Nedbank Group · JSE:NED
Nedbank — Nedgroup Securities Investor Conference 2009
26 slides from Nedbank's conference presentation, Oct 9, 2009
Slide 1: Nedbank Corporate Interim Financial Results, six months ended 30 June 2009
NEDBANK GROUP NEDBANK INTERIM CORPORATE FINANCIAL RESULTS Mfundo Nkuhlu SIX MONTHS ENDED 30 JUNE 2009 Managing Executive Nedgroup Securities Investor Conference, Conference 9 October 2009
Slide 2: Overview
Overview • Macroeconomic environment • SA Banking environment • Nedbank Group • Nedbank Corporate – Profile – Financial highlights – Business strategy – Strategic positioning – Strategic growth areas – Risk management • Summary S • Future focus
Slide 3: Current macroeconomic environment
Current macroeconomic environment Forecast Indicators 2009 2010 2011 2012 GDP (2,2)% 2,0% 3,2% 4,2% Inflation 7,3% 5,9% 5,6% 5,6% Current account deficit 4 2% 4,2% 3 7% 3,7% 2 9% 2,9% 3 2% 3,2% Prime overdraft rate (year end) 10,0% 10,5% 13,0% 13,0% • GDP contracted in 2009 & forecast to increase mo
Slide 4: South African banking environment
South African banking environment • WEF rated SA’s banking sector 15th soundest in world (Oct 2008) • NCA introduced June 2007 to curb risk of reckless lending • Basel II successfully implemented and embraced in SA – Jan 2008 • “Originate & Sell” approach & complex derivatives low penetration • Rand
Slide 5: Nedbank Group
Nedbank Group ● South African based financial services group ● One of the ‘Big Four’ South African Banks ● Head quarters in Johannesburg ● JSE listed ● 55% % owned dbby Old M Mutuall plc l – LSE lilisted d ● Market capitalisation approx R50 billion ● 110 year history in South Africa ● Strong retail
Slide 6: Group highlights – June 2009
Nedbank Group highlights – June 2009 • Resilient in a challenging environment – 7,4% , growth g in tangible g NAV – R1,98 bn headline earnings (R3,9 bn annualised) • Capital adequacy increased significantly & continues to strengthen Dec ’08 Jun ‘09 – Core tier 1 8 2% 8,2% 8 6% 8,6% – Tier 1 9,6% 10,
Slide 7: Corporate profile
Nedbank Corporate profile • Corporate Banking – top two player in lending & deposit-taking Property Finance – market leader in commercial property lending Nedbank Africa – selected growth in sub-Saharan Africa • Key financial metrics (six months ended Jun ’09) Economic capital usage (Rm) 5 326 Asset
Slide 8: Corporate – 2009 H1 highlights
Nedbank Corporate – 2009 H1 highlights • Strong core banking performance - Efficient capital management (down 13%) • Improved margins (1,77% to 2,07%) • Property P t investment i t t values l marginally i ll d down • Good advances growth >25% • Effective risk management • BMI transactional banking s
Slide 9: Corporate strategic positioning
Nedbank Corporate strategic positioning Corporate Banking Property Finance Nedbank Africa To be top two player in Leader in property finance Three tier Africa T lending, liabilities and strategy & Ecobank R transactional banking & Alliance strategy A Public Sector bank of choice N S Innovation F Thr
Slide 10: Corporate strategic positioning (cont.)
