Slide 1: Overview
Overview Maria Ramos Group Chief Executive
Slide 2: The year under review
_The year under Strong underlying growth Improved quality of the advances book Growing customer numbers and primary banking relationshi Growth of assets under management Costs well controlled Improved risk management - Dealt with specific risk events - Continue to improve control environment - Ensur
Slide 3: Attributable earnings by business
Rm 3627 2823 2863 2276 2317 1515 1284 424 288 68 Ee Absa Capital ACBB AFS Retail Corporate Centre Compositio 4% 34% 19% 42% 1% 15% 18% 38% 14% nla Attributable earnings ™ 2008 ™ 2009
Slide 4: Earnings drivers
Earnings drivers Rm Underlying business growth 10666 -21% - Growth in customer numbers and primary 158% banking relationships - Higher retail and commercial om -11% 11% 6 840 deposit levels — = - Growing transaction volumes and fee and commission income - Improved new business margins - Strong growt
Slide 5: Margins held up
Margins held up Group (bps) Advances 27 - Change in client rates 32 - Change in composition 14 - Interest suspended (19) Deposits (42) - Client pricing (47) - Change in composition 5 Wholesale funding (15) Capital (18) Interest rate management 41 Change in margin on interest-bearing assets (7) Growi
Slide 6: Credit impairments stabilising
Credit impairments stabilising Dec Change Change Impairment charge 2009 Dec 2008 Jun 2009 Rm % % Retail banking 7778 a” 41 NT 15 Commercial banking 872 *& 204 v 34 Investment banking 318 4” 960 ” 65 Total 8 967 a 54 v 15 NPL ratio Loss ratio 2009 2008 2009 2008 % % % % Retail banking 9.2 6.0 2.34 1.
Slide 7: Capital position as at December
Capital position as at December 2 RWA Bill Capital Bank |Group | Target Rbn ai adequacy % % % Capital demand Rbn Core Tier | 10.3 11.5 8.0 Credit risk 276 31 ore er Tier | 11.6 12:7 10.0 - Retail 129 18 7 Tier ll 3.1 2.9 - B ACBB 85 10 Total 147] 15.6] 13.0 - Absa Capital 62 3 Operational risk 53 4
Slide 8: Revenue after impairments
Revenue after impairments Rm 5,627 1,725 - Growth in Investment Banking fee income - Continued growth in Markets 1,547 revenue - Headline earnings of R1,3 billion 403 2,757 - Headline earnings affected by — P| Private Equity pre-tax losses of R1,2 billion - Residual SSF exposure limited to R215 mill
Slide 9: Difficult conditions for Equity Investments
Difficult conditions for Equity Investments F Revenue breakdown (Rm) " 2008 2009 Revaluations 715 (623) - Private Equity revenue loss Realisations, dividends, 223 39 sa interest and other of R1,2 billion pending ae) ddl - Negative impact of the Total revenue 356 (1,191) global recession Portfolio ex
Slide 10: Investment Banking fees delivered a strong performance
Investment Banking fees delivered a strong performance Revenue mix (Rm) - Investment Banking revenue of 1,700 1,512 R1,8 billion (6% down on prior year) 212 282 - Fee business up 33% - M&A advisory a key focus Income from fee business Income from Margin Business m 2008 m 2009 following Lehman acquis
Slide 11: Core business growth drivers
Se -21% ° -10% tsi Interest in suspense Earnings 2008 Credit impairments Underlying growth w drivers 2322 Earnings 2009 Core business growth drivers - Advances growth in selected focus areas - Annuity based fees up 12% - Growth in electronic banking volumes - Growth in customers utilising cash manag
Slide 12: Impairment risk remains
Impairment risk remains Rm 0.9 % - Impairments increased by 204% - Impairments were largely driven by : 0.6 % “ P P - Commercial vehicle finance 348 - Small and medium enterprises 0.4% . - Commercial property finance 176 - Increased recoveries \ collections 0.2 % capability H1 2008 H2 2008 H1 2009 H
Slide 13: Balance sheet growth in core focus areas
