ANNUAL RESULTS - Nedbank · 2018. 5. 12. · SAP ERP implementation Live on 1 Jan 2015 (Procurement & Finance) HR module planned for Sept 2015 implementation IT systems rationalisation

NEDBANK GROUP LIMITED

ANNUAL RESULTS

for year ended 31 December 2014

2

Delivering value in a volatile macro environment

STRATEGY & OVERVIEW MIKE BROWN

3

3,2 2,6

1,8 1,4

0

2

4

6

Aug 13 Feb 14 Aug 14 Feb 15

Nedbank 2014 GDP growth forecast

Growth currently slow in SA, but longer term

opportunities in both SA & rest of Africa

Rest of Africa growing off a low base

(IMF GDP growth forecasts, %)

SA GDP expectations revised downward

Global & local economy remains volatile, uncertain, complex & ambiguous

Source: Nedbank Group Economic Unit, IMF

2,2

1,4 2,1

2,5

5,2 4,8 4,9

5,2

0

2

4

6

13 14 15 16SA Sub Saharan Africa

Lower oil & commodity prices to play out

Volatility has increased

0

200

400

600

800

00 02 04 06 08 10 12 14

All Commodities Index

Nonfood Agriculturals Price Index ($)

Oil per barrel ($ indexed)

0

50

100

150

200

Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15

SA Banks indexJSE All Share indexNigerian Banks index

4

Wholesale credit growth ahead of retail, but

lower inflation to benefit consumers

Wholesale credit growth ahead of retail (%)

Source: Nedbank Group Economic Unit

Consumers remain under pressure

Low inflation & interest rates lower for longer

-10

0

10

20

30

40

00 02 04 06 08 10 12 14

Households

Companies

SA Capex investment muted

0

250

500

750

93 95 97 99 01 03 05 07 09 11 13

Public sector

Private sector

CPI & Prime (%)

-10

-5

0

5

10

15

20

00 02 04 06 08 10 12 14

Consumer spending: Q-o-q change

Personal Disposable Income: Q-o-q change

-1

2

5

8

11

14

17

07 08 09 10 11 12 13 14 15 16 17

CPI (%)

Prime (%) Forecast

5

9 8

31

10

75

3

11

72

1

13 1

43

14 3

95

2010 2011 2012 2013 2014

Continued focus on drivers of shareholder value

creation

480

605

752

895

1 0

28

2010 2011 2012 2013 2014

13,4

15,3

16,4

17,2 17,2

14,2

13,0 13,1 13,0 13,5

2010 2011 2012 2013 2014

ROE (excl GW) Cost of equity

NAV per share

(cents)

ROE & Cost of Equity

(%)

Full-year dividend per share

(cents)

NAV ROE > COE

9,5%

EP

Dividends

14,9%

Underpinned by solid CET1, surplus liquidity & high coverage

6

STAFF

Created 380 new permanent jobs in SA

Top 3 corporate values of accountability,

client satisfaction & brand

reputation align with strategy

High staff morale

COMMUNITIES

REGULATORS

Strong capital, liquidity &

coverage ratios

Commitment to

sustainable banking

practices

One of SA’s largest tax

contributors: R8,0bn

CLIENTS

New loan payouts R167bn

AUM up 11% to R212bn

– top 3 rated SA fund manager

Upgraded 174 ‘branch of the

future’ stores, 22 new outlets

& 304 new owned ATMs

Total client numbers up 7% to

7,1m

Digitally enabled clients up 48%

& value of AppSuiteTM

transactions up 66% to R58bn

Fair Share 2030 pilot successes

2014 FT & Banker Magazine SA

Bank of the year

SHAREHOLDERS

ROE (excl goodwill): 17,2%

Full-year dividend of 1028c, up 14,9%

Invested R5,9bn to become a c20%

shareholder in ETI (Ecobank)

Up to R8,2bn value created for SA

BBBEE shareholders

Total shareholder return: 23,2%

Made banking more accessible & affordable

Sourcing 87% or R8,5bn of our procurement locally

Maintained level 2 BBBEE for 6th year & one of the

most transformed companies on the JSE

For 9th consecutive year included in the Dow Jones

Sustainability Index

Leader in socially responsible banking (African Banker

awards)

BY OUR:

TO BE AFRICA’S

MOST ADMIRED

BANK

Delivering value to all stakeholders

7

Strategic positioning - 2014 a milestone year

Leadership &

Board changes

Seamless Group Exco transition enabled by good succession

planning & depth of leadership

Board appointments & scheduled retirements

Pan African

Banking Network

Invested R6,3bn in the rest of Africa:

c20% shareholding in ETI (Ecobank)

Initial 36,4% shareholding in Banco Unico

Integrated

Corporate &

Investment Bank

Improve client service

Unlock future revenue growth opportunities

8

Strategic positioning - 2014 a milestone year

Optimisation

Initiatives

Retail & Business Banking back office optimisation

External cost optimisation review of Shared Services

SAP ERP implementation

Live on 1 Jan 2015 (Procurement & Finance)

HR module planned for Sept 2015 implementation

IT systems rationalisation – decommissioned a further 18 core

systems in 2014 (74 since 2010 as we move from 250 to 60)

Old Mutual SA Group (OMSA, Nedbank & M&F) synergies on

track for pre-tax run rate of R1bn in 2017

Strategic

Choices

No fee increases, selected fee reductions & personal loans

slowdown

Impacted NIR growth by ~3,5% in 2014

Well positioned to continue to grow our transactional

banking franchise

9

A strong performance across all clusters

FINANCIAL OVERVIEW RAISIBE MORATHI

10

Key performance indicators

2014 2013

ROE (excl goodwill) 17,2% 17,2%

Diluted HEPS growth 13,0% 15,0%

Credit loss ratio 0,79% 1,06%

NIR : expense ratio 82,8% 86,4%

Efficiency ratio1 56,5% 55,1%

Common equity tier 1 CAR 11,6% 12,5%

Dividend per share (cents) 1 028 895

Note 1: Efficiency ratio includes associate income

11

0,82%

0,99%

1,15% 1,23% 1,27%

1%

1%

1%

1%

1%

2%

2%

2%

4 900 6 184

7 483 8 670

9 880

2010 2011 2012 2013 2014

13,4%

15,3%

16,4%17,2% 17,2%

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

4 year-CAGR: 19,2%

14,0%

Headline earnings (Rm)

ROE (excl. goodwill) Return on assets

Strong earnings growth trend, ROE & ROA uplift

12

Full year ended (Rm)

% change

2014

2013

Net interest income 8,2 22 961 21 220

Impairments (19,0) (4 506) (5 565)

Income from lending activities 17,9 18 455 15 655

Non-interest revenue 4,9 20 312 19 361

Total expenses 9,4 (24 534) (22 419)

Indirect taxation 5,7 (635) (601)

