LIBERTY HOLDINGS LIMITED - Operational Update for the three months ended 31 March 2014

Operational Update for the three months ended 31 March 2014

Liberty Holdings Limited
Registration number 1968/002095/06
Incorporated in the Republic of South Africa
Share code: LBH
ISIN code: ZAE0000127148
("Liberty Holdings" or "the Company")

LIBERTY HOLDINGS LIMITED

OPERATIONAL UPDATE FOR THE THREE MONTHS ENDED 31 MARCH 2014

Good group operating performance and strong capital position

The performance of the group for the three months to 31 March 2014 continues to reflect the benefits
of product innovation and effective distribution partnerships. Group long-term insurance indexed new
business increased to R1.6 billion for the period. Investment markets were relatively subdued for the
quarter resulting in lower earnings from the Shareholder Investment Portfolio compared to the
equivalent 2013 period. Assets under management across the group at 31 March 2014 are
R612 billion.

Capital position:

The capital adequacy level of Liberty Group Limited (LGL) at 31 March 2014 remains strong at 2.4
times the regulatory minimum, compared to 2.6 times at 31 December 2013. In support of the Liberty
Holdings 2013 final dividend, LGL paid a R850 million dividend to Liberty Holdings in the first quarter.
The other group life license subsidiaries remain well capitalised.

Insurance operations

South African Retail insurance segment indexed sales up 9%

The Retail insurance segment improved indexed new business for the period by 9%, with single
premium investment new business up 29% to R4.5 billion gross inflow. The investment new business
increase continues to be driven by strong ongoing support of our Evolve product range. Recurring
premium investment and risk business is marginally up compared to the equivalent 2013 period.

In addition, the recently launched Retail SA LISP attracted R0.5 billion of investment sales for the
period ended 31 March 2014.

Net cash inflows for the Retail insurance segment (excluding the Retail SA LISP) are R1.1 billion for
the period following the good growth in single premium investment business and ongoing improved
retention.

Corporate strategy progressing well

Corporate indexed new business of R147 million (single premium R14 million, recurring premium
R133 million) is 11% below the comparable period in 2013. This result is reflective of the lumpy nature
of this business.

Corporate net cash outflows for the period of R175 million are similar to the R168 million outflows for
the comparable period in 2013. The business remains on track with its strategy to provide
enhancements to product offerings during 2014.
Liberty Africa long-term insurance improved cash flows

Indexed long-term insurance new business is at similar levels to the equivalent 2013 period and long-
term insurance net customer cash inflows have grown by 24%. The introduction of an enhanced
product portfolio bodes well for future new business and product margin.

LibFin continues to provide strong balance sheet management

LibFin Investments continue to manage the Shareholder Investment Portfolio within approved asset
allocation limits. Returns for the quarter are marginally behind benchmark.

LibFin Markets continues to manage the market risk exposures within a narrow range and continues
to derive income growth from the ongoing build in the credit portfolio.

Asset management operations

STANLIB (includes asset management operations in all African regions)

Assets under management (excluding the on-balance sheet property portfolio) at 31 March 2014
amounted to R513 billion compared to R514 billion at 31 December 2013. Cash outflows (excluding
intergroup) for the period were R5 billion, primarily the result of institutional money market outflows of
R9 billion.

Higher margin Retail and Institutional funds (excluding intergroup) attracted R4 billion in net inflows for
the quarter.

Liberty Group Limited statutory actuary

The statutory actuary of Liberty Group Limited, Mr. PA Lancaster, will retire on 31 May 2014 after
21 years of service, the last seven of which were as Liberty Group Limited statutory actuary.
Accordingly, Mr. DF Jewell, who is currently being accredited by the Financial Services Board, will
assume the role and responsibilities of the statutory actuary going forward.

Conclusion

The core insurance and asset management businesses of Liberty, utilising the group’s key
competitive differentiators of distribution partnerships including the Standard Bank bancassurance
agreement, product innovation, investment expertise and balance sheet management continue to
deliver substantial value.

The focus is on growth, leveraging these capabilities to gain profitable market share in existing
markets and driving initiatives to broaden geographic representation and expand customer segments.

The operational update for the three months ended 31 March 2014 has not been audited or reviewed
by the Company's auditors.


Queries:
Investor Relations
Sharon Steyn 011 408 3063
www.libertyholdings.co.za

22 May 2014
Sponsor:
Merrill Lynch South Africa (Pty) Limited

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