Momentum - Fitch Assigns Momentum of South Africa IFS Rating of `AA+(zaf)";

Momentum - Fitch Assigns Momentum of South Africa IFS Rating of `AA+(zaf)";     
           Outlook Stable                                                       
Momentum Group Limited                                                          
Registration number                                                             
1904/002186/06                                                                  
("Momentum")                                                                    
Fitch Assigns Momentum of South Africa IFS Rating of `AA+(zaf)"; Outlook Stable 
Fitch Ratings-London-21 November 2005: Fitch Ratings has today assigned Momentum
Group Limited ("Momentum") a National Insurer Financial Strength Rating of      
`AA+(zaf)" and a National Long-term rating of `AA(zaf)". The Outlooks for both  
ratings are Stable.                                                             
The ratings reflect Momentum"s strong business position in South Africa, solid  
capital position, robust new business profit margins and very strong operating  
performance. Partially offsetting these factors is its lack of diversification  
outside of South Africa and the challenge to defend its business position, amid 
a very competitive South African life insurance market.                         
Fitch believes that Momentum"s capitalisation level is strong; the published    
statutory capital adequacy requirement (CAR) cover was 2.2x at YE05, up from    
2.0x at YE04. Following the acquisition of Sage Group and the issue of perpetual
preference shares, Fitch expects CAR cover to remain within the target range of 
1.8x to 2.0x. Fitch also recognises the company"s ongoing and active capital    
management programme, which could include the raising of subordinated debt. Such
a subordinated debt instrument would be expected to receive 100% credit for     
regulatory solvency purposes.                                                   
Momentum"s recent operating performance has been very strong, with a return on  
embedded value of 28% in 2005, up from 16.6% in 2004. The net new business      
margin of 18.7% is strong given Momentum"s mix of new business and the          
industry"s likely declining trend in margins, as a result of the competitive    
environment. Fitch also notes that Momentum has not suffered negative client    
cash flows, unlike some of its peers.                                           
Momentum is a wholly-owned subsidiary of FirstRand Limited. FirstRand Limited   
also fully owns FirstRand Bank Limited (National Long-term rating: `AA(zaf)")   
and has a 63% ownership of Discovery Holdings Limited. Momentum"s ratings       
reflect its position within this group as an integrated financial services      
provider.                                                                       
The rulings made by the Pension Funds Adjudicator ("PFA") continue to cause     
uncertainty in the South African life industry. In November, Sanlam Life"s      
(National Scale Long-term rating: `AA-(AA minus)(zaf)" appeal against the ruling
relating to benefit illustrations was upheld. While this was largely expected,  
rulings relating to early termination benefits remain untested. Fitch believes  
that compared to peers, Momentum has a relatively low exposure to the PFA       
rulings. This is due to its low historical market share of retirement annuities.
Fitch is further comforted by Momentum"s pro-active and responsive attitude and 
range of new generation products. At YE05, the impact of intended improvements  
to early termination was limited to ZAR100 million. Fitch will continue to      
monitor further developments.                                                   
Momentum was founded in 1965. Following various mergers and acquisitions, it is 
now firmly established as one of the top five life insurance companies in South 
Africa, both by new business market share and by assets under management. As at 
YE05, it had ZAR269 billion of assets under management shareholder funds of     
ZAR5.7bn.                                                                       
Contact: Sanjeev Shah, London, Tel/email:+44 20 7862                            
4130/sanjeev.shah@fitchratings.com; Harish Gohil, +44 20 7417                   
4367/harish.gohil@fitchratings.com                                              
Fitch"s National ratings provide a relative measure of creditworthiness for     
rated entities in countries with relatively low international sovereign ratings 
and where there is demand for such ratings. The best risk within a country is   
rated "AAA" and other credits are rated only relative to this risk. National    
ratings are designed for use mainly by local investors in local markets and are 
signified by the addition of an identifier for the country concerned, such as   
"AAA(zaf)" for National ratings in South Africa. Specific letter grades are not 
therefore internationally comparable.                                           
Fitch"s rating definitions and the terms of use of such ratings are available on
the agency"s public site, www.fitchratings.com. Published ratings, criteria and 
methodologies are available from this site, at all times. Fitch"s code of       
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance 
and other relevant policies and procedures are also available from the "Code of 
Conduct" section of this site.                                                  
Ends                                                                            
21 November 2005                                                                
Contacts:                                                                       
EB Nieuwoudt, Managing Director                                                 
Asokan Naidu, CFO                                                               
Gerhard Kruger, Head Capital Management Momentum Group                          
012 - 673 7211, 082 801 3576                                                    
Date: 21/11/2005 02:37:09 PM Supplied by www.sharenet.co.za                     
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