Interim Results 2012 - part 2 IFRS
Index to the financial information
For the six months ended 30 June 2012
Statement of directors' responsibilities in respect of the interim financial statements 38
Interim review report for the six months ended 30 June 2012 to Old Mutual plc 39
Consolidated income statement 41
Consolidated statement of comprehensive income 42
Reconciliation of adjusted operating profit to profit after tax 43
Consolidated statement of financial position 44
Condensed consolidated statement of cash flows 45
Consolidated statement of changes in equity 46
Notes to the consolidated financial statements
A: Accounting policies 52
B: Segment information 54
C: Other key performance information 68
D: Other income statement notes 74
E: Borrowed funds 76
F: Discontinued and held for sale operations 79
G: Other notes 80
Adjusted Group MCEV by line of business 82
Adjusted operating Group MCEV 83
Commentary on key changes in the MCEV 30 June 2012 primary statements compared to 2011 83
Adjusted operating Group MCEV earnings per share 84
Group market consistent embedded value statement of earnings 85
Notes to the MCEV basis supplementary information
A: MCEV policies 87
B: Segment information 95
C: Other key performance information 111
D: Sensitivity tests 116
Statement of directors' responsibilities in respect of the interim financial statements
For the six months ended 30 June 2012
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 87.
· the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
Julian Roberts Philip Broadley
Group Chief Executive Group Finance Director
8 August 2012 8 August 2012
Interim review report for the six months ended 30 June 2012 to Old Mutual plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the interim financial report for the six months ended 30 June 2012 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, set out on pages 41 to 81, which include the Reconciliation of Adjusted Operating Profit to Profit after Tax.
We have also been engaged by the company to review the Market Consistent Embedded Value (MCEV) basis supplementary information ('the supplementary information'), set out on pages 82 to 117, for the six months ended 30 June 2012.
We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements or the supplementary information.
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules (the DTR) of the UK's Financial 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 interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA. The directors have accepted responsibility for preparing the supplementary information contained in the interim financial report on an MCEV basis in accordance with the CFO Forum MCEV Principles as issued in June 2008 and updated in October 2009 ('the MCEV Principles').
As disclosed in note A, the 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 interim 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 interim 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 interim financial report for the six months ended 30 June 2012 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 2012 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, 8 August 2012
|
Consolidated income statement |
|
|||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
£m |
|
|
Notes |
6 months ended 30 June 2012 |
6 months ended 30 June 2011¹ |
Year ended 31 December 2011 |
|
Revenue |
|
|
|
|
|
Gross earned premiums |
B2 |
1,774 |
1,879 |
3,584 |
|
Outward reinsurance |
|
(155) |
(163) |
(325) |
|
Net earned premiums |
|
1,619 |
1,716 |
3,259 |
|
Investment return (non-banking) |
|
3,353 |
1,221 |
(567) |
|
Banking interest and similar income |
|
1,780 |
1,881 |
3,669 |
|
Banking trading, investment and similar income |
|
107 |
105 |
217 |
|
Fee and commission income, and income from service activities |
|
1,513 |
1,500 |
3,035 |
|
Other income |
|
70 |
89 |
171 |
|
Total revenues |
|
8,442 |
6,512 |
9,784 |
|
Expenses |
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
|
(2,326) |
(1,650) |
(3,331) |
|
Reinsurance recoveries |
|
125 |
104 |
123 |
|
Net claims and benefits incurred |
|
(2,201) |
(1,546) |
(3,208) |
|
Change in investment contract liabilities |
|
(1,840) |
(430) |
1,889 |
|
Losses on loans and advances |
|
(216) |
(251) |
(458) |
|
Finance costs |
|
(90) |
(85) |
(58) |
|
Banking interest payable and similar expenses |
|
(997) |
(1,093) |
(2,095) |
|
Fee and commission expenses, and other acquisition costs |
|
(494) |
(468) |
(1,007) |
|
Other operating and administrative expenses |
|
(1,837) |
(1,901) |
(3,852) |
|
Goodwill impairment |
|
- |
- |
(264) |
|
Change in third party interest in consolidated funds |
|
(64) |
(84) |
2 |
|
Total expenses |
|
(7,739) |
(5,858) |
(9,051) |
|
Share of associated undertakings and joint ventures' profit after tax |
|
10 |
6 |
10 |
|
Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
20 |
249 |
251 |
|
Profit before tax |
|
733 |
909 |
994 |
|
Income tax expense |
D1 |
(241) |
(178) |
(225) |
|
Profit from continuing operations after tax |
|
492 |
731 |
769 |
|
Discontinued operations |
|
|
|
|
|
Profit from discontinued operations after tax |
F1 |
595 |
150 |
198 |
|
Profit after tax for the financial period |
|
1,087 |
881 |
967 |
|
Attributable to |
|
|
|
|
|
Equity holders of the parent |
|
931 |
738 |
667 |
|
Non-controlling interests |
|
|
|
|
|
Ordinary shares |
|
126 |
112 |
238 |
|
Preferred securities |
|
30 |
31 |
62 |
|
Profit after tax for the financial period |
|
1,087 |
881 |
967 |
|
Earnings per share |
|
|
|
|
|
Basic earnings per share based on profit from continuing operations (pence) |
|
6.7 |
11.7 |
8.9 |
|
Basic earnings per share based on profit from discontinued operations (pence) |
|
12.5 |
3.0 |
4.0 |
|
Basic earnings per ordinary share (pence) |
C3(a) |
19.2 |
14.7 |
12.9 |
|
Diluted earnings per share based on profit from continuing operations (pence) |
|
6.2 |
10.7 |
8.0 |
|
Diluted earnings per share based on profit from discontinued operations (pence) |
|
11.5 |
2.8 |
3.7 |
|
Diluted earnings per ordinary share (pence) |
C3(a) |
17.7 |
13.5 |
11.7 |
|
Weighted average number of ordinary shares - millions |
|
4,759 |
4,897 |
4,935 |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core and include the African businesses not previously consolidated (see note A2). |
||||
|
Consolidated statement of comprehensive income |
||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
£m |
|
|
Notes |
6 months ended 30 June 2012 |
6 months ended 30 June 2011¹ |
Year ended 31 December 2011 |
|
Profit after tax for the financial period |
|
1,087 |
881 |
967 |
|
Other comprehensive income for the financial period |
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
Property revaluation |
|
(1) |
- |
39 |
|
Net investment hedge |
|
123 |
(25) |
28 |
|
Available-for-sale investments |
|
|
|
|
|
Fair value gains/(losses) |
|
10 |
3 |
(1) |
|
Recycled to the income statement |
|
(6) |
(5) |
(6) |
|
Shadow accounting |
|
1 |
- |
(22) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
(203) |
(358) |
(1,240) |
|
Other movements |
|
(1) |
(42) |
(49) |
|
Income tax relating to components of other comprehensive income |
D1(c) |
5 |
6 |
12 |
|
Total other comprehensive income for the financial period from continuing operations |
|
(72) |
(421) |
(1,239) |
|
Total other comprehensive income for the financial period from discontinued operations |
|
(348) |
(78) |
(161) |
|
Total other comprehensive income for the financial period |
|
(420) |
(499) |
(1,400) |
|
Total comprehensive income for the financial period |
|
667 |
382 |
(433) |
|
Attributable to |
|
|
|
|
|
Equity holders of the parent |
|
546 |
340 |
(408) |
|
Non-controlling interests |
|
|
|
|
|
Ordinary shares |
|
91 |
11 |
(87) |
|
Preferred securities |
|
30 |
31 |
62 |
|
Total comprehensive income for the financial period |
|
667 |
382 |
(433) |
|
1 The result for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core and include the African businesses not previously consolidated (see note A2). |
||||
|
Reconciliation of adjusted operating profit to profit after tax |
||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
£m |
|
|
Notes |
6 months ended 30 June 2012 |
6 months ended 30 June 2011¹ |
Year ended 31 December 2011 |
|
Core operations |
|
|
|
|
|
Long-Term Savings |
B3 |
384 |
414 |
793 |
|
Nedbank |
B3 |
406 |
359 |
755 |
|
Mutual and Federal |
B3 |
34 |
47 |
89 |
|
USAM |
B3 |
42 |
39 |
67 |
|
|
|
866 |
859 |
1,704 |
|
Finance costs |
|
(75) |
(60) |
(128) |
|
Long term investment return on excess assets |
|
25 |
18 |
37 |
|
Net interest payable to non-core operations |
|
(13) |
(9) |
(23) |
|
Corporate costs |
|
(25) |
(28) |
(57) |
|
Other net income/(expenses) |
|
13 |
5 |
(18) |
|
Adjusted operating profit before tax |
|
791 |
785 |
1,515 |
|
Adjusting items |
C1(a) |
(145) |
66 |
(329) |
|
Non-core operations |
B3 |
53 |
34 |
(183) |
|
Profit before tax (net of policyholder tax) |
|
699 |
885 |
1,003 |
|
Income tax attributable to policyholder returns |
B3 |
34 |
24 |
(9) |
|
Profit before tax |
|
733 |
909 |
994 |
|
Total tax expense |
D1(a) |
(241) |
(178) |
(225) |
|
Profit from continuing operations after tax |
|
492 |
731 |
769 |
|
Profit from discontinued operations after tax |
F1(a) |
595 |
150 |
198 |
|
Profit after tax for the financial period |
|
1,087 |
881 |
967 |
|
|
|
|
|
|
|
Adjusted operating profit after tax attributable to ordinary equity holders of the parent |
||||
|
|
|
|
|
£m |
|
|
Notes |
6 months ended 30 June 2012 |
6 months ended 30 June 2011¹ |
Year ended 31 December 2011² |
|
Adjusted operating profit before tax |
|
791 |
785 |
1,515 |
|
Tax on adjusted operating profit |
D1(d) |
(210) |
(189) |
(341) |
|
Adjusted operating profit after tax |
|
581 |
596 |
1,174 |
|
Non-controlling interests - ordinary shares |
|
(135) |
(120) |
(257) |
|
Non-controlling - preferred securities |
|
(30) |
(31) |
(62) |
|
Adjusted operating profit after tax attributable to ordinary equity holders of the parent |
|
416 |
445 |
855 |
|
Adjusted weighted average number of shares (millions) |
C3(b) |
4,806 |
4,722 |
4,756 |
|
Adjusted operating earnings per share (pence) |
C3(b) |
8.7 |
9.4 |
18.0 |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core, the African businesses not previously consolidated, and the seven for eight share consolidation (see note A2). |
||||
|
2 The results for the year ended 31 December 2011 have been restated to reflect the seven for eight share consolidation (see note A2). |
||||
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 acquisition/disposal of subsidiaries, associated undertakings and strategic investments, and fair value profits/(losses) on certain Group debt movements but includes dividends declared to holders of perpetual preferred callable securities. Bermuda, which is non-core, and Nordic and US Life, which are discontinued and non-core, are not included in adjusted operating profit.
Adjusted operating earnings per 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 2012 |
|
|
|
|
|
|
|
|
|
£m |
|
|
Notes |
At 30 June 2012 |
At 30 June 2011¹ |
At 31 December 2011 |
|
Assets |
|
|
|
|
|
Goodwill and other intangible assets |
|
3,252 |
4,833 |
3,358 |
|
Mandatory reserve deposits with central banks |
|
964 |
1,073 |
951 |
|
Property, plant and equipment |
|
925 |
1,008 |
925 |
|
Investment property |
|
2,046 |
2,254 |
2,064 |
|
Deferred tax assets |
|
313 |
403 |
339 |
|
Investments in associated undertakings and joint ventures |
|
130 |
176 |
111 |
|
Deferred acquisition costs |
|
1,324 |
1,565 |
1,351 |
|
Reinsurers' share of policyholder liabilities |
|
1,204 |
1,230 |
989 |
|
Loans and advances |
|
40,424 |
49,452 |
39,764 |
|
Investments and securities |
|
83,285 |
106,973 |
81,253 |
|
Current tax receivable |
|
183 |
151 |
138 |
|
Client indebtedness for acceptances |
|
200 |
254 |
237 |
|
Trade, other receivables and other assets |
|
3,431 |
4,152 |
3,348 |
|
Derivative financial instruments - assets |
|
2,209 |
1,770 |
1,795 |
|
Cash and cash equivalents |
|
4,088 |
4,544 |
3,624 |
|
Non-current assets held for sale |
F2 |
1,178 |
6 |
22,138 |
|
Total assets |
|
145,156 |
179,844 |
162,385 |
|
Liabilities |
|
|
|
|
|
Long-term business policyholder liabilities |
|
77,583 |
98,020 |
76,350 |
|
General insurance liabilities |
|
343 |
386 |
325 |
|
Third-party interests in consolidated funds |
|
2,571 |
4,711 |
1,893 |
|
Borrowed funds |
E1 |
3,536 |
4,497 |
3,656 |
|
Provisions |
|
272 |
233 |
269 |
|
Deferred revenue |
|
694 |
774 |
701 |
|
Deferred tax liabilities |
|
457 |
850 |
504 |
|
Current tax payable |
|
226 |
244 |
199 |
|
Trade, other payables and other liabilities |
|
4,433 |
5,116 |
4,243 |
|
Liabilities under acceptances |
|
200 |
254 |
237 |
|
Amounts owed to bank depositors |
|
41,471 |
51,638 |
40,978 |
|
Derivative financial instruments - liabilities |
|
1,863 |
1,355 |
1,755 |
|
Non-current liabilities held for sale |
F2 |
1,132 |
- |
20,417 |
|
Total liabilities |
|
134,781 |
168,078 |
151,527 |
|
Net assets |
|
10,375 |
11,766 |
10,858 |
|
Shareholders' equity |
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
7,965 |
9,266 |
8,488 |
|
Non-controlling interests |
|
|
|
|
|
Ordinary shares |
|
1,692 |
1,783 |
1,652 |
|
Preferred securities |
|
718 |
717 |
718 |
|
Total non-controlling interests |
|
2,410 |
2,500 |
2,370 |
|
Total equity |
|
10,375 |
11,766 |
10,858 |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect the consolidation of other African businesses (see note A2). |
||||
|
Condensed consolidated statement of cash flows |
|
|||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
£m |
|
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011¹ |
Year ended 31 December 2011 |
|
Cash flows from operating activities - continuing operations |
|
|
|
|
|
Profit before tax |
|
733 |
909 |
994 |
|
Non-cash movements in profit before tax |
|
(271) |
(108) |
1,372 |
|
Changes in working capital |
|
247 |
220 |
(1,415) |
|
Taxation paid |
|
(269) |
(180) |
(402) |
|
Net cash inflow from operating activities - continuing operations |
|
440 |
841 |
549 |
|
Cash flows from investing activities |
|
|
|
|
|
Net (acquisitions)/disposals of financial investments |
|
(563) |
(966) |
43 |
|
Acquisition of investment properties |
|
(21) |
(23) |
(57) |
|
Proceeds from disposal of investment properties |
|
17 |
2 |
6 |
|
Acquisition of property, plant and equipment |
|
(56) |
(54) |
(184) |
|
Proceeds from disposal of property, plant and equipment |
|
1 |
9 |
43 |
|
Acquisition of intangible assets |
|
(27) |
(29) |
(91) |
|
Acquisition of interests in subsidiaries, associated undertakings and strategic investments |
|
(4) |
68 |
103 |
|
Disposal of interests in subsidiaries, associated undertakings and strategic investments |
|
1,772 |
(353) |
(329) |
|
Net cash inflow/(outflow) from investing activities - continuing operations |
|
1,119 |
(1,346) |
(466) |
|
Cash flows from financing activities |
|
|
|
|
|
Dividends paid to |
|
|
|
|
|
Ordinary equity holders of the Company |
|
(1,093) |
(53) |
(97) |
|
Non-controlling interests and preferred security interests |
|
(118) |
(106) |
(206) |
|
Interest paid (excluding banking interest paid) |
|
(52) |
(36) |
(87) |
|
Proceeds from issue of ordinary shares (including by subsidiaries to non-controlling interests) |
|
- |
4 |
10 |
|
Net acquisition of treasury shares |
|
(2) |
(18) |
(17) |
|
Issue of subordinated and other debt |
|
137 |
831 |
890 |
|
Subordinated and other debt repaid |
|
(245) |
(448) |
(905) |
|
Net cash (outflow)/inflow from financing activities - continuing operations |
|
(1,373) |
174 |
(412) |
|
Net increase/(decrease) in cash and cash equivalents - continuing operations |
|
186 |
(331) |
(329) |
|
Net (decrease)/increase in cash and cash equivalents - discontinued operations |
|
(129) |
501 |
346 |
|
Effects of exchange rate changes on cash and cash equivalents |
|
(59) |
(185) |
(594) |
|
Cash and cash equivalents at beginning of the period |
|
5,055 |
5,632 |
5,632 |
|
Cash and cash equivalents at end of the period |
|
5,053 |
5,617 |
5,055 |
|
Consisting of |
|
|
|
|
|
Cash and cash equivalents in the statement of financial position |
|
4,088 |
4,544 |
3,624 |
|
Mandatory reserve deposits with central banks |
|
964 |
1,073 |
951 |
|
Cash and cash equivalents included in assets held for sale |
|
1 |
- |
480 |
|
Total |
|
5,053 |
5,617 |
5,055 |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core and include the African businesses not previously consolidated (see note A2). |
||||
Cash flows presented in this statement include all cash flows relating to policyholders' funds for life assurance.
