A positive business environment provides strong growth

RMBH delivers excellent growth with -
* Normalised Earnings +24%
and
* Dividends+21%

Separately listed RMBH (R29,3 billion market capitalisation at end June 2006) has interests in:-
Banking and insurance giant FirstRand (33%);
Personal lines insurer OUTsurance (63%);
Specialist insurer RMB Structured Insurance (80%); and
Short-term insurance broker Glenrand M.I.B (16%).

FINANCIAL HIGHLIGHTS

RMBHs key financial highlights for the year to 30 June 2006 are:-

Headline earnings per share+ 18% to247,6c (2005 : 209,7c)
Normalised earnings per share+ 24% to251,0c (2005 : 201,8c)
Dividend per share+ 21% to113,5c (2005 : 94,0c)

RMBH Chairman GT Ferreira commented that, A positive economic environment provided strong organic growth opportunities for Group companies. What was particularly pleasing was the strong growth in operational earnings reported by group entities.

He highlights the following excellent headline earnings growth

At FirstRand
*FirstRand Banking Group + 25% to R7 049m
*Momentum Group+ 21% to R1 534m
OUTsurance+ 24% toR 369m
RMBSI+ 31% to R 71m

and highlights that some 15% of RMBHs earnings and dividends are now derived from sources other than FirstRand.

Ferreira points out that the progression from this strong operational performance to reported earnings could potentially be clouded by:

The impact on RMBH of BEE transactions concluded by group companies;
The transition to IFRS at both RMBH and FirstRand.
The return of R1,2 billion surplus capital (100 cents per share) to RMBH shareholders in November 2005.

Factors such as the elimination effect of deemed treasury shares in both RMBH and FirstRand held for the benefit of policyholders give rise to non-operational and accounting anomalies. In its review of results, FirstRand sought to isolate those accounting anomalies and focused on Normalised Earnings as a truer and more appropriate / enduring method of reporting operational performance. RMBH agrees with such approach and made similar and consequential adjustments to arrive at the following unaudited operational trend for the year ended 30 June 2006:

Normalised Earnings+24% toR2 982m(2005 : R2 397m)
- per ordinary share +24% to251,0c(2005 : 201,8c)

RMBH believes this to be a more appropriate basis against which to measure future performance.

OPERATIONAL HIGHLIGHTS

Said Ferreira, This reporting cycle again underscored the value that can be produced by our diversified portfolio of financial sector investments.

FirstRand

The positive economic environment provided a basis for strong organic growth for all FirstRands businesses.

Within the FirstRand Banking Group-
RMB delivered a particularly outstanding performance, with much of its growth being driven by the excellent performance of its equity related businesses.
The strong performances by FNB and WesBank were driven in part by significant consumer credit demand (particularly for asset backed finance) increased customer numbers and transaction volumes. In addition, the implementation of a number of innovative growth strategies across all the businesses created additional organic growth.

Momentum Group delivered strong results in what remained a challenging operating environment. The combination of buoyant equity markets and the continued success of Momentums distribution model, resulted in a significant increase in lump sum investment inflows. Sales of recurring premium risk policies continued to also show strong growth.

Discovery Group enjoyed another year of excellent growth, characterised by a solid performance by Discovery Health and better than expected growth in new business at Discovery Life and PruHealth. On the back of strong cash flow generation, Discovery declared a maiden dividend.

Short-term Insurance Interests

OUTsurance posted excellent results for the year with:

Net earned premium income increasing by 24% to R2,1bn; while
Headline earnings increased by 24% to R369m (2005 : R297m).

OUTsurances personal lines business achieved this strong and profitable growth in the face of:
Higher loss ratios caused mainly by more rain induced damage during the current year; and
Investment in the risk assessment and administration backbone that OUTsurance is providing for the Momentum groups entry into the short-term market through that groups broker based distribution channel.

New business volumes from all sources continue to be encouraging. Given the dramatic drop in the underwriting profits reported by most of OUTsurances competitors, the expected hardening of premium rates is beginning to materialise.

Ferreira believes that, As a result of OUTsurances disciplined approach to underwriting, it should be well placed to benefit as this process plays out.

RMB Structured Insurance reported an exceptional outcome with a 31% increase in headline earnings, which amounted to R71m. This arose from:
Strong growth in premium income in the groups consumer protection business, driven by booming retail sector activity;
and increased management fees earned on its investment portfolios which benefited from strong equity markets.

The challenging market circumstances in which 16% held Glenrand M.I.B found itself have continued in the year under review. Revenues from continuing business have remained static as a result of lost business and a soft market that exerted downward pressure on commission based fees.

Glenrand M.I.B reported a headline earnings loss of R29m (2005 : + R10m).

OUTLOOK

Ferreira believes that South Africa remains in a structurally lower interest rate and inflation environment and that our economic prospects remain positive. The higher levels of interest rates that we are experiencing in the short term will have some dampening effect on consumer credit demand. However, strong public and private sector fixed investment leading up to 2010, together with increased BEE activity and consumption demand, should underpin future growth.

He expects the cycle of interest rate increases experienced from June 2006 onwards, to result in the low levels of bad debts experienced by FirstRand Banking Group over the last few years to trend back up to the long-term target ranges.

In Ferreiras opinion, The Banking Groups challenge going into 2007 will be to maintain robust asset growth while managing expected increases in bad debt levels.

He believes that, barring any unforeseen circumstances, the existing strategies of the Group and diversified income streams generated from the underlying business units positions the Group to achieve its stated objective of 10% real growth for the year to 30 June 2007.