Sanlam Limited - Trading Update

Sanlam Limited - Trading Update                                                 
SANLAM LIMITED                                                                  
(Registration number 1959/001562/06)                                            
JSE share code: SLM                                                             
ISIN number: ZAE000028262                                                       
Trading Update                                                                  
Strategic direction                                                             
We recently announced a realignment of the Sanlam Group strategy, which is aimed
at operational focus and delivery. This included structural and leadership      
changes necessary to facilitate that process.                                   
To date, we have made progress in implementing the required changes, both from a
short-term perspective to counter the impact of the current business            
environment, as well as longer-term initiatives to boost growth. The emphasis   
for the remainder of the year will continue to be on implementation and delivery
of this strategy.                                                               
Santam Limited appointed Mr Steffen Gilbert as Chief Executive Officer with     
effect from 14 July 2003. In that capacity he will also head up the Sanlam      
Group"s short-term insurance cluster and will join the Sanlam Executive         
Committee and the Sanlam Limited Board as Alternate Director.                   
Operational results                                                             
It is encouraging to report that, notwithstanding the difficult business        
environment, the Group achieved satisfactory operating results in several areas 
for the year to date.                                                           
Investment performance                                                          
The changes introduced at the Group"s asset manager, Sanlam Investment          
Management (SIM), are starting to bear fruit. The Sanlam portfolios delivered a 
good performance relative to most of their respective benchmarks. At the end of 
April SIM moved to 4th position for a 12 month rolling performance on the       
Alexander Forbes Domestic Large Manager Watch ranking.  Year to date performance
is also pleasing, with the domestic and global funds both being ranked 5/10.    
Business volumes                                                                
Overall new business inflows to the end of April are about 20% in excess of last
year, as SIM achieved strong growth in new segregated funds inflow and due to   
good short-term premium growth at Santam. The containment of fund outflows,     
coupled with the improvement in new business volumes, is impacting positively on
the Group"s net cash flow position.                                             
However, the lack of growth in new Life business is disappointing. Although     
recurring premium Life business continues to show growth on 2002, single premium
business, in particular, is being affected by the current market conditions. The
current relatively high level of short-term interest rates also erodes some of  
the value proposition of Life products, such as term annuities and guaranteed   
return products.                                                                
Earnings                                                                        
Our published headline earnings represent net operating results and investment  
income earned on the shareholder fund"s discretionary investment portfolio. A   
healthy increase is expected in headline earnings for the first six months      
compared to 2002, partly due to a much improved contribution from our investment
in Absa as their 2002 results were negatively impacted by losses incurred at    
Unifer.                                                                         
Notwithstanding difficult market conditions, gross operating profit for the     
first six months of 2003 should be marginally up on that recorded in 2002:      
Sanlam Life"s earnings are being affected by the depressed equity markets and   
the lower level of new business volumes. This should, however, be substantially 
offset by effective cost management and an improvement in certain other revenue 
sources.                                                                        
Santam is expected to maintain its good operating performance.                  
An improved operating performance is expected from Gensec Bank on the back of   
good performances in many areas of the bank.                                    
Although there have been improvements in SIM"s investment inflows, depressed    
equity markets have a marked impact on the total level of assets under          
management and the fee base of SIM locally, as well as the International asset  
management activities. Given the lower revenue base, a lower half-year profit   
contribution is expected from both.                                             
The results from the International business are, in addition, affected by a     
slower than planned rate of growth in new business and the stronger Rand        
conversion rate, while the depressed market also impacts on their private client
and stock broking business.                                                     
Assuming a long term investment return (LTRR) on the shareholder fund"s         
discretionary investment portfolio, a marginal increase is expected in the pro  
forma LTRR headline earnings over the first six months of 2002.                 
Capital and funding levels                                                      
The capital level of Sanlam Life remains sufficiently strong to support all     
regulatory and economic requirements.                                           
Conclusion                                                                      
We remain on target to improve on our 2002 performance in respect of both new   
business flows and headline earnings, although our ability to achieve that is   
obviously closely linked to the market conditions for the remainder of the year.
Positive signs of a potential reversal of the downward trend in the local equity
market, as well as expectations of an imminent lowering in interest rates, bode 
well for an improvement in Sanlam"s business environment.                       
Note                                                                            
At Sanlam"s AGM held on 4 June 2003, shareholders, inter alia, approved:        
The re-appointment of directors E van As, VP Khanyile, DC Brink, PEI Swartz, J  
van Zyl and T Vosloo to the Sanlam Limited Board.                               
An amendment to the resolution relating to the unissued ordinary shares in the  
share capital of the company to be placed at the disposal and under the control 
of the Board, subject to a maximum of 265 million shares.                       
JP Bester                                                                       
Company Secretary                                                               
4 June 2003                                                                     
Date: 05/06/2003 08:30:06 AM Supplied by www.sharenet.co.za                     
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