Except for mandatory reserve deposits with central banks of £964 million (30 June 2011: £1,073 million; 31 December 2011: £951 million) and cash and cash equivalents subject to consolidation of funds of £575 million (30 June 2011: £1,028 million; 31 December 2011: £756 million), management do not consider that there are any material amounts of cash and cash equivalents which are not available for use in the Group's day-to-day operations. Mandatory reserve deposits are, however, included in cash and cash equivalents for the purposes of the cash flow statement in line with market practice in South Africa.
Included within the above is interest income received (including banking interest) of £2,275 million (30 June 2011: £2,421 million; 31 December 2011: £4,936 million), dividend income received of £280 million (30 June 2011: £256 million; 31 December 2011: £371 million) and interest paid (including banking interest) of £1,195 million (30 June 2011: £1,199 million; 31 December 2011: £2,143 million).
|
Consolidated statement of changes in equity |
|||||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
Millions |
|
£m |
|||
|
Six months ended 30 June 2012 |
Notes |
Number of shares issued and fully paid |
|
Share capital |
Share premium |
Merger reserve |
Available-for-sale reserve |
|
Shareholders' equity at beginning of the period |
|
5,801 |
|
580 |
805 |
2,532 |
53 |
|
Profit after tax for the financial period |
|
- |
|
- |
- |
- |
- |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
- |
- |
- |
- |
|
Net investment hedge1 |
|
- |
|
- |
- |
- |
- |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
|
- |
- |
- |
14 |
|
Recycled to the income statement |
|
- |
|
- |
- |
- |
(6) |
|
Exchange differences recycled to the income statement1 |
F1(a) |
- |
|
- |
- |
- |
- |
|
Shadow accounting |
|
- |
|
- |
- |
- |
1 |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
|
- |
- |
- |
- |
|
Other movements |
|
- |
|
- |
- |
- |
- |
|
Income tax relating to components of other comprehensive income |
D1(c) |
- |
|
- |
- |
- |
(1) |
|
Total comprehensive income for the financial period |
|
- |
|
- |
- |
- |
8 |
|
Dividends |
C4 |
- |
|
- |
- |
- |
- |
|
Other movements in share capital and payment reserve |
|
22 |
|
2 |
23 |
- |
- |
|
Cancellation of treasury shares |
|
(239) |
|
(24) |
- |
- |
- |
|
Share consolidation |
|
(697) |
|
- |
- |
- |
- |
|
Merger reserve realised in the period |
|
- |
|
- |
- |
(815) |
- |
|
Change in participation in subsidiaries |
|
- |
|
- |
- |
- |
- |
|
Transactions with shareholders |
|
(914) |
|
(22) |
23 |
(815) |
- |
|
Shareholders' equity at end of the period |
|
4,887 |
|
558 |
828 |
1,717 |
61 |
|
1Following the sale of the Nordic business on 21 March 2012, foreign exchange translation gains of £350 million relating to the Nordic operations, and foreign exchange hedge losses of £102 million relating to net investment hedges in respect of the Nordic investment were recognised in the income statement. These amounts are included in the £595 million profit on sale. |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|||||
|
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
124 |
230 |
5 |
301 |
3,170 |
688 |
8,488 |
2,370 |
10,858 |
|
- |
- |
- |
- |
914 |
17 |
931 |
156 |
1,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
- |
- |
- |
- |
- |
(1) |
- |
(1) |
|
- |
- |
- |
123 |
- |
- |
123 |
- |
123 |
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
14 |
- |
14 |
|
- |
- |
- |
- |
- |
- |
(6) |
- |
(6) |
|
- |
- |
- |
(350) |
- |
- |
(350) |
- |
(350) |
|
- |
- |
- |
- |
- |
- |
1 |
- |
1 |
|
- |
- |
- |
(165) |
- |
- |
(165) |
(36) |
(201) |
|
1 |
15 |
- |
(8) |
(13) |
- |
(5) |
1 |
(4) |
|
- |
- |
- |
- |
- |
5 |
4 |
- |
4 |
|
- |
15 |
- |
(400) |
901 |
22 |
546 |
121 |
667 |
|
- |
- |
- |
- |
(1,093) |
(22) |
(1,115) |
(96) |
(1,211) |
|
- |
23 |
- |
- |
(2) |
- |
46 |
8 |
54 |
|
- |
- |
- |
- |
24 |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
- |
- |
- |
- |
815 |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
- |
- |
7 |
7 |
|
- |
23 |
- |
- |
(256) |
(22) |
(1,069) |
(81) |
(1,150) |
|
124 |
268 |
5 |
(99) |
3,815 |
688 |
7,965 |
2,410 |
10,375 |
|
Consolidated statement of changes in equity |
|||||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
Millions |
|
£m |
|||
|
Six months ended 30 June 2011¹ |
Notes |
Number of shares issued and fully paid |
|
Share capital |
Share premium |
Merger reserve |
Available- for-sale reserve |
|
Shareholders' equity at beginning of the period |
|
5,695 |
|
570 |
795 |
2,845 |
225 |
|
Profit after tax for the financial period |
|
- |
|
- |
- |
- |
- |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Net investment hedge |
|
- |
|
- |
- |
- |
- |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
|
- |
- |
- |
53 |
|
Recycled to the income statement |
|
- |
|
- |
- |
- |
(166) |
|
Shadow accounting |
|
- |
|
- |
- |
- |
(43) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
|
- |
- |
- |
- |
|
Other movements |
|
- |
|
- |
- |
- |
- |
|
Income tax relating to components of other comprehensive income |
D1(c) |
- |
|
- |
- |
- |
3 |
|
Total comprehensive income for the financial period |
|
- |
|
- |
- |
- |
(153) |
|
Dividends |
C4 |
- |
|
- |
- |
- |
- |
|
Other movements in share capital and payment reserve |
|
4 |
|
- |
4 |
- |
- |
|
Change in participation in other subsidiaries |
|
- |
|
- |
- |
- |
- |
|
Reclassification of translation differences on non controlling interests |
|
- |
|
- |
- |
- |
- |
|
Shares issued in lieu of cash dividend |
|
69 |
|
7 |
- |
- |
- |
|
Transactions with shareholders |
|
73 |
|
7 |
4 |
- |
- |
|
Shareholders' equity at end of the period |
|
5,768 |
|
577 |
799 |
2,845 |
72 |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect the consolidation of other African businesses (see note A2). |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|||||
|
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
101 |
215 |
5 |
1,176 |
2,331 |
688 |
8,951 |
2,523 |
11,474 |
|
- |
- |
- |
- |
722 |
16 |
738 |
143 |
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
(25) |
- |
- |
(25) |
- |
(25) |
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
53 |
- |
53 |
|
- |
(1) |
- |
24 |
- |
- |
(143) |
- |
(143) |
|
- |
- |
- |
- |
- |
- |
(43) |
- |
(43) |
|
- |
- |
- |
(224) |
- |
- |
(224) |
(86) |
(310) |
|
(1) |
(41) |
- |
- |
17 |
- |
(25) |
(15) |
(40) |
|
- |
- |
- |
- |
- |
6 |
9 |
- |
9 |
|
(1) |
(42) |
- |
(225) |
739 |
22 |
340 |
42 |
382 |
|
- |
- |
- |
- |
(145) |
(22) |
(167) |
(84) |
(251) |
|
- |
21 |
- |
- |
(18) |
- |
7 |
6 |
13 |
|
- |
- |
- |
- |
- |
- |
- |
50 |
50 |
|
- |
- |
- |
43 |
- |
- |
43 |
(43) |
- |
|
- |
- |
- |
- |
85 |
- |
92 |
6 |
98 |
|
- |
21 |
- |
43 |
(78) |
(22) |
(25) |
(65) |
(90) |
|
100 |
194 |
5 |
994 |
2,992 |
688 |
9,266 |
2,500 |
11,766 |
|
Consolidated statement of changes in equity |
|||||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
Millions |
|
£m |
|||
|
Year ended 31 December 2011 |
Notes |
Number of shares issued and fully paid |
|
Share capital |
Share premium |
Merger reserve |
Available-for-sale reserve |
|
Shareholders' equity at beginning of the year |
|
5,695 |
|
570 |
795 |
2,845 |
225 |
|
Profit after tax for the financial year |
|
- |
|
- |
- |
- |
- |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
- |
- |
- |
- |
|
Net investment hedge |
|
- |
|
- |
- |
- |
- |
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
|
- |
- |
- |
51 |
|
Recycled to the income statement |
|
- |
|
- |
- |
- |
(10) |
|
Realised on disposal |
|
- |
|
- |
- |
- |
(157) |
|
Exchange differences realised on disposal |
|
- |
|
- |
- |
- |
- |
|
Shadow accounting |
|
- |
|
- |
- |
- |
(58) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
|
- |
- |
- |
- |
|
Other movements |
|
- |
|
- |
- |
- |
- |
|
Income tax relating to components of other comprehensive income |
D1(c) |
- |
|
- |
- |
- |
2 |
|
Total comprehensive income for the financial year |
|
- |
|
- |
- |
- |
(172) |
|
Dividends |
C4 |
- |
|
- |
- |
- |
- |
|
Other movements in share capital and payment reserve |
|
7 |
|
- |
10 |
- |
- |
|
Merger reserve realised in the year |
|
- |
|
- |
- |
(313) |
- |
|
Change in participation in subsidiaries |
|
- |
|
- |
- |
- |
- |
|
Reclassification of translation differences on non-controlling interests |
|
- |
|
- |
- |
- |
- |
|
Shares issued in lieu of cash dividend |
|
99 |
|
10 |
- |
- |
- |
|
Transactions with shareholders |
|
106 |
|
10 |
10 |
(313) |
- |
|
Shareholders' equity at end of the year |
|
5,801 |
|
580 |
805 |
2,532 |
53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|||||
|
Property revaluation reserve |
Share-based payments reserve |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Attributable to equity holders of the parent |
Total non-controlling interests |
Total equity |
|
101 |
215 |
5 |
1,176 |
2,331 |
688 |
8,951 |
2,523 |
11,474 |
|
- |
- |
- |
- |
635 |
32 |
667 |
300 |
967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 |
- |
- |
- |
- |
- |
30 |
9 |
39 |
|
- |
- |
- |
28 |
- |
- |
28 |
- |
28 |
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
51 |
(1) |
50 |
|
- |
(1) |
- |
- |
- |
- |
(11) |
- |
(11) |
|
- |
- |
- |
- |
- |
- |
(157) |
- |
(157) |
|
- |
- |
- |
24 |
- |
- |
24 |
- |
24 |
|
(7) |
- |
- |
- |
- |
- |
(65) |
- |
(65) |
|
- |
- |
- |
(970) |
- |
- |
(970) |
(313) |
(1,283) |
|
- |
(34) |
- |
- |
15 |
- |
(19) |
(20) |
(39) |
|
- |
- |
- |
- |
- |
12 |
14 |
- |
14 |
|
23 |
(35) |
- |
(918) |
650 |
44 |
(408) |
(25) |
(433) |
|
- |
- |
- |
- |
(221) |
(44) |
(265) |
(162) |
(427) |
|
- |
50 |
- |
- |
(17) |
- |
43 |
16 |
59 |
|
- |
- |
- |
- |
313 |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
- |
- |
61 |
61 |
|
- |
- |
- |
43 |
- |
- |
43 |
(43) |
- |
|
- |
- |
- |
- |
114 |
- |
124 |
- |
124 |
|
- |
50 |
- |
43 |
189 |
(44) |
(55) |
(128) |
(183) |
|
124 |
230 |
5 |
301 |
3,170 |
688 |
8,488 |
2,370 |
10,858 |
Notes to the consolidated financial statements
For the six months ended 30 June 2012
A: Accounting policies
A1: Basis of preparation
The Group interim financial statements contained herein have 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 2012 and the financial position at that date have been prepared using accounting policies consistent with those applied in the preparation of the Group's 2011 Annual Report and Accounts.
The Group interim financial statements have been prepared on the going concern basis, which the directors believe appropriate. The Group Finance Director's review includes further details about risks and uncertainties and discloses how the Group actively manages these risks, including updates to the Group's exposure to Bermuda guarantees, the impact to the Group of regulatory changes and an overview of the Group's Capital and liquidity position.
The comparative figures for the financial year ended 31 December 2011 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.
