Standard Bank Retail Note - SBR003 Roadshow presentation 5 year Standard Bank Retail Deposit Note paying 3-month Jibar + 30 bps October 2008 Overview 1. Introduction: Standard Bank Retail Note 2. Indicative termsheets: SBR001, SBR002 & SBR003 3. Key features and value proposition 4. Comparative pricing: retail fixed income products 5. Trading cost comparatives: SBR003 6. Breakeven analysis and out performance 7. Secondary market performance: SBR001, SBR002 8. Primary offer trading process 9. Additional information 10. Contacts Introduction: Standard Bank Retail Note In May 2004 National Treasury launched the RSA Retail Savings Bonds Standard Bank launched STANDARD BANK RETAIL DEPOSIT NOTES (“Retail Notes”) with the debut R175m 3 year SBR001 issue in February 2006 (paying Jibar), followed by the R350m 5 year SBR002 issue in September 2006 (paying Jibar + 15bp) which has been increased to R475m City of Joburg launched the 2, 3 and 5 year Jozibonds in August 2007 at 3-month Jibar + 5 bps, 3-month Jibar + 25 bps and 3-month Jibar + 40 bps respectively. Their credit rating was A+ at the time of issue Standard Bank (AA+) is launching a new 5 year Retail Note in October 2008 paying 3-month Jibar + 30 bps. The offer will open on 13 October 2008 and close on 29 October 2008 SBR003 indicative termsheet – new offer from Standard Bank Issue amount: Unlimited The Standard Bank of South Africa Limited Issuer: (“SBSA”) Issuer credit rating: AA+ (zaf) Status: Deposit (senior debt) Maturity: 5 years 3-month JIBAR + 0.30%, paid quarterly in Interest: arrears 12.50% (NACQ), or 13.098% (NACA) 3- Interest rate*: month floating Pricing: 100% of par Listing: JSE (SBR003) and BESA (SBR003) Trading: JSE Indicatively, SBSA will post a bid of 25 Market making: cents per R100 on the theoretical clean price (99.75 – 100.00) Minimum deposit on R10,000 (100 Notes) primary offering Minimum trading R100 denomination JSE stockbroker 25 bps commission Note: *All rates as at 6 October 2008, to be finalised using Jibar on listing date SBR001 and SBR002 indicative termsheets – trading on the JSE SBR001 termsheet SBR002 termsheet * Initially issued as a 3 year note at 3-month Jibar on 17 February 2006 * Initially issued as a 5 year note at 3-month Jibar + 15 bps on 15 September 2006 Issue amount: R175 million Issue amount: R475 million The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited Issuer: Issuer: (“SBSA”) (“SBSA”) Issuer credit rating: AA+ (zaf) Issuer credit rating: AA+ (zaf) Status: Deposit (senior debt) Status: Deposit (senior debt) Maturity: 5 months (17 February 2009) Maturity: 3 years (15 September 2011) Interest: 3-month JIBAR, paid quarterly in arrears 3-month JIBAR + 0.15 %, paid quarterly in Interest: arrears 12.075 % (NACQ), or 12.633% (NACA) 3- 12.292 % (NACQ), or 12.870% (NACA) 3- Interest rate*: Interest rate*: month floating month floating Pricing: 100% of par Pricing: 100% of par Listing: JSE (SBR001) and BESA (SBR001) Listing: JSE (SBR002) and BESA (SBR002) Trading: JSE Trading: JSE Indicatively, SBSA post a bid of 25 cents Indicatively, SBSA post a bid of 25 cents per Market making: Market making: per R100 on the theoretical clean price R100 on the theoretical clean price (99.75 – (99.75 – 100.00) 100.00) Minimum trading Minimum trading R100 R100 denomination denomination Note: *All rates as at 6 October 2008 Key features and value proposition of the Standard Bank Retail Note Competitive wholesale interest rates for retail investors – no cost for investor to buy in primary offer and hold The Notes offer an alternative asset class to retail investors looking to maximise their medium term returns Stable interest income paid quarterly As a floating rate instrument, reduce interest rate risk and reduce erosion of capital risk. Rate resets every 3 months Tradeable on the JSE - ease of access (entry / exit) to the instrument Liquidity ensured by Standard Bank (as market-maker) Any