AfricaAfricaRichard GushYinka Sanni

Africa at the heart of Standard Bank’s strategy

• Presence in 17 countries in Africa

Over 145 years of experience on• Over 145 years of experience on the African continent

• Growth on the African continent is a key strategic focus area

• Most recent African acquisitions

− Stanbic IBTC Bank, Nigeria

− CFC Stanbic Bank, Kenya KenyaKenya

NigeriaNigeriaGhanaGhana

UgandaUganda

• Obtained a banking license in Angola in Q1 2010

• Approximately 1 000 branches and 4 000 ATMs across Africa (incl

Angola Angola

DRCDRCKenyaKenya

MozambiqueMozambique

MalawiMalawiZambiaZambia

TanzaniaTanzania

4 000 ATMs across Africa (incl. South Africa)

• Over 40 000 employees in Africa (incl. South Africa)

NamibiaNamibia

South Africa

qq

BotswanaBotswana

MauritiusMauritius

ZimbabweZimbabwe

LesothoLesotho

SwazilandSwaziland

2

CIB Africa view of the region

Five different markets with different focus and stages of evolution

South and Central Africa

Zambia, Malawi, DRC, Zimbabwe, Botswana, Mozambique, Namibia, Lesotho and Swaziland

East Africa

Kenya, Tanzania, Uganda and Mauritius

Nigeria Ghana Angola

3

Pertinent facts - the “five markets”

GDP: USD 173.43 billionPopulation: 151.87 million GDP: USD 79.54 billion

NigeriaEast Africa

GDP: USD 15.51billionPopulation: 23.08 million

Language: English Population: 110.9 millionLanguage: English

Ghana

KenyaKenya

NigeriaNigeriaGhanaGhana

UgandaUganda

pLanguage: English

GDP: USD 68.58 billion

South and Central AfricaAngola

Angola Angola

DRCDRCyy

MozambiqueMozambique

MalawiMalawiZambiaZambia

TanzaniaTanzaniaGDP: USD 68.76 billionPopulation: 17.31 million

Language: Portuguese

Population: 130.99 millionLanguage: English except for Mozambique and DRC

NamibiaNamibia

South Africa

BotswanaBotswana

MauritiusMauritius

ZimbabweZimbabwe

LesothoLesotho

SwazilandSwaziland

S IMF (2009 d t )

The Sub Saharan African countries in which Standard Bank has a presence, including South Africa, constituted 78%

4

Source: IMF (2009 data)(USD 693 billion) of the total GDP of SSA and 63% (483 million) of SSA’s population in 2009

Population growth in Africa

Population, health and environment data estimates

(Population Reference Bureau, 2009 data sheet)

• Africa had a population of 285 million in 1960 (9.4% of the world population)

• In 2009 Africa’s population was estimated to be 999 million (14.6% of the world 009 ca s popu at o as est ated to be 999 o ( 6% o t e o dpopulation)

• By 2050 Africa is expected to have a population of 1,994 million accounting for 21.1% of the world population

5

(Population Reference Bureau, 2009 data sheet)

Resource rich Africa

• Africa has an abundance of natural resources:• Africa has 9.5% of global crude oil reserves and

8.2% of global gas reserves; Libya, Algeria, Nigeria, Angola and Sudan account for 90% of the reserves

• Africa accounts for approximately 30% of global mineral reserves, including 38% of uranium, 42% of gold 88% of diamonds 60 % of cobalt and 90 % ofgold, 88% of diamonds, 60 % of cobalt and 90 % of the world's platinum group mineral reserves

• Countries with large mineral reserves include South Africa, Angola, Zambia and the DRC amongst others (Africa Economic Conference, 2009)

6

• South Africa has 72% of the world’s chrome ore reserves (Department of Mineral Resources, Republic of South Africa)

BRIC trade with Africa

African imports from the rest of the world African exports to the rest of the world

• BRIC’s proportion of World trade has doubled from 6.3% in 2000 to 12.8% in 2009

• BRIC-Africa trade as a proportion of Africa-world trade grew from 4.6% in 1993 to over 19% in 2008

(Standard Bank, Economic Research, October 2009)

7

GDP growth of Sub-Saharan Africa (SSA)

GDP growth in Sub-Saharan Africa is t d t b 4 75% i 2010 d 5 75%expected to be 4.75% in 2010 and 5.75%

in 2011 (IMF Regional Economic Outlook, April 2010)

8

Infrastructure development in Sub-Saharan Africa

• Infrastructure development is responsible for more than 50% of Africa’s recent improved performance

• Yet, Africa’s infrastructure network lags behind other developing economies and infrastructure services are twice as expensive

• Power is Africa’s largest infrastructure challenge

• The cost of addressing Africa’s infrastructure needs is estimated to be USD93 billion p.a.

• Overall annual infrastructure spending needs (in USD billion) for Sub-Saharan Africa is as below:

9

(Agence Française de Développement and the World Bank, 2010)

Other pertinent dynamics in Africa• Telecommunications

- Africa had 11 million mobile cellular subscriptions and 3 million Internet users in the year 2000. By the end of 2008, there were 32 million Internet users (penetration rate of 4.2%), and 246 million mobile cellular subscriptions (penetration rate of 32. 6%)

(Information Society Statistical Profiles 2009, Africa)

- Mobile phones have become the most widely used form of ICT by African businesses to deal with their clients (The Global Information Technology Report, 2008-2009)

• Capital MarketsCapital Markets- 2 stock markets in Sub Saharan Africa in 1989, 16 stock markets in 2010- Market capitalisation of stock markets doubled between 2002 and 2007 to 153% of GDP, before falling back to

83% of GDP in 2008 - Except for South Africa and Nigeria, stock markets in the region remain small (IMF Regional Economic Outlook, April 2010)

10

p g g

Corporate & Investment Banking Business in Africa

CIB capabilities in AfricaStandard Bank Group

Personal & Business Banking Corporate & Investment Banking Investment Management &Life Insurance

Global MarketsCoverage & Di ib i

Transactional Products Investment BankingGlobal Markets Distribution & Services

• Money Markets

• Forex• Management of client

relationships within CIB• Investor Services

• Transactional Banking

Investment Banking

• Advisory (M&A, Debt)• Capital Markets

• Commodities

• Interest Rate Sales and Structuring

• Global Markets

• Asset Syndication and Distribution

• Trade Services− DCM− ECM− Securitisation

• Balance Sheet Debt− Project FinanceResearch − Project Finance− Asset Finance− Structured Trade Finance− Structured Finance− Acquisition & Leveraged Finance

12

− Property Finance

CIB Africa domestic franchise

• Leading CIB franchise in Uganda and across most markets in Southern and Central Africa• Substantial and rapidly growing CIB businesses in Nigeria, Kenya, Ghana and a new

business in Angolag• Areas of strength in region include:

– Global Markets: Forex, Fixed Income and Money Market– Project Finance– Advisory– Investor services (Custody)– Equities (Nigeria and Kenya)

• Opportunities for growth– Transactional Banking– Trade– Equities

13

Priority sectors for CIB in Africa

Priority Sectors• Mining and Metals

Major deals in Africa in recent years:

• Oil, Gas and Renewables

Celtel Kenya Limited Tanzania

2008USD 270,000,000

Telecommunications FinanceJoint Lead Arranger

Diamond Bank Plc

2008USD 400,000,048

Domestic Offering of USD denominated Global Depositary receiptJoint Issuing House

Guaranty Trust Bank Plc

2007USD 306,208,000

Domestic Offering of USD denominated Global Depositary receiptJoint Issuing House

• Telecommunications, Media and Technology

• Power and Infrastructure Addax Petroleum N.V. Nigeria & Gabon

2007USD 1 600 000 000 USD 1.8 billion

Tullow Oil plc Gautrain

2007ZAR 20 billion

• Government and International Organisations

• Manufacturing and Distribution

USD 1,600,000,000

Senior Secured Reducing Revolving Credit FacilitySenior lead arranger

US 8

Senior Secured Revolving Borrowing Base FacilityArranger

ZAR 20 billion

High speed RailMandated Lead Arranger/Underwriter

• Financial Institutions

A i l

Department of Tradeand Industry

2003USD 500 million

Accommodation PPPMandated Lead Arranger/Advisor

Botswana Power CorporationMorupule B Power Project

2009USD 825 million

Joint Mandated on Term Facility

USD 140 millionGuarantor on Bridge Facility

Volta River AuthorityGhana

2005USD 520 million

Pipeline development West Africagas pipeline Nigeria, Ghana, Benin & TogoFinancial Advisor

• Agriculture

14

Cross border capabilities - connecting Africa to the world

Flows Product Area

1 Trade flows • Transactional Products & Services

• Structured products

• Forex

2 Direct investment • Advisory

• Structured debt finance

• Project Finance

• Forex, interest rates

3 Investor flows • Forex

• Rates

• Credit

Fixed Income and Equities• Fixed Income and Equities

• Investor Services

4 Aid / Donor / Multilateral flows • Forex

• Transactional Products & Services

15

Transactional Products & Services

Sub-Saharan Africa – Inward flows

Gross private flows grew from USD 10.1 billion in 2002 to USD 53 billion in 2007billion in 2002 to USD 53 billion in 2007