Associate Income 106,4 161 27

Headline profit before taxation 14,4 13 759 12 023

Direct taxation 15,0 (3 487) (3 033)

Minorities & preference shares 22,5 (392) (320)

Headline earnings 14,0 9 880 8 670

Attributable earnings 13,4 9 796 8 637

Consolidated statement of comprehensive income

BOOKLET ONLY SLIDE

13

8 670 8 670

11 470

9 880 9 880

1 741

1 059

951 2 115

134

560

2013 NII Impairments NIR Expenses AssociateIncome

Direct tax &other

2014

Headline earnings growth drivers


14,0%

8,2%

(19,0%)

4,9%

9,4%

>100%

Excluding

ETI 13,4%

14

Cluster headline earnings &

ROEs

Headline earnings

(Rm)

ROE

(%)

Year ended %

change 2014 2013 2014 2013

Nedbank Capital 23,3 2 128 1 726 30,9 29,4

Nedbank Corporate 15,8 2 599 2 245 24,5 26,4

Nedbank Business Banking 17,8 1 094 929 20,1 19,4

Nedbank Retail 15,7 2 937 2 539 13,3 11,6

Nedbank Wealth 15,8 1 042 900 36,8 36,2

Rest of Africa Division 106,4 357 173 10,1 8,7

Line clusters 19,3 10 157 8 512 19,7 18,7

Centre >(100,0) (277) 158

Group 14,0 9 880 8 670 15,8 15,6

Group (excl goodwill) 17,2 17,2

BOOKLET ONLY SLIDE

15

1 726 2 245

929

2 539

900 173

2 128 2 599

1 094

2 937

1 042 357

Capital Corporate Business Banking Retail Wealth Rest of AfricaDivision

29,4 26,4 19,4

11,6

36,2

8,7

30,9 24,5

20,1 13,3

36,8

10,1

Capital Corporate Business Banking Retail Wealth Rest of AfricaDivision

2013 2014

23,3%

15,8%

17,8%

15,8%

Strong performance across all clusters


ROE (%)

106,4%

15,7%

Note: Cost of equity 2013: 13,0%, 2014: 13,5%

16

% of daily average interest-earning banking assets % Rm

December 2013 3,57 21 220

Growth in banking assets - 2 051

Asset margin pricing & mix movements (0,15) (998)

Impact due to pricing (0,03) (188)

Impact due to mix change (0,12) (810)

Endowment 0,10 662

Capital 0,02 138

Deposits 0,08 524

Liability pricing and mix movements (0,01) (61)

Change in marginal cost of funding 0,00 19

Cost of enhancing liquidity risk profile (Basel III) 0,00 4

Liability pricing and mix (0,01) (84)

Other 0,01 87

December 2014 3,52 22 961

NII – margin analysis BOOKLET ONLY SLIDE

17

Net interest margin: endowment benefit more than offset by asset mix & pricing

Net interest margin (bps)

357

352

10

(3) (1) 1

(12)

2013 Endowment oncapital &deposits

Asset mix &pricing

Liability marginpricing & mix

Prime/Jibarreset & Other

2014

(15)

Mix

Pricing

18

Average Interest Earning Asset mix contribution

driving change in NIM

34,9 33,7 32,5 30,4

44,9 46,3 45,6 47,7

16,6 16,4 16,2 16,6

3,6 3,6 5,7 5,3

2011 2012 2013 2014

Retail Wholesale

Business Banking Other

5,41% 5,68% 5,81% 5,91%

1,82% 1,88% 1,89% 1,90%

3,29% 3,20% 3,24% 3,24%

3.48% 3.53% 3,57% 3,52%

2011 2012 2013 2014

Retail Wholesale

Business Banking Group

Contribution to AIEA (%) Net interest margin (%)

100% 100% 100% 100%

Note: Wholesale includes Nedbank Corporate & Nedbank Capital | Other represents the balance of AIEA

19

CLR (%)

% of avg

banking

advances

FY

2014

H2

2014

H1

2014

FY

2013

Through-the-

cycle target

ranges

Nedbank Capital 12,8 0,14 0,32 (0,04) 0,51 0,10 – 0,55

Nedbank Corporate 33,1 0,21 0,21 0,22 0,23 0,20 – 0,35

Nedbank Business Banking 11,4 0,42 0,39 0,44 0,65 0,55 – 0,75

Nedbank Retail 36,0 1,70 1,50 1,90 2,16 1,90 – 2,60

Nedbank Wealth 4,2 0,17 0,13 0,21 0,28 0,20 – 0,40

Rest of Africa 2,6 0,23 0,06 0,42 0,37

Group 0,79 0,74 0,83 1,06 0,80 – 1,20

Credit loss ratio BOOKLET ONLY SLIDE

20

Lower CLR reflective of quality portfolio & reduction in higher risk portfolios

136 113

105 106

79

118

89

59 55

46

Group CLR (bps)

Group CLR excl. PLs (bps)

Impairment charge (Rm)

2010 2011 2012 2013 2014

Personal loans Homeloans Wholesale Other

6 188

4 506

Group credit loss ratio (bps)

21

Defaulted advances declining & coverage increasing

Defaulted advances (Rm)

Defaulted advances as % of book (%)

33,9% 37,7% 38,6% 42,3% 43,1%

5 523 5 701 6 692

5 867 5 808

763 641

866 888 941

2010 2011 2012 2013 2014

Total & specific coverage (%)

Write-offs (Rm)

Post write-off recoveries (Rm)

70,0% 64,2%

56,4% 49,5%

41,9%

Note: 2013 Total & specific coverage restated

26

76

5

23

21

0

19

27

3

17

84

8

15

84

6

2010 2011 2012 2013 2014

(11,2%)

9,1%

5,6%

4,8% 3,1%

1,6%

1,3%

5,5%

3,0%

2,5%

Retail Wholesale Nedbank Group

22

Non-interest revenue

Full year (Rm)

% change

2014

2013

Commission & fees 3,9 14 570 14 023

Insurance income 3,1 1 986 1 927

3,8 16 556 15 950

Trading income 3,3 2 648 2 564

Private equity income 88,0 423 225

Other income 11,7 650 582

4,9 20 277 19 321

Fair value adjustments (12,5) 35 40

Credit spread on Nedbank bonds (38) (6)

Designated asset & liability hedged portfolios 73 46

4,9 20 312 19 361

BOOKLET ONLY SLIDE

Note: Other income includes investment & sundry income

23

19 361 19361

19908 19967 20051

20249 20 312 547

59 84 198

63

2013 Comm. & fees

Insurance Trading Privateequity

Otherincome

2014

NIR (Rm)

