New Impala Bond Offering:

Scottish Widows plc

September 2013

Agenda

pg 2

▪ Performance of the existing Impala bonds: LSE 4.75% and Barclays 14% Floating Rate Notes

▪ Brief overview of Scottish Widows plc business and credit

▪ Introduction to the £850m Scottish Widows 5.5% 2023 bond

▪ New launch – opportunity to invest

1. Impala Scottish Widows RPI linked bond

– Bond terms

– Summary of the investment opportunity

2. Impala Scottish Widows Floating Rate Note

– Bond terms

– Summary of the investment opportunity

▪ Liquidity in the secondary market

▪ Appendices

I. Relative performance – existing Impala FRNs vs. short duration fixed income alternatives

II. RPI linked bond comparisons

III. Investec credentials

▪ Contact details

Bonds converted to Impala Floating Rate Notes

pg 3

FRN Secured by LSE 4.75% 2021* FRN Secured by Barclays 14% 2049*

Issuer Investec Bank plc Investec Bank plc

Format Secured Secured

Security LSE 4.75% 2021 Senior Unsecured BACR 14% 2019 Perpetual Jr. Subordinated

Security Rating Baa2 / A- Ba1 / BBB-

ISIN GB00B8CQ6M56 XS0894194769

Maturity Date 2nd November 2021 Perpetual with Issuer call option on 15 June 2019

Issue Price 100.00 100.00

Coupon 3 Month GBP Libor + 2.73%

3 Month GBP Libor + 4.90% to 15 June 2019,

then

3 Month GBP Libor + 13.00% thereafter

Coupon Frequency Quarterly Quarterly

Denomination £1k plus increments of £1k thereafter £100k plus increments of £1k thereafter

Listing London Stock Exchange London Stock Exchange

Settlement Euroclear Euroclear

Pricing Bloomberg & London Stock Exchange Bloomberg & London Stock Exchange

Current price (Bid / Offer) 107.93 / 109.02 102.71 / 103.60

Performance of the existing Impala bonds: LSE and Barclays FRNs

pg 4

Impala LSE FRN price performance vs fixed rate bond

Impala Barclays FRN price performance vs fixed rate bond

In a rising interest rate

environment Impala

FRNs have outperformed

underlying fixed rate

bonds...

and most alternative fixed

income investments

1.60

1.80

2.00

2.20

2.40

2.60

2.80

100

102

104

106

108

110

112

Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13

9 y

ear

inte

rest

rat

e s

wap

( %

)

Bo

nd

pri

ce (

£)

LSE 4.75% 2021 (LH) Impala LSE FRN (LH) 9 year interest rate swap (RH)

0.90

1.10

1.30

1.50

1.70

1.90

92

94

96

98

100

102

104

106

Apr-13 May-13 May-13 Jun-13 Jun-13 Jul-13 Jul-13 Aug-13 Aug-13 Aug-13

6 ye

ar in

tere

st ra

te s

wap

(%

)

Bond

pri

ce (£

)

BACR 14% 2019/Perp (LH) Impala BACR FRN (LH) 6 year interest rate swap (RH)

Overview: Scottish Widows plc

pg 5

▪ A leading UK Life & Savings company

▪ Very strong brand with a track record stretching back to 1814

▪ A wholly owned, indirectly-held subsidiary of Lloyds TSB Bank Plc, benefitting from distribution and cost synergies

▪ Diversified distribution: Lloyds client base, IFA’s and direct

▪ Diversified product mix: Corporate pension, Annuities, Protection, Individual pension, Savings & Investments

▪ High quality assets with 96% of the portfolio rated above BBB- with an average credit rating of A or higher

▪ Assets backing annuities are matched to the projected liability cash flows

▪ Scottish Widows’ financial leverage at the end of 2011 at 22% is significantly below the peer average (Old Mutual at 28% and Legal &

General at 27%)

Rating type Entity S&P Moody’s Fitch

Financial

strength Scottish Widows plc A (-) A A

Tier 2 debt Scottish Widows plc BBB+ Baa2 BBB+

Leading Market position Broad multichannel distribution Strong balance sheet

- Premium income of £6.7bn

- 8 million policyholders

- #4 UK Life & Savings provider

- Unique bancassurance proposition

accessing 30m customers (31%)

