Interim Results - Part 2 (IFR
Consolidated income statement
For the six months ended 30 June 2009
|
£m |
|||||
|
|
Notes |
6 months |
6 months ended 30 June 2008 Restated* |
Year ended 31 December 2008 |
|
|
Revenue |
|||||
|
Gross earned premiums |
3(iii) |
1,817 |
2,861 |
5,156 |
|
|
Outward reinsurance |
|
(180) |
(164) |
(335) |
|
|
Net earned premiums |
|
1,637 |
2,697 |
4,821 |
|
|
Investment return (non-banking) |
|
1,553 |
(4,074) |
(11,578) |
|
|
Banking interest and similar income |
|
2,112 |
1,894 |
4,059 |
|
|
Banking trading, investment and similar income |
|
73 |
70 |
162 |
|
|
Fee and commission income, and income from service activities |
|
1,119 |
1,189 |
2,313 |
|
|
Other income |
|
61 |
190 |
270 |
|
|
Total revenues |
6,555 |
1,966 |
47 |
||
|
Expenses |
|||||
|
Claims and benefits (including change in insurance contract provisions) |
(1,377) |
(2,023) |
(3,610) |
||
|
Reinsurance recoveries |
176 |
149 |
262 |
||
|
Net claims and benefits incurred |
(1,201) |
(1,874) |
(3,348) |
||
|
Change in investment contract liabilities |
(1,142) |
3,842 |
10,051 |
||
|
Losses on loans and advances |
(253) |
(126) |
(319) |
||
|
Finance costs |
|
(19) |
(9) |
392 |
|
|
Banking interest payable and similar expenses |
|
(1,437) |
(1,302) |
(2,853) |
|
|
Fee and commission expenses, and other acquisition costs |
|
(406) |
(389) |
(937) |
|
|
Other operating and administrative expenses |
|
(1,446) |
(1,349) |
(2,834) |
|
|
Goodwill impairment |
4(ii) |
- |
- |
(74) |
|
|
Change in third party interest in consolidated funds |
|
(282) |
210 |
779 |
|
|
Amortisation of PVIF and other acquired intangibles |
4(ii) |
(164) |
(176) |
(361) |
|
|
Total expenses |
(6,350) |
(1,173) |
496 |
||
|
|
|
|
|
||
|
Share of associated undertakings' loss after tax |
|
- |
(2) |
(1) |
|
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
4(iii) |
(45) |
62 |
53 |
|
|
Profit before tax |
160 |
853 |
595 |
||
|
Income tax (expense)/credit |
5(i) |
(133) |
(168) |
88 |
|
|
Profit after tax for the financial period |
27 |
685 |
683 |
||
|
(Loss)/profit for the financial period attributable to: |
|||||
|
Equity holders of the parent |
(70) |
549 |
441 |
||
|
Non-controlling interests |
|||||
|
Ordinary shares |
|
63 |
110 |
188 |
|
|
Preferred securities |
|
34 |
26 |
54 |
|
|
Profit after tax for the financial period |
27 |
685 |
683 |
||
|
(Loss)/earnings per share |
|||||
|
Basic (loss)/earnings per ordinary share (pence) |
6(i) |
(1.8) |
11.2 |
8.6 |
|
|
Diluted (loss)/earnings per ordinary share (pence) |
6(i) |
(1.7) |
10.5 |
8.1 |
|
|
Weighted average number of shares - millions |
4,757 |
4,771 |
4,755 |
||
* Interim 2008 results have been restated to include Mutual & Federal as a continuing operation.
Consolidated statement of comprehensive income
For the six months ended 30 June 2009
|
£m |
||||
|
|
|
6 months |
6 months |
Year ended 31 December 2008 |
|
Profit after tax for the financial period |
|
27 |
685 |
683 |
|
Other comprehensive income |
|
|
|
|
|
Fair value gains/(losses): |
|
|
|
|
|
Property revaluation |
|
2 |
6 |
16 |
|
Net investment hedge |
|
2 |
5 |
281 |
|
Available-for-sale investments: |
|
|
|
|
|
Fair value gains/(losses) |
|
453 |
(528) |
(1,635) |
|
Recycled to the income statement |
|
117 |
85 |
414 |
|
Shadow accounting |
|
(63) |
227 |
26 |
|
Currency translation differences/exchange differences on translating foreign operations |
|
(248) |
(269) |
429 |
|
Other movements |
|
47 |
(14) |
68 |
|
Income tax relating to components of other comprehensive income |
(149) |
67 |
366 |
|
|
Total comprehensive income |
188 |
264 |
648 |
|
|
|
||||
|
Equity holders of the parent |
1 |
245 |
305 |
|
|
Non-controlling interests |
||||
|
Ordinary shares |
|
151 |
(7) |
299 |
|
Preferred securities |
|
36 |
26 |
44 |
|
Total comprehensive income |
188 |
264 |
648 |
|
Reconciliation of adjusted operating profit to profit after tax
For the six months ended 30 June 2009
|
£m |
||||
|
|
Notes |
6 months |
6 months ended 30 June 2008 Restated* |
Year ended 31 December 2008 |
|
Long Term Savings |
3(ii) |
317 |
420 |
452 |
|
Nedbank |
3(ii) |
211 |
337 |
575 |
|
M&F |
3(ii) |
20 |
28 |
76 |
|
USAM |
3(ii) |
30 |
70 |
97 |
|
Bermuda |
3(ii) |
4 |
(47) |
(137) |
|
|
582 |
808 |
1,063 |
|
|
Finance costs |
(47) |
(71) |
(140) |
|
|
Long term investment return on excess assets |
46 |
53 |
108 |
|
|
Other shareholders' expenses |
(43) |
(17) |
(32) |
|
|
Adjusted operating profit before tax |
538 |
773 |
999 |
|
|
Adjusting items |
4(i) |
(403) |
146 |
(168) |
|
Profit for the financial period before tax (excluding policyholder tax) |
135 |
919 |
831 |
|
|
Income tax attributable to policyholder returns |
3(ii) |
25 |
(66) |
(236) |
|
Profit for the financial period before tax |
|
160 |
853 |
595 |
|
Total income tax (expense)/credit |
5(i) |
(133) |
(168) |
88 |
|
Profit after tax for the financial period |
27 |
685 |
683 |
|
* Interim 2008 results have been restated to include Mutual & Federal as a continuing operation
Adjusted operating profit after tax attributable to ordinary equity holders
|
£m |
||||
|
|
Notes |
6 months |
6 months |
Year ended 31 December 2008 |
|
Adjusted operating profit before tax |
538 |
773 |
999 |
|
|
Tax on adjusted operating profit |
5(iii) |
(149) |
(220) |
(86) |
|
Adjusted operating profit after tax |
389 |
553 |
913 |
|
|
Non-controlling interest - ordinary shares |
|
(72) |
(122) |
(218) |
|
Non-controlling interest - preferred securities |
|
(34) |
(26) |
(54) |
|
Adjusted operating profit after tax attributable to ordinary equity holders |
283 |
405 |
641 |
|
|
Adjusted weighted average number of shares (millions) |
6(i) |
5,232 |
5,245 |
5,230 |
|
Adjusted operating earnings per share (pence) |
6(ii) |
5.4 |
7.7 |
12.2 |
* Interim 2008 results have been restated to include Mutual & Federal as a continuing operation
Basis of preparation
The reconciliation of adjusted operating profit to profit after tax 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 long-term business and general insurance businesses, adjusted operating profit is based on a long-term investment return, includes investment returns on life funds' investments in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For the US Asset Management business it includes compensation costs in respect of certain long-term incentive schemes defined as non-controlling interests in accordance with IFRS. For all businesses, adjusted operating profit excludes goodwill impairment, the impact of acquisition accounting, revaluations of put options related to long-term incentive schemes, the impact of closure of unclaimed shares trusts, profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments, dividends declared to holders of perpetual preferred callable securities, and fair value profits/(losses) on certain Group debt movements.
Adjusted operating earnings per ordinary share is calculated on the same basis as adjusted operating profit. It is stated after tax attributable to adjusted operating profit and non-controlling interests. It excludes income attributable to Black Economic Empowerment trusts of listed subsidiaries. The calculation of the adjusted weighted average number of shares includes own shares held in policyholders' funds and Black Economic Empowerment trusts.
Consolidated statement of financial position
At 30 June 2009
|
£m |
||||
|
|
Notes |
At 30 June |
At 30 June |
At 31 December |
|
Assets |
||||
|
Goodwill and other intangible assets |
|
5,397 |
5,453 |
5,882 |
|
Mandatory reserve deposits with central banks |
|
856 |
610 |
734 |
|
Property, plant and equipment |
|
763 |
549 |
682 |
|
Investment property |
|
1,578 |
1,265 |
1,478 |
|
Deferred tax assets |
|
1,434 |
764 |
1,590 |
|
Investments in associated undertakings and joint ventures |
|
115 |
69 |
111 |
|
Deferred acquisition costs |
|
2,933 |
2,728 |
3,199 |
|
Reinsurers' share of long-term business policyholder liabilities |
|
1,162 |
1,411 |
1,148 |
|
Reinsurers' share of general insurance liabilities |
|
130 |
- |
115 |
|
Deposits held with reinsurers |
|
137 |
185 |
164 |
|
Loans and advances |
|
37,835 |
29,890 |
35,745 |
|
Investments and securities |
|
84,493 |
83,789 |
83,522 |
|
Current tax receivable |
|
149 |
47 |
118 |
|
Client indebtedness for acceptances |
|
146 |
201 |
220 |
|
Other assets |
|
3,229 |
3,244 |
3,137 |
|
Derivative financial instruments - assets |
|
2,486 |
3,149 |
3,228 |
|
Cash and cash equivalents |
|
2,672 |
3,129 |
2,862 |
|
Non-current assets held-for-sale |
|
- |
571 |
7 |
|
Total assets |
|
145,515 |
137,054 |
143,942 |
|
Liabilities |
||||
|
Long-term business policyholder liabilities |
|
80,801 |
78,954 |
81,269 |
|
General insurance liabilities |
|
403 |
- |
344 |
|
Third party interests in consolidated funds |
|
2,610 |
2,674 |
2,591 |
|
Borrowed funds |
8 |
2,515 |
2,236 |
2,295 |
|
Provisions |
|
409 |
429 |
477 |
|
Deferred revenue |
|
604 |
521 |
598 |
|
Deferred tax liabilities |
|
1,466 |
1,389 |
1,452 |
|
Current tax payable |
|
195 |
206 |
219 |
|
Other liabilities |
|
3,947 |
5,622 |
3,733 |
|
Liabilities under acceptances |
|
146 |
201 |
220 |
|
Amounts owed to bank depositors |
|
40,590 |
32,033 |
38,171 |
|
Derivative financial instruments - liabilities |
|
2,109 |
3,062 |
2,990 |
|
Non-current liabilities held-for-sale |
|
- |
373 |
6 |
|
Total liabilities |
|
135,795 |
127,700 |
134,365 |
|
Net assets |
|
9,720 |
9,354 |
9,577 |
|
Shareholders' equity |
||||
|
Equity attributable to equity holders of the parent |
7,731 |
7,802 |
7,737 |
|
|
Non-controlling interests |
||||
|
Ordinary shares |
|
1,293 |
849 |
1,147 |
|
Preferred securities |
|
696 |
703 |
693 |
|
Total non-controlling interests |
1,989 |
1,552 |
1,840 |
|
|
Total equity |
9,720 |
9,354 |
9,577 |
|
* The 31 December 2008 financial position has been restated by an amount of £1,405 million for both derivative financial instruments assets and liabilities on a consistent basis to 30 June 2009. There was no impact on the consolidated net assets at 31 December 2008 as a result of the restatement.
Condensed consolidated statement of cash flows
For the six months ended 30 June 2009
|
£m |
|||
|
|
6 months |
6 months |
Year ended 31 December |
|
Cash flows from operating activities |
|||
|
Profit before tax |
160 |
853 |
595 |
|
Non-cash movements in profit before tax |
1,851 |
1,083 |
14,656 |
|
Changes in working capital |
(2,275) |
811 |
(13,249) |
|
Taxation paid |
(160) |
(262) |
(458) |
|
Net cash (outflow)/inflow from operating activities |
(424) |
2,485 |
1,544 |
|
Cash flows from investing activities |
|
|
|
|
Net disposal/(acquisitions) of financial investments |
477 |
(2,388) |
(1,170) |
|
Net acquisition of investment properties |
(22) |
(19) |
(7) |
|
Net acquisition of property, plant and equipment |
(98) |
(64) |
(110) |
|
Net acquisition of intangible assets |
(12) |
(2) |
(18) |
|
Acquisition of interests in subsidiaries |
(2) |
(65) |
(93) |
|
Disposal of interests in subsidiaries, associated undertakings and strategic investments |
16 |
1,133 |
1,138 |
|
Net cash inflow/(outflow) from investing activities |
359 |
(1,405) |
(260) |
|
Cash flows from financing activities |
|
|
|
|
Dividends paid to: |
|
|
|
|
Equity holders of the Company |
- |
(227) |
(352) |
|
Equity non-controlling interests and preferred security interests |
(103) |
(109) |
(208) |
|
Interest paid (excluding banking interest paid) |
(120) |
(61) |
(87) |
|
Proceeds from issue of ordinary shares (including by subsidiaries to non-controlling interests) |
46 |
(226) |
31 |
|
Net sale of treasury shares |
4 |
- |
5 |
|
Shares repurchased in buyback programme |
- |
- |
(175) |
|
Issue of subordinated and other debt |
290 |
76 |
374 |
|
Other debt repaid |
(33) |
(13) |
(225) |
|
Net cash inflow/(outflow) from financing activities |
84 |
(560) |
(637) |
|
Net increase in cash and cash equivalents |
19 |
520 |
647 |
|
Effects of exchange rate changes on cash and cash equivalents |
(175) |
(235) |
399 |
|
Cash and cash equivalents at beginning of the year |
4,642 |
3,596 |
3,596 |
|
Cash and cash equivalents at end of the period |
4,486 |
3,881 |
4,642 |
|
Consisting of: |
|
|
|
|
Cash and cash equivalents |
2,672 |
3,129 |
2,862 |
|
Mandatory reserve deposits with central banks |
856 |
610 |
734 |
|
Short term cash balances held in policyholder funds |
1,744 |
1,084 |
2,043 |
|
Cash and cash equivalents subject to consolidation of funds |
(785) |
(942) |
(997) |
|
Total |
4,486 |
3,881 |
4,642 |
Cash flows presented in this statement include all cash flows relating to policyholders' funds for the long-term business.
Cash and cash equivalents subject to consolidation of funds are not included in the cash flow as they relate to the minority holding in the funds.
Management do not consider that there are material amounts of cash and cash equivalents which are not available for use by the Group.
Mandatory reserve deposits with central banks held by Nedbank are included in cash and cash equivalents for the purposes of the statement of cash flows in line with market practice in South Africa.