72%

10%

13%

5%

Comm. & fees Insurance incomeTrading income Other income

43%

8% 11%

16%

17%

5%

Retail BB CorporateCapital Wealth Other

Non-interest revenue drivers

Contribution (%) Contribution

Product

Cluster

88,0% 3,9% 3,1% 3,3% 10,1%

4,9%

82,8%

86,4%

NIR : expenses ratio

24

Strong growth in H2 2014, supported by good volume growth

(0,6)

10,2

2,9 4,8

(3,5)

9,4

1,3

5,3

1,3

H1 2014 H2 2014

NIR Commission & fees Insurance Trading Other NIR

NIR growth (%)

160,3

4,9%

25

19 361

20 045

2013 PL slowdown& Credit life

Maintain fees at 2013levels & selected

reductions

2014

329

355

Credit life

pricing &

benefits

PL volume

Selected fee

reductions

0% fee

increases

Non-interest revenue impacted by strategic choices

3,5%

NIR (Rm)

1,7%

1,8%

NIR : expense ratio

impact of 2,8%

26

Expenses

Full year ended (Rm) %

change

2014

2013

Staff costs 9,6 13 838 12 629

Remuneration & other staff costs 8,8 11 132 10 242

STI 14,6 2 100 1 833

LTI 7,4 595 554

Computer processing 13,9 3 097 2 720

Marketing & PR 4,5 1 517 1 451

Fees & insurance 10,7 2 260 2 042

Other 6,8 3 822 3 577

Total operating expenses 9,4 24 534 22 419

…efficiency ratio 56,5% (FY 2013: 55,2%)

BOOKLET ONLY SLIDE


27

22 419

24 534

901

377

66 218

245

308

2013 StaffCost

ComputerProcessing

Marketing&

PR

Fees&

Insurance

Other 2014

9,4%

Expenses growth led by investment in franchise, volume-driven growth & cost optimisation

Expenses (Rm) Key initiatives

Continued investment in

the franchise

- Electronic & physical

channels

- Regulatory requirements

- Rest of Africa expansion

Group wide synergies

- R&BB back office

integration

- Cross cluster optimisation

programmes

- SAP ERP programme

- Rationalise, standardise &

simplify IT strategy

Incentives

Staff costs

9,6% 13,9% 4,5% 10,7%

28

Year ended (Rm)

Annualised

% change 2014 2013

Cash & securities 12,9 122 661 108 615

Advances 5,8 613 021 579 372

Other 19,5 73 631 61 607

Total assets 8,0 809 313 749 594

Ordinary shareholders’ equity 10,6 67 024 60 617

Minorities & preference shareholders 4,5 3 887 3 719

Deposits 8,4 653 450 602 952

Long-term debt instruments 7,1 35 638 33 268

Other 0,6 49 314 49 038

Total equity & liabilities 8,0 809 313 749 594

Consolidated statement of financial position

…Strengthened loan-to-deposit ratio to 93,8% (2013: 96,1%)

29

Year ended (Rm) Annualised

% change 2014 2013

Home loans 0,9 137 449 136 156

Commercial mortgages 16,3 123 652 106 325

Properties in possession (22,8) 596 772

Term loans 8,9 106 175 97 528

Personal loans (13,2) 18 346 21 145

Other term loans 15,0 87 829 76 383

Leases & instalment sales 10,8 94 237 85 038

Credit cards 17,2 13 404 11 441

Overnight loans 20,7 21 638 17 927

Overdrafts 7,3 16 141 15 048

Other (8,1) 110 824 120 593

Banking advances 83 876 83 163

Trading advances 26 948 37 430

Impairment of advances (3,2) (11 095) (11 456)

5,8 613 021 579 372

Advances BOOKLET ONLY SLIDE

30

Advances up 5,8% – aligned to portfolio tilt

Advances (Rbn)

Contribution (%)

YoY

Growth (%)

10,8

0,9

15,0

(13,2)

16,3

Other

Tradingadvances

Credit cards

Vehicle finance

Other term loans(wholesale)

Personal loans

Commercialmortgages

Home loans

2014 2013

17,2

22,0%

19,8%

2,9% 2,1%

14.1%

15,1%

6,1%

18,0%

HL Comm Prop

PL Card

Other term loans VAF/MFC

ONL & Overdrafts Other

(28,0)

5,4

Note : Other advances include Overdrafts, Overnight loans | Note 1 includes other types of asset-based finance

1

31

Deposits

Period ended (Rm)

Annualised

% change

2014

2013

Current accounts 11,0 65 170 58 704

Savings accounts 12,2 25 386 22 631

Term deposits & other 10,3 449 705 407 593

Call & term deposits 8,5 257 634 237 393

Fixed deposits 11,8 42 800 38 289

Cash management deposits 7,5 60 820 56 571

Other deposits 17,4 88 451 75 340

Foreign currency liabilities >100 30 153 14 309

NCDs (19,5) 70 377 87 457

Deposit repurchase agreements 3,3 12 659 12 258

8,4 653 450 602 952

BOOKLET ONLY SLIDE

32

15,5%

10,8%

4,6%

9,3%

6,5%

39,4%

13,9%

Other NCDs

Foreign currency Cash management

Fixed Call & term

CASA

Deposits up 8,4% – growing quality deposits

Deposits (Rbn)

Contribution (%)

YoY

Growth (%)

>100

11,3

7,5

11,8

8,5

Other

NCDs

Foreign currency

Cashmanagement

Fixed deposits

Call & termdeposits

Current & savingsaccounts

2014 2013

(19,5)

Note : Other deposits include overnight loans & deposits placed under repurchase agreements

33

41,7 45,6

69,7

82,6

2013 2014

Required Statutory Liquid Assets & Cash Reserves

Total Qualifying Statutory Liquid Assets & Cash Reserves

12,5

11,6

2,4

1,2

1,2

0,9

Dec2013

Generationof

reserves

Dividends Increasein RWA

Impact ofinvestments

Dec2014

Capital Only 2015

Balance sheet metrics remain sound

Common equity tier 1 ratio (%)

Liquidity & funding

R2,5bn Basel III compliant tier 2 capital

subordinated debt issued

R1,7bn old-style tier 2 capital subordinated

debt redeemed in 2014

Basel III target range:

10,5% -12,5%

Additional Tier 1 & Tier 2 capital

Qualifying statutory liquid assets (Rbn)

Min. 60% LCR exceeded from 1 January 2015

Ave. Q4 LT funding ratio: 25,4%

(ahead of industry average)

