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ABSA GROUP LIMITED - Absa Group Summary provisional consolidated financial results for the reporting period ended 31 December 2018

Release Date: 11/03/2019 07:16
Code(s): ABG     PDF:  
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Absa Group Summary provisional consolidated financial results for the reporting period ended 31 December 2018

Absa Group Limited
(formerly known as Barclays Africa Group Limited)
Authorised financial services and registered credit provider (NCRCP7)
Registration number: 1986/003934/06
Incorporated in the Republic of South Africa
JSE share code: ABG
ISIN: ZAE000255915

Absa Group Limited
Summary provisional consolidated financial results
For the reporting period ended 31 December 2018

The Board of Directors oversees the Group's activities and holds management accountable for adhering to the risk
governance framework. To do so, directors review reports prepared by the businesses, Risk, and others. They exercise 
sound independent judgement, and probe and challenge recommendations, as well as decisions made by management.

Finance is responsible for establishing a strong control environment over the Group's financial reporting processes
and serves as an independent control function advising business management, escalating identified risks and establishing
policies or processes to manage risk.

Finance is led by the Group's Financial Director who reports directly to the Interim Chief Executive Officer. The
Financial Director has regular and unrestricted access to the Board of Directors as well as to the Group Audit Compliance
Committee (GACC).

Together with the GACC, the Board has reviewed and approved the summary provisional consolidated financial statements 
including the reporting changes contained in the announcements released on the Stock Exchange News Services (SENS) on 
11 March 2019.

The GACC and the Board are satisfied that the changes disclosed in the SENS result in fair presentation of the
consolidated financial position and comply, in all material respects, with the relevant provisions of the Companies Act, 
IFRS and interpretations of IFRS, and SAICA's Reporting Guides.

Absa Group Limited
(formerly known as Barclays Africa Group Limited)
Absa Group Limited summary provisional consolidated annual financial results for the reporting period ended 
31 December 2018

Authorised financial services and registered credit provider (NCRCP7)
Registration number: 1986/003934/06
Incorporated in the Republic of South Africa
JSE share code: ABG
ISIN: ZAE000255915

These summary provisional consolidated annual financial results were prepared by Absa Group Financial Control under the 
direction and supervision of Financial Director, J P Quinn CA(SA).

Profit and dividend announcement

Salient features
Absa Group Limited (the Group) discloses International Financial Reporting Standards (IFRS) financial results and 
a normalised view, which adjusts for the financial consequences of separating from Barclays PLC.

IFRS basis
* Headline earnings per share (HEPS), which included R3.2bn of separation costs, recognised as operating expenses,
  decreased 1% to 1 703.7 cents from 1 724.5 cents.
* The Group declared a 4% higher full year dividend per share (DPS) of 1 110 cents.
* Retail and Business Banking (RBB) South Africa headline earnings grew 2% to R8.9bn, Corporate and Investment 
  Banking.(CIB) South Africa declined 1% to R3.4bn, Absa Regional Operations (ARO), previously known as Rest of 
  Africa Banking, rose 9% to R3.2bn and WIMI increased 3% to R1.3bn.
* Return on Equity (RoE) declined to 13.4% from 14.2%. 
* Revenue increased 4% to R76.5bn and costs rose 8% to R46.8bn. 
* Pre-provision profit (total income less operating expense) decreased 1% to R29.7bn.
* Credit impairments fell 10% to R6.3bn, resulting in a 0.73% credit loss ratio from 0.87%.
* Net Asset Value (NAV) per share increased 1% to 13 233 cents.

Normalised basis
* Diluted normalised HEPS grew 4% to 1 910.0 cents from 1 845.4 cents
* RoE increased slightly to 16.8%
* Revenue grew 4% to R75.7bn and operating expenses rose 5% to R43.6bn
* Pre-provision profit increased 1% to R32.0bn
* Absa Group's normalised Common Equity Tier 1 (CET1) ratio of 12.0% remains above regulatory requirements and 
  the Board's target range. Its statutory CET1 was 12.8%. 
* NAV per share rose 4% to 11 985 cents.

Normalised reporting
Given the process of separating from Barclays PLC, Absa Group continues to report IFRS-compliant financial results 
and a normalised view. The latter adjusts for the consequences of the separation and better reflects the Group's 
underlying operational performance. The Group will present normalised results for future periods where the 
financial impact of separation is considered material.

Normalisation adjusts for the following items: R330m of interest earned on Barclays PLC's separation contribution
(2017: R325m); hedging revenue linked to separation activities of R525m (2017: R80m); operating expenses of 
R3 161m (2017: R1 901m) and R194m of other expenses (2017: R394m), plus a R484m (2017: R408m) tax impact of the 
aforementioned items. In total, these adjustments added R1 986m (2017: R1 245m) to the Group's normalised headline 
earnings during the period. Since normalisation occurs at a Group level, it does not affect divisional disclosures. 
Non-IFRS measures such as normalised results are considered pro forma financial information as per JSE listing 
requirements. The pro forma financial information, is the responsibility of the Group's Board of the directors and 
is presented for illustrative purpose only and because of its nature may not fairly present the Group's financial 
position, changes in equity, and results in operations or cash flows.

Overview of results
The Group's IFRS headline earnings declined 1% to R14 142m from R14 378m and diluted HEPS decreased 1% to 1 700.4
cents. The Group's IFRS RoE fell to 13.4% from 14.2%, largely due to the higher capital base from the Barclays PLC
separation contribution and costs, while its return on average assets declined to 1.17% from 1.27%. Net interest 
income increased 3% and non-interest income grew 5%, resulting in 4% higher total revenue. Operating expenses grew 
8%, increasing the cost-to-income ratio to 61.2% from 59.0%. Pre-provision profit decreased 1% to R29,7bn. The 
Group's NAV per share rose 1% to 13 233 cents including Barclays PLC's remaining separation contribution in equity.

On a normalised basis,  Group's headline earnings grew 3% to R16 128m from R15 623m and diluted HEPS rose 4% to 
1 910.0 cents from 1 845.4 cents. The Group's normalised RoE was 16.8% from 16.5% and its return on assets was 
1.34% from 1.39%. Revenue grew 4% to R75.7bn, with net interest income and non-interest income rising 3% and 5%, 
respectively. The Group's net interest margin on average interest-bearing assets decreased to 4.64% from 4.83%, 
largely due to adopting IFRS 9. Gross loans and advances to customers grew 13% to R872bn, while deposits due to 
customers rose 7% to R736bn. With operating expenses growing 5%, the normalised cost-to-income ratio increased to 
57.7% from 56.7%, and pre-provision profit rose 1% to R32.0bn. In constant currency (CCY), pre-provision profit 
grew 2% and headline earnings 4%. Credit impairments fell 10% to R6.3bn, resulting in a 0.73% credit loss ratio 
from 0.87%. The Group's normalised NAV per share increased 4% to 11 985 cents and it declared a 4% higher full 
year DPS of 1 110 cents.

RBB South Africa's headline earnings rose 2% to R8 880m primarily due to 10% lower credit impairments. Retail 
Banking South Africa headline earnings grew 2% to R6 359m, while Business Banking South Africa increased 1% to 
R2 521m. CIB South Africa's earnings declined 1%, given 76% higher credit impairments. Corporate South Africa 
grew 4% to R1 171m and Investment Banking South Africa decreased 4% to R2 196m. ARO's headline earnings grew 
9% to R3 218m (CCY 13%), with RBB up 26% (CCY 29%) and CIB increasing 7% (CCY 11%). WIMI's headline earnings 
increased 3% to R1 268m, with continuing business line earnings up 8%.  

South African earnings grew 3% to R13.0bn, while Africa Regions rose 6% (CCY 10%) to account for 20% of the 
Group's earnings.

Operating environment
For the year, global growth is estimated to have remained  at 3.7%, but was less synchronised among the larger
developed markets. Growth in the US accelerated, supported by tax cuts, while political uncertainty and concern 
over trade slowed growth in the Euro Area and the United Kingdom (UK). Global trade tensions, a stronger dollar 
and concerns about United States (US) policy tightening increased market volatility. Global inflation firmed 
on higher oil prices and weaker emerging market currencies. Monetary policy continued on a gradual tightening 
path but is likely to become more restrictive by end of 2019. 

South Africa recorded its first recession since the last global financial crisis in the first half of 2018. The 
recession was short-lived as economic activity rebounded in the 3rd quarter at an annualised rate of 2.6% from 
negative 0.5% in the previous quarter. In the fourth quarter, GDP growth slowed to an annualised rate of 1.4% as 
gross fixed capital formation fell for the fourth consecutive quarter. For the year, GDP growth moderated to 0.8% 
from 1.4% in 2017. Weak labour markets and moderating confidence weighed on consumers appetite for credit and 
willingness to spend. Headline consumer price inflation finished 2018 at 4.5% year on year, broadly similar to 
its level at the beginning of the year, having ranged from 3.8% to 5.2% in the intervening months. The Reserve 
Bank cut the repurchase rate by 25 bps in March but reversed this in November (+25 bps), citing upside risks to 
the inflation outlook. 

Economic growth in our key Africa regions faced significant uncertainties and headwinds during 2018. On a
GDP-weighted basis and excluding South Africa, the region's economy grew by an estimated 5.6% in 2018, down from 
5.8% in 2017. Monetary policy tightened in a number of markets on the back of weaker currencies and rising 
inflation.

Group performance
Statement of financial position
IFRS 9 replaced IAS 39 on 1 January 2018, in terms of which credit impairments moved from an incurred basis to an
expected credit loss approach (ECL). The Group applied IFRS 9 retrospectively, with an adjustment to retained 
earnings and other reserves as at 1 January 2018, and elected not to restate comparative periods. The Group has 
reconsidered the treatment of post write-off recoveries in the calculation of the portfolio's accounting for LGD, 
since the previously published results as at 30 June 2018. The Group will exclude post write-off recoveries from 
LGD for accounting purposes.

The exclusion of post write-off recoveries from LGD has significantly increased the allowance for ECL as at 
1 January 2018:
* The restated allowance for ECL is R29 703m (including interest in suspense and ECL provision on off balance 
  sheet items), relative to the amount of R27 767m, as previously published. 
* This has resulted in a  reduction in the Group's retained income as at 1 January 2018 of R5 413m (after taxation
  adjustment of R2 063m and non-controlling interest of R328m), relative to the amount previously published of 
  R4 106m (after taxation adjustment of R1 572m  and non-controlling interest of R190m).
* The IFRS 9 transition disclosures previously published as at 30 June 2018 have been restated.

Total IFRS assets increased 10% to R1 289bn at 31 December 2018, largely due to 13% growth in loans and advances 
to customers.

Gross Loans and advances to customers
Gross loans and advances to customers increased 13% to R871bn. RBB South Africa loans rose 6% to R488bn. Retail
Banking South Africa's loans grew 5% to R416bn, reflecting 12% growth in Vehicle and Asset Finance (VAF) and 
Personal Loans, 2% growth in Home Loans, while Card increased 4% despite a reduced store card portfolio. Business 
Banking South Africa's gross loans rose 11% to R72bn, with term loans increasing 19%. CIB South Africa's gross 
loans grew 25% to R275bn, including 23% higher term loans and reverse repurchase agreements up 52%. ARO's gross 
loans increased 26% to R102bn or 12% in constant currency.

Funding
The Group's liquidity position remains strong, with liquid assets and other sources of liquidity growing 2% to 
R218bn which equates to 30% of customer deposits. The Group's average liquidity coverage ratio for the fourth 
quarter was 117%, comfortably above the minimum regulatory hurdle of 90% during 2018. Deposits due to customers 
grew 7% to R736bn. The Group's loans to deposit and debt securities ratio increased to 93.8% from 90.6%. Deposits 
due to customers constituted 72.3% of total funding. RBB South Africa's deposits grew 11% to R333bn, with Retail 
Banking South Africa up 11% to R208bn and Business Banking South Africa increasing 10% to R125bn. CIB South 
Africa's deposits fell 2% to R174bn. ARO's deposits increased 23% to R134bn, or 10% in constant currency.

Net asset value
The Group's IFRS NAV rose 1% to R109bn despite a R5.5bn reduction on adoption of IFRS 9 on 1 January 2018 and the 
NAV per share grew 1% to 13 233 cents. During the year the Group generated retained earnings of R13.9bn, from 
which it paid R9.0bn in ordinary dividends. Its foreign currency translation reserve increased by R2.6bn.

On a normalised basis, NAV rose 3% to R101bn.

Capital to risk-weighted assets
Group risk-weighted assets (RWAs) grew 11% to R819bn at 31 December 2018, largely due to increased credit risk 
RWAs. The Group remains well capitalised, comfortably above minimum regulatory capital requirements. It's 
normalised CET1 and total capital adequacy ratios were 12.0% and 15.4% (from 12.1% and 14.9%), respectively. The 
Group generated 2.0% of CET 1 capital internally over the past year. The day 1 impact from implementing IFRS 9 
reduced the Group's CET1 ratio by 7 bps, as we opted to phase it in over three years. Declaring of a 4% higher 
full year DPS of 1 110 cents on a dividend cover of 1.7 times took into account the operating environment, the 
Group's strong capital position, internal capital generation, strategy and growth plans.

Statement of comprehensive income
Net interest income
IFRS net interest income increased 3% to R43 755m from R42 644m (Normalised: increased 3% to R43 425m from 
R42 319m), while average interest-bearing assets grew 7%. The Group's net interest margin (to average interest-
bearing assets) declined to 4.64% from 4.83%, mostly due to transitioning to IFRS 9, which reduced the margin by 
12 bps. Excluding the impact of IFRS 9, loan pricing decreased 3 bps, while composition added 3 bps to margin, given 
slower growth in Home Loans. Deposit pricing reduced the margin by 3 bps, primarily due to competitive pricing on 
fixed retail deposits in South Africa. Deposit composition decreased the margin by 3 bps, as average wholesale 
funding balances grew faster than customer deposits. With lower average interest rates in South Africa, the equity 
and deposit endowment reduced the Group margin by 5 bps. The structural hedge released R545m to the income statement, 
3 bps more than the prior year, to largely offset the reduced endowment contribution. ARO reduced the margin by 2 bps
due to lower interest rates. Treasury's improving asset/liability construct in South Africa added 6 bps, partially 
offset by the reduction between prime and Johannesburg Interbank Average Rate (JIBAR).

Non-interest income
Non-interest income grew 7% to R32 760m from R30 571m (normalised: increased 5% to R32 235m from R30 671m) to 
account for 43% of total revenue from 42%. On a constant currency basis, the growth was 6%.

Net fee and commission income grew 4% to R22 523m, which represented 70% of total non-interest income. Within this,
cheque account fees increased 9% to R5 401m, electronic banking grew 3% to R5 335m, while credit cards and merchant 
income rose by 6% and 9%, respectively. 

Net trading income excluding hedge accounting grew 7% to R5 183m, reflecting CIB Markets South Africa income increasing 
10%, while ARO Markets income decreased 2%.

RBB South Africa's non-interest income grew 5% to R18 083m, as Retail Banking South Africa increased 6% and Business
Banking South Africa grew 2%. Within Retail Banking, Transactional and Deposits rose 8%, reflecting price increases,
debit card turnover, cheque account growth and the reclassifying of fee write-offs to credit impairments. CIB South 
Africa increased 7% to R4 589m, with 2% higher Corporate transactional banking revenue.

ARO non-interest income grew 6% to R5 157m, or 9% in constant currency, as CIB increased 3% and RBB 8%. 

WIMI's non-interest income increased 6% to R5 514m, including 10% higher Life Insurance net premium income and 8%
growth in Short-term Insurance net premium income.

Impairment losses on loans and advances
Implementing IFRS 9 increased the Group's IAS 39 credit provisions and interest in suspense by R7.0bn or 36% at 
1 January 2018 to R28.9bn. This impact is R1.9bn higher than the amount previously published following a change 
in the treatment of post write-off recoveries in the calculation of accounting LGD. Previously reported IAS 39 
impairment ratios in respect of performing and non-performing portfolios are not comparable to similar ratios 
under IFRS 9. At 31 December 2018 the Group's stage 3 (defaulted) loans were 5.10% of gross loans and advances 
from 5.53% at 1 January 2018 and the ECL coverage ratios on these were 45.1% and 43.7%, respectively.

At the IFRS Interpretations Committee (IFRS-IC) meeting held in November 2018, the committee concluded that any
unrecognised interest, which is subsequently recovered should be presented as a credit impairment gain.  Following 
this decision, the Group has amended its accounting treatment. This change does not impact profit or loss, but it 
does reduce both the Group's ECL and interest income by R608m for the year ending 31 December 2018 
(30 June 2018: R292m). 

Credit impairments decreased 10% to R6 324m from R7 022m, which improved the Group's credit loss ratio to 0.73% 
from 0.87% of gross loans and advances to customers and banks. Excluding the IFRS-IC conclusion's impact credit 
impairments declined 1%. 

RBB South Africa credit impairments decreased 10% to R4 555m, resulting in a 0.94% credit loss ratio from 1.10%.
Retail Banking South Africa credit impairments declined 9% to R4 313m, improving its credit loss ratio to 1.04% 
from 1.20%. Home Loans' charge fell 84% to R113m resulting in a 0.05% credit loss ratio from 0.30%. Card and 
Payments' credit loss ratio declined to 3.42% from 4.53%, given 23% lower credit impairments of R1 478m. Vehicle 
and Asset Finance credit impairments grew 29% to R1 096m, increasing its credit loss ratio to 1.02% from 0.87%. 
Personal Loans' charge fell 1% to R1 105m and its credit loss ratio improved to 5.51% from 6.09%. Business Banking 
South Africa credit impairments decreased 12% to R242m, improving its credit loss ratio to 0.35% from 0.43%.

CIB South Africa credit impairments increased 76% to R998m from R567m, due to a large single name exposure. Its 
credit loss ratio increased to 0.36% from 0.24%.

ARO's credit impairments fell 38% to R794m from R1 289m, reducing its credit loss ratio to 0.77% from 1.34%. 
Within this, RBB's charge declined 14% to R820m, a 1.80% credit loss ratio, while CIB's fell 91% to R32m or a 
0.07% credit loss ratio.

Operating expenses
Group operating expenses grew 8% (CCY +6%) on an IFRS basis, to R46 803m from R43 304m, resulting in a 61.2%
cost-to-income ratio from 59.0%. On a normalised basis operating expense increased 5% to R43 642m from R41 403m 
resulting in a 57.7% cost-to-income from 56.7%.

Staff costs grew 5% and accounted for 53% of total operating expenses. Salaries rose 8% and total incentives fell 2%. 

On a normalised basis staff costs grew 4% and accounted for 55% of total operating expenses. Salaries rose 7% and
total incentives fell 2%. Headcount decreased 2% to 40 856, largely due to reductions in South Africa and a 
disposal in WIMI.

Non-staff costs grew 7%. Professional fees grew 17% (normalised: 7%) to R2 700m, while telephone and postage 
increased 1% and printing and stationary decreased 1%. Operating leases on properties were flat at R1 606m and 
property costs increased 4% to R1 816m (normalised: 2% to R1 759m).  Marketing costs increased 9% to R1 962m from 
R1 793m due to the brand launch (normalised: decreased 7% to R1 595m reflecting lower product campaign spend). 
Total IT-related spend grew 7% to R7 886m and constituted 18% of Group operating expenses. Amortisation of 
intangible assets rose 30% to R846m (normalised: 25% to R815m), while cash transportation increased 16% to R1 266m. 
The 18% growth in depreciation reflects investment in technology and optimisation of the corporate property 
portfolio and branch network.

RBB South Africa costs grew 5% to R25 770m. Retail Banking South Africa increased 5% and Business Banking South 
Africa 5%, due to salary increases, amortisation of IT infrastructure, digital fraud losses and one-off 
restructuring and rebranding initiatives. 

CIB South Africa expenses grew 12% to R6 304m, after two years of low cost growth, due to investment in systems 
and technology and building out capabilities after separating from Barclays PLC.

ARO's expenses increased 6%, or 8% in constant currency, to R9 535m due to incremental costs following separation 
from Barclays PLC and high inflation rates in some countries. CIB increased 13% and RBB grew 3%. 

WIMI's costs declined 5% to R3 098m, due to disposals, as continuing business line costs grew 4%. Positive 
operating Jaws improved its cost-efficiency ratio to 33.3%.

Taxation
The Group's taxation expense increased 7% to R6 282m (normalised: 8% to R6 766m), slightly above the 5% pre-tax 
profit, resulting in a 29.2% (normalised: 28.1%) effective tax rate from 28.1% (normalised: 27.5%).

Segment performance
RBB South Africa
Headline earnings increased 2% to R8 880m, due to 10% lower credit impairments as pre-provision profits declined 2%.
Revenue grew 2% to R43 591m, with non-interest income increasing 5%. Costs rose 5% to R25 770m, resulting in a 59.1%
cost-to-income ratio from 57.4%. The credit loss ratio improved to 0.94% from 1.10%. RBB South Africa generated a 
return on regulatory capital (RoRC) of 24.0% and constituted 53% of total normalised headline earnings excluding 
the Group centre.

Retail Banking South Africa
Headline earnings grew 2% to R6 359m, primarily due to 9% lower credit impairments. Card and Payments earnings 
grew 15% to R1 723m, as a result of 23% lower credit impairments and 13% growth in acquiring turnover. Despite 7% 
higher pre-provision profits, Transactional and Deposits earnings fell 3% to R2 311m, because of significantly 
higher credit impairments. Home Loans earnings were flat at R1 736m, as credit impairments fell 84% to offset 9% 
lower revenue due to the impact of IFRS 9 and IFRS-IC conclusion. Vehicle and Asset Finance earnings fell 9% to 
R877m, as 29% higher credit impairments outweighed 5% higher pre-provision profits. Personal Loans earnings 
increased 7% to R461m, due to a combination of pre-provision profits rising 2% and credit impairments declining 
by 1%. Retail Banking South Africa accounted for 38% of normalised headline earnings excluding the Group centre.

Business Banking South Africa
Headline earnings increased 1% to R2 521m. Pre-provision profits were flat, given 5% cost growth due to continued
investment in frontline staff and systems. Credit impairments fell 12%, due to IFRS-IC conclusion. Business Banking
South Africa generated 15% of overall normalised headline earnings excluding the Group centre.

CIB South Africa
Headline earnings decreased 1% to R3 367m, primarily due to 76% higher credit impairments. Pre-provision profits 
grew 5% although 12% higher costs exceeded 8% revenue growth. Corporate earnings grew 4% to R1 171m, largely due 
to 11% revenue growth. Investment Bank earnings decreased 4% to R2 196m, due to 70% higher credit impairments. 
CIB South Africa contributed 20% of total normalised headline earnings excluding the Group centre and generated 
a 15.6% RoRC.

Absa Regional Operations 
Headline earnings grew 9%, or 13% in constant currency, to R3 218m, largely due to 38% lower credit impairments.
Pre-provision profits increased 3%. Revenue grew 5% to R16 323m. Costs grew 6% to R9 535m, resulting in a 58.4%
cost-to-income ratio. RBB earnings increased 26% to R844m, or 29% in constant currency, given positive operating 
leverage and 14% lower credit impairments. CIB earnings grew 7%, or 11% in constant currency, to R2 508m as its 
credit impairments dropped 91%. ARO accounted for 19% of total normalised headline earnings excluding the Group 
centre and produced a 18.5% RoE.

Wealth, Investment Management and Insurance
Headline earnings grew 3% to R1 268m, while earnings from continuing business lines increased 8% to R1 195m. Gross
operating income grew 10% to R6 869m and costs decreased 3% to R3 740m. Life insurance earnings grew 4% to R870m. 
The embedded value of new business increased 15%. Investment Cluster earnings declined 6%, largely due to margin 
compression since assets under management grew 1% to R337bn.  Short-term insurance earnings grew 32% to R299m. 
South Africa underwriting margins increased to 9.6%. WIMI's South Africa earnings increased  9% to R1 326m, while 
Africa Regions reported a loss of R58m. WIMI's RoE improved to 21.7% and it generated 8% of total earnings 
excluding the Group centre.

Prospects
South Africa's economic growth outlook for 2019 appears relatively modest. We see only tentative growth for 
consumer spending of 1.5%, with probably more downside than upside risks. On the view that the consumer remains 
constrained and business confidence tentative, we forecast GDP growth of 1.7% in 2019. Eskom's challenges are one 
key uncertainty for 2019, as is the global environment.  Beyond the election, the economy is likely to remain a 
challenge for fiscal policy, while we expect the Reserve Bank to leave interest rates unchanged for some time.

In our Africa regions markets, we forecast real GDP growth of 5.9% with risks tilted to the downside. 
Infrastructure investment, improved mining output and agriculture should help support growth in 2019. Global 
uncertainties will continue to weigh on the currency, inflation and interest rate outlook in the region.

Based on these assumptions, and excluding any major unforeseen political, macroeconomic or regulatory developments, 
we expect stronger deposit growth this year and it should exceed our loan growth. We again see better loan growth 
from Absa Regional Operations in constant currency than from South Africa, where momentum should continue. Our 
net interest margin is likely to decline slightly. Costs will remain well controlled and we are targeting positive
operating Jaws for the full year, although this could be challenging in the first half, given the slow start we 
expect from the economy and financial markets. Our credit loss ratio is likely to increase off a low base. Our 
Group CET1 ratio should remain above board targets and we are comfortable with our dividend cover at current 
levels. Lastly, our RoE should increase slightly in 2019, on the path to achieving our target of 18% to 20% by 
2020.

Normalised financial results as a consequence of Barclays PLC separation
On 1 March 2016, Barclays PLC announced its intention to sell down its 62,3% interest in the Group. A comprehensive
separation programme was initiated by Barclays PLC and the Group to determine possible interactions between the 
companies to ensure that the Group can operate as an independent and sustainable group without the involvement of 
Barclays PLC.

Barclays PLC currently holds 14,9% in the Group.

As part of its divestment Barclays PLC contributed ?765m to the Group, primarily in recognition of the investments
required for the Group to separate from Barclays PLC. Investments will be made primarily in rebranding, technology 
and separation-related projects and it is expected that these will neutralise the capital and cash flow impact of 
separation investments on the Group over time.

The separation process will have an impact on the Group's financial results for the next few years, most 
notably by increasing the capital base in the near-term and generating endowment revenue thereon, with increased 
costs over time as the separation investments are concluded ahead of the associated benefit realisation. 
International Financial Reporting Standards (IFRS) require that the Barclays PLC contribution be recognised 
directly in equity, while the subsequent investment expenditure (including the depreciation or amortisation of 
capitalised assets), will be recognised in profit or loss. The aforementioned will result in a disconnect between 
underlying business performance and the IFRS financial results during the separation period. Normalised financial 
results will therefore be disclosed while the underlying business performance is materially different from the 
IFRS financial results. Refer to the IFRS results.

The following presents the items which have been excluded from the normalised financial results:
* Barclays PLC contribution (including the endowment benefit)
* Hedging linked to separation activities
* Technology and brand separation projects
* Depreciation and amortisation on the aforementioned projects
* Transitional service payments to Barclays PLC
* Employee cost and benefits linked to separation activities
* Separation project execution and support cost 

Basis of presentation
IFRS financial results
The Group?s summary provisional consolidated financial results have been prepared in accordance with the recognition 
and measurement requirements of International Financial Reporting Standards (IFRS), interpretations issued by the 
IFRS Interpretations Committee (IFRS-IC), the South African Institute of Chartered Accountants? Financial 
Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by 
the Financial Reporting Standards Council, the JSE Listings Requirements and the requirements of the Companies Act.  

The information disclosed in the SENS is derived from the information contained in the audited annual consolidated
financial statements and does not contain full or complete disclosure details. Any investment decisions by 
shareholders should be based on consideration of the audited annual consolidated financial statements, which is 
available on request. The presentation and disclosures comply with International Accounting Standards IAS 34.

The preparation of financial information requires the use of estimates and assumptions about future conditions. 
Use of available information and application of judgement are inherent in the formation of estimates. The 
accounting policies that are deemed critical to the Group?s results and financial position, in terms of the 
materiality of the items to which the policies are applied, and which involve a high degree of judgement including 
the use of assumptions and estimation, are impairment of loans and advances, goodwill impairment, fair value 
measurements, impairment of fair value through other comprehensive income financial assets (2018)/
available-for-sale financial assets (2017), consolidation of structured or sponsored entities, post-retirement 
benefits, provisions, income taxes, share-based payments, liabilities arising from claims made under short-term 
and long-term insurance contracts and offsetting of financial assets and liabilities.

The directors assess the Group's future performance and financial position on an ongoing basis and have no reason 
to believe that the Group will not be a going concern in the reporting period ahead. For this reason, the 
information in this report has been prepared on a going concern basis.

