Experian Consumer Credit Default Index. Monthly Update - April 2018

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Experian Consumer Credit Default Index Monthly Update - April 2018

Index Page 1 Experian Consumer Default Index () Overview What it measures? Page 2 Experian Consumer Default Index Composite & Product Level Page 3 Mosaic Segmentation What is Mosaic? Page 4 Experian Composite Consumer Default Index Mosaic Segmentation Page 5 Appendix How is the Experian calculated? Page 6 Appendix Experian readings for each Mosaic segmentation type

Experian Consumer Default Index () Overview What it measures? The Experian Consumer Default Index () is designed to measure the rate of first time default of South African consumers with Home Loan, Vehicle Loan, Personal Loan and Credit Card accounts. On a monthly basis, lenders typically classify their consumer accounts into one of several predetermined payment categories to reflect the level of arrears. When a lender deems the statement balance of a consumer account to be uncollectible due to it being in arrears 90 or more days or statuses such as repossession, foreclosure, charge-off or write-off, the consumer account is said to be in default. The index measures the sum of first-time (accounts that have never) defaulted balances as a percentage of the total sum of balances outstanding. Published on a monthly basis, with a 2 month lag, the indices include a composite index that measures performance across Home Loan, Vehicle Loan, Credit Card and Personal Loan accounts. In addition, there are also 4 product specific sub-indices. Each of the indices are also determined at Mosaic segmentation level to provide further insight into the dynamics faced by specific consumer segments that are experiencing different stress due to macro forces such as unemployment, interest rate changes and economic growth. Consumers with Credit Card, Personal Loan, Vehicle Loan and/or Home Loan 17,6m Trillion in Outstanding Debt 14,1m Active accounts across Credit Card, Personal Loan, Vehicle Loan and/or Home Loan R1,52 Page 1

Experian Composite & Product Level Experian Consumer Default Index Composite = % Never Default Balances that Defaulted in the last 3 Months MONTHLY HIGHLIGHTS Overall index improved from 3.40% in Feb 2017 to 3.28% in Feb 2018, but tracking higher than the 3.19% recorded for Jan 2018. Experian Consumer Default Index Product Level = % Never Default Balances that Defaulted in the last 3 Months MONTHLY HIGHLIGHTS Month on month and year on year deterioration in Vehicle Finance and Credit Card. Experian Feb 18 Feb 17 Average Outstanding Dec 17 - Feb 18 New Default Balances Dec 17 - Feb 18 Composite Index 3,28 3,40 1,526,870,133,599 12,525,296,440 Home Loan Index 1,49 1,90 795,023,607,295 2,968,011,634 Vehicle Loan Index 3,48 2,83 387,278,341,520 2,899,596,833 Credit Card Index 6,14 5,96 100,549,783,077 1,543,815,993 Personal Loan Index 7,62 8,00 244,018,401,708 4,646,029,113 Page 2

