2
What’s inside this report overview Group
Country overview 1–8 About Us 1 overview Country Performance highlights 3 Operational overview 4 Our business 5 Our strategy 6 Notice and agenda 7 5-year !nancial summary 8 nancial review review nancial ! and Operating Operating and !nancial review 9–31 Chairman’s statement 9 Chief Executive’s review 11 People 15 Sustainability 19 Standard Chartered Ghana in 2012 23 Consumer Banking 25 Wholesale Banking 29 Corporate governance governance Corporate
Corporate governance 34–41 Corporate information 34 Board of directors 35 Senior management 37 Report of the directors 41 Financial statements and notes and statements Financial Financial statements and notes 42–94 Report of the Independent Auditors 42 Income statement 43 Statement of comprehensive income 44 Statement of !nancial position 45 Statement of changes in equity 46 Statement of cash ows 48 Notes to the !nancial statements 49 Supplementary information Supplementary Supplementary information 96–97 Proxy form 96 3 Standard Chartered Bank Ghana Annual Report 2012
Performance highlights Delivering growth
Financial highlights:
Operational Income Normalised return on equity ¢m GH¢282m 44%
37% GH¢218m GH¢217m 33%
2010 2011 2012 2010 2011 2012
Pro!t before taxation Normalised earnings ¢m per share
GH¢3.97 GH¢170m GH¢3.64
GH¢114m GH¢112m GH¢1.16
2010 2011 2012 2010 2011 2012*
Total assets Dividend per share ¢m
GH¢ GH¢3.05 2,391m
GH¢ 1,971m GH¢ GH¢1.27 1,668m
GH¢0.47
2010 2011 2012 2010 2011 2012*
*Values re ect post issue of bonus shares position 4
Operational overview overview Country Building diversity
Operational highlights in 2012 Non-!nancial highlights Fifth successive year of profit growth with disciplined execution of our strategy Employees
Wholesale Banking income up by 26 per cent with Consumer Banking registering 39 per 1 0 4 7 2011: 942 2010: 986 cent rise in income Nationalities Profit before tax increased 49 per cent to GH¢170m 1 0 2011:10 2010:11
Rebased basic earnings per share following Branches issue of bonus shares reached GH¢1.16 2 3 Overall balance sheet registered an 2011: 21 2010: 21 impressive 21 per cent growth to GH¢2.4bn
Return on equity continues to be strong at 44 per cent, an increase of 11 per cent. 5 Standard Chartered Bank Ghana Annual Report 2012
Our business A strong international bank
Standard Chartered Ghana belongs to an international banking group with 1,700 branches and offices in 68 markets, predominantly in Asia, Africa and the Middle East. This international perspective, coupled with our deep local knowledge, enables us to meet effectively both the local and cross-border needs of our clients and customers. We offer a wide range of banking products and services through our two businesses, Consumer Banking and Wholesale Banking. We think and operate as ‘One Bank’, supporting clients and customers by collaborating and creating synergies across our international network, businesses and functions.
Consumer Banking Wholesale Banking Our customer-focused approach, centered around We offer a wide range of financing and investment providing superior service and solutions to financial needs solutions to corporate and institutional clients. One of the while rewarding our customers for their total relationships key advantages we offer is our ability to facilitate trade and with the Group, differentiates us from the competition. investment across some of the world’s fastest growing markets. We offer solutions and services through multiple channels including branches, call centre’s, award winning online We take a relationship-focused approach to business and and mobile applications to bring greater convenience and combine international capabilities with on-the-ground exibility to our clients and customers. expertise to deliver a superior service to our clients.
Personal and Small and Medium-sized Global Corporates Financial Institutions Enterprise (SME) Preferred Banking We provide seamless We deliver a broad suite Banking t t t We provide a wide range international service and of services to support of banking products and t We deliver a full suite of offer a full suite of our institutional clients services including financial products, products and services to and facilitate commerce, deposits and savings services and advice to multinational financing, risk accounts, loans, SMEs across our corporations and large management and mortgages and credit network, and take businesses with investor solutions cards to serve the advantage of both our sophisticated cross- border needs. Commodity Traders and diverse and varied needs Consumer and Agribusiness of our customers. Wholesale Banking Local Corporates capabilities to help our t We leverage the strength Priority and clients grow and expand t We partner with our of our footprint to offer International Banking their businesses. clients to understand tailored services and their needs and growth solutions for commodity Private Banking tWe offer wealth aspirations. Our local traders, producers and management and cross knowledge and extensive processors for and in border solutions for the t Our international network provides access to network is a differentiator Asia, Africa and the more af uent. Our and this helps them Middle East. Priority customers are growth markets around the world while our One achieve their strategic recognized and goals. rewarded for their total Bank approach draws on relationship with us and the full complement of We combine the knowledge of a local bank with the have access to a our resources and network, platforms and capabilities of an international dedicated relationship capabilities to offer institution and offer the following solutions and services to manager, supported by a advisory services and meet the financial needs of our clients: team of experts. customized solutions to our clients. t Transaction Banking t Corporate Finance t Financial Markets t Principal Finance
Performance and Risk t A review of the 2012 performance of Consumer Banking and Wholesale Banking can be found on page 60. t A review of our financial risk management approach can be found on pages 80 to 90. 6
Our strategy overview Country Leading the way in Ghana
Our strategic intent To be the best international bank, We have a disciplined focus on Ghana - leading the way in Ghana a market where we have built deep local knowledge, have a competitive advantage and a commitment for the long term.
Our brand promise tWe aim to lead the industry in how tOur culture and values reassure clients and customers in an Here for good we do business, by being profitable and sustainable while also having a industry where trust and ethics Here for good underpins everything social purpose. have re-emerged as critical we do. It guides how we do business We believe our existing culture and tOur values attract employees to the and the decisions we make, whether t values put us in a good position to Bank and strengthen our strategic or operational achieve this and we aim to protect relationships with clients, and reinforce them all the times. customers, investors, regulators, colleagues and society.
Our distinctive strengths
Collaborative network Clients and customers Disciplined growth Combining global capability and Building deep and long term Delivering results without local knowledge compromising balance sheet relationships strength or control of risks and t We focus on the development tWe focus on carefully costs sectors within Ghana as the understanding our clients and Balance sheet strength is a Standard Chartered Group focuses customers immediate and future t on the fast growing economies in banking needs cornerstone of our strategy: Africa, Asia and the Middle East building a sustainable business and supported by superior insight and tWe develop products and services creating confidence with our clients deep local relationships. around those needs rather than and customers through our ability taking a purely product driven to continue lending in times of t We have a long history in Ghana, approach scarce liquidity. a total of 117 years, while in certain markets, Standard tBy anticipating industry trends, we tAs we grow, we aim to increase Chartered goes back more than aim to be innovative and are productivity and the scalability of 150 years. increasingly digitising our services. our business so we can invest even t Our two businesses, Consumer more in growth opportunities. Banking and Wholesale Banking, tWe believe that organic growth, work together as One Bank to rather than acquisitions, drives the create value. greatest value creation for our t The Group network, from which the shareholders. Standard Chartered Bank Ghana benefits, operates effectively across borders as well as between businesses and functions.
We have measured and rewarded our Courageous – We take measured risks Our values employees on the extent to which and stand up for what is right their behaviour at work supports the International – We value diversity and Our !ve core values are at the Bank’s values since 2003 work as One Bank heart of our culture and what we expect of our people We believe behaviour that re ects the Trustworthy – We are reliable, open values creates long-term value for our and honest shareholders, clients and customers while having a positive social and Responsive – We deliver relevant timely economic impact on society solutions for clients and customers Creative – We innovate and adapt, continuously improving the way we work 7 Standard Chartered Bank Ghana Annual Report 2012
Notice and Agenda
Notice is hereby given that the Annual General Meeting of Standard Chartered Bank Ghana Limited will be held at the National Theatre, opposite the Efua Sutherland Children’s Park, Accra on Thursday, 23rd May, 2013 at 11.00 am for the ordinary business of the Company.
Agenda
1. To receive the reports of the directors and auditors, the balance sheet as at 31st December, 2012 together with the profi t and loss and income surplus accounts for the year ended on that date.
2. To declare a dividend.
3. To elect a director.
4. To approve directors’ remuneration.
5. To approve the remuneration of the auditors.
SPECIAL RESOLUTION
6. To amend Rule 103 of the Company’s Regulations by removing the requirement for External Directors to retire from the Board at the age of 70.
A member of the Company entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of him/her. A proxy need not be a member.
A form of proxy is attached.
Dated the 14th day of February, 2013 BY ORDER OF THE BOARD
Dawn Kwesi Zaney (Board Secretary) 8
5-year Financial Summary overview Country
2008 2009 2010 2011 2012 GH¢'000 GH¢'000 GH¢'000 GH¢'000 GH¢'000
Interest income 110,402 155,492 213,941 195,775 222,725 Interest expense (34,134) (36,073) (61,193) (45,372) (52,982)
Net interest income 76,268 119,419 152,748 150,403 169,743
Commissions and fees 22,765 37,192 42,360 32,103 74,075 Other operating income 18,082 25,889 22,917 34,833 38,452
Net Revenue 117,115 182,500 218,025 217,339 282,270
Total operating expenses (71,568) (83,712) (102,936) (93,454) (105,059) Impairment loss (1,707) (15,074) (13,576) (9,847) (6,720)
Pro!t before taxation 43,840 83,714 101,513 114,038 170,491 Taxation (10,653) (26,217) (29,305) (36,362) (34,203)
Pro!t after taxation 33,187 57,497 72,208 77,676 136,288
Transfer to Statutory and Other Reserves (4,413) (14,231) (47,668) (17,288) (80,369)
Available for Distribution 28,774 43,266 24,540 60,388 55,919
Networth 89,461 159,578 195,981 232,576 311,349 Net Own Funds 86,510 155,874 139,610 183,830 247,287 Total Assets 984,944 1,404,213 1,667,882 1,971,062 2,390,684 Total Deposits 742,290 833,084 1,092,442 1,479,687 1,704,198 Loans & Advances 460,338 408,538 467,152 596,724 959,597
GH¢ GH¢ GH¢ GH¢ GH¢ Earnings per share 1.89 2.99 3.64 3.97 1.16* Proposed Final Dividend per share 1.50 2.47 1.27 3.05 0.47*
Return on Assets (PAT/Total Assets) 3% 4% 4% 4% 6% Return on Equity (PAT/Equity) 37% 36% 37% 33% 44% Capital Adequacy ratio 12% 22% 16% 17% 17% Cost/Income Ratio 61% 46% 47% 43% 37% *Values re ect post issue of bonus share position 9 Standard Chartered Bank Ghana Annual Report 2012
Chairman’s statement Consistent strategy
It is with a sense of great pride that I announce another impressive year of record income and pro!ts for the Bank. Despite a dif!cult year that was characterised by macroeconomic volatility and some economic uncertainty, Standard Chartered Bank has been able to surmount these challenges successfully to deliver yet another strong !nancial performance demonstrated through the business growth and the addition to shareholder value.
This demonstrates our ability to consistently deliver substantial and sustained value to our shareholders on the back of strong execution and a resilient business model. Here are some highlights:
t*ODPNFSPTFQFSDFOUUPGH¢283 million t1SPmUCFGPSFUBYJODSFBTFEQFSDFOUUPGH¢170 million t#BTJDFBSOJOHTQFSTIBSFQPTUFYFDVUJPOPGCPOVTJTTVF GH¢1.16* Ishmael Yamson Chairman On the back of this sterling performance and in anticipation of future growth prospects for the Bank, the “2012 was another year of good performance Board has approved a retention of GH¢67 million as for Standard Chartered, thanks to a statutory reserve from the 2012 profits to strengthen the consistent strategy, a stable management capital base of the Bank. Consequently, the Board is team, supportive clients, customers and proposing a final dividend per share (post bonus) of 47 pesewas per share compared to 51 pesewas per share shareholders, and above all, our great people. (post bonus) paid out last year. The Board remains confident for the year ahead” Ghana’s economy continues to derive great benefit from the Bank’s consistent performance over the years. The Key Highlights Bank has paid over GH¢130 million in corporate taxes over the last 5 years. Shareholders continue to benefit Basic earnings per share from impressive capital gains and dividend payouts as confidence in the Bank continues to grow. You would recall the recent execution of the 5 to 1 bonus share issue in November 2012 which saw the price of Standard G H ¢1.16* Chartered Bank Ghana shares predictably drop from 2011: GH¢3.97 GH¢63 to GH¢8 post bonus offer. Within 4 months, after the bonus share issue, the share price appreciated by over Dividend per share 70 per cent. In 2012, the loans and advances increased by 61 per cent from GH¢596.7 million in 2011 to GH¢959.6 million. The Bank continues to be an employer of choice in G H ¢0.47* Ghana and is attracting very high quality talent. 2011: GH¢3.05 *Values re ect post issue of bonus shares position 10 Country overview Country
Our consistent strong performance is underpinned by assignments elsewhere in the Group. Their replacements disciplined execution of our growth strategy through will be announced by the Bank shortly. respecting the basic tenets of good banking, adherence to our risk policies and procedures, deeper relationships with our existing clients and customers and leading the market In summary our record performance in 2012 is a re ection through innovative products and services. of a proven and sustainable business strategy reinforced by good governance oversight, a resilient operating model and a strong management capability. Through our Our brand promise, Here for good, remains an integral operating results, we are sending clear signals of our part of how we conduct our affairs around the globe appetite and growth ambitions for Ghana. Our long term including Ghana. This means we will do our best to view of Ghana’s prospects remains positive and we will exercise our day to day conduct to re ect our obligations continue to commit the necessary resources to ensure UPBMMTUBLFIPMEFST TIBSFIPMEFST DVTUPNFSTBOEDMJFOUT that Standard Chartered Bank plays an important role in employees, regulators and the communities in which we Ghana’s economic evolution. operate. Though we may not always get some things right, Here for good, remains the standard by which we will judge ourselves and expect to be judged by. It is who we are at our best and this means a lot to the Board, Management and Staff of the Bank. We will conduct our affairs in such a manner that will hopefully serve as the benchmark for Ghana’s banking industry and give even Ishmael Yamson greater relevance to “Here for good”. Chairman 26 February 2013 Ghana has reached a point in its economic and social development where there is the need for massive injection of capital to improve infrastructure to raise the economy’s overall effi ciency. In this regard, there is growing acceptance that Government alone can no longer bear the burden of seeking and providing investment resources to expand the country’s infrastructure. The shift towards a viable Public-Private Partnership (PPP) arrangement is very welcome and indeed timely as it will help to seek new methods, new expertise and more importantly to tap into new sources of fi nancing to accelerate infrastructure development in Ghana. Through its experience around the globe in other emerging markets, Standard Chartered Bank has the technical capability and expertise to help Ghana along a best practice PPP pathway. We will therefore be stepping up our dialogue and offering thought leadership with the relevant public agencies.
I want to use this occasion to thank Ahmad Pirzadah and Sanjay Rughani, two of our Executive Directors, who have come to the end of their respective assignments in Ghana. We thank them for their dedicated service and their contribution to the Bank’s impressive growth story in Ghana. Join me to wish them success in their new 11 Standard Chartered Bank Ghana Annual Report 2012
Chief Executive’s review Well positioned in an exciting market
It gives me pleasure once more to be present at this Annual General Meeting of Shareholders and together with my colleagues on the management team of Standard Chartered Bank Ghana, announce to you, yet another year of record income growth and pro!ts. Permit me to !rst of all acknowledge the contribution of each member of our Management and entire Staff body for this sterling performance. In the same vein, I acknowledge the oversight and contribution of our Board in what was quite a dif!cult and challenging year for the industry.
The achievements of 2012 were against numerous odds and challenges that the financial industry encountered during the year. While there are signs of weak growth in the global economy, this is clouded significantly by uncertainties around the Eurozone crisis, the political gridlock in the world’s largest economy, the United States of America and a slowdown in some of Asia’s biggest economies, led by China.
J. Kweku Bedu-Addo In the Challenges and Prospects for 2012 section of my Chief Executive report to shareholders last year, I mentioned the possibility of considerable headwinds that could affect business “Our results tell a compelling story – one of momentum in Ghana during the year. In addition to the uncertainty in the global economy, I identified potential consistency, discipline and focus in a very challenges in the interest rate environment and exchange volatile and uncertain business environment. rate stability in the immediate to short run. I also assured It also demonstrates the strength of our talent shareholders of the Bank’s long term view of Ghana and and the robustness of our approach to the resilience of our business. business. We expect to replicate this achievement in the coming years.” Our worst fears came to pass in 2012 but our confidence in our strategy and our model was also re-affirmed. Compared to 2011, the Ghanaian economy experienced significant volatility during the first half of the year, leading to an 18 per cent depreciation of the Ghana Cedi by half year 2012, a sharp hike in Treasury bill and Treasury bond rates and the introduction of a raft of policy measures by the Bank of Ghana to bring the resulting macroeconomic instability under control. These conditions described meant a reversal of the interest rate decline observed during 2011.
The regulatory framework in Ghana underwent significant transformation. Key among the changes that impacted the industry are the tightening of Anti-Money Laundering (AML) requirements, improving coverage on credit 12 Country overview Country
referencing with two new operators being licensed and the product knowledge and service behaviour. We are also strengthening of settlement and payments systems. The focusing on rolling out new products and services in line year also marked the deadline for local banks to meet the with the growth of the Ghanaian market and the high Bank of Ghana’s minimum capital requirements of GH¢60 expectations of our clients. million. This move is expected to further open up the banking industry and afford banks enhanced capacities to The Wholesale Bank remains a very strong and diversified handle big deals. business. The business recorded very impressive growth in its core business during 2012, re ecting the benefits of deepening our relationship with existing clients, Performance diversifying the sector exposure and continuously Our Bank’s remarkable success story in Ghana continues. improving our cross-selling abilities. Total revenue for the Last year, I assured shareholders of our commitment to Wholesale Bank grew by 26 per cent to GH¢168.1 million achieving double digit income growth while keeping a firm control on cost growth and improving the Earnings per while overall earnings grew by 51 per cent to GH¢127.5 Share (EPS) in 2012 relative to 2011. I am pleased to million. About three-quarters of the total revenue for the announce that we achieved that aim in 2012. The Bank Wholesale Bank was derived from client income. This achieved a year-on–year income growth of 30 per cent, trend is in line with the Bank’s aspiration to build a cost growth of 12 per cent, a profit growth of 75 per cent sustainable and well balanced Wholesale Bank business. and a rebased EPS of GH¢1.16 compared to GH¢0.66 in 2011. This means that over the last 5 years, the Bank’s As a Bank, we believe in always getting the basics right income has grown by a compound annual growth rate of and in charting a sustainable growth trajectory for the 25 per cent while its pre-tax profits have grown by 40 per business. Our results in 2012 demonstrate the cent. effectiveness of our operating model and it should provide all stakeholders with an assurance of the kind of institution we are and what we stand for. Our business origination and sales efforts were complemented by strong governance standards and attention to sound risk management to produce a stellar Due to the nature of our business and of our balance set of results for 2012. Both our Consumer Banking and sheet, the Bank was significantly impacted by the new Wholesale Banking businesses performed creditably in a Bank of Ghana guidelines on certain types of deposits, difficult business environment. thereby reducing the Bank’s overall liquidity. I am pleased to report that despite these significant challenges, the entire staff body with the support of our Board rose to the The Consumer Banking transformation journey which occasion and ensured a sterling outcome for the Bank’s started two years ago is beginning to yield good results. performance in 2012. Consumer Banking achieved a year-on-year income growth of 39 per cent to GH¢114 million and earnings growth of 43 per cent to GH¢43 million despite the Refreshing our priorities liquidity squeeze experienced on the market last year. The strong organic growth of the retail business is creating the The Standard Chartered Bank Group has reset its necessary headroom and confidence for new investment. priorities to re ect the ever changing context, complexities I am pleased to report the commencement of major and challenges. These priorities can be summarised along investment into our retail business through branch the following themes: expansion and digitisation of certain services. So far, about GH¢20 million has already been invested in new t$POUJOVJOHUPCVJMETUSPOHFSBOEEFFQFSMPOHUFSN branches and refurbishments of some existing branches. relationships with customers and clients. The strength of We expect this investment to continue into 2015. The our relationships forms the bedrock of our business investment in our retail business is being complemented t)FSFGPSHPPESBJTFTUIFCBSGPSBMMPGVTCVUJUSFNBJOT with a transformation project which is also well under way the right brand promise which in uences and drives our to upgrade the skill level of our branch staff by way of aspirations 13 Standard Chartered Bank Ghana Annual Report 2012
Chief Executive’s review continued
t*OOPWBUJPOBOEEJHJUJ[BUJPOBSFFYFSUJOHNBKPSJOnVFODFJO In 2013, we will continue to focus on maintaining the the transformation of the global banking landscape. We stability of the e-Channels and transaction processing will adopt a proactive stance to enable us adapt to the systems and also ensure a sound operating control expected changes to the industry environment. This will only be exceeded by our relentless focus on leveraging of our global system capabilities in t5IFBDUJWFDPMMBCPSBUJPOCFUXFFOPVSHMPCBMOFUXPSL solution delivery to meeting customers’ increasing needs. and our local presence continues to be a clear We will continue to invest in Innovation and Digitisation to differentiator in our markets and a strong facilitating continuously make banking easier and more convenient platform for cross border trade and investment for our valued clients and customers. t#VJMECVTJOFTTFTUIBUBSFmUGPSHSPXUI EFNPOTUSBUF operating efficiency and exible in the way we work Sustainability t$POUJOVFUPDSFBUFOFYUHFOFSBUJPOPGMFBEFSTUP Sustainability remains a mainstream item in our strengthen our succession planning process governance model. It is what ensures a good balance between opportunities today and in the future. During t%FMJWFSTVQFSJPSmOBODJBMSFTVMUTCZBMXBZTHFUUJOHUIF 2012, we increased funding to Small and Medium fundamentals right and sticking to strategy Enterprises by 100 per cent. We recognize the importance of a vibrant SME sector and we will continue to build scale In many ways, our business in Standard Chartered Bank into the business. Ghana has over the years recognised the importance of most of these themes but they also serve as a timely In line with the heightened requirement for awareness and reminder to remain on course and to ensure ownership of vigilance within the global banking industry for financial these priorities across the entire workforce. Our success crime, over a thousand employees completed training on in adopting these priorities will inevitably lead to the financial crime prevention procedures. creation of value for the benefit of all stakeholders.
