opERational ovERviEw nedbank capItal · this is nedbank group’s funding interface with local and international financial and investment markets. all domestic and foreign currency-funding

NEDBANK GROUP LimitED iNtEGRAtED REPORt 201064

opERational ovERviEwnedbank capItal

the cluster comprises three primary businesses, from which it makes its distinctive

products, services and solutions available to its clients. these are:

iNvEstmENt BANKiNG, which includes:

• advisory services, comprising corporate finance, debt origination and debt

advisory services.

• specialised finance, entailing debt-financing solutions with a portfolio that

includes project finance, export credit finance, leveraged debt, acquisition

finance, securitisation and structured trade and commodity finance.

• sectoral specialist teams, providing clients with insight and advice into

energy, infrastructure, telecommunications, aviation, mining and resources,

retail, healthcare and diversified industrials industries.

GLOBAL mARKEts, which includes:

• Equity trading, providing hedging and structuring services to corporate,

institutional and retail clients. this division exploits the synergies between

trading and structuring equities and facilitates black economic empowerment

(bee) transactions. a prime broking service is also offered.

• Fixed income, currency and commodities and Foreign Exchange, offering

currency, interest rate derivative and bond-related products as well as

proprietary trading in various markets.

• nedGroup securities (pty) limited, offering research, sales and trading

services to major institutions.

tREAsURy

this is nedbank group’s funding interface with local and international financial

and investment markets. all domestic and foreign currency-funding requirements

are satisfied and managed through this unit. treasury also includes the carbon

finance unit and offers structured financial solutions.

hEADLiNE EARNiNGs

REtURN ON EqUity

r1 202m17,2%

23,5%(2009: 31,0%)

nedbank capItal provIdes specIalIst advIce, debt and equIty raIsIng and executIon, and tradIng capabIlItIes to clIents In all maJor sa busIness sectors. clIents Include the top 200 domestIc corporates, parastatals, fInancIal InstItutIons, multInatIonal corporates and maJor Infrastructure and mInIng proJects In afrIca as well as emergIng black economIc empowerment consortIums.

2 Nedbank CFO_ops FA.indd 64 22/03/2011 12:00 PM

65

overvIew group reports

operational overview

sustaInable development performance

rIsk, governance and complIance

the year unDer reviewwhile the sa equity markets enjoyed a marginal recovery in 2010 –

assisted to a certain degree by the successful 2010 fIfa world cup –

this did not translate into any notable increase in corporate activity

for the period under review. a benign interest rate environment and

relatively low levels of volatility also meant fewer opportunities

for clients to avail themselves of nedbank capital’s products and

solutions.

credit extension was muted as corporates predominantly focused

inwards, placing greater emphasis on prudent business management

in order to ride out the difficult economic period. the business

environment has also become far more competitive, both locally

and internationally, with global organisations increasing their

local presence and many local businesses extending their product

offerings in preparation for an eventual economic upturn.

the challenging economic environment limited the need for clients

to raise capital due to a generally compressed credit extension

environment. as a result, while nedbank capital’s main asset-

generating businesses added r9 billion in new advances, repayments

of a similar amount occurred.

the global markets business also experienced difficult trading

conditions, which impacted negatively on foreign exchange volumes

and margins. a general lack of volatility in fixed-income and interest

rate markets also had an adverse effect on revenue.

given the uncertain economic outlook, as well as reduced earnings in

some of nedbank capital’s private equity investments, the business

adopted a conservative approach in the mark-to-market valuation of

its portfolio. this resulted in higher impairment levels.

the cluster’s equity businesses were supported by a moderate

recovery in the equity markets, resulting in an impressive turnaround

from the loss-making position of 2009.

despite this challenging environment, nedbank capital retained

its strong position in the local finance market, as evidenced by the

many awards it garnered during the year under review, the most

significant of which were:

• GlobalTradeReview best deal award for firstcape vineyards.

• emea finance project finance award for best

telecommunications deal (neotel).

• euromoney project finance deal of the year for bakwena in the

transport and public-private partnership category.

• three dealmakers awards, including second place in mergers and

acquisitions activity (Investment advisers and sponsors categories).

• fourth-ranked mining project finance lead arranger in the world

in ernst & young’s mining eye report.



the fifth annual nedbank capital green mining awards took place in 2010.

nedbank capital instituted these awards in 2005 to acknowledge and celebrate

the invaluable contribution that responsible mining and mineral beneficiation

make to the economic development of africa (see the sustainability development

performance section of this report, page 115, for more information).

Innovation and client service remain key to nedbank capital’s sustainable-business

model. every deal is structured around the creation of innovative solutions,

delivered from a base of understanding and full service support. while most of the

deals are tailored to specific client needs, this innovative thinking also led to the

development and launch of a number of off-the-shelf products during the year

under review – many of which will serve as a useful foundation for structuring

individual deals in the future.

responsible lenDing ensures sustainable success For allnedbank capital continues to review all potential finance transactions for

environmental and social compliance with International finance corporation (Ifc)

performance standards and legislation. an integrated and proactive approach to

current and future legislation and standards is followed, while strictly complying

with the equator principles – a set of guidelines drawn up in 2003 by the Ifc

in conjunction with 10 of the world’s largest banks with a view to ensuring

a consistent approach to managing environmental and social risks in project

financing. to embed the principles of responsible investing further, the origination

and credit teams underwent compliance training in 2010 to increase their

awareness and understanding of social and environmental risks and their influence

on the sustainability of the book.

nedbank group was the first african bank to adopt the equator principles in

november 2005 and applies these to all project finance transactions exceeding

us$10 million. the equator principles risk categories are broadly as follows:

• category a: high risk – projects with potentially significant adverse social and/or

environmental impacts that are diverse, irreversible and/or unprecedented.

• category b: medium risk – projects with potentially limited adverse social and

environmental impacts that are few in number, generally site specific, largely

reversible and readily addressed through mitigation measures.

• category c: low risk – projects with minimal or no social and/or environmental

impacts.

over the past four years the nedbank capital project finance portfolio has grown in

strength with multiple projects financed across the globe.

nedbank capital remains the primary sponsor of

the sa arm of the chesskids (uk) chess education

programme in south africa, which first started out as

a means of making a difference in the lives of orphans

and vulnerable children in the Zandspruit squatter

area.

since its establishment in 2008, the programme has

grown in leaps and bounds and, with the support of

gauteng department of education district 14, now

sees children from 16 primary schools and three high

schools developing their analytical, strategic thinking,

mathematical and social skills simply by playing chess

every week.

the programme was also expanded to include a

scholarship and bursary scheme that has already

enabled a number of talented young chess players to

attend private high schools and follow their dreams

by furthering their studies at monash university.

given the immense success of the chesskids academy

programme thus far, the vision is to offer the

chesskids school programme to 160 gauteng schools

by 2013.

both the gauteng department of education and

the schools have agreed to provide the chesskids

academy with learning material to track and evaluate

individual and group performance in order to measure

the benefits and effectiveness of the programme. this

research will be available towards the end of 2011.

In 2010 the chesskids academy also rolled out a

spelling programme called spell It. the programme is

endorsed by the gauteng department of education

and is being implemented in district 14 schools. spell

It seeks to teach the children how to spell in a fun and

relaxing manner by playing a game. Interschool and

interdistrict spelling bee competitions are also held.

both programmes afford staffmembers a unique

opportunity to give of their time and talents by

volunteering at fun days, graduations and spelling

bees.

cREatinG bEttER FutuREs through chess






67

neDbank capital equator principles project Finance transactions 2005 – 2010

all project finance transactions that are impacted by the equator principles must

comply with the guidelines, as well as world bank and Ifc performance standards

and environmental health and safety guidelines. every project finance application

is assessed and categorised in terms of its potential environmental and social

impacts, using the Ifc performance standard as a benchmark. prospective

borrowers are required to abide by the standard and, once finance is approved,

all potential environmental impacts are closely monitored to ensure ongoing

compliance. borrowers undertake to comply with specific obligations related to

their high- or medium-risk projects.

an Ifc prerequisite for any reporting of equator principles-linked transactions is

that the first drawdown must occur in the financial year being reported on.

in this regard the only project finance transaction by nedbank capital that

was subject to the Equator principles (as its first drawdown was in 2010)

was an energy transaction situated in Ghana that is categorised as a b

(medium risk). the nedbank capital value of the deal is us$25 million.

total equator Deals 2007 – 2010

2010 2009 2008 2007

total number of deals that experienced their first drawdown 1 5 4 13

category a 0 1 1 5

category b 1 3 3 4

category c 0 1 0 4

total value of deals $25m $174m $83,8m $239m

equator principles transactions are typically complex with material lead times

to implementation. the figures above only reflect transactions drawn in the

respective years and not total approvals for those years.