A2: Significant corporate activity and business changes
Disposal of Nordic
As previously reported the Group had agreed at 31 December 2011 to the disposal of its life assurance operations, asset management and banking operations in Sweden, Denmark and Norway to Skandia Liv. Following final regulatory approval on 8 March 2012 and subsequent shareholder approval the sale was completed on 21 March 2012. The sale represented the Group's exit from the life assurance market in the Nordic region and therefore met the criteria of a discontinued operation. 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. The assets and liabilities of Nordic were classified as non-current assets and liabilities held for sale at 31 December 2011. At 30 June 2012 following the completion of the disposal there are no assets and liabilities of Nordic remaining in the Statement of Financial Position. The position at 30 June 2011 reported Nordic on a line by line basis. For the purposes of adjusted operating profit, Nordic is classified as a non-core operation and the comparative information for the six months ended 30 June 2011 has been restated. Further details of the impact of discontinued operations are provided in note F1.
Special dividend and share consolidation
On 9 March 2012, the Group declared a special dividend of 18p per 10p ordinary share to all holders of those shares on the register at 20 April 2012 and the dividend was subsequently paid on 7 June 2012. A seven-for-eight share consolidation was effected on 23 April 2012 and from that date only new ordinary shares of 113/7 pence have been in issue. For basic and diluted earnings per share, the weighted average number of shares is adjusted with effect from 23 April 2012. For adjusted operating earnings per share the adjustment of the weighted average number of shares has been made effective 1 January 2012. Consequently the comparative information in the adjusted operating earnings per share note for the six months ended 30 June 2011 and the year ended 31 December 2011 has been restated accordingly.
Disposal of Finnish branch in Wealth Management
On 21 December 2011 the Group announced that it had agreed terms to sell the Finnish branch of Wealth Management to OP-Pohjola osk. The assets and liabilities of the Finnish branch have been classified as non-current assets and liabilities held for sale in the Statement of Financial Position at 30 June 2012, and 31 December 2011. The 30 June 2011 position reported the Finnish branch on a line by line basis. Details of the non-current assets and liabilities held for sale are provided in note F2.
Consolidation of other African businesses
As reported in the Group's 2011 Annual Report and Accounts the Group's operations in Zimbabwe, Kenya, Malawi, Swaziland and Nigeria ('the other African businesses'), were consolidated effective from 1 January 2011. The net asset value of the underlying businesses on 1 January 2011 was deemed to be the fair value of these operations on that date. As a result of the consolidation of these businesses, the Group recognised a gain on 1 January 2011, which was disclosed as a profit on acquisition of subsidiaries. The comparatives for the six months ended 30 June 2011 have been restated to include the results of the other African businesses.
In anticipation of the indigenisation of the Zimbabwe business a non-controlling interest adjustment has been included for this operation in respect of adjusted operating profit to reflect the agreed indigenous shareholding to be provided. At 30 June 2012 the Group had substantially completed the transfer of the agreed indigenous shareholding to approved indigenisation and economic empowerment trusts, which are fully consolidated for the purposes of IFRS reporting.
Reporting of Retail Europe within Wealth Management
On 24 January 2012 the Group announced that that it would combine its Wealth Management Continental Europe business (France and Italy) with the Skandia Retail Europe business unit (Germany, Austria, Poland and Switzerland). As a result the businesses previously reported as the Retail Europe segment are now reported within the Wealth Management segment for the six months ended 30 June 2012. The comparative information for the six months ended 30 June 2011 and the year ended 31 December 2011 has been reclassified where applicable.
Integration of OMAM UK with Skandia Investment Group
On 26 April 2012 the Group announced the integration of Old Mutual Asset Management UK (OMAM UK) with Skandia Investment Group. OMAM UK was previously reported within the US Asset Management segment and Skandia Investment Group is reported within the Wealth Management segment. Consequently OMAM UK is included within the Wealth Management segment for the six months ended 30 June 2012.
Cancellation of treasury shares
On 13 January 2012 the Group announced that it had cancelled 239,434,888 Ordinary Shares of 10p each previously held in treasury.
A3: Critical accounting estimates and judgements
In the preparation of these financial statements, the Group is required to make estimates and judgements that affect items reported in the consolidated income statement, statement of financial position, other primary statements and related supporting notes.
Critical accounting estimates and judgements are those which involve the most complex or subjective judgments or assessments, with estimates based on knowledge of the current situation and circumstances and assumptions based on that knowledge and predictions of future events and actions. There has been no significant change to the critical accounting estimates and judgements that the Group applied at 31 December 2011.
Notes to the consolidated financial statements
For the six months ended 30 June 2012
B: Segment information
B1: Basis of segmentation
Income statement segmentation
For all periods presented, Nordic has been classified as a discontinued operation and its results are non-core in determining the Group's adjusted operating profits.
In all reported periods, Bermuda is disclosed as a continuing operation in the IFRS income statement, and is classified as non-core in determining the Group's adjusted operating profit.
At 30 June 2012 all other businesses, including those held for sale are classified as continuing operations. US Life was classified as a discontinued operation in comparative periods.
The results of OMAM UK (previously included within US Asset Management) and Retail Europe are included within the Wealth Management segment for the six months ended 30 June 2012. Except for OMAM UK, the income statement segmental presentation for the six months ended 30 June 2011 and the year ended 31 December 2011 is consistent with the above.
Statement of financial position segmentation
At 30 June 2012 no assets and liabilities relating to Nordic remain. At 31 December 2011 the assets and liabilities of Nordic were classified as non-current assets and liabilities held for sale. At 30 June 2011 the assets and liabilities of Nordic were disclosed on a line by line basis.
The segmental analysis of the statement of financial position at 30 June 2012, 30 June 2011 and 31 December 2011 discloses Bermuda as non-core.
The assets and liabilities of the Finnish branch were classified as non-current assets and liabilities held for sale at 30 June 2012. At 30 June 2011 and 31 December, the assets and liabilities of the Finnish branch were reported on a line by line basis.
Segmental analysis
The Group's segmental results are analysed and reported on a basis consistent with the way that management and the Board of Directors assesses performance and allocates resources. Information is presented to the Board on a consolidated basis in pounds sterling (the presentational currency) and in local currency of each business.
The revenues generated in each reported segment can be seen in the analysis of profits and losses in note B3.The segmental information in notes B3 and B4, reflects the adjusted and IFRS measures of profit and loss, assets and liabilities for each operating segment as provided to management and the Board of Directors. There are no differences between the measurement of the assets and liabilities reflected in the primary statements and that reported for the segments.
Adjusted operating profit is one of the key measures reported to the Group's management and Board of Directors for their consideration in the allocation of resources to and the review of performance of the segments. The Group utilises additional measures to assess the performance of each of the segments, in particular the level of net client cash flows and funds under management. 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.
A reconciliation between the segment revenues and expenses and the Group's revenues and expenses is shown in note B3. In line with internal reporting, assets, liabilities, revenues or expenses that are not directly attributable to a particular segment are allocated between segments where appropriate and where there is a reasonable basis for doing so. The Group accounts for inter-segment revenues and transfers as if the transactions were with third parties at current market prices. Given the nature of the operations, there are no major customers within any of the segments.
There are four principal business activities from which the Group generates revenues. These are life assurance (premium income), asset management business (fee and commission income), banking (banking interest receivable) and general insurance (premium income). The lines of business in each operating segment derives its revenues are as follows:
Core operations
Long-Term Savings
Emerging Markets - 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
Discontinued and non-core operations
Bermuda - life assurance (non-core)
Nordic - life assurance, asset management and banking (discontinued and non-core)
US Life - life assurance (discontinued and non-core)
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B: Segment information continued |
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B2: Gross earned premiums |
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£m |
|
Six months ended 30 June 2012 |
Emerging Markets |
Wealth Management |
Long-Term Savings |
M&F |
Bermuda |
Total |
|
Life assurance - insurance contracts |
768 |
177 |
945 |
- |
- |
945 |
|
Life assurance - investment contracts with discretionary participation features |
470 |
- |
470 |
- |
- |
470 |
|
General insurance |
- |
- |
- |
359 |
- |
359 |
|
Gross earned premiums |
1,238 |
177 |
1,415 |
359 |
- |
1,774 |
|
Life assurance - other investment contracts recognised as deposits |
1,020 |
2,743 |
3,763 |
- |
- |
3,763 |
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£m |
|
Six months ended 30 June 2011¹ |
Emerging Markets |
Wealth Management |
Long-Term Savings |
M&F |
Bermuda |
Total |
|
Life assurance - insurance contracts |
819 |
183 |
1,002 |
- |
- |
1,002 |
|
Life assurance - investment contracts with discretionary participation features |
502 |
- |
502 |
- |
- |
502 |
|
General insurance |
- |
- |
- |
375 |
- |
375 |
|
Gross earned premiums |
1,321 |
183 |
1,504 |
375 |
- |
1,879 |
|
Life assurance - other investment contracts recognised as deposits |
1,030 |
3,318 |
4,348 |
- |
- |
4,348 |
|
1The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core (see note A2). |
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£m |
|
Year ended 31 December 2011 |
Emerging Markets |
Wealth Management |
Long-Term Savings |
M&F |
Bermuda |
Total |
|
Life assurance - insurance contracts |
1,567 |
304 |
1,871 |
- |
2 |
1,873 |
|
Life assurance - investment contracts with discretionary participation features |
975 |
- |
975 |
- |
- |
975 |
|
General insurance |
- |
- |
- |
736 |
- |
736 |
|
Gross earned premiums |
2,542 |
304 |
2,846 |
736 |
2 |
3,584 |
|
Life assurance - other investment contracts recognised as deposits |
2,088 |
6,406 |
8,494 |
- |
- |
8,494 |
|
Notes to the consolidated financial statements |
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For the six months ended 30 June 2012 |
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B: Segment information continued |
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B3: Adjusted operating profit statement - segment information six months ended 30 June 2012 |
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Long-Term Savings |
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|
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Notes |
Emerging Markets |
Wealth Management |
Total Long-Term Savings |
|
Revenue |
|
|
|
|
|
Gross earned premiums |
|
1,238 |
177 |
1,415 |
|
Outward reinsurance |
|
(41) |
(43) |
(84) |
|
Net earned premiums |
|
1,197 |
134 |
1,331 |
|
Investment return (non-banking) |
|
2,017 |
1,246 |
3,263 |
|
Banking interest and similar income |
|
- |
- |
- |
|
Banking trading, investment and similar income |
|
- |
- |
- |
|
Fee and commission income, and income from service activities |
|
201 |
597 |
798 |
|
Other income |
|
35 |
14 |
49 |
|
Inter-segment revenues |
|
33 |
2 |
35 |
|
Total revenues |
|
3,483 |
1,993 |
5,476 |
|
Expenses |
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
|
(1,958) |
(174) |
(2,132) |
|
Reinsurance recoveries |
|
49 |
34 |
83 |
|
Net claims and benefits incurred |
|
(1,909) |
(140) |
(2,049) |
|
Change in investment contract liabilities |
|
(663) |
(1,177) |
(1,840) |
|
Losses on loans and advances |
|
- |
- |
- |
|
Finance costs (including interest and similar expenses) |
|
- |
- |
- |
|
Banking interest payable and similar expenses |
|
- |
- |
- |
|
Fee and commission expenses, and other acquisition costs |
|
(111) |