Technology During the year, we also exposed our suppliers to guidelines on environmental and social guidelines and the In 2012, we invested substantially in technology roll out of the Standard Chartered Bank Supplier Charter infrastructure to support the business growth. We to encourage adoption. witnessed the launch of eOPs (electronic Operations platform) in our franchise. eOps is a unique Standard In 2012, Ghana was privileged to be selected, as part of Chartered initiative which provides a virtualisation the Bank’s Liverpool Football Club sponsorship platform, capability for efficient and effective transaction work ow to host the “Liverpool Soccer Clinic” for children. Liverpool and processing. This solution has won a number of Legend Ian Rush was the highlight of the three-day awards across the Standard Chartered Group’s global activity, which saw close to 300 children between the ages footprints. These include “The process excellence in of 8 and 16 years benefit from basic football lessons and account opening” by Banking & Payment Asia Trailblazer life skills like financial literacy, malaria prevention and HIV/ and Global Banking Technology award for Best Green IT AIDS. initiative by Financial Institutions globally. Our telephony infrastructure was changed to a state-of- the-art solution Our Employee Volunteering program, which is at the heart to demonstrate the value attached to our customers and of our commitment to the communities in which we live clients calls and feedback. We also undertook a number of and work, experienced a remarkable soar in staff process reengineering initiatives, supported by the QBSUJDJQBUJPO SFDPSEJOH WPMVOUFFSJOHEBZT BO deployment of productivity measurement tools which are increase of 153 per cent above the 2012 target of 753 now bearing results like substantially lower unit processing days. cost and improved customer service. We remain committed to accelerating service delivery efficiency in order to delight our customers and clients. 14 Country overview Country
Our “Seeing is Believing” Phase IV project, “Removing Outlook Barriers to Quality Eye care in Ghana” (RB2QE) delivered Global economic challenges will still linger around as the on its promise to provide 21 eye centres across six regions major economies continue to adjust from unsustainable with eye care equipment, signifi cantly positioning the key debt levels. This process is further complicated by the service delivery centres in the selected districts as crucial in uence of national politics and partisan or ideological sources of improved eye care. This positioning was further differences in the right policy tools required to counter this strengthened by training of eye care health professional crisis. It may therefore take some time for the world and equipment repair technicians. This has all been economy to rebound to pre crisis levels in 2008. possible following the excellent partnership we have built with Operation Eyesight International (OEU) and the Eye Unit of the Ghana Health Service. Some benefi ciary The global regulatory framework will continue to make institutions were the Amasaman Hospital, Korle-Bu more demands on banks by way of usage of capital, Teaching Hospital, Gambaga Hospital, Walewale Hospital, treatment of customers, product suitability and customer Bongo Hospital, Krachi Hospital, Nkwanta Hospital, appropriateness and greater transparency. Social Juaben Hospital, Nyinahin Hospital and Gushegu pressure will require that banks deliver more social Hospital. usefulness.
Management Changes Although Ghana’s economy has experienced some stress One of the hallmarks of our Management Team is its during the fi rst half of the year, the Bank continues to take diversity by way of gender and nationality. I am proud to a long term view of Ghana and its prospects. The recent lead this team. profi t retention sends a clear signal to the market on our growth ambitions in Ghana. The business results so far In 2012, a number of changes were made to our during the fi rst half of 2013 shows that the momentum Management team. Emmanuel Mayaki, Chief Information from 2012 has been carried through. However, from a risk Offi cer and Nana Araba Abban, Head of the Shared management stand point, it means we need to keep a Service Center both resigned from the Bank to pursue close eye on the key macroeconomic indicators and other interests. Consequently, Sheikh Jobe, a Gambian monitor the effects of any volatility that may arise. Our national was appointed as the new Chief Information commitment to you is that we will maintain our Offi cer for Ghana. His previous role was with the Bank in performance through healthy revenue growth, robust risk Singapore. Adalbert Rutaisire was also appointed to the management and good cost control. position of the new Head of our Shared Service Center. He is a Ugandan national and was previously based in We remain confi dent that we have the people, the systems Nairobi, Kenya. Finally, Victor Yaw Asante moved up to join and the processes to deliver superior fi nancial results in the Bank’s Management team on his appointment as the coming years. Our consistency will go a long way to Managing Director, Transaction Banking West Africa. enhance confi dence and attract new investment into the business in Ghana. Sanjay Rughani, Executive Director, Finance and Ahmad Pirzada, Executive Director, Origination and Client Coverage (O&CC) have come to the end of their assignments in Ghana. We thank them for their dedicated service to Standard Chartered Bank Ghana and wish them well in their future endeavours. Their replacements will be announced shortly once regulatory approvals are J. Kweku Bedu-Addo obtained. Chief Executive 26 February 2013 15 Standard Chartered Bank Ghana Annual Report 2012
People Bringing our culture and values to life
Through a diverse mix of over 1000 people Our highlights in 2012 representing 10 nationalities across the Bank, we We introduced performance differentiated pay which has bring together the complexities and bene!ts of a resulted in improved differentiated pay for top performers diverse workforce, thus, gaining a competitive advantage in the way we do business. Our belief in We have improved the employee relations environment our brand promise of Here for good determines how through the achievement of a multi-year wage negotiated agreement with organised labour, a comprehensive we do business in Ghana and motivates our people review of the Collective Agreement and the introduction of to consistently deliver outstanding performance. a local disciplinary policy and procedures We built on our performance culture by strengthening line Attracting and retaining talent manager capability which has improved the management of performance and increased engagement and Our strong employee value proposition, supported by our accountability across the businesses engagement strategies, have enabled us to keep our attrition levels low in order to grow and develop talent We focused on multiplying our leadership capability internally and safeguard our succession plans. Our strong through the introduction of a country Talent Council with oversight for the management of our High Potentials (HIPOs) employer brand enables us to attract the best talent in a challenging environment, in order to continually infuse fresh talent in our business. Our Priorities in 2013 These two key factors have made us successful in aligning Reinforce our brand promise, Here for good, as our core our business and talent strategies. We develop talent purpose in the behavior of our people, their decision internally through exposure to critical experiences and making and the way we do business. cross functional coaching whilst bringing in fresh talent as Improve succession planning through a strong leadership and when appropriate. This unique mix of talent has led to pipeline and sustain high performance and productivity in the delivery of our outstanding financial performance. We order to deliver the bank’s strategy to double its footprint remain committed to the development of a local leadership by 2015 pipeline to deliver the bank’s future strategy. Strengthen our employee value proposition through the right mix of talent management, career development Our graduate programs give opportunity for the best talent opportunities and reward and remain the employer of to join our bank and benefit from the structured choice in Ghana. development and rotational plan. This has led to the Strengthen our relationship with both internal and external development of a cadre of future leaders of Standard stakeholders through improved bench strength of our Chartered Bank. The year 2012 saw the recruitment of 3 human resources team to support the delivery of the International Graduates and 5 Fast Track Graduates Bank’s strategy whilst remaining in good standing with across Consumer Banking and Human Resources. our regulators Developing our leadership capabilities Employees Our leadership population in 2012 grew by 7.6 per cent, with 69 per cent of the new leaders rising from within the Bank. We have focused on building leadership capabilities 1047 across the bank through deliberate engagement People opportunities e.g. Leadership Conferences, workshops etc. These measures are to support managers to understand the way the bank works and improve their ability to collaborate and drive change in ambiguous 10 circumstances. Workshops were delivered by the Group Leadership facilitator on ‘Achieving Peak Performance’’ Nationalities which focused on improving managers’ ability to take ownership of their careers so as to achieve their aspirations. Leadership Effectiveness sessions were also run for the Senior Management team in order to 6 9 % strengthen their leadership skills. Proportion of new leaders recruited internally 16
1 2 1. Having needs-based conversations with a customer and addressing his Country overview Country needs. Ghana remains a key market for the Bank in Africa.
2. Sir John Peace, Standard Chartered Group Chairman engaging some of the Bank’s top talents in Accra during his visit in 2012
Managers have gained from these forums and workshops addressed and employee engagement maintained. This is and our HIPOs have also benefited from forums with further supported through Line Manager capability members of our Group Leadership when they have visited building to ensure accountability and authentic Ghana, enabling them to gain insight into how some of our conversations on career development continue within the Group leadership have achieved success within the bank. functions to drive employee engagement in the bank. Through all these efforts we kept attrition at 5.09 per cent in 2012. 25 of our managers attended the Great Manager Our culture and values program and other Leadership programs with 40 per cent of our HIPOs moving roles across and between The Bank’s distinct culture is a major attraction to our businesses to give them a broader understanding of the clients and customers and one of the main reasons why bank and prepare them to take up leadership positions in they stay with us. Our attention to solutions, compliance the future. and a well honed risk awareness means that we deliver consistently to clients and customers, shareholders, In 2012, we deepened our succession planning process to employees and other stakeholders. The way we do focus on the identification of successors for the Executive CVTJOFTTJTHVJEFECZPVSmWFDPSFWBMVFT $PVSBHFPVT Committee and two levels down and strengthen their Responsive, International, Creative and Trustworthy. development plans to ensure that the bank is able to deliver it’s Here for good agenda. We continue to enrich Our brand promise, Here for good, permeates our our talent from within and outside the country and 2012 relationships with our shareholders, regulators, employees saw the replacement of two Executive Committee and the communities we operate in. It is a simple yet members by highly skilled Standard Chartered employees compelling promise which says who we are, what we from Gambia and Uganda. stand for and what makes us different. It demonstrates how we consistently do the right thing and act responsibly and it is underpinned by our values and lived through our Business growth through Diversity and Inclusion day to day engagement. Our Diversity and Inclusion (D&I) agenda supports our brand, culture and delivery. All our people are supported Employee Relations in an inclusive manner which enables them to give of their very best as valued members of the bank taking We have over the last couple of years developed a very cognizance of the value they each bring to the Bank. stable employee relations (ER) environment which has helped the business to thrive and allowed us to focus on Gender diversity is a key area of focus and the Women productivity and performance. 2012 saw the introduction development progress and focus groups were attended of the performance differentiated pay policy and the by 16 women this year. Women represented 48 per cent recruitment of a dedicated Employee Relations (ER) of our staff in 2012 and we saw the first lady rise from Manager to support the embedding of ER governance within to take up the role of Head of Global Markets, structures. We brought on board in 2012, a new medical demonstrating the bank’s ability to drive high performance insurance provider and introduced annual wellness through diversity and locally developed talent. We checks for our employees. This was supported by successfully ran a second Career Fair for People with bespoke stress management workshops rolled out across %JTBCJMJUJFTJO+VMZ BUUSBDUJOHTQPOTPSTIJQGSPN the country to help employees take better care of Tullow and Chase Petroleum. We continue to partner with themselves. the Ghana Federation of the Disabled and Sight Savers in championing the promotion of employment opportunities As a Bank, we continue to lead the way in a futuristic ER for persons with disabilities. approach which draws on working collaboratively with organised labour within the local laws and in line with Group processes. The comprehensive review of the Building our employee engagement Collective Agreements with the Unions and the In 2012, we achieved a significant improvement in the development of a local disciplinary policy and procedures Gallup Organisation’s Q12 Employee Engagement Survey. have gone a long way to set the framework for employees A best in class Grand Mean (GM) score of 4.39 on a scale to focus on what matters. The welfare of our people of 1 to 5 demonstrated the high level of engagement of our remains paramount in the achievement of a fair ER employees which has contributed to the significant environment, thus, making the Bank an attractive place to financial performance of the bank as a whole. Particular work. We continue to build on our relationships with our attention will be paid to the two areas of ‘Cares about Me’ stakeholders including the unions and regulators whilst and ‘Progress’. Strategies and impact plans have already ensuring that we remain an employer of choice in this been deployed to ensure that these areas are properly market. 17 Standard Chartered Bank Ghana Annual Report 2012
People continued
Care4Ladies Plan
Performance and Reward We continue to improve our performance and reward mix to further align with our business strategy and ensure that we remain competitive in this market. The embedding of our Pay, Performance and Potential (P3) system together with our values ratings have gone a long way to develop the discipline of performance in the Bank. Line Manager Accountability and improved understanding of the system has led to more relevant and stretching job objectives and delivery underscored by reward. The improved focus on the authenticity of discussions has led to an overall uplift in children the management of performance. to raise Both line managers and employees have come together to benefit from the clarity and effectiveness of the process to deliver on the Bank’s strategy. The effectiveness of the 2 performance management system allows us to clearly differentiate rewards inspite of challenging budgetary hours a day demands. The continued recognition of high performers On call has led to the creation of a high performing environment supported by a robust compensation mix.. 24 Summary percent care In 2012, we drove a consistent people management agenda which built on past successes and was re ected for women strongly in our financial performance. The overall improvement in staff engagement and the stable like you employee relations environment were major contributors to the performance of the bank as a whole. 100 Our strategy remains focused on building an agile workforce that play to its strengths to achieve success both for the Bank and for each member of staff. This will be delivered through improved line manager capability and It’s good when women get the special care they deserve BDDPVOUBCJMJUZ EFWFMPQNFOUBOENBOBHFNFOUPGUBMFOUUP ESJWFUIF#BOLUPUIFOFYUMFWFMPGEFMJWFSZ UIF Each member of your family deserves unique care and attention, while you deserve health insurance that’s development of a strong leadership pipeline fuelled by tailored to you. Care4Ladies Plan from Standard Chartered Bank is a new insurance plan created especially local and international talent to deliver on our promise of for women, so it will be there, when you need support. Here for good. Peace-of-mind: Hospitalisation and Tailored to women: Female- Cash back: 10% of your premiums critical illness benefit, death and total related illness, maternity returned every 5 years if you haven’t 2013 will see a continued focus on our values and culture permanent disability complications claimed in order to continue on the trajectory of the successes of 2012 and our people will continue to act and deliver 0302 740100 standardchartered.com/gh business in a way that ensures that we are Here for good.
Underwritten by: Group overview 10% of your premiums 10% of your premiums : standardchartered.com/gh Cash back returned every 5 years if you haven’t returned every 5 years if you haven’t claimed
percent care care percent for women like you Female- hours a day children children to raise
0302 740100 for women, so it will be there, when you need support. for women, so it will be there,
2 Tailored to women: related illness, maternityrelated complications 24
On call 100 Hospitalisation and
Each member of your family deserves unique care and attention, while you deserve health insurance that’s health insurance that’s and attention, while you deserve Each member of your family deserves unique care tailored to you. Care4Ladies Plan from Standard Chartered Bank is a new insurance plan created especially created plan insurance new a is Bank Chartered Standard from Plan Care4Ladies you. to tailored Peace-of-mind: critical illness benefit, death and total permanent disability It’s good when women get the special care they deserve get the special care good when women It’s Care4Ladies Plan Care4Ladies Underwritten by: 19 Standard Chartered Bank Ghana Annual Report 2012
Sustainability Our social purpose
Sustainability and our business Our highlights in 2012 Banks have an essential role in a prosperous and GH¢63m of financing provided to small and healthy society. We believe that by running our medium-sized enterprises, an increase of 100 per operations well, standing by our clients and cent customers and investing in the communities where we operate, we can be a powerful force for good. 1205 staff completed financial crime risk training. 200 active suppliers provided with guidelines on our Our approach focuses on getting the basics of banking environmental and social standards through our right, making sure that we are financially stable with strong Supplier Charter governance and good sources of capital and liquidity, so Exceeded 1,153 days volunteered by our staff, an that we can create value for our shareholders and society achievement of 153 per cent of target. over the long run. Over 1,140 school children empowered through Over the last decade, we have continuously delivered for GOAL in 2012. our clients and customers, shareholders and communities. From 2008 to 2012, we increased our lending from GH¢460 million to GH¢960 million. Within the same period, our corporate tax contribution grew from Our priorities in 2013 GH¢10,653 million to GH¢34,203 million. Our staff strength rose from 632 to over 1000. Roll out and adopt our updated position statements We have three key priorities: contributing to sustainable Continue to improve our value proposition for our SME customers offering additional products and economic growth, being a responsible company and services investing in communities.
Strengthen our financial crime intelligence Contributing to sustainable economic growth capabilities and training resources Roll out revised Code of Conduct By providing finance efficiently and responsibly, we contribute to sustainable economic growth and job Develop our future leaders by providing additional creation. We are committed to supporting our clients and learning opportunities customers – helping businesses to set up, expand and Promote our target to reduce paper to 1 kg per full trade across borders, helping people to buy homes and time employee by 2020 grow their wealth for the future. Widening access to Increase our employee volunteering to 1,153 days. finance is a core tenet of our strategy, as is our commitment to providing finance that supports Introduce the Seeing is Believing innovation fund, sustainable development in our communities. supporting the development of new solutions to tackle avoidable blindness Sustainable !nance Revise and align our financial education curriculum Our main impact on people and the environment is globally. through the business activities we finance. We work closely with our clients and customers to manage potential environmental and social risks associated with our financing decisions and to identify opportunities to finance clean technologies. In 2011, the Standard Chartered Group launched a review of our financing position. As part of our commitment to sustainable finance, we aim to capture the growing opportunities presented by the emerging energy sector in Ghana. Since 2008 we have ensured that all our financing in this sector was in alignment with our relevant position statements and the Equator Principles, to which Standard Chartered is a signatory. 20
1 2 1 Standard Chartered volunteers engage
school children in a fi nancial literacy training overview Country session.
2 Environmental awareness is a key feature of the Bank’s efforts in ensuring a sustainable future for Ghana.
Access to ! nance screening systems and ensuring that our policies and We use our balance sheet to stand by our clients and procedures are effective and up to date. In 2011, as an customers through good times and bad. The lending we international institution, we aligned our existing anti-bribery provide to people and businesses helps to support job controls with the requirements of the new UK Bribery Act creation and economic development across our markets. 2010. In 2012, more than 1205 staff completed anti-bribery Enabling international trade to ourish is a key sustainable e-Learning, representing over 90 per cent of our staff. We business priority for Standard Chartered. We are also also undertook an enhanced Customer Due Diligence committed to extending access to fi nance for individuals initiative through which we ensured that our customers in and small businesses that have traditionally been Consumer Banking and Wholesale Banking provided underserved by fi nancial institutions. up-to-date information on their activities and businesses. Small and medium-sized enterprises (SMEs) play a crucial Responsible selling and marketing role in generating jobs and economic growth in this Responsible selling and marketing is integral to how we do market. In 2012, we continued to demonstrate our support business. In Consumer Banking, our Customer Charter for SMEs, increasing our lending to that sector by more outlines our commitment to treat customers fairly at all than 100 per cent from GH¢26 million in 2011 to GH¢63 times. In 2012, we continued to embed training on million in 2012 and assisting them to develop their capacity responsible selling to staff across Consumer Banking and to manage their businesses successfully. In partnership conducted compliance reviews of our investment product with PriceWaterHouseCoopers (PwC), we provided approvals, marketing materials and complaints handling. cutting edge training for 32 SME clients on key business Over 848 Consumer Banking employees in Ghana have skills, including marketing and accounting. completed the e-Learning on our Customer Charter.
Being a responsible company In Wholesale Banking, treating customers fairly is a requirement of our Code of Conduct and our Financial We want to deliver long-term value for our shareholders Markets’ Dealers Code of Conduct. In 2012, we regularly and society. This means having the right culture, assessed our policies, procedures and controls against structures and processes in place to ensure that we applicable regulatory guidelines and industry best practise strong governance, serve our clients and practice. customers well and provide a great workplace for our people. Doing what we can to combat fi nancial crime and People and values protect the environment and treating our customers fairly Our distinctive culture and values guide the way we do at all times are also crucial to this commitment. business, allowing us to deliver on our Here for good brand promise. We encourage a collaborative leadership Governance culture that values diversity and promotes inclusion. We Strong governance is central to our ability to deliver for focus on providing our people with learning and clients, customers and shareholders over the long-term. development opportunities so that they can grow We maintain the highest standards of compliance with personally and professionally. In 2012, 99 per cent of our local and international regulations. staff received training in Ghana. We reward people for The African Financial Market Academy based in Dubai in both what they achieve and for behaviour in line with our collaboration with Clifford Chance and Legal, Compliance values. & Global Markets Departments in Ghana organized a Environment symposium for staff of Bank of Ghana on Derivatives titled “The Key Principles” on 7 June 2012. We consider the environmental challenges across the communities where we operate and proactively manage Financial crime the direct impact of our operations. In 2012, we improved We continually work to prevent our products and services the energy effi ciency of our offi ces and branches by 10 per from being used for criminal fi nancing activity. In 2012, we cent and decreased our paper consumption by 2 per cent completed a Group-wide fi nancial crime risk per full time employee (FTE). We continue to stretch our transformation programme launched in 2011. To guard commitments, and set a new target to reduce paper against the risk of fi nancial crime within our business, we consumption to 1kg per FTE by 2020. focus on training our employees, strengthening our 21 Standard Chartered Bank Ghana Annual Report 2012
Sustainability continued
In partnership with the Ministry of Environment, we helped In Ghana, Living with HIV has since the dawn of the new plant 22,000 indigenous trees in strategic locations across millennium, gained a lot of momentum as a staff-led effort the country with a commitment to increasing the number to tackle HIV. Internally, our employees have received in subsequent years. counseling and have had the opportunity to benefit from free Voluntary Counselling and Testing (VCT) sessions. Suppliers In the past few years, the Living with HIV champions have Through our sourcing and procurement policies, we aim to carried their campaign to staff of organizations outside the support local businesses in our markets. In 2012, we Bank. These include media houses, corporate clients, the introduced the Standard Chartered Supplier Charter House of Parliament, tertiary institutions and communities which sets out the environmental and social standards we expect of our 200 active suppliers. We shared the Charter In other ways, the Bank has been driving the HIV/AIDS with almost 100 per cent of our suppliers in 2012, agenda by actively pursuing a thought-leadership strategy reinforcing the consistent standards and values we expect within the Ghana Business Coalition for HIV/AIDS, now across all of our markets. known as the Ghana Business Coalition for Employee Wellbeing (GBCEW). Furthermore our initiatives get to the Investing in communities community via our educational programmes and this directs assistance to the affected. Our sustainability as a business is closely intertwined with the health and prosperity of the communities where we In many of our communities, opportunities for the youth operate. Through employee volunteering and community are constrained by persistent unemployment, continued programmes, we work with partners to deliver initiatives gender inequality and limited access to education. GOAL, that promote positive social and economic outcomes for our global youth development programme, combines people in our markets. sports with life skills and financial literacy training to empower adolescent girls. In 2012, we launched this Employee volunteering initiative in Ghana and piloted the inclusion of boys to promote engagement on gender equality. Through this We actively encourage our staff to volunteer their time and initiative, 11,140 adolescents have been trained in Financial core skills to benefit their local communities. Each staff Literacy, Malaria Prevention and HIV awareness as of the member is entitled to three days of paid volunteering leave end of 2012. per year. In 2012, we set a record with employee volunteering reaching over 1,153 days, an achievement of In partnership with the Ghana Education Service, we 153 per cent of our country target of 753 days. continue to deliver Phase II of our Schools Desk Project. This project has been very successful in helping address Community programmes the classroom furniture challenge of deprived schools across the country. Under this initiative we are distributing Seeing is Believing is our global campaign to tackle 6600 desks to 66 deprived schools across the country avoidable blindness. From 2003 to 2012, we have over a three-year period. This translates into 22 schools impacted over 5million people in Ghana. receiving a set of 100 dual desks each, every year. So far a In 2012, we continued to deliver on our Seeing is Believing total of 4,500 dual desks have been formally presented to commitments under the “Removing Barriers to Quality Eye 45 schools across Ghana. care” project launched in 2010 Since 2006, when we launched ‘Nets for Life’, to create This year all 21 hospitals received their eye care equipment awareness on how to avoid the spread of malaria, the and medical consumables. Within the year under review, initiative has seen to the distribution of over 2.039 million an estimated 1.2 million people benefited directly from nets across 6 regions in the country alongside an improved eye care as a result of this initiative. awareness campaign on malaria prevention. As part of HIV/AIDS remain a serious challenge in many of the World Malaria Day celebrations in 2012, staff undertook an markets where we operate, impacting our staff, their Employee Volunteering activity at Adamrobe in the families and the broader community. In 2012, we Dangbe East District of the Greater Accra Region where strengthened our commitment to support awareness of they educated the community on Malaria prevention. HIV/AIDS through our workplace education programme, Living with HIV (LwHIV). We revised our comprehensive training toolkit to provide up to date information and resources to our staff and community partners. Group overview 20 2011 Jasmine Insertion date: Material date: 29 July 2011 Suit: Telephone: (65) 6324 3002 standardchartered.com T/Junction, 5 Kadayanallur 5 T/Junction, Street, Singapore 069183 4 mm 4C R 22 – 25 Jul ‘11, Here for good Bleed: Colour Specifications: Date In / Out & Rev No: with its conscience? Here for progress Can a bank balance its ambition Finance Asia Mag_Sapling (273h x 203w) mm NA deliver results, delivering them with a conscience matters more. deliver results, Descriptions: Size:Trim Area:Type We’re We’re working harder to create a brighter future for you. Our global guiding principles and ethical banking practices influence everything we do, from the customers we work with to the businesses we finance. By pursuing initiatives such as sustainable ventures, responsible forestry management and safer workplace conditions we’re making a real difference to communities and the environment. Because as important as it is to wìnníe SCGBM 21310 CMYK 21310SCGBM_FinAsia_Sap_273x203w.ai 1 7/25/11 12:34 PM 12:34 1 7/25/11 21310SCGBM_FinAsia_Sap_273x203w.ai Job Number: Initial / Name: Client: 23 Standard Chartered Bank Ghana Annual Report 2012
Standard Chartered Ghana in 2012 Consistent delivery and diversified growth
Our highlights and achievements in 2012 Consistent performance as evidenced by 5 consecutive years of profit growth Improved diversified income growth for most products and client segments with both businesses exhibiting continued positive momentum as they record strong double digit percentage increases Continued investments in both businesses whilst we remained disciplined on cost management Ensured a robust risk management process which has delivered portfolios with good credit quality in both businesses Exited 2012 with a liquid, well diversified balance sheet which will enable us to build on our growth strategy Sanjay Rughani Executive Director, Finance Further strengthened our capital position with Capital Adequacy Ratio (CAR) of 17.49 per cent “The Bank has delivered another record performance in 2012, as we continue to focus Our priorities in 2013 on the basics of banking including maintaining Wholesale Banking will continue with disciplined strong relationships with our clients and execution of the existing client-focused strategy with customers. We remain disciplined in the effective management of capital, liquidity and risk. execution of our strategy and have consistently invested for growth in our Consumer Banking will continue to improve business” footprint, reposition and diversify income streams whilst ensuring strong customer-centric focus Key performance We remain committed to capital and liquidity strength and will continue to proactively manage the Operating Income balance sheet The Bank is well positioned to seize opportunities as ¢ we continue to improve on our strong balance sheet G H 282m and risk management fundamentals 2011: GH¢217m
Profit before taxation G H ¢170m 2011: GH¢114m
Profit before taxation G H ¢136m 2011: GH¢78m
25 Standard Chartered Bank Ghana Annual Report 2012
Consumer Banking Meeting customer needs to build deeper relationships
Our Strategy Our strategy is based on three pillars: A unique country business model with a focus on key value segments Driving deeper customer relationships through service and solutions to meet customer needs Back-to-basics focus on cost, productivity, risk management and liquidity
Our Priorities in 2013 Remain committed to our strategy to drive sustainable growth Accelerate the roll out of digital and online/ mobile capabilities Deepen customer relationships and maintain focus on high value segments Andrew Okai Executive Director, Consumer Banking Continue to grow our balance sheet Improve productivity and remain disciplined on “We kept to our strategy and made significant cost strides in installing our customer value propositions for our key customer segments while focusing on delivering and aligning to their needs”.