Inflows in SSA show a similar pattern to global flows with proportionately larger flows in terms of portfolio and other flowsflows in terms of portfolio and other flows (trade credits and bank loans)

(IMF Regional Economic Outlook, April 2010)2010)

16

Donor flows to Africa in 2008

• Total donor flows to Africa in 2008 was USD 44bn

• Donor flows from• Donor flows from traditional countries to SSA increased 8 fold from USD 3bn in 2000 to USD 24bnin 2008

$1,656 m

$1,360 m

$2,330 m$1,289 m$1,293 m

in 2008

• Donor flows from non traditional countries to SSA increased from USD 1bn

$912 m

$ ,

$1,993m

$1 085$206

$ 368 m

$1,648 min 2003 to USD 5bn in 2008

• BRIC have emerged as important sources of aid $1,085 m

$611 m

$67 m $109 m$143 m

$716 m

$206 mimportant sources of aid

(IMF Regional Economic Outlook, April

17

(IMF Regional Economic Outlook, April 2010)

Outlook and opportunities

• Outlook- The African continent is poised for growth in the forthcoming years, Sub-Saharan Africa is

expected to grow by 4 75% in 2010 and 5 75% in 2011 (IMF Regional Economic Outlook April 2010)expected to grow by 4.75% in 2010 and 5.75% in 2011 (IMF Regional Economic Outlook, April 2010)

- CIB Africa business is well positioned and will continue to invest in people and technology and expanding its capabilities in the region to capitalise on expected growth

• Opportunities for growth- Infrastructure and energy development is a key theme across the continent: Project Finance

- Investment and trade into Africa from Brazil China India Russia and Middle East: TradeInvestment and trade into Africa from Brazil, China, India, Russia and Middle East: Trade Finance, Forex

- Development of domestic savings and capital markets: Fixed income, Equities and Corporate Finance

- Expected growth in agricultural sector: Trade Finance, Forex

- Angola: CIB Africa expects to be operational with core products in the 4th quarter of 2010

- Nigeria, Ghana & Kenya: Significant growth expected in these markets

18

NigeriaNigeriaYinka Sanni

Overview of Nigeria

• The most populous country in Africa and eighth most populous country in the worldwith an estimated population of 152.6 million (Population Reference Bureau 2009 FactSheet)

Th d l t i S b S h Af i GDP f USD 173 4 billi i• The second largest economy in Sub-Saharan Africa, GDP of USD 173.4 billion in2009 (IMF)

• Estimated oil reserves of 36 billion barrels and natural gas reserves of at least184 trillion cubic feet (Nigeria Energy Data Statistics and Analysis - Oil Gas Electricity Coal)184 trillion cubic feet (Nigeria Energy Data, Statistics and Analysis Oil, Gas, Electricity, Coal)

• Current estimates suggest that oil provides 20% of GDP, 95% of foreign exchangeearnings and about 85% of budgetary revenues (Nigeria Energy Data, Statistics andAnalysis - Oil, Gas, Electricity, Coal)

• 24 banks and 100’s of other financial institutions with an aggregate marketcapitalisation of approximately USD 20bn

• Rapidly growing pension industry – N1.6tn (USD 10.7bn) assets undertmanagement

• The Nigerian Stock Exchange (NSE) – second largest stock exchange in SSA witha market capitalisation of USD 41.7bn; the NSE, provided a 22.73% return (USD)for the four months ending April 2010 (Stanbic IBTC)for the four months ending April 2010 (Stanbic IBTC)

20

Nigeria projected to be the largest economy in Africa

Goldman Sach’s includes Nigeria as the only Sub-Saharan Africa country in the “N11” list of countries

Goldman Sachs, Global Economics Research Paper No. 173

Goldman Sach s includes Nigeria as the only Sub-Saharan Africa country in the N11 list of countries and expects the Nigerian economy to surpass the South African economy in the future

“You cannot have an African business without a significant presence in Nigeria”

21

CIB in NigeriaSt bi IBTC i l di t d i t t b k i Ni i C t & I t t B ki• Stanbic IBTC is a leading corporate and investment bank in Nigeria - Corporate & Investment Banking represented close to 60% of the Stanbic IBTC’s total revenues in 2009

• Services offered include:

- Debt and equity advisory, equities brokerage, structured and project finance, trade finance, transactional q y y, q g , p j , ,banking and lending, global markets, custody, private clients services and private equity funding

• Competitive Strengths- Global Markets: Forex and Fixed income

- Investment Banking: Leading Corporate Finance and Project Finance business

- Leading equities brokerage house in Nigeria (over 30% market share)

- Transactional Products and Services: Electronic Banking , Cash Management and Custody (70% share of foreign client market)

- Skilled and experienced management team

• Recent Awards- Best Investment Bank in Nigeria 2009, by Euromoney Award

- Best Equity House in Africa 2009, by Euromoney Awards

- Best Investment Bank in Nigeria Award, 2009, by Emeafinance

- PPP Champion of the Year for Various Initiatives, 2009 by Africa investor Infrastructure Awards

- Leading Custodian in Nigeria – Global Custodian Survey 2009- Leading Custodian in Nigeria – Global Custodian Survey 2009

- Africa’s Best Research House 2009, by Africa Investor

22

Priority sectors

• Oil, Gas and Renewables- Nigeria has the 8th largest oil reserves in the world (einfopedia, April 2010)

• Telecommunications- The fifth largest economic sector in Nigeria which has grown by 25% per annum

since 2003 (Standard Bank, Economic Research, April 2010)• Power, Infrastructure and Construction

- Top priority of Federal Government of Nigeria • Public Sector and International OrganisationsPublic Sector and International Organisations• Manufacturing and distribution

- Grew from 3.9% of GDP in 2006 to 9.3% in 2008, dropped back to 4.2% in 2009 but has tremendous growth potential going forwardbut has tremendous growth potential going forward

• Financial institutions- Represent in excess of 50% of the market capitalisation of the NSE

23

Outlook and opportunities• Nigeria GDP is expected to grow by 7% in 2010 and 7.3% in 2011 (IMF Regional

Economic Outlook, April 2010)• CIB Nigeria is well positioned to grow its business on the back of the expected

economic growtheconomic growth• Key areas of growth include:

- Financing of infrastructure and power developments – focus on Private and Public Partnershipsp

- Capital markets activity (equities and fixed income) • Global Markets – fixed income trading and forex to support domestic and offshore

investors• Investment Banking : debt solutions for corporates, raising long term financing for

the federal government, equity financing and brokerage • Transactional Products and Services opportunities: custody and transactional

b kibanking- Increase trade flow between Nigeria and the rest of the world, particularly the BRIC

countries• Trade finance and forex: linking Nigerian companies with the rest of Africa China• Trade finance and forex: linking Nigerian companies with the rest of Africa, China

and the rest of the world

24

AsiaAsiaAndrew King

Regional footprint

Beijing - Cross border transaction

Standard Bank Offices Country Focus

origination hub and ICBC relationship

Hong Kong - Transaction execution, Tokyo CHINA

MONGOLIA

SOUTH KOREA

Beijing

Shanghaig g ,Global Markets and regional support functions

Singapore SE Asia origination hubMALAYSIA

THAILAND VIETNAM PHILIPPINES

Singapore

TaipeiHong Kong

LAOS

CAMBODIA

INDIA

Singapore - SE Asia origination hub

Shanghai - Commodities trading (SRC)

INDONESIA

Tokyo - Access to TOCOM

Taipei - SBSA Branch; strong historic link with SA

Core Developing

Opportunistic

2

historic link with SA

Regional product capability

Global Markets Principal Investment Management

Cross Border M&A (China -Africa / Brazil / Russia /

Commodities Distressed debt investment

Investment Banking

Africa / Brazil / Russia / Turkey)

Structured Finance (incl.Structured Commodity Trade Finance)

Credit structuring, sales and trading

Treasury and local markets (FX, rates)

Single credit, corporate / SME and retail portfolios

Philippines, Thailand, MalaysiaFinance)

Project and Structured Finance advisory (Beijing -access to Chinese institutional funding)

Equities (warrants, convertible bonds derivative trading)

Principal Trading

Funds

CIMB / Standard Bank JV

SEASAF (SE Asia Strategic A t F d)g)

DCM (High yield)

Transactional Banking (China only-ICBC link to Africa)

Assets Fund)

IIF (Islamic Infrastructure Fund)

Africa)

3

Asia overview

China Regional

Core sector* focus with cross border Key regional building block is our bias

• Commodity trade flows into and within Asia (cross border sourcing of raw materials from Africa Brazil

y g gChina strategy and its link to Africa and other core EM countries (as covered by Craig Bond)

Africa and Brazil present of raw materials from Africa, Brazil and Indonesia/Mongolia)

• SE Asia and Mongolia are China’s “backyard”

• Africa and Brazil present significant cross border trade and investment opportunities for Chinese corporates y

