Proceeds from issue of ordinary shares (including by subsidiaries to non-controlling interests) |
|
9 |
- |
35 |
|
Net (acquisition)/disposal of treasury shares |
|
(29) |
(2) |
19 |
|
Issue of subordinated and other debt |
|
- |
137 |
290 |
|
Subordinated and other debt repaid |
|
(262) |
(245) |
(1,293) |
|
Net cash outflow from financing activities |
|
(629) |
(1,373) |
(2,417) |
|
Net increase in cash and cash equivalents |
|
117 |
177 |
206 |
|
Net decrease in cash and cash equivalents - discontinued operations |
|
- |
(129) |
(129) |
|
Effects of exchange rate changes on cash and cash equivalents |
|
(304) |
(86) |
(380) |
|
Cash and cash equivalents at beginning of the year |
|
5,982 |
6,285 |
6,285 |
|
Cash and cash equivalents at end of the year |
|
5,795 |
6,247 |
5,982 |
|
Consisting of |
|
|
|
|
|
Cash and cash equivalents in the statement of financial position |
|
5,035 |
5,282 |
5,061 |
|
Mandatory reserve deposits with central banks |
|
760 |
964 |
921 |
|
Cash and cash equivalents included in assets held for sale |
|
- |
1 |
- |
|
Total |
|
5,795 |
6,247 |
5,982 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
Cash flows presented in this statement include all cash flows relating to policyholders' funds for life assurance.
Except for mandatory reserve deposits with central banks of £760 million (30 June 2012: £964 million; 31 December 2012: £921 million) and cash and cash equivalents subject to consolidation of funds of £1,757 million (30 June 2012: £1,778 million; 31 December 2012: £1,893 million), management do not consider that there are any material amounts of cash and cash equivalents which are not available for use in the Group's day-to-day operations. Mandatory reserve deposits are, however, included in cash and cash equivalents for the purposes of the cash flow statement in line with market practice in South Africa.
|
Consolidated statement of changes in equity |
|||||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
Millions |
|
|
|||
|
Six months ended 30 June 2013 |
Notes |
Number of shares issued and fully paid |
|
Share capital |
Share premium |
Merger reserve |
Available-for-sale reserve |
|
Shareholders' equity at beginning of the period |
|
4,892 |
|
559 |
835 |
1,717 |
65 |
|
Impact of changes in accounting policies (note A1) |
|
- |
|
- |
- |
- |
- |
|
Restated shareholders' equity at beginning of the period |
|
4,892 |
|
559 |
835 |
1,717 |
65 |
|
Profit after tax for the financial period |
|
- |
|
- |
- |
- |
- |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
- |
- |
- |
- |
|
Actuarial gains on defined benefit plans |
|
- |
|
- |
- |
- |
- |
|
Income tax on items that will not be reclassified subsequently to profit or loss |
|
- |
|
- |
- |
- |
- |
|
|
|
- |
|
- |
- |
- |
- |
|
Items that may be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Net investment hedge |
|
- |
|
- |
- |
- |
- |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value losses |
|
- |
|
- |
- |
- |
(7) |
|
Recycled to the income statement |
|
- |
|
- |
- |
- |
(8) |
|
Currency translation differences on translating foreign operations |
|
- |
|
- |
- |
- |
- |
|
Other movements |
|
- |
|
- |
- |
- |
- |
|
Income tax on items that may be reclassified subsequently to profit or loss |
D1(c) |
- |
|
- |
- |
- |
1 |
|
Total comprehensive income for the financial period |
|
- |
|
- |
- |
- |
(14) |
|
Dividends for the year |
C3 |
- |
|
- |
- |
- |
- |
|
Other movements in share capital and share-based payment reserve |
|
4 |
|
- |
8 |
- |
- |
|
Change in participation in subsidiaries |
|
- |
|
- |
- |
- |
- |
|
Transactions with shareholders |
|
4 |
|
- |
8 |
- |
- |
|
Shareholders' equity at end of the period |
|
4,896 |
|
559 |
843 |
1,717 |
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Foreign currency translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
144 |
268 |
33 |
(378) |
3,908 |
682 |
7,833 |
1,965 |
9,798 |
|
- |
- |
- |
- |
(17) |
- |
(17) |
(8) |
(25) |
|
144 |
268 |
33 |
(378) |
3,891 |
682 |
7,816 |
1,957 |
9,773 |
|
- |
- |
- |
- |
397 |
17 |
414 |
133 |
547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
- |
- |
- |
- |
- |
(3) |
- |
(3) |
|
- |
- |
- |
- |
2 |
- |
2 |
- |
2 |
|
- |
- |
- |
- |
(1) |
5 |
4 |
- |
4 |
|
(3) |
- |
- |
- |
1 |
5 |
3 |
- |
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
9 |
- |
- |
9 |
- |
9 |
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
(7) |
- |
(7) |
|
- |
- |
- |
- |
- |
- |
(8) |
- |
(8) |
|
- |
- |
- |
(221) |
- |
- |
(221) |
(125) |
(346) |
|
- |
(10) |
1 |
- |
10 |
- |
1 |
(9) |
(8) |
|
- |
- |
- |
- |
- |
- |
1 |
- |
1 |
|
(3) |
(10) |
1 |
(212) |
408 |
22 |
192 |
(1) |
191 |
|
- |
- |
- |
- |
(238) |
(22) |
(260) |
(73) |
(333) |
|
- |
2 |
- |
- |
(29) |
- |
(19) |
(3) |
(22) |
|
- |
- |
- |
- |
- |
- |
- |
24 |
24 |
|
- |
2 |
- |
- |
(267) |
(22) |
(279) |
(52) |
(331) |
|
141 |
260 |
34 |
(590) |
4,032 |
682 |
7,729 |
1,904 |
9,633 |
|
Consolidated statement of changes in equity |
|||||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
Millions |
|
|
|||
|
Six months ended 30 June 2012 Restated¹ |
Notes |
Number of shares issued and fully paid |
|
Share capital |
Share premium |
Merger reserve |
Available-for-sale reserve |
|
Shareholders' equity at beginning of the period |
|
5,801 |
|
580 |
805 |
2,532 |
53 |
|
Impact of changes in accounting policies (note A1) |
|
- |
|
- |
- |
- |
- |
|
Restated shareholders' equity at beginning of the period |
|
5,801 |
|
580 |
805 |
2,532 |
53 |
|
Profit after tax for the financial period |
|
- |
|
- |
- |
- |
- |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
- |
- |
- |
- |
|
Actuarial gains on defined benefit plans |
|
- |
|
- |
- |
- |
- |
|
Income tax on items that will not be reclassified subsequently to profit or loss |
|
- |
|
- |
- |
- |
- |
|
|
|
- |
|
- |
- |
- |
- |
|
Items that may be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Net investment hedge |
|
- |
|
- |
- |
- |
- |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
|
- |
- |
- |
14 |
|
Recycled to the income statement |
|
- |
|
- |
- |
- |
(6) |
|
Exchange differences recycled to the income statement |
|
- |
|
- |
- |
- |
- |
|
Shadow accounting |
|
- |
|
- |
- |
- |
1 |
|
Currency translation differences on translating foreign operations |
|
- |
|
- |
- |
- |
- |
|
Other movements |
|
- |
|
- |
- |
- |
- |
|
Income tax on items that may be reclassified subsequently to profit or loss |
D1(c) |
- |
|
- |
- |
- |
(1) |
|
Total comprehensive income for the financial period |
|
- |
|
- |
- |
- |
8 |
|
Dividends |
C3 |
- |
|
- |
- |
- |
- |
|
Other movements in share capital and payment reserve |
|
22 |
|
2 |
23 |
- |
- |
|
Cancellation of treasury shares |
|
(239) |
|
(24) |
- |
- |
- |
|
Share consolidation |
|
(697) |
|
- |
- |
- |
- |
|
Merger reserve realised in the period |
|
- |
|
- |
- |
(815) |
- |
|
Change in participation in subsidiaries |
|
- |
|
- |
- |
- |
- |
|
Transactions with shareholders |
|
(914) |
|
(22) |
23 |
(815) |
- |
|
Shareholders' equity at end of the period |
|
4,887 |
|
558 |
828 |
1,717 |
61 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Foreign currency translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
124 |
230 |
5 |
301 |
3,170 |
688 |
8,488 |
2,370 |
10,858 |
|
- |
- |
- |
- |
(20) |
- |
(20) |
- |
(20) |
|
124 |
230 |
5 |
301 |
3,150 |
688 |
8,468 |
2,370 |
10,838 |
|
- |
- |
- |
- |
913 |
17 |
930 |
152 |
1,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
- |
- |
- |
- |
- |
(1) |
- |
(1) |
|
- |
- |
- |
- |
4 |
- |
4 |
- |
4 |
|
- |
- |
- |
- |
(2) |
5 |
3 |
- |
3 |
|
(1) |
- |
- |
- |
2 |
5 |
6 |
- |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
123 |
- |
- |
123 |
- |
123 |
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
14 |
- |
14 |
|
- |
- |
- |
- |
- |
- |
(6) |
- |
(6) |
|
- |
- |
- |
(350) |
- |
- |
(350) |
- |
(350) |
|
- |
- |
- |
- |
- |
- |
1 |
- |
1 |
|
- |
- |
- |
(165) |
1 |
- |
(164) |
(36) |
(200) |
|
1 |
15 |
- |
(8) |
(13) |
- |
(5) |
1 |
(4) |
|
- |
- |
- |
- |
- |
- |
(1) |
- |
(1) |
|
- |
15 |
- |
(400) |
903 |
22 |
548 |
117 |
665 |
|
- |
- |
- |
- |
(1,093) |
(22) |
(1,115) |
(96) |
(1,211) |
|
- |
23 |
- |
- |
(2) |
- |
46 |
8 |
54 |
|
- |
- |
- |
- |
24 |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
- |
- |
- |
- |
815 |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
- |
- |
7 |
7 |
|
- |
23 |
- |
- |
(256) |
(22) |
(1,069) |
(81) |
(1,150) |
|
124 |
268 |
5 |
(99) |
3,797 |
688 |
7,947 |
2,406 |
10,353 |
|
Consolidated statement of changes in equity |
|||||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
Millions |
|
|
|||
|
Year ended 31 December 2012 Restated¹ |
Notes |
Number of shares issued and fully paid |
|
Share capital |
Share premium |
Merger reserve |
Available-for-sale reserve |
|
Shareholders' equity at beginning of the period |
|
5,801 |
|
580 |
805 |
2,532 |
53 |
|
Impact of changes in accounting policies (note A1) |
|
- |
|
- |
- |
- |
- |
|
Restated shareholders' equity at beginning of the period |
|
5,801 |
|
580 |
805 |
2,532 |
53 |
|
Profit after tax for the financial year |
|
- |
|
- |
- |
- |
- |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to profit and loss |
|
|
|
|
|
|
|
|
Fair value gains |
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
- |
- |
- |
- |
|
Actuarial gain on defined benefit plans |
|
- |
|
- |
- |
- |
- |
|
Income tax on items that will not be reclassified subsequently to profit or loss |
|
- |
|
- |
- |
- |
- |
|
|
|
- |
|
- |
- |
- |
- |
|
Items that may be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Net investment hedge |
|
- |
|
- |
- |
- |
- |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
|
- |
- |
- |
33 |
|
Recycled to the income statement |
|
- |
|
- |
- |
- |
(21) |
|
Exchange differences recycled to the income statement |
|
- |
|
- |
- |
- |
- |
|
Shadow accounting |
|
- |
|
- |
- |
- |
6 |
|
Currency translation differences on translating foreign operations |
|
- |
|
- |
- |
- |
- |
|
Other movements |
|
- |
|
- |
- |
- |
- |
|
Income tax on items that may be reclassified subsequently to profit or loss |
D1(c) |
- |
|
- |
- |
- |
(6) |
|
Total comprehensive income for the financial year |
|
- |
|
- |
- |
- |
12 |
|
Dividends for the year |
C3 |
- |
|
- |
- |
- |
- |
|
Other movements in share capital and share-based payment reserve |
|
27 |
|
3 |
30 |
- |
- |
|
Cancellation of treasury shares |
|
(239) |
|
(24) |
- |
- |
- |
|
Share consolidation |
|
(697) |
|
- |
- |
- |
- |
|
Preferred securities purchased |
|
- |
|
- |
- |
- |
- |
|
Merger reserve realised in the year |
|
- |
|
- |
- |
(815) |
- |
|
Change in participation in subsidiaries |
|
- |
|
- |
- |
- |
- |
|
Transactions with shareholders |
|
(909) |
|
(21) |
30 |
(815) |
- |
|
Shareholders' equity at end of the year |
|
4,892 |
|
559 |
835 |
1,717 |
65 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Foreign currency translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
124 |
230 |
5 |
301 |
3,170 |
688 |
8,488 |
2,370 |
10,858 |
|
- |
- |
- |
- |
(20) |
- |
(20) |
- |
(20) |
|
124 |
230 |
5 |
301 |
3,150 |
688 |
8,468 |
2,370 |
10,838 |
|
- |
- |
- |
- |
1,140 |
32 |
1,172 |
306 |
1,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19 |
- |
- |
- |
- |
- |
19 |
1 |
20 |
|
- |
- |
- |
- |
8 |
- |
8 |
- |
8 |
|
- |
- |
- |
- |
(4) |
10 |
6 |
- |
6 |
|
19 |
- |
- |
- |
4 |
10 |
33 |
1 |
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
160 |
- |
- |
160 |
- |
160 |
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
33 |
1 |
34 |
|
- |
- |
- |
- |
- |
- |
(21) |
- |
(21) |
|
- |
- |
- |
(350) |
- |
- |
(350) |
- |
(350) |
|
- |
- |
- |
- |
- |
- |
6 |
- |
6 |
|
- |
- |
- |
(489) |
- |
- |
(489) |
(150) |
(639) |
|
1 |
(24) |
4 |
- |
(40) |
- |
(59) |
10 |
(49) |
|
- |
- |
- |
- |
- |
- |
(6) |
- |
(6) |
|
20 |
(24) |
4 |
(679) |
1,104 |
42 |
479 |
168 |
647 |
|
- |
- |
- |
- |
(1,172) |
(42) |
(1,214) |
(169) |
(1,383) |
|
- |
62 |
- |
- |
7 |
- |
102 |
13 |
115 |
|
- |
- |
24 |
- |
- |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
- |
- |
- |
- |
(13) |
(6) |
(19) |
(445) |
(464) |
|
- |
- |
- |
- |
815 |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
- |
- |
20 |
20 |
|
- |
62 |
24 |
- |
(363) |
(48) |
(1,131) |
(581) |
(1,712) |
|
144 |
268 |
33 |
(378) |
3,891 |
682 |
7,816 |
1,957 |
9,773 |
Notes to the consolidated financial statements
For the six months ended 30 June 2013
A: Significant accounting policies
A1: Basis of preparation
The Group interim financial statements contained herein are presented in accordance with the requirements of IAS 34 'Interim Financial Reporting' and are in compliance with International Financial Reporting Standards (IFRS) adopted by the EU. The Group's results for the six months ended 30 June 2013 and the financial position at that date have been prepared using accounting policies consistent with those applied in the preparation of the Group's 2012 Annual Report and Accounts, except for the adoption of new standards and interpretations effective for the period commencing 1 January 2013. The financial information has been restated where required.