R4,5bn senior unsecured debt issued

NSFR remains work in progress

34

Continued growth momentum

NEDBANK CORPORATE MFUNDO NKUHLU

35

Nedbank Corporate – financial highlights

Year ended

%

change 2014

2013

Headline earnings (Rm) 15,8 2 599 2 245

Operating income (Rm) 14,8 5 838 5 084

Preprovisioning operating profit (Rm) 16,5 3 836 3 294

Margin (%) 2,06 2,03

Credit loss ratio (%) 0,21 0,23

NIR : expense ratio (%) 93,7 89,7

Efficiency ratio (%) 38,6 39,6

Average banking advances (Rm) 12,2 188 271 167 817

Average deposits (Rm) 8,8 181 251 166 658

Allocated economic capital (Rm) 24,6 10 606 8 514

Headline economic profit (Rm) 2,5 1 167 1 138

ROE (%) 24,5 26,4

Nedbank Corporate

Assets

Other clusters

Headline earnings

26%

74%

26%

74%

36

Segmental analysis BOOKLET ONLY SLIDE

* Other includes Nedbank Investor Services, International Financial Institutions, Transactional Banking, Corporate Shared Services & Central costs

Headline earnings

(Rm) ROE

(%)

Average

banking advances

(Rbn)

Year ended

%

change 2014 2013 2014 2014

%

change

Corporate Banking 1,1 1 210 1 197 23,5 85 933 5,6

Property Finance 39,5 1 318 945 27,5 99 644 18,1

Subtotal 18,0 2 528 2 142 25,5 185 577 11,9

Other* (31,1) 71 103 10,5 2 694 32,1

Nedbank Corporate total 15,8 2 599 2 245 24,5 188 271 12,2

37

Corporate Banking – good returns despite flat

earnings

NII (Rm)

1 311 1 567

1 877 2 059

2 242

2010 2011 2012 2013 2014

697 746 834

957 1 077

2010 2011 2012 2013 2014

Core NIR (Rm)

8,9%

12,5%

HE at R1 210m; ROE at 23,5%

Advances growth of 5,6% in an intensely competitive market

Deposits increased 8,9%

Impairments up R37m off a low base. Defaulted advances 0,85% of portfolio

Core transactional NIR growing 12,5% - cash (22% up), electronic banking (13% up) & global trade (9% up)

Negative y-o-y fair-value movement of R76m

Expenses increased due to higher transactional volumes

Well rated on client service

Earnings flat in a slowed growth

environment

.

Core NIR = NIR less fair value income

38

HE at R1 318m (up 39,5%); ROE at 27,5%

NII growth largely driven by lending volumes due to strong advances growth

Market share 34% (Group 41%)

CLR at 0,21%; LTV<50%

NIR boosted by growth in property investment income of R602m, offset by a FV loss of R24m

Low efficiency ratio - improved to 25,1%

Exceptional & long-standing client relationships

Property Finance – another strong performance

Maintained market

leadership position

NII (Rm)

1 432 1 461 1 470 1 499

1 770

2010 2011 2012 2013 2014

18,1%

Property Investments (Rbn)

3,1 2,7

Property Investment NIR (Rm)

76

(78)

126

(24)

163

680

-200

0

200

400

600

800

2013 2014 2013 2014

239

602

Fair Value NIR (Rm)

Realised

Unrealised

39

Strong platform for integration

Strong growth momentum (Headline earnings CAGR of 17,6% since 2010)

Market leader in Property Finance (34% market share, Group 41%)

Highly rated on levels of client services

Advanced & highly-competitive transactional banking offering

120 transactional client gains since 2010

Quality book (CLR at 21bps at the lower end of target range)

Highly engaged staff (entropy at worldclass levels)

Consistent contributor to group earnings

40

Strong performance across all businesses

NEDBANK CAPITAL BRIAN KENNEDY

41

Nedbank Capital – financial highlights

Year ended

%

change Dec

2014

Dec

2013









Headline economic profit (Rm) 24,4 1 198 963


ROE (%) 30,9 29,4

Nedbank Capital

Assets

Other clusters

Headline earnings

22%

78%

21%

79%

42

0%

1%

2%

3%

4%

0%

100%

200%

2010 2011 2012 2013 2014

South Africa Outside South Africa

Lending Margin (RHS) CLR (RHS)

Exporting sector expertise to help develop the African continent together with our clients

Deal activity in 24 countries across Africa IB average loans & advances

NIM & CLR (%)

IET1 average loans & advances (Rbn)

GOI (Rm)

Resource Finance average loans & advances (Rbn)

GOI (Rm)

-

300

600

0%

100%

200%

2010 2011 2012 2013 2014

South Africa Outside South AfricaRevenue (RHS)

-

400

800

0%

100%

200%

2010 2011 2012 2013 2014South Africa Outside South Africa

Revenue (RHS)

Note 1: IET – Infrastructure, Energy & Telecommunications

43

Markets income distribution

Market business – focusing on flow

Trading revenue (% change yoy)

2012 2013 2014

Value at Risk(1) (Rm) 14,7 6,6 10,7

Days profit (%) 90% 96% 98%

Note 1: Average VaR (99%, one day)

0%

10%

20%

30%

40%

50%

<-2

5

-20 to

-1

5

-15 to

-1

0

-10 to

-5

-5 to

0

0 to

5

5 to

10

10 to

15

15 to

20

20 to 2

5

25 to

30

30 to

35

>3

5

% o

f tr

ad

ing d

ays

FY 2012

FY 2013

FY 2014

Value at risk

2012 2013 2014

Forex Debt securities

Equities Commodities

2 263 2 347 2 404

(1,2%)

4,2%

44

Nedbank Corporate & Investment Bank – powerful, scalable client facing wholesale business

Nedbank Corporate & Investment Bank

Relationship management & client coverage

Tra

nsa

ctio

na

l S

erv

ice

s

Fin

ancin

g &

ad

vis

ory

Mark

ets

Pro

pe

rty f

ina

nce

Strategic partners:

Ecobank, Banco Único, Bank of China, CIBC

Rationale

Combines the respective strengths of Nedbank

Capital & Corporate to build a market leading

franchise with a stronger client-centred focus

Combined headline earnings (Rm) & ROE (%)

1 202 1 228 1 431 1 726 2 128

1 496 1 571 1 817

2 245

2 599

21,7% 23,6% 23,7%

27,6% 27,0%

0%

5%

10%

15%

20%

25%

30%

0

1 000

2 000

3 000

4 000

5 000

6 000

2010 2011 2012 2013 2014

Capital Corporate ROE

2 698 2 799

3 248

3 971

4 727

45

Prospects for Corporate & Investment Bank

Transactional services pillar to focus on client growth & retention, & extract

synergies though collaboration & cross-sell across the group Grow transactional

banking franchise

Support functions to be centralised, eliminating duplication, ensuring prudent

management of costs & investment in integrated systems to enhance

business productivity & regulatory compliance

Optimise

& invest

Capture opportunities in rest of Africa utilising our sector expertise & offering

holistic solutions as our client expand into the rest of Africa, in conjunction

with working closely with our strategic partners

Pan-African

banking network

Client coverage & relationship team to create focus to ensure that our clients

are at the centre of our wholesale universe by offering a full spectrum of

products & solutions

Client-centred

innovation

Utilise the power of our balance sheet to originate & lead ‘big-ticket’ sector

deals, whilst capturing all of the opportunities available across the group Strategic portfolio