Nedbank Corporate strategic positioning (cont.) Corporate Banking Property Finance Nedbank Africa Ability to deliver world class All the benefits of a big Regional Network service operation offering bank with the personal touch of a small bank clients an integrated g • Highest Hi h t quality lit tte
Slide 11: Impact of external environment
Impact of external environment Sector Approach Focus • Pursue ‘guarded growth’ strategy • High asset quality • Ongoing benefit from infrastructure spend & • Lower risk Corporate Co po ate long-term g rollout • Good margin Banking • Public sector roll out likely impact in 2012, • Continue to improve
Slide 12: Corporate – segmental analysis
Nedbank Corporate – segmental analysis Headline earnings RORAC Average advances Jun Jun % Jun Jun % Rm 2009 2008 change 2009 % 2009 change Corporate Banking 384 282 36,2 37,1 70 193 35,9 p y Finance Property 236 375 ((37,1)) 17,7 , 59 442 24,1 Africa 50 44 13,6 19,8 6 079 13,3 670 701 (4,4) 25,6 135
Slide 13: Ecobank alliance strategy
Ecobank alliance strategy • Provide clients with immediate access to largest African banking network in 33 countries Ecobank footprint • Provide clients with ‘One Bank’ experience Nedbank footprint Expansion opportunities across combined footprint through seamless engagement model & deployment of un
Slide 14: Ecobank alliance update
Ecobank alliance update • Launched African Centre of Excellence: LocalKnowledgeAfrica • Alliance banking initiatives launched: – Nedbank & Ecobank clients can open bank accounts with respective banks in any jurisdiction through their in-country relationship manager – Nedbank & Ecobank clients can vi
Slide 15: Strategic income growth areas
Strategic income growth areas Grow our share of EP NII NIR Manage for Step Change value through in NIR the cycle growth Become client li t driven di Competitiveness/ differentiation Enhance Manage Risk productivity as an enabler and execution Impairments & risk Expenses … pursuing balanced strategic
Slide 16: Strategic income growth areas
Strategic income growth areas Grow our share of EP Corporate Banking: • Growth aimed at quality assets NII NIR • Emphasis on longer term assets Manage for Step Change • Focus on increasing credit margin value through in NIR • Liability growth constrained the cycle y Become growth g client driven Pro
Slide 17: Strategic income growth areas
Strategic income growth areas Grow our share of EP Continued tight risk management driven NII NIR through operational risk process within agreed Manage for Step Change parameters of EWR Framework: value through in NIR • Review credit granting practices the cycle y Become growth g client driven • Lim
Slide 18: Strategic income growth areas
Strategic income growth areas Grow our share of EP Corporate Banking: NII NIR • Grow Public Sector & p primary y clients • Deepen understanding of cost Manage for Step Change drivers for appropriate pricing value through in NIR Become • Deepen staff product knowledge the cycle y growth g client driv
Slide 19: Strategic income growth areas
Strategic income growth areas Grow our share of EP Spend wisely with sufficient emphasis on NII NIR investing in future growth while reducing Manage for Step Change duplication & seeking efficiencies in areas value through in NIR of operations & from our service providers the cycle y Become growth g
Slide 20: Corporate – risk management
Nedbank Corporate – risk management Corporate Banking • Risk Ri k as opportunity: t it - Extend tenure of loan portfolio to top end credit clients - Improve price competitiveness & drive capital optimisation • Risk Infrastructure: - Continue to invest in risk & workflow systems - Focus on data quali
Slide 21: Corporate – risk management (Contd.)
Nedbank Corporate – risk management (Contd.) Property Finance • Risk as opportunity: - Slower growth book vs. prevailing market conditions – managing for value - Continuation of ‘smart smart origination origination’ strategy – selective asset growth - Rigorous monitoring & proactive management of bo
Slide 22: Corporate – risk management (Contd.)
Nedbank Corporate – risk management (Contd.) Nedbank Africa • Risk Ri k as opportunity: t it - Redeploy specialist Trade Finance skills to broader industry & commodity dit sectors t - Leverage off the SA businesses skills base • Risk Infrastructure: - Upgrading of banking platform - Deepen the utili
Slide 23: Summary: Strategic income growth areas
Summary: Strategic income growth areas Grow our share of EP NII NIR Manage for value through Step Change in NIR growth the cycle Become client driven Competitiveness/ differentiation Manage Risk as an enabler Enhance productivity & execution Impairments & risk Expenses Corporate Banking • Deepen cli
Slide 24: Corporate – future focus
Nedbank Corporate – future focus • Focus on sustainable economic profit growth • Tight Ti ht risk i k managementt in i currentt difficult diffi lt economici environment i t • Focus on growing NIR - Gain primary banked corporate clients - Grow share of wallet through cross sell initiatives - Increase
Slide 25: Thank you
25 THANK YOU MAKE THIQ@®)GS HAPPEN RS ats
Slide 26: Disclaimer
Disclaimer Nedbank Group has acted in good faith & has made every reasonable effort to ensure the accuracy & completeness of the information contained in this document, including all information that mayy be defined as 'forward-looking g statements' within the meaning g of United States securities l
Nedbank Group — Nedgroup Securities Investor Conference 2009 on 6ix