STANBIC ANNOUNCEMENT

STANDARD BANK INVESTMENT CORPORATION LIMITED
(REGISTRATION NUMBER 69/17128/06)
("STANBIC")
STANBIC ANNOUNCEMENT

THE CHAIRMAN OF STANDARD BANK INVESTMENT CORPORATION LIMITED, DR. C.B. STRAUSS
YESTERDAY DELIVERED A LETTER TO THE CHAIRMAN OF NEDCOR LIMITED, MR. C.F.
LIEBENBERG, THE CONTENTS OF WHICH WERE AS FOLLOWS:

"I REFER TO OUR CORRESPONDENCE AND VARIOUS DISCUSSIONS WHEREBY YOU EXPRESSED A
DESIRE TO ADDRESS THE STANBIC BOARD IN SUPPORT OF A PLAN FOR A MERGER WITH
NEDCOR BASED ON PREVAILING MARKET VALUES. YOUR VIEWS ON THE MERITS OF YOUR PLAN
WERE PRESENTED TO OUR BOARD BY YOUR TEAM ON 5TH OCTOBER.

FOLLOWING YOUR PRESENTATION THE BOARD APPOINTED A SUB-COMMITTEE OF

NON-EXECUTIVE DIRECTORS TO CONSIDER YOUR PLAN IN DETAIL. IN ORDER TO ENSURE
THAT FULL CONSIDERATION WAS GIVEN TO ALL ASPECTS OF THE PLAN, A SIGNIFICANT
NUMBER OF OUR SENIOR EXECUTIVES AND THEIR SUPPORTING STAFF MEMBERS WERE
RELIEVED OF THEIR NORMAL DUTIES TO CONCENTRATE ON THIS MATTER AND WERE ASSISTED
BY J.P. MORGAN, DEUTSCHE BANK, MCKINSEY & CO., PRICEWATERHOUSECOOPERS AND
BOWMAN GILFILLAN. THE SUB-COMMITTEE, STANBIC MANAGEMENT AND THE ADVISERS HAVE
DEVOTED CONSIDERABLE TIME AND EFFORT IN ASSESSING THE NEDCOR PLAN AS WELL AS
CONDUCTING AN INDEPENDENT ASSESSMENT OF THE MERGER AND ITS POTENTIAL BENEFITS.
MEMBERS OF THE STANBIC EXECUTIVE HAVE MET WITH NEDCOR EXECUTIVES TO EXPLORE
CERTAIN OF THE BUSINESS ASSUMPTIONS UNDERLYING THE NEDCOR PLAN, WHILE J.P.
MORGAN AND MCKINSEY & CO. HAVE, INTER ALIA, COMPARED THE NEDCOR PLAN AGAINST
INTERNATIONAL EXPERIENCE AND PRECEDENT.

MANAGEMENT AND ADVISERS HAVE NOW COMPLETED THEIR ANALYSIS AND HAVE REPORTED
THEIR FINDINGS TO THE SUB-COMMITTEE AND THE BOARD. THE BOARD MET THIS MORNING
AND BASED ON THE RECOMMENDATION OF THE SUB-COMMITTEE AND ADVISERS HAS

UNANIMOUSLY REACHED THE CONCLUSIONS SET OUT IN THIS LETTER.

OUR ANALYSIS CONCURS WITH YOUR VIEW THAT THE POTENTIAL EXISTS TO EXTRACT
MEANINGFUL COST SAVINGS BY MERGING OUR ORGANISATIONS. HOWEVER, WE BELIEVE THAT
YOU HAVE UNDERESTIMATED THE ONE-OFF COSTS OF ACHIEVING THE SAVINGS, THE ONGOING
NET REVENUE LOSSES THAT WE ARE CONVINCED WILL RESULT FROM THE COMBINATION AND
THE INHERENT RISKS ASSOCIATED WITH THE IMPLEMENTATION OF THE MERGER. THE EFFECT
IS THAT OUR ESTIMATES OF THE SUSTAINABLE NET FINANCIAL BENEFITS ARE FAR LOWER
THAN YOURS.

IN THE LONGER TERM WE ALSO HAVE CONCERNS ABOUT THE GROWTH PROSPECTS OF THE
MERGED ENTITY GIVEN THE HIGH MARKET SHARES WHICH WILL RESULT IN CERTAIN AREAS.
THERE ARE CLEARLY BUSINESS RISKS ASSOCIATED WITH BEING BY FAR THE LARGEST
BANKING GROUP IN SOUTH AFRICA.

WE CONCUR WITH YOUR EXPRESSED VIEW THAT IF A MERGER WERE TO TAKE PLACE THEN IT
WOULD INEVITABLY REQUIRE THE UNTIMELY UNBUNDLING OR SALE OF OUR CONTROLLING
INTEREST IN LIBERTY LIFE. THIS WOULD TERMINATE THE SIGNIFICANT SYNERGISTIC
POTENTIAL OF STANBIC'S RELATIONSHIP WITH LIBERTY LIFE.

IN ADDITION, WE COULD NOT ACCEPT THE EARNINGS DILUTION THAT STANBIC

SHAREHOLDERS WOULD SUFFER IF A MERGER WERE TO OCCUR AT OR CLOSE TO MARKET
VALUES.

