STANBIC - LETTER TO STANBIC SHAREHOLDERS

STANDARD BANK INVESTMENT CORPORATION LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 69/17128/06)
("STANBIC")
LETTER TO STANBIC SHAREHOLDERS
"DEAR SHAREHOLDER

YOU WILL HAVE READ IN THE PRESS THAT NEDCOR AND ITS ADVISER HAVE BEEN

APPROACHING OUR SHAREHOLDERS DIRECTLY IN THEIR EFFORTS TO SECURE IRREVOCABLE
UNDERTAKINGS IN SUPPORT OF THEIR ATTEMPTED HOSTILE TAKEOVER OF STANBIC.  I FEEL
IT IS OPPORTUNE FOR ME TO OUTLINE AND REAFFIRM OUR VIEWS WITH RESPECT TO THE
PROCESS.

THE STANBIC BOARD UNANIMOUSLY CONCLUDED THAT THE NEDCOR BID SIGNIFICANTLY
OVERESTIMATES THE POTENTIAL BENEFITS AND DRAMATICALLY UNDERESTIMATES THE RISKS
INHERENT IN THIS TAKEOVER, WHICH ARE HEIGHTENED BY ITS HOSTILE NATURE.  I WOULD
LIKE TO REITERATE STRONGLY OUR REJECTION OF THE PROPOSED TERMS AS NOT BEING IN
YOUR INTERESTS, PARTICULARLY AS NEDCOR IS NOT OFFERING YOU A CASH ALTERNATIVE
AS PART OF ITS BID.
NO FORMAL OFFER SO DON'T BE PRESSURISED

THERE ARE VARIOUS ASPECTS OF THE NEDCOR PROCESS THAT SHOULD BE QUESTIONED BY
YOU.  FIRSTLY, AS NO FORMAL OFFER HAS BEEN RECEIVED, THERE IS ABSOLUTELY NO
NEED FOR YOU TO TAKE ANY ACTION NOW.
INAPPROPRIATE BEHAVIOUR BY NEDCOR AND ITS ADVISER

IT IS OUR VIEW THAT THE MANNER IN WHICH NEDCOR AND ITS ADVISER ARE PRESSURISING
STANBIC SHAREHOLDERS TO COMMIT THEIR SUPPORT IS INAPPROPRIATE.  THIS ACTION IS
CONTRARY TO INTERNATIONALLY ACCEPTED NORMS OF BEHAVIOUR IN BID SITUATIONS, AND
EXPOSES FUND MANAGERS TO POTENTIAL LEGAL ACTION FOR FAILING TO EXERCISE THEIR
FIDUCIARY RESPONSIBILITIES.
IRREVOCABLE COMMITMENTS

GIVEN THAT NEDCOR HAS COMMITTED TO MAKING AN OFFER AND THE CONSIDERABLE TIME
THAT MIGHT PASS BEFORE SUCH AN OFFER IS MADE, YOU AS A SHAREHOLDER HAVE BEEN
GRANTED A VALUABLE "PUT" OPTION BY NEDCOR WHICH YOU SHOULD NOT GIVE AWAY FOR
NOTHING BY SIGNING AN IRREVOCABLE COMMITMENT.

THE MATERIAL NON-DISCLOSURE BY NEDCOR OF ITS OFFER SOME 12 MONTHS AGO TO
ACQUIRE LIBERTY LIFE'S SHARES IN STANBIC AT AN EXCHANGE RATIO OF 4.35 STANBIC
SHARES PER NEDCOR SHARE, MAKES IT LIKELY THAT THE IRREVOCABLE NATURE OF ANY
COMMITMENTS PREVIOUSLY GIVEN COULD BE SUCCESSFULLY CHALLENGED.
OLD MUTUAL'S CONFLICT OF INTERESTS

IT IS ALSO OPPORTUNE TO QUESTION THE ROLE OF OLD MUTUAL IN THE ATTEMPTED
HOSTILE TAKEOVER, CONSIDERING THAT THE MAJOR PERCENTAGE OF IRREVOCABLE
COMMITMENTS NEDCOR HAS MANAGED TO OBTAIN, REPRESENT FUNDS THAT OLD MUTUAL
MANAGES ON BEHALF OF ITS POLICYHOLDERS.  SINCE OLD MUTUAL IS NEDCOR'S PARENT
COMPANY, IT HAS A CLEAR CONFLICT OF INTERESTS.

POLICYHOLDERS WILL BE UNDERSTANDABLY CONCERNED BY THE APPROACH OLD MUTUAL SEEMS
TO HAVE ADOPTED WITH REGARD TO THE APPROPRIATE PROTECTION OF POLICYHOLDERS'
INTERESTS.  OLD MUTUAL PUBLICLY STATED THAT A SUBCOMMITTEE WAS CONVENED TO
REPRESENT THE INTERESTS OF POLICYHOLDERS.  IT WAS REPORTED THAT THE

SUBCOMMITTEE AGREED TO SIGN AN IRREVOCABLE COMMITMENT FOLLOWING ITS MEETING ON
1 NOVEMBER.  THIS COMMITMENT WAS GIVEN BEFORE OLD MUTUAL, OR THE SUBCOMMITTEE,
HAD HEARD OUR CASE WHICH WAS GIVEN IN SUMMARY TO OLD MUTUAL REPRESENTATIVES ON
4 NOVEMBER AND AGAIN TO ALL INVESTORS ON 25 NOVEMBER.
NEDCOR'S UNREALISTIC ASSUMPTIONS

