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AFRICAN BANKING CORPORATION

Results Presentation for the Half Year ended 30 June 2008

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Agenda

Economic Environment

Financial PerformanceOverviewIncome statement reviewBalance sheet review

OutlookStrategic shiftChallenges & outlookCapitalisationDividend

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CountryGDP

(USDm) 2008

GDP Growth rate2008

( projected)

Banking Deposits (USDm)

2007

Banking Credit

(USDm) 2007

Banking Assets

(USDm) 2007

Population2006 est (m)

Botswana 11,716 5.2% 5,076 2,238 6,751 1.7

Mozambique 10,046 7.6% 2,400 1,200 3,100 20

Tanzania 19,541 7.8% 4,341 2,513 5,903 38.2

Zambia 11,918 7.0% 2,194 1,497 3,500 11.9

Zimbabwe* 1,500 -7.0% 95 32 225 11.7

Sources: - IMF – World economic outlook database: April 07 -Central Banks statistics

*2006

ECONOMIC ENVIRONMENT & INDUSTRY ATTRACTIVENESS

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Economic environment

World economic Growth is expected to slow down due to the credit crisis in the US and other Developed Countries.Real GDP growth for all the Southern African Countries, with the exception of Zimbabwe is expected to be higher than 5% in 2008Commodities boom largely responsible for the GrowthInflation is expected to soar largely due to increase in food and Oil pricesBanking assets continue to growBotswana has the highest GDP per Capita and highest banking assets per CapitaPositive interest rates ( Except in Zimbabwe)Relative stability for all currencies ( except Zimbabwe)Zimbabwe in a hyper inflationary environment, June inflation at 11.2 million percent!!

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ECONOMIC ENVIRONMENT– Exchange Rates

ZWD and MZM revalued in 2006ZWD Old Mutual implied rate

To 1 BWP 30 Jun-08 31 Dec-07 30 June-07

United States Dollar 0.15 0.17 0.16

Mozambique Metical 3.96 4.30 4.19

South African Rand 1.20 1.13 1.14

Tanzania Shilling 180 191 202

Zambian Kwacha 494 640 610

Zimbabwe Dollar 24.9 billion 822,765 23 637

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ECONOMIC ENVIRONMENT– Exchange Rates

•ZWD Old Mutual implied rate•ZWD revalued in August 2008 (10 zeroes removed)

To 1 US dollar 30 Jun-08 31 Dec-07 30 June-07Botswana Pula 6.53 6.02 6.17

Mozambique Metical 24.05 25.67 26.03

South African Rand 7.83 6.81 7.03

Tanzania Shilling 1 173 1 146 1 246

Zambian Kwacha 3 225 3 850 3 765

Zimbabwe Dollar 162.6 billion 4,948,961 145 906

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Economic Environment – Inflation & Interest Rates

Country

Inflation Rate

June-2008

Avg. TB Yield Rate*June-2008

Avg or Prime

Lending Rates 2008

Avg. Prime Lending

Rates 2007

Botswana 14.5% 12.11% 16.2% 16.2%

Mozambique 10.4% 13.50% 20.1% 20.1%

Tanzania 9.3% 6.70% 13.6% 14.4%

Zambia 12.1% 11.32% 24.3% 25.0%

Zimbabwe 11,2 m% 340%** 4,200% 559.0%

* 90 day* 1 year

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FINANCIAL PERFORMANCE

Overview

Income Statement Review

Balance Sheet Review

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FINANCIAL PERFORMANCE - Overview

Attributable profit up by 50% from BWP 55.3m to BWP 82.6m

Net asset value up by 66% and 31% to BWP 410 million from June 2007 and December 2007 respectively

Return on equity of 46% compared to 43% achieved in prior year

Net interest income for financial operations up by 68% from BWP 53.7 million to BWP 90 millionCost to income ratio down to 46%

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FINANCIAL PERFORMANCE - OverviewBalance sheet growth of 24% and 14% from June 2007 and December 2007 respectively to BWP 3.3 billion

Loans and advances up by 49% and 30% from June 2007 and December 2007 respectively to BWP 1.6 billion

Deposits increased by 26% and 16% from June 2007 and December 2007 respectively to BWP 2.3 billion

Strong results across the boardDividend of 8 Thebe per share

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FINANCIAL PERFORMANCE: Salient Features

BWP’000June 08

% change

June 07 Dec 07

Attributable profits 82,660 50% 55,287 123,523Basic EPS (Thebe) 57.5 38% 41.7 95.3Dividend per Share ( Thebe) 8 - - 14

Cost to income ratio 46% 10% 51% 47%Net asset value 410,275 65% 247,968 313,813NAV per share 2.85 52% 1.87 2.37Total Assets 3,338,405 24% 2,683,540 2,930,121

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Financial Performance - Five year earnings overview