Consolidated statement of changes in equity
For the six months ended 30 June 2009
|
Six months ended 30 June 2009 |
|
Millions |
|
|
|
£m |
|
Notes |
Number of shares issued and fully paid |
|
Attributable to equity holders of the parent |
Total non-controlling interest |
Total equity |
|
|
Equity holders' funds at beginning of the period |
|
5,516 |
|
7,737 |
1,840 |
9,577 |
|
(Loss)/profit after tax for the financial period |
|
- |
|
(70) |
97 |
27 |
|
Other comprehensive income |
|
- |
|
- |
- |
- |
|
Fair value gains: |
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
2 |
- |
2 |
|
Net investment hedge |
|
- |
|
2 |
- |
2 |
|
Available-for-sale investments: |
|
|
|
|
|
|
|
Fair value gains |
|
- |
|
453 |
- |
453 |
|
Recycled to the income statement |
|
- |
|
117 |
- |
117 |
|
Shadow accounting |
|
- |
|
(63) |
- |
(63) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
|
(327) |
79 |
(248) |
|
Other movements |
|
- |
|
36 |
11 |
47 |
|
Income tax relating to components of other comprehensive income |
|
- |
|
(149) |
- |
(149) |
|
Total comprehensive income |
|
- |
|
1 |
187 |
188 |
|
Dividends for the period |
9 |
- |
|
(22) |
(81) |
(103) |
|
Net sale of treasury shares |
|
- |
|
5 |
(1) |
4 |
|
Change in participation in subsidiaries |
|
- |
|
(4) |
42 |
38 |
|
Fair value of equity settled share options |
|
- |
|
14 |
2 |
16 |
|
Transactions with shareholders |
|
- |
|
(7) |
(38) |
(45) |
|
Equity holders' funds at end of the period |
|
5,516 |
|
7,731 |
1,989 |
9,720 |
|
Six months ended 30 June 2009 |
£m |
|||||||
|
Notes |
Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Total |
|
|
Attributable to equity holders of the parent at beginning of the period |
|
552 |
766 |
2,130 |
386 |
3,215 |
688 |
7,737 |
|
(Loss)/profit for the financial period attributable to equity holders of the parent |
|
- |
- |
- |
- |
(86) |
16 |
(70) |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Fair value gains: |
|
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
- |
2 |
- |
- |
- |
2 |
|
Net investment hedge |
|
- |
- |
- |
2 |
- |
- |
2 |
|
Available-for-sale investments: |
|
|
|
|
|
|
|
|
|
Fair value gains |
|
- |
- |
453 |
- |
- |
- |
453 |
|
Recycled to income statement on realisation |
|
- |
- |
117 |
- |
- |
- |
117 |
|
Shadow accounting |
|
- |
- |
(63) |
- |
- |
- |
(63) |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
- |
- |
(327) |
- |
- |
(327) |
|
Other movements |
|
- |
3 |
(6) |
2 |
37 |
- |
36 |
|
Income tax relating to components of other comprehensive income |
|
- |
- |
(150) |
- |
(5) |
6 |
(149) |
|
Total comprehensive income |
|
- |
3 |
353 |
(323) |
(54) |
22 |
1 |
|
Dividends for the period |
9 |
- |
- |
- |
- |
- |
(22) |
(22) |
|
Net sale of treasury shares |
|
- |
- |
- |
- |
5 |
- |
5 |
|
Change in participation in subsidiaries |
|
- |
- |
(4) |
- |
- |
- |
(4) |
|
Fair value of equity settled share options |
|
- |
- |
14 |
- |
- |
- |
14 |
|
Transactions with shareholders |
|
- |
- |
10 |
- |
5 |
(22) |
(7) |
|
Attributable to equity holders of the parent at end of the period |
|
552 |
769 |
2,493 |
63 |
3,166 |
688 |
7,731 |
|
£m |
|||
|
Other reserves |
|
|
At 30 June |
|
Merger reserve |
|
|
2,716 |
|
Available-for-sale reserve |
|
|
(482) |
|
Property revaluation reserve |
|
|
83 |
|
Share-based payments reserve |
|
|
179 |
|
Other reserves |
|
|
(3) |
|
Attributable to equity holders of the parent at end of the period |
|
|
2,493 |
Retained earnings were reduced by £342 million at 30 June 2009 (£550 million at 30 June 2008, £280 million at 31 December 2008) in respect of own shares held in policyholders' funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
Included within other reserves is the merger reserve for the additional share consideration made in respect of the Skandia acquisition, being the difference between the market value of the shares on the date of issue and the nominal value included as share capital.
Consolidated statement of changes in equity continued
For the six months ended 30 June 2009
|
Six months ended 30 June 2008 |
|
Millions |
|
|
|
£m |
|
Notes |
Number of shares issued and fully paid |
|
Attributable to equity holders of the parent |
Total non- controlling interest |
Total equity |
|
|
Equity holders' funds at beginning of the period |
|
5,510 |
|
7,961 |
1,636 |
9,597 |
|
Profit after tax for the financial period |
|
- |
|
549 |
136 |
685 |
|
Other comprehensive income |
|
|
|
|
|
|
|
Fair value gains: |
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
6 |
- |
6 |
|
Net investment hedge |
|
- |
|
5 |
- |
5 |
|
Available-for-sale investments: |
|
|
|
|
|
|
|
Fair value losses |
|
- |
|
(528) |
- |
(528) |
|
Recycled to the income statement |
|
- |
|
85 |
- |
85 |
|
Shadow accounting |
|
- |
|
227 |
- |
227 |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
|
(150) |
(119) |
(269) |
|
Other movements |
|
- |
|
(16) |
2 |
(14) |
|
Income tax relating to components of other comprehensive income |
|
- |
|
67 |
- |
67 |
|
Total comprehensive income |
|
- |
|
245 |
19 |
264 |
|
Dividends for the period |
9 |
- |
|
(249) |
(87) |
(336) |
|
Net sale of treasury shares |
|
- |
|
(5) |
- |
(5) |
|
Shares repurchased in the buyback programme |
|
- |
|
(174) |
- |
(174) |
|
Issue of ordinary share capital by the Company |
|
- |
|
4 |
- |
4 |
|
Change in participation in subsidiaries |
|
- |
|
- |
(16) |
(16) |
|
Exercise of share options |
|
4 |
|
3 |
- |
3 |
|
Fair value of equity settled share options |
|
- |
|
17 |
- |
17 |
|
Transactions with shareholders |
|
4 |
|
(404) |
(103) |
(507) |
|
Equity holders' funds at end of the period |
|
5,514 |
|
7,802 |
1,552 |
9,354 |
|
Six months ended 30 June 2008 |
|
|
|
|
|
|
|
£m |
|
Notes |
Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Total |
|
|
Attributable to equity holders of the parent at beginning of the period |
|
551 |
757 |
2,908 |
(304) |
3,361 |
688 |
7,961 |
|
Profit for the financial period attributable to equity holders of the parent |
|
- |
- |
- |
- |
533 |
16 |
549 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Fair value gains/(losses): |
|
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
- |
6 |
- |
- |
- |
6 |
|
Net investment hedge |
|
- |
- |
- |
5 |
- |
- |
5 |
|
Available-for-sale investments: |
|
|
|
|
|
|
|
|
|
Fair value gains/(losses) |
|
- |
- |
(528) |
- |
- |
- |
(528) |
|
Recycled to income statement |
|
- |
- |
85 |
- |
- |
- |
85 |
|
Shadow accounting |
|
- |
- |
227 |
- |
- |
- |
227 |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
- |
- |
(150) |
- |
- |
(150) |
|
Other movements |
|
- |
2 |
(9) |
- |
(9) |
- |
(16) |
|
Income tax relating to components of other comprehensive income |
|
- |
- |
61 |
- |
- |
6 |
67 |
|
Total comprehensive income |
|
- |
2 |
(158) |
(145) |
524 |
22 |
245 |
|
Dividends for the period |
9 |
- |
- |
- |
- |
(227) |
(22) |
(249) |
|
Net purchase of treasury shares |
|
- |
- |
- |
- |
(5) |
- |
(5) |
|
Shares repurchased in the buyback programme |
|
- |
- |
- |
- |
(174) |
- |
(174) |
|
Issue of ordinary share capital by the Company |
|
- |
4 |
- |
- |
- |
- |
4 |
|
Exercise of share options |
|
- |
3 |
- |
- |
- |
- |
3 |
|
Fair value of equity settled share options |
|
- |
- |
17 |
- |
- |
- |
17 |
|
Transactions with shareholders |
|
- |
7 |
17 |
- |
(406) |
(22) |
(404) |
|
Attributable to equity holders of the parent at end of the period |
|
551 |
766 |
2,767 |
(449) |
3,479 |
688 |
7,802 |
|
£m |
|||
|
Other reserves |
|
|
At 30 June |
|
Merger reserve |
|
|
2,716 |
|
Available-for-sale reserve |
|
|
(180) |
|
Property revaluation reserve |
|
|
75 |
|
Share-based payments reserve |
|
|
156 |
|
Other reserves |
|
|
- |
|
Attributable to equity holders of the parent at end of the period |
|
|
2,767 |
Consolidated statement of changes in equity continued
For the six months ended 30 June 2009
|
Year ended 31 December 2008 |
|
Millions |
|
|
|
£m |
|
Notes |
Number of shares issued and fully paid |
|
Attributable to equity holders of the parent |
Total non- controlling interest |
Total equity |
|
|
Equity holders' funds at beginning of the year |
|
5,510 |
|
7,961 |
1,636 |
9,597 |
|
Profit after tax for the financial period |
|
- |
|
441 |
242 |
683 |
|
Other comprehensive income |
|
|
|
|
|
|
|
Fair value gains/(losses): |
|
|
|
|
|
|
|
Property revaluation |
|
- |
|
16 |
- |
16 |
|
Net investment hedge |
|
- |
|
281 |
- |
281 |
|
Available-for-sale investments: |
|
|
|
|
|
|
|
Fair value losses |
|
- |
|
(1,635) |
- |
(1,635) |
|
Recycled to the income statement |
|
- |
|
414 |
- |
414 |
|
Shadow accounting |
|
- |
|
26 |
- |
26 |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
|
419 |
10 |
429 |
|
Other movements |
|
- |
|
(23) |
91 |
68 |
|
Income tax relating to components of other comprehensive income |
|
- |
|
366 |
- |
366 |
|
Total comprehensive income |
|
- |
|
305 |
343 |
648 |
|
Dividends for the year |
9 |
- |
|
(395) |
(165) |
(560) |
|
Net sale of treasury shares |
|
- |
|
5 |
- |
5 |
|
Shares repurchased in the buyback programme |
|
- |
|
(175) |
- |
(175) |
|
Issue of ordinary share capital by the Company |
|
- |
|
5 |
- |
5 |
|
Change in participation in subsidiaries |
|
- |
|
- |
26 |
26 |
|
Exercise of share options |
|
6 |
|
5 |
- |
5 |
|
Fair value of equity settled share options |
|
- |
|
26 |
- |
26 |
|
Transactions with shareholders |
|
6 |
|
(529) |
(139) |
(668) |
|
Equity holders' funds at end of the year |
|
5,516 |
|
7,737 |
1,840 |
9,577 |
|
Year ended 31 December 2008 |
|
|
|
|
|
|
|
£m |
|
Notes |
Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Perpetual preferred callable securities |
Total |
|
|
Attributable to equity holders of the parent at beginning of the year |
|
551 |
757 |
2,908 |
(304) |
3,361 |
688 |
7,961 |
|
Profit for the financial year attributable to equity holders of the parent |
|
- |
- |
- |
- |
410 |
31 |
441 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Fair value gains/(losses): |
|
|
|
|
|
|
|
|
|
Property revaluation |
|
- |
- |
16 |
- |
- |
- |
16 |
|
Net investment hedge |
|
- |
- |
- |
281 |
- |
- |
281 |
|
Available-for-sale investments: |
|
|
|
|
|
|
|
|
|
Fair value losses |
|
- |
- |
(1,635) |
- |
- |
- |
(1,635) |
|
Recycled to income statement |
|
- |
- |
414 |
- |
- |
- |
414 |
|
Shadow accounting |
|
- |
- |
26 |
- |
- |
- |
26 |
|
Currency translation differences/exchange differences on translating foreign operations |
|
- |
- |
- |
419 |
- |
- |
419 |
|
Other movements |
|
- |
- |
8 |
3 |
(34) |
- |
(23) |
|
Income tax relating to components of other comprehensive income |
|
- |
- |
367 |
(13) |
- |
12 |
366 |
|
Total comprehensive income |
|
- |
- |
(804) |
690 |
376 |
43 |
305 |
|
Dividends for the year |
9 |
- |
- |
- |
- |
(352) |
(43) |
(395) |
|
Net sale of treasury shares |
|
- |
- |
- |
- |
5 |
- |
5 |
|
Shares repurchased in the buyback programme |
|
- |
- |
- |
- |
(175) |
- |
(175) |
|
Issue of ordinary share capital by the Company |
|
- |
5 |
- |
- |
- |
- |
5 |
|
Exercise of share options |
|
1 |
4 |
- |
- |
- |
- |
5 |
|
Fair value of equity settled share options |
|
- |
- |
26 |
- |
- |
- |
26 |
|
Transactions with shareholders |
|
1 |
9 |
26 |
- |
(522) |
(43) |
(529) |
|
Attributable to equity holders of the parent at end of the year |
|
552 |
766 |
2,130 |
386 |
3,215 |
688 |
7,737 |
|
£m |
|||
|
Other reserves |
|
|
At |
|
Merger reserve |
|
|
2,716 |
|
Available-for-sale reserve |
|
|
(844) |
|
Property revaluation reserve |
|
|
85 |
|
Share-based payments reserve |
|
|
171 |
|
Other reserves |
|
|
2 |
|
Attributable to equity holders of the parent at end of the period |
|
|
2,130 |
.
Notes to the consolidated financial statements
For the six months ended 30 June 2009
1 Accounting policies
Basis of preparation
The consolidated financial information contained herein has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards adopted by the EU and in accordance with the requirements of IAS 34 'Interim Financial Reporting'. The Group's results for the six months ended 30 June 2009 and the position at that date have been prepared using accounting policies consistent with those applied in the preparation of the Group's 2008 Annual Report and Accounts, except for the revised IAS 1 set out below.
The consolidated financial information has been prepared on the going concern basis which the directors believe appropriate having taken into consideration the matters discussed in the Group Finance Director's Review in the section headed Risk and Uncertainties.
The comparative figures for the financial year ended 31 December 2008 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 237(2) or (3) of the Companies Act 1985.
Implementation of revised IAS 1 'Presentation of Financial Statements'
The financial information set out herein incorporates changes introduced as a result of the publication of a revised version of IAS 1 'Presentation of Financial Statements', effective for accounting periods commencing on or after 1 January 2009. The principal change is the inclusion of a new statement, a consolidated statement of comprehensive income, separately from the consolidated statement of changes in equity. Comparative information has been restated accordingly. There were no impacts on the Group's results or net assets as a result of the introduction of the revised standard.