In June 2010 nedbank capital was part of an

innovative power-saving initiative that saw solar-

powered traffic lights installed at a number of

intersections around sandton in Johannesburg. the

lights are powered exclusively by solar energy, thereby

lessening the load on the region’s power grid, reducing

dependency on an increasingly unreliable power source,

and reducing carbon emissions by keeping traffic

flowing more freely.

the project has economic spinoffs in that it enables

higher productivity by reducing the amount of man

hours lost by businesses due to employee lateness as a

result of traffic congestion.

the sponsorship by nedbank capital funded two

rotar lights, which include battery backup power to

ensure smooth traffic flow, regardless of the weather

or national power grid conditions. each solar-powered

intersection has the potential to save up to 385 kw

hours per month, or 4 620 kw hours per year – enough

to power 17 325 energy-saver light bulbs for 24 hours.

innovation-powERED envIronmental sustaInabIlIty

neDbank capital

EquatoR pRinciplEs pRojEct FinancE tRansactions corporate socIal Investment spend 2010

carrIbean

north amerIca

asIa

afrIca

57%

18%

11%

7%

3%4%

south amerIca

europe



cooperate closely with product experts to deliver tailored solutions

that enable nedbank capital’s clients to achieve their objectives.

the continued focus on new business opportunities will be linked to

regulatory changes and market trends. detailed strategies are being

developed with the aim of leveraging the growing green economy

and renewable energy sources, both of which are already creating a

fundamental shift in focus for finance providers around the world.

the expertise gained by nedbank capital in recent years in carbon

origination, financing and regulation positions the business as a

centre of excellence in these areas. this position will be strengthened

and extended to provide valuable advisory services to clients around

carbon financing. the green positioning is further entrenched by

nedbank capital’s commitment to fund renewable sources of energy

and a pipeline of deals in this area is in place and will be pursued

in 2011.

a boutique-driven international strategy will see the business

building on its sector expertise to expand its offering mainly

throughout africa and, in the case of resources, globally, off the

established london platform.

nedbank capital will also continue to leverage its close working

relationship with nedbank corporate to initiate a greater number of

nedbank group-driven joint deals, as opposed to merely acting as a

participant in deals originated by other parties.

Innovative product and solutions development, effective risk

management in all aspects of the business, and the attraction,

retention and development of talented people constitute the

cornerstones of nedbank capital’s strategy.

looking ForwarDwe are cautiously optimistic regarding the outlook for 2011 and expect

some corporate leveraging to take place. with a stable earnings platform

and good credit quality book in place, nedbank capital’s focus for the

coming year will be on increasing the cluster’s share of wallet, attracting

new clients, and developing innovative solutions that generate growth in

income. disciplined risk management will underpin all these endeavours.

the business boasts a broad spectrum of profitable investment banking

products and services, which offers good portfolio diversification.

with this in mind, nedbank capital will focus on acquiring additional

stable and diversified funding sources, while reinforcing its integrated

investment banking model.

the cluster will continue its theme of responsible investment banking

by formalising several of the initiatives it has undertaken – particularly

the creation of a sustainability forum that reports on, and monitors, its

green activities, carbon financing, chesskids and renewables financing.

nedbank capital’s significant investment in updating its trading systems

(the wallstreet implementation) will be further bedded down in 2011,

realising operational savings and optimising trading opportunities.

the strong ecobank nedbank alliance will be leveraged further and is

expected to gain further traction with the formation of an investment

banking arm known as ecobank capital.

Financial review year ended % change 2010 2009

headline earnings (rm) (17,2) 1 202 1 452*

efficiency ratio (%) 45,1 45,9

credit loss ratio banking advances (%) 1,27 0,36*

average banking advances (rm) 6,2 42 113 39 638

average deposits (rm) 16,4 182 637 156 934

allocated economic capital (rm) 9,4 5 116 4 678*

return on equity (roe) (%) 23,5 31,0*

*Restated.

nedbank capital’s roe remained strong in the 2010 financial year

at 23,5%. headline earnings decreased by 17,2% to r1 202 million

(2009: r1 452 million) for the first time in six successive years.

economic profit of r477 million declined 42,7% as a result of higher

capital allocation and increased cost of equity. capital allocation

increased from r4 678 million to r5 116 million as the group

realigned economic and regulatory capital utilisation.

the operating environment continued to be challenging, with

corporate and project demand for credit remaining muted. average

banking advances grew by 6,2% and average deposits by 16,4%,

boosted by negotiable certificates of deposit and fixed-rate notes as

institutional clients sought higher-yield, longer-dated instruments.

the cluster remains a strong generator of non-interest revenue

(nIr) as evidenced by the continued improvement in the nIr-to-

expenses ratio from an already high ratio of 139,2% to 145,0%.

trading income showed strong growth of 14,8%, primarily due to

a significant improvement in the equity trading business. the forex

business experienced margin compression and lack of volatility

compared with 2009. Income from the advisory business and

private equity decreased as a result of subdued levels of advisory

activity and difficult markets respectively.

nedbank capital impairments increased to r535 million due to a

conservative approach to mark-to-market valuation adjustments

in the private equity portfolio. this largely contributed to a 12,7%

decrease in operating income to r2 930 million for the 2010

financial period.

total expenses declined by 2,8% to r1 561 million, which can be

attributed to tight cost control. this is also reflected in the efficiency

ratio improving to 45,1%, compared with 45,9% in 2009, despite

the cluster investing for growth in a number of systems to improve

trading.

strategyfor 2011 and beyond the strategic direction for nedbank capital

remains to drive growth by providing its clients with solutions that

meet their unique needs rather than selling them products.

sector-focused teams, specialising in resources, power, infrastructure,

telecommunications, bee, and diversified industrials will continue to






69

neDbank capital



opERational ovERviEwnedbank corporate

corporate banking is a relationship-driven business that focuses on the wholesale

corporate market in southern africa, with teams based in Johannesburg, durban,

cape town and london. corporate banking engages with clients who have

turnovers exceeding r400 million per annum and lending requirements in excess

of r50 million. It extends a full-service wholesale banking offering from lending to

transactional banking through dedicated teams of corporate bankers, credit and

transactional experts, as well as a specialised structured-debt team.

property Finance specialises in providing tailormade financial property finance

solutions to:

• commercial, industrial, retail and residential property developers, investors and

owner occupiers;

• listed property funds; and

• partnerships – either through joint ventures or minority equity investments.

nedbank africa provides holistic banking in five southern african countries, and

offers retail banking products, wholesale lending and deposit-taking. the focus is

on economically profitable market segments and sectors where nedbank africa

has a competitive advantage. the business leverages the ecobank nedbank alliance

footprint in providing a one-bank experience and accessibility to its clients.

transactional banking supports nedbank corporate, nedbank business banking

and nedbank retail through innovative transactional product development. It

offers services across south africa, in five african countries, and in regions serviced

by the ecobank nedbank alliance. transactional banking also manages nedbank

corporate’s international financial relationships with its global banking partners.

corporate shared services is the delivery and service centre for transactional

processing and is primarily responsible for the processing and servicing of

wholesale products in support of nedbank corporate and business banking clients.

It also provides transactional processing and servicing for a large portion of

nedbank retail clients.

the year unDer reviewdespite continued weak credit demand and contracted margins, 2010 was

characterised by gains in primary-banked clients and a strong core banking

performance by nedbank corporate.

asset margins widened in key categories, but this was discounted by margin

compression in the lower-rate environment, higher funding costs and the effect of

liabilities.

the risk environment remained challenging, but nedbank corporate had another

solid year in terms of containing impairments, reinforcing the value of the robust risk

management disciplines that have been embedded in the business over the years.

hEADLiNE EARNiNGs

REtURN ON EqUity

r1 496m13,1%

19,7%(2009: 23,7%)

nedbank corporate provIdes lendIng, deposIt-takIng and transactIonal servIces to nedbank group’s wholesale bankIng clIents. It does thIs through three clIent-facIng busIness unIts and two support areas.






71

the nedbank property finance academy amply

demonstrated nedbank corporate’s commitment

to providing employees with opportunities for

growth and development, while equipping them

with a clear understanding of the industry and

the tools and knowledge they require to perform

and contribute to the overall performance of the

business. the academy is accredited through the

university of the witwatersrand and delegates

receive a certificate in property finance practice

from the university on completion of their studies.

a total of 166 nedbank staffmembers have

graduated from the programme. the academy has

been recognised as an industry leader, and was

voted the winner of the finance sector award at

the inaugural skills summit achiever awards early

in 2010. It has also been widely acknowledged for

displaying exceptional creativity and innovation,

and for bringing about positive change in the

property finance industry.

FocusED on skIlls development

the business performed well in a survey on the attributes most valued by clients,

and there was a strong showing in the annual survey of staff on the organisational

culture, underscoring the investment in people and the fact that the leadership

team is well established.

key to the performance of nedbank corporate is the focus on cultural sustainability

with regard to the management of our human capital. the business continued to

perform particularly well as evidenced by the decrease in the barrett survey entropy

score to 9%, with seven value matches, as well as nedbank corporate achieving a

positive overall nedbank staff survey score of 78,9% and including nedbank africa

72,2%. these scores are reflective of a healthy functioning business.

during 2010 priority was given to:

LEADERshiP EFFECtivENEss

• embedding a high-performance culture to address performance (productivity)

barriers.

• enhancing emotional intelligence (personal mastery and interpersonal

effectiveness).

• building further executive and staff coaching capabilities.

tRANsFORmAtiON

• ongoing rollout and customisation of the botho pele diversity workshops.

• continued focus on addressing the employment equity barrier.

ThenewNedbankPhase2buildinginSandton;thefirstbuilding

inSouthAfricatobeawardeda4-StarGreenStarrating.



tALENt mANAGEmENt AND sKiLLs DEvELOPmENt

• ensuring the availability of succession plans across divisions.

• Integrating the recognition and reward processes with overall talent

management in order to retain key people.

• continuing investment into business and executive education to ensure

succession management and to develop and mobilise talent.

• managing the supply of scarce and key skills through continued investment in

academies, bursaries, graduates and learnerships.

• building and developing the management leadership pipeline through, among

others, job rotation and coaching.

the highlight of nedbank corporate’s staff recognition process was the 2010 awards

dinner held at sun city. In keeping with the group’s green positioning the event was

held by candlelight to observe earth hour. the dinner coincided perfectly with the

timing of this global initiative and attendees were asked to light special candles as a

symbolic gesture to mark the occasion and show their support.

