| Wed 15 Sep 2010, 10:20 | | RMH - RMB Holdings - Summarised audited results announcement and cash dividend |
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RMH
RMH
RMH - RMB Holdings - Summarised, audited results announcement and cash dividend
declaration for the year ended 30 June 2010 and continuing cautionary
announcement
RMB HOLDINGS
(Incorporated in the republic of South Africa)
Registration number 1987/005115/06?
Share code RMH? ISIN code ZAE000024501
("RMBH")
SUMMARISED, AUDITED RESULTS ANNOUNCEMENT AND CASH DIVIDEND DECLARATION FOR THE
YEAR ENDED 30 JUNE 2010 AND CONTINUING CAUTIONARY ANNOUNCEMENT
NORMALISED EARNINGS
+42% to R3,6 billion or 295 cents
DIVIDEND
+25% to R1,5 billion or 124 cents
INTRINSIC VALUE
+28% to R38,7 billion or 3 202 cents
Overview of results
RMBH`s diversified portfolio of banking and insurance businesses produced a
strong outcome against a volatile and difficult macro background that is only
now starting to show signs of improving, with normalised earnings increasing by
42% to R3,6 billion.
It is, however, increasingly evident that global economic activity is likely to
experience severe "growth headwinds" over the next few years - notwithstanding
radical fiscal and monetary interventions on the part of many developed
economies.
Significant monetary and fiscal stimulus, as well as external trade allowed the
South African economy to emerge from recession during the 3rd quarter of 2009.
Falling inflation and interest rates (now at a 30 year low) eased pressure on
real disposable income. However, rising unemployment and uncertainty over the
sustainability of the recovery caused credit growth to remain subdued.
The Group`s earnings recovery was driven mainly by a modest increase in the
FirstRand Banking group`s top-line revenues and a reversal of the negative
factors that bedevilled the prior year`s outcome (namely retail lending bad
debts and losses in the international trading portfolios). The resultant outcome
reported at the RMBH level was:
Year ended 30 June 2010 R Cents %
million per change
share
Attributable earnings 3 607 300,8c +45
Headline earnings 3 594 299,8c +36
Normalised earnings 3 567 295,0c +42
Total ordinary dividends payable to RMBH shareholders for the year ended 30 June
2010 amounts to 124,0 cents (2009: 99,0 cents), representing a year-on-year
increase of 25%, in line with our net underlying dividend receipts.
The precipitous decline in equity markets during the prior year reversed itself
in the current financial year (JSE All share index +19%) and market volatility
reduced somewhat. The impact of the positive earnings outcome for the year has
flowed through to the valuation of the Group`s investment portfolio, with
intrinsic value increasing by 28% to R38,7 billion.
Group capital position
At the centre, RMBH continues to carry relatively little borrowings. At the end
of June 2010 our net borrowings amounted to some R0,75 billion (2009: R0,78
billion), directed largely at the funding raised for the Discovery acquisition
in 2008 and the funding of our commitment to Youi (OUTsurance`s Australian
initiative). At present the only material funding requirement indicated for the
current year is some R230 million to support OUTsurance`s continued
international expansion.
The intrinsic value of the Group`s investment portfolio reflected the strong
recovery in South African financial sector equities during the year. The values
at year end may be summarised as follows:
As at 30 June 2010 2009 %
R million change
Market value of listed interests 35 798 27 655 +29
(FirstRand, Discovery)
Director`s valuation of unlisted 3 671 3 457 +6
interests(OUTsurance, RMBSI)
Net cash resources/investments (754) (781)
Total intrinsic value 38 715 30 331 +28
Per RMBH share (cents) 3 202c 2 509c +28
At 30 June 2010 RMBH`s market capitalisation amounted to R37,7 billion or 3 120
cents per share (2009: R28,4 billion), representing a 2,6% discount (2009: 6,5%)
to the Group`s underlying intrinsic value.