(335) |
(446) |
|
Other operating and administrative expenses |
|
(497) |
(216) |
(713) |
|
Change in third-party interest in consolidated funds |
|
- |
- |
- |
|
Income tax attributable to policyholder returns |
|
(23) |
(11) |
(34) |
|
Inter-segment expenses |
|
- |
(19) |
(19) |
|
Total expenses |
|
(3,203) |
(1,898) |
(5,101) |
|
Share of associated undertakings' and joint ventures' profit after tax |
|
9 |
- |
9 |
|
Profit on disposal of subsidiaries, associated undertakings and strategic investments |
|
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
|
289 |
95 |
384 |
|
Income tax expense |
|
(70) |
(13) |
(83) |
|
Non-controlling interests |
|
(3) |
- |
(3) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
|
216 |
82 |
298 |
|
Adjusting items net of tax and non-controlling interests |
C1(a) |
(72) |
(54) |
(126) |
|
Profit/(loss) after tax from continuing operations |
|
144 |
28 |
172 |
|
Profit from discontinued operations after tax |
|
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
|
144 |
28 |
172 |
|
1 Non-core operations relates to Bermuda with the exception of £4 million of inter-segment revenue and the profit from discontinued operations after tax, with these reflecting the results of Nordic which has been classified as discontinued operations as detailed in notes A2 and B1. Bermuda profit after tax for the six months ended 30 June 2012 was £49 million. Further details on the results of discontinued operations is provided in note F1. |
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|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (note C1) |
Discontinued and non-core operations1 |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
359 |
- |
- |
- |
1,774 |
- |
- |
1,774 |
|
- |
(71) |
- |
- |
- |
(155) |
- |
- |
(155) |
|
- |
288 |
- |
- |
- |
1,619 |
- |
- |
1,619 |
|
- |
23 |
1 |
53 |
80 |
3,420 |
(86) |
19 |
3,353 |
|
1,780 |
- |
- |
- |
- |
1,780 |
- |
- |
1,780 |
|
107 |
- |
- |
- |
- |
107 |
- |
- |
107 |
|
533 |
12 |
209 |
- |
- |
1,552 |
(39) |
- |
1,513 |
|
13 |
- |
- |
- |
- |
62 |
- |
8 |
70 |
|
14 |
8 |
- |
7 |
(81) |
(17) |
- |
17 |
- |
|
2,447 |
331 |
210 |
60 |
(1) |
8,523 |
(125) |
44 |
8,442 |
|
|
|
|
|
|
|
|
|
|
|
- |
(235) |
- |
- |
- |
(2,367) |
- |
41 |
(2,326) |
|
- |
42 |
- |
- |
- |
125 |
- |
- |
125 |
|
- |
(193) |
- |
- |
- |
(2,242) |
- |
41 |
(2,201) |
|
- |
- |
- |
- |
- |
(1,840) |
- |
- |
(1,840) |
|
(216) |
- |
- |
- |
- |
(216) |
- |
- |
(216) |
|
- |
- |
- |
(75) |
- |
(75) |
(15) |
- |
(90) |
|
(997) |
- |
- |
- |
- |
(997) |
- |
- |
(997) |
|
- |
(53) |
(2) |
- |
(15) |
(516) |
45 |
(23) |
(494) |
|
(800) |
(41) |
(167) |
(36) |
(1) |
(1,758) |
(70) |
(9) |
(1,837) |
|
- |
- |
- |
- |
(64) |
(64) |
- |
- |
(64) |
|
- |
- |
- |
- |
- |
(34) |
34 |
- |
- |
|
(28) |
(10) |
- |
(24) |
81 |
- |
- |
- |
- |
|
(2,041) |
(297) |
(169) |
(135) |
1 |
(7,742) |
(6) |
9 |
(7,739) |
|
- |
- |
1 |
- |
- |
10 |
- |
- |
10 |
|
- |
- |
- |
- |
- |
- |
20 |
- |
20 |
|
406 |
34 |
42 |
(75) |
- |
791 |
(111) |
53 |
733 |
|
(113) |
(9) |
(6) |
1 |
- |
(210) |
(31) |
- |
(241) |
|
(139) |
(4) |
- |
(19) |
- |
(165) |
9 |
- |
(156) |
|
154 |
21 |
36 |
(93) |
- |
416 |
(133) |
53 |
336 |
|
8 |
(6) |
5 |
(14) |
- |
(133) |
133 |
- |
- |
|
162 |
15 |
41 |
(107) |
- |
283 |
- |
53 |
336 |
|
- |
- |
- |
- |
- |
- |
- |
595 |
595 |
|
162 |
15 |
41 |
(107) |
- |
283 |
- |
648 |
931 |
|
Notes to the consolidated financial statements |
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|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
B3: Adjusted operating profit statement - segment information six months ended 30 June 2011 |
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|
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Long-Term Savings |
||
|
|
Notes |
Emerging Markets1 |
Wealth Management |
Total Long-Term Savings |
|
Revenue |
|
|
|
|
|
Gross earned premiums |
|
1,321 |
183 |
1,504 |
|
Outward reinsurance |
|
(44) |
(44) |
(88) |
|
Net earned premiums |
|
1,277 |
139 |
1,416 |
|
Investment return (non-banking) |
|
1,006 |
129 |
1,135 |
|
Banking interest and similar income |
|
- |
- |
- |
|
Banking trading, investment and similar income |
|
- |
- |
- |
|
Fee and commission income, and income from service activities |
|
198 |
594 |
792 |
|
Other income |
|
32 |
9 |
41 |
|
Inter-segment revenues |
|
28 |
3 |
31 |
|
Total revenues |
|
2,541 |
874 |
3,415 |
|
Expenses |
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
|
(1,327) |
(147) |
(1,474) |
|
Reinsurance recoveries |
|
47 |
39 |
86 |
|
Net claims and benefits incurred |
|
(1,280) |
(108) |
(1,388) |
|
Change in investment contract liabilities |
|
(324) |
(106) |
(430) |
|
Losses on loans and advances |
|
- |
(1) |
(1) |
|
Finance costs (including interest and similar expenses) |
|
- |
- |
- |
|
Banking interest payable and similar expenses |
|
- |
- |
- |
|
Fee and commission expenses, and other acquisition costs |
|
(103) |
(311) |
(414) |
|
Other operating and administrative expenses |
|
(508) |
(216) |
(724) |
|
Goodwill impairment |
|
- |
- |
- |
|
Change in third-party interest in consolidated funds |
|
- |
- |
- |
|
Income tax attributable to policyholder returns |
|
(28) |
4 |
(24) |
|
Inter-segment expenses |
|
(1) |
(21) |
(22) |
|
Total expenses |
|
(2,244) |
(759) |
(3,003) |
|
Share of associated undertakings' and joint ventures' profit after tax |
|
2 |
- |
2 |
|
Profit on disposal of subsidiaries, associated undertakings and strategic investments |
|
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
|
299 |
115 |
414 |
|
Income tax expense |
|
(65) |
(20) |
(85) |
|
Non-controlling interests |
|
- |
- |
- |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
|
234 |
95 |
329 |
|
Adjusting items net of tax and non-controlling interests |
C1(a) |
208 |
(57) |
151 |
|
Profit/(loss) after tax from continuing operations |
|
442 |
38 |
480 |
|
Profit from discontinued operations after tax |
|
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
|
442 |
38 |
480 |
|
1 Emerging Markets has been restated to reflect the African businesses not previously consolidated (see note A2). |
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|
2 Non-core operations relates to Bermuda with the exception of £11 million and £4 million of inter-segment revenue and expenses and the profit from discontinued operations after tax, with these reflecting the results of Nordic and US Life both of which have been classified as discontinued operations. More detail is provided in notes A2 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 F1. |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|||
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (note C1) |
Discontinued and non-core operations2 |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
375 |
- |
- |
- |
1,879 |
- |
- |
1,879 |
|
- |
(75) |
- |
- |
- |
(163) |
- |
- |
(163) |
|
- |
300 |
- |
- |
- |
1,716 |
- |
- |
1,716 |
|
- |
28 |
- |
36 |
101 |
1,300 |
(86) |
7 |
1,221 |
|
1,881 |
- |
- |
- |
- |
1,881 |
- |
- |
1,881 |
|
105 |
- |
- |
- |
- |
105 |
- |
- |
105 |
|
515 |
16 |
223 |
- |
- |
1,546 |
(46) |
- |
1,500 |
|
20 |
- |
6 |
- |
12 |
79 |
- |
10 |
89 |
|
13 |
10 |
3 |
7 |
(86) |
(22) |
- |
22 |
- |
|
2,534 |
354 |
232 |
43 |
27 |
6,605 |
(132) |
39 |
6,512 |
|
|
|
|
|
|
|
|
|
|
|
- |
(212) |
- |
- |
- |
(1,686) |
- |
36 |
(1,650) |
|
- |
18 |
- |
- |
- |
104 |
- |
- |
104 |
|
- |
(194) |
- |
- |
- |
(1,582) |
- |
36 |
(1,546) |
|
- |
- |
- |
- |
- |
(430) |
- |
- |
(430) |
|
(250) |
- |
- |
- |
- |
(251) |
- |
- |
(251) |
|
- |
- |
- |
(60) |
- |
(60) |
(25) |
- |
(85) |
|
(1,089) |
- |
- |
- |
- |
(1,089) |
(4) |
- |
(1,093) |
|
(1) |
(55) |
(6) |
- |
(17) |
(493) |
54 |
(29) |
(468) |
|
(806) |
(46) |
(187) |
(39) |
(12) |
(1,814) |
(76) |
(11) |
(1,901) |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
- |
- |
- |
- |
(84) |
(84) |
- |
- |
(84) |
|
- |
- |
- |
- |
- |
(24) |
24 |
- |
- |
|
(29) |
(12) |
- |
(22) |
86 |
1 |
- |
(1) |
- |
|
(2,175) |
(307) |
(193) |
(121) |
(27) |
(5,826) |
(27) |
(5) |
(5,858) |
|
- |
- |
- |
4 |
- |
6 |
- |
- |
6 |
|
- |
- |
- |
- |
- |
- |
249 |
- |
249 |
|
359 |
47 |
39 |
(74) |
- |
785 |
90 |
34 |
909 |
|
(93) |
(11) |
(8) |
8 |
- |
(189) |
13 |
(2) |
(178) |
|
(128) |
(4) |
- |
(19) |
- |
(151) |
8 |
- |
(143) |
|
138 |
32 |
31 |
(85) |
- |
445 |
111 |
32 |
588 |
|
6 |
(8) |
(5) |
(33) |
- |
111 |
(111) |
- |
- |
|
144 |
24 |
26 |
(118) |
- |
556 |
- |
32 |
588 |
|
- |
- |
- |
- |
- |
- |
- |
150 |
150 |
|
144 |
24 |
26 |
(118) |
- |
556 |
- |
182 |
738 |
|
Notes to the consolidated financial statements |
||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
B3: Adjusted operating profit statement - segment information year ended 31 December 2011 |
||||
|
|
|
|
||
|
|
|
Long-Term Savings |
||
|
|
Notes |
Emerging Markets |
Wealth Management |
Total Long-Term Savings |
|
Revenue |
|
|
|
|
|
Gross earned premiums |
|
2,542 |
304 |
2,846 |
|
Outward reinsurance |
|
(88) |
(88) |
(176) |
|
Net earned premiums |
|
2,454 |
216 |
2,670 |
|
Investment return (non-banking) |
|
2,626 |
(2,878) |
(252) |
|
Banking interest and similar income |
|
- |
- |
- |
|
Banking trading, investment and similar income |
|
- |
- |
- |
|
Fee and commission income, and income from service activities |
|
411 |
1,183 |
1,594 |
|
Other income |
|
68 |
23 |
91 |
|
Inter-segment revenues |
|
66 |
11 |
77 |
|
Total revenues |
|
5,625 |
(1,445) |
4,180 |
|
Expenses |
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
|
(2,854) |
(102) |
(2,956) |
|
Reinsurance recoveries |
|
73 |
9 |
82 |
|
Net claims and benefits incurred |
|
(2,781) |
(93) |
(2,874) |
|
Change in investment contract liabilities |
|
(925) |
2,814 |
1,889 |
|
Losses on loans and advances |
|
- |
(1) |
(1) |
|
Finance costs (including interest and similar expenses) |
|
- |
- |
- |
|
Banking interest payable and similar expenses |
|
- |
- |
- |
|
Fee and commission expenses, and other acquisition costs |
|
(223) |
(664) |
(887) |
|
Other operating and administrative expenses |
|
(1,076) |
(404) |
(1,480) |
|
Goodwill impairment |
|
- |
- |
- |
|
Change in third-party interest in consolidated funds |
|
- |
- |
- |
|
Income tax attributable to policyholder returns |
|
(53) |
62 |
9 |
|
Inter-segment expenses |
|
(7) |
(46) |
(53) |
|
Total expenses |
|
(5,065) |
1,668 |
(3,397) |
|
Share of associated undertakings' and joint ventures' profit after tax |
|
10 |
- |
10 |
|
Profit on disposal of subsidiaries, associated undertakings and strategic investments |
|
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
|
570 |
223 |
793 |
|
Income tax expense |
|
(120) |
(26) |
(146) |
|
Non-controlling interests |
|
(3) |
- |
(3) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
|
447 |
197 |
644 |
|
Adjusting items net of tax and non-controlling interests |
C1(a) |
126 |
(87) |
39 |
|
Profit/(loss) after tax from continuing operations |
|
573 |
110 |
683 |
|
Profit from discontinued operations after tax |
|
- |
- |
- |
|
Profit/(loss) after tax attributable to equity holders of the parent |
|
573 |
110 |
683 |
|
1 Non-core operations relates to Bermuda with the exception of £22 million and £5 million of inter-segment revenue and expenses and the profit from discontinued operations after tax, with these reflecting the results of Nordic and US Life both of which have been classified as discontinued operations. More detail is provided in notes A2 and B1. Bermuda loss after tax for the year ended 31 December 2011 was £201 million. Further detail on the results of discontinued operations is provided in note F1. |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Adjusted operating profit |
Adjusting items (note C1) |
Discontinued and non-core operations1 |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
736 |
- |
- |
- |
3,582 |
- |
2 |
3,584 |
|
- |
(149) |
- |
- |
- |
(325) |
- |
- |
(325) |
|
- |
587 |
- |
- |
- |
3,257 |
- |
2 |
3,259 |
|
- |
54 |
- |
52 |
30 |
(116) |
(241) |
(210) |
(567) |
|
3,669 |
- |
- |
- |
- |
3,669 |
- |
- |
3,669 |
|
217 |
- |
- |
- |
- |
217 |
- |
- |
217 |
|
1,051 |
34 |
447 |
- |
- |
3,126 |
(91) |
- |
3,035 |
|
50 |
- |
10 |
- |
- |
151 |
- |
20 |
171 |
|
27 |
18 |
1 |
16 |
(185) |
(46) |
- |
46 |
- |
|
5,014 |
693 |
458 |
68 |
(155) |
10,258 |
(332) |
(142) |
9,784 |
|
|
|
|
|
|
|
|
|
|
|
- |
(422) |
- |
- |
- |
(3,378) |
- |
47 |
(3,331) |
|
- |
41 |
- |
- |
- |
123 |
- |
- |
123 |
|
- |
(381) |
- |
- |
- |
(3,255) |
- |
47 |
(3,208) |
|
- |
- |
- |
- |
- |
1,889 |
- |
- |
1,889 |
|
(457) |
- |
- |
- |
- |
(458) |
- |
- |
(458) |
|
- |
- |
- |
(128) |
- |
(128) |
70 |
- |
(58) |
|
(2,091) |
- |
- |
- |
- |
(2,091) |
(4) |
- |
(2,095) |
|
(9) |
(109) |
(12) |
- |
(24) |
(1,041) |
104 |
(70) |
(1,007) |
|
(1,641) |
(95) |
(379) |
(81) |
(8) |
(3,684) |
(154) |
(14) |
(3,852) |
|
- |
- |
- |
- |
- |
- |
(264) |
- |
(264) |
|
- |
- |
- |
- |
2 |
2 |
- |
- |
2 |
|
- |
- |
- |
- |
- |
9 |
(9) |
- |
- |
|
(61) |
(19) |
- |
(48) |
185 |
4 |
- |
(4) |
- |
|
(4,259) |
(604) |
(391) |
(257) |
155 |
(8,753) |
(257) |
(41) |
(9,051) |
|
- |
- |
- |
- |
- |
10 |
- |
- |
10 |
|
- |
- |
- |
- |
- |
- |
251 |
- |
251 |
|
755 |
89 |
67 |
(189) |
- |
1,515 |
(338) |
(183) |
994 |
|
(188) |
(22) |
(8) |
23 |
- |
(341) |
117 |
(1) |
(225) |
|
(269) |
(8) |
- |
(39) |
- |
(319) |
19 |
- |
(300) |
|
298 |
59 |
59 |
(205) |
- |
855 |
(202) |
(184) |
469 |
|
16 |
(24) |
(260) |
27 |
- |
(202) |
202 |
- |
- |
|
314 |
35 |
(201) |
(178) |
- |
653 |
- |
(184) |
469 |
|
- |
- |
- |
- |
- |
- |
- |
198 |
198 |
|
314 |
35 |
(201) |
(178) |
- |
653 |
- |
14 |
667 |
|
Notes to the consolidated financial statements |
||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