- Strong IFA channel (63%)

- Growing direct channel (6%)

- £3.9bn regulatory capital surplus (184% coverage ratio)

- £119bn managed assets

- High quality credit portfolio

- Total Capital of £8.5bn (£6.3bn equity and £1.2bn Lower

Tier 2) versus Capital required of £4.6bn

Source: Investor presentation, April 2013

Scottish Widows 5.5% 2023

pg 6

Background of the opportunity

▪ Investors like the credit risk and return offered by the Scottish Widows 5.5% 2023 bonds, but

▪ are worried about the expectations of rates rising over the tenor and/or inflation eroding their capital and income

The Scottish Widows 5.5% 2023 fixed rate bond

▪ Issued in April 2013 to cancel the funding from its parent Lloyds, hence

externalising internal funding. The book was 4.5x oversubscribed,

reflecting strong investor demand. This has resulted in a low allocation of

bonds for most investors and fair support in the secondary market.

▪ These bonds are unsecured subordinated Tier 2, not Coco’s (contingent

convertible) and have no specific capital ratio trigger event.

▪ Scottish Widows have the option to call the bond at par or vary the terms

of the notes if, due to changes in regulation, the bonds don’t qualify as

Dated Tier 2 Securities anymore.

▪ Deferral of the coupon payment and redemption, subject to Solvency 2

Capital Requirements.

▪ Scottish Widows have no senior unsecured bonds in the market. The only

other bond in issuance is a single junior subordinated bond which sits

below the Scottish Widows 5.5% 2023

Fixed Rate Bond Scottish Widows 5.5% 2023

Coupon 5.5% annual payment

Maturity date 16 June 2023

Format Subordinated, Tier 2

Credit rating BBB+ / BBB+ / Baa2

Issue size £850m

Denominations £100,000 / £1,000

Regulatory par call Applicable

Principal and interest

deferral option Applicable

Current price 96.92

Current YTM 5.92%

Investec new offering

▪ Investec is issuing an RPI linked note and a floating rate note secured by the Scottish Widows fixed rate bond. This bond offers

investors the opportunity to buy a new bond in £1,000 denominations at par, RPI index linked and/or floating rate with exposure to the

Scottish Widows 5.5% 2023 bond (sole credit risk). The Impala bond benefits from the same liquidity as the fixed rate bond, is listed on

the LSE, quoted intra-day and priced on Bloomberg and SEAQ (LSE).

Investment Option 1 - Impala Scottish Widows RPI linked bond

pg 7

RPI linker Impala bond secured by Scottish Widows: 1.90% RPI linked 2023

Issuer Investec Bank plc

ISIN / SEDOL XS0963352025 / BDC7QD4

Format Senior Secured, Dated, Unsubordinated

Security (Credit) Scottish Widows 5.5% 2023 Subordinated

Security Rating BBB+ / BBB+ / Baa2

Maturity 16 June 2023

Coupon 1.90% real interest rate paid annually, with notional RPI adjusted

Issue Price £100.00

Denomination £1,000 plus increments of £100 (minimum subscription £1,000)

Listing / Trading London Stock Exchange

Pricing Bloomberg and SEAQ (London Stock Exchange)

Settlement Euroclear

Close Date 18 September 2013

Issue date 23 September 2013

Source: Bloomberg, Investec

Summary of the investment opportunity: RPI linked bond

Investec has launched an Impala Scottish Widows RPI linked bond with the following characteristics:

• Investment grade (security rating): BBB+

• 9.81 years tenor (16 June 2023)

• Coupon: 1.90% real coupon (adjusted by RPI) with notional adjusted for inflation

• Credit risk: Scottish Widows unsecured subordinated Tier 2 bond

• Redemption value floored at par

• As liquid as the underlying fixed rate bond: £850m Scottish Widows 5.5% 2023

• In minimum denominations of £1,000 + increments of £100

• Listed on the London Stock Exchange

• Quoted intra-day on SEAQ (LSE platform) and Bloomberg

pg 8

Investment Option 2 - Impala Scottish Widows Floating Rate Note

pg 9

FRN Impala bond secured by Scottish Widows: 3mL + 2.90% 2023

Issuer Investec Bank plc

ISIN XS0963352884

Format Senior Secured, Undated, Unsubordinated

Security (Credit) Scottish Widows 5.5% 2023 Subordinated

Security Rating BBB+ / BBB+ / Baa2

Maturity 16 June 2023

Coupon 3 Month Libor + 2.90%

Issue Price £100.00

Denomination £1,000 plus increments of £100 (minimum subscription £1,000)

