Transactional products and servicesand servicesKenny Fihla

Regional dynamics

Africa• China-Africa trade has grown by 25% each year since 1992

• Trade volumes between China and Africa reached $106.8 billion by the end of 2008y

• Foreign Direct Investment from China to Africa was at $7.8 billion in 2008

• Formation of the Forum for China-Africa Cooperation (FOCAC) in 2000, now with 49 member states

• Over 40 participating African states in the 2010 Shanghai World Expo

• 2018 Single currency convergence: SADC Banking Association met with the SADC Central Bank Governors and the IMF in February 2010, which concluded with

i t t i l ti d tunanimous agreement to regional cooperation and support

Other emerging markets: Argentina• Exports destined for China increased from 2.34% in 1980 to 9.1% by the end of 2008

• Imports sourced from China increased from 0.3% in 1980 to 12.4% in 2008

• By the end of 2008, China was Argentina's third largest trading partner, after Brazil and the European Union

2Sources: SA Department of Trade & Industry (2010); SA Chinese Embassy (2010); WTO (2008); International Centre for Trade & Sustainable Development (2008)

China – Africa trade

NigeriaGh NigeriaNigeriaGhGhCHINA

DRCKenya

NigeriaGhana

Uganda

TanzaniaDRCDRC

KenyaKenya

NigeriaNigeriaGhanaGhana

UgandaUganda

TanzaniaTanzania

SA exports:

USD 6.5 bn (2009)

(9 3% of SA E ports)

Namibia

Angola Mozambique

Botswana

MalawiZambia

Zimbabwe

Tanzania

NamibiaNamibia

Angola Angola MozambiqueMozambique

BotswanaBotswana

MalawiMalawiZambiaZambia

ZimbabweZimbabwe

TanzaniaTanzania (9.3% of SA Exports)

South AfricaSouth Africa

MauritiusLesotho

Swaziland

South Africa

MauritiusMauritiusLesothoLesotho

SwazilandSwaziland

SA imports: USD 9.4 bn (2009)

3

p ( )

(13.1% of SA Imports)

Sources: SA Department of Trade & Industry (2009)

TPS presence

Applying for full banking licence in

Angola

Comprehensive core banking

offering focusing on growth

Transactional Products & Services

Angola

Botswan

DR

C

Ghan a

Kenya

Lesoth

Mala w

Mauritiu

Mozam

bi

Nam

ib i

Nigeria

Swazila

Tanza n

Ugand

Zambi a

Zimbabw

South Afr

UK

Argenti

Services a na a a o wi us que

ia a nd

nia a a we rica

na

Investor Services

Cash Management

S

Trade Services

Recognised player / leader in that productStrategy to grow

Trade Established and done several transactions

Target product for the country / done a transaction

4

Cross-border capabilities

5

Regional payments capability

6

Cash management overview

W kiW ki C it lC it l Fi dFi d

Trade CreditorsTrade Creditors

Collections Liquidity Management Paymentss Working

CapitalWorking Capital

Capital ProjectsCapital

ProjectsFixed

AssetsFixed

Assets

Treasury AccountsTreasury Accounts Operating AccountsOperating Accounts

EmployeesEmployees

ShareholdersShareholders

CustomersCustomers

Clie

nt N

eeds

GovernmentGovernment

• Electronic Collection • Electronic Collection Risk ManagementRisk ManagementLiquidity ManagementLiquidity Management

C

(Direct debits)• Cash Collection• Cheque Collection• Card Collection• Inward Transfers• Bill Presentment and

(Direct debits)• Cash Collection• Cheque Collection• Card Collection• Inward Transfers• Bill Presentment and

• Electronic 3rd Party Payments

• Inter Account Transfer• Cash Distribution• Cheque Payments• Card Payments

• Electronic 3rd Party Payments

• Inter Account Transfer• Cash Distribution• Cheque Payments• Card Payments

Risk ManagementRisk Management

• Domestic & Foreign Currency Accounts

• Notional Pooling• Electronic Sweeping

• Domestic & Foreign Currency Accounts

• Notional Pooling• Electronic Sweeping

Liquidity ManagementLiquidity Management

• Letters of Credit• Guarantees• Fx hedging• Interest rate

• Letters of Credit• Guarantees• Fx hedging• Interest ratetio

ns

• Bill Presentment and Collections

• Onsite Teller Representation

• Reconciliation with collections

• Messaging &

• Bill Presentment and Collections

• Onsite Teller Representation

• Reconciliation with collections

• Messaging &

Card Payments• Outgoing Telegraphic

Transfers• Real Time Gross

Settlement• Messaging &

notification of credits

Card Payments• Outgoing Telegraphic

Transfers• Real Time Gross

Settlement• Messaging &

notification of credits• Short Term Banking

Facilities• Short Term Banking

Facilities

Funds ManagementFunds Management

• Electronic Sweeping• Electronic Sweeping

Decision makingDecision making

• Balances & Statements

• Balances & Statements

Interest rate hedgingInterest rate hedging

Solu

t

7

Messaging & notification of creditsMessaging & notification of credits

Facilities• Long Term Facilities

Facilities• Long Term Facilities

Statements • Reconciliation

Statements • Reconciliation

Trade overviewProducts

Letter of Credit Other

Import, export, standby and back to back

Discounting & refinancing

Trade Finance Lines

S l Ch i Fig g

Pre-export finance

Supply Chain Finance

Confirmations

GuaranteesImport finance

Receivables finance

Guarantees

Issuance & confirmation

Documentary CollectionsStock, inventory and warehouse

Receipt financing

Inward & Outward

Documentary Collections- Import & Export

8

Inward & Outward Teletransmissions

Trade solutions for Chinese corporatesI t l ti E t l tiImport solutions:

• Import LC issuance

• Advising

Export solutions:• Export LC issuance

• Confirmation

• Confirmations

• Negotiation & Settlement

• Back to back structuring

• Advisory

• Back to back structuring

• Exchange control advisory on h ti t ti• Exchange control advice

Advantages of the solutions: • Ease of opening other credit lines

merchanting transactions

• LC documents pre-checking services

• Negotiation

• Quicker turn-around times

• Pricing benefits as the bank and country risk is reduced

• Settlement & discounting

Advantages of the solutions: • We can issue an import LC or

f• Better handling of arising discrepancies and facilitating amendments

• Risks of invalid discrepancies are eliminated

guarantee on the strength of the export LC received from the ICBC

9

eliminated

Guarantee gateway

• We have positioned ourselves as a gateway for all guarantees issued into our countries where Standard Bank is represented

• Access to guarantees through our wide network of correspondent banksAccess to guarantees through our wide network of correspondent banks

• The ICBC can issue a guarantee to Standard Bank and we, in turn, route the guarantee through our Stanbic network in-country and the entire process is managed end-to-end

• All in-country regulatory and compliance requirements are taken care ofcou y egu a o y a d co p a ce equ e e s a e a e ca e o

• Connectivity between Standard Bank and ICBC ensures speedy and efficient service

10

Investor services overview

• Securities lending– Lending of securities by one party to another. As payment for the loan, the parties

negotiate a fee quoted as an annualised percentage of the value of the loaned securitiesnegotiate a fee, quoted as an annualised percentage of the value of the loaned securities

• Futures clearing– The provision of clearing, settlement and reporting services in the agricultural, equity and

interest rate derivatives marketse es a e de a es a e s

• Custody– Safekeeping the investor’s interest in said securities held either electronically or physically

• Trustee services• Trustee services– Entails the safeguarding of the interest of unit holders in a collective investment scheme

• Investment administrationThi i i t i ll ff d t F d ( i di l lif ) d i l i il– This service is typically offered to a Fund (pension, medical, life) and involves primarily, investment accounting; compliance monitoring; and performance, attribution and risk reporting

11

Regional custody networkW h t d b i i th k t t id f SA• We have a custody business in other markets outside of SA- Nigeria, Kenya, Zambia, Ghana, Swaziland, Zimbabwe, Botswana, Namibia, Mauritius &

Argentina

• One contract with Standard Bank of South Africa for custody services in the 10 markets• One contract with Standard Bank of South Africa for custody services in the 10 markets

• Shared technology platform

• Flexible Service approach

R l ti hi b d i S th Af i i ll 10 k t• Relationship manager based in South Africa covering all 10 markets

• Custody operations carried out by Stanbic/Standard Bank entity in the local market

• Team based in JHB monitor operational performance of the

Stanbic/Standard Bank entities in the local markets

12

SA market share by product

Cash Management

DEPOSITSDEPOSITSJune 2008 30.8%June 2009 31.2%FOREIGN SECTOR ZAR OVERNIGHT DEPOSITSJune 2008 34.4%June 2009 39.8%Trade

GUARANTEES

June 2008 21.9%June 2009 23.4%Investor Services

BONDS UNDER CUSTODY2008 56%2009 54%

Source: BMI-T Electronic Banking Survey (2009)13

Some of our recent accolades

BMI - TechKnowledge• Best bank for business electronic banking in South Africa (2008)

Global Custodian• Top Rated Agent Bank in Major Markets Survey – South Africa by Domestic Clients (2009)

• Top-Rated Agent Bank in Major Markets Survey – South Africa by Domestic Clients (2008)

Global Finance Magazine• Best Bank for Payments and Collections in Africa (2008)

• Best Overall Bank for Cash Management in Africa (2008)

• Best Overall Bank in Cash Management in Africa (2009)g ( )

14

Global marketsGlobal marketsIan Dalglish

What is Global markets at Standard Bank?

• We define our mandate as trading:

- In the secondary market y

- On an exchange or OTC (over-the-counter)

• Also commonly referred to as “Markets” or “FICC & Equity”

• When defining our mandate we additionally define our activities to trade with Emerging Market clients or in Emerging Market referencing underlying securitiessecurities

2

What do Global markets trade?

• FICC & Equity:

• FI: Fixed Income = Bonds, Interest Rate Derivatives, Credit Derivatives, Leveraged Finance, Inflation and , , , g ,

Delta 1

• C: Currency

• C: Commodities = Precious [ Gold, Platinum Group Metals (Platinum, Paladium, Rhodium), Silver] +

Base [ Copper, Aluminium, Nickel, Steel] + Energy [ Oil, coal, carbon, freight] + Agri [Maize, Wheat, Barley,

S S ]Soya, Sugar]

• E: Equities = Cash (broking, including on-line services) + Derivatives

3

Global markets operations

4

Business model

Issuers / ConsumersClients serviced with funding, working capital, hedges & liability management tools

Coverage

Local MarketsForeign ExchangeCommodities ng

Lagos etc…Buenos AiresSão Paulo

Oil & Gas Mining Agri etc….

Global & Interest Rates(Base, Precious, Energy)

ALM &Money Markets

es &

Str

uctu

riMarketsTr

adin

g

Equities Client Finance Credit Trading

Sale

DistributionNew York

Research Credit Sales Syndication

London HongKong

etc…

Investors / ProducersDistribution-led demand determines risk-taking ability of Global Markets – repackaging

risk in structured/leveraged format to provide access to illiquid and exotic marketsHigh Volume, Low Complexity

Low Volume, High Complexity

5

Connecting the investment bank

6

Lead from strength – Africa is the last frontier

Russia$

Russia$

Total FDI flows into Africa over the last 6 years • Fixed Investment is driving:- Mergers & Acquisition