B4: Statement of financial position - segment information at 30 June 2012 |
||||
|
|
|
|
|
£m |
|
|
Notes |
Emerging Markets |
Wealth Management |
Total Long-Term Savings |
|
Assets |
|
|
|
|
|
Goodwill and other intangible assets |
|
105 |
1,673 |
1,778 |
|
Mandatory reserve deposits with central banks |
|
- |
- |
- |
|
Property, plant and equipment |
|
390 |
14 |
404 |
|
Investment property |
|
1,599 |
- |
1,599 |
|
Deferred tax assets |
|
74 |
63 |
137 |
|
Investments in associated undertakings and joint ventures |
|
48 |
- |
48 |
|
Deferred acquisition costs |
|
111 |
1,160 |
1,271 |
|
Reinsurers' share of policyholder liabilities |
|
52 |
1,028 |
1,080 |
|
Loans and advances |
|
401 |
194 |
595 |
|
Investments and securities |
|
30,412 |
42,427 |
72,839 |
|
Current tax receivable |
|
21 |
84 |
105 |
|
Client indebtedness for acceptances |
|
- |
- |
- |
|
Trade, other receivables and other assets |
|
751 |
332 |
1,083 |
|
Derivative financial instruments - assets |
|
443 |
- |
443 |
|
Cash and cash equivalents |
|
516 |
553 |
1,069 |
|
Non-current assets held for sale |
F2 |
- |
1,176 |
1,176 |
|
Inter-segment assets |
|
432 |
116 |
548 |
|
Total assets |
|
35,355 |
48,820 |
84,175 |
|
Liabilities |
|
|
|
|
|
Life assurance policyholder liabilities |
|
30,747 |
43,310 |
74,057 |
|
General insurance liabilities |
|
- |
- |
- |
|
Third-party interests in consolidated funds |
|
- |
- |
- |
|
Borrowed funds |
E1 |
234 |
- |
234 |
|
Provisions |
|
144 |
45 |
189 |
|
Deferred revenue |
|
13 |
672 |
685 |
|
Deferred tax liabilities |
|
158 |
195 |
353 |
|
Current tax payable |
|
144 |
35 |
179 |
|
Trade, other payables and other liabilities |
|
1,757 |
643 |
2,400 |
|
Liabilities under acceptances |
|
- |
- |
- |
|
Amounts owed to bank depositors |
|
93 |
- |
93 |
|
Derivative financial instruments - liabilities |
|
306 |
(4) |
302 |
|
Non-current liabilities held for sale |
F2 |
- |
1,132 |
1,132 |
|
Inter-segment liabilities |
|
73 |
460 |
533 |
|
Total liabilities |
|
33,669 |
46,488 |
80,157 |
|
Net assets |
|
1,686 |
2,332 |
4,018 |
|
Equity |
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
1,686 |
2,332 |
4,018 |
|
Non-controlling interests |
|
- |
- |
- |
|
Ordinary shares |
|
- |
- |
- |
|
Preferred securities |
|
- |
- |
- |
|
|
|
|
|
|
|
Total equity |
|
1,686 |
2,332 |
4,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Non-core operations Bermuda |
Total |
|
|
|
|
|
|
|
|
|
548 |
21 |
891 |
14 |
- |
- |
3,252 |
|
964 |
- |
- |
- |
- |
- |
964 |
|
487 |
22 |
11 |
1 |
- |
- |
925 |
|
48 |
- |
- |
- |
399 |
- |
2,046 |
|
21 |
13 |
139 |
2 |
- |
1 |
313 |
|
51 |
1 |
3 |
27 |
- |
- |
130 |
|
- |
15 |
7 |
- |
- |
31 |
1,324 |
|
16 |
108 |
- |
- |
- |
- |
1,204 |
|
39,828 |
1 |
- |
- |
- |
- |
40,424 |
|
6,589 |
429 |
42 |
430 |
1,543 |
1,413 |
83,285 |
|
76 |
2 |
- |
- |
- |
- |
183 |
|
200 |
- |
- |
- |
- |
- |
200 |
|
902 |
82 |
115 |
45 |
429 |
775 |
3,431 |
|
1,137 |
- |
- |
96 |
403 |
130 |
2,209 |
|
922 |
109 |
107 |
1,208 |
575 |
98 |
4,088 |
|
2 |
- |
- |
- |
- |
- |
1,178 |
|
166 |
21 |
21 |
1,093 |
(2,379) |
530 |
- |
|
51,957 |
824 |
1,336 |
2,916 |
970 |
2,978 |
145,156 |
|
|
|
|
|
|
|
|
|
887 |
- |
- |
- |
- |
2,639 |
77,583 |
|
- |
343 |
- |
- |
- |
- |
343 |
|
- |
- |
- |
- |
2,571 |
- |
2,571 |
|
2,281 |
- |
11 |
1,010 |
- |
- |
3,536 |
|
1 |
28 |
2 |
52 |
- |
- |
272 |
|
1 |
8 |
- |
- |
- |
- |
694 |
|
66 |
15 |
- |
23 |
- |
- |
457 |
|
4 |
- |
1 |
42 |
- |
- |
226 |
|
1,213 |
113 |
165 |
77 |
406 |
59 |
4,433 |
|
200 |
- |
- |
- |
- |
- |
200 |
|
41,378 |
- |
- |
- |
- |
- |
41,471 |
|
1,189 |
- |
- |
- |
372 |
- |
1,863 |
|
- |
- |
- |
- |
- |
- |
1,132 |
|
441 |
2 |
566 |
836 |
(2,379) |
1 |
- |
|
47,661 |
509 |
745 |
2,040 |
970 |
2,699 |
134,781 |
|
4,296 |
315 |
591 |
876 |
- |
279 |
10,375 |
|
|
|
|
|
|
|
|
|
2,381 |
294 |
563 |
430 |
- |
279 |
7,965 |
|
1,915 |
21 |
28 |
446 |
- |
- |
2,410 |
|
1,643 |
21 |
28 |
- |
- |
- |
1,692 |
|
272 |
- |
- |
446 |
- |
- |
718 |
|
|
|
|
|
|
|
|
|
4,296 |
315 |
591 |
876 |
- |
279 |
10,375 |
|
Notes to the consolidated financial statements |
||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
B4: Statement of financial position - segment information at 30 June 2011 |
||||
|
|
|
|
|
£m |
|
|
Notes |
Emerging Markets1 |
Wealth Management |
Total Long-Term Savings |
|
Assets |
|
|
|
|
|
Goodwill and other intangible assets |
|
125 |
1,942 |
2,067 |
|
Mandatory reserve deposits with central banks |
|
- |
- |
- |
|
Property, plant and equipment |
|
403 |
18 |
421 |
|
Investment property |
|
1,884 |
- |
1,884 |
|
Deferred tax assets |
|
83 |
59 |
142 |
|
Investments in associated undertakings and joint ventures |
|
24 |
- |
24 |
|
Deferred acquisition costs |
|
130 |
1,230 |
1,360 |
|
Reinsurers' share of policyholder liabilities |
|
35 |
1,036 |
1,071 |
|
Loans and advances |
|
454 |
195 |
649 |
|
Investments and securities |
|
33,675 |
46,163 |
79,838 |
|
Current tax receivable |
|
11 |
80 |
91 |
|
Client indebtedness for acceptances |
|
- |
- |
- |
|
Trade, other receivables and other assets |
|
994 |
403 |
1,397 |
|
Derivative financial instruments - assets |
|
527 |
- |
527 |
|
Cash and cash equivalents |
|
235 |
543 |
778 |
|
Non-current assets held for sale |
F2 |
- |
5 |
5 |
|
Inter-segment assets |
|
1,189 |
322 |
1,511 |
|
Total assets |
|
39,769 |
51,996 |
91,765 |
|
Liabilities |
|
|
|
|
|
Life assurance policyholder liabilities |
|
34,407 |
47,019 |
81,426 |
|
General insurance liabilities |
|
- |
- |
- |
|
Third-party interests in consolidated funds |
|
- |
- |
- |
|
Borrowed funds |
E1 |
276 |
- |
276 |
|
Provisions |
|
160 |
54 |
214 |
|
Deferred revenue |
|
19 |
743 |
762 |
|
Deferred tax liabilities |
|
248 |
309 |
557 |
|
Current tax payable |
|
104 |
60 |
164 |
|
Trade, other payables and other liabilities |
|
1,913 |
669 |
2,582 |
|
Liabilities under acceptances |
|
- |
- |
- |
|
Amounts owed to bank depositors |
|
74 |
4 |
78 |
|
Derivative financial instruments - liabilities |
|
162 |
1 |
163 |
|
Non-current liabilities held for sale |
F2 |
- |
- |
- |
|
Inter-segment liabilities |
|
163 |
471 |
634 |
|
Total liabilities |
|
37,526 |
49,330 |
86,856 |
|
Net assets |
|
2,243 |
2,666 |
4,909 |
|
Equity |
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
2,242 |
2,666 |
4,908 |
|
Non-controlling interests |
|
1 |
- |
1 |
|
Ordinary shares |
|
1 |
- |
1 |
|
Preferred securities |
|
- |
- |
- |
|
|
|
|
|
|
|
Total equity |
|
2,243 |
2,666 |
4,909 |
|
1 Emerging markets has been restated to reflect the African businesses not previously consolidated (see note A2). |
||||
|
2 Discontinued operations relate to Nordic and US Life (see note A2). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Non-core operations Bermuda |
Discontinued operations2 |
Total |
|
|
|
|
|
|
|
|
|
|
604 |
28 |
1,140 |
13 |
- |
- |
981 |
4,833 |
|
1,073 |
- |
- |
- |
- |
- |
- |
1,073 |
|
537 |
24 |
13 |
2 |
- |
1 |
10 |
1,008 |
|
19 |
- |
- |
- |
351 |
- |
- |
2,254 |
|
21 |
15 |
142 |
- |
- |
- |
83 |
403 |
|
108 |
2 |
8 |
30 |
- |
- |
4 |
176 |
|
1 |
17 |
12 |
- |
- |
98 |
77 |
1,565 |
|
29 |
115 |
- |
- |
- |
- |
15 |
1,230 |
|
43,221 |
2 |
- |
59 |
- |
- |
5,521 |
49,452 |
|
7,180 |
452 |
43 |
231 |
3,326 |
2,052 |
13,851 |
106,973 |
|
57 |
- |
- |
2 |
- |
- |
1 |
151 |
|
254 |
- |
- |
- |
- |
- |
- |
254 |
|
697 |
90 |
149 |
39 |
660 |
959 |
161 |
4,152 |
|
763 |
- |
- |
138 |
331 |
- |
11 |
1,770 |
|
1,081 |
137 |
142 |
781 |
1,028 |
59 |
538 |
4,544 |
|
1 |
- |
- |
- |
- |
- |
- |
6 |
|
227 |
25 |
2 |
982 |
(3,558) |
604 |
207 |
- |
|
55,873 |
907 |
1,651 |
2,277 |
2,138 |
3,773 |
21,460 |
179,844 |
|
|
|
|
|
|
|
|
|
|
848 |
- |
- |
- |
- |
3,281 |
12,465 |
98,020 |
|
- |
386 |
- |
- |
- |
- |
- |
386 |
|
- |
- |
- |
- |
4,711 |
- |
- |
4,711 |
|
2,511 |
- |
10 |
1,698 |
- |
- |
2 |
4,497 |
|
(6) |
30 |
2 |
39 |
- |
- |
(46) |
233 |
|
- |
10 |
- |
- |
- |
- |
2 |
774 |
|
155 |
11 |
- |
25 |
- |
- |
102 |
850 |
|
5 |
2 |
4 |
33 |
- |
1 |
35 |
244 |
|
1,204 |
125 |
179 |
110 |
660 |
19 |
237 |
5,116 |
|
254 |
- |
- |
- |
- |
- |
- |
254 |
|
44,791 |
- |
- |
- |
- |
- |
6,769 |
51,638 |
|
819 |
- |
- |
38 |
325 |
1 |
9 |
1,355 |
|
- |
- |
- |
- |
- |
- |
- |
- |
|
688 |
2 |
573 |
1,661 |
(3,558) |
- |
- |
- |
|
51,269 |
566 |
768 |
3,604 |
2,138 |
3,302 |
19,575 |
168,078 |
|
4,604 |
341 |
883 |
(1,327) |
- |
471 |
1,885 |
11,766 |
|
|
|
|
|
|
|
|
|
|
2,599 |
322 |
854 |
(1,773) |
- |
471 |
1,885 |
9,266 |
|
2,005 |
19 |
29 |
446 |
- |
- |
- |
2,500 |
|
1,734 |
19 |
29 |
- |
- |
- |
- |
1,783 |
|
271 |
- |
- |
446 |
- |
- |
- |
717 |
|
|
|
|
|
|
|
|
|
|
4,604 |
341 |
883 |
(1,327) |
- |
471 |
1,885 |
11,766 |
|
Notes to the consolidated financial statements |
||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
B: Segment information continued |
|
|
|
|
|
B4: Statement of financial position - segment information at 31 December 2011 |
||||
|
|
|
|
|
£m |
|
|
Notes |
Emerging Markets |
Wealth Management |
Total Long-Term Savings |
|
Assets |
|
|
|
|
|
Goodwill and other intangible assets |
|
104 |
1,756 |
1,860 |
|
Mandatory reserve deposits with central banks |
|
- |
- |
- |
|
Property, plant and equipment |
|
374 |
16 |
390 |
|
Investment property |
|
1,666 |
- |
1,666 |
|
Deferred tax assets |
|
81 |
65 |
146 |
|
Investments in associated undertakings and joint ventures |
|
32 |
- |
32 |
|
Deferred acquisition costs |
|
113 |
1,164 |
1,277 |
|
Reinsurers' share of policyholder liabilities |
|
31 |
844 |
875 |
|
Loans and advances |
|
299 |
190 |
489 |
|
Investments and securities |
|
30,064 |
41,508 |
71,572 |
|
Current tax receivable |
|
10 |
70 |
80 |
|
Client indebtedness for acceptances |
|
- |
- |
- |
|
Trade, other receivables and other assets |
|
711 |
310 |
1,021 |
|
Derivative financial instruments - assets |
|
298 |
- |
298 |
|
Cash and cash equivalents |
|
339 |
516 |
855 |
|
Non-current assets held for sale |
F2 |
- |
1,161 |
1,161 |
|
Inter-segment assets |
|
1,025 |
138 |
1,163 |
|
Total assets |
|
35,147 |
47,738 |
82,885 |
|
Liabilities |
|
|
|
|
|
Life assurance policyholder liabilities |
|
30,270 |
42,159 |
72,429 |
|
General insurance liabilities |
|
- |
- |
- |
|
Third-party interests in consolidated funds |
|
- |
- |
- |
|
Borrowed funds |
E1 |
239 |
- |
239 |
|
Provisions |
|
137 |
64 |
201 |
|
Deferred revenue |
|
17 |
673 |
690 |
|
Deferred tax liabilities |
|
185 |
189 |
374 |
|
Current tax payable |
|
120 |
39 |
159 |
|
Trade, other payables and other liabilities |
|
1,667 |
673 |
2,340 |
|
Liabilities under acceptances |
|
- |
- |
- |
|
Amounts owed to bank depositors |
|
- |
- |
- |
|
Derivative financial instruments - liabilities |
|
230 |
- |
230 |
|
Non-current liabilities held for sale |
F2 |
- |
1,120 |
1,120 |
|
Inter-segment liabilities |
|
141 |
462 |
603 |
|
Total liabilities |
|
33,006 |
45,379 |
78,385 |
|
Net assets |
|
2,141 |
2,359 |
4,500 |
|
Equity |
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
2,144 |
2,359 |
4,503 |
|
Non-controlling interests |
|
(3) |
- |
(3) |
|
Ordinary shares |
|
(3) |
- |
(3) |
|
Preferred securities |
|
- |
- |
- |
|
|
|
|
|
|
|
Total equity |
|
2,141 |
2,359 |
4,500 |
|
1 Discontinued operations relate to Nordic and US Life (see note A2). |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Other |
Consolidation adjustments |
Non-core operations Bermuda |
Discontinued operations1 |
Total |
|
|
|
|
|
|
|
|
|
|
557 |
23 |
904 |
13 |
- |
1 |
- |
3,358 |
|
951 |
- |
- |
- |
- |
- |
- |
951 |
|
502 |
21 |
11 |
1 |
- |
- |
- |
925 |
|
49 |
- |
- |
- |
349 |
- |
- |
2,064 |
|
21 |
14 |
165 |
(8) |
- |
1 |
- |
339 |
|
49 |
1 |
2 |
27 |
- |
- |
- |
111 |
|
- |
16 |
9 |
- |
- |
49 |
- |
1,351 |
|
16 |
98 |
- |
- |
- |
- |
- |
989 |
|
39,274 |
1 |
- |
- |
- |
- |
- |
39,764 |
|
6,403 |
416 |
41 |
216 |
874 |
1,731 |
- |
81,253 |
|
56 |
2 |
- |
- |
- |
- |
- |
138 |
|
237 |
- |
- |
- |
- |
- |
- |
237 |
|
943 |
75 |
126 |
54 |
293 |
836 |
- |
3,348 |
|
1,022 |
- |
- |
86 |
388 |
1 |
- |
1,795 |
|
1,071 |
113 |
197 |
467 |
756 |
165 |
- |
3,624 |
|
1 |
- |
16 |
- |
- |
- |
20,960 |
22,138 |
|
206 |
23 |
21 |
1,136 |
(3,155) |
566 |
40 |
- |
|
51,358 |
803 |
1,492 |
1,992 |
(495) |
3,350 |
21,000 |
162,385 |
|
|
|
|
|
|
|
|
|
|
815 |
- |
- |
- |
- |
3,106 |
- |
76,350 |
|
- |
325 |
- |
- |
- |
- |
- |
325 |
|
- |
- |
- |
- |
1,893 |
- |
- |
1,893 |
|
2,273 |
- |
11 |
1,133 |
- |
- |
- |
3,656 |
|
- |
32 |
3 |
33 |
- |
- |
- |
269 |
|
1 |
10 |
- |
- |
- |
- |
- |
701 |
|
93 |
13 |
- |
24 |
- |
- |
- |
504 |
|
10 |
- |
(3) |
32 |
- |
1 |
- |
199 |
|
1,123 |
108 |
219 |
96 |
348 |
9 |
- |
4,243 |
|
237 |
- |
- |
- |
- |
- |
- |
237 |
|
40,978 |
- |
- |
- |
- |
- |
- |
40,978 |
|
1,103 |
- |
- |
3 |
419 |
- |
- |
1,755 |
|
- |
- |
8 |
- |
- |
- |
19,289 |
20,417 |
|
501 |
2 |
598 |
1,451 |
(3,155) |
- |
- |
- |
|
47,134 |
490 |
836 |
2,772 |
(495) |
3,116 |
19,289 |
151,527 |
|
4,224 |
313 |
656 |
(780) |
- |
234 |
1,711 |
10,858 |
|
|
|
|
|
|
|
|
|
|
2,347 |
294 |
625 |
(1,226) |
- |
234 |
1,711 |
8,488 |
|
1,877 |
19 |
31 |
446 |
- |
- |
- |
2,370 |
|
1,605 |
19 |
31 |
- |
- |
- |
- |
1,652 |
|
272 |
- |
- |
446 |
- |
- |
- |
718 |
|
|
|
|
|
|
|
|
|
|
4,224 |
313 |
656 |
(780) |
- |
234 |
1,711 |
10,858 |
Notes to the consolidated financial statements
For the six months ended 30 June 2012
C: Other key performance information
C1: Operating profit adjusting items
(a) Summary of adjusting items
In determining the adjusted operating profit of the Group for core operations certain adjustments are made to profit before tax to reflect the directors' view of the underlying long-term performance of the Group. The following table shows an analysis of those adjustments from adjusted operating profit to profit before and after tax.