tilt

46

Strong strategic momentum with improving risk profile

NEDBANK RETAIL & BUSINESS BANKING PHILIP WESSELS

47

16% increase in headline earnings to R4bn

41bps improvement in CLR to 139bps

Significantly lower defaults – down 10,7% to

R12bn, with highest ever total coverage of 3,2%

Muted NIR growth of 1,5%

ROE of 14,6%

Resilient

performance

…driven by

strategic

choices

Assets

40%

60%

41%

59%

Headline earnings

Nedbank Retail &

Business Banking

Other clusters

Proactive de-risking of business & prudent

provisioning

No fee increases & selective reductions benefitting

clients

Consistent investment for sustainable growth -

distribution, marketing & innovation

Active cost management

Nedbank Retail & Business Banking – highlights

48

Nedbank Business Banking – financial highlights

Year ended

%

change 2014

2013

Headline earnings (Rm) 17,8 1 094 929



Margin (%) 3,24 3,24


NIR : expenses ratio (%) 50,5 55,4





Headline economic profit (Rm) 16,2 358 308

ROE (%) 20,1 19,4

Assets

Headline earnings

14%

86%

11%

89%

Nedbank Business

Banking

Other clusters

49

Maintaining strong momentum in quality advances

& deposit growth

Average deposits excl CAC

Balances, Rbn

1 Restated for rule refinements

Avg. Current Account Creditors (CAC)

Asset payouts

Credit Loss Ratio

9,8 10,7 12,1 13,5 14,7

2010 2011 2012 2013 2014

+9%

40 53 34

65 42

2010 2011 2012 2013 2014

bps

12,0 16,8 19,1

22,9 23,3

2010 2011 2012 2013 2014

Rbn Balances, Rbn

67,1 71,7 74,9 77,6 87,6

2010 2011 2012 2013 2014

+13%

1

50

NIR growth muted by macro factors &

strategic choices…

Low growth economy impacting

overall business volumes

R120m in NIR through selective price

reductions, benefiting long term

growth (adding 6,9% to NIR)

…with sustained momentum in client

growth & cross-sell

Maintained high level of quality client

gains over the past five years

4,9% increase in product holding

NIR growth muted by no fee increases & selected

fee reductions

NIR growth

#

Rm

Net new primary banked clients

1 342 1 486 1 578 1 729 1 710

2010 2011 2012 2013 2014

(1%)

601 748 775

965 752

2010 2011 2012 2013 2014

51

Nedbank Retail – financial highlights

Year ended

%

change 2014 2013



Preprovisioning operating profit (Rm) (4,1) 7 572 7 897

Margin (%) 5,91 5,81


NIR : expenses ratio (%) 69,5 73,9





Headline economic profit (Rm) 84,4 (48) (308)

ROE (%) 13,3 11,6

Assets

Headline earnings

26%

74%

30%

70%

Nedbank Retail

Other clusters

52

647 717 831

2 636 2 971

3 227

3 577 3 837

3 905

1 102

1 126 857

2012 2013 2014

5 566 6 152

6 675

328

271 213

2012 2013 2014

Client & NIR growth influenced by risk appetite

& pricing choices

1 Single product clients

2 Adjusted for MFC client migration

3 Total growth excluding personal loans. 2014 Includes the impact of selected fee reductions (R40m) & no price increases (R195m)

#000 Rm

Card

Trans-

actional

Secured

Personal

Loans

8 651 8 820

6 888

6 423

+7,2%

+9,0% 7 962

Personal

Loans1

Total Client Base NIR

Retail

excl

Personal

Loans1

+10,5%

+8,5%

Total

Total

+2,0%

+8,7%

+9,2%3

+9,7%3

5 894

2

53

Client-centred strategy driving growth in all

segments

Total client base,

# 000

Kid

s &

Yo

uth

E

ntr

y L

evel

1

Mid

dle

1,

2

Pro

fessio

na

l2

Sm

all

Bu

sin

ess

1 000 944

3 629 3 307

2013 2014

1 736 1 662

79 87

215 224

2014 2013

1 ELB and Middle segment growth is negatively impacted by reduction

in Personal Loans

2 Bases readjusted due to Professional’s migration to Consumer

segments in Feb’14 of ~6k

Note: Non-residential, Non-individual segment not shown

+6%

+10%

+4%

+10%

+4%

54 1 Client premium relative to prime with home loans excluding staff & re-advances

Asset pay-outs aligned to risk appetite & pricing

dynamics

YoY % Rbn %

2,42 2,49 2,36 2,41 2,30 2,43

0,48 0,51 0,65 0,84 0,70 0,57

H1 H2 H1 H2 H1 H2

MFC

Home

Loans

Personal

Loans

Other

2012 2013

0,5 0,8 0,7 0,7 0,6 1,1

4,7 4,9 5,3 6,1 5,6 7,5

12,1 14,0 14,7

15,9 15,0

16,6

8,0 7,5 5,1

4,1 3,6

3,9 25,4 27,1

25,8 26,8

24,7

29,1

H1 H2 H1 H2 H1 H2

2014 2012 2013 2014

11,2 13,0 14,9 17,5 17,6 16,9

Asset payouts Book growth New business pricing1

12,1

1,0

(16,3)

55

0%

5%

10%

15%

20%

Home Loans Personal Loans VAF

MFC Card Retail Total

HL Back HL Front Prime

H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2

2006 2007 2008 2009 2010 2011 2012 2013 2014

Defaults reducing across all asset class

2005

Defaults by asset class

% of total advances

56

Underlying business showed an improved performance & contributed to Retail’s growth

1 Profitability relates to the advances book & excludes some transactional, deposit & insurance income derived from strong Personal Loans positioning in the market

2 Excludes lending products in RRB

Headline Earnings

Personal

Loans1

Card

Rm

413 432 624

MFC2 1 193 1 152 1 134

Home

Loans2 153 308 485

RRB 161 222 323

2012 2013 2014

778 859 863

12,2 11,2 17,9

18,0 15,9 15,7

3,6 7,8 12,4

7,9 11,4 15,1

2012 2013 2014

28,8 30,9 28,2

ROE

%

57

2015 run-rate impact of selective fee reductions

Continued investment in physical & digital distribution

Cost optimisation

Focus on simplifying client on boarding & ongoing service

Building sustainable, profitable businesses through the cycle

Prospects for Retail & Business Banking

Innovative, competitively priced products

Vastly improved distribution channels

Quality advances supported by proactive risk management

Momentum in client gains & cross-sell

Operating

environment

Strategic

choices

Strong

fundamentals

Constrained by economic fundamentals

Regulatory changes & enhanced compliance

Heightened competition not only from banks

58

Strong growth & momentum off a high base

NEDBANK WEALTH DAVE MACREADY

59

Nedbank Wealth – financial highlights

Year ended

%

change Dec

2014

Dec

2013

Headline earnings (Rm) 15,8 1 042 900

Operating income (Rm) 12,2 3,986 3,553

Pre-provisioning operating profit (Rm) 12,1 1,441 1,286

Margin (%) 1,94 1,93




Assets under management (Rm) 11,4 212 013 190 341

Life embedded value (Rm) 12,0 2 393 2 137

Life value of new business (Rm) (27,0) 257 352


Headline economic profit (Rm) 14,4 660 577

ROE (%) 36,8 36,2

Nedbank Wealth

Headline earnings

Other clusters

AUM net

inflows R8,5bn

Life APE (22,6%)