The Group interim financial statements have been prepared on the going concern basis, which the directors believe appropriate. Part 2 of the Interim Review document includes more details on the financial performance of the business. It also sets out further details about risks and uncertainties and discloses how the Group actively manages these risks, the impact to the Group of regulatory changes and an overview of the Group's capital and liquidity position.
The comparative figures for the financial year ended 31 December 2012 represent the consolidated performance of the Group. They are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
Translation of foreign operations
The assets and liabilities of foreign operations are translated from their respective functional currencies into the Group's presentation currency using the period end exchange rates, and their income and expenses using the average exchange rates. Other than in respect of cumulative translation gains and losses up to 1 January 2004, cumulative unrealised gains or losses resulting from translation of functional currencies to the presentation currency are included as a separate component of shareholders' equity. To the extent that these gains and losses are effectively hedged, the cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders' equity. Upon the disposal of subsidiaries the cumulative amount of exchange differences deferred in shareholders' equity, net of attributable amounts in relation to net investments, is recognised in the income statement.
|
The principal exchange rates used to translate the operating results, assets and liabilities of key foreign business segments to pounds sterling are: |
||||||
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 |
Year ended 31 December 2012 |
|||
|
|
Income Statement (average rate) |
Statement of financial position (closing rate) |
Income Statement (average rate) |
Statement of financial position (closing rate) |
Income statement (average rate) |
Statement of financial position (closing rate) |
|
Rand |
14.2269 |
15.0827 |
12.5247 |
12.8401 |
13.0123 |
13.7696 |
|
US dollars |
1.5448 |
1.5185 |
1.5769 |
1.5682 |
1.5850 |
1.6242 |
|
Euro |
1.1763 |
1.1676 |
1.2154 |
1.2396 |
1.2326 |
1.2307 |
New standards, interpretations and amendments adopted by the Group affecting the financial statements for the period ended 30 June 2013
Several new accounting standards are applicable to the Group for the year ending 31 December 2013, and where required those standards have been applied in preparing the financial statements for the six months ended 30 June 2013, with restatement of the comparative information for the six months ended 30 June 2012 and the year ended 31 December 2012 as required. The standards that were relevant in the six months ended 30 June 2013 and have required restatement include amendments to IAS 1 'Presentation of Financial Statements', IAS 19 (Revised 2011) 'Employee Benefits', IFRS 10 'Consolidated Financial Statements' and IFRS 11 'Joint Arrangements'.
Several other new standards and amendments apply for the first time in 2013. However, they do not impact the interim consolidated financial statements of the Group and they are also not expected to have a material impact on future reporting periods as they are disclosure standards. These include IFRS 7 'Financial Instruments: Disclosures (Amended 2011), IFRS 12 'Disclosure of Interest in Other Entities' and IFRS 13 'Fair Value Measurement'.
The following standards were adopted by the Group and had an impact on the interim financial statements:
Amendments to IAS 1 'Presentation of Items of Other Comprehensive Income'
The amendments to IAS 1 require that an entity present separately the items of other comprehensive income (OCI) that may be reclassified to profit or loss in the future, from those that will never be reclassified to profit or loss. The amendment affected presentation only and had no impact on the shareholders' equity or profit.
IAS 19 'Employee Benefits' (Revised 2011)
The Group has adopted IAS 19 'Employee Benefits' (Revised 2011) with a date of initial application of 1 January 2013.
The key amendments are:
n The corridor method has been removed and all actuarial gains and losses are required to be recognised in OCI rather than in profit or loss Expected returns on plan assets are no longer recognised in profit or loss. Instead, interest is recognised on the net defined benefit liability or asset in profit or loss, calculated using the discount rate used to measure the defined benefit obligation.
n Past service costs arising from plan amendments or curtailment are now recognised in profit or loss at the earlier of when the amendment occurs or when the related restructuring or termination cost are recognised. The option to amortise such cost over future years has also been eliminated.
n Administration costs, other than costs of managing plan assets, are recognised in the profit and loss when the service is provided.
The change in accounting policy has been applied retrospectively and as a result, the comparative information for the six months ended 30 June 2012 and the year ended 31 December 2012 have been restated accordingly.
The major impact of the adoption of the standard was an increase in operating and administrative expenses and a net increase in other comprehensive income. The overall impact on the Group was a decrease in equity, an increase in the assets and an increase in the liabilities of the Group. The standard affects the accounting for certain defined pension schemes in Emerging Markets, Nedbank and Old Mutual plc.
The transitional adjustment, applied to the opening statement of financial position, as at 1 January 2013, had an effect of decreasing equity by £17 million, increasing total assets by £5 million and increasing total liabilities by £22 million.
IFRS 10 'Consolidated Financial Statements' and IAS 27 'Separate Financial Statements'
The Group has early adopted IFRS 10 'Consolidated Financial Statements' with a date of initial application of 1 January 2013.
IFRS 10 introduces a single control model that applies to all entities, including special purpose entities. IFRS 10 replaces the parts of IAS 27 'Consolidated and Separate Financial Statements' that dealt with consolidated financial statements and SIC-12 'Consolidation - Special Purpose Entities'. IFRS 10 changes the definition of control such that an investor controls an investee when it has power over the investee, when it is exposed, or has rights, to variable returns from its involvement with the investee and when it has the ability to use its power over the investee to affect those returns. To meet the definition of control in IFRS 10, all three of these criteria must be met.
The implementation of this standard did not have a significant financial impact on the Group's assessment of its interests in investment funds, but it did increase the number of investment funds consolidated. The principal effect was a gross up of the consolidated statement of financial position for the difference between the value of the newly consolidated assets and liabilities and the carrying value of the Group's interest, and the equal and opposite liability for the interests of external parties in these investment funds.
The transitional adjustment, applied to the opening statement of financial position, as at 1 January 2013 had an effect of decreasing non-controlling interest attributable to ordinary shareholders by £8 million, increasing total assets by £3,384 million and increasing total liabilities by £3,392 million.
The Group has only considered the consolidation suite of standards for interests that existed at 1 January 2013. The change in accounting policy has been applied retrospectively and as a result, the comparative information for the six months ended 30 June 2012 and the year ended 31 December 2012 have been restated accordingly.
The following standard was adopted by the Group but had no material impact on the interim financial statements:
IFRS 11 'Joint Arrangements' and IAS 28 'Investment in Associates and Joint Ventures'
The Group has early adopted IFRS 11 'Joint Arrangements' with a date of initial application of 1 January 2013.
IFRS 11 replaces IAS 31 'Interests in Joint Ventures' and SIC-13 'Jointly-controlled entities' and removes the option to account for joint arrangements using proportionate consolidation. Jointly-controlled entities that meet the definition of a joint arrangement under IFRS 11 must now be accounted for using the equity method.
Notes to the consolidated financial statements
For the six months ended 30 June 2013
A: Significant accounting policies continued
A1: Basis of preparation continued
Effect of the adoption of IAS 19 (Revised) and IFRS 10
The following tables summarise the impact of the restatements in the financial statements and the line items affected:
|
|
|
|
|
£m |
|
Six months ended 30 June 2012 |
As previously reported |
Adjustments for adoption of IAS 19 |
Adjustments for adoption of IFRS 10 |
As restated |
|
Consolidated income statement |
|
|
|
|
|
Profit after tax from continuing operations |
492 |
(1) |
(4) |
487 |
|
Profit after tax for the financial period |
1,087 |
(1) |
(4) |
1,082 |
|
Non-controlling interests - ordinary shares |
156 |
- |
(4) |
152 |
|
Consolidated statement of comprehensive income |
|
|
|
|
|
Total other comprehensive income for the financial period |
(420) |
2 |
- |
(418) |
|
Total comprehensive income for the financial period |
667 |
1 |
(4) |
664 |
|
Reconciliation of adjusted operating profit to profit after tax |
|
|
|
|
|
Adjusting items |
(145) |
- |
(4) |
(149) |
|
Adjusted operating profit after tax attributable to equity holders of the parent |
416 |
(1) |
- |
415 |
|
Consolidated statement of financial position |
|
|
|
|
|
Total Assets |
145,156 |
4 |
2,878 |
148,038 |
|
Total Liabilities |
134,781 |
22 |
2,882 |
137,685 |
|
Equity attributable to ordinary shareholders of the parent |
7,965 |
(18) |
- |
7,947 |
|
Non-controlling interests - ordinary shares |
2,410 |
- |
(4) |
2,406 |
|
Consolidated statement of cash flows |
|
|
|
|
|
Cash and cash equivalents at beginning of the year |
5,055 |
- |
1,230 |
6,285 |
|
Cash and cash equivalents at end of the year |
5,053 |
- |
1,194 |
6,247 |
|
Cash and cash equivalents in the statement of financial position |
4,088 |
- |
1,194 |
5,282 |
|
|
|
|
|
£m |
|
Year ended 31 December 2012 |
As previously reported |
Adjustments for adoption of IAS 19 |
Adjustments for adoption IFRS 10 |
As restated |
|
Consolidated income statement |
|
|
|
|
|
Profit after tax from continuing operations |
923 |
(1) |
(8) |
914 |
|
Profit after tax for the financial year |
1,487 |
(1) |
(8) |
1,478 |
|
Non-controlling interests - ordinary shares |
314 |
- |
(8) |
306 |
|
Consolidated statement of comprehensive income |
|
|
|
|
|
Total other comprehensive income for the financial period |
(835) |
4 |
- |
(831) |
|
Total comprehensive income for the financial period |
652 |
3 |
(8) |
647 |
|
Reconciliation of adjusted operating profit to profit after tax |
|
|
|
|
|
Adjusting items |
(459) |
- |
(8) |
(467) |
|
Adjusted operating profit after tax attributable to equity holders of the parent |
842 |
(1) |
- |
841 |
|
Consolidated statement of financial position |
|
|
|
|
|
Total Assets |
143,497 |
5 |
3,384 |
146,886 |
|
Total Liabilities |
133,699 |
22 |
3,392 |
137,113 |
|
Equity attributable to ordinary shareholders of the parent |
7,833 |
(17) |
- |
7,816 |
|
Non-controlling interests - ordinary shares |
1,965 |
- |
(8) |
1,957 |
|
Consolidated statement of cash flows |
|
|
|
|
|
Cash and cash equivalents at beginning of the year |
5,055 |
- |
1,230 |
6,285 |
|
Cash and cash equivalents at end of the year |
4,784 |
- |
1,198 |
5,982 |
|
Cash and cash equivalents in the statement of financial position |
3,863 |
- |
1,198 |
5,061 |
|
Refer to note C2 for the effect on basic and diluted earnings per share |
|
|
|
|
New standards, interpretations and amendments adopted by the Group not affecting the financial statements for the period ended 30 June 2013
The following standards had no financial impact on the interim result of the Group due to the nature of the standards, and will be disclosed in the year end financial statements:
IFRS 7 'Financial Instruments: Disclosures' (effective 1 January 2013)
The amendment to IFRS 7 requires that an entity disclose additional information for financial instruments that are subject to master netting or other similar agreements.
IFRS 12 'Disclosure of Interests in Other Entities'
IFRS 12 sets out the requirements for disclosures relating to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. The standard disclosures include all of the disclosures that were previously part of IAS 27 'Consolidated and Separate Financial Statements', IAS 28 'Investment in Associates and Joint Ventures' and IAS 31 'Interests in Joint Ventures'.
IFRS 13 'Fair Value Measurement'
IFRS 13 replaces existing guidance on fair value measurement in different IFRS with a single definition of fair value, a framework for measuring fair values and disclosures about fair value measurements. The Group has applied fair value measurements on a consistent basis across all reporting periods and, as a result, the implementation of IFRS 13 did not materially impact the fair value measurements carried out by the Group.
All of the disclosure requirements will be included in the year end financial statements. Only the disclosures required by IAS 34 'Interim Financial Reporting' have been included in the interim financial statements.
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
A detailed list of the Group's accounting policies can be found at www.oldmutual.com. The contents of the website are not subject to external audit.
A2: Significant corporate activity and business changes during the period
Acquisition of Oceanic's Nigerian general insurance business
On 22 February 2012, the Group announced that it has made an offer to acquire the majority stake in Oceanic Life, the life assurance operations of the former Oceanic Bank in Nigeria which was acquired by Ecobank Transitional Incorporated. The Group consolidated the financial results of Oceanic for the six months ended 30 June 2013 from 1 January 2013.
Acquisition of AIVA Business Platforms (AIVA)
On 19 November 2012, the Group announced that it has acquired the majority stake in AIVA, a business platform and distribution business based in Uruguay and spanning the Latin American region. All the relevant regulatory approvals where received and the Group consolidated the financial results of AIVA for the six months ended 30 June 2013 from 2 January 2013.
Acquisition of Provident Life Assurance Company Limited (Provident)
On 3 June 2013, the Group announced that it will expand its African presence through the acquisition of a majority stake in Provident, the fifth largest life company in Ghana. The transaction is conditional on relevant regulatory approvals and is expected to complete by the end of 2013.
Acquisition of Banco Unico
On 3 May 2013, the Group announced that Nedbank has entered into an agreement for a stepped acquisition of Banco Unico, located in Mozambique. The transaction is not yet effective as all the conditions precedent has not been met. It is expected to be complete by the end of 2013 and will be accounted for on completion.
Notes to the consolidated financial statements
For the year ended 30 June 2013
A: Significant accounting policies continued
A3: Critical accounting estimates and judgements
In the preparation of these interim financial statements, the Group is required to make estimates and judgements that affect items reported in the consolidated income statement, statement of financial position, and other primary statements and related supporting notes.
Critical accounting estimates and judgements are those which involve the most complex or subjective judgements or assessments. Where applicable, the Group applies estimation and assumption setting techniques that are aligned with relevant actuarial and accounting guidance based on knowledge of the current situation and require assumptions and predictions of future events and actions.