Key highlights Customers on E-Statement (‘000) Operating Income G H ¢114m 84 2011: GH¢82m 62
Year-on-Year growth in Profit before tax 34 45% 2011: 7% 2010 2011 2012 26
Spotlight on 2012 Group overview Group Expanded our footprint with the opening of 3 new Leveraged technology to introduce a number of state-of-the art branches to enhance customer cutting-edge online banking solutions experience Launched first-in-the market investment services proposition to strengthen our wealth
management solutions capabilities review nancial ! and Operating
Business transformation remains on track tWe continued to deepen our relationship with our The Consumer Banking (CB) business delivered a priority customers through a series of engagements. As sterling performance in a year which was a result, the Net Promoter Score (NPS) for Priority characterised mainly by changing regulations and Banking which measures customer satisfaction levels increasing competition. Despite these challenges, went up remarkably from 37 in 2011 to 51 in 2012. the business achieved signi!cant successes as the Our customers’ experience remains at the heart of transformation journey from a product-led focus to everything we do. In line with this, we continued to customer centricity continued to yield positive invest in our customer touch points to give a distinctive results. Income grew by 39 per cent from GH¢82 experience which they recognise as unique to Standard million to GH¢114 million and pro!t went up by 43 Chartered. per cent from GH¢30 million to GH¢43 million. tIn order to improve efficiency and upgrade capabilities, we completed the migration of our contact centre Our balance sheet remains strong following aggressive operations to our Global centre in Bangalore to better deposit mobilisation in the second half of the year. serve our customers. We have also set up a Customer Liabilities grew by 14 per cent year-on-year while assets Care Unit to centralise and enhance the speedy increased by 77 per cent on the back of SME lending. We resolution of customer complaints. As a result, our First continued to manage risk tightly and remained prudent on Time Resolution improved to 87 per cent. cost management to create room for further investment in the franchise. tThrough our process improvement initiatives, we improved queuing time in our branches and reduced the We ended 2012 with an excellent set of results and a turnaround time for Personal loans to an average of five strong improvement on virtually all key metrics. The working days. business is in good shape and well placed to sustain further expansion, bolstered by the healthy growth in Building scale underlying fundamentals. We see huge opportunities in areas where we have competitive advantage and we are In 2011, the Bank approved the release of investments to poised to exploit them. embark on distribution network expansion and to accelerate the pace of our transformation. Three new Deepening customer relationships state-of-the-art branches, namely North Industrial Area (NIA), Westlands and Tema East were opened in the Our Customer Charter, launched in 2010, sets out our second half of 2012, setting the tone for redefining commitment to provide fast, friendly and accurate service modern-day branch banking in Ghana. Three offsite ATMs to deliver appropriate solutions to our customers’ financial were also deployed at strategic locations to bring banking needs and to reward their total banking relationship with closer to the doorstep of our customers. These us. It is underpinned by a standardised sales, service and investments will continue into 2015, highlighting the relationship management model, the Standard Chartered growing confidence in our market and the growth Bank Way. This enables our teams to deepen customer opportunities it offers. relationships centered on needs-based conversations. Technology will shape the way we do banking in the In furtherance of our aim to become the best international coming years and we look forward to capturing the bank, we kept to our strategy and made significant strides opportunity it presents. We made good progress on our in installing our customer value propositions for our key digital agenda, launching a number of cutting-edge customer segments, while focusing on delivering and functionalities on our online and mobile platforms. We aim aligning to the needs of our customers. to expand significantly our pace and scale of digitization tWe refreshed our SME proposition to create more value starting with our first all-digital branch at East Legon and and deepen relationship with customers in this segment. an enhanced mobile banking application by the second Our lending to this segment increased by more than 100 quarter of 2013. per cent. Building the SME business is a strategic priority. It has strong growth potential and is an area where we continue to demonstrate our distinctive contribution to the broader economy. 27 Standard Chartered Bank Ghana Annual Report 2012
Consumer Banking continued
Performance in 2012 Digitising access to banking 2012 was a great year for Consumer Banking as the business recorded high double digit growth in both brand Revenue and Profi t before tax. The growth in Revenue was driven by Interest Income on the back of strong growth in new car balance sheet and favourable interest rates. Net Interest Income (NII) increased by 36 per cent over the previous year. Cost was up by 38 per cent. The increase in Cost 1 was mainly on account of higher investment, accelerated project expenditure and staff costs. Revenue growth years outstripped Cost on an underlying basis. Discounting the one-off payment on voluntary retirement, Cost grew by 29 warranty per cent.
Our Consumer Transaction Business posted a growth of 30 per cent over the previous year in a highly competitive environment. There was a good uplift in our Visa Card 3 business following successful customer promotions targeted at increasing new card issuance and driving months to active card usage. These initiatives underpin our progress spread the towards cashless banking. payments Personal lending saw a marginal slowdown as the direct Standard Chartered has a vision to be the digital main impact of higher rates and increased participation by bank to its customers, offering a world-class multi channel various players across the fi nancial services industry experience throughout the customer’s life cycle. With our adversely impacted demand for loans. suite of remote banking channels, we believe we will meet their evolving needs and choices. Wealth Management continues to be a key focus area for 60 the Bank. We took advantage of our global capabilities to In Ghana, the Bank has been the pioneer of banking via launch a fi rst-in-the-market investment services electronic and digital platforms, starting with being the fi rst proposition to diversity our product suite and enhance our to introduce electronic banking and later SMS banking, solutions. Additionally, we rolled out two new which allows customers to access their accounts through bancassurance propositions, Care-4-Ladies and an the convenience of using their mobile phones. enhanced Funeral Support Plan. We are proud of our A recent study conducted by PriceWaterHouseCoopers leadership position in the Wealth Management business (PwC) stated that ‘’Bank customers will mainly operate and the coming year will see us leverage more strongly the their accounts using digital systems by 2015 as younger synergies with the Priority Segment. consumers drive demand for mobile and computer platforms.” Well placed to capture opportunities In line with this, the Bank has introduced a number of Overall, the Consumer Banking business performed very cutting-edge and secured electronic banking capabilities strongly and as we expand and modernise our network, which are designed to give customers 24/7 access to their we expect the trend to continue in 2013. We remain accounts without compromising customer experience. focused on our customer-led strategy as we continue to These include full self service functionalities on online It’s good to have the cash when you need it make gains and create opportunities to deliver superior banking platforms such as the ability to transfer funds fi nancial performance. That’s why we offer you Personal Loans that put the things you want and need within reach. securely around the world. Additionally, advancements in We see opportunities for growth in SME, Wealth technology has made it possible for our customers to be s (IGH LOAN AMOUNTS UP TO '(# s %XTENDED REPAYMENT PERIODS UP TO MONTHS Management and Digitisation with a key focus on able to register and access online banking through their s #OMPETITIVE INTEREST RATES s ,OAN TOP UPS WHEN YOU NEED ADDITIONAL CASH deepening our relationships with customers in the high Visa cards, thus, eliminating the need to fi ll out lengthy s .O SECURITY OR COLLATERAL REQUIRED s 7E CAN EVEN COME TO YOU value segments. 2013 will be an important year to advance application forms. Utility payments are made so much our growth agenda. Our business is increasingly aligned to easier through the bill-payment facility available on the needs of our customers and we are well positioned to Standard Chartered Online Banking. deliver on our brand promise to be Here for good. With further advancements in technology and consequent sophistication of our customers, we are well placed to meet their future demands and expectations with the To know more, call +233 302 740 100 or visit standardchartered.com/gh introduction of more innovative platforms and services.
(U) J00522 SCB GHn Personal loan A3 Car.indd 1 3/25/12 12:56 PM 29 Group overview Group Operating and ! and review nancial Operating brand 1new car years 3 warranty months to spread the 60 payments
It’s good to have the cash when you need it That’s why we offer you Personal Loans that put the things you want and need within reach. s (IGH LOAN AMOUNTS UP TO '(# s %XTENDED REPAYMENT PERIODS UP TO MONTHS s #OMPETITIVE INTEREST RATES s ,OAN TOP UPS WHEN YOU NEED ADDITIONAL CASH s .O SECURITY OR COLLATERAL REQUIRED s 7E CAN EVEN COME TO YOU
To know more, call +233 302 740 100 or visit standardchartered.com/gh
(U) J00522 SCB GHn Personal loan A3 Car.indd 1 3/25/12 12:56 PM 29 Standard Chartered Bank Ghana Annual Report 2012
Wholesale Banking Leveraging our expertise to build deep and long-term client relationships
Mansa Nettey Ahmad Bilal Pirzadah Head, Global Markets Executive Director, Origination and Client Coverage “2012 sets the tone for the increased focus on relationships and the continuous effort to “Our deep and long-standing client relationships leverage our expertise to the benefi t of our are the foundation of our strategy and underpin clients” the success of our business” Our strategy Deep client relationships and a consistent client led strategy Local knowledge and international network delivering unmatched access to products, capital and cross border capabilities Financial discipline and a strong balance sheet to support our clients and their future growth
Our Priorities in 2013 Key highlights Remain committed to our clear and consistent client-centric strategy with Commercial Operating Income Banking remaining core. Deepen our client relationships by increasing G H ¢168m our offering of client solutions to key client 2011: GH¢134m segments Manage our costs, capital, risk and balance Client income as a percentage of total income sheet to maximize our ability to support our clients 74% Strengthen our brand, people, diversity and 2011: 60% culture to serve clients better and outperform the competition 30
Spotlight on 2012 Group overview Group Financial results re ect sustained and disciplined Enhanced our foreign exchange and risk execution of strategy management solutions to cater to the need of clients Expanded our leadership in Financial Markets, against challenges and volatility witnessed in the Corporate Finance and Capital Markets by providing Ghanaian economy. innovative solutions to support our client’s needs Core bank to a record number of client relationships based on value per client
Setting the context - 2012 operating environment of our strategy to secure long-term shareholder value, as well as the diligence and fortitude of our team was the key 2012 was a volatile year characterised by a dramatic driver of our strong performance. weakening of the Cedi in the early part of the year due to trade related pressures, speculative activity, and concerns Total Revenue for the Wholesale Bank rose 26 per cent about potential increases in the fiscal deficit during an year-on-year to GH¢168.1 million in 2012, resulting in our election year. Since then, the currency has stabilised to a tenth consecutive year of business growth. This was large extent. The stabilization was mainly due to bold mainly on the back of the Origination and Client Coverage measures introduced by the Bank of Ghana, effective (O&CC) business which delivered approximately GH¢125 intervention in the interbank market, as well as strict million in revenue, representing 56 per cent growth in client enforcement of existing regulations regarding foreign revenues on a year on year basis. Overall Wholesale Bank currency usage in Ghana. This triggered a reversal of Trading Profit was up 51 per cent from last year. Our speculative holding of Foreign Exchange (FX) and enabled passion for providing client-driven solutions was the the Cedi to appreciate. Actions taken included tightening linchpin of our success in 2012 and enabled us to measures implemented by the authorities and successful introduce unique and often market leading solutions to our bond issuances in which foreign investors were significant clients. participants thereby increasing the country’s FX reserves. The tightening measures also resulted in a significant rise Commercial banking – Back to basics in interest rates that impacted Wholesale Banking clients Our Commercial Banking client offering that covers seeking bank capital to finance growth in business and Transactional Banking and vanilla-lending contributed capital expenditure. significantly to the Wholesale Bank’s performance, adding GH¢93 million to our franchise and delivering 43 per cent Key challenges included limited access to FX to meet year on year revenue growth at the end of 2012. Building client demand, and mark-to-market movements on Fixed on our strengths, we grew our Transaction Banking Income and ALM portfolios. However, through proactive business by 55 per cent year-on-year in 2012. The Bank’s management of our balance sheet and client needs cash management and trade solution businesses saw backed by superior financial and risk management landmark revenue growth. This improved performance techniques, we successfully mitigated our risks, closing was on the back of increased client deposits and working the year with a strong set of financial results while meeting capital solutions as we gained wallet-share through the client needs. Furthermore, using our suite of risk employment of cutting edge platforms such as management products, we extended our expertise using Straight2Bank. This strong performance in our core tailor-made solutions to our clients facing similar business was the foundation of our success in 2012 and challenges and helped them weather the volatility. we expect this to continue into 2013 and beyond. We continue to focus on our strategy, improving our core Performance in 2012 revenue base by adding new high quality clients to our Despite the significant challenges faced in 2012, our Wholesale Banking franchise and further deepening Wholesale Banking business delivered another year of relationships with existing clients to enhance wallet-share. solid financials. Our disciplined approach in the execution
Risk management in a The supply of petroleum products after products have been bought, dynamic business such as Diesel, Petrol, and Aviation exchange rate volatility, and the impact environment Turbine Kerosine (ATK) among others of volatile interest rates. is key to the Ghanaian economy as it Through the use of our extensive directly impacts general price levels as network, suite of products and well as the country’s capacity for innovative capabilities Standard growth and development. In the 2012 Chartered led the way in providing operating year, Standard Chartered derivative solutions that offered exibility not only met the funding requirements in meeting our clients’ needs as well as of our clients engaged in the business solutions that were affordable to them. of fuel supply, but also assisted them Our solutions helped in creating stability in the mitigation of various risks that for our clients, and positively impacted could adversely affect their the wider Ghanaian economy by Our commitment to our Here for good businesses. Such risks included the reducing the in ationary impact of fuel agenda ensured a consistent supply of impact of downward reference price shortages stemming from the above- fuel throughout the year under review movements mentioned challenges. 31 Standard Chartered Bank Ghana Annual Report 2012
Wholesale Banking continued
Within our Transactional Banking suite of products, offer Renminbi solutions to facilitate cross border trade Securities Services completed its second year with across the Ghana-China trade corridor. In 2013 we aim to Standard Chartered Bank Ghana. This continues to be a continue to deliver superior and comprehensive product successful acquisition for the Bank, aligning perfectly with offering to meet our clients more sophisticated needs. The our Cash Management capabilities and Financial Market Bank is also a major provider of capital to Ghana’s expertise. In 2012, the business grew its assets under Telecoms industry. In 2012, we reinforced our commitment custody by close to 100 per cent mainly on the back of to the industry by lead managing capital raising Government bond issuances. Additionally, reforms in transactions for two major Telecom operators in Ghana. Ghana’s pension management have opened up new We look forward to providing further support across opportunities for the custody business, contributing various sectors to the development of industries and significantly to the growth in our assets under Custody. services in 2013. New pension fund contributions were credited directly to custodians for the first time in December, 2012. The Outlook for 2013 resultant increase in transactional volumes and assets The world still faces considerable challenges. With under custody, have positioned the business for European economies under pressure and the US considerable revenue growth in 2013. stagnating, one of the big concerns is whether emerging economies will continue to drive global growth as they Building a business to support our clients have in recent years. Locally, developments in the Oil and Since launching our client-focused strategy in 2002, we Gas industry, government’s focus on infrastructure, and have made significant progress in strengthening our client the trickle down impact to the broader economy should relationships. We carefully understand our clients’ play a key role in boosting growth though the positive immediate and future financing needs and match our impact on Gross Domestic Product (GDP), especially as coverage and support accordingly. production from the Jubilee field approaches its peak. On a client segment basis, growth was driven mainly by Continued growth from the non-oil economy is expected. our Local Corporates, Financial Institutions and Global Whilst cement sales, social security contributions and Corporate segments which all delivered record revenue exports weakened ahead of the 2012 general elections, growth. These key performances were driven by a strong greater certainty afterwards culminated in rising liability base for lending, increased delivery of value added investment activity in the sovereign bond markets. In and risk management solutions to both public and private these, the overall perceived strength of the economy was TFDUPSDMJFOUT BTXFMMBTMBOENBSLUSBOTBDUJPOTTVDIB demonstrated by the oversubscription in 2013’s first bond US$1.5 billion syndication for the Ghana Cocoa Board auction on 10 January 2013, where foreign investors (COCOBOD). Our middle markets/domestic corporate participated heavily. business focused on deepening relationships with key A key question for 2013 is whether confidence in the FX clients in select industries. We were the banking partner of rate’s stability will persist alongside strong GDP growth choice for a key Local Corporate client’s waste and well managed in ation. The country’s fiscal balance management initiatives with the Government of Ghana, will also come under close scrutiny. Should this stability including the financing of a compost recycling plant. Our continue the economy in general and the banking sector in Steel manufacturing clients also saw increased financing particular will be well positioned to take advantage of the in support of growing demand for their products from the accompanying opportunity. construction industry. In 2013 we expect to continue building long term strategic relationships with clients in line In 2013 the Wholesale Bank will continue to diversify its with evolving business needs as well as those of the revenue base and seek to leverage our expertise and general economy. product offerings across the Group to deliver tailor-made solutions to our Ghanaian clients. We will continue to Our value add proposition maintain our structurally sound balance sheet and pursue In addition to our traditional commercial banking product responsible management of risk across the business. Our offering, we continue to lead the way in the market in commitment and support to our employees, other stake proving value added and risk management solutions to holders, and communities in which we operate will remain meet our clients evolving needs as they grow within the central to our strategy. This has enabled us to outperform dynamic business environment. Our FX and Risk the competition and will remain the basis of our business Management Solutions business was another key model in 2013 and beyond. contributor to our success in 2012 delivering more than 100 per cent year-on-year growth for the franchise. Products such as Loan Syndications, Debt and Capital Markets solutions, Structured Trade Finance and Financial Markets solutions relating to Commodity, Interest Rates and Currency Risk Management have become a regular feature in our product proposition. We also continue to 33 Group overview Group Risk review and capital and review Risk 34 Standard Chartered Bank Ghana Annual Report 2012
Can an international bank understand its local markets?