Dividend payment
We have continued with our stated practice of paying out to shareholders any
dividend received from FirstRand as well as the net dividends received from
RMBH`s other investments, after servicing any funding commitments that we may
have at the centre. Consequently, the Board resolved to declare a final dividend
of 70,0 cents per share (2009: 45,0 cents). Such final dividend, together with
the interim dividend of 54,0 cents brings the total dividends for the year ended
30 June 2010 to 124,0 cents (2009: 99,0 cents). This represents a year-on-year
increase of 25% and a dividend cover ratio (on normalised earnings) of 2,4 times
(2009: 2,1 times). The apparent divergence from the underlying growth in
earnings is due to the fact that the 2009 dividend included RMBH`s share of the
R100 million extra ordinary dividend paid by RMBSI.
Sources of income
Predominantly sourced from Southern Africa, RMBH`S well-diversified income
stream is drawn from the full spectrum of financial services. The significant
shifts in relative contributions between years can be ascribed to a reversal of
the negative factors that suppressed the Banking group`s performance in the
prior year result, namely retail lending bad debts which started to unwind
during the current year and losses in the international trading portfolios of
the Investment bank that did not re-occur in the current year.
Outlook for the coming year
We remain hopeful that the South African economic environment has stabilised.
Whilst top line revenue growth in the financial services sector will remain
challenging over the medium term, the retail credit environment is expected to
continue to improve. Bad debts will continue to unwind, which will continue to
provide support to the current earnings recovery in the Group`s retail banking
franchises. However, growth in retail advances will remain low as levels of
consumer indebtedness are still at historic highs. Corporate balance sheets
remain strong and have weathered the cycle well. However, in the current
environment investment opportunities remain limited and therefore corporate
advances will remain subdued.
All the companies in which RMBH holds an interest continue to invest in their
infrastructure in South Africa, particularly where significant growth
opportunities have been identified.
FirstRand continues to focus on growing its footprint and building its client
franchise in selected African markets. In addition to such investment
strategies, given the anticipated pressures on top-line growth, FirstRand`s
operating franchises continue to focus on cost efficiency.
Both Discovery and OUTsurance are well positioned in their respective market
segments and should continue to extract superior growth. Their respective
international initiatives should also begin to gain traction during the current
year.
We believe the combination of their current growth strategies and the quality of
their underlying client franchises will allow the groups in which RMBH is
invested to take full advantage of any major improvements in the cycle.
Strategic initiatives
FirstRand, Momentum and Metropolitan Holdings Limited ("Metropolitan") have
informed their shareholders that they have reached agreement to merge Momentum
and Metropolitan to create the third largest life assurer in South Africa. To
facilitate the transaction, FirstRand will unbundle to shareholders its
resultant 59,3% interest in the new entity, MMI Holdings Limited ("MMI"). Upon
implementation, the unbundling will result in RMBH becoming the most significant
shareholder in the MMI group.
RMBH concurs with FirstRand`s belief that this transaction is positive for
shareholders as it brings two businesses together that have created very
successful franchises in different, but complementary, markets and facilitates a
significant expansion of the growth prospects for both Momentum and
Metropolitan.
In light of the proposed MMI transaction, RMBH has informed shareholders that
RMBH is exploring a number of consequential restructuring steps to realign its
investment portfolio and to enhance value for RMBH shareholders. The steps being
explored as part of this restructuring include:
- the appropriateness of a separation of RMBH`s insurance and banking interests
into separately listed entities; and
- possibly increasing RMBH`s interest in MMI.
While we have made significant progress in our discussions regarding the
proposed restructuring of RMBH, it is not yet appropriate to make a more
detailed announcement in this regard. RMBH shareholders should therefore
exercise caution when dealing in RMBH shares until further announcements in this
regard are made.
For and on behalf of the Board
GT Ferreira P Cooper
Chairman Chief Executive Officer
Sandton
15 September 2010
FirstRand Group
FirstRand`s diversified portfolio of banking and insurance businesses produced a
strong performance. Its normalised earnings increased by 39% to R9,96 billion,
with a normalised return on equity ("ROE") of 18% (2009: 14%). The relative
contributions to normalised earnings were as follows:
Year ended 30 June 2010 2009 %
R million change
Normalised earnings for ordinary
shareholders derived from:
- FirstRand Banking Group 8 535 6 056 +41
- Momentum Group 1 810 1 649 +10
- FirstRand Ltd (including preference (382) (554) +32
dividend payments)
Group normalised earnings 9 963 7 151 +39
Attributable to RMBH* 2 912 2 057 +42
* After consolidation eliminations
FirstRand Banking Group
The Banking Group`s results for the year ended 30 June 2010 reflect a
significant recovery in profitability in comparison to the prior year, with
normalised earnings increasing by 41% to R8,54 billion.
