Pillar 3 Quarterly Disclosures as at 31 March 2015 FirstRand Limited (incorporated in the Republic of South Africa) (registration number 1966/010753/06) JSE ordinary share code: FSR Ordinary share ISIN: ZAE000066304 JSE B preference share code: FSRP B preference share ISIN: ZAE000060141 NSX ordinary share code: FST (FSR or the group) FirstRand Bank Limited (incorporated in the Republic of South Africa) (registration number 1929/001225/06) JSE company code: BIFR1 (FRB or the bank) PILLAR 3 QUARTERLY DISCLOSURES AS AT 31 MARCH 2015 In accordance with Pillar 3 of the Basel Accord, Regulation 43(1)(e) of the Regulations relating to Banks requires the group to disclose quantitative information on its capital adequacy and liquidity ratios. Leverage is a supplementary measure to risk- based capital requirements and Directive 4 of 2014 requires quarterly disclosure of the leverage position. The figures below have not been reviewed and reported on by the group’s external auditors. FRB reflects solo supervision, i.e. excludes foreign branches and subsidiaries. CAPITAL ADEQUACY The capital positions (excluding unappropriated profits) for the group and bank at 31 March 2015 are set out below. R million FSR FRB Common Equity Tier 1 capital Ordinary share capital and premium 7 970 15 308 Qualifying reserves 71 751 44 650 Non-controlling interests 664 - Regulatory deductions (2 361) (3 054) Total Common Equity Tier 1 capital 78 024 56 904 Total Additional Tier 1 capital 4 941 2 100 Total Tier 1 capital 82 965 59 004 Tier 2 capital Tier 2 instruments 11 548 11 428 Other qualifying reserves 947 164 Regulatory deductions - (2 293) Total Tier 2 capital 12 495 9 299 Total qualifying capital and reserves 95 460 68 303 Total minimum requirement per risk type: Credit risk 42 948 33 964 Counterparty credit risk 1 401 1 328 Operational risk 10 112 7 169 Market risk 1 360 1 224 Equity investment risk 3 017 539 Other assets 3 283 1 821 Total minimum capital requirement 62 121 46 045 Common Equity Tier 1 capital ratio (%) 12.6 12.4 Tier 1 capital ratio (%) 13.4 12.8 Total capital ratio (%) 15.4 14.8 Notes: - The minimum capital requirement excludes any bank-specific individual capital requirement and is reported at 10%. LEVERAGE The leverage ratios for the group and bank at 31 March 2015 are set out below. FSR FRB Tier 1 capital measure (R million) 82 965 59 004 Total exposure measure (R million) 1 098 685 959 623 Leverage ratio (%) 7.6 6.1 LIQUIDITY The liquidity coverage ratio (LCR) is the first minimum standard for funding and liquidity under the Basel III regime. The objective of the LCR is to promote short-term resilience of a bank’s liquidity risk profile by ensuring it has sufficient high quality liquid assets (HQLA) to survive a significant stress scenario for one month. Regulation 26(12)(a)(vi) requires banks to continuously meet their liquidity needs by calculating the LCR from 1 January 2015; and Directives 6 and 11 of 2014 require quarterly disclosure of the LCR. The LCR compliance is on a phased in basis, beginning with a 60% minimum requirement on 1 January 2015 with 10% incremental increases each year to 100% on 1 January 2019. The average liquidity coverage ratios for the group and bank are set out below. FSR FRB High quality liquid assets(R million) 102 332 91 573 Net cash flows (R million) 169 635 146 294 Required LCR (%) 60.0 60.0 Actual LCR (%) 60.3 62.6 The group seeks to exceed the minimum LCR requirement with a sufficient buffer to allow for funding flow volatility as determined by its internal liquidity risk appetite. For the 2015 financial year, the group targets a minimum LCR of 70%. The bank has successfully applied for a committed liquidity facility (CLF) from the SARB as provided for under guidance notes 5 of 2012, 6 of 2013 and 8 of 2014, however, it is not able to recognise the CLF for LCR purposes until it has collateral as defined by the guidance notes to position against the facility. On positioning of collateral under the CLF, the LCR will exceed the group’s internal target. To mitigate net cash outflows given balance sheet growth and to meet internal liquidity risk appetite, the group will continue to increase high quality liquid assets via the accumulation of level 1 and level 2 assets together with utilisation of the SARB CLF. Notes: - The consolidated LCR for the group includes FRB’s operations in South Africa and all registered banks within the group. - The surplus HQLA holdings by subsidiaries and foreign branches in excess of the minimum required LCR of 60% have been excluded in the calculation of the consolidated group LCR. - Directive 11 of 2014 requires the LCR to be calculated on a simple average of the three month end data points for the past quarter and disclosure at a bank solo and consolidated level for bank and/or deposit-taking entities. - Further details on the liquidity coverage ratio can be found under the group analysis of financial results under the funding and liquidity section on the group’s website, http://www.firstrand.co.za/InvestorCentre/Pages/interim-results.aspx. - This announcement is also available on the group’s website: www.firstrand.co.za. Sandton 27 May 2015 Sponsor RAND MERCHANT BANK (a division of FirstRand Bank Limited) Date: 27/05/2015 03:23:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.