Financial reviewyear ended % change 2010 2009

headline earnings (rm) (13,1) 1 496 1 722*


credit loss ratio (%) 0,20 0,25*

average advances (rm) 5,1 151 433 144 055

average deposits (rm) (6,0) 124 077 131 945

allocated economic capital (rm) 4,4 7 603 7 280*


*Restated.

nedbank corporate recorded headline earnings of r1 496 million for the 2010

financial year and an roe of 19,7%. the negative impact of endowment contributed

to the 13,1% decrease in headline earnings (5,7% excluding the Imperial bank

property book).

core non-interest revenue (nIr) (excluding Imperial bank limited) grew strongly

by 11,9% in line with the cluster’s strategy of focusing on increasing primary-

banker market share, deepening transactional banking offerings, and embarking on

a cross-sell value proposition. this was further boosted by 20 new transactional

banking clients acquired during the year and a strong increase in electronic

banking revenues. expenses grew 17,0%, partly as a result of investment spend

on innovation to support nIr growth. this resulted in the nIr-to-expenses ratio

declining to 62,8%.

high-quality credit portfolios, coupled with the strategy of early identification and

proactive client engagement, led to a credit loss ratio of 0,09% (0,20% including

the Imperial bank property book), a continued improvement on the 0,25% recorded

in 2009 and well within the cluster’s through-the-cycle target range of 0,20%

to 0,35%. the credit loss ratio improved in all three operating businesses, with

corporate banking’s credit loss ratio declining to a negative ratio of 0,17% to reflect

net recoveries and a release from specific provisions, nedbank africa improving from

0,51% to 0,42%, and property finance standing at 0,34% (0,53% including the

Imperial bank property book).

average advances for the period under review grew by 5,1% to r151,4 billion, while

average deposits declined by 6,0% to r124,1 billion as a result of corporate clients

switching from term deposits to higher-yielding negotiable certificates of deposit

during the year, prompted by the environment of lower interest rates.

the new nedbank phase 2 building in sandton

represents an advance in the group’s sustainability

journey. the first building in south africa to be

awarded a 4-star green star rating, the new offices

embody nedbank’s commitment to minimising its

impact on the environment, and nedbank corporate

was intricately involved in making this happen for the

group. from environmentally friendly construction

materials and methods to interior design and the

overall operation of the building, everything about

nedbank phase 2 is green.

• material usage – the building is predominantly

framed in reinforced concrete, with 95% of the

reinforcing steel from recycled resources.

• fresh air – a full-economy-cycle air-conditioning

system flushes fresh air through the building when

conditions are favourable, while carbon dioxide

sensors on each floor monitor levels and adjust the

flow of fresh air.

• air-conditioning – high-efficiency, water-cooled

centrifugal chillers were combined with an

ingenious heat recovery system to minimise the

cost of heating and cooling the building. Zero-

ozone-depleting refrigerants make it an even more

environmentally friendly system.

• water recycling – an innovative black-water

treatment system sees water used in the building

partially recycled and reused for all non-potable

water requirements such as for toilets and the

irrigation of indigenous gardens.

• lighting – energy-efficient lighting is used

throughout the building and an intelligent lighting

system monitors, dims and switches off lights in

all unoccupied office sectors. some 60% of offices

have a direct line of sight to the outdoors or to a

natural-light atrium.

• waste management – a dedicated system provides

for the collection and separation of paper, glass,

plastics, metals and organic materials.

nEw nEDbank builDinG is a bluEpRint FoR a greener future






73

the weaker economic environment resulted in limited average

advances growth in corporate banking of 0,3%. despite this, the

business generated headline earnings of r826 million and an roe of

27,6%.

property Finance achieved 7,9% growth in average advances,

headline earnings of r550 million and an roe of 18,3%.

nedbank africa performed well, with average advances up 20,2%.

headline earnings increased by 4,5% to r139 million at an roe or

14,6%, greater than the cost of capital.

transactional banking continued to drive innovation within the

cluster with the successful implementation of cash solutions such as

emall and currency converter, the delivery of the enhanced electronic

banking system, and the reengineering of deposit-taking, while

the introduction of estatements is an initiative towards increased

efficiency and supports nedbank group’s green positioning.

shared services enjoyed another good year with operational losses

well below threshold levels and once again gained accolades as a

leading custodial services business.

strategynedbank corporate’s core strength is in providing personalised

relationship-based banking services and solutions to the wholesale

market. this is achieved by ensuring a thorough understanding of the

banking needs of clients and the markets in which they operate, and

delivering appropriate banking solutions.

key strategic focus areas include:

• growing sustainable economic profit through value-driven

strategies.

• Increasing client acquisition and share of wallet through

intragroup cross-selling.

• selective asset and liability growth.

• continuing to contribute to business sustainability and

transformation through the funding of black economic

empowerment and green initiatives.

• achieving a step change in nIr by aligning the cluster’s sales

force and profitable products to the appropriate clients and

business sectors.

• embedding risk and capital management imperatives in planning,

performance management and pricing.

• continuing to focus on driving efficiencies while maintaining

investment for future business growth.

• developing leaders and managing talent.

underpinning this strategic focus is a continued commitment to

cultural sustainability, with a particular focus on transforming

nedbank corporate’s workforce profile and creating an appropriate

pool of skills required for growth and diversity. through appropriate

remuneration and reward structures the cluster will also continue

to attract and retain the talent it requires to secure future business

growth. nedbank corporate remains committed to helping develop

south africa’s talent pools, particularly in areas of skills shortages.

looking ForwarDthe business environment and economic prospects are expected to

improve slightly in 2011, based on momentum gained in the last

quarter of 2010. credit extension is likely to improve with good

funding opportunities in the value chains of growing sectors of the

economy as well as the public sector infrastructure programme.

nedbank corporate will continue to focus on sustained economic

profit growth while applying rigorous risk management disciplines.

the business will seek to increase the number of primary-banked

clients and improve the nIr-to-expenses ratio.

continued client service improvement and the ongoing rollout of

innovative electronic banking products and solutions will remain key

focus areas for transactional banking.

all the businesses comprising nedbank corporate will continue to

align closely with the image and strong positioning of the nedbank

brand and strive to contribute to the strengthening of its corporate

and commercial equity through closely aligned media campaigns

and consistent financial performance.

nedbank africa is on a solid growth trajectory and will pursue

opportunities for expansion in line with the group’s vision of being

africa’s most admired bank.

nedbank corporate will continue to invest in people development

with a strong focus on providing visible leadership and a culture of

collaboration and unity.

neDbank corporate



opERational ovERviEwnedbank retaIl and nedbank busIness bankIngthe year 2010 was sIgnIfIcant, wIth multIfaceted busIness challenges and a tough economIc clImate In whIch contInued hIgh consumer Indebtedness and muted busIness demand resulted In Interest rates beIng decreased to theIr lowest In 36 years. sIgnIfIcant progress was made In brIngIng the nedbank retaIl and nedbank busIness bankIng leadershIp and frontlIne teams closer together and understandIng the strengths and opportunItIes for unlockIng value creatIon and growth for nedbank group’s clIents and communItIes across south afrIca.

NEDBANK BUsiNEss BANKiNGstrategythe primary strategic thrust for nedbank business banking is to continue its journey

of business transformation and growth en route to becoming the leader in business

banking for south africa as measured across the key dimensions of staff, clients

(including primary-banked market share) and financial performance. emphasis

is on the word ‘for’ south africa, in recognition of the importance of nedbank

business banking’s contribution towards enterprise development, job creation and

community upliftment in the broader context of sustainable development.

over the six years to 2010 nedbank business banking has delivered consistently

high returns to shareholders (> 25%) and cumulative economic profit of r3 billion,

while at the same time investing in the business in line with its strategic intent and

strategy roadmap. this investment occurred into people leadership and diversity,

the compelling holistic client offering with distinctive differentiators, organisational

design, disciplined risk management capabilities, pricing tools, client value

propositions for selected industries and overall market positioning.

review oF the yearthe sixth year of nedbank business banking’s business transformation was

characterised by the continued quality of the business with strong performance

across the areas of client, staff and financial growth.

the positive results of a consistent and cohesive focus were evidenced in the

results of the cluster’s first-ever independent customer management assessment

tool (cmat™) global benchmarking – a rigorous evaluation of an organisation’s

client management capabilities. nedbank business banking achieved the highest-

ever score of any fully business-to-business organisation and the fifth best score

out of all 900 businesses surveyed globally in the history of the assessment. this

places nedbank business banking in the top decile of global client management

competences, demonstrating the successful translation of client-centred principles

into practice.

the year 2010 saw a strong shift in both new client acquisitions (up 35% year-

on-year) and cross-sell to existing clients, with vastly enhanced reporting tools

and management processes put in place. at the same time the business retained

its focus on effective client retention. the r12 billion in new asset payouts also

confirmed that nedbank business banking remained open for business and provided

support to businesses even in these challenging economic times.