• Indian companies targeting African growth

• Malaysia corporates eyeing Africa

• Advisory driven business model (M&A, Structured / Project Finance)

• ICBC partnership y p y gas an investment destination

• Taiwan has a historic relationship with South Africa

• ICBC partnership

4

* Mining & Metals, Oil & Gas, Telecoms, Power & Infrastructure and Financial Institutions

Commodities - sourcing and distribution model

15%20%

25%25%

Net resource producers

Net resource consumers

Steel Complex (iron ore, coking coal, ferrochrome)

Thermal Coal

Base Metals

5

Crude Oil

Commodities – core capability

• Already a market leader in Asian base and precious metals

• Organic growth in bulk commoditiesC l (Th l d ki )- Coal (Thermal and coking)

- Steel complex

• Expand and develop physical trading capability to match physical commodity flows

Commodity Source DestinationBase Metals DRC / Southern Africa / SA China / Korea

Steel Complex Russia / Ukraine / Brazil / SA SE Asia / China / Korea / Turkeyp y

Physical Crude West Africa China

Thermal Coal SA / Indonesia Greater China / India / Korea / Japan

• Key commodity hubs- Singapore (precious metals, thermal coal, oil & gas)- Shanghai (base metals, steel complex, coal)

6

Indonesia - a growth opportunity• Indonesia has successfully transformed into• Indonesia has successfully transformed into

the world’s 3rd largest democracy and isconsidered politically more stable following 2009 elections

Third largest GDP growth in the world, behind only China and India, prompting many to now refer to “BRICI”

68

1012

• Regarded as the “Nigeria of Asia”

• 70% of consumption is domestic, providing some insulation against global shocks

6-4-20246

• Significant natural resources– World’s largest exporter of thermal

coal2nd largest producer of tin

Indonesian risk has come down significantly over the course of the last year

-10-8-6

2009 2010F

– 2nd largest producer of tin– 3rd largest copper producer– 4th in nickel (laterite) production

• Oil & Gas potential

course of the last year

Lehman collapse

1000

1200

1400

• Oil & Gas potential– Provides 11% of Asia-Pacific’s oil– 20% of the region’s natural gas

• Standard Bank revenue in 2009 US$2m 200

400

600

800

7

Standard Bank revenue in 2009 US$2m (principally gold trading); coming off a very low base May 05 April 10

0

Indonesia - cross border and domestic investmentChina Link

• China has agreed to lend >US$2.1bn in soft loans toIndonesia as part of its free trade agreement

• Power & Infrastructure: Chinese power companies looking for coal supply; construction of power plants

Chinalooking for coal supply; construction of power plants supported by the state

• Metals & Mining: Further development of the coal industry will be spurred by Chinese firms seeking to secure reserves (Australian coal “expensive”)

Domestic Activity• Telecommunications: expansion of networks,

particularly into rural areas; consolidation of towers sector

• Oil & Gas: new fields to be developed and existing

Indonesia

China’s net exports/imports of Coal Oil & Gas: new fields to be developed and existing fields upgraded (depending on tax environment); physical oil trading

• Metals & Mining:• New mining law introduced

B M t l j t i d l t llion

Exports

0

50

100

mill

ions

Exports

• Base Metals - new projects in development; significant export of these metals

• Coal - development and upgrading of mines and physical off-take of coal

• Power & Infrastructure: major construction projects i.e.

t mi

Imports

-150

-100

-50

T

Imports

8

j p jrail, roads, ports and power plants

Source: China Statistical Yearbook; General Administration of Customs of the People’s Republic of China

03 04 05 06 07 08 0903 04 05 06 07 08 09

India - on the radar

• Standard Bank has applied for a branch license and is awaiting approval from SARB– Full range of CIB product Essar Telecom Kenya Ltd

Kenya

• Current focus is on cross border business into and out of India with Africa as a key destination for a number of Indian Corporates

Kenya

USD 47.5 million

Bridge Loan

Sole Mandated Lead Arranger

– Target clients: Essar, Reliance, KEC International, Vedanta and Tata

• Recent cross border transactions includeStructured US$30m offshore receivables financing for– Structured US$30m offshore receivables financing for Videocon

– US$50m bridge financing for Econet (Essar) in Kenya

• CommoditiesUSD 30 million

Receivables Back Working • Commodities– Standard Bank is top 3 supplier of gold into India– Key clients include State Bank of India, ICICI and HDFC

Bank

ece ab es ac o gCapital Financing

Mandated Lead Arranger

9

Mongolia - resource rich developing economy • Landlocked between China and Russia; effectively an “economic province” of China

• Current GDP growth 8%

• Significant commodity potential – iron ore, coal (coking and thermal), copper, gold g y ( g ) gand oil & gas

• Market poised for growth subsequent to Oyu Tolgoi* signing; investment by CIC in South Gobi Energy (US$500m) and Iron Mining Intl (US$500m)

• Standard Bank has 10 year track record of doing business in Mongolia; 2009 revenue of US$12m (principally commodity trade finance)

Mongolia is very closely correlated to China

10

* World’s largest underdeveloped copper-gold project; capex US$5.65bn (US$1bn spent to date by Rio Tinto and Ironhoe Mines)

Mongolia – commodity driven growth• In November 2009, CEO of Rio Tinto Tom Albanese

commented “…coal from Mongolia to China is happening, it is expanding, probably doubling every two years. From my perspective, this is a place we

Year on year commodity growthneed to be investing.”

• Tavan Tolgoi is the largest undeveloped coking coal deposit in the world located 250km from the China border (Expressions of interest to develop from

Year-on-year commodity growth

border (Expressions of interest to develop from Shenhua Energy, Jindal Steel, Vale, Rio Tinto,Peabody, Mitsui, Sojitz, BHP Billiton)

• CNPC is reported to have invested in excess of US$1bn in its oil blocks in the west of Mongolia

• A sovereign bond issue is scheduled for the end of 2010, this will create a future benchmark pricing and likely trigger high yield bond opportunities for the toplikely trigger high yield bond opportunities for the top tier corporate entities

• Requirement for large infrastructure investment and close links to China should also position Standard Bank

11

to leverage the ICBC partnership

Mongolia - recent transactions

October 2009 June 2009

Government of Mongolia

July 2009 February 2010

US$25,000,000

Oil Product Import / Inventory & Receivable Financing Facility

Just Group LLC & Ulaanbaatar Railway

S l A

US$75,000,000

Zero Coupon Note Issue

Government of MongoliaActing through its Ministry of

Finance

Sole Arranger

US$36,000,000

Prepayment Loan

Just Group LLC & Erdernet Mining Corporation

S l A & C

Bridge Loan

MCS Holding LLC

US$15,000,000

Sole Arranger Sole Arranger Sole Arranger & Copper Offtaker

Sole Arranger

December 2009 July 2009 October 2009

US$20 000 000

Mongolia

US$10 000 000 US$30 000 000

Shunkhlai Group LLC

US$20,000,000

Oil Backed Structured Loan Facility

Agent & Sole Arranger

US$10,000,000Shunkhlai Group

Oil Backed Structured Loan Facility

Agent & Sole Arranger

US$30,000,000Financing of the Ukhaa Khudag

Coking Coal Mine

Agent & Lead Arranger

12

TurkeyTurkeyMahmut Ünlü

Turkey has the second largest and by far the youngest population in Europe

Population by Major Cities

Istanbul (12.7 million)

Comments

• Situated at the junction of Europe and Asia, Turkey is an

important cross-road between Western Europe, the Middle

Ankara (4.5 million)

Izmir (3.8 million) Adana

(2.0 million)

Bursa (2.5 million)

East and Asia. Turkey’s land borders extend for more than

1,630 miles and are shared with eight countries.

• Turkey has the second largest population (72.6 million as of

2009) in Europe, growing at a rate of slightly over 1% per

Population by Age Group (% breakdown)

( )

annum and has the youngest population in Europe with

nearly 50% of the population under the age of 28.5

• The transformation of Turkey’s economy from a largely

agricultural economy to an industrial and service-oriented

8.5 8.9 9.2 8.7 8.8 9.28.2

7.56.7

6.15.2

g y

economy has led to an increasingly urban population.

Turkey's population is concentrated in the West and along

the coastal areas.

