[PPT] - 19 September 2016 INTRODUCTION Christopher Gilmour WELCOME Roy PowerPoint Presentation

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19 September 2016

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INTRODUCTION Christopher Gilmour WELCOME Roy Andersen ECONOMIC AND BUSINESS ENVIRONMENT Tyrone Soondarjee GROUP REVIEW Tyrone Soondarjee TREASURY Tyrone Soondarjee BUSINESS BANKING Linda Fröhlich TRANSACTIONAL BANKING Michael Sassoon WEALTH Michael Sassoon CAPITAL Michael Sassoon COMMERCIAL SOLUTIONS David Edwards STRATEGY Roland Sassoon QUESTIONS

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Christopher Gilmour Chairman – Investment Analysts Society

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Roy Andersen Chair

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Tyrone Soondarjee

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GLOBAL

China’s industrial growth has slowed, resulting in a rapid fall in commodity prices
Europe and Japan have stepped up monetary stimulus
The USA deferred further interest rate increases to maintain growth

SOUTH AFRICA

A significant commodity producer with a wide wealth gap
Chronic unemployment and a high level of consumer indebtedness
Negatively affected by the weak global economy and declining commodity prices
Political uncertainty continues to result in increased market volatility
Banking industry – under pressure from the weak economy, escalating regulation,

technological disruption and cybercrime SASFIN

Improved credit rating (Global Credit Rating) up two notches to A1-(ZA)
Fintech acquisition being bedded down well
Capital division showed a positive turnaround

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Tyrone Soondarjee

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Headline earnings and Headline earnings per share increase of 29.0%
Total assets grew marginally to R11.004 billion from R10.866 billion in 2015
Loans and advances to customers grew by 20.6% to R6.449 billion

(2015: R5.345 billion)

Expanded and diversified its funding base
Surplus liquidity position of R1.910 billion, lower than the R2.618 billion in 2015
Total income growth of 25.1% driven by impressive revenue generation in the

Business Banking and Wealth divisions

The weak credit environment and sluggish economy led to the credit loss ratio

increasing to 108 bps (2015: 77 bps)

Group costs increased by 19.8% to R828.316 million (2015: R691.352 million)

› inclusion of the Fintech cost base › increased investment in Risk, Compliance and Information Technology

Cost-to-income ratio improved to 68.89% from 71.07% in 2015
JAWS ratio of 3.79% (2015: 1.11%)

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Growth

2016 2015 Headline earnings per share (cents)

▲ 29.0%

731.27 566.74 Headline earnings (Rm)

▲ 29.0%

232.080 179.864 Dividends per ordinary share (cents)

▲ 29.0%

287.39 222.73 Total assets (Rbn)

▲ 1.3%

11.004 10.866 Gross loans and advances (Rbn)

▲ 20.7%

6.449 5.345 Total funding base (Rbn) *

▲ 6.0%

7.303 6.892 Deposits (Rbn)

▼

2.1%

3.207 3.276 Total equity (Rbn) *

▲ 12.9%

1.404 1.243 Funds under advisement and management (Rbn)

▼

7.7%

108 117 Credit loss ratio (bps)

▲ 31 bps

108 77 Group Cost-to-income ratio (%)

▼ 218 bps

68.89 71.07 Return on average shareholders equity (%)

▲ 233 bps

17.54 15.21 Return on average assets (%)

▲ 23 bps

2.12 1.89 Group capital adequacy (%) (unaudited)

▼ 166 bps

19.20 20.86

* Preference shares are included as part of the Total funding base

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Growth

30 June 2016 R’000 30 June 2015 R’000 Cash and short-term negotiable securities

▼ -27.0%

1 910 584 2 618 366 Loans and advances to customers

▲ 19.3%

6 254 891 5 242 460 Financial assets held for trade facilitation and repurchase agreements

▼ -32.0%

1 147 227 1 687 221 Investment securities

▲ 34.8%

586 359 435 007 Other receivables 772 209 688 057 Investment property, Property, plant and equipment, Taxation, Intangible assets and goodwill 332 790 195 001 TOTAL 11 004 060 10 866 112

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Growth

30 June 2016 R’000 30 June 2015 R’000 Funding under repurchase agreements and interbank

▲ 85.6%

999 184 538 340 Deposits from customers 3 206 527 3 275 866 Debt securities issues 2 470 428 2 344 167 Long-term loans 433 889 538 071 TOTAL FUNDING

▲ 6.2%

7 110 028 6 696 444 Financial liabilities held for trade facilitation and repurchase agreements

▼ -31.4%

1 131 942 1 650 789 Other payables 1 023 354 975 204 Taxation 142 187 105 484 TOTAL LIABILITIES 9 407 511 9 427 921 Ordinary share capital and reserves

▲ 12.9%

1 403 680 1 242 741 Preference share capital 192 869 195 450 TOTAL LIABILITIES AND EQUITY 11 004 060 10 866 112