Listing / Trading London Stock Exchange

Pricing Bloomberg and SEAQ (London Stock Exchange)

Settlement Euroclear

Close date 18 September 2013

Issue date 23 September 2013

Source: Bloomberg, Investec

Summary of the investment opportunity: Floating Rate Note

Investec has launched an Impala Scottish Widows FRN with the following characteristics:

• Investment grade (security rating): BBB+

• 9.81 years tenor (16 June 2023)

• Coupon: 3 month Libor + 2.90%

• Credit risk: Scottish Widows unsecured subordinated Tier 2 bond

• As liquid as the underlying fixed rate bond: £850m Scottish Widows 5.5% 2023

• In minimum denominations of £1,000 + increments of £100

• Listed on the London Stock Exchange

• Quoted intra-day on SEAQ (LSE platform) and Bloomberg

pg 10

Liquidity in the secondary market

As Investec hold the Scottish Widows bonds, the liquidity of the RPI linked bond and Floating Rate Note is driven by the underlying Scottish

Widows bonds. The liquidity of the Floating Rate Note and RPI linked bond therefore benefits from the £850m underlying issuance.

The table below shows a summarised selection of market makers in Scottish Widows 5.5% 2023 together with their prices on Bloomberg –

dated 27 August 2013 at 16:16.

To view the price of the Floating Rate Notes and RPI linked bonds on Bloomberg, use IVSS as the pricing source.

pg 11

Market Makers Bid – Ask Price B size – A size (‘1000) Time

BNP Paribas 96.07 / 96.53 1000 x 1000 16:16

Barclays 96.11 / 96.92 1000 x 1000 16:16

HSBC 96.23 / 97.01 1000 x 1000 16:16

Source: Bloomberg

Appendices

I. Relative performance – existing Impala FRNs vs. short duration fixed income

alternatives

II. RPI linked bond comparisons

III. Investec credentials

pg 12

1.60

1.80

2.00

2.20

2.40

2.60

2.80

3.00

93

94

95

96

97

98

99

100

101

102

103

104

105

24 Apr 13 08 May 13 22 May 13 05 Jun 13 19 Jun 13 03 Jul 13 17 Jul 13 31 Jul 13 14 Aug 13

10

ye

ar s

wap

rat

e(

%)

Pri

ce

Impala Barclays FRN (LHS)

Impala LSE FRN (LHS)

iShares Euro Corporate Bond Short Duration/ Interest Rate Hedged (LHS)

M&G Strategic Corporate Bond Fund (LHS)

Neuberger Berman Floating Rate Income Fund (LHS)

3mL 10 years swap (RHS)

I. Relative performance – FRNs vs short duration fixed income alternatives

pg 13

Source: Bloomberg, 23 August 2013

Capital return since April 2013

pg 14

Period: 24 April – 23 Aug 2013 Capital Return Yield Total Return

Impala Barclays FRN 3.05% 1.80% 4.85%

Impala LSE FRN 3.89% 1.03% 4.93%

iShares Euro Corporate Bond Short Duration/ -0.46% 0.43% -0.03%

M&G Strategic Corporate Bond Fund -2.76% 0.83% -1.93%

Neuberger Berman Floating Rate Income Fund -1.06% 1.47% 0.41%

I. Relative performance – Total Return

Source: Bloomberg, Investec 23 August 2013

Impala FRNs have outperformed short duration fixed income funds & ETFs, both on a capital and total return

basis

II. RPI linker comparisons

pg 15

Security Rating Price Real Yield Size Denomination

Impala Scottish Widows 2023 BBB+

(Security) 100 1.90%

Liquidity of £850m

Fixed rate bond £1k / 100

Britel 3.5%

25/04/2025 BBB 181 1.47% £250m £1k / 1k

Scottish Power 3.49%

13/10/2024 BBB 175 1.62% £175m £1k / 1k

Places for People 1%

31/1/2022 A2 111 0.21% £40m £2k / 100

National Grid 1.25%

06/10/2021 BBB+ 114 0.40% £282m £2k / 100

Tesco Bank 1%

16/12/2019 unrated 109 0.38% £60m £2k / 100

Severn Trent 1.3%

11/07/2022 BBB- 111 0.46% £75m £2k / 1k

The Comps universe is composed of bonds with the following characteristics:

UK issuer, currency GBP, Maturity: 7-15 years, Investment grade, bullet

Source: Bloomberg, Investec, 13 September 2013

pg 16

Publicly available listed bonds

£35m

7.0% 7 years

Senior Retail Bond

Sole Bookrunner &

Distributor

£282.5m

1.25% RPI linked

10 years

Senior Retail Bond

Joint Bookrunner &

Distributor

£57.5m

6.0% 7 years

Senior Retail Bond

Joint Bookrunner &

Distributor

£80m

6.25% 7 years

Senior Retail Bond

Joint Bookrunner &

Distributor

Senior Retail Bond

Joint Bookrunner &

Distributor

£75m

1.30% RPI linked

10 years

£50m

7.5% 5 ½ years

Senior Retail Bond

Sole Bookrunner &

Distributor

Senior Retail Bond

Sole Bookrunner &

Distributor

£40m

1.0% RPI linked

10 years

£125m

5.2% 7 ½ years

Senior Retail Bond

Joint Bookrunner &

Distributor

Senior Retail Bond

Joint Bookrunner &

Distributor

£60m

1.0% RPI linked

8 years

5.0% 8 ½ years

Joint Bookrunner &

Distributor

£200m

Senior Retail Bond

£120m

7.0% 5 ½ years

Senior Retail Bond

Joint Bookrunner &

Distributor

£140m

5.0% 5 ½

years Senior Retail Bond

Sole Bookrunner &

Distributor

£90m

6.125% 7 ½ years

Senior Retail Bond

Joint Bookrunner &

Distributor

£50m

6.0% 7 years

Senior secured Retail

Bond Sole Bookrunner &

Distributor

£150m

10.5% 7NC3 years

B2/B

Senior Secured High

Yield

Joint Bookrunner

£5.5m

FRN: 3m Libor + 2.73% 2021

Security: LSE plc 4.75% 2021

A- / Baa2

Senior Secured Note

Sole Bookrunner

£20m

FRN: 3m Libor + 4.90%

Security: Barclays plc 14%

Ba1/ BBB-

Senior Secured Note

Sole Bookrunner

£15m

FRN: 3m Libor + 2.90% 2023

Security: Scottish Widows plc 5.5%

2023

BBB+ / Baa2

Senior Secured Note

Sole Bookrunner

£5m

RPI linker: 1.90% real coupon,

notional RPI adj.

Security: Scottish Widows plc

5.5% 2023

BBB+ / Baa2

Senior Secured Note

Sole Bookrunner

Contact details

Harris Gorre, CFA

Capital Markets

Direct: +44 (0) 20 7597 3892

Blackberry: +44 (0) 777 137 5080

harris.gorre@investec.co.uk

Manoelle Lefevre

Capital Markets

Direct: +44 (0)20 7597 5726

Blackberry +44 (0) 786 739 4087

manoelle.lefevre@investec.co.uk

pg 17

2 Gresham Street, London, EC2V 7QP

United Kingdom

www.investec.co.uk/impala

Neil Raja

Capital Markets

Direct: +44 (0) 20 7597 3813

Blackberry: +44 (0) 758 530 2147

neil.raja@investec.co.uk

Lisa Martinez

Capital Markets

Direct: +44 (0) 20 7597 3776

lisa.martinez@investec.co.uk

Dick Warburton

Capital Markets - Sales

Direct: +44 (0) 20 7597 5758

Blackberry: +44 (0) 793 263 2262

richard.warburton@investec.co.uk

Neil Baldwin

Capital Markets - Sales

Direct: +44 (0) 20 7597 5753

Blackberry: +44 (0) 779 695 4222

neil.baldwin@investec.co.uk

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pg 18