• Turkey’s most populous city and its corporate industrial and4.1

3.12.4

1.8 1.6

0.1 0.1 0.1

Turkey s most populous city and its corporate, industrial and

financial centre is Istanbul with an estimated population of

12.9 million as at the end of 2009

• Rapid urbanisation process has continued in Turkey since

1950s with population of urban areas increasing from c 25%

2

0-4

5-9

10-1

415

-19

20-2

425

-29

30-3

4

35-3

940

-44

45-4

950

-54

55-5

960

-64

65-6

970

-74

75-7

980

-84

85-8

990

+ 1950s with population of urban areas increasing from c.25%

in 1950 to c.75% in 2009Source: Turkish Statistical Institute

Turkey is the 8th largest economy in Europe withsubstantially improving macroeconomic fundamentals

582646

733

615

• 17th* largest globally with US$615 billion GDP in 2009

• The Turkish economy has experienced a major upturn with

GDP growing on average by 3 3% in real terms during the

GDP at Current Prices (US$ bn) Comments

195 231303

391483

GDP growing on average by 3.3% in real terms during the

2005-2009 period despite 4.7% contraction in 2009

• Turkey has been one of the few countries who have

weathered the global crisis much better than the most. The

GDP growth expectation for 2010 stands firmly at c 4%2001 2002 2003 2004 2005 2006 2007 2008 2009

Real GDP Growth GDP per Capita (PPP adjusted) (US$)

GDP growth expectation for 2010 stands firmly at c.4%

• Turkey’s GDP per capita has grown at a CAGR of 6% since

2001 and reached US$12,339 in 2009

6.2%5.3%

9.4% 8.4%6.9%

4.6% 4.0% 4.5% 5.0%7,748 8,224 8,705

9,84411,006

12,10712,891 13,139

12,339

1.1%

-4.7%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

E

2011

E

2012

E

01 02 03 04 05 06 07 08 09

3

%-5.7%

Source: Turkish Statistical Institute, Central Bank of Turkey, Standard Ünlü, IMF, Global Insight

200

200

200

200

200

200

200

200

200

*As of latest available IMF World Economic Outlook (October 2009)

R l I t t R t C t

Turkish economy has stabilised since 2001 and shielded itself to the global financial crisis

Real Interest Rates Comments

• Chronic hyper-inflation has been eliminated and

inflation has decreased from 70% levels in 2001 to

single digits in 2004 thanks to the policies and20%

25%

30%

single digits in 2004 thanks to the policies and

structural reforms of the current government

• Again, in line with the drastically improving

macroeconomic fundamentals, real interest rates

d d f 30% l l i 2003 t i l di it0%

5%

10%

15%

3 4 5 8 8Foreign Exchange Rates

decreased from 30% levels in 2003 to single-digit

levels and relatively stabilised

• Continuing implementation of the austerity measures of

the IMF stabilisation program and tight monetary

Jan-

03

Aug

-03

Mar

-04

Oct

-04

May

-05

Dec

-05

Jul-0

6

Feb-

07

Sep

-07

Apr

-08

Nov

-08

Jun-

09

Jan-

10

policies had entailed success in substantially reducing

inflation and interest rates between 2003 and 2009

• Along with the improved visibility and political stability,

Turkey realised a return of confidence in TRL financial

2

2,5

Turkey realised a return of confidence in TRL financial

assets

1

1,5

an.0

6

May

-06

Sep

.06

an.0

7

May

-07

Sep

.07

an.0

8

May

-08

ep-0

8

an-0

9

May

-09

ep-0

9

an-1

0

4

J M S J M S J M S J M S J

TL / € TL / $

Source: Central Bank of Turkey, Standard Ünlü analysis

Since 2005, Turkey has seen phenomenal increase in foreign direct investment coming into the country

Foreign Direct Investment (US$ bn) Comments

• Turkey has had a long relationship with the European Union: − In 1963 and 1970, it signed an association agreement and a

supplementary agreement, respectively with the predecessor of th EU

20.222.0

18.3

the EU− Effective from 1996 Turkey has been a part of Customs Union− The EU resolved on 17 December 2004 to commence accession

negotiations with Turkey and affirmed that Turkey’s candidacy will be judged on the same 28 criteria, applied to other candidates, which require a range of political, legislative and 3.4 2.8

10.0

7.6

Number of Deals by Industry - 2008

, q g p , geconomic reforms to be implemented

− Negotiations for Turkey’s accession to the European Union commenced on 4 October 2005

• Between 1975 and 2004, over a 25-year period, Turkey was able

to attract only about US$20 billion in FDI (c.US$700 million pa)

0.9 0.7 0.8 0.9 0.8 1.0 1.12.8

1.8

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

y $ ( $ p )

• Since 2004, Turkey has become one of the most attractive

emerging markets sought with average annual FDI level of above

US$15.5 billion between 2005 and 2009

• This considerable boost in FDI in Turkey has been on the back of

2420 19

10 9 8 8 8

40

increased liquidity globally; Turkey's membership talks with the

EU; a continued adherence of the Government to the IMF

programs and the undertaking of unprecedented social and

economic reforms; the enactment of the Foreign Direct Investment

10 9 8 8 8 6 5 5 5 5

Serv

ices

Ener

gy

Food

&Be

vera

ge

utom

otiv

e &

Parts R

etai

l

mac

eutic

als

Logi

stic

s &

ansp

orta

tion

Ser

vice

s

Fina

ncia

l S

erv.

Ener

gy

nufa

ctur

ing

Bev

erag

e

Med

ia

Aut

o P

arts

Hea

lthca

re

Ret

ail

Min

ing

mac

eutic

als

IT

s &

Tra

ns.

Oth

er

5

Law in June 2003; as well as fundamentally improving

macroeconomic conditions

Au

Phar L

Tra

Man

Food

&

A H

Phar

m

Logi

stic

s

Source: Central Bank of Turkey, Standard Ünlü analysis

Standard Bank in TurkeyStandard Ünlü

Standard Ünlü services

Markets

Equities Local Markets Sales & Structuring Derivatives

• Futures trading• Institutional sales • Sales and

Corporate Finance Advisory

M&A ECM Real Estate

• Acquisition advisory• Mergers & • Initial public Futures trading on TurkDEX

• OTC options

Institutional sales

• Research

• Margin trading

• Private placement

• Trading on behalf of high net worth

• Sales and structuring of fx, credit, rates and commodities products

• Client Financing

• Liability

Acquisition advisory

• Single asset or portfolio disposal advisory

• Strategic investment advisory

Fi i l d i

Mergers & acquisitions

• Privatization advisory

• Financial restructuring

pofferings

• Secondary public offerings

• Capital increases

• Public Bidsof high net worth individuals and corporations

Liability Management

• Asset side Solutions

• Equity Derivatives

• Financial advisory

• Securities underwriting

Asset Management

SU PortfoyManagement & Advisory Private Equity NPL Recovery

• Expansion stage development

R l t

• Investment advisory

NPL i i

• Portfolio management for high net-worth

Coverage and Structured Solutions

DCM Structured Solutions Other

• Structured trade finance

F t fl

• Syndicated loans

• Foreign and local b d

• Acquisition finance

H b id fi • Replacement capital

• Management buy –out

• NPL servicing

• NPL restructuring

high net worth private clients

• Management of funds and individual portfolio

• Long/Short Turkish equity

• Future flow financing

• Project financing

currency bond issuance

• Hybrid finance

7

q yHedge Fund 150 employees in Total

Standard Ünlü services - Corporate finance advisoryM&A and ECM

• Leader in terms of completed transaction in every league table classification since 1998 With 30 M&A transactions completed for a total• Leader in terms of completed transaction in every league table classification since 1998. With 30 M&A transactions completed for a total transaction value of €3 billion, Standard Ünlü maintained its leading position between 2006-2008 - most active years for the Turkish mergers and acquisitions market

–1st place in all mergers and acquisitions with 46 completed transactions since 1998

–1st place in cross-border mergers and acquisitions with 31 completed transactions since 1998

1 t l i i t it d l ith 13 l t d t ti i 1998–1st place in private equity deals with 13 completed transactions since 1998

–1st place in buy side deals with 18 completed transactions since 1998

–1st place in all mergers and acquisitions with 11, 8 and 11 completed transactions for the years 2006, 2007 and 2008, respectively

Public BidsSell-Side Transactions Buy-Side Transactions y

by

on behalf of

Public Bidby

September 2005

by

on behalf of

Public Bidby

September 2005

by

on behalf of

Public Bidby

September 2005March 2010

has been sold to a NewCo owned by

100% shareholding of

and

March 2008

has agreed to acquireof Turkey

from

February2008

has agreed to acquire majorityshareholding in

of Russia

of Turkeyto

has sold 61.2% of

of Turkey

November 2006

Initial Public Offerings Block Sales Capital IncreasesPending February 2007February 2007 June 2009 February 2009 February 2005

of Turkey

to acquire the outstanding shares in

of Turkey

to acquire the outstanding shares in

of Turkey

to acquire the outstanding shares in

The undersigned acted as exclusive financial advisorto Havaş

and

for EUR180 million

Principal Investmentsof USAfor US$850 million

The undersigned acted as financial advisor to Ülker Group

of TurkeyThe undersigned acted as exclusive financial advisor

to A1 Group

of FranceThe undersigned acted as exclusive financial

advisor to Koc Group

and

of Kuwait

Initial Public Offer

Ülker Çikolata Sanayi A.Ş.of Turkey

Initial Public Offer

TAV Havalimanları Holding A.Ş.

US$321m

of Turkey

Initial Public Offer

TAV Havalimanları Holding A.Ş.

US$321m

of Turkey

Tire Kutsan Oluklu Mukavva Kutu ve Kağıt Sanayi A.Ş.

Capital Increase

TL60.5 million

TAV Havalimanları Holding A.Ş.