Your culture and beliefs matter to us. For 150 years, we’ve immersed ourselves in the countries where we do business. We have drawn on this experience to bring you world-class products and services that meet your individual needs. And we are helping hundreds and thousands of people buy their own home across Asia, Africa and the Middle East. We’re an international bank that’s truly at home in the world’s most diverse markets. Here for people Here for good
standardchartered.com
Client: SCGBM Descriptions: SG Banking & Financial_Hats Bleed: 5 mm Insertion date:
Job Number: 21313_S’pore Trim Size: (257h x 185w) mm Colour Specifications: 4C Material date: 12 Aug 2011 T/Junction, 5 Kadayanallur Street, Singapore 069183 Initial / Name: wìnníe Type Area: (227h x 155w) mm Date In / Out & Rev No: 5 – 5 Aug ‘11, R Telephone: (65) 6324 3002 Suits: Jasmine
CMYK 34
Corporate Information overview Group
BOARD OF DIRECTORS Ishmael Yamson (Chairman) Kweku Bedu-Addo (Chief Executive Officer) Sanjay Rughani Herbert Morrison Felicia Gbesemete Andrew Okai Ahmad Pirzadah Corporate governance Corporate Anil Dua (Appointed – 19 March, 2012)
SECRETARY Dawn Kwesi Zaney Standard Chartered Bank Building 6 John Evans Atta Mills High Street P. O. B ox 76 8 Accra
AUDITORS Deloitte & Touche Chartered Accountants 4 Liberation Road P. O. B ox G P 4 5 3 Accra Corporate governance Corporate
SOLICITORS Bentsi-Enchill Letsa & Ankomah 1st Floor Teachers’ Hall Complex Education Loop (off Barnes Road) Adabraka P. O. B ox G P 16 32 Accra
REGISTRARS Computershare Pan Africa Ghana Limited 23 Eleventh Lane Osu R.E. P. O. B ox CT 2215 Cantonments Accra
REGISTERED OFFICE Standard Chartered Bank Building 6 John Evans Atta Mills High Street P. O. B ox 76 8 Accra 35 Standard Chartered Bank Ghana Annual Report 2012
Board of directors
1 2 3 4
5 6 7
8 9
The Board is accountable for ensuring that, as a collective body, it has the appropriate skills, knowledge and experience to perform its role effectively. It provides leadership through oversight, review and by providing guidance whilst setting the strategic direction. 36 Group overview Group
1. Ishmael Yamson 2. J. Kweku Bedu-Addo 3. Anil Dua Chairman Chief Executive Officer Non-Executive Director Appointed to the Board on 1 Appointed to the Board on Appointed to the Board on 19 February, 2005. He is a former 1 December, 2010. Before March, 2012. He is also the Chief Executive and current his appointment, he was the Chief Executive Officer, Chairman of Unilever Ghana Executive Director for Standard Chartered, West Limited. He is also Chairman Origination and Client Africa. Prior to this, he was of MTN Ghana, Mantrac Ghana Limited and Benso Oil Coverage in Standard Global Head, Project & Export Palm Plantation Ghana Chartered Bank, Ghana. Finance & Structured Trade Limited. He is currently He also held the position Finance. He has also worked Chairman of the Ghana of Program Director for on a number of assignments Investment Promotion Centre Origination and Client across India, UK, USA and (GIPC) and member of the Coverage in Standard Botswana. National Development Chartered Bank, Singapore Planning Commission and has also served on the (NDPC). Board of the Bank in 6. Felicia Gbesemete Zambia. Non-Executive Director Appointed to the Board on 4. Ahmad Bilal Pirzadah 4 May, 2009. She is a Executive Director, Origination 5. Herbert Morrison lawyer and a founding and Client Coverage Non-Executive Director Partner and Director of Appointed to the Board on Appointed to the Board on Lexconsult & Co. She has 10 March, 2011. Before his 4 May, 2009. He is also served as a Vice appointment, he was Managing Partner of President of the Ghana Bar
Managing Director and Morrison and Associates, Association and currently governance Corporate Regional Head for Structured a firm of Chartered chairs the Governing Board Trade Finance and Financing Accountants, Tax and of the Ghana Broadcasting Solutions in Dubai and prior to Management Consultants. Corporation. that he was Head of Corporate Relationship in Bahrain. 8. Sanjay Rughani Executive Director, Finance 9. Dawn Kwesi Zaney Appointed to the Board on Board Secretary 7. Andrew Okai 26 January, 2007. He is also Appointed to the Board in Executive Director, responsible for finance October,1997. He is also the Consumer Banking across the Bank’s markets Area Head of Legal, West Appointed to the Board on in West Africa (excl Nigeria). Africa with responsibility for 1 December, 2010. Before Before his appointment, he Standard Chartered Ghana, his appointment, he was held the position of Sierra Leone, Gambia and involved with Strategy and Executive Director for Cote D’Ivoire. corporate governance in the Finance in Standard office of the Chief Executive Chartered Bank, Tanzania in Hong Kong. He has also and prior to that he was the served in various capacities Regional Finance Manager in Wholesale Banking, for Africa. Consumer Banking and General Management divisions in different locations within the Standard Chartered Group. 37 Standard Chartered Bank Ghana Annual Report 2012
Senior management The Ghana Executive Committee as of 1 April 2013, comprises the executive directors of Standard Chartered Bank Ghana Limited, the Area Head of Legal, West Africa and Board Secretary and the following senior executives:
1 2 3
4 5 6
7 8 38 Group overview Group Corporate governance Corporate 39 Standard Chartered Bank Ghana Annual Report 2012
Ghana Standard Chartered is Ghana’s premier bank with a staff strength of over 1000 who deliver consistent performance to support the Bank’s Here for good agenda 40 41 Standard Chartered Bank Ghana Annual Report 2012
Report of the directors To the Members of Standard Chartered Bank Ghana Limited
The Directors in submitting to the shareholders The Directors are recommending a dividend of GH¢0.47 their report and ! nancial statements of the Bank for per share for ordinary shares amounting to the year ended 31 December 2012 report as follows: GH¢54.3million.
Directors’ Responsibility for the Financial Statements In accordance with Section 29(c) of the Banking Act, 2004 The Bank’s Directors are responsible for the preparation (Act 673), as amended by the Banking (Amendment) Act, and fair presentation of these fi nancial statements in 2007 (Act 738), a cumulative amount of GH¢123.2 million accordance with International Financial Reporting has been set aside in a Statutory Reserve Fund from the Standards, and in the manner required by the Companies Retained Earnings (Income Surplus Account). The Code, 1963 (Act 179), and the Banking Act, 2004 (Act cumulative balance includes an amount set aside from the 673), as amended by the Banking (Amendment) Act, 2007 retained earnings during the year. (Act 738); and for such internal control as the Directors Nature of Business determine is necessary to enable the preparation of The Bank is licensed to carry out Universal Banking fi nancial statements that are free from material business in Ghana. misstatement, whether due to fraud or error. There was no change in the nature of the Bank’s business The Directors have made an assessment of the Bank’s during the year. ability to continue as a going concern and have no reason to believe that the business will not be a going concern in Holding Company the year ahead. The Bank is a subsidiary of Standard Chartered Holdings (Africa) B.V., a company incorporated in The Netherlands. Financial Statement and Dividend GH¢’000 Subsidiary The Bank liquidated one of its subsidiaries Standard Profi t for the year was 136,288 Chartered Financial Services Limited during the year. No Less: Transfer to Statutory Reserve Fund gains or loss was realized on the liquidation. The and Other Reserves of (80,369) remaining subsidiary, Standard Chartered Ghana Nominees Limited did not carry out operational activities leaving a balance of 55,919 during the year. The subsidiary’s fi nancial statements have to which is added balance on Retained not been consolidated. The ultimate parent produces a Earnings (Income Surplus Account) brought consolidated fi nancial statement which is available for forward (excluding balance on Statutory public use that complies with International Financial Reserve Fund and Other Reserves) of 66,560 Reporting Standards. giving a cumulative amount available for Approval of the Financial Statements distribution of 122,479 The fi nancial statements of the Bank, as indicated above, were approved by the Board of Directors on 14 February, out of which was paid a fi nal dividend for 2013 and were signed on their behalf by: 2012 of GH¢3.05 per share for ordinary shares and GH¢0.0324 per share for March 2012 and GH¢0.0409 per share for September 2012 for preference shares amounting to (59,998) KWEKU BEDU-ADDO leaving a balance on the Retained Earnings DIRECTOR (Income Surplus Account) carried forward of 62,481
SANJAY RUGHANI DIRECTOR 42
Independent Auditor’s Report overview Group To the Members of Standard Chartered Bank Ghana Limited
Report on the Financial Statements Opinion We have audited the fi nancial statements of Standard In our opinion, the fi nancial statements give a true and fair Chartered Bank Ghana Limited which comprise the view of the fi nancial position of Standard Chartered Bank statement of fi nancial position at 31 December 2012, the Ghana Limited at 31 December 2012, and its fi nancial statements of comprehensive income, changes in equity, performance and cash ows for the year then ended in and cash ows for the year then ended, and notes to the accordance with International Financial Reporting fi nancial statements, which include a summary of Standards and in the manner required by the Companies signifi cant accounting policies and other explanatory Code, 1963 (Act 179), and the Banking Act, 2004 (Act notes as set out on pages 41 to 92. 673), as amended by the Banking (Amendment) Act, 2007 (Act 738). Directors’ Responsibility for the Financial Statements The Bank’s Directors are responsible for the preparation Report on Other Legal and Regulatory Requirements and fair presentation of these fi nancial statements in accordance with International Financial Reporting Standards, and in the manner required by the Companies Code, 1963 (Act 179), and the Banking Act, 2004 (Act 673), as amended by the Banking (Amendment) Act, 2007 We have obtained all the information and explanations (Act 738); and for such internal control as the directors which, to the best of our knowledge and belief, were determine is necessary to enable the preparation of necessary for the purpose of our audit. fi nancial statements that are free from material misstatement, whether due to fraud or error. In our opinion, proper books of account have been kept, governance Corporate and the statements of fi nancial position and Auditor’s Responsibility comprehensive income are in agreement with the books Our responsibility is to express an opinion on these of account. fi nancial statements based on our audit. We conducted The Bank’s transactions were within its powers, and the our audit in accordance with International Standards on Bank generally complied with the relevant provisions of the Auditing. Those standards require that we comply with Banking Act, 2004 (Act 673), as amended by the Banking ethical requirements and plan and perform the audit to (Amendment) Act, 2007 (Act 738). obtain reasonable assurance as to whether the fi nancial statements are free from material misstatement. Financial statements and notes and statements Financial An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, Felix Nana Sackey whether due to fraud or error. In making those risk assessments, the auditor considers internal control Practising Certi! cate Licence No.: ICAG/P/1131 relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also Licence Number: ICAG/F/026 includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting Chartered Accountants estimates made by management, as well as evaluating the Deloitte & Touche overall presentation of the fi nancial statements. We believe that the audit evidence we have obtained is 26 February, 2013 suffi cient and appropriate to provide a basis for our audit opinion. 43 Standard Chartered Bank Ghana Annual Report 2012
Income Statement For the year ended 31 December 2012
2012 2011 Notes GH¢’000 GH¢’000 Interest Income 8 222,725 195,775 Interest Expense 9 (52,982) (45,372) Net Interest Income 169,743 150,403 Fees and commission income 10 74,075 32,103 Other Operating Income 11 38,452 34,833 Non – interest income 112,527 66,936 Operating Income 282,270 217,339 Operating Expenses 12 (105,059) (93,454) Operating profit before impairment loss and Taxation 177,211 123,885 Impairment Loss 14 (6,720) (9,847) Pro!t before Taxation 170,491 114,038 Corporate Tax 16(i) (34,203) (30,660) National Fiscal Stabilisation Levy 16(ii) - (5,702) Pro!t for the year 136,288 77,676
Basic earnings per share (Ghana Cedi per share) 37(ii) GH¢1.16 GH¢3.97
Rebasing EPS (new shares) GH¢1.16 GH¢0.66 Group overview Financial statements and notes 44 ’000 2011 4,967 ¢ 63,649 77,676 (14,027) (18,994) GH ’000 2012 2,483 4,573 ¢ (2,090) 138,771 136,288 GH financial assets: financial Total Comprehensive Income for the year Other Comprehensive Income Comprehensive Other Net amount transferred to the income statement income the to transferred amount Net Other Comprehensive Income Comprehensive Other sale for available of value fair in change Net tax of net equity, in directly recognised Gains/(Losses) Profit for the year the for Profit Statement of Comprehensive Income Comprehensive of Statement DecemberyearendedtheFor 31 2012 The notes on pages 49 to 94 form an integral part of these financialstatements.these of partintegral an form 94 to 49 pages on notes The 45 Standard Chartered Bank Ghana Annual Report 2012
Statement of Financial Position At 31 December 2012
2012 2011 Notes GH¢’000 GH¢’000 Assets Cash and Balances with Bank of Ghana 18 515,468 159,872 Short –Term Government Securities 19(i) 177,098 170,104 Due from other Banks and Financial Institutions 20 155,473 479,245 Loans and Advances 21 959,597 596,724 Other Assets 24 127,615 68,848 Medium -Term Investments in other securities 19(ii) 425,148 469,322 Equity Investment 19(iii) 1 100 Property and Equipment 22 23,315 18,291 Intangible Assets 23 6,969 8,146 Deferred Taxation 17 - 410 Total Assets 2,390,684 1,971,062 Liabilities Customer Deposits 26 1,704,198 1,479,687 Due to other Banks and Financial Institutions 27 4,741 10,261 Provisions 30 50,160 40,828 Borrowings 31 193,166 90,976 Interest Payable and other Liabilities 29 119,718 110,068 Taxatio n 16(ii) 1,889 6,666 Deferred Taxation 17 5,463 - Total Liabilities 2,079,335 1,738,486 Shareholders’ Funds Share Capital 32(i) 61,631 61,131 Retained Earnings 32(ii) 62,481 66,560 Statutory Reserve Fund 32(iii) 123,175 56,139 Credit Risk Reserve 32(iv) 50,908 36,898 Other Reserves 32(v) 13,154 11,848 Total Shareholders’ Funds 311,349 232,576
Total Liabilities and Shareholders’ Funds 2,390,684 1,971,062 Net Assets Value per Share (Ghana Cedi per share) 37(i) 2.7 12.1 Rebasing with (new shares) Ghana Cedi per share 37(i) 2.7 2.0
These fi nancial statements were approved by the Board of Directors on 14 February, 2013 and signed on its behalf by:
Kweku Bedu-Addo Sanjay Rughani Director Director The notes on pages 49 to 94 form an integral part of these fi nancial statements. Group overview Financial statements and notes - - - - - 46 ’000 fund Total Total ¢ (59,998) 136,288 GH Shareholders’ Shareholders’ - - - - - ’000 2,4832,483 2,483 2,483 2,483 138,771 ¢ Other (1,177) GH Reserves ------’000 Risk ¢ Credit 36,898 11,848 232,576 14,010 14,010 (1,177) 50,908 13,154 311,349 Reserve GH ------’000 ¢ 56,139 67,036 67,036 123,175 Reserve GH Statutory - - ’000 (500) (500) 1,177 ¢ 62,481 66,560 (14,010) (67,036) (59,998) (80,369) 136,288 136,288 GH Earnings Retained ------500 500 ’000 ¢ 61,131 Share 61,631 Capital GH 49 to 94 form an integral part of these financialstatements.these of partintegral an form 94 to 49
Regulatory and other reservesother Regulatoryand reserve statutory to Transfer reserve risk credit to Transfer Gains recognised directly in equity in directly recognised Gains income comprehensive other Total comprehensiveincome Total year the for Profit for the year the for Profit Balance at 31 December 2012 December 31 at Balance Transfer from other reserves other from Transfer reserves from and to transfers Total shareholders to Dividend Transfer to share capital share to Transfer Balance at 1 January 2012 January 1 at Balance The notes on pages on notes The Statement of Changes in Equity in Changes of Statement DecemberyearendedtheFor 31 2012 47 Standard Chartered Bank Ghana Annual Report 2012
Statement of Changes in Equity For the year ended 31 December 2011
Credit Total Share Retained Statutory Risk Other Shareholders’ Capital Earnings Reserve Reserve Reserves Funds GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Balance at 1 January 2011 61,131 32,049 46,430 29,319 27,052 195,981
Profit for the year - 77,676 - - - 77,676
Gains recognised directly in equity - - - - (18,994) (18,994) Net amount transferred to the income statement - - - - 4,967 4,967 Total other comprehensive income - - - - (14,027) (14,027) Total comprehensive income for the year - 77,676 - - (14,027) 63,649
Regulatory and other reserves Transfer to statutory reserve - (9,709) 9,709 - - - Transfer to credit risk reserve - (7,579) - 7,579 - - Transfer from other reserves - - - - (1,177) (1,177) Total transfers to and from reserves - (17,288) 9,709 7,579 (1,177) (1,177)
Dividend to shareholders - (25,877) - - - (25,877)
Balance at 31 December 2011 61,131 66,560 56,139 36,898 11,848 232,576
The notes on pages 49 to 94 form an integral part of these financial statements. Group overview Financial statements and notes - 48 34 ’000 2011 - 2,845 9,847 2,361 ¢ (7,275) (1,756) (1,756) 20,812 10,065 40,324 (33,984) (92,407) (25,877) 186,583 152,599 114,038 126,764 387,245 124,966 514,151 639,117 GH (139,419) (161,887) (25,877) - ’000 2012 9,650 9,332 4,125 6,720 ¢ 48,890 99,695 31,824 (6,994) (5,520) (6,666) (7,972) (7,873) 224,511 102,190 135,035 170,491 181,336 639,117 670,941 (58,767) (28,674) (59,998) (59,998) (369,593) GH 99 Net cash from operating activities operating from cash Net activitiesinvesting from " ows Cash liquidated Investments Equity Provisions Borrowings operatingactivitiesgeneratedfrom Cash paid tax Income Tax adjustments Loans and advances and Loans assets Other deposits Customer banks other to due Amounts liabilities other payable, Interest Write-offs trading of purpose the for held those than other Investment trading for held Investments Profit before taxbefore Profit Depreciation assets financial on Impairment ows from operatingactivitiesfrom "ows Cash Cash and cash equivalents at 31 December 31 at equivalents cash and Cash nancing activities!nancingfrom " ows Cash paid Dividend activities !nancing in used cash Net equivalents cash and cash in increase Net January 1 at equivalents cash and Cash Purchase of property and equipment and property of Purchase activities investing in used cash Net The notes on pages 49 to 94 form an integral part of these financialstatements.these of partintegral an form 94 to 49 pages on notes The Statement of Cash Flows Cash of Statement DecemberyearendedtheFor 31 2012 49 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
1. Reporting Entity 3. Signi!cant Accounting Policies
Standard Chartered Bank Ghana Limited is a Bank The accounting policies set out below have been applied incorporated in Ghana. The address and registered office consistently to all periods presented in these financial of the Bank can be found on page 34 of this annual report. statements by the Bank. The Bank operates with a Universal Banking license that allows it to undertake Banking and related activities. a. Revenue Recognition Interest income and expense on available-for-sale assets and financial assets and liabilities held at amortised cost, 2. Basis of Preparation are recognized in the income statement using the effective interest method. a. Statement of compliance The financial statements have been prepared in Gains and losses arising from changes in the fair value of accordance with International Financial Reporting financial assets and liabilities held at fair value through Standards (IFRS) and its interpretations as issued by the profit or loss, as well as any interest receivable or payable, International Accounting Standards Board (IASB). is included in the income statement in the period in which they arise. Gains and losses arising from changes in the b. Basis of measurement fair value of available-for-sale financial assets, other than The financial statements are presented in Ghana Cedis foreign exchange gains and losses from monetary items, which is the Bank’s functional currency. They are are recognised directly in equity, until the financial asset is prepared on the historical cost basis except for the derecognised or impaired at which time the cumulative following assets and liabilities that are stated at their fair gain or loss previously recognised in equity is recognised value: derivative financial instruments, financial in the income statement. Dividends are recognised in the instruments at fair value through profit or loss and financial income statement when the Bank’s right to receive instruments classified as available-for-sale. payment is established. c. Use of estimates and judgement b. Interest Income and Expense The preparation of financial statements in conformity with Interest income and expense is recognised in the income IFRS requires management to make judgement, estimates statement using the effective interest method. The and assumptions that affect the application of policies and effective interest rate is the rate that discounts estimated reported amounts of assets, liabilities, income and future receipts or payments through the expected life of expenses. The estimates and associated assumptions the financial instruments or, when appropriate, a shorter are based on historical experience and various other period, to the net carrying amount of the financial asset or factors that are believed to be reasonable under the financial liability. The effective interest rate is established circumstances, the results of which form the basis of on initial recognition of the financial asset or liability and is making the judgement about carrying values of assets and not revised subsequently when calculating the effective liabilities that are not readily apparent from other sources. interest rate, the Bank estimates cash ows considering all Actual results may differ from these estimates. contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all The estimates and underlying assumptions are reviewed fees received or paid between parties to the contract that on an ongoing basis. Revisions to accounting estimates are an integral part of the effective interest rate, transaction are recognised in the period in which the estimate is costs and all other premiums or discounts. Transactions revised if the revision affects only that period or in the costs are incremental costs that are directly attributable to period of the revision and future periods if the revision the acquisition, issue or disposal of a financial asset or affects both current and future periods. In particular, liability. information about significant areas of estimation uncertainty and critical judgements in applying accounting When a financial asset or a group of similar financial assets policies that have the most significant effect on amounts have been written down as a result of impairment, interest recognised in the financial statements are described in income is recognised using the rate of interest used to notes 3h (ix), 3h (xi), 3h (xii) 35 and 43. Group overview Financial statements and notes 50 Financial Assets and Liabilitiesand AssetsFinancial Date of recognition of Date
classified as finance leases. Upon initial recognition the the recognition initial Upon leases. finance as classified lower the to equal amount an at measured is asset leased lease minimum the of value present and value fair its of leased the recognition, initial to Subsequent payments. accounting the with accordance in for accounted is asset asset. that to applicable policy leases. operating as classified are leases Other held at fair value through profit or loss, or at amortised at or loss, or profit through value fair at held its of categorisation the determines Management cost. recognition. initial at liabilities and assets financial (iii)Financial liabilitiesassetsandthroughvaluefair atheld loss or t ! pro assets financial sub-categories: two has category This fair at designated those and trading, for held liabilities and asset financial A inception. at loss or profit through value as an expense in the period in which termination takes takes termination which in period the in expense an as place. are leases finance under made payments lease Minimum reduction a and expense finance the between apportioned is expense finance The liability. lease outstanding the of to as so term lease the during period each to allocated the on interest of rate periodic constant a produce liability. the of balance remaining g. (i) on recognised initially are liabilities and assets financial All party a becomes Bank the that date the i.e., date, trade the This instrument. the of provisions contractual the to financial of sales or purchases trades: way regular includes frame time the within assets of delivery require that assets the in convention or regulation by established generally place. market liabilities and assets !nancial of Categorisation (ii) following the in assets financial its classifies Bank The profit through value fair at held assets financial categories: available-for-sale and receivables and loans loss; or either as classified are liabilities Financial assets. financial (ii) Lease payments Lease (ii) to charged are leases operating under made Payments the over basis straight-line a on statement income the terminated is lease operating an When lease. the of period required payment any expired, has period lease the before recognised is penalty of way by lessor the to made be to eases L ForeignCurrencyReference – Rate Other Operating Income Operating Other Fees and CommissionsandFees
f. cationClassi! (i) risks the all substantially assumes Bank the that Leases are asset underlying the of ownership of rewards and assets and liabilities are translated at historical exchange exchange historical at translated are liabilities and assets date the at rates exchange or cost historical at held if rates the and value, fair at held if determined was value fair the are losses and gains exchange foreign resulting shareholders’ or statement income the in recognised appropriate. as equity and selling of the underlying inter-bank foreign exchange exchange foreign inter-bank underlying the of selling and Ghana. – Bankers of Association the by quoted as rate the from resulting losses and gains exchange Foreign translation the from and transactions, such of settlement and assets monetary of rates exchange year-end at are currencies, foreign in denominated liabilities Non-monetary statement. income the in recognised Other operating income comprises other income including income other comprises income operating Other trading in changes value fair on arising losses or gains sale for available derecognised liabilities, and assets differences. exchange foreign and assets, financial e. buying the of average the are used rates transaction The performed. to mainly relates expense commission and fees Other the as expensed are which fees, service and transaction received. are services d. instruments are included in the measurement of the the of measurement the in included are instruments rate. interesteffective account including income, commission and fees Other sales fees, management investment fees, servicing and fees arrangement and placement commission, are services related the as recognised are fees syndication recognised in the income statement in the period they they period the in statement income the in recognised arise. c. an are that expenses and income commission and Fees financial on rate interest effective the of part integral discount the future cash ows for the purpose of of purpose the for ows cash future the discount loss. impairment the measuring and assets financial on expense and income Interest is loss or profit through value fair at held liabilities Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 51 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
