Interim Results 2011 Part 2 (IFRS)
Index to the financial information
For the six months ended 30 June 2011
Statement of directors' responsibilities in respect of the half-yearly financial statements 34
Interim review report for the six months ended 30 June 2011 to Old Mutual plc 35
Consolidated income statement 36
Consolidated statement of comprehensive income 38
Reconciliation of adjusted operating profit to profit after tax 39
Consolidated statement of financial position 40
Condensed consolidated statement of cash flows 41
Consolidated statement of changes in equity 42
Notes to the consolidated financial statements
A: Accounting policies 48
B: Segment information 48
C: Other key performance information 66
D: Other income statement notes 76
E: Borrowed funds 78
F: Other notes 81
G: Discontinued operations 82
Group Market Consistent Embedded Value statement of earnings 84
Adjusted operating Group MCEV earnings per share 85
Components of Group MCEV and adjusted Group MCEV information 86
Notes to the Old Mutual Market Consistent Embedded Value basis supplementary information
A: MCEV policies 88
B: Segment information 95
C: Other key performance information 115
D: Other income statement notes 122
E: Sensitivity tests 124
Shareholder information 126
Statement of directors' responsibilities in respect of the half-yearly financial statements
For the six months ended 30 June 2011
We confirm that to the best of our knowledge:
· the consolidated financial information has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards adopted by the EU and in accordance with the requirements of IAS34 'Interim Financial Reporting'
· 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 88.
· 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 current 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
5 August 2011 5 August 2011
Interim review report for the six months ended 30 June 2011 to
Old Mutual plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related notes 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') for the six months ended 30 June 2011.
We have read the other information contained in the half-yearly 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 Services Authority (the UK FSA) 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 half-yearly 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 FSA. The directors have accepted responsibility for preparing the supplementary information contained in the half-yearly 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 annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting 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, based on our review, on the condensed set of financial statements and the supplementary information in the half-yearly financial report.
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 half-yearly financial report for the six months ended 30 June 2011 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.
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 2011 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
for and on behalf of KPMG Audit Plc
Chartered Accountants, 15 Canada Square, London, E14 5GL, 5 August 2011
Consolidated income statement
For the six months ended 30 June 2011
|
£m |
|||||
|
|
Notes |
6 months |
6 months |
Year ended 31 December 2010 |
|
|
Revenue |
|||||
|
Gross earned premiums |
B3 |
1,944 |
1,700 |
3,582 |
|
|
Outward reinsurance |
|
(167) |
(147) |
(305) |
|
|
Net earned premiums |
|
1,777 |
1,553 |
3,277 |
|
|
Investment return (non-banking) |
|
843 |
1,274 |
10,791 |
|
|
Banking interest and similar income |
|
1,994 |
2,005 |
4,082 |
|
|
Banking trading, investment and similar income |
|
103 |
82 |
204 |
|
|
Fee and commission income, and income from service activities |
|
1,635 |
1,420 |
3,061 |
|
|
Other income |
|
94 |
107 |
159 |
|
|
Total revenues |
6,446 |
6,441 |
21,574 |
||
|
Expenses |
|||||
|
Claims and benefits (including change in insurance contract provisions) |
(1,701) |
(1,351) |
(5,039) |
||
|
Reinsurance recoveries |
108 |
118 |
227 |
||
|
Net claims and benefits incurred |
(1,593) |
(1,233) |
(4,812) |
||
|
Change in investment contract liabilities |
(13) |
(876) |
(6,899) |
||
|
Losses on loans and advances |
(253) |
(285) |
(552) |
||
|
Finance costs |
|
(85) |
(127) |
(269) |
|
|
Banking interest payable and similar expenses |
|
(1,154) |
(1,252) |
(2,519) |
|
|
Fee and commission expenses, and other acquisition costs |
|
(496) |
(406) |
(963) |
|
|
Other operating and administrative expenses |
|
(1,966) |
(1,736) |
(3,715) |
|
|
Change in third party interest in consolidated funds |
|
(66) |
28 |
(388) |
|
|
Amortisation of PVIF and other acquired intangibles |
C1(b) |
(117) |
(145) |
(297) |
|
|
Total expenses |
(5,743) |
(6,032) |
(20,414) |
||
|
Share of associated undertakings' profit after tax |
|
4 |
2 |
7 |
|
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
- |
(22) |
(22) |
|
|
Profit before tax |
707 |
389 |
1,145 |
||
|
Income tax expense |
D1(a) |
(205) |
(129) |
(456) |
|
|
Profit from continuing operations after tax |
502 |
260 |
689 |
||
|
Discontinued operations |
|||||
|
Profit/(loss) from discontinued operations after tax |
G1 |
130 |
120 |
(713) |
|
|
Profit/(loss) after tax for the financial period |
632 |
380 |
(24) |
||
|
Attributable to |
|||||
|
Equity holders of the parent |
489 |
265 |
(282) |
||
|
Non-controlling interests |
|||||
|
Ordinary shares |
|
112 |
84 |
196 |
|
|
Preferred securities |
|
31 |
31 |
62 |
|
|
Profit/(loss) after tax for the financial period |
632 |
380 |
(24) |
||
|
|
|||||
Consolidated income statement
For the six months ended 30 June 2011 continued
|
£m |
||||
|
|
Notes |
6 months |
6 months |
Year ended 31 December 2010 |
|
Earnings per share |
|
|
|
|
|
Basic earnings per share based on profit from continuing operations (pence) |
|
7.0 |
2.6 |
8.2 |
|
Basic earnings per share based on profit/(loss) from discontinued operations (pence) |
|
2.7 |
2.5 |
(14.7) |
|
Basic earnings per ordinary share (pence) |
C3(a) |
9.7 |
5.1 |
(6.5) |
|
Diluted earnings per share based on profit from continuing operations (pence) |
|
6.4 |
2.4 |
7.4 |
|
Diluted earnings per share based on profit/(loss) from discontinued operations |
|
2.4 |
2.3 |
(13.5) |
|
Diluted earnings per ordinary share (pence) |
C3(a) |
8.8 |
4.7 |
(6.1) |
|
Weighted average number of shares - millions |
|
4,897 |
4,849 |
4,859 |
* The results for the six months ended 30 June 2010 have been restated to reflect US Life as a discontinued operation (see note A1)
Consolidated statement of comprehensive income
For the six months ended 30 June 2011
|
£m |
||||
|
|
|
6 months |
6 months |
Year ended 31 December 2010 |
|
Profit/(loss) after tax for the financial period |
|
632 |
380 |
(24) |
|
Other comprehensive income for the financial period |
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
Property revaluation |
|
- |
5 |
26 |
|
Net investment hedge |
|
(25) |
(34) |
(87) |
|
Available-for-sale investments |
|
|
|
|
|
Fair value gains |
|
5 |
22 |
32 |
|
Recycled to the income statement |
|
(5) |
1 |
- |
|
Shadow accounting |
|
- |
(17) |
(15) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
(296) |
254 |
1,039 |
|
Other movements |
|
(40) |
11 |
31 |
|
Income tax relating to components of other comprehensive income |
|
6 |
6 |
13 |
|
Total other comprehensive income for the financial period from continuing operations |
|
(355) |
248 |
1,039 |
|
Total other comprehensive income for the financial period from discontinued operations |
|
(130) |
182 |
112 |
|
Total other comprehensive income for the financial period |
|
(485) |
430 |
1,151 |
|
Total comprehensive income for the financial period |
|
147 |
810 |
1,127 |
|
Attributable to |
|
|
|
|
|
Equity holders of the parent |
|
105 |
640 |
594 |
|
Non-controlling interests |
|
|||
|
Ordinary shares |
|
11 |
139 |
428 |
|
Preferred securities |
|
31 |
31 |
105 |
|
Total comprehensive income for the financial period |
147 |
810 |
1,127 |
|
* The results for the six months ended 30 June 2010 have been restated to reflect US Life as a discontinued operation (see note A1)
Reconciliation of adjusted operating profit to profit after tax
For the six months ended 30 June 2011
|
£m |
||||
|
|
Notes |
6 months |
6 months |
Year ended 31 December 2010 |
|
Core operations |
|
|
|
|
|
Long Term Savings |
B2 |
474 |
447 |
897 |
|
Nedbank |
B2 |
359 |
266 |
601 |
|
M&F |
B2 |
47 |
33 |
103 |
|
USAM |
B2 |
47 |
40 |
87 |
|
|
|
927 |
786 |
1,688 |
|
Finance costs |
|
(60) |
(68) |
(128) |
|
Long term investment return on excess assets |
|
18 |
16 |
31 |
|
Net interest payable to non-core operations |
|
(9) |
(9) |
(39) |
|
Other shareholders' expenses |
|
(31) |
(11) |
(71) |
|
Adjusted operating profit before tax |
|
845 |
714 |
1,481 |
|
Adjusting items |
C1(a) |
(212) |
(260) |
(482) |
|
Non-core operations |
|
23 |
(65) |
(3) |
|
Profit before tax (net of policyholder tax) |
|
656 |
389 |
996 |
|
Income tax attributable to policyholder returns |
B2 |
51 |
- |
149 |
|
Profit before tax |
|
707 |
389 |
1,145 |
|
Total income tax expense |
D1(a) |
(205) |
(129) |
(456) |
|
Profit from continuing operations after tax |
|
502 |
260 |
689 |
|
Profit/(loss) from discontinued operations after tax |
G1 |
130 |
120 |
(713) |
|
Profit/(loss) after tax for the financial period |
|
632 |
380 |
(24) |
Adjusted operating profit after tax attributable to ordinary equity holders of the parent
|
£m |
||||
|
|
Notes |
6 months |
6 months |
Year ended 31 December 2010 |
|
Adjusted operating profit before tax |
|
845 |
714 |
1,481 |
|
Tax on adjusted operating profit |
D1(c) |
(191) |
(155) |
(347) |
|
Adjusted operating profit after tax |
|
654 |
559 |
1,134 |
|
Non-controlling interest - ordinary shares |
|
(120) |
(95) |
(217) |
|
Non-controlling interest - preferred securities |
|
(31) |
(31) |
(62) |
|
Adjusted operating profit after tax attributable to ordinary equity holders |
|
503 |
433 |
855 |
|
Adjusted weighted average number of shares (millions) |
C3(b) |
5,397 |
5,342 |
5,359 |
|
Adjusted operating earnings per share (pence) |
C3(b) |
9.3 |
8.1 |
16.0 |
* The results for the six months ended 30 June 2010 have been restated to reflect US Life as a discontinued operation (see note A1).
Basis of preparation
The reconciliation of adjusted operating profit has been prepared so as to reflect the directors' view of the underlying long term performance of the Group. The statement reconciles adjusted operating profit to profit after tax as reported under IFRS as adopted by the EU.
For core life assurance and general insurance businesses, adjusted operating profit 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 the US Asset Management business it includes compensation costs in respect of certain long term incentive schemes defined as non-controlling interests in accordance with IFRS. For all core businesses, adjusted operating profit excludes goodwill impairment, the impact of acquisition accounting, revaluations of put options related to long term incentive schemes, profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments, dividends declared to holders of perpetual preferred callable securities, and fair value profits/(losses) on certain Group debt instruments. Bermuda and US Life, which are non-core, are not included in adjusted operating profit.
Adjusted operating earnings per ordinary share is calculated on the same basis as adjusted operating profit. It is stated after tax attributable to adjusted operating profit 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.
Consolidated statement of financial position
At 30 June 2011
|
£m |
||||
|
|
Notes |
At 30 June |
At 30 June |
At 31 December |
|
Assets |
||||
|
Goodwill and other intangible assets |
|
4,833 |
5,003 |
4,965 |
|
Mandatory reserve deposits with central banks |
|
1,073 |
985 |
1,079 |
|
Property, plant and equipment |
|
962 |
871 |
1,015 |
|
Investment property |
|
1,980 |
2,026 |
2,040 |
|
Deferred tax assets |
|
396 |
668 |
416 |
|
Investments in associated undertakings and joint ventures |
|
176 |
145 |
162 |
|
Deferred acquisition costs |
|
1,565 |
3,096 |
1,534 |
|
Reinsurers' share of life assurance policyholder liabilities |
|
1,114 |
1,325 |
982 |
|
Reinsurers' share of general insurance liabilities |
|
115 |
125 |
122 |
|
Loans and advances |
|
49,417 |
45,071 |
51,778 |
|
Investments and securities |
|
106,428 |
102,270 |
106,153 |
|
Current tax receivable |
|
151 |
166 |
156 |
|
Client indebtedness for acceptances |
|
254 |
159 |
190 |
|
Trade, other receivables and other assets |
|
4,144 |
3,780 |
3,934 |
|
Derivative financial instruments - assets |
|
1,770 |
1,933 |
2,503 |
|
Cash and cash equivalents |
|
4,526 |
3,267 |
4,132 |
|
Non-current assets held for sale |
|
6 |
18 |
12,391 |
|
Total assets |
|
178,910 |
170,908 |
193,552 |
|
Liabilities |
||||
|
Life assurance policyholder liabilities |
|
97,429 |
96,826 |
98,631 |
|
General insurance liabilities |
|
386 |
389 |
397 |
|
Third party interests in consolidated funds |
|
4,711 |
2,860 |
3,584 |
|
Borrowed funds |
E1 |
4,497 |
3,928 |
4,204 |
|
Provisions |
|
230 |
226 |
260 |
|
Deferred revenue |
|
773 |
661 |
730 |
|
Deferred tax liabilities |
|
830 |
930 |
858 |
|
Current tax payable |
|
244 |
198 |
238 |
|
Trade, other payables and other liabilities |
|
5,106 |
4,899 |
5,661 |
|
Liabilities under acceptances |
|
254 |
159 |
190 |
|
Amounts owed to bank depositors |
|
51,564 |
47,116 |
53,236 |
|
Derivative financial instruments - liabilities |
|
1,355 |
1,460 |
1,870 |
|
Non-current liabilities held for sale |
|
- |
- |
12,219 |
|
Total liabilities |
|
167,379 |
159,652 |
182,078 |
|
Net assets |
|
11,531 |
11,256 |
11,474 |
|
Shareholders' equity |
||||
|
Equity attributable to equity holders of the parent |
9,031 |
9,047 |
8,951 |
|
|
Non-controlling interests |
||||
|
Ordinary shares |
|
1,783 |
1,492 |
1,763 |
|
Preferred securities |
|
717 |
717 |
760 |
|
Total non-controlling interests |
2,500 |
2,209 |
2,523 |
|
|
Total equity |
11,531 |
11,256 |
11,474 |
|
Condensed consolidated statement of cash flows
For the six months ended 30 June 2011
|
£m |
|||
|
|
6 months |
6 months |
Year ended 31 December |
|
Cash flows from operating activities |
|||
|
Profit before tax |
707 |
389 |
1,145 |
|
Non-cash movements in profit before tax |
631 |
1,081 |
(7,398) |
|
Changes in working capital |
918 |
1,506 |
10,229 |
|
Taxation paid |
(185) |
(187) |
(413) |
|
Net cash inflow from operating activities |
2,071 |
2,789 |
3,563 |
|
Cash flows from investing activities |
|
|
|
|
Net acquisitions of financial investments |
(2,261) |
(2,560) |
(2,222) |
|
Acquisition of investment properties |
(23) |
(224) |
(162) |
|
Proceeds from disposal of investment properties |
2 |
19 |
272 |
|
Acquisition of property, plant and equipment |
(54) |
(69) |
(152) |
|
Proceeds from disposal of property, plant and equipment |
9 |
10 |
- |
|
Acquisition of intangible assets |
(31) |
(30) |
(78) |
|
Acquisition of interests in subsidiaries |
46 |
(124) |
(75) |
|
Net movement of interests in subsidiaries, associated undertakings and strategic investments (including cash and cash equivalents disposed of) |
(353) |
2 |
(16) |
|
Net cash outflow from investing activities |
(2,665) |
(2,976) |
(2,433) |
|
Cash flows from financing activities |
|
|
|
|
Dividends paid to |
|
|
|
|
Ordinary equity holders of the Company |
(53) |
(62) |
(102) |
|
Non-controlling interests and preferred security interests |
(107) |
(99) |
(196) |
|
Interest paid (excluding banking interest paid) |
(36) |
(38) |
(79) |
|
Proceeds from issue of ordinary shares |
4 |
4 |
5 |
|
Net purchase of treasury shares |
(18) |
(29) |
(25) |
|
Issue of subordinated and other debt |
831 |
584 |
492 |
|
Subordinated and other debt repaid |
(448) |
(41) |
(104) |
|
Net cash inflow/(outflow) from financing activities |
173 |
319 |
(9) |
|
Net (decrease)/increase in cash and cash equivalents - continuing operations |
(421) |
132 |
1,121 |
|
Net increase/(decrease) in cash and cash equivalents - discontinued operations |
148 |
(329) |
(104) |
|
Effects of exchange rate changes on cash and cash equivalents |
(185) |
128 |
376 |
|
Cash and cash equivalents at beginning of the period |
6,154 |
4,761 |
4,761 |
|
Cash and cash equivalents at end of the period |
5,696 |
4,692 |
6,154 |
|
Consisting of |
|
|
|
|
Cash and cash equivalents in the statement of financial position |
4,526 |
3,267 |
4,132 |
|
Mandatory reserve deposits with central banks |
1,073 |
985 |
1,079 |
|
Short term cash balances held in policyholder funds |
97 |
440 |
522 |
|
Cash and cash equivalents included in assets held for sale |
- |
- |
421 |
|
Total |
5,696 |
4,692 |
6,154 |
* The results for the six months ended 30 June 2010 have been restated to reflect US Life as a discontinued operation (see note A1).