ST GWP +2,5%

11%

89%

60

NIR increased by 10,3% to R3,4bn

Highlights & KPI’s

Wealth Management Asset Management Insurance

Relative divisional NIR contribution & growth

2013 2014

WM Asset Management Insurance

10,6%

11,0%

9,8%

61

-2 000 000

3 000 000

8 000 000

13 000 000

18 000 000

23 000 000

2

5 000 002

10 000 002

15 000 002

20 000 002

25 000 002

30 000 002

2010 2011 2012 2013 2014

Liabilities Advances

Wealth Management – strong performance & growth

Record YoY HE growth

Strong growth in banking

Record growth in AuA

Momentum in Financial Planning

Top quartile performance

Single, integrated international HNW

proposition

Operational overview

+27,8%

+13,3%

Wealth Management: Liabilities & Advances

+3,3% +36,7%

4

5

6

7

8

9

10

11

12

13

20

30

40

50

60

70

80

90

100

110

2010 2011 2012 2013 2014

+36,7%

Stockbroking AuA

62

Asset Management – scale & momentum

Top 3 Raging Bull company

Strong netflows internationally

Leading in passive

Momentum in Best of Breed™

Excellent fund performance

Investment in mobile, digital & brand

Operational overview Assets Under Management (Rbn)

Net flows (Rbn)

9,8 6,5

24,4

15,5

8,5

2010 2011 2012 2013 2014

2010 2011 2012 2013 2014

International Local

212,0 190,3

150,5

112,2

102,6

63

0

100

200

300

400

500

600

0

500

1000

1500

2000

2500

3000

2010 2011 2012 2013 2014

+12,0%

Insurance – back to basics

Rebasing of traditional volumes

Strong growth in funeral & niche

offerings

Launch of Green Property Fund

Innovation in mobile & digital

Investment in a single client centric

system

Operational overview Life EV & VNB (Rm)

Short-term GWP (Rm) & claims ratio (%)

Embedded value Value of new business

+1

0,7

%

Gross written premium Claims ratio

50,0%

47,1%

31%

36%

41%

46%

51%

56%

61%

2010 2011 2012 2013 2014

0

200

400

600

800

1000

1200

+2,5%

(27,0%)

64

Prospects

Growth in new clients & NCCF

Investment in specialist IP & capacity

Strong traction in single integrated proposition

Wealth

Management

Grow international, wholesale & passive

Maintain excellence in long-term performance track record

Continued momentum in BoB & Cash

Asset

Management

Refocus to simple bancassurance

Investment in Nedbank Insurance brand profile

Systems & solutions

Insurance

Broaden our financial services franchise

Increasing cross-sell opportunities

Leverage group collaboration

Overall Nedbank

Wealth

65

Building our Pan-African Banking Network

REST OF AFRICA DIVISION GRAHAM DEMPSTER

66

Building our pan-African banking network & governance structures

A client-centred, risk-mitigated, capital-efficient, longer-term strategy

SADC & East Africa (A)

Grow presence from 6 to 10 countries in the

medium-term

Standardised operating model & IT system

Banco Unico (Mozambique): acquired 36,4%

stake for R252m (with pathway to control)

Coverage bankers in East & West Africa

West & Central Africa (B)

Acquired 20% equity stake in ETI for $493m

in October 2014

Ecobank strengthening its franchise

‒ Presence in 36 countries

‒ #1 in 6, top 3 in 14 countries

‒ New Board, Chairman & CEO

70 Nedbank wholesale banking clients now

bank with Ecobank

‘One bank’ experience for clients across 39 countries & >2 000 staffed outlets

67

Rest of Africa division - financial highlights

Year ended

%

change 2014

2013

Headline earnings (Rm) 106,4 357 173


Preprovisioning operating profit (Rm) 66,2 477 287

Margin (%) 4,75 4,66



Efficiency ratio1 (%) 69,2 76,3




Headline economic profit (Rm) (40,2) (122) (87)

ROE (%) 10,1 8,7

Rest of Africa division

Assets

Other clusters

Headline earnings

3%

97%

4%

96%


68

SADC & East Africa banking subsidiaries

Financial performance

Continued investment in the franchise

new senior executives

added 5 branches (& 17 from

Banco Unico)

increased IT spend

Increased economic capital allocation

(change in methodology) – impacting

ROE

Strong advances growth, up 17%

Increasing margin

CLR remaining flat at 39bps

underpinned by an improved risk profile

Solid NIR growth of 8,8%

165

224

13,5%

10,3%

0

2

4

6

8

10

12

14

16

0

50

100

150

200

250

300

2013 2014


ROE (%)

35,8%

Key drivers

69

Q4 2014: Nedbank has made its own associate

earnings accrual for Q4 2014 on a prudent

mechanical basis as ETI reports after Nedbank

Future accounting: Report earnings from ETI a

quarter in arrears

ETI attributable income for 9 months to

30 September 2014

$277m

Average of first three quarters $92,3m

Nedbank shareholding in ETI c20%

Q4 2014 Rand : US$ exchange rate 11,23

Associate income for 3 months to 31 Dec

14 after Nedbank prudency discount

R146m

Funding of investment carried in NII (R99m)

Strategic Associate investments

8

133

-10

10

30

50

70

90

110

130

150

2013 2014


Financial performance Equity accounting ETI

Invested to become c20% ETI & 36,6% Banco Unico shareholder

ETI investment (31 Dec 2014):

Cost: R5,9bn

Book value: R6,2bn

Market value: R5,5bn

Entry price of less than 1,0x NAV

Long-term strategic shareholding &

alliance

70

Prospects

SADC & East

Africa banking

subsidiaries

Rest of Africa

division

Increase market share & revenues

Explore expansion opportunities in SADC & East Africa

Flexcube IT system implementation in 2015

Deepen & strengthen our level of activity & technical services to enhance value propositions for clients

All clusters have roles & a contribution to make to increase the value of the investments

Risks arising from political, social & economic factors (lower oil price & currencies)

Strategic

Associate

investments

Continue adding management capability & investing in our people to embed a culture of client centricity

