21 July 2003

5% PLUS 2% - After another 2 rounds of tough negotiations in June & July, SCBA has made a Final Offer of an additional Salary adjustment of 2% - as additional premium for adopting a PRRS system.

The PRRS system entails that the Annual Bonus be paid as follows:

•  One Month Fixed Bonus.

• All employees will receive an average of one month based on their performance appraisal. Employees may received higher or lower than one month, but the total pay out for all employees (excluding the one month fixed bonus) will average at least one month.

• 1st Year of implementation - the average must be at least 1.25 months.

• Employees not satisfied with their appraisal can invoke the grievance handling procedure. This means that SBEU will have a meaningful say in the way that members are appraised.

• Individual Banks can only implement the PRRS if they have a proper and transparent appraisal system.

While SBEU is committed to a PRRS system because we are convinced it will benefit all SBEU members in the long run, we feel that the current offer by SCBA is inadequate.

We intend to make a final presentation to Association of Banks (ABM) to convince them to improve the offer. ABM is where all the CEOs of the Bank are represented. In SCBA only Head of Human Resources are represented.

We hope to make the presentation to ABM before end of August. Once we get a response from ABM, we will then meet all SBEU members to make a decision.

We do hope all CEOs are forward looking and will support ABM's, MCBA/SCBA's and SBEU's efforts to develop a remuneration pay system that is flexible, progressive and competitive to move the banking industry forward.

We are now entering a crucial phase - It is make or Break and we do hope that we can avoid industrial actions.

ARTICLES AGREED TO IN PRINCIPLE
Please note that nothing is finalised yet and the agreed articles will only be effective once whole CA is agreed upon and signed.