BUsiNEss BANKiNG: hEADLiNE EARNiNGs

BUsiNEss BANKiNG: REtURN ON EqUity

REtAiL: REtURN ON EqUity

REtAiL: hEADLiNE EARNiNGs

r825m26,4%

26,4%(2009: 26,6%)

4,6%(2009: -0,2%)

r760m>100%






75

nEDbank busIness bankIng

nEDbank retaIl

nedbank business banking services medium-sized businesses with an

average annual turnover of r7,5 million to r400 million. typically these

businesses tend to be family-owned and geographically dispersed.

as such, nedbank business banking operates through a well-

entrenched, decentralised, accountable business service model, which

uniquely positions the business to deliver personalised relationship

banking based on local knowledge and a deep understanding of

clients’ businesses.

client service teams, comprising sales, service and credit specialists,

are located in offices around the country, ensuring quick responses

to client requests and early identification of risks and service

opportunities. the client service teams are supported by product

specialists who facilitate more complex client needs, including

specialist finance, invoice discounting, transactional banking, card

acquiring and asset management.

nedbank retail serves the financial needs of all individuals

(excluding high-net-worth clients) and small businesses with a

turnover of up to r7,5 million to whom it offers a full spectrum of

banking and assurance products and services. the nedbank retail

product portfolio includes transactional accounts, home loans,

motor finance [including motor finance corporation (mfc)], card

(both card-issuing and merchant-acquiring services), personal loans

and investments.



nedbank business banking continued to generate a high roe of

26,4% (2009: 26,6%) and strong economic profit of r382 million

(2009: r563 million), delivering consistently high returns for the

sixth successive year. this was achieved despite the r247 million

post-tax lower endowment earnings in 2010, both from the

environment of lower interest rates and the balance sheet efficiency

exercise undertaken during 2009 and 2010 that reduced capital

utilisation by r1,1 billion in the cluster for 2010, but strengthened

nedbank group ratios. headline earnings, when aligning the

capital base and interest rates to the 2009 capital ratio and rates

respectively, declined by 4,4%.

the cluster’s focus on deepening its product cross-sell of

transactional products has yielded good results with fees and

commission earnings up 10,8%. following two years of cost growth

below 3,0%, costs in 2010 grew by 10,3% as a result of investments

to unlock growth plans. actual advances growth, at 1,3%, remained

muted despite r12 billion in asset payouts as clients deferred

expansion plans and moderated inventory levels.

the decentralised, accountable business model and localised client

service teams contributed to net new primary-client acquisition,

which was up 35% on 2009, as well as to the improvement in

the credit loss ratio to 0,40% (december 2009: 0,52%). the

improvement in the credit loss ratio is once again evidence of

the continued effectiveness of risk management practices within

the cluster over the past six years. the sustainability of nedbank

business banking is demonstrated by the r3 billion in cumulative

economic profit generated between 2005 and 2010 on r3,7 billion

of average capital while continuing to invest in staff, clients and

communities.

NEDBANK REtAiLover the past 15 years nedbank group has not continuously

invested in building a client franchise for the long term with a

consistent, cohesive strategy aligned with demographic trends. this

is evidenced by the low share of mass market clients (1,1 million

versus the more than 4 million of competitors) and lower primary-

banked client profile with, consequently, lower participation in this

attractive economic profit pool.

nedbank group is also behind other banks in client experience and

infrastructure, which are the most important factors in a client’s

choice of bank. during the same period, however, nedbank retail

strengthened its position in terms of client service, sustained and

grew its presence in the personal loans, motor finance, card-

acquiring and deposit businesses, and improved client service, and

was able to increase its footprint by means of alternative outlets.

the investment in people and culture is also an area of strength and

source of distinctiveness for the business.

nedbank business banking approved just under r6 million in

enterprise development assistance to emerging black small and

medium enterprises comprising training, business mentorship,

entrepreneurial incubators and flexible lending structures. this

supported the creation of 95 jobs with 310 entrepreneurs benefiting

from easier access to finance and other developmental interventions.

nedbank business banking’s empowerment financing performance

exceeded its targets in both primary categories of loans extended

to black small and medium enterprises and emerging enterprises

operating in the agricultural sector.

service levels remained a top priority for the business. an extensive

internal campaign to raise awareness of the importance of service

excellence and to create accountability for service delivery with

every employee resulted in client service ratings, including client

loyalty, reaching the best levels in six years. this demonstrates

nedbank business banking’s understanding of its clients and its

ability to build enduring relationships through the lifecycle of clients’

businesses.

In recognition of the vital role that its people play in its continued

success, nedbank business banking continued to refine and embed

worldclass people practices – from recruitment and onboarding to

ongoing talent management – all intended to enhance the business’

cultural sustainability by empowering and equipping employees

to perform at their best. focus was placed on the coaching and

mentoring aspects of people development with a large proportion

of managers undergoing training aimed at equipping them to coach

those who report to them effectively. the continued improvement in

the results of nedbank group staff surveys showed that these efforts

are contributing towards a positive shift in staff satisfaction and a

more cohesive, empowered and high-performance organisational

culture.

In an effort to help overcome the ongoing shortage of skills within

the sa banking industry and contribute to social sustainability

nedbank business banking launched its talent academy with the

aim of building a continuous pipeline of sales- and credit-ready

employees. this formally registered sales and credit learnership

programme is an industry first and will see the ongoing deployment

of qualified training academy ‘graduates’ into the business.

Financial review

year ended % change 2010 2009

headline earnings (rm) (26,4) 825 1 121*

aligned headline earnings** (rm) (4,4) 1 072 1 121*



average advances (rm) (3,2) 52 439 54 187


allocated economic capital (rm) (25,9) 3 123 4 127*


* Restated.

** Alignedinterestratesandcapitalratiosin2010with2009levels.






77

strategya thorough strategic review of the market segments confirmed that retail is a growing

market with another five million new entrants likely to enter the formal banking

market in the next 10 years. It also showed that the middle class in south africa is

rising strongly, and the senior market remains attractive with another 1,4 million

people entering this market in the next 10 years. the overall retail market economic

profits are attractive and growing in the medium term.

taking into account the competitive landscape, technology trends, and its own internal

context and core strengths, nedbank retail has defined its vision to ‘understand clients’

financial aspirations and provide clients with a choice of distinctive, client-centred

banking experiences that strengthen the value of their relationship with nedbank’. this

aspiration is strongly underpinned by worldclass risk management practices.

recognising the powerful ‘virtuous circle’ of the individual who becomes an

entrepreneur, builds a business, and is then also an employer, means more of the

client’s banking activities can be captured as well as those of the client’s employees

due to interacting with the key influencer. the ease and simplicity of banking for the

client will be enhanced by servicing the individual and business as one. In nedbank

retail the influencers in households, their needs, and how they wish to be banked

will all be considered – whether they are at an entry level or in a more affluent

position – with offerings that service the needs of the client and can be easily

concluded by the influencer, eg a pension plan for a domestic worker or first savings

account for a child.

at the same time nedbank retail will leverage its existing strong product lines to

have relevant bundled offerings that are integrated into the way clients wish to

shop. this will mean offering a choice of opening hours and channels (ie branches,

outlets, contact centres and mobile and online channels). In particular, nedbank

retail will focus on extending its presence within attractive growth segments,

namely youth, entry-level banking and small business, while rebuilding its historic

strength in the middle market. the strong wholesale franchise will be harnessed to

access employees of companies through a differentiated nedbank@work offering.

this strategy has been translated into a comprehensive blueprint plan, comprising

12 step change initiatives to be implemented over and above the ‘business as usual’

activities. these initiatives include developing distinctive value propositions with

the entire organisation aligned to delivering these as well as repositioning the home

loans business, winning in the cellphone sphere, capturing cost efficiencies and

simplifying the information technology platforms and processes.

the year 2010 saw the launch of vodacom m-pesa,

a new mobile money transfer service resulting from

a collaboration between nedbank, vodacom and

vodafone. the service is targeted at south africa’s vast

unbanked population, who have financial needs for a

relevant, affordable product bundle distributed close

to the client, but the service also has relevance in the

small-businesses market for payments to non-payroll

employees.

m-pesa allows clients, many of whom have no access

to mainstream banking facilities, to send and receive

money via their cellphones. the individual’s cellphone

number is effectively used as their bank account and

allows m-pesa clients to deposit cash into an m-pesa

account at an authorised m-pesa outlet and then send

the details to another person, anywhere in the country,

who can withdraw the funds from an m-pesa outlet

or, if registered, one of nedbank’s 2 000 atms. the

m-pesa outlets are businesses that have been approved

to service clients for m-pesa transactions, including

over 450 nedbank branches. In launching m-pesa,

nedbank has removed the major obstacle of a lack of

transactional banking access and delivered a valuable

service to a large segment of south africa’s population.

more than 65 000 clients registered for m-pesa since

the launch of the solution in september 2010 and it is

steadily gaining momentum.

the askonce programme has continued to help to drive

worldclass service initiatives within nedbank retail.

everytime a client brings a broken promise to nedbank

group’s attention r50 is donated to a charity. In 2010

R167 700 (2009: r90 000) was paid across to charities.

DElivERinG bankinG bEnEFits thRouGh InnovatIon and partnershIps

askonce pRoMisE – drIves servIce

neDbank retail anD business banking

ANedbankbranch.A Nedbank branch.



this is a shift from the previous product focus to a client-centred

and integrated business with relevant offerings to distinctive

markets. as a consequence of this new strategic direction,

nedbank retail has been reorganised into four complementary line

businesses, namely consumer banking, retail relationship banking

(a combination of small-business services and private banking),

card and secured lending, with strong shared functional lines of

accountability, including risk, compliance, finance, strategy and

technology. nedbank wealth will be the singular offering for high-

net-worth clients.

the cohesive strategy and three fundamental imperatives of

worldclass risk management practices; consistent investment in

clients through their life stages; and strong alignment of product,

channel and client insights to deliver a choice of distinctive, client-

centred experiences, should deliver the desired results.

Importantly, the fundamental, sustainable transformation of

nedbank retail’s client franchise is a medium- to long-term journey,

requiring consistent, aligned execution of the identified strategic

initiatives, while also seeking to deliver growth and a shareholder

return above the cost of capital in four years based on the current

economic outlook.

while it represents a significant opportunity, the sustainable

turnaround of nedbank retail remains challenging in the short

term, as r16,6 billion of nedbank group’s capital is allocated to

the cluster and in the five years to 2010 this cluster has generated

r1,6 billion of cumulative economic losses. this is a challenging

situation that will take time to overcome.

review oF the year

nedbank retail has been stabilised through the rebuilding and

strengthening of the leadership team and addressing the secured-

lending impairment challenges. the business is now well positioned

for a sustainable turnaround following a comprehensive strategic

review and initial investments into strengthening the clients’

experience and access to banking.

focus has been on growing client numbers across the full spectrum

and deepening relationships with them through their life stages.

