Voluntary Update to Guidance and Trading Statement by FRB’s Parent in respect of the Year Ending 30 June 2021 FIRSTRAND BANK LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1929/001225/06) JSE company code debt issuer: FRD JSE company code ETF issuer: FRLE JSE company code ETN issuer: FRTN LEI: ZAYQDKTCATIXF9OQY690 (FRB or the bank) VOLUNTARY UPDATE TO GUIDANCE AND TRADING STATEMENT BY FRB’S PARENT IN RESPECT OF THE YEAR ENDING 30 JUNE 2021 FRB is a wholly owned subsidiary of FirstRand Limited (FirstRand or the group), which is listed on the JSE Limited and the Namibian Stock Exchange. The bank represents approximately 72% of the group’s earnings base and 75% of group assets. FRB noteholders are therefore referred to the announcement released by FirstRand on the JSE Stock Exchange News Service (SENS) on 7 June 2021, in which it advised FirstRand shareholders that it was updating the guidance provided for the year to 30 June 2021. In the prospects section of FirstRand’s announcement relating to its results for the six months ended 31 December 2020, released on the Stock Exchange News Service on 4 March 2021, the group provided the following guidance. “It’s important to note that the absolute level of earnings for the six months to December 2020 will likely not be repeated in the second half.” This view was, at the time, mainly predicated on continued elevated cost of credit in South Africa due to the lag effects of the December and January lockdown restrictions and the third wave in the UK resulting in higher arrears and non-performing loans (NPLs). In South Africa, the group has seen the economy rebound much faster than initially expected and this, combined with ongoing strong collections, has resulted in significantly lower impairments than predicted. Arrears have reduced and whilst NPL formation has continued, it is trending lower than expected. In the UK, the credit experience has also been better, supported by the extension of the government furlough scheme. Despite this improving picture, due to ongoing uncertainty the group remains conservatively positioned with regards to its forward-looking provisions. Given the level of improvement in the cost of credit, the group is now experiencing a stronger second half performance than expected. The rest of the income statement is broadly in line with previous guidance. Net interest income (NII) is tracking at a similar level to the first half and is expected to be marginally up year-on-year. This is despite the significant endowment impact and reflects the benefit of certain asset and liability management strategies. Non-interest revenue (NIR) is trending lower than in the first half mainly due to: • the strong contribution from fee and commission income in December 2020 compared to the lower volumes experienced in January and February 2021 following the second wave lockdown. Fee and commission income did improve in April and May 2021; • in the second half of the financial year ended June 2020, trading income was strong given the prevailing volatility and this did not repeat to the same extent in the second half of the financial year ending June 2021; and • insurance revenue continued to be impacted by elevated claim levels. Overall cost growth will normalise higher than the 1% increase reported for the six months ended December 2020. The group has however benefited from a strong focus on cost management and expects the increase for the year to be limited to low single digits. Regarding the balance sheet, the shape of the group’s deposit franchise remains in line with expectations. Current trends indicate that customers are utilising discretionary savings as the economy has opened up. Consumer spending is now back at pre-COVID levels. Advances growth has remained muted, reflecting the group’s cautious risk appetite and its focus on meeting the needs of its main banked customers in the retail and commercial segments. Corporate activity remains subdued. The group and bank have maintained strong capital and liquidity positions which allowed FirstRand’s board to re-introduce a dividend pay-out at the lower end of its cover range in March 2021. FIRSTRAND GROUP TRADING STATEMENT In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited, an issuer is required to publish a trading statement as soon as it becomes apparent that earnings per share for the next period to be reported on is expected, with a reasonable degree of certainty, to differ by at least 20% from that of the previous corresponding period. The group advised shareholders that its headline earnings per share (HEPS) of 308.9 cents, earnings per share (EPS) of 303.5 cents and normalised EPS of 307.8 cents for the year to 30 June 2020 will be exceeded by more than 35% in the year ending 30 June 2021. FirstRand’s HEPS, EPS, and normalised EPS will therefore be at least 417.0, 409.7 and 415.5 cents, respectively. FirstRand will issue a further trading statement to provide more specific guidance once there is reasonable certainty regarding the extent of the increase in earnings and the relevant HEPS, EPS and normalised EPS ranges. The forecast financial information contained in this announcement has not been reviewed or reported on by the bank or the group’s auditors. Sandton 7 June 2021 Debt sponsor RAND MERCHANT BANK (a division of FirstRand Bank Limited) Date: 07-06-2021 09:15:00 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.