Making the investment case

UBS conference

Louis von Zeuner, Deputy Group Chief Executive Officer

27 October 2011

Deteriorating global backdrop ...

Elevated VIX Index signals greater ‘fear’

50

60

70

80

90

EU bank CDS spreads increased sharply

200

250

300

350EU banks* 5-year CDS spread (bp)VIX Index *

2

0

10

20

30

40

7/0

6

1/0

7

7/0

7

1/0

8

7/0

8

1/0

9

7/0

9

1/1

0

7/1

0

1/1

1

7/1

1

0

50

100

150

10/0

7

1/0

8

4/0

8

7/0

8

10/0

8

1/0

9

4/0

9

7/0

9

10/0

9

1/1

0

4/1

0

7/1

0

10/1

0

1/1

1

4/1

1

7/1

1

10/1

1

Source: BloombergNote: *Chicago Board Options Exchange Market Volatility Index - measuring the impliedvolatility of S&P 500 index options

Source: BloombergNote: *Average Euro CDS (senior, 5 year) for Societe Generale, RBS, Lloyds, BBVA, Credit Agricole, Commerzbank, BNP Paribas, Barclays, Deutsche Bank, Standard Chartered, HSBC, Santander, Unicredit

... dampens our macro outlook

... dampening South Africa’s outlook

3.3%

3.5%

3.8%

4.0% 2012E GDP growth

Expected global GDP growth reduced* ...

5%

6%

7%

8%

9%

3

Source: IMF, Absa, SARB

2.5%

2.8%

3.0%

3.3%

Absa IMF SARB

Previous Updated

0%

1%

2%

3%

4%

Advanced economies

Latam & the Caribbean

SA Sub-Saharan Africa

Developing Asia

April 2011 September 2011

Source: IMFNotes: * Average, constant prices (2011-16E)

One Absa is delivering

Balance sheet optimisation and

proactive risk

management

Sustainable

growth in targeted markets

4

Customer and

people-centred organisation

Simple,

streamlined

Group for customer

delivery

Hedging policy paying dividends

Rates expected to remain low for longer

20%

25%

30%Prime rate

800

1000

1200

1400

1600

Hedge protects our margin

Net interest income (Rm)

5

5%

10%

15%

1Q

90

1Q

92

1Q

94

1Q

96

1Q

98

1Q

00

1Q

02

1Q

04

1Q

06

1Q

08

1Q

10

1Q

12

Source: Absa Capital estimates, I-Net

0

200

400

600

800

FY10 1H11

Endowment cost of lower rates Hedging benefit

Source: Absa

Focus on returns rather than market share

20%

25%

30%

35%

Personal loan market share dropped ...

12

16

20

... despite strong book growth since FY05

Personal and microloan book (Rbn)

6

0%

5%

10%

15%

12/05 12/06 12/07 12/08 12/09 12/100

4

8

FY05 1H11

Source: AbsaSource: Statutory returns

Quality non-interest revenue growing

• Robust bancassurance growth

• FX offering transformed

• Business Banking gaining traction6

8

10

12Non-interest revenue 1H11 (Rbn)

High level of annuity non-interest revenue

7

• Retail positioned to capture uptick

Source: AbsaNote: RBB is Retail and Business Banking

0

2

4

RBB net fees & comm

Financial Services

Markets (net

trading)