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Growth

30 June 2016 R’000 30 June 2015 R’000 NET INTEREST INCOME

▲ 38.9%

406 486 292 613 Non-interest income

▲ 19.0%

790 357 664 021 TOTAL INCOME

▲ 25.1%

1 196 843 956 634 Impairment charges on loans and advances

▲ 95.0%

63 912 32 771 NET INCOME AFTER IMPAIRMENTS 1 132 931 923 863 Operating costs

▲ 19.8%

828 316 691 352 Staff costs

▲ 13.7%

434 339 382 115 Other operating expenses

▲ 23.6%

380 888 308 045 Goodwill and intangible impairments 13 089 1 192 PROFIT FROM OPERATIONS

▲ 31.0%

304 615 232 511 Share of associate income 2 383 2500 Income tax expense

▲ 62.3%

68 210 42 037 PROFIT FOR THE YEAR

▲ 23.7%

238 788 192 974 Preference dividends 14 369 14 272 Headline adjustable items 7 661 1 162 HEADLINE EARNINGS

▲ 29.0%

232 080 179 864

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52 456 63 944 70 356 80 241 106 137 58 485 71 511 83 969 99 623 125 943 110 941 135 455 154 325 179 864 232 080 12.00 14.00 14.00 15.21 17.54 5 10 15 20 50 000 100 000 150 000 200 000 250 000 300 000 2012 2013 2014 2015 2016 % R’000 H1 H2 Return on equity

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72.00 72.00 72.00 71.07 68.89 62.00 62.00 64.00 61.18 62.43 50 60 70 80 2012 2013 2014 2015 2016 % Group Banking Group

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2 931 3 416 3 981 5 345 6 449 0.60 0.70 0.80 0.77 1.08 3.30 3.10 2.20 2.40 3.00 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 3 000 6 000 9 000 2012 2013 2014 2015 2016 % R ’Million Gross loans and advances Group credit loss ratio Provisions:advances

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538 999 539 538 652 538 434 1 298 1 379 1 574 2 345 2 470 1 787 2 161 2 707 3 276 3 207 3 961 4 421 5 381 6 892 7 303 2 000 4 000 6 000 8 000 2012 2013 2014 2015 2016 R ’Million Preference shares (2016: R193m) Funding under repurchase and interbank Long-term funding Debt securities Deposits

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117 857 10 390 64 425 12 691 23 106 (48 605)

Business Banking

2015 R’000 179 864

Transactional Banking and Treasury Wealth Group Capital Commercial Solutions

2016 R’000 232 080

164 200 6 559 76 406 (60 294) 20 344 24 865

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18 * 2016 Provisional and unaudited

3.70 4.47 5.31 6.44 7.63 26.47 25.60 23.71 20.86 19.20 11.50 11.50 12.00 12.00 12.375 5 10 15 20 25 30 35 1 2 3 4 5 6 7 8 9 2012 2013 2014 2015 2016* % R’Billion Risk weighted assets Capital adequacy Regulatory capital

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Tyrone Soondarjee

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Strong performance
Deposit base of:

› Group  R3.207 billion › Bank Solo  R3.708 billion

Improved returns on

surplus liquidity

Active in repo trading

market

674 1 795 6 628 7 886 4 033 5 182 8 211 5 621 2 504 2 526 5 856 10 006 12 249 10 390 6 559 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2012 2013 2014 2015 2016 R’000 H1 H2

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547 1 116 1 395 1 501 1 835 1 283 1 065 1 355 1 827 1 873 1 830 2 181 2 750 3 328 3 708 1 787 2 161 2 707 3 276 3 207 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 2012 2013 2014 2015 2016 R ’Million Term - Bank Solo Call - Bank Solo Group

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Attract wholesale term depositors following improved rating with competitive

rates

Increase yield on surplus cash
Drive operational efficiencies
Enhance client value propositions together with Transactional Banking
Raise new longer-term funding
Maintain LCR and NSFR ratios in excess of regulatory minimums

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Linda Fröhlich

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Integration benefits arising

from Fintech acquisition

Strong revenue growth
f 41.06% driven by a

19.3% growth in loans and advances

Offset by a sharp increase

in divisional credit loss ratio to 101 bps (2015: 70 bps)

Weaker performance in the

second half of the year due to increased impairments

Positive growth in Capital

Equipment Finance

Trade and Debtor Finance

performed well

Now the leading office

automation financier

42 546 48 112 47 302 47 650 86 243 48 015 41 732 54 189 70 207 70 051 90 561 89 844 101 491 117 857 156 294 30 000 60 000 90 000 120 000 150 000 180 000 2012 2013 2014 2015 2016 R’000 H1 H2

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179 282 445 628 775 459 613 749 813 1 194 2 104 2 317 2 534 3 711 4 035 2 742 3 212 3 732 5 215 6 220 2 000 4 000 6 000 8 000 2012 2013 2014 2015 2016 R ’Million Taxi (2016: R216m) Capital Equipment Trade and Debtor Equipment Finance

