Revenue Enhancement through Cross-Selling

Decrease Costs 10-30% Increase Revenues 70-90% Increase in Overall Value Valuing Customer Centricity Cross/up-selling, target customer retention and target pricing strategy are the greatest value creators in retail banking Source : Accenture The critical value driver path

Increase Revenue per Relationship % Increase Revenues 70-90% Grow Customer Base 20-40% Cross/up-selling, target customer retention and target pricing strategy are the greatest value creators in retail banking Source : Accenture

Increase Customer Referrals 20-40% Improve Marketing Effectiveness 60-80% Improve Customer Satisfaction 70-90% Set-up Switching Costs for Customers 10-30% Increase Target Cust. Reactivation 20-40% Increase Target Cust. Retention 45-65% Attract New Customers 5-25% Grow Customer Base 20-40% Valuing Customer Centricity Cross/up-selling, target customer retention and target pricing strategy are the greatest value creators in retail banking The critical value driver path Source : Accenture

Increase Revenue per Product Increase # of Products p. Cust % Develop Targeted Pricing Strategy by Customer Segment 50-70% Increase Cross/ Up- Selling 50-70% Foster Bundling Concepts with External Partners 5-25% Develop Personalized Product Offerings 20-40% Improve Sales Channel Efficiency 5-25% Increase Overall Price Level 20-30% Increase Revenue per Relationship % Increase Volume per Customer 10-20% Valuing Customer Centricity Cross/up-selling, target customer retention and target pricing strategy are the greatest value creators in retail banking The critical value driver path Source : Accenture 20-40%

Valuing Customer Centricity Cross/up-selling, target customer retention and target pricing strategy are the greatest value creators in retail banking Increase Revenue per Product 20-40% Increase # of Products p. Cust % Increase Customer Referrals 20-40% Improve Marketing Effectiveness 60-80% Improve Customer Satisfaction 70-90% Set-up Switching Costs for Customers 10-30% Develop Targeted Pricing Strategy by Customer Segment 50-70% Increase Cross/ Up-Selling50-70% Foster Bundling Concepts with External Partners 5-25% Develop Personalized Product Offerings 20-40% Improve Sales Channel Efficiency 5-25% Increase Overall Price Level20-30% Reduce Marketing Cost Reduce Selling Cost Reduce Servicing Cost Reduce Credit Risk Cost Increase Revenue per Relationship % Increase Target Cust. Reactivation 20-40% Increase Target Cust. Retention 45-65% Attract New Customers 5-25% Decrease Costs 10-30% Increase Revenues 70-90% Increase Volume per Customer 10-20% Increase in Overall Value Grow Customer Base 20-40% The critical value driver path Source : Accenture

To date, cross-sell remains a case of more heat than light for most institutions – only a few banks have successfully created a systematic capability to grow their business in this way Leading banks are using specific tactics to increase share of wallet  Offering tightly integrated product bundles  Using financial planning as a sales tool  Knowing what to offer and when based on life and other key events  Using a local market planning approach to drive cross-sell efforts Revenue Enhancement through Cross-Selling Source : McKinsey

Retail banks are executing a variety of sales tactics to increase customer penetration 1.Account Opening 2.Product Bundling 3.Financial Planning 4.Event- based Targeting 5.Local Market Planning Revenue Enhancement through Cross-Selling Source : McKinsey

… and design optimal bundles to sell at Consumer loan Mortgage Investment products I nvestment products Savings account over time… Product combinations customers buy over time Number of products cross-sold within 2 years if the first product is a … Number of products cross - sold within 2 years if the first product is a … Source : McKinsey Revenue Enhancement through Cross-Selling

Deepening customer relationships through financial planning * 30% of AEFA new clients come from American Express card holder base Share of wallet Percentage Leverage credit card transaction information and other corporate data to maximize customer knowledge and tailor financial planning approach* (e.g., corporate card, purchasing card, corporate travel) Focus on client advice and matching customer needs by offering proprietary and third party products Cater to consumer demand for advice during economic downturn Client retention (4 years) Percentage Plan No plan Plan No plan >90 ~70 Source : McKinsey Revenue Enhancement through Cross-Selling

Financial planning creates sales opportunity Citigroups' average cross-sell ratio is 3.6 rising to 6.7 when Citipro is used Citigroups' average cross-sell ratio is 3.6 rising to 6.7 when Citipro is used Targets all mass market customers Uses multiple channels to reach new clients Statement inserts Call center (inbound, outbound) Internet Client provides his/her financial information Account statements Tax statements Debt statements– Mortgage/Education Proof of Assets–Car/Home Insurance Systems generate customized plan and propose Citibank products to fulfill it Source : McKinsey Revenue Enhancement through Cross-Selling

11,712,0003,229,402 Total working population Tax-paying population Nedcor Retail Bank’s current target market is estimated at 3.2m individuals, constituting 28% of the total working population Revenue Enhancement through Cross-Selling Source : SARS (2001) Labour Force Survey (Sep 2000)

Nedcor Retail Bank – Derivation of Client Base (as of May 2001) Derivation of Nedcor Retail Bank Client Base 1,197, , , , ,000 1,200 1,400 Unique clientsNon-ActiveDependentsTotal client base Number of clients (thousands) Source : Nedcor Revenue Enhancement through Cross-Selling

Nedcor Retail Bank’s overall penetration into the 3.2 million tax-paying universe is 24% Nedcor Retail Bank Penetration into SARS Universe Nedcor Retail Bank SARS Universe 0 -<R75KR75K- <R150K R150K- <R250K R250K- R500K R500K- <R1m >R1m Income categories Number of people (thousands) (% penetration) ,000 1,200 1,400 1,600 1,800 21%21% 15%15% 22%22% 45% 60% 40% Nedcor clients = Nedcor clients = Revenue Enhancement through Cross-Selling Source : Nedcor

1) PRIMARY CLIENTS3) SECONDARY INTO PRIMARY CLIENTS ++ 2) SECONDARY CLIENTS Primary Client Average TOTAL REVENUE POTENTIAL The potential is the sum of primary and secondary average wallet depth and converting secondary clients to primary clients Source : Nedcor Revenue Enhancement through Cross-Selling

Within customer segments Between corporate and individual Through third party relationships Cross-Sell Macro Opportunities

Current / Savings Account Term Deposit Mortgage Asset Finance Credit / Debit Card Personal Loan Garage Card Insurance Assurance Asset Management / Fiduciary Cross-Sell Within Customer Segments Nedbank Retail1.7 to 4.4 (Wealth Management Products Add 2.5)

Cross-Sell Wealth Management Assets Under Management Assets on Balance Sheet Wills Tax Trust Transactions

BoE NIB Syfrets Cape of Good Hope Bank Nedbank Old Mutual Cross-Sell Wealth Management

High net worth Top 300 listed corporates, government, institutions Businesses Medium size listed, unlisted, professionals Owner managed Informal sector Individuals Middle income Mass market BoE main areas of focus Investment Managemen t Business Retail Banking Services Corporate Banking Services Cross-Sell Between Corporate and Individual

Imperial Bank Pick ‘n Pay JD Group Old Mutual Bank Cross-Sell Joint Ventures

Extract value through cost reduction and synergies Cross sell to significant client bases previously untapped Conclusion Nedbank is uniquely positioned to:

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