- Trade flows

P j t Fi$ 9 bn$ 9 bn - Project Finance

- FX liquidity

- Investor participations

• SBG is the largest bank, by assets, and Eurozone

$ 188 bnEurozone

$ 188 bn

ChiChi

Middle East$ 168 bn

Middle East$ 168 bn

g , y ,the largest custodian of assets on the African continent

• Global Markets product provides:- Hedges: FX + IRD + Commodity + Credit

USA$ 122 bnUSA

$ 122 bn

China$ 29 bnChina$ 29 bn

- Hedges: FX + IRD + Commodity + Credit

- Leverage: Commodity linked leases and consignments

- Repo

A CLN TRS

Brazil$ 10 bnBrazil$ 10 bn

India$ 25 bnIndia$ 25 bn

- Access: CLN + TRS

- Equity and EQD

- ……..to the region

7

Connecting the world – Commodities leads the wayOur Business model for expansion sourcing / distribution of Physical Commodities (focus• Our Business model for expansion – sourcing / distribution of Physical Commodities (focus

for 2010 – 2012)

8

How we take risk• Global Markets Risk Appetite

- Global Markets has a relatively low risk appetite and directional risk-taking is strictly

managed within relatively low VAR limitsmanaged within relatively low VAR limits.

- This is demonstrated by the stability of the Global Markets VaR; and lack of down days

over the last three years.

- The philosophy is that of a distribution-led operation, GM originates risk in differentiated

forms that can be on-sold to investor clients – managing any net exposures in the most

cost efficient way Primary sources of income come from capturing the bid offer spreadcost efficient way. Primary sources of income come from capturing the bid-offer spread

across the risk distribution continuum and from commissions earned on structured

transactions.

- Globally the division is a market-maker in the Rand, but apart from this Global Markets are

not full coverage market-makers, notwithstanding the bank’s dominant position in certain

African currency markets, Base and Precious metals and in certain Emerging market bondAfrican currency markets, Base and Precious metals and in certain Emerging market bond

issues.

9

Our global initiatives

• Global Markets continues to expand with our clients and across opportunities.

• Our focus:

- Core Account Management

- Equity strategy

- Physical Commodities

- E-Commerce

- Research

- IT strategy

- Best Practice

10

Investment bankingInvestment bankingBrad Koen

Strategic objectives

1.We strive to be a leading EM bank

2.Connecting Africa to the World and the World to Africa

3.Connecting Emerging markets to Emerging markets

4.Relevant and credible in-country IB franchise4.Relevant and credible in country IB franchise“Localness” is key

2

Business model – an integrated Corporate and Investment Bank

Tra

L P d t

Primary MarketAccess

StrategicAdvice

nsactional V

InvestmentBanking

Franchise Products

Core Banking & Basic Derivatives

Leverage Products & Complex Derivatives

Valu

e

Volume

Global Markets

Transactional

Client Base

Transactional Products

Franchise Products

ansa

ctio

nal V Transactional

Products & Services

Business EnablersTra

3

Business model – Coverage delivering the firm

Tran

L P d t

Primary MarketAccess

StrategicAdvice

Valu

ensactional V

• Strategic connectivityto core clients

• Service delivery of core banking products and

Franchise Products

Core Banking & Basic Derivatives

Leverage Products & Complex Derivatives

ansa

ctio

nal

Volume• Share of mind

• Ideas

products and services

• Solutions around

Client Base

Transactional Products

Franchise Products

Tra

• Lead from advisory

• Deliver the firm

core banking products

• Deliver the firmBusiness Enablers

• Deliver the firm • Deliver the firm

4

Client coverage model

CIB

Key Differentiator Operating Model

• We aim to:

– be a strong domestic player whereClient

Coverage

Domestic Cross Border

be a strong domestic player, where we have domestic presence

– be a connector of EM to EM via our sector expertise

Domestic economies of our footprint

Industry Groups

Financial Institutions

Group

Institutional Groups

International Development

Group

• Connect Africa to the World and the World to Africa

• Capable of delivering deep relationships at the CEO level driving credibility Group

Oil, Gas & Renewables

Mining &

Group

Investor Coverage

the CEO level, driving credibility

• Industry expertise able to present clever thinking, innovation and a constant stream of ideas, followed by excellent service and

Mining & Metals

Telecoms & Media

execution

Power & Infrastructure

5

Coverage model – Originate to distribute

Power & Infrastructu

re

Telecom & media

Metals & Miningna

te Investor Coverage

Investment Banking Coverage Corporate Banking Coverage

Domestic Relationshipsre

Oil & Gas IDGOrig

in

Financial institutions

Product

cute Global Markets PIMInvestment

Banking TPS

Exe g

Advisory Leverage Capital Markets

istr

ibut

e

Banks Hedge Pension Private Sovereign Asset

Distribution Channel

Di Banks g

Funds Funds Equityg

WealthAsset

Managers

6

Investment banking product suite

Operates across all Product Divisions

Investment Banking StructureInvestment Banking Products

• Product execution teams are aligned to the Bank’s core sectors

• Advisory: Focuses on providing strategic adviceInvestment

Banking

Structured

• Advisory: Focuses on providing strategic advice to clients on mergers, acquisitions and disposals as well as on the execution of primary and secondary equity capital offerings

• Leverage: Responsible for servicing our clients’ Advisory Leverage

Acquisition and Leverage Finance

Capital Markets

Debt Capital Markets

Structured Solutions

• Leverage: Responsible for servicing our clients financing requirements by utilising the Bank’s full suite of debt products

• Capital Markets: Provides arrangement and underwriting services for debt securities issued by

Project Finance

Structured Trade & C dit

Equity Capital Markets*

underwriting services for debt securities issued by emerging markets' issuers, and accessing both international investors as well as domestic investors where applicable.

• The development of an ECM offering is currently & Commodity Finance

Asset Finance

• The development of an ECM offering is currently in process.