Year ended 30 June 2010 2009 %
R million change
Retail Banking - FNB Retail, FNB Africa, 3 630 1 747 >100
Wesbank
Corporate Banking - FNB Corporate, FNB 2 150 2 847 -24
Commercial, Wesbank
Investment Banking - RMB 3 261 1 536 >100
Corporate centre, consolidation and IRFS
adjustments (506) (74) (>100)
FirstRand Banking Group 8 535 6 056 +41
Such recovery in earnings was driven mainly by a modest increase in top-line
revenue and the reversal of the two most significant negative issues from the
previous year, being bad debts emanating from the large retail lending books and
losses from certain offshore trading portfolios within the investment bank. Many
of the banking operations also showed strong operational performances and a
significant private equity realisation positively impacted earnings.
Overall, impairments decreased 29% from R8,0 billion to
R5,7 billion, primarily in the retail franchises of FNB and WesBank, reflecting
the positive benefits of the lower interest rate environment. In addition non-
interest-revenue increased 32% from R20 billion to R26 billion representing a
strong recovery in RMB`s trading activities and the realisation of the private
equity investment in Life Healthcare, which produced a R1,2 billion pre tax
profit. However, the net interest income component of the earnings base remained
under pressure, mainly due to declining asset growth and the negative impact of
lower interest rates on capital and endowment balances. This was, however,
partly offset by successful re-pricing strategies across all lending portfolios.
Momentum Group
The earnings of Momentum were positively impacted by a recovery in equity
markets, combined with continued good operational performance. Normalised
earnings increased 10% to R1,81 billion with the return on equity remaining
ahead of Momentum`s target at 22% (2009: 23%). Capitalisation levels
strengthened to 2,1 times the Capital Adequacy Requirement ("CAR").
Momentum`s operating profit increased 15% to R1,5 billion. The recovery in
equity markets during the first half of the financial year resulted in increased
asset based fees and a reduction in the liability held for minimum maturity
guarantees. The impact of the equity market recovery was dampened somewhat by
the fact that only around half of the assets recognised on the statement of
financial position are invested in equities.
The employee benefit and healthcare businesses showed an improved performance as
the benefits of systems integration and rationalisation in these businesses
started to emerge. The African operations generated a turnaround to a breakeven
position in the current year. The growth in the FNB Insurance operating profit
is due to the continued success of the embedded credit life and funeral
products.
Directly held insurance interests
DISCOVERY GROUP
Discovery`s performance for the year was pleasing, despite the uncertain macro-
economic environment. Given this instability and the prospect of further
economic decline, Discovery focused, in both its established and emerging
businesses, on ensuring that the group remains strongly positioned for continued
growth and profitability.
Such approach resulted in strong financial performance during the year under
review, with new business growing by 32% to a record level of R7,6 billion while
operating profit increased by 36% to R2,5 billion. Headline earnings increased
by 25% to R1,5 billion.
RMBH included R389 million (2009: R315 million) of Discovery`s earnings in its
normalised earnings.
OUTsurance
Notwithstanding the prevailing economic conditions, the South African operations
of OUTsurance produced good results and grew operating profit by 18% to R1,18
billion, driven by significantly improved profitability in the Home-owners
portfolio and strong growth being achieved by Business OUTsurance.
After accounting for the start up losses of some R290 million at Youi (the
Australian based initiative), group operating profit between years remained
static. Together with the impact of non-operational items (including the funding
costs incurred at Youi), this resulted in headline earnings declining by 11% to
R580 million (2009: R654 million). Notwithstanding its increased capital base
and the drag of the Youi start up costs, OUTsurance generated a 29% return on
equity (2009: 43%). Viewed in isolation (with the Youi start up costs and
funding eliminated) OUTsurance`s South African operations grew headline earnings
by 17%.