NEDCOR HAS COMMUNICATED ITS VIEW THAT A TAKEOVER WOULD BOOST STANBIC'S EARNINGS
PER SHARE AND SHARE PRICE DRAMATICALLY.  THESE ASSUMPTIONS HAVE NO BASIS IN
REALITY, AND OUR DETAILED ANALYSIS OF ALL LARGE BANK-ON-BANK DEALS AROUND THE
WORLD OVER THE PAST DECADE HAS NOT REVEALED A SINGLE EXAMPLE OF A HOSTILE
TAKEOVER THAT HAS ADDED VALUE FOR BOTH SETS OF SHAREHOLDERS.  HOSTILE BANKING
SECTOR TAKEOVERS SIMPLY DO NOT WORK - THEY DESTROY VALUE.
LONG, COMPLEX REGULATORY APPROVAL PROCESS

I AM MOST CONCERNED ABOUT THE EFFECT ON THE BANK, ITS STAFF AND OUR CUSTOMERS
GIVEN THE LENGTH OF TIME IT MIGHT TAKE TO RESOLVE THIS HOSTILE BID.  COMPLEX
LEGAL ISSUES THAT ARISE INCLUDE THE MECHANISMS FOR OBTAINING REGULATORY
APPROVALS AND THE LAWFULNESS OF THE THREE-TIER OFFER THAT NEDCOR HAS SAID IT
WILL MAKE.  BOTH OF THESE ISSUES MIGHT REQUIRE YOUR BOARD TO ENGAGE IN A
LENGTHY LEGAL PROCESS IN ORDER TO PROTECT YOUR INTERESTS.  IN THIS REGARD, YOU
MAY HAVE READ IN THE PRESS THAT THERE IS A LACK OF CLARITY REGARDING THE MANNER
IN WHICH THE COMPETITION ACT AND THE BANKS ACT ARE REQUIRED TO INTERRELATE.
ACCORDINGLY IN THE INTERESTS OF TRANSPARENCY AND CLARITY, STANBIC WILL BE
APPLYING TO THE HIGH COURT THIS WEEK FOR A DECLARATORY ORDER TO DETERMINE THE
APPROPRIATE REGULATORY APPROVAL MECHANISM FOR THIS PROCESS.

THE PRIMARY RESPONSIBILITY OF THE STANBIC BOARD IN THIS MATTER IS TO ITS
SHAREHOLDERS.  HOWEVER THIS TAKEOVER, IF IMPLEMENTED, WILL BE THE LARGEST
TRANSACTION IN SOUTH AFRICAN HISTORY, AND WILL HAVE A SIGNIFICANT IMPACT ON
EMPLOYEES, CUSTOMERS, THE BANKING AND INSURANCE INDUSTRIES AND THE ECONOMY AT
LARGE.  STANBIC THEREFORE BELIEVES THAT ALL AFFECTED STAKEHOLDERS REQUIRE A
TRANSPARENT PUBLIC PROCESS IN WHICH THEY ARE ENTITLED TO BE HEARD.  STANBIC'S
VIEW IS THAT THE COMPETITION COMMISSION AND TRIBUNAL WERE ESTABLISHED TO FULFIL
PRECISELY THIS ROLE.

STANBIC WILL FORMALLY REQUEST THE COMPETITION AUTHORITIES TO EXAMINE, INTER
ALIA, THE FOLLOWING ISSUES:

*  WHETHER IT IS APPROPRIATE FOR NEDCOR TO OWN IN EXCESS OF 50.1% BUT LESS THAN
100% OF STANBIC, A DIRECT COMPETITOR.  THIS RESULT, MADE LIKELY BY NEDCOR'S
HIGHLY UNUSUAL THREE-TIER OFFER, COULD BE EXTREMELY DETRIMENTAL TO STANBIC AND
ITS MINORITY SHAREHOLDERS; AND

*  WHETHER OLD MUTUAL/NEDCOR IN TRYING TO ACQUIRE STANBIC AND THEREAFTER SELL
OR UNBUNDLE LIBERTY LIFE, MIGHT BE ANTI-COMPETITIVE IN NATURE, GIVEN THAT
STANBIC/LIBERTY LIFE IS PROBABLY OLD MUTUAL/NEDCOR'S MOST SERIOUS COMPETITOR.
VALUE DESTRUCTION

WE ENCOURAGE NEDCOR AND OLD MUTUAL TO RECOGNISE THAT A CONTINUATION OF THEIR
HOSTILE BID IS VALUE DESTRUCTIVE FOR ALL PARTIES, AND IS NOT IN THE BEST
INTERESTS OF THE COUNTRY.  I REITERATE THAT STANBIC WILL CONTINUE TO PROTECT
THE INTERESTS OF ITS SHAREHOLDERS AND RESIST NEDCOR'S HOSTILE TAKEOVER
VIGOROUSLY AND FOR AS LONG AS IS NECESSARY.  WE BELIEVE THAT GIVEN THE VERY
SOUND STAND-ALONE GROWTH PROSPECTS OF YOUR BANK, NEDCOR'S TAKEOVER OFFER IS
SIMPLY NOT IN YOUR INTERESTS.
YOURS FAITHFULLY
C B STRAUSS
CHAIRMAN
STANDARD BANK INVESTMENT CORPORATION LIMITED"
JOHANNESBURG
5 DECEMBER 1999