In 2010 nedbank retail was able to attract almost 100 000 new

primary clients, 7,4% more than in the previous year, with higher

average revenue per client.

the innovative m-pesa cellphone offering, launched jointly with

vodacom in september 2010, complements the mzansi offering and

has already attracted over 65 000 registered users.

the nedbank savvy offering is another example of a distinctive

client-centred innovation, primarily for the youth market and

based on deep client insights. since its launch in september 2010

some 30 000 savvy accounts have been opened. the nedbank

savvy campaign was supported by a total realignment of internal

processes, product and pricing to develop a bundled, multichannel

offering that ensures real client benefits and an enhanced purchasing

experience. the savvy marketing campaign has been very successful

in repositioning the nedbank brand and is one that nedbank retail

can build on in future years.

significant investment was made to expand the group’s distribution

footprint with an additional 409 atms, 17 branches, 13 personal

loans branches and 70 kiosks as well as 69 outlets in retailers.

altogether 35% of personal loans branches now offer transactional

banking and 37% have atms, emphasising a more integrated offering

within the existing footprint.

the extended opening hours piloted during december 2010 received

positive feedback from both staff and clients. this is an opportunity

to support the way nedbank clients live, work and play in their

respective communities. with enhanced investments of r330 million

in 2010, resulting in 20% more outlets, extended branch hours and

cellphone innovations as well as 650 more frontline staffmembers,

clients will find it increasingly convenient, easy and affordable to

bank through their channel and at a time of their choice.

the positive effect of ongoing efforts in enhancing service levels are

demonstrated by the improved ratings received by nedbank retail

in the ask africa orange Index, the cmat™ assessment and a recent

independent banking industry study of key client experience scores.

nedbank retail’s employees remain key to the realisation of the

business’ vision and objectives, and the cluster’s investment in its

people has continued over the past year. a number of initiatives have

helped to strengthen the talent pool and enable the development

of individuals and teams that have the skills and knowledge to take

the business forward. staff satisfaction scores, while still high at

77,8%, dropped by 1,5% on 2009, and the focus is now on ensuring

that all staffmembers have the necessary context and insights to

appreciate the strategic direction of the journey ahead. more than

2 700 nedbank retail employees have already been exposed to the

detailed turnaround strategy and understand what it means for them.

feedback has been overwhelmingly positive, with staff displaying great

enthusiasm and appreciation for the part they can play as nedbank

retail charts a new path to sustainable, profitable growth.

with impairments representing the primary impact on nedbank

retail’s overall performance, particular focus has been placed on

addressing this challenge. a combination of low client numbers and

transaction volumes, high levels of consumer indebtedness, and the

slow recovery in the property market has meant that the transactional

banking side of the business has not been able to counterbalance

these high levels of impairments through non-interest-revenue (nIr)

generation and higher funding spread from savings accounts.

that said, efforts at addressing the impairment challenge have gained

traction, particularly given the recent improvements in the card

receivables book profile, improvements in home loans early arrears,

and gradual reduction in the defaulted book in the second half of

2010 (June 2009: 12,0%/december 2009: 12,7%/June 2010: 12,4%/

december 2010: 10,5%). through appropriate restructures, nedbank






79

retail has kept over 6 900 distressed households in their homes and

provided debt counselling to 46 000 individuals, while conducting free

seminars for small and medium enterprises to help them with basic

business skills.

to reduce the defaulted advances, particularly in home loans,

proactively nedbank retail undertook a number of actions in 2010

aimed at addressing the elevated levels of impairments, particularly

in home loans.

these included:

• Introducing differentiated realisation processes for security, such

as nedbank-assisted sales, which facilitate higher selling prices

(less than 20% in January 2010 vs 30% in december 2010).

• Improving the collections processes and team experience and

adding 16% capacity in this area.

• tightening lending criteria and giving greater consideration to

future interest changes that may affect clients’ affordability

levels in the future.

• ensuring effective risk-based pricing practices. In early 2008 25%

of new business was granted to the highest-risk clients at pricing

below prime, compared with the current 3% at pricing above

prime.

• Increasing the proportion of business secured through nedbank

retail’s own channels to 60% vs 25% two years ago, as the cost

of the origination is much less and the underlying risk experience

of better quality.

• emphasising the home loan as part of the total client

relationship.

the reality, however, is that we currently expect more than 50% of

impairments in the next four years to arise from the poor quality,

mispriced business written in 2007 and 2008.

Financial review year ended % change 2010 2009

headline earnings (rm) >100,0 760 (27)*

headline earnings

excluding Imperial bank (rm)

182 (474)



average advances (rm) (5,35) 191 212 181 502


allocated economic capital (rm) (0,21) 16 560 16 525*

roe (%) 4,6 (0,2)*

*Restated.

nedbank retail’s headline earnings improved to r760 million from

a loss of r27 million in 2009, after absorbing r296 million lower-

endowment earnings. this represents a fundamental turnaround in

underlying retail performance of r1 billion. some key contributors

were the r131 million growth in retail’s share of Imperial bank

earnings, r682 million lower impairments (excluding Imperial) as

well as outperformance in card and personal loans (cumulatively a

r380 million increase on 2009), good client growth and cross-sell,

enhanced collections in home loans (r224 million) and nedbank

vehicle and asset finance benefiting from improved processes and

impairments.

the balance of nedbank retail’s earnings have been affected by

r423 million lower-endowment income and economic capital

efficiencies of r1,3 billion.

nIr grew by 17%. reasonable cost growth of 10% includes the

impact of distribution expansion of over 400 atms and over

160 outlets. excluding this expansion, the business would reflect

organic cost growth at 7,8%.

the nedbank retail credit loss ratio improved to 2,67% from 3,17%

in 2009, with positive moves in all businesses other than small

business services. Impairments have declined as a result of focused

strategies on the collections front, improving arrears status, judicious

new advances growth at appropriate risk-based pricing and focus on

both post-writeoff recoveries and client restructures.

home loans continued to feel the effects of business written

in the 2007/8 vintages, with the rehabilitation of the defaulted

book remaining challenging in a more subdued property market.

Importantly, focused collection strategies have led to an improved

defaulted portfolio in home loans of 10,5%, down from 12,3%

in december 2009. factors contributing to this reduction include

higher levels of restructured loans (cumulatively r3,9 billion), lower

interest rates, differentiated security realisation processes, improved

collection processes and tightening loan-to-value ratios.

imPERiAL BANK iNtEGRAtiONthe Imperial bank integration progressed well, with earnings, assets

and liabilities transferred to nedbank group’s clusters following

section 54 approval in october 2010 and adjusted to reflect the

group’s economic capital and liquidity principles.

business continuity was maintained, which ensured 460 people

retained their jobs through redeployment within the greater

nedbank group. performances by mfc, supplier asset finance and

professional have been incorporated into the nedbank retail cluster

results, while property has been included in nedbank corporate’s

results. the Imperial bank mfc business was combined with the

nedbank vehicle asset finance business and has been run as a

holistic retail motor finance business for the whole of 2010. mfc, on

a combined basis, performed strongly in 2010, delivering headline

earnings of r606 million (2009: r309 million).

shareholder value was enhanced, as evidenced by the correct

allocation of capital and liquidity usage, integration costs of

r110 million incurred to unlock benefits of r200 million, increased

pricing for risk, and the sustained combined retail motor market

share above 30%.




LOOKiNG FORwARDwhile the fragile economic recovery and low interest rates have

contributed to the modest improvement in stabilisation of nedbank

retail’s defaulted advances and nedbank business banking’s low

credit loss ratio, the outlook for 2011 remains muted. high levels of

consumer indebtedness, a slow property market and renewed debt

counselling process challenges will slow the resolution of nedbank

retail’s defaulted advances. small- to medium-sized businesses are

also experiencing slow recovery in underlying demand and hence

remain cautious to invest in expanding capacity. the changes to

the companies act (business rescue – chapter 6) and ongoing

challenges in the debt counselling process are of significant concern

given dependency on the already stretched judicial system.

the next phase of delivering nedbank business banking’s strategy

will be focused on increasing its share of an attractive economic

profit pool in the medium to long term by increasing the number

of primary-banked clients with a higher share of transactional nIr

and, linked to that, current account creditor balances. with more

investment into technology accelerators planned, as well as a

continued focus on people, culture and delivery, nedbank business

banking is positioned to sustain high shareholder returns and unlock

further value creation.

nedbank retail’s strategic approach has been designed to deliver

strong earnings growth in the next three years while fundamentally

rebuilding the client franchise. the coming 12 months will see

nedbank retail proactively and cohesively aligning its brand, people,

processes, channels, technology, and risk management practices with

the primary aim of developing enduring primary-client relationships

and progressively increasing its share of retail and small-business

clients.

the step change initiatives outlined in the new strategy are likely

to deliver r600 million in cost efficiencies, on a run-rate basis, by

the end of year four, significant footprint expansions and growth in

primary-banked client numbers. the objective is to restore nedbank

retail to economic profit neutrality in three to four years, based on

the current economic outlook.

the significant opportunities for nedbank retail and business

banking will be unlocked through a cohesive focus in 2011 on the

following imperatives:

CAPtURiNG syNERGiEs ACROss thE BUsiNEssEsthe nedbank retail and business banking combination has brought

a step change increase in interactions and collaboration between the

senior leadership team as well as enhanced frontline relationships

benefiting nedbank group clients and staff. a range of revenue and

cost synergies has been identified and a significant portion of these

implemented:

• leads flow between the two businesses, and into the greater

group, has been vastly enhanced, with over 1 500 leads

exchanged. more than 9 000 accounts have been opened through

the nedbank@work channel, most of them on the back of

existing business relationships.