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, short-term cash balances held in policyholder funds and cash and cash equivalents subject to consolidation of funds, 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 2011
|
|
|
Millions |
|
|
£m |
|
Six months ended 30 June 2011 |
Notes |
Number of shares issued and fully paid |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
Shareholders' equity at beginning of the period |
|
5,695 |
8,951 |
2,523 |
11,474 |
|
|
|
|
|
|
|
|
Profit after tax for the financial period |
|
- |
489 |
143 |
632 |
|
Other comprehensive income |
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
Net investment hedge |
|
- |
(25) |
- |
(25) |
|
Available-for-sale investments |
|
- |
|
|
|
|
Fair value gains |
|
- |
53 |
- |
53 |
|
Recycled to the income statement |
|
- |
(10) |
- |
(10) |
|
Realised on disposal |
|
- |
(157) |
- |
(157) |
|
Exchange differences realised on disposal |
|
- |
24 |
- |
24 |
|
Shadow accounting |
|
- |
(43) |
- |
(43) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
(210) |
(86) |
(296) |
|
Other movements |
|
- |
(25) |
(15) |
(40) |
|
Income tax relating to components of other comprehensive income |
|
- |
9 |
- |
9 |
|
Total comprehensive income for the financial period |
|
- |
105 |
42 |
147 |
|
Dividends for the period |
C4 |
- |
(167) |
(84) |
(251) |
|
Net acquisition of treasury shares |
|
- |
(18) |
- |
(18) |
|
Change in participation in subsidiaries |
|
- |
- |
50 |
50 |
|
Reclassification of translation differences on non-controlling interests |
|
- |
43 |
(43) |
- |
|
Shares issued in lieu of cash dividend |
|
69 |
92 |
6 |
98 |
|
Exercise of share options |
|
4 |
3 |
- |
3 |
|
Other issues of ordinary share capital by the Company |
|
- |
1 |
- |
1 |
|
Change in share-based payments reserve |
|
- |
21 |
6 |
27 |
|
Transactions with shareholders |
|
73 |
(25) |
(65) |
(90) |
|
Shareholders' equity at end of the period |
|
5,768 |
9,031 |
2,500 |
11,531 |
|
£m |
||||||||
|
Six months ended 30 June 2011 |
Notes |
Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Total |
|
Attributable to equity holders of the parent at beginning of the period |
|
570 |
795 |
3,391 |
1,176 |
2,331 |
688 |
8,951 |
|
|
|
|
|
|
|
|
|
|
|
Profit for the financial period attributable to equity holders of the parent |
|
- |
- |
- |
- |
473 |
16 |
489 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
|
Net investment hedge |
|
- |
- |
- |
(25) |
- |
- |
(25) |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
- |
53 |
- |
- |
- |
53 |
|
Recycled to income statement |
|
- |
- |
(10) |
- |
- |
- |
(10) |
|
Realised on disposal |
|
|
- |
(157) |
- |
- |
- |
(157) |
|
Exchange differences realised on disposal |
|
|
- |
- |
24 |
- |
- |
24 |
|
Shadow accounting |
|
- |
- |
(43) |
- |
- |
- |
(43) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
- |
- |
(210) |
- |
- |
(210) |
|
Other movements |
|
- |
- |
(42) |
- |
17 |
- |
(25) |
|
Income tax relating to components of other comprehensive income |
|
- |
- |
3 |
- |
- |
6 |
9 |
|
Total comprehensive income for the financial period |
|
- |
- |
(196) |
(211) |
490 |
22 |
105 |
|
Dividends for the period |
C4 |
- |
- |
- |
- |
(145) |
(22) |
(167) |
|
Net acquisition of treasury shares |
|
- |
- |
- |
- |
(18) |
- |
(18) |
|
Reclassification of translation differences on non-controlling interests |
|
- |
- |
- |
43 |
- |
- |
43 |
|
Shares issued in lieu of cash dividends |
|
7 |
- |
|
- |
85 |
- |
92 |
|
Exercise of share options |
|
- |
3 |
- |
- |
- |
- |
3 |
|
Other issues of ordinary share capital by the company |
|
- |
1 |
- |
- |
- |
- |
1 |
|
Change in share-based payments reserve |
|
- |
- |
21 |
- |
- |
- |
21 |
|
Transactions with shareholders |
|
7 |
4 |
21 |
43 |
(78) |
(22) |
(25) |
|
Attributable to equity holders of the parent at end of the period |
|
577 |
799 |
3,216 |
1,008 |
2,743 |
688 |
9,031 |
|
£m |
|||||||
|
Other reserves attributable to equity holders of the parent |
Merger reserve |
Available-for-sale reserve |
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Total |
|
|
At beginning of the period |
|
2,845 |
225 |
101 |
215 |
5 |
3,391 |
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
53 |
- |
- |
- |
53 |
|
Recycled to income statement |
|
- |
(166) |
- |
(1) |
- |
(167) |
|
Shadow accounting |
|
- |
(43) |
- |
- |
- |
(43) |
|
Other movements |
|
- |
- |
(1) |
(41) |
- |
(42) |
|
Income tax relating to components of other comprehensive income |
|
- |
3 |
- |
- |
- |
3 |
|
Change in share-based payments reserve |
|
- |
- |
- |
21 |
- |
21 |
|
At end of the period |
|
2,845 |
72 |
100 |
194 |
5 |
3,216 |
Retained earnings were reduced by £528 million at 30 June 2011 in respect of own shares held in policyholders' funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
Consolidated statement of changes in equity continued
For the six months ended 30 June 2011
|
Six months ended 30 June 2010 |
|
Millions |
|
|
£m |
|
Notes |
Number of shares issued and fully paid |
Attributable to equity holders of the parent |
Total non-controlling interest |
Total equity |
|
|
Shareholders' equity at beginning of the period |
|
5,518 |
8,464 |
2,247 |
10,711 |
|
|
|
|
|
|
|
|
Profit after tax for the financial period |
|
- |
265 |
115 |
380 |
|
Other comprehensive income |
|
|
|
|
|
|
Fair value gains: |
|
|
|
|
|
|
Property revaluation |
|
- |
5 |
- |
5 |
|
Net investment hedge |
|
- |
(34) |
- |
(34) |
|
Available-for-sale investments |
|
|
|
|
|
|
Fair value gains/(losses) |
|
- |
473 |
(1) |
472 |
|
Recycled to the income statement |
|
- |
(43) |
- |
(43) |
|
Shadow accounting |
|
- |
(246) |
- |
(246) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
259 |
59 |
318 |
|
Other movements |
|
- |
14 |
(3) |
11 |
|
Income tax relating to components of other comprehensive income |
|
- |
(53) |
- |
(53) |
|
Total comprehensive income for the financial period |
|
- |
640 |
170 |
810 |
|
Dividends for the period |
C4 |
- |
(99) |
(77) |
(176) |
|
Net acquisition of treasury shares |
|
- |
(29) |
- |
(29) |
|
Acquisition of non-controlling interest in Mutual & Federal |
F1 |
147 |
51 |
(51) |
- |
|
Change in participation in subsidiaries |
F1 |
- |
- |
(81) |
(81) |
|
Shares issued in lieu of cash dividend |
|
14 |
15 |
- |
15 |
|
Exercise of share options |
|
2 |
3 |
- |
3 |
|
Other issues of ordinary share capital by the Company |
|
1 |
1 |
- |
1 |
|
Change in share-based payments reserve |
|
- |
1 |
1 |
2 |
|
Transactions with shareholders |
|
164 |
(57) |
(208) |
(265) |
|
Shareholders' equity at end of the period |
|
5,682 |
9,047 |
2,209 |
11,256 |
|
Six months ended 30 June 2010 |
£m |
|||||||
|
Notes |
Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Total |
|
|
Attributable to equity holders of the parent at beginning of the period |
|
552 |
771 |
3,087 |
469 |
2,897 |
688 |
8,464 |
|
|
|
|
|
|
|
|
|
|
|
Profit for the financial period attributable to equity holders of the parent |
|
- |
- |
- |
- |
249 |
16 |
265 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
- |
5 |
- |
- |
- |
5 |
|
Net investment hedge |
|
- |
- |
- |
(34) |
- |
- |
(34) |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
- |
473 |
- |
- |
- |
473 |
|
Recycled to income statement |
|
- |
- |
(43) |
- |
- |
- |
(43) |
|
Shadow accounting |
|
- |
- |
(246) |
- |
- |
- |
(246) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
- |
- |
259 |
- |
- |
259 |
|
Other movements |
|
- |
- |
7 |
- |
7 |
- |
14 |
|
Income tax relating to components of other comprehensive income |
|
- |
- |
(59) |
- |
- |
6 |
(53) |
|
Total comprehensive income for the financial period |
|
- |
- |
137 |
225 |
256 |
22 |
640 |
|
Dividends for the period |
C4 |
- |
- |
- |
- |
(77) |
(22) |
(99) |
|
Net acquisition of treasury shares |
|
- |
- |
- |
- |
(29) |
- |
(29) |
|
Acquisition of non-controlling interest in Mutual & Federal |
F1 |
15 |
- |
129 |
- |
(93) |
- |
51 |
|
Shares issued in lieu of cash dividend |
|
1 |
3 |
- |
- |
11 |
- |
15 |
|
Exercise of share options |
|
- |
3 |
- |
- |
- |
- |
3 |
|
Other issues of ordinary share capital by the Company |
|
- |
1 |
- |
- |
- |
- |
1 |
|
Change in share-based payments reserve |
|
- |
- |
1 |
- |
- |
- |
1 |
|
Transactions with shareholders |
|
16 |
7 |
130 |
- |
(188) |
(22) |
(57) |
|
Attributable to equity holders of the parent at end of the period |
|
568 |
778 |
3,354 |
694 |
2,965 |
688 |
9,047 |
|
|
|
|
|
|
|
|
£m |
|
Other reserves attributable to equity holders of the parent |
|
Merger reserve |
Available-for-sale reserve |
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Total |
|
At beginning of the period |
|
2,716 |
82 |
87 |
191 |
11 |
3,087 |
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
- |
5 |
- |
- |
5 |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
473 |
- |
- |
- |
473 |
|
Recycled to income statement |
|
- |
(43) |
- |
- |
- |
(43) |
|
Shadow accounting |
|
- |
(241) |
(5) |
- |
- |
(246) |
|
Other movements |
|
- |
- |
(1) |
8 |
- |
7 |
|
Income tax relating to components of other comprehensive income |
|
- |
(59) |
- |
- |
- |
(59) |
|
Acquisition of non-controlling interest in Mutual & Federal |
F1 |
129 |
- |
- |
- |
- |
129 |
|
Change in share-based payments reserve |
|
- |
- |
- |
1 |
- |
1 |
|
At end of the period |
|
2,845 |
212 |
86 |
200 |
11 |
3,354 |
Retained earnings were reduced by £381 million at 30 June 2010 in respect of own shares held in policyholders' funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
Consolidated statement of changes in equity continued
For the six months ended 30 June 2011
|
|
|
Millions |
|
|
£m |
|
Year ended 31 December 2010 |
Notes |
Number of shares issued and fully paid |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
Shareholders' equity at beginning of the year |
|
5,518 |
8,464 |
2,247 |
10,711 |
|
|
|
|
|
|
|
|
(Loss)/profit after tax for the financial year |
|
- |
(282) |
258 |
(24) |
|
Other comprehensive income |
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
Property revaluation |
|
- |
21 |
5 |
26 |
|
Net investment hedge |
|
- |
(87) |
- |
(87) |
|
Available-for-sale investments |
|
|
|
|
|
|
Fair value gains |
|
- |
562 |
- |
562 |
|
Recycled to the income statement |
|
- |
(12) |
- |
(12) |
|
Shadow accounting |
|
- |
(349) |
- |
(349) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
794 |
274 |
1,068 |
|
Other movements |
|
- |
1 |
(4) |
(3) |
|
Income tax relating to components of other comprehensive income |
|
- |
(54) |
- |
(54) |
|
Total comprehensive income for the financial year |
|
- |
594 |
533 |
1,127 |
|
Dividends for the year |
C4 |
- |
(175) |
(152) |
(327) |
|
Net acquisition of treasury shares |
|
- |
(25) |
- |
(25) |
|
Acquisition of non-controlling interest in Mutual & Federal |
F1 |
147 |
51 |
(51) |
- |
|
Change in participation in subsidiaries |
F1 |
- |
- |
(57) |
(57) |
|
Shares issued in lieu of cash dividend |
|
24 |
30 |
- |
30 |
|
Exercise of share options |
|
6 |
5 |
- |
5 |
|
Other issues of ordinary share capital by the Company |
|
- |
3 |
- |
3 |
|
Change in share-based payments reserve |
|
- |
4 |
3 |
7 |
|
Transactions with shareholders |
|
177 |
(107) |
(257) |
(364) |
|
Shareholders' equity at end of the year |
|
5,695 |
8,951 |
2,523 |
11,474 |
|
|
|
|
|
|
|
|
|
£m |
|
Year ended 31 December 2010 |
Notes |
Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Total |
|
Attributable to equity holders of the parent at beginning of the year |
|
552 |
771 |
3,087 |
469 |
2,897 |
688 |
8,464 |
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for the financial year attributable to equity holders of the parent |
|
- |
- |
- |
- |
(314) |
32 |
(282) |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
- |
21 |
- |
- |
- |
21 |
|
Net investment hedge |
|
- |
- |
- |
(87) |
- |
- |
(87) |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
- |
562 |
- |
- |
- |
562 |
|
Recycled to income statement |
|
- |
- |
(12) |
- |
- |
- |
(12) |
|
Shadow accounting |
|
- |
- |
(349) |
- |
- |
- |
(349) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
- |
- |
794 |
- |
- |
794 |
|
Other movements |
|
- |
- |
15 |
- |
(14) |
- |
1 |
|
Income tax relating to components of other comprehensive income |
|
- |
- |
(66) |
- |
- |
12 |
(54) |
|
Total comprehensive income for the financial year |
|
- |
- |
171 |
707 |
(328) |
44 |
594 |
|
Dividends for the year |
C4 |
- |
- |
- |
- |
(131) |
(44) |
(175) |
|
Net acquisition of treasury shares |
|
- |
- |
- |
- |
(25) |
- |
(25) |
|
Acquisition of non-controlling interest in Mutual & Federal |
F1 |
15 |
- |
129 |
- |
(93) |
- |
51 |
|
Shares issued in lieu of cash dividends |
|
2 |
17 |
- |
- |
11 |
- |
30 |
|
Exercise of share options |
|
1 |
4 |
- |
- |
- |
- |
5 |
|
Other issue of ordinary share capital by the Company |
|
- |
3 |
- |
- |
- |
- |
3 |
|
Change in share-based payments reserve |
|
- |
- |
4 |
- |
- |
- |
4 |
|
Transactions with shareholders |
|
18 |
24 |
133 |
- |
(238) |
(44) |
(107) |
|
Attributable to equity holders of the parent at end of the year |
|
570 |
795 |
3,391 |
1,176 |
2,331 |
688 |
8,951 |
|
£m |
|||||||
|
Other reserves attributable to equity holders of the parent |
|
Merger reserve |
Available-for-sale reserve |
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Total |
|
At beginning of the year |
|
2,716 |
82 |
87 |
191 |
11 |
3,087 |
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
- |
21 |
- |
- |
21 |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
562 |
- |
- |
- |
562 |
|
Recycled to income statement |
|
- |
(12) |
- |
- |
- |
(12) |
|
Shadow accounting |
|
- |
(343) |
(6) |
- |
- |
(349) |
|
Other movements |
|
- |
2 |
(1) |
20 |
(6) |
15 |
|
Income tax relating to components of other comprehensive income |
|
- |
(66) |
- |
- |
- |
(66) |
|
Acquisition of non-controlling interest in Mutual & Federal |
F1 |
129 |
- |
- |
- |
- |
129 |
|
Change in share-based payments reserve |
|
- |
- |
- |
4 |
- |
4 |
|
At end of the year |
|
2,845 |
225 |
101 |
215 |
5 |
3,391 |
Retained earnings were reduced by £478 million at 31 December 2010 in respect of own shares held in policyholders' funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
Notes to the consolidated financial statements
For the six months ended 30 June 2011
A Accounting policies
A1 Basis of preparation
The Group financial information contained herein has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards adopted by the EU and in accordance with the requirements of IAS 34 'Interim Financial Reporting'. The Group's results for the six months ended 30 June 2011 and the position at that date have been prepared using accounting policies consistent with those applied in the preparation of the Group's 2010 Annual Report and Accounts.