Segment presentation
There has been a presentational change in the way segmental information is reflected in the consolidated financial information following a change in the way that management and the Board of Directors considers information when making operating decisions and the basis on which resources are allocated and performance assessed by management and the Board of Directors. The reported segments are Long-term savings, Nedbank, Mutual & Federal (M&F), US Asset Management (USAM), Bermuda and Other operating segments.
The long-term savings segment is further analysed by major operating segments, namely OMSA (including Rest of Africa), Europe, US Life and Asia Pacific. Results of other business activities and operating segments are disclosed in the 'Other operating segments' category. Other operating segments comprise Group head office.
There are four principal business activities from which the Group generates revenues. These are long-term business (premium income), asset management business (fee and commission income), banking (banking interest receivable) and general insurance (premium income). The revenues generated in each reported segment can be seen in the analysis of profits and losses in note 3(ii).
The information reflected in note 3 reflects the measures of profit and loss, assets and liabilities for each segment as regularly 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. A reconciliation between the reported segment revenues and expenses and the Group's revenues and expenses is shown in note 3(ii).
Assets, liabilities, revenues or expenses that are not directly attributable to a particular segment are allocated between segments 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.
Reclassifications of comparative segment information have been made to align to the Group management reporting structure described above. There was no impact on net profit or net assets.
1 Accounting policies continued
Amendments to IAS 39 'Financial instruments: Recognition and Measurement' - reclassification of financial assets
The amendments to IAS 39 'Financial instruments: Recognition and Measurement', issued in October 2008, in respect of the reclassification of financial assets, were adopted in the Group's 2008 financial statements. Under the extended reclassification rules introduced by the amendments an entity has the ability to reclassify financial instruments from the held-for-trading and available-for-sale categories in certain specified rare circumstances. The Group's accounting policies were updated in 2008 to reflect the amendments to the standard. The Group's US Life on-shore business applied the amendments to certain financial assets previously categorised as available-for-sale, which it reclassified to the loans and receivables category. This reclassification was implemented as at 1 July 2008 in accordance with the transitional provisions in the IAS 39 amendment, with no impact on the comparative interim financial information shown in this report. There was no impact on the Group's IFRS profit or adjusted operating profit, before or after tax, as a result of the introduction of the amendments.
2 Foreign currencies
The principal exchange rates used to translate the operating results, assets and liabilities of foreign operations to Sterling are:
|
|
Income (average rate) |
Statement of financial position (closing rate) |
|
30 June 2009 |
||
|
Rand |
13.7363 |
12.7351 |
|
US Dollars |
1.4947 |
1.6453 |
|
Swedish Kronor |
12.1787 |
12.6989 |
|
Euro |
1.1193 |
1.1725 |
|
30 June 2008 |
|
|
|
Rand |
15.1008 |
15.5673 |
|
US Dollars |
1.9746 |
1.9908 |
|
Swedish Kronor |
12.1128 |
12.0009 |
|
Euro |
1.2903 |
1.2651 |
|
31 December 2008 |
||
|
Rand |
15.2948 |
13.7194 |
|
US Dollars |
1.8524 |
1.4575 |
|
Swedish Kronor |
12.2209 |
11.4494 |
|
Euro |
1.2594 |
1.0446 |
3 Segment information
(i) Basis of segmentation
The Group's results are analysed across the following reportable segments:
● Long-term savings - long-term business, asset management and banking
● Nedbank - banking and asset management
● Mutual & Federal (M&F) - general insurance
● US Asset Management (USAM) - asset management
● Bermuda - long-term business and asset management
● Other operating segments.
For purposes of presentation the long-term savings segment is further analysed by major operating segments, namely OMSA (including Rest of Africa), Europe, US Life and Asia Pacific. Results of other business activities and operating segments are disclosed in the 'other operating segments' category. Other operating segments comprise Group head office.
The segmental information is consistent with the way that management and the Board of Directors consider information when making operating decisions and is the basis on which resources are allocated and performance assessed by management and the Board of Directors.
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 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 Old Mutual Market Consistent Embedded Value information presented on pages 83-120.
Comparative segment information has been revised in accordance with the changes in presentation made in the current financial period.
Notes to the consolidated financial statements
For the six months ended 30 June 2009
3 Segment information continued
(ii) Adjusted operating profit statement - segment information six months ended 30 June 2009
|
|
Long Term Savings |
||||
|
OMSA |
Europe |
US Life |
Pacific |
Total |
|
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
877 |
215 |
421 |
- |
1,513 |
|
Outward reinsurance |
(28) |
(47) |
(51) |
- |
(126) |
|
Net earned premiums |
849 |
168 |
370 |
- |
1,387 |
|
Investment return (non-banking) |
(98) |
1,120 |
303 |
- |
1,325 |
|
Banking interest and similar income |
- |
96 |
- |
- |
96 |
|
Banking trading, investment and similar income |
- |
- |
- |
- |
- |
|
Fee and commission income, and income from service activities |
105 |
558 |
- |
4 |
667 |
|
Other income |
12 |
11 |
1 |
- |
24 |
|
Inter-segment revenues |
29 |
18 |
- |
- |
47 |
|
Total revenues |
897 |
1,971 |
674 |
4 |
3,546 |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
(219) |
(218) |
(589) |
- |
(1,026) |
|
Reinsurance recoveries |
28 |
55 |
54 |
- |
137 |
|
Net claims and benefits incurred |
(191) |
(163) |
(535) |
- |
(889) |
|
Change in investment contract liabilities |
(114) |
(1,026) |
- |
- |
(1,140) |
|
Losses on loans and advances |
- |
(3) |
- |
- |
(3) |
|
Finance costs |
- |
- |
- |
- |
- |
|
Banking interest payable and similar expenses |
- |
(51) |
- |
- |
(51) |
|
Fee and commission expenses, and other acquisition costs |
(77) |
(256) |
(71) |
(1) |
(405) |
|
Other operating and administrative expenses |
(291) |
(351) |
(32) |
(11) |
(685) |
|
Goodwill impairment |
- |
- |
- |
- |
- |
|
Change in third party interest in consolidated funds |
- |
- |
- |
- |
- |
|
Amortisation of PVIF and other acquired intangibles |
- |
- |
- |
- |
- |
|
Income tax attributable to policyholder returns |
(2) |
(23) |
- |
- |
(25) |
|
Inter-segment expenses |
(4) |
(22) |
(7) |
- |
(33) |
|
Total expenses |
(679) |
(1,895) |
(645) |
(12) |
(3,231) |
|
Share of associated undertakings' profit/(loss) after tax |
1 |
- |
- |
1 |
2 |
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
219 |
76 |
29 |
(7) |
317 |
|
Tax expense |
(60) |
(6) |
(8) |
(4) |
(78) |
|
Non-controlling interests |
(2) |
- |
- |
- |
(2) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
157 |
70 |
21 |
(11) |
237 |
|
Adjusting items net of tax and non-controlling interests |
(63) |
(115) |
(98) |
(45) |
(321) |
|
Profit/(loss) after tax attributable to equity holders of the parent |
94 |
(45) |
(77) |
(56) |
(84) |
3 Segment information continued
(ii) Adjusted operating profit statement - segment information six months ended 30 June 2009 continued
|
£m |
||||||||
|
Nedbank |
M&F |
USAM |
Bermuda |
Other operating segments |
Consolidation adjustments |
Adjusted operating profit Total reportable segments |
Adjusting items (Note 4) |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
297 |
- |
7 |
- |
- |
1,817 |
- |
1,817 |
|
- |
(54) |
- |
- |
- |
- |
(180) |
- |
(180) |
|
- |
243 |
- |
7 |
- |
- |
1,637 |
- |
1,637 |
|
- |
26 |
- |
124 |
43 |
310 |
1,828 |
(275) |
1,553 |
|
2,016 |
- |
- |
- |
- |
- |
2,112 |
- |
2,112 |
|
73 |
- |
- |
- |
- |
- |
73 |
- |
73 |
|
293 |
9 |
206 |
- |
- |
- |
1,175 |
(56) |
1,119 |
|
24 |
- |
2 |
11 |
- |
- |
61 |
- |
61 |
|
14 |
18 |
5 |
- |
12 |
(96) |
- |
- |
- |
|
2,420 |
296 |
213 |
142 |
55 |
214 |
6,886 |
(331) |
6,555 |
|
|
|
|
|
|
|
|
|
|
|
- |
(221) |
- |
(130) |
- |
- |
(1,377) |
- |
(1,377) |
|
- |
40 |
- |
1 |
- |
- |
176 |
- |
176 |
|
- |
(181) |
- |
(131) |
- |
- |
(1,201) |
- |
(1,201) |
|
- |
- |
- |
(2) |
- |
- |
(1,142) |
- |
(1,142) |
|
(250) |
- |
- |
- |
- |
- |
(253) |
- |
(253) |
|
- |
- |
- |
- |
(47) |
- |
(47) |
28 |
(19) |
|
(1,392) |
- |
- |
- |
- |
- |
(1,443) |
6 |
(1,437) |
|
- |
(53) |
(8) |
4 |
- |
(25) |
(487) |
81 |
(406) |
|
(529) |
(30) |
(175) |
(8) |
(38) |
(3) |
(1,468) |
22 |
(1,446) |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
(282) |
(282) |
- |
(282) |
|
- |
- |
- |
- |
- |
- |
- |
(164) |
(164) |
|
- |
- |
- |
- |
- |
- |
(25) |
25 |
- |
|
(40) |
(12) |
- |
(1) |
(10) |
96 |
- |
- |
- |
|
(2,211) |
(276) |
(183) |
(138) |
(95) |
(214) |
(6,348) |
(2) |
(6,350) |
|
2 |
- |
- |
- |
(4) |
- |
- |
- |
- |
|
|
- |
- |
- |
- |
- |
- |
(45) |
(45) |
|
|
20 |
30 |
4 |
(44) |
- |
538 |
(378) |
160 |
|
(48) |
(4) |
(9) |
- |
(10) |
- |
(149) |
16 |
(133) |
|
(84) |
(4) |
- |
- |
(16) |
- |
(106) |
9 |
(97) |
|
|
12 |
21 |
4 |
(70) |
- |
283 |
(353) |
(70) |
|
10 |
(5) |
11 |
(49) |
1 |
- |
(353) |
||
|
89 |
7 |
32 |
(45) |
(69) |
- |
(70) |
||
Notes to the consolidated financial statements
For the six months ended 30 June 2009 continued
3 Segment information continued
(ii) Adjusted operating profit statement - segment information six months ended 30 June 2008
|
|
Long Term Savings |
||||
|
OMSA |
Europe |
US Life |
Pacific |
Total |
|
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
790 |
126 |
582 |
- |
1,498 |
|
Outward reinsurance |
(24) |
(44) |
(51) |
- |
(119) |
|
Net earned premiums |
766 |
82 |
531 |
- |
1,379 |
|
Investment return (non-banking) |
(193) |
(3,798) |
96 |
- |
(3,895) |
|
Banking interest and similar income |
- |
129 |
- |
- |
129 |
|
Banking trading, investment and similar income |
- |
2 |
- |
- |
2 |
|
Fee and commission income, and income from service activities |
103 |
606 |
- |
19 |
728 |
|
Other income |
55 |
21 |
13 |
- |
89 |
|
Inter-segment revenues |
100 |
130 |
- |
- |
230 |
|
Total revenues |
831 |
(2,828) |
640 |
19 |
(1,338) |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
(289) |
(68) |
(567) |
- |
(924) |
|
Reinsurance recoveries |
35 |
22 |
54 |
- |
111 |
|
Net claims and benefits incurred |
(254) |
(46) |
(513) |
- |
(813) |
|
Change in investment contract liabilities |
44 |
3,795 |
- |
- |
3,839 |
|
Losses on loans and advances |
- |
(1) |
- |
- |
(1) |
|
Finance costs |
- |
- |
- |
- |
- |
|
Banking interest payable and similar expenses |
- |
(89) |
- |
- |
(89) |
|
Fee and commission expenses, and other acquisition costs |
(72) |
(267) |
(43) |
(6) |
(388) |
|
Other operating and administrative expenses |
(243) |
(348) |
(27) |
(17) |
(635) |
|
Goodwill impairment |
- |
- |
- |
- |
- |
|
Change in third party interest in consolidated funds |
- |
- |
- |
- |
- |
|
Amortisation of PVIF and other acquired intangibles |
- |
- |
- |
- |
- |
|
Income tax attributable to policyholder returns |
(4) |
70 |
- |
- |
66 |
|
Inter-segment expenses |
(79) |
(138) |
(4) |
(1) |
(222) |
|
Total expenses |
(608) |
2,976 |
(587) |
(24) |
1,757 |
|
Share of associated undertakings' profit/(loss) after tax |
4 |
- |
- |
(3) |
1 |
|
Profit on disposal of subsidiaries, associated undertakings and strategic investments |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
227 |
148 |
53 |
(8) |
420 |
|
Tax expense |
(78) |
(44) |
(15) |
- |
(137) |
|
Non-controlling interests |
(2) |
(1) |
- |
- |
(3) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
147 |
103 |
38 |
(8) |
280 |
|
Adjusting items net of tax and non-controlling interests |