or liability is classified as trading if acquired principally for (viii) Derecognition the purpose of selling in the short term. Financial assets are derecognised when the right to Financial assets and liabilities may be designated at fair receive cash ows from the financial assets has expired or value through profit or loss when the designation where the Bank has transferred substantially all the risks eliminates or significantly reduces a measurement or and rewards of ownership. Any interest in the transferred recognition inconsistency that would otherwise arise from financial assets that is created or retained by the Bank is measuring assets or liabilities on a different basis, or a recognised as a separate asset or liability. group of financial assets and/or liabilities is managed and Financial liabilities are derecognised when the contractual its performance evaluated on a fair value basis. obligations are discharged, cancelled or expire. (iv) Loans and receivables (ix) Fair value measurement Loans and receivables are non-derivative financial assets The Bank measures fair values using the following fair with fixed or determinable payments that are not quoted in value hierarchy that re ects the significance of the inputs an active market. used in making the measurements: (iv) Available for sale !nancial assets Level 1: Quoted market price (unadjusted) in an active market Available-for-sale assets are those non-derivative financial for an identical instrument. assets that are designated as available for sale or are not Level 2: Valuation techniques based on observable inputs, classified as financial assets at fair value through profit or either directly (i.e., as prices) or indirectly (i.e., derived from loss, loans and receivable and held to maturity. prices). This category includes instruments valued using (v) Financial liabilities measured at amortised cost quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets This relates to all other liabilities that are not designated at that are considered less than active; or other valuation fair value through profit or loss. techniques where all significant inputs are directly or indirectly observable from market data. (vi) Initial recognition Level 3: Valuation techniques using significant unobservable Purchases and sales of financial assets and liabilities held inputs. This category includes all instruments where the at fair value through profit or loss, available for sale valuation technique includes inputs not based on observable financial assets and liabilities are recognised on trade- data and the unobservable inputs have a significant effect on date (the date the Bank commits to purchase or sell the the instrument’s valuation. This category includes instruments asset). Loans and receivables are recognised when cash that are valued based on quoted prices for similar instruments is advanced to customers or borrowers. where significant unobservable adjustments or assumptions are required to re ect differences between the instruments. Financial assets and liabilities are initially recognised at fair The determination of fair values of quoted financial assets value plus directly attributable transaction cost except for and financial liabilities in active markets are based on those that are classified as fair value through profit or loss. quoted market prices or dealer price quotations. If the (vii) Subsequent measurement market for a financial asset or financial liability is not Available for sale financial assets are subsequently actively traded, the Bank establishes fair value by using measured at fair value with the resulting changes valuation techniques. These techniques include the use of recognised in equity. The fair value changes on available arms’ length transactions, discounted cash ow analysis, for sale financial assets are recycled to the income and valuation models and techniques commonly used by statement when the underlying asset is sold, matured or market participants. derecognised. Financial assets and liabilities classified as For complex instruments such as swaps, the Bank uses fair value through profit or loss are subsequently measured proprietary models, which are usually developed from at fair value with the resulting changes recognised in recognised valuation models. Some or all of the inputs income. into these models may be derived from market prices or Loans and receivables and other liabilities are rates or are estimates based on assumptions. subsequently carried at amortised cost using the effective The value produced by a model or other valuation interest method, less impairment loss. technique may be adjusted to allow for a number of factors Group overview Financial statements and notes 52 minus the cumulative amortisation using the effective the using amortisation cumulative the minus initial the between difference any of method interest any minus amount, maturity the and recognised amount impairment. for reduction interest rate. The carrying amount of the asset is reduced is asset the of amount carrying The rate. interest amount the and account allowance an of use the through loan a If statement. income the in recognised is loss the of discount the rate, interest variable a has receivable and current the is loss impairment any measuring for rate contract. the under determined rate interest effective future estimated the of value present the of calculation The the re ects asset financial collateralised a of ows cash for cost less foreclosure, from result may that ows cash the estimated future cash ows of the financial asset or asset financial the of ows cash future estimated the estimated. reliably be can that assets financial of group can impaired are assets financial that evidence Objective restructuring borrower, a by delinquency or default include adverse suggests that data observable other and loan a of borrower. the of status payment the in changes of evidence objective whether assesses first Bank The are that assets financial for individually exists impairment for collectively or individually and significant, individually the If significant. individually not are that assets financial impairment of evidence objective no that determines Bank whether asset, financial assessed individually an for exists of group a in asset the includes it not, or significant and characteristics risk credit similar with assets financial are that Assets impairment. for them assesses collectively an which for and impairment for assessed individually not are recognised, be to continues or is loss impairment impairment. of assessment collective a in included a on loss impairment an that evidence objective is there If the of amount the incurred, been has receivable and loan asset’s the between difference the as measured is loss future estimated of value present the and amount carrying not have that losses credit future (excluding ows cash effective original asset’s the at discounted incurred), been cation and measurement of impairment of measurement and Identication ! (xii) whether date sheet balance each at assesses Bank The group or asset financial a that evidence objective is there a or asset financial A impaired. are assets financial of impairment and impaired is assets financial of group objective is there if, only and if, incurred are losses events more or one of result a as impairment of evidence “loss (a asset the of recognition initial after occurred that on impact an has events) (or event loss that and event”), such as in the Bank’s trading activity. trading Bank’s the in as such measurement cost Amortised (xi) the is liability or asset financial a of cost amortised The measured is liability or asset financial the which at amount or plus repayments, principal minus recognition, initial at when, the Bank has a legal right to set off the amounts and amounts the off set to right legal a has Bank the when, asset the realise to or basis net a on settle to either intends simultaneously. liability the settle and only basis net a on presented are expenses and Income gains for or standards, accounting the by permitted when transactions similar of group a from arising losses and equity is recycled to the income statement. income the to recycled is equity is and management, of election the at is Reclassification basis. instrument by instrument an on determined Offsetting (x) net the and off set are liabilities and assets Financial only and when, sheet balance the in presented amount has been recognised in equity is amortised to profit or loss or profit to amortised is equity in recognised been has Any EIR. the using investment the of life remaining the over the and cost amortised new the between difference remaining the over amortised also is ows cash expected subsequently is asset the If EIR. the using asset the of life in recorded amount the then impaired, be to determined is only recognised in the income statement when the the when statement income the in recognised only is is instrument the when or observable, become inputs derecognised. assets!nancial Reclassi of !cation available-for- the of out reclassified asset financial a For that asset that on loss or gain previous any category, sale variables include only data from observable markets, the the markets, observable from data only include variables the between difference the recognises immediately Bank in loss) or profit 1 Day (a value fair and price transaction is value fair where cases In income. trading Net the observable, not is which data using determined value model and price transaction the between difference are necessary and appropriate to fairly state financial state fairly to appropriate necessaryand are sheet. balance the on value fair at carried instruments loss or pro !t 1’ Day of value fair the from differs price transaction the When same the in transactions market current observable other whose technique valuation a on based or instrument, as appropriate, because valuation techniques cannot cannot techniques valuation because appropriate, as take participants market factors all re ect appropriately transaction. a into entering when account into adjustments valuation these that believes Management Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 53 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
obtaining and selling the collateral, whether or not liabilities when fair value is negative. The fair value foreclosure is probable. For the purposes of a collective changes in the derivative are recognised in the income evaluation of impairment, financial assets are grouped on statement. the basis of similar credit risk characteristics (i.e. on the basis of the Bank’s grading process which considers i. Cash and Cash Equivalents asset type, industry, geographical location, collateral type, For the purposes of the statement of cash ow, cash and past due status and other relevant factors). These cash equivalents comprise cash on hand, cash and characteristics are relevant to the estimation of future cash balances with the Bank of Ghana and amounts due from ows for group of such assets being indicative of the banks and other financial institutions. debtors’ ability to pay all amounts due according to the j. Investment Securities contractual terms of the assets being evaluated. This comprises investments in short-term Government Future cash ows in a group of financial assets that are securities and medium term investments in Government collectively evaluated for impairment are estimated on the and other securities such as treasury bills and bonds. basis of historical loss experience for assets with credit Investments in securities are categorised as available-for- risk characteristics similar to those in the Bank. Historical sale or trading financial assets and carried in the balance loss experience is adjusted on the basis of current sheet at fair values. observable data to re ect the effects of current conditions that did not affect the period on which the historical loss k. Loans and Receivables experience is based, and to remove the effects of This is mainly made up of placements and overnight conditions in the historical period that do not exist deposits with Banks and other financial institutions and currently. loans and advances to customers. Loans and receivables are carried in the balance sheet at amortised cost, i.e. If, in a subsequent period, the amount of the impairment gross receivable less impairment allowance. loss decreases and the decrease can be related objectively to an event occurring after the impairment was l. Property and Equipment recognised (such as an improvement in the debtor’s credit rating), the previously recognised impairment loss is (i) Recognition and measurement reversed by adjusting the allowance account. The amount Items of property and equipment are measured at cost of the reversal is recognised in the income statement. less accumulated depreciation and impairment losses. Impairment losses on available-for-sale financial assets are Cost includes expenditures that are directly attributable to recognised by transferring the difference between the the acquisition of the asset. The cost of self-constructed amortised acquisition cost and current fair value out of assets includes the cost of materials and direct labour, and equity to the income statement. When a subsequent any other costs directly attributable to bringing the asset to event causes the impairment loss on an available for sale a working condition for its intended use. Purchased financial asset to decrease, the impairment loss is software that is integral to the functionality of the related reversed through the income statement. However, any equipment is capitalised as part of that equipment. subsequent recovery in the fair value of an impaired available for sale financial asset is recognised directly in When parts of an item of property and equipment have equity. different useful lives, they are accounted for as separate items (major components). h. Derivative Financial Instruments (ii) Subsequent costs Derivative contracts are initially recognised at fair value on The cost of replacing part of an item of property or the date on which a derivative contract is entered into and equipment is recognised in the carrying amount of the are subsequently remeasured at their fair value. Fair item if it is probable that future economic benefits values may be obtained from quoted market prices in embodied within the part will ow to the Bank and its cost active markets, recent market transactions, and valuation can be measured reliably. The costs of the day-to-day techniques, including discounted cash ow models and servicing of property and equipment are recognised in the option pricing models, as appropriate. All derivatives are income statement as incurred. carried as assets when fair value is positive and as Group overview Financial statements and notes 54 ividend D Eventsafterreportingthe date Deferred Taxation Deferred Taxation
Amortisation is based on the cost of the asset less its its less asset the of cost the on based is Amortisation value. residual straight a on loss and profit in recognised is Amortisation estimated The asset. the of lifespan the over basis line years. (6) six is life useful remaining material. q. receive to right the when recognised is income Dividend as recognised is payable Dividend established. is income declared. are they which in period the in liability a providing for temporary differences between the carrying the between differences temporary for providing reporting financial for liabilities and assets of amounts purposes. taxation for used amounts the and purposes temporary following the for recognised not is tax Deferred initial the goodwill, of recognition initial the differences: not is that transaction a in liabilities or assets of recognition neither affects that and combination business a to relating differences and profit, taxable nor accounting probably they that extent the to subsidiaries in investments is tax Deferred future. foreseeable the in reverse not will to applied be to expected are that rates tax at measured on based reverse, they when differences temporary the by enacted substantively or enacted been have that laws date. reporting the it that extent the to only recognised is asset tax deferred A available be will profits taxable future that probable is tax Deferred utilised. be can asset the which against are and date reporting each at reviewed are assets the that probable longer no is it that extent the to reduced realised. be will benefit tax related p. re ected are date sheet balance the to subsequent Events they that extent the to only statements financial the in is effect the and consideration under year the to relate n. income taxable on payable tax expected the is tax Current substantively or enacted rates tax using year, the for to adjustment any and date, sheet balance the at enacted years. previous of respect in payable tax o. method, sheet balance the using provided is tax Deferred
ars ears years fe of lease up up lease of fe o 50 years 50 o 50 li t ye 5 - 3 y 10 - 5
- - - -
losses. it when only capitalised is expenditure Subsequent the in embodied benefits economic future the increases expenses other All relates. it which to asset specific and goodwill generated internally on expenses excluding incurred. as loss and profit in recognised is brands software, from the date that it is available for use. The use. for available is it that date the from software, years. five to three is software of life useful estimated Business Custody – Assets Intangible Other (ii) and Bank the by acquired are that assets intangible Other less cost at recognised are lives useful finite have impairment accumulated and amortisation accumulated Subsequent expenditure on software is capitalised only capitalised is software on expenditure Subsequent embodied benefits economic future the increases it when other All relates. it which to asset specific the in incurred. as expensed is expenditure a on statement income the in recognised is Amortisation the of life useful estimated the over basis straight-line m. Intangible Assets Intangible m. Software (i) less cost at stated is Bank the by acquired Software impairment accumulated and amortisation accumulated losses. reassessed at the reporting date. reporting the at reassessed equipment and property of disposal on losses and Gains disposal from proceeds comparing by determined are and equipment and property of amounts carrying the with income. other as statement income the in recognised are Leasehold improvements improvements Leasehold vehicles and equipment IT fittings and Fixtures are values residual and lives useful methods, Depreciation are depreciated over their useful lives. Land is not not is Land lives. useful their over depreciated are depreciated. comparative and current the for lives useful estimated The follows: as are periods Buildings (iii) Depreciation (iii) a on statement income the in recognised is Depreciation each of lives useful estimated the over basis straight-line assets Leased equipment. and property of item an of part Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 55 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
r. Deposits, Amounts due to Banks and Borrowings Actuarial gains and losses on the plan are recognised in This is mainly made up of customer deposit accounts, the income statement. overnight placements by Banks and other financial (iii) Termination bene!ts institutions and medium term borrowings. They are categorised as other financial liabilities and carried in the Termination benefits are recognised as an expense when balance sheet at amortised cost. the Bank is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to s. Provisions terminate employment before the normal retirement date. A provision is recognised if, as a result of a past event, the Termination benefits for voluntary redundancies are Bank has a present legal or constructive obligation that recognised if the Bank has made an offer encouraging can be estimated reliably, and it is probable that an out ow voluntary redundancy, it is probable that the offer will be of economic benefits will be required to settle the accepted and the number of acceptances can be obligation. Provisions are determined by discounting the estimated reliably. expected future cash ows at a pre-tax rate that re ects (iv) Short-term bene!ts current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related t. Financial Guarantees service is provided. Financial guarantees are contracts that require the Bank to A provision is recognised for the amount expected to be make specified payments to reimburse the holder for a paid under short-term cash bonus or profit-sharing plans if loss it incurs because a specified debtor fails to make the Bank has a present legal or constructive obligation to payment when due in accordance with the terms of a debt pay this amount as a result of past service provided by the instrument. employee and the obligation can be estimated reliably. Financial guarantees are initially recognised at their fair value, and the fair value is amortised over the life of the v. Impairment on Non-!nancial Assets financial guarantee. The financial guarantees are The carrying amount of the Bank’s non-financial assets subsequently carried at the higher of the amortised other than deferred tax assets, are reviewed at each amount and the present value of any expected payment reporting date to determine whether there is any indication (when a payment under the guarantee has become of impairment. If any such indication exists then the probable). asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of u. Employee Bene!ts an asset exceeds its recoverable amount. The (i) De!ned contribution plans recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value Obligations for contributions to defined contribution in use, the estimated future cash ows are discounted to pension plans are recognised as an expense in the income their present value using pre-tax discount rate that re ects statement when they are due. current market assessment of the time value of money and (ii) De!ned bene!t plans risks specific to the asset. Impairment losses are The Bank’s net obligation in respect of defined benefit recognised in the income statement. pension plans is calculated separately for each plan by Impairment losses recognised in prior periods are estimating the amount of future benefit that employees assessed at each reporting date for any indications that have earned in return for their service in the current and the loss has decreased or no longer exists. An impairment prior periods; that benefit is discounted to determine its loss is reversed if there has been a change in estimates present value, and any unrecognised past service costs. used to determine the recoverable amount. An The discount rate is the yield at the reporting date on a impairment loss is reversed only to the extent that the long-dated instrument on the Ghana market. The asset’s carrying amount does not exceed the carrying calculation is performed using the projected unit credit amount that would have been determined, net of method. Changes in the fair value of the plan liabilities are depreciation or amortisation, if no impairment loss had recognised in the income statement. been recognised. Group overview Financial statements and notes 56 The amendment is effective for annual periods on or after or on periods annual for effective is amendment The the on impact no has amendment The 2013. January 1 Bank. IFRS 10 – Consolidated – FinancialStatements, 27 10 IAS IFRS Statements Financial Separate periods annual for effective becomes standard The the replaces It 2013. January 1 after or on beginning Separate and Consolidated 27 IAS of requirements for accounting the address that Statements Financial 12 SIC and statements financial consolidated in remains What Entities. Purpose Special – Consolidation jointly subsidiaries, for accounting to limited is 27 IAS Presentation. financial recognised to apply also disclosures The master enforceable an to subject are that instruments of irrespective agreement, similar or arrangement netting These 32. IAS with accordance in off set are they whether position financial Bank’s the impact not will amendments annual for effective become will and performance or 2013. January 1 after or on beginning periods Instruments Financial 9 IFRS IASB’s the of phase first the re ects issued, as 9, IFRS recently the to subject is date adoption the though work and 39 IAS of replacement the on Draft Exposure issued financial of measurement and classification to applies standard The 39. IAS in defined as liabilities and assets or on beginning periods annual for effective initially was 9 IFRS to Amendments but 2013, January 1 after Transition and 9 IFRS of Date Effective Mandatory the moved 2012, December in issued Disclosures, In 2015. January 1 to date effective mandatory impairment address will Board the phases, subsequent of effect the quantify will Bank The accounting. hedge and with conjunction in 9 IFRS of phase first the of adoption the a present to issued, when phases, other the picture. comprehensive IFRS 7 Disclosures — OffsettingDisclosures — 7 IFRSFinancial Assetsand 7 IFRS Amendments to Liabilities — Financial disclose to entity an require amendments These related and set-off to rights about information The agreements). collateral (e.g., arrangements is that information with users provide would disclosures on arrangements netting of effect the evaluating in useful are disclosures new The position. financial entity’s an are that instruments financial recognised all for required Instruments: Financial 32 IAS with accordance in off set New StandardsInterpretationsNewadopted and yet not Earnings per Share per Earnings Share Based Payment Transactions Payment Based Share Ordinary share capital share Ordinary
requirements of IFRS 9 (or IAS 39, as applicable) and IAS IAS and applicable) as 39, IAS (or 9 IFRS of requirements information the if retrospectively loans government to 20 initially of time the at obtained been had so do to needed give would exception The loan. that for accounting measurement retrospective from relief adopters first-time interest. of rate below-market a with loans government of IFRS 1 Government Loans — Amendments to IFRS 1 IFRS to Amendments — Loans Government 1 IFRS apply to adopters first-time require amendments These Government for Accounting 20 IAS of requirements the Assistance, Government of Disclosure and Grants of date the at existing loans government to prospectively the apply to choose may Entities IFRS. to transition z. not but issued, are that interpretations and standards The Bank’s the of issuance of date the to up effective, yet Bank The below. disclosed are statements financial they when applicable, if standards, these adopt to intends effective. become Employees of the Bank participate in share based share in participate Bank the of Employees company. parent Bank’s the with transactions payment fair the representing Bank the to cost allocates parent The the to attributable payments based share the of value recognised is cost allocated The Bank. the of employees period. each in expense an as shares outstanding during the period. The Bank has no has Bank The period. the during outstanding shares could which options, share and notes convertible Basic Bank’s the therefore and EPS its dilute potentially same. the essentially are EPS diluted and y. x. share per earnings diluted and basic presents Bank The calculated is EPS Basic shares. ordinary its for data (EPS) ordinary to attributable loss or profit the dividing by preference for adjustments after Bank the of shareholders ordinary of number average weighted the by dividends (ii) Preference share capital share Preference (ii) is it if equity as classified is capital share Preference option, Bank’s the at only redeemable or non-redeemable, share Preference discretionary. are dividends any and the meet not does it if liability a as classified is capital equity. of definition w. Sharew. Capital (i) equity. as classified are shares Ordinary Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 57 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
controlled entities, and associates in separate financial required or permitted by IFRS. There are also additional statements. The Bank is currently assessing the impact of disclosure requirements. Adoption of the standard is not adopting IFRS 10. expected to have a material impact on the financial position or performance of the Bank. IFRS 11 – Joint Arrangements The standard becomes effective for annual periods IAS 1 Presentation of Items of Other Comprehensive beginning on or after 1 January 2013. It replaces IAS 31 Income – Amendments to IAS 1 The amendments to IAS 1 change the grouping of items Interests in Joint Ventures and SIC 13 Jointly Controlled presented in other comprehensive income (OCI). Items Entities – Non-monetary Contributions by Venturers. that could be reclassified (or recycled) to profit or loss at a Because IFRS 11 uses the principle of control in IFRS 10 to future point in time (for example, net gains on hedges of define control, the determination of whether joint control net investments, exchange differences on translation of exists may change. The adoption of IFRS 11 is not foreign operations, net movements on cash ow hedges expected to have a significant impact on the accounting and net losses or gains on available-for-sale financial treatment of investments currently held by the Bank. assets) would be presented separately from items that will never be reclassified (for example, actuarial gains and IFRS 12 – Disclosure of Involvement with Other Entities losses on defined benefit plans). The amendment affects The standard becomes effective for annual periods presentation only and has no impact on the Bank’s beginning on or after 1 January 2013. It includes all of the financial position or performance. The amendment disclosures that were previously in IAS 27 related to becomes effective for annual periods beginning on or after consolidated financial statements, as well as all of the 1 July 2012. disclosures that were previously included in IAS 31 Interests in Joint Ventures and IAS 28 Investment in IAS 19 Employee Bene!ts – Amendments Associates. These disclosures relate to an entity’s interests The amendments to IAS 19 remove the option to defer the in subsidiaries, joint arrangements, associates and recognition of actuarial gains and losses, i.e., the corridor structured entities. A number of new disclosures are also mechanism. All changes in the value of defined benefit required. One of the most significant changes introduced plans will be recognised in profit or loss and other by IFRS 12 is that an entity is now required to disclose the comprehensive income. The effective date of the standard judgments made to determine whether it controls another is 1 January 2013. The amendment has no impact on the entity. Many of these changes were introduced by the Bank’s financial position or performance IASB in response to the financial crisis. Now, even if the Bank concludes that it does not control an entity, the IAS 27 Separate Financial Statements (as revised in 2012) information used to make that judgment will be As a consequence of the new IFRS 10 and IFRS 12, what transparent to users of the financial statements to make remains in IAS 27 is limited to accounting for subsidiaries, their own assessment of the financial impact were the jointly controlled entities and associates in separate Bank to reach a different conclusion regarding financial statements. The Bank does not present separate consolidation. financial statements. The amendment becomes effective The Bank will need to disclose more information about the for annual periods beginning on or after 1 January 2013. consolidated and unconsolidated structure entities with IAS 28 Investments in Associates and Joint Ventures (as which it is involved or has sponsored. However, the revised in 2012) standard will not have any impact on the financial position As a consequence of the new IFRS 11 Joint or performance of the Bank. Arrangements, and IFRS 12 Disclosure of Interests in Other Entities, IAS 28 Investments in Associates, has been IFRS 13 – Fair Value measurement renamed IAS 28 Investments in Associates and Joint The standard becomes effective for annual periods Ventures, and describes the application of the equity beginning on or after 1 January 2013. IFRS 13 does not method to investments in joint ventures in addition to change when an entity is required to use fair value, but associates. The revised standard becomes effective for rather, provides guidance on how to measure the fair value annual periods beginning on or after 1 January 2013. of financial and non-financial assets and liabilities when Group overview Financial statements and notes 58 This improvement clarifies the difference between difference the clarifies improvement This the and information comparative additional voluntary the Generally, information. comparative required minimum previous the is information comparative required minimum period. Equipment and Plant Property 16 IAS and parts spare major that clarifies improvement This property, of definition the meet that equipment servicing inventory. not are equipment and plant Presentation Instruments, Financial 32 IAS from arising taxes income that clarifies improvement This in for accounted are holders equity to distributions Taxes. Income 12 IAS with accordance Reporting Financial Interim 34 IAS for requirements disclosure the aligns amendment The in liabilities segment total with assets segment total ensures also clarification This statements. financial interim annual with aligned are disclosures interim that annual for effective are improvements These disclosures. 2013 January 1 after or on beginning periods . Annual Improvements May 2012 May Improvements Annual Bank, the on impact an have not will improvements These include: but InternationalFirst-timeAdoptionof 1 Financial IFRS StandardsReporting stopped that entity an that clarifies improvement This to required, is or chooses, and past the in IFRS applying is 1 IFRS If 1. IFRS re-apply to option the has IFRS, apply its restate retrospectively must entity an re-applied, not applying stopped never had it if as statements financial IFRS. Statements Financial of Presentation 1 IAS costs incurred in surface mining activity, during the the during activity, mining surface in incurred costs interpretation The mine. the of phase production stripping the from benefit the for accounting the addresses periods annual for effective is interpretation The activity. new The 2013. January 1 after or on beginning Bank. the on impact an have not will interpretation These amendments become effective for annual periods annual for effective become amendments These 2014. January 1 after or on beginning a Productiontheof StrippingPhase 20in Costs IFRIC Mine Surface (stripping) removal waste to applies interpretation This some may not. Any changes in offsetting are expected to to expected are offsetting in changes Any not. may some requirements, capital regulatory ratios, leverage impact Bank’s the on depends adoption the of impact the As etc. the by applied procedures operational the of examination deals it systems settlement and houses clearing central not is it criteria, new the meet they if determine to with effects. the quantify to practical grounds of simultaneous settlement is particularly relevant relevant particularly is settlement simultaneous of grounds of numbers large in engages it where to as Bank the for transactions Currently, transactions. repurchase and sale cases, most in are, systems clearing through settled many While settlement. simultaneous achieve to deemed criteria, new the meet to expected are systems settlement may prove to be a challenge for contracts where only one only where contracts for challenge a be to prove may default. of event the in offset to right the has party 32 IAS the of application the clarify also amendments The central as (such systems settlement to criteria offsetting settlement gross apply which systems) house clearing the on Offsetting simultaneous. not are that mechanisms assess the impact to the Bank by reviewing settlement reviewing by Bank the to impact the assess that ensure to documentation legal and procedures been has it where cases in possible still is offsetting no may offsetting cases, certain In past. the in achieved to have may contracts cases, other In achieved. be longer set-off of right the that requirement The renegotiated. be agreement netting the to counterparties all for available be IAS 32 Offsetting32 IAS FinancialFinancialAssetsand 32 IAS to Amendments — Liabilities a has “currently of meaning the clarify amendments These necessaryto be will It set-off”. to right enforceable legally Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 59 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
4. Regulatory Disclosures
(i) Non–Performing Loans Ratio Percentage of gross non-performing loans (“substandard to loss”) to total credit/advances portfolio (gross) 10% (2011: 10%). (ii) Capital Adequacy Ratio The capital adequacy ratio at the end of December 2012 was calculated at approximately 17.49% (2011: 16.68%). (iii) Regulatory Breaches There were two breaches with respect to one over-exposure and outsourcing without the Bank of Ghana’s prior approval. A penalty of GH¢24,000 was imposed. (2011: GH¢ 7,862 was imposed for one liquidity breach).