The Group financial information has been prepared on the going concern basis which the directors believe appropriate having taken into consideration the matters discussed in the Group Finance Director's Review in the section headed Risk and Uncertainties.
The comparative figures for the financial year ended 31 December 2010 are not the company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditors and delivered to the Registrar of Companies. The report of the auditors 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.
As previously reported the Group was in advanced stage negotiations at 31 December 2010 for the disposal of its life assurance operations in the United States, which represented almost the entirety of the US Life operating segment. Following US regulatory approval the disposal of US Life was completed on 7 April 2011. The sale represented the Group's exit from the life assurance market in the United States and therefore met the criteria of a discontinued operation. Consequently the comparative information in the income statement, statement of comprehensive income, statement of cash flows and the related notes has been restated where applicable to reflect this. For the purposes of adjusted operating profit, US Life is classified as a non-core operation for the six months ended 30 June 2011. In preparing the comparative information for the six months ended June 2011 this has required restatement of the published comparatives. The statement of financial position at 30 June 2010 has not required restatement as US Life was not considered held for sale at that point in time. Comparative information for the year ended 31 December 2010 has not required restatement as the US Life operations were already classified as non-core and discontinued at the time of reporting full year results for that period. Details of the impact are provided in notes G1 and G2.
In preparing the consolidated financial statements for the six months ended 30 June 2011 the Emerging Markets business has included its Namibian business but excluded all other African businesses on the basis of their size and political uncertainties related to the ability to access economic benefits. This is consistent with prior periods but will be reconsidered for the full year. Nedbank and Mutual & Federal consolidate the results of all African businesses under their control.
B Segment information
B1 Basis of segmentation
The Group's core operations are Emerging Markets, Nordic, Retail Europe and Wealth Management (collectively Long Term Savings), Nedbank, Mutual & Federal, US Asset Management and Other (including the Group head office functions). The Bermuda business is regarded as non-core. This is consistent with the manner in which management and the Board of Directors considers information when making operating decisions and is the basis on which resources are allocated and performance assessed by management and the Board of Directors. It is consistent with that reported in the previous financial year. This information is presented to the Board in local currency but in preparing these financial statements has been presented in pounds sterling, the presentation currency of the Group. As detailed above US Life is classified as discontinued and as a result also non-core with the comparative segment information restated accordingly, resulting in a reduction in adjusted operating profit before tax and non-controlling interests of £14 million for the six months ended 30 June 2011. The Group generates revenue from four principal business activities: life assurance, asset management, banking and general insurance. The types of products and services from which each operating segment derives its revenues are as follows:
Core operations
Long Term Savings
· Emerging Markets - life assurance and asset management
· Nordic - life assurance, asset management and banking
· Retail Europe - life assurance and asset management
· Wealth Management - life assurance and asset management
Other core operations
· Nedbank - banking and asset management
· Mutual & Federal - general insurance
· US Asset Management - asset management
· Other - other operating segments and business activities
Non-core operations
Non-core operations comprise Bermuda and, up until completion of disposal, US Life, with both businesses engaged in life assurance.
Consolidation adjustments
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 flow and funds under management. Additional performance measures considered by management and the Board of Directors in assessing the performance of the segments can be found in the Market Consistent Embedded Value supplementary information.
Performance measures
In the analysis that follows, consolidation adjustments include the elimination of inter segment revenues, expenses, assets and liabilities together with the impacts of the consolidation of the Group's interest in unit trusts, mutual funds and similar entities.
Notes to the consolidated financial statements
For the six months ended 30 June 2011
B2 Adjusted operating profit statement - segment information six months ended 30 June 2011
|
|
Long Term Savings |
||||
|
|
Nordic |
Retail Europe |
Wealth Management |
Total Long Term Savings |
|
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
1,321 |
65 |
14 |
169 |
1,569 |
|
Outward reinsurance |
(44) |
(4) |
(4) |
(40) |
(92) |
|
Net earned premiums |
1,277 |
61 |
10 |
129 |
1,477 |
|
Investment return (non-banking) |
1,006 |
(366) |
(55) |
184 |
769 |
|
Banking interest and similar income |
- |
113 |
- |
- |
113 |
|
Banking trading, investment and similar income |
- |
(2) |
- |
- |
(2) |
|
Fee and commission income, and income from service activities |
198 |
135 |
101 |
493 |
927 |
|
Other income |
32 |
4 |
1 |
8 |
45 |
|
Inter-segment revenues |
28 |
11 |
3 |
2 |
44 |
|
Total revenues |
2,541 |
(44) |
60 |
816 |
3,373 |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
(1,327) |
(51) |
(11) |
(136) |
(1,525) |
|
Reinsurance recoveries |
47 |
4 |
1 |
38 |
90 |
|
Net claims and benefits incurred |
(1,280) |
(47) |
(10) |
(98) |
(1,435) |
|
Change in investment contract liabilities |
(324) |
417 |
61 |
(167) |
(13) |
|
Losses on loans and advances |
- |
(2) |
(1) |
- |
(3) |
|
Finance costs (including interest and similar expenses) |
- |
- |
- |
- |
- |
|
Banking interest payable and similar expenses |
- |
(61) |
- |
- |
(61) |
|
Fee and commission expenses, and other acquisition costs |
(103) |
(33) |
(43) |
(268) |
(447) |
|
Other operating and administrative expenses |
(508) |
(141) |
(43) |
(173) |
(865) |
|
Change in third party interest in consolidated funds |
- |
- |
- |
- |
- |
|
Amortisation of PVIF and other acquired intangibles |
- |
- |
- |
- |
- |
|
Income tax attributable to policyholder returns |
(28) |
(27) |
- |
4 |
(51) |
|
Inter-segment expenses |
(1) |
- |
(2) |
(21) |
(24) |
|
Total expenses |
(2,244) |
106 |
(38) |
(723) |
(2,899) |
|
Share of associated undertakings' profit/(loss) after tax |
2 |
(2) |
- |
- |
- |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
299 |
60 |
22 |
93 |
474 |
|
Income tax (expense)/credit |
(65) |
(2) |
(7) |
(13) |
(87) |
|
Non-controlling interests |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
234 |
58 |
15 |
80 |
387 |
|
Adjusting items net of tax and non-controlling interests |
(41) |
(27) |
(15) |
(42) |
(125) |
|
Profit/(loss) after tax from continuing operations |
193 |
31 |
- |
38 |
262 |
|
Profit from discontinued operations after tax |
- |
- |
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
193 |
31 |
- |
38 |
262 |
B2 Adjusted operating profit statement - segment information six months ended 30 June 2011 continued
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (Note C1) |
Non-core operations* |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
375 |
- |
- |
- |
1,944 |
- |
- |
1,944 |
|
- |
(75) |
- |
- |
- |
(167) |
- |
- |
(167) |
|
- |
300 |
- |
- |
- |
1,777 |
- |
- |
1,777 |
|
- |
28 |
8 |
28 |
89 |
922 |
(86) |
7 |
843 |
|
1,881 |
- |
- |
- |
- |
1,994 |
- |
- |
1,994 |
|
105 |
- |
- |
- |
- |
103 |
- |
- |
103 |
|
515 |
16 |
223 |
- |
- |
1,681 |
(46) |
- |
1,635 |
|
20 |
- |
6 |
- |
13 |
84 |
- |
10 |
94 |
|
13 |
10 |
3 |
7 |
(88) |
(11) |
- |
11 |
- |
|
2,534 |
354 |
240 |
35 |
14 |
6,550 |
(132) |
28 |
6,446 |
|
|
|
|
|
|
|
|
|
|
|
|
(212) |
- |
- |
- |
(1,737) |
- |
36 |
(1,701) |
|
- |
18 |
- |
- |
- |
108 |
- |
- |
108 |
|
- |
(194) |
- |
- |
- |
(1,629) |
- |
36 |
(1,593) |
|
- |
- |
- |
- |
- |
(13) |
- |
- |
(13) |
|
(250) |
- |
- |
- |
- |
(253) |
- |
- |
(253) |
|
- |
- |
- |
(60) |
- |
(60) |
(25) |
- |
(85) |
|
(1,089) |
- |
- |
- |
- |
(1,150) |
(4) |
- |
(1,154) |
|
(1) |
(55) |
(6) |
- |
(23) |
(532) |
65 |
(29) |
(496) |
|
(806) |
(46) |
(187) |
(39) |
(13) |
(1,956) |
1 |
(11) |
(1,966) |
|
- |
- |
- |
- |
(66) |
(66) |
- |
- |
(66) |
|
- |
- |
- |
- |
- |
- |
(117) |
- |
(117) |
|
- |
- |
- |
- |
- |
(51) |
51 |
- |
- |
|
(29) |
(12) |
- |
(22) |
88 |
1 |
- |
(1) |
- |
|
(2,175) |
(307) |
(193) |
(121) |
(14) |
(5,709) |
(29) |
(5) |
(5,743) |
|
- |
- |
- |
4 |
- |
4 |
- |
- |
4 |
|
|
- |
- |
- |
- |
- |
- |
- |
- |
|
|
47 |
47 |
(82) |
- |
845 |
(161) |
23 |
707 |
|
(93) |
(11) |
(10) |
10 |
- |
(191) |
(12) |
(2) |
(205) |
|
(128) |
(4) |
- |
(19) |
- |
(151) |
8 |
- |
(143) |
|
|
32 |
37 |
(91) |
- |
503 |
(165) |
21 |
359 |
|
6 |
(8) |
(5) |
(33) |
- |
(165) |
165 |
- |
- |
|
144 |
24 |
32 |
(124) |
- |
338 |
- |
21 |
359 |
|
- |
- |
- |
- |
- |
- |
- |
130 |
130 |
|
144 |
24 |
32 |
(124) |
- |
338 |
- |
151 |
489 |
* Non-core operations relates to Bermuda with the exception of £(4) million of inter-segment revenue and expenses and the profit from discontinued operations after tax, with these reflecting the results of US Life which has been classified as a discontinued operation as detailed in notes A1 and B1. Bermuda profit after tax for the six months ended 30 June 2011 was £25 million. Further detail on the results of discontinued operations is provided in note G1.
Notes to the consolidated financial statements
For the six months ended 30 June 2011 continued
B2 Adjusted operating profit statement - segment information six months ended 30 June 2010 (restated)
|
|
Long Term Savings |
||||
|
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management |
Total Long Term Savings |
|
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
1,111 |
61 |
13 |
163 |
1,348 |
|
Outward reinsurance |
(35) |
(3) |
(4) |
(38) |
(80) |
|
Net earned premiums |
1,076 |
58 |
9 |
125 |
1,268 |
|
Investment return (non-banking) |
541 |
190 |
238 |
358 |
1,327 |
|
Banking interest and similar income |
- |
79 |
(1) |
- |
78 |
|
Banking trading, investment and similar income |
- |
- |
- |
- |
- |
|
Fee and commission income, and income from service activities |
180 |
114 |
99 |
433 |
826 |
|
Other income |
20 |
9 |
- |
6 |
35 |
|
Inter-segment revenues |
32 |
9 |
2 |
3 |
46 |
|
Total revenues |
1,849 |
459 |
347 |
925 |
3,580 |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
(891) |
(41) |
(14) |
(151) |
(1,097) |
|
Reinsurance recoveries |
44 |
- |
2 |
38 |
84 |
|
Net claims and benefits incurred |
(847) |
(41) |
(12) |
(113) |
(1,013) |
|
Change in investment contract liabilities |
(201) |
(141) |
(231) |
(303) |
(876) |
|
Losses on loans and advances |
- |
(2) |
(1) |
- |
(3) |
|
Finance costs (including interest and similar expenses) |
- |
- |
- |
- |
- |
|
Banking interest payable and similar expenses |
- |
(36) |
- |
- |
(36) |
|
Fee and commission expenses, and other acquisition costs |
(99) |
(29) |
(37) |
(223) |
(388) |
|
Other operating and administrative expenses |
(436) |
(128) |
(40) |
(186) |
(790) |
|
Change in third party interest in consolidated funds |
- |
- |
- |
- |
- |
|
Amortisation of PVIF and other acquired intangibles |
- |
- |
- |
- |
- |
|
Income tax attributable to policyholder returns |
8 |
(24) |
- |
16 |
- |
|
Inter-segment expenses |
(5) |
(1) |
(1) |
(21) |
(28) |
|
Total expenses |
(1,580) |
(402) |
(322) |
(830) |
(3,134) |
|
Share of associated undertakings' profit after tax |
- |
1 |
- |
- |
1 |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
269 |
58 |
25 |
95 |
447 |
|
Income tax (expense)/credit |
(61) |
(13) |
(7) |
(11) |
(92) |
|
Non-controlling interests |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
208 |
45 |
18 |
84 |
355 |
|
Adjusting items net of tax and non-controlling interests |
(19) |
(39) |
(15) |
(45) |
(118) |
|
Profit/(loss) after tax from continuing operations |
189 |
6 |
3 |
39 |
237 |
|
Profit from discontinued operations after tax |
- |
- |
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
189 |
6 |
3 |
39 |
237 |
B2 Adjusted operating profit statement - segment information six months ended 30 June 2010 (restated) continued
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (Note C1) |
Non-core operations* |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
352 |
- |
- |
- |
1,700 |
- |
- |
1,700 |
|
- |
(67) |
- |
- |
- |
(147) |
- |
- |
(147) |
|
- |
285 |
- |
- |
- |
1,553 |
- |
- |
1,553 |
|
- |
25 |
(2) |
35 |
(2) |
1,383 |
(71) |
(38) |
1,274 |
|
1,927 |
- |
- |
- |
- |
2,005 |
- |
- |
2,005 |
|
82 |
- |
- |
- |
- |
82 |
- |
- |
82 |
|
408 |
11 |
231 |
- |
(5) |
1,471 |
(51) |
- |
1,420 |
|
50 |
1 |
6 |
- |
4 |
96 |
- |
11 |
107 |
|
10 |
12 |
2 |
16 |
(95) |
(9) |
(2) |
11 |
- |
|
2,477 |
334 |
237 |
51 |
(98) |
6,581 |
(124) |
(16) |
6,441 |
|
|
|
|
|
|
|
|
|
|
|
- |
(233) |
- |
- |
- |
(1,330) |
- |
(21) |
(1,351) |
|
- |
34 |
- |
- |
- |
118 |
- |
- |
118 |
|
- |
(199) |
- |
- |
- |
(1,212) |
- |
(21) |
(1,233) |
|
- |
- |
- |
- |
- |
(876) |
- |
- |
(876) |
|
(282) |
- |
- |
- |
- |
(285) |
- |
- |
(285) |
|
- |
- |
- |
(68) |
- |
(68) |
(59) |
- |
(127) |
|
(1,207) |
- |
- |
- |
- |
(1,243) |
(9) |
- |
(1,252) |
|
(2) |
(53) |
(9) |
- |
(19) |
(471) |
77 |
(12) |
(406) |
|
(688) |
(42) |
(188) |
(33) |
(6) |
(1,747) |
22 |
(11) |
(1,736) |
|
- |
- |
- |
- |
28 |
28 |
- |
- |
28 |
|
- |
- |
- |
- |
- |
- |
(145) |
- |
(145) |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
(32) |
(8) |
- |
(22) |
95 |
5 |
- |
(5) |
- |
|
(2,211) |
(302) |
(197) |
(123) |
98 |
(5,869) |
(114) |
(49) |
(6,032) |
|
|
1 |
- |
- |
- |
2 |
- |
- |
2 |
|
- |
- |
- |
- |
- |
- |
(22) |
- |
(22) |
|
|
33 |
40 |
(72) |
- |
714 |
(260) |
(65) |
389 |
|
(53) |
(8) |
(4) |
2 |
- |
(155) |
26 |
- |
(129) |
|
(106) |
(1) |
- |
(19) |
- |
(126) |
11 |
- |
(115) |
|
|
24 |
36 |
(89) |
- |
433 |
(223) |
(65) |
145 |
|
6 |
(19) |
(17) |
(75) |
- |
(223) |
223 |
- |
- |
|
113 |
5 |
19 |
(164) |
- |
210 |
- |
(65) |
145 |
|
- |
- |
- |
- |
- |
- |
- |
120 |
120 |
|
113 |
5 |
19 |
(164) |
- |
210 |
- |
55 |
265 |
* Non-core operations relates to Bermuda with the exception of £(11) million of inter-segment revenue and expenses and the profit from discontinued operations after tax, with these reflecting the results of US Life which has been classified as a discontinued operation as detailed in notes A1 and B1. Bermuda loss after tax for the six months ended 30 June 2010 was £(54) million. Further detail on the results of discontinued operations is provided in note G1.