176 |
(12) |
(52) |
- |
112 |
|
Profit/(loss) after tax attributable to equity holders of the parent |
323 |
91 |
(14) |
(8) |
392 |
3 Segment information continued
(ii) Adjusted operating profit statement - segment information six months ended 30 June 2008 continued
|
£m |
||||||||
|
Nedbank |
M&F |
USAM |
Bermuda |
Other operating segments |
Consolidation adjustments |
Adjusted operating profit Total reportable segments |
Adjusting items (Note 4) |
IFRS Income statement |
|
|
|
|
|
|
|
|
|
|
|
- |
301 |
- |
1,062 |
- |
- |
2,861 |
- |
2,861 |
|
- |
(45) |
- |
- |
- |
- |
(164) |
- |
(164) |
|
- |
256 |
- |
1,062 |
- |
- |
2,697 |
- |
2,697 |
|
- |
28 |
10 |
(237) |
60 |
(184) |
(4,218) |
144 |
(4,074) |
|
1,765 |
- |
- |
- |
- |
- |
1,894 |
- |
1,894 |
|
68 |
- |
- |
- |
- |
- |
70 |
- |
70 |
|
254 |
8 |
250 |
- |
- |
1 |
1,241 |
(52) |
1,189 |
|
67 |
- |
8 |
10 |
- |
16 |
190 |
- |
190 |
|
8 |
5 |
4 |
- |
7 |
(254) |
- |
- |
- |
|
2,162 |
297 |
272 |
835 |
67 |
(421) |
1,874 |
92 |
1,966 |
|
|
|
|
|
|
|
|
|
|
|
- |
(221) |
- |
(878) |
- |
- |
(2,023) |
- |
(2,023) |
|
- |
38 |
- |
- |
- |
- |
149 |
- |
149 |
|
- |
(183) |
- |
(878) |
- |
- |
(1,874) |
- |
(1,874) |
|
- |
- |
- |
3 |
- |
- |
3,842 |
- |
3,842 |
|
(125) |
- |
- |
- |
- |
- |
(126) |
- |
(126) |
|
- |
- |
- |
- |
(71) |
- |
(71) |
62 |
(9) |
|
(1,213) |
- |
- |
- |
- |
- |
(1,302) |
- |
(1,302) |
|
- |
(58) |
(5) |
4 |
- |
(39) |
(486) |
97 |
(389) |
|
(466) |
(24) |
(197) |
(10) |
(22) |
(4) |
(1,358) |
9 |
(1,349) |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
- |
- |
- |
- |
- |
210 |
210 |
- |
210 |
|
- |
- |
- |
- |
- |
- |
- |
(176) |
(176) |
|
- |
- |
- |
- |
- |
- |
66 |
(66) |
- |
|
(24) |
(4) |
- |
(1) |
(3) |
254 |
- |
- |
- |
|
(1,828) |
(269) |
(202) |
(882) |
(96) |
421 |
(1,099) |
(74) |
(1,173) |
|
3 |
- |
- |
- |
(6) |
- |
(2) |
- |
(2) |
|
|
- |
- |
- |
- |
- |
- |
62 |
62 |
|
|
28 |
70 |
(47) |
(35) |
- |
773 |
80 |
853 |
|
(77) |
(5) |
(13) |
(3) |
15 |
- |
(220) |
52 |
(168) |
|
(130) |
(7) |
- |
- |
(8) |
- |
(148) |
12 |
(136) |
|
|
16 |
57 |
(50) |
(28) |
- |
405 |
144 |
549 |
|
14 |
(6) |
(1) |
(50) |
75 |
- |
144 |
||
|
144 |
10 |
56 |
(100) |
47 |
- |
549 |
||
Notes to the consolidated financial statements
For the six months ended 30 June 2009 continued
3 Segment information continued
(ii) Adjusted operating profit statement - segment information year ended 31 December 2008
|
|
Long Term Savings |
||||
|
OMSA |
Europe |
US Life |
Pacific |
Total |
|
|
Revenue |
|
|
|
|
|
|
Gross earned premiums |
1,672 |
315 |
1,269 |
- |
3,256 |
|
Outward reinsurance |
(47) |
(90) |
(106) |
- |
(243) |
|
Net earned premiums |
1,625 |
225 |
1,163 |
- |
3,013 |
|
Investment return (non-banking) |
(427) |
(9,918) |
211 |
1 |
(10,133) |
|
Banking interest and similar income |
- |
266 |
- |
- |
266 |
|
Banking trading, investment and similar income |
- |
24 |
- |
- |
24 |
|
Fee and commission income, and income from service activities |
189 |
1,167 |
- |
33 |
1,389 |
|
Other income |
97 |
36 |
3 |
- |
136 |
|
Inter-segment revenues |
230 |
237 |
- |
- |
467 |
|
Total revenues |
1,714 |
(7,963) |
1,377 |
34 |
(4,838) |
|
Expenses |
|
|
|
|
|
|
Claims and benefits (including change in insurance contract provisions) |
(700) |
(209) |
(1,478) |
- |
(2,387) |
|
Reinsurance recoveries |
42 |
40 |
106 |
- |
188 |
|
Net claims and benefits incurred |
(658) |
(169) |
(1,372) |
- |
(2,199) |
|
Change in investment contract liabilities |
200 |
9,847 |
- |
- |
10,047 |
|
Losses on loans and advances |
- |
(4) |
- |
- |
(4) |
|
Finance costs |
- |
- |
- |
- |
- |
|
Banking interest payable and similar expenses |
- |
(183) |
- |
- |
(183) |
|
Fee and commission expenses, and other acquisition costs |
(156) |
(530) |
(158) |
(10) |
(854) |
|
Other operating and administrative expenses |
(497) |
(692) |
(68) |
(37) |
(1,294) |
|
Goodwill impairment |
- |
- |
- |
- |
- |
|
Change in third party interest in consolidated funds |
- |
- |
- |
- |
- |
|
Amortisation of PVIF and other acquired intangibles |
- |
- |
- |
- |
- |
|
Income tax attributable to policyholder returns |
6 |
230 |
- |
- |
236 |
|
Inter-segment expenses |
(183) |
(270) |
(9) |
- |
(462) |
|
Total expenses |
(1,288) |
8,229 |
(1,607) |
(47) |
5,287 |
|
Share of associated undertakings' profit/(loss) after tax |
6 |
- |
- |
(3) |
3 |
|
Profit on disposal of subsidiaries, associated undertakings and strategic investments |
- |
- |
- |
- |
- |
|
Adjusted operating profit/(loss) before tax and non-controlling interests |
432 |
266 |
(230) |
(16) |
452 |
|
Tax expense |
(135) |
(81) |
76 |
- |
(140) |
|
Non-controlling interests |
(5) |
- |
- |
- |
(5) |
|
Adjusted operating profit/(loss) after tax and non-controlling interests |
292 |
185 |
(154) |
(16) |
307 |
|
Adjusting items net of tax and non-controlling interests |
148 |
(83) |
(341) |
(1) |
(277) |
|
Profit/(loss) after tax attributable to equity holders of the parent |
440 |
102 |
(495) |
(17) |
30 |
3 Segment information continued
(ii) Adjusted operating profit statement - segment information year ended 31 December 2008 continued
|
|
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Bermuda |
Other operating segments |
Consolidation adjustments |
Adjusted operating profit Total reportable segments |
Adjusting items (Note 4) |
IFRS Income |
|
|
|
|
|
|
|
|
|
|
|
- |
570 |
- |
1,330 |
- |
- |
5,156 |
- |
5,156 |
|
- |
(91) |
- |
(1) |
- |
- |
(335) |
- |
(335) |
|
- |
479 |
- |
1,329 |
- |
- |
4,821 |
- |
4,821 |
|
- |
56 |
(3) |
(543) |
94 |
(713) |
(11,242) |
(336) |
(11,578) |
|
3,793 |
- |
- |
- |
- |
- |
4,059 |
- |
4,059 |
|
138 |
- |
- |
- |
- |
- |
162 |
- |
162 |
|
533 |
16 |
473 |
- |
- |
(1) |
2,410 |
(97) |
2,313 |
|
85 |
- |
17 |
19 |
- |
13 |
270 |
- |
270 |
|
19 |
26 |
8 |
- |
66 |
(586) |
- |
- |
- |
|
4,568 |
577 |
495 |
805 |
160 |
(1,287) |
480 |
(433) |
47 |
|
|
|
|
|
|
|
|
|
|
|
- |
(401) |
- |
(822) |
- |
- |
(3,610) |
- |
(3,610) |
|
- |
72 |
- |
2 |
- |
- |
262 |
- |
262 |
|
- |
(329) |
- |
(820) |
- |
- |
(3,348) |
- |
(3,348) |
|
- |
- |
- |
4 |
- |
- |
10,051 |
- |
10,051 |
|
(315) |
- |
- |
- |
- |
- |
(319) |
- |
(319) |
|
- |
- |
- |
- |
(140) |
- |
(140) |
532 |
392 |
|
(2,684) |
- |
- |
- |
- |
- |
(2,867) |
14 |
(2,853) |
|
- |
(101) |
(10) |
(106) |
- |
(44) |
(1,115) |
178 |
(937) |
|
(928) |
(59) |
(388) |
(16) |
(38) |
(34) |
(2,757) |
(77) |
(2,834) |
|
- |
- |
- |
- |
- |
- |
- |
(74) |
(74) |
|
- |
- |
- |
- |
- |
779 |
779 |
- |
779 |
|
- |
- |
- |
- |
- |
- |
- |
(361) |
(361) |
|
- |
- |
- |
- |
- |
- |
236 |
(236) |
- |
|
(71) |
(12) |
- |
(4) |
(37) |
586 |
- |
- |
- |
|
(3,998) |
(501) |
(398) |
(942) |
(215) |
1,287 |
520 |
(24) |
496 |
|
5 |
- |
- |
- |
(9) |
- |
(1) |
- |
(1) |
|
|
- |
- |
- |
- |
- |
- |
53 |
53 |
|
|
76 |
97 |
(137) |
(64) |
- |
999 |
(404) |
595 |
|
(123) |
(17) |
2 |
- |
192 |
- |
(86) |
174 |
88 |
|
(227) |
(19) |
- |
- |
(21) |
- |
(272) |
30 |
(242) |
|
|
40 |
99 |
(137) |
107 |
- |
641 |
(200) |
441 |
|
29 |
(49) |
1 |
(228) |
324 |
- |
(200) |
||
|
254 |
(9) |
100 |
(365) |
431 |
- |
441 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
3 Segment information continued
(iii) Gross earned premiums
|
Six months ended 30 June 2009 |
Long Term Savings |
||||
|
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
|
Long-term business-insurance contracts |
582 |
215 |
421 |
- |
1,218 |
|
Long-term business-investment contracts with discretionary |
295 |
- |
- |
- |
295 |
|
General insurance |
- |
- |
- |
- |
- |
|
Gross earned premiums |
877 |
215 |
421 |
- |
1,513 |
|
Long-term business - other investment contracts recognised as deposits |
1,213 |
3,064 |
82 |
- |
4,359 |
|
|
Long Term Savings |
||||
|
Six months ended 30 June 2008 |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Long-term business-insurance contracts |
526 |
126 |
582 |
- |
1,234 |
|
Long-term business-investment contracts with discretionary |
264 |
- |
- |
- |
264 |
|
General insurance |
- |
- |
- |
- |
- |
|
Gross earned premiums |
790 |
126 |
582 |
- |
1,498 |
|
Long-term business - other investment contracts recognised as deposits |
597 |
3,938 |
53 |
- |
4,588 |
|
|
Long Term Savings |
||||
|
Year ended 31 December 2008 |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Long-term business-insurance contracts |
1,148 |
315 |
1,269 |
- |
2,732 |
|
Long-term business-investment contracts with discretionary |
524 |
- |
- |
- |
524 |
|
General insurance |
- |
- |
- |
- |
- |
|
Gross earned premiums |
1,672 |
315 |
1,269 |
- |
3,256 |
|
Long-term business - other investment contracts recognised as deposits |
1,391 |
6,920 |
115 |
- |
8,426 |
(iv) Impairments on financial assets
|
|
£m |
|||
|
|
|
6 months |
6 months |
Year ended 31 December 2008 |
|
Europe |
|
3 |
1 |
5 |
|
US Life |
|
133 |
68 |
392 |
|
Total Long Term Savings |
|
136 |
69 |
397 |
|
Nedbank |
|
250 |
125 |
315 |
|
Bermuda |
|
14 |
7 |
22 |
|
Total |
400 |
201 |
734 |
|
3 Segment information continued
(iii) Gross earned premiums
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
|
Total |
|
- |
- |
- |
7 |
1,225 |
|
|
- |
- |
- |
295 |
|
|
297 |
|
|
297 |
|
- |
297 |
- |
7 |
1,817 |
|
|
- |
- |
8 |
4,367 |
|
|
|
|
|
£m |
|
|
M&F |
USAM |
Bermuda |
Total |
|
- |
- |
- |
1,062 |
2,296 |
|
|
- |
- |
- |
264 |
|
- |
301 |
- |
- |
301 |
|
- |
301 |
- |
1,062 |
2,861 |
|
|
- |
- |
63 |
4,651 |
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Bermuda |
Total |
|
- |
- |
- |
1,330 |
4,062 |
|
|
- |
- |
- |
524 |
|
- |
570 |
- |
- |
570 |
|
- |
570 |
- |
1,330 |
5,156 |
|
- |
- |
- |
115 |
8,541 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
3 Segment information continued
(v) Funds under management
|
|
|
||||
|
|
Long Term Savings |
||||
|
As at 30 June 2009 |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Long-term business policyholder funds |
21,380 |
39,102 |
347 |
257 |
61,086 |
|
Unit trusts and mutual funds |
4,044 |
12,668 |
- |
- |
16,712 |
|
Third party client funds |
6,988 |
- |
- |
- |
6,988 |
|
Total client funds under management |
32,412 |
51,770 |
347 |
257 |
84,786 |
|
Shareholder funds |
1,776 |
1,289 |
- |
- |
3,065 |
|
Total funds under management |
34,188 |
53,059 |
347 |
257 |
87,851 |
|
|
Long Term Savings |
||||
|
As at 30 June 2008 |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Long-term business policyholder funds |
18,435 |
42,665 |
235 |
167 |
61,502 |
|
Unit trusts and mutual funds |
3,318 |
13,249 |
- |
2,346 |
18,913 |
|
Third party client funds |
6,221 |
- |
- |
3,453 |
9,674 |
|
Total client funds under management |
27,974 |
55,914 |
235 |
5,966 |
90,089 |
|
Shareholder funds |
1,721 |
1,348 |
- |
- |
3,069 |
|
Total funds under management |
29,695 |
57,262 |
235 |
5,966 |
93,158 |
|
|
Long Term Savings |
||||
|
As at 31 December 2008 |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Long-term business policyholder funds |
20,301 |
38,791 |
241 |
193 |
59,526 |
|
Unit trusts and mutual funds |
3,613 |
12,399 |
- |
1,859 |
17,871 |
|
Third party client funds |
8,841 |
- |
- |
1,484 |
10,325 |
|
Total client funds under management |
32,755 |
51,190 |
241 |
3,536 |
87,722 |
|
Shareholder funds |
1,632 |
1,614 |
- |
- |
3,246 |
|
Total funds under management |
34,387 |
52,804 |
241 |
3,536 |
90,968 |
3 Segment information continued
(v) Funds under management
|
|
|
|
£m |
|
|
|
|
|
|
|
|
Nedbank |
M&F |
USAM |
|
Total |
|
549 |
- |
12,359 |
2,327 |
76,321 |
|
2,863 |
- |
3,132 |
- |
22,707 |
|
3,361 |
- |
134,529 |
- |
144,878 |
|
6,773 |
- |
150,020 |
2,327 |
243,906 |
|
- |
139 |
163 |
- |
3,367 |
|
6,773 |
139 |
150,183 |
2,327 |
247,273 |
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
|
Total |
|
412 |
- |
11,404 |
2,298 |
75,616 |
|
2,321 |
- |
4,878 |
- |
26,112 |
|
3,096 |
- |
141,613 |
- |
154,383 |
|
5,829 |
- |
157,895 |
2,298 |
256,111 |
|
- |
78 |
176 |
- |
3,323 |
|
5,829 |
78 |
158,071 |
2,298 |
259,434 |
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
|
Total |
|
425 |
- |
13,623 |
2,401 |
75,975 |
|
2,617 |
- |
3,127 |
- |
23,615 |
|
3,375 |
- |
147,956 |
- |
161,656 |
|
6,417 |
- |
164,706 |
2,401 |
261,246 |
|
- |
145 |
177 |
- |
3,568 |
|
6,417 |
145 |
164,883 |
2,401 |