|
|
|
£m |
||
|
Six months ended 30 June 2012 |
Notes |
Emerging Markets |
Wealth Management |
Total Long- Term Savings |
|
Income/(expense) |
|
|
|
|
|
Goodwill impairment and impact of acquisition accounting |
C1(b) |
(1) |
(62) |
(63) |
|
Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
- |
- |
- |
|
Short-term fluctuations in investment return |
C1(d) |
(44) |
1 |
(43) |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
C1(e) |
(37) |
- |
(37) |
|
Dividends declared to holders of perpetual preferred callable securities |
C1(f) |
- |
- |
- |
|
Credit-related fair value losses on Group debt instruments |
C1(h) |
- |
- |
- |
|
Total adjusting items |
|
(82) |
(61) |
(143) |
|
Tax on adjusting items |
D1(d) |
6 |
7 |
13 |
|
Non-controlling interest in adjusting items |
|
4 |
- |
4 |
|
Total adjusting items after tax and non-controlling interests |
|
(72) |
(54) |
(126) |
|
|
|
|
|
|
|
|
|
£m |
||
|
Six months ended 30 June 2011¹ |
Notes |
Emerging Markets |
Wealth Management |
Total Long- Term Savings |
|
Income/(expense) |
|
|
|
|
|
Goodwill impairment and impact of acquisition accounting |
C1(b) |
(1) |
(63) |
(64) |
|
Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
249 |
- |
249 |
|
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 gains/(losses) on Group debt instruments |
C1(h) |
- |
- |
- |
|
Total adjusting items |
|
194 |
(77) |
117 |
|
Tax on adjusting items |
D1(d) |
14 |
20 |
34 |
|
Non-controlling interest in adjusting items |
|
- |
- |
- |
|
Total adjusting items after tax and non-controlling interests |
|
208 |
(57) |
151 |
|
1 The results for the six months ended 30 June 2012 have been restated to reflect Nordic as discontinued and non-core and the African businesses not previously consolidated (see note A2). |
||||
|
|
|
£m |
||
|
Year ended 31 December 2011 |
Notes |
Emerging Markets |
Wealth Management |
Total Long- Term Savings |
|
Income/(expense) |
|
|
|
|
|
Goodwill impairment and impact of acquisition accounting |
C1(b) |
(2) |
(127) |
(129) |
|
Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments |
C1(c) |
249 |
- |
249 |
|
Short-term fluctuations in investment return |
C1(d) |
(98) |
(14) |
(112) |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
C1(e) |
(71) |
- |
(71) |
|
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 gains/(losses) on Group debt instruments |
C1(h) |
- |
- |
- |
|
Total adjusting items |
|
78 |
(141) |
(63) |
|
Tax on adjusting items |
D1(d) |
43 |
54 |
97 |
|
Non-controlling interest in adjusting items |
|
5 |
- |
5 |
|
Total adjusting items after tax and non-controlling interests |
|
126 |
(87) |
39 |
|
|
|
||||
|
|
|
||||
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
||||
|
Nedbank |
M&F |
USAM |
Other |
Total |
|
|
|
|
|
|
|
|
|
- |
- |
(1) |
- |
(64) |
|
|
- |
- |
20 |
- |
20 |
|
|
- |
(6) |
- |
- |
(49) |
|
|
- |
- |
- |
- |
(37) |
|
|
- |
- |
- |
22 |
22 |
|
|
- |
- |
- |
(37) |
(37) |
|
|
- |
(6) |
19 |
(15) |
(145) |
|
|
- |
(1) |
(10) |
1 |
3 |
|
|
8 |
1 |
(4) |
- |
9 |
|
|
8 |
(6) |
5 |
(14) |
(133) |
|
|
|
|
|
|
|
|
|
£m |
|
||||
|
Nedbank |
M&F |
USAM |
Other |
Total |
|
|
|
|
|
|
|
|
|
(3) |
- |
(2) |
- |
(69) |
|
|
- |
- |
- |
- |
249 |
|
|
- |
(11) |
- |
(6) |
(54) |
|
|
- |
- |
- |
- |
(31) |
|
|
- |
- |
- |
22 |
22 |
|
|
(4) |
- |
- |
(47) |
(51) |
|
|
(7) |
(11) |
(2) |
(31) |
66 |
|
|
2 |
2 |
1 |
(2) |
37 |
|
|
11 |
1 |
(4) |
- |
8 |
|
|
6 |
(8) |
(5) |
(33) |
111 |
|
|
|
|
|
|
|
|
|
£m |
|
||||
|
Nedbank |
M&F |
USAM |
Other |
Total |
|
|
|
|
|
|
|
|
|
- |
- |
(272) |
- |
(401) |
|
|
- |
- |
2 |
- |
251 |
|
|
- |
(28) |
- |
(31) |
(171) |
|
|
- |
- |
- |
- |
(71) |
|
|
- |
- |
- |
44 |
44 |
|
|
- |
- |
(4) |
- |
(4) |
|
|
(4) |
- |
- |
27 |
23 |
|
|
(4) |
(28) |
(274) |
40 |
(329) |
|
|
1 |
3 |
20 |
(13) |
108 |
|
|
19 |
1 |
(6) |
- |
19 |
|
|
16 |
(24) |
(260) |
27 |
(202) |
|
Notes to the consolidated financial statements
For the six months ended 30 June 2012
C: Other key performance information continued
C1: Operating profit adjusting items continued
(b) Goodwill impairment and impact of acquisition accounting
Acquisition date deferred acquisition costs and deferred revenues 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 and the movements in certain acquisition date provisions. Goodwill impairment and acquisition accounting adjustments to adjusted operating profit are summarised below:
|
|
£m |
||||
|
Six months ended 30 June 2012 |
Emerging Markets |
Wealth Management |
Nedbank |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(43) |
- |
- |
(43) |
|
Amortisation of acquired deferred costs and revenue |
- |
6 |
- |
- |
6 |
|
Amortisation of other acquired intangible assets |
(1) |
(25) |
- |
(1) |
(27) |
|
|
(1) |
(62) |
- |
(1) |
(64) |
|
|
|
|
|
|
|
|
|
£m |
||||
|
Six months ended 30 June 2011¹ |
Emerging Markets |
Wealth Management |
Nedbank |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(46) |
- |
- |
(46) |
|
Amortisation of acquired deferred costs and revenue |
- |
8 |
- |
- |
8 |
|
Amortisation of other acquired intangible assets |
(1) |
(25) |
(3) |
(2) |
(31) |
|
|
(1) |
(63) |
(3) |
(2) |
(69) |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core (see note A2). |
|||||
|
|
£m |
||||
|
Year ended 31 December 2011 |
Emerging Markets |
Wealth Management |
Nedbank |
USAM |
Total |
|
Amortisation of acquired PVIF |
- |
(90) |
- |
- |
(90) |
|
Amortisation of acquired deferred costs and revenue |
- |
13 |
- |
- |
13 |
|
Amortisation of other acquired intangible assets |
(2) |
(50) |
- |
(8) |
(60) |
|
Goodwill impairment |
- |
- |
- |
(264) |
(264) |
|
|
(2) |
(127) |
- |
(272) |
(401) |
|
(c) Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments is analysed below: |
|||
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011¹ |
Year ended 31 December 2011 |
|
Emerging Markets |
- |
249 |
249 |
|
Long-Term Savings |
- |
249 |
249 |
|
USAM |
20 |
- |
2 |
|
Profit on acquisition/disposal of subsidiaries, associated undertakings and strategic investments |
20 |
249 |
251 |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect the African businesses not previously consolidated (see note A2). |
|||
On 13 April 2012 USAM disposed of Old Mutual Capital, Inc, a subsidiary, at a profit of £12 million. On 15 May 2012 USAM disposed of Dwight Asset Management Company LLC, a fixed income affiliate, at a profit of £8 million.
In preparing the consolidated financial statements for the six months ended 30 June 2011 the Emerging Markets segment included the South African and Namibian businesses but excluded all other African businesses. This was consistent with prior periods. Following a period of greater political and currency stability in Zimbabwe and an expectation that the Group would be able to extract benefits from its Zimbabwean business it was consolidated for the first time for the year ended 31 December 2011 together with operations in Kenya, Malawi, Swaziland and Nigeria. Further detail has been provided in note A2.
d) Short-term fluctuations in 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 rates of return appropriate to the underlying asset base, adjusted for current inflation expectations, default assumptions, costs of investment management and consensus economic investment forecasts. The long-term rates of return 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 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.
|
|
|
|
% |
|
Long-term investment rates |
6 months ended 30 June 2012 |
6 months ended 30 June 2011 |
Year ended 31 December 2011 |
|
Emerging Markets |
9.0 |
9.0 |
9.0 |
|
Wealth Management |
1.5-2.1 |
2.0-2.1 |
2.0-2.1 |
|
M&F |
8.6 |
9.0 |
9.0 |
|
Analysis of short-term fluctuations in investment return |
||||||
|
|
£m |
|||||
|
Six months ended 30 June 2012 |
Emerging Markets |
Wealth Management |
Total Long-Term Savings |
M&F |
Other |
Total |
|
Actual shareholder investment return |
19 |
19 |
38 |
18 |
25 |
81 |
|
Less: Long-term investment return |
63 |
18 |
81 |
24 |
25 |
130 |
|
Short-term fluctuations in investment return |
(44) |
1 |
(43) |
(6) |
- |
(49) |
|
|
|
|
|
|
|
|
|
|
£m |
|||||
|
Six months ended 30 June 2011¹ |
Emerging Markets |
Wealth Management |
Total Long- Term Savings |
M&F |
Other |
Total |
|
Actual shareholder investment return |
29 |
22 |
51 |
17 |
12 |
80 |
|
Less: Long-term investment return |
52 |
36 |
88 |
28 |
18 |
134 |
|
Short-term fluctuations in investment return |
(23) |
(14) |
(37) |
(11) |
(6) |
(54) |
|
|
|
|
|
|
|
|
|
|
£m |
|||||
|
Year ended 31 December 2011 |
Emerging Markets |
Wealth Management |
Total Long- Term Savings |
M&F |
Other |
Total |
|
Actual shareholder investment return |
14 |
66 |
80 |
26 |
6 |
112 |
|
Less: Long-term investment return |
112 |
80 |
192 |
54 |
37 |
283 |
|
Short-term fluctuations in investment return |
(98) |
(14) |
(112) |
(28) |
(31) |
(171) |
|
1 The results for the six months ended 30 June 2011 have been restated to reflect Nordic as discontinued and non-core (see note A2). |
||||||
|
2 Wealth Management long term investment return includes £14 million (six months ended 30 June 2011 £28 million; year ended 31 December 2011 £65 million) in respect of income tax attributable to policyholder returns. |
||||||
(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 2012 the investment return adjustment increased adjusted operating profit by £37 million (six months ended 30 June 2011: increase of £31 million; year ended 31 December 2011: increase £71 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 2012 (six months ended 30 June 2011: £22 million year ended 31 December 2011: £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 equity.
(g) US Asset Management equity plans and non-controlling interests
US Asset Management has a number of long-term incentive arrangements with senior employees in 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 loss recognised in the six months ended 30 June 2012 was £4 million (six months ended 30 June 2011: £nil; year ended 31 December 2011: loss £6 million).
The Group has issued put options in equities in the affiliates to senior employees as part of its US affiliate incentive schemes. The impact of revaluing these instruments is recognised in accordance with IFRS, but excluded from adjusted operating profit. At 30 June 2012 these instruments were revalued, the impact of which was a profit of £4 million (six months ended 30 June 2011: £nil; year ended 31 December 2011: profit £10 million).