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Monitor credit performance closely
Bespoke solutions with a high personal touch
Focus on technology to enhance customer and supplier experience
Grow Capital Equipment Finance
Complete integration of Fintech
Explore acquisition opportunities

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Michael Sassoon

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YEAR TO JUNE 2016

Full clearing and settlement bank
Sasfin successfully banked itself
Further investment in the newly launched Transactional Banking offering
Lower than anticipated client acquisition

BEYOND 2016

Build Sasfin as the Bank for Business
Complete core platform
Grow Transactional Banking deposit base
Implement a holistic client-centric transactional banking proposition

for entrepreneurial businesses

Explore alliance partnerships

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Michael Sassoon

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Continued strong

performance from Wealth

Increased distribution,

enhanced system and

perational capabilities
Decrease in Assets Under

Administration due to loss

f low margin safe custody

clients

Growth in Assets Under

Management (including under advice) from R36 billion to R40 billion

Acquired 14.3% of

Efficient Group Limited

11 741 15 554 22 085 32 965 35 058 19 777 30 601 26 094 31 460 41 348 31 518 46 155 48 179 64 425 76 406 20 000 40 000 60 000 80 000 2012 2013 2014 2015 2016 R’000 H1 H2

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46 60 73 81 68 9 12 18 36 40 55 72 91 117 108 20 40 60 80 100 120 140 2012 2013 2014 2015 2016 R ’Billion Assets under administration Assets under management (including under advice)

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Enhance client experience through technology – seamless on-boarding, reporting

and tools

Continued investment in private client and institutional distribution
Well packaged investment solutions that work seamlessly for advisers and clients
Operation, reporting and system excellence
Ongoing product development
A great place to work for the entrepreneurially-minded investment professionals
Strong growth in foreign assets and income
Explore offshore opportunities – become the preferred home for clients’ offshore

assets

Efficient Group Limited – explore ways to collaborate

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Michael Sassoon

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Profitability increase
f 60.30%
Positive turnaround

in Corporate Finance › Aided by first investment banking transaction

Positive results in Private

Equity largely due to realised gains

Losses incurred on

legacy Property Equity portfolio

2,665

5,490 5,268 6,448

4,853

2 725 3 932 9 109 6 243 25 197 60 9 422 14 377 12 691 20 344 (5 000) 5 000 10 000 15 000 20 000 25 000 30 000 2012 2013 2014 2015 2016 R’000 H1 H2

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CORPORATE FINANCE

New management team driving turnaround
Full service, integrated investment banking offering
Target medium-sized enterprises

PRIVATE EQUITY

Core private equity portfolio performing well
Focus on “fintech” companies with strong growth potential, complementary

to the Group

Greater focus on exits
Exploring higher growth investment opportunities
Effective collaboration with Business Banking

PROPERTY EQUITY

Exit legacy portfolio
Equity partner to property entrepreneurs and medium-sized businesses
New investments performing in line with expectations

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David Edwards

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Encouraging performance

from Sasfin Forex with a significant increase in profitability

Freight and Logistics

struggled, due to the economic downturn and difficult trading conditions

Traditional “Iquad”

business performed satisfactorily

Sale of 70% of SPL post

year-end to Imperial Group Limited

Restructure of Short-term

Insurance business post year-end to grow market share

8 318 16 661 15 344 12 651 12 321 10 928 17 137 19 991 10 455 12 544 19 246 33 798 35 335 23 106 24 865 10 000 20 000 30 000 40 000 2012 2013 2014 2015 2016 R’000 H1 H2

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Target organic growth in the saleable Sasfin Forex offering
Combine IQuad Treasury Outsourcing with Sasfin Forex to create a complete

foreign exchange and risk management solution

Grow Short-term Insurance through Sasfin HRS
Launch the Solar PV  Build-Own-Operate product
Traditional “iQuad” businesses expected to be negatively impacted by changes

in legislation and downturn in economy

Build a full service logistics capability and broaden client base with Imperial

Logistics relationship

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Roland Sassoon

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Strategic objective Performance Profitably grow existing divisions

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All divisions have shown an increase in profitability with

the exception of Transactional Banking and Treasury, due to increased investment in the new Transactional Banking unit

Fintech acquisition brings scale and allows for growth into

new suppliers

Strong turnarounds in Corporate Finance and Sasfin Forex

Continue to increase funding to facilitate

ngoing growth

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Increased funding base from R6.892 billion to R7.303 billion

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Strategic objective Performance Continue to improve efficiency

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Notable improvement in cost-to-income ratio and JAWS

Broaden our franchise value

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Launched Transactional Banking offering to the market and

in operation for 18 months

Successfully concluded first investment banking transaction

Improve BEE status ◄►

The Group has improved its BEE Rating
Potential negotiations on equity transactions are ongoing

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Continue to drive scale across the Group
Improve client experience through digital
Embed Transactional Banking at the core of the Group
Drive a strong focus around technology
Reinforce regulatory compliance across the Group
Strategic allocation of capital across the Group
Explore corporate opportunities within Sasfin Wealth
Conclude a BEE transaction

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