Capital Increasee

TL120 million has been placed for US$ 250,232,769through a series of block trades in the ISE

held by

4.98% of

Demir Sabancı

the share capital of

8

The undersigned acts as the lead advisor

to Ülker Çikolata

The undersigned acted as the lead advisor

to TAV

The undersigned acted as the lead advisor

to TAV The undersigned acted as the financial advisor to Tire Kutsan

The undersigned acted as the financial advisor to TAV The undersigned acted as exclusive financial advisor

and intermediary to Demir Sabancı

Standard Ünlü services - MarketsInstitutional Sales (Equities)• Combination of research centered sales amd idea driven opportunistic trading.

• Cash Equity team: 14 people. 5 equity analysts + 3 Sales (Istanbul) + 2 Trading (Istanbul) + 2 Sales (New York)

• Strong equity research culture; six members of the team had worked as head of research in reputable institutions earlier in g y

their careers

• Long-standing relationships with Turkish corporates

• Significant penetration to international asset management firms

• Block placementsBlock placements

• Competitive special situations research and execution

• 6% market share in International equity business in Turkey

• Second largest net buyers in equities overall in 2009 for international clients (2010 – 4th largest)

Global Markets 2010This announcement appears as a matter of record only

Global Markets• Local presence since 1999

• Experienced sales team with diverse backgrounds

• Product & services

Client Financing (fi ed income/eq ities le erage)

Altınyıldız

US$ 30,000,000– Client Financing (fixed income/equities leverage)

– Credit (Turkey sovereign CDS, corporate/sovereign debt trading)

– Rates (G7 rates hedging)

– FX (spot, forwards, swaps, options)

Credit Linked Note

MANDATED LEAD ARRANGER

– Local Markets (TRY interest rate swaps, cross currency swaps, forwards)

– Commodities (precious metals, base metals) & Energy

9

St d d Ü lü’ C d St t d S l ti (“CSS”) t t b th th i l R l ti hi M t t

Standard Ünlü services – DCM and structured solutions• Standard Ünlü’s Coverage and Structured Solutions (“CSS”) team acts both as the regional Relationship Management team

and as a conduit for delivering Standard Bank’s banking services and products to our clients• Industry sector coverage focuses on Power and Infrastructure, Financial Institutions, and Diversified Industries• Delivering a range of products to a focused group of clients• SB has led and arranged over US$16 billion of finance in the Turkish syndication market for both corporates and FI’s over theg y p

past 5 years• Products & services

– Acquisition finance– Foreign and local currency bond issuance

Future flow financing– Future flow financing– Hybrid finance– Project Financing– Structured trade finance– Syndicated loans

2009

Y K di B k A Ş

2006

Tü P i i i

This announcement appears as a matter of record only

Syndicated Locan Debt Capital Markets Project Finance Acquisition Finance

BankPozitif Kredi ve Kalkınma

2009 2008This announcement appears as a matter of record only

2008This announcement appears as a matter of record only

US$975,000,000

Yapı Kredi Bankası A.Ş.

1 Year

Dual Tranche Multi-Currency

Term Loan Facility

Tüpraş Privatisation

US$ 1,800,000,000Acquisition Finance Facility for

Tupras Privatisation

MANDATED LEAD ARRANGER, JOINT

Bankası A.Ş.

USD 150 million

7.0% Notes due 2014Joint Book runner

Joint Lead Manager

TAV Tunisia

EUR 392,000,000

Project Finance Facility for Tunisian Projects

MANDATED LEAD ARRANGER and

US$ 950,000,000

Syndicated Term Loan Facility

10

Mandated Lead Arranger BOOKRUNNER and HEDGING BANKBOOKRUNNER MANDATED LEAD ARRANGER

P i t E it (AUM $150 )

Standard Ünlü services - Asset managementPrivate Equity (AUM: $150mn)• SU Turkish Private Equity Opportunities I S.C.A., SICAR (Luxembourg) was established to investin Turkish Companies with superior growth and return prospective. SU Private Equity Management Ltd. (Isle of Man) is the Investment Manager/Advisor• Fund Life: 7 10 years

SU Private Equity acquired a minority stake in

SU Private Equity acquired a majority stake in• Fund Life: 7 - 10 years

• Transaction Value: US$10 million and above• Investments to date: Fida Film Yapım Dagıtım ve Reklamcılık A.S. And Bizim Toplu Tuketim Pazarlama Sanayi ve Ticaret A.S.Non performing Loan Management (AUM: $250mn) The undersigned acted as advisors

to the transaction

acquired a minority stake in

Bizim Toplu Tüketim PazarlamaSanayi ve Ticaret A.S.

The undersigned acted as advisors to the transaction

acquired a majority stake in

Fida Film Yapım Dağıtımve Reklamcılık A.Ş.

Non-performing Loan Management (AUM: $250mn)• Invests in and manages NPL portfolios• Has a licensed investment vehicle (Standard Varlık 2009) and two servicing companies (DUFDAS – corporate and PLATO –consumer)• Acquired 5+ consumer credit and one corporate portfolio from local banks in the last 6 months

to the transaction

YTY Consulting, Deloitte

September 2008

to the transaction

Standard Ünlü, Can Verdi, YTY Consulting, Grant Thornton

December 2007

• Acquired 5+ consumer credit and one corporate portfolio from local banks in the last 6 months• Provides outsourced servicing to two banksPortfolio Management (AUM: $30mn)• SUA & SUB: Open ended equity and fixed income funds, respectively, established under the regulations of domestic securities markets regulator SPKmarkets regulator SPK• Standard Ünlü A type Equity Fund ranks 4th among 38 peer group funds • Taç Yatırım Ortaklığı: Listed closed end fund controlled by the Ülker Group. Standard Ünlü Asset Management has the management mandate• Off-shore Inverstment Funds: Aqua Long/Short Turkish Equity Hedge Fund has been established and targets institutionalOff shore Inverstment Funds: Aqua Long/Short Turkish Equity Hedge Fund has been established and targets institutional investors and high net worth individuals

11

Transaction HistoryMajor cross-border EM transactions

Major cross-border EM transactions* in 2007 and 2008Deal Value US$

Completed Date Target Company Bidder Company Bidder Country StakeDeal Value US$

mnTarget Sector

Nov-08Akpet Akaryakit Dagitim Anonim Sirketi

Lukoil OAO Russia 100.0% 555 Energy

Sep-08 Sakarya Elektrik Dagitim ASAkcez Consortium(Ak Enerji-Cez group)

Turkey, Czech Republic

100.0% 600 Energy

Th N ti l C i lFeb-08 Turkiye Finans Katilim Bankası

The National Commercial Bank

Saudi Arabia 60.0% 1,080 Banking

Nov-07 Petkim Petrokimya Holdings AS SOCAR, turcas Turkey, Azerbaijan 51.0% 2,013 Petrochemicals

Jul-07 Sabiha Gokcen Airport Limak, GMR, Malaysia AirportTurkey, India, Malaysia

100.0% 3,134 Airport

Jul 07Eczacibasi-Zentiva Kimyasal

Zentiva NV Czech Republic 75 0% 602 PharmaceuticalsJul-07Ürünler ve Sağlık Ürünleri

Zentiva NV Czech Republic 75.0% 602 Pharmaceuticals

Imports by countries Exports by countriesValue 000 $ Value 000 $

Year Country Total Year Country Total

Turkey's BRIC and South Africa trade in recent years

2009 Total 140 925 987 2009 Total 102,128,702Russia 19 719 510 Russia 3,202,046South Africa 1 103 350 South Africa 866,721Brazil 1 105 890 Brazil 388,136India 1 893 265 India 411,164China 12 676 759 China 1,599,115

2008 Total 201 963 574 2008 Total 132,027,196Russia 31 364 477 Russia 6 483 004Russia 31 364 477 Russia 6,483,004South Africa 1 502 492 South Africa 1,238,632Brazil 1 423 868 Brazil 318,027India 2 457 908 India 542,730China 15 658 210 China 1,437,204

2007 Total 170 062 715 2007 Total 107,271,750Russia 23 508 494 Russia 4,726,853South Africa 2 172 298 South Africa 653 785

13*Minimum deal value of US$500 million is listed

South Africa 2 172 298 South Africa 653,785Brazil 1 172 669 Brazil 229,914India 2 299 732 India 348,229China 13 234 092 China 1,039,523

Standard Ünlü cross-border EM transactionsDCM and Structured Solutions

Pending Standard Bank together with aTurkish financial institution iscurrently structuring a projectfinancing package for TAV Airports

2008

Standard Bank underwrote EUR15mof the EUR100m A/B loan toAlbt l b idi f T ki h

TAV Macedonia

EUR 70,000,000Project Finance Facilityfor Macedonian Projects

MANDATED LEAD ARRANGER and BOOKRUNNER

Holding, a leading Turkish airportoperator, to finance the constructionand/or refurbishment of (i) the Skopje“Alexander the Great” Airport, (ii)Ohrid “St. Paul the Apostle” Airportand (iii) a new cargo airport in Shtipin Macedonia