Youi`s launch has been successful and is running according to plan. Management
remains confident regarding Youi`s future prospects.
RMBH`s attributable share of OUTsurance`s normalised earnings for the year
amounted to R341 million (2009: R384 million).
RMB Structured Insurance
At the interim reporting date, RMBSI reported a normalised loss of R3 million
for the half year to December 2009. In the second half of the year it made some
progress rebuilding its revenue streams and for the full year to June 2010 it
reported headline earnings of R13 million. This outcome was driven by increased
profitability from its portfolio of underwriting management agencies as well as
new business gained. However it will take time for RMBSI to restore its income
to a meaningful level.
RMBH`s attributable share of RMBSI`s normalised earnings for the year amounted
to R11 million (2009: R60 million).
Dividend declaration
Notice is hereby given that a final cash dividend of 70 cents per share was
declared on 15 September 2010 in respect of the financial year ended 30 June
2010.
Shareholders` attention is drawn to the following important dates:
- Last day to trade in
order to participate in
this dividend Friday, 8 October 2010
- Shares commence trading
"ex dividend" Monday, 11 October 2010
- The record date for the
dividend payment Friday, 15 October 2010
- Dividend payment date Monday, 18 October 2010
No dematerialisation or rematerialisation of share certificates may be done
between Monday, 11 October 2010 and Friday, 15 October 2010 (both days
inclusive).
By order of the Board
AL Maher
Company Secretary
15 September 2010
SUMMARISED CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2010 2009 %
R million Audited Audited change
Share of after tax results in 3 329 2 387 39
associate companies
Profit on sale of associate - 4
Earned premiums net of reinsurance 4 975 4 886
Commission and fee income 144 107
Investment income 658 (264)
Income 9 106 7 120
Net claims paid (2 695) (1 930)
Investment contract benefits and (564) (381)
insurance provisions
Acquisition, marketing and (1 448) (1 697)
administration expenses
Operating profit 4 399 3 112 41
Net finance costs (154) (179)
Profit before tax 4 245 2 933 45
Taxation (400) (301) (33)
Profit for the year 3 845 2 632 46
Attributable to:
Equity holders of RMBH 3 607 2 485 45
Non-controlling interests 238 147 62
3 845 2 632 46
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2010 2009 %
R million Audited Audited change
Profit for the year 3 845 2 632 46
Other comprehensive income, net of
tax
Currency translation differences 18 (27)
Available-for-sale financial assets 25 15
Share of other comprehensive income (105) (521)
of associates
Other comprehensive income for the (62) (533) >100
year
Total comprehensive income for the 3 783 2 099 80
year
Total comprehensive income
attributable to:
Equity holders of RMBH 3 528 1 957 80
Non-controlling interests 255 142 80
3 783 2 099 80
COMPUTATION OF HEADLINE EARNINGS
For the year ended 30 June 2010 2009 %
R million Audited Audited change
Earnings attributable to equity 3 607 2 485 45
holders
Adjustment for:
Profit on sale of associate - (4)
Impairment of available-for-sale - 14
assets
Other (2) (5)
Share of adjustment made by
associates:
Loss on sale of shares in subsidiary (37) 9
and associate
Profit on sale of available-for-sale (69) (16)
financial assets
Gains from a bargain purchase (66) -
Impairment of assets in terms of 57 -
IAS36
Impairment of available-for-sale - 22
financial assets
Loss on sale of advances books - 79
Impairment of goodwill and 53 39
intangible assets
Other 33 21
Total tax effect of adjustments 17 (4)
Total non-controlling interests in 1 (4)
adjustments
Headline earnings attributable to 3 594 2 636 36
equity holders
SOURCES OF HEADLINE EARNINGS
For the year ended 30 June 2010 2009 %
R million Audited Audited change
Headline earnings from:
FirstRand 2 902 2 138 36
Discovery 411 332 24
OUTsurance 359 405 (11)
RMB Structured Insurance 8 62 (87)
3 680 2 937 25
Other net income/(funding costs) (86) (301) 71
Headline earnings 3 594 2 636 36
COMPUTATION OF EARNINGS PER SHARE
For the year ended 30 June 2010 2009 %
R million Audited Audited change
Earnings attributable to equity 3 607 2 485 45
holders
Headline earnings attributable to 3 594 2 636 36
equity holders
Number of shares in issue (millions) 1 209 1 209
Weighted average number of shares in 1 199 1 200
issue (millions)
Earnings per share (cents) 300,8 207,1 45
Diluted earnings per share (cents)* 298,0 206,7 44
Headline earnings per share (cents) 299,8 219,7 36
Diluted headline earnings per share 297,0 219,3 35
(cents)*
Dividend per share (cents)
Interim 54,0 54,0 -
Final 70,0 45,0 56
Total 124,0 99,0 25
Dividend cover (relative to headline 2,4 2,2
earnings)
* The diluted calculations give cognisance to the impact of a
similar calculation within FirstRand and Discovery. This has no
impact on RMBH`s weighted average number of shares.