Constant currency
Constant currency pro forma financial information has been presented to illustrate the impact of changes in the
Group's major foreign currencies, namely the, Botswana Pula, Ghanaian Cedi, Kenyan Shilling, Mauritius Rupee, 
Mozambique Metical, Seychelles Rupee, Tanzanian Shilling, Uganda Shilling and Zambia Kwacha. Because of its nature, 
the constant currency pro forma financial information may not fairly present the Group's financial position, 
changes in equity, results of operations or cash flows.  In determining the constant currency pro forma financial 
information, amounts denoted in the above listed currencies for the current period have been converted to the 
presentation currency using the spot exchange rate as at 31 December 2017. The constant currency pro forma 
financial information is the responsibility of the directors.

Normalised financial results
The summary provisional consolidated normalised financial results (normalised results) have been prepared to 
illustrate the impact of the separation from Barclays PLC and adjust for the interest income on Barclays PLC's 
separation contribution, hedging linked to the separating activities, operating expenses and other expenses, as 
well as the tax impact of the aforementioned items (collectively the "separation").  

Normalised results have been prepared for illustrative purposes only and because of their nature may not fairly
present the Group's financial position, changes in equity, cash flows and results of operations.

The normalised results have not been prepared using the accounting policies of the Group and do not comply with 
IFRS. These results are considered to be pro forma financial information and have been prepared in terms of the 
Johannesburg Stock Exchange listing requirements. The pro forma financial information, is the responsibility of 
the Group's Board of directors.

The pro forma financial information contained in this announcement has been reviewed by the group's external auditors
and their unmodified limited assurance report prepared in terms of ISAE 3420 is available for inspection at the
company's registered office on weekdays from 09:00 to 16:00

Accounting policies
The accounting policies applied in preparing the summary provisional consolidated financial statements are the same 
as those in place for the Group?s annual consolidated financial statements for the reporting period ended 
31 December 2017 except for the adoption of IFRS 9 Financial Instruments (IFRS 9), IFRS 15 Revenue from Contracts 
with Customers (IFRS 15), internal accounting policy amendments and changes to the Group?s operating segments and 
business portfolios changes. Refer to note 15.

Standards issued not yet effective
IFRS 16 Leases (IFRS 16) sets out the principles for the recognition, measurement, presentation and disclosure of
leases. One of the key changes brought by IFRS 16 is the elimination of the classification of leases as either 
operating leases or finance leases for a lessee, and the introduction of a single lessee accounting model.

Applying the revised model, a lessee is required to recognise:
* a right of use asset together with a lease liability representing the future lease payments for all leases 
  (unless the lease term is shorter than 12 months or the underlying asset is of low value and the related exemptions 
  are elected); and
* depreciation of lease assets separately from interest on lease liabilities in the statement of comprehensive income.

The standard provides revised guidance in defining what constitutes a lease and how the lease term is determined as
well as enhanced disclosure requirements for both lessees and lessors about its leasing activities and how exposures 
are managed.

During 2018, the joint leases programme (incorporating corporate real estate services and finance) has focused its
efforts on implementing the IT solution, which will ensure that leases are recognised and disclosed in terms of the
requirements of IFRS 16, collating the required lease data, designing and testing new processes, and ensuring 
appropriate financial disclosures.

The effective date of IFRS 16 is 1 January 2019. The Group intends to apply the modified retrospective approach on
adoption, with right of use assets measured retrospectively using the Group's transition date incremental borrowing 
rate. 

The implementation of IFRS 16 will require the recognition of right-of-use assets (presented as part of property and
equipment) and lease liabilities, together with a debit against retained earnings of between R225m and R285m (net of
deferred tax, non-controlling interests and the release of IAS 17 straight line reserves). Right-of-use assets will be risk
weighted in line with the nature of the underlying assets, and the debit to retained income will reduce CET1. The 
value of the right-of-use assets recognised is expected to be less than R3.8bn and the value of the increase in lease
liabilities is expected to be less than R4.6bn (before the release of the IAS 17 straight-lining liability 
of approximately R400m).

IFRS 17 - Insurance contracts
IFRS 17 Insurance Contracts establishes principles for the recognition, measurement, presentation and disclosure of
insurance contracts issued. It also requires similar principles for reinsurance contracts held and issued investment
contracts with discretionary participation features.  The standard brings a greater degree of comparability and transparency
about an insurer's financial health and the profitability of new and in-force insurance business.  

IFRS 17 introduces a general measurement model that measures groups of insurance contracts based on fulfilment cash
flows (comprising probability-weighted current estimates of future cash flows and an explicit entity specific adjustment
for risk) and a contractual service margin. The premium allocation approach (PAA) is a simplified measurement model that
may be applied when certain conditions are fulfilled. Under the premium allocation approach, the liability for remaining
coverage shall be initially recognised as the premiums, if any, received at initial recognition, minus any insurance
acquisition cash flows. The general measurement model has specific modifications applicable to accounting for reinsurance
contracts, direct participating contracts and investment contracts with discretionary participation features. 

At a Board meeting held on 14 November 2018, the IASB tentatively decided to propose amending the IFRS 17 effective
date for reporting periods beginning on or after 1 January 2022. This is a deferral of 1 year compared to the current date
of 1 January 2021 and is subject to public consultation, which is expected to take place in 2019.

A joint insurance programme incorporating finance, actuarial, data and IT was started in the last quarter of 2017 to
address the implementation requirements of IFRS 17. It is a multi-year programme impacting models, data, systems and
business processes. During 2018, the programme has focused on interpreting the requirements, project design and model
prototyping as well as the commencement of impact assessment. 2019 will see the programme move into a 'build and test' 
phase with planned parallel testing ahead of the 2021/2022 implementation. 

Auditor report
Ernst & Young Inc. (EY), the Group's independent auditor, has audited the annual consolidated and separate financial
statements of the Group from which management prepared the summary provisional consolidated financial results. The 
auditor has expressed an unqualified audit opinion on the consolidated annual financial statements. The summary 
provisional consolidated financial results comprise: the summary provisional consolidated statement of financial 
position at 31 December 2018, summary provisional consolidated statement of comprehensive income, summary provisional 
consolidated statement of changes in equity and summary provisional consolidated statement of cash flows for the 
reporting period then ended and selected explanatory notes, excluding items indicated as unaudited. 
The audit report on the consolidated annual financial statements as well as the independent reporting accountants' 
report on the normalised financial results and the constant currency pro forma financial information is available for 
inspection at the Group's registered office.

The summary of provisional consolidated statements for the year ended 31 December 2018 have been audited by
EY, who expressed an unmodified opinion thereon. A copy of the auditor's report on the summary provisional consolidated 
financial statements are available for inspection at the Group's registered office.

Events after the reporting period 

Absa Group Limited CEO, Maria Ramos announced her retirement on the 29 January 2019, effective 28 February 2019. The
Board has appointed Ren? van Wyk as Absa's Interim Chief Executive with effect from 1 March 2019.

Apart from the above mentioned, the directors are not aware of any other events (as defined per IAS 10 Events after the 
Reporting Period) after the reporting date of 31 December 2018 and the date of authorisation of these annual consolidated 
and separate financial statements.
 
On behalf of the Board

W E Lucas-Bull             JP Quinn
Group Chairman             Financial Director

Johannesburg
8 March 2019

Declaration of ordinary  dividend number 65

Shareholders are advised that an ordinary dividend of 620 cents per ordinary share was declared on 11 March 2019, for 
the period ended 31 December 2018. The ordinary dividend is payable to shareholders recorded in the register of
members of the Company at the close of business on 12 April 2019. The directors of Absa Group Limited confirm that the 
Group will satisfy the solvency and liquidity test immediately after completion of the dividend distribution.

The dividend will be subject to local dividends withholding tax at a rate of 20%. In accordance with paragraphs 
11.17 (a) (i) to (ix) and 11.17 (c) of the  JSE Listings Requirements, the following additional information 
is disclosed:

* The dividend has been declared out of income reserves.
* The local dividend tax rate is twenty per cent (20%).
* The gross local dividend amount is 620 cents per ordinary share for shareholders exempt from the dividend tax.
* The net local dividend amount is 496 cents per ordinary share for shareholders liable to pay the dividend tax.
* Absa Group Limited currently has 847 750 679 ordinary shares in issue (includes 20 273 811(1) treasury shares).
* Absa Group Limited?s income tax reference number is 9150116714.

In compliance with the requirements of Strate, the electronic settlement and custody system used by the JSE Limited, 
the following salient dates for the payment of the dividend are applicable:

Last day to trade cum dividend                         Tuesday, 9 April 2019
Shares commence trading ex-dividend                    Wednesday, 10 April 2019
Record date                                            Friday, 12 April 2019
Payment date                                           Monday, 15 April 2019

Share certificates may not be dematerialised or rematerialised between Wednesday, 10 April 2019 and Friday, 
12 April 2019, both dates inclusive. On Monday, 15 April 2019, the dividend will be electronically transferred to the 
bank accounts of certificated shareholders. The accounts of those shareholders who have dematerialised their shares 
(which are held at their participant or broker) will also be credited on Monday, 15 April 2019.

On behalf of the Board

N R Drutman
Group Company Secretary

Johannesburg

8 March 2019

Absa Group Limited is a company domiciled in South Africa. Its registered office 
is 7th Floor, Absa Towers West, 15 Troye Street, Johannesburg, 2001. 

(1)Includes Group shares to be used in the furtherance of the Group?s objective of 
establishing a BBBEE structure.   

Consolidated IFRS salient features
for the period ended 31 December

                                                                                  2018           2017    
Statement of comprehensive income (Rm)                                                                   
Income(1)                                                                       76 515         73 395    
Operating expenses                                                              46 803         43 304    
Profit attributable to ordinary equity holders(1)                               13 917         13 888    
Headline earnings(1)(2)                                                         14 142         14 378    
Statement of financial position                                                                          
Loans and advances to customers (Rm)(3)                                        841 720        749 772    
Total assets (Rm)(4)                                                         1 288 744      1 169 595    
Deposits due to customers (Rm)                                                 736 305        689 867    
Loans to deposits and debt securities ratio (%)                                   93.8           90.6    
Financial performance (%)                                                                                
Return on equity (RoE)                                                            13.4           14.2    
Return on average assets (RoA)                                                    1.17           1.27    
Return on risk-weighted assets (RoRWA)                                            1.86           2.02    
Stage 3 loans ratio on gross loans and advances                                   5.10            n/a    
Non-performance loans (NPL) ratio on gross loans and advances                      n/a           3.75    
Operating performance(%)                                                                                 
Net interest margin on average interest - bearing assets(5)                       4.65           4.83    
Credit loss ratio on gross loans and advances to customers and banks              0.73           0.87    
Non-interest as a percentage of total income                                      42.8           41.9    
Cost-to-income ratio                                                              61.2           59.0    
Jaws                                                                                (4)            (7)   
Effective tax rate                                                                29.2           28.1    
Share statistics (million)                                                                               
Number of ordinary shares in issue                                               847.8          847.8    
Number of shares in issue (excluding treasury shares)                            827.5          832.8    
Weighted average number of ordinary shares in issue                              830.1          833.7    
Diluted weighted average number of ordinary shares in issue                      831.7          833.8    
Share statistics (cents)                                                                                 
Headline earnings per ordinary share (HEPS)(1)                                 1 703.7        1 724.5    
Diluted headline earnings per ordinary share (DHEPS)(1)                        1 700.4        1 724.2    
Basic earnings per ordinary share (EPS) (1)                                    1 676.5        1 665.7    
Diluted basic earnings per ordinary share (DEPS) (1)                           1 673.3        1 665.5    
Dividend per ordinary share relating to income for the reporting period          1 110          1 070    
Dividend cover times (times)                                                       1.5            1.6    
NAV per ordinary share(1)                                                       13 233         13 042    
Tangible NAV per ordinary share(1)                                              12 185         12 396    
Capital adequacy (%)                                                                                     
Absa Group Limited                                                                16.1           16.1    
Absa Bank Limited                                                                 16.5           16.9    
Common Equity Tier 1 (%)                                                                                 
Absa Group Limited                                                                12.8           13.5    
Absa Bank Limited                                                                 12.2           13.4    

(1) Numbers have been restated, refer to note 15.3 for further details.
(2) After allowing for R351m (2017: R362m) profit attributable to preference equity holders and R190m (2017:
    R48m) profit attributable to Additional Tier 1 capital holders.
(3) Current year figures have been prepared in accordance with IFRS 9 reporting standards, whilst comparatives 
    (2017) had been prepared in accordance with IAS 39 reporting standards.
(4) Numbers have been restated, refer to note 15.4 for further details.
(5) Net interest margin has been restated to reflect an update of the Group's policy for classifying assets as
    interest bearing or non-interest bearing. The updated policy classifies reverse repurchase transactions entered 
    into for regulatory purposes as interest bearing; under the previous policy these transactions were classified 
    as non-interest bearing. Under the previous policy the Group's net interest margin would have been 4.77% 
    (2017: 5.05%). 

Normalised salient features
for the period ended 31 December

                                                                                  2018           2017    
Statement of comprehensive income (Rm)                                                                   
Income(1)                                                                       75 660         72 990    
Operating expenses                                                              43 642         41 403    
Profit attributable to ordinary equity holders(1)                               15 903         15 370    
Headline earnings(1)(2)                                                         16 128         15 623    
Statement of financial position                                                                          
Total assets (Rm)(3)                                                         1 285 552      1 168 683    
Financial performance (%)                                                                                
Return on equity (RoE)                                                            16.8           16.5    
Return on average assets (RoA)                                                    1.34           1.39    
Return on risk-weighted assets (RoRWA)                                            2.12           2.17    
Operating performance(%)                                                                                 
Net interest margin on average interest - bearing assets(4)                       4.64           4.83    
Non-interest as a percentage of total income                                      42.6           42.0    
Cost-to-income ratio                                                              57.7           56.7    
Jaws                                                                                (2)            (3)   
Effective tax rate                                                                28.1           27.5    
Share statistics (million)                                                                               
Number of shares in issue (excluding treasury shares)                            840.2          845.6    
Weighted average number of ordinary shares in issue                              842.9          846.5    
Diluted weighted average number of ordinary shares in issue                      844.4          846.6    
Share statistics (cents)                                                                                 
Headline earnings per ordinary share (HEPS)(1)                                 1 913.4        1 845.6    
Diluted headline earnings per ordinary share (DHEPS)(1)                        1 910.0        1 845.4    
Basic earnings per ordinary share (EPS) (1)                                    1 886.7        1 815.7    
Diluted basic earnings per ordinary share (DEPS) (1)                           1 883.3        1 815.5    
Dividend per ordinary share relating to income for the reporting period          1 110          1 070    
Dividend cover times (times)                                                       1.7            1.7    
NAV per ordinary share(1)                                                       11 985         11 573    
Tangible NAV per ordinary share(1)                                              11 273         11 030    
Capital adequacy (%)                                                                                     
Absa Group Limited                                                                15.4           14.9    
Absa Bank Limited                                                                 15.4           15.0    
Common Equity Tier 1 (%)                                                                                 
Absa Group Limited                                                                12.0           12.1    
Absa Bank Limited                                                                 11.2           11.6    

(1) Numbers have been restated, refer to note 15.3 for further details.
(2) After allowing for R351m (2017: R362m) profit attributable to preference equity holders and R190m (2017:R48m)
    profit attributable to Additional Tier 1 capital holders.
(3) Numbers have been restated, refer to note 15.4 for further details.
(4) Net interest margin has been restated to reflect an update of the Group's policy for classifying assets as
    interest bearing or non-interest bearing. The updated policy classifies reverse repurchase transactions entered into 
    for regulatory purposes as interest bearing; under the previous policy these transactions were classified as non-
    interest bearing. Under the previous policy the Group's net interest margin would have been 4.80% (2017: 4.95%). 


Reconciliation of IFRS to normalised results 
for the period ended 31 December

                                                                             IFRS     Barclays PLC      Normalised
                                                                            Group       separation           Group
                                                                    performance(1)       effects(2)  performance(3)    
                                                                             2018             2018            2018    
Statement of comprehensive income (Rm)                                                                                
Net interest income                                                        43 755              330          43 425    
Non-interest income                                                        32 760              525          32 235    
Total income                                                               76 515              855          75 660    
Impairment losses                                                          (6 324)               -          (6 324)   
Operating expenses                                                        (46 803)          (3 161)        (43 642)   
Other expenses                                                             (2 026)            (194)         (1 832)   
Share of post-tax results of associates and joint ventures                    179                -             179    
Operating profit before income tax                                         21 541           (2 500)         24 041    
Tax expenses                                                               (6 282)             484          (6 766)   
Profit for the reporting period                                            15 259           (2 016)         17 275    
Profit attributable to:                                                                                               
Ordinary equity holders                                                    13 917           (1 986)         15 903    
Non-controlling interest - ordinary shares                                    801              (30)            831    
Non-controlling interest - preference shares                                  351                -             351    
Non-controlling interest - additional Tier 1                                  190                -             190    
                                                                           15 259           (2 016)         17 275    
Headline earnings                                                          14 142           (1 986)         16 128    
Operating performance (%)                                                                                             
Net interest margin on average interest - bearing assets                     4.65              n/a            4.64    
Credit loss ratio on gross loans and advances to customers and banks         0.73              n/a            0.73    
Non - interest income as % of total income                                   42.8              n/a            42.6    
Income growth                                                                   4              n/a               4    
Operating expenses growth                                                       8              n/a               5    
Cost-to-income ratio                                                         61.2              n/a            57.7    
Effective tax rate                                                           29.2              n/a            28.1    
Statement of financial position (Rm)                                                                                  
Loans and advances to customers                                           841 720                -         841 720    
Loans and advances to banks                                                53 140                -          53 140    
Investment securities                                                     135 420                -         135 420    
Other assets                                                              258 464            3 192         255 272    
Total assets                                                            1 288 744            3 192       1 285 552    
Deposits due to customers                                                 736 305                -         736 305    
Debt securities in issue                                                  160 971                -         160 971    
Other liabilities                                                         269 862       (5 561) (4)        275 423    
Total liabilities                                                       1 167 138           (5 561)      1 172 699    
Equity                                                                    121 606            8 753         112 853    
Total equity and liabilities                                            1 288 744            3 192       1 285 552    
Key performance ratios (%)                                                                                            
RoA                                                                          1.17              n/a            1.34    
RoE                                                                          13.4              n/a            16.8    
Capital adequacy                                                             16.1              n/a            15.4    
Common Equity Tier 1                                                         12.8              n/a            12.0    
Share statistics (cents)                                                                                              
Diluted headline earnings per ordinary share                              1 700.4              n/a         1 910.0    

(1) IFRS performance presents the IFRS information as extracted from the Group?s summary provisional consolidated 
    financial results for the reporting period ended 31 December 2018.
(2) Barclays PLC separation effects, presents the financial effects of the separation on the summary provisional 
    consolidated financial results of the Group.
(3) Normalised performance, presents the summary provisional consolidated financial results of the Group, after 
    adjusting for the consequences of the separation.
(4) This represents the contribution of R12.1bn that was received from Barclays PLC, net of amounts already spent
    on separation ativities. The cash received is held centrally by Treasury and is presented as an intersegmental 
    asset in 'Other Liabilities'.

Reconciliation of IFRS to normalised results 
for the period ended 31 December

                                                                                                           Total
                                                                             IFRS     Barclays PLC         Group
                                                                            Group       separation    normalised
                                                                      performance          effects   performance
                                                                             2017             2017          2017    
Statement of comprehensive income (Rm)                                                                              
Net interest income                                                        42 644              325        42 319    
Non-interest income (1)                                                    30 750               80        30 670    
Total income                                                               73 395              405        72 990    
Impairment losses                                                          (7 022)               -        (7 022)   
Operating expenses                                                        (43 304)          (1 901)      (41 403)   
Other expenses                                                             (2 270)            (394)       (1 876)   
Share of post-tax results of associates and joint ventures                    170                -           170    
Operating profit before income tax                                         20 969           (1 890)       22 859    
Tax expenses(1)                                                            (5 882)             407        (6 289)   
Profit for the reporting period                                            15 087           (1 482)       16 569    
Profit attributable to:                                                                                             
Ordinary equity holders(1)                                                 13 888           (1 482)       15 370    
Non-controlling interest - ordinary shares                                    789                -           789    
Non-controlling interest - preference shares                                  362                -           362    
Non-controlling interest - additional Tier 1                                   48                -            48    
                                                                           15 087           (1 482)       16 569    
Headline earnings(1)                                                       14 378           (1 245)       15 623    
Operating performance (%)                                                                                           
Net interest margin on average interest - bearing assets(2)                  4.83              n/a          4.83    
Credit loss ratio on gross loans and advances to customers and banks         0.87              n/a          0.87    
Non - interest income as % of total income                                   41.9              n/a          42.0    
Income growth                                                                   1              n/a             1    
Operating expenses growth                                                       8              n/a             3    
Cost-to-income ratio                                                         59.0              n/a          56.7    
Effective tax rate                                                           28.1              n/a          27.5    
Statement of financial position (Rm)                                                                                
Loans and advances to customers                                           749 772                -       749 772    
Loans and advances to banks                                                55 426                -        55 426    
Investment securities                                                     111 409                -       111 409    
Other assets(3)                                                           252 988              912       252 076    
Total assets(3)                                                         1 169 595              912     1 168 683    
Deposits due to customers                                                 689 867                -       689 867    
Debt securities in issue                                                  137 948                -       137 948    
Other liabilities(3)                                                      222 522      (9 840) (4)       232 362    
Total liabilities(3)                                                    1 050 337           (9 840)    1 060 177    
Equity(3)                                                                 119 258           10 752       108 506    
Total equity and liabilities(3)                                         1 169 595              912     1 168 683    
Key performance ratios (%)                                                                                          
RoA                                                                          1.27              n/a          1.39    
RoE                                                                          14.2              n/a          16.5    
Capital adequacy                                                             16.1              n/a          14.9    
Common Equity Tier 1                                                         13.5              n/a          12.1    
Share statistics (cents)                                                                                            
Diluted headline earnings per ordinary share(1)                           1 724.5              n/a       1 845.6    

(1) Numbers have been restated, refer to note 15.3 for further details.
(2) Net interest margin has been restated to reflect an update of the Group's policy for classifying assets as
    interest bearing or non-interest bearing. The updated policy classifies reverse repurchase transactions entered into 
    for regulatory purposes as interest bearing; under the previous policy these transactions were classified as non-interest 
    bearing. Under the previous policy the Group's net interest margin would have been 4.77% (2017:5.05%) on IFRS and 4.80% 
    (2017: 4.95%) on normalised basis.
(3) Numbers have been restated, refer to note 15.4 for further details.
(4) This represents the contribution of R12.1bn that was received from Barclays PLC, net of amounts already spent on
    separation activities. The cash received is held centrally by Treasury and is presented as an intersegmental asset in
    'Other liabilities'. 

Summary provisional consolidated statement of financial position 
as at 31 December

                                                                                     Restated       Restated    
                                                                          2018           2017           2016    
                                                           Note             Rm             Rm             Rm    
Assets                                                                                                          
Cash, cash balances and balances with central banks                     46 929         48 669         50 006    
Investment securities                                                  135 420        111 409        114 315    
Loans and advances to banks                                             53 140         55 426         49 789    
Trading portfolio assets                                               128 569        132 183         96 236    
Hedging portfolio assets                                                 2 411          2 673          1 745    
Other assets(1)                                                         30 642         24 576         28 107    
Current tax assets                                                         819            314            894    
Non-current assets held for sale                              1            239          1 308            823    
Loans and advances to customers                               2        841 720        749 772        720 309    
Reinsurance assets                                                         618            892            985    
Investments linked to investment contracts                              18 481         18 936         18 816    
Investments in associates and joint ventures                             1 310          1 235          1 065    
Investment properties                                                      508            231            478    
Property and equipment                                                  15 835         15 303         14 643    
Goodwill and intangible assets                                           8 672          5 377          4 049    
Deferred tax assets                                                      3 431          1 291          1 328    
Total assets                                                         1 288 744      1 169 595      1 103 588    
Liabilities                                                                                                     
Deposits from banks                                                    121 421         67 390         53 192    
Trading portfolio liabilities                                           51 632         64 047         47 429    
Hedging portfolio liabilities                                            1 343          1 123          2 064    
Other liabilities(1)                                                    36 662         35 360         30 261    
Provisions                                                               4 017          3 041          3 005    
Current tax liabilities                                                    236             57            244    
Non-current liabilities held for sale                         1            124             48              9    
Deposits due to customers                                              736 305        689 867        674 865    
Debt securities in issue                                               160 971        137 948        139 714    
Liabilities under investment contracts                                  29 674         30 585         29 198    
Policyholder liabilities under insurance contracts(2)                    4 168          4 342          4 283    
Borrowed funds                                                3         20 225         15 895         15 673    
Deferred tax liabilities(2)                                                360            634          1 237    
Total liabilities                                                    1 167 138      1 050 337      1 001 174    
Equity                                                                                                          
Capital and reserves                                                                                            
Attributable to ordinary equity holders:                                                                        
Share capital                                                            1 655          1 666          1 693    
Share premium                                                           10 205         10 498          4 467    
Retained earnings(2)                                                    91 237         92 080         81 738    
Other reserves                                                           6 387          4 370          5 293    
                                                                       109 484        108 614         93 191    
Non-controlling interest - ordinary shares                               4 737          4 500          4 579    
Non-controlling interest - preference shares                             4 644          4 644          4 644    
Non-controlling interest - Additional Tier 1 Capital                     2 741          1 500              -    
Total equity                                                           121 606        119 258        102 414    
Total liabilities and equity                                         1 288 744      1 169 595      1 103 588    

(1) Numbers have been restated, refer to note 15.4 for further details.
(2) Numbers have been restated, refer to note 15.3.1 for further details. 

Summary consolidated statement of comprehensive income
for the reporting period ended 31 December

                                                                               2018          2017    
                                                                 Note            Rm            Rm    
Net interest income                                                          43 755        42 644    
Interest and similar income                                                  89 236        85 929    
Effective interest income(1)                                                 87 634        84 656    
Other interest income(1)                                                      1 602         1 273    
Interest expense and similar charges                                        (45 481)      (43 285)   
Effective interest expense(1)                                               (45 481)      (43 285)   
Non-interest income                                                 4        32 760        30 751    
Net fee and commission income                                                22 523        21 711    
Fee and commission income                                                    25 675        24 724    
Fee and commission expense                                                   (3 152)       (3 013)   
Net insurance premium income                                                  7 190         6 598    
Net claims and benefits incurred on insurance contracts                      (3 565)       (3 334)   
Changes in investment and insurance contract liabilities(2)                     808        (2 023)   
Gains and losses from banking and trading activities                          5 820         5 246    
Gains and losses from investment activities                                    (636)        1 905    
Other operating income                                                          620           648    
Total income                                                                 76 515        73 395    
Impairment losses                                                            (6 324)       (7 022)   
Operating income before operating expenditure                                70 191        66 373    
Operating expenditure                                                       (46 803)      (43 304)   
Other expenses                                                               (2 026)       (2 270)   
Other impairments                                                   5          (434)         (648)   
Indirect taxation                                                            (1 592)       (1 622)   
Share of post-tax results of associates and joint ventures                      179           170    
Operating profit before income tax                                           21 541        20 969    
Taxation expense(2)                                                          (6 282)       (5 882)   
Profit for the reporting period                                              15 259        15 087    
Profit attributable to:                                                                              
Ordinary equity holders(2)                                                   13 917        13 888    
Non-controlling interest - ordinary shares                                      801           789    
Non-controlling interest - preference shares                                    351           362    
Non-controlling interest - Additional Tier 1 Capital                            190            48    
                                                                             15 259        15 087    
Earnings per share:                                                                                  
Basic earnings per share (cents)(2)                                         1 676.5       1 665.7    
Diluted earnings per share (cents)(2)                                       1 673.3       1 665.5    

(1) An amendment was made to IAS 1 Presentation of Financial Statements, which is effective from 
    1 January 2018. The amendment requires interest and similar income which is calculated using the 
    effective interest method to be presented separately on the face of the statement of comprehensive 
    income. The Group has elected to apply the same approach in presenting interest expense and similar 
    charges to achieve consistency.
(2) Numbers have been restated, refer to note 15.3.1 for further details. 