Notes to the consolidated financial statements
For the six months ended 30 June 2011 continued
B2 Adjusted operating profit statement - segment information year ended 31 December 2010
|
|
Long Term Savings |
||||
|
|
Nordic |
Retail Europe |
Wealth Management |
Total Long Term Savings |
|
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
2,353 |
122 |
28 |
351 |
2,854 |
|
Outward reinsurance |
(72) |
(5) |
(8) |
(79) |
(164) |
|
Net earned premiums |
2,281 |
117 |
20 |
272 |
2,690 |
|
Investment return (non-banking) |
4,072 |
1,144 |
392 |
4,409 |
10,017 |
|
Banking interest and similar income |
- |
169 |
- |
- |
169 |
|
Banking trading, investment and similar income |
- |
5 |
- |
- |
5 |
|
Fee and commission income, and income from service activities |
372 |
238 |
198 |
912 |
1,720 |
|
Other income |
72 |
8 |
- |
11 |
91 |
|
Inter-segment revenues |
54 |
20 |
5 |
12 |
91 |
|
Total revenues |
6,851 |
1,701 |
615 |
5,616 |
14,783 |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
(3,943) |
(83) |
(25) |
(303) |
(4,354) |
|
Reinsurance recoveries |
83 |
5 |
5 |
75 |
168 |
|
Net claims and benefits incurred |
(3,860) |
(78) |
(20) |
(228) |
(4,186) |
|
Change in investment contract liabilities |
(1,261) |
(1,066) |
(382) |
(4,190) |
(6,899) |
|
Losses on loans and advances |
- |
(4) |
(1) |
- |
(5) |
|
Finance costs (including interest and similar expenses) |
- |
- |
- |
- |
- |
|
Banking interest payable and similar expenses |
- |
(78) |
- |
- |
(78) |
|
Fee and commission expenses, and other acquisition costs |
(219) |
(62) |
(75) |
(500) |
(856) |
|
Other operating and administrative expenses |
(941) |
(255) |
(84) |
(390) |
(1,670) |
|
Change in third party interest in consolidated funds |
- |
- |
- |
- |
- |
|
Amortisation of PVIF and other acquired intangibles |
- |
- |
- |
- |
- |
|
Income tax attributable to policyholder returns |
(32) |
(48) |
- |
(69) |
(149) |
|
Inter-segment expenses |
(2) |
(2) |
(2) |
(43) |
(49) |
|
Total expenses |
(6,315) |
(1,593) |
(564) |
(5,420) |
(13,892) |
|
Share of associated undertakings' profit/(loss) after tax |
3 |
2 |
- |
1 |
6 |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
539 |
110 |
51 |
197 |
897 |
|
Income tax (expense)/credit |
(146) |
(20) |
(13) |
(44) |
(223) |
|
Non-controlling interests |
(1) |
- |
- |
- |
(1) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
392 |
90 |
38 |
153 |
673 |
|
Adjusting items net of tax and non-controlling interests |
(1) |
(87) |
(25) |
(140) |
(253) |
|
Profit/(loss) after tax from continuing operations |
391 |
3 |
13 |
13 |
420 |
|
Loss from discontinued operations after tax |
- |
- |
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
391 |
3 |
13 |
13 |
420 |
B2 Adjusted operating profit statement - segment information year ended 31 December 2010 continued
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (Note C1) |
Non-core operations* |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
728 |
- |
- |
- |
3,582 |
- |
- |
3,582 |
|
- |
(140) |
- |
- |
- |
(304) |
- |
(1) |
(305) |
|
- |
588 |
- |
- |
- |
3,278 |
- |
(1) |
3,277 |
|
- |
56 |
16 |
61 |
435 |
10,585 |
(93) |
299 |
10,791 |
|
3,913 |
- |
- |
- |
- |
4,082 |
- |
- |
4,082 |
|
199 |
- |
- |
- |
- |
204 |
- |
- |
204 |
|
946 |
28 |
465 |
1 |
- |
3,160 |
(99) |
- |
3,061 |
|
35 |
- |
9 |
(1) |
3 |
137 |
- |
22 |
159 |
|
20 |
20 |
4 |
29 |
(207) |
(43) |
- |
43 |
- |
|
5,113 |
692 |
494 |
90 |
231 |
21,403 |
(192) |
363 |
21,574 |
|
|
|
|
|
|
|
|
|
|
|
- |
(436) |
- |
- |
- |
(4,790) |
- |
(249) |
(5,039) |
|
- |
58 |
- |
- |
- |
226 |
- |
1 |
227 |
|
- |
(378) |
- |
- |
- |
(4,564) |
- |
(248) |
(4,812) |
|
- |
- |
- |
- |
- |
(6,899) |
- |
- |
(6,899) |
|
(548) |
- |
- |
1 |
- |
(552) |
- |
- |
(552) |
|
- |
- |
- |
(128) |
- |
(128) |
(141) |
- |
(269) |
|
(2,422) |
- |
- |
- |
- |
(2,500) |
(19) |
- |
(2,519) |
|
(3) |
(109) |
(23) |
- |
(36) |
(1,027) |
149 |
(85) |
(963) |
|
(1,485) |
(83) |
(384) |
(93) |
(14) |
(3,729) |
40 |
(26) |
(3,715) |
|
- |
- |
- |
- |
(388) |
(388) |
- |
- |
(388) |
|
- |
- |
- |
- |
- |
- |
(297) |
- |
(297) |
|
- |
- |
- |
- |
- |
(149) |
149 |
- |
- |
|
(54) |
(20) |
- |
(77) |
207 |
7 |
- |
(7) |
- |
|
(4,512) |
(590) |
(407) |
(297) |
(231) |
(19,929) |
(119) |
(366) |
(20,414) |
|
- |
1 |
- |
- |
- |
7 |
- |
- |
7 |
|
|
- |
- |
- |
- |
- |
(22) |
- |
(22) |
|
|
103 |
87 |
(207) |
- |
1,481 |
(333) |
(3) |
1,145 |
|
(128) |
(24) |
(17) |
45 |
- |
(347) |
(113) |
4 |
(456) |
|
(232) |
(5) |
- |
(41) |
- |
(279) |
21 |
- |
(258) |
|
241 |
74 |
70 |
(203) |
- |
855 |
(425) |
1 |
|
|
10 |
(11) |
(20) |
(151) |
- |
(425) |
425 |
- |
- |
|
251 |
63 |
50 |
(354) |
- |
430 |
- |
1 |
431 |
|
- |
- |
- |
- |
- |
- |
- |
(713) |
(713) |
|
251 |
63 |
50 |
(354) |
- |
430 |
- |
(712) |
(282) |
* Non-core operations relates to Bermuda with the exception of £(21) million of inter-segment revenue and expenses and the loss from discontinued operations after tax, with these reflecting the results of US Life which has been classified as a discontinued operation as detailed in notes A1 and B1. Bermuda profit after tax for the year ended 31 December 2010 was £22 million. Further detail on the results of discontinued operations is provided in note G1.
Notes to the consolidated financial statements
For the six months ended 30 June 2011
B3 Gross earned premiums
|
Six months ended 30 June 2011 |
Long Term Savings |
||||
|
Emerging Markets |
Nordic |
|
Wealth Management |
Total Long Term Savings |
|
|
Life assurance - insurance contracts |
819 |
65 |
14 |
169 |
1,067 |
|
Life assurance - investment contracts with discretionary participation features |
502 |
- |
- |
- |
502 |
|
General insurance |
- |
- |
- |
- |
- |
|
Gross earned premiums |
1,321 |
65 |
14 |
169 |
1,569 |
|
Life assurance - other investment contracts recognised as deposits |
1,030 |
627 |
318 |
3,000 |
4,975 |
|
|
Long Term Savings |
||||
|
Six months ended 30 June 2010 |
Emerging Markets |
Nordic |
|
Wealth Management |
Long Term Savings |
|
Life assurance - insurance contracts |
726 |
61 |
13 |
163 |
963 |
|
Life assurance - investment contracts with discretionary participation features |
385 |
- |
- |
- |
385 |
|
General insurance |
- |
- |
- |
- |
- |
|
Gross earned premiums |
1,111 |
61 |
13 |
163 |
1,348 |
|
Life assurance - other investment contracts recognised as deposits |
983 |
561 |
365 |
3,489 |
5,398 |
|
|
Long Term Savings |
||||
|
Year ended 31 December 2010 |
|
Nordic |
Retail Europe |
Wealth Management |
Total Long Term Savings |
|
Life assurance - insurance contracts |
1,498 |
122 |
28 |
351 |
1,999 |
|
Life assurance - investment contracts with discretionary participation features |
855 |
- |
- |
- |
855 |
|
General insurance |
- |
- |
- |
- |
- |
|
Gross earned premiums |
2,353 |
122 |
28 |
351 |
2,854 |
|
Life assurance - other investment contracts recognised as deposits |
1,829 |
1,040 |
656 |
6,287 |
9,812 |
B4 Impairments of financial assets
|
|
£m |
|||
|
|
|
6 months |
6 months |
Year 31 December 2010 |
|
Nordic |
|
- |
3 |
4 |
|
Total Long Term Savings |
|
- |
3 |
4 |
|
Nedbank |
|
22 |
282 |
547 |
|
Total |
22 |
285 |
551 |
|
B3 Gross earned premiums continued
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Total core operations |
Non-core operations |
Total - continuing operations |
|
- |
- |
- |
1,067 |
- |
1,067 |
|
|
- |
- |
502 |
- |
502 |
|
- |
375 |
- |
375 |
- |
375 |
|
- |
375 |
- |
1,944 |
- |
1,944 |
|
|
- |
- |
4,975 |
- |
4,975 |
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Total core operations |
Non-core operations |
Total - continuing operations Restated |
|
- |
- |
- |
963 |
- |
963 |
|
|
- |
- |
385 |
- |
385 |
|
- |
352 |
- |
352 |
- |
352 |
|
- |
352 |
- |
1,700 |
- |
1,700 |
|
|
- |
- |
5,398 |
- |
5,398 |
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Total core operations |
Non-core operations |
Total - continuing operations |
|
- |
- |
- |
1,999 |
- |
1,999 |
|
|
- |
- |
855 |
- |
855 |
|
- |
728 |
- |
728 |
- |
728 |
|
- |
728 |
- |
3,582 |
- |
3,582 |
|
|
- |
- |
9,812 |
- |
9,812 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
B5 Funds under management
|
|
Long Term Savings |
||||
|
As at 30 June 2011 |
Emerging Markets |
Nordic |
Retail Europe |
|
Total Long Term Savings |
|
Life assurance policyholder funds |
29,570 |
11,923 |
4,529 |
41,062 |
87,084 |
|
Unit trusts and mutual funds |
10,475 |
1,640 |
387 |
15,625 |
28,127 |
|
Third party client funds |
10,757 |
- |
- |
- |
10,757 |
|
Total client funds under management |
50,802 |
13,563 |
4,916 |
56,687 |
125,968 |
|
Shareholder funds |
2,764 |
483 |
255 |
1,023 |
4,525 |
|
Total funds under management |
53,566 |
14,046 |
5,171 |
57,710 |
130,493 |
|
|
Long Term Savings |
||||
|
As at 30 June 2010 |
Emerging Markets |
Nordic |
Retail Europe |
|
Total Long Term Savings |
|
Life assurance policyholder funds |
25,636 |
9,509 |
3,731 |
35,636 |
74,512 |
|
Unit trusts and mutual funds |
8,677 |
1,465 |
370 |
12,239 |
22,751 |
|
Third party client funds |
9,469 |
- |
- |
- |
9,469 |
|
Total client funds under management |
43,782 |
10,974 |
4,101 |
47,875 |
106,732 |
|
Shareholder funds |
2,370 |
408 |
199 |
899 |
3,876 |
|
Total funds under management |
46,152 |
11,382 |
4,300 |
48,774 |
110,608 |
|
|
Long Term Savings |
||||
|
As at 31 December 2010 |
Emerging Markets |
Nordic |
Retail Europe |
|
Total Long Term Savings |
|
Life assurance policyholder funds |
31,750 |
11,722 |
4,317 |
40,401 |
88,190 |
|
Unit trusts and mutual funds |
10,613 |
1,800 |
398 |
14,525 |
27,336 |
|
Third party client funds |
11,732 |
- |
- |
- |
11,732 |
|
Total client funds under management |
54,095 |
13,522 |
4,715 |
54,926 |
127,258 |
|
Shareholder funds |
2,882 |
431 |
245 |
958 |
4,516 |
|
Total funds under management |
56,977 |
13,953 |
4,960 |
55,884 |
131,774 |
B5 Funds under management continued
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
|
Non-core operations |
Total |
|
868 |
- |
3,444 |
91,396 |
2,459 |
93,855 |
|
5,697 |
- |
4,813 |
38,637 |
- |
38,637 |
|
3,977 |
- |
153,104 |
167,838 |
- |
167,838 |
|
10,542 |
- |
161,361 |
297,871 |
2,459 |
300,330 |
|
- |
200 |
228 |
4,953 |
- |
4,953 |
|
10,542 |
200 |
161,589 |
302,824 |
2,459 |
305,283 |
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
|
Non-core operations |
Total |
|
711 |
- |
7,667 |
82,890 |
9,935 |
92,825 |
|
4,341 |
- |
3,992 |
31,084 |
- |
31,084 |
|
3,973 |
- |
150,706 |
164,148 |
- |
164,148 |
|
9,025 |
- |
162,365 |
278,122 |
9,935 |
288,057 |
|
- |
171 |
192 |
4,239 |
- |
4,239 |
|
9,025 |
171 |
162,557 |
282,361 |
9,935 |
292,296 |
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
|
Non-core operations |
Total |
|
846 |
- |
3,846 |
92,882 |
13,489 |
106,371 |
|
5,713 |
- |
4,974 |
38,023 |
- |
38,023 |
|
4,164 |
- |
157,555 |
173,451 |
- |
173,451 |
|
10,723 |
- |
166,375 |
304,356 |
13,489 |
317,845 |
|
- |
210 |
226 |
4,952 |
- |
4,952 |
|
10,723 |
210 |
166,601 |
309,308 |
13,489 |
322,797 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
B6 Statement of financial position - segment information at 30 June 2011
|
|
Long Term Savings |
||||
|
At 30 June 2011 |
Emerging Markets |
Nordic |
Retail Europe |
|
Total Long Term Savings |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
125 |
981 |
530 |
1,412 |
3048 |
|
Mandatory reserve deposits with central banks |
- |
- |
- |
- |
- |
|
Property, plant and equipment |
357 |
10 |
4 |
14 |
385 |
|
Investment property |
1,610 |
- |
- |
- |
1,610 |
|
Deferred tax assets |
83 |
83 |
28 |
31 |
225 |
|
Investments in associated undertakings and joint ventures |
24 |
4 |
- |
- |
28 |
|
Deferred acquisition costs |
130 |
77 |
345 |
885 |
1,437 |
|
Reinsurers' share of life assurance policyholder liabilities |
34 |
15 |
7 |
1,029 |
1,085 |
|
Reinsurers' share of general insurance liabilities |
- |
- |
- |
- |
- |
|
Loans and advances |
419 |
5,521 |
1 |
194 |
6,135 |
|
Investments and securities |
33,130 |
13,851 |
4,692 |
41,471 |
93,144 |
|
Current tax receivable |
11 |
1 |
14 |
66 |
92 |
|
Client indebtedness for acceptances |
- |
- |
- |
- |
- |
|
Trade, other receivables and other assets |
986 |
161 |
66 |
337 |
1,550 |
|
Derivative financial instruments - assets |
527 |
11 |
- |
- |
538 |
|
Cash and cash equivalents |
217 |
538 |
88 |
455 |
1,298 |
|
Non-current assets held for sale |
- |
- |
- |
5 |
5 |
|
Inter-segment assets |
1,189 |
207 |
64 |
258 |
1,718 |
|
Total assets |
38,842 |
21,460 |
5,839 |
46,157 |
112,298 |
|
Liabilities |
|
|
|
|
|
|
Life assurance policyholder liabilities |
33,816 |
12,465 |
4,692 |
42,327 |
93,300 |
|
General insurance liabilities |
- |
- |
- |
- |
- |
|
Third-party interests in consolidated funds |
- |
- |
- |
- |
- |
|
Borrowed funds |
276 |
2 |
- |
- |
278 |
|
Provisions |
157 |
(46) |
5 |
49 |
165 |
|
Deferred revenue |
18 |
2 |