264,814 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
3 Segment information continued
(vi) Statement of financial position - segment information at 30 June 2009
|
|
Long Term Savings |
||||
|
At 30 June 2009 |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
35 |
3,543 |
101 |
- |
3,679 |
|
Mandatory reserve deposits with central banks |
- |
- |
- |
- |
- |
|
Property, plant and equipment |
327 |
38 |
1 |
- |
366 |
|
Investment property |
1,405 |
3 |
- |
- |
1,408 |
|
Deferred tax assets |
58 |
283 |
918 |
- |
1,259 |
|
Investments in associated undertakings and joint ventures |
8 |
1 |
- |
(3) |
6 |
|
Deferred acquisition costs |
111 |
1,000 |
1,554 |
- |
2,665 |
|
Reinsurers' share of long-term business policyholder liabilities |
11 |
682 |
450 |
- |
1,143 |
|
Reinsurers' share of general insurance liabilities |
- |
- |
- |
- |
- |
|
Deposits held with reinsurers |
- |
99 |
35 |
- |
134 |
|
Loans and advances |
151 |
3,739 |
56 |
- |
3,946 |
|
Investments and securities |
23,458 |
40,997 |
9,376 |
- |
73,831 |
|
Current tax receivable |
3 |
101 |
- |
- |
104 |
|
Client indebtedness for acceptances |
- |
- |
- |
- |
- |
|
Other assets |
567 |
461 |
288 |
- |
1,316 |
|
Derivative financial instruments - assets |
98 |
7 |
68 |
- |
173 |
|
Cash and cash equivalents |
74 |
932 |
(17) |
- |
989 |
|
Inter-segment assets |
1,208 |
421 |
57 |
- |
1,686 |
|
Total assets |
27,514 |
52,307 |
12,887 |
(3) |
92,705 |
|
Liabilities |
|
|
|
|
|
|
Long-term business policyholder liabilities |
24,393 |
40,254 |
11,475 |
- |
76,122 |
|
General insurance liabilities |
- |
- |
- |
- |
- |
|
Third party interests in consolidated funds |
- |
- |
- |
- |
- |
|
Borrowed funds |
255 |
25 |
- |
- |
280 |
|
Provisions |
136 |
177 |
- |
- |
313 |
|
Deferred revenue |
23 |
573 |
- |
- |
596 |
|
Deferred tax liabilities |
165 |
474 |
647 |
- |
1,286 |
|
Current tax payable |
61 |
55 |
(9) |
- |
107 |
|
Other liabilities |
938 |
673 |
331 |
- |
1,942 |
|
Liabilities under acceptances |
- |
- |
- |
- |
- |
|
Amounts owed to bank depositors |
- |
4,907 |
- |
- |
4,907 |
|
Derivative financial instruments - liabilities |
6 |
23 |
16 |
- |
45 |
|
Inter-segment liabilities |
37 |
369 |
142 |
20 |
568 |
|
Total liabilities |
26,014 |
47,530 |
12,602 |
20 |
86,166 |
|
Net assets |
1,500 |
4,777 |
285 |
(23) |
6,539 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
1,501 |
4,777 |
285 |
(23) |
6,540 |
|
Non-controlling interests |
(1) |
- |
- |
- |
(1) |
|
Non-controlling interests - ordinary shares |
(1) |
- |
- |
- |
(1) |
|
Non-controlling interests - preference shares |
- |
- |
- |
- |
- |
|
Total equity |
1,500 |
4,777 |
285 |
(23) |
6,539 |
3 Segment information continued
(vi) Statement of financial position - segment information at 30 June 2009
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Bermuda |
Other operating segments |
Consolidation adjustments |
Total reportable segments |
|
|
|
|
|
|
|
|
|
508 |
31 |
1,163 |
3 |
13 |
- |
5,397 |
|
856 |
- |
- |
- |
- |
- |
856 |
|
351 |
22 |
21 |
- |
3 |
- |
763 |
|
18 |
- |
- |
- |
- |
152 |
1,578 |
|
17 |
8 |
141 |
- |
9 |
- |
1,434 |
|
76 |
- |
7 |
- |
26 |
- |
115 |
|
2 |
17 |
34 |
215 |
- |
- |
2,933 |
|
18 |
- |
- |
1 |
- |
- |
1,162 |
|
- |
130 |
- |
- |
- |
- |
130 |
|
- |
3 |
- |
- |
- |
- |
137 |
|
33,886 |
3 |
- |
- |
- |
- |
37,835 |
|
5,194 |
370 |
156 |
2,915 |
76 |
1,951 |
84,493 |
|
44 |
1 |
- |
- |
- |
- |
149 |
|
146 |
- |
- |
- |
- |
- |
146 |
|
376 |
84 |
124 |
831 |
45 |
453 |
3,229 |
|
1,401 |
- |
- |
(35) |
163 |
784 |
2,486 |
|
632 |
80 |
125 |
38 |
23 |
785 |
2,672 |
|
33 |
45 |
2 |
508 |
684 |
(2,958) |
- |
|
43,558 |
794 |
1,773 |
4,476 |
1,042 |
1,167 |
145,515 |
|
|
|
|
|
|
|
|
|
548 |
- |
- |
4,131 |
- |
- |
80,801 |
|
- |
403 |
- |
- |
- |
- |
403 |
|
- |
- |
- |
- |
- |
2,610 |
2,610 |
|
1,064 |
- |
- |
- |
1,171 |
- |
2,515 |
|
- |
18 |
2 |
- |
76 |
- |
409 |
|
- |
8 |
- |
- |
- |
- |
604 |
|
158 |
1 |
- |
- |
21 |
- |
1,466 |
|
18 |
- |
7 |
16 |
47 |
- |
195 |
|
877 |
97 |
180 |
20 |
96 |
735 |
3,947 |
|
146 |
- |
- |
- |
- |
- |
146 |
|
35,683 |
- |
- |
- |
- |
- |
40,590 |
|
1,244 |
- |
- |
- |
40 |
780 |
2,109 |
|
412 |
- |
803 |
3 |
1,172 |
(2,958) |
- |
|
40,150 |
527 |
992 |
4,170 |
2,623 |
1,167 |
135,795 |
|
3,408 |
267 |
781 |
306 |
(1,581) |
- |
9,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,941 |
217 |
754 |
306 |
(2,027) |
- |
7,731 |
|
1,467 |
50 |
27 |
- |
446 |
- |
1,989 |
|
1,217 |
50 |
27 |
- |
- |
- |
1,293 |
|
250 |
- |
- |
- |
446 |
- |
696 |
|
3,408 |
267 |
781 |
306 |
(1,581) |
- |
9,720 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
3 Segment information continued
(vi) Statement of financial position - segment information at 30 June 2008
|
|
Long Term Savings |
||||
|
At 30 June 2008 |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
22 |
3,849 |
193 |
16 |
4,080 |
|
Mandatory reserve deposits with central banks |
- |
- |
- |
- |
- |
|
Property, plant and equipment |
227 |
42 |
1 |
4 |
274 |
|
Investment property |
1,028 |
3 |
- |
- |
1,031 |
|
Deferred tax assets |
57 |
151 |
459 |
6 |
673 |
|
Investments in associated undertakings and joint ventures |
21 |
- |
- |
(11) |
10 |
|
Deferred acquisition costs |
89 |
853 |
1,546 |
9 |
2,497 |
|
Reinsurers' share of long-term business policyholder liabilities |
18 |
730 |
658 |
- |
1,406 |
|
Deposits held with reinsurers |
- |
156 |
29 |
- |
185 |
|
Loans and advances |
72 |
3,647 |
44 |
- |
3,763 |
|
Investments and securities |
21,000 |
44,085 |
8,963 |
- |
74,048 |
|
Current tax receivable |
3 |
39 |
- |
- |
42 |
|
Client indebtedness for acceptances |
- |
- |
- |
- |
- |
|
Other assets |
392 |
452 |
213 |
8 |
1,065 |
|
Derivative financial instruments - assets |
44 |
19 |
21 |
- |
84 |
|
Cash and cash equivalents |
122 |
976 |
- |
11 |
1,109 |
|
Non-current assets held-for-sale |
8 |
- |
- |
- |
8 |
|
Inter-segment assets |
2 |
558 |
(1) |
- |
559 |
|
Total assets |
23,105 |
55,560 |
12,126 |
43 |
90,834 |
|
Liabilities |
|
|
|
|
|
|
Long-term business policyholder liabilities |
21,223 |
43,814 |
9,620 |
- |
74,657 |
|
Third party interests in consolidated funds |
- |
- |
- |
- |
- |
|
Borrowed funds |
209 |
55 |
- |
- |
264 |
|
Provisions |
113 |
182 |
- |
10 |
305 |
|
Deferred revenue |
22 |
488 |
- |
10 |
520 |
|
Deferred tax liabilities |
228 |
548 |
496 |
- |
1,272 |
|
Current tax payable |
52 |
59 |
(1) |
- |
110 |
|
Other liabilities |
707 |
817 |
1,045 |
11 |
2,580 |
|
Liabilities under acceptances |
- |
- |
- |
- |
- |
|
Amounts owed to bank depositors |
- |
4,442 |
- |
- |
4,442 |
|
Derivative financial instruments - liabilities |
53 |
9 |
- |
- |
62 |
|
Non-current liabilities held-for-sale |
6 |
- |
- |
- |
6 |
|
Inter-segment liabilities |
(795) |
502 |
(28) |
33 |
(288) |
|
Total liabilities |
21,818 |
50,916 |
11,132 |
64 |
83,930 |
|
Net assets |
1,287 |
4,644 |
994 |
(21) |
6,904 |
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
1,281 |
4,639 |
994 |
(21) |
6,893 |
|
Non-controlling interests |
6 |
5 |
- |
- |
11 |
|
Non-controlling interests - ordinary shares |
6 |
5 |
- |
- |
11 |
|
Non-controlling interests - preference shares |
- |
- |
- |
- |
- |
|
Total equity |
1,287 |
4,644 |
994 |
(21) |
6,904 |
3 Segment information continued
(vi) Statement of financial position - segment information at 30 June 2008
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Bermuda |
Other operating segments |
Consolidation adjustments |
Total reportable segments |
|
|
|
|
|
|
|
|
|
399 |
- |
958 |
3 |
13 |
- |
5,453 |
|
610 |
- |
- |
- |
- |
- |
610 |
|
252 |
- |
20 |
- |
3 |
- |
549 |
|
12 |
- |
- |
- |
- |
222 |
1,265 |
|
8 |
- |
95 |
(12) |
- |
- |
764 |
|
56 |
- |
- |
- |
3 |
- |
69 |
|
2 |
- |
27 |
202 |
- |
- |
2,728 |
|
5 |
- |
- |
- |
- |
- |
1,411 |
|
- |
- |
- |
- |
- |
- |
185 |
|
26,127 |
- |
- |
- |
- |
- |
29,890 |
|
4,808 |
- |
176 |
2,787 |
186 |
1,784 |
83,789 |
|
2 |
- |
- |
- |
3 |
- |
47 |
|
201 |
- |
- |
- |
- |
- |
201 |
|
897 |
- |
168 |
823 |
89 |
202 |
3,244 |
|
1,077 |
- |
- |
1 |
123 |
1,864 |
3,149 |
|
744 |
- |
178 |
42 |
114 |
942 |
3,129 |
|
2 |
561 |
- |
- |
- |
- |
571 |
|
(1) |
(1) |
- |
- |
1,433 |
(1,990) |
- |
|
35,201 |
560 |
1,622 |
3,846 |
1,967 |
3,024 |
137,054 |
|
|
|
|
|
|
|
|
|
413 |
- |
- |
3,884 |
- |
- |
78,954 |
|
- |
- |
- |
- |
- |
2,674 |
2,674 |
|
783 |
- |
- |
- |
1,189 |
- |
2,236 |
|
11 |
- |
2 |
- |
111 |
- |
429 |
|
1 |
- |
- |
- |
- |
- |
521 |
|
117 |
- |
- |
- |
- |
- |
1,389 |
|
22 |
- |
1 |
4 |
69 |
- |
206 |
|
2,121 |
- |
247 |
46 |
109 |
519 |
5,622 |
|
201 |
- |
- |
- |
- |
- |
201 |
|
27,591 |
- |
- |
- |
- |
- |
32,033 |
|
1,106 |
- |
- |
- |
73 |
1,821 |
3,062 |
|
- |
367 |
- |
- |
- |
- |
373 |
|
300 |
(34) |
1,441 |
(17) |
588 |
(1,990) |
- |
|
32,666 |
333 |
1,691 |
3,917 |
2,139 |
3,024 |
127,700 |
|
2,535 |
227 |
(69) |
(71) |
(172) |
- |
9,354 |
|
|
|
|
|
|
|
|
|
1,460 |
183 |
(97) |
(71) |
(566) |
- |
7,802 |
|
1,075 |
44 |
28 |
- |
394 |
- |
1,552 |
|
818 |
44 |
28 |
- |
(52) |
- |
849 |
|
257 |
- |
- |
- |
446 |
- |
703 |
|
2,535 |
227 |
(69) |
(71) |
(172) |
- |
9,354 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
3 Segment information continued
(vi) Statement of financial position - segment information at 31 December 2008
|
|
Long Term Savings |
||||
|
At 31 December 2008* |
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
|
Assets |
|
|
|
|
|
|
Goodwill and other intangible assets |
32 |
3,930 |
132 |
11 |
4,105 |
|
Mandatory reserve deposits with central banks |
- |
- |
- |
- |
- |
|
Property, plant and equipment |
267 |
44 |
1 |
1 |
313 |
|
Investment property |
1,281 |
3 |
- |
- |
1,284 |
|
Deferred tax assets |
65 |
295 |
1,036 |
3 |
1,399 |
|
Investments in associated undertakings and joint ventures |
26 |
- |
- |
7 |
33 |
|
Deferred acquisition costs |
105 |
988 |
1,896 |
8 |
2,997 |
|
Reinsurers' share of long-term business policyholder liabilities |
6 |
625 |
505 |
- |
1,136 |
|
Reinsurers' share of general insurance liabilities |
- |
- |
- |
- |
- |
|
Deposits held with reinsurers |
- |
121 |
40 |
- |
161 |
|
Loans and advances |
59 |
3,987 |
62 |
- |
4,108 |
|
Investments and securities |
22,326 |
40,151 |
10,284 |
- |
72,761 |
|
Current tax receivable |
3 |
88 |
- |
2 |
93 |
|
Client indebtedness for acceptances |
- |
- |
- |
- |
- |
|
Other assets |
443 |
441 |
252 |
4 |
1,140 |
|
Derivative financial instruments - assets |
209 |
- |
36 |
- |
245 |
|
Cash and cash equivalents |
101 |
757 |
(18) |
10 |
850 |
|
Non-current assets held-for-sale |
7 |
- |
- |
- |
7 |
|
Inter-segment assets |
1,322 |
516 |
46 |
- |
1,884 |
|
Total assets |
26,252 |
51,946 |
14,272 |
46 |
92,516 |
|
Liabilities |
|
|
|
|
|
|
Long-term business policyholder liabilities |
23,162 |
39,559 |
13,338 |
- |
76,059 |
|
General insurance liabilities |
- |
- |
- |
- |
- |
|
Third party interests in consolidated funds |
- |
- |
- |
- |
- |
|
Borrowed funds |
237 |
1 |
- |
- |
238 |
|
Provisions |
128 |
240 |
- |
4 |
372 |
|
Deferred revenue |
23 |
559 |
- |
8 |
590 |
|
Deferred tax liabilities |
172 |
526 |
578 |
- |
1,276 |
|
Current tax payable |
97 |
51 |
(15) |
- |
133 |
|
Other liabilities |
831 |
879 |
267 |
16 |
1,993 |
|
Liabilities under acceptances |
- |
- |
- |
- |
- |
|
Amounts owed to bank depositors |
- |
4,622 |
- |
- |
4,622 |
|
Derivative financial instruments - liabilities |
31 |
1 |
- |
- |
32 |
|
Non-current liabilities held-for-sale |
6 |
- |
- |
- |
6 |
|
Inter-segment liabilities |
31 |
765 |
1 |
35 |
832 |
|
Total liabilities |
24,718 |
47,203 |
14,169 |
63 |
86,153 |
|
Net assets |
1,534 |
4,743 |
103 |
(17) |
6,363 |
|
Equity |
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
1,526 |
4,743 |
103 |
(17) |
6,355 |
|
Non-controlling interests |
8 |
- |
- |
- |
8 |
|
Non-controlling interests - ordinary shares |
8 |
- |
- |
- |
8 |
|
Non-controlling interests - preference shares |
- |
- |
- |
- |
- |
|
Total equity |
1,534 |
4,743 |
103 |
(17) |
6,363 |
* The 31 December 2008 financial position has been restated by an amount of £1,405 million for both derivative financial instruments assets and liabilities on a consistent basis to 30 June 2009. There was no impact on the consolidated net assets at 31 December 2008 as a result of the restatement.