Summary provisional consolidated statement of other comprehensive income
for the reporting period ended 31 December

                                                                         2018      2017 Restated    
                                                                           Rm                 Rm    
Profit for the reporting period(1)                                     15 259             15 087    
Other comprehensive income                                                                          
Items that will not be reclassified to profit or loss                      53               (179)   
Movement on equity instruments designated at fair value 
through other comprehensive income (FVOCI)                                 27                  -    
Fair value gain                                                            38                  -    
Deferred tax                                                              (11)                 -    
Movement on liabilities designated at FVTPL due to changes 
in own credit risk                                                        (13)              (147)   
Fair value losses                                                         (71)              (147)   
Deferred tax                                                               58                  -    
Movement in retirement benefit fund assets and liabilities                 39                (32)   
Decrease in retirement benefit surplus                                    (26)               (91)   
Increase in retirement benefit deficit                                     55                 45    
Deferred tax                                                               10                 14    
Items that are or may be subsequently reclassified to 
profit or loss                                                          2 215             (1 327)   
Movement in foreign currency translation reserve                        3 052             (2 219)   
Differences in translation of foreign operations                        3 052             (2 271)   
Release to profit or loss                                                   -                 52    
Movement in cash flow hedging reserve                                    (247)               794    
Fair value gains                                                          265              1 465    
Amounts transferred within other comprehensive income                     (58)                 -    
Amount removed from other comprehensive income and 
recognised in profit or loss                                             (550)              (365)   
Deferred tax                                                               96               (306)   
Movement in fair value of debt instruments measured at FVOCI             (590)                 -    
Fair value losses                                                        (750)                 -    
Release to profit or loss                                                  (9)                 -    
Deferred tax                                                              169                  -    
Movement in available-for-sale reserve                                      -                 98    
Fair value gains                                                            -                154    
Release to profit or loss                                                   -                 67    
Deferred tax                                                                -               (123)   
Total comprehensive income for the reporting period                    17 527             13 580    
Total comprehensive income attributable to:                                                         
Ordinary equity holders(1)                                             15 816             12 654    
Non-controlling interest - ordinary shares                              1 170                516    
Non-controlling interest - preference shares                              351                362    
Non-controlling interest - Additional Tier 1 capital                      190                 48    
                                                                       17 527             13 580    

(1) Numbers have been restated, refer to note 15.3.1 for further details.

Summary provisional consolidated statement of changes in equity 
as at 31 December

                                                                            2018
                                                    Number of 
                                                     ordinary        Share       Share      Retained
                                                       shares      capital     premium      earnings    
                                                         '000           Rm          Rm            Rm    
Restated balance at the end of the previous 
reporting period(1)                                   832 838        1 666      10 498        92 080    
Impact of adopting new accounting standards 
at 1 January 2018
IFRS 9                                                      -            -           -        (5 413)   
IFRS 15                                                     -            -           -           (44)   
Adjusted balance at the beginning of the 
reporting period                                      832 838        1 666      10 498        86 623    
Total comprehensive income                                  -            -           -        13 937    
Profit for the period                                       -            -           -        13 917    
Other comprehensive income                                  -            -           -            20    
Dividends paid during the reporting period                  -            -           -        (9 033)   
Distributions paid during the reporting period              -            -           -             -    
Issuance of Additional Tier 1 Capital                       -            -           -             -    
Purchase of Group shares in respect of 
equity-settled  share-based payment arrangements            -            -        (491)          (66)   
Elimination of the movement in Treasury shares 
held by  Group entities                                (5 361)         (11)       (293)            -    
Movement in share-based payment reserve                     -            -         491             -    
Transfer from share-based payment reserve                   -            -         491             -    
Value of employee services                                  -            -           -             -    
Deferred tax                                                -            -           -             -    
Movement in general credit risk reserve                     -            -           -           (44)   
Movement in foreign insurance subsidiary 
regulatory reserve                                          -            -           -            (1)   
Share of post-tax results of associates and 
joint ventures                                              -            -           -          (179)   
Balance at the end of the reporting period            827 477        1 655      10 205        91 237    


                                                                              2018
                                                                          Fair value
                                                                             through
                                                                               other
                                                                General      compre-            Cash
                                                       Total    credit-      hensive            flow
                                                       other       risk       income         hedging
                                                    reserves    reserve      reserve         reserve    
                                                          Rm         Rm           Rm              Rm    
Restated balance at the end of the previous 
reporting period(1)                                    4 370        779           445            650    
Impact of adopting new accounting standards 
at 1 January 2018
IFRS 9                                                  (126)         -           (22)             -    
IFRS 15                                                    -          -             -              -    
Adjusted balance at the beginning of the 
reporting period                                       4 244        779           423            650    
Total comprehensive income                             1 879          -          (503)          (247)   
Profit for the period                                      -          -             -              -    
Other comprehensive income                             1 879          -          (503)          (247)   
Dividends paid during the reporting period                 -          -             -              -    
Distributions paid during the reporting period             -          -             -              -    
Issuance of Additional Tier 1 Capital                      -          -             -              -    
Purchase of Group shares in respect of 
equity-settled share-based payment arrangements            -          -             -              -    
Elimination of the movement in Treasury shares 
held by Group entities                                     -          -             -              -    
Movement in share-based payment reserve                   40          -             -              -    
Transfer from share-based payment reserve               (491)         -             -              -    
Value of employee services                               554          -             -              -    
Deferred tax                                             (23)         -             -              -    
Movement in general credit risk reserve                   44         44             -              -    
Movement in foreign insurance subsidiary 
regulatory reserve                                         1          -             -              -    
Share of post-tax results of associates and 
joint ventures                                           179          -             -              -    
Balance at the end of the reporting period             6 387        823           (80)           403    


                                                                  2018
                                                                      Foreign                   Associates
                                                      Foreign       insurance        Share-            and
                                                     currency      subsidiary         based          joint
                                                  translation      regulatory       payment       ventures
                                                      reserve         reserve       reserve        reserve    
                                                           Rm              Rm            Rm             Rm    
Restated balance at the end of the previous 
reporting period(1)                                       431               6           837          1 222    
Impact of adopting new accounting standards at                                   
1 January 2018                                                                             
IFRS 9                                                      -               -             -           (104)   
IFRS 15                                                     -               -             -              -    
Adjusted balance at the beginning of the                                         
reporting period                                          431               6           837          1 118    
Total comprehensive income                              2 629               -             -              -    
Profit for the period                                       -               -             -              -    
Other comprehensive income                              2 629               -             -              -    
Dividends paid during the reporting period                  -               -             -              -    
Distributions paid during the reporting period              -               -             -              -    
Issuance of Additional Tier 1 Capital                       -               -             -              -    
Purchase of Group shares in respect of equity-                                   
settled share-based payment arrangements                    -               -             -              -    
Elimination of the movement in Treasury shares                                   
held by Group entities                                      -               -             -              -    
Movement in share-based payment reserve                     -               -            40              -    
Transfer from share-based payment reserve                   -               -          (491)             -    
Value of employee services                                  -               -           554              -    
Deferred tax                                                -               -           (23)             -    
Movement in general credit risk reserve                     -               -             -              -    
Movement in foreign insurance subsidiary                                         
regulatory reserve                                          -               1             -              -    
Share of post-tax results of associates and                                      
joint ventures                                              -               -             -            179    
Balance at the end of the reporting period              3 060               7           877          1 297    


                                                                     2018
                                                          Capital       
                                                              and             
                                                         reserves
                                                     attributable           Non-            Non-
                                                               to   controlling      controlling
                                                         ordinary    interest -       interest -
                                                           equity      ordinary       preference 
                                                          holders        shares           shares    
                                                               Rm            Rm               Rm    
Restated balance at the end of the previous 
reporting period(1)                                       108 614         4 500            4 644    
Impact of adopting new accounting standards at 
1 January 2018
IFRS 9                                                     (5 539)         (230)               -    
IFRS 15                                                       (44)            -                -    
Adjusted balance at the beginning of the 
reporting period                                          103 031         4 270            4 644    
Total comprehensive income                                 15 816         1 170              351    
Profit for the period                                      13 917           801              351    
Other comprehensive income                                  1 899           369                -    
Dividends paid during the reporting period                 (9 033)         (703)            (351)   
Distributions paid during the reporting period                  -             -                -    
Issuance of Additional Tier 1 Capital                           -             -                -    
Purchase of Group shares in respect of equity-
settled share-based payment arrangements                     (557)            -                -    
Elimination of the movement in Treasury shares 
held by Group entities                                       (304)            -                -    
Movement in share-based payment reserve                       531             -                -    
Transfer from share-based payment reserve                       -             -                -    
Value of employee services                                    554             -                -    
Deferred tax                                                  (23)            -                -    
Movement in general credit risk reserve                         -             -                -    
Movement in foreign insurance subsidiary 
regulatory reserve                                              -             -                -    
Share of post-tax results of associates and 
joint ventures                                                  -             -                -    
Balance at the end of the reporting period                109 484         4 737            4 644    

                                                                           2018
                                                                      Non-
                                                              controlling 
                                                               interest - 
                                                               Additional 
                                                                   Tier 1 
                                                                  Capital      Total equity    
                                                                       Rm                Rm    
Restated balance at the end of the previous 
reporting period(1)                                                 1 500           119 258    
Impact of adopting new accounting standards 
at 1 January 2018
IFRS 9                                                                  -            (5 769)   
IFRS 15                                                                 -               (44)   
Adjusted balance at the beginning of the 
reporting period                                                    1 500           113 445    
Total comprehensive income                                            190            17 527    
Profit for the period                                                 190            15 259    
Other comprehensive income                                              -             2 268    
Dividends paid during the reporting period                              -           (10 087)   
Distributions paid during the reporting period                       (190)             (190)   
Issuance of Additional Tier 1 Capital                               1 241             1 241    
Purchase of Group shares in respect of equity-
settled share-based payment arrangements                                -              (557)   
Elimination of the movement in Treasury shares 
held by Group entities                                                  -              (304)   
Movement in share-based payment reserve                                 -               531    
Transfer from share-based payment reserve                               -                 -    
Value of employee services                                              -               554    
Deferred tax                                                            -               (23)   
Movement in general credit risk reserve                                 -                 -    
Movement in foreign insurance subsidiary 
regulatory reserve                                                      -                 -    
Share of post-tax results of associates and 
joint ventures                                                          -                 -    
Balance at the end of the reporting period                          2 741           121 606    

                                                                         2017
                                                   Number 
                                                       of 
                                                 ordinary       Share     Share   Retained 
                                                   shares     capital   premium   earnings    
                                                     '000          Rm        Rm         Rm    
Balance as reported at the end of the 
previous reporting period                         846 675       1 693     4 467     81 604    
Restatement owing to a change in Life 
insurance accounting policy                             -           -         -        134    
Restated balance at the beginning of 
the reporting period                               846 675       1 693     4 467    81 738    
Total comprehensive income                              -           -         -     13 714    
Profit for the period                                   -           -         -     13 888    
Other comprehensive income                              -           -         -       (174)   
Dividends paid during the reporting 
period                                                  -           -         -     (8 821)   
Distributions paid during the reporting 
period                                                  -           -         -          -    
Issuance of Additional Tier 1 Capital                   -           -         -          -    
Purchase of Group shares in respect of 
equity-settled share-based payment 
arrangements                                            -           -      (741)        12    
Elimination of the movement in Treasury                                            
shares held by Group entities                     (13 837)        (27)   (2 385)         -    
Movement in share-based payment reserve                 -           -       742          -    
Transfer from share-based payment reserve               -           -       742          -    
Value of employee services                              -           -         -          -    
Deferred tax                                            -           -         -          -    
Movement in general credit risk reserve                 -           -         -        (22)   
Share of post-tax results of associates                                            
and joint ventures                                      -           -         -       (170)   
Disposal of non-controlling interest (1)                -           -         -          -    
Barclays PLC separation (2)                             -           -     8 415      3 690    
Barclays PLC separation - Empowerment Trust (3)         -           -         -      1 891    
Shareholder contribution - fair value                                              
of investment (4)                                       -           -         -         48    
Restated balance at the end of the                                                 
reporting period                                  832 838       1 666    10 498     92 080    


                                                                    2017
                                                            General         Available-        Cash 
                                                Total       credit-               for-        flow
                                                other          risk               sale     hedging
                                             reserves       reserve            reserve     reserve
                                                   Rm            Rm                Rm           Rm
Balance as reported at the end of the                                                     
previous reporting period                       5 293           757                377        (144)   
Restatement owing to a change in Life                                                     
insurance accounting policy                         -             -                  -           -    
Restated balance at the beginning of                          
the reporting period                            5 293           757                377        (144)   
Total comprehensive income                      1 060             -                 68         794    
Profit for the period                               -             -                  -           -    
Other comprehensive income                      1 060             -                 68         794    
Dividends paid during the reporting
period                                              -             -                  -           -    
Distributions paid during the reporting                       
period                                              -             -                  -           -    
Issuance of Additional Tier 1 Capital               -             -                  -           -    
Purchase of Group shares in respect of
equity-settled share-based payment
arrangements                                        -             -                  -           -    
Elimination of the movement in Treasury                       
shares held by Group entities                       -             -                  -           -    
Movement in share-based payment reserve           (55)            -                  -           -    
Transfer from share-based payment reserve        (742)            -                  -           -    
Value of employee services                        655             -                  -           -    
Deferred tax                                       32             -                  -           -    
Movement in general credit risk reserve            22            22                  -           -    
Share of post-tax results of associates                       
and joint ventures                                170             -                  -           -    
Disposal of non-controlling interest (1)            -             -                  -           -    
Barclays PLC separation (2)                         -             -                  -           -    
Barclays PLC separation - Empowerment Trust (3)     -             -                  -           -    
Shareholder contribution - fair value
of investment (4)                                   -             -                  -           -    
Restated balance at the end of the
reporting period                                4 370           779                445         650    

                                                                   2017
                                                                 Foreign                   Associates
                                                 Foreign       insurance        Share-            and
                                                currency      subsidiary         based          joint
                                             translation      regulatory       payment       ventures
                                                 reserve         reserve       reserve        reserve    
                                                      Rm              Rm            Rm             Rm
Balance as reported at the end of the 
previous reporting period                          2 353               6           892          1 052    
Restatement owing to a change in Life                                         
insurance accounting policy                            -               -             -              -    
Restated balance at the beginning of                                          
the reporting period                               2 353               6           892          1 052    
Total comprehensive income                        (1 922)              -             -              -    
Profit for the period                                  -               -             -              -    
Other comprehensive income                        (1 922)              -             -              -    
Dividends paid during the reporting                                           
period                                                 -               -             -              -    
Distributions paid during the reporting                                       
period                                                 -               -             -              -    
Issuance of Additional Tier 1 Capital                  -               -             -              -    
Purchase of Group shares in respect of                                        
equity-settled share-based payment                                            
arrangements                                           -               -             -              -    
Elimination of the movement in Treasury                                       
shares held by Group entities                          -               -             -              -    
Movement in share-based payment reserve                -               -           (55)             -    
Transfer from share-based payment reserve              -               -          (742)             -    
Value of employee services                             -               -           655              -    
Deferred tax                                           -               -            32              -    
Movement in general credit risk reserve                -               -             -              -    
Share of post-tax results of associates                                       
and joint ventures                                     -               -             -            170    
Disposal of non-controlling interest (1)               -               -             -              -    
Barclays PLC separation (2)                            -               -             -              -    
Barclays PLC separation - Empowerment Trust (3)        -               -             -              -    
Shareholder contribution - fair value of                                      
investment (4)                                         -               -             -              -    
Restated balance at the end of the                                            
reporting period                                     431               6           837          1 222    

                                                                       2017               
                                                           Capital       
                                                               and             
                                                          reserves
                                                      attributable          Non-            Non-
                                                                to  controlling      controlling
                                                          ordinary   interest -       interest -
                                                            equity     ordinary       preference 
                                                           holders       shares           shares    
                                                                Rm           Rm               Rm   
Balance as reported at the end of the 
previous reporting period                                   93 057        4 579            4 644    
Restatement owing to a change in Life 
insurance accounting policy                                    134            -                -    
Restated balance at the beginning of the 
reporting period                                            93 191        4 579            4 644    
Total comprehensive income                                  12 654          516              362    
Profit for the period                                       13 888          789              362    
Other comprehensive income                                  (1 234)        (273)               -    
Dividends paid during the reporting 
period                                                      (8 821)        (567)            (362)   
Distributions paid during the reporting 
period                                                           -            -                -    
Issuance of Additional Tier 1 Capital                            -            -                -    
Purchase of Group shares in respect of 
equity-settled share-based payment 
arrangements                                                  (729)           -                -    
Elimination of the movement in Treasury 
shares held by Group entities                               (2 412)           -                -    
Movement in share-based payment reserve                        687           (4)               -    
Transfer from share-based payment reserve                        -            -                -    
Value of employee services                                     655           (4)               -    
Deferred tax                                                    32            -                -    
Movement in general credit risk reserve                          -            -                -    
Share of post-tax results of associates 
and joint ventures                                               -            -                -    
Disposal of non-controlling interest (1)                         -          (24)               -    
Barclays PLC separation (2)                                 12 105            -                -    
Barclays PLC separation - Empowerment Trust (3)              1 891            -                -    
Shareholder contribution - fair value of 
investment (4)                                                  48            -                -    
Restated balance at the end of the reporting 
period                                                     108 614        4 500            4 644    

                                                                             2017
                                                                      Non-
                                                              controlling 
                                                               interest - 
                                                               Additional 
                                                                   Tier 1 
                                                                Capital(5)      Total equity    
                                                                       Rm                 Rm    
Balance as reported at the end of the 
previous reporting period                                               -            102 280    
Restatement owing to a change in Life insurance 
accounting policy                                                       -                134    
Restated balance at the beginning of the 
reporting period                                                        -            102 414    
Total comprehensive income                                             48             13 580    
Profit for the period                                                  48             15 087    
Other comprehensive income                                              -             (1 507)   
Dividends paid during the reporting period                              -             (9 750)   
Distributions paid during the reporting period                        (48)               (48)   
Issuance of Additional Tier 1 Capital                               1 500              1 500    
Purchase of Group shares in respect of equity-              
settled share-based payment arrangements                                -               (729)   
Elimination of the movement in Treasury shares              
held by Group entities                                                  -             (2 412)   
Movement in share-based payment reserve                                 -                683    
Transfer from share-based payment reserve                               -                  -    
Value of employee services                                              -                651    
Deferred tax                                                            -                 32    
Movement in general credit risk reserve                                 -                  -    
Share of post-tax results of associates and                 
joint ventures                                                          -                  -    
Disposal of non-controlling interest (1)                                -                (24)   
Barclays PLC separation (2)                                             -             12 105    
Barclays PLC separation - Empowerment Trust (3)                         -              1 891    
Shareholder contribution - fair value of                    
investment (4)                                                          -                 48    
Restated balance at the end of the reporting                
period                                                              1 500            119 258    

(1) The Group disposed of its controlling stake in a non-core subsidiary which was classified as held for sale.
(2) As part of the disinvestment, Barclays PLC contributed R12,1bn in recognition of the investments required for 
    the Group to separate from Barclays PLC. The contribution meets the definition of a transaction with a shareholder 
    and was recognised in equity on the date that the Group became entitled to the contribution.
(3) As part of the separation, Barclays PLC contributed cash of R1 981m to the independent Absa Empowerment Trust to
    allow for its subsidiary to purchase 12 716 260 Group shares (1.5%) in the furtherance of the Group's objective of
    establishing a Broad-Based Black Economic Empowerment structure. In terms of IFRS, these shares have been accounted 
    for as treasury shares and eliminated against the Group's share capital.
(4) CLS Group Holding AG shares were transferred to Barclays PLC for no consideration in 2005. During the current
    reporting period these shares were transferred back to the Group for a nominal consideration of one British Pound 
    Sterling (GBP). The shares have been recognised at a fair value of R48m. The related credit has been recognised 
    in equity as a shareholder contribution. 
(5) The additional Tier 1 capital notes represent perpetual, subordinated instruments redeemable in full at the 
    option of Absa Group Limited (the issuer) on 12 September 2022 subject to regulatory approval. Interest is paid at 
    the discretion of the issuer and is non-cumulative. In addition, if certain conditions are reached, the regulator 
    may prohibit the issuer from making interest payments. Accordingly, the instruments are classified as equity 
    instruments.

Summary provisional consolidated statement of cash flows
as at 31 December

                                                                                                       2017
                                                                                          2018   Restated(1)  
                                                                            Note            Rm           Rm    
Net cash generated from/(utilised in) operating activities                              13 884         (534)   
Income taxes paid                                                                       (6 648)      (6 371)   
Net cash generated from other operating activities                                      20 532        5 837    
Net cash utilised in investing activities                                               (6 577)      (2 634)   
Purchase of property and equipment                                                      (3 373)      (3 263)   
Proceeds from sale of non-current assets held for sale                                   1 414        1 146    
Net cash utilised in other investing activities                                         (4 618)        (517)   
Net cash (utilised)/generated from financing activities                                 (6 521)       2 593    
Net cash generated from Barclays PLC separation                                              -       12 105    
Issue of Additional Tier 1 Capital                                                       1 241        1 500    
Proceeds from borrowed funds                                                             6 571        2 841    
Repayment of borrowed funds                                                             (3 195)      (2 805)   
Dividends paid                                                                         (10 087)      (9 750)   
Net cash utilised from other financing activities                                       (1 051)      (1 298)   
Net increase/(decrease) in cash and cash equivalents                                       786         (575)   
Cash and cash equivalents at the beginning of the reporting period             1        17 320       17 734    
Effect of foreign exchange rate movements on cash and cash equivalents                     388          161    
Cash and cash equivalents at the end of the reporting period                   2        18 494       17 320    


                                                                                         2017
                                                                             2018  Restated(1)    
                                                                               Rm          Rm    
Notes to the summary provisional consolidated statement of cash flows                                        
1. Cash and cash equivalents at the beginning of the reporting period                            
Cash, cash balances and balances with central banks(2)                     13 518      13 141    
Loans and advances to banks(3)                                              3 802       4 593    
                                                                           17 320      17 734    
2. Cash and cash equivalents at the end of the reporting period                                  
Cash, cash balances and balances with central banks(2)                     14 252      13 518    
Loans and advances to banks(3)                                              4 242       3 802    
                                                                           18 494      17 320    

(1) In order to provide more transparent disclosures, the summary provisional consolidated statement of cash flows 
has been expanded to include line items specifying significant cash flow movements. The effect of this is to provide 
specific disclosure of the following line items, rather than include them in the total cash generated by/used in 
operating, investing or financing activities: income taxes paid, purchase of property and equipment, proceeds from 
sale of non-current assets, Issue of Additional Tier 1 Capital, proceeds/repayments of borrowed funds, dividends paid. 
Comparative statement of cash flows has been restated to take account of this additional disclosure.
(2) Includes coins and bank notes.
(3) Includes call advances, which are used as working capital by the Group. 

Summary provisional notes to the consolidated financial results
for the reporting period ended 31 December

1. Non-current assets and non-current liabilities held for sale
The following movements in non-current assets and non-current liabilities held for sale were effected during the
current financial reporting period:
* Retail Banking South Africa disposed of a loan book with a carrying amount of R1 118m and property and equipment
  with a carrying amount of R1m.
* Absa Regional Operations (ARO) disposed of investment property with a carrying amount of R2m, and transferred
  property and equipment with a carrying value of R11m to non-current assets held for sale.
* WIMI disposed of a subsidiary with assets of R139m and liabilities of R34m out of non-current assets and non-current
  liabilities held for sale, respectively.
* WIMI further disposed of a business line with assets of R14m and liabilities of R14m out of non-current assets and
  non-current liabilities held for sale, respectively.
* WIMI Africa transferred an entity with a net asset value of R20m to non-current assets and non-current liabilities
  held for sale. This transfer comprised of loans and advances to banks R22m, reinsurance assets R73m, investment
  securities R8m, property and equipment R3m, deferred tax assets R11m, other assets R27m, policyholder liabilities 
  under insurance contracts R92m and other liabilities R32m.
* Head office transferred property and equipment with a carrying amount of R50m to non-current assets held for sale.

The following movements in non-current assets and non-current liabilities held for sale were effected during the
previous financial reporting period:
* Retail Banking South Africa transferred loans and advances to customers of R1 118m and property and equipment of R1m
  to non-current assets held for sale. The Commercial Property Finance (CPF) Equity division in Business Banking South
  Africa disposed of a subsidiary with assets of R373m and liabilities of R26m out of non-current assets and non-current
  liabilities held for sale respectively. Business Banking South Africa further disposed of two investment properties with a
  total carrying value of R475m. 
* ARO transferred property with a carrying value of R3m to non-current assets held for sale.
* CIB South Africa transferred investment securities with a carrying value of R547m to non-current assets held for
  sale. Prior to its disposal at a carrying value of R467m, a negative fair value adjustment of R80m was applied to the
  investment securities.
* WIMI transferred two subsidiaries to non-current assets and non-current liabilities held for sale. The subsidiaries
  held assets of R139m and R14m, and liabilities of R34m and R14m respectively.

2. Loans and advances

                                                         Carrying                   Stage 1
                                                           amount 
                                                               of 
                                                        financial 
                                                        assets at 
                                                             fair                             
                                                            value                          
                                                          through          Gross                      
                                                           profit       carrying           ECL        ECL 
                                                          or loss          value     allowance   coverage   
                                                               Rm             Rm            Rm          %    
RBB South Africa                                                -        413 118         2 899       0.70    
Retail Banking South Africa                                     -        352 726         2 356       0.67    
Credit cards                                                    -         30 913           832       2.69    
Instalment credit agreements                                    -         73 806           582       0.79    
Loans to associates and joint ventures                          -         25 490             1          -    
Mortgages                                                       -        197 020           288       0.15    
Other loans and advances                                        -          3 059            20       0.65    
Overdrafts                                                      -          4 847            61       1.26    
Personal and term loans                                         -         17 591           572       3.25    
Business Banking South Africa                                   -         60 392           543       0.90    
CIB South Africa                                           45 263        195 965           415       0.21    
Absa Regional Operations                                        -         87 849           879       1.00    
WIMI                                                            -          5 342            24       0.45    
Head Office, Treasury and other operations                                           
in South Africa                                                 -            269          (195)         -    
Loans and advances to customers                                 -            269             6       2.23    
Reclassification to provisions(1)                               -              -          (201)         -    
Loans and advances to customers                            45 263        702 543         4 022       0.57    
Loans and advances to banks                                19 800         30 190             9       0.03    
Loans and advances to customers and banks                  65 063        732 733         4 031       0.55    


(1) This represents the ECL allowance on undrawn facilities which has resulted in the ECL allowance on loans 
and advances exceeding the carrying value of the drawn exposure. The excess is recognised in provisions in 
the statement of financial position.

