PSG GROUP LTD

PSG GROUP LIMITED
("PSG" PREVIOUSLY PAG LIMITED)
(REGISTRATION NUMBER 70/08484/06)
PSG FINANCIAL SERVICES LIMITED
("PSL" PREVIOUSLY SERVGRO INTERNATIONAL LIMITED)
(REGISTRATION NUMBER 03/00478/06)
ESTABLISHMENT OF PSG BANK
1. INTRODUCTION

THE BOARD OF DIRECTORS OF PSG WISH TO ANNOUNCE THAT PSG HAS BEEN AUTHORISED BY
THE SOUTH AFRICAN RESERVE BANK TO ESTABLISH, AS A WHOLLY-OWNED SUBSIDIARY OF
PSL (APPROXIMATELY 72% OF THE ISSUED SHARE CAPITAL OF WHICH IS IN TURN HELD BY
PSG):
PSG BANK HOLDINGS LIMITED
("PSG BH")
AND ITS WHOLLY-OWNED SUBSIDIARY,
PSG BANK LIMITED
("PSG BANK")
2. CAPITALISATION OF PSG BANK

2.1 PSG AND PSL WILL PROVIDE PSG BH WITH THE REQUIRED RESOURCES IN ORDER TO
CAPITALISE PSG BANK WITH R500 MILLION, SAME TO BE DIVIDED INTO
- R250 MILLION ORDINARY SHARE CAPITAL; AND
- R250 MILLION PREFERENCE SHARE CAPITAL.

  IT IS ANTICIPATED THAT THE R250 MILLION PREFERENCE SHARE CAPITAL WILL BE
CONVERTED INTO ORDINARY SHARE CAPITAL WITHIN FIVE YEARS.

2.2 PSG AND PSL HAVE THE REQUIRED RESOURCES TO CAPITALISE PSG BANK.

2.3 THIS INITIAL SHARE CAPITAL OF PSG BANK WILL BE SUFFICIENT TO IMPLEMENT AND
EXECUTE ITS BUSINESS PLAN.
3. VISION AND BUSINESS OF PSG BANK

3.1 THE VISION OF PSG BANK IS TO BE A SPECIALIST/NICHE BANK ACTIVE IN TREASURY,
FINANCIAL STRUCTURING, INVESTMENT BANKING, FINANCIAL ENGINEERING AND RISK
MANAGEMENT OUTSOURCING: ALL AREAS IN WHICH THE CURRENT MANAGEMENT TEAM WITHIN
PSG HAVE PROVEN EXPERTISE.

3.2 THE ESTABLISHMENT OF PSG BANK WILL ALLOW PSG TO APPLY ITS EXISTING RISK
MANAGEMENT SKILLS IN A WIDER ARENA SUCH AS THE MARKET FOR STRUCTURED PRODUCTS
AND MONEY MARKET DERIVATIVES.

3.3 PSG BANK'S BUSINESS PLAN INITIALLY PROVIDES FOR OPERATIONAL DIVISIONS IN:
- TREASURY WHICH INCLUDES DEPOSIT TAKING, TREASURY SERVICES TO CORPORATES,
HEDGING PRODUCTS TO LENDING CLIENTS, STRUCTURING AND ENGINEERING OF INVESTMENT
PRODUCTS IN THE MONEY MARKET, CAPITAL MARKET AND EQUITY ASSETS AND DERIVATIVES,
BOTH AS PRINCIPAL AND AGENT.

THE EXISTING HIGHLY SUCCESSFUL BUSINESS OF PSG RISK MANAGERS (MONEY MARKET,
GILTS AND DERIVATIVES TRADING, RISK MANAGEMENT AND HEDGE FUND OPERATIONS) WILL
BE INCORPORATED INTO PSG BANK THEREBY ENSURING THE PROFITABILITY OF PSG BANK
FROM INCEPTION.

- INVESTMENT AND CORPORATE BANKING WITH TRADITIONAL MERCHANT BANKING TO FOLLOW
AS A SEPARATE DIVISION. THE CURRENT PROFITABLE OPERATIONS OF PSL WILL ALSO BE
TRANSFERRED TO PSG BANK.

- FINANCING, MOSTLY TO HIGH NET WORTH INDIVIDUALS AND THE CORPORATE MARKET. IT
IS INTENDED TO ESTABLISH THIS DIVISION IMMEDIATELY UTILISING PSG GROUP'S
EXISTING CLIENT BASE, BUT A CONSERVATIVE GROWTH PROFILE WOULD BE ADOPTED.
- SPECIALISED AND STRUCTURED FINANCE ACTIVITIES WILL FOLLOW THE ESTABLISHMENT
OF THE GENERAL FINANCING DIVISION.

- SERVICES AND TECHNOLOGY TO PSG BANK WITH A VIEW TO EVENTUALLY ALSO OFFERING
THESE SERVICES TO THE BANK'S CLIENTS.
4. DIRECTORS AND MANAGEMENT

* JANNIE MOUTON, CHAIRMAN OF PSG, WILL ALSO ACT AS CHAIRMAN OF PSG BANK WITH
BOTHA SCHABORT, A DIRECTOR OF PSG AND CURRENTLY MANAGING DIRECTOR OF PSG RISK
MANAGERS, HAVING BEEN NOMINATED AS MANAGING DIRECTOR OF PSG BANK.

* HUGH OOSTHUIZEN, EXECUTIVE DIRECTOR, WILL HEAD UP THE TRADING AND DERIVATIVES
ACTIVITIES.

* C N LOUW, EXECUTIVE DIRECTOR, AND EDDIE STRYDOM, GENERAL MANAGER, WILL BE
RESPONSIBLE FOR TREASURY AND MONEY MARKETS.

* EKE WALKER, EXECUTIVE DIRECTOR, HAS ASSUMED RESPONSIBILITY FOR FINANCES,
ADMINISTRATION AND SYSTEMS.

* THE INVESTMENT AND CORPORATE BANKING DIVISION WILL INITIALLY BE MANAGED BY
JANNIE MOUTON AND CHRIS OTTO, EXECUTIVE DIRECTOR OF PSG, THE INTENTION BEING TO
RECRUIT FURTHER EXECUTIVE MANAGEMENT IMMEDIATELY.

* SUITABLE MANAGEMENT WILL BE RECRUITED TO STAFF THE FINANCING DIVISION.
* THE NON-EXECUTIVE DIRECTORS OF PSG BANK WILL INITIALLY CONSIST OF J HOFFMAN,
P J J VAN DER WALT, DR J VAN ZYL SMIT, PROF P J DU P LE ROUX AND S MONTSI.
5. REGISTERED OFFICE

THE REGISTERED OFFICES AND PRINCIPAL PLACE OF BUSINESS OF PSG BANK WILL BE AT:
1ST FLOOR, KILDARE HOUSE, 1 OAK DRIVE, NEWLANDS 7700, WITH TELEPHONE NUMBER
(021) 683-6930 AND TELEFAX (021) 683-6941.
6. EFFECT ON EARNINGS

THE ESTABLISHMENT OF PSG BANK WILL NOT HAVE AN IMMEDIATE EFFECT ON THE EARNINGS
OF PSL AND PSG BUT IT IS EXPECTED TO HAVE A POSITIVE EFFECT FROM 1999 ONWARDS.
STELLENBOSCH
5 MAY 1998