• Structured Solutions: Operates across all product divisions to identify and execute structuring opportunities for clients of the bank

7

structuring opportunities for clients of the bank* Capability currently being developed

7

IB Coverage – Case studiesIB Coverage Case studies

Mining & Metals – case study: Corporacion Venezolana de Guayana - US$1 billion pre-export financing advisory

Transaction:USD1 billion iron ore pre-export financingfor Corporacion Venezolana de Guayana(“CVG”)

Standard Bank role Co-Financial Advisor to CVG

Transaction OverviewStandard Bank Involvement

• Standard Bank acted as Co-Advisor to CVG• Standard Bank was specifically mandated for its mining

expertise and Chinese network• Standard Bank:

Lender China Development Bank

Amount USD1 billion

Tenor 6 years

Pricing USD Libor + credit margin

R t S h d l d ti ti

• Standard Bank:– advised on the selection of an off-taker;– assisted with negotiation for the off-take

agreements; and– assisted with raising the pre-export finance

Repayment Scheduled amortisation

Off-taker Wuhan Iron & Steel Corporation (Wisco”)

Standard Bank provided the connection between China and• CVG is a state owned entity controlled by the Ministry of

Company Overview Highlights

Standard Bank:• Standard Bank provided the connection between China and

Venezuela• Standard Bank provided local expertise in both markets, adding to

product knowledge• Key determinants for the financing included:

– loan tenor: a longer tenor would give a higher financingamount;

• CVG is a state-owned entity controlled by the Ministry ofBasic Industries and Mining in Venezuela

• It is the largest diversified mining and minerals company inVenezuela with interests in iron ore, steel, gold, bauxite andaluminium extraction and production

• Key challenges in advising CVG included:– Venezuela as a B1/BB-/B+ rated country (by

Advised on the selection of an off-taker;

Negotiated the off-take agreements; and

arranged the pre-export financeamount;

– off-take volume: off-take volume drives the financingamount;

– off-take price: financing parties typically assume a longterm off-take price and run some basic stress tests; and

– debt service cover ratios and cash reserve requirements• The transaction gave Standard Bank valuable insight into the

y ( yMoody’s/S&P/Fitch), limiting the financing optionsavailable; and

– CVG never having accessed the internationalfinancing market

The transaction gave Standard Bank valuable insight into thetransaction approval processes of both Chinese off-takers andfinancing institutions

9

Mining & Metals - case study: Global advisory: USD300m equity acquisition

• Standard Bank is acting as sole financial advisor to LSE-listed ENRC Plc in its acquisition of a minority stake in JSE-listed Northam Platinum Limited

• Standard Bank’s services includes amongst others:

Standard Bank Involvement Transaction Overview

AcquirerENRC Plc (LSE:ENRC)

(Market Capitalisation: USD20bn)

Eurasian Natural Resources Corporation PLC

2010USD 299 million

Standard Bank s services includes, amongst others:

- Valuation of Northam Platinum and subsequent formulation of transaction structures

- Advising on developing and implementing a strategy to accomplish the transaction as well as negotiations with the target and related tactics

- Navigating South African regulatory issues including SRP

TargetNortham Platinum Limited (JSE:NHM)

(Market Capitalisation: USD2.5bn)

Seller Mvelaphanda Resources Limited (JSE:MVL)

Standard Bank Role Financial Advisor to ENRC Plc

Buy-side advisor to ENRC on the purchase of 12.2% of JSE listed

Northam Platinum Limited

Navigating South African regulatory issues including SRP takeover rules, JSE listing rules and BEE requirements

- Assisting the company in internal and external documentation including Board presentations and public announcements

ENRC Overview Key Features

Standard Bank Role Financial Advisor to ENRC Plc

Transaction Value USD300m (ZAR2.2bn) for 12.2%

Commodity PGMs

Standard Bank ranked Top 20 Advisor for W ld id Mi i M&A

• ENRC is a leading diversified natural resources group, performing integrated mining, processing, energy, logistics and marketing operations

• ENRC's production assets are largely located in the Republic of Kazakhstan; other assets, notably the Other Non-ferrous Division, are mainly located in Africa

• Key features of the transaction included knowledge on execution of:

– Public market transaction with all parties publicly listed

– Cross-border acquisition structuring

– PGM-sector expertise

Worldwide Mining M&A transactions announced year to date 2010

Standard Bank ranked Number 1 Advisor for Mi i M&A t ti • In 2009, the group accounted for approximately 3% of

Kazakhstan's GDP

• For the year ended 31 December 2009, the Group had revenue of USD3,831 million (2008:USD6,823 million) and profit attributable to equity shareholders of USD1,045 million (2008: USD2,642 million)

ENRC’ i li ti i th L d St k E h ith

– South African regulatory expertise

– Political, equity, transaction and currency risk mitigation

• The transaction also represented Standard Banks second major cross-border African mining transaction in 60 days following Standard Bank’s role as financial advisor to International Mineral

Mining M&A transactions with African involvement year to date 2010

• ENRC’s primary listing is on the London Stock Exchange with a market capitalisation of ~USD20bn and is a member of the FTSE100

Resources (IMR) on its strategic sale of copper/cobalt producer Chambishi Metals and Comit Resources for USD300 million

10

Power & Infrastructure – case study: Morupule B Power Plant, Botswana

• Botswana Power Corporation (BPC) is currently building a 4x150MW coal-fired and air-cooled power plant at US$1.6bn

• Standard Bank and Industrial and Commercial Bank of China (ICBC) jointly arrange the loans of US$825mn over 20 years in 2008 / 2009

• ICBC provides a 20-year loan of US$825 million, guaranteed by Sinosure for 15 years with remaining years guaranteed by World Bank. Both guarantees will cover

Morupule B Power Plant, Botswana

p y , g y y g y g y gcommercial and political risk

• Another US$140 million bridge finance facility will also be provided by ICBC, guaranteed by Standard Bank

• In turn, the Botswana Ministry of Finance will provide guarantees to Sinosure and Standard Bank for any outstanding

• Standard Bank will also provide a cross-currency swap to convert USD funding into fixed rate synthetic Botswana Pula funding