Balance sheet growth in core focus areas 2009 Rm 2008 Rm Term loans and other Installment finance Mortgage loans 22 953 23 141 17 692 47 070 11710 20 748 20 147 20 340 47 102 13 837 Gross loans and advances 122 566 122 174 104 628 100 046 Growing the corporate franchise -34% 971 Corporate Large Medi
Slide 14: Bancassurance
Bancassurance F 1515 =3% Rm i - 15% a — he 1284 —_ 2008 Life Insurance Investments Other 2009 ie 46% 21% 24% 9% w lings composition Strong growth in top line income Increased assets under management Competitive investment returns for our clients Absa Insurance impacted by higher weather-related clai
Slide 15: Breakthrough year for Absa Investments
Breakthrough year for Absa Investments Fr 7" Change Investments Rbn | 2009} 2008 Rbn - ‘Total net inflows amounted to R25 bn Net Inflows ex MM 2301 89} Mm 14 ~ “Oneraling incomes 41% Retail 1.9 1.2| ® 1 - Net margin increased by 5.4 bps to 31.4 bps Institutional 21.2 7.7| ® 14 e . Superior investmen
Slide 16: Absa Life top-line growth resilient
r r Absa Life top-line growth resilient Life insurance 2009 | 2008 | Change % Gross premium income Rm | 1386 | 1 207 a” 15 eo equivalent 761 717 » 6 Net income after tax Rm 587| 631 v7 croccsedvave,, | 2a4] sat] a cco value % 28.0) 35,7 Absa Insurance profitable in Short-term insurance 2009 2008 | C
Slide 17: Healthy Balance Sheet
‘althy Balance Sheet r ™— - Business retained its cash 3 generative profile a 37.8% 42,4% 9% | - Capital programme completed 4 - Return on equity (RoE) of 37.9% d = Targeted solvency for regulated ae 2007 500 pone entities Equity (Rbn) / RoE Actual Target - Absalnsurance 56% 45% - Absa Life 3.6x 2.5
Slide 18: Retail earnings drivers
Retail earnings drivers = Underlying business growth - Fees and commission income up 3 628 -45% 11% - Retail deposits up 4% +37% 2 863 - Customer numbers continue to grow -13% sd - Higher transaction volumes —_ - Improved new business margins - Cost maintained at previous year levels - Sale of Maste
Slide 19: Growth in customer numbers and transaction volumes
Growth in customer numbers and transaction volumes Fees and commissions 2879 2125 22 ui 2097 . Savings accounts Cheque fees Electronic banking 2008 (Rm) 2009 (Rm) Year-on-year growth ATM transactions | -2% Branch banking J transactions Con. aS +: customers ° NotifyMe customers | 36% Internet custome
Slide 20: Quality of new business
Quality of new business Home Loans New booked performance trends | ia - Vintages improving 3g 12,000 | 2.5% A pp.cne | 20% & ae ie 9:000 a = | - Increased lifetime value and % 6,000 pak return on capital 4,000 | 1.0% 2,000 0.5% . : ! 4 cia - Stress testing confirms quality Qt1-08 012-08 Q13-08 At4-0
Slide 21: Underlying operations delivered resilient performance
Underlying operations delivered resilient performance Healthy balance sheet Strong underlying growth Pro-active risk management Franchise health remains robust Attractive growth opportunities
Slide 22: There is a clear and focused strategy
There is a clear and focused strategy Corporate - Establish a Corporate Bank - Fully integrated CIB offering - Broader suite of investment banking solutions - Growth in Africa Commercial - Increase number of primary banking relationships - Penetration through best investment banking solutions, forex
Slide 23: There is a clear and focused strategy
There is a clear and focused strategy Core Middle Market - Extract more value by cross selling and innovative products - Differentiate through service - Channels: footprint and electronic - Insurance opportunities outside SA What we have already achieved Changes to business and governance structure
Slide 24: In conclusion
In conclusion Strong capital position with usage aligned to growth strategies - Driving top line income growth - Quality and well diversified earnings - Integrated financial services group with customers at the centre - Risk and governance at the heart of what we do - Responsible corporate citizen t
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