ALL OF THE ABOVE HAS LED THE BOARD TO CONCLUDE THAT YOUR CURRENT PLAN WOULD NOT
BE IN THE INTERESTS OF STANBIC SHAREHOLDERS.

FOR THE BOARD TO RECONSIDER ITS POSITION IT WOULD REQUIRE AN APPROPRIATE
EXCHANGE RATIO WHICH COMPENSATES STANBIC SHAREHOLDERS FOR EARNINGS DILUTION AND
MERGER RISK. AS AN ABSOLUTE MINIMUM WE WOULD REQUIRE THAT THE EARNINGS IMPACT
OF THE TRANSACTION BE EQUALISED BETWEEN THE TWO SETS OF SHAREHOLDERS AND THAT
OUR SHAREHOLDERS SUFFER NO EARNINGS DILUTION IN THE FIRST YEAR OF THE MERGER
PRIOR TO ANY ASSUMED MERGER BENEFITS. IT IS THE CONSIDERED VIEW OF THE BOARD
AND ITS FINANCIAL ADVISERS, J.P. MORGAN AND DEUTSCHE BANK, THAT ON THIS BASIS
THE EXCHANGE RATIO MUST BE NO LESS FAVOURABLE TO STANBIC SHAREHOLDERS THAN 1
NEDCOR SHARE FOR 4.75 STANBIC SHARES. THIS RATIO WOULD NEED TO BE ADJUSTED FOR
ANY UNBUNDLING OR SALE OF STANBIC ASSETS, WHICH MUST BE PURELY FOR THE ACCOUNT
AND BENEFIT OF STANBIC SHAREHOLDERS. IT ALSO SPECIFICALLY EXCLUDES ANY FORM OF
CONTROL PREMIUM, WHICH WOULD BE REQUIRED IF THE SUBSTANCE OF YOUR PROPOSAL
PROVES TO BE A TAKEOVER RATHER THAN A TRUE MERGER OF EQUALS.

IF YOU ARE WILLING TO CHANGE YOUR PREVIOUS STANCE OF AN EXCHANGE RATIO AT
MARKET VALUES AND ACCEPT THIS MINIMUM RATIO, WHICH MAY REQUIRE A CASH

COMPONENT, THERE ARE CRITICAL ADDITIONAL ISSUES THAT NEED TO BE RESOLVED.
THE BULK OF THE PERCEIVED MERGER BENEFITS ARE BASED ON COMBINING COMMERCIAL
BANKING BUSINESSES IN SOUTH AFRICA WHICH REPRESENT APPROXIMATELY 45% OF
STANBIC'S EARNINGS. YOUR PLAN DOES NOT SUFFICIENTLY ADDRESS THE OTHER IMPORTANT
COMPONENTS OF STANBIC'S BUSINESS. THESE INCLUDE:SCMB, WHICH WE CONSIDER TO BE
AN EXTREMELY STRONG FRANCHISE THAT IS LIKELY TO BE SUBSTANTIALLY DAMAGED BY THE
MERGER; AFRICA, WHERE THERE IS A MARKED DIFFERENCE IN OUR RESPECTIVE

STRATEGIES; STANDARD BANK LONDON, WHICH WE BELIEVE IS A BUSINESS WITH STRONG
GROWTH POTENTIAL AND, AS MENTIONED ABOVE, LIBERTY LIFE. WE ARE ALSO CONCERNED
ABOUT POTENTIAL VALUE LOSS FROM THE DILUTION OF THE STANDARD BANK BRAND. IN
ADDITION YOU HAVE MADE NO SUBSTANTIVE PROPOSAL WITH REGARD TO SENIOR MANAGEMENT
AND BOARD STRUCTURES.

ALTHOUGH YOU HAVE PERSONALLY EXPRESSED SOME CONFIDENCE IN OBTAINING COMPETITION
TRIBUNAL AND OTHER REGULATORY APPROVALS, WE HAVE BEEN ADVISED THAT THE NATURE
AND SIZE OF THIS TRANSACTION IS SUCH THAT THE PROCESS IS LIKELY TO BE OF
UNCERTAIN OUTCOME. WE WOULD NOT UNDER ANY CIRCUMSTANCES CONSIDER EXPOSING
STANBIC TO THE BUSINESS RISKS ASSOCIATED WITH AN UNACCEPTABLE DELAY IN
RECEIVING REGULATORY APPROVALS.

WE BELIEVE THAT ANY FORM OF DUE DILIGENCE WILL INEVITABLY INVOLVE SHARING
COMPETITIVE INFORMATION WHICH COULD PROVE DETRIMENTAL TO SHAREHOLDERS AND
THEREFORE WOULD ONLY BE APPROPRIATE ONCE ALL OF THESE MATTERS HAVE BEEN
ADDRESSED."

ACCORDINGLY, SHAREHOLDERS ARE ADVISED TO EXERCISE CAUTION UNTIL A FURTHER
ANNOUNCEMENT IS MADE.
JOHANNESBURG
26 OCTOBER 1999