6 September 2007

Sanlam delivers impressive overall results

Sanlam, a leading South African financial services group focused on building, preserving and growing wealth for its clients, delivered an impressive interim financial performance for the six months ended 30 June 2007.

Earnings

• Net result from financial services up 24%
• Core earnings per share up 27%
• Normalised headline earnings per share up 18%

Business volumes

• Total new business volumes up 26% to R49,8 billion
• Net fund inflows of R1,3 billion

Embedded Value

• Embedded value per share of R21,88
• Annualised return on embedded value per share of 22,7% - well in excess of the Group's long-term return target
• Value of new life insurance business up 51% to R260 million
• Life new business margin of 2,3%

Capital management

• 2,7% of issued shares bought back for R1,4 billion since year-end
• Aggregate amount of capital returned to shareholders since the start of 2005 amounts to R7,5 billion
• Discretionary capital of R5,8 billion at 30 June 2007

Dr Johan van Zyl, Group chief executive of Sanlam commented on the Group's results: "The Group continues to make significant progress in implementing its ongoing strategy of transforming into a well-diversified financial services organisation. Clear evidence of this success is the increasing contribution by non-traditional client solutions to Group performance. The Group's continued focus on distribution capacity and reach is further reflected in the strong new business volumes achieved during the first half of 2007, particularly from Sanlam Developing Markets. During the period Sanlam also announced its intent to augment its financial services offering with a quality health management solution by acquiring the Bestmed medical scheme's administration and managed health-care operations."

"The business environment for all our operations remained competitive during the first half of 2007. This was evident in challenging underwriting conditions and demanding competitive pricing. Despite these challenges the Group delivered impressive overall results. A particularly satisfactory trend is the 17% growth in individual life business and the increasing contribution of value of new life business to the return on embedded value."

Strong growth in earnings was achieved, with the net result from financial services and core earnings both increasing by 24% on the first half of 2006. Embedded value per share increased from 2 047 cents per share at the end of December 2006 to 2 188 cents per share at the end of June 2007, representing an annualised return on embedded value of 22,7% per share for the six months. Total new business volumes of R50 billion for the first half of 2007 are 26% higher than in the comparable 2006 period.

All Group operations recorded satisfactory growth in earnings, with a sterling performance by Santam and Sanlam Capital Markets in particular. Sanlam Developing Markets delivered on expectations and contributed more than R1 billion in new life business flows, an increase of 36% compared to the same period in 2006, resulting in a 110% improvement in its value of new life business. The value of new life business of R260 million is 51% up on the comparable 2006 period.

Looking ahead, van Zyl added: "Sanlam is well positioned to continue to maximise shareholder value. During the period, the Group delivered improved performances in both new business margin and efficiency terms and enhanced its non-traditional distribution channels significantly within a very competitive operating environment. The effective management of the Group's capital base remains a key component of our strategy to maximise shareholder value."

Market conditions in general, and in particular risk-underwriting conditions and the effect of the current volatility and relative weakness in debt and equity markets, will have a significant impact on the Group's ability to repeat the performance of the first six months during the second half of the year.