                                                                   31 December 2018
                                                                       Stage 2
                                                        Gross 
                                                     carrying                ECL              ECL 
                                                        value          allowance          coverage    
                                                           Rm                 Rm                 %    
RBB South Africa                                       37 333              3 886             10.41    
Retail Banking South Africa                            29 881              3 431             11.48    
Credit cards                                            4 503              1 578             35.04    
Instalment credit agreements                            6 698                774             11.56    
Loans to associates and joint ventures                      -                  -                 -    
Mortgages                                              14 096                235              1.67    
Other loans and advances                                  447                 21              4.70    
Overdrafts                                              1 254                194             15.47    
Personal and term loans                                 2 883                629             21.82    
Business Banking South Africa                           7 452                455              6.11    
CIB South Africa                                       30 749                305              0.99    
Absa Regional Operations                                8 491                842              9.92    
WIMI                                                      332                 20              6.02    
Head Office, Treasury and other operations in     
South Africa                                                9               (191)                -    
Loans and advances to customers                             9                  -                 -    
Reclassification to provisions(1)                           -               (191)                -    
Loans and advances to customers                        76 914              4 862              6.32    
Loans and advances to banks                             3 173                 14              0.44    
Loans and advances to customers and banks              80 087              4 876              6.09    


                                                            31 December 2018
                                                                Stage 3
                                                 Gross 
                                              carrying           ECL              ECL            Net
                                                 value     allowance          coverage         total
                                                    Rm            Rm                 %      exposure
RBB South Africa                                37 963        15 708             41.38       465 921    
Retail Banking South Africa                     33 407        13 422             40.18       396 805    
Credit cards                                     5 810         4 033             69.41        34 783    
Instalment credit agreements                     5 147         2 017             39.19        82 278    
Loans to associates and joint ventures               -             -                 -        25 489    
Mortgages                                       18 441         4 774             25.89       224 260    
Other loans and advances                            20            20            100.00         3 465    
Overdrafts                                         567           376             66.31         6 037    
Personal and term loans                          3 422         2 202             64.35        20 493    
Business Banking South Africa                    4 556         2 286             50.18        69 116    
CIB South Africa                                 2 860         1 978             69.16       272 139    
Absa Regional Operations                         6 034         3 409             56.50        97 244    
WIMI                                               310           206             66.45         5 734    
Head Office, Treasury and other          
operations in South Africa                           -           (18)                -           682    
Loans and advances to customers                      -             -                 -           272    
Reclassification to provisions(1)                    -           (18)                -           410    
Loans and advances to customers                 47 167        21 283             45.12       841 720    
Loans and advances to banks                          -             -                 -        53 140    
Loans and advances to customers and banks       47 167        21 283             45.12       894 860    


                                                                 2017(1)
                                                             Performing loans
                                                  Exposure        Impairment        Coverage ratio    
Loans and advances                                      Rm                Rm                     %    
RBB South Africa                                   436 694             3 997                  0.92    
Retail Banking South Africa                        374 761             3 223                  0.86    
Credit cards                                        34 503               729                  2.11    
Instalment credit agreements                        74 429               682                  0.92    
Loans to associates and joint ventures              23 037                 -                     -    
Mortgages                                          215 464             1 124                  0.52    
Other loans and advances                             2 807                16                  0.57    
Overdrafts                                           5 348                71                  1.33    
Personal and term loans                             19 167               601                  3.14    
Business Banking South Africa                       61 934               774                  1.25    
Mortgages (including CPF)                           26 158               141                  0.54    
Overdrafts                                          19 864               396                  1.99    
Term loans                                          15 912               237                  1.49    
CIB South Africa                                   218 437               559                  0.26    
Absa Regional Operations                            76 738               981                  1.28    
WIMI                                                 4 930                13                  0.26    
Head Office, Treasury and other operations 
in South Africa                                       956                10                  1.05    
Loans and advances to customers                    737 755             5 560                  0.75    
Loans and advances to banks                         55 426                 -                     -    
                                                   793 181             5 560                  0.70    


                                                                            2017(1)      
                                                                 Non-Performing loans     
                                                                             Coverage    Net total 
                                                    Exposure    Impairment       ratio    exposure    
Loans and advances                                        Rm            Rm           %          Rm    
RBB South Africa                                      23 868         9 671       40.52     446 895    
Retail Banking South Africa                           20 534         8 576       41.76     383 495    
Credit cards                                           5 053         3 605       71.34      35 222    
Instalment credit agreements                           2 362         1 117       47.29      74 992    
Loans to associates and joint ventures                     -             -           -      23 037    
Mortgages                                             10 353         2 073       20.02     222 625    
Other loans and advances                                   -             -           -       2 791    
Overdrafts                                               383           215       56.14       5 445    
Personal and term loans                                2 383         1 566       65.72      19 383    
Business Banking South Africa                          3 334         1 095       32.84      63 399    
Mortgages (including CPF)                              1 477           519       35.14      26 975    
Overdrafts                                             1 082           374       34.57      20 176    
Term loans                                               775           202       26.06      16 248    
CIB South Africa                                       2 019           832       41.21     219 065    
Absa Regional Operations                               4 742         2 636       55.59      77 863    
WIMI                                                     262           175       66.79       5 004    
Head Office, Treasury and other operations 
in South Africa                                            -             -           -         946    
Loans and advances to customers                       30 891        13 314       43.10     749 772    
Loans and advances to banks                                -             -           -      55 426    
Loans and advances to customers and banks             30 891        13 314       43.10     805 198    

(1) These numbers have been restated, refer to the reporting changes overview in note 15.
 
3. Borrowed funds
During the reporting period the significant movements in borrowed funds were as follows: R6 571m 
(2017: R2 841m) of subordinated notes were issued and R3 195m (2017: R2 805m) were redeemed.

4. Disaggregation of non-interest income
The following table disaggregates non-interest income splitting it into income received from contracts 
with customers by major service lines and per reportable segment, and other items making up non-interest 
income: 


                                                                           Absa                 
                                                                        Regional                
                                              RBB SA      CIB SA      Operations         WIMI   
                                                  Rm          Rm              Rm           Rm   
Fee and commission income from contracts                                            
with customers                                18 065       2 341           3 174        3 262   
Consulting and administration fees               236          99              57           87   
Transactional fees and commissions            15 318       1 576           2 756          107   
Cheque accounts                                5 216         115              16           54   
Credit cards                                   2 608           -             162            -   
Electronic banking                             4 144       1 082              91           17   
Other (1)                                      1 287         378           2 473           35   
Savings accounts                               2 063           1              14            1   
Merchant income                                1 902           -             164            -   
Asset management                                  22           1               5        1 308   
Other fees and commissions                        27         230             104          608   
Insurance commissions received                   560           -              86        1 111   
Investment banking fees                            -         435               2           41   
Other income from contracts with customers        68           -              15            -   
Other non-interest income, net of expenses       (50)      2 248           1 968        2 252   
Total non-interest income                     18 083       4 589           5 157        5 514   


                                                Head Office,
                                                    Treasury
                                                   and other    Barclays PLC 
                                                  operations      separation
                                                       in SA         effects       Total    
                                                          Rm              Rm          Rm    
Fee and commission income from contracts                        
with customers                                        (1 167)              -      25 675    
Consulting and administration fees                         1               -         480    
Transactional fees and commissions                        (2)              -      19 755    
Cheque accounts                                            -               -       5 401    
Credit cards                                               -               -       2 770    
Electronic banking                                         1               -       5 335    
Other (1)                                                 (3)              -       4 170    
Savings accounts                                           -               -       2 079    
Merchant income                                            -               -       2 066    
Asset management                                         (15)              -       1 321    
Other fees and commissions                              (223)              -         746    
Insurance commissions received                          (927)              -         830    
Investment banking fees                                   (1)              -         477    
Other income from contracts with customers                 7               -          90    
Other non-interest income, net of expenses                52             525       6 995    
Total non-interest income                             (1 108)            525      32 760    

5. Other impairments


                                                   2018      2017    
                                                     Rm        Rm    
Impairment raised on financial instruments(2)         -         5    
Other                                               434       643    
Goodwill                                             34        38    
Intangible assets(3)                                  2       384    
Property and equipment(4)                           398       221    
                                                    434       648    

(1) Includes fees on mortgage loans and foreign currency transactions.
(2) With the adoption of IFRS 9 the impairment on other financial instruments has been included as part of 
    impairment losses.
(3) The impairment incurred during the prior period on intangible assets mainly related to internally generated
    software, Barclays.Net which was fully impaired. 
(4) Management have decided to dispose of certain property and equipment resulting in an impairment of R398m 
    (2017: R221m). As the property will be disposed of, the impairment was calculated based on fair value 
    less costs to sell.

6. Headline earnings
                                                                        2018                   2017
                                                                   Gross      Net( 1)      Gross       Net(1)    
                                                                      Rm           Rm         Rm           Rm    
Headline earnings is determined as follows:                                                                      
Profit attributable to ordinary equity holders of the Group(2)                 13 917                  13 888    
Total headline earnings adjustment:                                               225                     490    
IAS 36 - Goodwill impairment                                          34           34         38           38    
IFRS 5 - Loss/(profit) on disposal of non-currents assets 
held for sale                                                       (142)         (80)        36           39    
IAS 16 - Loss/(profit) on disposal of property and equipment           5            2        (43)         (34)   
IAS 21 - Recycled foreign currency translation reserve                 -            -         52           52    
IAS 36 - Impairment of property and equipment                        398          297        221          159    
IAS 36 - Impairment of intangible assets                               2            1        384          280    
IAS 39 - Release of available-for-sale reserves (2017)                 -            -         67           49    
IAS 40 - Change in fair value of investment properties               (38)         (29)      (105)         (87)   
IAS 40 - Profit on disposal of investment property                     -            -         (5)          (5)   
Headline earnings/diluted headline earnings(2)                                 14 142                  14 378    
Headline earnings per share (cents)(2)                                        1 703.7                 1 724.5    
Diluted headline earnings per share (cents)(2)                                1 700.4                 1 724.2    

IAS 33 Earnings per share prescribes that the weighted average number of shares outstanding during a reporting period,
and for all periods presented, should be adjusted for events that change the number of ordinary shares outstanding
without a corresponding change in resources. The contribution of cash by Barclays PLC and acquisition of Absa Group Limited
shares by a subsidiary of the independent ABSA Empowerment Trust in the previous reporting period did not result in an
adjustment to the net asset value of the Group. The weighted average number of shares outstanding in 2017 has been
restated to reflect the acquisition from Barclays PLC of 12 716 260 (1.5%) Absa Group Limited shares in the prior reporting
period. The acquisition of shares has been treated as treasury shares from the beginning of 2017, which has led to a
reduction in the number of ordinary shares outstanding for the purposes of determining the weighted average number of shares
in the Headline earnings per share and Diluted headline earnings per share.

(1) The net amount is reflected after taxation and non-controlling interest.
(2) Numbers have been restated, refer to note 15.3.1 for further details.
 
7. Dividends per share
                                                                                                      2018       2017    
                                                                                                        Rm         Rm    
Dividends declared to ordinary equity holders                                                                            
Interim dividend (6 August 2018: 490 cents) (28 July 2017: 475 cents)                                4 154      4 027    
Final dividend (11 March 2019: 620 cents) (1 March 2018: 595 cents)                                  5 256      5 044    
                                                                                                     9 410      9 071    
Dividends declared to ordinary equity holders (net of treasury shares)                                                   
Interim dividend (6 August 2018: 490 cents) (28 July 2017: 475 cents)                                4 076      4 024    
Final dividend (11 March 2019: 620 cents) (1 March 2018: 595 cents)                                  5 130      4 955    
                                                                                                     9 206      8 979    
Dividends declared to non-controlling preference equity holders                                                          
Interim dividend (6 August 2018: 3 542.67 cents) (28 July 2017: 3 685.06849 cents)                     175        182    
Final dividend (11 March 2019: 3 518.6986 cents) (1 March 2018: 3 558.01 cents)                        174        176    
                                                                                                       349        358    
Distributions declared to Additional Tier 1 Capital note holders                                                         
Distribution (12 December 2018: 31 620.63 Rands) (12 September 2018: 31 675.726 Rands)                                   
(12 June 2018: 32 200 Rands) (12 March 2018: 31 500 Rands) (12 December 2017: 31 990.79 Rands)         190         48    
                                                                                                       190         48    
Dividends paid to ordinary equity holders (net of treasury shares)(1)                                                    
Final dividend (16 April 2018: 595 cents) (10 April 2017: 570 cents)                                 4 962      4 832    
Interim dividend (17 September 2018: 490 cents) (11 September 2017: 475 cents)                       4 071      3 989    
                                                                                                     9 033      8 821    
Dividends paid to non-controlling preference equity holders                                                              
Final dividend (16 April 2018: 3 588.01 cents) (10 April 2017: 3 644.7952 cents)                       176        180    
Interim dividend (17 September 2018:3 542.67 cents) (11 September 2017: 3 685.06849 cents)             175        182    
                                                                                                       351        362    
Distributions paid to Additional Tier 1 Capital note holders                                                             
Distribution (12 December 2018: 31 620.63 Rands) (12 September 2018: 31 675.726 Rands)                                   
(12 June 2018: 32 200 Rands) (12 March 2018: 31 500 Rands) (12 December 2017: 31 990.79 Rands)         190         48    
                                                                                                       190         48    

(1) The dividends paid on treasury shares are calculated on payment date.

8. Acquisitions and disposals of businesses and other similar transactions
8.1.1 Acquisitions of businesses during the current reporting period 

During the period, the Group acquired the remaining 50% in a non-core investment, which was previously held as an
investment in associate at fair value.  The acquisition of the investment had an effective acquisition date of 
16 March 2018 and is a business combination within the scope of IFRS 3. The acquisition date fair value of the 
consideration transferred amounted to R198m. 
                                                                                    Fair value    
                                                                                 recognised on    
                                                                                   acquisition    
                                                                                          2018    
                                                                                            Rm    
Consideration at date of acquisition:                                                             
Cash                                                                                        30    
Acquisition- date fair value of initial interest                                           168    
Total consideration                                                                        198    
Recognised amounts of identifiable assets acquired and liabilities assumed                        
Cash and balances at central banks                                                          15    
Other assets                                                                                 4    
Investment properties                                                                      165    
Current tax assets                                                                           1    
Other liabilities                                                                          (14)   
Deferred tax liabilities                                                                    (7)   
Total identifiable net assets                                                              164    
Total Non-Controlling Interest                                                               -    
Goodwill                                                                                    34    
Total                                                                                      198    

A summary of the total net cash outflow and cash and cash equivalents related to acquisitions and disposals of
businesses and other similar transactions is included below:


                                                     2018      2017    
                                                       Rm        Rm    
Summary of net cash outflow due to acquisitions        30         -    

The profit recognised in the consolidated statement of comprehensive income as a result of the acquisition of a
subsidiary is R30.6m.

8.1.2 Disposals of businesses during the current reporting period 
Apart from the business classified as non-current assets/liabilities held for sale and disposed of (refer to 
note 1) there were no other disposals of businesses that were finalised during the current reporting period. 
The cash consideration received on disposal of subsidiary included in non-current assets/liabilities held for 
sale was R1 398m.

8.2.1 Acquisitions of businesses during the previous reporting period
There were no acquisitions of businesses during the previous reporting period.

8.2.2 Disposals of businesses during the previous reporting period
Apart from the businesses classified as non-current assets/liabilities held for sale and disposed of (refer to 
note 1) there were no other disposals of businesses that were finalised during the previous reporting period. The 
cash consideration received on the disposal of a subsidiary included in non-current assets/liabilities held for 
sale was R205m. 

9. Related parties
There were no one-off significant transactions with related parties of Absa Group Limited during the current reporting
period.

In the prior reporting period, as part of the separation, Barclays PLC sold ordinary Absa Group Limited shares
representing 12.2% and 33.7% of issued ordinary share capital in May 2016 and June 2017, respectively. Barclays PLC 
currently holds 126.2m ordinary Absa Group Limited shares representing 14.9% of issued ordinary shares. The remaining 
85.1 % of the shares are widely held on the JSE.

Barclays PLC contributed ?765 million to the Group, primarily in recognition of the investments required for the Group
to separate from Barclays PLC. This contribution will be invested primarily in rebranding, technology and
separation-related projects and it is expected that it will neutralise the capital and cash flow impact of separation 
investments on the Group over time. 

Barclays PLC contributed cash of R1 891m to be used in the furtherance of the Group's objective of establishing
Broad-Based Black Economic Empowerment structure. The cash was contributed to the independent Absa Empowerment Trust, 
whose subsidiary purchased 12 716 260 Absa Group shares. In terms of the requirements of IFRS, these shares have been 
accounted for as treasury shares and eliminated against the Group's share capital.

CLS Group Holding AG shares were transferred to Barclays PLC for no consideration in 2005. During the previous
reporting period these shares were transferred back to the Group for a nominal consideration of one British Pound (GBP). 
The shares have been recognised at a fair value of R48m. The related credit has been recognised in equity as a shareholder
contribution. 

10. Commitments
                                                                                                      2018        2017    
                                                                                                        Rm          Rm    
Authorised capital expenditure                                                                                            
Contracted but not provided for                                                                      1 337         270    
The Group has capital commitments in respect of computer equipment, software and                
property development. Management is confident that future net revenues and funding 
will be sufficient to cover these commitments.
Operating lease payments due                                                                                              
No later than one year                                                                               1 408       1 365    
Later than one year and no later than five years                                                     3 905       3 056    
Later than five years                                                                                  707         948    
                                                                                                     6 020       5 369    

The operating lease commitments comprise a number of separate operating leases in relation to property and equipment,
none of which is individually significant to the Group. Leases are negotiated for an average term of three to five years
and rentals are renegotiated annually.

11. Contingencies
                                                              2018          2017    
                                                                Rm            Rm    
Guarantees                                                  46 529        38 799    
Irrevocable debt facilities/other lending facilities       199 062       162 907    
Irrevocable equity facilities                                    8            33    
Letters of credit                                           14 838         7 814    
Other                                                           63           262    
                                                           260 500       209 815    

Guarantees include performance guarantee contracts and financial guarantee contracts.

Financial guarantee contracts represent contracts where the Group undertakes to make specified payments to a
counterparty, should the counterparty suffer a loss as a result of a specified debtor failing to make payment when due in
accordance with the terms of a debt instrument. This amount represents the maximum off-statement of financial position
exposure.

Irrevocable debt facilities are commitments to extend credit where the Group does not have the right to terminate the
facilities by written notice. Following the implementation of IFRS 9 other lending facilities in respect of which expected
credit losses are recognised have been included above, as the Group does not enforce the ability to revoke these
facilities in the normal day-to-day management thereof.

Commitments generally have fixed expiry dates. Since commitments may expire without being drawn upon, the total
contract amounts do not necessarily represent future cash requirements.

An impairment provision of R123m has been raised on financial guarantees, R48m has been raised for letters of credit
and R497m on irrevocable debt facilities/other lending facilities. 

Irrevocable equity facilities and other contingencies fall outside the scope of the expected credit losses model of
IFRS 9. 

Legal matters
The Group has been party to proceedings against it during the reporting period. The following material cases were
ongoing at the reporting date:

* Pinnacle Point Holdings Proprietary Limited:  It is alleged that a local bank conducted itself unlawfully in
relation to a financial product offered by it, and that Absa Bank Limited was privy to such conduct. Subsequent to the
withdrawal of the first plaintiff's (Pinnacle Point Holdings) claim, the total claim amount has been substantially reduced,
however, the second to fifth plaintiffs persist with their claims for damages for an amount of R470m. 

* Ayanda Collective Investment Scheme (the Scheme): Absa Capital Investor Services was the trustee of Ayanda
Collective Investment Scheme, in which Corporate Money Managers (CMM) managed a portfolio of assets within the Scheme. 
The joint curators of the CMM group of companies and the Altron Pension Fund (an investor in the fund) allege that the 
defendants caused damages to them arising from their alleged failure to meet their obligations in the trust deed together 
with their statutory obligations set out in the Collective Investment Scheme Act, in respect of which they seek payment 
of R934m.

The Group is engaged in various other legal, competition and regulatory matters both in South Africa and a number of
other jurisdictions. It is involved in legal proceedings which arise in the ordinary course of business from time to
time, including (but not limited to) disputes in relation to contracts, securities, debt collection, consumer credit, 
fraud, trusts, client assets, competition, data protection, money laundering, employment, environmental and other 
statutory and common law issues.

The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal
and other proceedings by regulators, governmental and other public bodies in connection with (but not limited to) consumer
protection measures, compliance with legislation and regulation, wholesale trading activity and other areas of banking
and business activities in which the Group is or has been engaged.

At the present time, the Group does not expect the ultimate resolution of any of these other matters to have a
material adverse effect on its financial position. However, in light of the uncertainties involved in such matters and the
matters specifically described in this note, there can be no assurance that the outcome of a particular matter or matters
will not be material to the Group's results of operations or cash flow for a particular period, depending on, amongst
other things, the amount of the loss resulting from the matter(s) and the amount of income otherwise reported for the
reporting period.

The Group has not disclosed the contingent liabilities associated with these matters either because they cannot
reasonably be estimated or because such disclosure could be prejudicial to the outcome of the matter. Provision is made for
all liabilities which are expected to materialise.

Regulatory matters
The scale of regulatory change remains challenging and the global financial crisis has resulted in a significant
tightening of regulation and changes to regulatory structures globally and locally, especially for companies that are deemed
to be of systemic importance. Concurrently, there is continuing political and regulatory scrutiny of the operation of
the banking and consumer credit industries globally which, in some cases, is leading to increased regulation. 

The nature and impact of future changes in the legal framework, policies and regulatory action especially in the areas
of financial crime, banking and insurance regulation, cannot currently be fully predicted and are beyond the Group's
control. Some of these are likely to have an impact on the Group's businesses, systems and earnings. 

The Group is continuously evaluating its programmes and controls in general relating to compliance with regulation.
The Group undertakes   monitoring, review and assurance activities, and the Group has also adopted appropriate remedial
and/or mitigating steps, where necessary or advisable, and has made disclosures on material findings as and when
appropriate. 

Absa Bank Limited, a subsidiary of Absa Group Limited, identified potentially fraudulent activity by certain of its
customers using advance payments for imports in 2014 and 2015 to effect foreign exchange transfers from South Africa to
beneficiary accounts located in East Asia, UK, Europe and the US. As a result, the Group conducted a review of relevant
activity, processes, systems and controls, and provided information to relevant authorities, in a process which has now
largely concluded. No financial impact is anticipated.

In February 2017 the South African Competition Commission (SACC) referred Barclays PLC, Boutique Collective Investments 
(Pty) Ltd (BCI) and Absa Bank Limited, a subsidiary of Absa Group Limited, among other banks, to the Competition Tribunal 
to be prosecuted for breaches of South African antitrust law related to Foreign Exchange trading of South African Rand. The 
SACC found from its investigation that between 2007 and 2013 the banks had engaged in various forms of collusive behaviour. 
Barclays PLC was the first to bring the conduct to the attention of the SACC under its leniency programme and has cooperated 
with, and will continue to cooperate with, the SACC in relation to this matter.  The SACC is therefore not seeking an order 
from the Tribunal to impose any fine on Barclays Bank PLC, BCI or Absa Bank Limited. 

Income Taxes
The Group is subject to income taxes in numerous jurisdictions and the calculation of the Group's tax charge and
provisions for income taxes necessarily involves a degree of estimation and judgement. There are many transactions and
calculations for which the ultimate tax treatment is uncertain or in respect of which the relevant tax authorities may have
indicated disagreement with the Group's treatment and accordingly the final tax charge cannot be determined until
resolution has been reached with the relevant tax authority. 

The Group recognises provisions for anticipated tax audit issues based on estimates of whether additional taxes will
be due after taking into account external advice where appropriate. The carrying amount of any resulting provisions will
be sensitive to the manner in which tax matters are expected to be resolved, and the stage of negotiations or discussion
with the relevant tax authorities. There may be significant uncertainty around the final outcome of tax proceedings,
which in many instances, will only be concluded after a number of years. Management estimates are informed by a number of
factors including, inter alia, the progress made in discussions or negotiations with the tax authorities, the advice of
expert legal counsel, precedent set by the outcome of any previous claims, as well as the nature of the relevant tax
environment. The dispute with the South African tax authority that was referred to in the 2017 financial statements has now
been settled.

Where the final tax outcome of these matters is different from the amounts that were initially recorded, such
differences will impact the current and deferred income tax assets and liabilities in the reporting period in which such
determination is made. These risks are managed in accordance with the Group's Tax Risk Framework.
 
12. Segment reporting  
                                                                     2018        2017(1)    
                                                                       Rm             Rm    
12.1 Total headline earnings by segment                                                     
RBB South Africa                                                    8 880          8 748    
CIB South Africa                                                    3 367          3 411    
Absa Regional Operations                                            3 218          2 954    
WIMI                                                                1 268          1 231    
Head Office, Treasury and other operations South Africa(2)           (605)          (721)   
Barclays PLC separation effects(2)                                 (1 986)        (1 245)   
                                                                   14 142         14 378    
12.2 Total income by segment                                                                
RBB South Africa                                                   43 591         42 607    
CIB South Africa                                                   11 595         10 706    
Absa Regional Operations                                           16 323         15 617    
WIMI                                                                5 831          5 580    
Head Office, Treasury and other operations South Africa(2)         (1 680)        (1 520)   
Barclays PLC separation effects(2)                                    855            405    
                                                                   76 515         73 395    
12.3 Total internal income by segment                                                       
RBB South Africa                                                   (8 466)        (9 282)   
CIB South Africa                                                   (6 738)        (7 900)   
Absa Regional Operations                                             (625)          (241)   
WIMI                                                                 (411)          (471)   
Head Office, Treasury and other operations South Africa(2)         16 240         17 569    
Barclays PLC separation effects(2)                                      -            325    
                                                                        -              -    
12.4 Total assets by segment                                                                
RBB South Africa                                                  803 985        753 849    
CIB South Africa                                                  531 839        495 725    
Absa Regional Operations                                          192 960        162 720    
WIMI                                                               50 448         50 697    
Head Office, Treasury and other operations South Africa(2)       (293 680)      (294 308)   
Barclays PLC separation effects(2)                                  3 192            912    
                                                                1 288 744      1 169 595    
12.5 Total liabilities by segment                                                           
RBB South Africa                                                  795 672        741 550    
CIB South Africa                                                  524 761        488 926    
Absa Regional Operations                                          170 071        142 394    
WIMI                                                               44 947         45 643    
Head Office, Treasury and other operations South Africa(2)       (362 752)      (358 336)   
Barclays PLC separation effects(2)                                 (5 561)        (9 840)   
                                                                1 167 138      1 050 337    

(1) Operational changes, accounting policy changes, management changes and associated changes to the way in which the
    chief operating decision maker views the performance of each segment, have resulted in the allocation of earnings,
    assets and liabilities between segments, refer to note 15.5 for further details.
(2) These represent reconciling strips and are not reporting segments.

13. Assets and liabilities not held at fair value
The following table summarises the carrying amounts and fair value of those assets and liabilities not held at fair
value.
                                                                           2018                 
                                                                Carrying                  
                                                                   value      Fair value  
                                                                      Rm              Rm  
Financial assets                                                                          
Balances with other central banks                                 11 371          11 374  
Balances with the South African Reserve Bank                      13 108          13 108  
Coins and bank notes                                              14 252          14 252  
Money market assets                                                   27              27  
Cash, cash balances and balances with central banks               38 758          38 761  
Investment securities                                              7 359           7 414  
Loans and advances to banks                                       33 339          35 669  
Other assets                                                      27 468          27 356  
RBB South Africa                                                 465 921         467 096  
Retail Banking South Africa                                      396 805         397 907  
Credit cards                                                      34 783          35 322  
Instalment credit agreements                                      82 282          82 616  
Loans to associates and joint ventures                            25 489          25 489  
Mortgages                                                        224 260         224 260  
Other loans and advances                                           3 461           3 461  
Overdrafts                                                         6 037           6 104  
Personal and term loans                                           20 493          20 655  
Business Banking South Africa                                     69 116          69 189  
Mortgages (including CPF)                                         29 245          29 245  
Overdrafts                                                        20 018          20 088  
Term loans                                                        19 853          19 856  
CIB South Africa                                                 226 876         226 876  
Absa Regional Operations                                          97 244          97 504  
WIMI                                                               5 734           5 985  
Head Office, Treasury and other operations in South Africa           681             681  
Loans and advances to customers - net of impairment losses       796 456         798 142  
Non-current assets held for sale                                      30              30  
Total assets (not held at fair value)                            903 410         907 372  
Financial liabilities                                                                     
Deposits from banks                                               75 651          79 757  
Other liabilities                                                 32 614          32 826  
Call deposits                                                     80 007          80 007  
Cheque account deposits                                          199 053         199 053  
Credit card deposits                                               1 904           1 904  
Fixed deposits                                                   155 184         155 184  
Foreign currency deposits                                         35 597          35 597  
Notice deposits                                                   58 367          58 367  
Other deposits                                                     2 779           2 779  
Saving and transmission deposits                                 164 321         164 321  
Deposits due to customers                                        697 212         697 212  
Debt securities in issue                                         145 382         147 666  
Borrowed funds                                                    20 225          20 225  
Total liabilities (not held at fair value)                       971 084         977 686  

                                                                           2017
                                                                 Carrying                    
                                                                    value      Fair value    
                                                                       Rm              Rm    
Financial assets                                                                             
Balances with other central banks                                  10 281          10 281    
Balances with the South African Reserve Bank                       19 109          19 109    
Coins and bank notes                                               13 519          13 519    
Money market assets                                                     -               -    
Cash, cash balances and balances with central banks                42 909          42 909    
Investment securities                                                   -               -    
Loans and advances to banks                                        38 228          39 037    
Other assets                                                       17 486          17 556    
RBB South Africa                                                  447 752         447 984    
Retail Banking South Africa                                       383 495         383 727    
Credit cards                                                       35 223          35 224    
Instalment credit agreements                                       77 044          77 275    
Loans to associates and joint ventures                             23 037          23 037    
Mortgages                                                         222 625         222 625    
Other loans and advances                                              740             740    
Overdrafts                                                          5 443           5 443    
Personal and term loans                                            19 383          19 383    
Business Banking South Africa                                      64 257          64 257    
Mortgages (including CPF)                                          27 833          27 833    
Overdrafts                                                         19 199          19 199    
Term loans                                                         17 225          17 225    
CIB South Africa                                                  192 257         192 257    
Absa Regional Operations                                           77 005          77 137    
WIMI                                                                5 004           5 004    
Head Office, Treasury and other operations in South Africa            943             943    
Loans and advances to customers - net of impairment losses        722 961         723 325    
Non-current assets held for sale                                    1 118           1 118    
Total assets (not held at fair value)                             822 702         823 945    
Financial liabilities                                                                        
Deposits from banks                                                54 835          54 915    
Other liabilities                                                  27 833          27 832    
Call deposits                                                      81 076          81 076    
Cheque account deposits                                           191 048         191 048    
Credit card deposits                                                1 921           1 921    
Fixed deposits                                                    148 328         148 328    
Foreign currency deposits                                          28 418          28 418    
Notice deposits                                                    58 459          58 459    
Other deposits                                                      2 629           2 629    
Saving and transmission deposits                                  157 098         157 098    
Deposits due to customers                                         668 977         668 977    
Debt securities in issue                                          132 891         132 891    
Borrowed funds                                                     15 895          15 895    
Total liabilities (not held at fair value)                        900 431         900 510    

14. Assets and liabilities held at fair value
14.1 Fair value measurement and valuation processes
Financial assets and financial liabilities
The Group has an established control framework with respect to the measurement of fair values. The framework includes
a Traded Risk and Valuations Committee and an Independent Valuation Control team (IVC), which is independent from the
front office.

