| All-in tax rate (%) |
| The all-in tax rate is the income statement taxation charge (ie both direct and indirect taxation) expressed as a percentage of
profit before any taxation. |
| |
| Average cost of funds |
| The average cost of funds is calculated by expressing the interest expense as a percentage of the average total interestbearing
liabilities. |
| |
| Average gross advances |
| The average gross advances is the sum of the month-end gross advances for the period, divided by the number of months
in the period. |
| |
| Average interest-bearing liabilities |
| The average interest-bearing liabilities comprise subordinated bonds/debentures, bonds and other long-term and short-term
funding and are calculated as the sum of the month-end balances for these instruments, divided by the number of months in
the period. |
| |
| Bad debts to advances ratio (%) |
| The bad debts to advances ratio is calculated by expressing the charge for bad and doubtful advances as a percentage of
average gross advances. |
| |
| Basel Capital Accord |
| The new Basel Capital Accord (Basel II) of the Bank for International Settlements is an improved capital adequacy framework
accomplished by aligning banks' capital requirements with enhanced modern risk management practices and sophisticated
risk assessment capabilities. Basel II becomes effective for all South African banks on 1 January 2008. |
| |
| Basic earnings attributable to ordinary shareholders |
Profit for the period less dividends on non-redeemable, non-cumulative, non-participating preference shares declared during
the
reporting period. |
| |
| Basic earnings per share (cents) |
Basic earnings per share is calculated by dividing basic earnings attributable to ordinary shareholders by the weighted number
of shares in issue during
the period. |
| |
| Capital adequacy ratio (%) |
| The capital adequacy of banks and banking groups is measured in terms of the requirements of the Banks Act (Act number
94 of 1990, as amended) and regulations thereto. The ratio is calculated by dividing the sum of tier 1 and tier 2 capital by the
risk-weighted assets. The minimum South African total capital adequacy ratio for banks and banking groups is 10% of riskweighted
assets. |
| |
| Cash and cash equivalents |
| Cash and cash equivalents comprise cash on hand, deposits held on call with banks, investments in money market
instruments and cash reserves held by the insurance company, net of bank overdrafts. |
| |
| Cost to advances ratio (%) |
| The cost to advances ratio is calculated by expressing the operating expenses as a percentage of average gross advances. |
| |
| Cost to income ratio (%) |
| The cost to income ratio is calculated by expressing the operating expenses as a percentage of total income (total income is
also referred to as revenue). |
| |
| Deferred taxation assets |
| Deferred taxation assets are the amounts of income taxation recoverable in future years in respect of deductible temporary
differences arising from differences between the taxation and accounting treatment of transactions and the carry-forward of
unused taxation losses. |
| |
| Direct taxation |
| Direct taxation includes normal taxation on income, capital gains tax (CGT) and secondary tax on companies (STC). |
| |
| Dividend cover (times) |
| Dividend cover is calculated by dividing basic earnings attributable to ordinary shareholders for the period by ordinary
dividends declared for the period excluding STC costs. |
| |
| Economic profit |
| Reported headline earnings less a charge for an imputed cost of capital, based on average shareholder funds multiplied by
the estimated average cost of equity for the group, resulting in a measure of shareholder value creation. |
| |
| Effective tax rate (%) |
| The effective tax rate is the direct taxation charge per the income statement expressed as a percentage of profit before
taxation. |
| |
| Fully diluted basic earnings per share (cents) |
| Fully diluted basic earnings per share is calculated by dividing basic earnings attributable to ordinary shareholders by the fully
diluted number of ordinary shares in issue during the period. |
| |
| Fully diluted headline earnings per share (cents) |
| Fully diluted headline earnings per share is calculated by dividing headline earnings by the fully diluted number of ordinary
shares in issue during the period. |
| |
| Fully diluted number of shares in issue |
| The fully diluted number of shares in issue is the weighted number of ordinary shares in issue adjusted for the impact of
outstanding options under the ABIL Employee Share Participation Scheme as defined in IAS 33 – Earnings per share. |
| |
| Gearing |
| Gearing represents the ratio of average total assets to average ordinary shareholders' equity, and therefore indicates the extent
to which the group uses debt financing to fund assets. Gearing is important in order to optimise the weighted average cost
of capital and the return on equity of the group. |
| |
| Headline earnings |
| For the purposes of definition and calculation the guidance given on headline earnings, as issued by the South African Institute
of Chartered Accountants (SAICA) in circular 8/2007 of July 2007, has been used. Headline earnings consist of basic earnings
attributable to ordinary shareholders adjusted for goodwill impairments, capital profits and losses and other non-headline
items. |
| |
| Headline earnings per share (cents) |
| Headline earnings per share is calculated by dividing headline earnings by the weighted number of ordinary shares in issue
during the period. |
| |
| IFRS |
International Financial Reporting Standards, as adopted by the International Accounting Standards Board (IASB), and
interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB.