person over 18 years or any legal entity can invest Low minimum investment of R10,000 in primary offer No maximum restriction on the amount invested No fees / charges on the primary offer to investor - JSE brokerage applies for secondary market sales / purchases No annual management fees Use tax interest exemption allowance Under 65 years – an aggregate amount of R19 000 of interest can be earned tax-free per annum Assuming 12.50% (NACQ) interest rate, then individual can invest R152 000 Over 65 years – an aggregate amount of R27 500 of interest can be earned tax-free per annum Assuming 12.50% (NACQ) interest rate, then individual can invest R220 000 Comparative retail fixed income products Product Term Cost Rate type Bank deposits Call to 60 mths Bank fees, withdrawal penalties Floating and Fixed Online investment/brokerage accounts Call account Management fee depending on amount Floating Money-market unit trusts Undated Annual management fee Floating Bond funds Undated Front-end and annual management fee Floating and Fixed Preference shares Perpetual Brokerage fee and bid offer spread Prime floating Government retail bonds 2, 3 and 5 years No charge (withdrawal penalty) Fixed Jozibonds 1, 2 and 4 years Brokerage fee and bid offer spread Floating JSE Trustees Pty Ltd Call account Brokerage, management fee Floating Property Loan Stock (“PLS”) Perpetual Brokerage fee Floating Source: Standard Bank Comparative pricing – SBR003 Comparative retail fixed income products Notes: 5 year Retail Note paying 3 month Jibar + 30 bps 1. All rates as at 6 October 2008 2. Using Jibar of 12.20% as of 6 October 2008, to be finalised using Jibar as on listing date Retail product Return 3. All rates quoted NACQ * Standard Bank retail note: Indicative rate Standard Bank Retail Note* 3-month JIBAR + 30 bps ** Money market call account (11.40% NACM) for investments R1m and above Money Market Call Account** 3-month JIBAR – 69 bps *** Standard Bank Money Market unit trust (11.67% NACM) **** Standard Bank ordinary fixed deposits rates : R10k to R100k: Standard Bank MM Unit Trust*** 3-month JIBAR – 42 bps (5 years) 9.25% NACM ***** Standard Bank online share trading (OST): overnight interest Standard Bank Fixed Deposit Fixed**** 3-month JIBAR – 27 bps on cash balances: 10.262% Standard Bank Online Share Trading***** 3-month JIBAR – 185 bps Trading cost: SBR003 – secondary market 0.35%* brokerage on all Retail Notes Worst case – with SBSA bid spread Best case – no bid spread Assumptions Assumptions Brokerage* 0.35% Brokerage* 0.35% Bid spread as % of dirty price 0.25% Bid spread as % of dirty price 0.00% Trade volume R100,000.00 Trade volume R100,000.00 Sell Sell Bid spread R250.00 Bid spread R0.00 Brokerage R350.00 Brokerage R350.00 Investor protection levy R0.20 Investor protection levy R0.20 STRATE R10.92 STRATE R10.92 VAT R50.56 VAT R50.56 Total rand value R661.68 Total rand value R411.68 Total cost as a % of initial investment 0.662% Total cost as a % of initial investment 0.412% * Online Share Trading (operated by Standard Financial Markets (Pty) Ltd) for all clients trading Retail Notes Breakeven analysis and out performance Breakeven in months and out performance in % Standard Bank Retail Notes offer considerable value versus 5 year Retail Note – no cost to investor to buy in primary offer and hold to maturity comparative fixed income / money market instruments: Notes: Out Breakeven 1. Breakeven (in months) if the Retail Notes are sold prior to maturity: Retail product performance (months) breakeven period calculating those costs for a worst-case scenario of (%) investor selling SBR003 notes back into secondary market with JSE Money Market Call Account 7.40 5.42 fees + 35 bps brokerage + 25 cents points bid / offer spread per R100. Beyond this period, investor will benefit from a yield pickup by Standard Bank MM Unit Trust 10.27 3.92 holding SBR003 notes over these comparative instruments. 