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Review of 2008
STAFF:
'A great place to work',
'Create a community of leaders' and 'Living our values.'
| Objective | Making it happen in 2008 | 2008 self- assessment |
|---|---|---|
| Improve staff satisfaction | Employee satisfaction improved by a further 3,6% in the Nedbank Employee Survey. There have been positive shifts in all of the 12 dimensions measured. | Exceeded |
| Build a unique culture for competitive advantage | Limiting values have been eliminated from the top 10 values in the Nedbank Culture Survey and five matches of values from existing culture to ideal culture were recorded, indicating a closer alignment between reality and what staff are seeking. This trend has been consistent over the last four years. | Exceeded |
| Retain our staff | Overall, staff attrition is lower than previous years. | Achieved |
| Improve HR effectiveness and service delivery | The HR 2010 Programme, which is dedicated to improving effectiveness, efficiencies, capability and service delivery, has reached the midway stage. 2009 sees the start of the second phase of implementation. | On track |
| Build our leadership and management capabilities | The rollout of the Management Development Programme and the Leading for Deep Green leadership transformation initiative has been successful and is comfortably ahead of target. | Exceeded |
| Transform our workforce to start to align to the demographics of the South African economically active population | Transformation of our workforce is showing good progress across key indicators. Altogether 57% of all appointments are African and demographic profiles are generally meeting or exceeding targets. | On track |
The table below shows the entropy score for Nedbank Group from 2005 to 2008 as well as the graphic representation of the staff survey results.
| Objective | Making it happen in 2008 | 2008 self-assessment |
| Grow Nedbank Retail and penetrate the mass market | Market share in credit cards and home loans has been maintained during 2008, while year-on-year market share in instalment credit increased by 2%. In the latter part of 2008 all business units shifted their focus to growing profitable market share (focusing on economic-profit generation rather than advances market share growth). | Partially achieved |
| Retail primary clients increased by more than 119 000 to over 1,1 million. | Achieved | |
| Mzansi clients reached a milestone of 1 000 000 in August 2008. | Exceeded | |
| Retain our leading positions in key wholesale market segments and grow our business banking franchise | Retained strong market positions in property finance and domestic corporate lending. Nedbank Investor Services awarded the Top-rated Domestic Custodian for 2008 by the Global Custodian. The Global Finance Survey voted Nedbank Investor Services the Best Subcustodian for South Africa and Africa for 2008 (for the third consecutive year). | Achieved |
| Increased net new client acquisition by 60% in Business Banking, compared with prior year. Gained 16 new major corporates. | Achieved | |
| Nedbank Capital achieved top three placings in the Dealmakers corporate finance ranking by dealflow and led the Bond Exchange of South Africa (BESA) bond market share rankings in value and volume. Forex turnover continued to increase. Nedbank recorded a higher win ratio relative to the number of deals lost in tenders. | Partially
achieved |
|
| Improve service levels ultimately to achieve worldclass service over time | Nedbank has been ranked number one among South African banks in the Ask Afrika Orange Index (Banking Sector Client Service) for the second consecutive year. | Exceeded |
| Client Management Assessment Tool (CMAT) scores improved to the top decile of global financial services companies, while further commitments to our AskOnce service promise were launched. | Exceeded | |
| Client satisfaction surveys indicate upward trends in client loyalty driven by Business Banking’s decentralised, empowered delivery model. | ||
| Capital Corporate Finance Ratings (Dealmakers) – top three in dealflow for 2007; Spire Awards (Bond Trading) – five top-three placings; improved the Nedgroup Securities Financial Mail ranking by one place. | ||
| Expand our distribution footprint through investment and innovation | A total of 15 new branches, 278 new automated teller machines (ATMs) and 23 instore branches were commissioned. Cashback at 2 193 additional point-of-sale devices. | Achieved |
| Provide value-for-money products | The reduction in retail bank fees over the past two years makes Nedbank the most affordable of the big four banks particularly in the lower-income and mass-market segments. | Achieved |
| Maintained competitive pricing in wholesale banking products. NetBank Business (electronic platform) ranked first in South Africa in the BMI-T Survey for the value-for-money attribute. | ||
| Improve our positioning in the public sector | Appointed dedicated investment banking manager for the public sector and several pitches and mandates awarded from various public sector enterprises, eg ACSA, Eskom, Public Investment Corporation. | Achieved |
| On the back of winning the Western Cape government account in 2007, Business Banking has won a number of municipalities as clients in 2008. | Achieved | |
| Grow our presence in Africa | Approvals were received to open representative branches in Angola and Kenya. | Achieved |
| Announced a strategic alliance with Ecobank to provide clients access to a combined Pan-African banking network covering 30 countries (including South Africa), with over 1 000 branches and banking outlets across the continent. | New |
SHAREHOLDERS:
'A great place to invest.