Notes to the consolidated financial statements
For the six months ended 30 June 2012
C: Other key performance information continued
C1: Operating profit adjusting items continued
(h) Credit-related fair value gains and losses on Group debt instruments
The widening of credit spread of the Group's debt instruments in the market price has resulted in losses in the six months ended 30 June 2012 of £37 million in Other operating segments and £nil in Nedbank (six months ended 30 June 2011: losses of £47 million and £4 million respectively; year ended 31 December 2011: gains of £27 million and losses of £4 million respectively) 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 |
Year ended 31 December 2011 |
|||
|
|
Income Statement (average rate) |
Statement of financial position (closing rate) |
Income Statement (average rate) |
Statement of financial position (closing rate) |
Income Statement (average rate) |
Statement of financial position (closing rate) |
|
Rand |
12.5247 |
12.8401 |
11.1428 |
10.8616 |
11.6445 |
12.5643 |
|
US dollars |
1.5769 |
1.5682 |
1.6165 |
1.6067 |
1.6037 |
1.5553 |
|
Swedish kronor |
10.8030 |
10.8604 |
10.3023 |
10.1564 |
10.4144 |
10.6801 |
|
Euro |
1.2154 |
1.2396 |
1.1513 |
1.1073 |
1.1519 |
1.1970 |
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 year excluding own shares held in policyholder funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 |
|
Profit for the financial period attributable to equity holders of the parent from continuing operations |
336 |
588 |
469 |
|
Profit for the financial period attributable to equity holders of the parent from discontinued operations |
595 |
150 |
198 |
|
Profit for the financial period attributable to equity holders of the parent |
931 |
738 |
667 |
|
Dividends declared to holders of perpetual preferred callable securities |
(17) |
(16) |
(32) |
|
Profit attributable to ordinary equity holders |
914 |
722 |
635 |
|
Total dividends declared to holders of perpetual preferred callable securities of £17 million in 2012 (30 June 2011: £16 million; 31 December 2011: |
|||
|
£32 million) are stated net of tax credits of £5 million (30 June 2011: £6 million; 31 December 2011: £12 million). |
|||
|
|
|
|
Millions |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 |
|
Weighted average number of ordinary shares in issue |
5,303 |
5,470 |
5,502 |
|
Shares held in charitable foundations |
(6) |
(7) |
(6) |
|
Shares held in ESOP trusts |
(66) |
(66) |
(61) |
|
Adjusted weighted average number of ordinary shares |
5,231 |
5,397 |
5,435 |
|
Shares held in life funds |
(193) |
(201) |
(201) |
|
Shares held in Black Economic Empowerment trusts |
(279) |
(299) |
(299) |
|
Weighted average number of ordinary shares |
4,759 |
4,897 |
4,935 |
|
Basic earnings per ordinary share (pence) |
19.2 |
14.7 |
12.9 |
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.
|
|
|
|
|
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 |
|
Profit attributable to ordinary equity holders (£m) |
914 |
722 |
635 |
|
Dilution effect on profit relating to share options issued by subsidiaries (£m) |
(2) |
(3) |
(8) |
|
Diluted profit attributable to ordinary equity holders (£m) |
912 |
719 |
627 |
|
Weighted average number of ordinary shares (millions) |
4,759 |
4,897 |
4,935 |
|
Adjustments for share options held by ESOP trusts (millions) |
106 |
149 |
133 |
|
Adjustments for shares held in Black Economic Empowerment trusts (millions) |
279 |
299 |
299 |
|
|
5,144 |
5,345 |
5,367 |
|
Diluted earnings per ordinary share (pence) |
17.7 |
13.5 |
11.7 |
|
(b) Adjusted operating earnings per ordinary share |
|
|
|
|
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 ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 restated |
|
Profit for the financial period attributable to equity holders of the parent |
931 |
738 |
667 |
|
Adjusting items |
145 |
(66) |
329 |
|
Tax on adjusting items |
(3) |
(37) |
(108) |
|
Non-core operations |
(53) |
(32) |
184 |
|
Profit from discontinued operations |
(595) |
(150) |
(198) |
|
Non-controlling interest on adjusting items |
(9) |
(8) |
(19) |
|
Adjusted operating profit after tax attributable to ordinary equity holders |
416 |
445 |
855 |
|
Adjusted weighted average number of ordinary shares (millions) |
4,806 |
4,722 |
4,756 |
|
Adjusted operating earnings per ordinary share (pence) |
8.7 |
9.4 |
18.0 |
(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 3/2009 'Headline Earnings'. The table below sets out a reconciliation of basic earnings per ordinary share and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS.
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 |
|||
|
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
|
Profit for the financial period attributable to equity holders of the parent |
931 |
931 |
738 |
738 |
667 |
667 |
|
Dividends declared to holders of perpetual preferred callable securities |
(17) |
(17) |
(16) |
(16) |
(32) |
(32) |
|
Profit attributable to ordinary equity holders |
914 |
914 |
722 |
722 |
635 |
635 |
|
Adjustments: |
|
|
|
|
|
|
|
Impairments of goodwill and intangible assets |
- |
- |
- |
- |
264 |
264 |
|
(Profit)/loss on acquisition/disposal of subsidiaries, associated undertakings and strategic investments |
(262) |
(256) |
29 |
29 |
(222) |
(228) |
|
Realised gains (including impairments) on available-for- sale financial assets |
(6) |
(6) |
(167) |
(167) |
(144) |
(144) |
|
Exchange differences realised on disposal |
(350) |
(350) |
24 |
24 |
- |
- |
|
Headline earnings |
296 |
302 |
608 |
608 |
533 |
527 |
|
Weighted average number of ordinary shares |
4,759 |
4,759 |
4,897 |
4,897 |
4,935 |
4,935 |
|
Diluted weighted average number of ordinary shares |
5,144 |
5,144 |
5,345 |
5,345 |
5,367 |
5,367 |
|
Headline earnings per share (pence) |
6.2 |
6.3 |
12.4 |
12.4 |
10.8 |
10.7 |
|
Diluted headline earnings per share (pence) |
5.7 |
5.8 |
11.3 |
11.3 |
9.8 |
9.7 |
|
Notes to the consolidated financial statements |
|
|
|
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
C: Other key performance information continued |
|
|
|
|
C4: Dividends |
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 |
Year ended 31 December 2011 |
|
2010 Final dividend paid - 2.9p per 10p share |
- |
145 |
145 |
|
2011 Interim dividend paid - 1.5p per 10p share |
- |
- |
76 |
|
2011 Final dividend paid - 3.5p per 10p share |
178 |
- |
- |
|
Special dividend - 18.0p per 10p share |
915 |
- |
- |
|
Dividends to ordinary equity holders |
1,093 |
145 |
221 |
|
Dividends declared to holders of perpetual preferred callable securities |
22 |
22 |
44 |
|
Dividend payments for the period |
1,115 |
167 |
265 |
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 2012 £22 million was declared and paid to holders of perpetual preferred callable securities (March 2011: £22 million; November 2011: £22 million).
Following the disposal of Nordic a special dividend of 18.0 pence per 10p share was recommended by the directors and a seven for eight share consolidation proposed, with the consolidation approved at the Company's general meeting on 14 March 2012. The special dividend was paid on 7 June 2012. Further details of the disposal of the Nordic business unit have been provided in notes A2 and F1.
An interim dividend of 1.75 pence (or its equivalent in other applicable currencies) per ordinary share in the Company has been recommended by the directors. This interim dividend will be paid on 30 November 2012 to shareholders on the register at the close of business on 26 October 2012. The dividend will absorb an estimated £77 million of shareholders' funds. The Company is not planning to offer a scrip dividend alternative.
|
D: Other income statement notes |
|
|
|
|
D1: Income tax expense |
|
|
|
|
|
|
|
|
|
(a) Analysis of total income tax expense |
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 |
|
Current tax |
|
|
|
|
United Kingdom tax |
6 |
17 |
22 |
|
Overseas tax |
|
|
|
|
South Africa |
208 |
155 |
390 |
|
United States |
- |
2 |
(2) |
|
Europe |
8 |
12 |
20 |
|
Secondary Tax on Companies (STC) |
20 |
9 |
14 |
|
Prior year adjustments |
2 |
(26) |
(7) |
|
Total current tax |
244 |
169 |
437 |
|
Deferred tax |
|
|
|
|
Origination and reversal of temporary differences |
(3) |
13 |
(204) |
|
Changes in tax rates/bases |
- |
(5) |
(8) |
|
Recognition of deferred tax assets |
- |
1 |
- |
|
Total deferred tax |
(3) |
9 |
(212) |
|
Total income tax expense |
241 |
178 |
225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Reconciliation of total income tax expense |
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 |
|
Profit before tax |
733 |
909 |
994 |
|
Tax at standard rate of 24.5% (2011: 26.5%) |
180 |
242 |
263 |
|
Different tax rate or basis on overseas operations |
27 |
3 |
57 |
|
Untaxed and low taxed income |
(47) |
(98) |
(166) |
|
Disallowable expenses |
11 |
6 |
93 |
|
Net movement on deferred tax assets not recognised |
22 |
21 |
5 |
|
Effect on deferred tax of changes in tax rates |
2 |
(3) |
(8) |
|
STC |
18 |
14 |
19 |
|
Income tax attributable to policyholder returns |
28 |
17 |
(28) |
|
Other |
- |
(3) |
(10) |
|
Prior period adjustments |
- |
(21) |
- |
|
Total income tax expense |
241 |
178 |
225 |
|
|
|
|
|
|
|
|
|
|
|
(c) Income tax relating to components of other comprehensive income |
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 |
Year ended 31 December 2011 |
|
Preferred perpetual callable securities |
(5) |
(6) |
(12) |
|
Income tax credit - continuing operations |
(5) |
(6) |
(12) |
|
Fair value gains |
1 |
1 |
2 |
|
Shadow accounting |
- |
(4) |
(4) |
|
Income tax expense/(credit) - discontinued operations |
1 |
(3) |
(2) |
|
Income tax credit relating to components of other comprehensive income |
(4) |
(9) |
(14) |
|
|
|
|
|
|
|
|
|
|
|
(d) Income tax on adjusted operating profit |
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 restated |
Year ended 31 December 2011 |
|
Income tax expense |
241 |
178 |
225 |
|
Tax on adjusting items |
|
|
|
|
Goodwill impairment and impact of acquisition accounting |
13 |
17 |
35 |
|
Profit on disposal of subsidiaries, associated undertakings and strategic investments |
(8) |
- |
6 |
|
Short-term fluctuations in investment return |
7 |
25 |
75 |
|
Income tax attributable to policyholders returns |
(34) |
(24) |
9 |
|
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity |
(5) |
(6) |
(12) |
|
Fair value gains and losses on Group debt instruments |
- |
1 |
2 |
|
US Asset Management equity plans |
(2) |
- |
2 |
|
Tax on dividends received in trusts |
(2) |
- |
- |
|
Tax on non-core operations |
- |
(2) |
(1) |
|
Income tax on adjusted operating profit |
210 |
189 |
341 |
|
Notes to the consolidated financial statements |
||||||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E: Borrowed funds |
||||||||
|
E1: Borrowed funds |
||||||||
|
|
|
|
|
|
|
|
|
£m |
|
|
|
Group Excluding Nedbank |
Nedbank |
At 30 June 2012 Group |
|
Group Excluding Nedbank |
Nedbank |
At 30 June 2011 Group |
|
Senior debt securities and term loans |
|
507 |
1,427 |
1,934 |
|
539 |
1,464 |
2,003 |
|
Floating Rate Notes |
|
- |
926 |
926 |
|
31 |
873 |
904 |
|
Fixed Rate Notes |
|
507 |
501 |
1,008 |
|
506 |
591 |
1,097 |
|
Term loan and other loans |
|
- |
- |
- |
|
2 |
- |
2 |
|
Mortgage Backed Securities |
|
- |
70 |
70 |
|
- |
97 |
97 |
|
Subordinated debt securities (net of Group holdings) |
|
747 |
785 |
1,532 |
|
1,447 |
950 |
2,397 |
|
Borrowed funds |
|
1,254 |
2,282 |
3,536 |
|
1,986 |
2,511 |
4,497 |
|
Other issues treated as equity for accounting purposes |
|
|
|
|
|
|
|
|
|
US$750 million cumulative preference securities |
|
458 |
|
|
|
458 |
|
|
|
€500 million perpetual preferred callable securities |
|
338 |
|
|
|
338 |
|
|
|
£350 million perpetual preferred callable securities |
|
350 |
|
|
|
350 |
|
|
|
Total: Book value |
|
2,400 |
|
|
|
3,132 |
|
|
|
Nominal value of the above |
|
2,476 |
|
|
|
3,277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
|
|
|
|
|
Group Excluding Nedbank |
Nedbank |
At 31 December 2011 Group |
|
Senior debt securities and term loans |
|
|
|
|
|
507 |
1,355 |
1,862 |
|
Floating Rate Notes |
|
|
|
|
|
- |
844 |
844 |
|
Fixed Rate Notes |
|
|
|
|
|
507 |
511 |
1,018 |
|
Mortgage Backed Securities |
|
|
|
|
|
- |
77 |
77 |
|
Subordinated debt securities (net of Group holdings) |
|
|
|
|
|
876 |
841 |
1,717 |
|
Borrowed funds |
|
|
|
|
|
1,383 |
2,273 |
3,656 |
|
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 |
|
|
|
|
|
2,529 |
|
|
|
Nominal value of the above |
|
|
|
|
|
2,666 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior notes |
|
|
|
|
|
(a) Floating Rate Notes |
|
|
|
|
|
|
|
|
|
£m |
|
|
At 30 June 2012 |
At 30 June 2011 |
At 31 December 2011 |
Maturity date |
|
Nedbank |
|
|
|
|
|
R1,690 million unsecured senior debt at 3 month JIBAR + 1.5% |
81 |
147 |
119 |
September 2012 |
|
R1,044 million unsecured senior debt at JIBAR + 2.20% |
82 |
97 |
84 |
September 2015 |
|
R1,750 million unsecured senior debt at inflation linked (3.9% real yield) |
158 |
176 |
158 |
March 2013 |
|
R98 million unsecured senior debt at inflation linked (3.8% real yield) |
9 |
10 |
9 |
March 2013 |
|
R1,552 million unsecured senior debt at JIBAR + 1.48% |
123 |
145 |
125 |
April 2013 |
|
R1,027 million unsecured senior debt at JIBAR + 1.75% |
81 |
96 |
83 |
April 2015 |
|
R80 million unsecured senior debt at JIBAR + 2.15% |
6 |
7 |
6 |
April 2020 |
|
R988 million unsecured senior debt at JIBAR + 1.05% |
75 |
86 |
79 |
March 2014 |
|
R677 million unsecured senior debt at JIBAR + 1.25% |
53 |
62 |
54 |
March 2016 |
|
R500 million unsecured senior debt at JIBAR + 1% |
39 |
47 |
40 |
April 2014 |
|
R1,075 million unsecured senior debt at JIBAR + 0.94% |
85 |
- |
87 |
October 2014 |
|
R1,297 million unsecured senior debt at JIBAR + 1% |
102 |
- |
- |
February 2015 |
|
R405 million unsecured senior debt at JIBAR + 1.3% |
32 |
- |
- |
February 2017 |
|
|
926 |
873 |
844 |
|
|
Group excluding Nedbank |
|
|
|
|
|
US$50 million at 3 month LIBOR plus 0.5% |
- |
31 |
- |
Repaid |
|
|
- |
31 |
- |
|
|
Total floating rate notes |
926 |
904 |
844 |
|
|
|
|
|
|
|
|
All floating rate notes are non-qualifying for the purposes of regulatory tiers of capital. |
||||
|
|
|
|
|
|
|
(b) Fixed Rate Notes |
|
|
|
|
|
|
|
|
|
£m |
|
|
At 30 June 2012 |
At 30 June 2011 |
At 31 December 2011 |
Maturity date |
|
Nedbank |
|
|
|
|
|
R660 million unsecured senior debt at zero coupon |
15 |
15 |
14 |
October 2024 |
|
R3,244 million unsecured senior debt at 10.55% |
260 |
308 |
265 |
September 2015 |
|
R762 million unsecured senior debt at 11.39% |
61 |
73 |
63 |
September 2019 |
|
R478 million unsecured senior debt at R157 + 1.75% |
38 |
45 |
39 |
April 2015 |
|
R450 million unsecured senior debt at R206 + 1.28% |
36 |
42 |
37 |
March 2014 |
|
R1,137 million unsecured senior debt at R157 + 1.5% |
91 |
108 |
93 |
March 2016 |
|
|
501 |
591 |
511 |
|
|
Group excluding Nedbank |
|
|
|
|
|
£500 million euro bond at 7.125% |
496 |
496 |
496 |
October 2016 |
|
US$16.5 million secured senior debt at 5.23% |
11 |
10 |
11 |
August 2014 |
|
|
507 |
506 |
507 |
|
|
Total fixed rate notes |
1,008 |
1,097 |
1,018 |
|
All fixed rate notes are non-qualifying for the purposes of regulatory tiers of capital.
