Results for the year ended 31 December 1999

1. Results for the year ended 31 December 1999

2. OUTLINE • Stuart Morris • Financial highlights • Provisions • Richard Laubscher • Metric dashboard • Divisions • Positioning

3. FINANCIAL HIGHLIGHTS

4. INCOME STATEMENT

5. EARNINGS PER SHARE - UP 25% CAGR 3 Year 25%

6. PEER GROUP

7. PEER GROUP

8. OPERATING COMPANIES * NIB reported earnings growth of 25% to R500 million, of which R21 million was attributable to NIB minorities

9. NET INTEREST MARGIN

10. SHAREHOLDERS’FUNDS UP 10%

11. PROVISIONS Provisions were bolstered, not fed into earnings

12. NON-PERFORMING LOANS

13. Metric dashboard Beacons or markers

14. Multiple of revenue / earnings • Marker = ROE • gearing level - financial leverage, financial risk • benchmarks in low inflation economies • proportion of NAV in hard currencies • ROE required to self-service capital • separate management of shareholders’ funds • capital allocated to best ROE opportunities

15. RESULTS OF ROE FOCUS • Capital ratio grown to 12% • Gearing of 8.5 times is low • Surplus capital held centrally and allocated to best ROE opportunities • Exit inadequate ROE businesses • Travel, air-ticket processing, linked products • Duplicate areas & international businesses • Positioned to gear capital mix at low rates • Much less need for earnings retention

16. ROE PROSPECTS • >R6bn invested in hard currencies • plans to create currency for further acquisitions, for example listing DDIL • Capital held in cash during high rates • recent moves with Didata - R3bn invested • market value surplus of >R3bn not booked • high earnings growth, hard currency assets • cellular & internet deals in pipeline • Shareholders’ funds are working hard

17. ASSET PRODUCTIVITY • Marker = ROA • nearing 2% • high return relative to low risk • provisions nearly 3% of advances • Gross coverage 86%, net coverage 167% • Ahead of indicated standardised provision regulations • strong provisions enable improvements to flow through to bottom line

18. RETAIL DIVISION • Capital One JV for underserved through Peoples Bank • pilots show high upside • information based strategy - data analysis • empowerment deal under negotiation • Right client, brand affinity & attitudinal pull • Nedbank & Permanent Bank • positioned to follow suburban drift • Nedbank Private Bank • merged Nedbank, Syfrets & UAL, leading player • New card system • big growth in electronic base

19. COMMERCIAL • ROE per client capability • focused service (six-pack teams) on valued clients • factored into all credit decisions • manage client channel choices • 65% of commercial clients have electronic facilities • 75 000 business clients use telecentre • specialised service centres (outside branches) • High ROE/low cost ratio division • Formative relationships, piggy-back growth

20. CORPORATE • Core credit analysis capability • clean sheet, small share of main failures • Quality growth • running at 24%, 18-20% prospective • Term lending = 40% (annuity component) • Rate competition has always been keen • Client profitability MIS capability • New electronic platform • NIB/ENF deal flow

21. INTERNATIONAL • Do not do • High-street banking • Investment banking • Global treasury • Take risk in unknown countries • Do • go virtual • minimise capital intensity • share skills and risk with partners • use armour-piercing strategies for barriers to entry

22. RESULTS • Only major bank gaining market share • Commercial market gains, doubled in 5yrs • High ROA, high asset quality, low risk • high provisions/low NPLs • economic upturn goes directly to bottom line • CBD properties written down

23. NON-INTEREST REVENUE • Marker = NIR/Total income • target 45% • low capital intensity • choice of channel, ability to analyse activity • high inflation protection • high intellectual capital • Results • cost consequences of channel choice • insurance sales platform, at least R150m upside • private equity growing

24. EXPENSES • Efficiency ratio (cost/income) • sustainable efficiency without compromising service via process re-engineering culture • Other beacons/markers • assets per employee up by 20% in 1999 to R7.5m • profits per employee up by 37% in 1999 to R139 000 • fixed assets/income now inside 3 months • transaction volumes, cycle times, error rates, unit costs

25. 25% 75% 50% 20% IT BASED PROCESS RE-ENGINEERING VOLUME & SCALE INTERNATIONALISE Efficiency curve PROJECT SYNERGY PROJECT ALPHA • ADD VOLUME • 3rd Party/Stanbic • Underbanked Unit Cost REPLICATE INTERNATIONALLY PROCESS ENGINEERING

26. EXPENSE FOCUS RESULTS • Cost ratio now under 52% • lowest in SA • international benchmarks within sight • continuing momentum, eg R400m via projects • ratio in Retail >60% under attack • Branch closures & repositioning • Staff productivity way ahead of peers • Share options in lieu of bonuses • 3rd year of zero increase in processing costs • State of the art technology platform • substantial volume headroom

27. PLATFORMS • Major spend on • new internet engine • direct telecentre • cell phone (view phone) • electronic banking • network “pipe” • Client choice, pricing for functionality

28. PLATFORM RESULTS • 903 4th generation ATMs, top in Saswitch • 337 SSTs, user friendly touch screen • 90 000 business clients contracted at Nedtel • first with WAP/MMM internet connectivity • 45 000 internet clients • 770 000 transactions per month • Lower costs/higher functionality

29. BUSINESS MODEL • Smaller units • co-operation, participation, ownership • performance driven, individual and team • invest in performers/exit non-performers • Values based culture • fairness, development, integrity, performance • people management rewarded • Concentration on • virtual form & ensuring convergence play • intellectual capacity • partnerships (share knowledge & risk) • Didata , Capital One , Dresdner & BNP , HSBC , Old Mutual , State Street, American Express

30. CONCLUSION • Less risk • More capital appreciation • Higher returns • Inch by inch sustainable performance improvements • Pick-ups in GDP, volume & efficiency go straight to the bottom line