EUR 100,000,000 Acquisition Finance

Facility CO_ARRANGER

Albtelecom, a subsidiary of TurkishÇalık Holding, with EBRD, BlackSea Trade & Development bank,Bank Austria and RZB

in Macedonia

2008 Standard Bank together with three 2006

TAV Tunisia

EUR 392,000,000Project Finance Facilityfor Tunisian Projects

international financial institutionsstructured a project financingpackage for TAV Airports Holding tofinance the construction of a newairport in Enfidha, and refurbishmentof the Monastir airport, both inTunisia The project is the first public

Astelit - TurkcellUkraine

US$ 390,000,000Syndicated Credit Facility

Turkcell is the leading GSMoperator in Turkey and the thirdbiggest GSM operator in Europe.Standard Bank acted as themandated lead arranger for theUS$390m Syndicated Credit Facilityfor Tunisian Projects

MANDATED LEAD ARRANGER and BOOKRUNNER

Tunisia. The project is the first public-private partnership (PPP) in theairport sector in North Africa, and isexpected to lead to more PPPs inTunisia and the wider region

y y

MANDATED LEAD ARRANGER and FINANCIAL ADVISOR

for Astelit, the 3rd mobile operatorin Ukraine owned by Turkcell andSCM

14

Standard Ünlü cross-border EM transactionsMergers and Acquisitions

2008 2006

has sold 61.2% of

of TurkeyKoç Group, one of the leading conglomerates in Turkey, disposed its 61 2% h h ldi i it b idi

A1 Group Limited (“A1 Group”) ofRussia has agreed to acquire 51.9%shareholding in AFM Uluslararası Film

has agreed to acquire majority shareholding in

Russia

of TurkeyThe undersigned acted as exclusive financial Advisor o A1 Group

of Turkey

to

of France

The undersigned acted as exclusive financial advisor to Koç Group

and of Kuwait

61.2% shareholding in its subsidiary Izocam Sanayi ve Ticaret A.Ş (“Izocam”) to JV of Saint Gobain Isover and Alamana Industries

Prodüksiyon Ticaret Sanayi A.Ş.(“AFM”), the leading Turkish movieexhibitor. A1 Group will also bid forthe public shares of AFM, following theacquisition

2008 2006

to

and

of Turkeyhave agreed to sell their 60% of shareholding in c

of Turkey

of TurkeyTAV Yatırım Holding AŞ.

has sold a minority interest in

to

TAV Yatırım Holding A.Ş., a jointventure company of TepeConstruction and Akfen Holding, hassold a minority interest in TAVHavalimanları İşletme A.Ş. (“TAVAirports”) to The Islamic

Ülker Group and Boydak Group, the shareholders of Türkiye FinansKatılım Bankası (“Türkiye Finans”), have sold their 60% shareholding in Türkiye Finans to Saudi Arabia's largest bank, the National

The undersigned acted as financial advisor toÜlker Group

of Saudi Arabiafor US$1,080 million The Islamic Development Bank

of Saudi ArabiaThe undersigned acted as exclusive financial advisor

to TAV

p )Development Bank (“IDB”) for aconsideration of US$73m

Commercial Bank (“NCB”)

15

RussiaRussiaDavid Duffy

Country snapshot

• Coastline of 34,653km with 43 sea ports

• Shared borders with 14 countries, notably:

- Kazakhstan: 6,846km

Largest country in the world Comments

- China: 3,645km

- Mongolia: 3,411km

- Ukraine: 1,576km

• Population of 140 million

• GDP of USD1.232 trillion in 2009 (est.)

• Economic growth on average of 7% per year crisis to crisis (1998 – 2008) – growth doubled real disposable income

2009 ti R i Chi I di B il USA K kh t S th Af i2009 comparatives Russia China India Brazil USA Kazakhstan South Africa

Exchange rate per USD1.00 RUB31.70 CNY6.8 INR48.4 BRL2.0 USD1 KZT148 ZAR8.54

GDP (USD bn) 1,231 4,881 1,279 1,467 14,430 103 280

Inflation (annual average %) 11.7 -0.8 10.5 4.3 -0.7 6.3 7.2

Budget balance (% GDP) -5.9 -3.4 -11.1 -4.3 -8.5 -3.2 -7.3

Current account balance (% GDP) 3.8 -6.1 -0.7 -1.3 -2.6 -1.3 -5.5

Foreign debt to GDP (%) 38.2 7.1 17.5 23 16.6 96.2 26.4

Foreign debt service to exports (%) 19 7 2 4 9 9 24 dnr 39 5 10 3

22

Foreign debt service to exports (%) 19.7 2.4 9.9 24 dnr 39.5 10.3

Foreign reserves (USD bn) 416.7 2,206 285 240 127 49 37.4

Economy and exports driven by natural resources, primarily energy

• Russia has substantial reserves of coal, oil, gas, metals and timber

- Proven oil reserves of 79 trillion bbl (8th largest in world)

- Proven gas reserves of 43.3 trillion m3 (largest in world)

Wealth of Natural Resources Slave to Oil

• EU imports mainly oil and gas from Russia, CIS countries import mostly machinery and relatively cheaper consumer goods

• Export revenue heavily reliant on Energyg ( g )

• In 2009, Russia was the worlds largest exporter of gas, second largest exporter of oil, third largest exporter of steel and primary aluminium

- Produces 9.81m bbl/day of oil (2nd largest in world)

- Exports 4.93m bbl/day (2nd largest in world)

- Energy forms up to 65% of total exports (oil alone up to 35%) while metals forms up to 15%

• GDP fell 7.9% in 2009 – worse than most emerging markets

• Economic diversification sorely needed; “modernisation” and “innovation”

- Produced 662.2bn m3 of gas (largest in world – 2008 est)

- Exported 245bn m3 of gas (largest in world – 2008 est)

GDP strongly linked to oil price

innovation

2525

Change in GDP and Inflation

2 000 2 000

5

10

15

20

25

5

10

15

20

25 2,000 2,000

1,000

1,500

P, U

SDbl

n

2007

2008

1,000

1,500

2009

-10

-5

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

-10

-5

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

500

GD

P

1999

2003

20042005

2006

0

500

33

Change in real GDP % InflationChange in real GDP % InflationUrals, USD/bbl

0 20 40 60 80 100

Recent economic performance

• 2008 / 2009 – Russia hard hit by crisis

• Russian Central Bank supported and stabilised the Rouble using USD200bn in reserves

• Crisis generated some positives

- inflation was curbed, excessive forex borrowing stopped, reduced personnel costs and turnover, companies forced to rationalise and improve operations

New DriversCrisis Management

• Further USD200bn spent to support illiquid state banks and over-indebted firms

to rationalise and improve operations

• Cost of borrowing is falling

- Reduce reliance of foreign debt

• Oil prices may settle lower than anticipate

St th i A i

Export Partners

• Netherlands: 12.2%

I l 9%

• Strong growth in Asia

• Impetus for Privatisation

38.00USD/RUB exchange rate

• Import Partners

• China: 12.9% (USD24.9bn)

G 12 6%

Trade Partners

• Italy: 9%

• Germany: 6.9%

• Ukraine: 5.0%

• China: 4.5% (USD13.6bn) 28.0030.0032.0034.0036.00• Germany: 12.6%

• Japan: 6.9%

• Ukraine: 6.0%

• Unites States: 5.1%

• Poland: 4.3%

• Trade dynamics have changed over the last few years – in 2006/07 85% of Russia’s exports went to CIS countries, while now nearly 50% of all exports go to the EU

• China has particularly grown in importance as in recent years to

20.0022.0024.0026.00

n-08 r-08

y-08

ul-0

8

p-08

v-08

n-09 r-09

y-09

ul-0

9

p-09

v-09

n-10 r-10

• Italy: 4.1%

4

become Russia’s largest single import partner, 5th largest in exports

• China is Russia’s largest trade partner outside of EU

4

Jan

Ma

May Ju Sep

Nov Jan

Ma

Ma y Ju Sep

Nov Jan

Ma

Capabilities in RussiaStrategic focus

Standard Bank and Russia

• Resource rich developing nation

• Matches Standard Bank’s industry excellence in

Mining & Metals

Russia : a natural strategic fit

• Global strategy has strong BRICSA focus

• “Lets connect the world to Africa and Africa to the world”

• Connecting China and Africa

Supporting Global Strategy

- Mining & Metals

- Oil & Gas

- Power & Infrastructure

• Under-banked with fast developing domestic capital market

• Connecting China and Africa

• Complementary ability in Russia

- SB at forefront of development of Rand capital markets, the most sophisticated in emerging markets

• Domestic Personal and Commercial Banking development opportunity

• Crisis exposed potential advantages from being “local”

1990 1997 2002 2003 2007 2008 2009 2010

1997: Representative office launched

2002: Establishment of ZAO Standard Bank

2003: Bank of Russia General

2007: Bank of Russia Retail Licence obtained

2008: ZAO Standard Bank reached

2009: USD300m Troika Dialog investment

Mid 1990’s: Standard Bank starts working in the Russian Market

6

2003: Bank of Russia General Banking Licence obtained

2008: ZAO Standard Bank reached USD100m capitalisation

Troika Dialog as a natural local choiceAn attractive investment

• Excellent brand well known within Russia and CIS

• A leading and truly independent Investment Bank in the region

• Complementary product fit:

Strong synergies

• Troika is a full service Russia and CIS focused investment bank and asset manager with excellent broker/dealer capabilities

- Recognised market leader across business areas

- Troika Dialog traditionally equity product focused

- Standard Bank strength in debt and loan products

• Valuable cultural fit with Standard Bank

Troika’s partnership ownership structure has

• Strong relationships developed at a senior management level

• Multiple business initiatives in place not only for Russia but CIS region as a whole (e.g. joint strategy in Kazakhstan)

• Working toward building up Troika’s personal banking offering- Troika s partnership ownership structure has

engendered a strong professional and ethical structure

Troika representationProminent platform

• Investment into Troika opened not only opportunity within• Investment into Troika opened not only opportunity within Russia but is a broader CIS play for Investment Banking

• Troika has operating assets in Almaty and Kiev as well as Moscow, although to a smaller scale and capacity

• Relationship and sales offices are located internationally in London and New York

• Troika has 25 national branches and investment centres in Russia for distribution of financial products to companies and individuals

• Current platform provides opportunity for further leverage and

77

Current platform provides opportunity for further leverage and development.

Troika Dialog: a market leader

Investment Banking Global Markets Research Asset Management & Private Banking Troika Capital Partners

• Mergers & Acquisitions

• Equity Capital Markets

C B ki

• Equities

• Fixed income

D i i

• Institutional asset management

• Private Banking

• Private Equity Fund

• Alternative Investments

• Economics

• Strategy

• Corporate Broking

• Primary Debt

• Privatisation

• Restructuring advisory

• Derivatives

• Structured Products

• Money market, FX, Repos

• Commodities

Private Banking

• Individual discretionary accounts

• Equities

• Fixed Income

• Local operations in Ukraine & Kazakhstan

• #1 M&A advisor in Russiaby deal value and bynumber of deals in 2008 by Mergermarket

• Total maximum deal value of over USD25 bn

• The largest sales and trading operations in Russia

• #1 in Equity Sales and #1in Trading & ExecutionThomson Extel 2008 /

• Over USD800 m undermanagement in three Troika Capital PartnersFunds

• Three venture funds withUSD50 m in assets

• Over USD6.2 bn in assets under management

• Over USD400 m in Troika Dialog’s mutual funds

• #1 All-Russia Researchteam by Extel in 2009

• #1 Extel rated analysts in2009 for Strategy, Oil & Gas, Metals & Mining, Autos, and Chemicalsvalue of over USD25 bn

in the past 24 months

• Led 18 public offerings asa bookrunner in the past 3 years of total value of USD5.1 bn

Thomson Extel 2008 / 2009

• #1 in global Russianequities market share (12% in FY 2008)

• 21% of Ruble bond

USD50 m in assetsfunds

• 14% of open and intervalmutual funds market (1st

place)

• 13 agent banks and 443points of sale in Russia

Autos, and Chemicals

• #1 Institutional Investorrated analysts forEconomics and Oil & Gas

• #1 according to RBC in2007

• Total deal value in 5 years exceeds USD22 bn

• #1 arranger andunderwriter in the localdebt market with 34 issues amounting to c.

trading on MICEX in FY 2008 (1st place)

• Aggregated trade turnover over USD1,379 bn in FY 2008 (1st place)

• #2 All-Russia ResearchTeam in 2009, 2008, 2006and 2005 by InstitutionalInvestor

• Research coverage of around 200 Russian

Troika Dialog is the leading Russian investment bank offering a full range of services across the

globe for its global and domestic clients

8

USD3.2 bn since 2007 around 200 Russian, Ukrainian and Kazakh companies

Troika: the first 6 months

Business environment

• Domestic markets increasingly competitive

- International banks return to hiring

From our perspective

• Strong relationships have been developed at senior management level – will form basis for cooperation in CIS region

- New domestic challenger in state owned VTB Capital

• Domestic bond market developing – led by Troika

• Equity Capital Markets re opening – Troika successes

CIS region

• An active working relationship at business level between Moacow and Beijing, Johannesburg and London

• Strategic business initiativesq y p p g

Business Highlights

• Petropavlovsk Kimkano & Garinskoye Iron Ore deposit: Standard Bank andPetropavlovsk Kimkano & Garinskoye Iron Ore deposit: Standard Bank and ICBC

• Sheremetyevo Airport: Restructuring and advisory role

• Moscow to St Petersburg Toll Road: Mandate to raise finance..

• Commodity Pre-Export Finance - $3b: Mandate to raise finance against Chinese off-takers

• Major metals producer: Bridge finance and capital markets take-out:

• Global Markets: First two significant cross currency derivative transactions

9

• Global Markets: First two significant cross currency derivative transactions concluded

Project: Moscow-St-Petersburg Highway

Client and Deal Description

• The North-West Concession Company

Standard Bank/Troika’s Role

• Troika provided financial advisory e o t est Co cess o Co pa y(NWCC) LLC is jointly owned by Vinci Concessions and Russian partners

• NWCC has won the concession tender to finance build and operate a 43km section

o a p o ded a c a ad so y(structuring & fund raising) for NWCC

• Ruble funds raised for the financial closing – up to RUB49bn (c.$1,6bn), not including capital grantfinance, build and operate a 43km section

of toll road between Moscow and St. Petersburg (15-58 km)

• Concession agreement signed on July

capital grant

• Troika is currently working on 20 year RUB project bonds issuance linked to inflation rate. State guarantees received,

27th 2009 and financial closing completed on April 26th 2010

RUB 10bn bonds placement scheduled for mid-2010

• Key Troika personnel involved includes S. Batkibekov A Karasev and A SchastlivovBatkibekov, A. Karasev and A. Schastlivov

10

Linked CIS play: Kazakhstan

Joint strategy for Kazakhstan• Joint Workshop recently held to construct a joint strategy for

developing the Kazakhstan franchise

• Professional, well respected and connected local team

Unit Reserves Share of globalreserves

Global rankingfor reserves

Oil bln bbl 40 3.2% 9Coal mln tonnes 34,000 3.4% 8

Kazakhstan is Resource Rich

• Substantial opportunity with natural fit

- Kazakhstan holds 3% of world resources

- Both Russia and China are major strategic partners

- Economy similar in structure to Russia with 85% of

,Gas bln m3 1,800 1.0% 10Iron ore mln tonnes 7,000 4.0% 13Uranium mln tonnes 1 15.0% 2Copper mln tonnes 20 2.0% 12Chrome ore mln tonnes 320 4.0% 2Zinc mln tonnes 35 8.0% 4

• At a glance China and Russia have connected interest in Kazakhstan

Economy similar in structure to Russia with 85% of exports coming from commodities

- Improving business environment

Gold tonnes 1,800 2.0% 15Manganese mln tonnes 360 7.0% 3Bauxite mln tonnes 660 2.0% 10

Mutual Interests

At a glance, China and Russia have connected interest in Kazakhstan

For Russia:

• historic cultural and business connections

• Similar economies and Russia

For China:

• Interest in securing further natural resources

• Strategic location near W t Chi f l t d

St d d B k h th i ti d it

resources

• 80% of Kazakh oil runs through Russia

• Key geographic position with world’s longest land borderChina

Kazakhstan Mongolia

Western China for close trade links, and allows access to the Caspian Sea

• Strong connected transport links

11

Standard Bank has the unique connections and capacity

to be meaningful in all three countries

AmericasAmericasEduardo Centola

Summary – Strategic objectives

• Core economies in the region: Brazil and Argentina• Core sectors: Oil & Gas, Mining & Metals, Power &

Infrastructure• Leader in cross border advisory and financing between core

economies across product lines:

– M&AP j t Fi– Project Finance

– Trade Finance– Acquisition Finance– Capital MarketsCapital Markets– Hedging and Trading

• Leader in connecting core economies:

Brazil & Argentina Africa & China– Brazil & Argentina Africa & China

2

• Brazil is the 10th largest economy in the world

Brazil – Economic overview• Brazil is the 10 largest economy in the world• The macroeconomic, political and demographic aspects are all aligned to sustain

Brazilian growth going forward• The Brazilian economy is complex, diverse and balanced, with relevant presence of all

main sectors (basic resources, industry and services)– Brazil is one of the main players in several commodities sectors

• Although exports are very relevant, increasing internal consumption is determinant forBrazilian growth potential

Macroeconomics Aspects• After a long period of economic instability, marked by high inflation rates, the Brazilian

economy has improved continuously since the creation of Plano Real in 1994y p y• During this period, the management of the macroeconomics aspects has also improved

considerably and Brazil has adopted inflation targeting and floating exchange rate regimes• As a consequence, inflation has stabilised, although in a relatively high level, and the

interest rates are decreasing to the lowest level in decades

Brazilian Inflation RateBra il’s So ereign Ratings

7.0%8.0%9.0%

10.0%11.0%

Brazilian Inflation Rate

5.69%

4.46%

5.90%

4.26%5.00%

6.00%

7.00%

8.00%

6.50%

4.50%

Brazil’s Sovereign Ratings

0.0%1.0%2.0%3.0%4.0%5.0%6.0%

BB- BB BB+ BBB-

Ba3 Ba2 Ba1

BB- BB BB+ BBB-

Ba1

Fitch

S&P

Moody’sBaa3

BBB-

BBB-

3.14%

0.00%

1.00%

2.00%

3.00%

4.00%

2005 2006 2007 2008 2009

2.50%

3

2005 2006 2007 2008 2009 2010

Sovereign Risk Rate

2005 2006 2007 2008 2009

Actual Inflation Upper and Lower Limits Target Inflation

Argentina – Economic overview

Macroeconomics Aspects• In the '90s, the Convertibility Plan ended the hyperinflationary period and kept

prices under control. However, due to the devaluation of the peso in January2002, cumulative inflation during that year reached 40% (it is important to noteth t iti it th t th A ti h t f h i ththe great sensitivity that the Argentina economy has to face changes in theexchange rate, mainly due to the fact that a major exporter of foodcommodities).