2. Out performance (%): SBR003’s yield out performance over Standard Bank Fixed Deposit 2.33 17.25 comparative instruments if held over the lifetime of the SBR003 Standard Bank Online Share Trading 3.43 11.71 Secondary market performance since issue: SBR001 and SBR002 SBR001 – issued 17 February 2006 R175 million was placed in the primary offer Secondary market trade of R181 million 736 trades Average trade size of R247k Liquidity (turnover p.a./issue size) = 39% SBR002 – issued 15 September 2006 R350 million was placed in the primary offer; subsequent tap (increase) of R125 million sees current issue size of R475 million Secondary market trade of R388 million 1368 trades Average trade size of R284k Liquidity (turnover p.a./issue size) = 48% Standard Bank has been an active market maker (buyer or seller in most of the trades) Product has proven track record now – the platform is stable and the notes liquid Average bid/offer spread by Standard bank of 25 bps (99.75 – 100.00) * Data sourced as of 6 October 2008 Primary offer trading process Primary offer: Retail investor places ISSUER order through stockbroker. Broker collates orders with Standard Bank in the bookbuild process. Settlement takes place through JSE and STRATE JOHANNESBURG SECURITIES EXCHANGE STRATE LTD Secondary trading: Retail investor places buy or sell order through stockbroker. Best bid and offer matched through JSE system. Standard Bank has undertaken to BROKER NETWORK always ensure a bid price on the JSE. Settlement takes place through JSE and STRATE RETAIL MARKET Primary offer key dates* 13 Oct 29 Oct 5 Nov 13 14 15 16 17 20 21 22 23 24 27 28 29 30 31 3 4 5 1 1 2 3 1 13 October – 29 October 2008 Book open 2 29 October 2008 Bookbuild - Orders may be submitted at any time from 13 October. Book closes at 12h00 on 29 October 2008** 3 5 November 2008 Settlement and listing (T + 5) 3 5 November 2008 Trading on the JSE * Dates and times subject to change ** Stockbrokers may have earlier cut off times for submission of orders Additional information Standard Bank company information: www.standardbank.co.za Retail Note information: www.standardbank.co.za/rdn Information on market rates: www.interestrates.co.za Standard Bank deposit rates: www.standardbank.co.za JSE prices: - Reuters - Bloomberg (to be confirmed) - I-Net Bridge - Moneyweb - press Standard Bank prices: Reuters page SBID Contacts Andrew Costa Tel: 011 378 7008 E-mail: email@example.com Martine Schlosser Tel: 011 378 7132 E-mail: firstname.lastname@example.org Louis Dirker Tel: 011 378 8103 E-mail: email@example.com Mark Kalil Tel: 011 636 6964 E-mail: firstname.lastname@example.org Disclaimer This presentation is provided on the express understanding that the information contained herein would be regarded and treated as strictly confidential and proprietary to Standard Bank. It is not to be delivered nor shall its contents be disclosed to anyone other than the entity to which it is being provided and its employees. Moreover, it shall not be reproduced or used, in whole or in part, for any purpose other than for the consideration of the financing described herein, without the prior written consent of the Standard Bank. Whilst every effort has been made to ensure the accuracy and completeness of the information contained in this presentation, no responsibility is accepted by the Standard Bank for the treatment by any court of law, tax, banking or other authorities in any jurisdiction mentioned herein of any transaction based on the information contained herein. Furthermore, nothing in this presentation should be deemed to constitute giving of advice or should be used as such. It is therefore recommended that, whilst this presentation has been made in good faith, independent professional advice be taken before a commitment to any financing be provided. Such independent professional advice should be sought subject to the Standard Bank’s prior written consent.