Slide 1: Overview: Solid performance
2011/08/04 Overview Maria Ramos 1 Solid performance » One Absa strategy delivering » Meeting our financial commitments » Revenue growth » Cost containment » Returns » Broad-based improvement » Further strengthened our balance sheet 2 1
Slide 2: Strengthened our balance sheet
2011/08/04 Strengthened our balance sheet » Increased high capital Sources and uses of funding YoY (Rbn) levels 50 » Further improved liquidity 40 4.9 38.4 » Grew deposits in target 30 areas » Strong credit rating 20 » Additional focus areas 15.1 -4.5 10 » Sticky non-performing -45.9 loans 0 -12.8 0
Slide 3: Improved performance; Good earnings momentum
2011/08/04 Improved performance Change 1H11 1H10 % Headline earnings (Rm) 4 595 3 862 19 Diluted headline earnings per share (cents) 638.5 535.9 19 Dividends per ordinary share (cents) 292 225 30 Net interest margin on average interest-bearing assets (%) 4.05 3.89 Credit loss ratio (%) 1.18 1.50 Cos
Slide 4: Moderate net interest income growth; Hedging preserved net interest margin
2011/08/04 Moderate net interest income growth 3.60% 3.74% 4.05% 3.89% 3.71% 3.58% 3.29% 3.31% 2.95% 3.04% 2.62% 1.97% 6 891 8 574 10 565 10 772 11 293 11 623 1H06 1H07 1H08 1H09 1H10 1H11 Net interest income (Rm) Margin on average interest-bearing assets before credit losses (%) Margin on average i
Slide 5: Grew non-interest income in target areas; NPL cover remains appropriate
2011/08/04 Grew non-interest income in target areas Non-interest income (Rm) 1H11 Change Mix Rm % % ©5% ª 5% ©10% Retail net fees and 5 098 4 47 commissions 10 860 ABB net fees and 1 795 8 17 commissions 10 209 Financial Services 1 909 11 18 9 713 Markets – net trading results 1 301 5 12 Private Equ
Slide 6: Containing costs a priority; Solid core deposit growth
2011/08/04 Containing costs a priority Cost-to-income ratio (%) 1H11 Change Mix Rm % % Staff costs 6 623 13 54 58.7% Accommodation, property and 2 084 10 17 54.8% equipment-related 53.6% Information technology 1 121 6 9 -2% Communication and 865 (1) 7 marketing Professional fees and 497 (9) 4 -12% i
Slide 7: Focussed loan strategy; Underlying returns improved
2011/08/04 Focussed loan strategy Gross loans and advances to 1H11 Change Mix customers (Rbn) Rbn % % Retail Banking 331 1 65 65 59 • Credit cards 21 6 4 119 118 • Instalment finance 38 2 7 • Mortgages 248 0 49 • Other 24 (3) 5 329 331 Absa Business Bank 118 (1) 23 Absa Capital 59 (9) 12 1H10 1H11 T
Slide 8: Core Tier 1 ratio increased further; Expected Basel impact
2011/08/04 Core Tier 1 ratio increased further 106 bps -39 bps 12.8% 5 bps -2 bps -13 bps 52 bps 11.7% FY10 Credit risk Equity risk Market risk Other Profit Dividend 1H11 15 Expected Basel impact on Core Tier 1 ratio 11.7% ~ 1.2% ~ 0.7% ~ 10% FY10 Basel II Basel II.5 Basel III FY10 adjusted 16 8
Slide 9: Cluster performance: Good portfolio mix
2011/08/04 Good portfolio mix 45 Return on regulatory capital (%) 40 Financial Services * 35 Retail Banking 30 Absa Business Bank 25 20 CoE 14.0% 15 Absa Capital 10 5 Headline earnings growth YoY (%) 0 -40 -20 0 20 40 60 80 100 Note: Bubble size represents headline earnings; dotted bubbles represent
Slide 10: Retail Banking: Financial and product performance
2011/08/04 Retail Banking Financial performance 1H11 1H10 Headline earnings 1 737 993 (Rm) 12 025 Non-interest income / Revenue 11 199 ©7% 43.8 44.8 total revenue (%) Cost-to-income ratio 57.3 58.2 (%) 2 333 ª 22% Credit losses 3 002 Credit loss ratio (%) 1.46 1.90 Return on risk- ©6% 6 893 2.12 1.3