The only change to the critical accounting estimates and judgements that the Group applied during the six months ended 30 June 2013 has been in respect of consolidation of certain entities in accordance with the requirements of IFRS 10.
The Group acts as a fund manager to a number of investment funds. In determining whether the Group controls such a fund, it will focus on an assessment of the aggregate economic interests of the Group (comprising any carried interests and expected management fees) and the investor's rights to remove the fund manager. The Group assesses, on an annual basis, such interests to determine if the fund will be consolidated.
B: Segment information
B1: Basis of segmentation
The Group's segmental results are analysed and reported on a basis consistent with the way that management and the Board of directors assesses performance and allocates resources. Information is presented to the Board on a consolidated basis in pounds sterling (the presentational currency) and in the functional currency of each business.
Adjusted operating profit is one of the key measures reported to the Group's management and Board of directors for their consideration in the allocation of resources to and the review of performance of the segments. The Group utilises additional measures to assess the performance of each of the segments, in particular the level of net client cash flows and funds under management.
A reconciliation between the segment revenues and expenses and the Group's revenues and expenses is shown in note B3. Consistent with internal reporting, assets, liabilities, revenues and expenses that are not directly attributable to a particular segment are allocated between segments where appropriate and where there is a reasonable basis for doing so. The Group accounts for inter-segment revenues and transfers as if the transactions were with third parties at current market prices. Given the nature of the operations, there are no major customers within any of the segments.
The revenues generated in each reported segment can be seen in the analysis of profits and losses in note B3. The segmental information in notes B3 and B4, reflects the adjusted and IFRS measures of profit and loss and the assets and liabilities for each operating segment as provided to management and the Board of directors. There are no differences between the measurement of the assets and liabilities reflected in the primary statements and that reported for the segments.
There are four principal business activities from which the Group generates revenues. These are life assurance (premium income), asset management business (fee and commission income), banking (banking interest receivable) and general insurance (premium income). The lines of business from which each operating segment derives its revenues are as follows:
Core operations
Emerging Markets - life assurance and asset management
Old Mutual Wealth - life assurance and asset management
Property & Casualty - general insurance
Nedbank - banking and asset management
US Asset Management - asset management
Non-core operations
Old Mutual Bermuda - life assurance
Segment presentation
In the short-term insurance review section of the 2012 Annual Report and Accounts, it was announced that, in future, all of the Group's Property and Casualty activities would be reported as a single segment. Consequently, the M&F segment has been renamed as Property & Casualty. This will now include M&F, 100% of iWyze, previously reported as a 50% joint venture between Emerging Markets and M&F, and the general insurance businesses in Namibia and Botswana. The name change has been applied to all reporting periods. Comparative information for the six months ended 30 June 2012 and the year ended 31 December 2012 have been restated accordingly.
In addition to the above, the Long-term Savings segment has been removed from the adjusted operating profit statement - segment information and the statement of financial position - segment information as previously reflected in notes B3 and B4. This segment was merely a sub total of the Emerging Markets and Old Mutual Wealth Segments. This presentational change has been applied to all reporting periods.
The reported segments are now Emerging Markets, Old Mutual Wealth, Property & Casualty, Nedbank and US Asset Management. The Other segment includes Group head office. Old Mutual Bermuda is the principal component of the non-core operations. For all reporting periods, Old Mutual Bermuda has been classified as a continuing operation in the IFRS income statement, but as non-core in determining the Group's adjusted operating profit.
The Group continues to incur costs related to the sale of its Nordic business in 2012. These costs relate to the transition of IT and other support services that were previously provided by the disposed business to the wider Group, back to the Group. These costs are included in the expenses related to the discontinued operations in the interim financial statements for the six months ended 30 June 2013. Further information on the results of discontinued operations is provided in note G1.
In the comparative periods, Nordic has been classified as a discontinued operation in the IFRS consolidated income statement and its results as non-core in determining the Group's adjusted operating profit.
All other businesses have been classified as continuing operations for all reporting periods.
|
|
|
|
|
|
|
B2: Gross earned premiums and deposits to investment contracts |
||||
|
|
|
|
|
£m |
|
Six months ended 30 June 2013 |
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
Total |
|
Life assurance - insurance contracts |
967 |
175 |
- |
1,142 |
|
Life assurance - investment contracts with discretionary participation features |
476 |
- |
- |
476 |
|
General insurance |
- |
- |
377 |
377 |
|
Gross earned premiums |
1,443 |
175 |
377 |
1,995 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Six months ended 30 June 2012 |
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
Total |
|
Life assurance - insurance contracts |
768 |
177 |
- |
945 |
|
Life assurance - investment contracts with discretionary participation features |
470 |
- |
- |
470 |
|
General insurance |
- |
- |
359 |
359 |
|
Gross earned premiums |
1,238 |
177 |
359 |
1,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Year ended 31 December 2012 |
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
Total |
|
Life assurance - insurance contracts |
1,673 |
362 |
- |
2,035 |
|
Life assurance - investment contracts with discretionary participation features |
970 |
- |
- |
970 |
|
General insurance |
- |
- |
720 |
720 |
|
Gross earned premiums |
2,643 |
362 |
720 |
3,725 |
|
Notes to the consolidated financial statements |
|||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
|
B3: Adjusted operating profit statement - segment information for the six months ended 30 June 2013 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
B2 |
|
1,443 |
175 |
377 |
|
Outward reinsurance |
|
|
(41) |
(43) |
(78) |
|
Net earned premiums |
|
|
1,402 |
132 |
299 |
|
Investment return (non-banking) |
|
|
1,974 |
2,195 |
17 |
|
Banking interest and similar income |
|
|
- |
- |
- |
|
Banking trading, investment and similar income |
|
|
- |
- |
- |
|
Fee and commission income, and income from service activities |
|
|
262 |
608 |
14 |
|
Other income |
|
|
23 |
13 |
- |
|
Inter-segment revenues |
|
|
30 |
- |
8 |
|
Total revenues |
|
|
3,691 |
2,948 |
338 |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
|
|
(1,886) |
(148) |
(282) |
|
Reinsurance recoveries |
|
|
32 |
25 |
61 |
|
Net claims and benefits incurred |
|
|
(1,854) |
(123) |
(221) |
|
Change in investment contract liabilities |
|
|
(888) |
(2,112) |
- |
|
Losses on loans and advances |
|
|
- |
- |
- |
|
Finance costs (including interest and similar expenses) |
|
|
- |
- |
- |
|
Banking interest payable and similar expenses |
|
|
- |
- |
- |
|
Fee and commission expenses, and other acquisition costs |
|
|
(117) |
(340) |
(59) |
|
Other expenses |
|
|
(524) |
(205) |
(39) |
|
Change in third-party interest in consolidated funds |
|
|
- |
- |
- |
|
Income tax attributable to policyholder returns |
|
|
(22) |
(49) |
- |
|
Inter-segment expenses |
|
|
(1) |
(11) |
(11) |
|
Total expenses |
|
|
(3,406) |
(2,840) |
(330) |
|
Share of associated undertakings' and joint ventures' profit after tax |
|
|
5 |
- |
2 |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
|
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
|
|
290 |
108 |
10 |
|
Income tax expense |
D1 |
|
(76) |
(20) |
(2) |
|
Non-controlling interests |
|
|
(9) |
- |
(3) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
|
|
205 |
88 |
5 |
|
Adjusting items net of tax and non-controlling interests |
C1(a) |
|
- |
(54) |
(4) |
|
Profit/(loss) after tax from continuing operations |
|
|
205 |
34 |
1 |
|
Loss from discontinued operations after tax |
G1 |
|
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
|
|
205 |
34 |
1 |
1 Non-core operations relates to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the six months ended 30 June 2013 was £2 million. Non-core operations also includes £8 million of divestment cost which relates to the Nordic business sold in 2012. Further information on discontinued operations is provided in note G1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (note C1) |
Discontinued and non-core operations¹ |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
1,995 |
- |
- |
1,995 |
|
- |
- |
- |
- |
(162) |
- |
- |
(162) |
|
- |
- |
- |
- |
1,833 |
- |
- |
1,833 |
|
- |
- |
34 |
304 |
4,524 |
(17) |
(18) |
4,489 |
|
1,573 |
- |
- |
- |
1,573 |
- |
- |
1,573 |
|
110 |
- |
- |
- |
110 |
- |
- |
110 |
|
537 |
185 |
- |
4 |
1,610 |
(34) |
- |
1,576 |
|
18 |
2 |
- |
- |
56 |
- |
4 |
60 |
|
7 |
- |
5 |
(56) |
(6) |
- |
6 |
- |
|
2,245 |
187 |
39 |
252 |
9,700 |
(51) |
(8) |
9,641 |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
(2,316) |
- |
21 |
(2,295) |
|
- |
- |
- |
- |
118 |
- |
- |
118 |
|
- |
- |
- |
- |
(2,198) |
- |
21 |
(2,177) |
|
- |
- |
- |
- |
(3,000) |
- |
- |
(3,000) |
|
(234) |
- |
- |
- |
(234) |
- |
- |
(234) |
|
- |
- |
(46) |
- |
(46) |
23 |
- |
(23) |
|
(832) |
- |
- |
- |
(832) |
- |
- |
(832) |
|
(25) |
(2) |
- |
(32) |
(575) |
40 |
(3) |
(538) |
|
(740) |
(134) |
(35) |
(5) |
(1,682) |
(80) |
(8) |
(1,770) |
|
- |
- |
- |
(271) |
(271) |
- |
- |
(271) |
|
- |
- |
- |
- |
(71) |
71 |
- |
- |
|
(27) |
- |
(6) |
56 |
- |
- |
- |
- |
|
(1,858) |
(136) |
(87) |
(252) |
(8,909) |
54 |
10 |
(8,845) |
|
- |
3 |
- |
- |
10 |
- |
- |
10 |
|
- |
- |
- |
- |
- |
(1) |
- |
(1) |
|
387 |
54 |
(48) |
- |
801 |
2 |
2 |
805 |
|
(100) |
(13) |
4 |
- |
(207) |
(43) |
- |
(250) |
|
(134) |
- |
- |
- |
(146) |
13 |
- |
(133) |
|
153 |
41 |
(44) |
- |
448 |
(28) |
2 |
422 |
|
4 |
(9) |
35 |
- |
(28) |
28 |
- |
- |
|
157 |
32 |
(9) |
- |
420 |
- |
2 |
422 |
|
- |
- |
- |
- |
- |
- |
(8) |
(8) |
|
157 |
32 |
(9) |
- |
420 |
- |
(6) |
414 |
|
Notes to the consolidated financial statements |
|||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
|
B3: Adjusted operating profit statement - segment information for the six months ended 30 June 2012 Restated¹ |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
B2 |
|
1,238 |
177 |
359 |
|
Outward reinsurance |
|
|
(41) |
(43) |
(71) |
|
Net earned premiums |
|
|
1,197 |
134 |
288 |
|
Investment return (non-banking) |
|
|
2,017 |
1,246 |
23 |
|
Banking interest and similar income |
|
|
- |
- |
- |
|
Banking trading, investment and similar income |
|
|
- |
- |
- |
|
Fee and commission income, and income from service activities |
|
|
201 |
597 |
12 |
|
Other income |
|
|
35 |
14 |
- |
|
Inter-segment revenues |
|
|
33 |
2 |
8 |
|
Total revenues |
|
|
3,483 |
1,993 |
331 |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
|
|
(1,958) |
(174) |
(235) |
|
Reinsurance recoveries |
|
|
49 |
34 |
42 |
|
Net claims and benefits incurred |
|
|
(1,909) |
(140) |
(193) |
|
Change in investment contract liabilities |
|
|
(663) |
(1,177) |
- |
|
Losses on loans and advances |
|
|
- |
- |
- |
|
Finance costs (including interest and similar expenses) |
|
|
- |
- |
- |
|
Banking interest payable and similar expenses |
|
|
- |
- |
- |
|
Fee and commission expenses, and other acquisition costs |
|
|
(111) |
(335) |
(53) |
|
Other expenses |
|
|
(494) |
(216) |
(44) |
|
Change in third-party interest in consolidated funds |
|
|
- |
- |
- |
|
Income tax attributable to policyholder returns |
|
|
(23) |
(11) |
- |
|
Inter-segment expenses |
|
|
- |
(19) |
(10) |
|