The group's consolidated financial statements are prepared in accordance
with IFRS. |
| |
| Indirect taxation |
| Value-added tax (VAT) and other taxes, levies and duties paid to government, excluding direct taxation. |
| |
| JIBAR |
| Johannesburg Interbank Agreed Rate, which is the rate that South African banks charge each other for wholesale money. |
| |
| National Credit Act |
| The National Credit Act (Act 34 of 2005) (NCA) became fully operational on 1 June 2007. Subject to certain defined exceptions
it regulates all arm's length credit agreements that are made or have an effect within the Republic of South Africa and it
replaces the Usury Act (Act 73 of 1968) (including the Exemption Notices published by the Minister of Trade and Industry in
terms of section 15A), the Credit Agreements Act (Act 75 of 1980) and the Integration of Usury Laws Act (Act 57 of 1996). |
| |
| Net asset value per share (cents) |
Net asset value per share is calculated as ordinary shareholders' equity divided by the number of ordinary shares in issue (net
of treasury shares) at the end of
the period. |
| |
| Non-performing loans (NPLs) |
| Non-performing loans are defined as loans that have more than three cumulative instalments in arrears. Primarily, NPLs are
considered impaired loans in terms of IAS 39 and therefore require an assessment for impairment provisions. |
| |
| NPL coverage (%) |
| NPL coverage is calculated as the total impairment provisions (including ceded credit life reserves) divided by non-performing loans. |
| |
| Perpetual preference shares |
| Perpetual preference shares are non-redeemable, non-cumulative and non-participating preference shares which carry a
dividend as a fixed percentage of the prime overdraft lending rate. |
| |
| Primary (tier 1) capital |
| Primary capital consists of issued ordinary share capital and perpetual preference share capital, retained earnings and reserves. |
| |
| Return on assets (RoA) (%) |
| Return on assets is calculated by expressing headline earnings as a percentage of monthly average total assets. |
| |
| Return on equity (RoE) (%) |
| Return on equity is calculated by expressing headline earnings as a percentage of monthly average shareholders' equity.
Alternatively, return on equity is equal to return on assets multiplied by the gearing ratio. |
| |
| Risk-weighted assets |
| Risk-weighted assets are determined by applying risk weights to balance sheet assets and off-balance sheet assets and
commitments according to the relative credit risk of the counterparty. The risk weighting for each balance sheet asset and offbalance
sheet asset is defined by the regulations to the Banks Act (Act number 94 of 1990, as amended). |
| |
| Sales |
| Sales constitute the aggregate of the amount disbursed in a period. In the case of the credit card products, sales represent
the aggregate value of credit limits granted in respect of credit cards issued during the period. |
| |
| Statutory assets – bank and insurance |
| Statutory assets – bank and insurance comprises cash reserves and prudential liquid assets placed with the South African
Reserve Bank, together with insurance prudential cash reserves as required by the Financial Services Board. |
| |
| Secondary (tier 2) capital |
| Secondary capital is made up of qualifying subordinated debt and portfolio impairments net of deferred tax. For the purposes
of the internal economic capital model, only the qualifying subordinated debt is included in tier 2 capital. |
| |
| Total expected recoverable |
| The number of contractual instalments on a loan multiplied by the total monthly instalment, including insurance and service fees. |
| |
| Weighted number of shares in issue |
| The weighted number of shares in issue is calculated as the number of ordinary shares in issue at the beginning of the year,
increased by shares issued during the period, reduced by shares cancelled or bought back during the period, further reduced
by treasury shares as a result of share transactions in the ABIL Employee Share Trust, weighted on a time basis for the period
in which they have participated in the income of the group. |