Slide 11: Retail Banking: Loan quality and balance sheet shape
2011/08/04 Retail Banking Loan quality improved » Credit losses improved 22% Home Loans legal book full payers (Rm) » Portion of performing rose 1 782 1 786 1 577 1 600 » 3-6 month delinquency book 1 479 1 303 declined » Legal book stabilised 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 » High debt review terminat
Slide 12: Absa Business Bank: Financial performance
2011/08/04 Absa Business Bank Financial performance 1H11 1H10 Headline earnings 1 378 1 296 (Rm) Revenue 5 854 Non-interest income / 5 593 ©5% 34.4 34.7 total income (%) Cost-to-income ratio 55.2 53.8 ª15% (%) 533 Credit losses 627 Credit loss ratio (%) 0.95 1.12 Operating ©7% 3 229 Return on risk-
Slide 13: Absa Business Bank: Credit quality and transactional growth
2011/08/04 Absa Business Bank Credit quality continues to improve » Commercial Asset Finance Credit losses (Rm) delinquencies at fifteen month ª15% lows 627 » Commercial real estate vacancies improving and rental growth returning 533 1H10 1H11 25 Absa Business Bank Successful transactional growth »
Slide 14: Absa Capital: Financial performance
2011/08/04 Absa Capital Financial performance 1H11 1H10 Headline earnings Revenue 2 786 832 831 2 717 ©3% (Rm) Cost-to-income ratio 57.6 54.0 (%) Credit losses 75 ª52% 36 Credit loss ratio (%) 0.12 0.23 Operating ©9% 1466 1604 expenses Return on risk- 1.83 1.71 weighted assets (%) Other 106 ª66% 36
Slide 15: Absa Capital: Markets and Investment Banking
2011/08/04 Absa Capital Solid core Markets performance Revenue mix (Rm) » Net revenue up 3% to R1.8 billion ©9% ©20% ©14% ª44% ª62% 889 819 » Strong growth in client 1H10 activity and transactions 1H11 467 388 285 324 » Further reduced daily 215 120 52 20 earnings volatility, lower Foreign Equities
Slide 16: Financial Services: Financial performance
2011/08/04 Financial Services Financial performance © 11% © 8% ª 12% © 17% © 12% © 16% 1H11 1H10 133 -144 238 -97 Investment -19 income 80 118 830 820 shareholders (Rm) 708 Headline earnings 644 606 (Rm) Cost efficiency 26.5 27.6 ratio (%) Return on embedded value 22.1 32.3 (%) Net Premiums Claims R
Slide 17: Financial Services: Insurance and Non-insurance
2011/08/04 Financial Services Insurance » Absa Life maintained growth Gross premium income and underwriting momentum and margins profit (Rm) » Gross premiums rose 22% ©5% ©21% ©14% ©4% ©92% ª>100% » Value of new business R216m 959 » RoEV of 22.1% » Strong underwriting performance in Absa Short-term
Slide 18: Prospects: One Absa strategy continues to deliver
2011/08/04 Prospects Maria Ramos One Absa strategy continues to deliver Enhancing business-as-usual Key priorities » Grow Retail business » Build Corporate Bank » Grow core deposits » Absa Business Bank leadership » Standardise/streamline the Group » Entry-level banking proposition » Performance thr
Slide 19: Africa opportunity; Prospects
2011/08/04 Africa opportunity » Strategy has progressed Presence Share by Rank by since Assets (%) Revenue » We are part of a leading Egypt 1864 2 12 franchise South Africa 1888 22 2 Zimbabwe 1912 9 4 » Operate as One Bank to Tanzania 1916 18 3 (1) capture the opportunity 4 2 Ghana 1917 Zambia 1918
Slide 20: Disclaimer
2011/08/04 Disclaimer Forward-looking statements Certain statements in this document are forward looking that relate to, among other things, the plans, objectives, goals, strategies, future operations and performance of Absa Group Limited (“Absa”). Words such as “anticipates”, “estimates”, “expects”