Leverage off & collaborate with the greater Nedbank Group

Targeting ROE of well above Nedbank Group cost of equity

71

Nedbank Group in good shape for a volatile & uncertain environment

SUMMARY & PROSPECTS MIKE BROWN

72

Macro & industry environment

Global

macro

environment

Domestic

macro

environment

SA banking

industry

2015 GDP growth: 2,5% with downside risk

Inflation to remain below 6%

Repo rate lower for longer: 25bps increase forecast in November 2015

Consumers highly indebted but some potential relief from lower inflation

Electricity constraints continue to impact business confidence

Mixed outlook for developed economies

Emerging market volatility likely to continue

Impact of oil & commodity prices to play out

Rest of Africa higher growth trajectory intact, but short term volatility

Low asset growth (wholesale > retail) & margin pressure

Corporate volumes holding up

Consumer advances & transactional volume growth to remain muted

Focus on bank fees, interchange remain

Capital market volatility to continue

Regulatory change remains intense

73

2015 guidance

Advances to grow at mid-single digits

Margin below the 2014 level NII

At the lower end of our target range of 80 – 120bps

Above mid-single digit growth (excluding fair-value adjustments)

Above mid-single digit growth

CLR

NIR

Expenses

Volatile economic

environment

Forecast risk

increased

Building our franchise

for the long-term

Growth in DHEPS greater than growth in nominal GDP DHEPS

growth

74

THANK YOU

75

Medium-to-long-term targets

Metric 2014 Medium-to-long-term

target 2015 outlook1

ROE

(excl goodwill) 17,2% 5% above COE Below target

Diluted HEPS growth 13,0% ≥ CPI + GDP growth + 5% > CPI + GDP growth

Credit loss ratio 79bps 80 – 120 bps At the lower end

of our target range

NIR : expenses 82,8% > 85% Below target

Efficiency ratio2 56,5% 50% - 53% Above target

CET 1 CAR

Tier 1 CAR

Total CAR

B III

11,6%

12,5%

14,6%

Basel III basis:

10,5% - 12,5%

11,5% - 13,0%

14,0% - 15,0%

Within target range

Dividend cover 2,07 1,75 to 2,25 times

BOOKLET ONLY SLIDE

1 2015 outlook based on current economic forecasts

2 Efficiency ratio includes associate income & going forward this target will be reviewed in line with this change

76

Key trends over time

477 499

527

579 613

2010 2011 2012 2013 2014

492 524

551

603

653

2010 2011 2012 2013 2014

3,36

3,48 3,53

3,57 3,52

2010 2011 2012 2013 2014

1,36

1,13 1,05 1,06

0,79

2010 2011 2012 2013 2014

79,6

81,5

84,2

86,4

82,8

2010 2011 2012 2013 2014

55,7 56,6 55,6 55,2

56,6

2010 2011 2012 2013 2014

Advances (Rbn): 6,5% CAGR Deposits (Rbn): 7,3% CAGR NIM (%): +16bps

CLR (%): -57bps NIR : expenses (%): +320bps

Efficiency ratio (%): +90bps

BOOKLET ONLY SLIDE

77

Full year ended

% change

2014

2013


Economic profit (Rm) (0,1) 2 112 2 114

HEPS (cents) 12,9 2 127 1 884

Diluted HEPS (cents) 13,0 2 066 1 829


ROA (%) 1,27 1,23

ROE (excluding goodwill) (%) 17,2 17,2

ROE (%) 15,8 15,6

Tangible NAV per share (cents) 10,6 12 553 11 346

Assets under management (Rbn) 11,4 212,0 190,3

Common equity Tier 1 capital ratio (%) 11,6 12,5

Dividend per share (cents) 14,9 1 028 895

Financial highlights BOOKLET ONLY SLIDE

78

Nedbank Retail Building more enduring client relationships through increased levels of transactional products cross-sell

3,4

10,5

5,2

(11,4)

0,1

Card

Personal

Loans

MFC

Home Loans

Total Retail

clients as at Dec’14

Investments

% YOY

Growth

TP 5,4

1,9

11,1

4,7

(15,6)

(2,4)

9,8

326

546

555

1,034

1,193

5 358

% YOY

Growth

# ‘000

Transactional clients with

product line

914

77%

827

77%

497 523

51% 50%

46%

257 290

44%

128 124

23% 23%

121

36% 37%

121

2014

1,459

27%

2013

1,385

28%

H2

Number of product line clients

with transactional products

79

Nedbank Retail No fee increases assist in slowing client attrition & the switch to lower priced bundled offerings

Personal Loans

Other

Card

Secured Lending

Mix & activity

Fee increases

Total

Transactional Volume

gains

Lending

related

Comparison of YoY NIR growth

Rm 2013

324

277

(269)

26

(34)

(211)

56

2014

449

299

24

39

196

(351)

33

+689 +169

R95m reduction

for lower credit

pricing with

enhanced

benefits

R235m

opportunity cost

of pricing

decisions

80

Nedbank Retail Embedding effective risk culture with adequate impairments - CLR impacted by advances mix, methodology changes & credit cycle

4,0 4,9 8,8 10,1 8,9 7,5

1 Actual CLR re-calculated assuming 2014 asset mix

2 Percentage defaulted advances including legal & non legal

6,3

Comparable CLR1

Retail CLR

(%)

1,21 1,15 1,35

2,70

3,27

2,72

1,98 2,01 2,16

1,70

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

4,6 NPLs2 (%)

1,9

Other

Personal Loans

Home Loans

Extreme volatility

2,2 3,1 3,7 3,9 4,0 4,0 Total

coverage3 (%) 2,3 3,6

3 2005 to 2008 numbers exclude MFC

4 Income statement impairments

5,6

4,1

4 959 1 512 3 559 5 644 1 040 3 729 887 3 927 I/S4 (Rm) 4 355

2,6

4,8

3,6

3 500

Target

range

81

Defaulted advances & specific impairments

Rbn

Portfolio impairments

Rbn

29 30 36 41 45 Specific

coverage (%) 50

0,6 0,5 0,8 1,0 1,2 1,3 Performing

book (%)

0,3 0,3 0,5 0,6 0,7 0,8 0,7 0,2 0,1 0,1

0,3 0,6

0,8 0,7

0,3 0,5 0,7

0,8

1,0 1,0 1,1

0,9 0,9

1,3 1,7

2,3 2,6 2,6

2008 2009 2010 2011 2012 2013 2014

Other

Personal Loans

Home Loans

Defaulted advances

Specific impairments

12,8

20,1 17,7

14,4 12,4 11,4 10,2

3,6 5,9 6,2 5,9 5,6 5,7 5,0

2008 2009 2010 2011 2012 2013 2014

1

Nedbank Retail Defaulted advances reduced - coverage at highest levels

1,1

0,7

1

49

1,3

2

2

1 Restated to include acquisition of Imperial Bank; restatement effect on portfolio impairments is minimal, hence not explicitly shown

