Group Interim Results Presentation31 March 2002

Contents of presentation

Background and environment

Interim results

Nedcor offer

Environment

Turmoil in the banking sector- liquidity- microlending

Volatility in the Rand

Interest rate increases

Consolidation in the banking sector

10,000

11,000

12,000

13,000

14,000

15,000

16,000

Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02

Turmoil in the Banking Sector

A number of banks have failed and this has precipitated a flight by depositors to the large banks

01-Feb-99NRB placed under curatorship

25-Oct-99Both TFS and FBC Fidelity placed under curatorship

01-Mar-00PSG acquires TBB after threat of curatorship

28-Jun-01Regal placed under curatorship

09-Feb-02Saambou placed under curatorship

15-Jan-02Unifer shares suspended

22-Apr-02Nedcorofferto BoE shareholders

BANKS INDEX

14-Mar-02SARB guarantees BoE depositors

6/8-Mar-02Brait andCorpcapitalreturn bankinglicences

Conflicting Demands from Different Stakeholders

Higher growth

Optimal banking model High ROE

Optimal capital structure

Lower risk or higher rates

Require surplus capital

Critical mass

Equity investorsDepositors

There is an increasing conflict for banks between the demands of depositors versus equity investors

Can this be resolved ?Can this be resolved ?

Sequence of Events

Restructuring of the business & funding profile in past two years Initial discussion on sale of NBS Home Loan book Bad debt problems at Unifer Saambou curatorship Liquidity issues regarding NBS/BoE SARB announcement & guarantee of BoE depositors Sale of NBS Home Loan book Nedcor offer

What BoE’s focus has been

Unbundling non-core businesses Returning excess capital

- unbundling- special dividend- buy-backs

Deploying excess capital through acquisitions Disposing of underperforming assets Objective to increase ROE

Group Results

%Change

March2002

March2001

Headline earnings (R’m) 573551(4)

Dividend per share (cents)

Margin (%)Cost to income ratio (%)

Non-interest income:total income (%)

Assets under management (R’m)

Weighted average no. of shares (‘m)

7.0

4.251.7

49.5

120 088

2 287

n/a

3.6

53.9

61.1

153 728

2 190

22

Headline EPS (cents) 25.125.2-Fully diluted headline EPS (cents) 24.524.5-

Return on equity (%) 16.217.7

Why the Interim Results are Flat

Higher provisions in retail divisions Lower margins

- liquidity pressure- competitive pressure

Lower asset growth- retail division- environment

Home loan business continued operating losses prior to sale

Segmental Contribution

Corporate Banking 63%

Investment Management 20%

Retail Banking 1%

Capital & Investments 16%

HeadlineEarnings

R’m

Cost toIncome

%ROE

%

Corporate Banking

Investment Management

Retail Banking

Capital & Investments

343

110

5

93

47.6

66.4

64.6

39.7

25.0

24.9

0.9

13.0

551 53.9 17.7

Retail division turnaround taking longer than expectedRetail division turnaround taking longer than expected

Cost Containment

R’m March2002

March2001

%Change

Cost to income ratio

Adjustment for acquisitions (210) -4969

Cost to income ratio impacted by share buy-backs and new businesses acquiredCost to income ratio impacted by share buy-backs and new businesses acquired

1 005

51.7% 53.9%

Operating expenses 969 251 215

Conservative Provisioning

Levels of provisions increased to reflect changed environmentLevels of provisions increased to reflect changed environment

March 2002 September 2001

ANALYSIS OF ASSET QUALITY AND PROVISIONS FOR DOUBTFUL DEBTS

% of Gross % of GrossR'mAdvances

R'm

Advances

Gross advances 39 526 48 848

Non-performing advances 2 371 6.0 2 543 5.2 Non-performing loans 1 401 3.5 1 428 2.9Properties in possession 970 2.5 1 115 2.3

Total doubtful debts provisions 1 450 3.7 1 390 2.8 Specific provisions and interest in suspense 1 172 3.0 1 071 2.1 General provisions 278 0.7 319 0.7

Bad debt charge to the income statement 318 1.3 671 1.4

Income Drivers

Margin / advances

Other income

Overheads / advances

Bad debts / advances

Sub total

1 – tax rate

Advances / total assets

ROA

GEARING

ROE

3.6% 9.2%

17.7%

10.7

1.6%

72.8%

2.2%

53.9%

36.3%

-1.5%

0.82

2.7%

2.6

-5.0%

multiply

=

multiply

=

multiply

multiply

bad debts / margin

cost / income

less

less

March 2002

ROE improving although still below target of 20%ROE improving although still below target of 20%