The Traded Risk and Valuations Committee, which comprises representatives from senior management, will formally
approve valuation policies and any changes to valuation methodologies. Significant valuation issues are reported to 
the Absa Group Audit and Compliance Committee.

The Traded Risk and Valuations Committee is responsible for overseeing the valuation control process and will
therefore consider the appropriateness of valuation techniques and inputs for fair value measurement.

The IVC team independently verifies the results of trading and investment operations and all significant fair value
measurements. They source independent data from external independent parties, as well as internal risk areas when
performing independent price verification for all financial instruments held at fair value. They also assess and document the
inputs obtained from external independent sources to measure the fair value which supports conclusions that valuations are
performed in accordance with IFRS and internal valuation policies.

Investment properties
The fair value of investment properties is determined based on the most appropriate methodology applicable to the
specific property. Methodologies include the market comparable approach that reflects recent transaction prices for similar
properties, discounted cash flows and income capitalisation methodologies. In estimating the fair value of the
properties, the highest and best use of the properties is taken into account.

Where possible the fair value of the Group's investment properties is determined through valuations performed by
external independent valuators.

When the Group's internal valuations are different to that of the external independent valuers, detailed procedures
are performed to substantiate the differences, whereby the IVC team verifies the procedures performed by the front office
and considers the appropriateness of any differences to external independent valuations.

14.2 Fair value measurements
Valuation inputs
IFRS 13 requires an entity to classify fair values measured and/or disclosed according to a hierarchy that reflects
the significance of observable market inputs. The three levels of the fair value hierarchy are defined as follows:

Quoted market prices - Level 1
Fair values are classified as Level 1 if they have been determined using observable prices in an active market. Such
fair values are determined with reference to unadjusted quoted prices for identical assets or liabilities in active
markets where the quoted price is readily available, and the price represents actual and regularly occurring market
transactions on an arm's length basis. An active market is one in which transactions occur with sufficient volume and 
frequency to provide pricing information on an ongoing basis.

Valuation technique using observable inputs - Level 2
Fair values are classified as Level 2 if they have been determined using models for which inputs are observable in an
active market.

A valuation input is considered observable if it can be directly observed from transactions in an active market, or if
there is compelling external evidence demonstrating an executable exit price.

Valuation technique using significant unobservable inputs - Level 3
Fair values are classified as Level 3 if their determination incorporates significant inputs that are not based on
observable market data (unobservable inputs). An input is deemed significant if it is shown to contribute more than 10% to
the fair value of an item. Unobservable input levels are generally determined based on observable inputs of a similar
nature, historical observations or other analytical techniques.

Judgemental inputs on valuation of principal instruments
The following summary sets out the principal instruments whose valuation may involve judgemental inputs:

Debt securities and treasury and other eligible bills
These instruments are valued, based on quoted market prices from an exchange, dealer, broker, industry group or
pricing service, where available. Where unavailable, fair value is determined by reference to quoted market prices for 
similar instruments or, in the case of certain mortgage-backed securities, valuation techniques using inputs derived from
observable market data, and, where relevant, assumptions in respect of unobservable inputs.

Equity instruments
Equity instruments are valued, based on quoted market prices from an exchange, dealer, broker, industry group or
pricing service, where available. Where unavailable, fair value is determined by reference to quoted market prices for
similar instruments or by using valuation techniques using inputs derived from observable market data, and, where relevant,
assumptions in respect of unobservable inputs.

Also included in equity instruments are non-public investments, which include investments in venture capital
organisations. The fair value of these investments is determined using appropriate valuation methodologies which, dependent on
the nature of the investment, may include discounted cash flow analysis, enterprise value comparisons with similar
companies and price: earnings comparisons. For each investment, the relevant methodology is applied consistently over time.

Derivatives
Derivative contracts can be exchange-traded or traded over-the-counter (OTC). OTC derivative contracts include
forward, swap and option contracts related to interest rates, bonds, foreign currencies, credit spreads, equity prices and
commodity prices or indices on these instruments. Fair values of derivatives are obtained from quoted market prices, dealer
price quotations, discounted cash flow and option pricing models.

Loans and advances
The disclosed fair value of loans and advances to banks and customers is determined by discounting contractual cash
flows. Discount factors are determined using the relevant forward base rates (as at valuation date) plus the originally
priced spread. Where a significant change in credit risk has occurred, an updated spread is used to reflect valuation date
pricing. Behavioural cash flow profiles, instead of contractual cash flow profiles, are used to determine expected cash
flows where contractual cash flow profiles would provide an inaccurate fair value.

Deposits, debt securities in issue and borrowed funds
Deposits, debt securities in issue and borrowed funds are valued using discounted cash flow models, applying rates
currently offered for issuances with similar characteristics. Where these instruments include embedded derivatives, the
embedded derivative component is valued using the methodology for derivatives as detailed above.

The fair value of amortised cost deposits repayable on demand is considered to be equal to their carrying value. For
other financial liabilities at amortised cost the disclosed fair value approximates the carrying value because the
instruments are short term in nature or have interest rates that reprice frequently.

14.3 Fair value adjustments
The main valuation adjustments required to arrive at a fair value are described below:

Bid-offer valuation adjustments
For assets and liabilities where the Group is not a market maker, mid prices are adjusted to bid and offer prices
respectively. Bid-offer adjustments reflect expected close out strategy and, for derivatives, the fact that they are managed
on a portfolio basis. The methodology for determining the bid-offer adjustment for a derivative portfolio will
generally involve netting between long and short positions and the bucketing of risk by strike and term in accordance with
hedging strategy. Bid-offer levels are derived from market sources, such as broker data. For those assets and liabilities
where the firm is a market maker and has the ability to transact at, or better than, mid-price (which is the case for
certain equity, bond and vanilla derivative markets), the mid-price is used, since the bid-offer spread does not represent a
transaction cost.
 
Uncollateralised derivative adjustments
A fair value adjustment is incorporated into uncollateralised derivative valuations to reflect the impact on fair
value of counterparty credit risk, the Group's own credit quality, as well as the cost of funding across all asset classes.

Model valuation adjustments
Valuation models are reviewed under the Group's model governance framework. This process identifies the assumptions
used and any model limitations (for example, if the model does not incorporate volatility skew). Where necessary, fair
value adjustments will be applied to take these factors into account. Model valuation adjustments are dependent on the size
of portfolio, complexity of the model, whether the model is market standard and to what extent it incorporates all
known risk factors. All models and model valuation adjustments are subject to review on at least an annual basis. 

14.4  Fair value hierarchy
The following table shows the Group's assets and liabilities that are recognised and subsequently measured at fair
value and are analysed by valuation techniques. The classification of assets and liabilities is based on the lowest level
input that is significant to the fair value measurement in its entirety.

                                                                          2018
                                                         Level 1      Level 2      Level 3        Total    
Recurring fair value measurements                             Rm           Rm           Rm           Rm    
Financial Assets                                                                                           
Cash, cash balances and balances with central banks        2 142        6 029            -        8 171    
Investment securities                                     52 990       63 079       11 991      128 060    
Loans and advances to banks                                    -       19 800            -       19 800    
Trading and hedging portfolio assets                      61 083       65 144        3 449      129 676    
Debt instruments                                          43 666        8 647          445       52 758    
Derivative assets                                              -       44 495        2 450       46 945    
Commodity derivatives                                          -        1 256          224        1 480    
Credit derivatives                                             -            -          173          173    
Equity derivatives                                             -        3 442        1 947        5 389    
Foreign exchange derivatives                                   -        8 807           26        8 833    
Interest rate derivatives                                      -       30 990           80       31 070    
Equity instruments                                        15 848            -            -       15 848    
Money market assets                                        1 569       12 002          554       14 125    
Other assets                                                   -            2            -            2    
Loans and advances to customers                                -       34 602       10 661       45 263    
Investments linked to investment contracts                17 230        1 059          192       18 481    
Total financial assets                                   133 445      189 715       26 293      349 453    
Financial liabilities                                                                                      
Deposits from banks                                            -       45 751           19       45 770    
Trading and hedging portfolio liabilities                 15 514       36 007        1 454       52 975    
Derivative liabilities                                         -       36 007        1 454       37 461    
Commodity derivatives                                          -        1 260          222        1 482    
Credit derivatives                                             -            6          174          180    
Equity derivatives                                             -        2 315          778        3 093    
Foreign exchange derivatives                                   -        9 318           19        9 337    
Interest rate derivatives                                      -       23 108          261       23 369    
Short positions                                           15 514            -            -       15 514    
Other liabilities                                              -            2           45           47    
Deposits due to customers                                    238       36 031        2 823       39 092    
Debt securities in issue                                       3       15 586            -       15 589    
Liabilities under investment contracts                         -       29 674            -       29 674    
Total financial liabilities                               15 755      163 051        4 341      183 147    
Non-financial assets                                                                                       
Commodities                                                1 304            -            -        1 304    
Investment properties                                          -            -          508          508    
Non-recurring fair value measurements                                                                      
Non-current assets held for sale(1)                            -            -          239          239    
Non-current liabilities held for sale(1)                       -            -          124          124    


                                                                              2017
                                                          Level 1       Level 2      Level 3         Total    
Recurring fair value measurements                              Rm            Rm           Rm            Rm    
Financial Assets                                                                                              
Cash, cash balances and balances with central banks         1 839         3 921            -         5 760    
Investment securities                                      53 068        50 740        7 601       111 409    
Loans and advances to banks                                     -        16 714          484        17 198    
Trading and hedging portfolio assets                       54 966        76 015        1 824       132 805    
Debt instruments                                           29 668         5 133          177        34 978    
Derivative assets                                               -        58 980          546        59 526    
Commodity derivatives                                           -           981          124         1 105    
Credit derivatives                                              -             -          165           165    
Equity derivatives                                              -         2 371          173         2 544    
Foreign exchange derivatives                                    -        15 878            8        15 886    
Interest rate derivatives                                       -        39 750           76        39 826    
Equity instruments                                         23 662             -            -        23 662    
Money market assets                                         1 636        11 902        1 101        14 639    
Other assets                                                    -             2            2             4    
Loans and advances to customers                                 -        22 070        4 741        26 811    
Investments linked to investment contracts                 17 906         1 030            -        18 936    
Total financial assets                                    127 779       170 492       14 652       312 923    
Financial liabilities                                                                                         
Deposits from banks                                             -        12 555            -        12 555    
Trading and hedging portfolio liabilities                  11 946        52 279          945        65 170    
Derivative liabilities                                          -        52 279          945        53 224    
Commodity derivatives                                           -         1 172          121         1 293    
Credit derivatives                                              -            10          148           158    
Equity derivatives                                              -         1 973          423         2 396    
Foreign exchange derivatives                                    -        14 874            4        14 878    
Interest rate derivatives                                       -        34 250          249        34 499    
Short positions                                            11 946             -            -        11 946    
Other liabilities                                               -             3            5             8    
Deposits due to customers                                     203        19 115        1 572        20 890    
Debt securities in issue                                      214         4 355          488         5 057    
Liabilities under investment contracts                          -        30 585            -        30 585    
Total financial liabilities                                12 363       118 892        3 010       134 265    
Non-financial assets                                                                                          
Commodities                                                 2 051             -            -         2 051    
Investment properties                                           -             -          231           231    
Non-recurring fair value measurements                                                                         
Non-current assets held for sale(1)                             -             -          190           190    
Non-current liabilities held for sale(1)                        -             -           48            48    


(1) Includes certain items classified in terms of the requirements of IFRS 5 which are measured in terms of their
    respective standards.

14.5  Measurement of assets and liabilities categorised at Level 2
The following table presents information about the valuation techniques and significant observable inputs used in
measuring assets and liabilities categorised as Level 2 in the fair value hierarchy:

Category of asset/liability                               Valuation techniques applied                        
Loans and advances to banks                               Future cash flows are discounted using market-
                                                          related interest rates, adjusted for credit inputs,
                                                          over the contractual period of the instruments 
                                                          (that is, discounted cash flow)
Trading and hedging portfolio assets and liabilities                                                          
Debt instruments                                          Discount cash flow models                           
Derivatives                                                                                                   
Commodity derivatives                                     Discounted cash flow techniques, option pricing, 
                                                          models such as the Black Scholes model, futures
                                                          pricing models and/or Exchange Traded Fund (ETF)
                                                          models.
Credit derivatives                                        Discounted cash flow techniques and/or option 
                                                          pricing models, such as the Black Scholes model
Equity derivatives                                        Discounted cash flow models, option pricing models
                                                          and/or futures pricing models                              
Foreign exchange derivatives                              Discounted cash flow techniques and/or option 
                                                          pricing models, such as the Black Scholes model
Interest rate derivatives                                 Discounted cash flow and/or option pricing models   
Money market assets                                       Discounted cash flow models                         
Loans and advances to customers                           Discounted cash flow models                         
Investment securities and investments linked to           Listed equities: market bid price. 
investment contracts                                      
Deposits from banks                                       Discounted cash flow models                         
Deposits due to customers                                 Discounted cash flow models                         
Debt securities in issue and other liabilities            Discounted cash flow models                         

Category of asset/liability                               Significant observable inputs
Loans and advances to banks                               Interest rates and/or money market curves, as well
                                                          as credit spreads
Trading and hedging portfolio assets and liabilities
Debt instruments                                          Underlying price of market traded instruments and 
                                                          interest rates                            
Derivatives
Commodity derivatives                                     Spot price of physical or futures, market interest rates 
                                                          and/or volatilities                         
Credit derivatives                                        Interest rate, recovery rate, credit spread and/or 
                                                          quanto ratio                             
Equity derivatives                                        Spot share prices, market interest rates, volatility 
                                                          and/or dividend stream                                
Foreign exchange derivatives                              Interest rate curves, repurchase agreements, money
                                                          market curves and/or volatilities
Interest rate derivatives                                 Interest rate curves, repurchase agreement curves, 
                                                          money market curves and/or volatility    
Money market assets                                       Money market curves and/or interest rates
Loans and advances to customers                           Interest rate and/or money market curves
Investment securities and investments linked to           Underlying price of the market traded instrument and/or
investment contracts                                      interest rate curves 
Deposits from banks                                       Interest rate curves and/or money market curves
Deposits due to customers                                 Interest rate curves and/or money market curves
Debt securities in issue and other liabilities            Underlying price of the market traded instrument and/or 
                                                          interest rate curves                

14.6  Reconciliation of Level 3 assets and liabilities
A reconciliation of the opening balances to closing balances for all movements on Level 3 assets and liabilities is
set out below:
                                                                             2018
                                                            Trading and 
                                                                hedging               Loans and     Loans and
                                                              portfolio    Other     advances to      advances 
                                                                 assets   assets       customers      to banks    
                                                                     Rm       Rm              Rm            Rm    
Opening balance at the beginning of the reporting period          1 824        2           4 741           484    
Net interest income                                                   -        -             153             -    
Other income                                                          -        -               -             -    
Gains and losses from banking and trading activities              1 240        -             427             -    
Gains and losses from investment activities                           -        -               -             -    
Purchases                                                         1 174        -           6 617             -    
Sales                                                              (257)       -            (156)          (18)   
Movement in other comprehensive income                                -        -               -             -    
Transferred to/(from) assets/liabilities                              -        -               -             -    
Transfer to Level 3                                                 357        -               -             -    
Transfer (out) of Level 3                                          (889)      (2)         (1 121)         (466)   
Step acquisition of subsidiary                                        -        -               -             -    
Closing balance at the end of the reporting period                3 449        -          10 661             -    

                                                                         2018
                                                                                   Investments
                                                                                        linked             Total 
                                               Investment       Investment       to Investment         assets at
                                               securities       properties           contracts        fair value    
                                                       Rm               Rm                  Rm                Rm    
Opening balance at the beginning of the 
reporting period                                    7 601              231                   -            14 883    
Net interest income                                    89                -                   -               242    
Other income                                            -               38                   -                38    
Gains and losses from banking and trading 
activities                                            199                -                   -             1 866    
Gains and losses from investment activities            23                -                   -                23    
Purchases                                           3 815              165                 192            11 963    
Sales                                                (516)               -                   -              (947)   
Movement in other comprehensive income                (41)              33                   -                (8)   
Transferred to/(from) assets/liabilities                -               41                   -                41    
Transfer to Level 3                                 2 928                -                   -             3 285    
Transfer (out) of Level 3                          (1 914)               -                   -            (4 392)   
Step acquisition of subsidiary                       (193)               -                   -              (193)   
Closing balance at the end of the 
reporting period                                    11 991              508                 192            26 801    

                                                                             2017
                                                            Trading and 
                                                                hedging                 Loans and     Loans and
                                                              portfolio    Other      advances to      advances 
                                                                 assets   assets        customers      to banks    
                                                                     Rm       Rm               Rm            Rm    

Opening balance at the beginning of the 
reporting period                                                  1 505        5            4 890           571    
Net interest income                                                   -        -               12             -    
Other income                                                          -        -                -             -    
Gains and losses from banking and trading activities               (635)       -               29             -    
Gains and losses from investment activities                           -        -                -             -    
Purchases                                                         1 101        -            1 020            88    
Sales                                                              (147)       -           (1 112)         (175)   
Movement in other comprehensive income                                -        -                -             -    
Settlements                                                           -       (3)               -             -    
Transfer (out) of Level 3                                             -        -              (98)            -    
Closing balance at the end of the reporting period                1 824        2            4 741           484    

                                                                                    2017
                                                                                     Investments
                                                                                       linked to          Total 
                                                           Investment   Investment    Investment      assets at 
                                                           securities   properties     contracts     fair value    
                                                                   Rm           Rm            Rm             Rm    
Opening balance at the beginning of the reporting                                      
period                                                          3 358         478              -         10 807    
Net interest income                                                62           -              -             74    
Other income                                                        -          12              -             12    
Gains and losses from banking and trading activities                -           -              -           (606)   
Gains and losses from investment activities                         2           -              -              2    
Purchases                                                       4 832           1              -          7 042    
Sales                                                            (579)       (260)             -         (2 273)   
Movement in other comprehensive income                             29           -              -             29    
Settlements                                                       (22)          -              -            (25)   
Transfer (out) of Level 3                                          (81)          -              -           (179)   
Closing balance at the end of the reporting period              7 601         231              -         14 883    


A reconciliation of the opening balances to closing balances for all movements on Level 3 assets and liabilities is
set out below:
                                                                                    2018
                                                                              Trading and 
                                                                                  Hedging  
                                                                 Deposits       Portfolio            Other
                                                               from Banks     Liabilities      Liabilities    
                                                                       Rm              Rm               Rm    
Opening balance at the beginning of the                                                            
reporting period                                                        -             945                5    
Gains and losses from banking and trading                                                          
activities                                                              -             (52)               -    
Movement in other comprehensive income                                  -               -                -    
Issues                                                                 19           1 042               40    
Settlements                                                             -            (344)               -    
Transferred to/(from) assets/liabilities                                -               -                -    
Transfer (out) of Level 3                                               -            (137)               -    
Closing balance at the end of the reporting period                     19           1 454               45    

                                                                                 2018
                                                                Deposits                                Total 
                                                                  due to    Debt securities       liabilities 
                                                               customers           in issue     at Fair Value    
                                                                      Rm                 Rm                Rm    
Opening balance at the beginning of the reporting period           1 572                488             3 010    
Gains and losses from banking and trading activities                   5                  -               (47)   
Movement in other comprehensive income                                 1                  -                 1    
Issues                                                             2 501                  -             3 602    
Settlements                                                         (766)                 -            (1 110)   
Transferred to/(from) assets/liabilities                              (1)                 -                (1)   
Transfer (out) of Level 3                                           (489)              (488)           (1 114)   
Closing balance at the end of the reporting period                 2 823                  -             4 341    

                                                                                   2017
                                                                              Trading and 
                                                                                  Hedging  
                                                                 Deposits       Portfolio            Other
                                                               from Banks     Liabilities      Liabilities    
                                                                       Rm              Rm               Rm    
Opening balance at the beginning of the reporting period               -              308               41    
Net interest income                                                    -                -                -    
Gains and losses from banking and trading activities                   -              585                -    
Issues                                                                 -               52                -    
Settlements                                                            -                -              (36)   
Transfer (out) of Level 3                                              -                -                -    
Closing balance at the end of the reporting period                     -              945                5    

                                                                       2017
                                                                Deposits                                Total 
                                                                  due to    Debt securities       liabilities 
                                                               customers           in issue     at Fair Value    
                                                                      Rm                 Rm                Rm    
Opening balance at the beginning of the reporting period           1 139                604             2 092    
Net interest income                                                    7                  -                 7    
Gains and losses from banking and trading activities                   -                  -               585    
Issues                                                             1 685                 30             1 767    
Settlements                                                       (1 144)               (68)           (1 248)   
Transfer (out) of Level 3                                           (115)               (78)             (193)   
Closing balance at the end of the reporting period                 1 572                488             3 010    


14.6.1 Significant transfers between levels

During the 2018 and 2017 reporting periods, transfers between levels occurred because of changes in the observability
of valuation inputs, in some instances owing to changes in the level of market activity. Transfers have been reflected
as if they had taken place at the beginning of the year.

14.7  Unrealised gains and losses on Level 3 assets and liabilities
The total unrealised gains and losses for the reporting period on Level 3 positions held at the reporting date are set
out below:

                                                   2018
                                     Trading                                                          Trading 
                                         and                                                              and  
                                     hedging      Loans and                           Total           hedging  
                                   portfolio    advances to      Investment       assets at         portfolio  
                                      assets      customers      securities      fair value       liabilities  
                                          Rm             Rm              Rm              Rm                Rm  
Gains and (losses) from banking 
and trading activities                 2 589          1 027             233           3 849              (174) 


                                                   2018
                                                          Total 
                                                    liabilities
                                   Deposits due              at 
                                   to customers      fair value
                                             Rm              Rm 
Gains and (losses) from banking 
and trading activities                      134             (40)   


                                     Trading                                                          Trading 
                                         and                                                              and 
                                     hedging      Loans and                            Total          hedging 
                                   portfolio    advances to      Investment        assets at        portfolio 
                                      assets      customers    securities(1)      fair value      liabilities
                                          Rm             Rm              Rm               Rm               Rm 
Gains and (losses) from banking 
and trading activities                    67            761              88              916              284 

                                
                                                            Total 
                                                      liabilities
                                     Deposits due              at 
                                     to customers      fair value    
                                               Rm              Rm 
Gains and (losses) from banking 
and trading activities                          -             284    


14.8 Sensitivity analysis of valuations using unobservable inputs

As part of the Group's risk management processes, we perform a sensitivity analysis on the significant unobservable
parameters, in order to determine the impact of reasonably possible alternative assumptions on the valuation of level 3
financial assets and liabilities. The assets and liabilities that most impact this sensitivity analysis are those with
more illiquid and/or structured portfolios. The alternative assumptions are applied independently and do not take account
of any cross correlation between assumptions that would reduce the overall effect on the valuations.

The following tables reflects the reasonable possible variances applied to significant parameters utilised in our
valuations:


Significant unobservable parameter               Positive/(negative) variance applied to parameters    
Credit spreads                                   100/(100) bps                                         
Volatilities                                     10/(10)%                                              
Basis curves                                     100/(100) bps                                         
Yield curves and repo curves                     100/(100) bps                                         
Future earnings and marketability discounts      15/(15)%                                              
Funding spreads                                  100/(100) bps                                         

A significant parameter has been deemed to be one which may result in a charge to profit or loss, or a change in the
fair value asset or liability by more than 10% of the underlying value of the affected item. This is demonstrated by the
following sensitivity analysis which includes reasonable range of possible outcomes:

(1) The gains and losses from banking and trading activities on investment securities have been restated to include
unrealised gains on unlisted Private Equity investments, resulting in an increase of R27.61m. Previously only unrealised
gains relating to unobservable corporate bonds were taken into account in the disclosure, and has therefore been
corrected accordingly.

                                                                                                 2018
                                                                             Potential effect     Potential effect
                                                                                  recorded in    recorded directly
                                                                               profit or loss            in equity    
                                  Significant unobservable parameters             Favourable/          Favourable/
                                                                               (Unfavourable)       (Unfavourable)    
                                                                                          Rm                   Rm    
Deposits due to banks             Absa Group Limited /Absa funding spread                -/-                  -/-    
Deposits due to customers         Absa Group Limited /Absa funding spread          178/(178)                  -/-    
Investment securities and         Risk adjustment yield curves,
investments linked to             future earnings and marketability 
investment contracts              discount                                               -/-              (20)/20    
Loans and advances to customers   Credit spreads                                   (323)/323                  -/-    
Other assets                      Credit spreads                                         -/-                  -/-    
Trading and hedging               Volatility, credit spreads, basis curves,                        
portfolio assets                  yield curves, repo curves, funding spreads        162/(162)                  -/-    
Trading and hedging portfolio     Volatility, credit spreads, basis curves,                        
liabilities                       yield curves, repo curves, funding spreads       (224)/224                  -/-    
Other liabilities                 Volatility, credit spreads                             -/-                  -/-    

                                                                                                 2017
                                                                             Potential effect     Potential effect
                                                                                  recorded in    recorded directly
                                                                               profit or loss            in equity    
                                  Significant unobservable parameters             Favourable/          Favourable/
                                                                               (Unfavourable)       (Unfavourable)    
                                                                                          Rm                   Rm    
Deposits due to banks             Absa Group Limited /Absa funding spread              17/17                  -/-    
Deposits due to customers         Absa Group Limited /Absa funding spread             13/(12)                 -/-    
Investment securities and         Risk adjustment yield curves,
investments linked to             future earnings and marketability 
investment contracts              discount                                            76/(76)            323/(306)    
Loans and advances to customers   Credit spreads                                      70/(69)                 -/-    
Other assets                      Credit spreads                                         -/-                  -/-    
Trading and hedging               Volatility, credit spreads, basis curves,                        
portfolio assets                  yield curves, repo curves, funding spreads          33/(33)                 -/-    
Trading and hedging portfolio     Volatility, credit spreads, basis curves,                        
liabilities                       yield curves, repo curves, funding spreads          17/(17)                 -/-    
Other liabilities                 Volatility, credit spreads                             -/-                  -/-    



14.9  Measurement of assets and liabilities at Level 3
The following table presents information about the valuation techniques and significant unobservable inputs used in
measuring assets and liabilities categorised as Level 3 in the fair value hierarchy:

Category of asset/liability       Valuation techniques applied       Significant unobservable inputs        
Loans and advances to banks       Discounted cash flow and/or        Credit spreads                         
and customers                     dividend yield models                                                     
Investment securities and         Discounted cash flow models,       Marketability discounts and/or         
investments linked to             third-party valuations,            comparator multiples                   
investment contracts              earnings multiples and/or                                                 
                                  income capitalisation                                                     
                                  valuations                                                                
Trading and hedging                                                                                         
portfolio assets and                                                                                        
liabilities                                                                                                 
Debt instruments                  Discounted cash flow models        Credit spreads                         
Derivative assets                                                                                           
Credit                            Discounted cash flow               Credit spreads,                        
derivatives(1)                    and/ or credit                     Recovery rates and/or,                 
                                  default swap (hazard               Quanto ratio                           
                                  rate) models                                                              
Equity derivatives                Discounted cash flow, option       Volatility and/or                      
                                  pricing and/or futures             dividend streams                       
                                  pricing models                     (greater than 3 years)                 
Foreign exchange                  Discounted cash flow and/or        African basis curves                   
derivatives                       option pricing models              (greater than 1 year)                  
Interest rate derivatives         Discounted cash flow and/or        Real yield curves (greater than        
                                  option pricing models              1 year), repurchase agreement          
                                                                     curves (greater than 1 year),          
                                                                     funding spreads                        
Deposits due to customers         Discounted cash flow models        Absa Group Limited's funding           
                                                                     spreads (greater than 5 years)         
Debt securities in issue          Discounted cash flow models        Funding curves (greater than 5 years)  
Investment properties             Discounted cash flow models        Estimates of periods in which rental   
                                                                     units will be disposed of              
                                                                     Annual selling price                   
                                                                     escalations                            
                                                                     Annual rental                          
                                                                     escalations                            
                                                                     Expense ratios                         
                                                                     Vacancy rates                          
                                                                     Income capitalisation rates            
                                                                     Risk adjusted discount rates


                                            2018                                  2017    
Category of asset/liability              Range of estimates utilised for the unobservable inputs
Loans and advances to banks          0.513% to 3.235%                   0.3% to 2.3%    
and customers                     
Investment securities and            Discount rate of 7.75% to 8%       Discount rates between 7% to 9%,     
investments linked to                                                   comparator multiples between 5 and 10.5
investment contracts              
Trading and hedging               
portfolio assets and              
liabilities                       
Debt instruments                     0.15% to 8.2%                      3% to 15%    
Derivative assets                                                 
Credit                               0.03% - 14% ,                      (0.04%) to 9%,    
derivatives(1)                       15% - 76%,                         15% to 76%,    
                                     60% - 90%                          54% to 90%    
Equity derivatives                                                
                                     14.91% to 53.2%                    15.09% to 64.67%    
Foreign exchange                                                  
derivatives                          (4.48)% to 24.7%                   (28%) to 29.5%    
Interest rate derivatives            0.20% to 9.34%                     0.25% to 10.69%    
Deposits due to customers            1.3% to 1.8%                       0.2% to 1.9%    
Debt securities in issue             1.3% to 1.8%                       0.2% to 1.9%    
Investment properties                                             
                                     1 to 6 years                       1 to 6 years    
                                     6%                                 0% to 6%    
                                     6%                                 0% to 6%    
                                     n/a                                n/a    
                                     n/a                                n/a    
                                     n/a                                n/a    
                                     7.5% to 8%                         7.75% to 8%    
                                     10% to 15%                         11% to 15%    

For assets or liabilities held at amortised cost and disclosed in levels 2 or 3 of the fair value hierarchy, the
discounted cash flow valuation technique is used. Interest rates and money market curves are considered unobservable inputs
for items which mature after 5 years. However, if the items mature in less than 5 years, these inputs are considered to
be observable, depending on other facts and circumstances.