225 |
518 |
763 |
|
Deferred tax liabilities |
235 |
102 |
111 |
198 |
646 |
|
Current tax payable |
104 |
35 |
19 |
41 |
199 |
|
Trade, other payables and other liabilities |
1,903 |
237 |
76 |
593 |
2,809 |
|
Liabilities under acceptances |
- |
- |
- |
- |
- |
|
Amounts owed to bank depositors |
- |
6,769 |
- |
4 |
6,773 |
|
Derivative financial instruments - liabilities |
162 |
9 |
- |
1 |
172 |
|
Inter-segment liabilities |
163 |
- |
3 |
468 |
634 |
|
Total liabilities |
36,834 |
19,575 |
5,131 |
44,199 |
105,739 |
|
Net assets |
2,008 |
1,885 |
708 |
1,958 |
6,559 |
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
2,007 |
1,885 |
708 |
1,958 |
6,558 |
|
Non-controlling interests |
1 |
- |
- |
- |
1 |
|
Non-controlling interests - ordinary shares |
1 |
- |
- |
- |
1 |
|
Non-controlling interests - preference shares |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Total equity |
2,008 |
1,885 |
708 |
1,958 |
6,559 |
B6 Statement of financial position - segment information at 30 June 2011 continued
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Bermuda |
Other |
|
Total |
|
|
|
|
|
|
|
|
|
604 |
28 |
1,140 |
- |
13 |
- |
4,833 |
|
1,073 |
- |
- |
- |
- |
- |
1,073 |
|
537 |
24 |
13 |
1 |
2 |
- |
962 |
|
19 |
- |
- |
- |
- |
351 |
1,980 |
|
21 |
15 |
135 |
- |
- |
- |
396 |
|
108 |
2 |
8 |
- |
30 |
- |
176 |
|
1 |
17 |
12 |
98 |
- |
- |
1,565 |
|
29 |
- |
- |
- |
- |
- |
1,114 |
|
- |
115 |
- |
- |
- |
- |
115 |
|
43,221 |
2 |
- |
- |
59 |
- |
49,417 |
|
7,180 |
452 |
220 |
2,052 |
54 |
3,326 |
106,428 |
|
57 |
- |
- |
- |
2 |
- |
151 |
|
254 |
- |
- |
- |
- |
- |
254 |
|
697 |
90 |
149 |
959 |
39 |
660 |
4,144 |
|
763 |
- |
- |
- |
138 |
331 |
1,770 |
|
1,081 |
137 |
142 |
59 |
781 |
1,028 |
4,526 |
|
1 |
- |
- |
- |
- |
- |
6 |
|
227 |
25 |
2 |
604 |
982 |
(3,558) |
- |
|
55,873 |
907 |
1,821 |
3,773 |
2,100 |
2,138 |
178,910 |
|
|
|
|
|
|
|
|
|
848 |
- |
- |
3,281 |
- |
- |
97,429 |
|
- |
386 |
- |
- |
- |
- |
386 |
|
- |
- |
- |
- |
- |
4,711 |
4,711 |
|
2,511 |
- |
10 |
- |
1,698 |
- |
4,497 |
|
(6) |
30 |
2 |
- |
39 |
- |
230 |
|
- |
10 |
- |
- |
- |
- |
773 |
|
155 |
11 |
- |
- |
18 |
- |
830 |
|
5 |
2 |
4 |
1 |
33 |
- |
244 |
|
1,204 |
125 |
179 |
19 |
110 |
660 |
5,106 |
|
254 |
- |
- |
- |
- |
- |
254 |
|
44,791 |
- |
- |
- |
- |
- |
51,564 |
|
819 |
- |
- |
1 |
38 |
325 |
1,355 |
|
688 |
2 |
737 |
- |
1,497 |
(3,558) |
- |
|
51,269 |
566 |
932 |
3,302 |
3,433 |
2,138 |
167,379 |
|
4,604 |
341 |
889 |
471 |
(1,333) |
- |
11,531 |
|
|
|
|
|
|
|
|
|
2,599 |
322 |
860 |
471 |
(1,779) |
- |
9,031 |
|
2,005 |
19 |
29 |
- |
446 |
- |
2,500 |
|
1,734 |
19 |
29 |
- |
- |
- |
1,783 |
|
271 |
- |
- |
- |
446 |
- |
717 |
|
|
|
|
|
|
|
|
|
4,604 |
341 |
889 |
471 |
(1,333) |
- |
11,531 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
B6 Statement of financial position - segment information at 30 June 2010
|
|
Long Term Savings |
||||
|
At 30 June 2010 |
Emerging Markets |
Nordic |
Retail |
Wealth Management |
Total Long Term Savings |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
109 |
960 |
510 |
1,536 |
3,115 |
|
Mandatory reserve deposits with central banks |
- |
- |
- |
- |
- |
|
Property, plant and equipment |
345 |
11 |
3 |
14 |
373 |
|
Investment property |
1,648 |
- |
- |
- |
1,648 |
|
Deferred tax assets |
66 |
94 |
70 |
24 |
254 |
|
Investments in associated undertakings and joint ventures |
28 |
1 |
- |
- |
29 |
|
Deferred acquisition costs |
126 |
56 |
261 |
828 |
1,271 |
|
Reinsurers' share of life assurance policyholder liabilities |
19 |
8 |
7 |
744 |
778 |
|
Reinsurers' share of general insurance liabilities |
- |
- |
- |
- |
- |
|
Loans and advances |
285 |
4,444 |
1 |
165 |
4,895 |
|
Investments and securities |
28,185 |
11,145 |
3,854 |
36,151 |
79,335 |
|
Current tax receivable |
6 |
4 |
18 |
106 |
134 |
|
Client indebtedness for acceptances |
- |
- |
- |
- |
- |
|
Trade, other receivables and other assets |
727 |
164 |
55 |
243 |
1,189 |
|
Derivative financial instruments - assets |
322 |
6 |
- |
- |
328 |
|
Cash and cash equivalents |
384 |
374 |
73 |
223 |
1,054 |
|
Non-current assets held for sale |
- |
- |
- |
7 |
7 |
|
Inter-segment assets |
1,078 |
44 |
31 |
250 |
1,403 |
|
Total assets |
33,328 |
17,311 |
4,883 |
40,291 |
95,813 |
|
Liabilities |
|
|
|
|
|
|
Life assurance business policyholder liabilities |
29,364 |
9,704 |
3,852 |
36,531 |
79,451 |
|
General insurance liabilities |
- |
- |
- |
- |
- |
|
Third-party interests in consolidated funds |
- |
- |
- |
- |
- |
|
Borrowed funds |
283 |
2 |
- |
- |
285 |
|
Provisions |
143 |
(14) |
4 |
33 |
166 |
|
Deferred revenue |
22 |
1 |
148 |
481 |
652 |
|
Deferred tax liabilities |
203 |
109 |
172 |
138 |
622 |
|
Current tax payable |
64 |
25 |
2 |
38 |
129 |
|
Trade, other payables and other liabilities |
1,456 |
260 |
76 |
515 |
2,307 |
|
Liabilities under acceptances |
- |
- |
- |
- |
- |
|
Amounts owed to bank depositors |
- |
5,666 |
- |
- |
5,666 |
|
Derivative financial instruments - liabilities |
109 |
14 |
4 |
- |
127 |
|
Inter-segment liabilities |
87 |
4 |
1 |
169 |
261 |
|
Total liabilities |
31,731 |
15,771 |
4,259 |
37,905 |
89,666 |
|
Net assets |
1,597 |
1,540 |
624 |
2,386 |
6,147 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
1,593 |
1,540 |
624 |
2,386 |
6,143 |
|
Non-controlling interests |
4 |
- |
- |
- |
4 |
|
Non-controlling interests - ordinary shares |
4 |
- |
- |
- |
4 |
|
Non-controlling interests - preference shares |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Total equity |
1,597 |
1,540 |
624 |
2,386 |
6,147 |
B6 Statement of financial position - segment information at 30 June 2010 continued
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Bermuda |
US Life |
|
Total |
|
|
|
|
|
|
|
|
|
|
568 |
31 |
1,233 |
13 |
1 |
42 |
- |
5,003 |
|
985 |
- |
- |
- |
- |
- |
- |
985 |
|
454 |
23 |
18 |
3 |
- |
- |
- |
871 |
|
18 |
- |
- |
- |
- |
- |
360 |
2,026 |
|
36 |
10 |
162 |
9 |
- |
197 |
- |
668 |
|
83 |
1 |
8 |
24 |
- |
- |
- |
145 |
|
2 |
16 |
26 |
- |
192 |
1,589 |
- |
3,096 |
|
27 |
- |
- |
- |
- |
520 |
- |
1,325 |
|
- |
125 |
- |
- |
- |
- |
- |
125 |
|
40,117 |
2 |
- |
- |
- |
57 |
- |
45,071 |
|
6,341 |
464 |
184 |
39 |
2,870 |
11,264 |
1,773 |
102,270 |
|
32 |
- |
- |
- |
- |
- |
- |
166 |
|
159 |
- |
- |
- |
- |
- |
- |
159 |
|
541 |
93 |
128 |
58 |
919 |
276 |
576 |
3,780 |
|
1,115 |
- |
- |
89 |
6 |
57 |
338 |
1,933 |
|
704 |
90 |
160 |
299 |
55 |
8 |
897 |
3,267 |
|
- |
- |
11 |
- |
- |
- |
- |
18 |
|
161 |
29 |
- |
1,467 |
614 |
62 |
(3,736) |
- |
|
51,343 |
884 |
1,930 |
2,001 |
4,657 |
14,072 |
208 |
170,908 |
|
|
|
|
|
|
|
|
|
|
712 |
- |
- |
- |
4,224 |
12,439 |
- |
96,826 |
|
- |
389 |
- |
- |
- |
- |
- |
389 |
|
- |
- |
- |
- |
- |
- |
2,860 |
2,860 |
|
2,237 |
- |
- |
1,406 |
- |
- |
- |
3,928 |
|
(4) |
25 |
3 |
36 |
- |
- |
- |
226 |
|
1 |
8 |
- |
- |
- |
- |
- |
661 |
|
153 |
7 |
- |
22 |
- |
126 |
- |
930 |
|
13 |
1 |
8 |
39 |
6 |
2 |
- |
198 |
|
1,164 |
120 |
171 |
106 |
8 |
261 |
762 |
4,899 |
|
159 |
- |
- |
- |
- |
- |
- |
159 |
|
41,450 |
- |
- |
- |
- |
- |
- |
47,116 |
|
952 |
- |
- |
50 |
- |
9 |
322 |
1,460 |
|
496 |
- |
1,324 |
1,483 |
- |
172 |
(3,736) |
- |
|
47,333 |
550 |
1,506 |
3,142 |
4,238 |
13,009 |
208 |
159,652 |
|
4,010 |
334 |
424 |
(1,141) |
419 |
1,063 |
- |
11,256 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,296 |
321 |
392 |
(1,587) |
419 |
1,063 |
- |
9,047 |
|
1,714 |
13 |
32 |
446 |
- |
- |
- |
2,209 |
|
1,443 |
13 |
32 |
- |
- |
- |
- |
1,492 |
|
271 |
- |
- |
446 |
- |
- |
- |
717 |
|
|
|
|
|
|
|
|
|
|
4,010 |
334 |
424 |
(1,141) |
419 |
1,063 |
- |
11,256 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
B6 Statement of financial position - segment information at 31 December 2010
|
|
Long Term Savings |
||||
|
At 31 December 2010 |
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management |
Total Long Term Savings |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
120 |
995 |
522 |
1,463 |
3,100 |
|
Mandatory reserve deposits with central banks |
- |
- |
- |
- |
- |
|
Property, plant and equipment |
396 |
12 |
3 |
16 |
427 |
|
Investment property |
1,679 |
- |
- |
- |
1,679 |
|
Deferred tax assets |
96 |
78 |
27 |
27 |
228 |
|
Investments in associated undertakings and joint ventures |
26 |
4 |
- |
1 |
31 |
|
Deferred acquisition costs |
139 |
66 |
316 |
855 |
1,376 |
|
Reinsurers' share of life assurance policyholder liabilities |
24 |
12 |
8 |
907 |
951 |
|
Reinsurers' share of general insurance liabilities |
- |
- |
- |
- |
- |
|
Loans and advances |
343 |
5,216 |
1 |
185 |
5,745 |
|
Investments and securities |
34,519 |
13,392 |
4,466 |
40,856 |
93,233 |
|
Current tax receivable |
4 |
1 |
9 |
95 |
109 |
|
Client indebtedness for acceptances |
- |
- |
- |
- |
- |
|
Trade, other receivables and other assets |
854 |
191 |
58 |
274 |
1,377 |
|
Derivative financial instruments - assets |
557 |
10 |
- |
- |
567 |
|
Cash and cash equivalents |
1,141 |
198 |
93 |
336 |
1,768 |
|
Non-current assets held for sale |
- |
- |
- |
6 |
6 |
|
Inter-segment assets |
947 |
58 |
56 |
294 |
1,355 |
|
Total assets |
40,845 |
20,233 |
5,559 |
45,315 |
111,952 |
|
Liabilities |
|
|
|
|
|
|
Life assurance policyholder liabilities |
35,676 |
12,248 |
4,460 |
41,468 |
93,852 |
|
General insurance liabilities |
- |
- |
- |
- |
- |
|
Third-party interests in consolidated funds |
- |
- |
- |
- |
- |
|
Borrowed funds |
291 |
2 |
- |
1 |
294 |
|
Provisions |
158 |
(38) |
4 |
50 |
174 |
|
Deferred revenue |
22 |
1 |
197 |
498 |
718 |
|
Deferred tax liabilities |
225 |
98 |
124 |
224 |
671 |
|
Current tax payable |
123 |
12 |
4 |
65 |
204 |
|
Trade, other payables and other liabilities |
2,246 |
259 |
94 |
544 |
3,143 |
|
Liabilities under acceptances |
- |
- |
- |
- |
- |
|
Amounts owed to bank depositors |
- |
5,957 |
- |
- |
5,957 |
|
Derivative financial instruments - liabilities |
135 |
10 |
- |
- |
145 |
|
Non-current liabilities held for sale |
- |
- |
- |
- |
- |
|
Inter-segment liabilities |
123 |
1 |
4 |
99 |
227 |
|
Total liabilities |
38,999 |
18,550 |
4,887 |
42,949 |
105,385 |
|
Net assets |
1,846 |
1,683 |
672 |
2,366 |
6,567 |
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
1,847 |
1,683 |
672 |
2,366 |
6,568 |
|
Non-controlling interests |
(1) |
- |
- |
- |
(1) |
|
Non-controlling interests - ordinary shares |
(1) |
- |
- |
- |
(1) |
|
Non-controlling interests - preference shares |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Total equity |
1,846 |
1,683 |
672 |
2,366 |
6,567 |
B6 Statement of financial position - segment information at 31 December 2010 continued
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Bermuda |
US Life |
|
Total |
|
|
|
|
|
|
|
|
|
|
637 |
33 |
1,181 |
14 |
- |
- |
- |
4,965 |
|
1,079 |
- |
- |
- |
- |
- |
- |
1,079 |
|
546 |
25 |
16 |
1 |
- |
- |
- |
1,015 |
|
19 |
- |
- |
1 |
- |
- |
341 |
2,040 |
|
28 |
12 |
148 |
- |
- |
- |
- |
416 |
|
96 |
2 |
8 |
25 |
- |
- |
- |
162 |
|
1 |
19 |
14 |
- |
124 |
- |
- |
1,534 |
|
31 |
- |
- |
- |
- |
- |
- |
982 |
|
- |
122 |
- |
- |
- |
- |
- |
122 |
|
46,032 |
1 |
- |
- |
- |
- |
- |
51,778 |
|
6,886 |
553 |
218 |
109 |
2,567 |
- |
2,587 |
106,153 |
|
47 |
- |
- |
- |
- |
- |
- |
156 |
|
190 |
- |
- |
- |
- |
- |
- |
190 |
|
943 |
84 |
138 |
62 |
1,038 |
- |
292 |
3,934 |
|
1,350 |
- |
- |
109 |
1 |
- |
476 |
2,503 |
|
841 |
131 |
171 |
458 |
74 |
- |
689 |
4,132 |
|
1 |
- |
- |
- |
- |
12,384 |
- |
12,391 |
|
202 |
23 |
4 |
975 |
874 |
47 |
(3,480) |
- |
|
58,929 |
1,005 |
1,898 |
1,754 |
4,678 |
12,431 |
905 |
193,552 |
|
|
|
|
|
|
|
|
|
|
846 |
- |
- |
- |
3,933 |
- |
- |
98,631 |
|
- |
397 |
- |
- |
- |
- |
- |
397 |
|
- |
- |
- |
- |
- |
- |
3,584 |
3,584 |
|
2,456 |
- |
11 |
1,443 |
- |
- |
- |
4,204 |
|
(4) |
40 |
3 |
47 |
- |
- |
- |
260 |
|
1 |
11 |
- |
- |
- |
- |
- |
730 |
|
158 |
13 |
- |
16 |
- |
- |
- |
858 |
|
12 |
1 |
7 |
13 |
1 |
- |
- |
238 |
|
1,717 |
114 |
210 |
120 |
7 |
- |
350 |
5,661 |
|
190 |
- |
- |
- |
- |
- |
- |
190 |
|
47,279 |
- |
- |
- |
- |
- |
- |
53,236 |
|
1,172 |
- |
- |
102 |
- |
- |
451 |
1,870 |
|
- |
- |
- |
- |
- |
12,219 |
- |
12,219 |
|
431 |
2 |
803 |
1,860 |
- |
157 |
(3,480) |
- |
|
54,258 |
578 |
1,034 |
3,601 |
3,941 |
12,376 |
905 |
182,078 |
|
4,671 |
427 |
864 |
(1,847) |
737 |
55 |
- |
11,474 |
|
|
|
|
|
|
|
|
|
|
2,643 |
409 |
832 |
(2,293) |
737 |
55 |
- |
8,951 |
|
2,028 |
18 |
32 |
446 |
- |
- |
- |
2,523 |
|
1,714 |
18 |
32 |
- |
- |
- |
- |
1,763 |
|
314 |
- |
- |
446 |
- |
- |
- |
760 |
|
|
|
|
|
|
|
|
|
|
4,671 |
427 |
864 |
(1,847) |
737 |
55 |
- |
11,474 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
C Other key performance information
C1 Operating profit adjusting items
(a) Summary of adjusting items
In determining the adjusted operating profit of the Group 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.