3 Segment information continued
(vi) Statement of financial position - segment information at 31 December 2008
|
|
|
|
|
|
|
£m |
|
Nedbank |
M&F |
USAM |
Bermuda |
Other operating segments |
Consolidation adjustments |
Total reportable segments |
|
|
|
|
|
|
|
|
|
425 |
29 |
1,305 |
5 |
13 |
- |
5,882 |
|
734 |
- |
- |
- |
- |
- |
734 |
|
316 |
24 |
26 |
- |
3 |
- |
682 |
|
15 |
- |
- |
- |
- |
179 |
1,478 |
|
25 |
8 |
158 |
- |
- |
- |
1,590 |
|
75 |
- |
- |
- |
3 |
- |
111 |
|
2 |
15 |
40 |
145 |
- |
- |
3,199 |
|
9 |
- |
- |
3 |
- |
- |
1,148 |
|
- |
115 |
- |
- |
- |
- |
115 |
|
- |
3 |
- |
- |
- |
- |
164 |
|
31,634 |
2 |
- |
- |
1 |
- |
35,745 |
|
5,043 |
322 |
177 |
3,676 |
88 |
1,455 |
83,522 |
|
25 |
- |
- |
- |
- |
- |
118 |
|
220 |
- |
- |
- |
- |
- |
220 |
|
486 |
68 |
139 |
789 |
96 |
419 |
3,137 |
|
1,627 |
- |
- |
21 |
226 |
1,109 |
3,228 |
|
631 |
56 |
220 |
29 |
79 |
997 |
2,862 |
|
- |
- |
- |
- |
- |
- |
7 |
|
19 |
46 |
99 |
377 |
1,632 |
(4,057) |
- |
|
41,286 |
688 |
2,164 |
5,045 |
2,141 |
102 |
143,942 |
|
|
|
|
|
|
|
|
|
426 |
- |
- |
4,784 |
- |
- |
81,269 |
|
- |
344 |
- |
- |
- |
- |
344 |
|
- |
- |
- |
- |
- |
2,591 |
2,591 |
|
960 |
- |
- |
- |
1,097 |
- |
2,295 |
|
1 |
21 |
3 |
- |
80 |
- |
477 |
|
- |
8 |
- |
- |
- |
- |
598 |
|
162 |
2 |
- |
- |
12 |
- |
1,452 |
|
18 |
2 |
8 |
19 |
39 |
- |
219 |
|
747 |
71 |
299 |
9 |
149 |
465 |
3,733 |
|
220 |
- |
- |
- |
- |
- |
220 |
|
33,549 |
- |
- |
- |
- |
- |
38,171 |
|
1,731 |
- |
- |
- |
124 |
1,103 |
2,990 |
|
- |
- |
- |
- |
- |
- |
6 |
|
427 |
(1) |
1,452 |
3 |
1,344 |
(4,057) |
- |
|
38,241 |
447 |
1,762 |
4,815 |
2,845 |
102 |
134,365 |
|
3,045 |
241 |
402 |
230 |
(704) |
- |
9,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,717 |
193 |
365 |
230 |
(1,123) |
- |
7,737 |
|
1,328 |
48 |
37 |
- |
419 |
- |
1,840 |
|
1,081 |
48 |
37 |
- |
(27) |
- |
1,147 |
|
247 |
- |
- |
- |
446 |
- |
693 |
|
3,045 |
241 |
402 |
230 |
(704) |
- |
9,577 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
4 Operating profit adjusting items
(i) Summary of adjusting items
In determining the adjusted operating profit of the Group certain adjustments are made to profit before tax to reflect the directors' view of the underlying long-term performance of the Group. The following table shows an analysis of those adjustments from adjusted operating profit to profit before and after tax.
|
£m |
||||||
|
Six months ended 30 June 2009 |
Notes |
Long Term Savings |
||||
|
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
||
|
Income/(expense) |
||||||
|
Goodwill impairment and impact of acquisition accounting |
4(ii) |
- |
(109) |
(9) |
- |
(118) |
|
Loss on disposal of subsidiaries, associated undertakings and strategic investments |
4(iii) |
(1) |
- |
- |
(45) |
(46) |
|
Short-term fluctuations in investment return |
4(iv) |
(32) |
(27) |
(93) |
- |
(152) |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
4(v) |
(40) |
- |
- |
- |
(40) |
|
Dividends declared to holders of perpetual preferred callable securities |
4(vi) |
- |
- |
- |
- |
- |
|
US Asset Management equity plans and minority holders |
4(vii) |
- |
- |
- |
- |
- |
|
Credit-related fair value gains on Group debt instruments |
4(viii) |
- |
- |
- |
- |
- |
|
Total adjusting items |
|
(73) |
(136) |
(102) |
(45) |
(356) |
|
Tax on adjusting items |
5(iii) |
10 |
21 |
4 |
- |
35 |
|
Non-controlling interest in adjusting items |
6(iii) |
- |
- |
- |
- |
- |
|
Total adjusting items after tax and non-controlling interests |
|
(63) |
(115) |
(98) |
(45) |
(321) |
|
£m |
||||||
|
Six months ended 30 June 2008 |
Notes |
Long Term Savings |
||||
|
OMSA |
Europe |
US Life |
Asia |
Total |
||
|
Income/(expense) |
||||||
|
Goodwill impairment and impact of acquisition accounting |
4(ii) |
- |
(114) |
(13) |
- |
(127) |
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
4(iii) |
(13) |
75 |
- |
- |
62 |
|
Short-term fluctuations in investment return |
4(iv) |
40 |
9 |
(32) |
- |
17 |
|
Investment return adjustment for Group equity and debt instruments held in life funds |
4(v) |
150 |
- |
- |
- |
150 |
|
Dividends declared to holders of perpetual preferred callable securities |
4(vi) |
- |
- |
- |
- |
- |
|
US Asset Management equity plans and minority holders |
4(vii) |
- |
- |
- |
- |
- |
|
Credit-related fair value gains on Group debt instruments |
4(viii) |
- |
- |
- |
- |
- |
|
Total adjusting items |
|
177 |
(30) |
(45) |
- |
102 |
|
Tax on adjusting items |
5(iii) |
(1) |
18 |
(7) |
- |
10 |
|
Non-controlling interest in adjusting items |
6(iii) |
- |
- |
- |
- |
- |
|
Total adjusting items after tax and non-controlling interests |
|
176 |
(12) |
(52) |
- |
112 |
4 Operating profit adjusting items
(i) Summary of adjusting items
|
£m |
|||||
|
|
|||||
|
Nedbank |
M&F |
USAM |
|
Other |
Total |
|
|
|||||
|
- |
- |
- |
- |
- |
(118) |
|
|
- |
1 |
- |
- |
(45) |
|
- |
(11) |
- |
(49) |
(23) |
(235) |
|
|
- |
- |
- |
- |
(40) |
|
|
- |
- |
- |
22 |
22 |
|
- |
- |
1 |
- |
- |
1 |
|
6 |
- |
- |
- |
6 |
12 |
|
6 |
(11) |
2 |
(49) |
5 |
(403) |
|
(2) |
3 |
9 |
- |
(4) |
41 |
|
6 |
3 |
- |
- |
- |
9 |
|
10 |
(5) |
11 |
(49) |
1 |
(353) |
|
£m |
|||||
|
|
|||||
|
Nedbank |
M&F |
USAM |
Bermuda |
Other |
Total |
|
|
|||||
|
- |
- |
- |
- |
- |
(127) |
|
|
- |
(1) |
- |
- |
62 |
|
- |
(10) |
- |
(50) |
37 |
(6) |
|
|
- |
- |
- |
- |
150 |
|
|
- |
- |
- |
22 |
22 |
|
- |
- |
5 |
- |
- |
5 |
|
- |
- |
- |
- |
40 |
40 |
|
1 |
(10) |
4 |
(50) |
99 |
146 |
|
- |
- |
- |
- |
(24) |
(14) |
|
13 |
4 |
(5) |
- |
- |
12 |
|
14 |
(6) |
(1) |
(50) |
75 |
144 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
4 Operating profit adjusting items continued
(i) Summary of adjusting items continued
|
|
||||||||
|
Year ended 31 December 2008 |
Notes |
Long Term Savings |
||||||
|
OMSA |
Europe |
US Life |
Asia Pacific |
Total |
||||
|
Income/(expense) |
||||||||
|
Goodwill impairment and impact of acquisition accounting |
4(ii) |
- |
(341) |
(96) |
(1) |
(438) |
||
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
4(iii) |
(11) |
72 |
- |
- |
61 |
||
|
Short-term fluctuations in investment return |
4(iv) |
(95) |
145 |
(248) |
- |
(198) |
||
|
Investment return adjustment for Group equity and debt instruments held in life funds |
4(v) |
234 |
- |
- |
- |
234 |
||
|
Dividends declared to holders of perpetual preferred callable securities |
4(vi) |
- |
- |
- |
- |
- |
||
|
US Asset Management equity plans and minority holders |
4(vii) |
- |
- |
- |
- |
- |
||
|
Credit-related fair value gains on Group debt instruments |
4(viii) |
- |
- |
- |
- |
- |
||
|
Total adjusting items |
|
128 |
(124) |
(344) |
(1) |
(341) |
||
|
Tax on adjusting items |
5(iii) |
20 |
41 |
3 |
- |
64 |
||
|
Non-controlling interest in adjusting items |
6(iii) |
- |
- |
- |
- |
- |
||
|
Total adjusting items after tax and non-controlling interests |
|
148 |
(83) |
(341) |
(1) |
(277) |
||
4 Operating profit adjusting items continued
(i) Summary of adjusting items continued
|
|
|
|
|
|
£m |
|
|
|
|
|
|
|
|
Nedbank |
M&F |
USAM |
|
Other |
Total |
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
(438) |
|
|
(10) |
1 |
- |
- |
53 |
|
- |
(72) |
- |
(228) |
(72) |
(570) |
|
|
- |
- |
- |
- |
234 |
|
|
- |
- |
- |
43 |
43 |
|
- |
- |
7 |
- |
- |
7 |
|
14 |
- |
- |
- |
489 |
503 |
|
15 |
(82) |
8 |
(228) |
460 |
(168) |
|
(4) |
14 |
- |
- |
(136) |
(62) |
|
18 |
19 |
(7) |
- |
- |
30 |
|
29 |
(49) |
1 |
(228) |
324 |
(200) |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
4 Operating profit adjusting items continued
(ii) Goodwill impairment and impact of acquisition accounting
In applying acquisition accounting in accordance with IFRS deferred acquisition costs and deferred revenue are not recognised. These are reversed in the acquisition statement of financial position and replaced by goodwill, other intangible assets and the value of the acquired present value of in-force business ('acquired PVIF'). In determining its adjusted operating profit the Group recognises deferred revenue and acquisition costs in relation to policies sold by acquired businesses pre-acquisition, and excludes the impairment of goodwill and the amortisation of acquired other intangibles and acquired PVIF.
Goodwill impairment and acquisition accounting adjustments to adjusted operating profit are summarised below:
|
£m |
|||||
|
Six months ended 30 June 2009 |
Long Term Savings |
Total |
|||
|
OMSA |
Europe |
US Life |
Asia Pacific |
||
|
|
|
|
|
|
|
|
Amortisation of acquired PVIF |
- |
(117) |
(9) |
- |
(126) |
|
Amortisation of acquired deferred costs and revenue |
- |
23 |
- |
- |
23 |
|
Amortisation of other acquired intangible assets |
- |
(38) |
- |
- |
(38) |
|
Change in acquisition statement of financial position provisions |
- |
23 |
- |
- |
23 |
|
Goodwill impairment |
- |
- |
- |
- |
- |
|
|
- |
(109) |
(9) |
- |
(118) |
|
£m |
||||||
|
Six months ended 30 June 2008 |
Long Term Savings |
Total |
||||
|
OMSA |
Europe |
US Life |
Asia |
|||
|
|
|
|
|
|
|
|
|
Amortisation of acquired PVIF |
- |
(126) |
(13) |
- |
(139) |
|
|
Amortisation of acquired deferred costs and revenue |
- |
45 |
- |
- |
45 |
|
|
Amortisation of other acquired intangible assets |
- |
(37) |
- |
- |
(37) |
|
|
Change in acquisition statement of financial position provisions |
- |
4 |
- |
- |
4 |
|
|
Goodwill impairment |
- |
- |
- |
- |
- |
|
|
|
- |
(114) |
(13) |
- |
(127) |
|
|
£m |
|||||
|
Year ended 31 December 2008 |
Long Term Savings |
Total |
|||
|
OMSA |
Europe |
US Life |
Asia |
||
|
|
|
|
|
|
|
|
Amortisation of acquired PVIF |
- |
(251) |
(35) |
- |
(286) |
|
Amortisation of acquired deferred costs and revenue |
- |
81 |
- |
- |
81 |
|
Amortisation of other acquired intangible assets |
- |
(75) |
- |
- |
(75) |
|
Change in acquisition statement of financial position provisions |
- |
(84) |
- |
- |
(84) |
|
Goodwill impairment |
- |
(12) |
(61) |
(1) |
(74) |
|
|
- |
(341) |
(96) |
(1) |
(438) |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
4 Operating profit adjusting items continued
(iii) (Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments
On 6 March 2009 the Group disposed of its interest in OM Australia at a loss of £4 million.