ATTRIBUTABLE PROFIT (BWPm) and R.O.E. (%)6 months to 30 June

84

18 24

4755

20%

30%

22%

46%43%

-102030405060708090

2004 2005 2006 2007 20080%

10%

20%

30%

40%

50%

Profit R O E

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FINANCIAL PERFORMANCE: Profit per Subsidiary

BWP’000s June 08 % contribution June 07 % contribution

ABC Botswana 5,968 12% 7,202 42%

ABC Mozambique 7,340 14% 4,697 27%

ABC Tanzania* 3,606 7% (1,688) -10%

ABC Zambia 877 2% (1,576) -9%ABC Zimbabwe 29,816 58% 8,025 46%Microfin Zambia 3,833 7% 611 4%

Financial institutions 51,440 100% 17,271 100%ABCH & Other 32,353 37,605**

TOTAL 83,793 54,876*Adjusted for minority interest & includes TDFL**Prior year adjustments( application of hedge accounting)

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INCOME STATEMENT REVEIW

All Banking operations are profitableAll operations except ABC Botswana posted results that are better than what was achieved last yearBotswana affected by impairments of BWP 8.3 largely due to one client

All key performance indicators for ABCB are very positive

Mozambique, Tanzania and Zimbabwe posted very strong results

Financial operations outside 42% ( BWP 21.6 million) to this segmentWhile Zambia is profitable its performance is not satisfactoryMassive depreciation of the Zimbabwe dollar

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INCOME STATEMENT REVEIW

NII declined by 11% to BWP 107.3m

Massive depreciation of the Zimbabwe dollar

Huge increase in non interest earning assets in Zimbabwe

Cost of additional Tier II capital still a burden, but now reversing as capital is fully leveraged

NII covered 67% of costs, down from 81% in 2006

Botswana contributed 27% to NII, up from 17% in prior year

Zimbabwe contribution to NII declined by over 100%

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INCOME STATEMENT REVIEW

Mozambique contribution increased from 17% to 22%

Zambia and Tanzania registered growth albeit off a low base

Non-interest revenue increased by 37% to BWP 231.7m.

Operations outside Zimbabwe contribution to non-interest revenue up from 43% in 2006 to 48%

Impairments charge of BWP 32.9m up 25% compared to 2006. Botswana and Zambia most affected.

Significant write backs in Botswana.

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INCOME STATEMENT REVIEW – Total income

BWP’000sJun 08

% contribution Jun 07

% contributionDec 07

% contribution

ABC Botswana 25,753 12% 22,67016% 50,67616%

ABC Mozambique 24,251 11% 16,57312% 41,87614%

ABC Tanzania* 20,905 9% 9,3607% 36,43012%

ABC Zambia 18,991 9% 12,6359% 30,27510%

Microfin Zambia 20,536 9% 10,6468% 28,6469%

ABC Zimbabwe 47,806 22% 13,255 10% 39,386 13%

Total Fin OPS 158,242 72% 85,13962 227,28974%

ABCH and other 62,296 28% 53,27238% 82,16526%

TOTAL GROUP 220,538 100% 138,411 100% 309,454 100%

*Including TDFL

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INCOME STATEMENT REVIEW – Net interest income

BWP’000s Jun 08%

contributionJun 07 %

contribution Dec 07 % contribution

ABC Botswana 18,18824% 12,77823% 29,48327%

ABC Mozambique 13,66818% 10,98220% 23,26922%

ABC Tanzania 11,61415% 6,00011% 13,69913%

ABC Zambia 10,92515% 6,54512% 16,11615%

Microfin Zambia 22,62831% 13,78725% 28,86827%

ABC Zimbabwe 12,827 17% 3,592 7% 15,429 14%

Total Fin OPS 89,850120% 53,68498% 126,864118%

ABCH and other (14,691)(20%) 1,1682% (19,576)(18%)

TOTAL GROUP 75,086 100% 54,852 100 107,288 100%

*Including TDFL

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INCOME STATEMENT REVIEW – Net interest income

BWP’000s Ave. Yield on IEA Ave. Cost Spread

ABC Botswana 11.0% (9.7)% 1.3%

ABC Mozambique 13.2% (7.9)% 5.4%

ABC Tanzania 11.2% (7.5)% 3.7%

ABC Zambia 12.1% (7.1)% 4.9%ABC Zimbabwe 24.1% (3.6)% 20.5%Microfin Zambia 71.0% (27.1)% 43.9%

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INCOME STATEMENT REVIEW – Other income

BWP’000s Jun 08%

contributionJun 07 %

contribution Dec 07 % contribution

ABC Botswana 15,752 9,602 21,193

ABC Mozambique 10,853 8,701 18,606

ABC Tanzania* 11,160 5,160 23,625

ABC Zambia 10,851 9,058 14,160

Microfin Zambia 34 (115) (222)

ABC Zimbabwe 34,980 9,759 23,973

Total Fin OPS 83,630 42,165 101,335

ABCH and other 74,461 41,611 130,406

TOTAL GROUP 158,091 83,776 231,741

*Including TDFL

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Excluding impairmentsOther income still the main income driverNII income covers 67% of costsLeverage of new capital should change the dynamics in 2008