5. Contingent Liabilities and Commitments
2012 2011 GH¢’000 GH¢’000 (i) Contingent Liabilities Pending Legal Suits 281 1,234
(ii) Commitments for Capital Expenditure There was no commitment for capital expenditure at the balance sheet date and at 31 December 2012.
(iii) Unsecured Contingent Liabilities and Commitments
2012 2011 GH¢’000 GH¢’000 This relates to commitments for trade letters of credit and guarantees. 125,889 204,846
6. Social Responsibility Cost
An amount of GH¢303,199 (2011: GH¢176,325) was spent under the Bank’s social responsibility program.
7. Segmental Reporting
Segmental information is presented in respect of the Bank’s business segments. The Bank is organised into two main business segments: Wholesale Banking and Consumer Banking. Some of the Bank’s corporate costs are managed centrally and standardised basis are used to allocate these costs to the business segments on a reasonable basis. Group overview Financial statements and notes 60 ’000 ’000 Total Total ¢ ¢ (9,847) (6,720) 66,936 (93,454) 150,403 217,339 123,885 114,038 169,743 112,527 282,270 177,211 170,491 (105,059) GH GH 2,390,684 2,079,335 1,971,062 1,738,486 ------’000 ’000 1,718 1,718 (1,718) ¢ ¢ 660,475 228,799 325,346 GH GH Unallocated Unallocated ’000 ’000 (597) ¢ ¢ 94,142 (4,436) 73,997 93,028 40,556 88,940 127,537 128,134 727,097 (44,644) (40,005) 133,584 864,996 Banking Banking 1,367,123 727,418 1,143,666 GH GH Wholesale Wholesale ’000 ’000 (5,411) ¢ ¢ (6,123) 75,601 49,077 82,037 42,954 55,657 29,534 84,504 34,945 26,380 38,530 114,131 168,139 (47,092) 296,143 889,193 (65,054) 166,921 782,590 Banking Banking GH GH Consumer Consumer Class of Business of Class 2012 t before taxationbefore Pro ! t Operating Income Operating Expenses Operating Taxation and Loss Impairment before profit Operating Loss Impairment Class of Business of Class Income Interest Net Income Funded Non Total Liabilities 2011 Net Interest Income Interest Net Total Assets Total Total Liabilities Impairment Loss Impairment taxationbefore Pro ! t Assets Total Non Funded Income Funded Non Income Operating Expenses Operating Taxation and Loss Impairment before profit Operating Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 61 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
8. Interest Income
(i) Classi!cation 2012 2011 GH¢’000 GH¢’000 Placements, Special Deposits 6,674 11,878 Investment Securities 99,907 111,755 Loans and Advances 116,144 72,142 222,725 195,775 (ii) Categorization Financial assets held at fair value through Profit and Loss: Held for Trading 8,778 26,018 Available for Sale Instruments 91,129 85,737 Loans and Receivables 122,818 84,020 222,725 195,775
Included in interest income on loans and receivable is a total amount of GH¢Nil (2011: GH¢Nil) accrued on impaired financial assets.
9. Interest Expense
2012 2011 GH¢’000 GH¢’000 Current Accounts 2,618 603 Time and other Deposits 18,897 10,221 Overnight and Call Accounts 1,554 8,620 Borrowings 29,913 25,928 52,982 45,372
Total interest expense on financial liabilities held at amortised cost was GH¢52,982,000 (2011: GH¢45,372,000). Group overview Financial statements and notes 62 ’000 ’000 ’000 2011 2011 2011 3,264 ¢ ¢ ¢ 17,233 (2,838) (2,838) 14,444 34 ,941 34,941 32,103 34,833 GH GH GH ’000 ’000 ’000 2012 2012 2012 ¢ ¢ ¢ 75,828 74,075 38,452 11,869 (1,753) (1,753) 51,690 75,828 12,269 GH GH GH
Fees and commission expense
Fees and commission income 10.Net Fees and Commission Income 11. Other Operating Income (ii) fees transaction -Bank Inter Letters of credit issued credit of Letters Others Total fees and commission income (i) fees servicing account Customer Fees and Commission Income [Note 10(i)] [Note Income Commission and Fees 10(ii)] [Note Expense Commission and Fees Income Commission and Fees Net Gains on foreign exchange foreign on Gains The reported credit related fees and commissions are those which are not regarded as part of the EIR on loans. on EIR the of part as regarded not are which those are commissions and fees related credit reported The Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 63 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
12. Operating Expenses
2012 2011 GH¢’000 GH¢’000 Staff cost (Note 13) 76,710 55,820 Advertising and marketing 1,807 748 Administrative 17,276 16,683 Training 675 562 Depreciation and amortization 4,125 2,845 Directors’ emolument 2,168 2,027 Auditors’ remuneration 152 132 Donations and sponsorship 303 176 Others 1,843 14,461 105,059 93,454
13. Staff Costs
2012 2011 GH¢’000 GH¢’000 Wages, Salaries, Bonus and Allowances 63,025 46,864 Social Security Costs 4,055 3,450 Pension and Retirement Benefits 2,181 1,834 Other Staff Costs 1,464 3,345 Severance Pay 5,985 327 76,710 55,820 The average number of persons employed by the Bank during the year was 949 (2011: 942). Included in this figure is staff of 209 (2011: 201) who work at the Shared Service Centre for processing transactions of six (6) countries in West Africa including Ghana. For the purpose of analysis, about 53% of transactions processed are for the Ghana office.
14. Impairment Loss
2012 2011 GH¢’000 GH¢’000 Individual impairment charge 4,715 11,140 Portfolio impairment charge/(release) 2,005 (1,293) Total Impairment Loss 6,720 9,847 Group overview Financial statements and notes 1 64 Fair ’000 ¢ Value GH 1 100 100 ’000 Total 8,164 8,164 ¢ 602,246 602,246 639,426 639,426 Amount GH Carrying - - - - - and ’000 ¢ Loans 155,473 155,473 155,473 515,468 515,468 515,468 959,597 959,597 959,597 159,872 159,872 159,872 479,245 479,245 479,245 596,724 596,724 596,724 GH 1,630,538 2,232,785 2,232,785 1,235,841 1,883,531 1,883,531 Receivables ------1 100 ’000 ¢ 485,113 485,013 539,627 539,628 for Sale for GH Available ------’000 8,164 ¢ 62,619 62,619 154,413 162,577 GH Loss (Trading) Loss t or Prothrough! t Held at fair value fair at Held 19 18 19 18 19 19 24 21 21 20 20 Notes 15.Financial Instruments Classi !cationSummary Due from other Banks and Banks other from Due institutions Financial Advances and Loans Due from other Banks and Banks other from Due institutions Financial Advances and Loans Total at 31/12/12 with balances and Cash Ghana of Bank Securities Government EquityInvestment Financial AssetsFinancial with balances and Cash Ghana of Bank Securities Government EquityInvestment Assets Other Total at 31/12/11 instruments have been combined for presentation on the face of the statement of financial position. financial of statement the of face the on presentation for combined been have instruments below: summarised are liabilities and assets financial principal its of classification Bank’s The 15a. Financial instruments are classified along four recognition principles: held at fair value through profit or loss (comprising (comprising loss or profit through value fair at held principles: recognition four along classified are instruments Financial financial of categories These receivables. and loans and held-to-maturity available-for-sale, designated), and trading Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 65 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
Financial Held at fair value Liabilities Total through Pro!t or Measured at Carrying Fair Loss (Trading) Amortised cost Amount Value Notes GH¢’000 GH¢’000 GH¢’000 GH¢’000 Financial Liabilities Customer Deposits 26 - 1,704,198 1,704,198 1,704,198 Due to other Banks and Financial Institutions 27 - 4,741 4,741 4,741 Other Liabilities 29 603 - 603 603 Borrowings 31 - 193,166 193,166 193,166 Total at 31/12/12 603 1,902,105 1,902,708 1,902,708 Financial Liabilities Customer Deposits 26 - 1,479,687 1,479,687 1,479,687 Due to other Banks and Financial Institutions 27 - 10,261 10,261 10,261 Other Liabilities 29 - - - - Borrowings 31 - 90,976 90,976 90,976 Total at 31/12/11 - 1,580,924 1,580,924 1,580,924
15b. Fair value hierarchy as defined under Note 3(g-(ix)) analysis The table below analyses financial instruments measured at fair value at the end of the reporting period by the level in fair value hierarchy, into which the fair value measurement is categorised.
Level 1 Level 2 Level 3 Level 4 Notes GH¢’000 GH¢’000 GH¢’000 GH¢’000 2012 Government Securities 19 - 602,246 - 602,246 Equity Investment 19 - - 1 1 Total at 31/12/12 - 602,246 1 602,247 2011 Government Securities 19 - 639,426 - 639,426 Equity Investment 19 - - 100 100 Other Assets 24 - 8,164 - 8,164 Total at 31/12/11 - 647,590 100 647,690 2012 Other Liabilities 29 - 603 - - 2011 Other Liabilities 29 - - - - Financial statements and notes 66 - - - - 1 100 ’000 ’000 ’000 2011 1,889 1,889 ¢ ¢ 1,889 ¢ Equity Equity (1,078) 30,660 31,738 GH GH 31/12/12 GH Balance at Balance Investments - (479) ’000 Add (293) 1,145 ¢ (6,666) (6,187) (7,039) GH Taxation Taxation ’000 2012 3,640 ¢ Adjustment 30,563 34,203 GH - - - - ’000 ¢ 30,563 30,563 30,563 the year the GH Charge for Charge 17 - - - 16(iii) Notes ’000 ¢ (28,674) (28.674) during (28,674) the year the GH Payments - 479 293 ’000 6,187 6,666 7,0 3 9 ¢ (1,145) 1/1/12 GH Balance atBalance 16.Taxation National Fiscal Stabilisation Levy LevyStabilisation Fiscal National Current Tax Current 2012 December 31 at and January 1 at Balance 2011 December 31 at and January 1 at Balance 2012 Deferred Tax Deferred Income Tax: Income 20092005to 2010 2011 (ii) Taxation Payable Taxation (ii) (i) Income tax expense tax Income (i) The following table shows a reconciliation from the beginning balances to the ending balances for fair value value fair for balances ending the to balances beginning the from reconciliation a shows table following The hierarchy: value fair the of 3 Level in measurements Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 67 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
(iii) Reconciliation of Effective Tax Rate Analysis of tax charge in the year: The charge for taxation based upon the profit for the year comprises:
2012 2011 GH¢’000 GH¢’000 Current tax on income for the year 30,563 31,738 Total current tax 30,563 31,738
Charged/(Reversal) of temporary differences 3,640 (1,078) Tax on profits on ordinary activities 34,203 30,660
Effective tax rate 20.05% 26.9% The differences are explained below: Profit before tax 170,491 114,038 Tax at 25% (2011: 25%) 42,623 28,509 Non-deductible expenses 5,243 4,894 Tax exempt revenues - - Capital allowances (948) (534) Deferred taxes 3,640 (1,078) Impairment losses - (463) Other deduction (16,115) - Tax rebates (240) (668) Current tax charge 34,203 30,660
Tax liabilities up to 2011 have been agreed with the Ghana Revenue Authority. The 2012 liability is subject to agreement with the Ghana Revenue Authority. National Fiscal Stabilisation Levy is a levy introduced by the Government as a charge on profit before tax effective July 2009. There was no charge this year because the levy was abolished in 2012. Group overview Financial statements and notes 68 Net ’000 ’000 ’000 (410) (212) 2011 2011 2011 5,343 5,343 ¢ ¢ ¢ (1,078) (4,675) (2,462) (1,103) 45,743 114,129 159,872 GH GH GH - - - ’000 2,132 2,132 1,235 1,235 ¢ GH Liabilities ’000 ’000 2012 2012 (410) 3,640 5,463 ¢ ¢ 2,233 52,449 - - 515,468 463,019 GH GH ’000 (212) ¢ (2,462) (1,103) (3,777) 3,367 (410) Assets GH - Net ’000 2012 (501) 1,645 5,463 ¢ 1,234,000) recognized directly in equity in respect in equity in directly recognized 1,234,000) (1,924) ¢ GH 6,243 - - - ’000 7,8 8 8 1,645 6,243 ¢ GH Liabilities - - - 2,233,000GH (2011: ’000 (501) ¢ ¢ (1,924) (2,425) Assets GH 18.Cash And Balances With Bank OfGhana 17.Deferred Taxation Cash on hand on Cash Ghana of Bank with Balances Available for sale assets sale for Available Provisions (assets)/liabilities tax Net Property and equipment and Property impairment Portfolio trading on losses Unrealised investments Balance at 1 January 1 at Balance loss and profit to Charge/(Release) equity to Charge/(Release) Balance at 31 December 31 at Balance Included in deferred taxes are amounts of GH of amounts are taxes deferred in Included Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 of mark to market valuation on available for sale financial assets. financial sale for available on valuation market to mark of (i) Recognised deferred tax assets and liabilities and assets tax deferred Recognised (i) following: the to attributable are liabilities and assets tax Deferred 69 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
19. Investments
(i) Short-Term Government Securities
2012 2011 GH¢’000 GH¢’000 Short-Term Investments 177,098 170,104 Short-term Government Securities comprises of Ghana Government fixed and oating rate instruments. The oating rate instruments are benchmarked against the 91 day Treasury Bill rate plus a markup. (ii) Government Securities
2012 2011 GH¢’000 GH¢’000 Government Bonds 425,148 469,322 These are fixed and oating Government of Ghana Bonds maturing between 2013 and 2017. The oating rate instruments are bench marked against the 91 day Treasury Bill rate plus a markup.
(iii) Equity Investment
2012 2011 GH¢’000 GH¢’000 Investment in Subsidiaries 1 100 Investment in subsidiaries represents the Bank’s equity interest in Standard Chartered Ghana Nominees Limited, which is a wholly owned subsidiary. The subsidiary’s financial statements have not been consolidated because of its dormancy. The company does not currently have any assets or liabilities reported.