• a joint review of the small- to medium-sized business segment

that straddles both nedbank retail and nedbank business

banking has highlighted an opportunity to remove certain

duplication, improve client migrations and create greater

alignment of the offering especially in high-growth industries.

• area teams are engaging regularly to ensure a consistent

strategic approach is followed to ‘win in each area’. this includes

assessing future growth nodes, aligning marketing and corporate

social investment efforts, and footprint expansion.

• closer collaboration in the human resources environment

has increased staff mobility and career choices and ensured a

stronger talent pipeline to overcome skills shortages. this was

particularly evidenced in the succession planning at senior level

and movement of 80 staffmembers between nedbank business

banking and nedbank retail. cost synergies of r4 million are

being captured by sharing learning venues, trainers and course

material. the very successful coaching programme developed in

nedbank retail was adapted by nedbank business banking at

a fraction of the cost of an external supplier.

existing areas of expertise and core capabilities (such as the use

of the risk management system, client relationship management

platform and client value propositions) are being leveraged across

business banking and retail to maximise reuse and avoid duplication,

while less-established areas such as innovation are being explored

together.






81

For nedbank Retail:

• enhance the client banking experience through alignment of

channel, product and client insights (span of control, frontline

effectiveness, access, cost efficiencies, market positioning).

• build an effective relationship banking offering to capture

economic profits in small-business services and affluent areas

using the retail and business banking capabilities.

• fix the economics of secured lending by improving the risk

profile and pricing practices and leveraging mfc.

• Inculcate a deep risk culture and leverage and sustain quality

business banking risk capability.

For business banking:

• complete the deep cultural transformation of business banking.

• grow through client acquisition and cross-sell, in particular in

the smaller-business segments through leveraging specialist

capabilities to enhance the small-business services offering.

• deliver nIr-led innovation to ensure long-term sustainability of

nIr streams.

• sustain quality risk management practices.

common to both businesses:

• optimise distribution footprint to capture area growth nodes.

• harness card-acquiring strengths to attract primary

transactional-banking business and optimise sales and

relationship strength of the wholesale business.

• optimise the virtuous circle of the business, owner and

employees through distinctive offerings.

• step change in innovation (including cellphone and other virtual

channels) and optimise the technology portfolio and distribution

to enhance the client experience significantly.

• continue talent management and coaching for growth.

rather than viewing sustainability as a destination, nedbank group sees it as an ongoing journey; one that involves a demonstrable commitment to empowering others to undertake their own journey towards a better future.

this philosophy lies at the heart of the group’s ‘caring for our communities and saving our world’ initiative – a comprehensive community education programme that packages the many sustainability lessons learned by the bank and presents them to community members in a way that allows them to harness the power of sustainable thinking and action for their own benefit.

whAt is CARiNG FOR COmmUNitiEs?

more than merely a consumer education programme, the initiative seeks to entrench sustainable thinking by demonstrating the value and interdependence of environmental, social, cultural and economic sustainability.

the programme follows a two-pronged approach, engaging with adult community members via a two-day intensive workshop, and educating grade 6 and 7 learners from the same community about the basics of sustainability via a fun four-hour workshop.

BRiNGiNG sUstAiNABiLity tO LiFEthe knowledge provided to both groups is brought to life at the end of the programme by involving all attendees in an eco-school project build day. these projects are a collaboration between nedbank and the wildlife and environmental society of south africa and allow nedbank volunteers, community members, learners, and educators

to work together to construct a vegetable tunnel, solar cooker, rainwater harvesting tank, or indigenous garden, depending on the identified community need.

DELivERiNG LAstiNG REsULtsto date nedbank group has undertaken eco-school projects in 23 schools, nine of which also participated in the consumer education programme, which translates into 600 learners and 200 adults who have learned the value of environmental, economic, cultural and social sustainability.

In 2010 altogether 625 nedbank staffmembers volunteered on these projects, and their efforts helped community members to construct: • 38 vegetable tunnels;• 15 water tanks;• 56 solar cookers;• 9 indigenous gardens; and• 1 arboretum.


Eco-Schoolprojects–vegetabletunnel.

caRinG FoR coMMunitiEs makes sustaInabIlIty a realIty



opERational ovERviEwnedbank wealth

nedbank wealth encompasses a number of businesses offering life and short-

term insurance solutions, insurance broking, financial planning, stockbroking,

private banking, wealth and fiduciary, as well as asset management services. with

representation in south africa and london and on the Isle of man, Jersey and

guernsey, nedbank wealth comprises the following three business divisions:

iNsURANCE, which includes:

• nedgroup life, offering credit life, simple risk and savings solutions and a set of

differentiated individual risk life products supported by a wellness programme.

• nedgroup insurance, a short-term insurer specialising in homeowner’s cover,

personal accident and vehicle-related value-added insurance products,

eg warranty, topup and tyre and rim cover.

• nedbank Group insurance brokers, distributing a wide range of short-term

insurance products.

AssEt mANAGEmENt, which includes:

• nedgroup investments, offering a range of local and international ‘best of

breed’ unit trusts, private client asset management and multimanagement

solutions.

wEALth mANAGEmENt, which includes:

• boE private clients, a private client wealth management business offering a

fully integrated spectrum of services across a client’s balance sheet, with focus

on investments, banking (transactional, specialised and leveraged finance),

estate and risk management and philanthropy.

• trust and Fiduciary services (local), providing professional fiduciary and trust

services.

• nedbank Financial planning, offering financial planning services in risk,

investment, retirement and estate planning to the broader nedbank client base.

• Fairbairn private bank, with offices in london, on the Isle of man and Jersey

and in south africa and offers private banking and private client wealth

management services.

• trust and Fiduciary services (international), located on Jersey and guernsey

and offering a comprehensive suite of fiduciary solutions designed to match the

bespoke requirements of high-net-worth clients.

hEADLiNE EARNiNGs

REtURN ON EqUity

r592m17,9%

41,0%(2009: 40,9%)

nedbank wealth provIdes Insurance, wealth and asset management solutIons. the cluster Is responsIble for the hIgh-net-worth segment of nedbank group and also operates vIa fInancIal planners, Independent fInancIal advIsers and thIrd-party IntermedIarIes.






83

review oF the yearfor nedbank wealth 2010 has been a noteworthy year. In addition

to reorganising the business to be more client-centric, significant

progress was achieved against the strategy set in 2009 following

the buyout of the joint ventures. this included large investments in

technology and innovation as well as new product development.

In the wealth management division considerable progress has

been made with planning the actions required to realise the

objective of building a single niche high-net-worth business. this

integrated offering will include estate planning, risk management,

investment management, banking and philanthropy solutions

and will be achieved by leveraging the existing businesses of boe

private clients, nedbank financial planning, nedbank private

bank, fairbairn private bank and the local and international trust

and fiduciary businesses. the benefits of having an integrated and

holistic client view are numerous and include the potential for

enhanced risk management practices as well as improved ability to

cross-sell into nedbank.

the boe private clients philanthropy office was short-listed as a finalist

in the category philanthropy team of the year in the International step

private client awards 2010/2011 held recently in london. boe private

clients also contributes 1% of its headline earnings to corporate social

investment initiatives, 75% of which goes towards the boe charitable

and boe educational trust foundations, with the remaining 25% used

to fund internal initiatives. with high-profile individuals acting as

trustees on many recipient organisations, this also serves to profile the

business within the high-net-worth segment.

supported by a reduction in lapses from 15,1% in 2009 to 10,0% in

2010 as well as an increase from 15,0% to 24,5% in the conversion

ratio of leads from nedbank retail, the financial planning business

achieved considerable growth in advice-based sales. the financial

planning industry continues to be challenged with finding high-

quality planners and this remains a key focus in 2011.

during the period under review fairbairn private bank was recognised

as the best International bank and best International wealth

manager at the International fund and product awards 2010 for the

offshore financial services industry. despite the difficult european

economic environment, moody’s Investors service maintained

fairbairn’s a3/ p-2 credit rating in 2010.

at a community level fairbairn continues to support a variety

of sporting, cultural and environmental initiatives, among them

the annual sponsorship of the Isle of man charity, sailing for the

disabled, and the fairbairn private bank multisport team (team

fpb). In 2010 fairbairn private bank also donated 200 tree saplings

to the Jersey trees for life hedgerow campaign. each of these

sponsorships is in line with nedbank group’s overall commitment to

sustainability.

the overseas pension scheme offered by the International trust

business enjoyed pleasing growth during 2010. the scheme, which is

aimed at non-uk residents with uk pension rights, is an important

source of new business for the international trust operations.

