PSG GROUP / PSGBH - RESTRUCTURING

PSG Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/008484/06)
("PSG Group")
PSG Investment Bank
(Incorporated in the Republic of South Africa)
(Registration number 1998/017358/06)
("PSGBH")

Restructuring of group investment in Keynes Rational Limited and launch of
Capitec Bank
1.     BACKGROUND

       -1.1 -PSG Group and a team of businessmen led by Michiel le Roux ("the
executives") some 18 months ago provided start-up equity capital and PSGBH
subscribed for a convertible debenture ("CD") of R80 million to establish the
business of Keynes Rational Limited ("KR") as a specialist financial services
provider to the lower-income historically underbanked sector. A group of
experienced bankers later joined KR.

       1.2 -In the period since its formation, the growth in KR's business has
been exponential, far surpassing the expectations of its founders. This success
of KR is attributed to:

             1.2.1 -the simplicity and affordability underlying its business
model which distinguishes KR from other suppliers of finance in its sector of
business and is characterised by a simple and low-cost product offering, low
transaction costs, one-month cash loans and low-cost medium term loans;
             1.2.2 a major investment in developing sophisticated technology
and systems;

             1.2.3 -KR's substantial and low-cost branch infrastructure which
provides a face-to-face client contact in geographic areas of high client
density in a manner which affords KR a major cost advantage over traditional
financial services providers;

             1.2.4 -a concerted focus on its vision of being the financial
friend of the poor and supporter of low-income earners and the informal
business sector.
2.     THE BUSINESS OF KR

       2.1 -Currently KR conducts its business through 299 branches under
different trade names, has 1 283 employees and is expected to record headline
earnings before tax and convertible debenture interest for the year ending 28
February 2001 in excess of R76 million.

       2.2 -KR's five-year vision is to become a fully fledged retail bank to
the "underbanked" through a nationwide network of branches and many access
points formalised through strategic alliances.

       2.3 -To realise KR's vision and growth potential it is essential that
KR's business be converted from that of a financial services company to a bank.
3.     THE RESTRUCTURING

       -3.1 -In March 2000 PSGBH acquired The Business Bank Limited ("TBB").
PSGBH has successfully reorganised the business of TBB, achieved a turnaround
and has recapitalised TBB with R100 million to continue its business.

       3.2 -PSGBH, to expeditiously reposition TBB, has reached agreement with
PSG Group and the executives of KR, effective 1 March 2001, the salient terms
of which are as follows:

            3.2.1 -TBB will acquire the business of KR for a consideration of
R165,4 million which will be satisfied by the issue of new TBB shares. In terms
thereof, KR and PSG Group have warranted a tangible net asset value at 28
February 2001 of at least R70 million and headline earnings before tax and
debenture interest of not less than R76 million per annum in respect of the
years ending 28 February 2001 and 28 February 2002 ("the KR acquisition");
            3.2.2 -PSGBH will acquire from PSG Group its entitlement to some
shares in TBB arising from the KR acquisition for a cash consideration of
approximately R84 million, and dispose of some shares to management of KR for a
cash consideration of approximately R26 million, resulting in a net cash
outflow for PSGBH of approximately R58 million.

       3.3 -PSG Group will as a result of the transaction retain a direct and
indirect investment in KR, and PSG Anchor Life Limited will become a subsidiary
of Channel Holdings Limited.

       3.4 -The restructuring results in PSGBH increasing its investment of
R180 million in TBB and KR by a further approximately R58 million and creates
in TBB a specialist banking group with a strongly capitalised balance sheet
with focus on service to the "underbanked" through a limited product offering,
leveraging off its banking licence.

       3.5 -At the request of the directors of PSGBH, Deloitte & Touche,
independent accountants and auditors, have considered the terms and conditions
of the KR acquisition and have expressed the opinion that such terms and
conditions are fair and reasonable to PSGBH.
4.     ABRIDGED GROUP STRUCTURE

" Before the transaction, PSG Group holds 68% of PSGBH and 73% of KR.
Management and others hold 27% of KR.

PSGBH holds 100% of TBB and of PSGIB. PSGIB holds a R80m CD in KR.

After the transaction PSG Group holds 68% of PSGBH. PSGBH holds 100% of
PSGIB and 70% of a new subsidiary  Holdco. The other shares in Holdco are
held by PSG Group (10%) and management and others (20%). PSGIB retains its
R80m CD in Holdco. Holdco owns 100% of TBB.

PSG Group and PSGBH are listed on the JE. TBB and PSGIB are registered
deposit-taking institutions

The percentage holdings in Holdco will vary after the conversion of the CD
and share incentive scheme."
5.     NAME CHANGE TO CAPITEC BANK

       -5.1 -TBB will be renamed Capitec Bank and Holdco named Keynes Rational
Holdings Limited ("KRH").

       5.2 -The boards of both KRH and Capitec Bank will consist of J F Mouton
(Chairman), C J Borstlap*, G M Fourie*, A B la Grange, M S du P le Roux* (CEO),
Dr M Mehl, C A Otto, J Solms, R Stassen* (Managing Director) and Dr J van Zyl
Smit (*denotes an executive director). Further appointments of non-executive
board members will be made in due course.
6.     EFFECTS

       6.1 -The PSGBH investment in KRH/Capitec Bank is in line with its
investment philosophy of innovating, bridging and trading.

       6.2 -As the transaction is effective on 1 March 2001 it will not have
any effect on the results of PSG Group and PSGBH as at and for the year ending
28 February 2001.

       6.3 -An illustration of the pro forma financial effects of the

transaction on PSGBH and PSG Group will be incorporated in the results for the
year ended 28 February 2001 to be published by 30 April 2001.
7.     REGULATORY APPROVAL

       -The Registrar of Banks has been informed of the transaction and
requires further submissions with regard to the process and compliance, which
matters will be attended to in due course.
Stellenbosch
21 February 2001
Investment bank and joint sponsor
PSG Investment Bank
Joint sponsor
Pricewaterhousecoopers
Pricewaterhousecoopers Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
Advisor to PSGBH
Deloitte & Touche