For debt securities in issue held at amortised cost, a further significant input would be the underlying price of the
market traded instrument.

The sensitivity of the fair value measure is dependent on the unobservable inputs. Significant changes to the
unobservable inputs in isolation will have either a positive or negative impact on fair values.

(1) The range of estimates has been disaggregated to better reflect the individual assumptions used.  

14.10 Unrecognised losses (gains) as a result of the use of valuation models using unobservable inputs
The amount that is yet to be recognised in the statement of comprehensive income that relates to the difference
between the transaction price and the amount that would have arisen had valuation models using unobservable inputs 
been used on initial recognition, less amounts subsequently recognised, is as follows:

                                                                       2018       2017    
                                                                         Rm         Rm    
Opening balance at the beginning of the reporting period               (134)      (139)   
New transactions                                                       (367)       (27)   
Amounts recognised in profit or loss during the reporting period         73         32    
Closing balance at the end of the reporting period                     (428)      (134)   

14.11  Third-party credit enhancements
There were no significant liabilities measured at fair value and issued with inseparable third-party credit
enhancements.

15. Reporting changes overview
A number of key financial reporting changes were effected during the current reporting period, including the adoption
of IFRS 15 and IFRS 9, and a consequential amendment to IAS 1. The Group elected to amend its accounting policy with
regards to the presentation of interest expense, so as to align to the amendment for the presentation of effective interest
under the IAS 1 amendment. In addition, the Group elected to amend its internal accounting policy governing the
valuation of policyholder liabilities under the Group's life insurance contracts. 

Implementation of new International Financial Reporting Standards (IFRS):
* IFRS 9 Financial Instruments (IFRS 9) - The Group has applied IFRS 9 on a retrospective basis, with an adjustment to
retained earnings and other reserves as at 1 January 2018. As permitted under IFRS 9, the Group has elected not to
restate comparative periods.
* IFRS 15 Revenue from Contracts with Customers (IFRS 15) - The Group has elected to adopt IFRS 15 using the
cumulative effect method, under which the comparative information has not been restated. 
Amendments to IFRS:
* A change to the presentation of interest income, as required by an amendment to IAS 1. This amendment has resulted
in the presentation of effective interest income as a separate line item within profit or loss on the face of the
statement of comprehensive income.
Amendments to internal accounting policies:
* In addition to the amendment required to the presentation of effective interest income under IAS 1, the Group has
voluntarily elected to bifurcate both interest income and interest expense, as presented on the face of the statement of
comprehensive income. Further, the Group has voluntarily elected to restate the prior reporting period, and
* A change in the valuation method applied to policyholder liabilities under the Group's life insurance contracts.

Correction of prior period error:
* The Group determined that certain intra-day 'due for settlement accounts' in respect of long and short proprietary
positions with the JSE have been incorrectly netted in prior reporting periods, notwithstanding the fact that these
accounts are not permitted to be net settled. Correction of this error did not have an impact on profit or loss, or equity,
but it did result in a gross up of other assets and other liabilities.

The most significant reporting change effected during the current period was the adoption of IFRS 9. The project has
been one of strategic importance to the Group over the past 5 years, with extensive work being performed in building new
models, and developing the necessary infrastructure and data management systems to deliver a high-quality implementation
on 1 January 2018. A natural concomitant of adopting any new IFRS, particularly one of this level of complexity, is the
evolution of technical interpretation, particularly in areas where diversity has been identified and challenged. There
are two areas of technical interpretation which have evolved since the publication of the Group's IFRS 9 transitional
disclosures within this report, as at 30 June 2018. These are as follows:

* Exclusion of post write-off recoveries (PWOR) from loss given default (LGD) modelling: IFRS 9 provides that financial assets
should be written off, and accordingly derecognised, when the Group believes there to be no reasonable expectation of
recovery. The Group has well-governed internal policies, which define how an individual account should be assessed for
write-off, and ensure that post write-off recoveries remain insignificant over the long run. Further, the policies are
recalibrated over time, as and when actual recovery experience changes. Whilst the Group's write-off policy determines the
point of derecognition at an individual account level, it also impacts the level of recoveries modelled on a collective
basis for the purposes of determining the LGDs to be applied at a portfolio level.  The Group's LGD models have
historically included the present value of all forecast recoveries on a pool of loans, over the full life of such loans, thereby
including cash flows which would otherwise be classified as post-write off recoveries, from an accounting perspective. 

The IFRS 9 requirements for write-off have been one of the most robustly debated topics following the global banking
industry's adoption of IFRS 9. Whilst the guidance regarding derecognition under IFRS 9 remains largely unchanged from
IAS 39, IFRS 9 does explicitly provide that write-off constitutes a derecognition event. The IASB's intention in drafting
IFRS 9, and specifically with regards to the treatment of post write-off recoveries in the calculation of LGD, has been
the subject of extensive technical debate across the industry. This matter has not however been formally tested through
international accounting forums, such as the IFRS-IC and the IFRS 9 Transition Resource Group. However, in line with
evolving IFRS 9 technical interpretation, the Group has reconsidered the approach previously applied to LGD modelling for
accounting purposes. The Group believes that under IFRS 9, the write-off assumptions should be consistently applied at
both an individual account level and on a collective modelling basis. Accordingly, the Group will adjust the original
treatment it applied as at 1 January 2018. The exclusion of post write-off recoveries from LGD, under IFRS 9, has resulted 
in a significant increase in the allowance for ECL recognised in the statement of financial position, as at 1 January
2018. The restated allowance for ECL is R29 703m (including interest in suspense and ECL provision on financial guarantee
contracts, letters of credit and undrawn facilities), relative to the amount of R27 767m as previously published.  This
has further resulted in a reduction in the Group's retained income as at 1 January 2018 of R1 307m (after taxation
adjustment of R491m and non-controlling interest of R138m). The 1 January 2018 IFRS 9 transition disclosures previously
published in the 30 June 2018 report have been restated. The change in valuation methodology did not have a significant 
impact on the credit losses recognised during the current reporting period, since the impact on both the 1 January 2018 
and 31 December 2018 ECL allowances, were of a similar magnitude. Please refer to section http://15.1.2.6 for further information.  

* Interest recoveries on cured stage 3 financial assets: IFRS 9 requires interest income on stage 3 assets to be
calculated based on the net carrying value of the exposure, that is, the gross carrying value less the ECL allowance. In
order to practically give effect to this requirement, the Group first suspends the recognition of contractual interest, and
second, multiplies the net carrying value by the effective interest rate (EIR). Interest income recognised on stage 3
assets will therefore be less than the contractual interest charged. In some instances, the Group may recover contractual
interest which is in excess of that previously recognised under IFRS 9. This prompted extensive industry debate
regarding whether such excess should be presented as a credit impairment gain, reflecting a credit recovery event, or as
interest income, reflecting recovery of interest in the ordinary course of business. A request for clarification regarding 
this IFRS 9 requirement was submitted by the banking industry through the South African Institute of Chartered Accountants
(SAICA) to the IFRS-IC in August 2018. At the IFRS-IC meeting held in November 2018, the committee observed that any
unrecognised interest, which is subsequently recovered, should be presented as a credit impairment gain.  Since such
clarification was only provided post the Group's 30 June 2018 reporting date, the Group had elected to present an amount of 
R292m as interest income over the reporting period ending 30 June 2018. It was the Group's view that presentation of the
recovered interest previously unrecognised as a credit impairment gain would understate, and accordingly distort, the Group's
ECL. The Group has however amended its accounting treatment following the decision made by the IFRS-IC. The accounting
treatment does not impact profit or loss, but it does reduce both the Group's ECL and interest income. As at 31 December
2018, the interest recoveries on cured stage 3 assets amounted to R608m and was presented within ECL as a credit
impairment gain. This is discussed further in section http://15.1.2.8.

Other less significant amendments to IFRS became effective during the current reporting period, although these had no
impact on the financial results of the Group. These amendments relate to IAS 40 Investment Property, IAS 28 Investment
in Associates and Joint Ventures, as well as IFRS 2 Share-based Payment Transactions (IFRS 2). The changes to IFRS 2 were
however early adopted by the Group in 2016. A new IFRS-IC Interpretation, IFRS-IC 22 Foreign Currency Transactions and
Advance Consideration is effective in the current reporting period.

The table below summarises the total impact of the reporting changes on the Group's statement of changes in equity:

                                                                                                   Capital and
                                                                                                      reserves 
                                                                                                  attributable
                                                Share capital      Retained         Other          to ordinary 
                                            and share premium      earnings      reserves       equity holders    
                                                           Rm            Rm            Rm                   Rm    
Balance reported as at 31 December 2016                 6 160        81 604         5 293               93 057    
Restatement owing to change in life                                                             
insurance accounting policy                                 -           134             -                  134    
Restated balance as at 31 December 2016                 6 160        81 738         5 293               93 191    
Balance reported as at 31 December 2017                12 164        91 882         4 370              108 416    
Restatement owing to change in life                                                             
insurance accounting policy                                 -           198             -                  198    
Restated balance as at 31 December 2017                12 164        92 080         4 370              108 614    
Reported impact of adopting IFRS 9                          -        (4 106)          (95)              (4 201)   
IFRS 9 LGD restatement (1)                                  -        (1 307)          (31)              (1 338)   
Restated impact of adopting IFRS 9                          -        (5 413)         (126)              (5 539)   
Impact of adopting IFRS 15                                  -           (44)            -                  (44)   
Adjusted balance as at 1 January 2018                  12 164        86 623         4 244              103 031  

                                            Non-controlling      Non-controlling         Non-controlling     
                                            interest-                  interest-     interest-Additional     Total
                                            ordinary shares    preference shares          Tier 1 Capital    equity    
                                                         Rm                   Rm                      Rm        Rm    
Balance reported as at 31 December 2016               4 579                4 644                       -   102 280    
Restatement owing to change in life                                                   
insurance accounting policy                               -                    -                       -       134    
Restated balance as at 31 December 2016               4 579                4 644                       -   102 414    
Balance reported as at 31 December 2017               4 500                4 644                   1 500   119 060    
Restatement owing to change in life                                                   
insurance accounting policy                               -                    -                       -       198    
Restated balance as at 31 December 2017               4 500                4 644                   1 500   119 258    
Reported impact of adopting IFRS 9                     (131)                   -                       -    (4 332)   
IFRS 9 LGD restatement (1)                              (99)                   -                            (1 437)   
Restated impact of adopting IFRS 9                     (230)                   -                       -    (5 769)   
Impact of adopting IFRS 15                                -                    -                       -       (44)   
Adjusted balance as at 1 January 2018                 4 270                4 644                   1 500   113 445    

(1) The Group has restated the 1 January 2018 ECL allowance, and the related effects on retained income, which it
    previously presented in this report, as at 30 June 2018. Under this amendment, which follows from the adoption of 
    IFRS 9, post write-off recoveries have been excluded from LGD, thereby resulting in a reduction of R1 307m in 
    retained income as at 1 January 2018.

15. 1. Initial adoption of IFRS 9 Financial Instruments
15.1.1. Overview and highlights
http://15.1.1.1. The impact of IFRS 9 on the Group
IFRS 9 is effective from 1 January 2018 and introduces significant changes to three fundamental areas of the
accounting for financial instruments, namely;
* The classification and measurement of financial instruments;
* The scope and calculation of credit losses, which has moved from an incurred loss, to an expected credit loss (ECL)
approach; and
* The hedge accounting model.

Whilst the adoption of a revised classification and measurement framework has had a less material impact on the Group,
application of the IFRS 9 ECL methodology has affected both the financial and regulatory capital position, and can be
reasonably expected to impact the net profit or loss of the Group going forward.

In accordance with the transition options allowable under IFRS 9, the Group will continue to apply the hedge
accounting requirements set out in IAS 39. The Group employs a governed hedging programme to reduce margin volatility 
associated with structural balances (that is, rate insensitive liabilities as well as the endowment associated with equity).
Operational complexity would be introduced by adopting the revised IFRS 9 hedge accounting requirements ahead of the
finalisation of the IASB's Dynamic Risk Management project in respect of macro hedging. The Group has accordingly elected
not to adopt the revised IFRS 9 hedge requirements.

http://15.1.1.2. The impact of adopting a revised classification and measurement framework for financial instruments
A portfolio of South African consumer price index (CPI) linked investment securities have been reclassified from
available-for-sale under IAS 39, to amortised cost under IFRS 9. This aligns the portfolio's classification with the Group's
business model of holding the instruments to collect contractual cash flows. Other less significant reclassifications of
financial assets were also recorded, although these did not have any impact on equity (refer to section 15.1.10). The
accounting for financial liabilities remains largely unchanged, except for financial liabilities designated at fair value
through profit or loss (FVTPL). Gains and losses on such financial liabilities are required to be presented in other
comprehensive income (OCI), to the extent that they relate to changes in own credit risk. The Group early adopted this
requirement in 2017, and therefore recognised a debit of R147m in OCI in that reporting period.

http://15.1.1.3. The impact of adopting a revised ECL methodology
The adoption of IFRS 9 will impact the timing of credit loss recognition, by accelerating the recognition of losses
relative to IAS 39, and potentially creating increased volatility through the incorporation of forward looking
assumptions. From an economic perspective, total long-run credit losses incurred by the Group will not be impacted by 
the change in accounting framework. The Group dedicates considerable resources to gaining a clear and accurate understanding 
of credit risk across the business and to correctly reflecting the value of the assets in accordance with applicable accounting
principles. The core processes remain the measurement of exposures and concentrations, performance monitoring and
tracking of asset quality, and the write-off of assets in accordance with the Group's credit risk policies.

http://15.1.1.4. Summary of the impact of IFRS 9 as at 1 January 2018
The disclosures set out within this section of the report serve to bridge the statement of financial position of the
Group as at 1 January 2018 between IAS 39 and IFRS 9. Information has been provided to facilitate an understanding of the
key areas of difference, as well as the core drivers of ECL going forward. The Group highlights the role that unexpected 
changes in forward looking assumptions may play in driving earnings volatility, and that changes in stage distribution
could have an impact on net interest income. Exposures within certain industry sectors or products are expected to be
more sensitive to changes in macroeconomic conditions than others, which could mean that the overall response to changes
in forward looking assumptions is driven by the relative composition of the loans and advances portfolios.

The adoption of IFRS 9 has impacted the financial and regulatory capital position of the Group, as follows:
* The Group's ECL allowance has increased from R21 899m as at 31 December 2017 to an amount of R29 703m as at
1 January 2018. This includes the provision recognised in respect of off-statement of financial position items. The ECL
allowance post the adoption of IFRS 9, as previously reported, was R27 767m. The exclusion of post write-off recoveries has
therefore increased the ECL allowance post adoption by R1 936m.
* Retained income decreased by R5 413m (net after a taxation adjustment of R2 063m and a decrease in non-controlling
interest of R328m). The impact of IFRS 9 on retained income, as at 1 January 2018, was previously reported to be 
R4 106m, with a tax adjustment of R1 572m, and a decrease in non-controlling interest of R190m). The net impact on retained
income of excluding post write-off recoveries is therefore R 1 307m.
* Other reserves decreased by R126m (previously reported R95m), owing principally to the reclassification of
investment securities from available-for-sale to amortised cost.
* The Group remains strongly capitalised notwithstanding a R3 456m decrease in CET 1 (previously reported to be 
R2 118m) and a 28 bps decrease in the CET1 ratio (previously reported 21 bps). The decrease of 28 bps is the amount 
determined before the application of the transitional arrangement elected by the Group, which will spread the CET 1 
impact over three years. This deferral reduces the impact on the CET 1 ratio on the date of initial adoption to 7 bps 
(previously reported 5 bps).

http://15.1.1.5. Condensed consolidated statement of financial position for the Group 
The following table summarises the total impact of IFRS 9 on the statement of financial position as at 1 January 2018:

                                                                    Impact of IFRS 9
                                                  Classification                   Exclusion        Total            
                                    31 December              and     Reported        of PWOR   IFRS 9 ECL   1 January
                                           2017   Measurement (1)      ECL (2)   from LGD (3)      impact        2018
                                             Rm               Rm           Rm             Rm           Rm          Rm
Assets
Cash, cash balances and balances
with central banks (4)                   48 669                -          (10)             -          (10)     48 659
Investment securities                   111 409             (195)          (2)             -           (2)    111 212
Loans and advances to banks              55 426                -          (67)             -          (67)     55 359
Loans and advances to customers         749 772              (20)      (5 034)        (1 936)      (6 970)    742 782
Investments in associates and                                                                                        
joint ventures (5)                        1 235                -          (73)           (31)        (104)      1 131
Other assets (6)                        199 468               55        1 149            530       (1 679)    201 202
Total assets                          1 165 979             (160)      (4 037)        (1 437)      (5 474)  1 160 345
Liabilities                                                                                                          
Trading portfolio liabilities            64 047              (20)           -              -            -      64 027
Provisions (7)                            3 041                -          574              -          574       3 615
Other liabilities (6)                   979 831                -         (419)             -         (419)    979 412
Total liabilities                     1 046 919              (20)         155              -          155   1 047 054
Equity
Capital and reserves
Attributable to ordinary
equity holders:
Share capital                             1 666                -            -              -            -       1 666
Share premium                            10 498                -            -              -            -      10 498
Retained earnings                        91 882                -       (4 106)        (1 307)      (5 413)     86 469
Other reserves                            4 370             (140)          45            (31)          14       4 244
Ordinary equity holders                 108 416             (140)      (4 061)        (1 338)      (5 399)    102 877
Non-controlling interest -                                                                                           
ordinary shares                           4 500                -         (131)           (99)        (230)      4 270
Non-controlling interest -                                                                                           
preference shares                         4 644                -            -              -            -       4 644
Non-controlling interest -                                                                                           
Additional Tier 1 Capital                 1 500                -            -              -            -       1 500
Total equity                            119 060             (140)      (4 192)        (1 437)      (5 629)    113 291
Total liabilities and equity          1 165 979             (160)      (4 037)        (1 437)      (5 474)  1 160 345

(1) Classification and measurement reclassifications relate to two portfolios:
* Short-term commodity-linked instruments that had embedded derivatives which were previously bifurcated under IAS 39,
and have been mandatorily classified at FVPTL under IFRS 9; and 
* A portfolio of CPI linked investment securities that have been reclassified from available-for-sale to amortised
cost.
(2) Reflects the IFRS 9 ECL impact as previously presented in this report as at 30 June 2018, (not extracted from the 
    consolidated annual financial statements). 
(3) Reflects the financial impact of amending the Group's methodology for calculating LGD of loans and advances to
    customers, (not extracted from the consolidated annual financial statements). 
(4) Relates predominantly to a central bank within Absa Regional Operations.
(5) Reflects the change in the Group's share of net assets from associates and joint ventures due to their adoption of
    IFRS 9. 
(6) Relates to the adjustments to deferred tax and current tax assets. 
(7) The increase in the carrying value of provisions relates to the expected credit losses recognised on financial
    guarantee contracts, letters of credit and undrawn facilities (to the extent that it exceeds the gross carrying 
    amount of loans and advances to customers at an account level).

15.1.2. Key elements of the revised impairment model under IFRS 9
http://15.1.2.1. Introduction
IFRS 9 introduces an ECL impairment model that requires entities to recognise ECL based on a stage allocation
methodology, with such categorisation informing the level of provisioning required. The ECL allowance calculated on stage 1
assets reflects the lifetime losses associated with events of default that are expected to occur within 12 months of the
reporting date (12 month ECL). Assets classified within stage 2 and stage 3 carry an ECL allowance calculated based on the
lifetime losses associated with defaults that are expected to occur over the lifetime of the exposure (lifetime ECL).
The assessment of whether an exposure should be transferred from stage 1 to stage 2, is a relative measure, where the
credit risk at the reporting date is compared to the risk that existed at initial recognition. 

The stage allocation is required to be performed as follows: 
* Stage 1: Stage 1 assets comprise exposures which are performing in line with expectations at origination. Financial
assets that are not purchased or originated with a credit impaired status are required to be classified on initial
recognition within stage 1.
* Stage 2: Exposures are required to be classified within stage 2 when a significant increase in credit risk has been
observed. The factors which trigger a reclassification from stage 1 to stage 2 have been defined so as to meet the
specific requirements of IFRS 9, and in order to align with the Group's credit risk management practices. These are 
discussed further in section http://15.1.2.3.
* Stage 3: Credit exposures are classified within stage 3, when they are regarded as being credit impaired, which
aligns to the bank's regulatory definition of default. Purchased or originated credit impaired lending facilities are
classified on the date of origination within stage 3. This definition is discussed further in section http://15.1.2.3.

http://15.1.2.2. Definition of a significant increase in credit risk
The Group uses various quantitative, qualitative and back stop measures as indicators of a significant increase in
credit risk. The thresholds applied for each portfolio are reviewed on a regular basis to ensure they remain appropriate.
Where evidence of a significant increase in credit risk is not yet available at an individual instrument level,
instruments which share similar risk characteristics are assessed on a collective basis. 

Key drivers of a significant increase in credit risk include:  
* Where the weighted average PD for an individual exposure or group of exposures as at the reporting date evidences a
material deterioration in credit quality, relative to that determined on initial recognition;
* Adverse changes in payment status, and where accounts are more than 30 days in arrears at reporting date. In certain
portfolios a more conservative arrears rule is applied where this is found to be indicative of increased credit risk
(e.g. 1 day in arrears);
* Accounts in the Retail portfolio which meet the portfolio's impairment high risk criteria; and
* The Group's watch list framework applied to the Wholesale portfolio, which is used to identify customers facing
financial difficulties or where there are grounds for concern regarding their financial health.

Stage 2 assets are considered to be cured (that is, reclassified back into stage 1), when there is no longer evidence
of a significant increase in credit risk, and a defined period of performance has been observed. The definition of high
risk is, from a credit management perspective central to controlling the flow of exposures back to stage 1 and gives
effect to any cure periods deemed necessary.

http://15.1.2.3. Definition of credit impaired assets
Assets classified within stage 3 are considered to be credit impaired, which, as discussed in section http://15.1.2.1 applies
when an exposure is in default. Whilst IAS 39 does not prescribe any alignment between the accounting and regulatory
definition of default, this has been implemented by the Group as an amendment under IFRS 9. This departure from IAS 39 has
resulted in a large increase in the number of exposures which are classified within stage 3, and accordingly within
accounting default. 

The default definition applied within Wholesale and Retail is now aligned with the regulatory definition, and
therefore assets are classified as defaulted when either:
* The Group considers that the obligor is unlikely to pay its credit obligations without recourse by the Group to
actions such as realising security. Elements to be taken as indications of unlikeliness to pay include the following:
* The Group consents to a distressed restructuring/forbearance of the credit obligation where this is likely to
result in a diminished financial obligation caused by the material forgiveness of principal, interest or fees;
* The customer is under debt review, business rescue or similar protection; or,
* Advice is received of customer insolvency or death.
* The obligor is past due 90 days or more on any credit obligation to the Group.

Further, within the Retail portfolios, two additional requirements for the classification of default are applied.
These have historically been included as criteria for determining whether default exists from a regulatory perspective, 
but not from an accounting perspective under IAS 39:
* Assets within forbearance/debt counselling are treated as in default, regardless of whether the restructure has led
to a diminished financial obligation or not; and
* The Group requires an exposure to reflect 12 consecutive months of performance, in order to be considered to have
cured from default.

Defaulted assets are considered to be cured once the original event triggering default no longer applies, and the
defined probation period (that is, the required consecutive months of performance) have been met. In the Retail portfolio,
the cure definition applied, per the credit risk management policy is stringent, and assets will typically only cure from
stage 3 to stage 2, and therefore won't normally move directly from stage 3 to stage 1. In the Wholesale portfolio
assets can move from stage 3 directly to stage 1.

http://15.1.2.4. Determination of the lifetime of a credit exposure
The point of initial recognition and asset duration (lifetime) are critical judgements to be applied in determining
the quantum of lifetime losses to be recognised. The date of initial recognition reflects the date that a transaction (or
account) was first recognised on the statement of financial position. The PD recorded at this time provides the baseline
used for subsequent determination of a significant increase in credit risk.
  
In defining the period over which the entity is typically exposed to credit risk, but for which the ECL would not be
mitigated by the entity's normal credit risk management actions, the Group considers the results of collective data
modelling and the evidence accordingly provided of:
* The period over which the entity is exposed to credit risk on similar financial instruments;
* The length of time for related defaults to occur on similar financial instruments following a significant increase
in credit risk; and 
* The credit risk management actions that an entity expects to take once the credit risk on the financial instrument
has increased, such as the reduction or removal of undrawn limits.

For asset duration, the approaches which are applied (in line with IFRS 9 requirements) are:
* Term lending: the contractual maturity date, reduced for behavioural trends where appropriate (such as, expected
settlement and amortisation); and
* Revolving facilities: for Retail portfolios, asset duration is based on behavioural life and this is normally
greater than contractual life. For Wholesale portfolios, a sufficiently long period to cover expected life modelled 
and an attrition rate is applied to cater for early settlement.

http://15.1.2.5. Write-off policy
The gross carrying amount of a financial asset shall be directly reduced (that is, written off) when the entity has
no reasonable expectations of recovering it in its entirety, or a portion thereof. A write-off constitutes a
derecognition event for accounting purposes. Depending on the nature of the account, balances are written off when: 
* There has been less than one qualifying payment received within the last 12 months; or
* It is no longer economically viable to keep the debt on the statement of financial position.

A qualifying payment, for use in the write-off assessment, is defined as the minimum monthly contractual payment due.

Indicators which suggest that an account is not economically viable to retain on the statement of financial position
are as follows (but do not represent an exhaustive list):
* The exposure is unsecured i.e. there is no tangible security the Group can claim against (excluding suretyships); 
* The debt has prescribed; 
* The exposure would attract reputational risk should the Group pursue further legal action due to the valuation/
exposure ratio, for example where the exposure is low and the valuation is very high in relation to the low exposure; or
* Where the cost to recover is high in relation to the valuation of the asset, for example legal, realisation and
safe-guarding cost and rates and taxes. 

Under IFRS 9, the Group applies the write-off assumptions consistently at both an individual account level and on a
collective modelling basis. This means that the Group's LGD model includes only the present value of forecast recoveries
on a pool of loans up until the designated point of write-off. Recoveries of amounts previously written off are
recognised as an ECL gain in the statement of comprehensive income as and when the cash is received.

http://15.1.2.6. General IFRS 9 ECL parameters and modelling approach
15.1.2.6.1 Introduction
The estimate of ECL is required to reflect an unbiased and probability-weighted estimate of future losses, which
should be determined by evaluating a range of possible outcomes. In some cases, relatively simple modelling is considered to
be sufficient, without the need to consider the outcome under different scenarios. For example, the average credit
losses of a large group of financial instruments with shared risk characteristics may be a reasonable estimate of the
probability-weighted amount. In other situations, the identification of scenarios that specify the amount and timing of the
cash flows for particular outcomes and the estimated probability of those outcomes will be needed.  The IFRS 9 models make
use of three parameters namely PD, LGD and EAD in the calculation of the ECL allowance. 

Expert credit judgement may, in certain instances be applied to account for situations where known or expected risk
factors have not been considered in the ECL assessment or modelling process, or where uncertain future events have not
been incorporated into the modelled approach. Adjustments are intended to be short term measures and will not be used to
incorporate any continuous risk factors. The Group has a robust policy framework which is applied in the estimation and
approval of management adjustments. 