In 2010 four separate asset management operations were

consolidated successfully into a single nedbank wealth asset

management division offering a range of best-of-breed multi- and

private client active management solutions. while international

inflows remained disappointing, the domestic business attracted

strong inflows across a wide spread of funds.

during 2010 nedgroup Investments won the morningstar best

large fund house award and came second in the plexcrown survey.

more recently nedgroup Investments was placed second in the

raging bull awards for best domestic management company and

received recognition for a number of individual funds.

the year also saw the launch of the first-ever nedgroup Investments

above-the-line marketing campaign. the campaign is aimed at

establishing the brand within the minds of prospective clients as

well as creating awareness of the risk of basing investment decisions



on emotion instead of reason. much progress has been made in the

implementation of new international and institutional strategies,

which should impact favourably on the business in 2011.

nedgroup investments supports various social and educational

upliftment programmes, with 30% of service fees levied on

the nedbank balanced fund donated to childline, habitat for

humanity, nIcor, and rape crisis. at 31 december 2010 nedgroup

Investments also had 3 767 fundisa unit trust accounts, with a total

of r9,8 million in assets under management. fundisa, launched in

2007, is a national initiative aimed at encouraging south africans to

save towards education. the programme rewards people for investing

in education by paying them an annual bonus of 25% of their

contributions to a maximum of r600 a year.

the buyout of the balance of the shares in the former joint ventures

with old mutual effectively removed the remaining product

restrictions. the life assurance business launched 360life, a fully

underwritten life product supported by a unique wellness programme

called become (see case study on page 86). product features on

360life include individual and continuous pricing, which allow an

insured life to benefit from the correct price for his or her current

needs. the become wellness programme is offered for free and is

embedded in the 360life product range. become will enable members

and their families to enhance every aspect of their life – including

physical, mental, relationship, environmental and financial areas.

following the acquisition of Imperial bank, credit life has now

been extended to the motor finance corporation base. In short-

term insurance the product range has been expanded with a credit

guarantee offering into nedbank namibia as well as vehicle-related

value-added products including warranty, topup and tyre and rim

cover.

In the short-term insurance industry the effects of climate change is

becoming more apparent with an increase in claims associated with

severe weather occurrences. however, in 2010 claims in the short-

term insurance business could be managed within acceptable levels.

further work will be required fully to understand the potential future

impact of climate change on the sa insurance industry.

the Insurance broking business continued to focus on cross-selling

new and existing insurance products to the wider nedbank group

base. attracting and retaining quality insurance advisers are still

challenges in the broker industry and remain a key focus area in 2011.

Financial reviewyear ended % change 2010 2009

headline earnings (rm) 17,9 592 502*



assets under management (rm) 17,6 102 570 87 204*

life embedded value 29,7 1 031 795life value of new business 57,8 295 187allocated economic capital (rm) 17,9 1 445 1 226*


*Restated.

In 2010 boe private clients amended its credit process and policies

to comply with the latest environmental legislation. a detailed

environmental checklist was adopted to form part of the initial

credit assessment process and to serve as an early caution for

potential environmental risks presented by prospective finance

recipients. the environmental sustainability enhancements to the

credit policy were supported by the rollout of relevant training to

lending specialists, valuators and compliance officers.

fairbairn private bank remains committed to, and involved in, social, cultural and environmental sustainability initiatives. It continued its three-year partnership with durrell wildlife conservation trust in Jersey. after extending the sponsorship agreement in 2009, durrell started a new breeding programme for the distinctive madagascan

ring-tailed lemur. In 2010 the first infant in the last 17 years was born at durrell. this sponsorship allows the charity to develop an understanding of lemurs in order to protect them and enhance their chances of survival in the wild.

coMMitMEnt to REsponsiblE lEnDinG anD EnhancEMEnt of rIsk management processes

FaiRbaiRn Focus on sustaInabIlIty

airbairn p






85

nedbank wealth delivered strong financial performance in 2010,

with headline earnings of r592 million, up 17,9% on 2009 and an

roe of 41,0% (2009: 40,9%).

on a like-for-like basis, adjusting for the acquisition of the old

mutual joint ventures in 2009, expense growth was well contained

at 7,2% and headline earnings growth increased by 16,6%. the

acquisition of the joint ventures delivered a return on investment

well in excess of original expectations.

this performance was achieved notwithstanding the adverse impact

of the unfavourable interest rate environment, particularly in the

united kingdom, as well as the strength of the sa rand. this was

offset by improved lapse rates, normalised claims ratios, improved

stock market levels in the latter part of 2010 as well as significant

organic growth in insurance and asset management.

overall net interest income (nII) declined by 4,0% (9,5% like-for-

like) as a result of the environment of low interest rates, both locally

and in the united kingdom. non-interest revenue grew strongly by

29,0% (12,4% like-for-like) primarily on the back of the growth in

the insurance and asset management businesses. headline earnings

equated to an economic profit of r388 million – up 14,5% on 2009,

notwithstanding additional capital allocation. this growth is partially

inflated by a client loan recovery of £2,6 million in fairbairn private

bank, which resulted in a favourable overall credit loss ratio for the

cluster of 0,15%.

the wealth management division continued to be negatively

impacted by low uk interest rates and the strength of the rand.

these factors contributed to a decline in nII for fairbairn private

bank of 23,7%.

boe private clients maintained growth in line with inflation despite

margin pressure, lower stockbroking volumes as well as subdued

investment appetite. this was offset by the more favourable credit

environment.

advice-based sales in the financial planning business rose by 13,9%

on the back of increased planner productivity, a more favourable

economic climate and closer collaboration with nedbank group.

significant domestic net inflows and strong fund performance

contributed to a noteworthy performance from the asset

management division. total assets under management increased

by 17,6% to r102,6 billion. Internationally, the restructuring of the

business away from alternative hedge funds of funds into the new

best-of-breed range resulted in a marginal increase in assets under

management, compared with net outflows in 2009.

the earnings increase in the Insurance division was driven by a notable

performance in both the life and short-term insurance businesses.

continued growth in the unsecured lending businesses contributed to

the increased value of new business of 57,8% and annual premium

equivalent growth of 37,0%. the short-term insurance business

achieved gross written premium growth of 10,2% while managing to

keep claims well within acceptable levels. the business is characterised

by strong risk management, significant levels of reinsurance, tight

capital management and low exposure of capital to market risk.

EnsuRinG a greener future

Focus on stewardshIp

neDbank wealth

nedgroup Investments adopted the value of stewardship as one of the

key measures against which business performance will be tracked. as an

example, the investments in inhouse investment products for personal

savings by executives is a measure of stewardship. an internal scorecard has

been developed based on 10 key principles for measuring and tracking the

degree to which the business succeeds in achieving this objective.

nedbank group Insurance brokers and nedgroup Insurance

company contribute 50c and 30c respectively per live policy to

the green trust. In 2010 r58 000 was donated to the organisation

in support of the various environmental conservation projects it

undertakes. this serves to attract clients who wish to link their

investments to social causes to these products.

nedbank ggroup Insurance

nedgroup Investments adopted the value of stewardship as one of the



strategynedbank wealth sees significant opportunity through innovative

product development as well as consolidating its existing multi-

offerings into client-centric solutions. the focus in 2011 will include:

insurance

• further penetration through new products and cross-sell.

• bundled insurance solutions.

• leveraging current products via a direct offering.

asset Management

• return on investment in the nedgroup Investments brand.

• leveraging good fund performance and awards.

• replicating ‘best of breed’ internationally.

• leveraging success into the wholesale and institutional markets

and the group.

wealth Management

• capitalising on the competitive client value proposition as a

result of a single high-net-worth business.

• leveraging core strengths of nedbank group via business banking

and corporate.

• grow non-interest revenue internationally.

looking ForwarDgiven the strategy outlined above, nedbank wealth has strong growth

and profitability prospects for the future. however, the cluster’s overall

performance remains subject to a number of external market and

economic influences, most notably exchange rate volatility, interest

rate and stock market movements as well as credit extension within

the retail sector.

despite the likelihood of continued volatility in global stock markets,

normalised stockbroking volumes and moderate Jse growth into 2011

are anticipated. optimism in this regard should be tempered by the

impact of the uk austerity programme, negative endowment effects

of prolonged low uk and sa interest rates, as well as reductions in

new home loan volumes on the back of the new home loan strategy,

which could potentially impact short-term insurance earnings.

within the insurance market further decreases in policy lapse rates are

expected as affordability improves and financial pressure on consumers

ease. these factors, coupled with the planned launch of a number of

new insurance products, augur well in the coming years. however, as

the business is changing to more complex insurance products, the

effects of new-business strain and larger reserving requirements are

likely to impact earnings growth in the short term.

nedbank wealth is partnering with its life assurance clients

to deliver sustainable health and wellbeing benefits through

an innovative life product and wellness programme aimed at

encouraging positive lifestyle choices.

In 2010 nedgroup life launched a fully underwritten new

generation life insurance product known as 360life. unique

product features of 360life include individual and continuous

pricing, which allow an insured life to benefit from the correct

price for his or her current needs. unlike normal underwritten

life products where the discounted pricing effect only lasts

for on average two years, 360life will continue to offer clients

this discounted premium of up to 20% by managing risk

information on clients’ overall wellbeing.

to this end nedgroup life also introduced a unique and holistic

wellness programme, become, which is embedded in the 360life

product range and, unlike many other competitor wellness

programmes, is absolutely free. the programme provides

clients with the motivation, assessments, tools and coaching to

improve and maintain their overall wellbeing while at the same

time creating a risk management tool that the business could

harness to reduce claims and premiums.

the programme takes a fresh approach to member wellness

by means of a holistic focus on enabling members and their

families to improve every aspect of their lives.

A sUstAiNABLE sOLUtiON tO wELLNEss

by encouraging members to assess the state of their health,

and then engage with the many health enhancement resources

available to them, become is designed to walk members

through a process of improving and/or maintaining their health

and wellness. the better their progress, the greater the benefits

they enjoy, not just in terms of access to benefits, but also via

cashback payments on their monthly life assurance premiums.

however, the true sustainability benefits of 360life and become

are not the discounted premiums or financial rewards it offers,

but rather the series of effective tools it affords clients to

ensure their long-term health and wellbeing. In addition to a

comprehensive set of informative and motivational resources

that highlight the need for better health, members have access

to advice and guidance from qualified health professionals

in numerous fields – all with the intention of delivering real,

sustainable health benefits, rather than mere loyalty incentives.