2 Restated due to an incorrect split in MFC between defaulted restructured accounts & performing restructured accounts. Restated R393m of defaulted

restructured accounts & R73m of related provisions which were incorrectly classified in Dec 2013 as performing & have now been correctly classified as

defaulted to better reflect the underlying nature

1

82

Nedbank Retail– Personal loans Personal loans operating within strategic intent & lowered risk profile

-20

0

20

40

5

10

15

20

25

30

1 Asset growth reflects the 6 months on the preceding 6 months growth annualised 2 GOI margin is the total gross operating income (Net Interest Income & Non Interest Revenue) divided by average advances, before Wealth related income 3 PD is the probability of loan going into default based on early warning risk indicators

Early, comprehensive actions

taken since late 2011 have

successfully mitigated risk

Outcome achieved:

Book R3bn lower than

December 13

Negative growth rate slowing

in H2 2014

Portfolio expected to stabilise

in 2015

Better quality risk, within

desired risk appetite at higher

pricing

Default Rate peaked in H1’13,

now back in line with

expectations

Impairment Methodology

changes raised from 2012 to

address risk of higher write-

offs than forecast by models

PL asset

growth1

Nedbank growth (%)

Rest of market (%)

R3bn reduction in

2014

Expected PD model calibration 3 (%)

Actual / Predicted PD 3 (%)

Avg GOI margin2(%)

GOI

margin &

risk over

time

2014 2009 2010 2011 2012 2013

83

HL’s embedded in CVP’s

Priced for risk & better quality

Origination via own channels (79% from

existing clients; 10% online)

R1.2bn restructures (still on book) with

13% coverage (R0,8bn performing)

Total balance sheet impairments 1,2%:

Portfolio 0,6%; Specific 22,7%

R16bn (36%) good quality1, but mis-priced

by 125bps

R0,7bn in defined processes with 29%

coverage

R4,4bn restructures (still on book) with

12% coverage (R3,3bn performing)

Total balance sheet impairments 3,1%:

Portfolio 1,2%; Specific 27,8%

RoE dilution: 1,8% as no insurance

commission received & 7% from mis-

priced advances

Back book2

R43bn:

Loss of

R732m since

2009

Front book2

R38bn:

Profit of

R789m since

2009

RoE, %

1 Loans which would pass current credit policy utilising current pricing

2 Average Retail Home loan book excluding Retail Relationship Banking & Business Banking

3 Dec 2013 ROE restated due to due to changes in ALM risk management cost allocation

Nedbank Retail – Home Loans Fundamental redesign of home loans business model to address underperformance on risk & sources of competitive distinctiveness

(46,8) (36,7)

(6,4)

1,2 2,2 6,3

0

(8,6)

1,2

7,7

16,1 19,3

2009 2010 2011 2012 2013 20143

84

Nedbank Retail – Home Loans Early actions taken since mid 2009 to resolve 2006-2008 vintages with adequate coverage, while judiciously growing new business

2010 FY

2014 FY

Average advances (Rbn)1

Defaulted Loans (%)1 Credit Loss Ratio (%)1

Vintages Vintages

1 Retail Home loan book excluding Retail Relationship Banking & Business Banking

2 Based on Nedbank MMFTP, Liquidity & Balance Sheet Management charges, excluding endowment on ECAP

3 Margin required for 06-08 profile to be EP neutral in 2010, assuming no drop-off due to higher price

4 LTV based on original loan amount & valuation at point of registration

>100

90-100

LTV Distribution (%)4 Dec ‘14 Lending margin (%)2

~300bps higher

margin required3

80-90

0-80

44 22 26

13

12

38

37

39

34 7

27 2

Pre-06 06-08 09-14

14

62

16

8

36 38

Pre-06 06-08 09-14

1.5 1.2 1.2

1.5

1.0

1.9

Pre-06 06-08 09-14

7,2

14,7

3,4 5,1

7,5

2,6

Pre-06 06-08 09-14

2,2 2,5

1,0

0,1 0,1 0,2

Pre-06 06-08 09-14

Headline Earnings (Rm)1

Vintages

(111)

(748)

(45)

44 86

355

Pre-06 06-08 09-14

85

Plan

R2.1bn distribution investment over 3 years (2015

to 2017), including 278 branch reformats, 63 new

points of presence and 300 Intelligent Depositor

devices (IDs)

64 branch reformats, 23 new points of presence

and 23 closures in the next 12 months

Nedbank has redesigned the branches to provide

a distinctive client experience ,including improved

queuing and self service options such as video

banking and cash deposit functionality at ATMs.

Nedbank Retail The investment in the reformat of branches to our “Branch of the future” format

(BoF) is meeting client experience as well as financial expectations

Implementation Progress (per 31 December 2014)

171 branches reformatted

456 Intelligent Depositors installed

Reduction in retail floor space of 10,418sqm

Impact

Sales of transactional products have increased by

10% when compared to a control cell

39% of deposit transactions have shifted to self-

service (intelligent depositor ATMs) which exceed

354k transactions per month

20k transactions per month are being processed

through the video banker capability

22% of the Nedbank client base has been exposed

to the “branch of the future” formats

86

Disclaimer

Nedbank Group has acted in good faith & has made every reasonable effort to ensure the accuracy &

completeness of the information contained in this document, including all information that may be defined as

'forward-looking statements' within the meaning of United States securities legislation.

Forward-looking statements may be identified by words such as ‘believe’, 'anticipate', 'expect', 'plan',

'estimate', 'intend', 'project', 'target', 'predict' & 'hope'.

Forward-looking statements are not statements of fact, but statements by the management of Nedbank Group

based on its current estimates, projections, expectations, beliefs & assumptions regarding the group's future

performance.

No assurance can be given that forward-looking statements will prove to be correct & undue reliance should

not be placed on such statements.

The risks & uncertainties inherent in the forward-looking statements contained in this document include, but

are not limited to: changes to IFRS & the interpretations, applications & practices subject thereto as they apply

to past, present & future periods; domestic & international business & market conditions such as exchange

rate & interest rate movements; changes in the domestic & international regulatory & legislative environments;

changes to domestic & international operational, social, economic & political risks; & the effects of both current

& future litigation.

Nedbank Group does not undertake to update any forward-looking statements contained in this document &

does not assume responsibility for any loss or damage whatsoever & howsoever arising as a result of the

reliance by any party thereon, including, but n limited to, loss of earnings, profits, or consequential loss or

damage.

Documents

ANNUAL RESULTS - Nedbank · 2018. 5. 12. · SAP ERP implementation Live on 1 Jan 2015 (Procurement & Finance) HR module planned for Sept 2015 implementation IT systems rationalisation