(c) Revolving credit facilities and irrevocable letters of credit
The Group has access to a £1,200 million five-year multi-currency revolving credit facility (agreed in April 2011). At 30 June 2012 £nil (30 June 2011: £nil, 31 December 2011: £nil) of this facility was utilised in the form of drawn debt and there is £168 million (30 June 2011: £174 million, 31 December 2011: £160 million) in the form of an undrawn irrevocable letter of credit.
|
Notes to the consolidated financial statements |
|||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
E: Borrowed funds |
|
|
|
|
|
|
E1: Borrowed funds continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) Mortgage backed securities - Nedbank |
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
At 30 June 2012 |
At 30 June 2011 |
At 31 December 2011 |
Tier |
Maturity date |
|
Nedbank |
|
|
|
|
|
|
R1.4 billion (class A2A) at 11.817% |
60 |
85 |
67 |
Tier 2 |
November 2039 |
|
R98 million (class B note) at 12.067% |
6 |
7 |
6 |
Tier 2 |
November 2039 |
|
R76 million (class 3 note) at 13.317% |
4 |
5 |
4 |
Tier 2 |
November 2039 |
|
Total mortgage backed securities |
70 |
97 |
77 |
|
|
|
(e) Subordinated debt securities (net of Group holdings) |
||||||
|
|
|
|
|
|
|
£m |
|
|
At 30 June 2012 |
At 30 June 2011 |
At 31 December 2011 |
Tier |
First call date |
Maturity date |
|
Nedbank |
|
|
|
|
|
|
|
R1.8 billion (9.84%) |
150 |
175 |
153 |
Tier 2 |
September 2013 |
September 2018 |
|
R650 million (9.03%) |
- |
63 |
54 |
Tier 2 |
- |
Repaid |
|
R1.7 billion (8.9%) |
143 |
165 |
144 |
Tier 2 |
February 2014 |
February 2019 |
|
R2.0 billion (3 month JIBAR plus 0.47%) |
157 |
187 |
161 |
Tier 2 |
July 2017 |
July 2022 |
|
R500 million (3 month JIBAR plus 0.45%) |
39 |
46 |
40 |
Tier 2 |
August 2012 |
August 2012 |
|
R1.0 billion (10.54%) |
86 |
98 |
87 |
Tier 2 |
September 2015 |
September 2020 |
|
R500 million (3 month JIBAR plus 0.70%) |
39 |
46 |
40 |
Tier 2 |
December 2012 |
December 2017 |
|
R120 million (10.38%) |
10 |
11 |
10 |
Tier 2 |
December 2012 |
December 2017 |
|
R487 million (15.05%) |
43 |
48 |
42 |
Tier 2 |
November 2018 |
November 2018 |
|
R1,265 million (JIBAR plus 4.75%) |
100 |
118 |
102 |
Non-core Tier 1 |
November 2018 |
November 2018 |
|
R300 million (JIBAR + 2.5%) |
12 |
14 |
12 |
Non-core Tier 1 |
December 2013 |
December 2013 |
|
US$100 million (3 month USD LIBOR) |
64 |
63 |
65 |
Tier 2 Secondary |
March 2017 |
March 2022 |
|
|
843 |
1,034 |
910 |
|
|
|
|
Less: banking subordinated debt securities held by other Group companies |
(58) |
(84) |
(69) |
|
|
|
|
Banking subordinated debt securities (net of Group holdings) |
785 |
950 |
841 |
|
|
|
|
Group excluding Nedbank |
|
|
|
|
|
|
|
R3.0 billion (8.9% to October 2015, 3 month JIBAR plus 1.59% thereafter) |
234 |
276 |
239 |
Lower Tier 2 |
October 2015 |
October 2020 |
|
€200 million (2010: €750 million) (4.5% to January 2012 and 6 month EURIBOR plus 0.96 thereafter)1 |
- |
671 |
166 |
Lower Tier 2 |
- |
Repaid |
|
£500 million (8.0%)2 |
513 |
500 |
471 |
Lower Tier 2 |
- |
June 2021 |
|
|
747 |
1,447 |
876 |
|
|
|
|
Total subordinated debt securities |
1,532 |
2,397 |
1,717 |
|
|
|
|
1The principal and coupon on the bond were swapped at issue equally into Sterling and US dollars with coupons of 6 month GBP LIBOR plus 0.34% and 6 month USD LIBOR plus 0.31% respectively. During 2011 a €550 million partial repayment, together with settlements of associated currency swaps, was made. On 18 January 2012 the remaining €200 million was repaid on the first call date. |
||||||
|
2The principal and coupon on the bond were initially swapped into floating rate Swedish Kroner, at 3 month STIBOR plus 5.46%. Following the Nordic sale, £375 million of the coupon is now swapped into floating rate sterling at 6 month GBP LIBOR plus 4.15% and £125 million of principal and coupon is swapped into US dollars at 6 month USD LIBOR plus 5.49%. |
||||||
F: Discontinued operations and disposal groups held for sale
F1: Discontinued operations
The results of the Group's Swedish, Danish and Norwegian life businesses, collectively Nordic, and United States life business, US Life, are shown as discontinued operations in these financial statements. The disposal of Nordic was completed on 21 March 2012 following shareholder and regulatory approval, and has been reported up until that date. The disposal of US Life was completed on 7 April 2011 following regulatory approval, and has been reported up until that date. Further detail is provided in note A2.
|
(a) Income statement from discontinued operations |
|||||||||
|
|
|
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 |
Year ended 31 December 2011 |
||||||
|
|
Nordic |
US Life |
Total |
Nordic |
US Life |
Total |
Nordic |
US Life |
Total |
|
Revenue |
842 |
- |
842 |
(57) |
342 |
285 |
(421) |
342 |
(79) |
|
Expenses |
(831) |
- |
(831) |
104 |
(330) |
(226) |
541 |
(330) |
211 |
|
Profit before tax from discontinued operations |
11 |
- |
11 |
47 |
12 |
59 |
120 |
12 |
132 |
|
Profit/(loss) on disposal1 |
242 |
- |
242 |
- |
(29) |
(29) |
- |
(29) |
(29) |
|
Realised available-for-sale investment gains and exchange differences on disposal1 |
350 |
- |
350 |
- |
133 |
133 |
- |
133 |
133 |
|
Profit before tax |
603 |
- |
603 |
47 |
116 |
163 |
120 |
116 |
236 |
|
Income tax (charge)/credit |
(8) |
- |
(8) |
(27) |
14 |
(13) |
(52) |
14 |
(38) |
|
Profit from discontinued operations after tax |
595 |
- |
595 |
20 |
130 |
150 |
68 |
130 |
198 |
|
1Cumulative foreign exchange translation gains of £350 million previously included in equity translation reserves are realised on the disposal of the Nordic business. Net investment currency hedge losses of £102 million also previously included in equity translation reserves have been included in the profit on disposal. |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(b) Statement of comprehensive income from discontinued operations |
|||||||||
|
|
|
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 |
Year ended 31 December 2011 |
||||||
|
|
Nordic |
US Life |
Total |
Nordic |
US Life |
Total |
Nordic |
US Life |
Total |
|
Profit from discontinued operations after tax |
595 |
- |
595 |
20 |
130 |
150 |
68 |
130 |
198 |
|
Other comprehensive income for the financial period |
|
|
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
|
|
|
|
|
|
|
|
|
Available-for-sale investments |
|
|
|
|
|
|
|
|
|
|
Fair value gains |
4 |
- |
4 |
2 |
48 |
50 |
3 |
48 |
51 |
|
Recycled to the income statement |
- |
- |
- |
- |
(5) |
(5) |
- |
(5) |
(5) |
|
Realised on disposal |
- |
- |
- |
- |
(157) |
(157) |
- |
(157) |
(157) |
|
Exchange differences realised on disposal |
(350) |
- |
(350) |
- |
24 |
24 |
- |
24 |
24 |
|
Shadow accounting |
- |
- |
- |
- |
(43) |
(43) |
- |
(43) |
(43) |
|
Currency translation differences/exchange differences on translating foreign operations |
2 |
- |
2 |
49 |
- |
49 |
(43) |
- |
(43) |
|
Other movements |
(3) |
- |
(3) |
1 |
- |
1 |
10 |
- |
10 |
|
Aggregate tax on transfers from equity |
(1) |
- |
(1) |
- |
3 |
3 |
(1) |
3 |
2 |
|
Total other comprehensive (loss)/income from discontinued operations |
(348) |
- |
(348) |
52 |
(130) |
(78) |
(31) |
(130) |
(161) |
|
Total comprehensive income for the financial period from discontinued operations |
247 |
- |
247 |
72 |
- |
72 |
37 |
- |
37 |
|
Attributable to |
|
|
|
|
|
|
|
|
|
|
Equity holders of the parent |
247 |
- |
247 |
72 |
- |
72 |
37 |
- |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the consolidated financial statements |
|||||||||
|
For the six months ended 30 June 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Net cash flows from discontinued operations |
|||||||||
|
|
|
|
|
|
|
|
|
|
£m |
|
|
6 months ended 30 June 2012 |
6 months ended 30 June 2011 |
Year ended 31 December 2011 |
||||||
|
|
Nordic |
US Life |
Total |
Nordic |
US Life |
Total |
Nordic |
US Life |
Total |
|
Operating activities |
(8) |
- |
(8) |
1,229 |
2 |
1,231 |
1,609 |
2 |
1,611 |
|
Investing activities |
(121) |
- |
(121) |
(876) |
146 |
(730) |
(1,411) |
146 |
(1,265) |
|
Net cash flows from discontinuing operations |
(129) |
- |
(129) |
353 |
148 |
501 |
198 |
148 |
346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F2: Disposal group held for sale |
|
|
(a) Statement of financial position |
|
|
|
£m |
|
At 30 June 2012 |
Finnish Branch |
|
Assets |
|
|
Goodwill and other intangible assets |
67 |
|
Deferred acquisition costs |
43 |
|
Investments and securities |
1,058 |
|
Other assets |
3 |
|
Cash and balances with central banks |
1 |
|
Total assets |
1,172 |
|
Liabilities |
|
|
Long-term business policyholder liabilities |
1,057 |
|
Provisions |
3 |
|
Deferred revenue |
54 |
|
Deferred tax liabilities |
15 |
|
Other liabilities |
3 |
|
Total liabilities |
1,132 |
|
|
|
|
In addition to the disposal groups held for sale, the Group had additional non-current assets held for sale of £6 million (June 2011: £6 million; December 2011: £22 million) and non-current liabilities of £nil (June 2011: £nil; December 2011 £9 million) |
|
|
|
|
|
(b) Equity attributable to equity holders of the parent directly associated with disposal group held for sale |
|
|
|
£m |
|
At 30 June 2012 |
Finnish Branch |
|
Retained earnings |
40 |
|
|
40 |
|
|
|
At 31 December 2011 the assets and liabilities of the Group's Nordic business were shown as held for sale in the financial statements, being £20,960 million and £19,289 million respectively. At 31 December 2011 the assets and liabilities of the Group's Finnish branch were also shown as held for sale in the financial statements, being £1,156 million and £1,119 million respectively.
G: Other notes
G1: 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 intended to establish certain internal reinsurance arrangements, which were subject to regulatory approval. In the event that regulatory approval is not forth coming, there is potential for a reduction to the purchase price, of up to a maximum of US$50 million. On 9 July 2012, Harbinger formally filed a legal claim against the Group for the payment of a purchase price adjustment of US$50 million. In view of the ongoing uncertainty and the current assessment of this matter, the Group has not raised a provision against this exposure.
§ On 3 August 2012, the Group received formal notification of a number of claims from Harbinger under the warranty terms included in the sale agreement. This notification is consistent with the final date for submission of such claims of 6 August 2012. The Group has purchased insurance protection in respect of such warranty claims and is in the process of assessing the merit of each claim.
§ 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 $265 million letter of credit to back these redundant reserves. In the event that this letter of credit is drawn upon, Harbinger is obligated to fully reimburse Old Mutual plc.
G2: Events after the reporting date
The Group routinely reviews events occurring after the reporting date but prior to the announcement date. Since 30 June 2012, the following events have occurred:
(a) Debt repurchase
Following a tender issued by the Group on 19 July 2012, £388 million of the £500 million Senior Eurobond (7.125%) fixed rate note was repurchased on 1 August 2012. The cost of the repurchase was £459 million.
(b) Recapitalisation of OM Bermuda
New Bermudan regulatory requirements were issued late in 2011, to be enacted for the 31 December 2011 filing. Following discussions with the Bermudan monetary authority, the Group has clarified how the requirements are to be applied in order to implement these in the local filing which was submitted on 31 July 2012. In order to address these, the Group allocated US$571 million of capital to its Bermuda business. Further details of the impact of the regulatory changes and the capital allocated are included in the Finance Director's review.
This information is provided by RNS
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