360life and become






87



nedbank group Is growIng Its franchIse off the strong operatIng platform that has been buIlt over the past few years. sIgnIfIcant development of new systems wIth an emphasIs on enhancIng the clIent experIence through greater functIonalIty and ease of use has posItIoned the group well to grow Its share of prImary-banked clIents In all market segments.

chiEF opERatinG oFFicER’s report

tOtAL BLACK ECONOmiC EmPOwERmENt sCORE

(DEPARtmENt OF tRADE AND iNDUstRy)

NON-iNtEREst-REvENUE/ExPENsEs RAtiO

89,50(2009: 86,62)

79,6%(2009: 78,8%)

level 2

level 2

the central specialist functions in the chief operating officer portfolio play

a critical role in enabling the frontline clusters to execute their strategies

and deliver client-centred services and solutions in a coordinated way,

thereby competing strongly in the various segments and markets in which

they operate.

a number of key projects have been established to drive cross-cluster

initiatives to optimise the group’s systems, services and people practices:

leaDership Development during the past few years nedbank group invested a great deal of time

and resources in unleashing the natural potential of its leadership across

the group. this has been achieved by developing a deep appreciation of

what it takes to be effective leaders and through participation in multiday

development programmes that focus on personal insights and team

effectiveness, as well as building a ‘vision-led, values-driven culture’ through

the leading for deep green programme. these programmes have reached

over 2 000 senior executives in the organisation and the benefits can be

seen in the strong corporate culture and staff survey scores, higher staff

morale, lower attrition rates and overall team effectiveness. the next phase

of the leading for deep green programme is to cascade this, over three

years, to the 6 800 employees in middle management positions. this is

an ambitious target, but will have a profound impact on the leadership

capability and effectiveness of the organisation as it continues to build a

strong values-based leadership culture.

it systems rationalisation anD replacement In 2010 nedbank undertook a groupwide initiative to rationalise and

simplify a large portion of its core information technology (It) systems

(from 220 to 60) over the medium term. the objective is to streamline

the landing of new products, reduce costs and ensure greater ease of use.

underpinning this initiative is a service-oriented architecture, which enables

a gradual approach to systems replacement and the reuse of processes

where possible. the It roadmap has been developed in collaboration with

the frontline clusters and based on their strategic priorities. this approach

will lead to significant cost benefits over the longer term and will enable

greater investment in client systems, thereby enhancing the client

experience.






89

non-interest revenue upliFt through primary-client growth anD collaboration between clustersthe cross-cluster non-interest revenue (nIr) project initiated in

2010 was primarily established to seek additional sources of primary

clients and fee-generating services through better collaboration

between business clusters and the enabling of cross-sell. cross-

business opportunities have been identified and built into the

group’s forward projections and there is a rigorous process of

tracking progress to deliver over r750 million in nIr in the medium

term, thereby supporting the group’s achievement of its medium-

term nIr/expense ratio target of 85%.

optimise-to-invest initiative towards the end of 2010 the group executive committee agreed

to launch a new project to identify cross-cluster overlaps in services

and cost duplication in order to optimise the group’s cost base and

simplify its operations. the ultimate objectives of this project are

to improve the client experience, reduce costs, and reinvest the

majority of the savings into the group’s It systems rationalisation

and replacement initiative.

neDbank branD anD marketing repositioninga significant brand revitalisation project was initiated and completed

in 2010. key outputs of the project included a sharpened, more

focused and distinctive nedbank brand position, and a framework

and improved processes for building the nedbank brand on an

integrated, aligned basis across the group’s diverse target markets.

the ultimate outcome of the brand-strengthening exercise has been

the embedding of the brand promise around ‘making things

happen … because things don’t just happen on their own’. In future

greater focus will be placed on building on the tangible banking

benefits and value-add for clients.

optimise economic proFit through portFolio tilt In the light of changing banking regulations and pressure on banking

returns on equity, capital and liquidity have become increasingly

scarce commodities. through the combined effort of the balance

sheet management, group strategy and group finance functions,

together with the frontline business clusters, the group introduced

the concept of portfolio tilt in 2010. In essence, this involves the

allocation of scare resources to areas of strategic focus and/or

higher economic profit returns on a sustainable basis. the group has

identified businesses, products and geographies in which it would

like to grow faster, others that should maintain their positioning

and growth plans, and a few where the group should address the

economic returns of the business. this portfolio tilt approach is

incorporated into the strategic planning process to review the

performance of businesses and actively redirect resources to

optimise economic profits.

manage the ecobank neDbank alliance the strategic business alliance between nedbank and ecobank is

of fundamental importance in terms of affording clients of both

institutions access to a banking network across 35 countries in

africa. the group continued to build on the initial foundations of the

ecobank nedbank alliance with a number of major achievements

during 2010. the alliance won the award for the ‘most innovative

bank’ at the AfricanBanker awards in washington during the 2010

International monetary fund and world bank meetings. during

the year various banking initiatives were implemented that align

with the vision of providing clients with a one-bank experience

across the african continent. this included the enabling of ecobank

regional cards on nedbank atms in south africa. nedbank group will

continue to build this partnership and assist clients who are pursuing

strategies into africa, while continuing to consider joint strategic

investments into countries around the continent.

Graham Dempster Chief Operating Officer



shaREholDERs’ analysisFOR thE yEAR ENDED 31 DECEmBER

register date: 31 december 2010

authorised share capital: 600 000 000 shares

Issued share capital: 514 891 827 shares

shareholDer spreaD Number of

shareholdings % Number of

shares %

1 – 1 000 shares 14 798 81,08 3 194 118 0,62

1 001 – 10 000 shares 2 705 14,82 7 124 773 1,38

10 001 – 100 000 shares 560 3,06 18 574 609 3,61

100 001 – 1 000 000 shares 149 0,82 45 179 786 8,77

1 000 001 shares and over 40 0,22 440 818 541 85,62

total 18 252 100,00 514 891 827 100,00

Distribution of shareholdersbanks 164 0,90 57 931 046 11,25

close corporations 108 0,59 227 560 0,04

empowerment 35 0,19 41 526 148 8,07

endowment funds 78 0,43 678 090 0,13

Individuals 15 007 82,22 8 539 969 1,66

Insurance companies 69 0,38 14 858 427 2,89

Investment companies 54 0,30 7 550 117 1,47

medical aid schemes 22 0,12 214 442 0,04

mutual funds 290 1,59 27 321 804 5,31

nominees and trusts 1 784 9,77 2 939 461 0,56

old mutual life assurance company (south africa) limited and associates 48 0,26 264 491 115 51,37

other corporations 64 0,35 80 911 0,02

private companies 219 1,20 985 555 0,19

public companies 22 0,12 84 275 0,02

retirement funds 277 1,52 62 414 284 12,11

share trusts* 10 0,05 10 333 574 2,01

treasury shares 1 0,01 14 715 049 2,86

total 18 252 100,00 514 891 827 100,00

public/non-public shareholders

non-public shareholders 126 0,69 331 656 453 64,41

directors and associates of the company** 12 0,07 1 308 221 0,25

old mutual life assurance company (south africa) limited and associates 48 0,26 264 491 115 51,37

treasury shares 1 0,01 14 715 049 2,86

nedbank/nedbank group pension funds 5 0,03 114 760 0,02

nedbank group limited and associates (share trusts)* 10 0,05 10 333 574 2,01

nedbank group limited and associates (mutual funds) 17 0,09 587 744 0,11

nedbank group bee*** trusts – south africa* 15 0,08 39 336 238 7,64

nedbank group bee*** trusts – namibia 18 0,10 769 752 0,15

public shareholders 18 126 99,31 183 235 374 35,59

total 18 252 100,00 514 891 827 100,00

* Excludessharesheldbydirectorsinsharetrusts(executivedirectorsonly)andEyethuschemes.Seepage237.

** Includessharesheldbydirectorsinsharetrusts(executivedirectorsonly)andEyethuschemes.

*** Blackeconomicempowerment.


overvIewgroup

reportsoperatIonal

overvIew



91

major shareholDers/managers Number of shares

2010% holding

2009% holding

old mutual life assurance company (south africa) limited and associates 264 491 115 51,37 52,21

nedbank group treasury shares (sa) 66 327 716 12,88 12,63

black economic empowerment trusts:

– eyethu scheme – nedbank south africa 39 607 201 7,69 7,94

– omufima scheme – nedbank namibia 722 240 0,14 0,15

nedbank group (2005) share option, matched and restricted share scheme 11 003 534 2,14 1,53

nedbank group limited and associates (capital management) 14 715 049 2,86 2,95

nedbank namibia 47 512 0,01 0,01

nes Investments (pty) limited 232 180 0,05 0,05

public Investment corporation (sa) 33 212 027 6,45 6,00

lazard asset management (us) 15 228 510 2,96 5,78

coronation fund managers (sa) 14 129 073 2,74 2,81

sanlam Investment management (sa) 11 235 331 2,18 2,20

stanlib asset management (sa) 8 865 398 1,72 0,66

blackrock Inc (us and uk) 7 088 356 1,38 1,20

beneficial shareholders holding 5% or moreold mutual life assurance company (south africa) limited and associates 264 491 115 51,37 52,21

public Investment corporation (sa) 39 286 687 7,63 7,42

geographical distribution of shareholdersdomestic 448 155 287 87,04 86,42

south africa 437 206 579 84,91 85,17

namibia 8 294 868 1,61 0,67

swaziland 154 470 0,03

unclassified 2 499 370 0,49 0,58

foreign 66 736 540 12,96 13,58

united states of america 44 616 660 8,67 9,74

united kingdom and Ireland 7 705 099 1,50 1,10

europe 5 891 733 1,14 1,10

other countries 8 523 048 1,65 1,64

514 891 827 100,00 100,00


opERational ovERviEw nedbank capItal · this is nedbank group’s funding interface with local and international financial and investment markets. all domestic and foreign currency-funding

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