20. Due From Other Banks And Financial Institutions
2012 2011 GH¢’000 GH¢’000 Nostro Account Balances 557 10,906 Items in course of Collection 23,007 52,765 Placement with other Banks 131,909 415,574 155,473 479,245 Group overview Financial statements and notes 70 ’000 ’000 2011 2011 5,677 ¢ ¢ 31,413 25,736 (31,413) 628,137 596,724 194,288 433,849 GH GH ’000 ’000 2012 2012 7,682 ¢ ¢ 30,451 38,133 205,272 997,730 (38,133) 959,597 792,458 GH GH pairment Allowance pairment tio of fifty (50) largest exposure (gross funded and non-funded) to total exposures was 60% (2011: 52%). (2011: 60% was exposures total to non-funded) and funded (gross exposure largest (50) fifty of tio an loss provision ratio was 4% (2011: 5%). (2011: 4% was ratio provision loss an oss non-performing loan ratio was 10% (2011: 10%). (2011: 10% was ratio loan non-performing oss Lo Gr Ra 21. Loans And AdvancesAndLoans 21. Im Analysis by Type by Analysis
Net Loans and Advances and Loans Net Overdrafts Term Loans Advances and Loans Gross Impairment Allowance Impairment
Specific Portfolio a. b. c. iii. Key ratios on Loans and Advances and Loans on ratios Key iii. ii. The above constitutes loans and advances (including credit bills negotiated) to customers and staff. staff. and customers to negotiated) bills credit (including advances and loans constitutes above The i. Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 71 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
iv. Analysis by Business Segments
2012 2011 GH¢’000 GH¢’000 Agriculture, Forestry and Fishing 4,699 24,219 Mining and Quarrying 2,643 3,227 Manufacturing 275,761 135,204 Construction - 11,422 Electricity, Gas and Water 6,534 11,780 Commerce and Finance 603,356 318,821 Transport, Storage and Communication 7,741 25,698 Services 48,010 56,011 Miscellaneous 48,986 41,755 Gross Loans and Advances 997,730 628,137 Impairment Allowance (38,133) (31,413) Net Loans and Advances 959,597 596,724 v. Analysis by Type of Customer
2012 2011 GH¢’000 GH¢’000 Individuals 161,396 165,803 Private Enterprises 751,342 414,021 Joint Private and State Enterprises - 5,027 Public Institutions 36,006 1,531 Staff 48,986 41,755 Gross Loans and Advances 997,730 628,137 Impairment Allowance (38,133) (31,413)
Net Loans and Advances 959,597 596,724 Financial statements and notes 72 At At 683 208 492 214 ’000 ’000 ’000 2011 1,483 2,658 3,059 ¢ 3,721 7,329 ¢ ¢ 10,754 23,315 18,291 34,069 6,132 6,132 1,355 3,732 GH 31/12/12 GH GH 19,073 - At 31/12/12 At - - - - - ’000 ’000 ¢ ¢ 44 500 ’000 2012 GH 2,795 Transfers 2,251 GH ¢ - Transfers (2,080) - - 1,048 1,048 1,032 1,032 GH - - - - - ’000 ’000 (190) (190) (316) (316) ¢ ¢ (14,899) (14,899) (11,353) (11,353) (11,353) (11,353) (3,040) (3,040) Write-off GH (3,040) (3,040) Write-off GH Disposal/ Disposal/ - - 69 ’000 573 ’000 7,972 1,095 1,384 ¢ 1,105 1,201 2,948 ¢ GH Additions GH Additions -- At At At At 308 5,493 404 ’000 329 ’000 9,224 ¢ 12,719 4,898 5,343 18,341 ¢ 40,996 12,135 22,705 01/01/12 GH 01/01/12 GH 22. Property and Equipment and Property 22. Computers Furnitureequipments& Vehicle Motor Less than one year one than Less years 5 and one Between years 5 than More Asset in course of construction of course in Asset buildings and Land At 31 December, 2011 31 At Net Book Value Book Net December,2012 31 At Land and buildings and Land Asset in course of construction of course in Asset Motor Vehicle Motor Computers Furnitureequipments& Cost/ valuationCost/ Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 (i) Operating leases in respect of Property and Equipment and Property of respect in leases Operating (i) follows: as payable are rentals lease operating Non-cancellable Depreciation 73 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
23. Intangible Asset
Custody Business At Cost 2012 2011 GH¢’000 GH¢’000 Balance at 1 January 8,146 9,323 Amortisation (1,177) (1,177) Carrying Amount 6,969 8,146
24. Other Assets
2012 2011 GH¢’000 GH¢’000 Accounts Receivable and Prepayments 13,524 27,973 LC Acceptance * 75,278 - Accrued Interest Receivable 6,238 30,310 Impersonal Accounts 32,575 2,401 Other Assets (Note 25) - 8,164 127,615 68,848
*Letters of Credit Acceptance - Acceptances and endorsements counter signed by the Bank is recognised on the Balance Sheet, with an equal amount recognised in assets representing the customer’s obligation to repay amounts disbursed by the bank. Financial statements and notes 74 - 2011 25,099 ¢ Amount Notional US$72,248 US$25,099 GH Net 2011 2011 8,164 6,067 Amount - 2011 (4,342) (4,342) 2,097 Liabilities 2011 6,067 6,439 12,506 Assets 2012 9,443 ¢ Amount Notional GH US$12,443 US$132,589 GBP300,000 Net 346 2012 2012 (949) (603) Amount (143) 2012 (5,802) (5,945) Liabilities 489 2012 5,342 4,853 Assets 25. Derivative Financial Instruments Financial Derivative 25. Derivatives for held trading Interest rate rate Interest swaps Currency Swaps credit risk. credit The table below shows the fair values of derivative financial instruments recorded as assets or liabilities together with with together liabilities or assets as recorded instruments financial derivative of values fair the shows below reference table The asset, underlying derivative’s a of amount the is gross, recorded amount, notional The amounts. amounts notional notional their The measured. are derivatives of value the in changes which upon basis the is and the index nor or risk rate market the neither of indicative are and end year the at outstanding transactions of volume the indicate Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 requirements. The risk. liquidity and risk credit are contracts futures and forward with associated risks the in differences main is The contracts future to related risk credit The contracts. forward of counterparties the to exposure credit has Bank are contracts these that ensure help exchange the of requirements margin cash the because minimal than considered risk liquidity higher a bear to considered therefore, are, and gross settled are contracts Forward honoured. exposure. riskalways market in result contracts of types Both basis. net a on settled are that contracts futures the Forwardsspecific futuresand a at instrument financial specified a sell or buy to agreements contractual are contracts futures and Forward Futures market. over–the–counter the in transacted contracts customised are Forwards future. the in date and price margin cash daily to subject are and exchanges regulated on amounts standardised in transacted are contracts The Bank’s exposure under derivative contracts is closely monitored as part of the overall management of its market market its of management overall the of part as monitored closely is contracts derivative under exposure Bank’s The risk However, these instruments frequently involve a high degree of leverage and are very volatile. very are and leverage of degree high a involve frequently instruments these However, significant a have may contract derivative a underlying index or rate asset, the of value the in movement small relatively A Bank. the of loss or profit the on impact on market exchange an of absence the with associated risks the to Bank the expose may derivatives Over–the–counter position. open an out close to which At their inception, derivatives often involve only a mutual exchange of promises with little or no transfer of consideration. consideration. of transfer no or little with promises of exchange mutual a only involve often derivatives inception, their At 75 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
Swaps Swaps are contractual agreements between two parties to exchange streams of payments over time based on specified notional amounts, in relation to movements in a specified underlying index such as an interest rate, foreign currency rate or equity index. Interest rate swaps relate to contracts taken out by the Bank with other financial institutions in which the Bank either receives or pays a oating rate of interest, respectively, in return for paying or receiving a fixed rate of interest. The payment ows are usually netted against each other, with the difference being paid by one party to the other. In a currency swap, the Bank pays a specified amount in one currency and receives a specified amount in another currency. Currency swaps are mostly gross–settled.
Derivative !nancial instruments held or issued for trading purposes Most of the Bank’s derivative trading activities relate to deals with customers that are normally offset by transactions with other counterparties. The Bank may also take positions with the expectation of profiting from favourable movements in prices, rates or indices.
26. Customer Deposits And Current Accounts
2012 2011 GH¢’000 GH¢’000 Current Accounts 976,484 828,407 Time Deposit 74,098 73,508 Savings Deposit 403,101 368,656 Call Deposit 250,515 209,116 1,704,198 1,479,687 i. Analysis by Type of Depositors
2012 2011 GH¢’000 GH¢’000 Individuals and other Private Enterprises 1,703,183 1,477,625 Public Enterprises 1,015 2,062 1,704,198 1,479,687 Ratio of twenty largest depositors to total deposit is 25% (2011: 25%).
27. Due To other Banks and Financial Institutions
2012 2011 GH¢’000 GH¢’000 Nostro Account Balances 4,741 10,261 Group overview Financial statements and notes 76 - - - ’000 ’000 ’000 2011 2011 Total 1,428 1,799 ¢ ¢ ¢ 25,877 40,828 24,449 50,160 44,459 85,287 (25,877) 110,068 108,269 (35,127) GH GH GH - 3.05 per share) share) per 3.05 603 ’000 ’000 ¢ ’000 2012 2012 1,918 1,282 ¢ ¢ ¢ 41,919 58,716 75,278 59,998 36,927 35,029 68,004 Others 119,718 (31,077) (59,998) GH GH GH ’000 9,434 7,849 32,979 ¢ 17,283 (4,050) 13,233 GH Staff Related Staff 0.47 per share for ordinary shares (2011: GH (2011: shares ordinary for share per 0.47 ¢ 58.7 million). 58.7 ¢ 54.3 million (2011: GH (2011: million 54.3 ¢ 30. Provisions 30. 29. Interest Payable And Other Liabilities Other And Payable Interest 29. 28. Dividends 28. Balance at 1 January 1 at Balance Statement Income to Charged Others (Note 25) (Note Others Accrued Interest Payable AccruedInterest Accruals and Creditors Other 24) (Note Acceptance LC Payments during the year the during Payments December 31 at Balance Ordinary Dividend Ordinary Dividend Preference Utilised during the year the during Utilised December 31 at Balance The Directors are recommending a dividend of GH of dividend a recommending are Directors The Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 amounting to GH to amounting Others utilised be to expected are These year. the during obligations operational various for made provisions comprises This 2013. during Staff related Staff end. year the at exist that obligations related staff for made provisions to relates This 77 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
31. Borrowing
2012 2011 GH¢’000 GH¢’000 Intra-Group 143,160 90,976 Short-term Loan 50,006 - 193,166 90,976 The short-term loan represents borrowing on the local market. The applicable interest rates are bench marked against the 91-day Treasury Bill rate.
32. Capital And Reserves
(i) Share Capital (Stated Capital)
2012 2011 No of Shares Proceeds No of Shares Proceeds ‘000 GH¢’000 ‘000 GH¢’000
(a) Ordinary Shares
Authorised No. of Ordinary Shares of no par value 250,000 250,000
Issued and Fully Paid
Issued for Cash Consideration 5,655 48,001 5,655 48,001 Transferred from Income Surplus Account 109,852 4,540 13,596 4,040 115,507 52,541 19,251 52,041 Bonus Issue:- The Bank issued 96 million bonus shares to existing shareholders in a ratio of 1:5, bringing the total shares issued to 115, 507, 284. An amount of GH¢500,000 was transferred from retained earnings to Share Capital in respect of the bonus shares.
(b) Preference Shares Issued and Fully Paid
No. of Preference Shares 17,486 9,090 17,486 9,090
Total Share Capital 61,631 61,131 Group overview Financial statements and notes 78 ’000 2011 8,146 4,937 ¢ (1,235) 11,848 GH 123.2 million has million 123.2 ¢ ’000 2012 8,418 ¢ 6,969 13,154 (2,233) GH 33. Related Party Transactions Party Related 33. Amount relating to intangible asset intangible to relating Amount Marked-to- market gains on available for sale securities sale for available on gains market Marked-to- equity in directly recognised taxes Deferred This represents amounts set aside from the retained earnings account to meet the minimum requirements of statutory statutory of requirements minimum the meet to account earnings retained the from aside set amounts represents This advances. and loans non-performing for allowance impairment ReservesOther (v) following: the comprises This been set aside in a Statutory Reserve Fund from the Retained Earnings (Income Surplus Account). The cumulative cumulative The Account). Surplus (Income Earnings Retained the from Fund Reserve Statutory a in aside set been year. the during earnings retained the from aside set amount an includes balance Reserve risk Credit (iv) The following are loan balances due from related parties: related from due balances loan are following The (i) Parent and ultimate controlling party controlling ultimate and Parent (i) Standard is company parent ultimate its and B.V (Africa) Holdings Chartered Standard of subsidiary a is Bank The PLC. Chartered Employees other and Of cers ! Directors, with Transactions (ii) This represents amounts set aside as a non-distributable reserve from annual profits in accordance with section 29 of of 29 section with accordance in profits annual from reserve non-distributable a as aside set amounts represents GH This of amount cumulative A Bank. Central the from guidelines and 673) (Act 2004 Act, Banking the (ii) Retained Earnings (Income Surplus Account) Surplus (Income Earnings Retained (ii) shareholders. to distribution for available are that profits annual cumulative of residual the represents This Reserve Statutory (iii) There is no share in treasury and no call or installment unpaid on any share. share. any on unpaid installment or call no and treasury in share no is There payments. dividend to respect with non-cumulative and irredeemable are shares preference The Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 79 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
2012 2011 GH¢’000 GH¢’000 Directors 572 582 Officers and other Employees 48,414 41,173 48,986 41,755
Interest rates charged on balances outstanding from related parties are lower than the Bank’s market rate for similar products. This is due to the risk inherent in these products. Mortgages and secured loans granted are secured over property of the respective borrowers. Other balances are not secured and no guarantees have been obtained. No impairment losses have been recorded against balances outstanding during the period from directors, officers and employees, and no specific allowance has been made for impairment losses on balances due from these persons at the period end.
Staff compensation for the period:
2012 2011 GH¢’000 GH¢’000 Short-term employee benefits 1,469 1,432 iii. Associated Companies Amounts due from associated companies at the balance date sheet were as follows:
2012 2011 GH¢’000 GH¢’000 Nostro account balances 230 10,703 Inter Bank advances 39,909 275,574 40,139 286,277
Amounts due to associated companies at the balance sheet date were as follows:
2012 2011 GH¢’000 GH¢’000 Short -term borrowing 143,160 90,976 Nostro account balances 4,755 10,261 147,915 101,237
All transactions with related parties were carried out at arm’s length. Group overview Financial statements and notes 80 2,243,643) payable to the Holding company in respect in company Holding the to payable 2,243,643) ¢ 2,730,999GH (2011: ¢ are based Paymentsbased are operational risks operational credit risk credit risk liquidity risks market 34. Financial Risk Management Risk Financial 34. Sh
interest rate risk. rate interest risk. pension of management the for responsible is PEC The Executive Committee (PEC). RiskCo is responsible for the establishment of, and compliance with, policies relating to to relating policies with, compliance and of, establishment the for responsible is RiskCo (PEC). Committee Executive management risk overall our defines also RiskCo The risk. reputational and risk, operational risk, market risk, credit Asset Special Group Committee, Risk Operational Country as such committees oversees RiskCO framework. Committee. Approval Credit and WB), & (SME Alert Early Management, to relating policies with, compliance and of, establishment the and capital of management the for responsible is ALCO and exchange foreign structural and adequacy capital liquidity, of management including management, sheet balance Country Risk Committee (RiskCO) and Asset and Liability Committee (ALCO). Committee Liability and Asset and (RiskCO) Committee Risk Country liquidity standards, and policies trends, portfolio including management, risk on of reports quarterly terms receives its BRC within The activity an to relating information any seek or investigate to authorised is and adequacy, capital and reference. Pensions the and ALCO than other risks all of management the for responsible is (RiskCo) Committee Risk The Acting within an authority delegated by the Board, the Board Risk Committee (BRC), whose membership is comprised is membership whose (BRC), Committee Risk Board the Board, the by delegated authority an within Acting risks prudential of review and oversight for responsibility has Board, the of directors non-executive risk of overall exclusively country’s the reviews It reputational. and operational liquidity, market, credit, to limited not but including the reviewing include also responsibilities Its Board. the to thereon recommendations makes and appetite the considering controls, and systems management risk country’s the of effectiveness and appropriateness the of activities the monitoring on diligence due effective ensuring proposals, change regulatory material of implications This note presents information about the Bank’s exposure to each of the above risks, the Bank’s objectives, policies objectives, Bank’s the risks, above the of each to exposure Bank’s the about information presents note This capital. of management Bank’s the and risk, managing and measuring for processes and Framework Management Risk Board. the with rests risk of management effective the for and appetite risk our setting for responsibility Ultimate (i) Introduction and Overview and Introduction (i) instruments: financial of use its from risks following the to exposure has Bank The v. GH of amount an is cost staff in Included iv. Management and Technical Services Fees Services Technical and Management iv. of out 1547) (LI Regulation Transfer Technology the under Group SCB the with agreements (3) three has Bank Theagreement. unapproved the for made been has provision specific No GIPC. by approved been have two which Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 of value of equity settled share based payments allocated to employees of the Bank on a group arrangement basis. arrangement group a on Bank the of employees to allocated payments based share settled equity of value of 81 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
The committee governance structure ensures that risk-taking authority and risk management policies are cascaded down through to the appropriate functional, divisional and country-level committees. Information regarding material risk issues and compliance with policies and standards is communicated to the functional committees and country-level sub-committees. Roles and responsibilities for risk management are defined under a Three Lines of Defence model. Each line of defence describes a specific set of responsibilities for risk management and control. The first line of defence is that all employees are required to ensure the effective management of risks within the scope of their direct organisational responsibilities. Business and function governance heads are accountable for risk management in their respective businesses and functions. The second line of defence comprises the Risk Control Owners, supported by their respective control functions. Risk Control Owners are responsible for ensuring that the risks within the scope of their responsibilities remain within appetite. The scope of a Risk Control Owner’s responsibilities is defined by a given Risk Type and the risk management processes that relate to that Risk Type. These responsibilities cut across and are not constrained by functional and business boundaries. The third line of defence is the independent assurance provided by the Country’s Internal Audit function. Its role is defined and overseen by the Audit Committee. The findings from the country audits are reported to management and governance bodies – accountable line managers, relevant oversight function or committee and committees of the Board. The country’s internal audit provides independent assurance of the effectiveness of management’s control of its own business activities (the first line) and of the processes maintained by the Risk Control Functions (the second line). As a result, Internal Audit provides assurance that the overall system of control effectiveness is working as required within the Risk Management Framework. Below is the schematic view of the country’s risk governance framework.
Credit Risk Credit risk is the potential for loss due to the failure of counterparty to meet its obligations to pay the bank in accordance with agreed terms. Credit exposures may arise from both the banking and trading books. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. There is a clear segregation of duties between transaction originators in the businesses and approvers in the Risk function. All credit exposure limits are approved within a defined credit approval authority framework. Credit monitoring We regularly monitor credit exposures, portfolio performance, and external trends that may impact risk management outcomes. Internal risk management reports are presented to risk committees, containing information on key environmental, political and economic trends across major portfolios; portfolio delinquency and loan impairment performance; and Internal Risk Based (IRB) portfolio metrics including credit grade migration. Credit mitigation Potential credit losses from any given account, customer or portfolio are mitigated using a range of tools such as collateral, netting agreements, credit insurance, and other guarantees. The reliance that can be placed on these mitigants is carefully assessed in light of issues such as legal certainty and enforceability, market valuation correlation and counterparty risk of the guarantor. Risk mitigation policies determine the eligibility of collateral types. Traded products Credit risk from traded products is managed within the overall credit risk appetite for corporates and financial institutions. The credit risk exposure from traded products is derived from the positive mark-to-market value of the underlying instruments, and an additional component to cater for potential market movements. Group overview Financial statements and notes 82 Loans renegotiated before 90 days past due and on which no default in interest payments or loss of principal is expected is principal of loss or payments interest in default no which on and due past days 90 before renegotiated Loans more for payments principal or interest in default no been has there which on but due, past days 90 after or at renegotiated Loans expected is principal of loss no which against and renegotiation, since days 180 than accounts to 90 days past due (unsecured and automobile finance) and 120 days past due (secured) respectively. (secured) due past days 120 and finance) automobile and (unsecured due past days 90 to accounts The provisions are based on the estimated present values of future cash ows, in particular those resulting from the the from resulting those particular in ows, cash future of values present estimated the on based trigger are to provisions used The due past days The off. written be will loan remaining any realisation such Following security. of realisation relevant the reaches account an once that shows which experience, past by driven broadly all are For IIPs and low. write-offs is appropriate) where security realising by than (other recovery of probability the due, past days of number accelerated, is process write-off or provisioning impairment individual the where situations certain are there restructured all products for accelerated are IIPs and Write-off death. and fraud customer bankruptcy, involving cases in as such Provisioning within Consumer Banking re ects the fact that the product portfolios consist of a large number of of number large a of consist portfolios product the that fact the re ects Banking Consumer within Provisioning exposures. small comparatively days 150 at off written generally is amount outstanding entire the secured, loans and products unsecured main the For individual loans secured For due. past days 90 at off written are loans finance consumer Unsecured due. past past Management) (Wealth days 90 or (Mortgages) days 150 either at raised generally are (IIPs) provisions impairment due. In Consumer Banking, where there are large numbers of small value loans, a primary indicator of potential impairment is is impairment potential of indicator primary a loans, value small of numbers large are there where Banking, Consumer In interest or principal a make to failed has counterparty the when due) (past delinquent considered is loan A delinquency. delinquency) of stage early the in those (particularly loans delinquent all not However, due. contractually when payment 30, 1, of as delinquency measuring standards, industry and follow we monitored purposesclosely reporting more delinquency are For days impaired. 30 be than will more by overdue are that Accounts due. past days 150 and 120 90, 60, processes. collections specific to subject and credit conditions. It is possible that actual events over the next year differ from the assumptions built into the model the into built assumptions the from differ year next the over events actual that possible is It conditions. credit and advances. and loans of amount carrying the to adjustments material in resulting regulations Ghana of principles/BankGAAP with tandem in prepared are books our in identified of losses outcome Impairment the is which difference Any report. this in used provisioning IAS by replaced recently very until was which Reserve. Risk Credit under sheet balance our in reported is above principles two the using BankingConsumer provisions have been raised. been have provisions arrears of level the considers and judgment, significant involves recoveries future of timing and amount the Estimating collateral, of value the and processes court conditions, economic future as such matters of assessment the as well as market. accessible readily a be not may there which for economic in changes to sensitive being uncertain inherently is allowances impairment bank’s the of amount total The represents those loans against which individual impairment provisions have been raised) and excludes: and raised) been have provisions impairment individual which against loans those represents within or assets loan specific on either losses impairment incurred recognize to established are provisions loss loan The impairment individual which against loans those are loans impaired Individually receivables. and loans of portfolio a Problem credit management and provisioningmanagementcreditProblemand (which WholesaleBanking impaired individually otherwise is or due past days 90 than more is that loan any is loan non-performing A Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 83 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
Individually impaired loans for Consumer Banking will therefore not equate to those reported as non-performing, because non-performing loans include all those over 90 days past due. This difference re ects the fact that, while experience shows that an element of delinquent loans is impaired it is not possible to identify which individual loans the impairment relates to until the delinquency is sufficiently prolonged that loss is almost certain, which, in the bank’s experience, is generally around 150 days in Consumer Banking. Up to that point the inherent impairment is captured in portfolio impairment provision (PIP). The PIP methodology provides for accounts for which an individual impairment provision has not been raised, either individually or collectively. PIP is raised on a portfolio basis for all products, and is set using expected loss rates, based on past experience supplemented by an assessment of specific factors affecting the relevant portfolio. These include an assessment of the impact of economic conditions, regulatory changes and portfolio characteristics such as delinquency trends and early alert trends. The methodology applies a larger provision against accounts that are delinquent but not yet considered impaired.
