Outlined below is the historical information on the Absa and Barclays transaction which took place in 2005 between Absa Group and Barclays Bank of the United Kingdom.

Barclays Transaction 20 May 2005

In line with Absa’s commitment to the creation of long-term value for all stakeholders, the board of directors of Absa has adopted as a strategic imperative, the development of Absa into the leading financial services business in South Africa and the pre-eminent bank on the African continent. In so doing, we have recognised that partnering with a significant global player, while reinforcing our South African roots, would be an important element of this strategy.

Barclays, as a major global bank with extensive interests in Africa, is an ideal partner, and shares Absa’s strategic imperative. Importantly, it also has significant experience in regional partnerships, holding stakes in banks in a number of markets while retaining and respecting minority interests.

The Absa Board of Directors believes that Barclays will offer Absa the benefit of a stable and committed shareholder whose expertise, financial strength and global positioning will be of major benefit to Absa and Absa’s stakeholder groups. The key benefits to Absa’s business operations can be summarised as follows:

• Access to world-class product ideas and business processes across various banking sectors
• Partnering with a global leader in the important corporate banking sector
• A unique opportunity to consolidate the African operations of Barclays and Absa to create a significant banking network in sub-Saharan Africa
• Ensuring that the standards we set for our local operations continue to measure up to global standards

The recommended acquisition, if successful, will:

• Enable Absa shareholders to realise an attractive return on their investment by disposing of a portion of their Absa shares following a significant re-rating of the South African banking sector in general and Absa in particular
• Afford Absa shareholders the opportunity to continue to participate in the future economic benefits that are expected to arise from the combined Barclays and Absa operations, by retaining the balance of their shares

Barclays and Absa have confirmed that they intend maintaining the listing of Absa’s ordinary shares on the JSE, with an adequate free float to ensure a liquid market for Absa shares.

This opportunity also holds significant benefits for Absa’s other stakeholders including:

• The recommended acquisition is good for customers as it gives them more choice from the best of Absa and the best of Barclays. Customers can expect a broader range of products and services, with an enhanced focus on delivery, and access to a wide network of offices and support internationally and across Africa
• The recommended acquisition is a tangible vote of confidence in the future and the potential of South Africa and the greater Africa, reflecting South Africa’s significant political, economic and social progress over the past 11 years. It affirms South Africa’s position as a growing and solid financial centre and a platform for African development
• The recommended acquisition is based on sound business practices, combining Absa’s leading local and retail franchise with the strength of a global bank to create the pre-eminent bank in Africa
• The recommended acquisition will further enhance Absa’s transformation programme as it embraces the principle of growth and Absa’s values in creating Africa’s pre-eminent financial services organisation. As Absa grows so too will the job opportunities, including international career opportunities. All changes will be founded on the principle of consultation and the process will be fair, open and transparent

In summary, therefore, the recommended acquisition holds the following key benefits:

• It enables Absa to accelerate its growth strategy
• It releases and enhances value for Absa’s current shareholders
• It is a positive development for South Africa and, indeed, the rest of Africa

The transaction structure is designed in such a way as to meet the interests of all shareholders and to ensure equality of treatment of all shareholders.

This is a significant opportunity, and Absa would be proud to be the first South African bank to be the African partner of a major global bank. Accordingly, the Absa board of directors recommends that Absa shareholders vote in favour of the scheme and necessary resolutions to be proposed at the general meeting, and, to the extent that they are able, to accept the recommended offer.

The board encourages shareholders to be present at the scheme and general meetings at which shareholders will be afforded the opportunity to participate in discussions relating to the recommended acquisition. Accordingly, I look forward to welcoming you at the scheme and general meetings. If shareholders are unable to be present at either the scheme or general meetings, the board encourages shareholders to submit proxies.

Yours sincerely

D C CRONJÉ Chairman.