In August 2008, an agreement with ABN AMRO Asset Management Asia and their parent company, Fortis Bank had been entered into to acquire the 49% stake that Fortis holds in AATEDA, a major Chinese asset management joint venture for €165 million. On 27 May 2009 termination of AATEDA transaction with ABN AMRO Asset Management Asia and Fortis Bank was announced, with an exit fee of £41 million which has been accounted for as a loss on disposal.
On 11 June 2008, ELAM completed the disposal of its controlling shareholding in Palladyne, an asset management business, resulting in a profit on disposal of £17 million.
Part of the Nordic segment's banking business, Skandia's Nordic vehicle finance operation, SkandiaBanken Bilfinans, was sold during the six months ended 30 June 2008, resulting in a profit on disposal of £55 million.
During 2008, the Group has closed its project to develop a direct financial services capability in South Africa due to adverse market conditions. Costs relating to the closure amounting to £25 million have been excluded from the adjusted operating profit. OMSA realised a profit of £4 million on the sale of its administration business and Nedbank recognised a £1 million profit on the disposal of Bond Choice.
(Loss)/profits on the disposal of subsidiaries, associated undertakings and strategic investments are analysed below:
|
£m |
||||
|
|
Notes |
6 months |
6 months |
Year ended 31 December |
|
OMSA |
|
(1) |
(13) |
(11) |
|
Europe |
|
- |
75 |
72 |
|
US Life |
|
- |
- |
- |
|
Asia Pacific |
|
(45) |
- |
- |
|
Total Long Term Savings |
|
(46) |
62 |
61 |
|
Nedbank |
|
- |
1 |
1 |
|
M&F |
|
- |
- |
(10) |
|
USAM |
|
1 |
(1) |
1 |
|
Other |
|
- |
- |
- |
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
|
(45) |
62 |
53 |
(iv) Long-term investment return
Profit before tax includes actual investment returns earned on the shareholder assets of the Group's long-term and general insurance businesses. Adjusted operating profit is stated after recalculating shareholder asset investment returns based on a long-term investment return rate. The difference between the actual and the long-term investment returns are short-term fluctuations in investment return.
Long-term rates of return are based on achieved real rates of return appropriate to the underlying asset base, adjusted for current inflation expectations, default assumptions, costs of investment management and consensus economic investment forecasts, and are reviewed frequently, usually annually, for appropriateness. These rates of return have been selected with a view to ensuring that returns credited to adjusted operating profit are consistent with the actual returns expected to be earned over the long-term.
For South Africa long-term business, the return is applied to an average value of investible shareholders' assets, adjusted for net fund flows. For South Africa general insurance business, the return is an average value of investible assets supporting shareholders' funds and insurance liabilities, adjusted for net fund flows. For US and Europe long-term businesses, the return is applied to average investible assets.
Notes to the consolidated financial statements
For the six months ended 30 June 2009
4 Operating profit adjusting items continued
(iv) Long-term investment return continued
|
|
|||
|
Long-term investment rates |
6 months |
6 months ended 30 June 2008 Restated |
Year ended 31 December |
|
OMSA |
13.3% |
16.6% |
16.6% |
|
Europe |
4.3% |
4.8% |
4.8% |
|
US Life |
5.6% |
5.9% |
5.9% |
|
M&F |
13.3% |
16.6% |
16.6% |
(iv) Long-term investment return continued
Analysis of short-term fluctuations in investment return
|
£m |
||||||||
|
|
Long Term Savings |
M&F |
Bermuda |
Other |
Total |
|||
|
Six months ended 30 June 2009 |
OMSA |
Europe |
US Life |
Total |
||||
|
Long-term investment return |
61 |
53 |
303 |
417 |
28 |
69 |
46 |
560 |
|
Less: Actual shareholder investment return |
29 |
26 |
210 |
265 |
17 |
74 |
23 |
379 |
|
Short-term fluctuations in investment return |
32 |
27 |
93 |
152 |
11 |
(5) |
23 |
181 |
|
Hedge losses on Bermuda guarantees treated as short-term fluctuations |
- |
- |
- |
- |
- |
54 |
- |
54 |
|
Total short-term fluctuations in investment return |
32 |
27 |
93 |
152 |
11 |
49 |
23 |
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
Long Term Savings |
M&F |
Bermuda |
Other |
Total |
|||
|
Six months ended 30 June 2008 |
OMSA |
Europe |
US Life |
Total |
||||
|
Long-term investment return |
67 |
5 |
98 |
170 |
29 |
74 |
53 |
326 |
|
Less: Actual shareholder investment return |
107 |
14 |
66 |
187 |
19 |
68 |
90 |
364 |
|
Short-term fluctuations in investment return |
(40) |
(9) |
32 |
(17) |
10 |
6 |
(37) |
(38) |
|
Hedge losses on Bermuda guarantees treated as short-term fluctuations |
- |
- |
- |
- |
- |
44 |
- |
44 |
|
Total short-term fluctuations in investment return |
(40) |
(9) |
32 |
(17) |
10 |
50 |
(37) |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£m |
|
|
Long Term Savings |
M&F |
Bermuda |
Other |
Total |
|||
|
Year ended 31 December 2008 |
OMSA |
Europe |
US Life |
Total |
||||
|
Long-term investment return |
133 |
66 |
213 |
412 |
60 |
541 |
108 |
1,121 |
|
Less: Actual shareholder investment return |
38 |
211 |
(35) |
214 |
(12) |
519 |
36 |
757 |
|
Short-term fluctuations in investment return |
95 |
(145) |
248 |
198 |
72 |
22 |
72 |
364 |
|
Hedge losses on Bermuda guarantees treated as short-term fluctuations |
- |
- |
- |
- |
- |
206 |
- |
206 |
|
Total short-term fluctuations in investment return |
95 |
(145) |
248 |
198 |
72 |
228 |
72 |
570 |
The actual investment return attributable to shareholders for the US long-term business reflects total investment income, as a distinction is not drawn between shareholder and policyholder funds.
(v) 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 by the Group's life funds. These include investments in the Company's ordinary shares, and the subordinated liabilities and ordinary securities of the Group's South Africa banking subsidiary. These investment returns are eliminated within the consolidated income statement in arriving at profit before tax, but are included in adjusted operating profit. For the six months ended 30 June 2009, the investment return adjustment increased adjusted operating profit by £40 million (six months ended 30 June 2008: decrease of £150 million, year ended 31 December 2008: decrease of
£234 million).
(vi) 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 2009 (six months ended 30 June 2008: £22 million, year ended 31 December 2008: £43 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.
Notes to the consolidated financial statements
For the six months ended 30 June 2009
4 Operating profit adjusting items continued
(vii) US Asset Management equity plans and non-controlling interests
US Asset Management has entered into a number of long-term incentive arrangements with its asset management affiliates.
In accordance with IFRS requirements the cost of these schemes is disclosed as being attributable to non-controlling interests. However, this is treated as a compensation expense in determining adjusted operating profit. The amount recognised in relation to this for the six months ended 30 June 2009 was less than £1 million (six months ended 30 June 2008: £5 million, year ended 31 December 2008: £7 million).
The Group has issued put options to employees as part of some of its US affiliate incentive schemes. The impact of revaluing these instruments is recognised in accordance with IFRS, but excluded from adjusted operating profit. As at 30 June 2009 these instruments were revalued, the impact of which was £1 million (six months ended 30 June 2008: less than £1 million, year ended 31 December 2008: nil).
(viii) Credit-related fair value gains on Group debt instruments
The widening of credit spread of the Group's debt instruments in the market price has resulted in gains of £6 million for the six months ended 30 June 2009 (six months ended 30 June 2008: £40 million gain, year ended 31 December 2008: £489 million gain) at Group head office and £6 million for the six months ended 30 June 2009 (six months ended 30 June 2008: nil, year ended 31 December 2008: £14 million gain) in Nedbank being recorded in the Group's income statement for those instruments that are recorded at fair value.
In the directors' view, this gain is not reflective of the underlying performance of the Group and will reverse over time. The gain has therefore been excluded from adjusted operating profit.
5 Income tax expense/(credit)
(i) Analysis of total income tax expense/(credit)
|
£m |
|||
|
|
6 months |
6 months |
Year ended |
|
Current tax |
|||
|
United Kingdom tax |
|||
|
Corporation tax |
65 |
96 |
93 |
|
Double tax relief |
(44) |
(93) |
(145) |
|
Overseas tax |
|||
|
South Africa |
107 |
132 |
264 |
|
United States |
2 |
(7) |
4 |
|
Europe |
22 |
39 |
68 |
|
Secondary Tax on Companies (STC) |
5 |
5 |
22 |
|
Prior year adjustments |
6 |
18 |
1 |
|
Total current tax |
163 |
190 |
307 |
|
Deferred tax |
|||
|
Origination of temporary differences |
(73) |
(44) |
(548) |
|
Changes in tax rates/bases |
- |
(5) |
(1) |
|
Write down/recognition of deferred tax assets |
44 |
27 |
154 |
|
Total deferred tax |
(29) |
(22) |
(395) |
|
Total income tax expense/(credit) |
133 |
168 |
(88) |
|
|
|||
|
(ii) Reconciliation of total income tax expense/(credit) |
|||
|
£m |
|||
|
|
6 months |
6 months |
Year ended |
|
Profit before tax |
160 |
853 |
595 |
|
Tax at standard rate of 28% (2008: 28.5%) |
44 |
243 |
169 |
|
Different tax rate or basis on overseas operations |
9 |
9 |
(23) |
|
Untaxed and low taxed income |
(49) |
(128) |
(218) |
|
Disallowable expenses |
66 |
23 |
8 |
|
Net movement on deferred tax assets not recognised |
49 |
34 |
123 |
|
Effect on deferred tax of changes in tax rates |
(2) |
(5) |
(5) |
|
STC |
6 |
41 |
53 |
|
Income tax attributable to policyholder returns |
20 |
(46) |
(169) |
|
Other |
(10) |
(3) |
(26) |
|
Total income tax expense/(credit) |
133 |
168 |
(88) |
(iii) Income tax on adjusted operating profit
|
£m |
|||
|
|
6 months |
6 months |
Year ended |
|
Income tax expense/(credit) |
133 |
168 |
(88) |
|
Tax on adjusting items |
|
|
|
|
Impact of acquisition accounting |
19 |
20 |
46 |
|
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments |
- |
1 |
12 |
|
Short-term fluctuations in investment return |
23 |
(18) |
35 |
|
Income tax attributable to policyholders returns |
(25) |
66 |
236 |
|
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity |
(6) |
(6) |
(12) |
|
Fair value gains on group debt instruments |
(3) |
(11) |
(143) |
|
IAS 34 effective tax rate adjustment |
8 |
- |
- |
|
Income tax on adjusted operating profit |
149 |
220 |
86 |
6 (Losses)/earnings and (loss)/earnings per share
(i) Basic and diluted (loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the (loss)/profit for the financial period attributable to ordinary equity shareholders by the weighted average number of ordinary shares in issue during the period excluding own shares held in policyholder funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.
|
£m |
|||
|
|
6 months |
6 months |
Year ended |
|
(Loss)/profit for the financial period attributable to equity holders of the parent |
(70) |
549 |
441 |
|
Dividends declared to holders of perpetual preferred callable securities |
(16) |
(16) |
(31) |
|
(Loss)/profit attributable to ordinary equity holders |
(86) |
533 |
410 |
|
Total dividends declared to holders of perpetual preferred callable securities of £22 million in 2008 (six months ended 30 June 2008: £22 million, year ended 31 December 2008: £43 million) are stated net of tax credits of £6 million (six months ended 30 June 2008: £6 million, year ended 31 December 2008: £12 million). |
|||
|
Millions |
|||
|
|
6 months |
6 months |
Year ended |
|
Weighted average number of ordinary shares in issue |
5,277 |
5,311 |
5,294 |
|
Shares held in charitable foundations |
(7) |
(21) |
(19) |
|
Shares held in ESOP trusts |
(38) |
(45) |
(45) |
|
Adjusted weighted average number of ordinary shares |
5,232 |
5,245 |
5,230 |
|
Shares held in life funds |
(239) |
(239) |
(240) |
|
Shares held in Black Economic Empowerment trusts |
(236) |
(235) |
(235) |
|
Weighted average number of ordinary shares |
4,757 |
4,771 |
4,755 |
|
Basic (loss)/earnings per ordinary share (pence) |
(1.8) |
11.2 |
8.6 |
|
Diluted earnings per share recognises the dilutive impact of share options held in ESOP trusts and Black Economic Empowerment trusts which are currently in the money in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period. |
|||
|
Millions |
|||
|
|
6 months |
6 months |
Year ended |
|
Weighted average number of ordinary shares |
4,757 |
4,771 |
4,755 |
|
Adjustments for share options held by ESOP trusts |
109 |
51 |
61 |
|
Adjustments for shares held in Black Economic Empowerment trusts |
236 |
235 |
235 |
|
|
5,102 |
5,057 |
5,051 |
|
Diluted (loss)/earnings per ordinary share (pence) |
(1.7) |
10.5 |
8.1 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
6 Earnings and earnings per share continued
(ii) Adjusted operating earnings per ordinary share
Adjusted operating earnings per ordinary share is determined based on adjusted operating profit. Adjusted operating profit represents the directors' view of the underlying performance of the Group. For long-term and general insurance business adjusted operating profit is based on a long-term investment return, includes investment returns on life funds' investments in Group equity and debt instruments and is stated net of income tax attributable to policyholder returns. For the US Asset Management business it includes compensation costs in respect of certain long-term incentive schemes defined as non-controlling interests in accordance with IFRS. For all businesses, adjusted operating profit excludes goodwill impairment, the impact of acquisition accounting, revaluations of put options related to long-term incentive schemes, the impact of closure of unclaimed shares trusts, profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments, dividends declared to holders of perpetual preferred callable securities, income/(expense) from closure of unclaimed shares trusts and fair value gains/(losses) on Group debt instruments.