Mosaic Segmentation What is Mosaic? Experian Marketing Solutions Mosaic SA is a consumer lifestyle segmentation system that classifies the South African population and enumeration areas into 36 unique types and 9 overarching groups, providing a 360-degree view of consumers choices, preferences and habits. This classification system paints a rich picture of SA consumers and their socio-demographics, lifestyles, behaviours, and culture, providing marketers with the most accurate and comprehensive view of their customers, prospects, and markets. Mosaic SA offers a common customer language to define, measure, describe and engage target audiences through accurate segment definitions that enable more strategic and sophisticated conversations with consumers. All of the indices are also determined at Mosaic segmentation level to provide further insight into the dynamics faced by specific consumer segments that are experiencing different stress due to macro forces such as unemployment, interest rate changes and economic growth. Group Description Type Description A Wealth To Do 9,84% A1 A2 A3 A4 A5 Midlife Cruisers Secured Affluence Hard-working Money Platteland Progressives Prosperous Pensioners 0,70% 2.65% 2,83% 2,57% 1,09% B Up-and-Coming 4,37% B6 B7 B8 B9 Upwardly Mobile Would-be Wealth City Convenience Student Digs 1,04% 0,84% 1,47% 1,02% C Township Traditionalists 7,56% C10 C11 C12 Diligent Settlement Households Adult Township Families Elderly-headed Homes 2,23% 2,21% 3,11% D Loyal Labourers 7,84% D13 D14 D15 D16 D17 In the Family Manufactory Middle Class Farmworking Communities Senior Migrant Farmhands Migratory Hard Labour 1,85% 1,30% 2,51% 0,74% 1,44% E Blue-collar Communities 18,43% E18 E19 E20 E21 E22 E23 Generational Township Family Middle-aged Marginalists Coastal Low-wage Households Informal Country Tenants Breadline Families Modest Township Living 4,43% 3,18% 3,66% 3,46% 2,23% 1,39% F Young Urban Survivors 9,28% F24 F25 F26 Migrant City Settler Indigent Township Families Single Room Landlords 1,53% 3,86% 3,89% G State Dependents 11,46% G27 G28 G29 G30 Sustainable RDP Families Poor RDP Households Impoverished Grant Reliants Penniless Grant Transients 4,14% 3,08% 2,27% 1,97% H Rural Traditionalists 17,97% H31 H32 H33 Eastern Tribal Gap Households Inland Traditional Gap Households Senior Single Traditionalists 7,07% 6,88% 4,03% I Outskirts Families 13,24% I34 I35 I36 Borderline Gap Households Baseline Gap Families Minimum Wage Rural Families 7,28% 2,82% 3,14% *percentages relate to proportion of SA population and not the index value per segment Page 3

Experian Mosaic Segmentation Experian Composite Consumer Default Index Mosaic Segmentation = % Never Default Balances that Defaulted in the last 3 Months 3,28% of balances on an annualized basis defaulted for first time over the period Dec 2017 to Feb 2018 R12,52bn in value defaulted for first time over the period Dec 2017 to Feb 2018 Experian Feb 18 Feb 17 New Default Balances Dec 17 - Feb 18 Composite Index 3,28 3,40 12,525,296,440 Mosaic type A03 - Largest credit exposure 2,68 2,99 1,326,131,678 Mosaic type A02 - Lowest 1,84 1,97 854,709,200 Mosaic type E20 - Highest 7,04 7,24 523,883,839 Geospatial & Mosaic Insights Province & Rank 1. Western Cape 2. Gauteng 3. Eastern Cape 4. Northern Cape 5. KwaZulu-Natal 6. Free State 7. Mpumalanga 8. North West 9. Limpopo Best Good Average Bad Worst 2,28 3,00 3,38 3,58 3,67 3,77 3,94 4,15 4,20 Mosaic type A03 - Largest Credit Exposure Mosaic type A02 - Lowest Mosaic type E20 - Highest A03 Hard Working Money Middle-aged educated families, with a mid to high income living in the suburbs around industrial and mining areas recorded an improved of 2.68% in Feb 2018 compared to the 2.99% in Feb 2017. A02 Secured Affluence Mature, well educated, wealthy couples living in free-standing high-value established homes in city suburbs recorded the lowest of 1.84% in Feb 2018 which was an improvement on the 1.97% recorded in Feb 2017. G29 Impoverished Grant Reliants Families with children relying on government grants and living rent-free in informal dwellings in residential areas recorded the best year on year improvement in from 5.26% in Feb 2017 to 3.97% in Feb 2018. E20 Coastal Low-wage Households Large young households with a high unemployment rate, living in small low-value coastal township properties were the worst performing segment with a of 7.04% in Feb 2018 compared to the 7.24% recorded in Feb 2017. E23 Modest Township Living Mixed-age, minimum wage, extended families, living in their own small shacks or poor quality housing in cities and towns recorded the worst year on year deterioration moving from 3.09% in Feb 2017 to 3.72% in Feb 2018. Page 4