• This sizable funding was feasible due to the Chinese participation and the Sovereign Government Guarantee, through the Botswana Ministry of Finance

• The primary requirement of BPC was to secure local currency funding given BPC sells power to its customers in BWP. The funding solution provided by StandardBank, ICBC, Sinosure and World Bank provided the liquidity and currency risk mitigation that ensure that BPC’s primary objective will be achieved

• The funding solution provided a one-stop solution to the client. The value add that Standard Bank brings in this instance, is its regional knowledge. This localknowledge, when combined with the considerable lending capability of ICBC and political risk mitigation capability for Sinosure, provided the client with a fundingsolution that few financial institutions can offer

Standard Bank:

Ministry of

World Bank

Partial Credit Guarantee

Sinosure

Guarantee

16 – 20 year

15 year Political/Commercial cover

Provided local knowledge

Provided product knowledge

Link to the financing capability of ICBC

Political risk mitigation for Finance

Guarantee

BPC

CurrencyBasis Risk hedging

US$825 mn 20 year loan

Bridge

Sinosure

US$140mn US$140 mnGuarantee Bridge 9 month

11

Telecoms & Media - case study: CamGSM acquisition financing and M&A advisory services

• On November 26, 2009, Royal Group of Companies (“RG”) acquired 61.5% of CamGSM from Millicom International Cellular S.A. (“Millicom”)

• The transaction arose due to different strategies of local and international investors:

− In early 2009 Millicom decided to refocus its strategy on its core

Overview of the transaction Overview of CamGSM and RG• CamGSM

─ Cambodia’s No. 1 mobile operator─ Established in 1996 with a strong track record for quality and

innovation2 5 illi b ib t d f 2009

Cam GSM Co. Ltd Cambodia

November 2009 USD 421 million

Bridge Acquisition Financing − In early 2009, Millicom decided to refocus its strategy on its core African and Latin American operations and to divest its assets in Cambodia, Laos and Sri Lanka

− RG – Millicom’s local partner in Cambodia (38.5% stake), believing there was additional value in CamGSM that could be unlocked through operational and management changes exercised its pre-emption right

− 11 August 2009, Millicom agreed to sell its Cambodian operation to

─ 2.5 million subscribers at end of 2009─ 46% market share by subscribers─ High-quality GSM network and largest 3G network in the country─ Population coverage of 75%─ Positioned as a young, vibrant and aspirational brand ─ Revenues of USD 240m in 2009

g q g

Coordinating ArrangerJoint BookrunnerSecurity Agent

g , g pRG for a consideration of USD 346m

− RG mandated Standard Bank to raise a loan of USD 421m to finance the acquisition price and to refinance outstanding CamGSM loans

• The agreed price valued CamGSM at an enterprise value of USD 605m which represented 7.1x estimated 2009 EBITDA.

• Standard Bank, together with ANZ and a few selected hedge funds financed the acquisition loan of USD 421m

• RG─ RG is the premier sponsor in Cambodia, having established several

market-leading joint venture relationships with blue chip international players (ANZ, Samsung, Siemens, Swiss Re and Toll Holdings)

─ RG has business interests in the telecommunications, financial services, insurance, food and transport sectors

─ Chairman and CEO Neak Oknha Kith Meng the majority

The acquisition of CamGSM is the largest M&A transaction in Cambodia

At USD 346m for 61 5%

Lead Arranger for the USD 421m acquisition financing

• Largest ever syndicated loan in Cambodia• Largest M&A transaction in Cambodia to date

Standard Bank Role

─ Chairman and CEO Neak Oknha Kith Meng, the majority shareholder of RG, is a prominent member of the Cambodian business community and is also the President of both the Cambodia and Phnom Penh Chamber of Commerce

At USD 346m for 61.5% of the company, CamGSM’s EV was approximately, USD 605m corresponding to an EV / 2009E EBITDA multiple of 7.1x

Population of 14 8 million

Cambodia Mobile Market

• Lead Arranger for the USD 421m acquisition financing─ Financing tapped into banks’ and hedge funds’ appetite for

Cambodia─ Despite the challenges of bringing a Cambodian client to the

international markets, financing was closed within a very short period of only 3 months

• Lead M&A advisor to RG in selection of strategic partner

• Population of 14.8 million• 2009 GDP/capita – $704.7• Strong historical real GDP and GDP per capita growth since political

stability in 1998 • No foreign exchange risk as Cambodia is a dollarised economy• Low mobile penetration and fixed line penetration of 34% (2009E) and

0.3% (2009E) respectively demonstrates strong growth potential g p─ Advisory role includes assistance with business plan, structuring

and management of sale process─ Sale is expected to achieve a very good return for RG, as well as to

bring a strong strategic sponsor to CamGSM

• Low internet penetration (2.0%) in the region (2009E)• Nine licensed operators of which only four have a significant subscriber

base

12

Telecoms & Media – case study: Acquisition of Powercom by Telecel Globe

Transaction overview

• On 13 January, Telecel Globe (TG) a 100% owned subsidiary of

Orascom Telecom Holdings S.A.E. completed the 100% acquisition of

Powercom (Pty) Limited (‘Powercom’)

Company overview

• Powercom is 2nd mobile operator in Namibia. At close of

transaction company had:

─ 198,000 subscribers

Telecel GlobeNamibia

January 2009USD 59 million

Acquisition of Powercom (Pty) Ltd Powercom (Pty) Limited ( Powercom )

• Transaction value US$59million

• Deal announced and closed 13 January 2009

• Standard Bank acted as sole financial advisor to Telecel Globe

,

─ 17% market share

• GSM operator founded in 2007 which offers prepaid and

postpaid mobile services for residential and business customers

• Previously owned by:

Acquisition of Powercom (Pty) Ltd

Sole Advisor

e ous y o ed by

─ Telecom Management Partner: 39%

─ NamPower: 37%

─ Zeven Investment Corporation: 12%

─ Old Mutual (Namibia) Ltd: 10%

Transaction Notes

• Telecel Globe was formed to target licenses and mobile

operators in small and medium sized developing countries that

h hi h th t ti l

• Telecel Globe paid US$59 million equity value for 100%

• Despite its late entry into the process, Telecel Globe quickly managed to secure exclusivity

Transaction summary

have high growth potential

• Powercom represented one of few opportunities to acquire a

2nd mobile operator with growth potential in a stable market

to secure exclusivity

• Previous maximum for foreign ownership of telecoms assets in Namibia was 49%─ Telecel Globe secured authorisation for 100% ownership on condition of

later selling a 30% stake to black empowerment shareholders

13

Oil, Gas & Renewables – case study:Marine Subsea AS

• Marine Subsea, headquartered in Norway, is an off-shore oil and gas services provider with expertise and operations in West Africa

Company Overview

• Having previously financed itself in the Norwegian capital markets, Marine Subsea faced a liquidity crisis with USD 314 million of bonds falling due in 2012 and USD 222 million of new funding required to meet payment obligations on four new vessels in 2009/10

Standard Bank Involvement

• Standard Bank’s Structured Solutions & Project Finance teams workedwith Marine Subsea to successfully:

– restructure its three series of floating rate notes and convertiblebonds, consolidating the bond issues and extending maturities until2019; and

Standard Bank Involvement

Highlights: 2019; and

– arrange $222 million in new 7-year export-credit backed projectfinancing provided by Eksportfinans ASA, Garantai-instituttet foreksportkreditt and Standard Bank Plc

• The bond restructuring received near unanimous approval from EU/USinstitutional and private investors

g gDemonstrates Standard Bank’s ability to deliver advisory, lending and hedging solutions to clients spanning both developed and emerging markets

institutional and private investors

• The project financing allowed Marine Subsea to take delivery of the‘Sarah’ well-intervention vessel and secure delivery in 2010 of its sistervessel, the ‘Karianne’, each for deployment on long-term contracts inWest Africa

• Standard Bank also provided Marine Subsea with hedging to mitigate itscurrency exposure

14

Oil, Gas & Renewables – case study:PA Resources AB

• PA Resources AB (“PAR” the “Company”) is a Swedish international oil and gas group, listed on the Oslo Stock

Company Overview

Exchange and OMX Nordic Exchange in Stockholm which compromises of assets held in Tunisia, the Republic of Congo (Brazzaville), the United Kingdom, Denmark, Greenland, Netherlands, and Equatorial Guinea

Standard Bank Involvement

• During the completion and ramp up of production in a newfield (Azurite, Congo Brazzaville) the company needed aninterim solution to bridge to longer term financing

Standard Bank Involvement

Highlights:

• PAR mandates SB as Mandated Lead Arranger andBookrunner to arrange and syndicate a $125 million shortterm facility with a tenor of 364 days and a bullet repayment

• The facility allowed the company to meet capexi t f th it l i t i fi l t f th

g g

Demonstrated Standard Bank’s ability to quickly deliver and underwrite a hybrid finance solution customised to the client’s needs

requirements for the capital intensive final stage of theproject

15

Financial Institutions – case study RBS: Partnership mandate for Africa

In 2009, RBS decided to reduce its South African operations from a branch to a rep office and completely exit the local Rand market. They looked for a South African bank as a partner

After a long due diligence process and several rounds of meetings, RBS

Background of TransactionIn a detailed feedback session, RBS gave us a number of reasons why the entire RBS selection team chose Standard Bank unanimously over the other South African Banks

• Our understanding of RBS’s requirements

Client Feedback

e a o g due d ge ce p ocess a d se e a ou ds o ee gs, Sappointed Standard Bank as their Partner Bank for Africa in January 2010

The deal structure consisted of 2 partsMoving all existing RBS clients in South Africa to Standard BankBecoming RBS’s Partner Bank for all future business that RBS and RBS’s clients want to do in Sub Saharan Africa.

Our understanding of RBS s requirements

• Our product capabilities and our leadership positioning across Sub- Saharan Africa

• Our positioning of a Pan African solution rather than limit our response to South Africa

• Our creative approach including looking at the possibility of hiring RBS staff, co-branding of documents, solutions for RBS’s loan book etc

• Our client service team approach where all the team members (over 60 people were involved in this pitch at different points of time) were aligned with the same message to RBS

• This partnership deal with RBS is part of Standard Bank’s strategy ofconnecting the World to Africa

• The deal is part of the Global Financial Institutions Group strategy offocusing on a smaller number of priority clients and building up a

Fit with Standard Bank Group Strategy

• Senior management commitment to this transaction – We involved Jacko Mareein pitching for this business

• High level of quality in terms of people and presentation material throughout the process

g p y g psubstantial cross product relationship with them. We would like toposition ourselves as Partner Bank for Africa for our priority clients

• This deal generates multi-million dollars in additional revenues forStandard Bank

• RBS has agreed to be a reference in all future pitches that we will makeacross Financial Institutions for Partner Banks

Strategic Drivers

Part of SB strategy

Good economics

Repeat potential

• Additionally, this transaction leverages the existing infrastructureinvestment of Standard Bank across Africa and with increased volumes,will result is a lower per unit cost processing cost for our clients

• This deal is an ideal case study on the role of coverage in developingthe strategic dialogue with our priority clients which generates revenuesacross TPS, GM and IB

Cross Product

• Great example of team work across the bank with several businessesinvolved in pitching for this mandate

16

Financial Institutions – case study Banco Espirito Santo: Bond and FX Swap Mandate

Issuer: BES Investimento do Brasil S.A.Amount: US$ 500 millionI D t 18 M h 2010

Key Success Factors

TERMS AND CONDITIONS:

New Issue Commentary

• BES Investimento do Brasil S.A., the Issuer, is the Brazil investment banking subsidiary of Banco Espirito Santo from Portugal (BES)