Total expenses |
|
|
(3,200) |
(1,898) |
(300) |
|
Share of associated undertakings' and joint ventures' profit after tax |
|
|
9 |
- |
- |
|
Profit on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
|
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
|
|
292 |
95 |
31 |
|
Income tax expense |
D1 |
|
(70) |
(13) |
(9) |
|
Non-controlling interests |
|
|
(3) |
- |
(4) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
|
|
219 |
82 |
18 |
|
Adjusting items net of tax and non-controlling interests |
C1(a) |
|
(72) |
(54) |
(6) |
|
Profit/(loss) after tax from continuing operations |
|
|
147 |
28 |
12 |
|
Profit from discontinued operations after tax |
G1 |
|
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
|
|
147 |
28 |
12 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
2 Non-core operations principally relates to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the year ended 31 December 2012 was £49 million. It also includes £4 million of inter-segment revenue, and the after tax results of the Group's discontinued operations. Further information on discontinued operations is provided in note G1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (note C1) |
Discontinued and non-core operations² |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
1,774 |
- |
- |
1,774 |
|
- |
- |
- |
- |
(155) |
- |
- |
(155) |
|
- |
- |
- |
- |
1,619 |
- |
- |
1,619 |
|
- |
1 |
53 |
206 |
3,546 |
(86) |
19 |
3,479 |
|
1,780 |
- |
- |
- |
1,780 |
- |
- |
1,780 |
|
107 |
- |
- |
- |
107 |
- |
- |
107 |
|
533 |
178 |
- |
- |
1,521 |
(39) |
- |
1,482 |
|
13 |
- |
- |
- |
62 |
- |
8 |
70 |
|
14 |
- |
7 |
(81) |
(17) |
- |
17 |
- |
|
2,447 |
179 |
60 |
125 |
8,618 |
(125) |
44 |
8,537 |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
(2,367) |
- |
41 |
(2,326) |
|
- |
- |
- |
- |
125 |
- |
- |
125 |
|
- |
- |
- |
- |
(2,242) |
- |
41 |
(2,201) |
|
- |
- |
- |
- |
(1,840) |
- |
- |
(1,840) |
|
(216) |
- |
- |
- |
(216) |
- |
- |
(216) |
|
- |
- |
(75) |
- |
(75) |
(15) |
- |
(90) |
|
(997) |
- |
- |
- |
(997) |
- |
- |
(997) |
|
- |
(2) |
- |
(30) |
(531) |
45 |
(23) |
(509) |
|
(801) |
(140) |
(36) |
(5) |
(1,736) |
(74) |
(9) |
(1,819) |
|
- |
- |
- |
(171) |
(171) |
- |
- |
(171) |
|
- |
- |
- |
- |
(34) |
34 |
- |
- |
|
(28) |
- |
(24) |
81 |
- |
- |
- |
- |
|
(2,042) |
(142) |
(135) |
(125) |
(7,842) |
(10) |
9 |
(7,843) |
|
- |
5 |
- |
- |
14 |
- |
- |
14 |
|
- |
- |
- |
- |
- |
20 |
- |
20 |
|
405 |
42 |
(75) |
- |
790 |
(115) |
53 |
728 |
|
(113) |
(6) |
1 |
- |
(210) |
(31) |
- |
(241) |
|
(139) |
- |
(19) |
- |
(165) |
13 |
- |
(152) |
|
153 |
36 |
(93) |
- |
415 |
(133) |
53 |
335 |
|
8 |
5 |
(14) |
- |
(133) |
133 |
- |
- |
|
161 |
41 |
(107) |
- |
282 |
- |
53 |
335 |
|
- |
- |
- |
- |
- |
- |
595 |
595 |
|
161 |
41 |
(107) |
- |
282 |
- |
648 |
930 |
|
Notes to the consolidated financial statements |
|||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
|
B3: Adjusted operating profit statement - segment information for the year ended 31 December 2012 Restated¹ |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
B2 |
|
2,643 |
362 |
720 |
|
Outward reinsurance |
|
|
(82) |
(87) |
(153) |
|
Net earned premiums |
|
|
2,561 |
275 |
567 |
|
Investment return (non-banking) |
|
|
5,288 |
3,806 |
44 |
|
Banking interest and similar income |
|
|
- |
- |
- |
|
Banking trading, investment and similar income |
|
|
- |
- |
- |
|
Fee and commission income, and income from service activities |
|
|
440 |
1,199 |
26 |
|
Other income |
|
|
61 |
26 |
1 |
|
Inter-segment revenues |
|
|
83 |
3 |
18 |
|
Total revenues |
|
|
8,433 |
5,309 |
656 |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
|
|
(4,813) |
(387) |
(485) |
|
Reinsurance recoveries |
|
|
89 |
59 |
73 |
|
Net claims and benefits incurred |
|
|
(4,724) |
(328) |
(412) |
|
Change in investment contract liabilities |
|
|
(1,756) |
(3,605) |
- |
|
Losses on loans and advances |
|
|
- |
- |
- |
|
Finance costs (including interest and similar expenses) |
|
|
- |
- |
- |
|
Banking interest payable and similar expenses |
|
|
- |
- |
- |
|
Fee and commission expenses, and other acquisition costs |
|
|
(227) |
(677) |
(113) |
|
Other expenses |
|
|
(1,066) |
(446) |
(82) |
|
Change in third-party interest in consolidated funds |
|
|
- |
- |
- |
|
Income tax attributable to policyholder returns |
|
|
(49) |
(26) |
- |
|
Inter-segment expenses |
|
|
(20) |
(32) |
(14) |
|
Total expenses |
|
|
(7,842) |
(5,114) |
(621) |
|
Share of associated undertakings' and joint ventures' profit after tax |
|
|
20 |
- |
2 |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
|
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
|
|
611 |
195 |
37 |
|
Income tax expense |
D1 |
|
(164) |
(43) |
(9) |
|
Non-controlling interests |
|
|
(9) |
- |
(8) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
|
|
438 |
152 |
20 |
|
Adjusting items net of tax and non-controlling interests |
C1(a) |
|
(153) |
(134) |
(15) |
|
Profit/(loss) after tax from continuing operations |
|
|
285 |
18 |
5 |
|
Profit from discontinued operations after tax |
G1 |
|
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
|
|
285 |
18 |
5 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
2 Non-core operations principally relates to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the year ended 31 December 2012 was £161 million. It also includes £4 million of inter-segment revenue, and the after tax results of the Group's discontinued operations. Further information on discontinued operations is provided in note G1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (note C1) |
Discontinued and non-core operations² |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
3,725 |
- |
- |
3,725 |
|
- |
- |
- |
- |
(322) |
- |
- |
(322) |
|
- |
- |
- |
- |
3,403 |
- |
- |
3,403 |
|
- |
1 |
75 |
722 |
9,936 |
(191) |
135 |
9,880 |
|
3,431 |
- |
- |
- |
3,431 |
- |
- |
3,431 |
|
214 |
- |
- |
- |
214 |
- |
- |
214 |
|
1,084 |
360 |
- |
6 |
3,115 |
(76) |
- |
3,039 |
|
23 |
1 |
- |
(1) |
111 |
- |
14 |
125 |
|
21 |
- |
7 |
(156) |
(24) |
- |
24 |
- |
|
4,773 |
362 |
82 |
571 |
20,186 |
(267) |
173 |
20,092 |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
(5,685) |
- |
73 |
(5,612) |
|
- |
- |
- |
- |
221 |
- |
- |
221 |
|
- |
- |
- |
- |
(5,464) |
- |
73 |
(5,391) |
|
- |
- |
- |
- |
(5,361) |
- |
- |
(5,361) |
|
(400) |
- |
- |
- |
(400) |
- |
- |
(400) |
|
- |
- |
(130) |
- |
(130) |
(84) |
- |
(214) |
|
(1,886) |
- |
- |
- |
(1,886) |
(1) |
- |
(1,887) |
|
- |
(5) |
- |
(67) |
(1,089) |
88 |
(63) |
(1,064) |
|
(1,604) |
(276) |
(67) |
(9) |
(3,550) |
(147) |
(18) |
(3,715) |
|
- |
- |
- |
(651) |
(651) |
- |
- |
(651) |
|
- |
- |
- |
- |
(75) |
75 |
- |
- |
|
(58) |
- |
(32) |
156 |
- |
- |
- |
- |
|
(3,948) |
(281) |
(229) |
(571) |
(18,606) |
(69) |
(8) |
(18,683) |
|
- |
10 |
- |
- |
32 |
- |
- |
32 |
|
- |
- |
- |
- |
- |
(56) |
- |
(56) |
|
825 |
91 |
(147) |
- |
1,612 |
(392) |
165 |
1,385 |
|
(221) |
(15) |
12 |
- |
(440) |
(31) |
- |
(471) |
|
(287) |
- |
(27) |
- |
(331) |
25 |
- |
(306) |
|
317 |
76 |
(162) |
- |
841 |
(398) |
165 |
608 |
|
16 |
(10) |
(102) |
- |
(398) |
398 |
- |
- |
|
333 |
66 |
(264) |
- |
443 |
- |
165 |
608 |
|
- |
- |
- |
- |
- |
- |
564 |
564 |
|
333 |
66 |
(264) |
- |
443 |
- |
729 |
1,172 |
|
Notes to the consolidated financial statements |
|||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
|
B4: Statement of financial position - segment information at 30 June 2013 |
|||||
|
|
|
|
|
||
|
|
Notes |
|
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
|
|
121 |
1,556 |
13 |
|
Mandatory reserve deposits with central banks |
|
|
- |
- |
- |
|
Property, plant and equipment |
|
|
323 |
13 |
21 |
|
Investment property |
|
|
1,555 |
- |
- |
|
Deferred tax assets |
|
|
83 |
32 |
13 |
|
Investments in associated undertakings and joint ventures |
|
|
63 |
- |
2 |
|
Deferred acquisition costs |
|
|
94 |
1,145 |
16 |
|
Reinsurers' share of policyholder liabilities |
|
|
53 |
1,459 |
105 |
|
Loans and advances |
|
|
240 |
188 |
- |
|
Investments and securities |
|
|
30,260 |
48,306 |
330 |
|
Current tax receivable |
|
|
10 |
64 |
5 |
|
Trade, other receivables and other assets |
|
|
687 |
480 |
107 |
|
Derivative financial instruments |
|
|
358 |
- |
- |
|
Cash and cash equivalents |
|
|
915 |
633 |
123 |
|
Non-current assets held for sale |
|
|
- |
4 |
- |
|
Inter-segment assets |
|
|
456 |
75 |
23 |
|
Total assets |
|
|
35,218 |
53,955 |
758 |
|
Liabilities |
|
|
|
|
|
|
Life assurance policyholder liabilities |
|
|
29,826 |
49,520 |
- |
|
General insurance liabilities |
|
|
- |
- |
350 |
|
Third-party interests in consolidated funds |
|
|
- |
- |
- |
|
Borrowed funds |
E2 |
|
199 |
- |
- |
|
Provisions |
|
|
99 |
51 |
26 |
|
Deferred revenue |
|
|
9 |
646 |
8 |
|
Deferred tax liabilities |
|
|
135 |
234 |
22 |
|
Current tax payable |
|
|
161 |
40 |
- |
|
Trade, other payables and other liabilities |
|
|
2,348 |
764 |
121 |
|
Amounts owed to bank depositors |
|
|
83 |
- |
- |
|
Derivative financial instruments |
|
|
401 |
- |
- |
|
Non-current liabilities held for sale |
|
|
- |
- |
- |
|
Inter-segment liabilities |
|
|
244 |
631 |
- |
|
Total liabilities |
|
|
33,505 |
51,886 |
527 |
|
Net assets |
|
|
1,713 |
2,069 |
231 |
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
|
1,683 |
2,069 |
209 |
|
Non-controlling interests |
|
|
30 |
- |
22 |
|
Ordinary shares |
|
|
30 |
- |
22 |
|
Preferred securities |
|
|
- |
- |
- |
|
|
|
|
|
|
|
|
Total equity |
|
|
1,713 |
2,069 |
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
USAM |
Other |
Consolidation adjustments |
Non-core operations |
Total |
|
|
|
|
|
|
|
|
494 |
872 |
- |
- |
- |
3,056 |
|
760 |
- |
- |
- |
- |
760 |
|
424 |
12 |
1 |
- |
- |
794 |
|
14 |
- |
- |
342 |
- |
1,911 |
|
21 |
181 |
2 |
- |
2 |
334 |
|
35 |
13 |
17 |
- |
- |
130 |
|
- |
9 |
- |
- |
- |
1,264 |
|
12 |
- |
- |
- |
- |
1,629 |
|
36,812 |
- |
- |
- |
- |
37,240 |
|
5,839 |
36 |
426 |
3,323 |
573 |
89,093 |
|
30 |
- |
- |
- |
- |
109 |
|
623 |
103 |
37 |
501 |
417 |
2,955 |
|
862 |
- |
56 |
133 |
8 |
1,417 |
|
1,113 |
104 |
259 |
1,757 |
131 |
5,035 |
|
1 |
- |
- |
- |
- |
5 |
|
142 |
22 |
1,390 |
(2,772) |
664 |
- |
|
47,182 |
1,352 |
2,188 |
3,284 |
1,795 |
145,732 |
|
|
|
|
|
|
|
|
906 |
- |
- |
- |
1,191 |
81,443 |
|
- |
- |
- |
- |
- |
350 |
|
- |
- |
- |
5,479 |
- |
5,479 |
|
1,726 |
11 |
627 |
- |
- |
2,563 |
|
39 |
3 |
34 |
- |
- |
252 |
|
1 |
- |
- |
- |
- |
664 |
|
28 |
- |
16 |
- |
- |
435 |
|
8 |
2 |
39 |
- |
- |
250 |
|
1,016 |
203 |
71 |
472 |
36 |
5,031 |
|
37,926 |
- |
- |
- |
- |
38,009 |
|
1,112 |
- |
4 |
105 |
1 |
1,623 |
|
- |
- |
- |
- |
- |
- |
|
451 |
548 |
898 |
(2,772) |
- |
- |
|
43,213 |
767 |
1,689 |
3,284 |
1,228 |
136,099 |
|
3,969 |
585 |
499 |
- |
567 |
9,633 |
|
|
|
|
|
|
|
|
2,140 |
562 |
499 |
- |
567 |
7,729 |
|
1,829 |
23 |
- |
- |
- |
1,904 |
|
1,557 |
23 |
- |
- |
- |
1,632 |
|
272 |
- |
- |
- |
- |
272 |
|
|
|
|
|
|
|
|
3,969 |
585 |
499 |
- |
567 |
9,633 |
|
Notes to the consolidated financial statements |
|||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
|
B4: Statement of financial position - segment information at 30 June 2012 Restated¹ |
|||||
|
|
|
|
|
||
|
|
Notes |
|
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
|
|
105 |
1,673 |
21 |
|
Mandatory reserve deposits with central banks |
|
|
- |
- |
- |
|
Property, plant and equipment |
|
|
390 |
14 |
22 |
|
Investment property |
|
|
1,599 |
- |
- |
|
Deferred tax assets |
|
|
74 |
63 |
13 |
|
Investments in associated undertakings and joint ventures |
|
|
48 |
- |
1 |
|
Deferred acquisition costs |
|
|
111 |
1,160 |
15 |
|
Reinsurers' share of policyholder liabilities |
|
|
52 |
1,028 |
108 |
|
Loans and advances |
|
|
401 |
194 |
1 |
|
Investments and securities |
|
|
30,412 |
42,427 |
429 |
|
Current tax receivable |
|
|
21 |
84 |
2 |
|
Trade, other receivables and other assets |
|
|
751 |
332 |
82 |
|
Derivative financial instruments |
|
|
443 |
- |
- |
|
Cash and cash equivalents |
|
|
516 |
553 |
109 |
|
Non-current assets held for sale |
|
|
- |
1,176 |
- |
|
Inter-segment assets |
|
|
432 |
116 |
21 |
|
Total assets |
|
|
35,355 |
48,820 |
824 |
|
Liabilities |
|
|
|
|
|
|
Life assurance policyholder liabilities |
|
|
30,747 |
43,310 |
- |
|
General insurance liabilities |
|
|
- |
- |
343 |
|
Third-party interests in consolidated funds |
|
|
- |
- |
- |
|
Borrowed funds |
E2 |
|
234 |
- |
- |
|
Provisions |
|
|
125 |
45 |
28 |
|
Deferred revenue |
|
|
13 |
672 |
8 |
|
Deferred tax liabilities |
|
|
163 |
195 |
15 |
|
Current tax payable |
|
|
144 |
35 |
- |
|