Models are validated with the same rigor applied to regulatory models. Testing procedures assess the quality of data,
conceptual soundness and performance of models, model implementation and compliance with accounting requirements.

15.1.2.6.2 Probability of default (PD)
The PD is the likelihood of default assessed based on the prevailing economic conditions at the reporting date (that
is, at a point in time), adjusted to take into account estimates of future economic conditions that are likely to impact
the risk of default and it will not therefore equate to a long run average. For IFRS 9 purposes, two distinct PD
estimates are required:
* 12 month PD: the likelihood of accounts entering default within 12 months of the reporting date.
* Lifetime PD: the likelihood of accounts entering default during the remaining life of the asset.

15.1.2.6.3 Loss given default (LGD)
LGD is defined as the percentage loss rate suffered by a lender on a credit exposure if the obligor defaults. In other
words, even if the counterparty fails to repay the amount owed, the lender will usually succeed in recovering some
percentage of the current amount owed in the process of workout or sale of the obligor's assets. This percentage is termed
the recovery rate (RR), that is, the following relation holds: RR = 1 - LGD. LGD can be estimated on the basis of
historical data on realised losses. 

The modelling of loan behavior and cash recoveries on a collective basis has, theoretically, a risk diversification
effect which would cause the inclusion of some recoveries that would technically be defined as post write-off recoveries
at an individual account level. Due to this fact, collective data modelling has historically been considered to more
appropriately represent the forecast performance of a portfolio of loans, which is influenced by prepayments, late payments,
PD, LGD and modifications. To illustrate this point, consider the assessment of whether an individual home loan will be
prepaid. The entity may observe prepayment behaviour across its home loans portfolio, but might find it difficult to
ascribe a probability of prepayment to an individual account.

From a regulatory perspective LGD parameters are modelled by forecasting full lifetime economic losses over the
duration of the portfolio. Accordingly, the points of write-off applied at an individual account level (for example, 12 months
of no payments), would not necessarily be aligned with those incorporated into the regulatory LGD models (which would
include recoveries on a derecognised accounts received beyond the 12 month write-off period). In line with the regulatory
treatment of LGD, and in the absence of clear accounting guidance regarding the treatment under IAS 39, this approach
has historically been accepted as a more appropriate manner in which to present the accounting performance on a portfolio
of loans with similar characteristics, predominantly in the retail portfolios. 

Whilst the guidance regarding derecognition under IFRS 9 remains largely unchanged from IAS 39, IFRS 9 does specifically 
provide that write-off constitutes a derecognition event. This has prompted the Group to reconsider the treatment of
post write-off recoveries in the calculation of accounting LGD. In line with evolving IFRS 9 technical interpretation,
the Group has resolved to amend the approach historically applied to LGD modelling for accounting purposes. The Group
believes that under IFRS 9, the write-off assumptions should be consistently applied at both an individual account level
and on a collective modelling basis. The decision to exclude post write-off recoveries from the LGD models applied across
the Group's portfolios has resulted in a significant increase in the allowance for ECL recognised in the statement of
financial position, as at 1 January 2018. The ECL allowance as previously published has increased from R27 767m to a
restated amount of R29 703m (including the ECL provision on financial guarantee contracts, letters of credit and undrawn
facilities). This means that the total increase in the allowance for ECL under IFRS 9 is 36% (27% previously published)
greater than the impairment allowance under IAS 39. This has resulted in a reduction in the Group's retained income as at
1 January 2018 of R1 307m (from the previously published reduction in retained earnings of R4 106m, to a restated
reduction amount of R5 413m). 

This change does not reflect a worsening of the Group's view of credit quality, and full lifetime losses are not
expected to change with this adoption. The regulatory treatment of LGD remains unchanged.

In calculating LGD, losses are discounted to the reporting date using the EIR determined at initial recognition or an
approximation thereof. For debt instruments, such as loans and advances, the discount rate applied is the EIR calculated
on origination or acquisition date. For financial guarantee contracts or loan commitments for which the EIR cannot be
determined, losses are discounted using a rate that reflects the current market assessment of the time value of money and
the risks that are specific to the cash flows (to the extent that such risks have not already been taken into account
by adjusting the cash shortfalls).

15.1.2.6.4 Exposure at default (EAD)
The EAD model estimates the exposure that an account is likely to have at any point of default in future. This
incorporates both the amortising profile of a term loan, as well as behavioural patterns such as the propensity of the client
to draw down on unutilised facilities in the lead up to a default event. 

http://15.1.2.7. Interaction of the IFRS 9 ECL model with the Basel Framework
The Group applies both the standardised approach (TSA) and advanced internal ratings-based (AIRB) approaches to
calculate its regulatory capital requirements relating to credit risk. While, the Group's operations across ARO as well as the
Edcon portfolio are subject to the TSA approach, the remaining portfolios are subject to the AIRB approach, which
applies the Group's own measures of PD, EAD and LGD. In designing IFRS 9 compliant ECL models, the Group recognised that it
could leverage, specifically within Wholesale South Africa, on the data used by the regulatory models to model IFRS 9 ECL
and encourage easier reconciliation of inputs for capital requirement and impairment calculations.

Existing Basel models were used as a starting point to develop IFRS 9 ECL parameters. The following are key
differences to the regulatory capital parameters:

Key risk parameter               Basel III                                 IFRS 9
Probability of default (PD)      Average of default within the             For stage 1 assets, the PD is measured
                                 next 12 months, but calculated            for the next 12 months, whilst in the 
                                 based on the long-run historical          case of stage 2 and stage 3 assets, PD
                                 average over the whole economic           is measured over the remaining life of
                                 cycle (that is, through the cycle).       the financial instrument.
                                                                           The PD should reflect the current and 
                                                                           future economic cycles to the extent 
                                                                           relevant to the remaining life of the 
                                                                           loan calculated at a point in time, 
                                                                           as at the reporting date.
Loss Given Default (LGD)         LGD is a downturn based metric,           A current or forward-looking LGD is 
                                 representing a prudent view of            used to reflect the impact of economic 
                                 recovery in adverse economic              scenarios, with no bias to adverse 
                                 conditions.                               economic conditions.     
                                 The LGD calculation incorporates          Collection costs incorporated into the 
                                 both direct and indirect costs            LGD calculation include only those that 
                                 associated with the collection            are directly attributable to the 
                                 of the exposure.                          collection of recoveries.
                                 The LGD model includes forecast           The LGD model excludes post write-off 
                                 economic recoveries over the              recoveries.
                                 full duration of the loan, thereby        The discount rate applied is the EIR
                                 incorporating cash recoveries             on the exposure.
                                 forecast to be received post 
                                 the IFRS 9 point of write-off.            
                                 Cash flows are discounted at the          
                                 risk free rate plus an 
                                 appropriate premium.
Exposure at default (EAD)        A downturn EAD is calculated to           The calculation of EAD considers all 
                                 reflect what would be expected            the contractual terms over the lifetime
                                 during a period of economic               of the instrument.
                                 downturn.

http://15.1.2.8. Impact of IFRS 9 on interest
15.1.2.8.1 Impact on the statement of comprehensive income
IFRS 9 requires interest income to be calculated on stage 1 or stage 2 financial assets by multiplying the effective
interest rate (EIR) by the gross carrying amount of such assets. Hypothetically, should the EIR per IFRS 9 equal the
contractual interest rate charged, any interest income recognised will be aligned with the amount charged to the client 
as per the Group's product system. In contrast to the treatment of stage 1 and stage 2 assets, IFRS 9 requires interest
income on stage 3 financial assets to be calculated based on the net carrying value of the exposure, that is, the gross
carrying value less the ECL allowance. In order to practically give effect to this requirement, the Group first suspends 
the recognition of contractual interest, and second, multiplies the net carrying value by the EIR. Interest income
recognised on stage 3 assets will therefore be less than the amount of contractual interest charged. In principle, this means
that an exposure classified within stage 3 will realise lower interest income than that which would be recognised had it
been classified within stage 1 or stage 2 over the same period.

Cured stage 3 assets
In some instances, an entity may recover cash flows which are in excess of the cumulative interest previously
suspended over the life of the instrument. The accounting treatment to be applied when interest is recovered on a
credit-impaired financial asset which subsequently cures (that is, when it is paid in full or is no longer credit-impaired), 
prompted a significant amount of technical debate during the current reporting period. The Group elected to present such excess
interest received, amounting to R292m, within interest income, and not as a gain within ECL in its 30 June 2018 financial
results.  

The existence of diverging interpretations across the local industry prompted a formal request for clarification to be
made by SAICA to the IFRS-IC. In a meeting held on 27 November 2018, the IFRS-IC observed that the curing of the asset is a
credit recovery event and that interest previously unrecognised, should be presented as a credit impairment gain, and
not as interest income.  

Application of the revised accounting treatment observed by the IFRS-IC to be correct resulted in an amount of R608m
being presented as a gain within credit impairment losses, and accordingly, resulted in a reduction in interest income.
There is no related corresponding amount presented for 2017 as this relates to the new presentation requirements of IFRS 9
which is being applied from 1 January 2018.

15.1.2.8.2 Impact on the statement of financial position
Under IFRS 9, Interest in Suspense (IIS) is required to be presented as part of both the gross carrying value of the 
financial instrument and the related ECL allowance. Under IAS 39, cumulative suspended interest was not reflected on the 
statement of financial position at all. Accordingly, under IFRS 9, both the gross carrying value and the ECL allowance will 
be larger than it was under IAS 39, however, this amendment will not impact the net carrying value of the exposure.

Had the revised presentation requirement been applied as at 31 December 2017, the Group would have recognised a larger
gross carrying value, and a larger impairment allowance of R3 025m.


15.1.3. Reconciliation of the allowance for impairment under IAS 39 to the total ECL allowance under IFRS 9
http://15.1.3.1. Summary of ECL by segment and class of credit exposure
The following table sets out the transition of the impairment allowances applied to all credit exposures from IAS 39
to IFRS 9, by asset class, and by segment:

                                                      IAS 39 - 31 December 2017
                                             Performing    Non-performing   Total IAS 39    Interest in     Total IAS 39 
                                              provision         Portfolio     (excl. IIS)      Suspense   (including IIS)    
                                                     Rm                Rm             Rm             Rm               Rm    
Retail and Business Banking South Africa          3 997             9 671         13 668          2 313           15 981    
Retail Banking                                    3 223             8 576         11 799          1 264           13 063    
Credit cards                                        729             3 605          4 334             83            4 417    
Instalment credit agreements                        698             1 117          1 815             94            1 909    
Loans to associates and joint ventures                -                 -              -              -                -    
Mortgages                                         1 124             2 073          3 197            828            4 025    
Other loans and advances                              -                 -              -              -                -    
Overdrafts                                           71               215            286             73              359    
Personal and term loans                             601             1 566          2 167            186            2 353    
Business Banking South Africa                       774             1 095          1 869          1 049            2 918    
CIB South Africa                                    559               832          1 391            123            1 514    
Absa Regional Operations                            981             2 636          3 617            564            4 181    
WIMI                                                 13               175            188             25              213    
Head Office, Treasury and other operations
in South Africa                                      10                 -             10              -               10    
Loans and advances                                   10                 -             10                              10    
Reclassification to provisions                        -                 -              -              -                -    
Loans and advances to customers                   5 560            13 314         18 874          3 025           21 899    
Loans and advances to banks                           -                 -              -              -                -    
Total Loans and advances                          5 560            13 314         18 874          3 025           21 899    
Investment securities                                 -                 -              -              -                -    
Cash, cash balances and balances with                                                                     
central banks(1)                                      -                 -              -              -                -    
Total ECL allowance: On-statement of                                                                      
financial position                                5 560            13 314         18 874          3 025           21 899    
Off-statement of financial                                                                              
position exposures                                                                                        
Undrawn committed facilities(2)                       -                 -              -              -                -    
Financial guarantees                                  -                 -              -              -                -    
Letters of credit                                     -                 -              -              -                -    
Total ECL allowance: Off-statement of                                                                   
financial position                                    -                 -              -              -                -    
Total ECL allowance                               5 560            13 314         18 874          3 025           21 899    

(1) Relates predominantly to a central bank within Absa Regional Operations.
(2) Relates to ECL on undrawn committed facilities to the extent that it exceeds the gross carrying amount on loans
    and advances at an account level.

                                                                                                Total IFRS 9 
                                                                                                   provision
                                                      Reported IFRS 9      PWOR Impacts       (including IIS)    
                                                                   Rm                Rm                   Rm    
Retail and Business Banking South Africa                       20 278             1 456               21 734    
Retail Banking                                                 16 708             1 386               18 094    
Credit cards                                                    5 724               727                6 451    
Instalment credit agreements                                    2 580               334                2 914    
Loans to associates and joint ventures                              2                 -                    2    
Mortgages                                                       5 004                50                5 054    
Other loans and advances                                           34                 -                   34    
Overdrafts                                                        412                86                  498    
Personal and term loans                                         2 952               189                3 141    
Business Banking South Africa                                   3 570                70                3 640    
CIB South Africa                                                1 821                 -                1 821    
Absa Regional Operations                                        4 975               480                5 455    
WIMI                                                              266                 -                  266    
Head Office, Treasury and other operations in                                                
South Africa                                                     (407)                -                 (407)   
Loans and advances                                                 19                 -                   19    
Reclassification to provisions                                   (426)                -                 (426)   
Loans and advances to customers                                26 933             1 936               28 869    
Loans and advances to banks                                        67                                     67    
Total Loans and advances                                       27 000             1 936               28 936    
Investment securities                                             183                 -                  183    
Cash, cash balances and balances with                                                        
central banks(1)                                                   10                 -                   10    
Total ECL allowance: On-statement of                                                         
financial position                                             27 193             1 936               29 129    
Off-statement of financial position exposures                                                                 
Undrawn committed facilities(2)                                   426                 -                  426    
Financial guarantees                                              139                 -                  139    
Letters of credit                                                   9                 -                    9    
Total ECL allowance: Off-statement of                                                      
financial position                                                574                 -                  574    
Total ECL allowance                                            27 767             1 936               29 703    

                                                      IFRS 9 - 1 January 2018 (Restated)            IFRS 9 transition 
                                                      Stage 1      Stage 2                   adjustment (Restated) (3)    
                                                           Rm           Rm           Rm                            Rm    
Retail and Business Banking South Africa                3 029        3 427       15 278                         5 753    
Retail Banking                                          2 379        3 084       12 631                         5 031    
Credit cards                                              816        1 431        4 204                         2 034    
Instalment credit agreements                              686          629        1 599                         1 005    
Loans to associates and joint ventures                      2            -            -                             2    
Mortgages                                                 308          257        4 489                         1 029    
Other loans and advances                                    8           18            8                            34    
Overdrafts                                                 58          160          280                           139    
Personal and term loans                                   501          589        2 051                           788    
Business Banking South Africa                             650          343        2 647                           722    
CIB South Africa                                          482          384          955                           307    
Absa Regional Operations                                1 090          798        3 567                         1 274    
WIMI                                                       27            6          233                            53    
Head Office, Treasury and other operations in                                               
South Africa                                             (188)        (172)         (47)                         (417)   
Loans and advances                                          8           11            -                             9    
Reclassification to provisions                           (196)        (183)         (47)                         (426)   
Loans and advances to customers                         4 440        4 443       19 986                         6 970    
Loans and advances to banks                                40           27            -                            67    
Total Loans and advances                                4 480        4 470       19 986                         7 037    
Investment securities                                      65          118            -                           183    
Cash, cash balances and balances with                                                       
central banks(1)                                            3            7            -                            10    
Total ECL allowance: On-statement of                                                        
financial position                                      4 548        4 595       19 986                         7 230    
Off-statement of financial position exposures                                                                          
Undrawn committed facilities(2)                           196          183           47                           426    
Financial guarantees                                       91           48            -                           139    
Letters of credit                                           9            -            -                             9    
Total ECL allowance: Off - statement of                                                     
financial position                                        296          231           47                           574    
Total ECL allowance                                     4 844        4 826       20 033                         7 804    

(3) 'IFRS 9 transaction adjustment' is calculated as 'Total IFRS 9 provision (including IIS)' less 'Total IAS 39
    (including IIS)'.

The measurement of the ECL allowance is required to reflect an unbiased probability-weighted range of possible future
outcomes, which are factored into the PD and LGD models, as well as applied in determining whether a significant
increase in credit risk has occurred.

Key drivers of the ECL allowance are as follows:
* Interest in suspense: The cumulative interest which was suspended, and therefore not presented as part of the
impairment allowance as at 31 December 2017, amounted to R3 025m. As at the date of initial adoption this has been included
in the opening impairment allowance, with an equivalent increase in the gross carrying value of the financial assets.

* Removal of post write-off recoveries from LGD: The Group has adopted a revised approach to the collective data
modelling of LGD, and has specifically excluded post write-off recoveries from the forecast recoverable cash flows. This is
an amendment under IFRS 9, and has resulted in an increase in the ECL allowance as at 1 January 2018.

* Change in emergence period of stage 1 assets: The emergence period under IAS 39 was calculated as the average time
between when a loss event occurred and the impairment event was actually identified, and was typically 12 months or less.
An increase in the ECL allowance has been observed and is attributable to the period under IFRS 9 being defined as 12
months (or less if the contractual period is less than 12 months) on stage 1 assets.  

* Significant increase in credit loss for stage 2 classification: Under IAS 39, stage 2 assets were classified as
performing exposures with an impairment allowance being recognised to reflect latent risks, and calculated based on an
appropriate emergence period. Under IFRS 9, lending exposures that have experienced a significant increase in credit risk
since origination are required to carry a lifetime ECL allowance. 

* Change in default definition: The definition of credit impaired is aligned with the regulatory definition of
default, which has resulted in a larger population of credit exposures being classified within stage 3 compared to the NPL
population under IAS 39.  The differences have been discussed further in section 5 include the application of a 90 day
backstop, as well as a widening of the watch list categories included within stage 3, relative to those that were
specifically impaired under IAS 39. Further, all debt counselling and performing forbearance accounts are included in stage 3, but
were not previously classified as NPL. 

* Off-balance sheet exposures: The credit risk inherent in the undrawn component of lending facilities are managed and
monitored by the Group together with the drawn component as a single exposure. The exposure at default (EAD) on the
entire facility is therefore used to calculate the ECL on loans and advances. For this reason, it is not possible to
identify the ECL on the loan commitment component separately from the financial asset component. As a result, the total ECL is
recognised in the ECL allowance for the financial asset unless the total ECL exceeds the gross carrying amount of the
financial asset, in which case the ECL is recognised as a provision on the face of the statement of financial position. A
provision of R426m was recognised on 1 January 2018.  

The Group presents the ECL on financial guarantees and letters of credit as a provision on the statement of financial
position. This provision has been presented as part of the IFRS 9 ECL allowance for the purposes of illustrating the
full effects of applying a revised methodology. As at 1 January 2018, the provision calculated in respect of these
exposures was R148m. 

* The calculation of ECL on other assets: Cash reserves with central banks and investment securities are included
within the scope of IFRS 9 ECL and have contributed R193m to the Group's total ECL allowance.

15.1.4. Analysis of the ECL allowance as at 1 January 2018
http://15.1.4.1. Summary of ECL coverage by segment and class of credit exposure
The following table provides an analysis of the total ECL allowance by market segment, and per stage distribution. For
credit exposures disclosed on the statement of financial position, the gross carrying value of on-statement of
financial position exposures includes only the amounts that were drawn, as at 1 January 2018, whilst the allowance for ECL
includes expected losses (EL) on committed, undrawn lending facilities. To the extent that the ECL allowance exceeds the
carrying value of the drawn exposure, a liability (provision) has been recognised in the statement of financial position.

                                                                             1 January 2018
                                               Financial assets                         
                                           measurement at FVTPL                             Stage 1
                                                 Carrying Value      Carrying Value      ECL allowance    ECL coverage    
                                                             Rm                  Rm                 Rm               %    
RBB South Africa                                              -             390 374              3 029            0.78    
Retail Banking South Africa                                   -             336 635              2 379            0.71    
Credit cards                                                  -              29 329                816            2.78    
Instalment credit agreements                                  -              67 498                686            1.02    
Loans to associates and joint ventures                        -              23 037                  2            0.01    
Mortgages                                                     -             193 979                308            0.16    
Other loans and advances                                      -               2 453                  8            0.33    
Overdrafts                                                    -               4 360                 58            1.33    
Personal and term loans                                       -              15 979                501            3.14    
Business Banking South Africa                                 -              53 739                650            1.21    
CIB South Africa                                         26 899             156 286                482            0.31    
Absa Regional Operations                                      -              65 662              1 090            1.66    
WIMI                                                          -               4 658                 27            0.58    
Head Office, Treasury and other operations 
in South Africa                                               -                 187               (188)              -    
Loans and advances to customers                               -                 187                  8            4.28    
Reclassification to provisions(1)                             -                   -               (196)              -    
Loans and advances to customers                          26 899             617 167              4 440            0.72    
Loans and advances to banks                              17 198              36 163                 40            0.11    
Loans and advances to customers and banks                44 097             653 330              4 480            0.69    

(1) This represents the ECL allowance on undrawn facilities which has resulted in the ECL allowance on loans and
    advances exceeding the carrying value of the drawn exposure. To the extent that such occurs a provision is recognised 
    on the Group's statement of financial position.

                                                                      Stage 2
                                               Carrying Value      ECL allowance      ECL coverage    
                                                           Rm                 Rm                 %    
RBB South Africa                                       34 888              3 427              9.82    
Retail Banking South Africa                            27 980              3 084             11.02    
Credit cards                                            4 392              1 431             32.58    
Instalment credit agreements                            5 217                629             12.06    
Loans to associates and joint ventures                      -                  -                 -    
Mortgages                                              14 461                257              1.78    
Other loans and advances                                  345                 18              5.22    
Overdrafts                                              1 024                160             15.63    
Personal and term loans                                 2 541                589             23.18    
Business Banking South Africa                           6 908                343              4.97    
CIB South Africa                                       35 232                384              1.09    
Absa Regional Operations                               10 732                798              7.44    
WIMI                                                      229                  6              2.62    
Head Office, Treasury and other operations    
in South Africa                                           769               (172)                -    
Loans and advances to customers                           769                 11              1.43    
Reclassification to provisions(1)                           -               (183)                -    
Loans and advances to customers                        81 850              4 443              5.43    
Loans and advances to banks                             2 065                 27              1.31    
Loans and advances to customers and banks              83 915              4 470              5.33    

                                                                     Stage 3
                                              Carrying Value      ECL allowance      ECL coverage      Net total exposure    
                                                          Rm                 Rm                 %                            
RBB South Africa                                      37 612             15 278             40.62                 441 140    
Retail Banking South Africa                           31 942             12 631             39.54                 378 463    
Credit cards                                           5 918              4 204             71.04                  33 188    
Instalment credit agreements                           4 167              1 599             38.37                  73 968    
Loans to associates and joint ventures                     -                  -                 -                  23 035    
Mortgages                                             18 213              4 489             24.65                 221 599    
Other loans and advances                                  11                  8             72.73                   2 775    
Overdrafts                                               416                280             67.31                   5 302    
Personal and term loans                                3 217              2 051             63.76                  18 596    
Business Banking South Africa                          5 670              2 647             46.68                  62 677    
CIB South Africa                                       2 143                955             44.56                 218 739    
Absa Regional Operations                               5 650              3 567             63.13                  76 589    
WIMI                                                     330                233             70.61                   4 951    
Head Office, Treasury and other operations    
in South Africa                                            -                (47)                -                   1 363    
Loans and advances to customers                            -                  -                 -                     937    
Reclassification to provisions(1)                          -                (47)                -                     426    
Loans and advances to customers                       45 735             19 986             43.70                 742 782    
Loans and advances to banks                                -                  -                 -                  55 359    
Loans and advances to customers and banks             45 735             19 986             43.70                 798 141    


15.1.5. The impact of IFRS 9 on regulatory capital 
http://15.1.5.1. Adoption of IFRS 9 and its impact on the Group's regulatory capital (unaudited)
The Group has elected to utilise the transition period of three years for phasing in the regulatory capital impact of
IFRS 9, as afforded by paragraph 2.2 of Directive 5 of 2017 issued by the SARB. The key drivers of such impact are
explained in the next table:

IFRS (Including Unappropriated profits)      31 December 2017      Initial recognition of ECL      Release of EL shortfall    
                                                      (IAS 39)                                                                
                                   Note                                            15.1.5.1.1.                  15.1.5.1.2.    
Capital Supply (Rm)                                                                                                           
Common equity tier 1                                   99 295                          (5 413)                       2 083    
Tier 1 capital                                        103 659                          (5 413)                       2 083    
Total capital                                         118 916                          (5 413)                       2 083    
Risk weighted assets                                  736 892                                                                 
Capital Ratios (%)(1)                                                                                                         
Common equity tier 1                                     13.5                           (0.73)                        0.28    
Tier 1                                                   14.1                                                                 
Total capital                                            16.1                                                                 
Leverage                                                                                                                      
Leverage exposure                                   1 312 889                          (7 804)                       2 083    
Leverage ratio (%)                                        7.9                           (0.40)                        0.15    


IFRS (Including                                     Impact on         Release of RWA on 
Unappropriated profits)      Deferred tax      other reserves      non-performing loans    
                       Note    15.1.5.1.3.         15.1.5.1.1.               15.1.5.1.5.    
Capital Supply (Rm)
Common equity tier 1                                     (126)                             
Tier 1 capital                                           (126)                             
Total capital                                            (126)                             
Risk weighted assets                3 922                                       (14 300)   
Capital Ratios (%)(1)                                                                        
Common equity tier 1                (0.07)              (0.02)                     0.25    
Tier 1                                                                                     
Total capital                                                                              
Leverage                                                                                   
Leverage exposure                   1 902                (220)                             
Leverage ratio (%)                  (0.01)              (0.01)                             

                                                                  1 January 2018
IFRS (Including                Eligible General           Fully loaded          Transitional 
Unappropriated profits)      Provisions (Tier 2)      capital position      capital position    
                      Note           15.1.5.1.6.
Capital Supply (Rm)
Common equity tier 1                                            95 839                98 431    
Tier 1 capital                                                 100 203               102 795    
Total capital                             1 795                117 255               118 501    
Risk weighted assets                                           726 514               734 298    
Capital Ratios (%)(1)                                                                             
Common equity tier 1                                              13.2                  13.4    
Tier 1                                                            13.8                  14.0    
Total capital                              0.25                   16.1                  16.1    
Leverage                                                                                        
Leverage exposure                                            1 308 851             1 311 880    
Leverage ratio (%)                                                 7.7                   7.8    

(1) The Group's IFRS capital ratios decreased as follows as a result of the adoption of IFRS 9:
    - CET 1 ratio decreased by 28 bps on a fully loaded basis and 7 bps after phase-in.
    - Tier 1 ratio decreased by 27 bps on a fully loaded basis and 7 bps after phase-in.
    - Total capital ratio decreased by 1 bps on a fully loaded basis and 0 bps after phase-in.

http://15.1.5.1. Adoption of IFRS 9 and its impact on the Group's regulatory capital (unaudited)
15.1.5.1.1.  Increase in ECL provision under IFRS 9
The adoption of the revised IFRS 9 ECL model has reduced shareholders equity by R7 804m (previously reported: R5 868m) 
which is partially offset by the recognition of a net tax credit of R2 063m (previously reported: R1 572m). The tax 
credit includes current and deferred tax.

15.1.5.1.2.  Release of ECL shortfall to credit provisions
For reporting periods up to 31 December 2017, the calculation of capital took into account the regulatory expected
loss for performing assets, which was greater than the IAS 39 provision, thereby resulting in an additional deduction
against CET 1 to the extent of the shortfall in the accounting provision. Under IFRS 9, the accounting ECL allowance has
increased resulting in the elimination of the shortfall. This is reflected in the above reconciliation as a reversal of the
previous deduction and has the effect of partially reducing the negative impact of IFRS 9 ECL on regulatory capital. 

15.1.5.1.3. Recognition of a higher deferred tax asset balance
As discussed in point 15.1.5.1.1, the carrying value of the Group's deferred tax asset balance has increased, driven
by an increase in the ECL provision. The reclassification of investment securities, as discussed below in 15.1. 5.1.4
resulted in a reversal of a deferred tax liability. The net effect has been an increase in risk weighted assets (RWA) 
of R3 922m (previously reported: R3 221m), and accordingly, a decrease in the CET1 ratio.

15.1.5.1.4.  Impact on other reserves under IFRS 9
Other reserves decreased by R126m (previously reported: R95m) (net of deferred tax) primarily as a result of a reclassification
from available-for-sale to amortised cost of a small portfolio of South African CPI linked investments so as to reflect
the Group's business model of holding the instruments to collect contractual cash flows. 