INCOME STATEMENT REVIEW: Total income composition

34%

43%

47%

42%

32%

66%

57%

53%

58%

68%

2003

2004

2005

2006

2007

NII

Other income

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INCOME STATEMENT REVIEW: Operating expenditure

Cost to income ratio

47%49%

66%75%

80%

2003 2004 2005 2006 2007

Cost to income ratio down due to a combination of: • Zimbabwe dollar depreciation• cost containment

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INCOME STATEMENT REVIEW: Operating expenditure

Cost to income ratio at an all time low of 47%

Operating expenditure up 10% to BWP 160m

Sustained cost containment throughout the group

Pula costs in Zimbabwe lower due to the ZWD depreciation

Head count at 395 compared to 337 prior year; employee costs accounted for 54% compared with 57% in 2006

Marketing costs set to increase in support of growth targets and retail roll out

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Total employee costs up from BWP82m to BWP87 mEmployee costs 54% of total costsStaff compliment of 395 (2006: 337)Head count set to increase significantly in 2008

Head count per Operation

37 4333 41

2838

86

109

142153

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Botswana Mozambique Tanzania Zambia Zimbabwe ABCH

2006 2007

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BALANCE SHEET REVIEW

Balance sheet grew by 20% from BWP 2.4 billion to BWP 2.9 billion

Loans and advances increased by 33% to BWP 1.25 billion in line with group’s aggressive asset growth ambitions

Deposits up by 28% to BWP 1.96 billion; Botswana contributed 51% to total deposits

NAV up by 15% to BWP 313.8m compared to Dec 2006

Zimbabwe FCTR up BWP 104m in 2007

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20% balance sheet growth compared to December 06 sustained balance sheet growth since 2003Compound annual growth rate of 21.01%

BALANCE SHEET REVIEW: Total Assets

Total Assets (BWPm)

1,366,5721,724,426 1,887,361

2,447,135

2,930,122

2003 2004 2005 2006 2007

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28% growth in Deposits Botswana continues to lead and breached the BWP 1 billion mark Very good growth in Tanzania & Zambia, albeit from a low base

BALANCE SHEET REVIEW: Geographic split of deposits

Zimbabwe1%Microfin

3%Zambia9%

Tanzania18%

Mozambique21%

Botswana51%

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BALANCE SHEET REVIEW: Loans and advances

Net loans increased by 33% from December 2006All subsidiaries registered growthOverall compound annual growth rate of 28.81%

453609 509

9411247

0

500

1000

1500

2003 2004 2005 2006 2007

Loans & Advances (BWPm)

Net loans

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BALANCE SHEET REVIEW: Geographical Split of Loans

BWP m

Microfin: 67m: 5%

Zimbabwe: 5m:0%

Zambia: 195m: 16%

ABCH & Other:83m: 7%

Botswana: 486m: 39%

Mozambique: 215m: 17%

Tanzania: 196m: 16%

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BALANCE SHEET REVIEW: CapitalBWP’000 Capital*

Dec-07FCTR

Dec-07Capital*

Dec-06FCTR

Dec-06

ABC Botswana 99 856 - 98 559 -

ABC Mozambique** 104 712 (7 789) 63 902 (7 016)

ABC Tanzania** 96 601 7 231 21 292 6 432

ABC Zambia*** 99 079 6 002 58 277 (1 782)

ABC Zimbabwe 110 035 (405 766) 105 767 (301 902)

*Including Tier II**Including TDFL***Including Microfin

Zimbabwe FCTR up BWP104m since Dec 06

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BALANCE SHEET REVIEW: Capital Adequacy

Dec 07 Dec 06

Botswana 18% 30%

Mozambique 44% 31%Tanzania 28% 20%Zambia 29% 27%ABC Zimbabwe 26% 23%

Healthy capital adequacy ratios in all subsidiaries due to injection of capital & prudent capital preservation in Zimbabwe

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Directors propose a dividend of 14 thebe (ZWD 529,839.00) per share

Dividend cover of 6.9 times

DIVIDEND

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CAPITALISATION

IFC subscription of 13.9 million shares, bringing shareholding to 10.7% in January 2008IFC Convertible loan still to be drawn downCVCI approved investment of USD 25 million on terms broadly similar to IFC convertible loan

Directors evaluating hybrid offer: rights issue and private placement

Group well positioned for sustained growth

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OUTLOOK: STRATEGIC SHIFT OVER THE NEXT 12 MONTHS

Group embarking on an ambitious growth path driven by:

retail banking roll out

branch network expansion

introduction of e-banking

mortgage finance

Consumer banking (debit cards, credit cards, auto loans)

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Acquisition of profitable assets

Deposit mobilization remains a key focus area for the group, particularly in ZambiaChanging the business model –People, processes, systems and culture Retail banking structure in place from 3rd quarter of 2008Branch profitability: 12 months to 24 months

OUTLOOK & CHALLENGES

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Thank you