Trade, other payables and other liabilities |
|
|
1,757 |
643 |
113 |
|
Amounts owed to bank depositors |
|
|
93 |
- |
- |
|
Derivative financial instruments |
|
|
306 |
(4) |
- |
|
Non-current liabilities held for sale |
|
|
- |
1,132 |
- |
|
Inter-segment liabilities |
|
|
73 |
460 |
2 |
|
Total liabilities |
|
|
33,655 |
46,488 |
509 |
|
Net assets |
|
|
1,700 |
2,332 |
315 |
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
|
1,700 |
2,332 |
294 |
|
Non-controlling interests |
|
|
- |
- |
21 |
|
Ordinary shares |
|
|
- |
- |
21 |
|
Preferred securities |
|
|
- |
- |
- |
|
|
|
|
|
|
|
|
Total equity |
|
|
1,700 |
2,332 |
315 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
USAM |
Other |
Consolidation adjustments |
Non-core operations |
Total |
|
|
|
|
|
|
|
|
548 |
891 |
14 |
- |
- |
3,252 |
|
964 |
- |
- |
- |
- |
964 |
|
487 |
10 |
1 |
- |
- |
924 |
|
48 |
- |
- |
402 |
- |
2,049 |
|
25 |
139 |
2 |
- |
1 |
317 |
|
51 |
15 |
27 |
- |
- |
142 |
|
- |
7 |
- |
- |
31 |
1,324 |
|
16 |
- |
- |
- |
- |
1,204 |
|
40,028 |
- |
- |
- |
- |
40,624 |
|
6,589 |
42 |
430 |
3,091 |
1,413 |
84,833 |
|
76 |
- |
- |
- |
- |
183 |
|
902 |
101 |
45 |
564 |
775 |
3,552 |
|
1,137 |
- |
96 |
404 |
130 |
2,210 |
|
922 |
98 |
1,208 |
1,778 |
98 |
5,282 |
|
2 |
- |
- |
- |
- |
1,178 |
|
166 |
21 |
1,093 |
(2,379) |
530 |
- |
|
51,961 |
1,324 |
2,916 |
3,860 |
2,978 |
148,038 |
|
|
|
|
|
|
|
|
887 |
- |
- |
- |
2,639 |
77,583 |
|
- |
- |
- |
- |
- |
343 |
|
- |
- |
- |
5,390 |
- |
5,390 |
|
2,281 |
11 |
1,010 |
- |
- |
3,536 |
|
33 |
2 |
61 |
- |
- |
294 |
|
1 |
- |
- |
- |
- |
694 |
|
61 |
- |
23 |
- |
- |
457 |
|
4 |
1 |
42 |
- |
- |
226 |
|
1,213 |
157 |
77 |
477 |
59 |
4,496 |
|
41,578 |
- |
- |
- |
- |
41,671 |
|
1,189 |
- |
- |
372 |
- |
1,863 |
|
- |
- |
- |
- |
- |
1,132 |
|
441 |
566 |
836 |
(2,379) |
1 |
- |
|
47,688 |
737 |
2,049 |
3,860 |
2,699 |
137,685 |
|
4,273 |
587 |
867 |
- |
279 |
10,353 |
|
|
|
|
|
|
|
|
2,358 |
563 |
421 |
- |
279 |
7,947 |
|
1,915 |
24 |
446 |
- |
- |
2,406 |
|
1,643 |
24 |
- |
- |
- |
1,688 |
|
272 |
- |
446 |
- |
- |
718 |
|
|
|
|
|
|
|
|
4,273 |
587 |
867 |
- |
279 |
10,353 |
|
Notes to the consolidated financial statements |
|||||
|
For the six months ended 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
|
B4: Statement of financial position - segment information at 31 December 2012 Restated¹ |
|||||
|
|
|
|
|
||
|
|
Notes |
|
Emerging Markets |
Old Mutual Wealth |
Property & Casualty |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
|
|
98 |
1,594 |
14 |
|
Mandatory reserve deposits with central banks |
|
|
- |
- |
- |
|
Property, plant and equipment |
|
|
336 |
13 |
20 |
|
Investment property |
|
|
1,588 |
- |
- |
|
Deferred tax assets |
|
|
82 |
44 |
20 |
|
Investments in associated undertakings and joint ventures |
|
|
57 |
- |
2 |
|
Deferred acquisition costs |
|
|
103 |
1,159 |
18 |
|
Reinsurers' share of policyholder liabilities |
|
|
55 |
1,236 |
100 |
|
Loans and advances |
|
|
142 |
180 |
- |
|
Investments and securities |
|
|
31,157 |
45,402 |
397 |
|
Current tax receivable |
|
|
16 |
64 |
5 |
|
Trade, other receivables and other assets |
|
|
697 |
333 |
92 |
|
Derivative financial instruments |
|
|
612 |
- |
- |
|
Cash and cash equivalents |
|
|
816 |
576 |
109 |
|
Non-current assets held for sale |
|
|
- |
5 |
- |
|
Inter-segment assets |
|
|
562 |
101 |
43 |
|
Total assets |
|
|
36,321 |
50,707 |
820 |
|
Liabilities |
|
|
|
|
|
|
Life assurance policyholder liabilities |
|
|
31,124 |
46,455 |
- |
|
General insurance liabilities |
|
|
- |
- |
346 |
|
Third-party interests in consolidated funds |
|
|
- |
- |
- |
|
Borrowed funds |
E2 |
|
218 |
- |
- |
|
Provisions |
|
|
120 |
54 |
30 |
|
Deferred revenue |
|
|
11 |
667 |
10 |
|
Deferred tax liabilities |
|
|
130 |
189 |
21 |
|
Current tax payable |
|
|
198 |
39 |
- |
|
Trade, other payables and other liabilities |
|
|
2,221 |
669 |
127 |
|
Amounts owed to bank depositors |
|
|
86 |
- |
- |
|
Derivative financial instruments |
|
|
377 |
- |
- |
|
Non-current liabilities held for sale |
|
|
- |
- |
- |
|
Inter-segment liabilities |
|
|
216 |
587 |
2 |
|
Total liabilities |
|
|
34,701 |
48,660 |
536 |
|
Net assets |
|
|
1,620 |
2,047 |
284 |
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
|
1,606 |
2,047 |
261 |
|
Non-controlling interests |
|
|
14 |
- |
23 |
|
Ordinary shares |
|
|
14 |
- |
23 |
|
Preferred securities |
|
|
- |
- |
- |
|
|
|
|
|
|
|
|
Total equity |
|
|
1,620 |
2,047 |
284 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
USAM |
Other |
Consolidation adjustments |
Non-core operations |
Total |
|
|
|
|
|
|
|
|
534 |
816 |
- |
- |
- |
3,056 |
|
921 |
- |
- |
- |
- |
921 |
|
465 |
12 |
1 |
- |
- |
847 |
|
15 |
- |
- |
344 |
- |
1,947 |
|
34 |
162 |
2 |
- |
1 |
345 |
|
49 |
18 |
26 |
- |
- |
152 |
|
- |
8 |
- |
- |
- |
1,288 |
|
15 |
- |
- |
- |
- |
1,406 |
|
38,173 |
- |
- |
- |
- |
38,495 |
|
6,303 |
37 |
368 |
3,897 |
952 |
88,513 |
|
18 |
- |
- |
- |
- |
103 |
|
674 |
105 |
62 |
372 |
595 |
2,930 |
|
1,003 |
- |
97 |
50 |
18 |
1,780 |
|
1,049 |
115 |
379 |
1,892 |
125 |
5,061 |
|
37 |
- |
- |
- |
- |
42 |
|
111 |
21 |
1,366 |
(2,877) |
673 |
- |
|
49,401 |
1,294 |
2,301 |
3,678 |
2,364 |
146,886 |
|
|
|
|
|
|
|
|
907 |
- |
- |
- |
1,702 |
80,188 |
|
- |
- |
- |
- |
- |
346 |
|
- |
- |
- |
6,116 |
- |
6,116 |
|
2,163 |
10 |
659 |
- |
- |
3,050 |
|
36 |
1 |
40 |
- |
- |
281 |
|
1 |
- |
- |
- |
- |
689 |
|
40 |
- |
24 |
- |
- |
404 |
|
9 |
6 |
34 |
- |
1 |
287 |
|
1,076 |
193 |
70 |
400 |
92 |
4,848 |
|
39,413 |
- |
- |
- |
- |
39,499 |
|
977 |
- |
8 |
39 |
1 |
1,402 |
|
3 |
- |
- |
- |
- |
3 |
|
596 |
554 |
922 |
(2,877) |
- |
- |
|
45,221 |
764 |
1,757 |
3,678 |
1,796 |
137,113 |
|
4,180 |
530 |
544 |
- |
568 |
9,773 |
|
|
|
|
|
|
|
|
2,283 |
507 |
544 |
- |
568 |
7,816 |
|
1,897 |
23 |
- |
- |
- |
1,957 |
|
1,624 |
23 |
- |
- |
- |
1,684 |
|
273 |
- |
- |
- |
- |
273 |
|
|
|
|
|
|
|
|
4,180 |
530 |
544 |
- |
568 |
9,773 |
Notes to the consolidated financial statements
For the six months ended 30 June 2013
C: Other key performance information
C1: Operating profit adjusting items
(a) Summary of adjusting items for determination of AOP
In determining the adjusted operating profit of the Group for core operations, certain adjustments are made to profit before tax to reflect the directors' view of the underlying long-term performance of the Group. The following table shows an analysis of those adjustments from adjusted operating profit to profit before and after tax.
|
|
|
£m |
||
|
|
Notes |
Six months ended 30 June 2013 |
Six months ended 30 June 2012 |
Year ended 31 December 2012 |
|
Income/(expense) |
|
|
|
|
|
Goodwill impairment and impact of acquisition accounting |
C1(b) |
(57) |
(64) |
(123) |
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
(1) |
20 |
(56) |
|
Short-term fluctuations in investment return |
C1(d) |
16 |
(49) |
(78) |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
C1(e) |
(33) |
(37) |
(113) |
|
Dividends declared to holders of perpetual preferred callable securities |
C1(f) |
22 |
22 |
42 |
|
US Asset Management equity plans |
C1(g) |
(17) |
(4) |
(13) |
|
Credit-related fair value losses on Group debt instruments |
C1(h) |
1 |
(37) |
(126) |
|
Total adjusting items |
|
(69) |
(149) |
(467) |
|
Tax on adjusting items |
|
28 |
3 |
44 |
|
Non-controlling interest in adjusting items |
|
13 |
13 |
25 |
|
Total adjusting items after tax and non-controlling interests |
|
(28) |
(133) |
(398) |
|
|
|
|
|
|
(b) Goodwill impairment and impact of acquisition accounting
When applying acquisition accounting, deferred acquisition costs and deferred revenues existing at the point of acquisition are not recognised under IFRS. These are reversed in the acquisition statement of financial position and replaced by goodwill, other intangible assets and the value of the acquired present value of in-force business (acquired PVIF). In determining adjusted operating profit, the Group recognises deferred revenue and acquisition costs in relation to policies sold by acquired businesses pre-acquisition and excludes the impairment of goodwill and the amortisation of acquired other intangibles and acquired PVIF and the movements in certain acquisition date provisions. The effect of these adjustments to determine adjusted operating profit are summarised below:
|
|
|
|
|
£m |
|
Six months ended 30 June 2013 |
Emerging Markets |
Old Mutual Wealth |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(38) |
- |
(38) |
|
Amortisation of acquired deferred costs and revenue |
- |
6 |
- |
6 |
|
Amortisation of other acquired intangible assets |
(1) |
(23) |
- |
(24) |
|
Goodwill impairment |
(1) |
- |
- |
(1) |
|
|
(2) |
(55) |
- |
(57) |
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Six months ended 30 June 2012 |
Emerging Markets |
Old Mutual Wealth |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(43) |
- |
(43) |
|
Amortisation of acquired deferred costs and revenue |
- |
6 |
- |
6 |
|
Amortisation of other acquired intangible assets |
(1) |
(25) |
(1) |
(27) |
|
|
(1) |
(62) |
(1) |
(64) |
|
|
||||
|
|
|
|
|
£m |
|
Year ended 31 December 2012 |
Emerging Markets |
Old Mutual Wealth |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(84) |
- |
(84) |
|
Amortisation of acquired deferred costs and revenue |
- |
12 |
- |
12 |
|
Amortisation of other acquired intangible assets |
(2) |
(48) |
(1) |
(51) |
|
|
(2) |
(120) |
(1) |
(123) |
|
(c) (Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments (Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments is analysed below: |
||||
|
|
|
|
£m |
|
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 |
Year ended 31 December 2012 |
|
|
USAM |
(1) |
20 |
(16) |
|
|
Emerging Markets |
- |
- |
(15) |
|
|
Old Mutual Wealth |
- |
- |
(25) |
|
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
(1) |
20 |
(56) |
|
On 2 January 2013, USAM completed the previously announced transactions to sell five of its affiliates. For the six months ended 30 June 2013, a loss of £1 million was recognised in relation to these transactions.
On 13 April 2012, USAM disposed of Old Mutual Capital, Inc, a subsidiary, at a profit of £12 million. On 15 May 2012, USAM disposed of Dwight Asset Management Company LLC, a fixed income affiliate, at a profit of £7 million. On 11 October 2012, the Group announced that it had finalised agreements to sell five USAM affiliates at a loss of £32 million. A £3 million loss was also recognised during the year ended 31 December 2012 in relation to disposals of other USAM subsidiaries in previous periods.
On 20 November 2012, the Emerging Markets segment recognised a profit of £3 million on the acquisition of a strategic investment Curo Fund Services (Pty) Ltd.
During the year ended 31 December 2012, the Group incurred expenses of £18 million as initial costs regarding Zimbabwean Indigenisation and Economic Empowerment Schemes. These costs are directly related to the acquisition of the Zimbabwean business.
On 31 August 2012, Old Mutual Wealth completed the sale of its Finnish branch at a loss of £27 million. A profit of £2 million was recognised on the sale of Skandia Services AG (Switzerland) on 30 June 2012.
(d) Short-term fluctuations in investment return
Profit before tax, as disclosed in the consolidated IFRS income statement, includes actual investment returns earned on the shareholder assets of the Group's life assurance and general insurance businesses. Adjusted operating profit is stated after recalculating shareholder asset investment returns based on a long-term investment return rate. The difference between the actual and the long-term investment returns is referred to as the short-term fluctuation in investment return.
Long-term rates of return are based on achieved rates of return appropriate to the underlying asset base, adjusted for current inflation expectations, default assumptions, costs of investment management and consensus economic investment forecasts. The underlying rates are principally derived with reference to 10-year government bond rates, cash and money market rates and an explicit equity risk premium for South African businesses. The rates set out below reflect the proposed weighting of investments in underlying cash, money market and equity assets. Long-term rates of return are reviewed frequently by the Board, usually annually, for appropriateness. The review of the long-term rates of return seeks to ensure that the returns credited to adjusted operating profit are consistent with the actual returns expected to be earned over the long-term.
