FirstRand Limited · JSE:FSR

FirstRand — Warburgs Conference 2003

16 slides from FirstRand's conference presentation, October 2003

1. Slide 1: Growing profits in a declining interest and low inflation environment

   Growing profits in a declining interest and low inflation environment Wendy Lucas-Bull FirstRand • Retail banking • Corporate market

2. Slide 2: Agenda

   FirstRand • Insurance (Life & Health) FNB Life • Short-term insurance Agenda • Environments are always changing • Natural hedges in financial services • Broad responses • Specific FirstRand strengths • Conclusion

3. Slide 3: What's our preferred interest rate?

   What’s our preferred interest rate? “If Fed Chairman Alan Greenspan were to whisper to me what his monetary policy was going to be over the next two years, it wouldn’t change one thing I do.” Warren Buffett Environment over the past five years Rm % 30 6000 25 5000 Prime rate Core headline earnings 2

4. Slide 4: Environment over the past five years

   Environment over the past five years Year Major Events Asian banking / emerging market crisis 1998 Interest rate spike 1999 World braces itself for Y2K 2000 Dotcom implosion & commencement of the bear market September 11th Corporate accounting scandals 2001 US corporate debt default spike Rapid depr

5. Slide 5: Growing in a declining market

   Growing in a declining market 300,000 31% 29% 280,000 Market share 27% 260,000 25% 23% 240,000 21% New car unit sales 19% 220,000 17% 200,000 15% 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Agenda • Environments are always changing • Natural hedges in financial services • Broad responses

6. Slide 6: Natural hedges in financial services

   Natural hedges in financial services • Generally speaking, lower interest and inflation rates lead to: ƒ Improved equity markets ƒ Increased property values ƒ Countries with lower interest and inflation rates have higher economic growth rates ƒ Higher demand for credit ƒ Improvement in bad debts In

7. Slide 7: Natural hedges in financial services: merchant banking and insurance

   Natural hedges in financial services • Merchant banking ƒ Improved equity markets ™ More corporate activity ™ More capital raising (debt & equity) ƒ Large generator of non-interest income Natural hedges in financial services • Insurance ƒ Insurance profits linked to equity markets • Costs ƒ Salaries

8. Slide 8: Broad responses: Capital management

   Agenda • Fundamentals • Natural hedges in financial services • Broad responses • Specific FirstRand strengths • Conclusion Broad responses Capital management Capital Management Framework Level of Investment Allocation of capital of Capital Capital

9. Slide 9: Capital management and non-interest revenue

   Capital management Momentum Group 2.5 Optimal Capital Level1: CAR cover 2x 2.0 Balanced 1.5 portfolio Regulatory requirement: CAR cover 1x 1.0 0.5 Cash 0.0 2003 This strategy delivers optimal ROE, given risk profile Broad responses Non-interest revenue • Increased focus on non-interest revenue • Dri

10. Slide 10: Broad responses: credit management and insurance

    Broad responses Credit management • Credit management ƒ Increased affordability ƒ Lower defaults ƒ Lower loss given defaults (e.g. increased property values) Bigger credit market Broad responses Insurance • Insurance ƒ FirstRand well positioned in risk and health ™ Pressure on savings products ƒ Mar

11. Slide 11: Broad responses: cost management

    Broad responses Cost management • Cost management ƒ Sweat assets and infrastructure ƒ Converting fixed costs to variable costs Our track record speaks for itself Agenda • Fundamentals • Natural hedges in financial services • Our specific opportunities • Specific FirstRand strengths • Conclusion

12. Slide 12: Specific FirstRand strengths: diversified earnings base

    Specific FirstRand strengths • FirstRand has a fully diversified earnings base ƒ Not a single growth story ƒ Less reliance on profits from any single business unit, which provides a measure of protection ƒ Each business unit affected differently and will have own response/strategy HomeLoans Deposits

13. Slide 13: Specific FirstRand strengths: culture

    Specific FirstRand strengths • Culture ƒ Empowering culture allows speed and flexibility ™ One of few emerging market banks that invested capital and transactional deposits proactively ™ NBS, Saambou, SWABOU ƒ Owner-managers understand their cost and revenue dynamics ™ Efficiency gains, e.g. reducin

14. Slide 14: Specific FirstRand strengths: growth and management

    Specific FirstRand strengths • FirstRand growth in 2003: +23% ƒ Greenfields operations contributed 4% Growth +265% +42% +69% +206% Specific FirstRand strengths • Management are strong implementers ƒ Southern Life ƒ Consolidation of banking operations ƒ NBS, Saambou & SWABOU ƒ Saambou integration ƒ R

15. Slide 15: Back to Buffett…

    Agenda • Fundamentals • Natural hedges in financial services • Our specific opportunities • Specific FirstRand strengths • Conclusion Back to Buffett… “If Fed Chairman Alan Greenspan were to whisper to me what his monetary policy was going to be over the next two years, it wouldn’t change one thing

16. Slide 16: FirstRand

    FIRSTRAND

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