|
|
||||||
|
Six months ended 30 June 2011 |
Notes |
Long Term Savings |
||||
|
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management |
Long Term Savings |
||
|
Income/(expense) |
||||||
|
Goodwill impairment and impact of acquisition accounting |
C1(b) |
(1) |
(29) |
(20) |
(43) |
(93) |
|
Short-term fluctuations in investment return |
C1(d) |
(23) |
- |
- |
(14) |
(37) |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
C1(e) |
(31) |
- |
- |
- |
(31) |
|
Dividends declared to holders of perpetual preferred callable securities |
C1(f) |
- |
- |
- |
- |
- |
|
Credit-related fair value adjustments on Group debt instruments |
C1(h) |
- |
- |
- |
- |
- |
|
Total adjusting items |
|
(55) |
(29) |
(20) |
(57) |
(161) |
|
Tax on adjusting items |
|
14 |
2 |
5 |
15 |
36 |
|
Non-controlling interest in adjusting items |
|
- |
- |
- |
- |
- |
|
Total adjusting items after tax and non-controlling interests |
|
(41) |
(27) |
(15) |
(42) |
(125) |
|
|
||||||
|
Six months ended 30 June 2010* |
Notes |
Long Term Savings |
||||
|
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management |
Long Term Savings |
||
|
Income/(expense) |
||||||
|
Goodwill impairment and impact of acquisition accounting |
C1(b) |
(1) |
(40) |
(21) |
(38) |
(100) |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
- |
- |
- |
- |
- |
|
Short-term fluctuations in investment return |
C1(d) |
(39) |
- |
- |
(19) |
(58) |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
C1(e) |
19 |
- |
- |
- |
19 |
|
Dividends declared to holders of perpetual preferred callable securities |
C1(f) |
- |
- |
- |
- |
- |
|
US Asset Management equity plans and non-controlling interests |
C1(g) |
- |
- |
- |
- |
- |
|
Credit-related fair value adjustments on Group debt instruments |
C1(h) |
- |
- |
- |
- |
- |
|
Total adjusting items |
|
(21) |
(40) |
(21) |
(57) |
(139) |
|
Tax on adjusting items |
|
2 |
1 |
6 |
12 |
21 |
|
Non-controlling interest in adjusting items |
|
- |
- |
- |
- |
- |
|
Total adjusting items after tax and non-controlling interests |
|
(19) |
(39) |
(15) |
(45) |
(118) |
|
* The results for the six months ended 30 June 2010 have been restated to reflect US Life as a discontinued operation. |
||||||
C1 Operating profit adjusting items continued
(a) Summary of adjusting items continued
|
|
|
|
|
£m |
||
|
|
|
|
|
|
||
|
|
M&F |
USAM |
Other |
Total |
||
|
|
||||||
|
(3) |
- |
(2) |
- |
(98) |
||
|
- |
(11) |
- |
(6) |
(54) |
||
|
|
- |
- |
- |
(31) |
||
|
|
- |
- |
22 |
22 |
||
|
(4) |
- |
- |
(47) |
(51) |
||
|
(7) |
(11) |
(2) |
(31) |
(212) |
||
|
2 |
2 |
1 |
(2) |
39 |
||
|
11 |
1 |
(4) |
- |
8 |
||
|
6 |
(8) |
(5) |
(33) |
(165) |
||
|
|
|
|
|
£m |
|
|
|
|
|
|
|
Nedbank |
M&F |
USAM |
Other |
Total |
|
|
|
|
|
|
|
- |
- |
(1) |
- |
(101) |
|
|
- |
(20) |
- |
(22) |
|
- |
(19) |
- |
(12) |
(89) |
|
|
- |
- |
- |
19 |
|
|
- |
- |
22 |
22 |
|
- |
- |
1 |
- |
1 |
|
(9) |
- |
- |
(81) |
(90) |
|
(11) |
(19) |
(20) |
(71) |
(260) |
|
3 |
- |
6 |
(4) |
26 |
|
14 |
- |
(3) |
- |
11 |
|
6 |
(19) |
(17) |
(75) |
(223) |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
C1 Operating profit adjusting items continued
(a) Summary of adjusting items continued
|
£m |
||||||
|
Year ended 31 December 2010 |
Notes |
Long Term Savings |
||||
|
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management |
Long Term Savings |
||
|
Income/(expense) |
||||||
|
Goodwill impairment and impact of acquisition accounting |
C1(b) |
(2) |
(89) |
(41) |
(74) |
(206) |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
- |
- |
- |
- |
- |
|
Short-term fluctuations in investment return |
C1(d) |
1 |
(1) |
1 |
(71) |
(70) |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
C1(e) |
(10) |
- |
- |
- |
(10) |
|
Dividends declared to holders of perpetual preferred callable securities |
C1(f) |
- |
- |
- |
- |
- |
|
US Asset Management equity plans and non-controlling interests |
C1(g) |
- |
- |
- |
- |
- |
|
Credit-related fair value adjustments on Group debt instruments |
C1(h) |
- |
- |
- |
- |
- |
|
Total adjusting items |
|
(11) |
(90) |
(40) |
(145) |
(286) |
|
Tax on adjusting items |
|
10 |
3 |
15 |
5 |
33 |
|
Non-controlling interest in adjusting items |
|
- |
- |
- |
- |
- |
|
Total adjusting items after tax and non-controlling interests |
|
(1) |
(87) |
(25) |
(140) |
(253) |
C1 Operating profit adjusting items continued
(a) Summary of adjusting items continued
|
|
|
|
|
£m |
|
|
|
|
|
|
|
|
M&F |
USAM |
Other |
Total |
|
|
|
|
|
|
|
(6) |
- |
(2) |
- |
(214) |
|
|
- |
(21) |
- |
(22) |
|
- |
(7) |
- |
(6) |
(83) |
|
|
- |
- |
- |
(10) |
|
|
- |
- |
44 |
44 |
|
- |
- |
6 |
- |
6 |
|
(20) |
- |
- |
(183) |
(203) |
|
(27) |
(7) |
(17) |
(145) |
(482) |
|
7 |
(4) |
6 |
(6) |
36 |
|
30 |
- |
(9) |
- |
21 |
|
10 |
(11) |
(20) |
(151) |
(425) |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
C1 Operating profit adjusting items continued
(b) Goodwill impairment and impact of acquisition accounting
In applying acquisition accounting in accordance with IFRS deferred acquisition costs and deferred revenue are not recognised. 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 its 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.
Goodwill impairment and acquisition accounting adjustments to adjusted operating profit are summarised below:
|
£m |
|||||||
|
Six months ended 30 June 2011 |
Emerging Markets |
Nordic |
Retail |
Wealth Management |
Nedbank |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(26) |
(10) |
(36) |
- |
- |
(72) |
|
Amortisation of acquired deferred costs and revenue |
- |
11 |
(3) |
11 |
- |
- |
19 |
|
Amortisation of other acquired intangible assets |
(1) |
(14) |
(7) |
(18) |
(3) |
(2) |
(45) |
|
|
(1) |
(29) |
(20) |
(43) |
(3) |
(2) |
(98) |
|
£m |
|||||||
|
Six months ended 30 June 2010* |
Emerging |
Nordic |
Retail |
Wealth Management |
Nedbank |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(57) |
(10) |
(38) |
- |
- |
(105) |
|
Amortisation of acquired deferred costs and revenue |
- |
13 |
(4) |
14 |
- |
- |
23 |
|
Amortisation of other acquired intangible assets |
(1) |
(13) |
(7) |
(18) |
- |
(1) |
(40) |
|
Change in acquisition date provisions |
- |
17 |
- |
4 |
- |
- |
21 |
|
|
(1) |
(40) |
(21) |
(38) |
- |
(1) |
(101) |
|
£m |
|||||||
|
Year ended 31 December 2010 |
Emerging |
Nordic |
Retail |
Wealth Management |
Nedbank |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(116) |
(21) |
(77) |
- |
- |
(214) |
|
Amortisation of acquired deferred costs and revenue |
- |
23 |
(7) |
34 |
- |
- |
50 |
|
Amortisation of other acquired intangible assets |
(1) |
(26) |
(13) |
(35) |
(6) |
(2) |
(83) |
|
Change in acquisition date provisions |
- |
30 |
- |
4 |
- |
- |
34 |
|
Goodwill impairment |
(1) |
- |
- |
- |
- |
- |
(1) |
|
|
(2) |
(89) |
(41) |
(74) |
(6) |
(2) |
(214) |
|
* The results for the six months ended 30 June 2010 have been restated to reflect US Life as a discontinued operation. |
|||||||
C1 Operating profit adjusting items continued
(c) Loss on disposal of subsidiaries, associated undertakings and strategic investments
The loss on the disposal of subsidiaries, associated undertakings and strategic investments is analysed below.
|
|
|
|
£m |
|
|
6 months ended 30 June 2011 |
6 months |
Year ended 31 December |
|
Nedbank |
- |
(2) |
(1) |
|
USAM |
- |
(20) |
(21) |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
- |
(22) |
(22) |
(d) Long term investment return
Profit before tax 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 are short-term fluctuations in investment return.
Long term rates of return are based on achieved real 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, and are reviewed frequently, usually annually, for appropriateness. These rates of return have been selected with a view to ensuring that 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 Nordic, Retail Europe, and Wealth Management, the return is applied to average investible assets. For M&F general insurance business, the return is an average value of investible assets supporting shareholders' funds and insurance liabilities, adjusted for net fund flows.
Notes to the consolidated financial statements
For the six months ended 30 June 2011
C1 Operating profit adjusting items continued
(d) Long term investment return continued
|
|
|
|
% |
|
Long term investment rates |
6 months |
6 months |
Year ended 31 December 2010 |
|
Emerging Markets |
9.0 |
9.4 |
9.4 |
|
Nordic |
1.7 |
1.8 |
1.8 |
|
Retail Europe |
2.1 |
2.5 |
2.5 |
|
Wealth Management |
2.0 |
2.0 |
2.0 |
|
M&F |
9.0 |
9.4 |
9.4 |
Analysis of short-term fluctuations in investment return
|
£m |
||||||||
|
Six months ended 30 June 2011 |
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management |
Total Long Term Savings |
M&F |
Other |
Total |
|
Long term investment return |
52 |
3 |
1 |
35 |
91 |
28 |
18 |
137 |
|
Less: Actual shareholder investment return |
29 |
3 |
1 |
21 |
54 |
17 |
12 |
83 |
|
Short-term fluctuations in investment return |
23 |
- |
- |
14 |
37 |
11 |
6 |
54 |
|
|
|
|
|
|
|
|
|
£m |
|
Six months ended 30 June 2010** |
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management |
Total Long Term Savings |
M&F |
Other |
Total |
|
Long term investment return |
52 |
- |
1 |
61 |
114 |
27 |
16 |
157 |
|
Less: Actual shareholder investment return |
13 |
- |
1 |
42 |
56 |
8 |
4 |
68 |
|
Short-term fluctuations in investment return |
39 |
- |
- |
19 |
58 |
19 |
12 |
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Year ended 31 December 2010 |
Emerging Markets |
Nordic |
Retail Europe |
Wealth Management* |
Total Long Term Savings |
M&F |
Other |
Total |
|
Long term investment return |
108 |
2 |
1 |
132 |
243 |
56 |
31 |
330 |
|
Less: Actual shareholder investment return |
109 |
1 |
2 |
61 |
173 |
49 |
25 |
247 |
|
Short-term fluctuations in investment return |
(1) |
1 |
(1) |
71 |
70 |
7 |
6 |
83 |
· * Wealth Management long term investment return includes £28 million (six months ended 30 June 2010: £56 million; year ended 31 December 2010: £121 million) in respect of income tax attributable to policyholder returns.
