Momentum continues its strong performance - EB Nieuwoudt, Managing Director

The Momentum Group Announces Results for year ended 30 June 2006

The Momentum Group, a wholly owned subsidiary of The FirstRand Group, posted strong results for the year ended 30 June 2006.

Highlights:

Earnings:
- Normalised earnings up 23%
- Group operating profit up 38%
- Group headline earnings up 21%
- Return on equity 24.1%

Business Volumes
- Total new business up 39%
- Value of new business up 18%

Embedded value
- Return on embedded value of 31%
- Embedded value up 22%

Assets under management
- Total assets under management or administration up 31%

This robust performance was driven by solid new business inflows and meaningful growth in assets under management said EB Nieuwoudt, Managing Director of Momentum. Nieuwoudt goes on to say, We are pleased with these results, particularly in the light of a highly competitive operating environment. Momentum was able to respond to these market challenges through product innovation and strong support from financial intermediaries.

Insurance Operations
The insurance operations increased operating profit by 37% to R940 million. The strong growth in investment markets and the inclusion of earnings from new acquisitions impacted positively on the results for the year with local insurance operations increasing operating profit by an excellent 22%. The collaborative initiatives with FNB produced excellent new business growth, and resulted in a contribution of R58 million to after tax earnings. The turnaround in the losses experienced in the international operations also benefited the overall results from insurance operations.

Asset Management Operations
The groups asset management operations generated an increase in operating profit of 40% to R347 million. These sound results can be attributed to the strong increase in equity markets during the period, as well as good net inflows into unit trust funds.

In conclusion Nieuwoudt said, We are confident that Momentums focus on extracting efficiencies from existing operations, improved service levels, continued product innovation and strong distribution partnerships will continue to place us on a firm footing for sustainable growth.