• BES is a new coverage client for the Global Financial Institutions Group and within a relatively short period of time, we have generated a significant Issue Date: 18 March 2010

Issuer Rating: Baa2 / BBB-Coupon: 5.625 %Tenor: 5 yearsFormat: 144A / RegSBookrunners: Standard Bank

Deutsche BankBanco Espirito Santo

and within a relatively short period of time, we have generated a significant cross product pipeline with this client

• This bond issue was the inaugural transaction for BES in Brazil and a high profile transaction for the BES Group

• Securing the mandate involved overcoming strong competition from investment banks active in Brazil and our limited track-record of leading bank debt issues

• The Standard Bank teams involved (DCM and Corporate) successfully TRANSACTION OVERVIEW:• BES Investimento Brasil successfully brought to market US$ 500 million senior

notes due 2015 under its Global Medium Term Note Programme. The issuer had previously held investor meetings in early February in the US and Europe but postponed its issue due to extreme market volatility. After completing additional investor meetings in Hong Kong and Singapore, the issuer elected to revive the transaction.

• Initial price whispers on the transaction of T+ high 300bps for a US$300 million

worked on decision makers in Lisbon and Sao Paolo to highlight the reciprocity potential of the relationship, mutual regional relevance, and technical skills.

• The high visibility of this successful issue (first 144A bank bond for SB in Brazil) was a factor in securing a role in the subsequent US$500mln Banco Panamericano issue and positions SB well for other bank issuance out of Brazil

• Finally our deal economics (US$1 2mln) were boosted by providing BES • Initial price whispers on the transaction of T+ high 300bps for a US$300 million deal produced a good initial response and the order book built quickly over a period of 24 hours. Strong overnight demand from Asia allowed for a second iteration of pricing to 5.875% to 6%.

• The order book generated US$2.5 billion, which included a diverse mix of institutional and retail accounts across the US, Europe and Asia. The quality of the order book, which included a high percentage of real money accounts from the US and UK, allowed the issuer to print an upsized US$500 million transaction

t th ti ht d f fi l id

Investors by Geography Investors by Type

Hedge Fund 19%

Asia16%

Americas6%

• Finally, our deal economics (US$1.2mln) were boosted by providing BES an FX hedge on US$250mln of the issued bonds.

Strategic Drivers

•Good economics

•Repeat potential

•Multi-productat the tight end of final guidance.

• US investors bought 44% of the transaction, UK 13%, Europe 22% and Asia 16%. Fund Managers bought 34%, Hedge Funds 19%, Banks 12%, and Insurance 6%. The issuer, which had previously focused its offshore funding exercises on the retail market, successfully tapped in to the US and European institutional market, fulfilling one of its key strategic objectives for the transaction.

• In early trading, investors proved unwilling to sell their paper and the price of the bond was marked up to 100 to 100.5.

Retail22%

Fund Manager

34%

Europe22%

US43%

•Cross-Geography

p

Bank12%

Insurance6%

Other7%

UK13%

17

Appendix – Accolades & Recent Transactions

Recognised Investment Banking skills

o Emeafinance awards 2009

– Standard Bank “Best Investment Bank

in Africa”

– Stanbic IBTC “Best Investment Bank

in Nigeria”in Nigeria

– Troika Dialog “Best Local Investment

Bank in Russia”

– Standard Ünlü “Best Investment Bank

of the Year - Turkey”19

Recent transactions funded by Standard Bank Group in South Africa

Transnet

2009ZAR 2 billi

African Rainbow Minerals

2009

ArcelorMittal South Africa Limited

2009

Vodacom Group Limited

2009ZAR 1 25 billi

Naspers

2009 USD 1 6 billi

MTN Group Ltd

2009

Illove Sugar Limited

2009USD 20 illiZAR 2 billion

Term loan

2009ZAR 1.75 billion

Joint Lead Underwriter

009ZAR 1.05 billion

Term funding

ZAR 1.25 billion

Medium Term LoanJoint Mandated Lead Arranger

USD 1.6 billion

Syndicated Forward Start Facility Co-ordinator and Mandated Lead

Arranger

ZAR 1.5 billion

Term fundingLead Arranger and Underwriter

USD 20 million

Acquisition funding

Gold Fields Limited

2009ZAR 1 billion

Revolver Facility

Commerzbank South Africa

2009 ZAR 1.1 billion

Term facility

Barloworld Limited

2008ZAR 1.9 billion

Investment Bank, transaction Sponsor, debt advisor and

d it

Pretoria Portland Cement Company Limited

2008ZAR 2.7 billion

Investment bank, debt adviser, mandated lead arranger and

d it

Aspen Global Incorporated

2008USD 129 million

Acquisition refinancing

Pioneer Foods

2008ZAR 3.5 billion

Investment Bank, Transaction Sponsor, Debt Advisor and

M d t d l d A

Assmang Ltd

2007ZAR 1.4 billion

Khumani Iron Ore ProjectSole Arranger & Lender

underwriter underwriterMandated lead Arranger

De Beers

2006ZAR 6.2 billion

Funding for empowerment

Pepkor

2006ZAR 1.4 billion

Term funding

Mondi

2007ZAR 2 billion

Term funding (part of offshore listing debt package)

