About Nedbank Group

ProgresS made in 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 Staff Survey. There have been positive shifts in all of the 12 dimensions measured.			Exceeded Refer here
	Build a unique culture for competitive advantage			Limiting values have been eliminated from the top 10 values in the Barrett 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 Refer here
	Retain our staff			Overall, staff attrition is lower than previous years.			Achieved Refer here
	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 Refer here
	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 Refer here
	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 Refer here

 

CLIENTS

‘A GREAT PLACE TO BANK.’

	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 Refer here
				Retail primary clients increased by more than 119 000 to over 1,1 million.			Achieved Refer Annual Report
				Mzansi clients reached a milestone of 1 000 000 in August 2008.			Exceeded Refer here
	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 Refer Annual Report
				Increased net new client acquisition by 60% in Business Banking, compared with the prior year. Gained 16 new major corporates.			Achieved Refer Annual Report
				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 Refer BEE Report
	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 Refer here
				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 Refer here
				Client satisfaction surveys indicate upward trends in client loyalty driven by Business Banking’s decentralised, empowered delivery model.			Achieved Refer here
				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.			Partially achieved Refer BEE Report
	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 Refer here
	Provide value-for-money products			The reduction in retail bank fees in 2006 and 2007 and the below-inflation average increase in 2008 makes Nedbank very affordable particularly in the lower-income and mass-market segments.			Achieved Refer here
				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.			Achieved Refer BEE Report and Annual Report
	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 Refer BEE Report and Annual Report
				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 Refer BEE Report
	Grow our presence in Africa			Approvals were received to open representative branches in Angola and Kenya.			Achieved Refer Annual Report
				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 Refer here

 

SHAREHOLDERS

‘A GREAT PLACE TO INVEST.’

Financial Targets

Measure

Making it happen in 2008

2009 outlook

Medium-to long-term targets

2008 self- assessment

Return on equity (ROE) (excl goodwill)

20,1%

> 15%

5% (2008: 10%) above monthly weighted average cost of ordinary shareholders’ equity (COE).

Did not achieve Refer Annual Report

Efficiency ratio

51,1%

< 53%

< 50% (2008: <55%)

Exceeded Refer Annual Report

Growth in diluted headline earnings per share

(2,0%)

+- 10% down

At least CPIX + gross domestic product (GDP) growth + 5%.

Did not achieve Refer Annual Report

Credit loss ratio

1,17%

< 1,30%

Between 0,55% and 0,85% of average advances.

Did not achieve Refer Annual Report

Core Tier 1

8,2%

Towards the top end of the range

7,5% – 9,0%

Exceeded Refer Annual Report

Tier 1

8,5% – 10,0%

9,6%

Tier 2

11,5% – 13,0%

12,4%

Economic capital

R9,6 billion surplus

A- (including 10% buffer)

Capitalised to a 99,9% confidence interval on economic-capital basis target A- debt rating (+ 10% buffer).

Exceeded Refer Annual Report

Dividend cover policy

2,29

2,25 – 2,75 times

2,25 – 2,75 times.

Achieved Refer Annual Report

 

REGULATORS

‘WORLDCLASS AT MANANGING RISK’

	Objective			Making it happen in 2008			2008 self- assessment
	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 Refer here
				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 Refer Annual Report
				Strong risk culture prevails, underpinned by sound risk governance endorsed by the Enterprisewide Risk Management Framework.			Achieved Refer here
				Across the bank we have refined our credit parameters and loan-to-value (LTV) requirements on home loans, and bolstered collections capabilities.			On track Refer Annual Report
				Relationships and feedback from regulators and government stakeholders.			Achieved Refer here
				Prudent risk management in the wake of the global credit crisis limiting losses in respect of international exposures.			Achieved Refer Annual Report
	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 Refer here
				First South African bank to successfully execute non-core Tier 1 subordinated note of R1,8 billion in 2008.			Achieved Refer Annual Report
				Liability growth was solid, specifically deposit growth at 21,4%, which exceeded asset growth at 16,1%.			Achieved Refer Annual Report

 

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 Refer here
				Nedbank expanded its sponsorship profile to cover the mass market by successfully hosting the first Nedbank Cup (soccer mass-market sponsorship deal).			Achieved Refer here
				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 Refer here; here
	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 Refer here; here
				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 Refer here; here; here
				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 Refer here
				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 Refer here
				Awards received: Financial Times Award for Emerging Markets Sustainable Bank of the Year for Middle East and Africa. African Bank Award for Gender Sensitivity. Association for Advancement of Black Accountants in Southern Africa Award. CSI Programme Award at the National Business Awards for our Client Local Hero Programme.			Refer here; here Refer here Refer here Refer here
	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 Refer here
				Reached 1 million Mzansi clients in August 2008. More than 60% of all new outlets are opened in historically unrepresented areas.			Exceeded Refer here
				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 Refer here