Sanlam Limited - Financial Update

Sanlam Limited  - Financial Update                                              
Registered name: Sanlam Limited                                                 
(Registration number 1959/001562/06)                                            
JSE share code: SLM                                                             
NSX share code: SLA                                                             
ISIN number: ZAE000028262                                                       
Sanlam Financial Update                                                         
Operating results                                                               
Earnings:                                                                       
The Group achieved sound operating results in the first four months of the year.
Most of the major businesses improved on their 2004 performance.                
Net operating profit for the first four months is more than 10% higher than the 
restated results for the same period in 2004. Sanlam Life"s lower cost base     
contributed to improved earnings for the period. All businesses in the          
Investment cluster performed well and contributed to a material improvement on  
the cluster"s results for the same period in 2004. Stronger equity markets,     
increased assets under management and incentive fees earned contributed to this 
performance. The revised business model of Sanlam Capital Markets is now well   
established and delivering according to expectations. In line with expectations,
lower net insurance results had a negative impact on Santam"s relative          
contribution to the Group results to date.                                      
Headline earnings per share, based on International Financial Reporting         
Standards (`IFRS") as set out in the Financial Review in the 2004 Annual Report,
are up some 20% on the first four months of 2004. In addition to the growth in  
operating results, equity market movement during the reporting period           
contributed to this improvement in earnings. Headline Earnings for the 2005     
financial year include both the realised and unrealised market value changes    
attributable to investments held in the shareholders" funds and are reported net
of transfers to or from policyholders" funds to compensate the portfolios for   
market value changes in respect of Sanlam and Santam shares held in those       
portfolios. The 2004 results have been restated accordingly. Market movements   
may therefore have a material impact on Headline Earnings and shareholders need 
to be aware of the potential volatility in reported earnings.                   
Business volumes:                                                               
New business flows for the four months to April are 5% up on 2004. Positive     
investment inflows were offset by lower Life business inflows.                  
The volatility in equity and currency markets, coupled with the spate of recent 
negative press reports on the insurance industry, impacted client investment    
behaviour as private and collective investments grew in popularity as           
substitutes for insurance policy based investments. Individual Life single      
premiums for the four months are down 7% on 2004, substantially due to a fall in
Life policy continuations, while new recurring premiums showed marginal growth. 
The strategic initiatives launched recently to address our reach and market     
share in key segments are expected to take longer in making a positive          
contribution than originally planned. New group business inflows for the four   
months are down on 2004, partly due to a structural change in the employee      
benefit investment environment where multi-managers are making strong inroads   
into this market.  This is also evidenced in a more than doubling in the new    
funds attracted by the Sanlam Multi Manager for the period. Overall, new        
investment inflows continued the upward trend of the recent past, greatly       
assisted by the strong growth in inflows to our Personal and Collective         
Investments businesses.                                                         
The Public Investment Commission withdrew R6bn of its funds under management    
from Sanlam Investment Management in March 2005 as part of the restructuring of 
its investment process and mandates. Apart from this withdrawal, the Group      
achieved positive net business inflows of R4bn for the four months. The positive
flows were essentially in respect of investment and short term insurance        
activities. Both the individual and group Life businesses experienced a small   
increase in net outflows for the period.                                        
Shareholders are advised that the results referred to in this trading update    
have not been reviewed or reported on by Sanlam"s auditors.                     
Strategic update                                                                
The pensions fund adjudicator recently issued a number of rulings against       
various retirement annuity funds that could have potentially significant        
implications for the insurance industry as a whole. We strongly support actions 
to ensure that policyholders are treated fairly and have appointed a Sanlam     
internal ombudsman to oversee the protection of policyholder interests. In terms
of the rulings against retirement annuity funds administered by Sanlam, we      
believe that they are not based on an accurate interpretation of all the        
relevant and applicable facts and we have therefore instituted the necessary    
legal process to appeal against them. Importantly, Sanlam is committed to       
providing a fair value offering to our policyholders and is continuously seeking
ways to improve this. As part of this process, Sanlam is pro-actively addressing
issues such as the cost base, product values, transparency and the flexibility  
offered to policyholders. To this end, Sanlam Life has already reduced its      
annual overheads by some R250 million in 2004. Shareholders and policyholders   
will be kept informed as we continue to make progress on these issues.          
Major progress has been made on Sanlam"s strategy to grow a more balanced       
business within a defined financial services framework. An important milestone  
has been the recent announcement of Barclays" offer for Absa. If successful,    
this transaction will remove the imbalance in Sanlam"s capital portfolio and    
release capital for alternative application in an optimal combination of        
structural growth opportunities and a reduction of capital. An announcement in  
this regard will follow as soon as there is certainty on the level of success of
the Barclays offer, including the number of shares to be sold by Sanlam into the
offer. Sanlam shareholders will vote on their support for the transaction on 9  
June 2005.                                                                      
Sanlam recently announced its entry into the Indian insurance market in         
partnership with the local Shriram group. This is a unique opportunity for      
Sanlam to explore this potentially lucrative market with a fairly limited       
initial capital outlay.  The partnership is in line with our strategy of        
developing selective international opportunities with the potential to diversify
revenue and enhance profitability on a sustainable basis.                       
Annual General Meeting                                                          
At the Annual General Meeting of Sanlam Limited held in Bellville on Wednesday 1
June 2005, Sanlam shareholders approved all the resolutions proposed in the     
notice of the Annual General Meeting.                                           
Bellville                                                                       
1 June 2005                                                                     
Sponsor:                                                                        
JP Morgan Equities Limited                                                      
Date: 01/06/2005 02:59:30 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department