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2010 2009
R million Audited Audited
ASSETS
Property and equipment 165 146
Goodwill and other intangible assets 46 19
Investment in associate companies 22 371 20 100
Financial assets 5 288 5 565
Receivables and prepayments 635 532
Policyholders` interest - 11
Reinsurers` share of insurance provisions 152 112
Cash and cash equivalents 2 749 1 986
Total assets 31 406 28 471
EQUITY
Share capital and premium 5 126 5 191
Reserves 17 722 15 451
Capital and reserves attributable to equity 22 848 20 642
holders of the company
Non-controlling interests 1 036 1 099
Total equity 23 884 21 741
LIABILITIES
Financial liabilities 2 792 2 646
Insurance contract provisions 4 184 3 704
Payables and provisions 546 380
Total liabilities 7 522 6 730
Total equity and liabilities 31 406 28 471
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2010 2009
R million Audited Audited
Cash available from operating activities 2 476 2 460
Dividends paid (1 195) (1 528)
Investment activities (58) (364)
Financing activities (473) (612)
Net increase/(decrease) in cash and cash 750 (44)
equivalents
Unrealised foreign currency translation 13 (28)
adjustments
Cash and cash equivalents at the beginning of
the year 1 986 2 058
Cash and cash equivalents at the end of the 2 749 1 986
year
Cash available from operating activities includes net premium
receipts by short-term insurance operations. Given the
fluctuations inherent in non-recurring structured insurance
transactions, such cash flows are not necessarily directly
comparable between years.
Computation of UNAUDITED normalised earnings
The group believes that normalised earnings more accurately reflect operational
performance. Headline earnings are adjusted to take into account non-operational
and accounting anomalies. These adjustments are consistent with those reported
at 30 June 2009.
For the year ended 30 June Note 2010 2009 %
R million Unaudite Unaudite chang
d d e
Headline earnings attributable 3 594 2 636 36
to equity holders
RMBH`s share of adjustments
made by associates:
Treasury shares 1 83 103
IFRS 2 share based expenses 73 (34)
3 750 2 705 39
Adjustment for:
RMBH shares held by 2 66 22
policyholders
Group treasury shares 3 (249) (213)
Normalised earnings 3 567 2 514 42
attributable to equity holders
Weighted average number of 1 209 1 209
shares in issue (millions)
Normalised earnings per share (cents) 295,0 207,9 42
Diluted normalised earnings per share
(cents) 295,0 207,9 42
Dividend cover (relative to 2,4 2,1
normalised earnings)
Sources of normalised earnings
For the year ended 30 June 2010 2009 %
R million Unaudite Unaudite change
d d
Normalised earnings from:
FirstRand 2 912 2 057 42
Discovery 389 315 23
OUTsurance 341 384 (11)
RMB Structured Insurance 11 60 (82)
3 653 2 816 30
Other net income/(funding costs) (86) (302) 72
Normalised earnings 3 567 2 514 42
Notes:
1. Deconsolidation of treasury shares and "deemed" treasury
shares by FirstRand and Discovery to account for:
- the Discovery BEE transaction;
- Shares acquired to hedge liabilities under staff share schemes;
and
- Shares held as policyholders assets by group insurers.