15.1.5.1.5.  Release of RWA on non-performing loans 
The alignment of the definition of default for both accounting and regulatory purposes resulted in a reduction of RWA
of R14 300m (previously reported: R7 421m) due to specific provisions (stage 3) being raised for an increased population of
exposures. The methodology applied in calculating default RWA's permits a bank to reduce the LGD of the defaulted exposure by
the bank's estimate of expected loss, represented by the bank's specific accounting provision. 

15.1.5.1.6.  Tier 2 eligible provisions
Under IFRS 9, the total stage 1 and stage 2 ECL provision calculated in respect of Group's AIRB portfolio exceeds the
regulatory EL. The excess is added back to Tier 2 capital, subject to a limit of 0.6% of the AIRB credit RWA. In respect
of the Group's standardised portfolio, the IFRS 9 general provision (stage 1 and stage 2) is added back to Tier 2
capital, subject to a limit of 1.25% of the standardised credit RWA. This has resulted in an increase in total capital of 
R1 885m.

15.1.5.1.7.  Impact of IFRS 9 ECL on leverage ratio
Key drivers of change in the leverage ratio as a result of the adoption of IFRS 9 were a decrease in leverage exposure
and Tier 1 capital, mainly attributable to increased ECL provisions. This was however partly offset by the release of
the EL shortfall.

15.1.6. Drivers of the impairment charge under IFRS 9
IFRS 9 impacts the timing of loss recognition, but over time, the long run expected cash losses are driven by economic
and commercial factors, independent from the accounting framework applied. 

Differences in the timing of recognition of an impairment charge under IFRS 9 versus IAS 39 are attributed to, inter
alia:
* significant increases in credit risk causing a transfer of assets to stage 2 assets;
* significant changes in forwarding looking macroeconomic conditions leading to assets moving between stages; and
* the size of new business growth.

Significant increase in credit risk: Transfers of exposures to stage 2 are driven by significant deterioration in
credit quality, although a large stage 2 balance does not necessarily mean that the exposures have a poor default grade. An
important principle under IFRS 9 is that a significant increase in credit risk constitutes a measure of relative credit
risk, requiring the absolute credit quality of an exposure on origination to be compared against the absolute credit
quality at reporting date. Exposures classified within stage 2 may actually have a better credit quality than other assets
which remain in Stage 1. Further, owing to the Group's definition of credit impaired, and the inclusion of performing
forbearance accounts within stage 3, a credit impaired exposure may have a better credit quality than an exposure in stage
2. Notwithstanding this principle, should the Group's stage 2 population start growing, this could indicate that the
credit quality across the portfolio on reporting date may be worse than management had initially anticipated. 

Changes in forward looking assumptions: IFRS 9 requires forward-looking and historical information to be used in order
to determine whether a significant increase in credit risk has occurred, as well as to determine the appropriate PDs
and LGDs to be applied. Transfers between stages could be driven by a deteriorating or improving macro-economic
environment, which could make the impairment charge more susceptible to volatility.

New business growth: One of the key changes under IFRS 9 is the recognition of ECL losses in respect of all exposures
on initial recognition, or on the date that the Group becomes irrevocably committed to providing a lending facility.
This means that growth in new business will strain profitability in the short to medium term, although over time the
realised economic returns should, all else being equal, remain unchanged from IAS 39.  

15.1.7. Impact of IFRS 9 on the Group's tax position 
The adoption of IFRS 9 has resulted in a change in the timing of the recognition of credit losses, but does not impact
the value of credit losses ultimately incurred. Accordingly, the long run tax effect of credit losses and recoveries
are unchanged by the implementation of a new accounting framework. The change in the timing of loss recognition is
accounted for through the recognition of a deferred tax adjustment, calculated based on the statutory tax rate applicable.  

In South Africa, the value of the deferred tax asset (and corresponding impact on retained earnings and other
reserves) which was recognised on adoption of IFRS 9 was impacted by both a change in the accounting recognition of losses,
as well as a change in the tax legislation. In accordance with amended tax legislation issued by the South African Revenue
Service in 2017, the deduction permitted in respect of doubtful debt balances has changed to 25% for stage 1 ECL, 40% for
stage 2 ECL and 85% for stage 3 ECL. This is a change from the previous deductions under IAS 39, which were 25% of
incurred but not reported losses, 80% for portfolio specific impairments and 100% for specific impairments. A higher
deferred tax asset has therefore been driven by an increase in the ECL provision under IFRS 9, partially offset by a 
change in the South African tax treatment of pre-existing allowances.

15.1.8. Incorporation of forward-looking information in the IFRS 9 modelling
The Group's IFRS 9 impairment models consume macroeconomic information to enable the models to provide an output that
is based on forward looking information. The macro-economic variables and forecast scenarios are sourced from one of the
world's largest research companies, and are reviewed and approved in accordance with the Group's macroeconomic
governance framework. This review includes the testing of forecast estimates, the appropriateness of variables and 
probability weightings, as well as the incorporation of these forecasts into the ECL allowance. 

The Group has adopted the use of three economic scenarios: a base scenario, a mild upside scenario, and a mild
downside scenario. IFRS 9 requires the inclusion of point-in-time forward looking assumptions, and in respect of which the
application of hindsight is prohibited. The scenarios presented below are therefore reflective of the Group's view of
forecast economic conditions as at the date of initial adoption.

http://15.1.8.1.  Base scenario
Global
Global expansion is expected to remain broad-based across sectors and synchronised in developed economies. The outlook
on emerging market growth remains solid on the back of better growth in developed economies and rising commodity
prices. Developed market central banks continue tightening their monetary policies at a gradual pace in 2018-20 but 
this is not expected to be disruptive to emerging markets.

South Africa
The economy recovered from a weak growth at the start of 2017, on the back of growing agricultural output, but the
near-term outlook still remains moderate. GDP growth is forecast to marginally increase in 2018. Positive political
developments are observed, although the consumer remains in a defensive mindset, and household spending remains relatively
muted given tax increases. Beyond 2019, growth is supported by a stronger global and domestic environment. South Africa's
fiscal fortunes and potential ratings downgrade remain a concern over the forecast period. Disappointing growth could
result in low fiscal revenue that is expected to undershoot budget targets. No further interest rate cuts over the forecast
horizon are assumed.

Africa Regions
Sub-Saharan Africa's economic recovery continues although the trajectory is not smooth across all jurisdictions.
Headwinds that could still derail growth in some markets include low fiscal buffers and political risks ahead of elections 
in key markets this year. Countries with weak fiscal positions continue to necessitate close monitoring. Economic growth
is supported largely by a recovery in the agriculture sector, improved commodity output and prices, as well as more
accommodative monetary policy stances.

http://15.1.8.2.  Mild upside scenario: Stronger near term growth
Global
The global economy grows faster than expected, and is supported by fiscal stimulus in the United States (US), and a
quick negotiation of Britain's exit (Brexit) from the European Union (EU), which boosts global business confidence. 
Commodity prices rise sharply relative to the base scenario and the global financial markets improve. Globally, investor 
and consumer sentiment rises, due to the favorable financial environment.

South Africa
It is assumed there are no further rating downgrades. Policy and political stability boosts business confidence and
private sector fixed investment. We assumed a strong rand compared to the base scenario that is driven by the sovereign
rating being unchanged and the positive global sentiment toward emerging markets. Inflation moves lower on the back of the
stronger rand and continued moderation in food price inflation. Falling inflation and diminished risk at a domestic
level gives the South African Reserve Bank (SARB) room to provide stimulus to the economy by cutting interest rates to support 
the economy. The cumulative interest rate cuts, higher commodity prices and stronger global growth boost South Africa's GDP
growth. 

Africa Regions
A stronger global economy and higher commodity prices help support growth in African commodity exports and fixed
investments. The level of output remains above the baseline scenario. Inflation moves lower as currencies appreciate on the
back of capital flows and higher commodity prices supporting exports. Easing inflation allows central banks to lower
interest rates, supporting African economic growth further. 

http://15.1.8.3.  Mild downside scenario: Moderate recession
Global
The US economy slows relative to baseline due to delays in implementing the stimulus package promised before the
elections. Business and consumer confidence falls in the US, followed by stock market indices. It is assumed Brexit
negotiations take longer than expected, increasing uncertainty on financial markets, weighing on business and consumer
confidence. As a result, euro zone growth slows compared to baseline, contributing to economic and financial stress faced 
by some of the heavily indebted countries in the region. Furthermore, slower growth in key markets affects China's exports 
and result in its GDP.

South Africa
South Africa goes into recession on the back of weaker global growth environment and falling commodity prices. As a
result, government revenue comes under pressure and the finances of state owned enterprises deteriorate. Rating agencies
downgrade South Africa's sovereign rating further, resulting in capital outflow and rand weakness. The weakening of the
rand drives inflation above the SARB's 3-6% target range in 2018-2019, resulting in the SARB hiking the repurchase rate.
The yield curve moves higher in line with the selling of South African bonds and higher short-term rates. Economic
performance recovers slowly from 2020 as the weaker exchange rate builds some export competitiveness aiding in arresting some
of the rand's decline, and spending power returns slowly to consumers as inflation abates in the middle of 2020.

Africa Regions
In Sub-Saharan Africa some economies go into recession on the back of lower global growth and commodity prices. Fiscal
positions deteriorate further and political risks increase in some markets. Capital outflows and falling exports drive
currencies weaker, pushing inflation higher. Central banks intervene by hiking interest rates to help stem the flight of
capital and protect currencies.

15.1.9. The key elements of classification and measurement requirements under IFRS 9
IFRS 9 will require financial assets to be classified on the basis of two criteria:
* The business model within which financial assets are managed, and
* Their contractual cash flow characteristics, and specifically whether the cash flows represent Solely Payments of
Principal and Interest ('SPPI').

Financial assets will be measured at amortised cost if they are held within a business model whose objective is to
hold financial assets to collect contractual cash flows, and their contractual cash flows meet the SPPI requirements.

Financial assets will be measured at FVOCI if they are held within a business model whose objective is achieved by
both collecting contractual cash flows as well as selling financial assets and their contractual cash flows meet the SPPI
requirements.

Other financial assets are required to be measured at FVPL if they are held for the purposes of trading, if their
contractual cash flows do not meet the SPPI criterion, or if they are managed on a fair value basis and the Group maximises
cash flows through sale. IFRS 9 allows an entity to irrevocably designate a financial asset as at FVTPL if doing so
eliminates or significantly reduces a measurement or recognition inconsistency (that is, an accounting mismatch).

An entity is permitted to make an irrevocable election for non-traded equity investments to be measured at FVOCI, in
which case dividends are recognised in profit or loss, but other gains or losses remain in equity and are not
reclassified to profit or loss upon derecognition.

Classification and Measurement Impact
The following table presents the changes in the classification of financial assets as at 1 January 2018, by showing
the changes in the carrying amounts on the basis of their measurement categories in accordance with IAS 39 and the changes
in the net carrying amounts, which includes the effects of ECL:

                                                                    IAS 39
                                             Measurement Category                Carrying amount      Reclassification    
Assets                                                                                        Rm                    Rm    
Cash, cash balances and balances            
with central banks                          
                                             Designated at FVTPL                           4 808                (4 808)   
                                                                                               -                  4808    
                                             Available for sale (AFS)
                                             - designated                                    952                     -    
                                             Amortised cost - designated                  42 909                     -    
                                                                                          48 669                     -    
Investment securities                                                                                                     
                                             Designated at FVTPL                          26 335               (14 972)   
                                                                                               -                14 972    
                                             AFS - designated                             64 657                (7 593)   
                                                                                               -                   752    
                                             AFS - hedged items                           20 417                     -    
                                                                                               -                 6 646    
Loans and advances to banks                                                              111 409                  (195)
                                             Designated at FVTPL                          17 198               (15 747)   
                                                                                                                15 747    
                                             Amortised cost - designated                  38 228                     -    
                                                                                          55 426                     -    
Trading portfolio assets                     FVTPL - held for Trading                    130 132                     -    
Hedging portfolio assets                     FVTPL - hedging Instrument                    2 673                     -    
Other assets                                                                                                              
                                             Designated at FVTPL                               4                    (4)   
                                                                                               -                     4    
                                             Amortised cost - designated                  17 486                     -    
                                                                                          17 490                     -    
Loans and advances to customers                                                                                           
                                             Designated at FVTPL                          26 811               (19 378)   
                                                                                                                19 466    
                                             Amortised cost - designated                 722 915                  (108)   
                                             Amortised cost - hedged items                    46                     -    
                                                                                         749 772                   (20)   
Investments linked to investment contracts                                                                                
                                             Designated at FVTPL                          18 877               (18 877)   
                                                                                               -                18 877    
                                             FVTPL - held for Trading                         59                     -    
                                                                                          18 936                     -    
Non-current asset held for sale              Amortised cost - designated                   1 118                     -    
                                                                                                                          
Assets outside the scope of IFRS 9                                                        30 354                    55
Total assets                                                                           1 165 979                  (160)   


                                                                                           IFRS 9
                                             Remeasurement      Measurement category                    Carrying amount    
Assets                                                  Rm                                                           Rm    
Cash, cash balances and balances             
with central banks                           
                                                         -      Designated at FVTPL                                   -    
                                                         -      Mandatorily at FVTPL                              4 808    
                                                         -      FVOCI - debt instruments                            952    
                                                       (10)     Held at amortised cost                           42 899    
                                                       (10)                                                      48 659    
Investment securities                                                                                                      
                                                         -      Designated at FVTPL                              11 363    
                                                         -      Mandatorily at FVTPL                             14 972    
                                                         -      FVOCI - debt instruments                         57 064    
                                                         -      FVOCI - equity instruments                          752    
                                                         -      FVOCI - hedged items                             20 417    
                                                        (2)     Amortised cost -debt instruments                  6 644    
                                                        (2)                                                     111 212    
Loans and advances to banks                                                                                                
                                                         -      Designated at FVTPL                               1 451    
                                                                Mandatorily at FVTPL                             15 747    
                                                       (67)     Amortised cost - debt instruments                38 161    
                                                       (67)                                                      55 359    
Trading portfolio assets                                 -      Mandatorily at FVTPL                            130 132    
Hedging portfolio assets                                 -      FVTPL - hedging Instrument                        2 673    
Other assets                                                                                                               
                                                         -      Designated at FVTPL                                   -    
                                                         -      Mandatorily at FVTPL                                  4    
                                                         -      Amortised cost - designated                      17 486    
                                                         -                                                       17 490    
Loans and advances to customers                                                                                            
                                                         -      Designated at FVTPL                               7 433    
                                                         -      Mandatory at FVTPL                               19 466    
                                                    (6 970)     Amortised cost - designated                     715 837    
                                                         -      Amortised cost - hedged items                        46    
                                                    (6 970)                                                     742 782    
Investments linked to investment contracts                                                                                 
                                                         -      Designated at FVTPL                                   -    
                                                         -      Mandatory at FVTPL                               18 877    
                                                         -      FVTPL - held for Trading                             59    
                                                         -                                                       18 936    
Non-current asset held for sale                                 Amortised cost - designated                       1 118    
Assets outside the scope of IFRS 9                   1 575      Assets outside the scope of IFRS 9               31 984    
Total assets                                        (5 474)                                                   1 160 345    

Adoption of the new classification and measurement rules will require a limited number of reclassifications to be
effected as at 1 January 2018, but will not require a significant adjustment to the gross carrying values of the Group's
financial assets and financial liabilities. Initial application of the new requirements resulted in a decrease in reserves
of R140m (after tax) as at 1 January 2018. Explanations of the reclassifications that will be required are provided
below:

* A portfolio of consumer price index (CPI) linked investment securities within Treasury, have been reclassified from
available-for-sale under IAS 39, to amortised cost in terms of the Groups business model of holding the instruments to
collect contractual cash flows. Had these assets not been reclassified to amortised, the fair value of the instruments
would have been R5 630m, and a fair value loss of R151m would have been recognised in OCI during the reporting period. 

* Certain financial assets, including loans and advances in CIB and investments in WIMI were designated at FVTPL under
IAS 39 as they were managed on a fair value basis. In terms of IFRS 9, these assets are now required to be measured at
FVTPL, and noted as mandatory designations. 

* Certain debt securities are held by Treasury in a separate portfolio to meet everyday liquidity needs. These were
classified as available-for-sale under IAS 39. Treasury seeks to minimise the cost of managing liquidity needs and
therefore actively manages the return on the portfolio. The return consists of collecting contractual cash flows as well as
gains and losses from the sale of financial assets. The business model may result in sales activity and these instruments
have therefore been classified at FVOCI under IFRS 9. 

* In a particular jurisdiction within the Africa Regions, a small portfolio of debt securities held by Treasury have
been reclassified from available-for-sale to amortised cost as there is limited evidence of an ability to sell these
securities, and the portfolio is therefore aligned to a business model with the objective of collecting contractual cash
flows.

* Commodity-linked debt instruments within CIB, were previously bifurcated and separately recognised as a loan at
amortised cost and a derivative. These are now classified as FVTPL as their cash flows do not consist of SPPI.

* Debt securities held by insurance entities within the Africa Regions, have been reclassified from available-for-sale
to amortised cost. The objective of the portfolio is to collect contractual cash flows as the securities are neither
held within a portfolio whose business model is to manage the securities and evaluate their performance on a fair value
basis, nor is it possible to evidence an adequate frequency and volume of sales.

* In October 2017, the IASB issued an amendment to IFRS 9 Prepayment Features with Negative Compensation.  Under the
current IFRS 9 requirements, the SPPI condition is not met if the lender has to make a settlement payment in the event of
termination by the borrower (also referred to as early repayment gain). The amendment clarifies how a company would
classify and measure a debt instrument if the borrower is permitted to prepay the instrument at an amount less than the
unpaid principal and interest owed. Under the amendments, the sign of the prepayment amount is not relevant. The
calculation of this compensation payment must be the same for both the case of an early repayment penalty and the case 
of an early repayment gain. This amendment is effective on 1 January 2019 and is not expected to have a significant 
impact on the Group

15.1.11. Governance
http://15.1.11.1.  Implementation of IFRS 9  
The implementation of IFRS 9 has been completed through a jointly accountable risk and finance governance programme,
with representation from all impacted departments. A parallel run of IFRS 9 and IAS 39 was initiated in February 2017,
providing oversight for both IAS 39 and IFRS 9 impairment results. This included model, process and output validation,
testing, calibration and analysis. During the course of the programme there have been regular updates provided to the 
Group Audit Compliance Committee (GACC), who have approved key judgments and decisions.

http://15.1.11.2. Ongoing governance of IFRS 9  
The Group's basic risk management framework has not been altered due to the introduction of IFRS 9. The Group Credit
Impairment Committee (GCIC) remains the key management committee responsible for the governance of impairments as well as
the oversight of the Group's impairment position. The overall credit risk appetite also remains unchanged with all the
controls in place in the business for the extension and subsequent monitoring of credit exposure. It has however, been
necessary to develop new processes and related controls to support the calculation of the Group's ECL. In particular, new
governance processes have been established to review and approve the forward looking macroeconomic assumptions.

15.2. Adoption of IFRS 15 Revenue from contracts with customers (IFRS 15)
IFRS 15, is effective from 1 January 2018, and replaces the previous revenue recognition standards and interpretations,
including IAS 18 Revenue and IFRS-IC 13 Customer Loyalty Programmes. IFRS 15 establishes a single approach for the
recognition and measurement of revenue, and requires an entity to recognise revenue as performance obligations are satisfied.
It applies to all contracts with customers except for transactions specifically scoped out, which includes interest,
dividends, leases, and insurance contracts. The adoption of IFRS 15 has resulted in a change in the accounting treatment
of a loyalty programme which resulted in a reduction in retained earnings of R44m, net of tax.
 
15.3. Accounting policy amendments
15.3.1. The accounting treatment of policyholder liabilities under life insurance contracts
During the current reporting period, the Group amended its accounting policy with respect to the measurement of
policyholder liabilities, and specifically, with regards to the calculation of discretionary margins held within policyholder
reserves. This change impacts life insurance products where the present value of expected benefit payments, plus the
future expected administration expenses under a life insurance contract, is lower than the expected discounted value of the
contractual premiums to be received. Prior to the change, the Group's policy was to eliminate all negative liabilities.
The policy has been changed to allow for discretion to be applied in full or partial elimination of negative liabilities 
in order to more appropriately provide for prudent reserving and release of profits. This policy change will address
scenarios where a loss is recognised in a reporting period solely as a consequence of incurring initial acquisition costs
despite the contract being expected to be profitable over its duration. In accordance with the revised policy, negative
liabilities will still be eliminated, to avoid the premature recognition of profits, however such elimination is only
applied to the excess remaining after adjusting for the product's initial acquisition costs. The change in accounting
policy has been applied retrospectively to the extent practicable, and comparatives restated accordingly.

The effects of the retrospective application are not determinable prior to 2014 and the change in accounting policy
has been applied from the start of the 2014 financial year.

The impact of this change on the Group's condensed statement of financial position as at 31 December 2017 is set out
in the following table:

                                  As previously reported                                               Restated
                                        31 December 2017      Change in accounting policy      31 December 2017    
                                                      Rm                               Rm                    Rm    
Assets                                                                                                             
Total assets                                   1 165 979                                -             1 165 979    
Liabilities                                                                                                        
Policyholder liabilities          
under insurance contracts                          4 617                            ( 275)                4 342    
Deferred tax liabilities                             557                               77                   634    
Other liabilities                              1 041 745                                -             1 041 745    
Liabilities                                    1 046 919                            ( 198)            1 046 721    
Equity                                                                                                             
Capital and reserves                                                                                               
Attributable to ordinary          
equity holders:                   
Share capital                                      1 666                                -                 1 666    
Share premium                                     10 498                                -                10 498    
Retained earnings                                 91 882                              198                92 080    
Other reserves                                     4 370                                -                 4 370    
Ordinary equity holders                          108 416                              198               108 614    
Non-controlling interest -        
ordinary shares                                    4 500                                -                 4 500    
Non-controlling interest -        
preference shares                                  4 644                                -                 4 644    
Non-controlling interest -        
Additional Tier 1 Capital                          1 500                                -                 1 500    
Total equity                                     119 060                              198               119 258    
Total liabilities and equity                   1 165 979                                -             1 165 979    

The impact of this change on the Group's condensed statement of financial position as at 31 December 2016 is set out
in the following table:
                                    As previously reported                                          Restated
                                               31 December      Change in accounting policy      31 December    
                                                      2016                                              2016    
                                                        Rm                               Rm               Rm    
Assets                                                                                                          
Total assets                                     1 101 023                                -        1 101 023    
Liabilities                                                                                                     
Policyholder under liabilities      
insurance contracts                                  4 469                            ( 186)           4 283    
Deferred tax liabilities                             1 185                               52            1 237    
Other liabilities                                  993 089                                -          993 089    
Liabilities                                        998 743                            ( 134)         998 609    
Equity                                                                                                          
Capital and reserves                                                                                            
Attributable to ordinary            
equity holders:                     
Share capital                                        1 693                                -            1 693    
Share premium                                        4 467                                -            4 467    
Retained earnings                                   81 604                              134           81 738    
Other reserves                                       5 293                                -            5 293    
Ordinary equity holders                             93 057                              134           93 191    
Non-controlling interest -          
ordinary shares                                      4 579                                -            4 579    
Non-controlling interest -          
Additional Tier 1 Capital                            4 644                                -            4 644    
Total equity                                       102 280                              134          102 414    
Total liabilities and equity                     1 101 023                                -        1 101 023    

The impact of the change on the Group's condensed statement of comprehensive income for the reporting period ended 31
December 2017 is disclosed in the following table:

                                               As previously reported                                          Restated
                                                          31 December      Change in accounting policy      31 December    
                                                                 2017                                              2017    
                                                                   Rm                               Rm               Rm    
Net interest income                                            42 644                                -           42 644    
Non-interest income                                            30 661                               90           30 751    
Changes in investment and insurance           
contract liabilities                                           (2 113)                              90           (2 023)   
Other non-interest income                                      32 774                                -           32 774    
Operating income before operating expenses                     73 305                               90           73 395    
Operating expenses                                            (52 596)                               -          (52 596)   
Share of post-tax results of associates       
and joint ventures                                                170                                -              170    
Operating profit before income tax                             20 879                               90           20 969    
Taxation expense                                               (5 857)                            ( 25)          (5 882)   
Profit for the reporting period                                15 022                               65           15 087    
Ordinary equity holders                                        13 823                               65           13 888    
Non-controlling interest                                        1 199                                -            1 199    
                                                               15 022                               65           15 087    

The extent to which the change has impacted the Group's condensed statement of cash flows for the reporting period
ended 31 December 2017 is disclosed in the following table:

                                               As previously reported                         Restated
                                                          31 December      Change in accounting policy      31 December    
                                                                 2017                                              2017    
                                                                   Rm                               Rm               Rm    
Cash flows from operating activities                                                                                       
Changes in insurance premiums and claims/
investment and contract liabilities                             2 703                                -            2 703    
Insurance premiums and claims                                   1 153                               90            1 243    
Net increase/(decrease) in insurance and 
investment funds                                                1 550                             ( 90)           1 460    

15.3.2. The presentation of net interest income
As a consequence of IFRS 9, an amendment was made to IAS 1 Presentation of Financial Statements, which is effective
from 1 January 2018. The amendment requires interest revenue, which is calculated using the effective interest method, 
to be presented separately on the face of the statement of comprehensive income. This only includes interest earned on
financial assets measured at amortised cost or at FVOCI, subject to the effects of applying hedge accounting to derivatives
in designated hedge relationships. In compliance with this amendment the Group has separately presented its effective
interest income within profit or loss, but elect to present all interest which fall outside the afore-mentioned scope 
as a sub-component of 'Interest and similar income". The Group has elected to apply the same approach in presenting
'Interest expense and similar charges' to achieve consistency in the presentation of 'Net interest income'. The revised
presentation has been applied on a retrospective basis, to ensure comparability between reporting periods.

15.4. Correction of prior period error
The Group determined that certain due for settlement accounts in respect of long and short proprietary positions with
the JSE have been incorrectly netted in prior reporting periods, notwithstanding the fact that these accounts are not
permitted to be net settled. Correction of this error did not have an impact on profit or loss, or equity, but it did
result in a gross up of other assets and other liabilities in the previous reporting period of R3 616m (2016: R2 565m).

15.5. Changes to reportable segments and business portfolios
The South Africa Banking segment (which consisted of RBB (SA) and CIB (SA) in aggregate) has been removed in the
Group's segmental disclosures to align with how the banking operations are now managed.

Rest of Africa Banking was renamed to Absa Regional Operations (ARO) in order to align to the new Absa Group.

The following business portfolio changes resulted in the restatement of financial results for the comparative period.
None of the restatements have impacted the overall financial position or net earnings for the Group.

* The Group refined its treasury allocation methodology, resulting in the following restatements:
- Net interest income from CIB South Africa of R3m and Head Office, Treasury and other operations of R124m to RBB
South Africa R121m; 
- Non-interest income from Head Office, Treasury and other operations of R92m to CIB SA of R88m and RBB SA of R4m; and
* The Group continued refining its cost allocation methodology, resulting in restatement of operating expenses from
CIB South Africa R27m, WIMI R14m and Head Office, Treasury and other operations R4m to RBB South Africa R45m. 

Our contact details
Absa Group Limited
Formally known as Barclays Africa Group Limited
Incorporated in the Republic of South Africa
Registration number: 1986/003934/06
Authorised financial services and registered credit provider (NCRCP7)
JSE share code: ABG
ISIN: ZAE000255915

Head Investor Relations
Alan Hartdegen
Telephone: +27 11 350 2598

Group Company Secretary
Nadine Drutman
Telephone: +27 11 350 5347

Head of Financial Control
John Annandale
Telephone: +27 11 350 3496

Transfer secretary
Computershare Investor Services (Pty) Ltd 
Telephone: +27 11 370 5000 
http://computershare.com/za/

Auditors
Ernst & Young Inc. 
Telephone: +27 11 772 3000 
http://ey.com/ZA/en/Home

Registered office
7th Floor, Absa Towers West
15 Troye Street, Johannesburg, 2001
PO Box 7735, Johannesburg, 2000

Switchboard: +27 11 350 4000

www.absa.safrica

Queries
Please direct investors relations queries to 
IR@absa.co.za

Please direct media queries to groupmedia@absa.africa

Please direct queries relating to your Absa Group shares to questions@computershare.co.za

And other queries regarding the Group to groupsec@absa.co.za

Sponsors

Lead independent sponsor
J.P. Morgan Equities South Africa (Pty) Ltd 
Telephone: +27 11 507 0300 
http://jpmorgan.com/pages/jpmorgan/emea/local/za

Joint sponsor
Absa Bank Limited (Corporate and Investment Bank) 
Telephone: +27 11 895 6843 
equitysponsor@absacapital.com

Date: 11/03/2019 07:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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