Trans African Concessions

2006ZAR 3 billion

Toll Road RefinancingMandated Lead

Arranger/Underwriter

GautrainSouth Africa

2007ZAR 20 billion

High speed RailMandated Lead

Arranger/Underwriter

Allan Gray

2007 ZAR 1.2 billion

Funding for empowerment

VodafoneSouth Africa

2006ZAR 8 billion

Acquisition Finance FacilityGlobal Co-ordinator,

ZAR 4 billion Underwriter, Arranger

20

Recent transactions funded by Standard Bank Group in Africa

Maurel & PromCongo-Brazzaville

2008

STRABAG Kenya

CurrentUSD 900 illi

Aldwych International Ltd and Nykomb Synergetics AB

Senegal

C t

Botswana Power CorporationBotswana

2009

Gamma Energy LtdWaste-to-Energy Project

Mauritius

Guinea AluminaGuinea

C t

Lafarge Cement WAPCO Nigeria Plc

20092008

USD 150 million

Revolving BorrowingBase Term Facility

Original Lender

USD 900 million

Nairobi Northern Corridor Toll Road Concession

Advisor & Mandated Lead Arranger

CurrentEUR 165 million

250MW coal-fired IPPfirst phase, 125MW

Financial Advisor and Arranger

2009USD 800 million

Joint Underwriter with ICBC

CurrentUSD 140 million

Mandated Lead Arranger

CurrentUSD 1.3 billion

Financial Arranger of Export Credit-backed funding

EUR 225 million (Multi-Currency)

Medium Term Loan FacilityMandated Lead Arranger &

Underwriter

MTN NigeriaNigeria

2007USD 2 billion

Syndicated USD and Local Currency Facilities

M d t d L d A & S l

Celtel TanzaniaTanzania

2008USD 270 million

Syndicated LoanJoint Mandated Lead

A & B k

Orascom TelecomEgypt

2008USD 2.5 billion

Syndicated LoanJoint Mandated Lead Arranger &

J i t B k

HRGBurkina Faso

2007USD 10 million

Working Capital FacilityL d A

First Quantum MineralsZambia

2007USD 400 million

Kansanshi Copper ProjectM d t dL d A

TAVTunisia

2008EUR 563 million

Project Finance Facility for Tunisian Airports

MLA & B k

NigeriaLekki Concession Company

Limited (“LCCL”)

2008USD 300 million

Nigeria’s first Toll roadAd i /L d Mandated Lead Arranger & Sole

BookrunnerArranger & Bookrunner Joint Bookrunner Lead Arranger MandatedLead ArrangerMLA & Bookrunner Advisor/Lender

Safaricom LtdKenya

2006KES 12 billion

Syndicated Medium Term LoanJoint Lead Arranger

Millicom Ghana Company LtdGhana

2007USD 141 million

Domestic & International Syndicated Loan Facilities

Club DealFacility Agent & Security Agent

Sociedade Nacional de Combustiveisde Angola

Angola

2006USD 300 million

Oil backedPrepayment Facility

Co-arranger, Underwriterand Hedge Provider

Pan Ocean Energy Corporation Gabon

2006

USD 85 million

Revolving Borrowing Base Facility

Mandated lead arranger, hedging bank

Addax Petroleum N.V. Nigeria & Gabon

2007

USD 1.6 billion

Senior Secured Reducing Revolving Credit Facility

Senior lead arranger

Civil Aviation AuthorityUganda

2007USD 40 million

Airport FinanceSole Arranger

Millicom (SL) LimitedSierra Leone

2006USD 10 million

Bilateral Credit FacilitySole Lender

21

Recent transactions funded by Standard Bank Group outside Africa

Trader Media EastCentral & Eastern Europe

2007USD 200 million

Digicel International Finance LtdPan Caribbean Region

2006USD 600 million

MTCKuwait

2006USD 4 billion

AlbtelecomAlbania

2008USD 100 illi

Nextel do Brazil, Ltda.Brazil

2007USD 300 illi

AstelitUkraine

2006USD 360 illi & USD 30 illi

TalvivaaraFinland

2007USD 320 illiUSD 200 million

Syndicated Credit FacilitiesMandated Lead Arranger

USD 600 million

Senior Secured Term Loan Facilities Manager

USD 4 billion

Syndicated Credit FacilityLead Arranger

USD 100 million

Acquisition Finance FacilityJoint Mandated Lead Arranger

USD 300 million

Term Loan FinancingMandated Lead Arranger

& Sole Bookrunner

USD 360 million & USD 30 million

Syndicated Credit Facility & Standby Vendor Loan

Joint Mandated lead Arranger & Bookrunner

USD 320 million

Talvivaara Nickel projectStructuring Bank and Mandated

Lead Arranger

Axtel S.A.Mexico

2006USD 520 million

Acquisition & Term FinancingMandated Lead Arranger

Telemóvil El Salvador SAEl Salvador

2006USD 200 million

Syndicated Credit FacilityJoint Mandated Lead Arranger

& B k

KazakhtelecomKazakhstan

2006USD 220 million

Syndicated Credit FacilitySole Arranger & Bookrunner

MTC InternationalNetherlands

2008USD 100 million

Bridge LoanSole Arranger

Turkcell Iletişim Hizmetleri A.ŞTurkey

2007USD 3 billion

Syndicated Term Loan FacilitiesJoint Mandated Lead Arranger

& B k

Yamana GoldCanada

2007USD 700 million

Senior Secured Revolving Credit Facility Participant

Red Sea Gateway TerminalSaudi Arabia

2007USD 500 million

Container Terminal, Saudi ArabiaAdvisor/Mandated Lead Arranger

& Bookrunner & Bookrunner

Telecom Development Company Afghanistan Ltd, T/A Roshan

Afghanistan

2006USD 65 million

Syndicated Term LoanMandated Lead Arranger of

Commercial Tranche & Facility Agent

VimpelComRussia

2008EUR 474 million

Syndicated LoanJoint Mandated Lead Arranger &

Bookrunner

Wataniya Palestine Mobile Telecommunications

Palestine

2009USD 85 million

Global Co-ordinator and Mandated Lead Arranger

Continental Minerals China

CurrentUSD 300 million

Financing for the Xietongmen Cu Au Project

Structuring Bank and Mandated Lead Arranger

Silver StandardArgentina

2008USD 100 million

Pirquitas Silver/Zinc/Tin ProjectMandated Lead Arranger

HochschildPeru

2008USD 200 million

Secured Term Loan FacilityLead Arranger

Ener Petroleum ASANorway

2006USD 36 million

Oil Finance FacilityLender

22