** The results for the six months ended 30 June 2010 have been restated to reflect US Life as a discontinued operation.
C1 Operating profit adjusting items continued
(e) Investment return adjustment for Group equity and debt instruments held in life 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 of Nedbank. These investment returns are eliminated within the consolidated income statement in arriving at profit before tax, but are included in adjusted operating profit. In the six months ended 30 June 2011 the investment return adjustment increased adjusted operating profit by £31 million (six months ended 30 June 2010: decrease of £19 million; year ended 31 December 2010: increase of £10 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 2011 (six months ended 30 June 2010: £22 million; year ended 31 December 2010: £44 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 cost is recognised in the consolidated statement of changes in equity.
(g) US Asset Management equity plans and non-controlling interests
US Asset Management has entered into a number of long term incentive arrangements with its asset management affiliates.
In accordance with IFRS requirements the cost of these schemes is disclosed as being attributable to non-controlling interests. However, this is treated as a compensation expense in determining adjusted operating profit. The gain/loss recognised in the six months ended 30 June 2011 was £nil (six months ended 30 June 2010: £1 million loss; year ended 31 December 2010: £9 million loss).
The Group has issued put options to employees as part of some of its US affiliate incentive schemes. The impact of revaluing these instruments is recognised in accordance with IFRS, but excluded from adjusted operating profit. As at 30 June 2011 these instruments were revalued, the impact of which was £nil (six months ended 30 June 2010: £nil; year ended 31 December 2010: £3 million).
(h) Credit-related fair value gains on Group debt instruments
The narrowing of credit spread of the Group's debt instruments in the market price has resulted in losses in the six months ended 30 June 2011 of £47 million (six months ended 30 June 2010: gains of £81 million; year ended 31 December 2010: losses of £183 million) on Other operating segments and losses in the six months ended 30 June 2011 of £4 million (six months ended 30 June 2010: £9 million; year ended 31 December 2010: losses of £20 million) in Nedbank being recorded in the Group's income statement for those instruments that are recorded at fair value.
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.
C2 Foreign currencies
The principal exchange rates used to translate the operating results, assets and liabilities of foreign operations to Sterling are:
|
|
Income statement (average rate) |
Statement of (closing rate) |
|
30 June 2011 |
|
|
|
Rand |
11.1428 |
10.8616 |
|
US Dollars |
1.6165 |
1.6067 |
|
Swedish Kronor |
10.3023 |
10.1564 |
|
Euro |
1.1513 |
1.1073 |
|
30 June 2010 |
|
|
|
Rand |
11.4878 |
11.4531 |
|
US Dollars |
1.5265 |
1.4963 |
|
Swedish Kronor |
12.2744 |
11.6254 |
|
Euro |
1.1487 |
1.2208 |
|
31 December 2010 |
|
|
|
Rand |
11.3095 |
10.2796 |
|
US Dollars |
1.5459 |
1.5530 |
|
Swedish Kronor |
11.1364 |
10.4227 |
|
Euro |
1.1650 |
1.1614 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
C3 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 period excluding own shares held in policyholder funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
|
£m |
|||
|
|
6 months |
6 months |
Year ended |
|
Profit for the financial period attributable to equity holders of the parent from continuing operations |
359 |
145 |
431 |
|
Profit/(loss) for the financial period attributable to equity holders of the parent from discontinued operations |
130 |
120 |
(713) |
|
Profit/(loss) for the financial period attributable to equity holders of the parent |
489 |
265 |
(282) |
|
Dividends declared to holders of perpetual preferred callable securities |
(16) |
(16) |
(32) |
|
Profit/(loss) attributable to ordinary equity holders |
473 |
249 |
(314) |
Total dividends declared to holders of perpetual preferred callable securities of £16 million for the six months ended 30 June 2011 (six months ended 30 June 2010: £22 million; year ended 31 December 2010: £44 million) are stated net of tax credits of £6 million (six months ended 30 June 2010: £6 million; year ended 31 December 2010: £12 million).
|
Millions |
|||
|
|
6 months |
6 months |
Year ended |
|
Weighted average number of ordinary shares in issue |
5,470 |
5,397 |
5,422 |
|
Shares held in charitable foundations |
(7) |
(7) |
(7) |
|
Shares held in ESOP trusts |
(66) |
(48) |
(56) |
|
Adjusted weighted average number of ordinary shares |
5,397 |
5,342 |
5,359 |
|
Shares held in life funds |
(201) |
(206) |
(205) |
|
Shares held in Black Economic Empowerment trusts |
(299) |
(287) |
(295) |
|
Weighted average number of ordinary shares |
4,897 |
4,849 |
4,859 |
|
Basic earnings per ordinary share (pence) |
9.7 |
5.1 |
(6.5) |
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.
|
Millions |
|||
|
|
6 months |
6 months |
Year ended |
|
Weighted average number of ordinary shares |
4,897 |
4,849 |
4,859 |
|
Adjustments for share options held by ESOP trusts |
149 |
173 |
137 |
|
Adjustments for shares held in Black Economic Empowerment trusts |
299 |
287 |
295 |
|
|
5,345 |
5,309 |
5,291 |
|
Diluted earnings per ordinary share (pence) |
8.8 |
4.7 |
(6.1) |
C3 Earnings and earnings per share continued
(b) Adjusted operating earnings per ordinary share
Adjusted operating earnings per ordinary share is determined based on adjusted operating profit. Adjusted operating profit represents the directors' view of the underlying performance of the Group. For long term and general insurance business adjusted operating profit is based on a long term investment return, includes investment returns on life funds' investments in Group equity and debt instruments and is stated net of income tax attributable to policyholder returns. For the US Asset Management business it includes compensation costs in respect of certain long term incentive schemes defined as non-controlling interests in accordance with IFRS. For all core businesses, adjusted operating profit excludes goodwill impairment, the impact of acquisition accounting, revaluations of put options related to long term incentive schemes, profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments, dividends declared to holders of perpetual preferred callable securities, and fair value profits/(losses) on certain Group debt instruments. Bermuda and US Life, which are non-core, are not included in adjusting operating profit.
The reconciliation of profit/(loss) for the financial period to adjusted operating profit after tax attributable to ordinary equity holders is as follows:
|
£m |
|||
|
|
6 months |
6 months Restated |
Year ended |
|
Profit/(loss) for the financial period attributable to equity holders of the parent |
489 |
265 |
(282) |
|
Adjusting items |
212 |
260 |
482 |
|
Tax on adjusting items |
(39) |
(26) |
(36) |
|
Non-core operations |
(21) |
65 |
(1) |
|
(Profit)/loss from discontinued operations - US Life |
(130) |
(120) |
713 |
|
Non-controlling interest on adjusting items |
(8) |
(11) |
(21) |
|
Adjusted operating profit after tax attributable to ordinary equity holders |
503 |
433 |
855 |
|
Adjusted weighted average number of ordinary shares (millions) |
5,397 |
5,342 |
5,359 |
|
Adjusted operating earnings per ordinary share (pence) |
9.3 |
8.1 |
16.0 |
(c) Headline earnings per share
In accordance with the JSE Limited (JSE) listing requirements, the Group is required to calculate a 'headline earnings per share' (HEPS), determined by reference to the South African Institute of Chartered Accountants' circular 8/2007 '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 International Financial Reporting Standards.
|
£m |
||||||
|
|
6 months |
6 months Restated |
Year ended |
|||
|
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
|
Profit/(loss) for the financial period attributable to equity holders of the parent |
489 |
489 |
265 |
265 |
(282) |
(282) |
|
Dividends declared to holders of perpetual preferred callable securities |
(16) |
(16) |
(16) |
(16) |
(32) |
(32) |
|
Profit/(loss) attributable to ordinary equity holders |
473 |
473 |
249 |
249 |
(314) |
(314) |
|
Adjustments: |
|
|
|
|
|
|
|
Impairments of goodwill and intangible assets |
- |
- |
- |
- |
20 |
20 |
|
Impairment of discontinued operations |
- |
- |
- |
- |
827 |
827 |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
29 |
29 |
22 |
16 |
22 |
17 |
|
Realised gains (including impairments) on available-for-sale financial assets |
(167) |
(167) |
(43) |
(43) |
(12) |
(12) |
|
Exchange differences realised on disposal |
24 |
24 |
- |
- |
- |
- |
|
Headline earnings |
359 |
359 |
228 |
222 |
543 |
543 |
|
Weighted average number of ordinary shares |
4,897 |
4,897 |
4,849 |
4,849 |
4,859 |
4,859 |
|
Diluted weighted average number of ordinary shares |
5,345 |
5,345 |
5,309 |
5,309 |
5,291 |
5,291 |
|
Headline earnings per share (pence) |
7.3 |
7.3 |
4.7 |
4.6 |
11.2 |
11.1 |
|
Diluted headline earnings per share (pence) |
6.7 |
6.7 |
4.3 |
4.2 |
10.1 |
10.0 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
C4 Dividends
Dividends paid were as follows:
|
|
|
|
£m |
|
|
6 months |
6 months |
Year ended 31 December 2010 |
|
2009 Final dividend paid - 1.5p per 10p share |
- |
77 |
77 |
|
2010 Interim dividend paid - 1.1p per 10p share |
- |
- |
54 |
|
2010 Final dividend paid - 2.9p per 10p share |
145 |
- |
- |
|
Dividends to ordinary equity holders |
145 |
77 |
131 |
|
Dividends declared to holders of perpetual preferred callable securities |
22 |
22 |
44 |
|
Dividend payments for the period |
167 |
99 |
175 |
Dividends paid to ordinary equity holders, as above, are calculated using the number of shares in issue at the record date, less treasury shares held in ESOP trusts, life funds of Group companies, 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.
In March 2011 £22 million was declared and paid to holders of perpetual preferred callable securities (March 2010: £22 million; November 2010: £22 million).
An interim dividend of 1.5 pence per 10p share has been declared by the directors. The dividend will be paid on 30 November 2011 to shareholders on the register at the close of business on 14 October 2011. The dividend will absorb an estimated £74 million of shareholders' funds. The Company is planning to offer a scrip dividend alternative for eligible shareholders.
D Other income statement notes
D1 Income tax expense
(a) Analysis of total income tax expense
|
£m |
|||
|
|
6 months |
6 months |
Year ended
|
|
Current tax |
|
|
|
|
United Kingdom tax |
17 |
16 |
23 |
|
Overseas tax |
|
|
|
|
South Africa |
155 |
128 |
346 |
|
United States |
2 |
- |
(4) |
|
Europe |
41 |
25 |
61 |
|
Secondary Tax on Companies (STC) |
9 |
(2) |
4 |
|
Prior year adjustments |
(26) |
- |
(1) |
|
Total current tax |
198 |
167 |
429 |
|
Deferred tax |
|
|
|
|
Origination and reversal of temporary differences |
13 |
(50) |
(10) |
|
Changes in tax rates/bases |
(4) |
- |
(4) |
|
Write down/recognition of deferred tax assets |
(2) |
12 |
41 |
|
Total deferred tax |
7 |
(38) |
27 |
|
Total income tax expense |
205 |
129 |
456 |
D1 Income tax expense continued
(b) Reconciliation of total income tax expense
|
£m |
|||
|
|
6 months |
6 months 2010 Restated |
Year ended |
|
Profit before tax |
707 |
389 |
1,145 |
|
Tax at standard rate of 26.5% (2010: 28%) |
188 |
111 |
321 |
|
Different tax rate or basis on overseas operations |
3 |
11 |
(22) |
|
Untaxed and low taxed income |
(43) |
(66) |
(171) |
|
Disallowable expenses |
13 |
22 |
124 |
|
Net movement on deferred tax assets not recognised |
20 |
60 |
92 |
|
Effect on deferred tax of changes in tax rates |
(3) |
- |
(7) |
|
STC |
14 |
(1) |
(3) |
|
Income tax attributable to policyholder returns |
37 |
2 |
134 |
|
Other |
(3) |
(10) |
(12) |
|
Prior year adjustments |
(21) |
- |
- |
|
Total income tax expense |
205 |
129 |
456 |
(c) Income tax on adjusted operating profit
|
£m |
|||
|
|
6 months |
6 months 2010 Restated |
Year ended
|
|
Income tax expense |
205 |
129 |
456 |
|
Tax on adjusting items |
|
|
|
|
Impact of acquisition accounting |
18 |
14 |
35 |
|
Loss/profit on disposal of subsidiaries, associated undertakings and strategic investments |
- |
5 |
5 |
|
Short-term fluctuations in investment return |
26 |
11 |
3 |
|
Income tax attributable to policyholders returns |
(51) |
- |
(149) |
|
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity |
(6) |
(6) |
(12) |
|
Fair value gains and losses on group debt instruments |
1 |
3 |
5 |
|
Tax on non-core operations |
(2) |
(1) |
4 |
|
Income tax on adjusted operating profit |
191 |
155 |
347 |
Notes to the consolidated financial statements
For the six months ended 30 June 2011
E Borrowed funds
E1 Borrowed funds
|
|
|
|
£m |
|
|
|
|
Group excluding Nedbank |
Nedbank |
At 30 June 2011 |
|
Senior debt securities and term loans |
|
539 |
1,464 |
2,003 |
|
Mortgage backed securities |
|
- |
97 |
97 |
|
Subordinated debt securities (net of Group holdings) |
|
1,447 |
950 |
2,397 |
|
Borrowed funds |
|
1,986 |
2,511 |
4,497 |
|
Other issues treated as equity for accounting purposes |
|
|
|
|
|
US$750 million cumulative preference securities |
|
458 |
|
|
|
€500 million perpetual preferred callable securities |
|
338 |
|
|
|
£350 million perpetual preferred callable securities |
|
350 |
|
|
|
Total: Book value |
|
3,132 |
|
|
|
Nominal value of the above |
|
3,277 |
|
|
|
|
||||
|
|
|
|
|
£m |
|
|
|
Group excluding Nedbank |
Nedbank |
At 30 June 2010 |
|
Senior debt securities and term loans |
|
622 |
1,061 |
1,683 |
|
Mortgage backed securities |
|
- |
114 |
114 |
|
Subordinated debt securities (net of Group holdings) |
|
1,069 |
1,062 |
2,131 |
|
Borrowed funds |
|
1,691 |
2,237 |
3,928 |
|
Other issues treated as equity for accounting purposes |
|
|
|
|
|
US$750 million cumulative preference securities |
|
458 |
|
|
|
€500 million perpetual preferred callable securities |
|
338 |
|
|
|
£350 million perpetual preferred callable securities |
|
350 |
|
|
|
Total: Book value |
|
2,837 |
|
|
|
Nominal value of the above |
|
3,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
|
Group excluding Nedbank |
Nedbank |
At 31 December 2010 |
|
Senior debt securities and term loans |
|
550 |
1,186 |
1,736 |
|
Mortgage backed securities |
|
- |
112 |
112 |
|
Subordinated debt securities (net of Group holdings) |
|
1,198 |
1,158 |
2,356 |
|
Borrowed funds |
|
1,748 |
2,456 |
4,204 |
|
Other issues treated as equity for accounting purposes |
|
|
|
|
|
US$750 million cumulative preference securities |
|
458 |
|
|
|
€500 million perpetual preferred callable securities |
|
338 |
|
|
|
£350 million perpetual preferred callable securities |
|
350 |
|
|
|
Total: Book value |
|
2,894 |
|
|
|
Nominal value of the above |
|
3,045 |
|
|
E1 Borrowed funds continued
(a) Senior debt securities and term loans
|
|
|
|
£m |
|
|
|
|
At 30 June 2011 |
At 30 June 2010 |
At 31 December 2010 |
|
Floating rate notes1 |
|
927 |
737 |
806 |
|
Fixed rate notes2 |
|
1,043 |
946 |
928 |
|
Revolving credit facility3 |
|
- |
- |
- |
|
Term loan and other loans |
|
33 |
- |
2 |
|
Total senior debt securities and term loan |
|
2,003 |
1,683 |
1,736 |
Senior debt securities and term loans comprise:
1. Floating rate notes
Group excluding Nedbank
· R550 million repayable August 2010 at 3 month ZAR - JIBAR-SAFEX + 4.5% - repaid.