'Financial targets
| Measure | Making it happen in 2008 | 2008 self- assessment |
2009 outlook |
Medium- to long-term targets |
| Return on equity (ROE) (excl goodwill) | 20,1% | Did not achieve | > 15% | 5% (2008: 10%) above monthl weighted average cost of ordinary shareholders’ equity (COE). |
| Efficiency ratio | 51,1% | Exceeded | < 53% | < 50% (2008: <55%) |
| Growth in diluted headline earnings per share | (2,0%) | Did not achieve | + - 10% down | At least CPIX + gross domestic product (GDP) growth + 5%. |
| Credit loss ratio | 1,17% | Did not achieve | < 1,30% | Between 0,55% and 0,85% of average advances. |
| Core Tier 1 | 8,2% | 7,5% – 9,0% | ||
| Tier 1 | 9,6% | Exceeded | Towards the top end of the range | 8,5% – 10,0% |
| Tier 2 | 12,4% | 11,5% – 13,0% | ||
| Economic capital | R9,6 billion surplus | Exceeded | A- (including 10% buffer) | Capitalised to a 99,9% confidence interval on economic-capital basis target A- debt rating (+ 10% buffer). |
| Dividend cover policy | 2,29 | Achieved | 2,25 – 2,75 times | 2,25 – 2,75 times. |
REGULATORS:
'Worldclass at managing risk.'
| Objective | Making it happen in 2008 | 2008 self-assessment |
| DELIVER WORLDCLASS RISK PRACTICES | ||
| Manage risk as an enabler | Basel II fully implemented for the group, including Advanced Internal Ratings-based (AIRB) approval from South African Reserve Bank (SARB) for credit risk in Nedbank and implementation for operational risk on track. | Achieved |
| Risk-based capital allocation (including a comprehensive economic-capital system and shareholder value-add basis) now driving strategic decisionmaking, business performance measurement and incentives. | Achieved | |
| Strong risk culture prevails, underpinned by sound risk governance endorsed by the Enterprisewide Risk Management Framework. | Achieved | |
| Across the bank we have refined our credit parameters and loan-to-value (LTV) requirements on home loans, and bolstered collections capabilities. | On track | |
| Relationships and feedback from regulators and government stakeholders. | Achieved | |
| Prudent risk management in the wake of the global credit crisis limiting losses in respect of international exposures. | Achieved | |
| OPTIMISE CAPITAL AND LIQUIDITY | ||
| The group’s capital levels have improved significantly during 2008 in an environment where capital adequacy is a key focus area. | Exceeded | |
| First South African bank to successfully execute non-core Tier 1 subordinated note of R1,8 billion in 2008. | Achieved | |
| Liability growth was solid, specifically deposit growth at 21,4%, which exceeded asset growth at 16,1%. | Exceeded | |
GROUP CAPITAL ADEQUACY
COMMUNITIES:
Highly involved in the community and environment', 'becoming a bank for all south Africans', 'leading transformation', 'most respected and aspirational brand' and 'leading as a corporate citizen.'
| Objective | Making it happen in 2008 | 2008 self-assessment |
| Build the Nedbank brand and become a bank for all South Africans | Brand equity has improved with marked increases in awareness, relevance and loyalty, particularly in the mass consumer segment of the market. It is also very encouraging that Nedbank remains the only major South African banking brand to have made positive improvements in brand equity over the year. | Exceeded |
| Nedbank expanded its sponsorship profile to cover the mass market by successfully hosting the first Nedbank Cup (soccer mass-market sponsorship deal). | Achieved | |
| The launch of the Local Hero Programme for our clients was highly successful, with Nedbank contributing more than R1 million to our clients’ charities of choice. | Achieved | |
| Become South Africa’s green and caring bank | Included in the JSE SRI Index and Dow Jones Sustainability Index for the fifth consecutive year. | Achieved |
| Leading position among South Africa’s banks in the South African Carbon Leadership Index, and fourth place overall in the low-carbon industries category. | Exceeded | |
| Added 132 000 new clients to the Nedbank Affinity Programme, which exceeded the targeted growth for 2008. Even during the tough economic times the total amount donated to various affinity trusts in 2008 grew by 8% to R10,4 million. | Exceeded | |
| Funding of an equity stake in an affordable-housing development, Tanganani, with the capacity to yield 12 000 housing units (developers will be reducing its carbon footprint, both during development and during occupation). | New | |
| Awards received: | ||
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| Accelerate transformation | Achieved a Financial Sector Charter (FSC) score of 99,1 and level-three black economic empowerment (BEE) contributor against the dti scorecard. Significant progress across the board, with all areas exceeding FSC targets. | Exceeded |
| Reached 1 million Mzansi clients in August 2008. More than 60% of all new outlets are opened in historically unrepresented areas. | Exceeded | |
| During 2008 Nedbank launched various internal transformation initiatives aimed at enabling and embracing diversity conversations – these included the launch of the ‘Be the key’ transformation booklet and diversity workshops (evolving to greatness) to expose staff to the cultural diversity and history of South Africa. | On track |
| This page was updated on 25 June, 2009 |  Return to top |