For Emerging Markets, the return is applied to an average value of investible shareholders' assets, adjusted for net fund flows. For Old Mutual Wealth, the return is applied to average investible assets. For Property & Casualty, the return is an average value of investible assets supporting shareholders' funds and insurance liabilities, adjusted for net fund flows.
|
|
|
|
% |
|
Long-term investment rates |
Six months ended 30 June 2013 |
Six months ended 30 June 2012 |
Year ended 31 December 2012 |
|
Emerging Markets |
8.0 |
9.0 |
9.0 |
|
Old Mutual Wealth |
1.0 |
1.5 |
1.5 |
|
Property & Casualty |
7.4 |
8.6 |
8.6 |
Notes to the consolidated financial statements
For the six months ended 30 June 2013
C: Other key performance information continued
C1: Operating profit adjusting items continued
|
(d) Short-term fluctuations in investment return continued |
||||||
|
|
||||||
|
Analysis of short-term fluctuations in investment return |
||||||
|
|
£m |
|||||
|
Six months ended 30 June 2013 |
Emerging Markets |
Old Mutual Wealth1 |
Property & Casualty |
Other |
Total |
|
|
Actual shareholder investment return |
88 |
24 |
12 |
18 |
142 |
|
|
Less: Long-term investment return |
55 |
29 |
17 |
25 |
126 |
|
|
Short-term fluctuations in investment return |
33 |
(5) |
(5) |
(7) |
16 |
|
|
|
|
|
|
|
|
|
|
|
£m |
|||||
|
Six months ended 30 June 2012 |
Emerging Markets |
Old Mutual Wealth1 |
Property & Casualty |
Other |
Total |
|
|
Actual shareholder investment return |
19 |
19 |
18 |
25 |
81 |
|
|
Less: Long-term investment return |
63 |
18 |
24 |
25 |
130 |
|
|
Short-term fluctuations in investment return |
(44) |
1 |
(6) |
- |
(49) |
|
|
|
|
|
|
|
|
|
|
|
£m |
|||||
|
Year ended 31 December 2012 |
Emerging Markets |
Old Mutual Wealth1 |
Property & Casualty |
Other |
Total |
|
|
Actual shareholder investment return |
81 |
65 |
34 |
34 |
214 |
|
|
Less: Long-term investment return |
124 |
67 |
47 |
54 |
292 |
|
|
Short-term fluctuations in investment return |
(43) |
(2) |
(13) |
(20) |
(78) |
|
1 Old Mutual Wealth long-term investment return includes £26 million (six months ended 30 June 2012: £14 million; year ended 31 December 2012: £59 million) in respect of income tax attributable to policyholder returns.
(e) Investment return adjustment for Group equity and debt instruments held in policyholder funds
Adjusted operating profit includes investment returns on policyholder investments in Group equity and debt instruments held by the Group's life funds. These include investments in the Company's ordinary shares and the subordinated liabilities and ordinary securities issued by Nedbank. These investment returns are eliminated within the consolidated income statement in arriving at profit before tax in the IFRS income statement, but are included in adjusted operating profit. During the six months ended 30 June 2013, the investment return adjustment increased adjusted operating profit by £33 million (six months ended 30 June 2012: increase of £37 million; year ended 31 December 2012: increase of £113 million).
(f) Dividends declared to holders of perpetual preferred callable securities
Dividends declared to the holders of the Group's perpetual preferred callable securities were £22 million for the six months ended 30 June 2013 (six months ended 30 June 2012: £22 million; year ended 31 December 2012: £42 million). These are recognised in finance costs on an accruals basis for the purpose of determining adjusted operating profit. In the IFRS financial statements this distribution is recognised directly in equity.
(g) US Asset Management equity plans
US Asset Management has a number of long-term incentive arrangements with senior employees in its asset management affiliates.
The Group has issued put options in equities in the affiliates to senior employees as part of its US affiliate incentive schemes. The impact of revaluing these instruments is recognised in accordance with IFRS, but excluded from adjusted operating profit. At 30 June 2013, these instruments were revalued, the impact of which was a profit of £17 million (six months ended 30 June 2012: profit of £4 million; year ended 31 December 2012: profit of £13 million).
(h) Credit-related fair value gains and losses on Group debt instruments
The widening of credit spread for the Group debt instruments causes the market value of debt to decrease. This results in gains being recognised in the Group consolidated income statement, compared with losses if the credit spread narrows and the market value of debt instruments rises. This resulted in net gains of £1 million for the six months ended 30 June 2013 (£37 million loss for the six months ended 30 June 2012; £55 million loss for the year ended 31 December 2012).
In the directors' view, such movements are not reflective of the underlying performance of the Group and will reverse over time. They have therefore been excluded from adjusted operating profit.
On 1 August 2012, the Group redeemed £388 million of the £500 million senior bond due in 2016 at a cash consideration of £459 million. The £71 million excess over the nominal value reflected the market value of the instrument prior to expiration.
C2: Earnings and earnings per share
(a) Basic and diluted earnings per share
Basic earnings per share is calculated by dividing the profit for the financial period attributable to ordinary equity shareholders by the weighted average number of ordinary shares in issue during the year excluding own shares held in policyholder funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Profit for the financial period attributable to equity holders of the parent from continuing operations |
422 |
335 |
608 |
|
(Loss)/profit for the financial period attributable to equity holders of the parent from discontinued operations |
(8) |
595 |
564 |
|
Profit for the financial period attributable to equity holders of the parent |
414 |
930 |
1,172 |
|
Dividends paid to holders of perpetual preferred callable securities |
(17) |
(17) |
(32) |
|
Profit attributable to ordinary equity holders |
397 |
913 |
1,140 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
Total dividends paid to holders of perpetual preferred callable securities of £17 million for the six months ended 30 June 2013 (six months ended 30 June 2012: £17 million; year ended 31 December 2012: £32 million) are stated net of tax credits of £5 million (six months ended 30 June 2012: £5 million; year ended 31 December 2012: £10 million).
|
|
|
|
Millions |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 |
Year ended 31 December 2012 |
|
Weighted average number of ordinary shares in issue |
4,894 |
5,303 |
5,096 |
|
Shares held in charitable foundations |
(6) |
(6) |
(6) |
|
Shares held in ESOP trusts |
(53) |
(66) |
(61) |
|
Adjusted weighted average number of ordinary shares |
4,835 |
5,231 |
5,029 |
|
Shares held in life funds |
(160) |
(193) |
(181) |
|
Shares held in Black Economic Empowerment trusts |
(239) |
(279) |
(261) |
|
Weighted average number of ordinary shares |
4,436 |
4,759 |
4,587 |
|
Basic earnings per ordinary share (pence)¹ |
8.9 |
19.2 |
24.9 |
1 Restatement for the impact of changes in policies did not result in changes to basic earnings per share for the six months ended 30 June 2012 and the year ended 31 December 2012.
Diluted earnings per share recognises the dilutive impact of share options held in ESOP trusts and Black Economic Empowerment trusts which are currently in the money in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period.
|
|
|
|
|
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Profit attributable to ordinary equity holders (£m) |
397 |
913 |
1,140 |
|
Dilution effect on profit relating to share options issued by subsidiaries (£m) |
(4) |
(4) |
(10) |
|
Diluted profit attributable to ordinary equity holders (£m) |
393 |
909 |
1,130 |
|
Weighted average number of ordinary shares (millions) |
4,436 |
4,759 |
4,587 |
|
Adjustments for share options held by ESOP trusts (millions) |
46 |
106 |
53 |
|
Adjustments for shares held in Black Economic Empowerment trusts (millions) |
239 |
279 |
261 |
|
|
4,721 |
5,144 |
4,901 |
|
Diluted earnings per ordinary share (pence)² |
8.3 |
17.7 |
23.1 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
2 Restatement for the impact of changes in policies did not result in changes to diluted earnings per share for the six months ended 30 June 2012 and the year ended 31 December 2012.
Notes to the consolidated financial statements
For the six months ended 30 June 2013
C: Other key performance information continued
C2: Earnings per share continued
|
(b) Adjusted operating earnings per ordinary share |
|
|
|
|
The reconciliation of profit for the financial period to adjusted operating profit after tax attributable to ordinary equity holders is as follows: |
|||
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Profit for the financial period attributable to equity holders of the parent |
414 |
930 |
1,172 |
|
Adjusting items |
69 |
149 |
467 |
|
Tax on adjusting items |
(28) |
(3) |
(44) |
|
Non-core operations |
(2) |
(53) |
(165) |
|
Profit from discontinued operations |
8 |
(595) |
(564) |
|
Non-controlling interest on adjusting items |
(13) |
(13) |
(25) |
|
Adjusted operating profit after tax attributable to ordinary equity holders |
448 |
415 |
841 |
|
Adjusted weighted average number of ordinary shares (millions)² |
4,835 |
4,806 |
4,818 |
|
Adjusted operating earnings per ordinary share (pence) |
9.3 |
8.6 |
17.5 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
2 For the six months ended 30 June 2012 and the year ended 31 December 2012, the weighted average number of shares used in the calculation of basic and diluted earnings per share was adjusted for the seven-for-eight share consolidation that was affected on 23 April 2012. For adjusted operating earnings per share, the adjustment of the weighted average number of shares has been made effective from 1 January 2012. This adjustment had the effect of presenting adjusted earnings per share on a more consistent basis, but resulted in a difference between the adjusted weighted average number of shares for IFRS and AOP for the comparative periods.
(c) Headline earnings per share
The Group is required to calculate a 'headline earnings per share' (HEPS) in accordance with the JSE Limited (JSE) Listing Requirements, determined by reference to the South African Institute of Chartered Accountants' circular 3/2009 'Headline Earnings'. The table below sets out a reconciliation of basic earnings per ordinary share and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used measure of earnings in South Africa.
|
|
|
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|||
|
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
|
Profit for the financial period attributable to equity holders of the parent |
414 |
414 |
930 |
930 |
1,172 |
1,172 |
|
Dividends declared to holders of perpetual preferred callable securities |
(17) |
(17) |
(17) |
(17) |
(32) |
(32) |
|
Profit attributable to ordinary equity holders |
397 |
397 |
913 |
913 |
1,140 |
1,140 |
|
Adjustments: |
|
|
|
|
|
|
|
Impairments of goodwill and intangible assets |
1 |
1 |
- |
- |
- |
- |
|
Loss/(profit) on disposal of subsidiaries, associated undertakings and strategic investments |
1 |
(14) |
(262) |
(256) |
(183) |
(173) |
|
Realised gains (net of impairments) on available-for- sale financial assets |
(8) |
(8) |
(6) |
(6) |
(21) |
(21) |
|
Exchange differences realised on disposal |
- |
- |
(350) |
(350) |
(350) |
(350) |
|
Headline earnings |
391 |
376 |
295 |
301 |
586 |
596 |
|
Weighted average number of ordinary shares |
4,436 |
4,436 |
4,759 |
4,759 |
4,587 |
4,587 |
|
Diluted weighted average number of ordinary shares |
4,721 |
4,721 |
5,144 |
5,144 |
4,901 |
4,901 |
|
Headline earnings per share (pence) |
8.8 |
8.5 |
6.2 |
6.3 |
12.8 |
13.0 |
|
Diluted headline earnings per share (pence) |
8.3 |
8.0 |
5.7 |
5.9 |
12.0 |
12.2 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
C3: Dividends |
|
|
|
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 |
Year ended 31 December 2012 |
|
2011 Final dividend paid - 3.5p per 10p share |
- |
178 |
178 |
|
Special dividend - 18.0p per 10p share |
- |
915 |
915 |
|
2012 Interim dividend paid - 1.75p per 11 3/7p share |
- |
- |
79 |
|
2012 Final dividend paid - 5.25p per 11 3/7p share |
238 |
- |
- |
|
Dividends to ordinary equity holders |
238 |
1,093 |
1,172 |
|
Dividends declared to holders of perpetual preferred callable securities |
22 |
22 |
42 |
|
Dividend payments for the period |
260 |
1,115 |
1,214 |
Final and interim dividends paid to ordinary equity holders are calculated using the number of shares in issue at the record date less treasury shares held in ESOP trusts, life funds of Group entities, Black Economic Empowerment trusts and related undertakings.
As a consequence of the exchange control arrangements in place in certain African territories, dividends to ordinary equity holders on the branch registers of those countries (or, in the case of Namibia, the Namibian section of the principal register) are settled through Dividend Access Trusts established for that purpose.
An interim dividend of 2.1 pence (or its equivalent in other applicable currencies) per ordinary share in the Company has been recommended by the directors. The interim dividend will be paid on 31 October 2013 to shareholders on the register at the close of business on 27 September 2013. The dividend will absorb an estimated £93 million of shareholders' funds. The Company is not planning to offer a scrip dividend alternative.