The reconciliation of (loss)/profit for the financial period to adjusted operating profit after tax attributable to ordinary equity holders is as follows:
|
£m |
|||
|
|
6 months |
6 months |
Year ended |
|
(Loss)/profit for the financial period attributable to equity holders of the parent |
(70) |
549 |
441 |
|
Adjusting items |
403 |
(146) |
168 |
|
Tax on adjusting items |
(41) |
14 |
62 |
|
Non-controlling interest on adjusting items |
(9) |
(12) |
(30) |
|
Adjusted operating profit after tax attributable to ordinary equity holders |
283 |
405 |
641 |
|
Adjusted weighted average number of ordinary shares (millions) |
5,232 |
5,245 |
5,230 |
|
Adjusted operating earnings per ordinary share (pence) |
5.4 |
7.7 |
12.2 |
(iii) Headline earnings per share
In accordance with the JSE Limited (JSE) listing requirements, the Group is required to calculate a 'headline earnings per share' (HEPS), determined by reference to the South African Institute of Chartered Accountants' circular 8/2007 'Headline Earnings'. The table below sets out a reconciliation of basic earnings per ordinary share and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of International Financial Reporting Standards.
|
£m |
||||||
|
|
6 months |
6 months |
Year ended |
|||
|
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
|
(Loss)/profit for the financial period attributable to equity holders of the parent |
(70) |
(70) |
549 |
549 |
441 |
441 |
|
Dividends declared to holders of perpetual preferred callable securities |
(16) |
(16) |
(16) |
(16) |
(31) |
(31) |
|
(Loss)/profit attributable to ordinary equity holders |
(86) |
(86) |
533 |
533 |
410 |
410 |
|
Adjustments: |
|
|
|
|
|
|
|
Impairments of goodwill and intangible assets |
- |
- |
- |
- |
100 |
100 |
|
Loss/(profit) on disposal of subsidiaries, associated undertakings and strategic investments |
45 |
45 |
(62) |
(63) |
(53) |
(67) |
|
Realised gains/losses (including impairments) on available-for-sale financial assets |
117 |
111 |
85 |
81 |
414 |
381 |
|
Headline earnings |
76 |
70 |
556 |
551 |
871 |
824 |
|
Weighted average number of ordinary shares |
4,757 |
4,757 |
4,771 |
4,771 |
4,755 |
4,755 |
|
Diluted weighted average number of ordinary shares |
5,102 |
5,102 |
5,057 |
5,057 |
5,051 |
5,051 |
|
Headline earnings per share (pence) |
1.6 |
1.5 |
11.7 |
11.5 |
18.3 |
17.3 |
|
Diluted headline earnings per share (pence) |
1.5 |
1.4 |
11.0 |
10.9 |
17.2 |
16.3 |
Notes to the consolidated financial statements
For the six months ended 30 June 2009
7 Goodwill
|
£m |
||||
|
|
|
At |
At |
At |
|
US Asset Management |
|
1,134 |
932 |
1,271 |
|
US Life |
|
- |
57 |
- |
|
Nedbank |
|
378 |
303 |
308 |
|
UK |
|
644 |
644 |
644 |
|
Nordic |
|
199 |
223 |
222 |
|
ELAM |
|
511 |
467 |
574 |
|
Other |
|
54 |
46 |
62 |
|
Goodwill, net of impairment losses |
2,920 |
2,672 |
3,081 |
|
Goodwill is reviewed annually for impairment for each cash generating unit (CGU) as part of the process for preparation of the Group's annual financial statements and in accordance with the Group's accounting policy. Recognised goodwill amounts are compared to the recoverable amounts, which are the higher of the value in use or net selling price calculations for the CGU in question. Goodwill is further reviewed at other points in the financial year if there are indicators of impairment of the goodwill amount for a particular CGU. No impairment charges have been made to any of the goodwill balances, for any of the CGUs, in the interim financial information.
8 Borrowed funds
|
£m |
|||||
|
|
Notes |
At |
At |
At 2008 |
|
|
Senior debt securities and term loans |
8(i) |
732 |
449 |
557 |
|
|
Mortgage backed securities |
8(ii) |
111 |
91 |
104 |
|
|
Subordinated debt securities |
8(iii) |
1,672 |
1,696 |
1,634 |
|
|
Borrowed funds |
2,515 |
2,236 |
2,295 |
||
|
(i) Senior debt securities and term loans |
|||||
|
|
£m |
||||
|
|
At 2009 |
At |
At |
||
|
Floating rate notes1 |
67 |
75 |
85 |
||
|
Fixed rate notes2 |
137 |
46 |
152 |
||
|
Revolving credit facility3 |
528 |
192 |
294 |
||
|
Term loan and other loans |
- |
23 |
26 |
||
|
Investment fund borrowings |
- |
113 |
- |
||
|
Total senior debt securities and term loans |
732 |
449 |
557 |
||
Senior debt securities and term loan comprises:
1. Floating rate notes
● £6 million note repayable in December 2010, with holders having the option to elect for early redemption every 6 months with coupon referenced against 6 month LIBOR less 0.50 per cent
● US$150 million repayable September 2014 at 3 month LIBOR plus 0.63 per cent - repaid 2008
● US$50 million repayable September 2011 at 3 month LIBOR plus 0.50 per cent
● US$10 million repayable September 2009 at 3 month LIBOR plus 0.35 per cent
● SEK100 million repayable March 2009 at 3 month STIBOR plus 0.20 per cent - repaid 2009
● €22 million repayable January 2010 at 3 month EURIBOR plus 0.35 per cent
● SEK50 million repayable March 2010 at 3 month STIBOR plus 0.38 per cent.
2. Fixed rate notes
● €30 million Euro bond repayable July 2010, capital and interest swapped into fixed rate US Dollars at 5.28 per cent
● €10 million Euro bond repayable December 2010, capital and interest swapped into floating rate US Dollars at 3 month LIBOR plus 0.95 per cent
● €20 million Euro bond repayable August 2013, capital and interest swapped into floating rate US Dollars at 3 month LIBOR plus 1.30 per cent
● €100 million Euro bond repayable December 2009 at 3.46 per cent.
The total fair value of the swap derivatives associated with the Senior notes is £11 million (six months ended 30 June 2008: £11 million, year ended 31 December 2008: £11 million). These are recognised as derivative assets.
3. Revolving credit facility
The Group has a £1,250 million five-year multi-currency revolving credit facility, which had an original maturity date of September 2010. On 18 August 2007 syndicate banks agreed to extend the maturity date of £1,232 million of the facility until September 2012. At 30 June 2009 £999 million (six months ended 30 June 2008: £443 million, year ended 31 December 2008: £826 million) of this facility was utilised, £528 million (six months ended 30 June 2008: £192 million, year ended 31 December 2008: £294 million) in the form of drawn debt and £471 million (six months ended 30 June 2008: £264 million, year ended 31 December 2008: £532 million) in the form of irrevocable letters of credit.
The Group has a SEK1,000 million revolving credit facility, which has a maturity date of 2 July 2009. At 30 June 2009 this facility was undrawn. As of 3 July 2009 the maturity date was extended by 364 days to 2 July 2010.
(ii) Mortgage backed securities
|
|
£m |
||
|
At 30 June |
At 30 June |
At |
|
|
R291 million notes (class A1) repayable 18 November 2039 (11.467%)1 |
23 |
19 |
22 |
|
R1.4 billion notes (class A2A) repayable 18 November 2039 (11.817%)1 |
78 |
64 |
73 |
|
R98 million notes (class B note) repayable 18 November 2039 (12.067%)1 |
6 |
5 |
5 |
|
R76 million notes (class C note) repayable 18 November 2039 (13.317%)1 |
4 |
3 |
4 |
|
|
111 |
91 |
104 |
1 Issued on 10 December 2007 by the Group's South African banking business and are callable on 18 November 2012.
8 Borrowed funds continued
(iii) Subordinated debt securities
|
|
£m |
||
|
At 30 June |
At 30 June |
At |
|
|
Banking |
|||
|
US$18 million repayable 31 August 2009 (6 month LIBOR less 1.5%)1 |
10 |
9 |
12 |
|
R1.5 billion repayable 24 April 2016 (7.85%)2 |
116 |
86 |
108 |
|
R1.8 billion repayable 20 September 2018 (9.84%)3 |
139 |
107 |
135 |
|
R515 million repayable on 4 December 2008 (13.5%)4 - repaid |
- |
33 |
- |
|
R500 million repayable on 30 December 2010 (8.38%)5 |
38 |
28 |
36 |
|
R650 million repayable 8 February 2017 (9.03%)6 |
51 |
39 |
49 |
|
R1.7 billion repayable 8 February 2019 (8.9%)7 |
125 |
98 |
125 |
|
R2.0 billion repayable 6 July 2022 (3 month JIBAR plus 0.47%)8 |
160 |
132 |
150 |
|
R500 million repayable 15 August 2012 (3 month JIBAR plus 0.45%)9 |
40 |
33 |
37 |
|
R1.0 billion repayable 17 September 2015 (10.54%)10 |
78 |
61 |
77 |
|
R500 million repayable 14 December 2017 (3 month JIBAR plus 0.70%)11 |
40 |
32 |
37 |
|
R120 million repayable 14 December 2017 (10.38%)12 |
9 |
7 |
9 |
|
R487 million repayable 20 November 2018 (15.05%)13 |
38 |
30 |
40 |
|
R1,265 million repayable 20 November 2018 (JIBAR plus 4.75%)14 |
101 |
46 |
94 |
|
R300 million repayable on 4 December 2013 (JIBAR plus 2.5%)15 |
12 |
- |
11 |
|
US$100 million repayable on 3 March 2022 (3 month US Dollar LIBOR)16 |
61 |
- |
- |
|
|
1,018 |
741 |
920 |
|
Other |
|
||
|
R3.0 billion repayable 27 October 2020 (8.9%)17 |
235 |
193 |
219 |
|
£300 million repayable 21 January 2016 (5.0%)18 |
147 |
273 |
239 |
|
R250 million preference shares repayable 9 June 201119 |
20 |
16 |
18 |
|
€750 million repayable 18 January 2017 (4.5%)20 |
318 |
522 |
303 |
|
|
720 |
1,004 |
779 |
|
Less: Banking subordinated debt securities held by other Group companies |
(66) |
(49) |
(65) |
|
Total subordinated liabilities |
1,672 |
1,696 |
1,634 |
The subordinated notes rank behind the claims against the Group depositors and other unsecured, unsubordinated creditors. None of the Group's subordinated notes are secured.
1. This instrument is matched either by advances to clients or covered against exchange rate fluctuations.
2. Unsecured secondary callable note was issued 24 April 2005 with a call date of 24 April 2011.
3. Unsecured secondary callable note was issued 20 September 2006 at R1.5 billion with a call date of 20 September 2013. On 18 May 2007 an additional R0.3 billion was issued.
4. Unsecured callable bonds issued 10 June 2002 - repaid.
5. Unsecured callable bonds issued 30 March 2006.
6. Unsecured secondary callable note was issued 8 February 2007 with a call date of 8 February 2012.
7. Unsecured secondary callable note was issued 8 February 2007 at R1.0 billion. On 19 March 2007 an additional R0.7 billion was issued.
8. Unsecured secondary capital callable note issued 6 July 2007 and has a call date of 6 July 2017.
9. This bond issued on 15 August 2007 is an unsecured secondary capital callable floating rate note with a call date of 15 August 2012.
10. This bond issued on 17 September 2007 is an unsecured fixed rate note with a term of 13 years (non-call 8).
11. This bond issued on 14 December 2007 is a 10 year (non-call 5) floating rate note. After its call date on 14 December 2012 its terms become JIBAR plus 1.70 per cent until maturity.
12. This bond issued on 14 December 2007 is a 10 year (non-call 5) fixed rate note. After its call date its terms become floating 3 month JIBAR plus initial margin over mid swaps plus 1.0 per cent until maturity.
13. This bond issued on 20 May 2008 is a perpetual (non-call 10 year) fixed rate note with a call date of 20 November 2018.
14. This bond issued on 20 May 2008 is a perpetual (non-call 10 year) floating rate note with a call date of 20 November 2018.
15. This bond issued on 4 December 2008 is a floating rate note with a call date of 4 December 2013.
16. Dated Tier 2 Notes issued 3 March 2009 with call date of 3 March 2017.
17. These bonds have a maturity date of 27 October 2020 and pay a coupon of 8.92 per cent to 27 October 2015 and 3 month JIBAR plus 1.59 per cent thereafter. The Group has the option to repay the bonds at par on 27 October 2015 and at 3 monthly intervals thereafter.
18. These bonds issued on 20 January 2006 have a maturity date of 21 January 2016 and pay a coupon of 5.0 per cent to 21 January 2011 and 6 month LIBOR plus 1.13 per cent thereafter. The coupon on the bonds was swapped into floating rate of 6 month STIBOR plus 0.50 per cent. The Group has the option to repay the bonds at par on 21 January 2011 and at 6 monthly intervals thereafter.
19. These preference shares are redeemable on 9 June 2011 and pay a variable cumulative coupon of 61.0 per cent of the Prime Rate as quoted by Nedbank Limited. The Group has the option to redeem the shares at par at any time before the final redemption date but after giving an agreed period of notice.
20. This bond issued on 16 January 2007 has a maturity date of 18 January 2017 and pays a coupon of 4.5 per cent to 17 January 2012 and 6 month EURIBOR plus 0.96 per cent thereafter. The principal and coupon on the bond were swapped equally into Sterling and US Dollars with coupons of 6 month LIBOR plus 0.34 per cent and 6 month US LIBOR plus 0.31 per cent respectively. The Group has the option to repay the bonds at par on 17 January 2012 and at 6 monthly intervals thereafter.
Notes to the consolidated financial statements
For the six months ended 30 June 2009
9 Dividends
Dividends paid were as follows:
|
£m |
|||
|
|
6 months |
6 months |
Year ended |
|
2007 Final dividend paid - 4.55p per 10p share |
- |
227 |
227 |
|
2008 Interim dividend paid - 2.45p per 10p share |
- |
- |
125 |
|
Dividends to ordinary equity holders |
- |
227 |
352 |
|
Dividends declared to holders of perpetual preferred callable securities |
22 |
22 |
43 |
|
Dividend payments for the year |
22 |
249 |
395 |
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 2009, £22 million was declared and paid to holders of perpetual preferred callable securities (March 2008: £22 million and November 2008: £21 million).
10 Contingent liabilities
|
£m |
|||
|
|
At |
At |
At |
|
Guarantees and assets pledged as collateral security |
2,038 |
1,315 |
1,839 |
|
Irrevocable letters of credit |
110 |
286 |
760 |
|
Secured lending |
412 |
1,038 |
383 |
|
Other contingent liabilities |
36 |
151 |
393 |
Nedbank structured financing
Historically a number of the Group's South African banking businesses entered into structured finance transactions with third parties using the tax base of these companies. Pursuant to the terms of the majority of these transactions, the underlying third party has contractually agreed to accept the risk of any tax being imposed by the South African Revenue Service (SARS), although the obligation to pay in the first instance rests with the Group's companies. It is only in limited cases where, for example, the credit quality of a client becomes doubtful, or where the client has specifically contracted out of the re-pricing of additional taxes, that the recovery from a client could be less than the liability that could arise on assessment, in which case provisions are made. SARS has examined the tax aspects of some of these types of structures and SARS could assess these structures in a manner different to that initially envisaged by the contracting parties. As a result Group companies could be obliged to pay additional amounts to SARS and recover these from clients under the applicable contractual arrangements.
American Skandia
The sale of American Skandia to Prudential Financial contained customary representations and warranties. The indemnity in respect of this is limited to US$1 billion. Investigations by various US regulators have given rise to potential settlements and claims in relation to market timing. American Skandia's exposure to market timing is part of a wider investigation of the US industry. The exposure is covered by the aforementioned indemnity which also covers the matter of American Skandia's failure to administer the annuitisation provisions contained in certain contracts. This was an administrative error made by the American Skandia business between 1996 and 2003. American Skandia has been provided for in the acquisition accounting.
Other contingent liabilities
The reduction within other contingent liabilities reflects a reclassification of utilised facilities to commitments.
This information is provided by RNS
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