4.2%8.4%

16.2%

9.1

1.8%

69.6%

2.6%

51.7%

23.8%

-1.1%

0.83

3.1%

2.0

-4.3%

multiply

=

multiply

=

multiply

multiply

bad debts / margin

cost / income

less

less

March 2001

NBS Home Loan Division

Capital Items R’m

Direct deal costs

Staff retrenchments/redundant systemsProvision for future costs

87

253

16

97

Includes provisions for retrenchments, closure costsand future realisation of residual assets

Loss on sale of book 53

Summary Balance SheetMarch

2002September

2001R'm

ASSETSInvestments 12 218 10 221Advances 38 076 47 458Other assets 16 264 9 557

66 558 67 236

EQUITY AND LIABILITIESCapital and reserves 6 059 6 674Interest-bearing borrowings 715 849Life funds liabilities 8 864 7 420Deposits and other accounts 48 446 49 847Other liabilities 2 474 2 446

66 558 67 236

Movements since year end:

NBS Home Loan book sold (R11 909 m)

Cashbank book purchased R422 m

Organic growth R2 105 m

Includes home loan debtor of R6 808 m

Movements since year end:

Net share buybacks (R529 m)

Headline earnings R551 m

Exceptional items (R365 m)

Dividends paid (R272 m)

Balance sheet expected to reduce as proceeds from home loan sale are receivedBalance sheet expected to reduce as proceeds from home loan sale are received

Bank Capital Adequacy

Capital adequacy within target range for the BankGroup still has excess capitalCapital adequacy within target range for the BankGroup still has excess capital

March2002

10.2%

1.1%

11.3%

41 797 45 379

11.2%

2.3%

8.9%

September2001

Tier 1 - Primary

Tier 2 - Secondary

Risk weighted assets (R’m)

Gross Advances

Sale of home loan bookAdvances growth in focus areasSale of home loan bookAdvances growth in focus areas

R’mMarch

2002September

2001%

Change

Mortgage advances

- Commercial 14 522 14 075 6

- Residential properties

- Residential developments

Corporate loans

Instalment credit agreements

Interbank

Properties in possession

Other advances

5 307

652

6 270

3 027

1 886

970

6 892

16 816

973

6 077

2 772

953

1 115

6 067

(66)

6

18

196

(26)

27

39 526 48 848 (38)

Deposits

R'm

Interbank funding 11 593 298Demand deposits 11 021 15 842Savings deposits 3 323 3 744Fixed and notice deposits 8 309 11 598NCD’s issued 6 337 12 031Foreign funding 1 719 1 420Loans received under repurchase agreement 1 909 811Foreign loan syndication 1 163 1 097Domestic bond issue 1 821 1 823Other funding liabilities 1 251 1 183

Total deposits 48 446 49 847

March2002

September2001

Deposits (continued)

%of total

R'm

Wholesale funding 67% 32 580 31 428 63%

Retail funding 33% 15 866 18 419 37%BoE Private Bank 1 547 1 765BoE Bank Business Division 3 886 4 207BoE Corporate 4 493 6 036NBS Savings & Investments 5 940 6 411

Total deposits 48 446 49 847

March2002

September2001

%of total

Change in funding profile is putting pressure on the GroupChange in funding profile is putting pressure on the Group

Corporate Banking Services

BoE Merchant Bank - strong earnings - good deal flow

BoE Corporate - good earnings - private equity realisation - managing old NBS commercial loans

BoE Bank Business Division - improvements in business are continuing

BoE Treasury - difficult trading due to volatility- good results in circumstances

25% earnings growth and 25% ROE25% earnings growth and 25% ROE

63%

Significant growth prospects off a low baseSignificant growth prospects off a low base

Investment Management Business

20%

Strong offshore earnings

Good results from new acquisitions

Net inflows of assets

Integration progressing well

Off Balance Sheet Assets Under Management

0102030405060708090

100

Sept '99 Sept '00 Mar '01 Sept '01 Mar '02

Fund Services - offshoreUnit Trust - offshore

Asset Mgt - offshoreLinked Products - localPrivate Clients - localUnit Trust - local

Asset Mgt - local

66.4

54.2

52.3

87.2

46.7

R’bn

Integration should lead to a medium term improvement in earningsIntegration should lead to a medium term improvement in earnings

Retail Banking Services

Tough trading conditions

NBS Home Loan sale

Review of provisions and processes in Credcor

Integration starting 1%

Nedcor Offer

Rationale for deal:

A set of strong businesses that are hampered by current liquidity pressure, potential damage to brand and uncertainty about the future

Changed environment for smaller banks

Global trend of consolidation

Provide a measure of certainty for staff and clients

Reduce risk for shareholders

Certainty, security and opportunityCertainty, security and opportunity

Thank You

“BoE is a specialist providerof innovative financial solutions

to businesses, and throughbusinesses to individuals”