2. Deconsolidation of "deemed" RMBH`s treasury shares held for
policyholders by group insurers.
3. Adjustment to reflect earnings impact based on actual RMBH
shareholding in group companies, i.e. reflecting treasury shares
as non-controlling interests.
Summarised consolidated statement of changes in equity
R million Share Treasury Equity Non-
Capital shares Accounted Distributabl
& reserve reserves e
Premium reserves
Balance at 30 June 5 328 (131) 11 993 552
2008 (audited) as
previously reported
Total comprehensive - - (521) (7)
income for the year
Dividend paid - - - -
Income of associated - - 1 091 -
companies retained
Capital invested by - - - -
non-controlling
interests
Reserve movements - - - 14
relating to
subsidiaries
Change in carrying - - (27) -
value of associate
due to elimination of
treasury shares
Movement in treasury - (6) 13 -
shares
Reserve movements - - (53) -
relating to
associates
Balance at 30 June 5 328 (137) 12 496 559
2009 (audited)
Total comprehensive - - (105) 26
income for the year
Dividend paid - - - -
Income of associated - - 2 282 -
companies retained
Capital invested by - - - -
non-controlling
interests
Sale of emerging - - - -
market portfolio
Reserve movements - - - 24
relating to
subsidiaries
Change in carrying - - (91) -
value of associate
due to elimination of
treasury shares
Movement in treasury - (65) 94 -
shares
Reserve movements - - (62) -
relating to
associates
Summarised consolidated statement of changes in equity
R million Retained Total Non- Total
Earnings equity Controllin equity
holders` g
funds Interests
Balance at 30 June 2 565 20 307 1 044 21 351
2008 (audited) as pre-
viously reported
Total comprehensive 2 485 1 957 142 2 099
income for the year
Dividend paid (1 530) (1 530) (181) (1 711)
Income of associated (1 091) - - -
companies retained
Capital invested by - - 100 100
non-controlling
interests
Reserve movements (33) (19) (6) (25)
relating to
subsidiaries
Change in carrying - (27) - (27)
value of associate
due to elimination of
treasury shares
Movement in treasury - 7 - 7
shares
Reserve movements - (53) - (53)
relating to
associates
Balance at 30 June 2 396 20 642 1 099 21 741
2009 (audited)
Total comprehensive 3 607 3 528 255 3 783
income for the year
Dividend paid (1 197) (1 197) (189) (1 386)
Income of associated (2 282) - - -
companies retained
Capital invested by - - 188 188
non-controlling
interests
Sale of emerging - - (323) (323)
market portfolio
Reserve movements (26) (2) 6 4
relating to
subsidiaries
Change in carrying
value of associate
due to elimination of
treasury shares - (91) - (91)
Movement in treasury 1 30 - 30
shares
Reserve movements - (62) - (62)
relating to
associates
Balance 5 328 (202) 14 614 609 2 499 22 848 1 036 23
at 30 884
June 2010
(audited)
Basis of preparation of results
The accompanying summarised results for the year ended 30 June 2010 reflect:
- the consolidation of the operations of RMBH and its subsidiaries including
OUTsurance and RMBSI; and
- RMBH`s proportionate interest in its associates, FirstRand and Discovery,
which have been equity accounted.
The annual financial statements for the year ended 30 June 2010, to which this
profit announcement relates, were prepared in accordance with:
- International Financial Reporting Standards ("IFRS"), including IAS 34:
Interim Financial Reporting;
- The requirements of the South African Companies Act, Act 61 of 1973, as
amended; and
- The Listings Requirements of the JSE Limited (the "JSE").
The annual financial statements were audited by PricewaterhouseCoopers Inc. A
copy of their unqualified audit opinion is available for inspection at RMBH`s
registered office.