In March 2013, £22 million was declared and paid to holders of perpetual preferred callable securities (March 2012: £22 million; November 2012: £20 million).
|
D: Other income statement notes |
|
|
|
|
D1: Income tax expense |
|
|
|
|
|
|
|
|
|
(a) Analysis of total income tax expense |
|
|
|
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Current tax |
|
|
|
|
United Kingdom |
9 |
6 |
18 |
|
Overseas tax |
|
|
|
|
- Africa |
198 |
208 |
512 |
|
- United States |
- |
- |
4 |
|
- Europe |
10 |
8 |
30 |
|
Secondary tax on companies (STC) |
- |
20 |
23 |
|
Adjustment to current tax in respect of prior years |
(19) |
2 |
5 |
|
Total current tax |
198 |
244 |
592 |
|
Deferred tax |
|
|
|
|
Origination and reversal of temporary differences |
40 |
(3) |
(121) |
|
Changes in tax rates/bases |
- |
- |
2 |
|
Recognition of deferred tax assets |
- |
- |
(2) |
|
Adjustments to deferred tax in respect of prior years |
12 |
- |
- |
|
Total deferred tax |
52 |
(3) |
(121) |
|
Total income tax expense |
250 |
241 |
471 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
Notes to the consolidated financial statements
For the six months ended 30 June 2013
D: Other income statement notes continued
D1: Income tax expense continued
|
(b) Reconciliation of total income tax expense |
|
|
|
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Profit before tax |
805 |
728 |
1,385 |
|
Tax at UK standard rate of 23.25% (2012: 24.5%) |
187 |
178 |
339 |
|
Different tax rate or basis on overseas operations |
33 |
27 |
19 |
|
Untaxed and low taxed income |
(31) |
(45) |
(57) |
|
Disallowable expenses |
(4) |
11 |
48 |
|
Net movement on deferred tax assets not recognised |
13 |
22 |
48 |
|
Effect on deferred tax of changes in tax rates |
- |
2 |
2 |
|
STC |
- |
18 |
20 |
|
Income tax attributable to policyholder returns |
49 |
28 |
59 |
|
Other |
3 |
- |
(7) |
|
Total income tax expense |
250 |
241 |
471 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
(c) Income tax relating to components of other comprehensive income |
|
|
|
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Preferred perpetual callable securities |
(5) |
(5) |
(10) |
|
Actuarial gains on defined benefit plans |
1 |
2 |
4 |
|
Income tax on items that will not be reclassified subsequently to profit or loss |
(4) |
(3) |
(6) |
|
Income tax on items that may be reclassified subsequently to profit or loss |
(1) |
- |
5 |
|
Income tax credit - continuing operations |
(5) |
(3) |
(1) |
|
Income tax expense on fair value movements - discontinued operations |
- |
1 |
1 |
|
Income tax credit relating to components of other comprehensive income |
(5) |
(2) |
- |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
|
(d) Reconciliation of income tax expense in the IFRS income statement to income tax on adjusted operating profit |
|||
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 Restated¹ |
Year ended 31 December 2012 Restated¹ |
|
Income tax expense |
250 |
241 |
471 |
|
Goodwill impairment and impact of acquisition accounting |
6 |
13 |
51 |
|
Profit on disposal of subsidiaries, associates and strategic investments |
15 |
(8) |
(10) |
|
Short-term fluctuations in investment return |
3 |
7 |
7 |
|
Income tax attributable to policyholders returns |
(71) |
(34) |
(75) |
|
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity |
(5) |
(5) |
(10) |
|
US Asset Management equity plans |
9 |
(2) |
6 |
|
Tax on dividends received in trusts |
- |
(2) |
- |
|
Income tax on adjusted operating profit |
207 |
210 |
440 |
1 Prior periods have been restated for the impact of changes in accounting policies. Refer to note A1 for further details.
E: Financial assets and liabilities
E1: Group statement of financial position
The Group is exposed to financial risk through its financial assets (investments and loans), financial liabilities (investment contracts, customer deposits and borrowings), reinsurance assets and insurance liabilities. The key focus of financial risk management for the Group is ensuring that the proceeds from its financial assets are sufficient to fund the obligations arising from its insurance and banking operations. The most important components of financial risk are credit risk, market risk (arising from changes in equity, and bond prices, interest and foreign exchange rates), and liquidity risk.
Categories of financial instruments
The analysis of assets and liabilities into their categories as defined in IAS 39 'Financial Instruments: Recognition and Measurement' is set out in the following table. Assets and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of IAS 39, are reflected in the non-financial assets and liabilities category.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
|
Fair value through income statement |
|
|
|
|
|
|
|
At 30 June 2013 |
Total |
Held-for-trading |
Designated |
Available-for-sale financial assets |
Held-to-maturity investments |
Loans and receivables |
Financial liabilities amortised cost |
Non-financial assets and liabilities |
|
Assets |
|
|
|
|
|
|
|
|
|
Mandatory reserve deposits with central banks |
760 |
- |
- |
- |
- |
760 |
- |
- |
|
Reinsurers' share of policyholder liabilities |
1,629 |
- |
1,386 |
- |
- |
19 |
- |
224 |
|
Loans and advances |
37,240 |
2,467 |
3,778 |
2 |
- |
30,993 |
- |
- |
|
Investments and securities |
89,093 |
1,237 |
85,115 |
811 |
1,550 |
380 |
- |
- |
|
Trade, other receivables and other assets |
2,955 |
176 |
393 |
- |
- |
1,882 |
- |
504 |
|
Derivative financial instruments |
1,417 |
1,417 |
- |
- |
- |
- |
- |
- |
|
Cash and cash equivalents |
5,035 |
- |
- |
- |
- |
5,035 |
- |
- |
|
Total financial assets |
138,129 |
5,297 |
90,672 |
813 |
1,550 |
39,069 |
- |
728 |
|
Total non-financial assets |
7,603 |
- |
- |
- |
- |
- |
- |
7,603 |
|
Total assets |
145,732 |
5,297 |
90,672 |
813 |
1,550 |
39,069 |
- |
8,331 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Life assurance policyholder liabilities |
81,443 |
- |
61,876 |
- |
- |
209 |
- |
19,358 |
|
Third-party interest in consolidation of funds |
5,479 |
- |
5,479 |
- |
- |
- |
- |
- |
|
Borrowed funds |
2,563 |
- |
880 |
- |
- |
- |
1,683 |
- |
|
Trade, other payables and other liabilities |
5,031 |
416 |
472 |
- |
- |
211 |
2,778 |
1,154 |
|
Amounts owed to bank depositors |
38,009 |
3,661 |
5,032 |
- |
- |
- |
29,316 |
- |
|
Derivative financial instruments |
1,623 |
1,623 |
- |
- |
- |
- |
- |
- |
|
Total financial liabilities |
134,148 |
5,700 |
73,739 |
- |
- |
420 |
33,777 |
20,512 |
|
Total non-financial liabilities |
1,951 |
- |
- |
- |
- |
- |
- |
1,951 |
|
Total liabilities |
136,099 |
5,700 |
73,739 |
- |
- |
420 |
33,777 |
22,463 |
Notes to the consolidated financial statements
For the six months ended 30 June 2013
E: Financial assets and liabilities continued
E1: Group statement of financial position continued
|
Fair value hierarchy |
||||
|
The table below analyses the financial assets and liabilities according to fair value hierarchy: |
||||
|
|
|
|
|
£m |
|
At 30 June 2013 |
Total |
Level 1 |
Level 2 |
Level 3 |
|
Financial assets measured at fair value |
|
|
|
|
|
Held-for-trading (fair value through income statement) |
5,297 |
474 |
4,811 |
12 |
|
Loans and advances |
2,467 |
- |
2,467 |
- |
|
Investments and securities |
1,237 |
294 |
936 |
7 |
|
Other financial assets |
176 |
176 |
- |
- |
|
Derivative financial instruments - assets |
1,417 |
4 |
1,408 |
5 |
|
|
|
|
|
|
|
Designated (fair value through income statement) |
90,672 |
72,482 |
16,966 |
1,224 |
|
Reinsurers' share of policyholder liabilities |
1,386 |
1,386 |
- |
- |
|
Loans and advances |
3,778 |
2 |
3,772 |
4 |
|
Investments and securities |
85,115 |
70,703 |
13,192 |
1,220 |
|
Other financial assets |
393 |
391 |
2 |
- |
|
|
|
|
|
|
|
Available-for-sale financial assets |
813 |
371 |
439 |
3 |
|
Loans and advances |
2 |
2 |
- |
- |
|
Investments and securities |
811 |
369 |
439 |
3 |
|
|
|
|
|
|
|
Total assets measured at fair value |
96,782 |
73,327 |
22,216 |
1,239 |
|
Financial liabilities measured at fair value |
|
|
|
|
|
Held-for-trading (fair value through income statement) |
5,700 |
412 |
5,288 |
- |
|
Other liabilities |
416 |
408 |
8 |
- |
|
Amounts owed to bank depositors |
3,661 |
- |
3,661 |
- |
|
Derivative financial instruments - liabilities |
1,623 |
4 |
1,619 |
- |
|
|
|
|
|
|
|
Designated (fair value through income statement) |
73,739 |
44,675 |
28,529 |
535 |
|
Life assurance policyholder liabilities |
61,876 |
43,806 |
17,535 |
535 |
|
Third-party interests in consolidated funds |
5,479 |
- |
5,479 |
- |
|
Borrowed funds |
880 |
865 |
15 |
- |
|
Other liabilities |
472 |
4 |
468 |
- |
|
Amounts owed to bank depositors |
5,032 |
- |
5,032 |
- |
|
|
|
|
|
|
|
Total liabilities measured at fair value |
79,439 |
45,087 |
33,817 |
535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
At 31 December 2012 |
Total |
Level 1 |
Level 2 |
Level 3 |
|
Financial assets measured at fair value |
|
|
|
|
|
Held-for-trading (fair value through income statement) |
5,459 |
639 |
4,816 |
4 |
|
Designated (fair value through income statement) |
87,813 |
68,059 |
18,694 |
1,060 |
|
Available-for-sale financial assets |
902 |
335 |
565 |
2 |
|
Total assets measured at fair value |
94,174 |
69,033 |
24,075 |
1,066 |
|
Financial liabilities measured at fair value |
|
|
|
|
|
Held-for-trading (fair value through income statement) |
5,925 |
462 |
5,463 |
- |
|
Designated (fair value through income statement) |
68,895 |
42,788 |
25,627 |
480 |
|
Total liabilities measured at fair value |
74,820 |
43,250 |
31,090 |
480 |
The best evidence of fair value is a quoted price in an active market. In the event that the market for a financial asset or liability is not active, or quoted prices cannot be obtained without undue effort, another valuation technique is used.
The judgement as to whether a market is active may include, for example, consideration of factors such as the magnitude and frequency of trading activity, the availability of prices and the size of bid/offer spreads. In inactive markets, obtaining assurance that the transaction price provides evidence of fair value or determining the adjustments to transaction prices that are necessary to measure the fair value of the asset or liability requires additional work during the valuation process.
The majority of valuation techniques employ only observable data and so the reliability of the fair value measurement is high. However, certain financial assets and liabilities are valued on the basis of valuation techniques that feature one or more significant inputs that are unobservable and, for them, the derivation of fair value is more judgemental. A financial asset or liability in its entirety is classified as valued using significant unobservable inputs if a significant proportion of that asset or liability's carrying amount is driven by unobservable inputs. In this context, 'unobservable' means that there is little or no current market data available for which to determine the price at which an arm's length transaction would be likely to occur. It generally does not mean that there is no market data available at all upon which to base a determination of fair value. Furthermore, in some cases the majority of the fair value derived from a valuation technique with significant unobservable data may be attributable to observable inputs. Consequently, the effect of uncertainty in determining unobservable inputs will generally be restricted to uncertainty about the overall fair value of the asset or liability being measured. Details of the Group's valuation techniques can be found in Note E1(p) of the Annual Report. There have been no significant changes to the valuation techniques applied.
The transfers into Level 3 largely relate to instances where inputs to the valuation for certain financial assets and liabilities obtained from pricing service providers are no longer observable. There were no significant transfers between Level 1 and Level 2 during the year.
|
The table below shows the movement in Level 3 assets measured at fair value: |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Six months ended 30 June 2013 |
Held-for-trading - Investments and securities |
Held- for-trading - Derivatives |
Designated fair value through income statement - Loans and advances |
Designated fair value through income statement - Investments and securities |
Available-for- sale - Investments and securities |
Total |
|
Level 3 financial assets |
|
|
|
|
|
|
|
At beginning of the year |
4 |
- |
9 |
1,051 |
2 |
1,066 |
|
Total net gains/(losses) recognised in the income statement for the period |
4 |
- |
(5) |
54 |
- |
53 |
|
Total gains recognised in other comprehensive income |
- |
- |
- |
1 |
- |
1 |
|
Purchases and issues |
- |
5 |
- |
24 |
- |
29 |
|
Sales and settlements |
(1) |
- |
- |
(21) |
- |
(22) |
|
Transfers in |
- |
- |
- |
151 |
1 |
152 |
|
Transfers out |
- |
- |
- |
- |
- |
- |
|
Foreign exchange and other |
- |
- |
- |
(40) |
- |
(40) |
|
Total level 3 financial assets |
7 |
5 |
4 |
1,220 |
3 |
1,239 |
|
Gains relating to assets held at 30 June 2013 recognised in: |
|
|
|
|
|
|
|
- income statement |
- |
- |
- |
52 |
- |
52 |
|
- other comprehensive income |
- |
- |
- |
- |
- |
- |
Notes to the consolidated financial statements
For the six months ended 30 June 2013
E: Financial assets and liabilities continued
E1: Group statement of financial position continued
Fair value hierarchy continued
|
The table below shows the movement in Level 3 liabilities measured at fair value: |
|
|
|
|
|
|
£m |
|
Six months ended 30 June 2013 |
Designated fair value through income statement - Life assurance policyholder liabilities (investment contracts) |
|
Level 3 financial liabilities |
|
|
At beginning of the year |
480 |
|
Total net losses recognised in the income statement for the period |
72 |
|
Purchases and issues |
1 |
|
Sales and settlements |
(104) |
|
Transfers in |
77 |
|
Foreign exchange and other |
9 |
|
Total level 3 financial liabilities |
535 |
|
Losses relating to liabilities held at 30 June 2013 recognised in: |
|
|
- income statement |
74 |
|
- other comprehensive income |
- |
Effect of changes in significant unobservable assumptions to reasonable possible alternatives
Favourable and unfavourable changes are determined on the basis of changes in the value of the financial asset or liability as a result of varying the levels of the unobservable parameter using statistical techniques. When parameters are not amenable to statistical analysis, quantification of uncertainty is judgemental.
When the fair value of a financial asset or liability is affected by more than one unobservable assumption, the figures shown reflect the most favourable or most unfavourable change from varying the assumptions individually.
In respect of private equity investments, the valuations are assessed on an asset-by-asset basis using a valuation methodology appropriate to the specific investment, in line with industry guidelines. In many of the methodologies, the principal assumption is the valuation multiple to be applied to the main financial indicators including, for example, multiples for comparable listed companies and discounts for marketability.
For asset-backed securities whose prices are unobservable, models are used to generate the expected value of the asset, incorporating benchmark information on factors such as prepayment patterns, default rates, loss severities and the historical performance of the underlying assets. The models used are calibrated by using securities for which external market information is available.
For structured notes and other derivatives, principal assumptions concern the future volatility of asset values and the future correlation between asset values. These principle assumptions include credit volatilities and correlations used in the valuation of the structured credit derivatives. For such unobservable assumptions, estimates are based on available market data, which may include the use of a proxy method to derive a volatility or correlation from comparable assets for which market data is more readily available, and examination of historical levels.
Alternative assumptions
Accounting standards require consideration of the effect of reasonable possible alternative assumptions on the fair value of Level 3 financial assets and liabilities.
Alternative assumptions are assessed in terms of possible favourable and unfavourable changes in the key market inputs for the major types of Level 3 financial assets and liabilities, ranging from, for example, a 10% change in the price earnings multiple for equity securities, to a 25% change in the discount rates applied to debt securities and volatility assumptions in derivative contracts. Changes in business risk inputs such as lapses and non-performance risk were also considered.