• After reaching a historical peak in the second quarter of 1998, in 2002 with afall in constant prices by almost 11% over the figure recorded the previousyear, this trend was reversed from 2003. Over the past four years, GDPyear, this trend was reversed from 2003. Over the past four years, GDPgrowth (ie growth of the country) has been approximately 6,2% per annum.

Outlook for 2010-11• The stage is set for a period of legislative deadlock and heightened

political tension as the opposition-dominated Congress the Real GDPpolitical tension as the opposition-dominated Congress the Real GDPgrowth for 2010 is expected to be 4.2% and 2.9% in 2011.

• Political pressure to sustain growth in expenditure. Further deterioration inthe public finances.

• Argentina’s main trade partners, will drive a brisk economic recovery in2010, but growth will weaken in 2011 as pre-election jitters deterinvestment and inflation erodes real incomes and dampers privateconsumption

• Despite signs of financing problems, the government continues toannounce new spending initiatives.

• Export earnings started to grow again in the fourth quarter of 2009, and inthe first two months of 2010 were up 11% year to year Recovery was

4

the first two months of 2010 were up 11% year to year. Recovery wasdriven by 35% growth in exports of manufactures of industrial origin andprimary products.

S t d O t iti E l ti f C ti G

Brazil – Internal environment & growth potentialSectors and Opportunities Evolution of Consumption Groups

46.7% 48.6% 48.9% 51.9%

11.6% 12.6% 13.6% 14.4% 15.5%

42.3%

OIL, GAS & RENEWABLES:• Brazil has become one of the major oil producers in the globe

• Considering pre-salt reserves, Brazil would become the 5thcountry with larger proven oil reserves, only behind Saudi Arabia,

30.5% 25.4% 24.6% 21.7% 18.4%

15.7%15.3% 13.3% 15.0% 14.2%

2004 2005 2006 2007 2008Classes A and B Class C Class D Class E

Iran, Iraq and Kuwait

MINING & METALS:• Brazil has demonstrated significant reserves of several important

metals

• World’s largest exporter of Iron oreFrom US$ 2,509

Classes A and BFrom US$ 581to US$ 2.508

Class CFrom US$ 420to US$ 580

Class DFrom US$ 0to US$ 419

Class E

Brazilian Growth Acceleration Program – “PAC”Unveiled in 2007 by Brazilian Government, the Growth AccelerationProgram (“PAC”) aims at improving the country’s aging infrastructure,comprising projects in areas such as sanitation water sewage and

• Country is also an important producer of non-metallic minerals

PULP & PAPER:• Brazil is the 6th largest pulp producer and the 11th largest paper

producer in the world

• Main destinies are Latin America (61%), Europe (15%), North comprising projects in areas such as sanitation, water, sewage andelectricity, as well as railroad, highway, port and housingconstruction.

In addition to a four-year investment plan (2007-2010) worth aroundUS$ 323 billion in infrastructure projects, PAC also encompassesother economic measures such as credit stimulation, the creation ofadequate regulatory frameworks and tax burden decrease for sectors

( ), p ( ),America (12%), Asia (8%) and Africa (4%)

AGRIBUSINESS:• Brazil is one of the largest agricultural producers in the world but

there are still approximately 261.9 million acres of unexploitedfarmland

adequate regulatory frameworks and tax burden decrease for sectorsthat are considered vital (capital goods, civil construction andtechnology)

Social and Urban

PAC - Investment by sector

Energy Generation

• Brazilian exports of farming products totaled US$59.4billion in2008, representing growth of 298% from 2000 to 2008

INFRASTRUCTURE:• Transportation, Ports, Energy and Telecommunication sectors are

key to Brazilian growth plan

5

Social and UrbanInfrastructure

US$ 128 billion

TransportationUS$ 47 billion

Energy Generation & TransmissionUS$ 148 billion

Argentina - Internal environment & growth potentialSectors and Opportunities • Rich in natural resources and a strong

productive agricultural sector, a majorexporter of wheat. Produces corn,soybeans and sugarsoybeans and sugar

• The meat is no longer the key exportitem as it used to be

• Argentina also exports textiles, metalsArgentina also exports textiles, metalsand chemicals. The energy sector hasbecome important thanks to innovationsin the petroleum sector

Th t l d t h i l i d t i• The steel and petrochemical industriesand telecom were privatised

• Brazil is the most important tradingcountryy

6

Trade flow – Brazil & Argentina to China & Africa

In late April, China has become Brazil’s maincommercial partner, surpassing USA who has beenin this position for the last 80 years;

Favorable perspectives for 2009: expectation of atl t i t i i th l f t i

20.191

22.793

15.921

Export Evolution Brazil & Argentina to China & Africa

19.12%9.80%CAGR

least maintaining the same volume of exports in soy(12,5 million tons) and iron ore (100 million tons);

From January to April, trade flow of Brazil x Chinahas increased 13.9% on a Y-o-Y basis, summingUS$ 10.2 billion;12 months would reach US$ 30.7billion a record so far8 69210.1708 578

11.912

7 456

10.028AfricaChina

billion, a record so far.

Given the cultural affinity and familiarity stimulatedby similar conditions of terrain and climate, Braziliancompanies have comparative advantages toparticipate in African development. The

2009

8.692

20082007

8.5787.4565.981

20062005

Import Evolution Brazil & Argentina to China & Africa

Source: MDiC & INDECI – Amounts in USD (000)

p p ptechnological level of our performance allowscompanies in sectors of medium complexity, withtheir capacity to induce, such as training,construction, agriculture, and others.

As example, the BNDES promotes the opening ofdit li t B ili i th t t t

15.911

27.148

17.713

China

CAGR 28.13%6.19%

credit lines to Brazilian companies that want toproduce in Africa.

In addition, the experience of integration betweeneconomies of same industrial level, lived inMercosul, can assist South American partners todevelop cooperation with entities of similar size in

8.465

15.76111.347

11.112

8.111

5.904

6.657

AfricaChina

7

develop cooperation with entities of similar size inAfrica, creating a multiplier effect on economic andcommercial relationship.

20092008200720062005Source: MDIC & INDECI – Amounts in USD (000)

Trade flow – Brazil to China

• Export of raw material and import of finished goods

• Oil and gas exploration, minerals and production of transportation equipments were the most profitable

Brazil Companies into China

t a spo tat o equ p e ts e e t e ost p o tab esectors of the Chinese economy in 2008

• Access to Asian market, including Japan and India

• Low processing/production cost

• Local partnershipsLocal partnerships

• Great demand and long term off-taker contract

• Lower cost of debt: plentiful funding resources

• Abundant raw materials at more competitive prices

Chinese Companies into Brazil

• Large offer of natural resources

• Cost advantages and large volumes

• Retraction in demand in both Europe and USA; places Brazil as an alternative market

• Way to access Latam and Central American markets with a larger scale

8

Standard Bank America strategic markets

Strategic Markets : Brazil & Argentina

Investment Banking

• Full platform of products and coverage sectors: 100% aligned with Global CIB

Global Markets

• Leadership and Growing position in key products: including unique expertise in commodities.

• Very profitable client franchise; growth strategy• Most capabilities based in Brazil with Regional Mandate

• Corporate Banking in Argentina: Long Term relationships now fully coordinated with IB Products and Coverage

Very profitable client franchise; growth strategy based on leveraging the new IB platform

• “EM-only” mandate: differentiation on focus and risk management capabilities.

• Capability to source illiquid assets/risks to institutional investorinstitutional investor

Personal & Business Banking

• Argentina based strategically looking at other

Principal Investment Management

• Private Equity team based in Brazil: First investment• Argentina based, strategically looking at other regional opportunities

• Critical to our local funding: SBAR has the lowest cost of funding in the local market

• Private Equity team based in Brazil: First investment completed in 2009. Strong pipeline

• Strategy include other principal investment opportunities in the region

9