FirstRand Limited - Acquisition of the Saambou Housing Finance Book

FirstRand Limited - Acquisition of the Saambou Housing Finance Book             
FirstRand Limited                                                               
(Incorporated in the Republic of South Africa)                                  
(Registration number: 1966/010753/06)                                           
Share code: FSR                                                                 
ISIN: ZAE 000014973                                                             
("FirstRand")                                                                   
Acquisition of the Saambou Housing Finance Book                                 
1. Introduction                                                                 
The board of directors of FirstRand Limited ("FirstRand") are proud to announce 
that agreement in principle has been reached with the Receiver of Saambou Bank  
Limited (in receivership) ("Saambou") in terms of which the FirstRand group     
will:                                                                           
- acquire the majority of the assets comprising Saambou`s Housing Finance Book; 
and                                                                             
- administer and collect the remainder of the assets comprising the Housing     
Finance Book.                                                                   
2. Background to the Saambou Housing Finance Book                               
The Saambou Housing Finance Division was created to focus on a market segment   
with a household income of between R30 000 and R80 000 per annum. Its main      
objective was to offer appropriate housing finance to this segment of the       
market. Saambou`s Housing Finance Book comprises approximately 23 000 home loans
provided predominantly to families in the affordable housing market across the  
country. It has a gross value of approximately R1.4 billion and an average loan 
size of approximately R65 000.                                                  
3. Rationale for the transaction                                                
The transaction that is currently being finalised provides the FirstRand group  
with the capacity to develop further opportunities in the niche market of       
affordable housing finance. The acquisition will enhance the FirstRand group`s  
position in the low and medium income housing market.                           
The transaction is being structured such that it provides an attractive solution
for the Receiver of Saambou, as it allows for a sharing in the risks and rewards
of a book that has shown good performance to date.                              
4. Salient terms of the transaction                                             
The salient terms of the transaction are summarised as follows:                 
- the book of approximately R1.4 billion will be stratified into two segments,  
referred to as "included assets" and "excluded assets" respectively;            
- FirstRand will acquire the included assets for cash at face value of          
approximately R984 million ("the purchase consideration");                      
- the Receiver will place 50% of the purchase consideration on deposit with     
FirstRand to cover a first loss position; and                                   
- the excluded assets of approximately R414.0 million will be administered and  
collected by FirstRand for a market-related collection fee.                     
5. Condition                                                                    
The transaction is subject to the finalisation and signing of legal agreements  
regarding the transaction and appropriate regulatory approvals.                 
Sandton                                                                         
15 September 2002                                                               
Merchant Bank and Sponsor                                                       
to FirstRand Limited                                                            
Rand Merchant Bank                                                              
A division of FirstRand Bank Limited                                            
Corporate Finance                                                               
Receiver to Saambou                                                             
John Louw                                                                       
KPMG                                                                            
Date: 13/09/2002 05:13:00 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department