These financial statements incorporate accounting policies that are consistent
with those used in preparing the financial results for the year ended 30 June
2009.
www.rmbh.co.za
RMB Holdings Limited
Directors GT Ferreira (Chairman), P Cooper (CEO, effective 17 August 2010), L
Crouse (resigned 10 February 2010), LL Dippenaar, JW Dreyer, JJ Durand
(appointed 10 February 2010), PM Goss, PK Harris, KC Shubane, Ms SEN Sebotsa and
MH Visser ?Secretary and registered office AL Maher BCompt(Hons), CA(SA)
?Physical address 3rd Floor, 2 Merchant Place, Corner of Fredman Drive and
Rivonia Road, Sandton, 2196 ?Postal address PO Box 786273, Sandton, 2146?
Telephone +27 11 282 1010? Telefax +27 86 632 0963? Web address www.rmbh.co.za
?Sponsor (in terms of JSE Listings Requirements)?Rand Merchant Bank (a division
of FirstRand Bank Limited) ?Physical address 1 Merchant Place, corner of Fredman
Drive and Rivonia Road, Sandton, 2196 ?Transfer secretaries Computershare
Investor Services (Pty) Limited ?Physical address Ground Floor, 70 Marshall
Street, Johannesburg, 2001 ?Postal address PO Box 61051, Marshalltown, 2107?
Telephone +27 11 370 5000? Telefax +27 11 688 5221
THE RMB GROUP AT A GLANCE
RMBH is a significant investor in some of Southern Africa`s prominent financial
services groups. Our interests include:
Effective interest 32,3%
FirstRand Limited (the "FirstRand or FirstRand Group")
The FirstRand Group comprises of a portfolio of leading financial services
franchises. For regulatory oversight purposes, its operations are housed in two
subsidiary groups under FirstRand Bank Holdings Limited and Momentum Group
Limited. Other unregulated businesses are housed under FirstRand
Investment Holdings (Proprietary) Limited.
The FirstRand Banking Group provides customers with a comprehensive range of
products and services according to specific target market segments.
BANKING
First National Bank ("FNB") services the retail, business and medium corporate
segments. In addition it provides transactional services to the group`s large
corporate clients.
Rand Merchant Bank ("RMB") is responsible for the large corporate segment, to
which it provides loans, value added advisory and structuring services.
WesBank is South Africa`s dominant movable asset financier.
The balance of the Banking Group includes its African banking subsidiaries and
Banking Group Treasury.
ASSURANCE
Momentum Group provides for the assurance needs of individuals in the middle
and upper income markets, principally under the Momentum Life, Momentum Wealth,
Momentum Health and RMB Asset Management and Unit Trust brand names.
Effective interest 26,7%*
Discovery Holdings Limited ("Discovery")
Discovery services the health care funding and insurance markets in South Africa
and the United Kingdom. It is a pre-eminent developer of financial services
products and operates under the Discovery Health, Discovery Life, Discovery
Invest, Discovery Card, Vitality, PruHealth and PruProtect brand names.
Effective interest 61,7%*
FirstRand STI Holdings Limited ("OUTsurance")
OUTsurance is a direct personal lines and small business short-term insurer.
Pioneers of the OUTbonus concept, it has grown rapidly by applying a scientific
approach to risk selection, product design and claims management; Youi, its
direct personal lines initiative in Australia, is still in start-up phase.
Effective interest 79,6%*
RMB-SI Investments (Proprietary) Limited ("RMBSI")
RMBSI holds both short-term and life assurance licenses. It creates bespoke
insurance and financial risk solutions for South Africa`s large corporations by
using sophisticated risk techniques and innovative financial structures.
The effective interest held by RMBH in these group entities shows variations
between years as a result of the consolidation, by such entities of treasury
shares held by them; shares held in them by their staff share incentive trusts;
and/or "deemed" treasury shares arising from BEE transactions entered into; as
well as "deemed" treasury shares held in them by policyholders and mutual funds
managed by them.
At 30 June 2010 the effective interest held as recorded above can be compared to
the actual interest that RMBH holds in the statutory issued share capital of the
companies as follows:
Effective Actual
*FirstRand 32,3% 30,1%
*Discovery 26,7% 25,0%
*OUTsurance 61,7% 58,6%
*RMBSI 79,6% 76,4%
Date: 15/09/2010 10:20:01 Produced by the JSE SENS Department.
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