Set out below is an analysis of various credit exposures. Analysis by credit grade of loans and advances Loans and receivables
2012 2011 GH¢’000 GH¢’000 Impaired loans Individually impaired 121,922 77,645 Allowance for impairment (30,451) (25,736) Impaired loans, net of individual provisions 91,471 51,909 Loans past due but not impaired Past due up to 30 days 35,296 19,359 Past due 31-60 days 5,547 5,116 Past due 61-90 days 3,705 2,024 Past due 91-120 days 2,678 877 Past due 121-150 days 1,240 606 Past due more than 150 days 7,634 8,510 56,100 36,492 Loans neither past due nor impaired Credit grading 1-12 or equivalent 819,708 514,000 Less: Portfolio impairment provision (7,682) (5,677) 868,126 544,815 Total net loans 959,597 596,724 Financial statements and notes 84 ’000 ’000 2011 2011 5,605 ¢ ¢ 45,608 40,003 596,724 190,549 415,574 GH GH 1,202,847 ’000 ’000 2012 2012 ¢ ¢ 17,381 131,909 101,218 118,599 959,597 125,889 GH GH 1,217,395 Loans and Advances and Loans Commitments and Liabilities Contingent Unsecured Placements with other BanksotherPlacements with Against impaired assets assets impaired Against Against past due but not impaired assets impaired not but due past Against The Bank holds collateral against loans and advances to customers in the form of mortgage interests over property, property, over interests mortgage of form the in customers to advances and loans against collateral collateral holds Bank of The value the on based are value fair of Estimates guarantees. and assets, over securities registered as other assessed individually is loan a when except updated not are generally and borrowing, of time the at assessed impaired. below: shown is assets financial against held enhancements security other and collateral of value fair the of estimate An receivables and Loans Fairvalue collateralof held their contractual nominal amounts. nominal contractual their The concentration of loans and advances by business segment and customer types are disclosed in Note 21(iv) and 21(iv) Note in disclosed are types customer and segment business by advances and loans of concentration The instruments. Government in largely held are securities Investment respectively. 21(v) their perform to failing exposure parties credit other Maximum of event the in Bank the of exposure risk credit maximum the 2012, is December loss 31 to At exposure maximum the and held collateral any of taken been has account No below. detailed is obligations transactions, sheet off-balance non-derivative for or, amount carrying sheet balance instruments’ the be to considered Analysis of credit concentration risk concentration credit of Analysis Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 ALCO has primary responsibility for compliance with regulations and Bank policy and maintaining a liquidity crisis liquidity a maintaining and policy Bank and regulations with compliance for responsibilityprimary has ALCO plan. contingency It is the policy of the Bank to maintain adequate liquidity at all times, and for all currencies. Hence the Bank aims to be in in be to aims Bank the Hence currencies. all for and times, all at liquidity adequate maintain to Bank the of policy other the any is meet It to and lend to commitments fulfill to depositors, repay to obligations, all meet to position a commitments. is which (ALCO), Committee Management Liability and Asset Bank’s the by governed is management Theserisk Liquidity liquidity. prudential and statutory both for responsible is ALCO Officer. Executive Chief the by chaired procedures. and policies authorities, of provision the include responsibilities (iii) Liquidity Risk Liquidity (iii) its with associated obligations meeting in difficulty encounter will Bank the that risk the as risk liquidity defines Bank The asset. financial another or cash delivering by settled are that liabilities financial 85 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
A substantial portion of the Bank’s assets are funded by customer deposits made up of current and savings accounts and other deposits. These customer deposits, which are widely diversified by type and maturity, represent a stable source of funds. Lending is normally funded by liabilities in the same currency. The Bank also maintains significant levels of marketable securities either for compliance with local statutory requirements or as prudential investments of surplus funds. ALCO oversees the structural foreign exchange and interest rate exposures that arise within the Bank. These responsibilities are managed through the provision of authorities, policies and procedures that are co-ordinated by ALCO. Compliance with Bank ratios is also monitored by ALCO. An analysis of various maturities of the Bank’s assets and liabilities is provided below. Maturities of assets and liabilities
0-3 3-6 6-12 over 1 months months months year 2012 2011 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Assets Cash and Balances with Bank of Ghana 515,468 - --515,468 159,872 Short-Term Government Securities 66,122 110,976 --177,098 170,104 Due from other Banks and Financial 155,473 - --155,473 479,245 Institutions Loans and Advances 544,571 92,208 22,160 300,658 959,597 596,724 Investment in Subsidiaries -- -1 1 100 Other Assets - 127,615 --127,615 68,848 Government Bonds Medium Term Securities 59 - 100,513 324,576 425,148 469,322 Property, and Equipment -- - 23,315 23,315 18,291 Intangible Assets -- - 6,969 6,969 8,146 Deferred Tax -- -- - 410 1,281,693 330,799 122,673 655,519 2,390,684 1,971,062 Group overview Financial statements and notes - - 86 ’000 2011 6,666 ¢ 10,261 90,976 40,828 110,068 232,576 GH 1,971,062 1,479,687 1,738,486 1,738,486 603 ’000 2012 4,741 1,889 5,463 ¢ 50,160 119,115 193,166 311,349 GH 1,704,198 2,126,423 2,079,335 2,390,684 - - - - - ’000 year ¢ over 1 over 655,519 655,519 GH ------603 ’000 6-12 7,9 5 5 7,9 5 5 1,889 5,463 ¢ 114,718 122,673 months GH - - 3-6 3-6 ’000 7,834 ¢ 10,254 193,166 119,545 330,799 months GH ------0-3 0-3 ’000 4,741 ¢ 50,160 111,281 months (578,433) GH 1,860,126 211,254 1,860,126 211,254 1,281,693 1,693,944 Borrowings Liabilities Derivative: Non Deposits Customer Derivative Interest Payables and other Liabilities other and Payables Interest Taxation Tax Deferred Provisions Due to other Banks and Financial Institutions Financial and Banks other to Due Total Liabilities Gap Liquidity Net Total Liabilities Gap liquidity Net Assets Total Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 Bank’s Market Risk unit complements the VaR measurement by regularly stress testing market risk exposures to to exposures risk market testing stress regularly by measurement VaR the complements unit an Risk is Market testing Bank’s Stress plausible. but rare are that events market extreme from arise may that risks potential highlight forward and events market historical both considers and framework management risk market the of part integral stress consistent A conditions. market specific re ecting prepared also are scenarios hoc Ad scenarios. looking books. non-trading and trading to applied is methodology testing defined as the Banking book. Limits are proposed by the businesses within the terms of agreed policy. agreed of terms the within businesses the by proposed are Limits book. Banking the as defined Additional limits. these against exposures monitors and authorities delegated within limits the approves also unit The are measures Sensitivity appropriate. where concentrations currency and instruments specific on placed are limits tools. management risk as VaR to addition in used The maintained. are accuracy of levels pre-determined ensure to results actual against tested back are models VaR The Bank recognises market risk as the exposure created by potential changes in market prices and rates, such as such rates, and prices market in changes potential by created exposure the as risk market recognises Bank from Theprincipally arising risk market to exposed is Bank The rates. exchange foreign and prices equity rates, interest transactions. driven customer policies, agrees which and ALCO, by supervised is which unit Risk Market Bank’s the and by oversight governed risk is risk market Market provides unit The (“VaR”). Risk at Value of terms in appetite risk is of book levels and non-trading procedures The Bank. the of books non-trading and trading the both cover Policies setting. policy on guidance (iv) Market Risks Market (iv) Risk Market of Management 87 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
Stress scenarios are regularly updated to re ect changes in risk profile and economic events. The unit has responsibility for reviewing stress exposures and, where necessary, enforcing reductions in overall market risk exposure. It also considers stress testing results as part of its supervision of risk appetite. The stress test methodology assumes that management action would be limited during a stress event, re ecting the decrease in liquidity that often occurs. Contingency plans are in place and can be relied on in place of any liquidity crisis. The Bank also has a liquidity crisis management committee which also monitors the application of its policies. The Bank has not identified any limitations of the VaR methodology.
Foreign Exchange Exposure The Bank’s foreign exchange exposures comprise trading and non-trading foreign currency translation exposures. Foreign exchange exposures are principally derived from customer driven transactions. Concentration of foreign currency denominated assets and liabilities are disclosed in note 36.
Sensitivity Analysis A 5% strengthening of the Cedi against the following currencies at 31 December 2012 would have impacted equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2011. Sensitivity analysis Effect in Cedis 31 December 2012
Pro!t or Loss GH¢’000 USD 261 GBP (5) EUR 10 Others 22 31 December 2011
Pro!t or Loss GH¢’000 USD (922) GBP (129) EUR (65) Others 1 A best case scenario 5% weakening of the Ghana Cedi against the above currencies at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
Interest Rate Exposure The principal risk to which non-trading portfolios are exposed is the risk of loss from uctuations in the future cash ows or fair values of financial instrument because of a change in market interest rates. Interest rate risk is managed principally through monitoring interest rate gaps and by having pre-approved limits for repricing bands. ALCO is the monitoring body for compliance with these limits and is assisted by the Bank’s Market Risk unit in its day-to-day monitoring activities. Financial statements and notes 88 856 ’000 ’000 1,712 ¢ ¢ 16,937 13,580 100 bp bp 100 100 bp bp 100 (12,724) (15,225) GH GH Decrease Decrease ’000 ’000 (856) ¢ ¢ (1,712) 12,724 100 bp bp 100 100 bp bp 100 15,225 (16,937) (13,580) Increase Increase GH GH Interest expense impact expense Interest impact Net Interest expense impact expense Interest impact Net 31 December31 2012 impact income Interest 31 December31 2011 impact income Interest Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 Compliance and Regulatory risk includes the risk of non-compliance with regulatory requirements. The Bank’s Bank’s The requirements. regulatory with non-compliance of risk the includes risk Regulatory and Compliance of framework appropriate an maintaining and establishing for responsible is function Risk Regulatory and compliance of responsibility the is procedures and policies such with Compliance procedures. and policies compliance Bank’s the managers. all Bank’s key operational risk exposures. This unit is supported by Wholesale Banking and Consumer Banking Consumer and Banking Wholesale by supported is unit This exposures. risk operational key Bank’s the in procedures and policies with compliance ensuring for responsible are units These units. Risk Operational areas business respective the to guidance of provisions the and exposures, risk operational key monitoring business, risk. operational on RegulatoryRisk Complianceand (vi) monitor, control and report such risks. risks. such report and control monitor, the direct and supervise to established been has (CORC) Committee Risk Operational Country Bank’s The appropriate and adequate ensuring for responsible also is CORC Bank. the across risks operational of management operational of reporting and control monitoring, assessment, identification, the for place in are procedures and policies, risks. the monitoring for and framework risk operational overall the maintaining and establishing for responsible is CORC The (v) OperationalRisks (v) internal of failure the from resulting action or event an to due loss indirect or direct of risk the is are risk risks Operational operational key that ensure to seeks Bank The events. external from or systems, and people processes, assess, identify to tools and procedures policies, of framework a through manner effective and timely a in managed The management of interest rate risk against interest rate gap limits is supplemented by monitoring the sensitivity of the the of sensitivity the monitoring by supplemented is limits gap rate interest against risk rate interest of management The scenarios Standard scenarios. rate interest non-standard and standard various to liabilities and rates. assets interest financial market Bank’s in rise or fall parallel (bp) point basis 100 a include basis monthly a on considered are that by loss or profit and equity impacted have would date reporting the at rates interest in points basis 100 a of change A below: shown amounts the 89 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
(vii) Capital Management The Central Bank sets and monitors capital requirements for the Bank. Under the guidelines of the Central Bank, the Bank is required to maintain a prescribed ratio of total capital to total risk-weighted assets. The Bank’s capital is analysed into two tiers: Tier 1 capital, which includes ordinary paid up share capital, permanent preference shares and disclosed reserves, after deducting certain assets such as investments in capital of other Banks and financial institutions. Tier 2 capital, which includes some reserves such as the element of the fair value reserve relating to unrealised gains on equity instruments classified as available-for-sale. Various limits are applied to elements of the capital base, and other assets are given various classifications such as claims on government, claims on the Central Bank and contingent liabilities and risk-weighted assets are determined according to specified requirements that seek to re ect the varying levels of risk attached to assets and off-balance sheet exposures. The Bank’s policy is to maintain a strong capital base so as to maintain investor, and market confidence and to sustain future development of the business. The impact of the level of capital on shareholders’ return is also taken into consideration, and the Bank recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position. The Bank has complied with all externally imposed capital requirements throughout the year. There has been no material changes in the Bank’s management of capital during the year.
35. Concentration Of Ghana Cedi Equivalent Of Foreign Currency Denominated Assets, Liabilities And Off Balance Sheet Items
USD GBP EUR Others 2012 2011 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Assets Cash and Balances with Bank of 188,237 12,874 7,433 20 208,564 44,454 Ghana Due from other Banks and Financial 19,596 20,120 - 558 40,274 275,195 Institutions Loans and Advances 357,647 732 36,670 - 395,049 285,597 Other Assets 90,022 405 6,253 - 96,680 15,234 Total Assets 655,502 34,131 50,356 578 740,567 620,480
Liabilities Customer Deposits 450,924 32,103 33,047 19 516,093 552,258 Due to other Banks and Financial 144,286 - - - 144,286 10,229 Institutions Interest Payable and other Liabilities 206,206 9,954 11,418 30 227,608 38,747 Total Liabilities 801,416 42,057 44,465 49 887,987 601,234 Net-on Balance Sheet Position (145,914) (7,926) 5,891 529 (147,420) 19,246 Financial statements and notes 90 100 1.16 ’000 0.98 3.22 2011 2011 2,000 94.64 ¢ 19,246 601,234 190,069 190,069 620,480 GH Percentage ’000 2012 ¢ 100,273 GH 76,390,800) and 76,390,800) 2012 ¢ 9,000 - 618 222 394 396 ’000 ¢ Others Holding GH 3,715,974 1,133,403 1,342,727 115,507,284 109,315,180 ’000 EUR 7,59 3 ¢ 134,157,000 (2011: GH (2011: 134,157,000 17,686 41,060 48,653 ¢ GH 194 207 805 ’000 GBP 1,705 5,315 3,209 ¢ 37,924 31,067 GH Number of of Number Shareholders ’000 USD 4,574 6,857 ¢ 91,400 8,550 323 171,184 528,711 533,285 GH 37. Number Of Shares In IssueSharesIn NumberOf 37. 38. Number Of Shareholders Of Number 38. 36. Directors’ Shareholding Directors’ 36. Over 10,000 Over Ishmael Yamson Ishmael Off-Balance Sheet Credits and Credits Sheet Off-Balance Commitments 5,001 - 10,0005,001- Range of Shares of Range 1,001 - 5,000 At 31 December 31 2011 At Assets Total 1 - 1,000 - 1 Total Liabilities Net-on Balance Sheet Position Sheet Balance Net-on and Credit Sheet Off-balance Commitments Dividend and net assets per share are based on 115,507,284 (2011: 19,251,214) ordinary shares in issue during the year. the during issue in shares ordinary 19,251,214) (2011: 115,507,284 on based are share per assets net and Dividend share per earnings diluted and Basic (ii) to attributable profit the on based was 2012 December 31 at share per earnings diluted and basic of calculation The GH of dividends preference for adjustments after shareholders ordinary (i) Dividend and net assets per share per assets net and Dividend (i) (i) Ordinary Shares Ordinary (i) 115,507,284 (2011: 19,251,214) weighted average shares in issue. issue. in shares average weighted 19,251,214) (2011: 115,507,284 follows: as distributed 2012 December 31 at shareholders preference 971 and ordinary 5,315 had company The Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 The Directors named below held the following number of shares in the Bank as at 31 December 2012: December 31 at as Bank the in shares of number following the held below named Directors The Shares Ordinary 91 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
(ii) Preference Shares
Number of Range of Shares Shareholders Holding Percentage 1 - 1,000 775 289,424 1.65 1,001 - 5,000 147 332,435 1.9 5,001 - 10,000 21 170,916 0.98 Over 10,000 28 16,693,490 95.47 971 17,486,083 100
39. Employee Bene!ts
(i) De!ned Contribution Plans The Bank now operates the new three-tier pension scheme as directed by the National Pension Authority. This requires an additional contribution rate of 1% to be shared equally between the employer and the employee. The bank now pays 13% (instead of the current 12.5%) and the employee now pays 5.5% (instead of the current 5%), making a total contribution of 18.5% (instead of the 17.5%). Out of a total contribution of 18.5%, the bank remits 13.5% to a restructured Social Security and National Insurance Trust towards the first tier pension scheme, out of which 2.5% is a levy for the National Health Insurance scheme. The bank remits the remaining 5% to a privately managed and mandatory second tier for lump sum benefit. The third tier is a voluntary provident fund and personal pension scheme which the bank contributes 7% of staff basic salary. (ii) De!ned Bene!t Scheme
Retired Staff Medical Plan The Bank has a scheme to pay the medical cost of some retired staff and their spouses from the date of retirement till death. Under the scheme, the Bank pays the medical cost of eligible persons with a cost cap of GH¢5000 per person. The scheme is accounted for as a defined benefit plan. The total provision carried in the balance sheet in respect of this scheme was GH¢Nil (2011: GH¢Nil). The Bank has taken an insurance policy to cover the scheme. The plan assets covered fully the obligation at the year end.
40. Cash And Cash Equivalents In The Statement Of Cash"ow
For the purposes of the cash ow statement, cash and cash equivalents comprise the following balances with less than three months maturity from the date of acquisition.
2012 2011 GH¢’000 GH¢’000 Cash and balances with Bank of Ghana 515,368 159,872 Nostro account balances 557 10,906 Items in course of collection 23,007 52,765 Placement with other Banks 131,909 415,574 670,941 639,117 Group overview Financial statements and notes 92 0.17 0.12 0.15 0.13 0.13 0.18 0.13 0.18 1.97 0.47 0.31 0.21 0.27 0.28 0.20 0.38 0.34 0.86 14.34 69.42 90.23 171,504 191,532 236,130 207,354 207,600 246,570 145,494 315,366 325,026 434,784 148,500 148,200 138,000 362,340 544,092 395,208 990,000 2,270,514 16,566,612 Number of of Number 80,181,096 104,225,922 Shares Held Shares Holdings (%) 41.Details Of Shareholders At 31 December 2012 SCBN/State Street Lond C/o SSB Bost RE Russell RE Bost SSB C/o Lond Street SCBN/State SSNIT Informal Sector Fund Sector Informal SSNIT Limited Group Enterprise SCBU/Unilever Ghana Managers Pension Fund Pension Managers Ghana SCBU/Unilever University of Science & Technology & Science of University Fund Market Emerging Structured Vance Eaton SCBN/SSB STD Noms Tvl Pty/Bnym/Frontier Market Select Fund II, LP II, Fund Select Market Pty/Bnym/Frontier Tvl Noms STD SCBN/SSB Eaton Vance Tax-Managed Emerging Market Market Emerging Tax-Managed Vance Eaton SCBN/SSB SSNIT SOS Fund SOS SSNIT Social Security & National Insurance Trust Insurance National & Security Social Standard Chartered Holdings (Africa) BV Shareholders of Number BV (Africa) Holdings Chartered Standard SCBN/ELAC Policyholders Fund Policyholders SCBN/ELAC LLC (USA) Sec Suisse PTY/Credit TVL Noms STD Kojo Anim-Addo Teachers Fund Fund Teachers Limited Company Assurance Union Ghana Limited Fund Investment SCBN/EPACK Endowment Ghana. of University for Council SCBN/SSB TST X71 AX71 6169E AX71 X71 TST SCBN/SSB HL S/A Branch Singapore SCB Re Mauritius SCBN/SCB (i) Details of 20 Largest Ordinary Shareholders at 31 December 2012 December 31 at Shareholders Ordinary Largest 20 of Details (i) Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 93 Standard Chartered Bank Ghana Annual Report 2012
Notes to the Financial Statements For the year ended 31 December 2012
(ii) Details of 20 Largest Preference Shareholders at 31 December 2012
Number of Number of Shareholders Shares Held (%) Holdings
Standard Chartered Holdings (Africa) BV 15,220,598 87.04
Barton Kwaku Glymin Jnr. 422,019 2.41
SSNIT SOS Fund 307,692 1.76
Anim-Addo Kojo 106,806 0.61
Ghana Union Assurance Company Limited 99,351 0.57
Kudjawu Norbert Kwasivi Mr. 68,775 0.39
Akosah-Bempah F. Ophelia 54,150 0.31
Afedo Moses Kwasi 45,450 0.26
Akosah-Bempah Kwaku Jnr. 40,654 0.23
STD Noms TVL PTY/Credit Suisse Sec(USA) LLC/Africa Opportunity Fund L.P 29,366 0.17
Aryee Clifford Edward 25,000 0.14
Boye Ebenezer Magnus 25,000 0.14
Minkah Anthony Mr. 20,268 0.12
Nyako John Percival Awuku Mr. 20,000 0.11
Safo Kwakye Eddie Mr. 20,000 0.11
Yankson Edem 20,000 0.11
SIC Life Company Limited 19,231 0.11
NTHC Trading Account 19,231 0.11
Nelson Aruna 19230 0.11
16,603,482 95.00 Group overview FinancialFinancial statements statements and and notes notes 94
43. Fair Value Of Financial Assets And Liabilities And Assets Financial Of Value Fair 43. 42. Comparative InformationComparative42. vestment securities with observable market prices, including debt are fair valued using that information. Equity information. that using valued fair are debt including prices, market observable with securities vestment The aggregate fair values are calculated based on quoted market prices. For those notes were quoted market prices market quoted were notes those For prices. market quoted on based calculated are values for fair appropriate aggregate curve The yield related market current a on based used is model ow cash discounted a available, not are maturity. of term remaining the Deposits and borrowings fair and estimated Deposits The demand. on repayable amount the is maturity stated no with deposits of value fair estimated The discounting on based is prices market quoted without borrowings other and deposits bearing interest fixed of value maturity. remaining and risk credit similar a with debts for rates market prevailing the using ows cash funds borrowed other and liabilities subordinated issue in securities Debt Investment securities Investment cost. at In presented are values fair their estimate reliably to data market observable have not do that the held using instruments ows cash discounting either by valued fair are data market observable have not do that securities for pricesDebt market quoted using or maturity remaining and risk credit similar a with debts for rates market prevailing characteristics. yield and maturity credit, similar with securities with a similar credit risk and remaining maturity. remaining and risk credit similar a with customers to advances and represents Loans advances and loans of value fair estimated The impairment. for allowance of net at are discounted advances and are Loans ows cash Expected received. be to expected ows cash future estimated of amount discounted the value. fair determine to rates market current The following sets out the Bank’s basis of establishing fair values of financial instruments disclosed under note 15. 15. note under disclosed instruments financial of values fair establishing of basis Bank’s the out sets following The BankCentral of at heldbalances value and fair Cash estimated The amounts. carrying their is deposits overnight and placements rate oating of value fair debts The for rates money-market prevailing the using ows cash discounted on based is deposits bearing interest fixed The comparative financial information, where considered necessary, have been reclassified to achieve consistency with with consistency achieve to reclassified been have necessary, considered where information, financial comparative The figures. year current of presentation The fair value of derivatives is based on discounted cash ows of using observable market quotes of similar credit risk credit similar Derivatives of quotes market observable using of ows cash discounted on based is derivatives of value fair The maturity. and Notes to the Financial StatementsFinancial the to Notes DecemberyearendedtheFor 31 2012 Notes Form of Proxy
I……………………………………………………………………………………………………………………………… (Block Capitals Please)
Of
……………………………………………………………………………………………………………………………….. Being Member/Members of STANDARD CHARTERED BANK GHANA LIMITED hereby appoint
……………………………………………………………………………………………………………………………….
Of
……………………………………………………………………………………………………………………………… or failing him the duly appointed Chairman of the Meeting, as my/our Proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 11.00 am on Thursday, 23rd day of May, 2013 and at every adjournment thereof.
Please indicate with an X in the spaces below how you wish your votes to be cast.
RESOLUTION FOR AGAINST
1. Declaring a Dividend
2. Electing Mr. Anil Dua as Director
3. Approving Directors’ Remuneration
4. Approving the Remuneration of the Auditors
SPECIAL RESOLUTION
6. Amendment of Company Regulations
Signed……………………………. day of ……………………… 2013 Sig nature ……………………...
cut here cut here
IMPORTANT: Before posting the Form of Proxy above, please tear off this part and retain it – see over. If you wish to insert in the blank space on the form the name of any person, whether a Member of the company or not, who will attend the meeting and vote on your behalf, you may do so; if you do not insert a name, the Chairman of the Meeting will vote on your behalf. If this Form is returned without any indication as to how the person appointed a proxy shall vote, he will exercise his discretion as to how he votes or whether he abstains from voting. To be valid, this Form must be completed and must reach the Registered Office of the Company not less than 48 hours before the time fixed for holding the Meeting or adjourned Meeting.
95 Group overview Group
PLEASE AFFIX STAMP HERE FIRST FOLD HERE SECOND FOLD HERE
The Secretary Standard Chartered Bank, Ghana Limited Head Office P. O . B o x 7 6 8 , A c c r a
THIRD FOLD HERE
CUT HERE CUT HERE
IMPORTANT: A person attending the meeting should not produce this form