PE/CPF revals

Other investment

income

Other income

Total

Sustainable cost containment

60%

65%

70%

75%

Efficiency ratio has turned the corner Headcount slightly below FY07 levels

36000

37000

38000

39000

40000

Cost to income ratio * Staff numbers

8

45%

50%

55%

60%

FY

95

FY

96

FY

97

FY

98

FY

99

FY

00

FY

01

FY

02

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

1H

11

Source: AbsaNote: * March year end until FY05, IFRS from FY06

32000

33000

34000

35000

36000

FY05 FY06 FY07 FY08 FY09 FY10 1H11

Source: AbsaNote: Excludes contract workers

Scope for credit costs to normalise

1.5%

1.8%

2.1%

2.4%

Credit costs still above historical average

0.8%

1.0%

1.2%

1.4%

1H11 credit loss ratio relatively high

UniFer

Financial crisis

Credit loss ratio *

9

0.0%

0.3%

0.6%

0.9%

1.2%

FY

97

FY

98

FY

99

FY

00

FY

01

FY

02

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

1H

11

Source: Absa Note: * March year end until FY05; IFRS from 2006

0.0%

0.2%

0.4%

0.6%

Bank 1 Absa Bank 2 Bank 3

Source: Company reports

Excluding

UniFer

Average

Several drivers to improve our returns

1H07%

1H08%

1H09%

1H10%

1H11%

Income to RWAs 10.6 11.6 10.9 10.9 10.8

Cost to income ratio 52.8 49.3 46.6 53.6 54.8

Credit losses to income 5.9 10.8 23.0 17.6 13.0

Operating margin * 26.1 23.4 18.2 18.4 20.6

Return on risk-weighted assets 2.77 2.72 1.99 2.00 2.23

Financial leverage * 9.7 9.0 8.2 7.5 7.2

Return on equity 26.8 24.6 16.3 15.0 16.2

* Note: Operating margin = headline earnings / total revenue; Financial leverage = average RWAs / average shareholders equity

Source: Absa

10

We will maintain a strong balance sheet

11%

13%

15%

Capital levels well above target

15

20

25

Continue to build our surplus liquidity

Surplus liquid assets (Rbn) Absa Group tier 1 capital ratio

11

Source: Absa

5%

7%

9%

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 1H110

5

10

FY08 FY09 FY10 1H11

Source: AbsaNotes: March year end until FY05, Basel II from FY08

Excess capital masks improving underlying returns

15

16

17

18

1.4%

1.5%

1.6%

1.7%

1.8%

RoA is recovering, but leverage remains sub-optimal

12

12

13

14

15

0.9%

1.0%

1.1%

1.2%

1.3%

1H07 1H08 1H09 1H10 1H11

Return on assets Average accounting leverage (RHS)

Source: Absa

Further runway to grow locally

Retail banking confidence remains low

50

60

70

80

90

100

110

• Retail and Business Banking

• Absa Capital

• Absa Financial Services

Average

13

0

10

20

30

40

50

1Q

02

3Q

02

1Q

03

3Q

03

1Q

04

3Q

04

1Q

05

3Q

05

1Q

06

3Q

06

1Q

07

3Q

07

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

Source: Ernst & YoungNote: Retail Banking business confidence index, % satisfactory

Absa Financial Services well-positioned to grow

8%

10%

12%

14%

16%

18%

Scope to increase our market share...

20%

25%

30%

35%

40%

45%

...while generating attractive returns

14

0%

2%

4%

6%

8%

Life Employee Benefits

Investments (unit trusts)

Short-term insurance

Trusts

Source: Absa, ASISA, RIA

0%

5%

10%

15%

20%

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 1H11

RoE CoE

Source: Absa, I-NetNote: * March year end until FY05

Africa opportunity

Share ofassets (%)

Rank by Revenue

Presencesince

South Africa 1888 22 2

Egypt 1864 2 12

Tanzania 1916 18 3 *

Ghana 1917 4 2

Zimbabwe 1912 9 4

• Offers attractive growth potential

• Our Africa strategy has progressed

• We are part of a leading franchise

• Operate as One Bank to capture the

opportunity

15

Kenya 1925 12 1

Uganda 1927 10 3

Zambia 1918 10 1

Botswana 1950 26 1

Mauritius 1919 11 3

Mozambique 2002 7 4

Seychelles 1959 24 1

Source: Bank annual reports, central banks, Global Credit Ratings, McKinsey

Note: * Includes consolidated National Bank of Commerce and Barclays Tanzania data except for the ranking based on revenue where NBC is

ranked 3rd and Barclays 6th

We continue to deliver

This year

• Double digit non-interest revenue growth

• Single digit cost growth

• Positive JAWS

Medium term

16

Medium term

• Cost to income ratio of 50%

• RoRWA above 2.5%

• Sustainable RoE of 20%

Best bond house

2010

Questions

Best Retail Bank in South Africa

Best mobile phone banking (international)

2011

1st

Overall bank

1st

Overall currency

2011

Best debt house in South Africa

2010-2011

1st

Dealing: Fixed Interest Securities

2011

Best local bank in South Africa

2009-2011

17

Best Islamic Financial Institution in Non-Gulf Cooperation Council Middle East/Africa

2009-2011

Top Retail Bank

2010-2011

Coolest bank award

2006-2011

Banking Category Winner

2011

1st

Financial services

2nd

South African corporates

2011

1st

Banking

1st

Short-term household insurance

2011

Best Islamic Bank in South Africa

2009-2010

Top Companies Reputation Index

Business segment award

2011

Innovative Use of Technology

“Improve access to banking” category

2011

Peer Review

1s

Retail Lending and Deposits

2005-20111s

Retail Mortgages

2005-2011

Best debt house

2011

CSI award

2011