The table below shows the income statement effect of reasonable possible alternative assumptions on the fair value of Level 3 financial assets and liabilities:
|
|
|
|
|
|
|
£m |
|
|
Reflected in income statement |
|
|
Six months ended 30 June 2013 |
Favourable changes |
Unfavourable changes |
|
Level 3 financial assets |
|
|
|
Designated (fair value through income statement) |
123 |
120 |
|
Loans and advances |
1 |
1 |
|
Investments and securities |
122 |
119 |
|
|
|
|
|
Total Level 3 financial assets |
123 |
120 |
|
Level 3 financial liabilities |
|
|
|
Designated (fair value through income statement) |
20 |
48 |
|
Life assurance policyholder liabilities (investment contracts) |
20 |
48 |
|
|
|
|
|
Total Level 3 financial liabilities |
20 |
48 |
The impact of reasonable possible alternative assumptions on other comprehensive income was £nil in all periods.
Notes to the consolidated financial statements
For the six months ended 30 June 2013
E: Financial assets and liabilities
E2: Borrowed funds
|
|
|
|
|
|
|
|
|
|
£m |
|
|
Notes |
|
Group excluding Nedbank |
Nedbank |
At 30 June 2013 Group |
|
Group excluding Nedbank |
Nedbank |
At 30 June 2012 Group |
|
Senior debt securities and term loans |
|
|
123 |
994 |
1,117 |
|
507 |
1,427 |
1,934 |
|
Floating rate notes |
E2(a) |
|
- |
525 |
525 |
|
- |
926 |
926 |
|
Fixed rate notes |
E2(b) |
|
123 |
469 |
592 |
|
507 |
501 |
1,008 |
|
Mortgage-backed securities |
E2(d) |
|
- |
114 |
114 |
|
- |
70 |
70 |
|
Subordinated debt securities (net of Group holdings) |
E2(e) |
|
714 |
618 |
1,332 |
|
747 |
785 |
1,532 |
|
Borrowed funds |
|
|
837 |
1,726 |
2,563 |
|
1,254 |
2,282 |
3,536 |
|
Other Group instruments treated as equity for accounting purposes |
|
|
|
|
|
|
|
|
|
|
US$750 million cumulative preference securities |
|
|
- |
|
|
|
458 |
|
|
|
€495 million perpetual preferred callable securities |
|
|
334 |
|
|
|
338 |
|
|
|
£348 million perpetual preferred callable securities |
|
|
348 |
|
|
|
350 |
|
|
|
Total: Book value |
|
|
1,519 |
|
|
|
2,400 |
|
|
|
Nominal value of the above |
|
|
1,594 |
|
|
|
2,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
|
|
|
|
|
|
Group excluding Nedbank |
Nedbank |
At 31 December 2012 Group |
|
Senior debt securities and term loans |
|
|
|
|
|
|
122 |
1,363 |
1,485 |
|
Floating rate notes |
E2(a) |
|
|
|
|
|
- |
849 |
849 |
|
Fixed rate notes |
E2(b) |
|
|
|
|
|
122 |
514 |
636 |
|
Mortgage-backed securities |
E2(d) |
|
|
|
|
|
- |
131 |
131 |
|
Subordinated debt securities (net of Group holdings) |
E2(e) |
|
|
|
|
|
765 |
669 |
1,434 |
|
Borrowed funds |
|
|
|
|
|
|
887 |
2,163 |
3,050 |
|
Other Group instruments treated as equity for accounting purposes |
|
|
|
|
|
|
|
|
|
|
US$750 million cumulative preference securities |
|
|
|
|
|
|
- |
|
|
|
€495 million perpetual preferred callable securities |
|
|
|
|
|
|
334 |
|
|
|
£348 million perpetual preferred callable securities |
|
|
|
|
|
|
348 |
|
|
|
Total: Book value |
|
|
|
|
|
|
1,569 |
|
|
|
Nominal value of the above |
|
|
|
|
|
|
1,590 |
|
|
|
Senior notes |
|
|
|
|
|
(a) Floating rate notes |
|
|
|
|
|
|
|
|
|
£m |
|
|
Maturity date |
At 30 June 2013 |
At 30 June 2012 |
At 31 December 2012 |
|
Nedbank - Floating rate unsecured senior debt |
|
|
|
|
|
R98 million at inflation linked (3.80% real yield) |
Repaid |
- |
9 |
8 |
|
R1,750 million at inflation linked (3.90% real yield) |
Repaid |
- |
158 |
151 |
|
R1,690 million at JIBAR + 1.50% |
Repaid |
- |
81 |
- |
|
R1,552 million at JIBAR + 1.48% |
Repaid |
- |
123 |
114 |
|
R988 million at JIBAR + 1.05% |
March 2014 |
64 |
75 |
71 |
|
R500 million at JIBAR + 1.00% |
April 2014 |
30 |
39 |
33 |
|
R1,075 million at JIBAR + 0.94% |
October 2014 |
72 |
85 |
79 |
|
R1,297 million at JIBAR + 1.00% |
February 2015 |
87 |
102 |
95 |
|
R1,027 million at JIBAR + 1.75% |
April 2015 |
69 |
81 |
76 |
|
R250 million at JIBAR + 1.00% |
August 2015 |
17 |
- |
18 |
|
R1,044 million at JIBAR + 2.20% |
September 2015 |
70 |
82 |
76 |
|
R677 million at JIBAR + 1.25% |
March 2016 |
45 |
53 |
49 |
|
R405 million at JIBAR + 1.30% |
February 2017 |
27 |
32 |
30 |
|
R786 million at JIBAR + 1.31% |
August 2017 |
39 |
- |
43 |
|
R80 million at JIBAR + 2.15% |
April 2020 |
5 |
6 |
6 |
|
Total floating rate notes |
|
525 |
926 |
849 |
|
|
|
|
|
|
|
All floating rate notes are non-qualifying for the purposes of regulatory tiers of capital. |
||||
|
|
|
|
|
|
|
(b) Fixed rate notes |
|
|
|
|
|
|
|
|
|
£m |
|
|
Maturity date |
At 30 June 2013 |
At 30 June 2012 |
At 31 December 2012 |
|
Nedbank - Fixed rate unsecured senior debt |
|
|
|
|
|
R450 million at 8.39% |
March 2014 |
30 |
36 |
33 |
|
R478 million at 9.68% |
April 2015 |
32 |
38 |
35 |
|
R3,244 million at 10.55% |
September 2015 |
222 |
260 |
242 |
|
R1,137 million at 9.36% |
March 2016 |
77 |
91 |
85 |
|
R1,273 million at 11.39% |
September 2019 |
93 |
61 |
102 |
|
R660 million at zero coupon |
October 2024 |
15 |
15 |
17 |
|
|
|
469 |
501 |
514 |
|
Group excluding Nedbank |
|
|
|
|
|
£112 million eurobond at 7.125% |
October 2016 |
112 |
496 |
112 |
|
US$16 million secured senior debt at 5.23% |
August 2014 |
11 |
11 |
10 |
|
|
|
123 |
507 |
122 |
|
Total fixed rate notes |
|
592 |
1,008 |
636 |
|
|
||||
|
All fixed rate notes are non-qualifying for the purposes of regulatory tiers of capital. |
||||
(c) Revolving credit facilities and irrevocable letters of credit
The Group has access to a £1,200 million five-year multi-currency revolving credit facility (agreed in April 2011). At 30 June 2013, 30 June 2012 and 31 December 2012, none of this facility was drawn down and there were no irrevocable letters of credit in issue against this facility.
Notes to the consolidated financial statements
For the six months ended 30 June 2013
E: Financial assets and liabilities continued
E2: Borrowed funds continued
|
(d) Mortgage-backed securities - Nedbank |
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
Tier |
Maturity date |
At 30 June 2013 |
At 30 June 2012 |
At 31 December 2012 |
|
Nedbank |
|
|
|
|
|
|
R1.4 billion (class A2A) at 11.817% |
Tier 2 |
Repaid |
- |
60 |
- |
|
R98 million (class B note) at 12.067% |
Tier 2 |
Repaid |
- |
6 |
- |
|
R76 million (class C note) at 13.317% |
Tier 2 |
Repaid |
- |
4 |
- |
|
R480 million (class A1) at JIBAR + 1.10% |
Tier 2 |
25 October 2039 |
24 |
- |
32 |
|
R336 million (class A2) at JIBAR + 1.25% |
Tier 2 |
25 October 2039 |
23 |
- |
25 |
|
R900 million (class A3) at JIBAR + 1.54% |
Tier 2 |
25 October 2039 |
60 |
- |
66 |
|
R110 million (class B) at JIBAR + 1.90% |
Tier 2 |
25 October 2039 |
7 |
- |
8 |
|
Total mortgage-backed securities |
|
|
114 |
70 |
131 |
|
(e) Subordinated debt securities (net of Group holdings) |
||||||
|
|
|
|
|
|
|
£m |
|
|
Tier |
First call date |
Maturity date |
At 30 June 2013 |
At 30 June 2012 |
At 31 December 2012 |
|
Nedbank |
|
|
|
|
|
|
|
R500 million at 3 month JIBAR + 0.45% |
Tier 2 |
Repaid |
Repaid |
- |
39 |
- |
|
R500 million at 3 month JIBAR + 0.70% |
Tier 2 |
Repaid |
Repaid |
- |
39 |
- |
|
R120 million at 10.38% |
Tier 2 |
Repaid |
Repaid |
- |
10 |
- |
|
R300 million at 3 month JIBAR + 2.50% |
Tier 2 |
December 2013 |
December 2013 |
10 |
12 |
11 |
|
R1.8 billion at 9.84% |
Tier 2 |
September 2013 |
September 2018 |
124 |
150 |
137 |
|
R1,265 million at JIBAR + 4.75% |
Non-core Tier 1 |
November 2018 |
November 2018 |
85 |
100 |
93 |
|
R487 million at 15.05% |
Non-core Tier 1 |
November 2018 |
November 2018 |
37 |
43 |
43 |
|
R1.7 billion at 8.90% |
Tier 2 |
February 2014 |
February 2019 |
118 |
143 |
132 |
|
R1.0 billion at 10.54% |
Tier 2 |
September 2015 |
September 2020 |
72 |
86 |
81 |
|
R2.0 billion at JIBAR + 0.47% |
Tier 2 |
July 2017 |
July 2022 |
134 |
157 |
146 |
|
US$100 million at 3 month USD LIBOR |
Tier 2 Secondary |
March 2017 |
March 2022 |
66 |
64 |
62 |
|
|
|
|
|
646 |
843 |
705 |
|
Less: banking subordinated debt securities held by other Group companies |
|
|
|
(28) |
(58) |
(36) |
|
Banking subordinated securities (net of Group holdings) |
|
|
|
618 |
785 |
669 |
|
Group excluding Nedbank |
|
|
|
|
|
|
|
R3.0 billion at 8.92% to October 2015, 3 month JIBAR + 1.59% thereafter) |
Lower Tier 2 |
October 2015 |
October 2020 |
199 |
234 |
218 |
|
£500 million at 8.00% |
Lower Tier 2 |
- |
June 2021 |
515 |
513 |
547 |
|
|
|
|
|
714 |
747 |
765 |
|
Total subordinated debt securities |
|
|
|
1,332 |
1,532 |
1,434 |
F: Other Notes
F1: Events after the reporting date
Acquisition of Faulu Kenya DTM LTD (Faulu)
On 3 July 2013, the Group announced that it is to enter into a strategic partnership with Faulu through the acquisition of a controlling stake in the business. The transaction is conditional on the relevant regulatory approvals being obtained and is expected to complete by the end of 2013.
Acquisition of SELAH (Skandia Europe & Latin America Holdings) by Old Mutual South Africa (OMSA) from Old Mutual plc (parent company).
The Financial Services Board has provisionally given approval for the acquisition of SELAH by OMSA from Old Mutual plc and the transaction was completed on 12 July 2013. This resulted in increasing the cash holdings of the parent company by £120 million.
Repatriation of Old Mutual Bermuda capital
In July 2013, Old Mutual Bermuda received formal written approval from the Bermuda Monitory Authority (BMA) to repatriate $450 million via cancellation of OM Group (UK) Limited Loan Notes.
New debt issued by Nedbank
In July 2013, Nedbank successfully issued a total of R1.8 billion new-style, fully loss-absorbent, Basel lll compliant, tier 2 subordinated-debt capital to replace the £119 million debt that matures in September 2013. Furthermore, R3.2 billion of three-year senior unsecured debt was also issued.
G: Discontinued operations and disposal groups held for sale
G1: Discontinued operations
Discontinued operations relate to the results of the Group's Swedish, Danish and Norwegian life businesses, collectively Nordic. The disposal of Nordic was completed on 21 March 2012 following shareholder and regulatory approval and was reported up until that date. The Group continues to incur costs that are directly related to the sale of Nordic. These costs relate to the transition of IT and other services, previously provided by Nordic to the wider Group, back to the Group. These costs are included in the expenses related to the discontinued operations.
|
(a) Income statement from discontinued operations (Nordic) |
|||
|
|
|
|
£m |
|
|
Six months ended 30 June 2013 |
Six months ended 30 June 2012 |
Year ended 31 December 2012 |
|
Revenue |
- |
842 |
842 |
|
Expenses |
(9) |
(831) |
(866) |
|
(Loss)/profit before tax from discontinued operations |
(9) |
11 |
(24) |
|
Profit on disposal |
- |
242 |
239 |
|
Realised available-for-sale investment gains and exchange differences on disposal |
- |
350 |
350 |
|
(Loss)/profit before tax |
(9) |
603 |
565 |
|
Income tax credit/(charge) |
1 |
(8) |
(1) |
|
(Loss)/profit from discontinued operations after tax |
(8) |
595 |
564 |
G2: Contingent liabilities in respect of the disposal of US Life
Following its disposal in April 2011 of US Life to the Harbinger group (Harbinger), the Group has retained certain residual commitments and contingent liabilities relating to that business. These arise from sale warranties and indemnities that are typical in transactions of this nature, including in respect of certain litigation (including class actions) and regulatory enforcement actions arising from events that occurred before completion of the sale. The residual commitments are in effect for varying periods of time.
The sale agreement contemplated that Harbinger would establish certain internal reinsurance arrangements after completion, which were subject to regulatory approval. If such regulatory approval was not forthcoming, there was potential for a reduction in the purchase price of US Life of up to a maximum of US$50 million. In July 2012, Harbinger filed a lawsuit against the Group, claiming payment of a purchase price adjustment of US$50 million. The Group has filed its defence and is vigorously defending this claim. In view of the ongoing uncertainty and the Group's current assessment of this claim, the Group has not raised a provision against this exposure.
This information is provided by RNS
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