Appendix How is the Experian calculated? A cleaner way to look at consumer credit trends: new, incremental default rates Published monthly, each index is based upon the following core metric: percent of open, outstanding credit newly in default in the most recent month Core Metric for March SUM OF March balances for accounts that first default in March March balances for open accounts never defaulted, unless it occured in March The index is the 3-month, balance-weighed moving average of the core metric, Index Value for March Core Metric numerators for January, February, March 12 X SUM OF Core Metric denominators for January, February, March An index of 8.1751 means: annualized rate of 8.1751% of never-defaulted balances defaulted in the recent three months Page 5

Appendix Experian readings for each Mosaic segmentation type MOSAIC Average Outstanding New Default Balances Feb 18 Dec 17 Dec 17 - Feb 18 Dev 17 - Feb 18 A1 A2 A3 A4 A5 Midlife Cruisers Secured Affluence Hard-working Money Platteland Progressive Prosperous Pensioners 1,96 1,84 2,68 2,78 2,49 2,14 1,97 2,99 2,77 2,35 112,294,865,378 185,534,099,139 198,022,420,629 71,838,592,396 25,166,429,656 183,181,978 284,903,067 442,043,893 166,523,626 52,228,636 B6 B7 B8 B9 Upwardly Mobile Would-be Wealth City Convenience Student Digs 2,24 3,13 2,09 3,27 2,06 3,79 2,19 3,37 119.279.958.464 57.906.248.628 95.227.709.611 15,263,912,151 222,410,215 150,814,995 166,049,491 41,630,834 C10 C11 C12 Diligent Settlement Households Adult Township Families Elderly-headed Homes 3,68 4,22 3,72 3,97 4,37 3,92 67,129,343,607 26,265,354,767 47,991,912,136 205,656,041 92,299,020 148,713,662 D13 D14 D15 D16 D17 In the Family Manufactory Middle Class Farmworking Communities Senior Migrant Farmhands Migratory Hard Labour 3,85 4,86 3,20 4,08 4,39 4,09 5,30 2,69 4,70 4,27 103,226,011,587 34,699,663,352 25,166,680,824 2,956,259,019 8,242,041,445 330,777,062 140,403,404 67,033,071 10,042,258 30,158,093 E18 E19 E20 E21 E22 E23 Generational Township Family Middle-aged Marginalists Coastal Low-wage Households Informal Country Tenants Breadline Families Modest Township Living 5,97 5,74 7,04 6,26 4,24 3,72 6,23 6,52 7,24 6,62 4,63 3,09 17,101,626,259 12,445,176,144 29,765,584,291 10,714,761,637 18,492,421,020 2,428,968,043 85,015,726 59,505,288 174,627,946 55,890,342 65,346,526 7,537,688 F24 F25 F26 Migrant City Settler Indigent Township Families Single Room Landlords 4,10 6,82 6,68 4,89 7,51 6,77 25,532,301,254 8,620,953,266 24,321,173,840 87,206,939 48,999,202 134,891,304 G27 G28 G29 G30 Sustainable RDP Families Poor RDP Households Impoverished Grant Reliants Penniless Grant Transients 6,57 6,39 3,97 4,96 6,32 6,38 5,26 5,02 11,343,528,245 10,818,027,356 1,344,455,680 1,930,922,193 62,120,701 57,613,627 4,444,394 7,979,091 H31 H32 H33 Eastern Tribal Gap Households Inland Traditional Gap Households Senior Single Traditionalists 5,89 5,15 4,10 6,49 5,28 4,71 2,299,501,246 8,291,907,868 1,451,993,550 11,279,443 35,597,150 4,959,091 I34 I35 I36 Borderline Gap Households Baseline Gap Families Minimum Wage Rural Families 4,39 4,38 6,99 4,72 5,26 6,68 13,446,495,659 6,517,899,643 2,106,343,985 49,208,249 23,776,606 12,272,362 Page 6