· R100 million repayable February 2011 at 3 month ZAR - JIBAR-SAFEX + 4.5% - repaid.
· US$50 million repayable September 2011 at 3 month LIBOR plus 0.50%.
· £3 million note repayable in December 2010, with holders having the option to elect for early redemption every six months with coupon referenced against six month LIBOR less 0.50% - repaid.
Nedbank
· R1,690 million unsecured senior debt repayable September 2012 at 3 month JIBAR + 1.5%.
· R1,044 million unsecured senior debt repayable September 2015 at JIBAR + 2.20%.
· R1,750 million unsecured senior debt repayable March 2013 inflation linked (3.9% real yield).
· R98 million unsecured senior debt repayable March 2013 inflation linked (3.8% real yield).
· R1,552 million unsecured senior debt repayable April 2013 JIBAR +1.48%.
· R1,027 million unsecured senior debt repayable April 2015 JIBAR +1.75%.
· R80 million unsecured senior debt repayable April 2020 JIBAR +2.15%.
· R837 million unsecured senior debt repayable March 2014 JIBAR +1.05%.
· R677 million unsecured senior debt repayable March 2016 JIBAR + 1.25%.
· R500 million unsecured senior debt repayable April 2014 JIBAR + 1.0%.
2. Fixed rate notes
Group excluding Nedbank
· £500 million Euro bond repayable October 2016 at 7.125%.
· US$16.5 million secured senior debt repayable August 2014 at 5.23%.
· €30 million Euro bond repayable July 2010, capital and interest swapped into fixed rate US dollars at 5.28% - repaid.
· €10 million Euro bond repayable December 2010, capital and interest swapped into floating rate US dollars at 3 month LIBOR + 0.95% - repaid.
Nedbank
· R130 million unsecured senior debt repayable October 2024 at zero coupon.
· R3,244 million unsecured senior debt repayable September 2015 at 10.55%.
· R762 million unsecured senior debt repayable September 2019 at 11.39%.
· R478 million unsecured senior debt repayable April 2015 at R157 + 1.75%.
· R450 million unsecured senior debt repayable March 2014 at R206 + 1.28%.
· R1,137 million unsecured senior debt repayable March 2016 at R157 + 1.5%.
The total fair value of the swap derivatives associated with the senior notes is £nil (June 2010: £5 million; December 2010: £nil). The movement from the prior year is caused by the close out of the Eurobond notes in 2010.
3. Revolving credit facilities and irrevocable letters of credit
In April 2011 the Group signed a new £1,200 million five-year multi-currency revolving credit facility, replacing the £1,232 million facility due to mature in September 2012.
At 30 June 2011 £174 million (June 2010: £517 million; December 2010: £499 million) of this facility was utilised, £nil (June 2010: £nil; December 2010: £nil) in the form of drawn debt and £174 million (June 2010: £517 million; December 2010: £499 million) in the form of irrevocable letters of credit.
The Group has a SEK 1,500 million revolving credit facility, which had a maturity date of 1 July 2011 which has subsequently been extended, at the amount of SEK 1,000 million to 1 July 2012. At 30 June 2011 this facility was undrawn (June 2010 and December 2010: undrawn).
Notes to the consolidated financial statements
For the six months ended 30 June 2011
E1 Borrowed funds continued
(b) Mortgage backed securities - Nedbank
|
|
£m |
||
|
At 30 June |
At 30 June |
At |
|
|
R291 million notes (class A1) repayable 18 November 2039 (11.467%) |
- |
17 |
4 |
|
R1.4 billion notes (class A2A) repayable 18 November 2039 (11.817%) |
85 |
87 |
96 |
|
R98 million notes (class B note) repayable 18 November 2039 (12.067%) |
7 |
6 |
7 |
|
R76 million notes (class C note) repayable 18 November 2039 (13.317%) |
5 |
4 |
5 |
|
|
97 |
114 |
112 |
(c) Subordinated debt securities
|
|
£m |
||
|
At 30 June 2011 |
At 30 June 2010 |
At 31 December 2010 |
|
|
Nedbank |
|
|
|
|
R1.5 billion repayable 24 April 2016 (7.85%)1 |
- |
132 |
148 |
|
R1.8 billion repayable 20 September 2018 (9.84%)2 |
175 |
160 |
186 |
|
R500 million repayable on 30 December 2010 (8.38%)3- repaid |
- |
44 |
- |
|
R650 million repayable 8 February 2017 (9.03%)4 |
63 |
58 |
67 |
|
R1.7 billion repayable 8 February 2019 (8.9%)5 |
165 |
147 |
171 |
|
R2.0 billion repayable 6 July 2022 (3 month JIBAR plus 0.47%)6 |
187 |
178 |
198 |
|
R500 million repayable 15 August 2017 (3 month JIBAR plus 0.45%)7 |
46 |
44 |
49 |
|
R1.0 billion repayable 17 September 2020 (10.54%)8 |
98 |
92 |
105 |
|
R500 million repayable 14 December 2017 (3 month JIBAR plus 0.70%)9 |
46 |
44 |
49 |
|
R120 million repayable 14 December 2017 (10.38%)10 |
11 |
11 |
12 |
|
R487 million repayable 20 November 2018 (15.05%)11 |
48 |
45 |
51 |
|
R1,265 million repayable 20 November 2018 (JIBAR plus 4.75%)12 |
118 |
112 |
125 |
|
R300 million repayable on 4 December 2013 (JIBAR + 2.5%)13 |
14 |
13 |
15 |
|
US$100 million repayable on 3 March 2022 (3 month USD LIBOR)14 |
63 |
67 |
65 |
|
|
1,034 |
1,147 |
1,241 |
|
Less: banking subordinated debt securities held by other Group companies |
(84) |
(85) |
(83) |
|
Banking subordinated debt securities (net of Group holdings) |
950 |
1,062 |
1,158 |
|
Group excluding Nedbank |
|
|
|
|
R3.0 billion repayable 27 October 2020 (8.9%)15 |
276 |
262 |
293 |
|
£300 million repayable 21 January 2016 (5.0%)16 - repaid |
- |
273 |
296 |
|
R250 million preference shares repayable 9 June 201117 - repaid |
- |
22 |
- |
|
€750 million repayable 18 January 2017 (4.5%)18 |
671 |
512 |
609 |
|
£500 million repayable 3 June 2021 (8.0%)19 |
500 |
- |
- |
|
|
1,447 |
1,069 |
1,198 |
|
Total subordinated liabilities |
2,397 |
2,131 |
2,356 |
E1 Borrowed funds continued
(c) Subordinated debt securities
The subordinated notes rank behind the claims against the Group depositors and other unsecured, unsubordinated creditors. None of the Group's subordinated notes are secured.
1. Unsecured secondary callable note was issued 24 April 2006 with a call date of 24 April 2011.
2. Unsecured secondary callable note was issued 20 September 2006 at R1.5 billion with a call date of 20 September 2013. On 18 May 2007 an additional R0.3 billion was issued.
3. Unsecured callable Bonds issued 30 March 2006 - repaid.
4. Unsecured secondary callable note was issued 8 February 2007 with a call date of 8 February 2012.
5. Unsecured secondary callable note was issued 8 February 2007 at R1.0 billion. On 19 March 2007 an additional R0.7 billion was issued.
6. Unsecured secondary capital callable note issued 6 July 2007 and has a call date of 6 July 2017.
7. This bond issued on 15 August 2007 is an unsecured secondary capital callable floating rate note with a call date 15 August 2012.
8. This bond issued on 17 September 2007 is an unsecured fixed rate note with a term of 13 years (non-call 8 year).
9. This bond issued on 14 December 2007 is a 10 year (non-call 5 year) floating rate note. After its call date on 14 December 2012 its terms become JIBAR plus 1.70% until maturity.
10. This bond issued on 14 December 2007 is a 10 year (non-call 5 year) fixed rate note. After its call date its terms become floating 3 month JIBAR plus initial margin over mid swaps plus 1.0% until maturity.
11. This bond issued on 20 May 2008 is a perpetual (non-call 10 year) fixed rate note with a call date on 20 November 2018.
12. This bond issued on 20 May 2008 is a perpetual (non-call 10 year) floating rate note with a call date of 20 November 2018.
13. This bond issued on 4 December 2008 is a floating rate note with a call date of 4 December 2013.
14. Dated Tier 2 notes issued 3 March 2009 with call date 3 March 2017.
15. These bonds have a maturity date of 27 October 2020 and pay a coupon of 8.92% to 27 October 2015 and 3 month JIBAR plus 1.59% thereafter. The Group has the option to repay the bonds at par on 27 October 2015 and at 3 monthly intervals thereafter.
16. These bonds, issued on 20 January 2006, have a maturity date of 21 January 2016 and pay a coupon of 5.0% to 21 January 2011 and 6 month LIBOR plus 1.13% thereafter. The coupon on the bonds was swapped into floating rate of 6 month STIBOR plus 0.50%. The Group had the option to repay the bonds at par on 21 January 2011 and at 6 monthly intervals thereafter. These bonds were redeemed at the first call date of 21 January 2011.
17. These preference shares were redeemable on 9 June 2011 and paid a variable cumulative coupon of 61.0% of the Prime Rate as quoted by Nedbank Limited. The Group had the option to redeem the shares at par at any time before the final redemption date but after giving an agreed period of notice, with the Group electing to redeem in 2010.
18. This bond, issued on 16 January 2007, has a maturity date of 18 January 2017 and pays a coupon of 4.5% to 17 January 2012 and 6 month EURIBOR plus 0.96% thereafter. The principal and coupon on the bond were swapped equally into Sterling and US Dollars with coupons of 6 month LIBOR plus 0.34% and 6 month US LIBOR plus 0.31% respectively. The Group has the option to repay the bonds at par on 17 January 2012 and at 6 monthly intervals thereafter. The Group redeemed €550 million of the bond on 1 July 2011.
19. This bond, issued on 3 June 2011, has a maturity date of 3 June 2021 and pays a coupon of 8%. The coupon on the bonds was swapped into floating rate of quarterly STIBOR plus 5.46%. The currency swaps have a 5 year mandatory break clause.
F Other notes
F1 Acquisition of non-controlling interests
Acquisition of non-controlling interest in Mutual & Federal
On 5 February 2010, the Group completed the acquisition of the remaining non-controlling shareholdings in Mutual & Federal Insurance Company Limited, following the fulfilment of all outstanding conditions precedent. On 8 February 2010, 147,313,449 new Old Mutual plc ordinary shares were issued in exchange for Mutual & Federal shares and listed on the London Stock Exchange, of which 68,378,851 were issued to Black Economic Empowerment trusts and 78,934,598 to other previous holders.
Other acquisitions
On 8 February 2010 Nedbank announced that it had obtained regulatory approval for the acquisition of the remaining 49.9% indirect interest in Imperial Bank Limited thereby satisfying all conditions precedent for the acquisition.
The purchase consideration was approximately £162 million (£155 million plus a Johannesburg Interbank Agreed Rate (JIBAR) factor applied up to 5 February 2010) which was settled in four instalments out of existing cash resources of Nedbank Limited. The total amount, which involved interest at the three-month JIBAR, amounted to £165 million.
F2 Events after the reporting date
Following a market tender, on 1 July 2011 the Group redeemed €550 million of the €750 million subordinated debt security repayable 18 January 2017.
Notes to the consolidated financial statements
For the six months ended 30 June 2011
G Discontinued operations
G1 Discontinued operations
The results of the Group's United States life business, US Life, are shown as a discontinued operation in these financial statements. At 31 December 2010 the Group had entered into an agreement to dispose of the controlling interest in US Life to Harbinger OM LLC, an affiliate of Harbinger Capital Partners, and was seeking to gain regulatory approval for the sale. Following regulatory approval the disposal was completed on 7 April 2011.
Analysis of the results is given below.
(a) Income statement from discontinued operations
|
£m |
|||
|
|
Period from 1 January 2011 to 7 April 2011 |
6 months |
Year ended |
|
Revenue |
342 |
758 |
1,608 |
|
Expenses |
(330) |
(704) |
(1,557) |
|
Profit before tax from discontinued operations |
12 |
54 |
51 |
|
Impairment on remeasurement to fair value less costs to sell |
- |
- |
(827) |
|
Loss on disposal |
(29) |
- |
- |
|
Realised available-for-sale investment gains and exchange differences on disposal |
133 |
- |
- |
|
Profit/(loss) before tax |
116 |
54 |
(776) |
|
Income tax credit |
14 |
66 |
63 |
|
Profit/(loss) from discontinued operations after tax |
130 |
120 |
(713) |
(b) Statement of comprehensive income from discontinued operations
|
£m |
|||
|
|
Period from 1 January 2011 to 7 April 2011 |
6 months |
Year ended |
|
Profit/(loss) after tax for the financial period |
130 |
120 |
(713) |
|
Other comprehensive income for the financial period |
- |
- |
|
|
Fair value (losses)/gains |
- |
- |
|
|
Available-for-sale investments |
|
|
|
|
Fair value gains/(losses) |
48 |
452 |
530 |
|
Recycled to the income statement |
(5) |
(43) |
(12) |
|
Realised on disposal |
(157) |
- |
- |
|
Exchange differences on disposal |
24 |
- |
- |
|
Shadow accounting |
(43) |
(229) |
(334) |
|
Currency translation differences/exchange differences realised on translating foreign operations |
- |
61 |
29 |
|
Other movements |
- |
- |
(34) |
|
Aggregate tax on transfers from equity |
3 |
(59) |
(67) |
|
Total other comprehensive (loss)/income for the financial period |
(130) |
182 |
112 |
|
Total comprehensive income/(loss) for the financial period |
- |
302 |
(601) |
|
Attributable to |
|
|
|
|
Equity holders of the parent |
- |
302 |
(601) |
|
Total comprehensive income/(loss) for the financial period |
- |
302 |
(601) |
c) Net cash flows from discontinued operations
|
£m |
|||
|
|
Period from 1 January 2011 to 7 April 2011 |
6 months |
Year ended |
|
Operating activities |
2 |
(25) |
(167) |
|
Investing activities |
146 |
(304) |
63 |
|
Net cash flows |
148 |
(329) |
(104) |
G2: Contingent liabilities in respect of the disposal of US Life
Following completion of the disposal of US Life to the Harbinger group ('Harbinger') on 7 April 2011, the Group has retained certain residual commitments and contingent liabilities. These relate to sale warranties and indemnities that are typical in transactions of this nature including in respect of litigation (including class actions) and regulatory enforcement actions arising from events occurring before completion. The specific conditions are in effect for varying periods of time, the longest dated of these will expire on 31 December 2015. The main elements are summarised below:
· Harbinger intends to establish certain internal reinsurance arrangements which are subject to regulatory approval. In the event that regulatory approval of the full amount of reinsurance is not forthcoming there is potential for a reduction in the purchase price, up to a maximum of US$50 million.
· US statutory regulations require reserving on a worst case scenario basis for deferred annuity policies that permit free partial withdrawals ('CARVM Reserves'). As such there is redundancy when comparing the worst case scenario and the economic scenarios. These CARVM redundant reserves are currently reinsured from US Life to Old Mutual Reassurance until no later than the end of 2015. Old Mutual plc provides a $280 million letter of credit to back these redundant reserves. In the event that this letter of credit is drawn upon Harbinger are obligated to fully reimburse Old Mutual plc.
· US statutory regulations require reserving on a worst case scenario basis in respect of guarantees included in universal life and term assurance products ('XXX and AXXX Reserves'). As such there is redundancy when comparing the worst case scenario and the economic scenarios. These XXX and AXXX Reserves are currently reinsured from US Life to their own reinsurance vehicle. Prior to close Old Mutual arranged a $535 million third party letter of credit to back the redundant component of these reserves. In the event that this letter of credit is drawn upon Harbinger are obligated to fully reimburse the third party. Old Mutual stands behind Harbinger's commitments. In addition if redundant reserving requirements change Old Mutual must provide further letter of credit financing up to $200 million. Harbinger must replace all XXX and AXXX redundant reserve financing and take Old Mutual fully off risk no later than the end of 2012. Harbinger has announced that it has entered into an agreement with Wilton Re to reinsure this business and therefore meet its commitment to Old Mutual.
This information is provided by RNS
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