Operating financial review 2007 Strong performance shows the strength and depth of our business In another strong year for global financial markets, we are pleased to report a solid performance that enabled us to deliver on all our stated financial objectives. These results demonstrate the strength and depth of our business which, together with an improved range of products, has increased our ability to attract high quality talent. Brand building continues to be a priority and, while we are an international group with our roots in South Africa, we are starting to gain increasing recognition on the international stage. On balance, all our core geographies performed well in local currencies as we increased the scale of our activities and penetrated our key markets. We continued to leverage off our platforms, with the UK and Australia performing particularly well following some of the initiatives implemented over the past four years. The UK and Australian operations posted a significant increase in attributable post-tax earnings of 55.5% and 71.4% respectively, comprising a combined 43.8% of total attributable earnings. South Africa produced a solid performance in Rands but increased marginally in Sterling because of the weak exchange rate. As a consequence, adjusted earnings per share (before goodwill and non-operating items) grew by 27.2% to 53.3 pence, from 41.9 pence, with the board recommending a final dividend of 13.0 pence per ordinary share. This brings the total dividends per share for the year to 23.0 pence, up from 18.2 pence in 2006. Balanced portfolio of businesses We continue to benefit from our balanced portfolio of business, with the majority of our businesses achieving good results. (“Operating profit” in the text below refers to profit before goodwill, non-operating items and taxation). Private Client Activities Private Client Activities reported strong growth in operating profit of 49.3% to £176.5 million. The performance of the Private Banking division was driven by strong growth in advances and non-interest income. The division continued to penetrate its core markets, with all areas of specialisation performing well. Momentum and an evolving brand supported performance, with the benefits of scale having a positive impact on bottom line. The average private client lending book grew by 24.4% to £6.5 billion and the division increased its average retail deposit book by 28.6% to £5.2 billion. Ongoing momentum supports the outlook of this business, with the focus on reinvestment and using existing strategies for scale and long-term growth. Private Client Portfolio Management and Stockbroking recorded solid growth, with the Private Client business in South Africa performing strongly and achieving an increase in average funds under management of 33.8%, to £7.6 billion. The division benefited from increased volumes, higher asset levels, new product launches and a strong focus on efficiency. Continued growth in this business will be supported by the launch of products appealing to sophisticated private clients, an aggressive approach to asset gathering through the reorganisation of client-facing teams and good market fundamentals. The Rensburg Sheppards plc integration in the UK was successfully completed and our results include Investec's 47.1% share of the directors' estimate of the post-tax profit of Rensburg Sheppards plc. Capital Markets Capital Markets (formerly Treasury and Specialised Finance) posted a significant increase in operating profit of 75.3%, to £117.3 million. Growth was underpinned by a solid performance from the division's advisory, structuring, asset creation, trading and distribution activities, with average advances increasing by 22.2% to £3.0 billion. A number of the businesses established over the past few years made meaningful contributions and increased the capability of the business in the UK. In Australia, we benefited from higher activity levels and increased scale largely as a result of the acquisition of NM Rothschild & Sons (Australia) Limited in July 2006. Looking forward, we will continue to pursue a strategy around specialist funds, with securitisation and capital markets a key focus. Investment Banking Our Investment Banking division recorded a 9.6% decline in operating profit, to £91.2 million. Corporate Finance benefited from a high level of activity from all underlying businesses across all geographies, with profits increasing by 36.9%. The improved quality of employees, clients and investment portfolios enabled a strong integrated investment banking platform with a growing market presence. The unlisted investments within the private equity and direct investments portfolios continued to perform well. However, the entrepreneurial investment component of the Direct Investment division generated less revenue than in prior years. The quality and strength of our deal pipeline and investment portfolios should continue to drive activity and sustain momentum. We strive to build value in our direct investments and private equity portfolios independently of market realisations and market conditions.