8 March 2007

Sanlam reports strong full year performance

Sanlam is a leading South African financial services group of businesses focused on building, preserving and growing wealth for its clients. An excellent performance in the first half of the year continued into the second, resulting in strong financial results for the year ended 31 December 2006.

Earnings

• Headline earnings per share up 33%
• Core earnings per share up 17%
• Dividend per share of 77 cents, increase of 18%

Business volumes

• Total new business volumes up 30% to R80,6 billion
• Net fund inflows of R14, 1 billion (before PIC withdrawal)
• Sanlam Investments assets under management up 24% to R406 billion

Embedded Value

• Embedded value per share of 2 047 cents
• Return on embedded value per share of 31%
• Value of new life insurance business of R434 million; up 49%
• Life new business margin of 2,1%

Capital management

• 4,3% of issued shares bought back during the year for R1, 6 billion
• Subordinated debt issue of R2 billion in August 2006

Dr Johan van Zyl, Group chief executive of Sanlam commented on the Group's results:

"The success of our strategy to build a balanced robust financial services group is evident from another year of strong financial performance in 2006. The Group's focus on client-centric financial solutions, enhanced distribution and improved capital management has contributed largely to the overall sound results. Further strategic implementation has seen a widening of our client base into both affluent and entry-level markets through solutions diversification and strengthening our sales force.

"The past financial year was characterised by the impact of increased consumerism and competition within the industry, which put pressure on pricing and margins across the board. Despite these challenges the Group continued to deliver strong results. On the back of its enhanced capital structure, Sanlam has continued to focus on driving increased return on embedded value (ROEV) through improving efficiencies, reducing costs and growing business volumes across all businesses.

"Excellent results are reported for most of our businesses, with a sterling performance from Sanlam Investments which increased its operating profit by more than 50% annually for three consecutive years. Our re-focused and dedicated workforce of staff and intermediaries across the Group deserve our appreciation for these achievements."

Sanlam's transformation from a life insurance business into a diversified financial services group is evident in the R4, 4 billion (37%) contribution of non-life operations to embedded value earnings in 2006 compared to R2, 3 billion (29%) in 2004. Growth from life insurance business contributed 28% of embedded value earnings for 2006 compared to 26% in 2004.

Looking ahead, van Zyl added: "Sanlam has developed a strong operational base from which to leverage growth in its markets and become the leader in wealth creation. The Group continues to strive for increased ROEV through enhanced capital management and earnings growth. While a focus on better cost control, improved new business margins and operating efficiencies is ongoing, enhanced diversity across cultures, geographies and product lines underpins the Group's strong growth potential. We will continue to pursue the five pillars of capital efficiency, growth, cost efficiency, transformation and diversification in our strategy for 2007."

While market conditions, including risk underwriting conditions may affect the Group's ability to repeat its 2006 performance, Sanlam will continue to build on its achievements and focus on delivering shareholder value.

More information on results.